Agenda packet — Lake Forest City Council, July 2, 2024 (part 1 of 3)

AGENDA

LAKE FOREST CITY COUNCIL
Regular Meeting of the City Council
Tuesday, July 2, 2024
Public Session 6:30 p.m.

City Council Chambers, 100 Civic Center Drive, Lake Forest, California NOTICE: Pursuant to Lake Forest Municipal Code Section 2.04.010, Regular Meetings of the City Council are held the First and Third Tuesday of each month at the hour of 5:30 p.m. for Closed Session matters, if required.

The Public Session of the meeting shall commence at 6:30 p.m. or as soon thereafter as possible. Special Meeting times may be held at a different time and date as listed on the Agenda.

AGENDA DOCUMENT REVIEW: The Agenda and staff reports are available on the Internet at https://www.lakeforestca.gov/en/government/meeting-agendas-and-minutes/meeting-agendas and at the City Clerk’s Office, 100 Civic Center Drive, Lake Forest, California, on the Friday before the meeting on Tuesday.

AGENDA DESCRIPTION: The Agenda descriptions are intended to give notice to members of the public of a general summary of items of business to be transacted or discussed. The listed Recommended Action represents staff’s recommendation. The City Council may take any action which it deems to be appropriate on the agenda item and is not limited in any way by the recommended action.

AGENDA ON SOCIAL MEDIA: This meeting will be streamed through Facebook Live. Comments will not be taken via Facebook Live. The City provides the Facebook Live stream as an additional service to the public.

However, the City cannot guarantee that its network and/or the site will be uninterrupted. The City is not responsible for any interrupted service.

SPECIAL NOTICE REGARDING PUBLIC ACCESS TO THE MEETING AND PUBLIC COMMENT:

PUBLIC PARTICIPATION: In addition to attending in person, members of the public may access the meeting live on our website at https://www.lakeforestca.gov/en/government/meeting-agendas-and-minutes/meeting-agendas.

PUBLIC COMMENT PRIOR TO THE MEETING: Members of the public may submit email comments to [email protected]. Email comments will be uploaded to the agenda packet and made part of the official public record of the meeting and will not be read at the meeting. To ensure staff reviews all comments prior to the City Council meeting, please submit email comments no later than 5:00 p.m. the day of the meeting.

PUBLIC COMMENT: Members of the public may provide comments in-person at the meeting. Public comments will no longer be accepted remotely. Those wishing to provide comments in-person at the meeting will be asked to submit a request to speak to the City Clerk. To ensure prompt distribution to the City Council, members of the public wishing to provide written materials to the City Council should do so prior to the start of the meeting or as close thereto as possible, as time will not be taken during the public comment period to distribute written materials to the City Council.

TRANSLATION SERVICE: Interpreters are available by request to members of the public that prefer to make their public comments in Spanish or Chinese. Requests for a translator need to be received by 8:00 a.m. the Monday before the scheduled City Council meeting. Such requests must be received via email at July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 1 [email protected]
Los intérpretes están disponibles previa solicitud para el público que prefiera hacer sus comentarios públicos en español o chino. Las solicitudes de traductor deben recibirse antes de las 8:00 a. m. del lunes anterior a la reunión programada del Concejo Municipal. Dichas solicitudes deben recibirse por correo electrónico a [email protected]
如果大眾願意用西班牙語或中文發表公開評論，我們可應要求提供口譯服務。需要在預定市議會會議之前的周一
上午 8:00 之前收到翻譯請求。此類請求必須透過電子郵件收到：[email protected] Rúguǒ dàzhòng yuànyì yòng xībānyá yǔ huò zhōngwén fābiǎo gōngkāi pínglùn, wǒmen kě yīng yāoqiú tígōng k ǒuyì fúwù. Xūyào zài yùdìng shì yìhuì huìyì zhīqián de zhōuyī shàngwǔ 8:00 Zhīqián shōu dào fānyì qǐngqiú. Cǐ l èi qǐngqiú bìxū tòuguò diànzǐ yóujiàn shōu dào: [email protected] CALL TO ORDER:

Council Members:

Mayor Pro Tem:

Mayor:

City Manager:

City Attorney:

City Clerk:
6:30 p.m.

Doug Cirbo
Robert Pequeño
Benjamin Yu
Scott Voigts
Mark Tettemer
Debra Rose
Matthew E. Richardson
Lisa Berglund
PUBLIC SESSION: 6:30 p.m.

PUBLIC SESSION: At this time, the City Council will convene to consider public matters. Those wishing to address the City Council must submit a completed “Request to Speak” form to the City Clerk prior to City Council action.

INVOCATION: The Invocation will be provided by Philip Porter, Lake Forest Ward of the Church of Jesus Christ of Latter-day Saints.

PLEDGE OF ALLEGIANCE: The Pledge of Allegiance to the Flag of our Country to be led by Girl Scout Troop #8621.

PUBLIC COMMENTS
Members of the public can submit an e-comment to [email protected]. E-comments will not be read at the meeting.

Members of the public may also provide comments in-person at the meeting or remotely. Those wishing to provide comments in- person at the meeting will be asked to submit a request to speak to the City Clerk.

July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 2 CONSENT CALENDAR (Item Nos. 1 – 5)
All matters listed under the Consent Calendar are considered routine and will be enacted by one vote. There will be no separate discussion of these items unless Members of the City Council, the public, or staff request specific items be removed from the Consent Calendar for separate action.

1. MOTION TO WAIVE READING OF RESOLUTIONS AND ORDINANCES RECOMMENDED ACTION: Said Ordinances and Resolutions which appear on the public agenda shall be determined to have been read by title and further reading waived.

2. MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL HELD ON JUNE 18, 2024
RECOMMENDED ACTION: Approve as submitted.

3. PROCLAMATION SUPPORTING WILDFIRE AWARENESS AND

PREVENTION SEASON
RECOMMENDED ACTION: Approve a proclamation supporting designating mid-summer through early Autumn as Wildfire Awareness and Prevention Season.

4. SECOND READING AND ADOPTION OF ORDINANCE AMENDING TITLE 12 OF THE LAKE FOREST MUNICIPAL CODE RELATING TO THE

ENACTMENT OF A SEPARATE SCHEDULE OF FINES FOR PARKING

VIOLATIONS
RECOMMENDED ACTION: Conduct second reading of and adopt an Ordinance entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, AMENDING CHAPTER 12.16 OF TITLE 12 OF THE LAKE FOREST MUNICIPAL CODE, RELATING TO THE

ENACTMENT OF A SEPARATE SCHEDULE OF FINES FOR PARKING
VIOLATIONS.

5. AWARD OF PROFESSIONAL SERVICES AGREEMENT FOR STATE
July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 3

LOBBYING SERVICES
RECOMMENDED ACTION: 1. Award Professional Consultant Service Agreement to Joe A. Gonsalves & Son for State Lobbying Services.

2. Authorize the Mayor to sign and the City Clerk to attest to the Agreement with Joe A. Gonsalves & Son, substantially in the form attached. DISCUSSION/ACTION ITEMS (Item Nos. 6 – 9)
The following matters are for City Council consideration/discussion/action. Members of the public may have the opportunity to address these items if they wish to do so. Please complete the Request to Speak form and give to the City Clerk.

6. PURCHASE AND SALE AGREEMENT(S) WITH SOUTH COUNTY
OUTREACH REGARDING REAL PROPERTY LOCATED AT 20702 EL
TORO ROAD #35 AND DECLARATION OF EXEMPT SURPLUS LAND

REGARDING THE SAME PURSUANT TO GOVERNMENT CODE
SECTION 54221
RECOMMENDED ACTION: 1. Adopt a Resolution entitled: A RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST APPROVING A

PURCHASE AND SALE AGREEMENT WITH SOUTH COUNTY
OUTREACH REGARDING 20702 EL TORO ROAD #35 (APN 938-741-79)

AND FINDING THAT THE ACTION IS EXEMPT FROM THE

CALIFORNIA
ENVIRONMENTAL QUALITY ACT; and 2. Approve and authorize the City Manager to sign the letter agreement in substantially similar form to the version attached, which acknowledges conformance with the terms of the Community Development Block Grant loan agreement between the City and South County Outreach; and 3. Adopt a Resolution entitled: A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST PURSUANT TO GOVERNMENT CODE SECTION 54221 DECLARING
THAT CERTAIN REAL PROPERTY LOCATED AT 20702 EL TORO ROAD #35 (APN 938-741-79) IS EXEMPT SURPLUS LAND, AND FINDING THAT

SUCH DECLARATION IS EXEMPT FROM THE

CALIFORNIA
ENVIRONMENTAL QUALITY ACT; and 4. Adopt a Resolution entitled: A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST

APPROVING A PURCHASE AND SALE AGREEMENT WITH SOUTH
COUNTY OUTREACH REGARDING 20702 EL TORO ROAD #35 (APN
938-741-79) AND FINDING THAT THE ACTION IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT; and 5. Authorize the City Manager or her designee to perform any additional acts necessary to July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 4 complete the above transactions.

7. ORDINANCE REGARDING AMENDMENTS TO LAKE FOREST
MUNICIPAL CODE CHAPTER 5.17 CONCERNING SIDEWALK VENDING

REGULATIONS
RECOMMENDED ACTION: Introduce the first reading of an Ordinance entitled: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, AMENDING CHAPTER 5.17 OF THE LAKE

FOREST MUNICIPAL CODE, RELATING TO SIDEWALK VENDING AND

FINDING THE ACTION TO BE EXEMPT FROM THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT

8. CITY COUNCIL WRITTEN COMMUNICATIONS POLICY
RECOMMENDED ACTION: Exercise City Council Discretion.

9. POTENTIAL PERFORMANCE OF THE PACIFIC SYMPHONY
RECOMMENDED ACTION: 1. Direct staff to produce the Pacific Symphony event on August 17, 2024, authorizing the City Manager to execute any contract documents with the Pacific Symphony related to the event. 2.

Adopt a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, AMENDING THE 2023-2025 OPERATING BUDGET; AMENDING APPROPRIATIONS FOR FISCAL
YEAR 2024-25, Or: 3. Receive and file a report from staff describing logistical and other considerations related to a potential performance of the Pacific Symphony at the Lake Forest Sports Park.

CITY MANAGER'S REPORT
At this time, the City Manager may comment on agenda and non-agenda items; and report on items of interest to the City Council and community.

July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 5 questions posed by the public, make a brief announcement, or make a brief report on his or her own activities. In addition, the City Council may refer to staff or other resources for factual information, request staff to report back at a subsequent meeting or direct staff to place a matter of business on a future agenda. No action may be taken on non-agenda matters unless authorized by law (Government Code Section 54954.2).

Council Member Cirbo:

Council Member Pequeño:

Council Member Yu:

Mayor Pro Tem Voigts:

Mayor Tettemer:

July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 6

CITY COUNCIL COMMENTS
At this time, City Council Members may comment on agenda or non-agenda matters. No discussion may take place on any item not appearing on the posted agenda. Council Members may ask a question for clarification, respond to statements made or

ADJOURNMENT
In compliance with the Americans With Disabilities Act, if you need special assistance to participate in this Meeting, including auxiliary aids or services, you should contact the Office of the City Clerk at (949) 461-3400.

Notification 48 hours prior to the Meeting will enable the City to make reasonable arrangements to assure accessibility to this meeting. The City Council agenda and agenda back-up materials can be obtained from the Office of the City Clerk on the Friday prior to the City Council meeting. Copies of all Agendas, Staff Reports and Supporting Materials can also be found on the City’s website – https://www.lakeforestca.gov/129/Agendas.

Agenda and agenda packets, if requested, will be made available in an appropriate alternative format to persons with a disability as required by the Americans With Disabilities Act. Copies of the agenda are provided at no cost and agenda back-up materials are available at the per page copy cost.

The City of Lake Forest mailing address is City Council Chambers, 100 Civic Center Drive, Lake Forest, California.

Phone: (949) 461-3400. FAX (949) 461-3511
CERTIFICATION: I, Lisa Berglund, City Clerk of the City of Lake Forest, California, hereby certify that the foregoing agenda was posted for public review at City Hall on June 27, 2024.

Lisa Berglund
City Clerk
July 2, 2024 LAKE FOREST CITY COUNCIL AGENDA Page 7

CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/2/2024
DEPARTMENT: City Clerk
SUBJECT:

MOTION TO WAIVE READING OF RESOLUTIONS AND ORDINANCES
RECOMMENDED ACTION(S):

Said Ordinances and Resolutions which appear on the public agenda shall be determined to have been read by title and further reading waived.

EXECUTIVE SUMMARY:

California Government Code 36934 allows titles of ordinances and resolutions to be waived.

FISCAL IMPACT:

There is minimal fiscal impact associated with the recommended action.

ATTACHMENTS:

None.

Submitted By: Lisa Berglund, MPA, City Clerk
Approved By: Debra Rose, City Manager
14 Item: 1
8 MINUTES OF A REGULAR MEETING

OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST

The regular meeting of the City Council of the City of Lake Forest held Tuesday, June 18, 2024, at the Lake Forest City Council Chambers, 100 Civic Center Drive, Lake Forest, California, was called to order at 5:30 p.m. with all members present.

ROLL CALL:

Council Members:

Doug Cirbo
Robert Pequeño
Benjamin Yu
Mayor Pro Tem: Scott Voigts
Mayor: Mark Tettemer

City Manager: Debra Rose
City Attorney: Matthew E. Richardson
City Clerk: Lisa Berglund

CLOSED SESSION

1. CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION Significant exposure to litigation pursuant to Government Code section 54956.9(d)(2). Number of potential cases: 1

ACTION: Closed session was conducted.

RECESS: City Council recessed to Closed Session for the purpose of conducting regular City business.

At 6:30 p.m. Mayor Tettemer reconvened Open Session with all members present.

CLOSED SESSION REPORT: City Attorney Richardson had no action to report.

INVOCATION: The Invocation was provided by Chaplain Serena Cummins of Orange County Sheriff’s Department.

PLEDGE OF ALLEGIANCE: The Pledge of Allegiance to the Flag of our Country was led by Council Member Yu.

CLOSED SESSION REPORT: City Attorney Richardson had no action to report.

PRESENTATIONS: (Item Nos. 2–4 )
MOTION: It was moved by Mayor Pro Tem Voigts, seconded by Council Member Yu, to approve Presentation Item Nos. 2 – 4. The motion was carried by a vote of 5/0.

Item: 2
9 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 2 of 9

2. RECOGNITION OF COMMUNITY HERO VANESSA BURDICK
City Manager Rose introduced this item and invited City Clerk Berglund to provide a presentation. No public comment was offered.

ACTION: The certificate of recognition was presented.

3. MULTICULTURAL FESTIVAL SUMMARY
City Manager Rose introduced this item and invited Recreation Manager Laura Hunter to give a presentation. Randy Johnson offered public comment and expressed his concerns with the performances that were included as part of the event.

ACTION: The summary was received and filed.

4. TASTE OF LAKE FOREST RETURNS
City Manager Rose introduced this item and invited Management Assistant Hope Hairrell to provide a presentation. No public comment was offered.

ACTION: The presentation on the 2024 Taste of Lake Forest received and filed.

PUBLIC COMMENTS:

Randy Johnson expressed his concerns with the mobile food vendors that set up food vending stations after hours.

City Manager Rose stated that a new ordinance will be brought to the City Council for consideration. The ordinance will strengthen the City’s ability to increase enforcement efforts.

Bob Holtzclaw expressed his thanks to Captain Pultz for assisting with people pursuing work as day laborers at the Home Depot. He reported a problem with litter, graffiti, homelessness and syringes found near the Ralphs shopping center off El Toro Road.

CONSENT CALENDAR: (Item Nos. 5–20)
Council Member Yu pulled Item No. 8, 10 and 18 and Council Member Cirbo pulled Item No. 17 for discussion.

MOTION: It was moved by Mayor Pro Tem Voigts, seconded by Council Member Yu, to approve Consent Calendar Item Nos. 5 – 7, 9, 11-16 and 19. The motion was carried by a vote of 5/0.

5. MOTION TO WAIVE READING OF RESOLUTIONS AND ORDINANCES ACTION: Said Ordinances and Resolutions which appeared on the public Item: 2
10 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 3 of 9 agenda were determined to have been read by title and further reading was waived.

6. MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL HELD ON JUNE 4, 2024
ACTION: The minutes were approved as submitted.

7. CERTIFICATION OF WARRANT REGISTER
ACTION: The warrant register was approved in the amount of $6,600,734.72.

9. APPROVE AN AGREEMENT WITH ALL CITY MANAGEMENT SERVICES, INC. FOR CROSSING GUARD SERVICES
ACTION: The Professional Consultant Services Agreement with All City Management Services, Inc. to provide Crossing Guard Services was approved.

The Mayor was authorized to sign, and the City Clerk to attest the agreement with All City Management Services, Inc., substantially in the form that was attached.

11. CONSIDERATION OF CONTRACTUAL SERVICES AGREEMENTS WITH THE

LAKE FOREST CHAMBER OF COMMERCE
ACTION: The contractual services agreement between the City of Lake Forest and Lake Forest Chamber of Commerce for Business Development and Attraction services in the amount of $42,000 for Fiscal Year 2024-25 was approved. The Mayor was authorized to sign, and the City Clerk to attest, the Contractual Services Agreement between the City and the Lake Forest Chamber of Commerce.

12. FIRST AMENDMENT TO THE AGREEMENT WITH ECS IMAGING, LLC FOR

ELECTRONIC DOCUMENT MANGEMENT SOFTWARE AND SERVICES
ACTION: The First Amendment to the Professional Consultant Services Agreement with ECS Imaging, LLC for Electronic Document Management Software and Services was approved. The Mayor was authorized to sign, and the City Clerk to attest, the First Amendment to the Agreement with ECS Imaging, LLC, substantially in the form that was attached.

13. FIRST AMENDMENT TO THE AGREEMENT WITH ABTECH TECHNOLOGIES

FOR INFORMATION TECHNOLOGY SUPPORT SERVICES
ACTION: The First Amendment to the Professional Consultant Services Agreement for Information Technology Support Services with Abtech Technologies was approved. The Mayor was authorized to sign, and the City Item: 2
11 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 4 of 9 Clerk to attest, the First Amendment to the Agreement with Abtech Technologies substantially in the form that was attached.

14. FIFTH AMENDMENT TO THE AGREEMENT WITH ABTECH TECHNOLOGIES

FOR CLOUD HOSTED DISASTER RECOVERY SERVICES
ACTION: The Fifth Amendment to the Agreement for Cloud Hosted Disaster Recovery Services with Abtech Technologies, Inc. was approved. The Mayor was authorized to sign and the City Clerk to attest the Fifth Amendment to the Agreement with Abtech Technologies, Inc., substantially in the form that was attached.

15. AMENDMENT OF THE PERSONNEL RULES AND REGULATIONS
ACTION: A Resolution entitled: RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF LAKE FOREST, CALIFORNIA ADOPTING AN AMENDMENT OF THE PERSONNEL RULES AND REGULATIONS was adopted.

16. ADOPTION OF LIST OF PROJECTS FUNDED BY SENATE BILL 1: THE

ROAD REPAIR AND ACCOUNTABILITY ACT
ACTION: Senate Bill 1: The Road Repair and Accountability Act Project List forms for Fiscal Year 2024-25 was approved. A Resolution entitled: A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST,

CALIFORNIA, CONCERNING THE LIST OF PROJECTS FOR FISCAL YEAR 2024/25 FUNDED BY SB1: THE ROAD REPAIR AND ACCOUNTABILITY ACT was adopted. The Director of Public Works was authorized to forward the Fiscal Year 2024-25 project list to the California Transportation Commission, as required under Road Repair and Accountability Act of 2017.

19. ANNUAL RENEWED MEASURE M ("M2") ELIGIBILITY SUBMITTAL TO THE

ORANGE COUNTY TRANSPORTATION AUTHORITY
ACTION: The Renewed Measure M ("M2") Seven-Year Capital Improvement Program for Fiscal Years 2024-25 through 2030-2031 was approved. The Director of Public Works was authorized to forward all eligibility requirements including the approved Renewed Measure M Seven-Year Capital Improvement Program to the Orange County Transportation Authority.

20. ACCEPTANCE OF LENNAR HOMES IMPROVEMENTS AND RELEASE OF BONDS FOR TRACT 18162
ACTION: The tract improvements and monumentation constructed by Lennar Homes of California, Inc., A California Corporation, for Tract 18162 was accepted as complete. The City Clerk was authorized to release the Subdivision Faithful Performance and Subdivision Labor and Materials Item: 2
12 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 5 of 9 Bonds, both in the amount of $1,197,021, and the Subdivision Improvement Monumentation Bond in the amount of $63,000. The City Clerk was authorized to release the Subdivision Improvement Warranty Bond in the amount of $119,702.10 one year after acceptance of the public improvements for Tract 18162 with the concurrence of the Director of Public Works/City Engineer.

ITEMS PULLED FOR DISCUSSION: (Item Nos. 8, 10 17, and 18)

8. CONSIDERATION OF RESOLUTIONS PERTAINING TO THE GENERAL MUNICIPAL ELECTION TO BE HELD NOVEMBER 5, 2024
Council Member Yu inquired about the procedure of canceling the election should the incumbent Council Members run unopposed. No public comment was offered.

MOTION: It was moved by Mayor Pro Tem Voigts and seconded by Council Member Yu to adopt the following resolutions: The City Council adopted the following resolutions are presented by staff: A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, CALLING FOR

THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 5, 2024, FOR THE ELECTION OF CERTAIN

OFFICERS AS REQUIRED BY THE PROVISIONS OF THE LAWS OF THE STATE OF CALIFORNIA RELATING TO GENERAL LAW CITIES; and

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST,

CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF ORANGE TO CONSOLIDATE A GENERAL MUNICIPAL
ELECTION TO BE HELD ON TUESDAY, NOVEMBER 5, 2024, WITH THE

PRESIDENTIAL GENERAL ELECTION TO BE HELD ON THE DATE
PURSUANT TO § 10403 OF THE CALIFORNIA ELECTIONS CODE, and

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST,

CALIFORNIA, ADOPTING REGULATIONS FOR CANDIDATES FOR

ELECTIVE OFFICE PERTAINING TO CANDIDATE STATEMENTS

SUBMITTED TO THE VOTERS AT AN ELECTION TO BE HELD ON
TUESDAY, NOVEMBER 5, 2024. The motion was carried by a vote of 5/0.

10. AWARD OF PROFESSIONAL CONSULTANT SERVICES AGREEMENT

WITH THE PET ADOPTION CENTER OF ORANGE COUNTY
Council Member Yu inquired about increasing the amount of the contract in future years to reflect the consumer price index. No public comment was offered.

Item: 2
13 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 6 of 9 MOTION: It was moved by Council Member Yu and seconded by Mayor Pro Tem Voigts to approve the Professional Consultant Services Agreement with the Pet Adoption Center of Orange County. The Mayor was authorized to sign and City Clerk to attest to the agreement with the Pet Adoption Center of Orange County, substantially in the form that was attached. Furthermore, the motion included direction that staff return the City Council next year with the contract and an option to increase the amount of the contract based off the consumer price index. The motion passed 5/0.

17. AWARD A PROFESSIONAL SERVICES AGREEMENT FOR THE DESIGN OF

THE PROTECTED-PERMISSIVE LEFT TURN PHASING PROJECT - PHASE 2 (24T02)
Council Member Cirbo inquired about the cost benefit of investing in the permissive left turns. No public comment was offered.

MOTION: It was moved by Mayor Tettemer and seconded by Mayor Pro Tem Voigts to return on July 16, 2024, with additional information on the cost benefit analysis of permissive left hand turn lanes. The motion passed 5/0.

18. COOPERATIVE AGREEMENT WITH THE CITY OF IRVINE FOR THE IRVINE

BOULEVARD/TRABUCO ROAD TRAFFIC SIGNAL SYNCHRONIZATION

PROJECT
Council Member Yu inquired about the working partnership between the City of Lake Forest and the City of Irvine. No public comment was offered.

MOTION: It was moved by Council Member Yu and seconded by Mayor Pro Tem Voigts to approve the Cooperative Agreement for the Irvine Boulevard / Trabuco Road Traffic Signal Synchronization Project between the City of Irvine and the City of Lake Forest for implementation of signal timing improvements within the City under the OC-Go Regional Traffic Signal Synchronization Program was approved. The City Manager was authorized to sign, and the City Clerk to attest, the cooperative agreement substantially in the form attached, in accordance with the City of Irvine's contract management system. The motion passed 5/0.

PUBLIC HEARING(S): (Item No. 21)

21. PUBLIC HEARING TO UPDATE FINES FOR PARKING VIOLATIONS Mayor Tettemer opened the public hearing. City Manager Rose introduced the item and invited Sharlyn de la Paz to provide a presentation. Council questions were asked and answered. No public comment was offered. Mayor Tettemer closed the public hearing.

Item: 2
14 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 7 of 9 MOTION: It was moved by Mayor Pro Tem Voigts and seconded by Council Member Yu to introduce for the first reading of an Ordinance entitled: AN

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, AMENDING CHAPTER 12.16 OF TITLE 12 OF THE LAKE

FOREST MUNICIPAL CODE, RELATING TO THE ENACTMENT OF A
SEPARATE SCHEDULE OF FINES FOR PARKING VIOLATIONS. The motion passed 5/0.

DISCUSSION/ACTION ITEMS: (Item Nos. 22-25)

22. SIXTH AMENDMENT TO CITY MANAGER EMPLOYMENT AGREEMENT City Manager Rose deferred to City Attorney Richardson to give a verbal report.

Randy Johnson offered public comment and expressed his concerns with the City Manager’s compensation.

MOTION: It was moved by Council Member Yu and seconded by Council Member Pequeno to approve the Sixth Amendment to City Manager Employment Agreement and authorize the Mayor to execute and the City Clerk to attest the document. The motion passed 5/0.

23. CLASSIFICATION PLAN AND SALARY SCHEDULE FOR FISCAL YEAR 2024- 2025
City Manager Rose introduced the item and deferred to Assistant City Manager Keith Neves to give a verbal report and presentation.

MOTION: It was moved to Council Member Yu and seconded by Council Member Cirbo to adopt a Resolution entitled: A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, ADOPTING A REVISED CLASSIFICATION PLAN AND COMPENSATION SCHEDULE. The motion passed 5/0.

24. OPTIONS FOR EXPANSION OF HOLIDAY LIGHTING DISPLAY ALONG EL

TORO ROAD CORRIDOR
City Manager Rose introduced the item and deferred to Recreation Manager Vicky Blethen to give a verbal report and presentation.

MOTION: It was moved by Mayor Tettemer and seconded by Council Member Yu to receive and file the presentation by staff. Expanded holiday Option #2 was approved with added direction from the City Council to include holiday lighting options along Portola using the $50,000 budgeted for holiday lighting.

Staff was directed to return at a subsequent City Council meeting with a contract document to effectuate the recommended action. The motion passed 5/0.

Item: 2
15 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 8 of 9

25. OXFORD PREPARATORY ACADEMY - CROSSING GUARD AND SCHOOL

TRAFFIC CONTROL ENHANCEMENTS REVIEW
City Manager Rose introduced the item and deferred to City Traffic Engineer Tran Tran to give a verbal report and presentation. Council Member Pequeno requested wayfinding signage to assist with traffic control around school pick-up and drop off times. Staff agreed to investigate traffic calming measures around drop off and pick-up times.

MOTION: It was moved by Mayor Pro Tem Voigts and seconded by Council Member Pequeño to approve traffic control measures with the Crossing Guard and School Traffic Control Enhancements Analysis. A Resolution entitled: A

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST,

CALIFORNIA, RECOMMENDING THE ADDITION OF A CROSSING GUARD

AT THE INTERSECTION OF BLACKFOOT DRIVE AND LOUMONT DRIVE, AS

WELL AS OTHER TRAFFIC CONTROL ENHANCEMENTS AT NEARBY
INTERSECTIONS was adopted. Council Member Pequeño made a friendly amendment to add signage to alleviate the traffic during pick up and drop off.

The friendly amendment was accepted by the maker of the motion.

Traffic Engineer Tran Tran offered to look at the intersections of Muirlands and Entrados and Muirlands and Tulip and return the City Council with a recommendation for traffic flow. Council Member Pequeño withdrew his friendly amendment and seconded the motion. The motion passed 5/0.

CITY MANAGER'S REPORT:

City Manager Rose announced the Taste of Lake Forest event is Friday, June 21, 2024, at Heritage Hill Park and encouraged everyone to attend.

CITY COUNCIL COMMENTS:

Council Member Cirbo attended the Cal Cities dinner, the City’s Multi Cultural Festival, Pedal Palooza held at Oakly, the Lake Forest Montessori school graduation and Bliss Animal Hospital Ribbon Cutting event.

Council Member Pequeño attended the City’s Multi Cultural Festival and Pedal Palooza held at Oakly. He complimented the staff on all their hard work. Council Member Pequeño received consensus to bring a resolution before the City Council supporting the repeal of Proposition 47
Council Member Yu attended the Cal Cities dinner, the City’s Multi Cultural Festival, and Bliss Animal Hospital Ribbon Cutting event. He complimented staff on all their hard work.

Mayor Pro Tem Voigts attended Bliss Animal Hospital Ribbon Cutting event. He wished everyone a happy summer and looks forward to the Taste of Lake Forest.

Item: 2
16 June 18, 2024 LAKE FOREST CITY COUNCIL MEETING MINUTES Page 9 of 9 Mayor Tettemer attended the Cal Cities dinner, the City’s Multi Cultural Festival, Pedal Palooza held at Oakly, and Bliss Animal Hospital Ribbon Cutting event. Mayor Tettemer received consensus to bring an item before the City Council on July 2, 2024, to consider scheduling a performance from the Pacific Symphony on August 17, 2024.

ADJOURNMENT: The City Council meeting adjourned at 8:20 p.m. in memory of El Toro Mobile Home Estates resident, Norma Westfall.

Respectfully submitted:

APPROVED:

LISA BERGLUND MARK TETTEMER

CITY CLERK MAYOR
Item: 2
17 CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/2/2024
DEPARTMENT: City Clerk
SUBJECT:

PROCLAMATION SUPPORTING WILDFIRE AWARENESS AND PREVENTION SEASON
RECOMMENDED ACTION(S):

Approve a proclamation supporting designating mid-summer through early Autumn as Wildfire Awareness and Prevention Season.

EXECUTIVE SUMMARY:

Annually, the Orange County Fire Authority (“OCFA”) designates mid-summer through early autumn as “Wildfire Awareness and Prevention Season.” Persistent drought, warmer temperatures, and more severe winds have compounded threatening and devastating wildfire realities in California. OCFA’s goal is to help prevent wildfires and mitigate the threat they pose to Orange County by working collaboratively with our communities to raise awareness through public education, emergency planning tools, and pre-emptive wildfire prevention strategies. Throughout this “Wildfire Awareness and Prevention Season,” the OCFA will be widely sharing such information, empowering its communities to play an integral role in preventing wildfires.
________________________________________________________________ FISCAL IMPACT:

There is no fiscal impact associated with the recommended action.

ATTACHMENTS:

Proclamation Supporting Wildfire Awareness and Prevention Season Initiated By: Lisa Berglund, City Clerk
Submitted By: Lisa Berglund, City Clerk
Approved By: Debra Rose, City Manager
Item: 3
18 5
3 7
5 8
Attachment
Item: 3
19 5
3 7
5 8

CITY OF LAKE FOREST PROCLAMATION

SUPPORTING WILDFIRE AWARENESS AND

PREVENTION SEASON AS
MID-SUMMER – EARLY AUTUMN 2024
WHEREAS, in 2020, over four million acres were burned across the state, setting a new record.

Since then, the State of California saw a substantial decrease in both the number of wildfires and the total acreage burned, compared to the five-year average. The total acreage burned was remarkably lower, with approximately 325,000 acres affected, significantly less than the 5-year average of over 2,300,000 acres.

WHEREAS, climate change has created a new wildfire reality in California. Persistent drought, warmer temperatures and more severe winds have created conditions that will lead to more frequent and catastrophic fires. Additionally, the cost of suppressing wildfires and the subsequent recovery efforts can be substantial. To meet this challenge, California must adopt an all-of-the-above approach to protecting public safety and maintaining the health of our forests; and WHEREAS, extreme fires are a growing threat to public health and safety, to homes, to air quality and climate goals. More than 25% of the state’s population lives in high fire-risk areas. Sudden and intense wildfires may swiftly emerge, traversing vast distances and penetrating urban zones far from their origin, thereby detrimentally affecting public health and diminishing overall quality of life.

WHEREAS, every citizen has a key role in preventing destructive wildfires from occurring. Public education and up-to-date regional emergency planning will be key to making our communities more resilient to the impacts of wildfire and other extreme weather events. Orange County residents can learn about Ready, Set, Go! to prepare for wildfire season and help prevent loss of life and property at www.OCFA.org/RSG; and
NOW, THEREFORE, the City Council of the City of Lake Forest, California, hereby proclaims the height of wildfire season beginning in mid-summer and running through early autumn as “Wildfire Awareness and Prevention Season” and encourages everyone to do their part to raise public awareness, take steps to protect our homes and businesses, and to prevent sparking a wildfire. One less spark means one less wildfire.
_____________________________

MARK TETTEMER
Mayor
__________________________

SCOTT VOIGTS
Mayor Pro Tem
__________________________
ROBERT PEQUEÑO
Council Member
__________________________

DOUG CIRBO
Council Member
__________________________

BENJAMIN YU
Council Member
Item: 3
20 CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/2/2024
DEPARTMENT: Management Services
SUBJECT:

SECOND READING AND ADOPTION OF ORDINANCE AMENDING TITLE 12

OF THE LAKE FOREST MUNICIPAL CODE RELATING TO THE ENACTMENT

OF A SEPARATE SCHEDULE OF FINES FOR PARKING VIOLATIONS
RECOMMENDED ACTION(S):

Conduct second reading of and adopt an Ordinance entitled: AN ORDINANCE

OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, AMENDING CHAPTER 12.16 OF TITLE 12 OF THE LAKE FOREST

MUNICIPAL CODE, RELATING TO THE ENACTMENT OF A SEPARATE SCHEDULE OF FINES FOR PARKING VIOLATIONS.

EXECUTIVE SUMMARY:

This item updates specific sections to the Lake Forest Municipal Code (“LFMC”) schedule of fines for the parking-related offenses by establishing a progressive fine system. Under the progressive fine system, the initial violation is $50. A second violation issued within the same calendar year would be $65 and a third violation would be $85. A year from the initial date the first violation was issued, the violation cycle resets and goes back to the original fine of $50. First reading of the Ordinance was conducted on June 18, 2024. To effectuate these changes to the LFMC, staff recommends the City Council conduct a second reading and adopt the Ordinance.

FISCAL IMPACT:

There is minimal fiscal impact associated with the recommended action.

ATTACHMENTS:

Ordinance Amending LFMC Chapter 12.16
Initiated By: Thy Merritt, Assistant City Clerk
Submitted By: Lisa Berglund, City Clerk
Approved By: Debra Rose, City Manager
Item: 4
21 ATTACHMENT
Item: 4
22 55136.00000\42320295.1

5 3
8 6
1 ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

LAKE FOREST, CALIFORNIA, AMENDING CHAPTER

12.16 OF TITLE 12 OF THE LAKE FOREST MUNICIPAL

CODE, RELATING TO THE ENACTMENT OF A SEPARATE

SCHEDULE OF FINES FOR PARKING VIOLATIONS

WHEREAS, the City of Lake Forest (“City”) maintains a Master Fee Schedule (“fee schedule”) that identifies charges and fees for licenses, permits, and various services provided by the City (collectively, “fees”); and

WHEREAS, the City recently concluded its User and Regulatory Fee Study, which reviews the prevailing practices and develops an updated fee schedule; and

WHEREAS, among the proposed recommendations to the fee schedule include removing from the fee schedule the various fines and penalties (collectively, “fines”) for violations of applicable State or local law, including violation of a provision of any ordinance or the City’s Municipal Code associated with parking regulations; and

WHEREAS, the schedule of fines for parking violations will be maintained and reviewed separately from the fee schedule going forward, in order to maintain clarity between fines and fees; and

WHEREAS, California Vehicle Code Section 40200 et seq. authorizes cities to impose and collect civil fines and penalties for violations of any regulation pertaining to the stopping, standing, or parking of a vehicle, and related charges, as specified in the California Vehicle Code, any federal statute or regulation, or any local ordinance; and

WHEREAS, California Vehicle Code Section 40203.5 specifically requires cities to establish a schedule of penalties for parking violations and related charges.

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

Section 1. The recitals above are true and correct and are incorporated as a basis for the findings.

