Los Gatos City Council
May 16, 2023

How to participate: The Town of Los Gatos strongly encourages your active participation in the public process, which is the cornerstone of democracy. If you wish to speak to an item on the agenda, please follow the participation instructions on page 2 of this agenda. If you wish to speak to an item NOT on the agenda, you may do so during the “Verbal Communications” period, by following the participation instructions on page 2 of this agenda. The time allocated to speakers may change to better facilitate the Town Council meeting.

Effective Proceedings: The purpose of the Town Council meeting is to conduct the business of the community in an effective and efficient manner. For the benefit of the community, the Town of Los Gatos asks that you follow the Town’s meeting guidelines while attending Town Council meetings and treat everyone with respect and dignity. This is done by following meeting guidelines set forth in State law and in the Town Code. Disruptive conduct is not tolerated, including but not limited to: addressing the Town Council without first being recognized; interrupting speakers, Town Council or Town staff; continuing to speak after the allotted time has expired; failing to relinquish the podium when directed to do so; and repetitiously addressing the same subject.

Deadlines for Public Comment and Presentations are as follows:
 Persons wishing to make an audio/visual presentation on any agenda item must submit the presentation electronically, either in person or via email, to the Clerk’s Office no later than 3:00 p.m. on the day of the Council meeting.
 Persons wishing to submit written comments to be included in the materials provided to Town Council must provide the comments as follows:
o For inclusion in the regular packet: by 11:00 a.m. the Thursday before the Council meeting
o For inclusion in any Addendum: by 11:00 a.m. the Monday before the Council meeting o For inclusion in any Desk Item: by 11:00 a.m. on the day of the Council Meeting

TOWN OF LOS GATOS

TOWN OF LOS GATOS

COUNCIL MEETING AGENDA
MAY 16, 2023
110 EAST MAIN STREET AND TELECONFERENCE

TOWN COUNCIL CHAMBERS

LOS GATOS, CA
7:00 PM
Maria Ristow, Mayor
Mary Badame Vice Mayor
Matthew Hudes, Council Member
Rob Moore, Council Member
Rob Rennie, Council Member

PARTICIPATION IN THE PUBLIC PROCESS
Town Council Meetings Broadcast Live on KCAT, Channel 15 (on Comcast) on the 1st and 3rd Tuesdays at 7:00 p.m.

Rebroadcast of Town Council Meetings on the 2nd and 4th Tuesdays at 7:00 p.m.

Live & Archived Council Meetings can be viewed by going to:
www.LosGatosCA.gov/TownYouTube

IN COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT, IF YOU NEED SPECIAL ASSISTANCE TO PARTICIPATE IN THIS MEETING, PLEASE CONTACT THE CLERK DEPARTMENT AT (408) 354-6834. NOTIFICATION 48 HOURS BEFORE THE MEETING WILL ENABLE THE TOWN TO MAKE REASONABLE ARRANGEMENTS TO ENSURE ACCESSIBILITY TO THIS MEETING [28 CFR §35.102-35.104]

COUNCIL MEETING AGENDA
MAY 16, 2023
110 EAST MAIN STREET AND TELECONFERENCE

TOWN COUNCIL CHAMBERS
7:00 PM

IMPORTANT NOTICE
This is a hybrid meeting and will be held in-person at the Town Council Chambers at 110 E.

Main Street and virtually through the Zoom webinar application (log-in information provided below). Members of the public may provide public comments for agenda items in-person or virtually through the Zoom webinar by following the instructions listed below. The live stream of the meeting may be viewed on television and/or online at www.LosGatosCA.gov/TownYouTube.

PARTICIPATION
To provide oral comments in real-time during the meeting:
 Zoom webinar: Join from a PC, Mac, iPad, iPhone or Android device: Please click this URL to join: https://losgatoscagov.zoom.us/j/85379428243?pwd=b3QzdklOUXRxaG5XQ2dSN3c0U0NLdz09 Passcode: 192366 You can also type in 853 7942 8243 in the “Join a Meeting” page on the Zoom website at https://zoom.us/join.
o When the Mayor announces the item for which you wish to speak, click the “raise hand” feature in Zoom. If you are participating by phone on the Zoom app, press *9 on your telephone keypad to raise your hand.  Join by telephone: Join by Telephone: Dial: USA 877 336 1839 US Toll-free or 636 651 0008 US Toll. Conference code: 686100
o If you are participating by calling in, press #2 on your telephone keypad to raise your hand.
 In-Person: If you wish to speak during the meeting, please complete a “speaker’s card” located on the back of the chamber benches and return it to the Town Clerk. If you wish to speak to an item on the agenda, please list the item number. If you wish to speak on an item NOT on the agenda, please list the subject and you may speak during the “Verbal Communications” period. The time allocated to speakers may change to better facilitate the Town Council meeting.

When called to speak, you may be asked to provide your full name and your town/city of residence. This identifying information is optional and not a requirement for participation. Please limit your comments to three (3) minutes, or such other time as the Mayor may decide, consistent with the time limit for speakers at a Council meeting. If you wish to speak to an item or items on the Consent Calendar, please state which item number(s) you are commenting on at the beginning of your time.

If you are unable to participate in real-time, you may email to [email protected] the subject line “Public Comment Item #__ ” (insert the item number relevant to your comment) or “Verbal Communications – Non-Agenda Item.” Comments received by 11:00 a.m. the day of the meeting will be reviewed and distributed before the meeting. All comments received will become part of the record.

MEETING CALL TO ORDER

RULES OF DECORUM AND CIVILITY
To conduct the business of the community in an effective and efficient manner, please follow the meeting guidelines set forth in the Town Code and State law.

The Town does not tolerate disruptive conduct, which includes but is not limited to:
· Addressing the Town Council Meeting without first being recognized; · Interrupting speakers, Town Council Meeting, or Town staff; · Continuing to speak after the allotted time has expired; · Failing to relinquish the microphone when directed to do so; · Repetitiously addressing the same subject.

Town Policy does not allow speakers to cede their commenting time to another speaker. Disruption of the meeting may result in a violation of Penal Code Section 403.

ROLL CALL
APPROVE REMOTE PARTICIPATION (This item is listed on the agenda in the event there is an emergency circumstance requiring a Council Member to participate remotely under AB 2449 (Government Code 54953)).

PLEDGE OF ALLEGIANCE

PRESENTATIONS
i. Historic Preservation Month Proclamation
ii. Affordable Housing Month Proclamation
iii. West Valley Community Services Update Presentation

COUNCIL / MANAGER MATTERS
CONSENT ITEMS (Items appearing on the Consent Items are considered routine Town business and may be approved by one motion. Any member of the Council may request to have an item removed from the Consent Items for comment and action. Members of the public may provide input on any or multiple Consent Item(s) when the Mayor asks for public comments on the Consent Items. If you wish to comment, please follow the Participation Instructions contained on

the item will be heard.)

1. Approve the Draft Minutes of the May 2, 2023 Town Council Meeting.

2. Receive the Monthly Financial and Investment Report (March 2023).

3. Receive FY 2021/22 Federal Single Audit Report.

4. Authorize the Town Manager to Execute a Use Agreement with Los Gatos United Soccer Club.

5. Adopt a Resolution to Adopt a List of Projects for Fiscal Year 2023/24 Funded by the State Senate Bill 1, the Road Repair and Accountability Act of 2017.

6. Adopt a Resolution to Extend the Term of the Housing Element Advisory Board.

7. Ratify a First Amendment to the Axon Body Worn Camera Agreement for an Increase of $15,095 and Authorize the Town Manager to Execute a Second Amendment for Additional Storage for an increase of $10,000 for a Total Agreement Not-to-Exceed Amount of $275,630.