Section 2. Section 12.16.010 of Title 12 of the Lake Forest Municipal Code is hereby amended, with additions in underline, to read as follows:

Item: 4
23 55136.00000\42320295.1

5 3
8 6
1 “12.16.010 Adoption of regulations.

Except as hereinafter provided, regulations and penalties pertaining to the stopping, standing or parking of vehicles shall be established by ordinance or resolution of the City Council.”

Section 3. The City Council finds that in accordance with the California Environmental Quality Act ("CEQA") and the CEQA Guidelines, the adoption of this Resolution is exempt from CEQA pursuant to Section 15061(b)(3) and Section 15273(a)(1) of Title 14 of the California Code of Regulations because CEQA applies only to projects which have the potential for causing a significant effect on the environment.

Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

Section 4. The schedule of fines attached to this Resolution as Exhibit "A", which is incorporated herein by reference, is hereby approved and adopted. Pursuant to Lake Forest Municipal Code Section 3.03.030, a supermajority, or four-fifths of the City Council have approved the adoption, establishment, or increase of fines and charges provided in Exhibit "A". Upon adoption of this Resolution, these fines and charges shall immediately take effect and remain in effect until amended by the City Council.

Section 5. The documents and materials associated with this Resolution that constitute the record of proceedings on which these findings are based are located at Lake Forest City Hall, 100 Civic Center Drive, Lake Forest, California 92630. The City Clerk is the custodian of the record of proceedings.

Section 6. The City Clerk shall attest as to the adoption and execution of this Resolution and cause the same to be maintained in the permanent records of the City.

PASSED, APPROVED AND ADOPTED this ____ day of June, 2024.

MARK TETTEMER
MAYOR

ATTEST:

LISA BERGLUND, CMC
Item: 4
24 55136.00000\42320295.1

5 3
8 6
1 CITY CLERK

APPROVED AS TO FORM:

MATTHEW E. RICHARDSON

CITY ATTORNEY
Item: 4
25 55136.00000\42320295.1

5 3
8 6
1 STATE OF CALIFORNIA )

COUNTY OF ORANGE ) SS

CITY OF LAKE FOREST )

I, Lisa Berglund, City Clerk of the City of Lake Forest, California, do hereby certify that the foregoing Resolution No. __ was duly passed and adopted at a regular meeting of the Lake Forest City Council on the ____ day of ______, 2024 by the following vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS: ABSENT:

COUNCIL MEMBERS: ABSTAIN:

COUNCIL MEMBERS:

__________________________

LISA BERGLUND, CMC

CITY CLERK
Item: 4
26 EXHIBIT A

Parking Penalty Bail Schedule

12.16.040(B) PARKED FOR OVER 72-HOURS $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.040(C) RV IN BUSINESS & INDUSTRIAL ZONE $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.040(D) NO PARKING / NO STOPPING $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.040(E) INOPERATIVE VEHICLE $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.040(F) REPAIRING VEHICLE ON ROADWAY $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.040(G) DETACHED TRAILER $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.040(I) STREET SWEEPING $50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.080 PERMIT PARKING PROGRAM

ENFORCEMENT
$50.00 $65.00 $85.00 +22 days $35.00 $45.00

12.16.070(A) OVERSIZED VEHICLE $50.00 $65.00 $85.00 +22 days $35.00 $45.00 22500(a) WITHIN AN INTERSECTION $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500(b) WITHIN A CROSSWALK $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500(e)(1) BLOCKING DRIVEWAY ACCESS $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500(f) BLOCKING SIDEWALK ACCESS $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500(h) DOUBLE PARKED $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500(k) PARKED ON BRIDGE $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500(L) BLOCKING WHEELCHAIR ACCESS RAMP $300.00 $300.00 $300.00 +22 days $35.00 $45.00 22500(m) PARKED IN PUBLIC TRANSIT BUS STOP $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22500.1 MARKED FIRE LANE $50.00 $50.00 $50.00 +22 days $35.00 $45.00 Item: 4
27 22502(a) PKG-18" FROM CURB/ WRONG WAY $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22507.8(a) DISABLED - NO VISIBLE PLACARD $300.00 $300.00 $300.00 +22 days $35.00 $45.00 22507.8(b) DISABLED - BLOCKING ACCESS $300.00 $300.00 $300.00 +22 days $35.00 $45.00 55136.00000\42320295.1

Code Violation Description First
Amount
Second
Amount
Third &
Subsequent
Amount
Reminder
Notice Mailed
Penalty Amount
Due if Payment is
More than 15
Days After
Reminder Notice
Penalty Amount
Due if Payment
is More than 30
Days After
Reminder Notice
22507.8(c)(1) DISABLED - BOUNDARY LINES $300.00 $300.00 $300.00 +22 days $35.00 $45.00 22507.8(c)(2) DISABLED - CROSSHATCHED SECTION $300.00 $300.00 $300.00 +22 days $35.00 $45.00 22514 FIRE HYDRANT - WITHIN 15 FEET $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22515(a) UNATTENDED VEHICLE LEFT RUNNING $50.00 $50.00 $50.00 +22 days $35.00 $45.00 22515(b) UNATTENDED VEHICLE WITHOUT
BLOCKS
$50.00 $50.00 $50.00 +22 days $35.00 $45.00
22523(a) ABANDONED VEHICLE $125.00 $125.00 $125.00 +22 days $35.00 $45.00 5200(a) NO LICENSE PLATE $50.00 $50.00 $50.00 +22 days $35.00 $45.00 5200(b) NO LICENSE PLATE - 1 ISSUED $50.00 $50.00 $50.00 +22 days $35.00 $45.00 5201(a) LICENSE PLATE IMPROPERLTY

MOUNTED/SECURED
$50.00 $50.00 $50.00 +22 days $35.00 $45.00
5201(c) LICENSE PLATE COVERED $50.00 $50.00 $50.00 +22 days $35.00 $45.00 5202(a) LICENSE PLATES NO LONGER VALID $50.00 $50.00 $50.00 +22 days $35.00 $45.00 5204(a) MISSING LICENSE TAB $50.00 $50.00 $50.00 +22 days $35.00 $45.00 28071 MISSING BUMPER $50.00 $50.00 $50.00 +22 days $35.00 $45.00 21113A PARKED ON PUBLIC GROUNDS $50.00 $50.00 $50.00 +22 days $35.00 $45.00

Item: 4
28 55136.00000\42320295.1

Item: 4
29 CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/2/2024
DEPARTMENT: City Manager
SUBJECT:

AWARD OF PROFESSIONAL SERVICES AGREEMENT FOR STATE

LOBBYING SERVICES
RECOMMENDED ACTION(S):

1. Award Professional Consultant Service Agreement to Joe A. Gonsalves & Son for State Lobbying Services.

2. Authorize the Mayor to sign and the City Clerk to attest to the Agreement with Joe A. Gonsalves & Son, substantially in the form attached.

EXECUTIVE SUMMARY:

The City’s Strategic Business Plan (“Strategic Plan”) initiative SP#19, Legislative Advocacy, entails procuring a multi-layer government affairs contract to advocate for the City’s interests at the state and federal levels. Following a Request for Proposal (“RFP”) procurement process, staff recommends awarding a new Professional Consultant Services Agreement to Joe A. Gonsalves & Son (“Gonsalves & Son”) for state lobbying services for an initial three-year term with two optional one-year extensions (“Agreement”) (Attachment 1). The total compensation under the Agreement would be $144,000 and would be charged on a monthly retainer basis. Staff performed a reference check on Gonsalves & Son, which provided favorable reviews of the firm’s services in other local agencies (Attachment 2). The proposed Agreement was prepared by the Finance department and has been approved as to form by the City Attorney. The 2023- 2025 Operating Budget includes sufficient funds for the recommended action.

BACKGROUND:

Strategic Plan initiative SP#19, Legislative Advocacy, entails procuring a multi- layer government affairs contract to advocate for the City’s interests at the state and federal levels. Per the Strategic Plan, the City initiated an RFP procurement for Lobbying Services which was released March 18, 2024. The 2023 Community Satisfaction Survey indicates that issues such as housing, homelessness, and infrastructure remain top concerns for Lake Forest residents. Each of these issues have connections to State and Federal-level policymaking. The City seeks Item: 5
30 to address these issues in part through the employment of lobbying services professionals that would be able to advocate on behalf of the City when funding opportunities are available, when regulations are considered, and when future policies are developed and have connections to Federal and State policymaking.

Additionally, the City seeks lobbying services to have a more active presence in advocating for funding through relationships with legislators, regulators, and State and Federal agencies. Due to the dynamic nature of lawmaking, legislative advocates would serve as the City’s eyes and ears for upcoming and future developments and would help the City develop an actionable plan to seek support for key issues at the Federal and State levels.

DISCUSSION:

Staff initiated a competitive RFP procurement process to solicit proposals for Lobbying Services for a three-year term and two optional one-year extensions.

The RFP included a scope of work for both federal and state lobbying services and allowed proposers to submit proposals for both state and federal or only state or only federal lobbying services. The solicitation was posted on OpenGov, the City’s electronic procurement management system. The RFP received 277 public views and 10 firms downloaded all the files associated with the procurement and elected to follow the project through the OpenGov system.

Three proposals were submitted for State Lobbying Services from the following firms: Joe A. Gonsalves & Son, Rojas Public Affairs in a joint proposal with McKeon Group, and Townsend Public Affairs.

Pursuant to the City’s Purchasing and Contracting Guidelines (“Purchasing Guidelines”), a selection committee comprised of the Deputy City Manager, the Assistant to the City Manager, and the Management Assistant in Economic Development reviewed the proposals. All three firms met the minimum scoring criteria on the technical review and participated in a qualifications interview.

Tables 1 and 2 below reflect the scores at the completion of the selection process.

Table 1: Technical Review Scoring
Vendor Evaluator 1 Evaluator 2 Evaluator 3
Total
Average
Score (Max
Score 100)
Joe A. Gonsalves & Son 60 83 74 72.3
Rojas Public Affairs 44 62 60 55.3
Townsend Public Affairs 87 94 90 90.3

Table 2: Interview and Costing Review
Item: 5
31 Vendor Evaluator 1 Evaluator 2 Evaluator 3
Total
Average
Score (Max
Score 200)
Joe A. Gonsalves & Son 149 147 131 142.3
Rojas Public Affairs 126 102 90 106
Townsend Public Affairs 146 111 126 127.7

Following the Technical Review, staff invited all three firms to participate in an interview. Rojas Public Affairs had an average score less than 60, however, based on most of the committee scores meeting the threshold for interviews (60 points) and to ensure the most competitive process, staff invited all three firms and did not exclude any firm from the interview process.

At the conclusion of the selection process, staff reviewed the cost proposals from all three firms. Table 3 shows the revised cost proposal from each firm. The points assigned based on cost for each firm are incorporated into the scores in Table 2.

Table 3: Revised Cost Proposals
State Level Advocacy and Lobbying
Services Fees
Gonsalves &
Son
Rojas Public
Affairs
Townsend
Public Affairs
Initial Three-Year Term
Year 1 Retainer Fee (Paid Monthly) $45,000.00 $106,200.00 $120,000.00 Year 2 Retainer Fee (Paid Monthly) $48,000.00 $106,200.00 $120,000.00 Year 3 Retainer Fee (Paid Monthly) $51,000.00 $106,200.00 $120,000.00 Total Initial Three-Year Term $144,000.00 $318,600.00 $360,000.00 First Optional One-Year Extension
Year 4 Retainer Fee (Paid Monthly) $54,000.00 $108,000.00 $120,000.00 Second Optional One-Year Extension
Year 5 Retainer Fee (Paid Monthly) $54,000.00 $108,000.00 $120,000.00 Total Cost Proposal
(Including Optional Extensions) $252,000.00 $534,600.00 $600,000.00 Following the completion of the evaluation of the proposals including cost, Gonsalves & Son was ranked the top firm with a total average score of 142.3 out of a max of 200. Gonsalves & Son is a family firm that provides non-partisan legislative advocacy before the Governor, Administration, California State Legislature, and various State regulatory agencies. The firm proposed a strategic approach tailored to the unique needs of the City. With 47 years of experience and relationships with legislators, the Administration, and stakeholders, Gonsalves & Son is well equipped to embrace and protect the City’s thriving Item: 5
32 business community, beautiful parks, and engaged community and assist the City achieve its legislative advocacy goals.

Staff recommends awarding the proposed Agreement with Gonsalves & Son with a total compensation of $144,000 for an initial three-year term (Attachment 1).

Table 4 contains the breakdown of the total compensation under the proposed Agreement.

Table 4: Proposed Agreement Compensation
Compensation Item Year 1 Year 2 Year 3 Total
Total Not-to-exceed Amount $45,000 $48,000 $51,000 $144,000

Per the Purchasing Guidelines, the City Council may approve contracts that exceed $50,000 per year following a formal RFP procurement process. Should any additional compensation be required beyond the compensation included in the proposed Agreement, the City Manager may approve up to 10% of the original compensation amount. The Agreement was prepared by the Finance Department and approved by the City Attorney as to form. Staff conducted a reference check (Attachment 2) with other local agencies that have contracted with Gonsalves & Son for state lobbying services. Staff found the reference check to be positive and to support staff’s recommendation to award the proposed Agreement with Gonsalves & Son. Should the City Council approve the proposed Agreement, staff would begin to design its strategic plan for upcoming legislative advocacy priorities to address the issues facing the City and reflected in community feedback.

FISCAL IMPACT:

Sufficient funds are allocated in the Fiscal Year 2024-25 of the 2023-2025 Operating Budget for the recommended action.

ATTACHMENTS:

1. Professional Consultant Services Agreement with Gonsalves & Son

2. Reference Check for Gonsalves & Son
Initiated By: Nidia Ruelas, Assistant to the City Manager Submitted By: Debra Rose, City Manager
Approved By: Debra Rose, City Manager
Item: 5
33 ATTACHMENT 1
Item: 5
34 STATE LOBBYING SERVICES
(2024-071)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
35 City of Lake Forest
Professional Consultant Services Agreement
State Lobbying Services
I. PARTIES AND DATE. ................................ ................................ ..............

II. RECITALS. ................................ ................................ ..............................

III. TERMS................................. ................................ ................................ ..

IV. SIGNATURES. ................................ ................................ ........................

V. EXHIBIT "A" SCOPE OF SERVICES ................................ ...........................

VI. EXHIBIT "B" - SCHEDULE OF SERVICES ................................ ..................

VII. EXHIBIT "C" - COMPENSATION ................................ ..............................

VIII. EXHIBIT "D" - INSURANCE REQUIREMENTS ................................ ...........

DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
36 Title: State Lobbying Services
3 1. PARTIES AND DATE.

This Agreement is made and entered into this [***INSERT DAY***] day of [***INSERT MONTH***], [***INSERT YEAR***], by and between the City of Lake Forest, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 100 Civic Center Drive, Lake Forest, California 92630 (“City”) and Joe A. Gonsalves & Son, a California Corporation (Inc.) , with its principal place of business at 925 L Street, Suite #250, Sacramento, CA 95814 (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.” DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
37 Title: State Lobbying Services
4 2. RECITALS.

2.1. Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional State Lobbying Services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing professional State Lobbying Services to public clients, is licensed in the State of California, and is familiar with the plans of City.

2.2. Project.

City desires to engage Consultant to render such professional State Lobbying Services for the State Lobbying Services project ("Project") as set forth in this Agreement.

DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
38 Title: State Lobbying Services
5 3. TERMS.

3.1. Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional State Lobbying Services consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be from July 3, 2024 to July 2, 2027, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement annually for no more than two (2) additional one-year terms. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines.

3.2. Responsibilities of Consultant.

3.2.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, nor any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant's conformance with the Schedule, City shall respond to Consultant's submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.

DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
39 Title: State Lobbying Services
6 3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Anthony D. Gonsalves, Jason A. Gonsalves, and Paul A. Gonsalves.

3.2.5 City's Representative. The City hereby designates Debra Rose, City Manager, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Work or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Work or change the Consultant's total compensation subject to the provisions contained in Section 3.3 of this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.2.6 Consultant's Representative. Consultant hereby designates Jason A. Gonsalves, or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.

3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
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7 adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed from the Project by the Consultant and shall not be re employed to perform any of the Services or to work on the Project.

3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If Consultant performs any work knowing it to be contrary to such laws, rules and regulations, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees, agents, and volunteers free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

3.2.10 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions, where applicable, shall include, but shall not be limited to: (A) adequate life protection and lifesaving equipment and procedures; (B) instructions in accident prevention for all employees and subconsultants, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.

3.2.11 Insurance. Consultant agrees to procure and maintain, at Consultant’s expense all insurance specified in Exhibit “D” attached hereto and by this reference incorporated herein. Consultant shall require all subconsultants to carry the same policies and limits of insurance that the Consultant is required to maintain, unless otherwise approved in writing by the City.

3.2.12 Water Quality Management and Compliance.

3.2.12.1 Storm Water Management. Storm, surface, nuisance, or other waters may be encountered at various times during the Services. Consultant hereby acknowledges that it has investigated the risk arising from such waters, and assumes any and all risks and liabilities arising therefrom.

3.2.12.2 Compliance with Water Quality Laws, Ordinances and Regulations. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must additionally comply with the lawful requirements of the City, and any other DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
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8 municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges.

3.2.12.3 Compliance with DAMP and LIP. In addition to compliance with the laws, ordinances and regulations listed in Section 3.2.12.2 of this Agreement, Consultant must comply with all applicable requirements of the Orange County Drainage Area Management Plan (“DAMP”), the City of Lake Forest Local Implementation Plan (“LIP”) and the applicable Water Quality Management Plan (“WQMP”). The DAMP contains requirements related to design and construction of public projects. Consultant must be familiar the DAMP, and the LIP and comply with the requirements as specified therein.

A copy of the DAMP is available on the internet at:
http://www.ocwatersheds.com/documents/damp/mapplan
A copy of the LIP is available on the internet at:
http://www.lakeforestca.gov/296/Local-Implementation-Plan-LIP

3.2.12.4 Standard of Care. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the work assigned to them without impacting water quality in violation of the laws, regulations and policies described in Sections 3.2.12.2 and 3.2.12.3 of this Agreement. Consultant further warrants that it, its employees and subcontractors have or will receive adequate training, as determined by the City, regarding these requirements as they may relate to the Services.

3.2.12.5 Liability for Non-compliance.
(A) Indemnity: Failure to comply with laws, regulations, and ordinances listed in Sections 3.2.12.2 and 3.2.12.3 of this Agreement is a violation of federal and state law. Notwithstanding any other indemnity contained in this Agreement, Consultant agrees to indemnify and hold harmless the City, its officials, officers, agents, employees and authorized volunteers from and against any and all claims, demands, losses or liabilities of any kind or nature which the City, its officials, officers, agents, employees and authorized volunteers may sustain or incur for noncompliance with the laws, regulations, and ordinances listed above, arising out of or in connection with the Services, except for liability resulting from the sole established negligence, willful misconduct or active negligence of the City, its officials, officers, agents, employees or authorized volunteers. (B) Defense: City reserves the right to defend any enforcement action or civil action brought against the City for Consultant’s failure to comply with any applicable water quality law, regulation, or policy. Consultant hereby agrees to be bound by, and to reimburse the City for the costs associated with, any settlement reached between the City and the relevant enforcement entity. (C) Damages: City may seek damages from Consultant for delay in completing the Services caused by Consultant’s failure to comply with the laws, regulations and policies described in Sections 3.2.12.2 and 3.2.12.3 of this Agreement, or any other relevant water quality law, regulation, or policy. regulation, or policy.

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9 3.3. Fees and Payments.

3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed ONE HUNDRED FORTY FOUR THOUSAND DOLLARS ($144,000.00) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.3.2 Payment of Compensation. Consultant shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Consultant. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice. City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges thereon. If the City disputes any of Consultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein.

3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement.

3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3.5 Rate Increases. In the event that this Agreement is renewed pursuant to Section 3.1.2, the rate set forth in Exhibit “C” may be adjusted each year at the time of renewal as set forth in Exhibit “C.”

3.4. Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and since the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
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10 agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.4.2 Registration. If the Services are being performed as part of an applicable “public works” or “maintenance” project, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the project and require the same of any subconsultants. This project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Contractor’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR.

3.5. Accounting Records.

3.5.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

3.6. General Provisions.

3.6.1 Termination of Agreement.

3.6.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.

3.6.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request.

3.6.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.6.1.4 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: Joe A. Gonsalves & Son
925 L Street, Suite #250
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11 Sacramento, CA 95814
ATTN: Jason A. Gonsalves
City: City of Lake Forest
100 Civic Center Drive
Lake Forest, CA 92630
ATTN: City Clerk
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.6.2 Ownership of Materials and Confidentiality.

3.6.2.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). Consultant shall require all subconsultants to agree in writing that City is granted a non exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk.

3.6.2.2 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.6.2.3 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information. Consultant shall have five (5) DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
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12 working days after receipt of the Release Notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of the Objection Notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non- appealable order by a court of competent jurisdiction requires that City release such information.

3.6.3 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.6.4 Attorney's Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reason¬able attorney's fees and all other costs of such action.

3.6.5 Indemnification.

To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorneys fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the Consultant or the City, its officials, officers, employees, agents or volunteers.

If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

3.6.6 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties.

3.6.7 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Orange County.

3.6.8 Time of Essence. Time is of the essence for each and every provision of this Agreement.

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13 3.6.9 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project.

3.6.10 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties.

3.6.11 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

3.6.12 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.6.13 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.6.14 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.6.15 No Third-Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.6.16 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.6.17 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant¬, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.6.18 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
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14 because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.6.19 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.6.20 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.6.21 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

3.7. Subcontracting.

3.7.1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

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15 4. SIGNATURES.

4.1. SIGNATURES.

CITY OF LAKE FOREST Joe A. Gonsalves & Son
By: [AUTHORIZED CITY SIGNATURE]

Mark Tettemer
Mayor
By: [VENDOR SIGNATURE 1]

Anthony D. Gonsalves
President
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Lisa Berglund
City Clerk
By: [VENDOR SIGNATURE 2]

Jason A. Gonsalves
Secretary (Corporation or LLC)
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
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16 5. EXHIBIT "A" SCOPE OF SERVICES

5.1. EXHIBIT "A" SCOPE OF SERVICES
State Advocacy and Lobbying Services
The preliminary scope of work includes a general overview of the services required for State Advocacy and Lobbying Services. This service request includes but is not limited to Advocacy, Tracking and Reporting, Strategy, and Relationship Building. The selected firm is expected to travel to Lake Forest as needed, with a minimum of one visit per year that would include a visit with a subset of the City Council.

The firm will also meet City staff in-person and/or virtually at least quarterly and more frequently as needed.

Task 1 - Initial Review of Legislative Program
At the direction of the City, initial deliverables may include but are not be limited to:
 Conduct initial review of the City's current Legislative Program (Program) and provide advise and recommendations to resources. Current Legislative Program efforts include:
o Annual adoption of Legislative Platform.
o Membership and participation in resource events, informational webinars, and conferences hosted and prepared by Cal Cities (Formerly known as the League of California Cities). o Membership and participation in resource events, informational webinars, and conferences hosted and prepared by the Association of California Cities - Orange County (ACC-OC). o Staff efforts to draft and implement City Council adopted Legislative Platform that outlines policy priorities for the next legislative session.
o Staff efforts to monitor and draft letters and resolutions based on the Legislative Platform, City Council direction, and information and guidance provided by Cal Cities and ACC-OC.  Conduct information gathering session with City Council members to identify goals for the legislative program and better inform the efforts listed under Tasks 2-5 of this Scope of Work.  Provide guidance and recommendations for Advocacy and Strategy (Tasks 2 and 4) based on the initial review of the Program and informational interviews with the City Council Task 2 - Advocacy
At the direction of the City, deliverables may include but are not be limited to:
 Represent the City and meet with legislators, their staff, and governmental agency officials to advance the City’s legislative agenda and interests.
 Advocate for City funding in the State budgets through grants and legislation and any other appropriate means.

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17  Help the City apply for and advocate to receive these grants and resources.  Identify potential funding opportunities available through state agencies or legislative appropriations the City may be eligible to apply for and receive.  Upon request of the City Manager, collaborate with City staff to develop persuasive grant proposals, including project descriptions, budgets, timelines, goals, and expected outcomes; assist in the preparation of grant applications by ensuring compliance with funder guidelines, formatting the proposals, and including all necessary attachments; provide guidance on effective grant writing techniques, ensuring proposals are clear, concise, and compelling; and monitor grant deadlines, reporting requirements, and assisting in the preparation of progress reports or evaluations as required by funding agencies.  Work closely with the City’s State representatives and City staff to draft and develop legislation on matters of importance to the City.
o Once legislation is introduced, the City’s lobbyist is expected to:
 Act as champion of the proposed legislation, including meeting with state elected officials to advance such initiative, assisting with drafting advocacy materials, gaining support from other agencies and partners, and providing collaborative strategic guidance to the City and its representatives.
 Take necessary steps to engage with state legislators, legislative staff, committee consultants, and administrative agencies when City positions are under consideration, ensuring the most favorable consideration for the City's interests and priorities.  Consult with designated City staff regarding opportunities for members of the City Council or City personnel to appear and testify before Congressional hearing committees and administrative agencies if doing so would further the City's interest.  Meet with State representatives on issues of interest or concern to the City. o Includes coordinating and facilitating meetings between these entities and members of the City Council and City staff to address funding, legislative, and regulatory issues of importance to the City.
 Draft letters, position statements, legislative language, and talking points on legislation as requested by the City.
 Engage in direct lobbying and provide testimony before policy committees in consultation with the City for the highest legislative priorities as determined by the City.  Attend committee and rule-making hearings and coordinate the preparation of testimony submissions and in-person testimony as requested by the City or when the City is seeking legislation.

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18  Participate in the preparation of itineraries and facilitate meetings between City staff, Councilmembers, and delegation staff and various agencies that serve as staff liaisons for City Manager and members of the City Council during their trips to Sacramento to conduct City business.
 Coordinate and facilitate meetings between these entities and members of the City Council and City staff to address funding, legislative, and regulatory issues of importance to the City. o Take necessary steps to engage with legislators, legislative staff, committee consultants, and administrative agencies when City positions are under consideration, ensuring the most favorable consideration for the City's interests and priorities.  Assist in the drafting and distribution of materials and correspondence to support advocacy for legislative platforms and appropriations requests.
 Assist in the development, drafting, and sponsorship of state legislation and amendments needed to further the City's goals and priorities.

Task 3 - Tracking and Reporting
For specific items requested by the City ONLY.

At the direction of the City, deliverables may include but are not be limited to:
 Track and review press releases, informational bulletins, and other important information released by the state government and state agencies.
 Monitor, identify, and prioritize actual and potential legislation, budget proposals, regulatory proposals, challenges, and opportunities that may impact or be relevant to the City.  Apprise Lake Forest of emerging issues and make recommendations regarding possible effects on City government.
 Inform the City of hearings, meetings, and any changes to the legislation of interest to the City.  Identify and monitor legislation and state regulatory processes, including pertinent administrative, legislative, and regulatory matters that may impact the City.  Track priorities and meetings of strategy with legislative partners.  Provide written briefing reports for the City Council and City Manager on key issues on an as needed basis.
 Prepare legislative reports and participate in periodic legislative briefings for the City Manager's Office, Lake Forest City Council, and departments.
 As requested by the City Manager, make occasional presentations to the City Council and City leadership team on legislative issues.

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19  Offer timely telephone and/or in-person updates to designated City staff, deliver status reports during legislative sessions, and attend meetings as required.  Complete and file on behalf of the City all lobbying and expenditure disclosure forms, reports, or any other reports required by the state government (Secretary of State, Fair Political Practices Commission, or any other State agency) and other relevant local, state, and federal jurisdictions in timely fashion.

Task 4 - Strategy
At the direction of the City, deliverables may include but are not be limited to:
 Regularly communicate with the City to assess legislative options, analyze legislation, and discuss policy objectives.
 Assist in developing Lake Forest’s state legislative agenda by providing strategic, policy, and coordination support. This may include strategic planning, program development, coordination assistance, and advice.
 Develop short-term and long-term strategies with the City pertaining to funding and other state policy and administrative issues.
o Provide state funding advocacy by assisting in the development of short and long-term funding strategies for grants and annual appropriations requests.  Act quickly on the City’s behalf to rapidly changing developments in Sacramento that may impact City policy and legislative matters.
 Pursue legislative, regulatory and/or policy directives to help address City priorities.  Provide guidance and support to the City in developing responses to legislation, including reviewing written material and providing suggestions, and distributing any documents prepared by the City to the required parties.
 Provide updates on the political landscape in Sacramento to help provide context and identify opportunities and potential issues.
 Identify and help pursue potential funding opportunities for the City’s services, projects, and programs.
 Develop a plan for off-season activities and coordinate with designated City staff.  Review and comment on proposed sponsored legislation the City prepares for submission to the state legislature when requested to do so by the City Manager and City Council.

Task 5 - Relationship Building
Deliverables shall include but not be limited to:

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53 Title: State Lobbying Services
20  Develop working relationships with key staff and representatives in the following entities:
o State: Governor’s office, State Legislature, State Water Resources Control Board, the Department of Parks and Recreation, the California Coastal Commission, the California Department of Transportation, and/or other agencies and key stakeholders.  Schedule meetings in person or virtually for City officials with the Governor and state legislators and their staffs, Cal Cities, and other state agencies and key stakeholders during visits to Sacramento, including facilitating meetings during conferences to which City officials may attend.
 Collaborate with the League of California Cities and other organizations, municipalities, companies, and firms having similar legislative objectives as the City. Where appropriate, advocate positions on legislation and work to secure language in law that will advance the City’s interests.
 Build strategic allies and coalitions, as well as analyze and identify potential threats.  Help coordinate with and reach out to groups, cities, or influential individuals with similar interests to the City of Lake Forest to create more effective partnerships.

Responsibilities of City
The City will be responsible for providing a designated City contact for assisting with communications and meetings, information regarding past work, and any other areas within the Scope of Work that needs additional support during the course of the project required to complete the work.

Vendor’s Employee Conduct
Vendor will agree to remove any employee whose conduct is improper, inappropriate, or offensive as determined by the City. A removed employee(s) is not to work on City premises without the written consent of the City. The Vendor will remove any employee from working in, or delivering to, City facilities who is convicted of a felony during his/her employment.

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54 Title: State Lobbying Services
21 6. EXHIBIT "B" - SCHEDULE OF SERVICES

6.1. EXHIBIT "B" - SCHEDULE OF SERVICES
The Consultant shall provide the services described in Exhibit “A” Scope of Services as directed by the City.

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55 Title: State Lobbying Services
22 7. EXHIBIT "C" - COMPENSATION

7.1. EXHIBIT "C" - COMPENSATION
Consultant shall be paid for services in accordance with Section 3.3 of the Agreement and as described above under Exhibit “A” Scope of Services and the not to exceed fee of ONE HUNDRED FORTY FOUR THOUSAND DOLLARS ($144,000.00). Compensation shall be paid per the following schedule and terms.

Description
Quantit
y
Unit of
Measure
Unit
Cost
Annual
Total
Initial Three-Year Term
Year 1 Monthly Retainer Fee 12 Monthly
$3,750.0
0 $45,000.00
Year 2 Monthly Retainer Fee 12 Monthly
$4,000.0
0 $48,000.00
Year 3 Monthly Retainer Fee 12 Monthly
$4,250.0
0 $51,000.00
Total Contract Amount (Years 1-
3): $144,000.00
Optional Years
(Subject to Amendments
exercising optional one-year
extensions per section 3.1.2 of
the Agreement)
Year 4 Monthly Retainer Fee 12 Monthly
$4,500.0
0 $54,000.00
Year 5 Monthly Retainer Fee 12 Monthly
$4,500.0
0 $54,000.00

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56 Title: State Lobbying Services
23 8. EXHIBIT "D" - INSURANCE REQUIREMENTS

8.1. EXHIBIT "D" - INSURANCE REQUIREMENTS

1.1.1 Time for Compliance. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section.

1.1.2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Consultant, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so. (A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 0001, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); or (3) containing any other exclusion(s) contrary to the terms or purposes of this Agreement.
(B) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 0001 covering "Any Auto" (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $1,000,000 combined limit for each occurrence.
(C) Workers’ Compensation: Workers' Compensation Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease.
(D) Professional Liability (Errors & Omissions): Waived

1.1.3 Insurance Endorsements. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:
(A) Commercial General Liability:
(1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement.

Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the terms or purposes of this Agreement. For all policies of Commercial General DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
57 Title: State Lobbying Services
24 Liability insurance, Consultant shall provide endorsements in the form of ISO CG 20 10 10 01 and 20 37 10 01 (or endorsements providing the exact same coverage) to effectuate this requirement. (2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (B) Automobile Liability:
(1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (C) Professional Liability (Errors & Omissions): Waived (D) Workers’ Compensation:
(1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the City, its officials, officers, employees, agents, and volunteers.

1.1.4 Primary and Non-Contributing Insurance. All policies of Commercial General Liability and Automobile Liability insurance shall be primary and any other insurance, deductible, or self- insurance maintained by the City, its officials, officers, employees, agents, or volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.

1.1.5 Waiver of Subrogation. All policies of Commercial General Liability and Automobile Liability insurance shall contain or be endorsed to waive subrogation against the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against the City, its officials, officers, employees, agents, and volunteers, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

1.1.6 Deductibles and Self-Insured Retentions. Any deductible or self-insured retention must be approved in writing by the City and shall protect the City, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.

1.1.7 Evidence of Insurance. The Consultant, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by the City, together with all endorsements affecting each policy. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior to the expiration of any such DocuSign Envelope ID: A78FDAB4-D3B1-47F4-850A-714B92F92F66 Item: 5
58 Title: State Lobbying Services
25 policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.

1.1.8 Failure to Maintain Coverage. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced immediately so as to avoid a lapse in the required coverage, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement effective upon notice.

1.1.9 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

1.1.10 Enforcement of Contract Provisions (non estoppel). Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

1.1.11 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Appendix are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

1.1.12 Insurance for Subconsultants. Consultant shall include all subconsultants engaged in any work for Consultant relating to this Agreement as additional insureds under the Consultant's policies, or the Consultant shall be responsible for causing subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City, its officials, officers, employees, agents, and volunteers as additional insureds to the subconsultant's policies. All policies of Commercial General Liability insurance provided by Consultant’s subconsultants performing work relating to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. Consultant shall not allow any subconsultant to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of subconsultant’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Consultant shall provide satisfactory evidence of compliance with this section upon request of the City.

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59 ATTACHMENT 2
Item: 5
60 State Lobbying Services
Reference Check
Title
Agency
Questions
Assistant City Manager
City of Irwindale, CA
Response
Management Associate
City of Torrance, CA
Response
City Manager
City of Atascadero, CA
Response
Deputy City Manager
City of Lakewood
Response#
1 What were the services
performed? State Lobbying Services State Lobbying Services State Lobbying Services State legislative advocacy Since 1999, hired on to help with legislation
related to mining, Irwindale was a mining
town, kept on for general lobbyign services
since.

How long have you contracted
with the firm for these
services?
Lakewood has contracted with the firm since
November 26, 1979.2
3 4
Since December 2009, 15 years We have been with them for 12 years.

Please rate the quality of
services on a 1-5 scale 5, Always available 5 N/A 5(1=Poor, 2=OK, 3=Good, 4=Very Good, 5=Excellent).

Were there any delays or
deviations from the firm's
strategy or workplan? If so,
how were they mitigated?
No delays or deviations from firm’s strategy or Jason and his brother Paul provide excellent There were no delays or deviations from theNo workplan. service and they are thorough and timely. city’s strategy.

Gonsalves and Sons provides weekly updates
to the City on legislation matters and tracks
certain state legislative bills that are important
to the City. Jason and Paul Gonsalves are
quite response when the City has an inquiry or
requires assistance on special projects or
legislative support.

Yes, they provide weekly updates via email
especially with topics of interest such as
housing and safety. Quick with updates and
responsive with pressing matters.

Regular communication with staff is excellent.

They are also reachable whenever we’ve
contacted them.