8. Adopt a Resolution to Renew an Ordinance Approving a Military Equipment Funding, Acquisition, and Use Policy Pursuant to Assembly Bill 481 and Affirm that Each Type of Military Equipment Identified in the Annual Report Complies with the Standards Set Forth in the Town’s Ordinance on this Matter.

9. Authorize the Town Manager to Execute a Notice of Completion and Certificate of Acceptance for Specified Improvements Completed by SummerHill N40 LLC for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and Authorize the Town Clerk to Submit for Recordation.

10. Approve a California State Library Negotiated Contract with Columbia Telecommunications Corporation for Continued Service of the Library’s Corporation for Education Network Initiatives in California Broadband Connection and Servicing.

VERBAL COMMUNICATIONS (Members of the public are welcome to address the Town Council on any matter that is not listed on the agenda. To ensure all agenda items are heard and unless additional time is authorized by the Mayor, this portion of the agenda is limited to 30 minutes and no more than three (3) minutes per speaker. In the event additional speakers were not able to be heard during the initial Verbal Communications portion of the agenda, an additional Verbal Communications will be opened prior to adjournment.)
PUBLIC HEARINGS (Applicants/Appellants and their representatives may be allotted up to a total of five minutes maximum for opening statements. Members of the public may be allotted up to three minutes to comment on any public hearing item. Applicants/Appellants and their representatives may be allotted up to a total of three minutes maximum for closing statements. Items requested/recommended for continuance are subject to Council’s consent at the meeting.)

11. Consider the Recommendations of the Finance Commission and Staff, and Provide Direction on the Town of Los Gatos Proposed Operating and Capital Budget for Fiscal Year (FY) 2023/24 and on the Proposed Capital Improvement Program for FY 2023/24 – FY 2027/28; Including but Not Limited to:
a. Provide direction to Balance the FY 2023/24 Proposed Budget; b. Provide Direction on the Proposed Operating Budget;
c. Provide Direction on the Proposed Capital Budget; and d. Consider the FY 2023/24 List of Potential Donations Consistent with the Town’s Donation Policy
ADJOURNMENT (Council policy is to adjourn no later than midnight unless a majority of Council votes for an extension of time)
Writings related to an item on the Town Council meeting agenda distributed to members of the Council within 72 hours of the meeting are available for public inspection at the front desk of the Los Gatos Town Library, located at 100 Villa Avenue, and are also available for review on the official Town of Los Gatos website. Copies of desk items distributed to members of the Council at the meeting are available for review in the Town Council Chambers.

Note: In accordance with Code of Civil Procedure §1094.6; litigation challenging a quasi-adjudicatory decision of the Town Council must be brought within 90 days after the decision is final unless a shorter time is required by State or Federal law.

110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 1
DRAFT
Minutes of the Town Council Meeting
Tuesday, May 2, 2023
The Town Council of the Town of Los Gatos conducted a regular meeting in-person and utilizing teleconferencing means on Tuesday, May 2, 2023, at 7:00 p.m.

MEETING CALLED TO ORDER AT 7:00 P.M.

ROLL CALL

Present: Mayor Maria Ristow, Vice Mayor Mary Badame, Council Member Matthew Hudes, Council Member Rob Moore, Council Member Rob Rennie.

Absent: None

PLEDGE OF ALLEGIANCE
Emma Richards led the Pledge of Allegiance. The audience was invited to participate.

PRESENTATIONS
Mayor Ristow presented a proclamation for Police Memorial Day and National Police Week.

Chief Field and staff accepted the proclamation.

Mayor Ristow presented a proclamation for National Public Works Week. Parks and Public Works Director Nicolle Burnham and staff accepted the proclamation.

Mayor Ristow presented a proclamation for International Municipal Clerks’ Week. Town Clerk Wendy Wood and staff accepted the proclamation.

Mayor Ristow presented a proclamation for Building and Safety Month. Chief Building Official Robert Gray and staff accepted the proclamation.

COUNCIL/TOWN MANAGER REPORTS
Council Matters
- Council Member Hudes stated he met with members of the Community Health and Senior Services Commission (CHSSC), Mayor and City Manager of Monte Sereno, Los GatosSaratoga Recreation leadership and Board of Directors regarding Senior Roadmap implementation and core services.
- Council Member Rennie stated he attended a Valley Transportation (VTA) Board of Directors workshop as an alternate; worked the Silicon Valley Clean Energy Authority (SVCEA) table at the Cupertino Earth Day Festival; attended the Los Gatos Spring into Green event, SVCEA Risk Oversight Committee and Executive Committee meetings, and Finance Commission meeting; and met with General Hillhouse regarding the Veteran’s Memorial. - Council Member Moore stated May is Jewish American Heritage month, Asian American Pacific Islander Heritage month, and Mental Health Awareness month; attended the Los Gatos Spring into Green event, Arbor Day Mulberry School tree planting, San Andreas

PAGE 2 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023
Regional Center Legislative Luncheon, Police Department Swearing-In and Promotional Ceremony, and Finance Commission as an observer; and announced his monthly Council Member community coffee at Great Bear Coffee.
- Vice Mayor Badame stated she attended two Finance Commission meetings as an observer, the Town Diversity, Equity, Inclusivity (DEI) Community Workshop, and the Los Gatos Spring into Green event; met with the Chair of the CHSSC; attended the CHSSC meeting as Council Liaison; and announced May is the month of Mother’s Day. - Mayor Ristow stated she attended the Town Diversity, Equity, Inclusivity (DEI) Community Workshop; volunteered at the Chamber Wine Walk; attended Spring into Green, Arbor Day Mulberry School tree planting, and NUMU Mosaic multicultural performance; announced her Mondays with the Mayor; attended a few Ribbon Cuttings, Police Department Swearing-In and Promotional Ceremony, and West Valley Mayor and Manager’s Meeting; and stated the meeting will adjourn in memory of Peter Siemens.

Manager Matters
- Announced the Adult Board and Commission recruitment is underway, and applications are due May 26 at 4:00 p.m. to the Clerk’s Office.
- Announced the Library has released its Summer programs to encourage reading and celebrate important stories.

CONSENT ITEMS (TO BE ACTED UPON BY A SINGLE MOTION)

1. Approve the Draft Minutes of the April 18, 2023 Town Council Meeting.

2. Adopt an Ordinance Repealing and Replacing Town Code Chapter 5, “Bicycles,” with a new Chapter 5, “Bicycles and Regulated Mobility Devices,” to Remove Obsolete Requirements and Add Regulations for E-Bikes and Regulated Mobility Devices and Amending Section

23.30.010, “Exceptions from Article” to Address Required Approval of Bicycle Racks in the Public Right of Way. ORDINANCE 2340

3. Adopt a Resolution Making Determinations and Approving the Reorganization of an Uninhabited Area Designated as Stephenie Lane No. 4, Approximately 0.53 Acres on Property Pre-Zoned R-1:8. APN 523-25-034. Exempt Pursuant to CEQA Guidelines Section 15061(b)(3): Common Sense Exemption. Annexation Application AN22-003. Project Location: 15974 Stephenie Lane. Property Owner/Applicant: Ron and Daphne Watson.

RESOLUTION 2023-016

4. Adopt a Resolution Declaring Hazardous Vegetation (Brush) a Public Nuisance, Ordering Abatement, and Setting June 20, 2023 as a Public Hearing to Consider Objections to the Proposed Removal of Brush. RESOLUTION 2023-017

5. Adopt a Resolution Approving Engineer’s Report, Adopt Resolution of Intention to Order Levy Collection of Assessments for the Following Landscape and Lighting Districts: Blackwell Drive, Kennedy Meadows, Santa Rosa Heights, Vasona Heights, Hillbrook Drive, Gemini Court, and Set Public Hearing for June 20, 2023. RESOLUTION 2023-018 through 2023-024

6. Adopt a Resolution Summarily Vacating 0.038 Acres of a 0.055-Acre Public Utility Easement at 15714 Kavin Lane. RESOLUTION 2023-025

PAGE 3 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023

7. Approve a Side Letter of Agreement Between the Town of Los Gatos and the Police Officers Association (POA) to Modify the Vacation Accrual Cap Through June 30, 2024 and Authorize the Town Manager to Execute the Side Letter.

8. Adopt a Resolution Approving the Parcel Map for 16194 Fisher Avenue and Accepting Dedication. RESOLUTION 2023-026

9. Authorize the Town Manager to Execute a Second Amendment to the Agreement with the County of Santa Clara for the Countywide Household Hazardous Waste Collection Program with a $65,874 Augmentation for Fiscal Year 2023/24.

10. Rescind and Replace the Town’s Economic Recovery Resolution 2022-066 with Draft Economic Recovery Resolution (Attachment 1) to Continue to Support the Town’s Economic Recovery Efforts, Including the Completion of the Construction and Implementation of the Semi-Permanent Parklet Program, and to Allow Time for the Planning Commission and Town Council to Consider Implementing Amendments to the Town Code that Reflect the Streamlining Efforts of the Resolution.

11. Approve a First Amendment to the Axon Body Worn Camera Agreement for an Increase of $25,095 for a Total Agreement Not-to-Exceed Amount of $275,629 Consisting of the Following:
a. Increase Total Quantity of Axon Body-Worn Camera Equipment and Charging Docks Not to Exceed a Total of $15,095; and
b. Increase Axon Digital Evidence Storage Capacity for Audio and Video Recordings Not to Exceed a Total of $10,000.

Council Member Rennie pulled item #10.

Opened public comment.

No one spoke.

Closed public comment.

MOTION: Motion by Council Member Rennie to approve consent items 1-9, and defer item #11 to the May 16, 2023 Town Council meeting. Seconded by Council Member Hudes.

VOTE: Motion passed unanimously.

VERBAL COMMUNICATIONS
Craig Gleason
- Commented on the legacy of Peter Siemens and the services he provided to the Town of Los Gatos and Midpeninsula Regional Open Space.

PAGE 4 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023
Chris Tanimoto
- Commented on a traffic issue and requested speed limit signage on a portion of Blossom Hill Road.

Kent Hillhouse, Los Gatos Veterans Memorial Foundation
- Requested financial support of $250,000 to pay off the Liberty Memorial construction loan so they can fundraise for its programs that support Veterans.

Clyde Horn, Los Gatos Veterans Memorial Foundation
- Commented on the services they provide and requested financial support to pay off the Flame of Liberty Memorial construction loan.

Jim Free, Los Gatos Veterans Memorial Foundation
- Shared his experience of helping educate youth regarding Veterans’ experiences.

Wayne Heimsoth, Los Gatos Veterans Memorial Foundation
- Requested financial support to pay off the construction costs for the Flame of Liberty Memorial.

Gavin Lu
- Commented on a Blossom Hill Road accident and requested the Council provide temporary financial support to impacted families.

John Lockner, Los Gatos Veterans Memorial Foundation
- Commented on the history of the Fire bell, how the Veterans Memorial celebrates Los Gatos’ local September 11, 2001 heroes, and requested financial support.

Ellen Manzo, Los Gatos Veterans Memorial Foundation
- Commented on the Memorial and requested financial support to pay off the Memorial construction loan.

OTHER BUSINESS

12. Receive the 2022 Complete Streets Transportation Commission (CSTC) Accomplishments and Provide Direction on the CSTC 2023 Work Plan.

Nicolle Burnham, Parks and Public Works Director, and Bill Ehlers, CSTC Chair, presented the item.

Opened Public Comment.

Cindy Walker, CSTC Commissioner
- Commented on traffic safety strategies and projects.

PAGE 5 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023
Gillian Verga, CSTC Commissioner
- Commented on bicycle and pedestrian infrastructure projects.

Ali Miano, CSTC Commissioner
- Commented on public transportation projects.

Closed Public Comment.

Council discussed the matter and provided direction to staff.

13. Receive the Report and Provide Direction on Potential Changes to the Town’s Transportation Impact Fee.

Nicolle Burnham, Parks and Public Works Director, presented the item.

Opened Public Comment.

No one spoke.

Closed Public Comment.

Council discussed the matter and provided direction to staff.

Recess 9:45 p.m.

Reconvene 9:55 p.m.

14. Authorize the Town Manager to Execute an Agreement for Services with the Los Gatos Chamber of Commerce to Manage the Town’s Visitors Information Center Including a Visit Los Gatos Website, Related Social Media Pages, and Participation with Related Community Vitality Initiatives as Outlined in the Scope of Services in an Amount Not to Exceed $55,000.

Monica Renn, Economic Vitality Manager, presented the item.

Opened Public Comment.

Catherine Somers, Chamber of Commerce
- Commented in support of the item and discussed additional projects and staff for additional funds.

Randi Chen, Chamber of Commerce
- Commented in support of the item and discussed additional projects and staff for additional funds.

PAGE 6 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023
Lee Fagot
- Requested the Council consider increasing the amount of the agreement to continue and increase the level of service provided by the Chamber.

Donna McCurrie, Chamber of Commerce
- Requested Council consider funding a dedicated social media coordinator in the future.

Closed Public Comment.

Council discussed the matter.

MOTION: Motion by Council Member Rennie to authorize the Town Manager to execute an agreement for services with the Los Gatos Chamber of Commerce to manage the Town’s Visitors Information Center including a Visit Los Gatos Website, related social media pages, and participation with related community vitality initiatives as outlined in the scope of services and include destination marketing and social media coordinator services increasing the amount not to exceed to $88,000. Seconded by Council Member Moore.

VOTE: Motion passed by a unanimous vote.

Pulled Consent Items

10. Rescind and Replace the Town’s Economic Recovery Resolution 2022-066 with Draft Economic Recovery Resolution (Attachment 1) to Continue to Support the Town’s Economic Recovery Efforts, Including the Completion of the Construction and Implementation of the Semi-Permanent Parklet Program, and to Allow Time for the Planning Commission and Town Council to Consider Implementing Amendments to the Town Code that Reflect the Streamlining Efforts of the Resolution. RESOLUTION 2023-027 Monica Renn, Economic Vitality Manager, presented the item.

Opened Public Comment.

Randi Chen, Chamber of Commerce
- Commented in support of the item and requested Council issue grant funds per the agreements.

Catherine Somers, Chamber of Commerce
- Commented in support of the item and requested Council issue grant funds per the agreements.

Closed Public Comment.

PAGE 7 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023
Council discussed the matter.

MOTION: Motion by Mayor Ristow to a rescind and replace the Town’s Economic Recovery Resolution 2022-066 with draft Economic Recovery Resolution in Attachment 1 of the staff report to continue to support the Town’s economic recovery efforts, including the completion of the construction and implementation of the SemiPermanent Parklet Program, and to allow time for the Planning Commission and Town Council to consider implementing amendments to the Town Code that reflect the streamlining efforts of the resolution. AMENDMENT: Add the words “and no further extensions will be given” in Section 7 of the resolution. Seconded by Council Member Moore.

VOTE: Motion passed by a unanimous vote.