Was regular communication
with staff satisfactory?
Jason and his brother Paul provide excellent
service and they are thorough and timely.5
How would you rate the firms
approach and performance
when communicating with
elected officials, the City
Council, Gubernatorial and
Legislative staff, and any other
external groups or
stakeholders? Please rate
external communications on a
1-5 scale (1=Poor, 2=OK,
3=Good, 4=Very Good,
The firm’s approach and performance with
elected officials, the City Council,
Gubernatorial and Legislative staff and other
external groups or stakeholders is 55, Very professional and communicates well with the public. Provides quarterly zoom
updates with City Council.
(Excellent). The firm has extensive6 5 N/A connections with Sacramento that permeate the Capitol – from legislative aides, directors,
chiefs of staffs and to the elected officials
themselves. And their reach extends to
various state agencies and departments.
5=Excellent)
1 of 2
Item: 5
61 State Lobbying Services
Reference Check
Title
Agency
Questions
Assistant City Manager
City of Irwindale, CA
Response
Management Associate
City of Torrance, CA
Response
City Manager
City of Atascadero, CA
Response
Deputy City Manager
City of Lakewood
Response#
The City of Torrance has contracted with Joe
A. Gonsalves and Sons since December
2009, and our experience with the firm has
been exceptional. Over the years, they have
become an indispensable partner in our state
advocacy efforts. Their deep understanding of
the legislative process, coupled with their
Yes, we would consider using this firm for
future projects and services as we have doneWould you consider using this firm for future projects or
services? What has been your
return on investment?
Yes, We do see return on investment, they are
our eyes and ears and represent the City's
interests in where staff cannot be.
extensive network of relationships within the They have successfully sought legislative and for the past 45 years. ROI is difficult to state government, has significantly enhanced administrative changes for us in Sacramento. determine on a quantity level, but qualitatively7 our ability to navigate complex political
landscapes. We deeply appreciate their hard
work, integrity, and unwavering support. Joe
A. Gonsalves and Sons have consistently
exceeded our expectations, and we look
forward to continuing our productive
speaking, their work with the city over the
years has paid many dividends.
partnership with them in the future.

Lakewood has a robust legislative affairs
program, with a multi-pronged strategy that
consists of an involved council with the
Intergovernmental Relations Committee, the
development of an annual Legislative Platform
that enables the city to quickly advocate on
legislation that affects Lakewood, and access
to a strong advocacy firm such as the
Gonsalves who advocates for our legislative
priorities when an important bill gets down to
the Assembly or Senate floor and critical votes
are needed. That’s what the Gonsalves firm
has done for Lakewood – they serve as a
force multiplier on those occasions when we
need them the most. But beyond our
relationship with them as just another contract
firm, they are simply good people that treat
our elected officials and our city staff with
warmth and respect as if we all are a family.

The team at Joe A. Gonsalves and Sons is
highly responsive and proactive. They
regularly provide us with detailed updates and
strategic advice, ensuring that we are always
well-informed and prepared to take advantage
of emerging opportunities. Their expertise has
been instrumental in securing critical funding
and legislative support for various city
projects, contributing to the overall betterment
of our community. In addition to their
professional acumen, we have found the team
to be genuinely committed to our city's
success. Their dedication goes beyond
contractual obligations, as they have often
gone the extra mile to advocate for our
interests.

Please include any additional Have supported Irvindale's efforts as a lead comments or information
regarding your experience
with the firm.
agency needing representation for mining
legislations, including backfilling and mining
tax.
8 We are served very well by this firm.
2 of 2
Item: 5
62 CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/2/2024
DEPARTMENT: City Manager
SUBJECT:

PURCHASE AND SALE AGREEMENT(S) WITH SOUTH COUNTY OUTREACH REGARDING REAL PROPERTY LOCATED AT 20702 EL TORO ROAD #35

AND DECLARATION OF EXEMPT SURPLUS LAND REGARDING THE SAME PURSUANT TO GOVERNMENT CODE SECTION 54221
RECOMMENDED ACTION(S):

1. Adopt a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF LAKE FOREST APPROVING A PURCHASE AND SALE
AGREEMENT WITH SOUTH COUNTY OUTREACH REGARDING 20702
EL TORO ROAD #35 (APN 938-741-79) AND FINDING THAT THE

ACTION IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT; and

2. Approve and authorize the City Manager to sign the letter agreement in substantially similar form to the version attached, which acknowledges conformance with the terms of the Community Development Block Grant loan agreement between the City and South County Outreach; and

3. Adopt a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF LAKE FOREST PURSUANT TO GOVERNMENT CODE
SECTION 54221 DECLARING THAT CERTAIN REAL PROPERTY
LOCATED AT 20702 EL TORO ROAD #35 (APN 938-741-79) IS EXEMPT

SURPLUS LAND, AND FINDING THAT SUCH DECLARATION IS
EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT;
and

4. Adopt a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF

THE CITY OF LAKE FOREST APPROVING A PURCHASE AND SALE
AGREEMENT WITH SOUTH COUNTY OUTREACH REGARDING 20702
EL TORO ROAD #35 (APN 938-741-79) AND FINDING THAT THE

ACTION IS EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT; and

5. Authorize the City Manager or her designee to perform any additional acts necessary to complete the above transactions.

Item: 6
63 EXECUTIVE SUMMARY:

South County Outreach (“SCO”) owns a single-bedroom condominium unit located at 20702 El Toro Road #35 (“Property”). SCO acquired the Property in 2002 with the assistance of $35,000 in Community Development Block Grant (“CDBG”) funds awarded by the City. As consideration for the CDBG funds, SCO agreed to use the Property as transitional housing; the City subsequently approved a change in use to affordable housing for low- and moderate-income tenants. Pursuant to federal CDBG regulations, SCO’s use of the Property is restricted for 25 years from the date that the City awarded the CDBG funds (i.e., until May 21, 2027).

The two proposed transactions before the City Council will replace SCO’s existing obligations (above) with a new restriction requiring SCO to rent the Property to very-low income households for 30 years (i.e., until 2054). The transactions are structured as follows:

1. The City will use CDBG funds to purchase the Property from SCO for $460,000, which is the Property’s appraised fair market value. SCO will also deposit $127,329 into escrow, which represents prepayment of transaction #2’s purchase price ($1) and funds that federal CDBG regulations require be repaid to the City ($127,328). In closing the first transaction, escrow will disburse $460,000 to SCO and $127,329 to the City.

2. On the same day as transaction #1 (or as soon as possible thereafter) the City will sell the Property back to SCO for $1 and an associated regulatory agreement requiring SCO to rent the Property to very-low income households for 30 years.

Staff contacted the U.S. Department of Housing and Urban Development (“HUD”) regarding the above transactions; HUD confirmed that they comply with federal CDBG regulations. To complete the transactions, the City Council will need to approve and authorize the following: adopt a resolution approving the proposed Purchase & Sale Agreement (Attachment 1) to purchase the property; authorize the City Manager to sign the attached letter agreement in substantially similar form (Attachment 2); adopt a resolution declaring the property as exempt surplus land (Attachment 3); and adopt a resolution approving the proposed purchase and sale agreement (Attachment 4) to sell the property.

Item: 6
64 BACKGROUND:

Lake Forest Affordable Housing Supply
The City’s 2021-2029 Housing Element (“Housing Element”) stipulates the goal to conserve the existing supply of transitional/ supportive and affordable housing (Policy 2.5 under Goal 2). Market rents in Lake Forest are at a level which significantly limits the supply of housing affordable for low-income households.

Through partnerships with nonprofit service agencies such as SCO, the City has maintained the existing supply of affordable housing. To continue to maintain the supply, a 2021-2029 Housing Elements objective includes supporting nonprofit organizations that provide affordable housing to individuals at risk for homelessness, subject to available funding.

Between 1998 and 2002, the City awarded SCO (formerly Saddleback Community Outreach) a total of $310,000 in CDBG funding to assist with the purchase of eight condominiums in Lake Forest. The Property was one of these units. Pursuant to the CDBG agreements for the acquisition of the units, each condominium was required to be operated as transitional housing for a period of 20 years plus an additional five years following the expiration of the respective agreement (for a total 25 years). Following the end of the five-year trailer, the units become restriction-free and SCO can transfer the Property to a market-rate rental, or sell. In March 2022, six of the CDBG agreement’s 20-year terms expired, including the Property’s. However, the five-year trailers continue to bind the units. At the request of SCO, the City authorized SCO to use the condominiums as affordable housing for low- and moderate-income tenants for the five-year trailer.
2023 Notice of Funding Availability (“NOFA”)
On April 5, 2022, the City Council approved the Fiscal Year (“FY”) 2022-23 CDBG Program Annual Action Plan. The funding available in FY 2022-23 was larger than in recent years, mostly due to the carry-over of more than anticipated unspent prior-year funds. As part of the plan, the City Council authorized the allocation of approximately $432,000 to be used toward achieving the City’s affordable housing goals.

On January 17, 2023, the City and Lake Forest Housing Authority (“Authority”) issued a notice of funding availability (“NOFA”) that identified approximately $1.6 million in funds for acquiring, converting, or rehabilitating affordable housing projects in the City. The NOFA funding sources included the City’s CDBG funds and $1.2 million in funds from the Authority’s Low/Moderate Income Housing Asset Fund. An additional $200,000 from the City’s Affordable Housing In Lieu Fund was added subsequently due to prevailing market conditions, which Item: 6
65 increased property costs that exceeded initial estimates and projections. This raised the total funding availability to approximately $1.8 million.

After reviewing the responses to the NOFA, in August 2023 the City entered into an exclusive negotiation agreement (“ENA”) with a nonprofit. Under the ENA, the nonprofit had 180 days to work with the City and Authority to select a site for an affordable housing project and negotiate an affordable housing agreement with the City. During this time, the nonprofit analyzed the market and assessed potential properties for acquisition or rehabilitation to fulfill the NOFA objectives.

Unfortunately, the escalation in property costs impacted the organization's ability to secure suitable properties within budget. The nonprofit evaluated potential alternatives to mitigate the effects of the high property costs. However, the alternatives proved to be either suboptimal in achieving the desired outcomes or infeasible within the existing budgetary constraints. The ENA expired in February 2024.

CDBG Program Compliance
CDBG entitlement grantees (like the City) are required to carry out programs in a timely manner, as measured by the rate of expenditure of funds from the grantee's line of credit with HUD. A CDBG entitlement grantee, in accordance with the CDBG regulations, must have a balance no greater than one and one- half times its annual grant remaining in its line of credit 60 days prior to the end of the program year. If this ratio is not met, HUD may reduce the entitlement grantee’s CDBG grant allocation for the following year. The expenditure of CDBG funds for the transactions before the City Council this evening will help ensure the City remains in compliance with these CDBG regulations.

DISCUSSION:

The attached CDBG agreement (Exhibit A to Attachment 2) memorializes the terms and conditions governing the City’s award of CDBG funds to facilitate SCO’s purchase of the Property (the “2002 CDBG Agreement”). As indicated above, the 2002 CDBG Agreement had a 20-year term. For an additional five years after its expiration, the agreement obligates SCO to either: (i) use the Property to meet one of the “National Objectives” provided in 24 C.F.R. section 570.208; or (ii) sell the Property and reimburse the City the fair market value less any portion attributable to non-CDBG funds. The Property’s five-year trailer (under the 2002 CDBG Agreement) expires on May 21, 2027; until then, SCO is obligated to use the Property as affordable housing for low- and moderate- income tenants (see Attachment 5).

The transactions before the City Council will replace SCO’s above obligations with a new restriction requiring SCO to rent the Property to very-low income Item: 6
66 households for 30 years (i.e., until 2054). The structure and order of operations for the transactions are described in further detail below.

Transaction No. 1: City Purchase with CDBG Funds
In the first transaction, the City will use CDBG funds to purchase the Property from SCO for $460,000, which is the Property’s appraised fair market value (See Attachment 6). SCO will deposit $127,329 into escrow, which represents prepayment of the second transaction’s $1 purchase price and $127,328 in funds that federal CDBG regulations require SCO to repay the City (for SCO selling the Property before the five-year trailer expires).

Completing this first transaction will require the City to execute the purchase and sale agreement and letter agreement and deposit $460,000 into escrow (Attachment 1). As previously noted, staff received confirmation from HUD that the transactions and amount of funds being returned to the City’ CDBG Fund as program income (as described in the letter agreement, Attachment 2) comply with federal CDBG regulations.

Transaction No. 2: City Sale back to SCO; Surplus Land Act Compliance On the same day as the first transaction (or as soon as possible thereafter) the City will sell the Property back to SCO for $1 and an associated regulatory agreement requiring SCO to rent the Property to very-low income households for 30 years. For example, in 2024, a four-person household can earn no more than $78,900 to qualify as very-low income. Because the City is a public agency, it is required to comply with the Surplus Land Act (“SLA”) before selling the Property.

The SLA requires the City to declare property as “surplus land” or “exempt surplus land” before disposing of it. For “surplus land,” the City must go through a formal process to offer the land to qualifying entities and negotiate with responsive parties. However, the SLA contains exemptions for certain types of land (i.e., exempt surplus land) where this formal process does not apply. One exemption is for real property that is transferred by the City—for less than fair market value—to facilitate its use as affordable housing for at least 30 years. (Gov. Code, § 54221(f)(1)(A), citing Gov. Code, § 37364.) This exemption fits because that is what the second transaction is doing: the City is conveying the Property to SCO for $1 and a regulatory agreement restricting its use as affordable housing for 30 years.

Completing this second transaction will require the City to declare the Property as exempt surplus land (Attachment 3) and execute the second purchase and sale agreement (Attachment 4). Under the Department of Housing and Community Development’s (“HCD”) SLA guidelines, the City must submit its exempt surplus land determination to HCD at least 30 days prior to disposal. City staff will do so, and neither transaction will close until HCD has approved the Item: 6
67 City’s exemption determination or at least 30 days have elapsed since it was made.

Environmental Determination
The City’s SLA exemption determination and its purchase and sale of the Property are exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty that there is no possibility that the activities in question may have a significant effect on the environment (State CEQA Guidelines, § 15061(b)(3).). The City’s actions do not authorize any new development or other action that has the potential to significantly impact the environment. Each of the attached resolutions include this CEQA determination.

Conclusion & Recommendation
Approving the transactions will benefit the City’s affordable housing stock by keeping the Property affordable to very-low income households for an additional 30 years (i.e., until 2054). Preserving this affordable housing unit also fulfills Policy 2.5 under Goal 2 of the City’s 2021-2029 Housing Element. In addition, the transaction helps the City remain in compliance with its obligation to expend CDBG funds in a timely manner. For these reasons, staff is recommending that the City Council approve the transactions by taking the five recommended actions listed on page 1.

FISCAL IMPACT:

The fiscal impacts associated with the transactions include staff and City Attorney time spent on preparing and negotiating the attached agreements. The transactions themselves will involve both expenditures and revenues. Purchasing the Property will require an expenditure of $460,000. However, the City will receive revenue back in the amount of $127,329. These funds will be deposited into the City’s CDBG Fund as program income and can only be used on CDBG eligible activities. Sufficient funds exist in the FY 2024-25 budget of the 2023- 2025 Operating Budget.

ATTACHMENTS:

1. Resolution approving and authorizing the City Manager to execute the attached purchase and sale agreement to the Property and cause a payment of $460,000 to be deposited into escrow

2. Letter agreement acknowledging SCO’s repayment of CDBG funds in conformance with the terms of the 2002 CDBG Agreement
Item: 6
68 3. Resolution declaring the Property exempt surplus property in accordance with Government Code section 54221(f)(1)(A)

4. Resolution approving and authorizing the City Manager to execute the attached purchase and sale agreement to sell the Property back to South County Outreach with an associated regulatory agreement to ensure 30 years of affordability for a very-low income household

5. Documents associated with the City’s authorization for the Property to be used as affordable housing for low- and moderate income tenants

6. Appraisal for the Property
Initiated By: Adrian Grijalva, Economic Development/Housing Manager Submitted By: Keith Neves, Assistant City Manager
Approved By: Debra Rose, City Manager
Item: 6
69 ATTACHMENT 1

Item: 6
70 55136.00525\42339999.1

RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF LAKE FOREST APPROVING A PURCHASE AND

SALE AGREEMENT WITH SOUTH COUNTY OUTREACH
REGARDING 20702 EL TORO ROAD #35 (APN 938 -741-
79) AND FINDING THAT THE ACTION IS EXEMPT FROM

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

WHEREAS, South County Outreach (“SCO”) owns a single -bedroom condominium unit located at 20702 El Toro Road #35 (“Property”). SCO acquired the Property in 2002 with the assistance of $35,000 in Community Development Block Grant (“CDBG”) funds awarded by the City of Lake Forest (“City”); and

WHEREAS, as consideration for the CDBG funds, SCO agreed to use the Property as transitional housing; the City subsequently approved a change in use to affordable housing for low - and moderate -income tenants. Pursuant to federal CDBG regulations, SCO’s use of the Property is restricted for 25 years from the date that the City awarded the CDBG funds (i.e., until May 21, 2027); and

WHEREAS, the City and SCO have agreed to replace the above restrictions governing the Property with a new restriction requiring SCO to rent the Property to very - low income households for 30 years (i.e., until 2054). Effectuating the foregoing requires City Council approval of two purchase and sale agreements (“PSA”); and

WHEREAS, under the first PSA, the City will use CDBG funds to purchase the Property from SCO for fair market value. U nder the second PSA, the City will sell the Property back to SCO for $1 and an associated regulatory agreement that requires the Property to be rented to very -low income households for a period of 30 years (in accordance with Government Code section 37364); and

WHEREAS, the above transactions will benefit the City’s affordable housing stock by keeping the Property affordable to very -low income households for an additional 30 years (i.e., until 2054). They will also help the City remain in compliance with its obligation to expend CDBG funds in a timely manner; and

WHEREAS, the attached PSA addresses the first transaction. For the reasons set forth above and in the agenda report, the City Council desires to approve the PSA; and

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

SECTION 1. Incorporation. The above recitals are true and correct and are a substantive part of this Resolution and findings of the City Council.

SECTION 2. CEQA. The City’s purchase of the Property is exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty Item: 6
71 55136.00525\42339999.1

Resolution No. _____

Page 2 ends

that there is no possibility that the act ivity in question may have a signifi cant effect on the environment. (State CEQA Guidelines, § 15061(b)(3).) The City’s action does not authorize any new development or other action that has the potential to significantly impact the environment.

SECTION 3. Approval; Authorization. The City Council hereby : (1) approves the PSA attached hereto as Exhibit “A” in substantially the form presented, subject to minor non-substantive revisions app roved by the City Attorney; (2) authorizes the City Manager to sign and enter into the PSA on behalf of the City; and (3) authorizes the City Manager or designee to perform the City’s obligations under the PSA.

SECTION 4. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this Resolution is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Resolution.

SECTION 5 . Certification. The City Clerk shall certify to the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED by the City Counil of the City of Lake Forest at a regular meeting held on the 2nd of July 2024, by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

Mark Tettemer, Mayor
ATTEST:

Lisa Berglund, City Clerk

Item: 6
72 55136.00525\42339999.1

Resolution No. _____

Page 3 ends

EXHIBIT “A”

City Purchase PSA

Item: 6
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REAL PROPERTY PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS
(Property at 20702 El Toro Road #35, Lake Forest, CA, APN: 938-741-79) by and between
South County Outreach, a California Non-Profit Public Benefit Corporation and
City of Lake Forest
a California Municipal Corporation
DATED AS OF [INSERT] ____, 2024, FOR REFERENCE PURPOSES ONLY Item: 6
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REAL PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW

INSTRUCTIONS
(PROPERTY AT 20702 EL TORO ROAD #35, APN: 938-741-79)
This REAL PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS, ( 20702 EL TORO ROAD , APN: 938-74-179) (“Agreement”) is dated as of [insert] _____, 2024, for reference purposes only, and is entered into by and between South County Outreach, a California non-profit public benefit corporation (“Seller”), and the City of Lake Forest, a California municipal c orporation (“Buyer”). Seller and Buyer enter into this Agreement with reference to the following recitals of fact (each, a “Recital”):

RECITALS
A. Seller is the owner of certain real prope rty located at 20702 El Toro Road, #35, Lake Forest, CA, Assessor Parcel Number: 938-741-79 (specifically defined in Section 1 of this Agreement as the “ Property”). Seller acquired the Property pursuant to June 3, 20 02 under the name of Saddleback Community Outreach;
B. Buyer desires to purchase the Property , together, with (a) all privileges, rights, easements, and appurtenances belonging to the Property, including without limitation all minerals, oil, gas and other hydrocarbon substances on and under the Property, (b) all development rights, air rights, water, water rights and water stock relating to the Property, and (c) all right, title and interest of Seller in and to any streets, alleys, passages, other easements and other rights-of-way or appurtenances included in, adjacent to or used in connection with such Property;

NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND COVENANTS

OF SELLER AND BUYER SET FORTH IN THIS AGREEMENT AND OTHER GOOD AND VALUABLE CONSIDERATION, SELLER AND BUYER AGREE, AS FOLLOWS:

TERMS AND CONDITIONS

1. DEFINITIONS

1.1 Definitions. The following words, terms and phrases are used in this Agreement with the following meanings, unless the particular context or usage of a word, term or phrase requires another interpretation:

1.1.1 Affiliate. Any other Person, directly or indirectly, Controlling or Controlled by or under common Control with the specified Person.

1.1.2 Agreement. This Real Property Purchase and Sale Agreement and Joint Escrow Instructions (20702 El Toro Road, Lake Forest, CA, Assessor Parcel Number: 938-741- 79) by and between Seller and Buyer, including all of the attached exhibits.

1.1.3 Approval. Any license, permit, approval, consent, certificate, ruling, variance, authorization, conditional use permit or amendment to any of the foregoing, as shall be necessary or appropriate under any Law to commence, perform or complete any construction on or development of the Property.

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1.1.4 Bankruptcy Law. Title 11 United States Code or any other or successor State or Federal statute relating to assignment for the benefit of creditors, appointment of a receiver or trustee, bankruptcy, composition, insolvency, moratorium, reorganization or similar matters.

1.1.5 Bankruptcy Proceeding . Any proceeding, whether voluntary or involuntary, under any Bankruptcy Law.

1.1.6 Business Day. Any day other than Saturday or Sunday or a State public holiday.

1.1.7 Buyer. City of Lake Forest, a California municipal corporation and any assignee of or successor to the rights, powers or responsibilities of City of Lake Forest.

1.1.8 Buyer’s Parties. Collectively, Buyer, Buyer’s City Council and Buyer’s elected officials, employees, agents and attorneys.

1.1.9 Buyer Title Policy . A standard CLTA owners’ policy of title insurance issued by the Title Company, with coverage in the amount of the Purchase Price, showing title to the Property vested in Buyer, subject only to Permitted Exceptions.

1.1.10 City. The City of Lake Forest, California.

1.1.11 City Manager . The City Manager of Buyer, or his or her designee or successor in function.

1.1.12 Claim. Any claim, loss, cost, damage, expense, liability, lien, action, cause of action (whether in tort, contract, under statute, at law, in equity or otherwise), charge, award, assessment, fine or penalty of any kind (including consultant and expert fees and expenses and investigation costs of whatever kind or nature and, if an Indemnitor improperly fails to provide a defense for an Indemnitee, then Legal Costs of the Indemnitee) and any judgment.

1.1.13 Close of Escrow. The first date on which the Escrow Agent has filed the Seller Deed with the County for recording in the official records of the County.

1.1.14 Control. Possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether by ownership of Equity Interests, by contract or otherwise.

1.1.15 County. The County of Orange, California.

1.1.16 Default. An Escrow Default, a Monetary Default or a Non -Monetary Default. Notwithstanding any other provision of this Agreement, HUD’s failure to approve the transaction contemplated hereby shall not constitute a Default (of any kind) under this Agreement.

1.1.17 Default Interest. Interest at an annual rate equal to the lesser of: (a) eight (8%) per annum; or (b) the Usury Limit.

1.1.18 Deposit. Forty Six Thousand Dollars and Zero Cents ($46,000.00).

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1.1.19 Due Diligence Completion Notice . A written notice from Buyer delivered to both Seller and Escrow Agent, prior to the end of the Due Diligence Period, indicating Buyer’s unconditional acceptance of the condition of the Property or indicating Buyer’s rejection of the condition of the Prope rty and refusal to accept a conveyance of title to the Property, describing in reasonable detail the actions that Buyer reasonably believes are indicated to allow Buyer to unconditionally accept the condition of the Property.

1.1.20 Due Diligence Investigations. Buyer’s due diligence investigations of the physical and economic feasibility of the Property for Buyer’s intended use of the Property, including investigation of the environmental and geotechnical conditions of the Property, obtaining Approvals for Buyer ’s intended use of the Property, studying the economic feasibility of Buyer’s intended use of the Property, obtaining tenant commitments for Buyer’s intended use of the Property, all as deemed appropriate in the reasonable discretion of Buyer and all at the sole cost and expense of Buyer.

1.1.21 Due Diligence Period. The time period of five (5) consecutive calendar days commencing on the day immediately following the Escrow Opening Date.

1.1.22 Effective Date. Defined in Section 2.

1.1.23 Environmental Claim . Any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements or expenses, including Legal Costs and fees and costs of environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever, directly or indirectly, relating to or arising from any actual or alleged violation of any Environmental Law or any Hazardous Substance Discharge.

1.1.24 Environmental Laws. All Federal, State, local or City laws, rules, orders, regulations, statutes, ordinances, codes, decrees or requirements of any Government in effect on or enacted after the Effective Date, regulating, relating to, or imposing liability or standards of conduct concerning any Hazardous Subs tance, the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use or pertaining to occupational health or industrial hygiene or occupational or environmental conditions on, under or about the Property, as now or may at any later time be in effect, including the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportati on Act (“HMTA”) [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 an d 657]; the California Underground Storage of Hazardous Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Item: 6
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Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.]; or the Porter -Cologne Water Quality Act [California Water Code Section 13000 et seq.]; together with any regulations promulgated under the authorities referenced in this Section 1.1.24.

1.1.25 Equity Interest. All or any part of any equity or ownership interest(s) (whether stock, partnership interest, beneficial interest in a trust, membership interest in a limited liability company, or other interest of an ownership or equity nature) in any entity, at any tier of ownership, that directly owns or holds any ownership or equity interest in a Person.

1.1.26 Escrow. An escrow, as defined in Civil Code Section 1057 and Financial Code Section 17003(a), that is conducted by the Escrow Agent with respect to the sale of the Property from Seller to Buyer pursuant to this Agreement.

1.1.27 Escrow Agent. Chicago Title Company, Mike Slinger, 725 S. Figueroa Street, Suite 200, Los Angeles – Email: [email protected], or such other Person mutually agreed upon in writing by both Seller and Buyer.

1.1.28 Escrow Closing Date . The earlier of: (a) on or before the third (3rd ) Business Day following the Escrow Agent’s receipt of written confirmation from both Seller and Buyer of the satisfaction or waiver of all conditions precedent to the Close of Escrow; (b) the 30th (30th) calendar day following the Escrow Opening Date; or (c) another date mutually agreed upon in writing between the Parties for the Close of Escrow, in the Parties’ respective sole and absolute discretion.

1.1.29 Escrow Closing Statement. A statement prepared by the Escrow Agent indicating, among other things, the Escrow Agent’s estimate of all funds to be deposited or received by Seller or Buyer, respectively, and all charges to be paid by Seller or Buyer, respectively, through the Escrow.

1.1.30 Escrow Default. The unexcused failure of a Party to submit any document or funds to the Escrow Agent as reasonably necessary to close the Escrow, pursuant to the terms and conditions of this Agreement.

1.1.31 Escrow Opening Date. The first date on which a copy of this Agreement signed by both Seller and Buyer is deposited with the Escrow Agent and Escrow Agent signs and returns the acknowledgement attached hereto and delivers to Seller and Buyer a fully signed Agreement, as provided in Section 4.1.

1.1.32 Event of Default. The occurrence of any one or more of the following:
(a) Monetary Default. A Monetary Default that continues for seven (7) calendar days after Notice to the Party in Default, specifying in reasonable detail the amount of money not paid or the bond, surety or insurance not provided; (b) Escrow Default . An Escrow Default that continues for seven (7) calendar days after Notice to the Party in Default, specifying in reasonable detail the document or funds not submitted;
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(c) Bankruptcy or Insolvency . Buyer admits in writing that Buyer is unable to pay Buyer’s debts as they become due or Buyer becomes subject to any Bankruptcy Proceeding (except an involuntary Bankruptcy Proceeding dismissed within ninety (90) days after commencement), or a custodian or trustee is appointed to take possession of, or an attachment, execution or other judicial seizure is made with respect to, substantially all of Buyer’s assets or Buyer’s interest in this Agreement or the Property (unless such app ointment, attachment, execution, or other seizure was involuntary and is contested with diligence and continuity and vacated and discharged within ninety (90) days);
(d) Transfer. The occurrence of a Transfer, whether voluntarily or involuntarily or by operation of Law, in violation of the terms or conditions of this Agreement; or (e) Non-Monetary Default . Any Non -Monetary Default, other than those specifically addressed in Section 1.1.32(c) or Section 1.1.32(d), that is not cured within thirty (30) days after Notice to the Party in Default describing the Non -Monetary Default in reasonable detail. In the case of such a Non-Monetary Default that cannot with reasonable diligence be cured within thirty (30) days after the effective date of such Notice, an Event of Default shall occur, if the Party in Default does not do all of the following: (a) withi n thirty (30) days after Notice of such Non-Monetary Default, advise the other Party of the intention of the Party in Default to take all reasonable steps to cure such Non-Monetary Default; (b) duly commence such cure within such thirty (30) day period; and (c) diligently prosecute such cure to completion within a reasonable time under the circumstances.

1.1.33 Federal. The federal government of the United States of America.

1.1.34 Final. Relative to issuance or denial of any Approval, when all administrative appeal periods regarding such Approval have expired, without the valid commencement of any such appeal, or all administrative appeals or challenges validly commenced regarding such Approval have been resolved to Buyer’s reasonable satisfaction.

1.1.35 FIRPTA Affidavit. A certification that Seller is not a “foreign person” within the meaning of such term under Section 1445 of the United States Internal Revenue Code in the form attached hereto as Exhibit B.

1.1.36 Form 593. A California Franchise Tax Board Form 593-C.

1.1.37 Government. Any and all courts, boards, agencies, commissions, offices or authorities of any nature whatsoever of any governmental unit (Federal, State, County, district, municipal, City or otherwise) whether now or later in existence.

1.1.38 Hazardous Substance. Any flammable substance, explosive, radioactive material, asbestos, asbestos -containing material, polychlorinated biphenyl, chemical known to cause cancer or reproductive toxi city, pollutant, contaminant, hazardous waste, medical wastes, toxic substance or related material, explosive, petroleum, petroleum product or any “hazardous” or “toxic” material, substance or waste that is defined by those or similar terms or is regulated as such under any Law, including any material, substance or waste that is: (a) defined as a “hazardous substance” under Section 311 of the Water Pollution Control Act (33 U.S.C. § 1317), as amended; (b) designated as “hazardous substances” pursuant to 33 U.S.C. § 1321; (c) defined as a “hazardous Item: 6
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waste” under Section 1004 of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. § 6901, et seq., as amended; (d) defined as a “hazardous substance” or “hazardous waste” under Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Reauthorization Act of 1986, 42 U.S.C. § 9601, et seq., or any so-called “superfund” or “superlien” law; (e) defined as a “pollutant” or “contaminant” under 42 U.S.C. § 9601(33); (f) defined as “hazard ous waste” under 40 C.F.R. Part 260; (g) defined as a “hazardous chemical” under 29 C.F.R. Part 1910; (h) any matter within the definition of “hazardous substance” set forth in 15 U.S.C. § 1262; (i) any matter, waste or substance regulated under the Toxic Substances Control Act (“TSCA”) [15 U.S.C. Sections 2601, et seq.]; (j) any matter, waste or substance regulated under the Hazardous Materials Transportation Act, 49 U.S.C.

Sections 1801, et seq.; (k) those substances listed in the United States Department of Transportation (DOT)Table [49 C.F.R. 172.101]; (l) any matter, waste or substances designated by the EPA, or any successor authority, as a hazardous substance [40 C.F.R. Part 302]; (m) defined as “hazardous waste” in Section 25117 of the California Health and Safety Code; (n) defined as a “hazardous substance” in Section 25316 of the California Health and Safety Code; (o) that is subject to any other Law regulating, relating to or imposing obligations, liability or standards of conduct concerning protection of human health, plant life, animal life, natural resources, property or the enjoyment of life or property free from the presence in the environment of any solid, liquid, gas, odor or any form of energy from whatever source; or (p) that is or becomes regulated or classified as hazardous or toxic under Law or in the regulations adopted pursuant to Law.

1.1.39 Hazardous Substance Discharge . Any deposit, discharge, generation, release or spill of a Hazardous Substance that occurs at, on, under, into or from the Property or during transportation of any Hazardous Substance to or from the Property, or that arises at any time from any construction, installation, use or operation or other activities conducted at, on, under or from the Property, whether or not caused by a Party.

1.1.40 HUD. The United States Department of Housing and Urban Development.

1.1.41 Indemnify. Where this Agreement states that any Indemnitor shall “indemnify” any Indemnitee from, against or for a particular Claim, that the Indemnitor shall indemnify the Indemnitee and defend and hold the Indemnitee harmless from and against such Claim (alleged or otherwise). “Indemnified” shall have the correlative meaning.

1.1.42 Indemnitee. Any Person entitled to be Indemnified under the terms of this Agreement.

1.1.43 Indemnitor. A Party that agrees to Indemnify any other Person under the terms of this Agreement.

1.1.44 Law. Every law, ordinance, requirement, order, proclamation, directive, rule or regulation of any Government applicable to the Property, in any way, including relating to any development, construction, use, maintenance, taxation, operation, occupancy of or environmental conditions affecting the Property, or relating to any taxes, or otherwise relating to this Agreement or any Party’s rights, obligations or remedies under this Agreement, or any Transfer of any of the foregoing, whether in force on the Effective D ate or passed, enacted, Item: 6
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modified, amended or imposed at some later time, subject in all cases, however, to any applicable waiver, variance or exemption.

1.1.45 Legal Costs. In reference to any Person, all reasonable costs and expenses such Person incurs in any legal proceeding or other matter for which such Person is entitled to be reimbursed for its Legal Costs, including reasonable attorneys’ fees, court costs and expenses and consultant and expert witness fees and expenses.

1.1.46 Monetary Default. Any failure by either Party to pay or deposit, when and as this Agreement requires, any amount of money, bond, surety or evidence of any insurance coverage required to be provided under this Agreement, whether to or with a Party or a Third Person.

1.1.47 Non-Monetary Default. The occurrence of any of the following, except to the extent constituting a Monetary Default or an Escrow Default: (a) any failure of a Party to perform any of such Party’s obligations under this Agreement; (b) any failure of a Party to comply with any mat erial restriction or prohibition in this Agreement; or (c) any other event or circumstance that, with passage of time or giving of Notice, or both, or neither, would constitute a breach of this Agreement by a Party.

1.1.48 Notice. Any consent, demand, designation, election, notice or request relating to this Agreement, including any Notice of Default. All Notices must be in writing.

1.1.49 Notify. To give a Notice.

1.1.50 Parties. Collectively, Seller and Buyer.

1.1.51 Party. Individually, either Seller or Buyer, as applicable.

1.1.52 Permitted Exception . All of the following: (a) all items shown in the Preliminary Report as exceptions to coverage under the proposed Buyer Title Policy that are approved by Buyer pursuant to Section 3.4; (b) any lien for non -delinquent property taxes or assessments; (c) any Laws applicable to the Property; (d) this Agreement; (e) the covenants, conditions or powers in the Seller Deed; (f) any existing improvements on the Property, if any; (g) any Approval; and (h) any other document or encumbrance expressly required or allowed to be recorded against the Property pursuant to the terms of this Agreement.

1.1.53 Person. Any association, corporation, governmental entity or agency, individual, joint venture, joint -stock company, limited liability company, partnership, trust, unincorporated organization or other entity of any kind.

1.1.54 Preliminary Report. A preliminary report issued by the Title Company in contemplation of the issuance of the Buyer Title Policy, accompanied by the best available copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Buyer Title Policy.

1.1.55 Property. That certain real property specifically described in Exhibit A attached to this Agreement.

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1.1.56 Purchase Price . Four Hundred and Sixty Thousand Dollars and Zero Cents ($460,000.00).

1.1.57 Seller. South County Outreach, a California non -profit public benefit corporation, and any assignee of or successor to the rights, powers or responsibilities of South County Outreach.

1.1.58 Seller Deed . A deed conveying Seller’s interest in the Property from Seller to Buyer, at the Close of Escrow, substantially in the form of Exhibit C attached to this Agreement.

1.1.59 Seller Parties. Collectively, Seller, and Seller’s agents and attorneys.

1.1.60 State. The State of California.

1.1.61 Third Person. Any Person that is not a Party, an Affiliate of a Party or an elected official, officer, director, manager, shareholder, member, principal, partner, employee or agent of a Party.

1.1.62 Title Company . Chicago Title Company, Ken Cyr, 725 S. Figueroa Street, Suite 200, Los Angeles – Email: [email protected], or such other Person mutually agreed upon in writing by both Seller and Buyer.