OTHER BUSINESS
Mayor Ristow recused herself from this item due to owning property within close proximity to the subject property and left the Chambers.

15. Provide Direction for the Potential Disposition and Use of 224 W. Main Street (APN 510- 44- 069).

Laurel Prevetti, Town Manager, presented the item.

Opened Public Comment.

No one spoke.

Closed Public Comment.

Council discussed the matter.

MOTION: Motion by Mayor Badame to retain ownership of the property as a parking lot until the Town has implemented more of the Dixon Parking Study recommendations.

AMENDMENT: direct the Town Manager to return to the Town Council in the form of a report or agenda item to identify progress with the implementation of the Dixon Parking Study as it relates to this site. Seconded by Council Member Hudes.

VOTE: Motion passed 4-0-1. Mayor Ristow Recused.

PAGE 8 OF 8
SUBJECT: Draft Minutes of the Town Council Meeting of May 2, 2023 DATE: May 2, 2023

ADJOURNMENT
The meeting adjourned in memory of Peter Siemens at 11:24 p.m.

Respectfully Submitted:
_____________________________________
Jenna De Long, Deputy Clerk

PREPARED BY: Gitta Ungvari
Finance Director
Reviewed by: Town Manager and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● 406-354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

FINANCE COMMISSION REPORT
MEETING DATE:05/16/2023
ITEM NO: 2
DATE: May 10, 2023
TO: Mayor Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive the Monthly Financial and Investment Report (March 2023).

RECOMMENDATION:

Receive the Monthly Financial and Investment Report (March 2023).

DISCUSSION:

California Government Code Section 41004 requires that the Town Treasurer submits to the Town Clerk and the legislative body a written report and accounting of all receipts, disbursement, and fund balances. The Finance Director assumes the Town Treasurer role.

Attachment 1 contains the March 2023 Monthly Financial and Investment Report which fulfills this requirement.

The Finance Commission received this report on May 8, 2023.

Attachment 1 includes a Fund Balance Schedule, representing estimated funding available for all funds at the end of the March 2023. The fund balances are estimated at a point in time and will be finalized at the final close of the fiscal year.

Please note that the amount in the Fund Schedule differs from the Portfolio Allocation and Treasurer’s Cash Fund Balances Summary schedule because assets and liabilities are components of the fund balance. As illustrated in the summary below, Total Cash is adjusted by the addition of Total Assets less the amount of Total Liabilities to arrive at the Ending Fund Balance – which represents the actual amount of funds available.

As of March 31, 2023, the Town’s financial position (Assets $80.1M, Liabilities $26.2M and Fund Equity $53.9M) remains strong and there are no issues meeting financial obligations in the near future.

PAGE 2 OF 3
SUBJECT: Monthly Financial and Investment Report (March 2023) for Fiscal Year 2022/23 DATE: May 10, 2023
DISCUSSION (continued):

As of March 31, 2023, the Town’s weighted portfolio yield for investments under management was 2.71% which was below by 12 basis points the Local Agency Investment Fund (LAIF) yield of

2.83% for the same reporting period. Currently the LAIF portfolio’s weighted average maturity (WAM) is 275 days versus the Town’s longer WAM of 410 days. The longer maturity (WAM) for Town assets under management reflects the Town’s strategy to take advantage of higher yields associated with longer maturities balanced with shorter term yields available on investments held with the State’s LAIF. The Town’s weighted average rate of return on investments under management of 2.71% at the close of March was 5 basis points higher when compared to the prior months return of 2.66% reported as of February 28, 2023.

Since December 31, 2022, LAIF yields had climbed from 217 basis points (2.17%) to 2.83 basis points (2.83%) through the end of March 2023. In addition, the Town transferred $5 million to the LAIF account during March, and the increased balance yielded a higher monthly interest earnings.

Staff in coordination with the Town’s investment advisor continued primarily replacing maturing investments with shorter to medium term maturities in the two- to three-year maturity range. These investments capture current yields that exceed the rates expected to be earned in the LAIF pool during that same time period. The State LAIF pool typically lags the market when current market yields are either increasing or decreasing.

As of March 2, 2023, the Federal Reserve voted to approve a ¼ percentage basis point increase from 4.75% to 5.00%. This action was followed with further hikes in the following months, the most recent in May 2023 from 5.00% to 5.25%. Through these actions over time, the Federal Open Market Committee’s (FOMC) goal is to bring year to year inflation to a its targeted level 2%. Following this announcement from FOMC, labor market data showed that about 311,000 new jobs were added in February, however tech layoffs started to show up in the data as information sector was the largest detractor with employment falling. This in turn affected the unemployment rate which rose to 3.6% from 3.4%.

The Town's investments are in compliance with the Town's Investment Policy dated February 21, 2023 and also in compliance with the requirements of Section 53600 at seq. of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

Total Cash $ 70,079,332
Plus: Assets $ 10,045,530
Less: Liabilities $ (26,237,403)
Estimated Fund Balance $ 53,887,459
Reconciling Cash to Fund Balance

PAGE 3 OF 3
SUBJECT: Monthly Financial and Investment Report (March 2023) for Fiscal Year 2022/23 DATE: May 10, 2023
CONCLUSION:

Receive the Monthly Financial and Investment Report (March 2023).

Attachment:

1. Financial and Investment Report (March 2023)

Weighted Average YTM Portfolio Yield on Investments
under Management 2.71%
Weighted Average Maturity (days) 410
This Month Last Month One year ago
Portfolio Allocation & Treasurer's Cash Balances $70,079,332 $69,108,644 $71,616,902 Managed Investments $47,081,480
Local Agency Investment Fund $11,978,204
Reconciled Demand Deposit Balances $11,019,648
Portfolio Allocation & Treasurer's Cash Balances $70,079,332 Benchmarks/ References:

Town's Average Yield 2.71% 2.66% 1.16%
LAIF Yield for month 2.83% 2.62% 0.37%
3 mo. Treasury 4.80% 4.85% 0.51%
6 mo. Treasury 4.91% 5.18% 1.03%
2 yr. Treasury 4.03% 4.82% 2.34%
5 yr. Treasury (most recent) 3.58% 4.19% 2.46%
10 Yr. Treasury 3.47% 3.93% 2.34%
Town of Los Gatos
Summary Investment Information
March 31, 2023
0 - 1 year
63%
1 - 2 years
18%
2 - 3 years
9%
3 - 5 years
10%
Portfolio Maturity Profile
Compliance: The Town's investments are in compliance with the Town's investment policy dated February 21, 2023 and also in compliance with the requirements of Section 53600 at seq. of the California State Code. Based on the information available, the Town has sufficient funds to meet the cash demands for the next six months.