1.1.63 Title Notice. A written notice from Buyer to Seller indicating Buyer’s acceptance of the state of the title to the Property, as described in the Preliminary Report, or Buyer’s disapproval or conditional approval of specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Buyer Title Policy, describing in suitable detail the actions that Buyer reasonably believes are required to obtain Buyer’s unconditional approval of the state of the title to the Property.

1.1.64 Title Notice Response. The written response of Seller to the Title Notice, in which Seller either elects to: (a) cause the removal from the Preliminary Report of any matters disapproved or conditionally approved in the Title Notice; (b) obtain title or other insurance or endorsement in a form reasonably satisfactory to Buyer insuring against any matters disapproved or conditionally approved in the Title Notice; or (c) not take either action described in clause “(a)” or “(b)” of this Section 1.1.64.

1.1.65 Title Notice Waiver . A written notice from Buyer to Seller waiving Buyer’s previous disapproval or conditional approval in the Title Notice of specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Buyer Title Policy.

1.1.66 Transfer. Regarding any property, right or obligation, any of the following, whether by operation of Law or otherwise, whether voluntary or involuntary and whether direct or indirect: (a) any assignment, conveyance, grant, hypothecation, mortgage, pledge, sale or other transfer, whether direct or indirect, of all or any part of such property, right or obligation, or of any legal, beneficial, or equitable interest or estate in such property, right or obligation or any part of it (including the grant of any easement, lien, or other encumbrance); (b) Item: 6
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any conversion, exchange, issuance, modification, reallocation, sale or other transfer of any Equity Interest(s) in the owner of such property, right or obligation by the holders of such Equity Interest(s); or (c) any transaction that is in substance equiv alent to any of the foregoing. A transaction affecting Equity Interests, as referred to in clauses “(b)” or “(c)” of this Section 1.1.66, shall be deemed a Transfer by Buyer, even though Buyer is not technically the transferor. A “Transfer” shall not, however, include any of the following (provided that the other Party has received Notice of such occurrence) relating to the Property or an y Equity Interest: (i) a mere change in form of ownership, with no material change in beneficial ownership, that constitutes a tax-free transaction under, as applicable, Federal income tax law or State real estate transfer tax law; (ii) a conveyance only to member(s) of the immediate family(ies) of the transferor(s) or trusts for their benefit; (iii) a conveyance only to any Person that, as of the Effective Date, holds an Equity Interest in the entity whose Equity Interest is being transferred; or (iv) an a ssignment of Buyer’s rights under this Agreement to any Person in which Buyer owns a majority of the Equity Interests and where such Person assumes all obligations of Buyer under this Agreement.

1.1.67 Unavoidable Delay. A delay in either Party performing any obligation under this Agreement arising from or on account of any cause whatsoever beyond the Party’s reasonable control, including strikes, labor troubles or other union activities, casualty, war, acts of terrorism, riots, litigation, governmental action or inaction, regional natural disasters or inability to obtain required materials. Unavoidable Delay shall not include delay caused by a Party’s financial condition or insolvency.

1.1.68 Usury Limit. The highest rate of interest, if any, that Law allows under the circumstances.

2. EFFECTIVE DATE. This Agreement shall become effective on the first date on which all of the following have occurred: (“Effective Date”): (a) this Agreement has been approved by Buyer’s City Council; (b) this Agreement has been signed by the authorized representative(s) of both Buyer and Seller; and (c ) one (1) original of this Agreement signed by the authorized representative(s) of Buyer has been delivered by Buyer to Seller. Buyer shall send Notice of the Effective Date to Seller within five (5) days following the occurrence of the Effective Date. Seller shall sign and return a copy of such Notice to Buyer within five (5) days after receipt of such Notice.

3. PURCHASE AND SALE OF PROPERTY

3.1 Escrow. Seller shall sell the Property to Buyer and Buyer shall purchase the Property from Seller, subject to the Permitted Exceptions and the terms and conditions of this Agreement. For the purposes of exchanging funds and documents to complete the sale of the Property from Seller to Buyer and the purchase of the Property by Buyer from Seller, pursuant to the terms and conditions of this Agreement, Seller and Buyer agree to open the E scrow with the Escrow Agent. The provisions of Section 4 are the joint escrow instructions of the Parties to the Escrow Agent for conducting the Escrow.

3.2 Payment of Purchase Price. Buyer shall purchase the Property from Seller for the Purchase Price, subject to the terms and conditions of this Agreement. Buyer shall pay the Purchase Price at the Close of Escrow in immediately available funds.

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3.3 Deposit. Buyer shall deliver the Deposit to Escrow Agent within five (5) Business Days following the Escrow Opening Date. Except as provided herein, the Deposit shall be fully refundable to Buyer upon termination of this Agreement during the Due Diligence Period or as a result of the occurrence of an Event of Default by Seller. The Deposit shall become non-refundable to Buyer, as earned compensation to Seller for providing the Due Diligence Period, upon the expiration of the Due Diligence Period (without Bu yer terminating this Agreement), except that the Deposit shall be refundable to Buyer upon the occurrence of an Event of Default by Seller. At the Close of Escrow, the Deposit shall be credited toward the Purchase Price for the benefit of Buyer.

3.4 Buyer’s Approval of Title to Property.

3.4.1 Title Notice. Within one (1) day after the Escrow Opening Date, Buyer shall request the Preliminary Report from the Title Company and that the Title Company deliver a copy of such Preliminary Report to Seller. Within five (5) days following Buyer’s receipt of the Preliminary Report, Buyer shall send the Title Notice to both Seller and Escrow Agent.

3.4.2 Failure to Deliver Title Notice. If Buyer fails to send the Title Notice to Seller and Escrow Agent within the time period provided in Section 3.4.1, Buyer will be deemed to disapprove the status of title to the Property and refuse to accept conveyance of the Property and Buyer or Seller shall have the right to cancel the Escrow and terminate this Agreement upon five (5) days’ Notice, in their respective sole and absolute discretion.

3.4.3 Title Notice Response. Within five (5) days following Seller’s receipt of the Title Notice (if any), Seller may send the Title Notice Response t o both Buyer and Escrow Agent. If Seller does not send the Title Notice Response within the time period provided in this Section 3.4.3, Seller shall be deemed to elect not to take any action in reference to the Title Notice.

If Seller elects in the Title Notice Response to take any action in reference to the Title Notice, Seller shall complete such action, prior to the Escrow Closing Date or as otherwise specified in the Title Notice Response.

3.4.4 Title Notice Waiver. If Seller elects or is deemed to have elected not to address one or more matters set forth in the Title Notice to Buyer’s reasonabl e satisfaction, then within five (5) days after the earlier of: (a) Buyer’s receipt of Seller’s Title Notice Response; or (b) the last date for Seller to deliver its Title Notice Response pursuant to Section 3.4.3, Buyer shall either: (i) refuse to accept the title to and conveyance of the Property, or (ii) waive Buyer’s disapproval or conditional approval of all such matters set forth in the Title Notice by sending the Title Notice Waiver to both Seller and Escrow Agent. Failure by Buyer to timely send the Title Notice Waiver, where the Title Notice Response or Seller’s failure to deliver the Title Notice Response results in Seller’s election not to address one or more matters set forth in the Title Notice to Buyer’s reasonable satisfaction, will be deemed Buyer’s continued refusal to accept the title to and conveyance of the Property, in which case either Buyer or Seller shall have the right, in their respective sole and absolute discretion, to cancel the Escrow and terminate this Agreement upon five (5) days’ Notice to the other Party and Escrow Agent. In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.

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3.4.5 Disapproval of Encumbrances Securing Seller Obligations .

Notwithstanding any other provision of this Agreement, Buyer disapproves any and all encumbrances against the Property securing monetary (other than non -delinquent property taxes) obligations of Seller.

3.4.6 No Termination Liability . Any termination of this Agreement or cancellation of the Escrow pursuant to this Section 3.4 shall be without liability to the other Party or any other Person. Termination shall be accomplished by delivery of a Notice of termination to both the other Party and the Escrow Agent at least five (5) days prior to the termination date.

Following issuance of a Notice of termination of this Agreement pursuant to a right provided under this Agreement, the Parties and the Escrow Agent shall proceed pursuant to Section 4.12. Once a Notice of termination is given pursuant to this Section 3.4, delivery of a Title Notice or Title Notice Waiver shall have no force or effect and this Agreement shall terminate in accordance with the Notice of termination.

3.5 Due Diligence Investigations.

3.5.1 Time and Expense . Buyer shall complete all Due Diligence Investigations within the Due Diligence Period and shall conduct all Due Diligence Investigations at Buyer’s sole cost and expense.

3.5.2 Right to Enter . As of the Effective Date, Seller licenses, permits and authorizes Buyer to enter the Property , upon forty-eight (48) hours prior written notice to Seller (which may be by e-mail) for the purpose of conducting Due Diligence Investigations. The license given by Seller in this Section 3.5 to conduct Due Diligence Investigations shall terminate with the termination of this Agreement. Any Due Diligence Investigations by Buyer shall not unreasonably disrupt any then-existing use or occupancy of the Property. Buyer’s exercise of the license provided pursuant to this Section 3.5 after expiration of the Due Diligence Period shall not extend the Due Diligence Period. Seller shall c ooperate with Buyer in its Due D iligence Investigations and provide access to the Property, its records, or provide information to Buyer as requested so long as it is within Seller’s possession.

3.5.3 Due Diligence Completion Notice ; “ AS-IS” Condition. Buyer shall deliver a Due Diligence Completion Notice to Seller prior to the end of the Due Diligence Period.

If Buyer does not unconditionally accept the condition of the Property by delivery of its Due Diligence Completion Notice indicating such acceptance, prior to the end of the Due Diligence Period, Buyer shall be deemed to have rejected the condition of the Property and refused to accept conveyance of title to the Property. If the condition of the Property is rejected or deemed rejected by Buyer, then either Seller or Buyer shall have the right to cancel the Escrow and terminate this Agreement, in their respective sole and absolute discretion, without liability to the other Party or any other Person, by delivery of a Notice of termination to the other Party and Escrow Agent, in which case the Parties and Escrow Agent shall proceed pursuant to Section 4.12. Buyer’s delivery of its Due Diligence Completion Notice indicating Buyer’s unconditional acceptance of the condition of the Property shall evidence the acceptance of the condition of the Property by Buyer in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, as of the last day of the Due Diligence Period. In its sole discretion, Buyer may accept the Property in its “AS Item: 6
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IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition at any time before the end of the Due Diligence Period.

3.6 Seller Covenants Regarding Maintenance of the Property . Seller covenants and agrees with the Buyer that between the Effective Date and the date of the Close of Escrow:

3.6.1 No Changes to Agreements. Seller shall not modify or amend any lease or any service contract or other agreement respecting the Property, or enter into any new lease or contract respecting the Property, without the Buyer's prior written approval;

3.6.2 Normal Maintenance. Seller shall maintain the Property in accordance with the same standards Seller has customarily observed in its ownership and management of the Property;

3.6.3 Maintenance of Insurance . Seller shall maintain in force all insurance policies (if any) currently maintained by Seller with respect to the Property; and

3.6.4 No Title Exceptions . Seller shall not cause, permit, allow or suffer any additional exception to the title of the Property.

3.7 Seller Representations and Warranties.

3.7.1 Defaults. Seller represents and warrants that the execution and delivery of this Agreement and the consummation of the transaction contemplated hereby will not result in any breach of the terms of, conditions of, or constitute a default under, any instrument or obligation by which Seller is bound, or violate any order, writ, injunction or decree of any court in any litigation to which Seller is a party.

3.7.2 Survival. All the representations and warranties of Seller set forth in this Section 3.7 shall be true upon the Effective Date and shall be deemed to be repeated at and as of Close of Escrow and shall survive Close of Escrow for three (3) months.

3.7.3 Condemnation. To Seller’s knowledge, Seller has not received written notice of, and is not aware of, any condemnation, eminent domain or similar action with respect to the Property.

3.7.4 Violations. To Seller’s knowledge, Seller has not received written notice of, and is not aware of, any violations or alleged violations of (1) any local, State or Federal law, statute, rules or regulations relating to the Property, nor (2) any covenant, conditions, restriction or other document encumbering the Property.

3.7.5 Agreements. Except as disclosed in the Preliminary Report or disclosed or provided for in this Agreement, Seller has not entered into, and Seller is not aware of, any agreements that will be binding against the Property after the Close of Escrow. Notwithstanding the foregoing, the Property is currently occupied by Priscilla Verduzo, a tenant in good standing residing in the Property pursuant to a lease agreement (“ Tenant”). Tenant’s lease will remain in effect following the Close of Escrow; consummation of the transaction contemplated hereby will not, in and of itself, terminate Tenant’s lease.

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3.7.6 Utilities. To the best of Seller’s knowledge, all water, sewer, gas, electric, telephone and drainage facilities, and all other utilities required by law or by the normal operation of the Property, are (a) installed to the property lines of the Property, (b) connected to the Property, (c) adequate t o service the Property in its present use and to permit full compliance with all requirements of law and normal usage by the occupants of the Property and (d) in good working order and repair. All such utilities and storm and sanitary sewers required for the operation of the Property enter the Property through adjoining public streets or through adjoining private land in accordance with valid public or private easements that will inure to the benefit of Buyer.

3.7.7 Litigation. To the best of Seller’s knowledge, there are no actions, suits, proceedings, judgments, orders, decrees or governmental investigations pending or threatened against the Property or Seller which could affect the Property or the purchase, use or enjoyment thereof by Buyer.

3.7.8 Compliance with Laws. To the best of Seller’s knowledge the Property and all existing uses and conditions of the Property are in compliance with all Laws, including but not limited to Environmental Laws, and Seller has not received any written notice of violation issued pursuant to any Laws with respect to the Property or any use or condition thereof.

3.7.9 Hazardous Material.
(a) To the best of Seller’s knowledge neither Seller nor any other present or former owner of the Property has used, handled, stored, transported, released or disposed of any Hazardous Material on, under or from the Property in violation of any Environmental Law. (b) To the best of Seller’s knowledge there is no Release of any Hazardous Material existing on, beneath or from or in the surface or ground water associated with the Property.
(c) To the best of Seller’s knowledge, no asbestos abatement or remediation work has been performed on the Property.
(d) To the best of Seller’s knowledge, there is no PCB-containing equipment or PCB-containing material located on or in the Property.

3.7.10 Health & Safety Code Disclosures. Seller represents and warrants that:
(1) the Property contains an operable smoke alarm in accordance with California Health and Safety Code section 13113.8; and (2) the Property’s water heater is braced, anchored, and/or strapped in accordance with California Health and Safety Code section 19211.

3.8 Title to the Property. Seller has good and marketable title to the Property, subject to the Conditions of Title. There are no outstanding rights of first refusal or first look, options to purchase, rights of reverter, or claim of right relating to the transfer or sale of the Pro perty or any interest therein. To Seller’s knowledge, there are no unrecorded or undisclosed documents or other matters which affect title to the Property. No person holding a security interest in the Property or any part thereof has the right to consent or deny consent to the sale of the Property as contemplated herein, and Seller has the right to pay off such person and to remove all such liens as of the Closing Item: 6
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Date. Seller has enjoyed the continuous and uninterrupted quiet possession, use and operation of the Property.

3.9 Misstatements and Omissions. Neither the representations and warranties made by Seller in this Agreement contain any untrue statement or any omission of a material fact. Seller has no documents in its possession, nor has any knowledge, that omits material facts related to the property or which would contradict or negate any of its representations contained in this Agreement.

4. JOINT ESCROW INSTRUCTIONS

4.1 Opening of Escrow; Escrow Instructions . The purchase and sale of the Property shall take place through the Escrow to be administered by Escrow Agent. Buyer shall cause the Escrow to be opened promptly following the Effective Date. Escrow Agent shall promptly confirm the Escrow Opening Date in writing to each of the Parties.

4.2 Escrow Instructions. This Section 4 constitutes the joint escrow instructions of the Parties to Escrow Agent for conduct of the Escrow for the purchase and sale of the Property, as contemplated by this Agreement. Buyer and Seller shall sign such further escrow instructions consistent with the provisions of this Agreement as may be reasonably requested by Escrow Agent.

In the event of any conflict between the provisions of this Agreement and any further escrow instructions requested by Escrow Agent, the provisions of this Agreement shall control.

4.3 Escrow Agent Authority. Seller and Buyer authorize Escrow Agent to:

4.3.1 Charges. Pay and charge Seller and Buyer for their respective shares of the applicable fees, taxes, charges and costs payable by either Seller or Buyer regarding the Escrow;

4.3.2 Settlement/Closing Statements . Release each Party’s Escrow Closing Statement to such Party;

4.3.3 Document Recording . File any documents delivered for recording through the Escrow with the office of the Recorder of the County for recordation in the official records of the County, pursuant to the joint instructions of the Parties; and

4.3.4 Counterpart Documents. Utilize documents signed by Seller or Buyer in counterparts, including attaching separate signature pages to one original of the same document.

4.4 Buyer’s Conditions Precedent to Close of Escrow. Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Buyer, Buyer’s obligation to purchase the Property from Seller on the Escrow Closing Date shall be conditioned upon the satisfaction or waiver ( waivers must be in writing and signed by Buyer) of each of the following conditions precedent to such purchase on or before the Escrow Closing Date:

4.4.1 Title Policy. Title Company is committed to issue the Buyer Title Policy to Buyer upon payment of Title Company’s premium for such policy; Item: 6
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4.4.2 Due Diligence . Buyer timely delivers its Due Diligence Completion Notice to Seller stating Buyer’s unconditional acceptance of the condition of the Property, in accordance with Section 3.5.

4.4.3 Seller Escrow Deposits . Seller deposits all of the items into Escrow required by Section 4.7;

4.4.4 Settlement/Closing Statement . Buyer reasonably approves Buyer’s Escrow Closing Statement; and

4.4.5 Seller Pre -Closing Obligations . Seller performs all of the material obligations required to be performed by Seller pursuant to this Agreement prior to the Close of Escrow.

4.4.6 HUD Approval . Buyer has received approval from HUD of the transaction contemplated by this Agreement.

4.5 Seller’s Conditions Precedent to Close of Escrow . Provided that the failure of any such condition to be satisfied is not due to a Default under this Agreement by Seller, Seller’s obligation to sell the Property to Buyer on the Escrow Closing Date shall be conditioned upon the satisfaction or waiver (waivers must be in writing and signed by Seller) of each of the following conditions precedent to such sale on or before the Escrow Closing Date:

4.5.1 Title. Buyer accepts the state of the title of the Property, in accordance with Section 3.4.

4.5.2 Due Diligence . Buyer timely delivers its Due Diligence Completion Notice to Seller stating Buyer’s unconditional acceptance of the condition of the Property, in accordance with Section 3.5.

4.5.3 Buyer Escrow Deposits . Buyer deposits all of the items into Escrow required by Section 4.6;

4.5.4 Settlement/Closing Statement . Seller reasonably approves Seller’s Escrow Closing Statement; and

4.5.5 Buyer Pre -Closing Obligations . Buyer performs all of the material obligations required to be performed by Buyer pursuant to this Agreement prior to Close of Escrow.

4.5.6 Approvals. All approvals from the Home Owner’s Association have been obtained, if any are required.

4.6 Buyer’s Escrow Deposits. Buyer shall deposit the following items into Escrow and, concurrently, provide a copy of each document submitted into Escrow to Seller, on or before the Escrow Closing Date:

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4.6.1 Closing Funds . All monetary amounts required to be deposited into Escrow by Buyer under the terms of this Agreement to close the Escrow, all in immediately available funds;

4.6.2 Certificate of Acceptance. The Certificate of Acceptance attached to the Seller Deed signed by the authorized representative(s) of Buyer in recordable form;

4.6.3 Escrow Closing Statement . The Buyer’s Escrow Closing Statement signed by the authorized representative(s) of Buyer;

4.6.4 Other Reasonable Items. Any other money or documents required to be delivered by Buyer under the terms of this Agreement or as otherwise reasonably requested by Escrow Agent or Title Company in order to close the Escrow or comply with applicable Law that have not previously been delivered by Buyer.

4.7 Seller’s Escrow Deposits. Seller shall deposit the following items into Escrow and, concurrently, provide a copy of each document (excluding the Seller Deed) deposited into Escrow to Buyer, at least one (1) business day prior to the Escrow Closing Date:

4.7.1 Seller Deed. The Seller Deed signed by the authorized representative(s) of Seller in recordable form;

4.7.2 Letter Agreement Funds . The funds required to be deposited by Seller pursuant to that certain “Letter of Agreement for 20702 El Toro Road #35 CDBG Grant” dated [insert], 2024 and executed by the Parties.

4.7.3 Escrow Closing Statement. Seller’s Escrow Closing Statement signed by the authorized representative(s) of Seller;

4.7.4 FIRPTA Affidavit . A FIRPTA affidavit signed by the authorized representative(s) of Seller, in the form used by the Escrow Agent;

4.7.5 Form 593 . A Form 593 signed by the authorized representative(s) of Seller; and

4.7.6 Estoppel Certificates. The originals (or copies if originals are unavailable) of the contracts Buyer has elected to assume, if any, including but not limited to estoppel certificates from the current tenants residing on the Property in a form and substance satisfactory to Buyer.

4.7.7 Other Reasonable Items. Any other money or documents required to be delivered by Seller under the terms of this Agreement or as otherwise reasonably requested by Escrow Agent or Title Company in order to close the Escrow or comply with applicable Law that have not been previously delivered by Seller.

4.8 Closing Procedure. Upon Escrow Agent’s receipt of written confirmation from both Buyer and Seller that each of their respective conditions precedent to the Close of Escrow are satisfied or waived, Escrow Agent shall close the Escrow by doing all of the following:

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4.8.1 Recording and Distribution of Documents . Escrow Agent shall cause the following documents to be filed with the Recorder of the County for recording in the official records of the County regarding the Property in the following order of priority at Close of Escrow:
(a) the Seller Deed; and (b) any other documents to be recorded regarding the Property through the Escrow upon the join t instructions of the Parties. At Close of Escrow, Escrow Agent shall deliver conformed copies of all documents filed with the Recorder of the County for recording in the official records of the County through the Escrow to Seller, Buyer and any other Person designated in the written joint escrow instructions of the Parties to receive an original or conformed copy of each such document. Each conformed copy of a document filed for recording shall s how all recording information. The Parties intend and agree that this Section 4.8.1 shall establish the relative priorities of the documents to be recorded in the official records of the County through the Escrow, by providing for recordation of senior interests prior to junior interests, in the order provided in this Section 4.8.1;

4.8.2 Funds. Distribute all funds held by the Escrow Agent pursuant to the Escrow Closing Statements approved in writing by Seller and Buyer.

4.8.3 FIRPTA Affidavit . File the FIRPTA Affidavit with the United States Internal Revenue Service;

4.8.4 Form 593. File the Form 593 with the California Franchise Tax Board; and

4.8.5 Title Policy . Obtain from the Title Company and deliver to Buyer the Buyer Title Policy issued by the Title Company.

4.9 Close of Escrow. The Close of Escrow shall occur on or before the Escrow Closing Date. The Parties may mutually agree in writing to change the Escrow Closing Date by joint written instruction to Escrow Agent. The City Manager is authorized to agree to one or more extensions of the Escrow Closing Date on behalf of Seller up to a maximum time period extension of six (6) months in the aggregate, in the City Manager’s sole and absolute discretion. If for any reason (other than a Default or Event of Default by such Party) the Close of Escrow has not occurred on or before the Escrow Closing Date, then any Party not then in Default under this Agreement may cancel the Escrow and terminate this Agreement, without liability to the other Party or any other Person for such cancellation and termination, by delivering Notice of termination to both the other Party and Escrow Agent. Following any such Notice of termination of this Agreement and cancellation of the Escrow, the Parties and Escrow Agent shall proceed pursuant to Section 4.12. Without limiting the right of either Party to cancel the Escrow and terminate this Agreement, pursuant to this Section 4.9, if the Escrow does not close on or before the Escrow Closing Date and neither Party has exercised its contractual right to cancel the Escrow and terminate this Agreement under this Section 4.9 before the first date on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with the terms and conditions of this Agreement, then the Escrow shall close as soon as reasonably possible following the first date on which Escrow Agent Notifies both Parties that Escrow is in a position to close in accordance with the terms and conditions of this Agreement.

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4.10 Cost Allocations . The following costs and expenses will be paid as follows in connection with the Closing:
(i) Buyer shall pay all sales and use taxes, recording fees for the Deed and related expenses;
(ii) Buyer shall pay the premium costs and expenses for a standard or extended ALTA coverage owner’s policy of title insurance;
(iii) Seller and Buyer shall each pay one-half (1/2) of the Escrow fees; (iv) Seller and Buyer shall each pay one-half (1/2) of any and all city and/or county documentary and other transfer taxes due; and
(v) all other costs of escrow, if any, shall be paid equally by Buyer and Seller.

4.10.1 Seller shall pay real property taxes at the Close of Escrow based on the most current real property tax bill available, including any additional property taxes that may be assessed after the Close of Escrow, regardless of when notice of those taxes is rece ived or who receives the notice. Seller may seek reimbursement from the Orange County Tax Assessor’s office for any property taxes that have been assessed for a period after the Close of Escrow as Buyer is a public agency exempt from payment of such taxes. Buyer further agrees to cooperate with Seller to provide any necessary information to the Assessor’s office in connection with such request for refund.

4.10.2 All utility charges shall be pr orated as of the Closing Date. All utility security deposits, if any, shall be retained by Seller. All water, electric, telephone, fuel and other utility charges based on the last ascertainable bill unless meter readings are made as of the Closing Date, in which case such meter readings shall govern, subject to readjustment as provided below upon transfer of the service to the Buyer. If the apportionment is not based on an actual current reading upon the date of transfer, then upon the taking of a subsequent actual reading, the Parties shall, within five (5) business days following notice of the determination of such actual reading, readjust such apportionment and Seller shall deliver to Buyer or Buyer shall deliver to Seller, as the case may be, the amount determined to be due upon such readjustment.

4.10.3 All other charges, fees and taxes levied by each and every Government relative to the conveyance of the Property through the Escrow shall be paid by the applicable Party, as customary in the County.

4.11 Escrow Cancellation Charges. If the Escrow fails to close due to Seller’s Default under this Agreement, Seller shall pay all ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company , respectively, if any. If the Escrow fails to close due to Buyer’s Default under this Agreement, Buyer shall pay all ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively, if any. If the Escrow fails to close for any reason other than the Default of either Buyer or Seller, Buyer and Seller shall each pay one -half (1/2) of any ordinary and reasonable Escrow and title order cancellation charges charged by Escrow Agent or Title Company, respectively, if any.

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4.12 Escrow Cancellation. If this Agreement is terminated pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement (other than due to an Event of Default by the other Party), the Parties shall do all of the following:

4.12.1 Cancellation Instructions. The Parties shall, within seven (7) Business Days following Escrow Agent’s written request, sign any reasonable Escrow cancellation instructions requested by Escrow Agent;

4.12.2 Return of Funds and Documents . Within seven (7) Business Days following receipt by the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Agent (if any) or within seven (7) Business days following Notice of termination, whichever is earlier: (a) Buyer or Escrow Agent shall return to Seller all documents previously delivered by Seller to Buyer or Escrow Agent, respectively, regarding the Escrow; (b) Seller or Escrow Agent shall return to Buyer all documents previously delivered by Buyer to Seller or Escrow Agent, respectively, regarding the Escrow; (c) Escrow Agent shall, unless otherwise provided in this Agreement, return to Buyer all funds deposited in Escrow by Buyer, less Buyer’s share of customary and reasonable Escrow and title order cancellation charges (if any) in accordance with Section 4.11; and (d) Escrow Agent shall, unless otherwise provided in this Agreement, return to Seller all funds deposited in Escrow by Seller, less Seller’s share of customary and reasonable Escrow and title order cancellation charges (if any) in accordance with Section 4.11.

4.13 Report to IRS. After the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service under applicable Federal law, if such report is required pursuant to Internal Revenue Code Section 6045(e), Escrow Agent sha ll report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099-B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Internal Revenue Code Section 6045(e). Concurrently with the filing of such reporting form with Internal Revenue Service, Escrow Agent shall deliver a copy of the filed form to both Seller and Buyer.

5. REMEDIES

5.1 Buyer’s Termination. This Agreement shall automatically terminate without further notice or action by Buyer upon the occurrence of any of the following events, provided that Buyer is not then in material breach of this Agreement: (a) any condition to Closing contained in Section

4.4 (Buyer’s Conditions Precedent to Close of Escrow) has not been satisfied or waived by Buyer by the Closing Date; or (b) Buyer having exercised its right to terminate this Agreement pursuant to Section 3.4 (Buyer’s Approval of Ti tle to Property) . In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.

5.2 Seller’s Termination . Provided that Seller is not then in material breach of this Agreement, this Agreement shall automatically terminate without further notice or action by Seller if any condition to Closing contained in Section 4.5 (Seller’s Conditions Precedent to Close of Escrow) has not been satisfied or waive d by Seller by the Closing Date; or (b) Seller having exercised its right to terminate this Agreement pursuant to Section 3.4 (Buyer’s Approval of Title Item: 6
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to Property). In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreement.

5.3 Buyer’s Remedies. If Seller breaches this Agreement and such breach is not cured by Seller within five (5) days of receiving notice of such breach, and the Closing does not occur as a result thereof (a “Seller Default”), Buyer's sole and exclusive remedy shall be to either: (i) terminate this Agreement by delivery of written notice to Seller and Escrow Holder, and Escrow Holder shall return the Deposit to Buyer, with the interest earned thereon, if any, whereupon this Agreement shall terminate and neither P arty shall have any further rights or obligations with respect to each other or this Agreement, except those that are expressly provided in this Agreement to survive the termination hereof; or (ii) seek all remedies it may have hereunder or at law, including continuing this Agreement and seek specific performance of Seller's obligations hereunder, provided that any such action for specific performance must be commenced within one hundred eighty (180) days after such default, and if Buyer prevails thereunder , Seller shall reimburse Buyer for all legal fees, court costs, and all other actual costs of such action. No termination of the Escrow by Buyer following a breach by Seller shall be deemed to waive such breach or any remedy otherwise available to Buyer.

5.4 Seller’s Remedies.
(a) Seller’s Remedies/Liquidated Damages. IF BEFORE THE CLOSE OF ESCROW BUYER FAILS TO COMPLY WITH OR PERFORM BUYER’S OBLIGATIONS UNDER THIS AGREEMENT AND (EXCEPT AS OTHERWISE PROVIDED IN SECTION 6.8) DOES NOT CURE SUCH FAILURE WITHIN FIVE BUSINESS DAYS AFTER SELLER’S WRITTEN NOTICE OF SUCH FAILUR E, THEN SELLER MAY THEREAFTER: (I) TERMINATE THIS AGREEMENT; (II) RECEIVE AND RETAIN TH E DEPOSIT AS LIQUIDATED DAMAGES; AND (III) EXERCISE THE OTHER RIGHTS AND REMEDIES RESERVED BY SELLER AS PROVIDED IN THIS PARAGRAPH. IN THE EVENT SELLER TERMINATES THIS AGREEMENT BY REASON OF BUYER’S DEFAULT, UPON THE

DISBURSEMENT OF THE DEPOSIT TO SELLER, BUYER AND SELLER SHALL BE

RELIEVED OF ANY FURTHER OBLIGATION TO EACH OTHER WITH RESPECT TO THIS

AGREEMENT AND THE PROPERTY EXCEPT FOR ANY OBLIGA TIONS WHICH EXPRESSLY SURVIVE. IT IS EXPRESSLY UNDERSTOOD A ND AGREED BY BUYER AND SELLER: THAT SELLER WILL INCUR SUBSTANTIAL DAMAGES AS A RESULT OF ANY FAILURE BY BUYER TO COMPLY WITH OR PERFORM BUYER’S OBLIGATIONS UNDER THIS AGREEMENT; THAT IT IS EXTREMELY DIFFICULT AND

IMPRACTICAL TO CALCULATE AND ASCERTAIN AS OF THE EFFECTIVE DATE OF

THIS AGREEMENT THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED IN SUCH EVENT BY SELLER; AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF THE EXTENT TO WHICH SELLER MAY BE DAMAGED BY BUYER’S DEFAULT IN LIGHT OF THE DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING SELLER’S ACTUAL DAMAGES AS A RESULT OF SUCH DEFAULT BY BUYER.
_________________ _________________
SELLER’S INITIALS BUYER’S INITIALS
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(b) Waiver of Specific Performance. SELLER HEREBY WAIVES THE RIGHT TO MAINTAIN AN ACTION FOR SPECIFIC PERFORMANCE OF BUYER’S

OBLIGATION TO PURCHASE THE PROPERTY AND SELLER AGREES THAT SELLER

CAN BE ADEQUATELY COMPENSATED IN MONEY DAMAGES IF BUYER FAILS TO PURCHASE THE PROPERT Y IN BREACH OF THIS AGREEMENT. SELLER

ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL

PART OF THE CONSIDERATION BEING GIVEN TO BUYER FOR ENTERING INTO THIS

AGREEMENT AND THAT BUYER WOULD BE UNWILLING TO ENTER INTO THIS AGREEMENT IN THE ABSENCE OF THE PROVISIONS OF THIS PARAGRAPH. _________________ _________________
SELLER’S INITIALS BUYER’S INITIALS

5.5 Legal Actions. Either Party may institute legal action, at law or in equity, to enforce or interpret the rights or obligations of the Parties under this Agreement or recover damages, subject to the provisions of this Agreement, as applicable.

5.6 Seller Indemnification of Buyer. Seller shall Indemnify Buyer’s Parties against any Claim to the extent that such Claim arises from any of the following: (a) any wrongful intentional act or negligence of Seller Parties relating to the Property or this Agreement; (b) reserved; (c) any worker’s compensation claim or determination relating to any employee of Seller Parties or their contractors; and (d) any breach of Seller’s representations and warranties set forth in Section 3.7.

Such obligation to Indemnify shall include all Legal Costs, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action.

5.7 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this Agreement are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by such Party, at the same or different times, of any other rights or remedies for the same Default or the same rights or remedies for any other Default by the other Party.

6. GENERAL PROVISIONS

6.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference.

6.2 Notices, Demands and Communications Between the Parties.

6.2.1 Delivery. Any and all Notices submitted by any Party to another Party pursuant to or as required by this Agreement shall be proper, if in writing and sent by messenger for immediate personal delivery, nationally recognized overnight (one Business Day) delivery service (i.e., United Parcel Service, Federal Express, etc.) or by registered or certified United States mail, postage prepaid, return receipt requested, to the address of the recipient Party, as designated in Section 6.2.2. Notices may be sent in the same manner to such other addresses as either Party may from time to time designate by Notice in accordance with this Section 6.2. Notice shall be deemed received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that the Notice is sent by Item: 6
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messenger for immediate personal delivery, one Business Day after delivery to a nationally recognized overnight delivery service or three (3) calendar days after the Notice is placed in the United States mail in accordance with this Section 6.2. Any attorney representing a Party may give any Notice on behalf of such Party.

6.2.2 Addresses. The Notice addresses for the Parties, as of the Effective Date, are as follows:

To Buyer:

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630
Attention: City Manager
(T) (949) 461-3400

With a Copy to:

Best Best Krieger, LLP
18101 Von Karman Ave., Suite 1000
Irvine, CA 92612
Attention: Elizabeth W. Hull
(T) (949) 263-2608
[email protected]

To Seller:

7 Whatney Ste B,
Irvine, California 92618
Attention: LaVal Brewer
Email: [email protected]

With Copy to: Sheppard, Mullin, Richter & Hampton LLP
650 Town Center Drive, 10th Floor
Costa Mesa, CA 92626-1993
Attn: Aaron Sobaski
Email: [email protected]

6.3 Relationship of Parties. The Parties each intend and agree that Seller and Buyer are independent contracting entities and do not intend by this Agreement to create any partnership, joint venture or similar business arrangement, relationship or association between them.

6.4 Non-liability of Buyer Officials and Employees. No elected official or employee of Buyer shall be personally liable to Seller, or any successor in interest to Seller, in the event of any Default by Buyer under this Agreement or for any amount that may become due to Seller or to Seller’s successor, or on any obligations under the terms of this Agreement, except to the extent resulting from the negligence or willful misconduct of such elected official or employee.

6.5 Calculation of Time Periods . Unless otherwise specified, all references to time periods in this Agreement measured in days shall be to consecutive calendar days, all references to time periods in this Agreement measured in months shall be to consecutive calendar months and Item: 6
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all references to time periods in this Agreement measured in years shall be to consecutive calendar years. Any reference to Business Days in this Agreement shall mean consecutive Business Days.

6.6 Principles of Interpretation. No inference in favor of or against any Party shall be drawn from the fact that such Party has drafted any part of this Agreement. The Parties have both participated substantially in the negotiation, drafting and revision of this Agreement, with advice from legal and other counsel and advisers of their own selection. Any word, term or phrase defined in the singular in this Agreement may be used in the plural, and vice versa, all in accordance with ordinary principles of English grammar, which shall govern a ll language in this Agreement. The words “include” and “including” in this Agreement shall be construed to be followed by the words:
“without limitation.” Each collective noun in this Agreement shall be interpreted as if followed by the words “(or any part of it),” except where the context clearly requires otherwise. Every reference to a document, including this Agreement, refers to such document, as modified from time to time (excepting any modification that violates this Ag reement), and includes all exhibits, schedules, addenda and riders to such document. The word “or” in this Agreement includes the word “and.” Every reference to a law, statute, regulation, order, form or similar governmental requirement refers to each such requirement as amended, modified, renumbered, superseded or succeeded, from time to time.

6.7 Governing Law. The procedural and substantive laws of the State shall govern the interpretation and enforcement of this Agreement, without application of conflicts of laws , principles, or statutes. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in the County. All legal actions arising from this Agreement shall be filed in the Superior Court of the State in and for the County or in the United States District Court with jurisdiction in the County.

6.8 Unavoidable Delay; Extension of Time of Performance.

6.8.1 Notice. Performance by either Party under this Agreement shall not be deemed or considered to be in Default, where any such Default is due to the occur rence of an Unavoidable Delay. Any Party claiming an Unavoidable Delay shall Notify the other Party: (a) within twenty (20) days after such Party knows of any such Unavoidable Delay; and (b) within twenty (20) days after such Unav oidable Delay ceases to exist. The extension of time for performance under this Agreement resulting from the occurrence of an Unavo idable Delay shall commence on the date of occurrence of the conditio n causing the Unavoidable Delay . Notice of an Unavoidable Delay must describe the Unavoidab le Delay in reasonable detail. The Party claiming an extension of time to perform due to an Unavoidable Delay shall exercise reasonable efforts to cure the condition causing the Unavoidable Delay, within a reasonable time.

6.8.2 Assumption of Economic Risks . EACH PARTY EXPRESSLY

AGREES THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, OF EITHER PARTY

SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN MARKET

CONDITIONS OR DEMAND OR CHANGES IN THE ECONOMIC ASSUMPTIONS OF

EITHER PARTY THAT MAY HAVE PROVIDED A BASIS FOR ENTERING INTO THIS

AGREEMENT SHALL NOT OPERATE TO EXCUSE OR DELAY THE PERFORMANCE OF EACH AND EVERY ONE OF EACH PARTY’S OBLIGATIONS AND COVENANTS ARISING UNDER THIS AGREEMENT. ANYTHING IN THIS AGREEMENT TO THE Item: 6
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CONTRARY NOTWITHSTANDING, THE PARTIES EXPRESSLY ASSUME THE RISK OF

UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES OR MARKET

DEMAND OR CONDITIONS AND WAIVE, TO THE GREATEST EXTENT ALLOWED BY

LAW, ANY DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART

ON ECONOMIC NECESSITY, IMPRACTICABILITY, CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES. THE

PARTIES AGREE THAT ADVERSE CHANGES IN ECONOMIC CONDITIONS, EITHER OF

THE PARTY SPECIFICALLY OR THE ECONOMY GENERALLY, OR CHANGES IN

MARKET CONDITIONS OR DEMANDS, SHALL NOT OPERATE TO EXCUSE OR DELAY

THE STRICT OBSERVANCE OF EACH AND EVERY ONE OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND R EQUIREMENTS OF THIS AGREEMENT. THE

PARTIES EXPRESSLY ASSUME THE RISK OF SUCH ADVERSE ECONOMIC OR

MARKET CHANGES, WHETHER OR NOT FORESEEABLE AS OF THE EFFECTIVE DATE.
_____________________
Initials of Authorized
Seller Representative(s)
___________________
Initials of Authorized
Buyer Representative(s)

6.9 Entire Agreement . This Agreement and the Exhibits hereto contain the entire agreement and understanding between Buyer and Seller concerning the subject matter of this Agreement and supersede all prior agreements, including any previous letter of intent or terms, understandings, conditions, representations and warranties, whether written or oral, made by Buyer or Seller concerning the Property or the other matters which are the subject of this Agreement.

6.10 Amendments and Waivers. No addition to or modification of this Agreement shall be effective unless set forth in writing and signed by the party against whom the addition or modification is sought to be enforced. The party benefited by any condition or obligation may waive the same, but such waiver shall not be enforceable by another party unless made in writing and signed by the waiving party.

6.11 Invalidity of Provision. If any provision of this Agreement as applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole.

6.12 References. Unless otherwise indicated, all Section and Exhibit references are to the sections and exhibits of this Agreement. All the Exhibits attached hereto are incorpor ated herein by this reference. Whenever under the terms of this Agreement the time for performance of a covenant or condition falls upon a Saturday, Sunday or State holiday, such time for performance shall be extended to the next business day. The headings used in this Agreement are provided for convenience only and this Agreement shall be interpreted without reference to any headings. The Item: 6
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masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so indicates or requires.

6.13 Confidentiality and Publicity. Buyer is a public entity and as such, this Agreement, upon its presentation for approval at Buyer’s City Council at a duly called and agendized public meeting, shall be subject to the Public Records Act and the Freedom of Information Act. No press release or other public disclosure may be made by Seller or any of its agents regarding Buyer’s intent for this Property this transaction without the prior consent of Buyer.

6.14 Time. Time is of the essence in the performance of the parties’ respective obligations under this Agreement.

6.15 Attorneys’ Fees. In the event of any legal or equitable proceeding to enforce any of the terms or conditions of this Agreement, or any alleged disputes, breaches, defaults or misrepresentations in connection with any provision of this Agreement, the prevailing party in such proceeding shall be entitled to recover its reasonable costs and expenses, including, without limitation, reasonable attorneys’ fees and costs of defense paid or incurred in good faith.

6.16 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. Neither Seller nor Buyer shall have the right to assign all or any portion of its interest in this Agreement except to an entity that is controlling, controlled by or under common control with Buyer or Seller.

6.17 Further Assurances. The parties shall deliver such additional documents or take such additional actions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement.

6.18 No Third Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any party hereto or give any third person any right of subrogation or action over against any party to this Agreement.

6.19 Counterparts/Facsimile/PDF Signatures . This Agreement may be executed in counterparts and when so executed by the parties, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument that shall be binding upon the parties, notwithstanding th at the parties may not be signatories to the same counterpart or counterparts. The parties may integrate their respective counterparts by attaching the signature pages of each separate counte rpart to a single counter part. In order to expedite the transaction contemplated herein, facsimile or .pdf signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile or .pdf document, are aware that the other party will rely on the facsimile or .pdf signatures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.

6.20 Remedies Cumulative. The remedies set forth in this Agreement are cumulative and not exclusive to any other legal or equitable remedy available to a party.

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SIGNATURE PAGE
TO

REAL PROPERTY PURCHASE AND SALE AGREEMENT AND JOINT ESCROW

INSTRUCTIONS
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date:

BUYER:

City of Lake Forest, a municipal corporation
By
Its
ATTEST:

By:

City Clerk
APPROVED AS TO FORM:

BEST BEST & KRIEGER LLP
By:

City Attorney

SELLER:

South County Outreach, a California non-profit
public benefit corporation

By
[insert]
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55136.00525\42184760.5

Acceptance by Escrow Holder
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the instructions contained therein. The Escrow Opening Date is [insert], 2024.

Dated: [insert], 2024 Chicago Title Company
By:

Name:

Title:

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101

55136.00525\42184760.5

EXHIBIT A

Property Legal Description

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102

55136.00525\42184760.5

EXHIBIT B

Transferor’s Certification of Non-Foreign Status
Section 1445 of the Internal Revenue Code of 1986, as amended (the “Code”), provides that a transferee of a U.S. real property interest must withhold tax if the t ransferor is a foreign person. To inform the CITY OF LAKE FOREST, a municipal corporation (the “Transferee”), that withholding of tax under Section 1445 of the Code will not be required upon the transfer of a U.S. real property interest to the Transferee by (the “Transferor”), the undersigned hereby certifies the following on behalf of the Transferor:

1. The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder);

2. The Transferor’s U.S. employer identification number is _______________; and

3. The Transferor’s office address is ______________________________________.

The Transferor understands that this Certificate may be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalty of perjury I declare that I have examined this Certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of the Transferor.

DATED: ________________, 2024.

By: ______________________________________
Name:____________________________________
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EXHIBIT C

TO BE REVIEWED BY TITLE COMPANY
Grant Deed

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630
ATTN: City Clerk

EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383

SPACE ABOVE THIS LINE FOR RECORDER'S USE

APN: [INSERT]
Grant Deed
The undersigned Grantor(s) declare(s): City of Lake Forest is exempt from property taxes Documentary transfer tax is $0.

Computed on full value of property conveyed, or
Computed on full value less value of liens and encumbrances remaining at time of sale.

Unincorporated area City of Lake Forest and

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, South County Outreach, a California nonprofit public benefit corporation hereby GRANT(S) to
The City of Lake Forest
the following described real property in the City of Lake Forest County of Orange
State of California:

SEE ATTACHED EXHIBIT A

[SIGNATURES ON FOLLOWING PAGES]

Item: 6
104

55136.00525\42184760.5

GRANTOR:

SOUTH COUNTY OUTREACH
a California nonprofit public benefit corporation

____________________________
[insert]

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

STATE OF CALIFORNIA )

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

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

WITNESS my hand and official seal.

Signature:

(seal)

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EXHIBIT “1”
TO

GRANT DEED

Legal Description

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106

55136.00525\42184760.5

CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the Grant Deed dated __________________, 2024, from _______________________________________, to the City of Lake Forest, a municipal corporation, is hereby accepted by the undersigned officer on behalf of the City of , pursuant to the authority conferred by Resolution No. _______, adopted by the City Council of the City of Lake Forest on ___________________, and the Grantee consents to recordation thereof by its duly authorized officer.

Dated: _________________, 2024 CITY OF LAKE FOREST

By ____________________________

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ATTACHMENT 2

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SIGNATURE PAGE TO
LETTER OF AGREEMENT FOR 20702 EL TORO ROAD #35 CDBG GRANT

CITY OF LAKE FOREST SOUTH COUNTY OUTREACH
By:

Debra D. Rose
City Manager
By:
[INSERT NAME AND TITLE]
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By:

Lisa Berglund
City Clerk
By:
[INSERT NAME AND TITLE]
APPROVED AS TO FORM:

By:

Matthew Richardson
Best Best & Krieger LLP
City Attorney
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55136.00525\42187642.2
(BB&K 2019)
Exhibit “B”-1

EXHIBIT “A”
2002 Agreement
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AGREEMENT BETWEEN

THE CITY OF LAKE FOREST
AND

SADDLEBACK COMMUNITY OUTREACH
For the Acquisition of Property
(Program No. B-01-MC-06-0584-00-18)
FOR PROGRAM YEAR 2001-2002

COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) FUNDS
THIS AGREEMENT, made and entered into as of this J./~day of //Ilk/ , 2002, by and between the CITY OF LAKE FOREST, a municipal corporation, her~ferred to as "City," and SADDLEBACK COMMUNITY OUTREACH, a California non-profit organization, hereinafter referred to as "Subrecipient".

RECITALS
WHEREAS, the City has entered into various funding agreements with the United States Department of Housing and Urban Development, which agreements provide funds ("CDBG Funds") to the City under the Federal Housing and Community Development Act of 1974 ( 42 U.S.C. Sections 5301 et. seq.), as amended from time to time, (the "Act") and the regulations promulgated thereunder (24 C.F.R. Sections 570 et. seq.); and WHEREAS, the Act provides that the City may grant or loan the CDBG Funds to non profit organizations for certain purposes allowed under the Act; and WHEREAS, Subrecipient desires to acquire one condominium unit and operate thereon transitional housing which will be located within the City of Lake Forest, County of Orange, State of California at 20702 El Toro Road, #35, Lake Forest, CA 92630 (the "Property"); and WHEREAS, the City desires to assist in the operation of the transitional housing by granting CDBG Funds to Subrecipient to finance a portion of the cost of acquiring the Property on terms and conditions more particularly set forth herein; and WHEREAS, Subrecipient is a non-profit, non-sectarian organization providing comprehensive urgent assistance to the poor and needy in Orange County, and Subrecipient will purchase the Facility in part with the CDBG funds granted by the City; and WHEREAS, the City has environmental clearance to release the funds for this project. @) OC#21425vl a-1-
Item: 6
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r ~•
NOW THEREFORE, in consideration of these recitals and the mutual covenants contained herein, City and Subrecipient agree as follows:

1. STATEMENT OF WORK
A. Scope of Services.

Program Delivery
The City has allocated Federal 2001-2002 COBO funds in the amount of thirty-seven thousand, five hundred dollars ($37,500.00) to the Subrecipient for partial financing for the acquisition of the Property to use for transitional housing as outlined in the Subrecipient's application to the City for COBO funds, included as Attachment "1" and fully incorporated herein, (the "Project"). Subrecipient hereby agrees to use the COBO funds provided to Subrecipient solely for the Project pursuant to all of the terms and conditions of this Agreement.

Schedule of Completing Work
The actual purchase of the Property for the Project must be completed before June 30, 2002. The use of the Property as described for the Project and generally throughout this Agreement shall continue for a period of twenty (20) years following the effective date of this Agreement unless prematurely terminated in compliance with Section 15 below.

Quarterly reports during the 2001-2002 Program Year, ending June 30, 2002, shall be provided by the Subrecipient to the City as described under Section 5 below. Following the 2001-2002 Program Year, the Subrecipient shall submit annual reports to the City, also as described in Section 5 below, for the duration of this Agreement.

Budget
The Subrecipient may request to draw down on the $37,500.00 COBO funds in one lump sum, or on a quarterly basis within the 2001-2002 Program Year, so long as appropriate receipts and documentation are provided to and approved by the City.

B. National Objectives. The Subrecipient certifies that the activities carried out with funds provided under this Agreement will meet one or more of the COBO program's National Objectives as defined in 24 CFR 570.208: 1) benefit low/moderate income persons, 2) aid in the prevention or elimination of slums or blight, 3) meet community development needs having a particular urgency as defined in 24 CFR Part 570.208.

Where the assisted activity involves the acquisition of real property, a preliminary determination of whether the activity addresses a National Objective may be based on the planned use of the Property after acquisition. A final determination will be based on the actual use of the Property.

C. Performance Monitoring. The City will monitor the performance of the Subrecipient against goals and performance standards required herein. Substandard OC #21425 vl a-2-
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' _.I
performance as determined by the City will constitute non-compliance with this Agreement. If action to correct such substandard performance is not taken by the Subrecipient within a reasonable period of time after being notified by the City, contract suspension or termination procedures will be initiated.

2. TERM OF AGREEMENT
Unless sooner terminated in accordance with this Agreement, this Agreement shall continue in full force and effect for a period of twenty (20) years following the effective date. For an additional period of five (5) years following the termination or expiration of this Agreement, the Subrecipient shall be required to comply with Section 15 below, and the use of the Property shall be so restricted.

3. DISBURSEMENT OF FUNDS
A. Maximum Amount of CDBG Funds. The maximum amount of CDBG Funds to be provided to Subrecipient is of thirty-seven thousand, five hundred dollars ($37,500.00).

Subrecipient hereby acknowledges that the City cannot guarantee that the CDBG Funds will be received from HUD. The City's obligation to fund the work hereunder is limited to the availability ofCDBG Funds from HUD. If the CDBG Funds are not forthcoming from HUD for any reason, the City shall have no obligation to fund the work through any other source of funds.

B. Method of Payment. The City shall not provide any payments/reimbursements in advance of actual expenditures by the Subrecipient. The Subrecipient may submit to the Lake Forest Neighborhood Services Manager a "Reimbursement Request" setting forth the amounts actually expended by Subrecipient for the Project; provided that said expenses are included in the Budget. Each request for reimbursement shall include documentation to verify that the expenditure of funds is consistent with the project description/definition as approved by the City Council. Prior to reimbursing the Subrecipient, the City will verify that the Subrecipient has met all applicable regulations for the project.

C. Labor, Materials, and Supplies. The Subrecipient shall furnish all labor, materials and services and bear all expenses necessary to provide the subject program as outlined in this Agreement. Under this Agreement, the City's only financial obligation to the Subrecipient is to provide the CDBG funds of $37,500.00 maximum, as allocated by the City Council for CDBG Program for 2001-2002.

4. PROGRAM INCOME
A. Definition. Program Income, as defined in 24 CFR 511. 76(b ), means the Subrecipient's gross income which is directly generated from the use of the CDBG Funds less all costs incidental to the generation of the income, and shall not include any such income from Subrecipient's Project unless the gross annual income from all CDBG projects by the City and all its Subrecipients exceeds $25,000.00 per year.

OC#2142S vi a-3-
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B. Restrictions. Pursuant to Section 5 below, the Subrecipient shall report to the City any rent, interest, or other income earned as a direct result of the use of the CDBG Funds, whether or not such income constitutes Program Income. Any Program Income ( as defined in Paragraph A above) received by Subrecipient shall be retained by the Subrecipient for expenses related to the provision and operation of the transitional housing unit identified in the Project. All provisions of this Agreement shall apply to such activities funded by Program Income. All Program Income shall be expended by Subrecipient before the City is obligated to advance any other CDBG Funds to Subrecipient under this Agreement. Any proportion of Program Income attributable to the grant of CDBG Funds which is on hand when this Agreement expires, terminates, or is otherwise canceled shall be subject to Section 15 herein.

5. RECORDS AND REPORTS
A. Documentation. The Subrecipient shall, at minimum, maintain the following records and reports to assist the City in complying with its record keeping requirements. a) Documentation of the income level, ethnicity, and/or age of persons and/or households participating in or benefiting from the Subrecipient's program; and, b) Documentation of the number of persons and/or households participating in or benefiting from the Subrecipient's program; and,
c) Documentation of all CDBG funds received from the City; and, d) Docwnentation of expenses and reimbursement requests; and, e) Documentation of how and where a determination was made as to the eligibility status of persons assisted; and,
f) Any such other related records as the City shall require.

B. Reports. The Subrecipient shall submit quarterly "Progress Reports," including the information described in Paragraph A of this Section, during the program year beginning July 1, 2001 and ending June 30, 2002 within fifteen (15) calendar days of the end of each quarter. The final progress report is due no later than July 15, 2002. The report must include sufficient information to assist the City in monitoring the Subrecipient's performance. The Subrecipient must demonstrate satisfactory performance prior to reimbursement for expenditures. Following the close of the 2001-2002 Program Year, the Subrecipient shall submit to the City's Neighborhood Services Manager an annual Progress Report, including the information described in Paragraph A of this Section. The annual Progress Report shall be due no later that July 15 of each calendar year throughout the duration of this Agreement.

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6. C. Maintenance of Records. The Subrecipient shall maintain separate accounting records for the Federal CDBG funds provided by the City. The City, Federal Grantor Agency, Comptroller General of the United States, or any of their duly authorized representatives shall have access to all books, documents, papers and records maintained by the Subrecipient which directly pertain to the Project for the purpose of audit, examination, excerpts and transcriptions.

Unless otherwise notified by the City, the Subrecipient shall retain all financial records, supporting documents and statistical reports necessary to evaluate the Project as consistent with the requirements of this Agreement until four (4) years following the expiration, termination, or early cancellation of this Agreement. All records subject to an audit finding must be retained for five (5) years from the date the finding is made or until the finding has been cleared by appropriate officials and the Subrecipient has been given official written notice.

SINGLE AUDIT REQUIREMENT
If the Subrecipient shall receive more than $300,000.00 in total federal funds in one fiscal year from the City of Lake Forest and/or any other city or agency, the Subrecipient is required to submit a Single Audit Report. As required by the Federal Single Audit Act, the Subrecipient shall be required to submit to the City, a comprehensive financial audit prepared by an independent, neutral third party auditor. The audit shall cover fmancial operations of the Subrecipient for the period beginning July 1, 2001 and ending June 30, 2002 and is due not later than June 30, 2003.

7. PROGRAM REQUIREMENTS
The Subrecipient shall adhere to the terms of the City's CDBG Application and Subrecipient Agreement and with assurances and agreements made by the City to the United States Department of Housing and Urban Development.

The Subrecipient shall comply with applicable Uniform Administrative Requirements as described in Section 570.502(b) of the federal regulations for the CDBG Program, included as Attachment "2" and fully incorporated herein.

The Subrecipient shall carry out all activities in compliance with all Federal laws and regulations as described in Subpart K, such as labor standards, environmental standards, and fair housing requirements, except that:

OC#21425 vl
a) The Subrecipient will not assume the City's environmental responsibilities as described in Section 570.604; and
b) The Subrecipient will not assume the City's responsibility for initiating the review process required under the provisions of 24 CFR Part 52. a-5-
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, . '
The provisions of Subpart K of the CDBG Regulations are included as Attachment "3" and fully incorporated herein.

8. RELIGIOUS ORGANIZATION
The Subrecipient agrees that funds provided under this contract will not be utilized for religious activities, to promote religious interest, or for the benefit of a religious organization in accordance with the Federal regulations specified in 24 CFR 570.2000).

9. NONDISCRIMINATION CLAUSE
There shall be no discrimination against or segregation of any person, or group of persons, on account or race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any part thereof, nor shall Subrecipient, or any person claiming under or through it, establish or permit any such practice of practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property, or any part thereof.

10. CHANGES IN USE OF FUNDS

11. Changes in the use of CDBG funds must be approved by the City Council. If the Subrecipient desires a change in the use of the CDBG funds following approval of this Agreement, a written request must be submitted to the City for review by the Council.

No change in use of the CDBG funds will be permitted by the City without prior formal approval by the City, subject to the provisions of the City's adopted Citizen Participation Plan. Notwithstanding the above, in accordance with 24 CFR 570.503(b)(8), the Property shall be used to meet one of the National Objectives summarized in Section 1.B. herein and more fully described in 24 CFR 570.208 for the duration of this Agreement plus five (5) years following or the City must be reimbursed as required under Section 15 below. If this Agreement is prematurely canceled, the Property shall be used to meet one of the CDBG National Objectives for at least five (5) years following cancellation or the City shall be reimbursed in accordance with Section 15 below.

SALE OR TRANSFER OF THE PROPERTY
Subrecipient hereby agrees not to transfer the Property or any of its interest therein except as provided in this Section. As used in this Section, the term "transfer" shall include any assignment, mortgage, hypothecation, conveyance, or encumbrance of the Property or the improvements thereon. A transfer shall also include the transfer of more than twenty-five percent (25%) (in the aggregate) of the present ownership and/or control of any person or entity constituting Subrecipient or its general partners, taking all transfers into account on a cumulative basis.

Subrecipient shall not transfer the Property or any of Subrecipient's rights hereunder, directly or indirectly, voluntary or by operation of law, without the prior written approval oc #21425 vi a-6-
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" ....
of the City during the term of this Agreement, and if so purported without written approval, said transfer shall be null and void. In considering whether the City will grant approval of any such transfer, the City shall consider such factors as: (i) whether the transfer will prevent or substantially interfere with the performance of this Agreement and the pwposes and restrictions of the Act and Regulations, (ii) the financial credit, strength, and capability of the proposed transferee to perform Subrecipient's obligations under this Agreement, and (iii) the proposed transferee's experience and expertise in the performance of similar Projects.

12. INSURANCE
If the Subrecipient shall receive more than $5,000.00 from the City in CDBG funds and/or other funds, the Subrecipient shall obtain and maintain policies of general liability insurance and a combined policy or worker's compensation and employers liability insurance from an insurance company authorized to do business in the State of California which meets the requirements of the City in an insurable amount of not less than $300,000.00 each, unless a lower amount is approved by the City Attorney or the City Manager.

This insurance shall be in force during the term of this Agreement and shall not be canceled without thirty (30) days prior written notice to the City sent by certified mail.

The City shall be named as an additional insured on these policies. The Subrecipient shall furnish certificates of insurance to the City before commencement of work.

13. HOLD HARMLESS AND INDEMNITY AGREEMENT
The City, its elected and appointed officers, employees and agents shall not be liable for any claims, liabilities, penalties, fines, or any damage to goods, properties, or effects of any person whatsoever, nor for personal injuries or death caused by, or claimed to have been caused by, or resulting from, any intentional or negligent acts, errors or omission of Subrecipient or Subrecipient's agents, employees, or representatives in completion of the Project outlined in the Agreement.

Subrecipient agrees to defend, protect, indemnify, and hold harmless the City and its elected and appointed officers, employees and agents against any of the foregoing liabilities or claims of any kind and any cost/and expense that is incurred by the City on account of any of the foregoing liabilities, including liabilities or claims by reason of alleged defects in any plans and specifications for the Project or facility, excluding only such claims or liabilities arising from the sole negligence or willful misconduct of the City.

OC #21425 vi a-7-
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14. SUSPENSION AND TERMINATION OF AGREEMENT
In accordance with Title 24, Sections 85.43 and 85.44 of the Code of Federal Regulations, this Agreement may be suspended or terminated if the Subrecipient fails to comply with any term(s) of the award and/or the award is terminated for convenience.

Title 24, Section 85.43 and 85.44 of the Code of Federal Regulations are included as Attachment "4" and fully incorporated herein.

15. REVERSION OF ASSETS
Upon expiration, termination, or early cancellation of this Agreement, the Subrecipient shall transfer to the City any CDBG funds on hand at the time of expiration, and any accounts receivable attributable to the use of CDBG funds. The Subrecipient shall be required to use any real property and any Program Income (as explained in Section 4 above) under the Subrecipient's control that was acquired or improved in whole or in part with CDBG funds in excess of$25,000.00 as follows:
a) Used to meet one of the National Objectives in 24 CFR, Section 570.208 until five ( 5) years after expiration, termination, or cancellation of this Agreement; or, b) Disposed of in a manner that results in the City being reimbursed in the amount of the current fair market value of the property less any portion of the value attributable to expenditures ofnon-CDBG funds for acquisition or improvement to the property. Notwithstanding the foregoing, the City hereby agrees to subordinate this right to demand reimbursement to the deed of trust recorded against the Property by the lender providing purchase money financing for Subrecipient's acquisition of the Property.

16. MISCELLANEOUS PROVISIONS
A. Notices. Any notices which either party may desire to give to the other party under this Agreement must be in writing and may be given either by (i) personal service, (ii) delivery by a reputable document delivery service, such as but not limited to, Federal Express, that provides a receipt showing date and time of delivery, or (iii) mailing in the United States Mail, certified mail, postage prepaid, return receipt requested, addressed to the address of the party as set forth below or at any other address as that party may later designate by Notice:

OC #21425 vi
CITY:

City of Lake Forest
23161 Lake Center Drive, Suite 100
Lake Forest, CA 92630
Attn: Elaine Nagano, Neighborhood Services Manager
a-8-
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With a copy to:

City Clerk
City of Lake Forest
23161 Lake Center Drive
Lake Forest, CA 92630
SUBRECIPIENT:

Saddleback Community Outreach
23011 Moulton Parkway, B·5
Laguna Hills, CA 92653• l 222
Attn: Chairman/Executive Director
B. Assignment of Agreement. The Subrecipient shall not assign this Agreement or any monies due thereunder without the prior written consent of the City.

C. Successors or Assigns. All terms, conditions, and provisions hereof shall inure to and shall bind each of the parties hereto, and each of their respective heirs, executors, administrators, successors, and assigns.

D. Interpretation. Each party to this Agreement warrants to each other party that each party either had the assistance of counsel or had counsel available to it, in the negotiation for, and execution of, this Agreement, and all related documents. The parties acknowledge and agree that the terms and provisions of this Agreement have been negotiated and discussed between the parties and their attorneys, and this Agreement reflects their mutual agreement regarding the same. Because of the nature of such negotiations and discussions, it would be inappropriate to deem any party to be the drafter of this Agreement, and therefore no presumption for or against validity or as to any interpretation hereof, based upon the identity of the drafter shall be applicable in interpreting or enforcing this Agreement.

E. Entire Agreement. This Agreement contains the entire understanding between the parties relating to the obligations of the parties described in this Agreement. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Agreement and shall be of no further force or effect. Each party is entering into this Agreement based solely upon the representations set forth herein and upon each party's own independent investigation of any and all facts such party deems material.

F. Severability. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Agreement is for any reasons held to be invalid by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Agreement.

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t I ll
. .,
G. Counterparts. This Agreement may be executed in multiple counterparts, each of which so fully executed counterpart shall be deemed an original. No counterpart shall be deemed an original or presumed delivered unless and until the counterparts executed by the other parties to this Agreement are in physical possession of the party seeking performance thereof.

H. Authority to Execute this Agreement. The person or persons executing this Agreement on behalf of Subrecipient warrants and represents that he/she has the authority to execute this Agreement on behalf of the Subrecipient and has the authority to bind Subrecipient to the performance of its obligations hereunder. [END OF TEXT; FOLLOWING PAGE CONTAINS SIGNATURES]
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• , r .._
I
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first written above.

SADDLEBACK COMMUNITY
OUTREACH (Z_--JJ~
~~--~--v
.>oHrJ e. R.. ectJc,
Cha:irmM!/Executive Director
(Signaturaj
~ttyJ,H 1rv~Rr
(Name) _ c . -r,,. .A
~ ~V'J
(Title)
ATTEST:

Eric S. Vail, Assistant City Attorney
OC#21425vl a-11-
CITY OF LAKE FOREST, a municipal
corporation
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I.
, City of Lake Forest
2001/2002 CDBG Application :-Page1
RECEf'v':eo
A.

CITY OF LAKE FOREST
Cl;TY._OF LARE FOREST
CtTY CLERK'S OFFICE
2001/2002 COMMUNITY DEVELOPMENT BLOCK G~T~'i1f.W5s

REQUEST FOR PROPOSALS FOR PUBUC SERVICES AND GRANTS

APPLICATION

GENERAL INFORMATION
I '

1. Organization: Saddleback Community Outreach (SCO)

2. Mailing Address and Telephone Number: 23011 Moulton Parkway, B-12 Laguna Hills, CA 92653
(949) 380-8144

3. Proposed Program Title: Capital Expenditure/Transitional Housing Program

4. Location Where Services Are To Be Provided: Lake Forest (Specific locations to be determined)

5. Official To Contact Regarding This Application: John Rooney, Executive Director

6. Official(s) Authorized to Sign Contract and Expend Funds:

7. Federal Tax I.D. Nwnber: 33-0330233
John Rooney, Exec. Director
Margaret McClean, CEO
Ray Havert, Chairman

8. Attach Copies of Tax Exempt Registration and Non-Profit Status Verification.

See attached 50lc3 letter.

9. Attach Proof of Coverage of Required Insurance.

See attached.
f:\common\enagano\O 1 cdbg\sbrappO I .doc ATTACHMENT 1
Item: 6
123

,City of Lake Forest
2001/2002 CDBG Application Page8
B. PROGRAM INFORMATION
This request is for a New __ X .... * __ Existing ____ program. * .For purchase of two condominiums for transitional hous·ing.

2. Have you previously received funding for this service through the City's CDBG Program? Yes X No ____ . If yes, identify the years, amounts and programs funded. Also provide names, agencies and contact persons at those agencies if other than Lake Forest.
1999-2000 $75,000 CDBG/City of Lake Forest
1999-lOOO $192,000 SuperNofA/County of Orange
!999-2000 $25,00o· CDBG/City of Mission Viejo
2000-2001 $75,0uO CDBG/City of Lake Forest
2000-2001 $60,000 CDBG/City of Mission Viejo

3. Are you requesting CDBG funding for this progratnthrough any other cities or the County? Yes ____ No X • If yes, from whom and how
much?

4. Funding requested under which category? (Limit one.)

5. 6.

7. 8.

9. X Services to/Projects for Homeless Persons or Persons Threatened With Homelessness.

Services to/Projects for Non-Homeless Persons with Special Needs.

Services to/Projects for Other Low Income Persons.

Amount of CDBG funds requested from Lake Forest: $ 90,000 Amount of CDBG funds requested from other agencies: $ ___ o_ Other sources of income: $171,800
Total cost of proposed program: . $261.800
Total agency budget: $666,200*
f:\cornmon\enagano\Olcdbg\sbrappOl.doc
*Agency budget plus
capita 1 expense·
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' I
·City of Lake Forest
2001/2002 CDBG Application Page9

10. Estimate the number of lower income Lake Forest residents to be directly assisted with requested grant funds. (Persons or Households?) 15 persons per year in perpetuity (15 persons X 30 years X Qi;:', 900:~ persons)°

11. Narrative: See narrative
On a separate sheet(s) of paper, please provide the following information:
a) Describe the proposed program/project. Include specific activities you will undert~e, the average amount or length of service to be provided and the expected outcome of the program/project.
b) Identify the nature and extent of the community need to be addressed by the proposed program/project. Provide data which supports the unmet demand for the proposed service.
c) Describe the characteristics of the targeted client population including age, sex, income level, ethnic background, target area, and other specialized characteristics. d) Describe your organization and explain your professional qualifications to carry out the proposed program. Please list all appropriate academic credentials (if applicable), related experience and past performance.
e) Describe how referrals are made to and from your organization. f) What other source(s) of funding will your program seek to support the proposed program/project?
g) What is the alternative plan if the City of Lake Forest contribution is not granted or the funding level is reduced?
h) Please complete the budget proposal provided in Attachment A of this application. f:\common\enagano\O 1 cdbg\sbrappO l .doc
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125

. .
•City of Lake Forest
200112002 CDBG Application
C. CERTIFICATION
Page10
I hereby certify tha4 if funds are granted from Lake Forest to our organization, they will be used to benefit lower income residents of Lake Forest. We understand that funding is provided on a reimbursable basis only, that proof of liability insurance will be required and that our formal agreement with the City will define other reporting and programmatic requirements.

Name: ....l f£J 14- JJ IE , (<.. c .c.'I ,..., c 7
Signature: -TJ1...,......,...-_"---__ z __ ._~--~--- Date: .D &.cefVl6611- f:\common\enagano\O 1 cdbg\sbrappO I .doc
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126

City of Lake Forest
2001-2002 CDBG Capital Expenditure Application
Saddleback Community Outreach
A. PROGRAM DESCRIPTION
Saddleback Comm.unity Outreach (SCO) seeks to continue our expansion of the Transitional Housing Program through the purchase of two condominimns in Lake Forest. The purpose of the program is to offer long term. transitional housing to South Orange County residents. Families may re.main in the program for six to twelve months. Clients work with the Sadclleback: Community Outreach staff and volunteer mentors on building new skills such as budgeting, employment goals, and other life skills. Parents and children also participate in a mandatmy counseling program consisting of group, individual and family sessions.

Families contribute monthly to the expenses associated with the housing unit The Spirit of the program encourages stability, responsibility, and seJf-sufficiency while providing encouragement and help.

Participants are expected to secure permanent housing and financial responsibility by the end of their stay.

With the help of the City of Lake Forest and other contributors, SCO has purchased nine condommiums in South Orange County. and is in escrow on two more. Six condominiums are located in the City of Lake Forest. Between July 1999 and June 2000, fifty-one people were served in the Transitional Housing Program, representing more than ~uble the number of clients served at the same time 1ast year.

B. STATEMENT OF NEED
There are no other programs in South Orange County that provides this particular service to families in need. Despite its growth, the Transitional Housing Program has been virtually 100% occupied. and with a frequent waiting list, since its inception. Between July 1999 and June 2-000, SCO has served 6,337 Lake Forest residents in all of our social services programs. Lake Forest residents have traditionally been one of the highest utilizers of all SCO programs. Lake Forest residents received more than $10,000 in rental assistance in the above referenced time period (9% of the total program). The :families who received this assistance were imminently at risk of losing their housing or bad been homeless. Oearly there are many precariously housed residents in the City of Lake Forest, Due to the high cost of housing and rising rents in Otange Collllty, it is not unusual for very low-income families to spend 60-80% of their income on rent For these families, a single crisis (such as a lost job or illness) can lead to eviction and/or homelessness.

SCO is a safety net for these at -risk families.

C. 'l'ARGETED CLIENT POPULATION
The Transitional Housing Program targets families who are homeless or at risk of homelessness and reside in South Orange County. All participants are very low-income families. Many recipients have experienced difficulties such as divorce, domestic violence, unemployment or illness. SCO has close working relationships with other social service providers in South Omnge County, especially domestic violence programs. Through these connections, SCO is often able to provide "second step" housing to families leaving emergency shelter programs. Families are interviewed by tJained volunteers to assess their level of motivation and willingness to fully participate in the program. Last year the demographic profile of Transitional Housing Program participants was as follows: 30% Latino, 50% Caucasum, and 20% African American.
l>. ORGANIZATION DESCRIPTION
Saddleback Community Outreach is a program like no other in South Orange County. SCO was founded in 1989 with a mission to provide a comprehensive range of services to our neighbors. The mission of the services is to encourage self-sufficiency among the recipients. Between July 1999 and June 2000, SCO provided services 18,747 times to residents of South Orange County. The evidence that SCO is truly a community project is reflected in our many volunteers and the financial support received from the community. In fact. a large percentage of our budget comes from community resources including Item: 6
127

businesses, congregations, individuals and fundraisers. SCO is very cost effective, maintaining only two staff persons, and utilizing tnore than 150 community volunteers to "staff' the agency.