Month YTD
Cash & Investment Balances - Beginning of Month/Period $ 69,108,644.05 $72,886,942.83 Receipts 10,573,784.09 47,900,295.03
Disbursements (9,603,095.73) (50,707,905.45)
Cash & Investment Balances - End of Month/Period $70,079,332.41 $70,079,332.41 Portfolio Allocation Amount % of Portfolio
Max. % or $ Allowed
per State Law or Policy
BNY MM $148,582.33 0.25% 20% of Town Portfolio
US Treasury Notes $8,877,414.30 15.03% No Max. on US Treasuries Government Agency Debenture Notes $24,857,006.60 42.09% No Max. on Non-Mortgage Backed Corporate Medium Term Bonds $13,198,477.01 22.35% 30% of Town Portfolio Local Agency Investment Fund $11,978,204.02 20.28% $75 M per State Law Subtotal - Investments 59,059,684.26 100.00%
Reconciled Demand Deposit Balances 11,019,648.15
Total Portfolio Allocation & Treasurer's Cash Balances $70,079,332.41 Town of Los Gatos
Portfolio Allocation & Treasurer's Cash Balances
March 31, 2023
BNY MM

0.25% US Treasury Notes

15.03%
Government Agency Debenture
Notes

42.09%
Corporate Medium Term Bonds

22.3%
Local Agency Investment Fund

20.3%
Portfolio Investment Allocation
$71.6 M $70.1 M
$0.0 M
$10.0 M
$20.0 M
$30.0 M
$40.0 M
$50.0 M
$60.0 M
$70.0 M
$80.0 M
$90.0 M
Mar-22 Apr-22 May-22 Jun-22 Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Treasurer's Fund Balances

Mar. 2023 Mar. 2023 Mar. 2023
Beginning Deposits Interest/ Ending
Balance Realized Gain/Adj. Earnings Withdrawals Balance Non-Treasury Funds:

Cert. of Participation 2002 Series A Reserve Fund $ 686,251.00 $ 2,094.29 $ 688,345.29 Note 1 Cert. Of Participation 2010 Ser A Lease Pymt Fund 31.60 0.05 31.65 Note 1 Cert. of Participation 2002 Lease Payment Fund 8,506.19 18.62 8,524.81 Note 1 Cert. of Participation 2010 Series Reserve Fund 1,299,754.81 4,355.11 1,304,109.92 Note 2 Total Restricted Funds: $ 1,994,543.60 $ - $ 6,468.07 $ - $ 2,001,011.67 CEPPT IRS Section 115 Trust 673,279.73 690,000.00 28,895.50 $ 1,392,175.23 Grand Total COP's and CEPPT Trust $ 2,667,823.33 $ 690,000.00 $ 35,363.57 $ - $ 3,393,186.90 These accounts are not part of the Treasurer's fund balances reported elsewhere in this report, as they are for separate and distinct entities.

Note 1: The three original funds for the Certificates of Participation 2002 Series A consist of construction funds which will be expended over the next few years, reserve funds which will guarantee the payment of lease payments, and a third fund for the disbursement of lease payments and initial delivery costs.

Note 2: The 2010 COP Funds are all for the Library construction, reserves to guarantee lease payments, and a lease payment fund for the life of the COP issue. The COI fund was closed in September 2010.

Note 3: The CEPPT Section IRS Section 115 Trust was established as an irrevocable trust dedicated to accumulate resources to fund the Town's unfunded liabilities related to pension and other p Town of Los Gatos
Non-Treasury Restricted Fund Balances
March 31, 2023

July 2022 $ 60,107.76
August 2022 61,456.65
September 2022 60,153.38
October 2022 68,965.25
November 2022 68,430.71
December 2022 77,485.61
January 2023 80,998.58
February 2023 79,760.25
March 2023 96,693.30
April 20203
May 2023
June 2023
$ 654,051.49
Interest by Month
Town of Los Gatos
Statement of Interest Earned
March 31, 2023

Town of Los Gatos Investment Schedule
March 31, 2023
Market Value Maturity Yield to Interest Interest Interest Days Deposit Par Original Market Above (Under) Purchased Date or Maturity Received Earned Earned to Institution CUSIP # Security Coupon Date Value Cost Value Cost Interest Call Date or Call to Date Prior Yrs. Current FY Maturity Treasury 91282CAP6 US Treasury Note 0.13% 6/30/2021 1,000,000.00 995,390.63 975,664.06 (19,726.57) 10/15/2023 0.33% $ 1,615.44 $ 3,260.06 $ 2,447.28 198 Toyota Motor Credit 89236THA6_1 Corporate Bond 1.35% 04/12/21 500,000.00 510,580.00 491,781.58 (18,798.43) 8/25/2023 0.45% $ 12,618.75 $ 2,780.30 $ 1,715.77 147 Toyota Motor Credit 89236THA6 Corporate Bond 1.35% 1/11/2022 1,100,000.00 1,107,315.00 1,081,919.47 (25,395.53) 8/25/2023 0.94% $ 16,665.00 $ 4,812.29 $ 7,756.28 147 US Treasury 91282CDD0 US Treasury Note 0.38% 1/13/2022 1,100,000.00 1,090,675.78 1,073,101.57 (17,574.21) 10/31/2023 0.85% $ 3,281.77 $ 4,286.54 $ 6,991.14 214 US Treasury 91282CCN9 US Treasury Note 0.13% 1/13/2022 1,200,000.00 1,188,375.00 1,181,859.37 (6,515.63) 7/31/2023 0.75% $ 1,573.37 $ 4,153.18 $ 6,773.63 122 FFCB 3133EKMX1 Gov. Agency Debenture 2.23% 8/2/2019 1,000,000.00 1,014,400.00 978,372.04 (36,027.96) 2/23/2024 1.90% $ 84,925.83 $ 55,756.94 $ 14,371.97 329 FFCB 3133EMBE1 Gov. Agency Debenture 0.30% 10/8/2020 1,600,000.00 1,598,000.00 1,530,606.70 (67,393.30) 3/28/2024 0.34% $ 11,853.34 $ 9,279.41 $ 4,035.81 363 FFCB 3133EMCQ3 Gov. Agency Debenture 0.28% 10/16/2020 2,000,000.00 1,998,000.00 1,949,647.98 (48,352.02) 10/13/2024 0.31% $ 11,153.33 $ 10,396.24 $ 4,579.69 562 Apple 037833DB3 Corporate Bond 2.90% 12/20/2022 1,300,000.00 1,228,591.00 1,244,303.45 15,712.45 6/21/2027 4.19% $ 8,587.22 $ - $ 14,819.10 1543 Home Depot 437076BM3 Corporate Bond 3.00% 8/4/2022 1,000,000.00 991,960.00 969,426.94 (22,533.06) 1/1/2026 3.04% $ 4,750.00 $ - $ 21,186.02 1007 Home Depot 912828ZW3 US Treasury Note 0.25% 8/9/2022 350,000.00 322,096.88 322,587.89 491.01 6/30/2025 3.16% $ 342.39 $ - $ 6,744.04 822 IBM 459200JY8 Corporate Bond 3.00% 3/25/2021 1,000,000.00 1,071,040.00 981,492.37 (89,547.63) 5/15/2024 0.71% $ 49,166.67 $ 9,358.41 $ 5,550.23 411 US Treasury 912828R28 US Treasury Note 1.63% 7/2/2019 500,000.00 497,246.09 498,840.74 1,594.65 4/30/2023 1.77% $ 27,046.54 $ 26,507.80 $ 6,639.07 30 Freddie Mac 3137EAEN5 Gov. Agency Debenture 2.75% 7/19/2019 2,000,000.00 2,072,358.00 1,991,124.40 (81,233.60) 6/19/2023 1.79% $ 187,916.67 $ 107,829.55 $ 27,432.96 80 FFCB 3133EN5V8 Gov. Agency Debenture 4.13% 1/17/2023 236,000.00 239,174.20 237,751.04 (1,423.16) 162.25 1/11/2027 3.76% $ (162.25) $ - $ 1,787.74 1382 Treasury 91282CBT7 US Treasury Note 0.75% 9/30/2022 800,000.00 712,565.18 731,906.25 19,341.07 3/31/2026 4.14% $ 3,000.00 $ - $ 15,443.37 1096 FFCB 3133ENP95 Gov. Agency Debenture 4.25% 9/30/2022 900,000.00 900,939.60 904,092.60 3,153.00 9/30/2025 4.14% $ 19,125.00 $ - $ 18,916.57 914 US Treasury 91282CDA6 Gov. Agency Debenture 0.25% 1/31/2022 1,100,000.00 1,085,222.44 1,076,367.18 (8,855.26) 9/30/2023 1.07% $ 3,195.74 $ 4,781.92 $ 8,734.98 183 US Treasury 91282CAW1 Gov. Agency Debenture 0.25% 7/15/2021 1,200,000.00 1,199,437.50 1,167,046.87 (32,390.63) 11/15/2023 0.27% $ 4,002.72 $ 3,107.52 $ 2,432.74 229 American Honda 02665WCZ2 Corporate Bond 2.40% 11/27/2019 1,000,000.00 1,012,410.01 970,313.60 (42,096.41) 6/27/2024 2.12% $ 84,733.34 $ 55,189.68 $ 15,985.17 454 JP Morgan Chase 46625HRS1 Gov. Agency Debenture 3.20% 9/23/2022 500,000.00 474,660.00 479,131.91 4,471.91 3/15/2026 4.70% $ 3,644.44 $ - $ 12,058.97 1080 Honeywell Int'l. 438516BW5 Corporate Bond 2.30% 11/20/2019 1,000,000.00 1,014,660.00 970,987.12 (43,672.88) 7/15/2024 1.64% $ 73,983.33 $ 51,828.99 $ 14,901.52 472 Caterpillar Financial Serv 14913Q2V0 Corporate Bond 2.85% 2/23/2021 1,000,000.00 1,077,370.00 979,904.28 (97,465.72) 5/17/2024 0.44% $ 49,400.00 $ 6,129.72 $ 3,413.71 413 FNMA 3135G0V75 Gov. Agency Debenture 1.75% 10/17/2019 1,100,000.00 1,105,833.30 1,061,284.24 (44,549.06) 7/2/2024 1.63% $ 62,081.25 $ 48,706.74 $ 13,521.43 459 US Bancorp 91159HHV5 Corporate Bond 3.38% 12/24/2019 1,000,000.00 1,049,040.00 980,920.97 (68,119.03) 1/5/2024 2.12% $ 105,093.75 $ 54,380.13 $ 16,213.44 280 FHLB 3133834G3 Gov. Agency Debenture 2.13% 3/11/2021 1,400,000.00 1,460,522.00 1,392,411.76 (68,110.24) 6/9/2023 0.19% $ 51,897.22 $ 3,664.98 $ 2,109.67 70 FFCB 3133EKQA7 Gov. Agency Debenture 2.08% 10/21/2019 1,000,000.00 1,019,780.00 966,598.94 (53,181.06) 9/10/2024 1.66% $ 70,431.11 $ 45,130.78 $ 12,579.69 529 PNC Financial 69349LAM0 Corporate Bond 3.80% 2/7/2022 1,000,000.00 1,033,470.00 993,565.77 (39,904.23) 6/25/2023 1.49% $ 36,733.33 $ 5,372.34 $ 10,293.86 86 FHLB 3135G05X7 Gov. Agency Debenture 0.38% 6/10/2022 1,200,000.00 1,102,952.40 1,098,641.87 (4,310.53) 8/25/2025 3.04% $ 3,187.50 $ 1,902.68 $ 26,066.68 878 Treasury 912828ZL7 Gov. Agency Debenture 0.38% 4/12/2022 1,700,000.00 1,583,927.57 1,576,750.00 (7,177.57) 4/30/2025 2.72% $ 3,504.49 $ 9,611.14 $ 33,334.85 761 JP Morgan Chase 46625HJT8 Corporate Bond 3.88% 9/23/2019 1,400,000.00 1,485,414.00 1,382,226.01 (103,187.99) 2/1/2024 2.39% $ 182,038.89 $ 96,022.89 $ 26,024.01 307 American Honda 02665WDH1 Corporate Bond 1.95% 2/14/2020 600,000.00 603,756.00 598,043.24 (5,712.76) 5/10/2023 1.75% $ 33,995.00 $ 25,034.14 $ 7,911.60 40 Treasury 912828V23 US Treasury Note 2.25% 11/29/2021 1,000,000.00 1,032,933.04 981,914.06 (51,018.98) 12/31/2023 0.66% $ 24,456.52 $ 3,924.44 $ 5,048.35 275 Treasury 91282CBE0 2 Gov. Agency Debenture 0.13% 10/7/2021 1,000,000.00 994,768.98 964,687.50 (30,081.48) 1/15/2024 0.36% $ 1,589.67 $ 2,587.41 $ 2,665.22 290 FHLB 3130ALH98 Gov. Agency Debenture 0.25% 2/26/2021 1,000,000.00 997,610.00 959,663.09 (37,946.91) 2/26/2024 0.33% $ 5,000.00 $ 4,416.63 $ 2,474.76 332 FHLB 3130AQF65 Gov. Agency Debenture 1.25% 11/30/2022 1,300,000.00 1,160,559.40 1,183,888.51 23,329.11 12/21/2026 4.15% $ 947.92 $ - $ 16,771.81 1361 Treasury 912828U57 US Treasury Note 2.13% 7/31/2019 1,000,000.00 1,011,875.00 983,203.12 (28,671.88) 11/30/2023 1.84% $ 70,833.33 $ 54,014.24 $ 13,896.62 244 Treasury 912828X70 US Treasury Note 2.20% 12/30/2019 1,000,000.00 1,010,589.29 972,539.06 (38,050.23) 4/30/2024 1.75% $ 62,703.30 $ 48,922.73 $ 14,682.18 396 Treasury 912828XT2 US Treasury Note 2.00% 10/31/2019 1,000,000.00 1,015,667.41 971,953.12 (43,714.29) 5/31/2024 1.64% $ 61,639.34 $ 44,208.50 $ 12,449.26 427 American Honda 02665WCQ2 Corporate Bond 3.63% 9/14/2021 950,000.00 1,012,871.00 942,308.81 (70,562.19) 10/10/2023 0.41% $ 36,924.65 $ 3,232.93 $ 3,065.13 193 FFCB 3133EJ3Q0 Gov. Agency Debenture 2.88% 8/28/2019 1,500,000.00 1,587,503.75 1,477,258.89 (110,244.86) 12/21/2023 2.12% $ 142,911.46 $ 64,945.24 $ 17,160.07 265 Treasury 91282CBE0 Gov. Agency Debenture 0.13% 9/15/2021 650,000.00 647,615.46 627,046.88 (20,568.58) 1/15/2024 0.28% $ 1,081.87 $ 1,447.14 $ 1,376.79 290 FHLB 3130APJH9 Gov. Agency Debenture 0.75% 1/17/2023 1,000,000.00 907,010.00 914,740.97 7,730.97 1,645.83 10/28/2026 4.17% $ (1,645.83) $ - $ 6,419.04 1307 FFCB 3133EN5N6 Gov. Agency Debenture 4.00% 2/8/2023 1,700,000.00 1,706,732.00 1,714,071.63 7,339.63 6,044.44 1/6/2028 3.91% $ (6,044.44) $ - $ 9,309.89 1742 Subtotal $ 46,886,000.00 $ 46,932,897.91 $ 45,531,947.84 $ (1,400,950.07) $ 7,852.52 $ 1,611,778.97 $ 876,983.63 $ 478,092.11 BNY MM Money Market 148,582.33 148,582.33 0.00 0.00% 1
LAIF State Investment Pool 11,978,204.02 11,816,621.99 (161,582.03) 2.83% 115,829.78 1 $59,059,684.26 $57,497,152.16 ($1,562,532.10) $7,852.52 $ 1,611,778.97 $ 876,983.63 $ 593,921.89 Matured Assets
IBM 459200HG9 Corporate Bond 8/8/2019 1,000,000.00 995,010.00 8/1/2022 2.05% $ 55,885.42 $ 59,141.32 $ 1,790.47 JP Morgan Chase 46625HJE1 Gov. Agency Debenture 2/11/2020 900,000.00 934,587.00 9/23/2022 1.74% $ 76,537.50 $ 38,210.60 $ 3,733.22 Treasury 912828L57 US Treasury Note 7/22/2019 1,200,000.00 1,197,988.40 9/30/2022 2.09% $ 67,016.39 $ 63,644.66 $ 5,451.87 Treasury 912828M80 US Treasury Note 7/22/2019 1,000,000.00 1,006,175.23 11/30/2022 1.81% $ 67,158.47 $ 53,444.10 $ 7,613.55 BankAmerica Corp 06051GHC6 Corporate Bond 10/9/2020 1,300,000.00 1,366,287.00 12/20/2023 0.66% $ 85,805.92 $ 31,569.88 $ 13,752.22 FFCB 3133EKVF0 Gov. Agency Debenture 1.88% 7/22/2019 1,000,000.00 999,630.00 1/17/2023 1.89% $ 65,364.58 $ 55,482.90 $ 10,383.67 Freddie Mac 3133EKKT2 Gov. Agency Debenture 2.25% 6/24/2019 1,550,000.00 1,573,188.00 2/8/2023 1.82% $ 135,043.75 $ 86,008.42 $ 17,404.61 Total Investments "Matured" $ 60,129.60
Total Interest FY 22_23 Matured and Current $ 654,051.49 Maturity Profile Amount
l $ 37,403,166.02 63.34%
1-2 years $10,325,350.01 17.48%
2-3 years $5,376,536.45 9.10%
3-5 years $ 5,954,631.78 10.08%
$59,059,684.26