E. REFFERAL PROCESS
Clients are generally referred to Saddleback Community Outreach by local congregations, social ~ce agencies community centers, senior citizen prognuns and by word of mouth. Specifically for the Transitional Housing Program we coordinate with a local domestic violence program to provide "second step" housing to their graduates. Through such collaboration with other community members, we are maximizing resources and providing the best seivice to our constituents.

F. SOURCES OF FUNDING
SCO has vigorously sought funding for the Transitional Housing Program in recent years due to the high demand for services. In addition to generous private donations and other local municipalities, SCO has .received. funding through the County of Orange and the SuperNOF A process for this program. SCO has been able to minimize administrative costs and raise sufficient operating funds to .finance the program's expansion The client repayment program also. offers a small, but important, ongoing support for the program.

G. ALTERNATIVE PLAN
Should the City of Lake Forest choose not to fund our program. it would seriously impact our ability to purchase these properties, and, therefore, serve needy families. Of course, SCO will continue to seek funds from a variety of sources, but CDBG funds are uniquely targeted for large capital purchases.

B. BUDGET PROPOSAL
See attachment A
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128

·City of Lake Forest
200112002 CDBG Application
Organization:

CDBG SUBRECIPIENT APPLICATION

ATTACHMENT A

PROPOSED BUDGET
Saddleback Community Outreach (SCO)
Pagell
Program: Capital Expenditure/Transitional Housing Program* Administration and
Salaries
Supplies
Facilities and 4,000 4,000 Maintenance
Communications
Professional
Services (; nr. l . i=>sr.r lmwi fees) 7.000 7.000
Conferences and
Meetings
Travel and Meals
Insurance 800 800
Capital Purchases 90,000 160,000 250,000
Other
(Please Specify)
TOTAL 90,000 171,BOOi 261,800
NOTE: All expenditures must be fully documented by receipts, time records, invoices, canceled checks, inventory records or other appropriate documentation which fully and completely disclose the amount and nature of the expenditure. *Note: This budget is soley for the purchase of two condominiums to be used in the Transitional Housing Program.
f:\cornmon\enagano\O 1 cdbg\sbrapp0 l .doc
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129

. .
'" Name of Organization: Saddleback Community Outreach
Address: 23011 Moulton Parkway, B-12
Laguna Hills, CA
CDBG FY 2001/02

QUESTIONNAIRE
I. Is your organization a religious entity, including a nonprofit religious organization?
( ) If yes, skip to Part II.
( XX ) If no, proceed.

A. Will the funds be used for the acquisition of property to be used for religious purposes or which will otherwise promote religious interests? . . ( ) YES If yes, stop here.
( xx ) NO If no, proceed:

B. Will the funds be used for the construction or rehabilitation including historic preseivation and removal of architectural barriers of structures to be used for religious purposes or which will otherwise promote religious interests?
( ) YES
( xx ) NO
If yes, stop here.

If no, proceed:

C. What are the eligible public services for which the funds will be used? Please describe the eligible public seivices:

Provide benefit to low income persons.
ll. If your organization is a religious entity, including a nonprofit religious organization, then proceed as follows: N / A
A. Will the funds be used for the acquisition of property for ownership by your organization?
f7c/m'Olcclbg/relques
(
(
) YES
) NO
If yes, stop here.

If no, proceed:

Item: 6
130

•,
'.

Name of Organization: Saddleback Community Outreach
Address: 23011 Moulton Parkway, B-12
Laguna Hill~, CA
CDBG FY 2001/02
Not Applicable
B. Will the funds be used for the construction of structures owned by your organization?
( ) YES If yes, stop here.
( ) NO If no, proceed:

C. Will the funds be used to rehabilitate buildings owned by your organization (including historic preservation and removal of architectural barriers)?
( ) YES If yes, proceed:
( ) NO If no, skip to Section D.

1. Is the building ( or portion thereof) that is to be improved with the CDBG funds leased to an existing or newly established wholly secular entity (including an entity established by the religious entity)?
( ) YES If yes, proceed.
( ) NO If no, stop here.

2. Will the CDBG assistance be provided to the lessee (and not the lessor) to make the improvements?
( ) YES If yes, proceed.
( ) NO If no, stop here.

3. Will the leased premises be used exclusively for secular pUiposes available to persons regardless ofre~igion?
( ) YES If yes, proceed.
( ) NO If no, stop here.

4. Are the lease payments equal to or less than the fair market rent of the premises as they were before the improvements were made? ( ) YES If yes, proceed.
( ) NO If no, stop here.
fie/en/OJ cclbg/relques
Item: 6
131

' .. •
, .

Name of Organization: Saddleback Community Outreach
Address: 23QJ J Moul too Parkway, B-J 2
Laguna Hills, CA
CDBG FY 2001/02
Not Applicable.

S. Will the portion of the cost of any improvements that also serve a non-leased part of the building be allocated to and paid for by your organization?
( ) YES If yes, proceed.
( ) NO Ifno, stop here.

6. Has your organization entered into a bindin& aareement that it will pay to the lessee the value of the improvements if the lessee ( or qualified successor lessee) fails to retain the use of the leased premises for a wholly secular purpose for at least the useful life of the improvements and that the lessee (or qualified successor lessee) also agrees that it must remit such amount received from your organization back to the City?
( ) YES If yes, proceed.
( ) NO If no, stop here.

D. Will the funds be used by your organization for eligible public services? ( ) YES If yes, describe public services:

NOTE: All Subrecipient organizations must agree to the tenns of the Subrecipient contract which include the following:
* The applicant agrees not to discriminate against any
employee or applicant for employment on the basis of
religion and will not limit employment or give preference in employment to persons on the basis of religion;
The applicant agrees not to discriminate against any person applying for such public services on the basis of religion and will not limit such services or give preference to
persons on the basis of religion; and,
flc/cnA)lcdba/relqucs
Item: 6
132

.. ,_.
'.

Not Applicable.
*
(
f/c/cn/01 cdbplquc:s
)
Name of Organization: Saddleback Community Outreach
Address: 23011 Moulton Parkway, B-12
Laguna Hills, CA
CDBG FY 2001/02
The applicant agrees not to provide religious instruction or counseling, conduct religious worship or services, engage in religious proselytizing, or exert any other religious influence in the provision of such public services.

NO Ifno, describe the public services for which
funding will be used.

Item: 6
133

•.•• · i
Dr rtmcnt of tho Treasury
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Cnso Number:
95H206002
Conl:act Person:

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~•~ai~·;;:~1::. Dased on infornml:ion supr>I ied, and ai;suminu y,)u1· ,.11.u!rnl:1011u, 1-1i 11 bo atr. :.J 111• t ...... '
~•./-~tf;,·._c!tatnd .in ~,our. appl iciltion for rar.c,gni-1:ion of o><un1pl;il,n, m: hi.Iva delorminod '/C.U •~):~:::..),a,ro exe,11pl: from Fodornl inco,110 -1:ax undo.- section 501 <.c1) of' l:1-1,:: lnl:oi-md '.<~:i1 ::·;!,l?eveoue Code as an organization do5cribed in section !:iOl.<d (3). ~,:C: .. ~~ .. ~~~-t ,. .
/·:·:,·.·~·:' ·, ... Becauue you arc, a n<11-dy crcal:c,d oqJani.:1.ation, •. 1:1t.-: itr1l nol nmst mal:in!J a .;:'.:r::,· final dotnrminal:ion of your fuundul:ion 1.t:ntus unJe1· i~od:i,m !:i():J(a) ,>f l:ho C,l,fo. ,. /:,,1\.!llo1-1ovar, 1-to havo deter111inod lhat \'OU co11 roasonnl.dy L .. ·1 m11.•(•cl,HI l:o l,e a pul.,1 i(:- • ;· ·-1.:hl.Y uupporl:od orgonl.:ml:ion doacribocJ in ~~ectiom:. bO!l(a) (l) ;_rn,J J/()(l,) (l) (ti) (viL ·.:·_: ... .:,_-·:.
~. t:•••:' , •. 1 ' I
.::./.: ... · : l\ccordlngly, you NI 11 be troal:01:I m~ n pub I icly !311ppc,rl:od orgnni,rnl:ion, -,'/•>t:Jand nol: as a priva~o foun~a·tion, durinsJ .m advance ruling 1-"~riod. rhls -i:t--,:;:;·i ndvn~ce rul Ing J>er1od bB!Jlnt> and c>ndu cm l:ho datos i,l·10Hn nl,o•u: • . ,.,{!.· ;z.l, ·. 0 4' 11•f' '·•:~:·: ' . .
•·,:-.i~=??:. · 'IUt:hin 90 days ufl:or l:ho end of your advanco rul inti lhW i•:h.l, you 1nusl:
;~\\'.1,'.(;;uubm.it_ to us lnfonu1tion noedod to d,,Lormino 1-1hal:hor \1ou h:.ivo n1<:I: l:ha ri:n1uire··· .'>;l;"f)•~mts of t:he apr,licablo support ·to11t during tha ndvanoi ruling period. H you \.~.:\i<~.(IB~ab,l.iuh that you havn boctn a r>ubl icl\' supported orn,,ni:z,,Lion~ you Hi 11 bo :•.;t;;•,'_:• .. •:i-c::lauolf.led as·a socl:lon 509(a) (1) or 509(11) <2> organizal:iml au long as yQU om ff;\·,~.:;~.;~_I_ nu.a ·-to 11eet the roqu I r<u11onts or tho ar>P I i cub Io sup~,or l; Ln1; l. If y<lU do not fi[b:(;~;J~_~eol:,:.l:he publ le sup1>orl: roc1ui1•einonl:s durlng tho advance rul in~J J)arh,d, you 1-1i 11 t;i-\'.".:,/:::~_l>,a cJ.asniflod eo a 1>rlv11to foundation for future 1>cwiodt1. f\ls<,, if vou are ,•·;~•:·!',••:ciao.a.if led au n pd,,at:o foundal:ion., you 1-li 11 bo l:roule~d a,. a rwivnto foundnl:il)n ( .. \t:\•::·f.ro1n 'the da to of yo1Jr · i n<:ept ion fc1r purpoHon of so<:t i (•ns U>7 Cd) aud '1940. 1::: .. ,-}, ..
~·.'.'.:~;<-. _.GrantorH and contr.it;,utoru Nin\, rnl\' on tho dotorm1natic,n tlu~t you arr, nc,t iJ •./i~·.•.'.·· ·_.r>rlval:e -foundnl:lon. unl:11 90 dayn nfti>r l:hn cm<l of youi· ndvance rul ino 1>c1rlc,d. :;1;~;1;:1.·;;-; ~: [ f_· you tiubmi t ·the 'raqu I rod inf or mat ion 1-1 I l:h ir1 -Um 90 d.a~•s,. ~1ra11 l:or-s and conb- i - ~\~f::'.:\,l~ul:ors 111ny conl:lnuo l:o rnly on l:ho adv.mco cfolor·111inal;i,,n 11nl:i I l:hn ~;,w'li<::o I I•· I ••\ • '•: •
,'//'·,·.::.
.j
Item: 6
134

~-;INT:RNAL RKVENUE SERVIC~

DISTRICT DIRECTOR
2 CUPJ\NIA CIRCLE
MONTEREY PARK, CA 91754
Date:

MAY 151993

SADDLEBACIC COMMUNITY OUTREACH
23011 MOULTON PKY BS
LAGUNA HILLS, CA 92653-1222
Dear Applicant:

DEPARTMENT OF THE TREASURY
Employer Identification Number:
33-0330233
Contact Person:

JULIE Y CHAN
Contact Telephone Number:
(213) 725 w 6619
Our Letter Dated:

August 10, 1989
Addendum Applies:
no
This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period.

Your exempt status under section S0l(a) of the Internal Revenue Code as an organization described in section SOl(c) (3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section S09(a) of the Code because you are an organization of the type described in section 509(a) (1) and 170(b} (1) (A) (vi).

Granters and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509{a) (1) status, a granter or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge.that the Internal Revenue Service had given notice that you would no longer be classified as a section 509(a) (1) organization.

If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter.

Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent ,records.

If you have any questions, please contact the person whose name and telephone number are shown above.

Sincerely yours,
• •
Michael· uinn
District Director
Letter l0S0(DO/CG)
Item: 6
135

STAT.E1-HD_M_E_0F_F_1c_E ____ ls_AN_F_R_ANC_I_s_co_.__l ______ A_N,_.1_L_R_A_T_1N_G_E_N_o_o_R_se_M_E_N~! ____ _

COMPENSATION

INSURANCE
FUND
IT IS AGREED THAT THE CLASSIFICATIONS AND RATES PER $100 OF REMUNERATION APPEARING IN THE CONTINUOUS POLICY ISSUED TO THIS EMPLOYER ARE AMENDED AS. SHOWN BELOW.

HERE ARE YOUR NEW RATES FOR THE PERIOD INDICATED. IF YOUR NAME OR ADDRESS SHOULD BE CORRECTED OR IF INSURANCE IS NOT NEEDED FOR NEXT YEAR, PLEASE TELL US.

IMPORTANT THIS IS NOT A BILL

SEND NO MONEY UNLESS STATEMENT IS ENCLOSED
THE RATING PERIOD BEGINS AND ENDS AT 12:01AM

PACIFIC STANDARD TIME
CONTINUOUS POLICY 1421523-00
RATING PERIOD 4-01-00 TO 4-01-01

SADDLEBACK COMMUNITY OUTREACH
23011 MOULTON PKWY B-5
LAGUNA HILLS, CALIF 92653

DEPOSIT PREMIUM

MINIMUM PREMIUM

PREMIUM ADJUSTMENT PERIOD
$535.00
$535.00

SEMI-ANNUAL
R SG
-
-

NAME OF EMPLOYER- SADDLEBACK COMMUNITY OUTREACH
CODE NO.
8810
8017
(A NON PROFIT PUBLIC BENEFIT CORPORATION)
(A NON-PROFIT CORP.)
PRINCIPAL WORK AND RATES EFFECTIVE FROM 04-01-00 TO 04-01-01

INTERIM
CLERICAL OFFICE EHPLOYEES--N.O.C.

STORES--RETAIL--N.O.C.

BASE BILLING
RATE RATE*

1.16 7.05

1.16 7.05
********BUREAU NOTE INFORMATION********
FEIN 330330233
COUNTERS I G}iED i\ND ISSUED AT SAN FRANCISCO MARCH 14, 2000 POLICY FORM L 1 Item: 6
136

PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION

ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE
HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR PHILADELPHIA INSURANCE COMPANIES 26300 LA ALAMEDA, SUITE 460
MISSION VIEJO, CA 92691
0 0 Cl B OW

COMPANIES AFFORDING COVERAGE
coM~ANY PHILADELPHIA INDEMNJ1Y INSURANCE COMPANY

INSURED SADDLEBACK COMMUNITY OUTREACH
23011 MOULTON PARKWAY, SUITE 8-5
LAGUNA HILLS, CA 92653

COMPANY
cc
LTR
A
A
A
B

COMPANY
C

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDmON OF PNf CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR ~y PERTAIN, THE INSURANCE AFFORDED B V THE POLICIES DESCRIBED HEREIN IS SUBJECT TO All THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, LIMITS SHOWN W.Y HAVE BEEN REDUCED BY PAID CLAIMS.

POLICY EFFeCTM! POUCY EXPIRATION TYPE OF INSURANCE POLICY NUMBER DATE {MM/CDIYY) DATE (MMIDDlYY) LIMITS GENERAL LIABILITY PHPG106436-O 2/1/2000 2/1/2001 GENERAL AGGREGATE s 100000( X COMMERCIAL GENERAL LIABILITY PRODUCTS • COMP/OP AGG $ 1 000 ooc Cl.AIMS MADE: 0 OCCUR PERSONAL & AOV INJURY $ 1000000
OWNER'S & CONTRACTOR'S PROT EACH OCCURRENCE s 1000000
X PROFESSIONAL LIAS. FIRE OAMAGE (Any cne lire) s 100 ooc MED exP (Any one perscn) $ 5,00(
AUTOMOBILE LIABILITY PHPG106436-D 2/1/2000 211/2001 COMBINED SINGLE LIMIT s ANYAUTO 1,000,00C All OWNED AUTOS BOOIL Y INJURY $
X SCHEDULED AUTOS (Per ptll!ICn)
X HIRED AUTOS BODILY!NJURY s X NON-OWNED AUTOS {Petacoident) PROPERTY DAMAGE s
GARAGE LIABILITY AUTO ONLY. EA ACCIDENT s
ANY AUTO OTHER lHAN AUTO ONLY;
EACH ACCIDENT $
AGGREGATE $
EXCESS LIABILITY EACH OCCURRENCE s
UMBRELLA FORM AGGREGATE s
OlllER THAN UMBRELLA FORM $
WCSTAT\J. 01}+,

WORKER'S COMPENSATION AND TORY LIMITS ER
EMPLOYERS' LIABILITY EL EACH ACCIDENT s
'!HE PROPRIETOR/ INCL EL DISEASE· POLICY UMIT s PAll'INEIISIEXl!Clll"M! OFFICERS ME: EXct EL DISEASE• EA EMPLOYEE S
OTHl:R
PROPERTY PHPG106436-C 2/1/2000 2/1/2001 CONTENTS: $5,000

I C S C
THIS CERTIFICATE OF INSURANCE SERVES AS EVIDENCE OF INSURANCE. *10 DAY NOTICE OF CANCELLATION APPLIES FOR NON-PAYMENT OF PREMIUM,

SECOND HARVEST FOOD BANK

OF ORANGE COUNTY
426A WEST ALMOND
ORANGE, CA 92688
SHOULD ANY OF TH!! ABOVE DESCRIBED POLICIES BE CANCEi.LSD BeRJRE THE EXPIRATION DATE THEREOF, THE! ISSUINCl COMPANY WlLL ENDEAVOR TO MAJL ~ DAYS WRITTEN NOTICETO THECERTIF!CATEHOLDERNAMEDTO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO 0BUGATJON OR LIABILITY OF ANY KIND UPON THE COMPANY ITS AGENTS OR REPRESENTATIVES.

Item: 6
137

State Farm Mutual Automob1. ~surance Company
31303 Agoura Road
Westlake Village CA 91363

AUTO RENEWAL
1997 FORD F150
:~ PO!-[CY NUMBER DATE DUE PLEASE PAV THIS AMOU
1t1 C97 5954-D22-75 OCT 22 1999 to APR 22 2000 OCT 22 1999 $300.23 1---..;...:..,;__..;;_.,;_.;;.,= ___ ..__________ -------.----,,----'"--- .---::---------=---- • '1 Coverages and Limits Premlu1
A Liability
Bodily Injury 100,000/300,000
Property Damage 50,000 161. f
C Medical Payments 5,000 13. (
D 500 Deductible Comprehensive 14.E
G 500 Deductible Collision 80.£
H Emergency Road Service 3. C
II ,luril,l,llm 1,1111ll1111111 ,lull111lml1 In lmllllml R1 Car Rental/Travel Expense 10. 7 u Uninsured Motor Vehicle
Y~ur premium Is based on the following ••• If not com~c ·, contact your agent. 1997 FORD F150 VIN 1FTDF1 /22VNA23416
Bodily Injury 30,000/60,000 13.E
U1 Uninsured Motor Vehicle
Property Damage 2.~
Cl.:iaa 083HOZ1 t Amount Due '$300.Z
Driving Safety Record Rate Level A+ (See description on back).

Driven over 71500 miles annually. {National average is 10,000 miles annually.)
Principal driver or spouse has at least 49 years of driving experience. No unmarried driver in your household with less than 9 years or driving experience unless rated as a principal operator of another car insured with State Fa.rm.

Pleasure use or commuting to and from work or school.

Your premium has already been adjusted
by the following:

Premium Reductions
Multicar
Air Bags
Driving Safety Record
California Good Driver

69.9 4.5
335.B
75,0
You may be eligible for additional discounts.

See the enclosed insert for more information.

Mature Driver
CONVENIENT PAYMENT OPTION: You may use one of State Farm's alternate payment plans which divides your present premium into two separate payments.

You may pay one half of the amount due, $150.11, plus a handling charge of $2.00. The amount due on OCT 22 1999 will be $152.11 .

The remaining half will be due on DEC 21 1999. We'll send you a reminder notice.

We nlso have available a plm1 to let you pay your premium in monthly installments. For details on this plan and to determine if you qualify, please contact your Slate Farm agent.

The rollowi11g list of drivers is shown for informational purposes only and does not extend or expand coverage beyond that contained in this autoniobile policy. Our records indicate the persons listed below are the only licensed drivers reported to us:

RAY HAVERT, GERALDINE HAVERT.

If the above information is inaccurate or incomplete, please contact your agent immediately to make corrections.

Tk,,l.r fer 1:/,tirj·«J'J'.:."W, jb.t ...

Aqcmt JIM DOHERTY
To/eµhono (949)583-0411

SAODLEBACK COMMUNITY OUTREACH
23011 MOULTON PKWY., B-5
LAGUNA HILLS, CA 92653-1222
(949) 380-8144
See reverse side far important information.

Please keep this part for your record.

Prepared SEP 17 1999
Item: 6
138

J
• Saddleback Community Outreach
Annual Budgets for Years 2000, 2001 & 2002
Revised December 3, 2000
Year2000 Year Year
Account Description Year end 2001 2002
Number Estimates Budget Budget
(rev 12/03/00)
INCOME
1G Grants $186.4 $250.0 $260.0
1B Businesses $11.3 $15.0 $25.0
1C Faith Communities $32.6 $40.0 $40.0
1F Fund Raising (less expenses) $73.0 $100.0 $100.0
11 Individuals $197.5 $70.0 $70.0
10 Organizations $12.6 $15.0 $25.0
1R Rental loan repayment $10.0 $15.0 $25.0
1T Rental Income $40.3 $70.0 $55.0
1M Others/Gifts/Adjusbnents $211.3 $0.0 $0.0
TOTAL INCOME sns.o $575.0 $600.0
2 EXPENSES
2 Aid to Clients
2F Food Cash outlay $19.3 $21.2 $23.2
2HR Rental Assistance $126.1 $144.0 $144.0
2HT Transitional Housing $55.3 $60.8 $66.9
2l Lodging $4.2 $4.6 $5.0
2M Medical $1.0 $1.1 $1.2
2S Support Services $5.3 $5.8
2T Transportation $5.7 $6.3 $6.8
2U Utilities $30.6 $33.7 $36.7
20 Others $16.9 $18.6 $20.3
2 Total Aid to Clients $264.4 $298.1 $304.2
3 Operating Expense
3C Coordinator expense (JVC) $2.5 $2.8 $3.0
30 Dues/Subscriptions $2.9 $3.2 $3.5
3ER Equipment/Relocation $0.1 $0.1 $0.1
3G Grants Expense $1.7 $1.9 $2.0
31 Insurance $11.7 $12.9 $14.0
30 Office Suppffes, postage $12.9 $14.2 $15.5
3Payroll Payroll $33.3 $34.0 $34.0
3PF Professional Fees $4.0 $4.4 $4.8
3PR Public relations 7.0 $7.7 $8.4
3R Rent $9.4 $10.3 $11.3
3T Taxes, Corporate & Payroll $3.2 $3.6 $3.8
3U Utilities $7.5 $8.3 $9.0
3V Volunteer Expense $1.7 $1.9 $2.0
30THER Others $2.9 $3.2 $3.5
3b Bank Expense $0.0 $0.0 $0.0
3 Total Operating Expense $100.8 $108.3 $115.0
Operating Exp to Income % 13.01% 18.83% 19.17%
TOTAL EXPENSE $365.2 $404.4 $419.2
NET ORDINARY INCOME $409.8 $170.8 $180.8
Acquisition of Condos $200.0 $370.0 $370.0
file: 2000 financial data\budgels for 2001 & 2002, sheet 1 dee 3 'OD Item: 6
139

..
§570.502
agencies, subrecipients, or con·tractors
does not relieve the recipientf or this re-
. sponsibility. The recipient is also re
sponsible for determining the a.dequa.cy
or performance under subrecipient
agreements a.nd procurement con
tracts, a.nd for ta.king appropria.te ac
tion when perform.a.nee problems arise,
· such as the· actions· described in
§ 570.910. Where a. ··umt of genera.I local
government is pa.rticipa.ting with. or as
part or, an urban county, or as part of
a. metropolita.n city, the recipient is re
sponsible for a.pplying to the unit of
general local government the same re
quirements as are a.pplica.ble to
subrecip1ents, except that the .nve-yea.r
period identified under §570.503(b)(8)(1)
shall begin with the da.te tha.t the unit
of general· local government is no
longer considered by HUD to be a part
of the metropolitan city or urba.n coun
ty, as applicable, instead of the date·
that the subrecipient agreement ex-
pires. ·
[53 FR 8058, Mar. 11, 1988, as amended at 57
FR 27120, June l'l, 1992)
§ 670.502 Applicability of unlf'orm. ad
minhltrat1ve requirements..
(a.) Recipients and subrecipients
which are governmental entities (in
cluding public agencies) shall comply
with the requirements and· standards of
0MB Circular No. A-87, 0 Princlples for
Determining Costs Applicable to
Grants and Contracts with State, Local
and Federally recognized Indian Tribal
Governments". 0MB Circula.r A-128,
"Audits or State a.nd Local Govern
ments" (implemented a.t 24 CFR part
44) and with the following sections or 24
CFR pa.rt 85 "Unirorm Administra.tive
Requirements for Gra.nts and Coopera.
tive .Agreements to State and Local
Governments":
(1) Section 85.3. 0 Definltions";
(2) Section 85.6, 11 Except1ons":
(3) S.ection 85.12, "Specia.l rra.nt or
subgrant conditions :for 1h1gh-risk 1
grantees";
(4) Section 85.20, "Standards tor fi
nancial management systems," except
paragraph (a);
(5) Section 85.21, "Payment, 11 except
as modified by § 570.613;
(6) Section 85.22, "Allowa.ble costs";
(7) Section 85.7.6, "Non-federa.l au
dits";
24 CFR Ch. V (4-1-95 Edltlo~)
·(S) Section 85.32, "Equipment," ex
cept in all ca.ses in which the eqUip.
ment is sold, the proceeds shall be pro
gram income:
(9) Section 85.33, usupplies";
(10) Section 85.34, "Copyrights":
(11) Section 85.35, "Suba.wards to
deba.r+ed ~d suspende_d parties";
(12) Section 85.36, 1!~ourement," ex-
cept para.gra.ph (a.): · - . .
(13) Section 85~37, "Subgra.nts";
(14) Section 85.40, "Monitoring and
reporting program performance,.. ex
cept paragraphs (b) through (d) and
paragra.ph en:
(15) Section 85.41. 11 Fina.ncia.l report
ing," except pa.ra.gra.phs (a.), (b), a.nd (e);
(16) Section 85.42, "Retention and ac
cess requirements for records," except
tba.t the period shall be four years:
(17) Section 85.43, "Enforcement":
(18) Section 85.44. 0 Terminatlon for
convenience";
(19) Section 85.61 "Later disallow
a.nces and adjustments" and
(20) Sectlon 85.52, °Collectlon or
a.mounts due."
(b) Subreciplents, except
subreciplents th&t are governmental
entities, shall compiy With the require
ments and sta.nda.rds of 0MB Clrcula.r
No. A-122, ucost Principles for Non
profit Organiza.tions," or OM:B Circular
No. A-21. °Cost Principles ror Edu
cational Institutions," as applicable,
and 0MB Circular A-133, HAudits or In
stitutions or Higher Education a.nd
Other Nonpront Institutions" (a.s set
forth in 24 CFR pa.rt 45). Audits aha.ll be
conducted annua.lly. Such
aubrecipients shall a.lso comply with
the following a.ttachments to 0MB Cir
cula.r No. A-110:
(1) Attachment A, "'Ca.sh Deposi
tories", except for para.gra.ph 4 con
cerning deposit insurance;
(2) Attachment B, "Bonding and In
surance";
· (3) Atta.chment C, "Retention and
Custodial Requirements for Records",
except that in lieu of the provisions in
paragraph 4 , the retention period for
records ;>ertaimng to individual CDBG
activities starts from the date or sub
miaslon of the annual performance a.nd
evalua.tlon report. aa preBCribed in
§570.507, in which the specific a.ctlvity
is reported on for the final time:
174
ATTACHMENT2
Item: 6
140

.,
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.503 (4) Attachment F, "Sta.nda.rds for Fi
nancial Management Systems," except
tor para.gra.ph 2(h) which is superseded
by 0MB Circula.r A-133, "Aucilts of In
stitutions of Higher Education 'and
Other Nonprofit Institutions;"
(5) Attachment H. 11Monitoring a.nd
Reporting ProS'I'.~ Performa.n_ce",
Para.graph 2:
.. (6) Attachment N, "Property Man
agement Standards", except for para
graph 3 concern!Dg the sta.nda.rds for
real property, and except tha.t para
g:ra.phs 6 a.nd 'l are modified so ths.t-
·ci.j in all cases in which persona.I
property is sold, the proceeds shall be
programincome,a.nd
(11) Personal property not needed by
the subrecipient for CDBG activities
shall be transferred to the recipient for
the CDBG program or sha.11 be reta.1ned
after compensating the recipient; a.nd
(7) Attachment 0, "Procurement
Standards."
[53 FR 8058, Ma.r. 11, 1988, a.s a.mended at 57
FR 33256, July Zl. 1992; 60 FR 1916, Jan. 5,
1995]
t 670.503 Agreements with
subreclplents.
(a) Before cilsbursing any CDBG funds
to a subrecipient, the recipient shall
sign a written agreement with the sub
reclplent. The agreement shall remain
in effect during any .period that the
subreclpient bas control over CDBG
funds, inclucilng program income.
(b) At a minimwn, the written agree
ment with the subrecipient shall inM
elude provisions concerning- the follow
ing following items:
(1) Statement of work. The agreement
·shall include a. description of the work
to be performed, a. schedule for com
pleting the work, a.nd a budget. These
items shall be in sufficient detail to
provide a sound basis for the recipient
effectively to monitor performance
undex:-the agreement.
(2) Recorcis and reports. The recipient
shall specify in the agreement the par
ticular records the subrecipient must
maintain and the particular reports
the subrec!pient must submit in order
to assist the recipient 1n meeting its
recordkeeping a.nd reporting require
ments.
(3) Program income. The agreement
shall include the program income reM
quirements set forth in § 570.504(c).
(4) Unifonn administrative require
ments. The agreement shall require the
subrecipient to comply w1 th a.pplica.ble
uniform administrative requirements,
as descrlbed i~ § 570.502. . .
(5) · Other. program requirements. The
agreement shall require the sub- .
recipient to carry out each activity in
compliance with all Federal la.ws a.nd
regulations described in subpart K of
these regulations, except that:
(i) The subrocipient does not assume
the recipient's environmental respon
sibilities described at § 570.604; and
(11) The subrecipient does not assume
the recipient's responsibUity for initi
a.ting the review process under the pro
visions of 24 CFR part 52,
(6) Conditions for religious organiw
tfons. Where applicable, the conciltions
prescribed by HUD for the use of CDBG
funds by rell@ioua organizations shall
be included in the agreement.
(7) Suspension and termination. The
agreement sha.11 specify that, in ac
cordance with 24 CFR 85.43, suspension
or termination may occur if the sub
recipient materially falls to comply
with any tt-,rm of the award, and that
the a.ward may be terminated for conM
ven!ence in accordance with 24 CFR

85.44. (8) Reversion of a.ssets. The agreement
shall specify that upon its expiration
the subrecipient shall transfer to the
recipient any CDBG funds on hand a.t
the time of expira.tion . and any ac
counts receivable attributable to the
use of CDBG funds. It shall-also include
provisions designed to ensure that any
real property under the subrecipient's
control that wa.s acquired or improved
in whole or in pa.rt with CDBG funds
(1nclucilng CDBG funds provided to the
subreciplent in the form of a loan) in
excess of $25,000 is either;
(1) Used to meet one of the national
objectives in §570.208 (formerly
§ 570.901) until five yea.rs after expira
tion of the agreement, or for such
longer period of time as determined to
be appropriate by the recipient; or
(ii) Not used in accordance with paraM
graph (b)(B)(i) of this section, in which
event the subreclpient shall pay to the
recipient a.n- a.mount equal to the cur-
175
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141

..
\,.

J
otc. of Asst. Secy., Comm. Planning, Develop., HUD §570.600 with longer than normal repa.yment pe-
riods; or ·
(0) Provision or adminlstra.tive serv
ices in support of the rehabilitation
program by the participating financial
institution at no cost or at lower tha.n
a.otual cost.
. (c) Program income. Interest ea.med on
lump. sum dePQslts" and pa.ym.ents on .
loans ma.de from such· deposl;s are pro- .
gram income and, during the period of
the agreement, shall be used for reha
bilitation activities under the provi
sions of this section.
(d) Outstanding findings. Notwith
standing a.ny other provision or this
section, no recipient shall enter into a.
new agreement during any period of
time in which an audit or monitoring

11.nding on a previous lump sum
drawdown agreement rema.ins unre
solved.

Ce) Prior notification. The recipient
shall provide the HUD field office with
written notification or the a.mount or
funds to be distributed to a. private fi
na.nclal institution before distribution
under the provisions or this section.
(0 RecOTdkeeping requiTement.f. The re
cipient shall maintain 1n its mes &
copy or the written agreement and re
lated documents establishing contorm-
. ance with this section and concerning
performance by a flna.ncial imtitutlon
in a.ccordance with the agreement.

Subpart K-other Program
. Requirements
SOURCE: 53 FR 34456, Sept. 6. 1988. unless
otherwise noted.
f 670.600 General.
(a) Section 104{b) of the Act provides
that any grant under section 106 or the
Act shall be ma.de only 1f the grantee
certifies to the satisfaction of the Sec
retary, among other things, that the
grant 11wlll be conducted and adminis
tered in con!ormity with Pub. L. 88-352
and Pub. L. 90-284.'' and, further, that
the grantee "will comply with the
other provi&iom of thia title a.nd with
other . applicable laws." Section
104(e)(l) of the Act requires that the
Secretary determine with respect to
grants made pursuant to section 106(b)
(Entitlement Gra.nts) and 106(d)(2)(B)
(HUD-a.dmJnistered Small Cities
Grants), at least on an annua.l ba.sis,
among other things, 0 whether the
grantee has can-led out {its] certifi
cations in compliance with the require
ments and the primary objectives of
this title and with other applicable
laws * * *.11 Certa.in other statutes a.re
expressly ma.de a.pplica.ble to activities .
assisted under the Act by the Act it.:
self, while other laws· not referred to in
the Act may be applicable to such ac
tivities by their own terms. Certain
statutes or Executive Orders which
ma.y be applicable to activities assisted
under the Act by their own terms are
administered or enforced by govern
mental departments or agencies other
than the Secretary or the Department.

This subpart K enumera.tes laws which
the Secreta.ry will treat as applicable
to grants made under section 106 of the
Act, other tha.n grants to States made
pursuant to section 106(d) or the Act,
for purposes of the determinations de
scribed above to be made by the Sec
retary under section 104(e)(l) or the
Act, including statutes expressly ma.de
applicable by the Act and certain other
statutes and Executive Orders for
which the Secretary has enforcement
responslb1Uty. The absence or mention
herein or any other statute for which
the Secretary does not have direct en
forcement responsibility is not in
tended to be ta.ken as an indication
that, in the Secretary's opinion, such
statute or Executive Order is not appll
ca.ble to activities assisted under the
Act. For laws which the Secretary will
treat as a.pplicable to grants made to
States under section 106(d) or the Act
for purposes or the determination re
quired to be ma.de by the Secreta.ry
pursuant to section 104(e)(2) or the Act,
see §570.496.
(b) This subpa.rt a.lso sets forth cer
tain additional program requirements
which the Secretary has determined to
be applicable to gra.nts provided under
the Act as a matter or administrative
discretion.
(o) In.addition to grants ma.de pursu
ant to section 106(b) and 106(d)(2)(B) or
the Act (subparts D and F, respec
tively), the requirements or tbis sub
part X are a.pplioable to grants ma.de
. pursuant to sections 107 and 119 of the
Act (subparts E and G, respectively),
187
ATTACHMENT3
Item: 6
142

§570.601
a.nd to loans guarantee~~ pursuant to
subpartM.
f 570,601 Public Law 8B-852 and Public
Law 90-284; affirmatively further•
ing fa.Jr housing; Executive Order
11063.