Fund Schedule
Fund
Number Fund Description
Current
Revenue
Current
Expenditure Transfer In
Transfer
Out

GENERAL FUND
Non-Spendable:

Loans Receivable 159,000 - - - - - 159,000
Restricted Fund Balances:

Pension 690,000 - - - - - 690,000
Committed Fund Balances:

Budget Stablization 5,991,566 - - - - - 5,991,566
Catastrphic 5,991,566 - - - - - 5,991,566
Pension/OPEB 300,000 - - - - - 300,000
Assigned Fund Balances:

Open Space 410,000 - - - - - 410,000
Sustainability 140,553 - - - - - 140,553
Capital/Special Projects 11,071,231 (15,498) - - - - 11,055,733 Carryover Encumbrances 33,145 - - - - - 33,145
Compensated Absences 1,519,147 - - - - - 1,519,147
Measure G District Sales Tax 590,581 - - - - - 590,581
Unassigned Fund Balances:
111 Other Unassigned Fund Balance Reserve (Pre YE distribution - (437,829) 5,721,716 (4,480,793) - - 803,093 General Fund Total 26,896,789 (453,327) 5,721,716 (4,480,793) - - 27,684,384 March 2023
Prior Year
Carryforward
7/1/2022
Increase/
(Decrease)
July-Feb
Estimated Fund
Balance
3/31/2023*

Fund Schedule
Fund
Number Fund Description
Current
Revenue
Current
Expenditure Transfer In
Transfer
Out

SPECIAL REVENUE
211/212 CDBG 166,654 - - - - - 166,654
222 Urban Runoff (NPDES) 451,558 95,213 29,996 (13,355) - - 563,412 231-236 Landscape & Lighting Districts 174,236 9,896 - (5,720) - - 178,412 241 ARPA - 3,614,872 - - - - 3,614,872
251 Los Gatos Theatre 19,500 (5,635) 14,900 (5,175) - - 23,590 711-714 Library Trusts 555,254 10,781 - (30,988) - - 535,047 Special Revenue Total 1,367,202 3,725,127 44,896 (55,238) - - 5,081,986

CAPITAL PROJECTS
411 GFAR - General Fund Appropriated Reserve 14,783,787 131,863 115,364 (337,649) - - 14,693,365 421 Grant Funded Projects (948,603) 553,694 114,046 (20,535) - - (301,398) 461-463 Storm Basin Projects 3,218,811 81,788 18,135 (214,900) - - 3,103,834 471 Traffic Mitigation Projects 405,570 - - - - - 405,570 472 Utility Undergrounding Projects 3,302,514 63,325 4,716 - - - 3,370,555 481 Gas Tax Projects 1,836,068 (783,146) 128,484 - - - 1,181,406 Capital Projects Total 22,598,147 47,524 380,745 (573,084) - - 22,453,332

INTERNAL SERVICE FUNDS
611 Town General Liability 803,292 (523,597) 29,122 - - - 308,817 612 Workers Compensation 1,295,185 (83,870) 71,185 (3,182) - - 1,279,318 621 Information Technology 2,990,932 (39,388) 165,271 (21,566) - - 3,095,249 631 Vehicle & Equipment Replacement 2,222,395 (4,440) 217,148 (93,143) - - 2,341,960 633 Facility Maintenance 928,481 (189,453) 239,339 (93,223) - - 885,144 Internal Service Funds Total 8,240,285 (840,748) 722,065 (211,114) - - 7,910,488 Trust/Agency
942 RDA Successor Agency (7,607,527) (1,635,063) - (141) - - (9,242,731) Trust/Agency Fund Total (7,607,527) (1,635,063) - (141) - - (9,242,731) Total Town 51,494,896 843,513 6,869,421 (5,320,370) - - 53,887,459 * Interfund transfers and ARPA funding allocation to be performed as part of the fiscal year end closing entries.

Deposit Accounts of Interest:
111-23541 General Plan Update deposit account balance $966,070 111-23521 BMP Housing deposit account balance $3,698,538 Prior Year
Carryforward
7/1/2022
Increase/
(Decrease)
July-Feb
March 2023
Estimated Fund
Balance
3/31/2023*

Security Description Maturity Date Par/Shares Moody Rating S&P Rating Insight ESG Rating Environment Social Governance AMERICAN HONDA FINANCE 1.95% 10MAY2023 5/10/2023 $ 600,000 A3 A- 2 1 3 3 PNC BANK NA 3.8% 25JUL2023 (CALLABLE 25JUN23) 7/25/2023 $ 1,000,000 A3 A- 3 2 4 3 TOYOTA MOTOR CREDIT CORP 1.35% 25AUG2023 8/25/2023 $ 1,600,000 A1 A+ 3 1 3 4 AMERICAN HONDA FINANCE 3.625% 10OCT2023 10/10/2023 $ 950,000 A3 A- 2 1 3 3 JPMORGAN CHASE & CO 3.875% 01FEB2024 2/1/2024 $ 1,400,000 A1 A- 3 1 3 4 US BANCORP 3.375% 05FEB2024 (CALLABLE 05JAN24) 2/5/2024 $ 1,000,000 A2 A+ 3 3 4 3 IBM CORP 3.0% 15MAY2024 5/15/2024 $ 1,000,000 A3 A- 2 1 2 3 CATERPILLAR FIN SERVICES 2.85% 17MAY24 5/17/2024 $ 1,000,000 A2 A 4 4 3 4 AMERICAN HONDA FINANCE 2.4% 27JUN2024 6/27/2024 $ 1,000,000 A3 A- 2 1 3 3 HONEYWELL INTERNATIONAL 2.3% 15AUG2024 (CALLABLE 15JUL24) 8/15/2024 $ 1,000,000 A2 A 4 4 5 4 HOME DEPOT INC. 3% 01APR2026 (CALLABLE 01JAN2026) 4/1/2026 $ 1,000,000 A2 A 2 2 2 2 JPMORGAN CHASE & CO 3.2 15JUN2026 (CALLABLE 15MAR2026) 6/15/2026 $ 500,000 A1 A- 3 1 3 4 APPLE INC. 2.9% 12SEP2027 (CALLABLE 12JUN2027) 9/12/2027 $ 1,300,000 Aaa AA+ 4 1 4 5 Total/Average $ 13,350,000 2.8 1.8 3.2 3.5
*ESG ratings are from 1 to 5, with 1 as the highest rating and 5 as the lowest. All ratings are weighted by industry rankings, based on the importance of the category within the individual industry.