Section 104(b) of the Act proVides
that any grant under section· 106 of the
Act shall be made only if the grantee
certifies to the satisfaction of the Sec
retary that the grant "will be con
ducted and administered in conformity
with Pub. L. 88-352 and Pub. L. 90-284
and the grantee will affirmatively fur
ther fair housing." Similarly, section
107 provides that no grant may be ma.de
under that section (Secretary's Discre
tionary Fund) or section 119 (UDAG) .
without satisfactory assurances tha.t
the grantee's progra.m will be con
ducted a.nd administered in conformity
with Pub. L. 88-352 and Pub. L. 90-284.
(a) "Pub. L. 88-352" refers to title VI
of the Civil Rights Act of 1964 (42
U.S.C. 2000d et seq.), which provides
that no person in l;he United States
shall on the ground of ra.ce, color, or
national origin, be excluded from par
ticipation in, be denied the benefits of,
or be subjected to discrimination under
any program or activity receiving Fed
eral financial assistance. Section 602 of
the Civil Rights Act of 1964 directs
each Federal department and agency
empowered to extend Federal financial
assistance to any program or activity
by wa.y of grant to effectuate the fore
going prohibition by issuing rules, reg
ulations. or orders of general applica
bility which shall be C0DSistent with
achievement of the statute authorizing
the financial assistance. HUD regula
tions implementing the requirements
of Title VI with respect to HUD pro
grams are contained in 24 CFR pa.rt 1.
(b) "Public La.w 90-284" refers to the
Fair Housing Act (42 U.S.C. 3601-20),
which states tha.t it 1s the policy of the
United States to provide, within con
stitutional limitations, for fair housing
throughout the United States and pro
hibits any person from discriminating
in the sale or rental of housing, the fi
nancing of housing, or the proVision of
brokerage services, including otherwise
ma.king unavailable or denying a dwell
ing to any person, because of race,
color, religion, sex, national origin,
24 CFR Ch. V (4-1-95 Edition)
handicap or familial status. The Fair
Housing Act further requires the Sec- ·
reta.ry to administer the programs and
activities relating to housing and
urban de,·elopment in a manner affirm
atively to further the policies of the
Fa.ir Housing Act. In accordance With
thi_s statutory direction, the Secretary
requires that grantees· administer all
programs a.nd ~ctivities related to
housing and community development
in a. ma.nner to affirmatively further
the policies of the Fair Rousing Act;
furthermore, section 104(b)(2) of the
Act requires that each grantee receiv
ing !Unds under section 106 of the Act
(entitlement or small cities grantees)
certify to the satisfaction of the Sec
retary that it will affirmatively fur
ther fa.fr housing. For each community
receiving a grant under subpart D of
this part, the certification that the
gra.ntee will a.fflrma.ti vely further fair
housing shall specifically require the
gra.ntee to assume the responsibiUty o!
fair housing planning by conducting a.n
analysis to identify impediments to
!air housing choice 'Within its jurisdic~
tion, taking appropriate actions to
overcome the effects of any impedi
ments identified through that analysis,
and ma.lnta.ining records reflecting the
analysis a.nd actions in this regard.
(c) Executive Order 11063, as amended
by Executive Order 1225£1, directs the
Department to take all action nec
essary and appropriate to prevent dis
crimina.ti on because of race, color, reli
gion (creed), sex, or na.tiona.l origin, in
the sale, leasing, rental, or other dis
position of residential property and re
lated facilities (including land to be de
veloped for residential ·use), or in the
use or occupancy thereof, if such prop
erty and related facilities a.re, a.mong
other things, provided in whole or in
part with the aid of loans, advances,
grants, or contributions agreed to be
made by the Federal Government. HUD
regulations implementing Executive
Order 11063 are contained in 24 CFR
part 107.
(5.3 FR 34456, Sept. 6, 1988, as amended a.t 54
FR 37411, Sept. 8, 1989; 60 FR 1917, Jan. 5,
1995]
§ 670.602 Section 109 of the Act.
(a.) Section 109 of the ·Act requires
that no .person in the United States
188
Item: 6
143

Ofc. of Asst. secy., Comm. Planning, Develop., HUD §570.602 . .
shall on the ground of race, color, na
tional origin or sex, be excluded from
pa.rticipa.tion in, be denied the benefits
of, or be subjected to discrimination
under, any program or activity funded
in whole or in part with community de
velopment funds ma.de available pursu
ant to the Act. For purpos~s . of this
section "program or activity" is de
fined as any .function conducted by an
identifiable a.dmlnistra.tive unit of the
recipient, or by a.ny Ullit of govern
ment, subrecipient, or private contrac
tor receiving community development
funds or loans from the recipient.
.. Funded in whole or in pa.rt with com
munity development funds" means
that community development funds in
a.ny amount in the form of grants or
proceeds from HUD guaranteed loans
have been transferred by the recipient
or a subrecipient to e.n identifiable ad
ministrative unit a.nd disbursed in e.
progra.m. or activity, In subsection (b)
of this section, "recipient" means re
cipient as defined in 24 CFR 1.2(f).
(b) Specific discriminatory actions
prohibited and corrective actions.

Cl) A recipient ma.y not, under any
program or activity to which the regu
lations of this part ma.y apply, d.lrectly
or through contractual or other ar
rangements, on the ground ·or race,
color, national origin, or sex:
(1) Deny a.ny individual any fa.cllities,
services, fina.Dcial a.id or other benefits
provided under the program or activ
ity.
(ii) Provide a.ny facilities, services,
financial aid or other benefits which
are different, or a.re provided in a. dif
ferent form, from that provided tooth
ers under the program or activity.
(111) Subject an individual to seg
regated or separate treatment in any
fac11ity in, or in any matter of process
related to receipt of any service or ben
efit under the program or activity.
(iv) Restrict an individual in any way
in access to, or in the enjoyment of,
any advantage or privilege enjoyed by
others in connection with facilities,
services, financial aid or other benefits
under the program or activity.
(v) Treat a.n individual differently
from others in determining whether
the individual satisfies a..ny adrn.ission,
enrollment, eligibility, membership, or
other requirement or condition which
the individual must meet in order to be
provided any facilities, services or
other benefit provided under the pro
gram or activity.
(vi) Deny an individual an oppor
tunity to participate in a program or
activity as an employee .
. (2) A recipient may not use criteria.
or m.ethods of administration which
ha.ve the effect of subjecting persons to
discrimination on the basis of ra.ce,
color, national origin, or sex, or have
the effect of defeating or substan tia.lly
impa.iring accomplishment of the ob
jectives of the program or activity
with respect to persons of a pa.rticula.r
race, color. national origin, or sex.
(3) A recipient, in determining the
site or location of housing or facilities
provided in whole or in part with funds
under this part, may not make selec
tions of such site or location which
have the effect of excluding persons
from, denYing them the benefits of, or
subjecting them to discrimination on
the ground of race, color, national ori
gin, or sex: or which have the purpose
or effect of defeating or substa.ntia.lly
impairing the accomplishment of the
objectives of the Act and of thls sec
tion.
(4)(1) In administering a program or
activity funded in whole or in part
with CDBG f'unds regarding which the
recipient· has previously discriminated
against persons on the ground of ra.ce,
color, national origin or sex, or if there
is sufficient evidence to conclude tha.t
such discrimination existed, the recipi
ent must ta.ke remedial affirma.tive ac
tion to overcome the effects of prior
discrimina.tlon. The word "previously"
does not exclude current discrimina
tory practices.
(11) In the absence of discrimination,
a recipient, in a.drn1nistering a. program
or activity funded in whole or in part
with funds ma.de available under this
part, ma.y ta.ke a.ny noncllscriminatory
affirmative action necessary to ensure
that the program or activity is open to
all without regard to race. color, na
tional origin or sex.
(iii) After a finding of noncomplia.oce
or after a. recipient has a firm basis to
conclude that discrimination has oc•
curred, a recipie~t shall not be prohib
ited by this section from ta.king any
action eligible under Subpart C to azne•
189
Item: 6
144

§570.603
liorate an imbalance in serVices or fa.
cilities provided to any geographic
area or specific group of persons within
its jw-isdiction, where the purpose of
such action is to remedy prior dis
criminatory practice or usage.
(5) Notwithstanding anything to the
contrary in this section, nothing con
tained herein shall be construed to pro
hibit any· recipient from maJnta.i~ng
or constructing separa.te living facili
ties or rest room facilities for the dif
ferent sexes. Furthermore, selectivity
on the basis or sex is not prohibited
when institutional or custodial serv
ices ca.n properly be performed only by
a member of the same sex as the recipi
ents of the services.
(c) Section 109 or the Act further pro
vides that any prohibition against dis
crimination on the basis of a.ge under
the Age Discrimination Act of 1975 (42
U.S.C. 6101 et seq.) or with respect to an
otherwise qualified handicapped person
a.s provided in section 504 of the Reha
bll1 ta.t1 on Act of 1973 (29 U.S.C. 794)
sha.11 also apply to any program or ac
tivity funded in whole or in part with
funds ma.de available pursuant to the
Act. HUD regula.tion5 1rnplemen ting
the Age Discrlmination Act are con
tained in 24 CFR part 146 and the regu
lations implementing section 504 are
contained in 24 CFR part 8.
§ 570.603 Labor standards.
. (a) Section llO(a) of the Act requires
tha.t all laborers and mechanics em
ployed by contractors or subcontrac
tors on construction work financed in
whole or in pa.rt with assistance re
ceived under the Act shall be pa.id
wages at rates not less than those pre
vailing on similar construction in the
locality as determined by the Sec
retary of Labor in accordance with the
Davis-Ba.con Act, as a.mended (40 U.S.C.
276a.-276a.-5). By reason or the foregoing
requirement, the Contra.ct Work Hours
and Safety Standards Act (40 U.S.C. 327
et seq.) also applies. However, these re-:
quirements apply to the rehabilit.<:.tion
of residential property only if such
property contains not less than 8 units.

With respect to the labor standards
specified in this section, the Secretary
of Labor has the authority and func
tions set forth in Reorganiz.a.t!on Plan
Number 14 of 1950 (5 U.S.C. 1332-15) and
24 CFR Ch. V (4-1-.95 Edition)
section 2 of the Act of June 13, 1934, as
amended (40 U.S.C. 276c).
(b) Under section llO(b) of the Act,
the requirements set out in para.graph
(a) of this section are inapplicable to
ind.1vidua.ls who volunteer their serv
ices under certain circumstances.

Grante.es,. subrecipients, contractors
and subcontractors shall -comply with
24 CFR part 70, which sets out the cir
cumstances under which volunteers
ma.ybe used.
(57 FR 14759, Apr. 22, 1992]
§ 570.604 Environmental standards.

Section 104(g) expresses the Intent
that "the policies of the National Envi
ronmental Policy Act or 1969 and other
provisions of la.w which further the
purposes of such Act (a.s specified in
reg-u.J.ations issued by the Sec
retary) * * * [be] most effectively im
plemented in connection with the ex
pend.1 ture or funds under" the Act.

Such other provisions or law which fur
ther the purposes of the National Envi
ronments.I Policy Act of 1969 are speci
fied in regulations issued pursuant to
section 104(g) of the Act and contained
in 24 CFR part 58. Section 104(g) also
provides that, in lieu of the environ
mental protection procedures other
wise applicable, the Secretary may
under regulations provide for the re
lease of funds for particular projects to
grantees who assume all of the respon
sib111ties for environmental review, de
cisionmaking, and action pursuant to
the National Environmental Policy Act
of 1969, .and the other provisions of law
specified by the Secretary as described
above, that would a.pply to the Sec
retary were he/she to undertake such
projects as Federal projects. Grantees
assume such environmental review, de
cisionma.king, and action responsibil
ities by execution of grant a.greements
with the Secretary. The procedures for
carrying out such environmental re
sponsibilities are contained in 24 CFR
part 68.
§ 570.605 National Flood Insurance
Program.

Section 202(a.) of the Flood D~saster
Protection Act of 1973 (42 U.S.c. 4105)
provides that no Federal officer or
agency shall approve any financial as
sistance for acquisition or Qonstruction
190
Item: 6
145

J
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.606 purposes (as defined under .section 3(a)
of said Act (42 U.S.C. 400(a.)), one year
a~er a. community has been formally
notified of its identification e.s a com
munity containing an area. of special
flood hazard, for use in any a.res. that
has been identified by the Director or
the Federal Emergency. MB.Da.gement
Agency as an area having special flood
hazards unless the community in which
such area. is situated is then participat
ing in the National Flood Insurance
Program. NotWithsta.nding the date of
HUD approval of the recipient's appli
cation (or, in the case of grants ma.de
unaer subpart D, the date of submis
sion of the grantee's consolidated plan,
in a.ccorda.nce with 24 CFR pa.rt 91),
funds provided under this part shall
not be expended for acquisition or con
struction purposes in an a.rea that has
been identified by the Federal Emer
gency Management Age.ncy (FEMA) as
having special flood hazards unless the
community in which the area is situ
ated is participating in the National
Flood Insurance Program in accord
ance with 44 CFR parts 59-79, or less
tha.n a. yea.r has passed since FEMA no
tification to the community regarding
such hazards; and flood insurance is ob
tained in accordance w1 th section
102(a) of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4001).
[53 FR a-4456, Sept. 6, 1988, a.s amended at 60
FR 1917, Jan. 5, 1995]
~ 570.606 Displacement, relocation, ac•
quisition, and replacement of hous
ing.
(a) General policy for minimizing dis
placement. Consistent with the other
goals and objectives or this part, grant,.
ees shall assure that they have taken
all reasonable steps to minimize the
displacement of persons (fa.miliee, indi
viduals, businesses, nonprofit organiza
tions, a.nd farms) as a result or activi
ties assisted under this pa.rt.
(b) Relocation assistance for displaced
persons at URA levels. (1) A displaced
person shall be proVided with reloca
tion assists.nee at the levels described
in, a.nd in accordance with the require
ments of, 49 CFR pa.rt 24 which con
tains the government-wide regulations
implementing the Uniform Relocation
Assistance and Real Property Acquisi-
tion Policies Act or 1970 (URA) (42
U .s.c. 4601-4655).
(2) Displaced person. (1) For purposes
of this paragraph (b), the term "dis
placed person" mea.ns any person (fam
ily, individual, business, nonprofit or
ganization, or farm) that moves from
real property, or moves his or her per
sonal property from rea.l_property. per-"
manently a.nd involuntarily, as a. direct
result of reha.bilita.tion, demolition, or
acquisition for an activity assisted
under this pa.rt. A permanent, involun
tary move for an assisted activity in
cludes a permanent move from real
property that is made:
(A) After notice by the grantee to
move permanently from the property,
1£ the move occurs on or after the date
or the initial submission to :mm of the
final • statement under 24 CFR
570.302(a.)(2) for activities under the en
titlement program; the initial submis
sion to HUD of an a.ppllcation for as
sistance under §§ 570.426, 570.430, or
570.435(d) that is later granted for ac
tl vities governed by the HUD-ad.minis
tered small cities program; the submis
sion to HUD of an application for as
sistance under § 570.458 that is later
granted for activities under the UDAG
program; the submission to HUD of an
application for assistance under part
570, subpart G (Special Purpose Grants)
that is later granted; or the submission
to HUD of a.n application for loan guar
antee assistance under §570. 701 that is
later provided for an activity under the
section 108 loan guarantee program.
(B) After notice by the . property
owner to move permanently from the
property, if the move occurs after the
date of the submission of a request for
financial assistance by the property
owner (or person in control of the site)
that is later approved for the requested
activity.
(C) Before the date described in para.
graph (b)(2)(1) (A) or (B) of this section,
if either HUD or the grantee deter
mines that the displacement directly
resulted from acquisition, rehabilita
tion, or demolition for the requested
activity.
(D) After the "initiation of negotia
tions" 1f the person is the tenant-occu
pant of a dwe111ng unit and any one of
the following three situations occurs:
191
Item: 6
146

...
§570.606
(1) The tenant has not been provided
with a reasona.ble opportunity to lease
and occupy a suita.ble decent, sa.re, a.nd
sanitary dwelling in the same building/
complex upon the completion or the
project under reasonable terms and
conditions, including a. monthly rent
that does not exceed the grea.ter or the
tenant's monthly rent a.nd estima.ted
. average utility costs before the init1-·
ation or negotia.tlons or 30 percent or
the household's average monthly gross
income; or
CZ) The tenant ls regulred to reloca.te
temporarily for the a.ctivity but (i) the
tenant is not offered payment for all
reasonable out-of-pocket expenses in
curred in connection with the tem
porary relocation, including the cost or
moving to a.nd from the t!mlpora.ry lo
ca.tion and any increased housing costs,
or other conditions or tbe temporary
relocation are not reasonable and (ii)
the tena.nt does not return to the build
ing/complex; or . ·
(3) The tenant is required to move to
another unit in the building/complex,
but is not offered reimbursement for
all reasonable out-of-pocket expenses
incurred 1n connection with the move.
(11) Notwithstanding the provisions or
para.graph (b)(2)(1) or this section, the
term "displaced person.. does not in
clude:
(A) A person who is evicted tor cause
based upon serious or repeated viola
tions or material terms or the lease or
occupa.ncy agreement. To exclude a
person on this ba.sis, the grantee must
determine tha.t the evtction wa.s not
undertaken for the purpose ot evading
the obliga.tion to provide relocation a.s
sistance under this section:
(B) A person who moves into the
property after the date of the notice
described in pa.ra.gra.ph (b)(2){1) (A) or
(B) or this section, but who received a.
written notice of the expected displace
ment before occupancy.
(0) A person who is not dlspla.ced a.s
described in 49 OFR 24.2(g)(2).
(D) A person who the gra.ntee deter.
mines is not displaced a.s a. direct result
or the acquisition, reha.bilita.tion, or
demolition for an assisted activity. To
exclude a. person on this basis, HUD
must concur in that determination.
(111) A grantee may, at any time, re
quest HUD to determine whether a. per-
24 CFR Ch. V (4-1-95 Edition)
son is a displa.ced person under this
section.
(3) Initiation of negotiations. For pur
poses or determining the type or re
placement housing assistance to be
provided under this para.graph, if the
displa.oement is the direct result or pri
vately undertaken rehabilitation, dem
olition, or acquisition or real ·propetty,
the term "initia:tlon of negptiatlons"
mea.ns the execution · or the grant or
loan agreement between the grantee
and the person owning or controlling
the real property.
(c) Residential antidi.splacement and re
location assistance plan. In accord.a.nee
with section l04(d) or the Act, ea.ch
grantee must a.dept, ma.ke public, a.nd
certify that it ls following a residential
antidisplacement a.nd relocation assist
s.nee pla.n providing one-for-one re
pla.cement units (pa.ra.gra.ph (c)(l) or
this section), and reloca.tlon assists.nee
(para.graph (c)(2) or this section). The
plan shall also indlca.te the steps tha.t
will be taken consistent with other
goals and objectives or this pa.rt to
minimize the d1spla.cement or r&m.1lies
and individuals from their homes and
neighborhoods as a. result or a.ny act,tvi
ttes assisted under this pa.rt,
(1) One-for-one replacement of lowhnod
erate-fncome dwelling unit.!. (1) All occu
pied and va.cant oocupia.ble low/mod
era.te-income dwelUng units tha.t a.re
demolished or converted to a. use other
tha.n aa low/modera.te-inoome dwelling
units in connection with a.n activity
assisted under this part must be re
pla.ced with low/moderate-income
dwe111ng units.
(ii) Replacement low/modera.te-in
come dwelling units ma.y be provided
by a.ny government agency or private
developer, and must meet the following
requirements:
(A) The units must be located within
the grantee"s Jurisdiction. To the ex
tent feasible and consistent with other
sta.tutory priorities, the units shall be
located within the same neighborhood
as the uni ts replaced.
(B) The units must be sufficient in
number and size to house no fewer than
the nwnber or occupants who could
ha.ve been housed in the units that a.re
demolished or converted. The number
or occupants who could have been
housed in units shall be determined in
192
Item: 6
147

. .
..
otc. of Asst. Secy., Comm. Planning, Develop., HUD §570.606 accordance with applicable local hous
ing oocupa.noy codes. The grantee ma.y
not replace those units with smaller
units (e.g., a. 2-bedroom unit with two
I-bedroom units), unless the grantee
has provided the information required
under para.graph (o)(l)(iil)(G} of this
section.
(C) The units must be· provided in
stands.rd conditiQn. Replacement low/
moderate-income dwelling units may
include units that have been raised to
stands.rd from substandard condition if
(l) no person was displaced from the
unit as a direct result of an assist a.o
tivity (see definition of displaced per
son in paragraph (c)(3)(ii) of this sec
tion, and (2) the unit wa.s vacant for a.t
lea.st three months before execution of
the agreement between the grantee and
the property owner.
(D) The Units must initially be ma.de
a.va.ila.ble for occupancy a.t any time
during the period beginning one yea.r
before the grantee's submission of the
information required under para.graph
(c)(l)(iii) of this section a.nd ending
three yea.rs after the commencement of
the demolition or rehabilitation relat
ed to the conversion.
(E) The units must be designed to re
ma.in low/moderate-income dwelling
units for at least 10 years from the date
of initial occupancy. Replacement low/
moderate-income dwelling units may
include, but a.re not limited to, public
housing, or existing housing receiving
Section 8 project-based assistance
under the United States Housing Act of
1937.
(111) Before the grantee enters into a
contract committing it to provide
funds under this part for any activity
that will directly result in the demoli
tion of low/moderate-income dwelling
units or the conversion of low/mod
erate-income dwelling uni ts to another
use, the grantee must make public, and
submit the following information in
writing to the HUD Field Office for
moni taring- purposes:
(A) A description of the proposed as
sisted activity;
(B) The location on a map and nwn
ber of dwelling units by size (number or
bedrooms) tha.t will be demolished or
converted to a use other than for low/
moderate-income dwelling units as a
direct result of the assisted activity;
(C) A time schedule for the com
mencement and completion of the dem
olition or conversion;
CD) The location on a. map and the
number of dwelling units by siz.e (num
ber of bedrooms) that will be provided
a.s replacement dwelllng units. I! such
data a.re not available at the time of
the general submission, the submission
shall identify .,-the.~ gen~ra.l location on
an area ma.p and the approximate num
ber of dwelling qnits by size, and infor
mation identifying the specific loca
tion and number or dwelling units by
size sha.11 be submitted and disclosed to
the public as soon as it is ava.ila.ble;
(E) The source of funding e.nd s. time
schedule for the provision or replace
ment dwelling units;
CF) The basis for concluding tha.t
ea.ch replacement dwelling unit will re
ms.in a. low/moderate-income dwelling
unit for at lea.st 10 yea.rs from the date
of initial occupancy; and
(G) Information demonstrating that
a.ny proposed replacement of dwelling
units with smaller dwelling units (e.g.,
a 2-bedroom unit with two 1-bedroom
units) is consistent with the needs
a.nalysis contained in the !IDD-a.p
proved Comprehensive Housing Afford
ability Strategy. A grantee tha.t is not
required to submit a. Housing Assist-.
a.nee Pla.n to HUD must submit lnfor
ma.tion demonstrating that the pro
posed replacement is consistent with
the housing needs of lov·- and mod
erate-income households in the juris
diction.
(iv)(A)- The one-for-one replacement
requirement of this paragraph (c)(l)
does not apply to the extent the Field
Office determines, based upon objective
da.ta, that-there is s.n adequate supply
of vacant low/moderate-income dwell
ing units in standard condition avail
able on a nondiscrlminatory basis
within the gra.ntee's jurisdiction. In de
termining the a.dequa.cy of supply, HUD
will consider whether the demolition or
conversion of the low/moderate-income
dwelling units will have a ma.teria.l im
pa.ct on the a.bili ty of low• and mod
erate-income households to find suit
able housing. HUD will consider rel
evant evidence of housing supply and
demand including, but not limited to,
the following factors: the housing va
cancy rate 1n the jurisdiction; the
193
Item: 6
148

. '
§570.606
number of vacant low/moderate-income
dwelling units in' the Jurisdiction (ex
cluding units that will be demolished
or converted); the number of eligible
fa.milies on waiting lists for housing as
sisted under the United States Housing
Act of 1937 in the jurisdiction; the
. needs a.naJysis contained in any appli
cable HU'D:-approved Comprehensive
Housing Affordability. Strategy; and
relevant past or predicted demographic
changes.

CB) RUD may consider the supply of
vacant low/moderate"."income dwelling
units in a. stand.a.rd condition available
on a nondiscriminatory basis· in a.n
area that is larger than the grantee's
jurisdiction. Such add! tiona.l dwelling
units shall be considered if the Field
Office detennines tha.t the u.n.1ts would
be suitable to serve the needs of the
low- and moderate-income households
that could be served by the low/mod
erate-income dwelling 'units that a.re to
be demolished or converted to another
use. HUD will base this determination
on geographic a.nd demographic fac
tors, such as location and access to
places of employment and to other fa
cili tles.
(C) The grantee must submit the re
quest for determination under this
para.graph (c)(l)(iv) directly to the
Field Office. Simultaneously with the
submission of the request, the grantee
must make the submission public a.nd
inform interested persons that they
have 30 days from the date of submis
sion to provide to HUD additional in
formation supporting or opposing the
request.
(2) Relocation assistance under section
104(d) of the Act. Under section 104(d),
each "displaced person" (defined in
:para.graph (c)(3)(ii) of this section) 1s
entitled to choose to receive either as
sistance at URA levels (see para.graph
(b) of this section) or the folloWing re
location assistance:
(i) Advisory services at the levels de
scribed in 49. CFR pa.rt 24, subpart C
(General Relocation Requirements).

Tenants shall be advised of their rights
under the Fair Housing Act (42 U.S.C.
3601-19) and of replacement housing op.
portunities in such a. manner that, to
the extent feasible, will provide a
choice between relocating within their
neighborhoods and other neighbor-
24 CFR Ch. V (4-1-95 Edition)
hoods consistent with the grantee's re
sponsibil1ty to affirmatively further
!a.ir bowing;
(ii) Payment for moving expenses at
the levels described in 49 C°FR part 24,
subpart D.
(ii!) The reasonable a.nd nel}essa.ry
cost of-any security deposit required to
rent the replacement dwelling unit,
and for credit checks required to rent
or purchase the repla.cemeot dwelling
unit.
(iv) Interim living costs. The grantee
shall reimburse a person for actual rea.
sona.ble out-of-pocket costs incurred in
connection with temporary relocation,
including moving expenses and in
creased housing costs, if (A) the person
must relocate temporarily because
continued occupancy of the dwelling
unit ~onstitutes a substantial danger
to the health or safety of the person or
the public, or (B) the person is dis
placed from a. "low/moderate-income
dwelling unit," none or the comparable
replacement dwelling units to which
the person has been referred qualifies
as a low/moderate-income dwelling
unit (defined in pa.rs.graph (c)(3)(1il) of
this section). and a. suita.ble low/mod
erate-income dwell1ng unit is sched
uled to become available iJJ. accordance
with pa.ragra.ph (c)(l) of this section.
(Because a. "comparable replacement
dwelling unit" ma.y be ma.de affordable
to a person through a rental assistance
payment and its market rent may ex
ceed the Fair Market Rent (FMR)
under the Section 8 Existing Housing
Program, it may not meet the defini
tion of a "low/moderate-income dwell-
ing unit.") ·
(v) Replacement housing assistance.

Persons a.re eligible to receive one of
the following two forms of replacement
housing assistance;
(A) Each person must be offered rent
al assistance equal to 60 times the
amount necessary to reduce the
monthly rent and estimated average
monthly cost of ut111ties for a replace
ment dwelling (comparable replace
ment dwelling or decent, sa.fe, and sani
tary replacement dwelling to which the
person relocates, whichever costs less)
to the "Total Tenant Payment," a.a de
termined under § 813.107 of this title.

All or a. portion of this assistance may
be offered through a certificate or
194
Item: 6
149

Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.606 housing· voucher for rental ,assistance
(if available) provided through the
Local Public Agency (PHA) under Sec
tion 8 of the United States Housing Act
of 1937. If a. Section 8 certificate or
housing voucher is provided to a.· per
son, the grantee must provide referrals
to comparable repla.c_ement dwelling
units where the owner is willing to par
ticipate in the Sect!on 8 Existing Hous-.
ing Program. To the extent that ca.sh
a.ssista.nce is provided, it ma.y, at the
discretion of the grantee, be in either a.
lump sum or in installments.
(B) If the person purchases a.n inter
est in a. housing cooperative or mutual
housing association and occupies a de
cent, safe, and sanitary dwelling in the
cooperative or_ association, the person
.may elect to receive a lump sum pay
ment. This lump sum payment shall be
equal to the capitalized value of 60
monthly installments of the a.mount
that is obtained by subtracting the
"Total Tenant · Payment," as deter
mined under §813.107 of this title, from
the monthly rent and estimated aver
age monthly cost of util1t1es a.ta. com
parable replacement dwelling unit. To
compute the capitalized value, the in
sta.llmen ts shall be discounted at the
rate of interest pa.id on passbook sav-
-ings deposits by a federally insured
bank of savings and loan institution
conducting business within the grant
ee's jurisdiction. To the extent nec
essary to minimize hardship to the
household, the gra.ntee shall, subject to
appropriate safeguards, issue a. pay
ment in advance of the.purchase of the
interest in the housing cooperative or
mutual housing association.
(C) Displaced lowtmodera.te income
ten.ants shall be advised of their right
to elect relocation assistance pursua.nt
to the Uniform Relocation Assists.nee
and Real Property Acquisition Policies
Act of 1970 and the regulations appear
ing at 49 CFR part 24 a.s an a.lternative
to the relocation a.ssistance available
under paragraph (c)(2) of this section.
(3) Definitions. For purposes·of provid
ing section 104(d) assistance under this
para.graph (c):
(1) Comparable replacement dwelling
unlt. The term "comparable replace~
ment dwelling unit" means a dwelling
unit ths.t (A) meets the criteria of 49
CFR 24.2(d)(l) through (6); a.nd (B) is
available at a. monthly cost for rent
plus estimated average monthly utility
costs that does not exceed the "Total
Tena.nt Payment" determined under
§813.107 of this title, after taking into
account any rental a.ssista.nce the
household would receive.
(ii) Displaced person. (A) The term
"displaced person" mea.ns any low/
moderate-income family or· individual
that moves from real property, or
moves his or her personal property
from real property, permanently and
involuntarily, as a. direct result of the
conversion of a. low/moderate-income
dwelling unit (defined in paragraph
(c)(3)(iv) of this section) or demolition
in connection with a.n activity assisted
under this part. A permanent in volun
tary move for an assisted activity in
cludes a permanent move from real
property that is ma.de:
(1) After notice by the grantee to
move perma.nently from the property,
if the move occurs after the initial sub
mission to HUD of the final statement
under 24 CFR 570.302(a)(2) for activities
under the entitlements progra..m: the
initial submission to HUD of an appli
cation !or assistance under § 570.426,
§570.430, or §570.435(d) tha.t is later
granted !or activities governed by the
HUD-adn11nlstered small cities pro
gram; the submission to HUD of a.n a.p
plica.tlon for assistance under § 570.458
that is later granted for a.ctivities
under the UDAG program; or the sub
mission to HUD of an application for
loan g-ua.ra.ntee assistance under
§ 570. 701 that is later provided for the
activity under the section 108 loan
guarantee program.
(2) After notice by the property
owner, to move permanently from the
property, if the move occurs after the
date of submission of a request for fi
nancial assistance by the property
owner (or person in control of the site)
that is later approved for the requested
actiVity.
(J) :Before the date described in para
graph (c)(3)(11)(A) (J) or (2) of this sec
tion, if either HUD or the grantee de
termines that the displacement di
rectly resulted from the conversion of
a low/modera.te-inoome dwelling unit
or demolition in connection with the
requested activity.
195
Item: 6
150

. .
§570.606
(4') After the execution of_ .. the agree
ment by the grantee covering the reha
bilitation or demolition, if the person
is the tenant-occupant of a. dwelling
unit a.nd any one of the following three
situa.tions occurs:
(i) The tenant has not been provided
with a. reasonable opportunity to lease
and occupy a. suitable decent, safe, and
~ta.ry: dwelling in the sa.me building/
complex upon completion of the
project, under rea.sona.ble terms and
conditions, including a. monthly rent
that does not exceed the greater of the
tenant's monthly rent a.nd estima.ted
average utflity costs before the execu
tion of such agreement, or the "Total
Tenant Payment" for the person as de
termined under § 813.107 of this title; or
(ii) The tenant, required to relocate
temporarily for the activity, does not
return to the building/complex; a.nd ei
ther the tenant is not offered pa.ymen t
for a.11 · reasonable out-of-pocket ex
penses incurred in connection with the
tempora.ry location (including the cost
of moving to and from the temporary
location and any increased housing
costs), or other conditions of the tem
pora.ry relocation a.re not reasonable;
or
(i#) The tenant is required to move to
another unit in the building/complex,
but is not offered reimbursement for
all reasonable out-of-pocket expenses
incurred In connection with the move.
(B) Notwithstanding the provisions of
pa.rs.graph (c)(3)(1i)(A) of this section,
the term "displaced person" does not
include:
(J) A person who is evicted for ca.use
based upon serious or repeated viola
tions of material terms of the lease or
occupancy agreement. To exclude a.
person on this basis, the grantee must
determine that the eviction was not
undertaken for the purpose of evading
the obliga.tion to provide relocation as
sistance under this section:
(2) A person who moves into the prop
erty after the date of the notice de
scribed in paragraph (c)(3){11)(A) (J) or
(2) of this section, but received a. writ
ten notice or the expected displace
ment before commencing occupancy.
(3) A person who is not displa.ced as
defined under 49 CFR 24.2(g)(2).
(4) A person who the grantee deter
mines is not displaced as a direct result
24 CFR Ch. V (4-1-95 Edition)
of the conversion of a low/moderate-in
come dwelling or demolition in connec
tion with an assisted a.ctivity. To ex
clude a. person on this basis, HUD must
concur in tha.t determination.
(5) A grantee ma.y, at a.ny time, re
quest HUD to determine whether a per
son is a. displs.ced person under .this
paragraph (c).
(111) · Lo~lmoderate-income dwelling
untt. The term "low/moderate-income
dwelling unit" means a. dwelling unit
with a. market rent (including utility
costs) that does not exceed the a.pplica.
ble Fair Market Rent (FMR) for exist
ing housing established under 24 CFR
pa.rt 888, except tha.t the term does not
include & unit that is owned and occu
pied by the same person before a.nd
a.fter the assisted rehabilitation.
(iv) Standard condition and sub
standard condition suitable for rehabilita
tion. If the gra.ntee has a HUD-approved
consolidated plan, the definitions of
"stands.rd condition" and "substandard
condition suitable for rehabllitation"
established in the pla.n will apply,
{v) Vacant occupiable dwelling untt,
The term .. vs.cant occupiable dwelling
unit'' mea.ns a. va.oa.nt dwelling unit
that is in a sta.ndB.rd concll tion; a va
cant dwelling unit that is in a sub
sta.nda.rd condition, but is suitable for
rehabilitation; or a. dwell1ng unit in
any condl tion tha.t has been occupied
(except by a squatter) a.t a.ny time
within the period beginning one year
before the da.te of execution of the
agreement by the grantee covering the
rehabilitation or demolition.
(d) Optional relocation assistance.

Under section 105(a)(ll) of the Act, the
grantee ma.y provide relocation pay
ments a.nd other relocation assistance
to persons displaced by a.ctivities that
are not subject to pa.ra.gre.ph (b) or (c)
of this section. The grantee may also
provide relocation assistance to per
sons receiving assistance under para.
graphs (b) or (c) of this section a.t lev
els in excess of those required by these
paragraphs. Unless such assists.nee 1s
provided under State or local law, the
grantee shall provide such assistance
only upon the basis or a written deter
mination tha.t the assistance is appro
priate (see 24 CFR 570.201(1)). The
grantee must adopt a. written policy
available to the public tha.t describes
196
Item: 6
151

. .

Ofc. of Asst. Secy., Comm. Planning, Develop •• HUD §570.608 the reloca.tion assistance.• tha.t the
grantee has elected to :furnish and pro
vides for equal reloca.tion assists.nee
within ea.ch class of displa.ced persons.
(e) .Acquisition of real property. The a.c
quisi tion of rea.l property for a.n as
sisted a.otivity is subject to 49 CFR
pa.rt 24, subpart B. .
(f) .Appeals. If·a person disagrees with
the gra.ntee's determination con·cerning
the person's eliglb11ity for, or the
a.mount of, a. reloca.tion payment under
this section, the person ma.y file a writ
ten a.ppea.l of tha.t determina.tion with
the grantee. The appeal procedures to
be followed a.re described in 49 CFR

24.10. In addition, a. low- or modera.te
income household tha.t has been dis
placed from a dwelling may file a writ
ten request for review of the grantee's
decision to the HUD Field Office.
(g) Res,:,omibility of grantee. (1) The
gra.n tee is responsible for ensuring
compliance with the requirements or
this section, notwithstanding a.ny third
party's contra.ctua.l obligation to the
grantee to comply with the proviBions
of this section.
(2) The cost of a.ssista.nce required
under this section ma.y be pa.id from
local public funds, funds provided
under this pa.rt, or funds a.vaila.ble from
other sources.
(3) The grantee must maintain
records in sufficient detail to dem
onstrate compliance with the provi
sions or this section.
(Approved by the Office or Management and
Budget under control number 2506-0102)
[55 FR 29312, July 18, 1990, as amended at 56
FR 56128, Oct. 31, 1991; 60 FR 191'1, Jan., 5,
1995}
t G70,807 . Employment and contracting
opportunities.
(a) Grantees shall comply with Exec
utive Order 11246, as a.mended by Exec
utive Order 12086, and the regulations
1cisued pursuant thereto (41 CFR cha.p-.
ter 60) which provide tha.t no person
shall be discrimina.ted aga.inst on the
basis of race, color, religion, sex, or na
tional origin 1D all phases of employ
ment during the performa.nce of Fed
eral or federally a.asisted construction
contracts. As specif'ied 1n Executive
Ord.er 11246 a.nd the implementing regu
lations, contractors a.nd subcontractors
on Federal or federally assisted con-
struction contracts shall take affirma
tive action to ensure fa.ir treatment in
employment, upgrading, demotion or
transfer, recruitment or recruitment
advertising, layoff or termination,
ra.tes o! pa.y, or other forms or com
penss.tion a.nd selection for training
and apprenticeship. ·
(b) Grantees shall comply with sec
tion 3 o! the Housing and Urban Devel
opment Act of 1968 (12 U.S.C. 1'10lu) a.nd
the implementing regulations in 24
CFR pa.rt 135. Section 3 requires that
employment and other economic op
portunities a.rising 1:n connection with
housing reha.bilita.tlon, housing con
struction, or other public construction
projects shall, to the grea.test extent
!ea.sible, and consistent With existing
Federal, Sta.te, a.nd loca.l la.ws and reg
ula.tions, be g1 ven to low- a.nd very low
income persons.
(53 FR 34456, Sept. 6, 1988, aa a.mended at li9
FR 33894, June 30, 1994)
I G70.608 . Lead-bued paint:
(a) Prohibition agaimt the we of lead
based paint. Section 40l(b) of the Lea.d
Ba.sed Pa.int Poisoning Prevention Act
(42 U.S.C. 4831(b)) directs the Secretary
to prohibit the use of lead-ba.sed paint
· in residential structures constructed or
rehabilita.ted with Federal a.ssistance.

Such prohibitions a.re contained in 24
CFR pa.rt 85, subpart B. a.nd are a.ppli
ca.ble to residential structures con
structed or reha.b111tated with assist
ance provided under this pa.rt.
(b) Notification of hazards of lead-based
paint poi.saning. (1) The Secreta.ry ha.a
promulgated requirements regarding
nottflca.tion to purchasers and tenants
of HUD-associated housing constructed
prior to 19'18 or the ha.za.rds or lead
based pa.int poisoning at 24 CFR pa.rt
35, subpart A. This paragraph is pro
mulgated pursuant to the authoriza
tion gra.nted in 24 CFR 35.5(c) a.nd su
persedes, with respect to all housing to
which it applies, the notificatlon re
quirements prescribed by subpart A of
24 CFR put 35.
(2) For properties constructed prior
to 19'18, applicants for reha.bilita.tion
a.ssista.nce provided under this pa.rt and
tenants or purchasers or properties
owned by the gra.ntee or its sub
recipient and acQuired or rehabillta.ted
197
Item: 6
152

..
•
§570.608
with assistance provided ·.·under this
pa.rt shall be notified:
(1) That the property may contain
lead-based paint;
(11) Of the hazards of lead-based
paint;
(iii) Of the symptoms and treatment
of lead-based poisoning; .
(iv) Of the precautions to be taken to
avoid lead-based paint poisoning (in
cluding maintenance and removal tech
niques for eliminating such hazards);
(v) or the advisability and a.va.ils.bil
ity of blood lead level screening for
children under seven years of a.ge; a.nd
(vi) That in the event lead-based
pa.int is foWld on the property, appro
priate abatement procedures may be
undertaken.
(c) Elimination of lead-based paint h.az-
. ard.s. The purpose of this paragraph is
to implement the provisions of section
302 of the Lead-Based Pa.int Poisoning
Prevention Act, 42 U.S.C. 4822, by es
tablishing procedures to eliminate as
fa.r as practicable the ha.zard.s due to
the presence of paint which may con
tain lead and to which children under
seven years of age may be exposed in
existing housing which 1s reha.biUta.ted
with assistance provided under this
pa.rt. The Secretary has promulgated
requirements regarding the elimi
nation of lea.d-ba.sed paint hazards in
HUD-associated housing at 24 CFR part
35, subpart C. This paragraph is pro
mulgated pursuant to the authoriza
tion granted in 24 CFR 35.24(b)(4) and
supersedes, with respect to all housing
to which it applies, the requirements
prescribed by subpart C of 24 CFR part

35. (1) Applicability. This para.graph ap
plies to the rehabilitation of applicable
surfaces in existing housing which is
assisted under this part. The following
actlvi ties assisted under the Commu
nity Development Block Gra.nt pro
gram are not covered by this para
graph:
(i) Emergency repairs (not including
lead-based paint-related emergency re
pairs):
(11) Wea.theriza.tion;
{iii) Water or sewer hook-ups:
(iv) Installation of eecw-ity devices;
(v) Fa.cm tatlon of tax exempt bond
issuances which provide funds for reha
bilitation;
24 CFR Ch. V (4-1-95 Edltton)
(vi) Other similar types of single-pur
pose programs that do not include
physical repairs or remodeling of appli
cable surfaces (as defined in 24 CFR

35.22) of residential structures; and
(vii) A:rJ.y non-single purpose reha.bili
ta.tion that does not involve applicable
surfaces · (a.s defined in 24 CFR 35.22)
that does not exceed $3,000 per untt.
(2) Definitions. .
"Applicable surface." All intact and
nonintact interior and exterior painted
surfaces of a residential structure.
"Chewable surface." All chewable
protruding painted surfaces up to five
feet from the floor or ground, which
are readily accessible to children under
seven yea.rs of age, e.g., protruding cor
ners, windowsills and fr-a.mes, doors and
frames, and other protruding wood-
work. ·
"Defective pa.int surface. Pa.int on
applicable surfaces that is era.eking,
scaling, chipping, peeling or loose.
"Elevated blood lead level or EBL."
Excessive absorption of lead. that is, a
confirmed concentration of lead in
whole blood of 25 µg/dl (microgra.ms of
lead per deciliter of whole blood) or
greater.
"Lead-based pa.int surface." A paint
surface, whether or not defective, iden
tified a.s having a. lea.d content greater
than or equal to 1 mg/cm2.
(3) Inspection and T~ting--(i) Defective
paint 3Ur/aces. The grantee shall in
spect for defective paint surfaces in all
units constructed prior to 1978 which
a.re occupied by families with children
under seven years of age and which are
proposed for reha.bilitation assistance.

The inspection shall occur a.t the same
time the property is being inspected for
rehabilitation. Defective pa.int condi
tions will be included in the work
write-up for the remainder of the reha-
bllitation work. .
(ii) Chewable surfaces. The grantee
shall be required to test the lead con
tent of chewable surfaces if the family ·
residing in a unit, constructed prior to
· 1978 and receiving rehabilitation assist
ance, includes a. child under seven
years of age with an identified EBL
condition. Lead content shall be tested
by using an X-ray fluorescence ana
lyzer (XRF) or other method approved
by HUD. Test readings of 1 mg/cm 2 or
higher using an XRF shall be coosid-
198
Item: 6
153

•
,_ .
•.· .. ... -. Q:
,.

Ofc. of Asst. Secy .• Comm. Planning, Develop., HUD §570.608 ered positive for presence o(.lead-based
pa.int. ·
(111) Abatement without testing. In lieu
or the procedures set forth in para
graph (c)(3)(11) of this section, in the
ca.se of a residential structure con
structed prior to 1978, the grantee ma.y
forgo testing a.n4 abate &11 applica.ble
surfaces in accordance with the· meth
ods set out in 24 CFR 35.24(b)(2)(11).
(4) Abatement ·Actions. (1) For inspec
tions performed under §570.608(0)(3)(1)
and where defective pa.int surfaces are
found, treatment f>hall be provided to
detective a.reaa. Treatment shall be
performed before final inspection and
a.pproval of the work.
(11) For testing performed under
§570.608(c)(3)(ll) and where interior
ohewa.ble surfaces are found to contain
lea.d-baaed pa.int, a.ll interior chewa.ble
surfaces in any a.ffected room shall be
treated. Where exterior chewable sur
faces are found to contain lead-based
pa.int, the entire exterior chewable sur
face shall be treated. Treatment shall
be performed before final inspection
and approval or the work.
(111) Wben weather prohibits repaint
ing exterior surfaces before final in
spection, the grantee may permit the
owner to abate the defective pa.int or
chewable lead-based pa.int as required
by thia section and agree to repaint by
a specified date. A separate inspection
is required.
(5) Abatement methods. At a. minimum.
treatment or the defective areas a.nd
chewable lead-based paint surfaces
shall consist of covering or removal of
the painted surface as described in 24
CFR 35.24(b)(2)(11).
(6) Funding for inspection, testing and
abatement. Program requirements and
local program design will determine
whether the cost or inspection, testing
or a.batement is to be borne by the
owner/developer, the grantee or a. com
bination of the owner/developer a.nd the
grantee. .
(7) Tenant protection. The owner/de
veloper shall ta.ke appropriate action
to protect tenants from ha.za.rda associ ..
a.ted with abatement procedures. Where
necessary, these actions may include
the temporary relooa.tlon o! tenants
during the abatement process. The
owner/developer shall notify the grant-
ee or all such a.ctions taken. ·
(8) Records. The grantee shall keep a
copy or each inspection a.nd/or test re
port tor at least three years.
(9) Monitoring and enforcement. HUD
field office monitoring or rehabilita
tion programs includes reviews for
compliance with applicable program
requirements for lead-based paint. The
OPD Field Monitoring Handbook which
currently- includes · instructions ror
monitoring lead-based pa.int require
ments will be amended as a.ppropriate.

In cases or noncompliance, HUD may
impose conditions or sanctions on
grantees to encourage prompt compli
ance.
(10) Compliance with. other program re
quirements, Federal, State and local laws.
(1) Other program requirements. To the
extent that assistance from any or the
programs covered by this section is
used in conjunction with other HUD
program assistance which have lead
based pa.int requirements which may
ha.ve more or less stringent require
ments, the more stringent require
ments will preva.11.
(ii) HUD responsibility. Ir HOD deter
mines tha.t a Sta.te or local law; ordi
na.nce, oade or regulation provides ror
lead-based pa.int testing or hazard
abatement 1n a manner which provides
a level or protection from the ha.za.rds
or lead-based paint poisoning at least
comparable to that provided by the re
quirements or this section and that ad
herence to the requirements or this
subpart would be duplicative or other
wise ca.use inefficiencies, HUD may
modify or waive the requirements of
this section in such manner as may be
appropriate to promote efficiency
while ensuring such compa.rable level
or protection.
(111) Grantee responsibility. Nothing in
this section is intended to relieve any
grantee in the programs covered by
this section of any responsibiUty for
oomplia.nce with State or local laws.
ordinances, codes or regula.tions gov
erning lead-based paint testing or haz
ard aba.tement.
(iv) Duposal of lead-based paint debris.

Lead-based paint and defective paint
debris shall be disposed of in a.ccord
ance with a.pplicable Federal, State or
199
Item: 6
154

I'
§570.609
loca.l requirements. (See e._g., 40 CFR
parts 260 through 271.) ,
[53 FR. 34456, Sept. 6, 1988; 53 FR 41330, Oct. 21,
1988]
§ 570,609 Use of debarred., suspended
or ineligible contractors or
subrecipients,
Assistance under thls pa.rt sha.11 not
be used directly oi-. indirectly to em
ploy, awa.rd contracts to, or otherwise
engage the services or, or fund any con
tractor or subreciplent during llJlY pe
riod or debarment, suspension, or
placern-:Jnt in ineligibillty status under
the provisions of 24 CFR pa.rt 24.
(53 FR 34456, Sept, 6, 1988: 53 FR 41330, Oct. 21,
1988]
§ 570.610 Uniform administrative re
quirements and cost principles.

The recipient, its agencies or instru
menta.lities, and subrecipients shall
comply with the policies, guidelines,
and requirements of 24 CFR part 85 and
0MB Circula.rs A-87, A-110, A-122, A-133
(implemented at 24 CFR part 45), and
A-128 2 (implemented a.t 24 CFR pa.rt
44), as applicable, a.s they rela.te to the
acceptance and use of Federal funds
under this part. The a.ppl!cable sections
of 24 CFR pa.rt 85 and 0MB Circular A-
110 are set forth at §570.502.
(53 FR 34456, Sept, 6, 1988; 53 FR 41330, Oct. 21,
1988, a.a amended at 57 FR 33256, July 27, 1992]
§570.611 Conflict of interest.
(a) Applicability. (1) In the procure
ment of supplies, equipment, construc
tion, a.nd services by recipients, and by
subrecipients (including those specified
at § 570.204(c)), the conflict of interest
provisions in 24 CFR 85.36 and 0MB Cir
cular A-110, respectively, shall apply.
(2) In all cases not governed by 24
CFR. 85.36 and 0MB Circular A-110, the
proVisions of this section shall apply.

Su~h cases include the acquisition and
disposition of real property and the
proVision of assistance by the recipi
ent, by its subrecipients, or to individ
uals, businesses or other private enti
tles under eligible activities which au
thorize such assistance {e.g., reha.blli
ta.tion, preservation, and other im
provements of private properties or fa-
2 See footnote l for § 570.200(a)(5).
24 CFR Ch. V (4-1-95 Edition)
cilities pursuant to §570.202, or grants,
loans and other assistance to busi
nesses, individuals and other private
entities pursuant to §570.203, §570.204 or
§570.455).
(b) Conj1icts prohibited. Except for the
use of CDBG funds to pay sala.ries and
other related administrative or person
nel costs, the general rule is· that no
persons described in paragraph (c) of
this section who exercise or have exer
cised any functions or responsibilities
with respect to CDBG activities as
sisted under this pa.rt, or who are in a
position to participate in a. decision
making process or to gain inside infor
mation with regard to such activities,
may obtain a financial interest or ben
efit from a CDBG-assisted activity, or
have a fina.ncial interest in any con
tract, subcontract, or agreement with
respect to a. CDBG-assisted activity, or
with respect to the proceeds of the
CDBG assisted activity, either for
themselves or those with whom they
have family or business ties, during
their tenure or for one yea.r thereafter.

For the TJDAG program, the a.bove
stated restriction shall apply to a.11 ac
tivities that are a pa.rt of the UDAG
project, a.nd shall cover a.ny financial
interest or benefit during, or s.t any
time after, the person's tenure.
(c) Persons covered. The conflict of in
terest provisions of paragraph (b) of
this section apply to any person who is
an employee, agent, consultant, officer,
or elected official or appointed official
of the recipient, or of any designated
public agencies, or subrecipients which
are receiving funds under this pa.rt.
(d) E:rceptiom: thre3hold requirements.

Upon the written request of the recipi
ent, HUD may grant an exception to
the provisions or para.graph (b) of this
section on a case-by-case basis when it
determines that such an exception will
serve to further the purposes of the Act
and the effective a.nd efficient a.dminls
tration or the recipient's program or
project. An exception may be consid
ered only a.fter the recipient ha.s pro
vided the following:
(1) A disclosure of the nature of the
conflict, accompanied by an assurance
that there has been public disclosure of
the conflict a.nd · a description of .how
the public disclosure was made; and
200
Item: 6
155

It
Ofc. of Asst. Secy., Comm. Planning, Develop., HUD §570.613 (2) An opinion of the rec:ipient's at
torney that the interest for which the
exception is sought would not violate
State or local law.
(e) Factors to be considered for e:ccep-.
tions. In determining whether to grant
a requested exception after the recipi
ent has sa.tisfactorily met the require- .
men.ts of par_a.graph (d) of this section, ·
HUD shall consider the cumula.tive ef
fect of the following factors, where ap-
pl1cable:
(1) Whether the exception would pro
vide a significant cost benefit or an es
sential degree or expertise to the pro
gram or project which would otherwise
not be a.vaila.ble;
(2) Whether an opportunity was pro
vided for open competitive bidding or
negotiation: .
(3) Whether the person a.f'!ected is a
member of a. group or class of low- or
modera.te-income persons intended to
be the beneficiaries of the assisted ac
tivity, and the· exception will permit
such person to receive generally the
ea.me interests or benefits as a.re being
ma.de available or provided to the
group or class;
(4) Whether the affected person has
withdrawn from his or her functions or
responsib1lities, or the decisiomnaking
process with respect to the specific as
sisted activity in question:
(5) Whether the interest or benefit
was present before the affected person
was in a. position as described in para.•
graph (b) or this section;
(6) Whether undue hard.ship will re
sult either to the recipient or the per
son affected when weighed a.gs.inst the
public interest served by a.voiding the
prohibited conflict: and
(7) Any other relevant consider
ations.
[53 FR 34456, Sept. 6, 1988; 53 FR 41330, Oct. 21,
198a, as amended at 57 FR 27120, June 17, 1992)
§ 570.~12 E:xecutlve Order 12372.
(a) General. Executive Order 12372, ·
Intergovernmental Review or Federal
Progra.ms, a.nd the Department's imple
menting regulations at 24 CFR pa.rt 52,
allow ea.ch State to establish its own
process for review and comment on
proposed Federal fina.ncia.l assistance
programs.
(b) Applicability. Executive Order
12372 applies to the CDBG Entitlement
program a.nd the UDAG program. The
Executive Order applies to all activi
ties proposed to be assisted under
UDAG, but it a.pplies to the Entitle
ment program only where a grantee
proposes to use funds for the planning
or construction (reconstruction or in
stallation) of wa_ter or sewer facilities.
. Such facilities include storm sewers a.s
well as a.11 sanitary sewers, but do .not
include water and sewer lines connect
ing a. structure to the lines in the pub
lic right-of-way or easement. It is the
responsibility of the grantee to initiate
the Executive Order review process if it
proposes to use its CDBG or UDAG
funds for a.ctiVities subject to review.
t 570.613 Eligibility restrictions for
certain resident aliens.
(a.) Restriction. Certa.in newly legal
ized aUens, a.s deecrlbed in 24 CFR part
49, are not eligible -to a.pply for benefl ts
under covered activities fU.nded by the
programs listed in para.graph (e) or this
section. "Benefits" under this section
means !lnancial assistance, public serv
ices, jobs and access to new or rehab111-
ta.ted housing and other fa.c111t1es made
a.va.ila.ble under covered activities fund
ed by programs listed in paragraph (e)
of this section, 11Benefits" do not in
clude relocation services and payments
to which displacees a.re entitled by la.w.
(b) Covered activities. "Covered activi
ties" under this section means activi
ties meeting the requirements of
§ 57D.208(a.) tha.t either:
(1) Have income eligibility require
ments limiting the benefits exclusively
to low and moderate income persons;
or .
(2) Are targeted geographically or
otherwise to primarily benefit low and
modera.te income persons (excluding
activities serving the public a.t large,
such as sewers, roads, sidewa.lks. a.nd
parks), and that provide benefits to
persons on the basis or a.n applica.tion.
(c) Limitation on coverage. The restric
tions under this section apply only to
a.pplica.nts !or new benefits not being
received by covered resident aliens as
or the effective date of this section.
(d) Compliance. Compliance can be ac
complished by obtaining certification
as provided in 24 CFR 49.20.
(e) Programs affected. (1) The Commu
nity Development Block Grant pro-
201
Item: 6
156

•
§570.700
gram for small cities, adril1n1stered
under subpart F of pa.rt 570 of this title
until closeout of the recipient's grant.
(2) The Community Development
Block Grant program for entitlement
grants, admlnlstered under subpart D
of pa.rt 570 of this title.
(3) The_ Community Development
Block Grant program for Sta.tes, ad
ministered under subpart I or pa.rt 570
of this title until closeout of the unit
or genera.! local government's grant by
the State.
(4) The Urban Development Action
Grants program, administered under
subpart G of pa.rt 570 of this title until
closeout of the recipient's grant.
(55 FR 18494, May 2, 1990)
Subpart L-(Reserved)
Subpart M-Loan Guarantees
SOURCE: 59 FR 66604, Dec. 27, 1994, unless
otherwise noted.
§570.700 Purpose.

This subpart contains requirements
governing the guarantee under section
108 of the Act of debt obligations u de
fined in § 570. 701.
§570,701 Definitions.

Borrower means the public entity or
its designated public agency that is
sues debt obliga.tlons under· this sub
pa.rt.

Debt obligation means a promissory
note or other obllgatlon issued by a
public entity or its designated public
agency and guaranteed by HUD under
this subpart, or a trust certificate or
other obligation offered by HUD or by
a trust or other offerer approved for
purposes of this subpart by HUD which
is guaranteed by HUD under this sub
part and is based on and backed by a
trust or pool composed of notes or
other obligations issued by public enti
ties or their designated public agencies
and guaranteed or eligible for guaran
tee by HUD under this SU bpart.

Designated public agency means a pub
lic agency designated by a. public en
tity to issue debt obligations as bor
. rower wider this subpart.

Entitlement public entity means a met
ropolitan city or an urban county re-
24 CFR Ch. V (4-1-95 Edition)
ceiving a. grant under subpart D of this
part.

Guaranteed loan funds means the pro
ceeds payable to the borrower from the
issuance of debt obliga.tions under this
subpart.

Nonentttlement public entity means
any unit of general local government
in a. nonentitlement area.

Public entity means any unit of gen
eral local government, including units
of genera.l local government in a. non
entitlement area.

State-a.sststed public entity means a
unit of general local government in a
nonentitlement area. which is a.saisted
by a State as required in §570.704(b)(9)
and § 570. 705(b )(2).
· § 570. 702 Eligible appllcants.

The following public entities may
apply for loan guarantee assistance
under this subpart.
(a) Entitlement public entities.·
. (b) Nonent1tlement public entities
that are assisted in the submission of
applications by States that administer
the CDBG program (under subpart I of
this part). Such assistance shall con
sist, at s. minimum, of the certifi•
cations required under § 570. 704(b)(9)
(and actions pursuant thereto).
(c) Nonentitlement public entities el
igible to apply for grant assistance
under subpart F of this part.
~ 570. 703 Ellgible activities.

Guaranteed loan funds may be used
for the following activities, provided
such activities meet the requirements
of § 570.200. However, guaranteed loan
funds may not be used to reimburse the
CDBG program account or line of cred
it for costs incurred by the public en
tity or designated public agency and
paid with CDBG grant funds or pro
gram income.
(a) Acquisition of improved or unim
proved real property in fee or by long
term lease, Including acquisition for.
economic development purposes.
(b) Rehabilitation of real property
owued or acquired by the public entity
or its designated public agency.
(c) Payment of interest on obliga
tions guaranteed under this subpart.
(d) Relocation payments and other
reloca.tion assistance for individuals,
fa.milies, businesses, nonprofit organi-
202
Item: 6
157

r
Office of the Secretary, HUD
&ITa.ngements with grantees and
subgran tees to retain rmy records
which a.re continuously needed for
joint use. The awarding agency will re
quest transfer or records to its custody
when it determines that the records
possess long-term retention value.

When the records s.re transferred to. or
ma.1nta.ined by the Federal agency, the
3-yea.r retention requirement is not ap
plicable to the grantee or subgrantee.

Cc) Starting dcite of retention period-Cl)
General. Wben gra.nt support is contin
ued or renewed at annual or other in
tervals, the retention period for the
records of each funding-period sta.rts on
the da.y the grantee or subgra.ntee sub
mits to the awarding a.gency its sing'le
or la.st expenditure report for that pe
riod. However, if' gra.nt support is con
tinued or renewed quarterly, the reten
tion period for each yea.r's records
starts on the da.y the grantee submits
its expenditure report for the last quar
ter or the Federal fiscal yea.r. In all
other cases, the retention period starts
on the day the grantee submits its
final expenditure report. If an expendi
ture report has been wa.1ved, the reten
tion period starts on the day the report
would have been due.
(2) Real 1J'f'OPertJ/ arid equipment
records. The retention period for real
property and equipment records starts
from the date or the disposition or re
pla.cement or transfer at the direction
or the awa.rcllng agency.
(3) Record! for income tran.sactiom
after grant or subgrant mpport. In some
ca.ses grantees must report income
a.rter the period or grant support.

Where there is such.a requirement, the·
retention period :l'or the records per~
ta.ln1ng to the ea.ming or the income
starts from the end or the gra.ntee•s fis
ca.1 yes.r in which the income is earned.
(4) Indirect cost rate proposals. cost al
locations plans, etc. This pa.rs.graph ap
plies to the !ollowhlg types or docu
ments, and their supparting records:

Indirect cost rate computations or prer
poaa.ls, cost &lloca.tion plans, and any
similar a.cco~tiJlg computations or
the ra.te at which a particular group or
costs is cha.rgea.ble (such as· computer
usage chargeback rates or composite
:l'ringe benefit ra.tes).
(1) If submitted for negotiation. If the
proposa.l, plan, or other. computa.tion is
§85.43
required to be submitted to the Federal
Government (or to the grantee) to form
the basis !or negotiation of the rate,
then the 3-yea.r retention period for its
supporting records starts fl'om the de.te
or such submission.
(11) 1/ not submitted for negotiation. It
the proposal, plan, or. other computa
tion is not required to be submitted to
the· Federal Government (or to the
grantee) :for negotiation purposes, then
the 3-yea.r retention period for the pro
posal pla.n, or computa.tion and its sup
porting records starts from end or the
fiscal year (or other accounting- period)
covered by the proposal, pla.n, or other
computa.tion.
(d) Substitution of microfilm. Copies
ma.de by microfilming, photocopying,
or simila.r methods me.y be substituted
for the original rec.ords.
(e) Access to records-Cl) Becord3 of
grantees and subgrantees. The awarding
agency a.nd the Comptroller General or
the United States, or any or their au
thorized representa.tivea, shall have the
right or access to any pertinent books,
docwnents; pa.pers, or other records of
g-ra.ntees and subgrantees which are
pertinent to the grant, in order to
ma.ke audits, examine.tlons, excerpts,
and tra.nscripts.
(2) Expiration of right of access. The
rights or access in this section must
not be limited to the required reten
tion period but sha.ll la.st a.s long- as the
records are retained.
(1) Re.strictiom on public access. The
Federal Freedom or Intorma.tlon Act (5
U.S.C. 552) does not apply to records
Unless required by Federal, Sta.te. or
local law, grantees and subgrantees &re
not required to perm! t public access to
their records.
f 85.43 Enforcement.
(a) Remedies for noncompliance. It a.
grantee or subgra.ntee materially fails
to comply with any tenn o! an a.wa.rd,
whether stated in a Federal statute or
reg-ula.tion, an a.ssura.nce, in a State
plan or application, a notice or award,
or elsewhere, the awarding agency may
take one or more o:l' the following ac•
tions, as appropriate in the c1r
cumsta.noes:
(1) Temporarily withhold ca.sh pay
ments pending correction or the defi~
ciency by the grantee or subgra.ntee or
575
A TT ACH1\1ENT 4
Item: 6
158

_•i • ,,,._ ,IA
§85.44
more severe enforcement aqtion by the
a.warding agency. ·
(2) Disallow (that is, deny both use of
funds and matching credit for) all or
pa.rt of the cost of the activity or ac
tion not in compliance,
(3) Wholly or partly suspend or ter
minate the current award for the
grantee's or subgrantee's program, ·
_· (4) Withhold further a.wards for the
program, or
(5) Take other remedies that may be
legally available.
(b) Hearings, appeals. In ta.king an en
forcement action, the a.warding agency
will provide the grantee or subgrantee
a.n opportunity for such hearing. ap
peal, or other administrative proceed
ing to which the grantee or subgra.ntee
is entitled under any statute or regula
tion a.pplicable to the action involved.
(c) Effects of suspension and termi
nation. Costs or ST&ntee or subgra.ntee
resulting from obligations incurred by
the grantee or subgrantee during a sus
pension or after tennina.tlon or an
award a.re not allowable unless the
awarding agency expressly authorizes.
them in the notice of suspension or ter
mination or subsequently. Other grant
ee or subgrantee costs ,during suspen
sion or after termination which are
necessary and not reasonably avoida.ble
are allowable if:
(1) The costs result from obligations
which were properly incurred by the
gTa.ntee or subgTantee ·before the effec
tive da.te of suspension or termination,
a.re not in anticipation of it, a.nd, in the
case of a. termination, a.re
noncancella.ble, and,
(2) The costs would be allmvable if
the award were not suspended or ex
. pired normally a.t the end or the fund
ing period in which the termination
takes effect.
(d) Relationship to debarment and .ntS
pension. The enforcement remedies
identified in this section, including
suspension and termination, do not
· preclude grantee or subgrantee from
being subject to "Deba.rment and Sus
pension" under E.O. 12549 (see §85.35).
§ 85.44 Termination for convenience.
. Except as provided in §85.43 a.wards
may be terminated in whole or in pa.rt
only a.s follows:
24 CFR SUbtttte A (4-1-95 Edition)
(a) By the a.warding agency With the
consent of the grantee or subgrantee in
which case the two parties shall agree
upon the termina.tion conditions, in
cluding the effective date and in the
case of partis.1 termination, the portion
to be termina.ted, or
(b) By the grantee or subgrantee
upon written notification to the a.ward
ing agency, setting forth the reasons
for · such termination, the effective
date, a.nd in the case of partial termJ
ne.tion, the portion to be terminated.

However, if, in the case of & partial ter-
. mlnation, the a.warding agency deter
mines that the rema.ining portioµ or
the a ward will not a.coompllsh the pur
poses for which the a.ward was made,
the a.warding- agency may terminate
the a.ward in its entirety under either
§ 85.43 or para.graph (a) of this section.

Subpart D-Affer-The-Grant
Requirements
¾ SS.60 Closeout.
(a) General. The Federal agency will
close out the a.ward when it determines
tha.t a.11 applicable administrative ac
tions a.nd all required work of the
grant has been completed.
(b) Reports. Within 90 days after the
expiration or termination of the grant,
the grantee must submit all fina.ncla.l,
performance, and other reports re
quired as a condition of the grant.

Upon request by the grantee, Federal
agencies may extend this timeframe.

These may include but a.re not llmlted
to:
(1) Final performance or progress re-
port. .
(2) Financial Status Report (SF 269) or
Outlay Report and .Request for Reim
bursement for Construction Programs
(SF-271) (as applicable).
(3) Final request for payment (SF-270)
(if applicable).
(4) Invention disclosure (if applicable).
(5) Federally-owned property report:

In accordance with §85.32(0, a. grantee
must submit an inventory of all feder
a.lly owned property (as distinct from
property acquired with grant funds) for
which it is accountable and request dis
position instructions from the Federal
agency of property no longer needed •
(c) Cost adjustment. The Federal agen
cy will. witlµn 90 days after receipt of
576
Item: 6
159

ATTACHMENT 3
Item: 6
160

55136.00525\42323871.2

RESOLUTION NO. _______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
FOREST PURSUANT TO GOVERNMENT CODE SECTION 54221
DECLARING THAT CERTAIN REAL PROPERTY LOCATED AT 20702
EL TORO ROAD #35 (APN 938-741-79) IS EXEMPT SURPLUS LAND,

AND FINDING THAT SUCH DECLARATION IS EXEMPT FROM THE

CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS, the City of Lake Forest (“City”) and South County Outreach (“SCO”) are parties to two purchase and sale agreements (“PSA”); and WHEREAS, u nder the first PSA, the City is purchasing one residential condominimum unit from SCO for fair market value. The condominimum unit is located at 20702 El Toro Road #35 and is referred to herein as the “Property.” The Property is more particularly described in Exhibit “A,” attached hereto and incorporated herein; and WHEREAS, under the second PSA, the City is selling the Property back to SCO for $1 and an associated regulatory agreement that requires the Property to be rented to very-low income households for a period of 30 y ears. The regulatory agreement will be recorded against the Property’s title; and
WHEREAS, the above transactions are anticipated to close on the same day or as soon as possible thereafter; and
WHEREAS, although the City will own the Property for a short period of time, as a public agency it must comply with the Surplus Land Act (Gov. Code, § 54220 et seq., the “SLA”) before conveying the Property back to SCO; and
WHEREAS, under the SLA, the City must declare property as “surplus land” or “exempt surplus land” before disposing of it. (Gov. Code, § 54221(b)(1)); and WHEREAS, the SLA’s definition for “exempt surplus land” includes, among other things, land transferred by the City pursuant to Government Code section 37364. (Gov.

Code, § 54221(f)(1)(A)). Section 37364 authorizes the City to convey property for less than fair market value to facilitate its use as affordable housing for at least 30 years. Here, this exemption fits because the City will be conveying the Property to SCO for $1 and a regulatory agreement restricting its use as affordable housing for very low income households for 30 years; and
WHEREAS, none of the characteristics listed under Government Code section 54221(f)(2) apply to the Property; and
WHEREAS, the City Council has reviewed this Resolution and now desires to declare the Property as exempt surplus land under the SLA, based on the findings and justifications contained in this Resolution; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lake Forest as follows:

SECTION 1: Incorporation. The above recitals are true and correct and are a substantive part of this Resolution and findings of the City Council.

SECTION 2: CEQA. The mere designation of the Property as as exempt surplus land and authorization for the City Manager to comply with the SLA are exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty that there is no possibility that these activities may have a signific ant effect on the environment. (State CEQA Guidelines, § 15061(b)(3).) The City’s actions do not authorize any new development or other action that has the potential to significantly impact the environment.

SECTION 3 . Exemption Declaration ; Findings . Given the foregoing, the City Council hereby declares that the Property is exempt from the SLA as exempt surplus land pursuant to Government Code section 54221(f)(1)(A), based on the findings contained in this Resolution, namely: (i) the Property is no longer necessary for the City’s use; (ii) the City intends to transfer the Property to SCO; (iii) SCO will record a regulatory agreement restricting the use of the Property to affordable housing for very low income households Item: 6
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for 30 years; (iv) the regulatory agreement will result in the Property being 100% affordable to very low income households (as the Property consist s of a single condominium unit that will be subject to the regulatory agreement); and (v) none of the characteristics listed under Government Code Section 54221(f)(2) apply to the Property.

SECTION 4: City Manager Authorization. The City Manager or her designee is hereby authorized and directed to send a copy of this Resolution to the California Department of Housing and Community Development in accordance with the requirements of the SLA Guidelines.

SECTION 5: Severability. If any section, subsection, paragraph, sentence, clause or phrase of this Resolution is declared by a court of competent jurisdiction to be unconstitutional or otherwise invalid, such decision shall not affect the validity of the remaining portions of this Resolution.

SECTION 6 : Certification. The City Clerk shall certify to the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED by the City Counil of the City of Lake Forest at a regular meeting held on the 2nd of July 2024, by the following roll call vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

Mark Tettemer, Mayor
ATTEST:

Lisa Berglund, City Clerk

Item: 6
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EXHIBIT “A”

Property Description

Item: 6
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ATTACHMENT 4

Item: 6
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55136.00525\42350894.1

RESOLUTION NO. _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF LAKE FOREST APPROVING A PURCHASE AND

SALE AGREEMENT WITH SOUTH COUNTY OUTREACH
REGARDING 20702 EL TORO ROAD #35 (APN 938 -741-
79) AND FINDING THAT THE ACTION IS EXEMPT FROM

THE CALIFORNIA ENVIRONMENTAL QUALITY ACT

WHEREAS, the attached PSA addresses the second transaction. For the reasons set forth above and in the agenda report, the City Council desires to approve the PSA; and

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

SECTION 1. Incorporation. The above recitals are true and correct and are a substantive part of this Resolution and findings of the City Council.

SECTION 2. CEQA. The City’s sale of the Property is exempt from the California Environmental Quality Act (“CEQA”) because it can be seen with certainty that there is Item: 6
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Resolution No. _____

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Lake Forest City CouncilJuly 2, 2024

Lake Forest City Council
July 2, 2024