Town of Los Gatos
Insight ESG Ratings as of March 31, 2023

PREPARED BY: Gitta Ungvari
Finance Director
Reviewed by: Town Manager and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● (408)354-6832
www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 3
DATE: May 10, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Receive FY 2021/22 Federal Single Audit Report RECOMMENDATION:

Staff recommends that the Town Council receive the Federal Single Audit Report for the fiscal year ending June 30, 2022, as prepared by Chavan & Associates, LLP.

DISCUSSION:

The Finance Commission received this Report on May 8, 2023.

In performing the Single Audit for FY 2021/22, the Town’s independent auditor Chavan & Associates, LLP concluded that the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

Attachment:

1. FY 2021/22 Single Audit

Chavan & Associates, LLP
Certified Public Accountants
15105 Concord Circle, Ste 130
Morgan Hill, CA 95037

TOWN OF LOS GATOS

CALIFORNIA

SINGLE AUDIT REPORT

FOR THE FISCAL YEAR
ENDED JUNE 30, 2022

TOWN OF LOS GATOS

CALIFORNIA

SINGLE AUDIT REPORT

TABLE OF CONTENTS
JUNE 30, 2022
PAGE NO.

Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards................................. 1 - 2 Independent Auditor’s Report on Compliance for Each Major Federal Program and Report on Internal Control Over Compliance in Accordance, and Report on the Schedule of Expenditures of Federal Awards Required by Uniform Guidance.......................................................................................................... 3 - 5 Schedule of Expenditures of Federal Awards...................................................................... 6 Notes to Schedule of Expenditures of Federal Awards....................................................... 7 Schedule of Findings and Questioned Costs:

Section I - Summary of Auditor’s Results..................................................................... 8 Section II - Financial Statement Findings...................................................................... 9 Section III - Federal Awards Findings and Questioned Costs....................................... 9 Summary Schedule of Prior Year Findings......................................................................... 10

Page | 1 15105 Concord Circle, Ste 130 Morgan Hill, CA 95037 Tel: 408-217-8749 • E-Fax: 408-872-4159
[email protected] • www.cnallp.com
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL

REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT

OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the
Town Council of the Town of Los Gatos
Los Gatos, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Town of Los Gatos (the “Town”) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the Town’s basic financial statements, and have issued our report thereon dated December 6, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Town’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control.

Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Town’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not

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express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Morgan Hill, California
December 6, 2022

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INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR THE MAJOR FEDERAL

PROGRAM AND REPORT ON INTERNAL CONTROL OVER COMPLIANCE, AND

REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Mayor and Members of the
Town Council of the Town of Los Gatos
Los Gatos, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the Town of Los Gatos (the Town)'s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the Town’s major federal programs for the year ended June 30, 2022.

The Town’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the Town complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2022.

Basis for Opinion on Each Major federal programs
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the Town and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal programs. Our audit does not provide a legal determination of the Town ’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the Town’s federal programs.

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Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Town’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Town’s compliance with the requirements of each major federal programs.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the Town’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 Obtain an understanding of the Town’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis.

A significant deficiency in internal control over compliance is a deficiency , or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

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Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of Town as of and for the year ended June 30, 2022, and have issued our report thereon dated December 6, 2022, which contained an unmodified opinion on those financial statements. Our audit was performed for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and re conciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

December 6, 2022
Morgan Hill, California

TOWN OF LOS GATOS, CALIFORNIA

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
See accompanying Notes to Schedule of Expenditures of Federal Awards. 6 Federal
Catalog Pass-through Expenditures
Number Identifying to Federal
Federal Grantor/Pass-Through Grantor/Program Title (CFDA) Number Subrecipients Expenditures U.S. Department of Transportation
Pass-through programs from the California Dept of Transportation:

Highway Planning and Construction Cluster
Highway Planning and Construction 20.205 HSIPL-5067(022) $ - $ 555,994 Highway Planning and Construction 20.205 CML-5067(022) - 44,442 Total Highway Planning and Construction Cluster - 600,436 Total US Department of Transportation - 600,436
U.S. Department of Treasury
Pass-through program from the State of California
Coronavirus State and Local Fiscal Recovery Funds (1) 21.027 N/A - 3,413,961 Total U.S. Department of Treasury - 3,413,961
U.S. Department of Justice
Direct program:

Bulletproof Vest Partnership Program 16.607 N/A - 6,060 Total U.S. Department of Justice - 6,060
Total Federal Programs $ - $ 4,020,457
(1) Audited as major program

TOWN OF LOS GATOS, CALIFORNIA

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
7 Note 1. Basis of Presentation
The accompanying schedule of expenditures of federal awards (the schedule) includes the federal grant activity of the Town of Los Gatos (the Town) under programs of the federal government for the year ended June 30, 2022. The information in this schedule is presented in accordance with the requirements of the Office of Management and Budget Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Town, it is not intended to and does not present the financial position, changes in net position, or cash flows of the Town and some amounts in this schedule may differ from amounts presented in the Town’s financial statements.

Note 2. Summary of Significant Accounting Policies
Expenditures reported on the schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available. The Town has elected not to use the 10 percent deminimus indirect cost rate as allowed under Uniform Guidance.

Note 3. Relationship to the Basic Financial Statements
The amounts reported in the accompanying schedule agree, in all material respects, to amounts reported within the Town’s financial statements. Federal award revenues are reported principally in the Town’s financial statements as intergovernmental revenues.

Note 4. Relationship to Federal Financial Reports
Amounts reported in the accompanying schedule agree or can be reconciled with the amounts reported or to be reported in the federal financial reports.

Note 5. Pass-Through Entities' Identifying Number
When federal awards were received from a pass-through entity, the Schedule of Expenditures of Federal Awards shows, if available, the identifying number assigned by the pass-through entity. When no identifying number is shown, the Town has determined that no identifying number is assigned for the program, or the Town was unable to obtain an identifying number from the pass-through entity.

TOWN OF LOS GATOS, CALIFORNIA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30,2022
8 Section I - Summary of Auditor's Results
Financial Statements
Type of auditor's report issued
Internal control over financial reporting:

Material weaknesses? Yes x No
Significant deficiencies identified not
considered to be material weaknesses? Yes x None Reported Non-compliance material to financial statements noted? Yes x No Federal Awards
Internal control over major programs:

Material weaknesses? Yes x No
Significant deficiencies identified not
considered to be material weaknesses? Yes x None Reported Type of auditor's report issued on compliance over major programs Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a) Yes x No
Identification of Major Programs:

CFDA Numbers Name of Federal Program
Coronavirus State and Local Fiscal Recovery Funds
Dollar threshold used to distinguish between
type A and type B programs:

Auditee qualified as low risk auditee? Yes x No
$ 750,000
Unmodified
Unmodified

21.027

TOWN OF LOS GATOS, CALIFORNIA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE FISCAL YEAR ENDED JUNE 30,2022
9 Section II - Financial Statement Findings
No findings noted.

Section III - Federal Award Findings and Questioned Costs No findings noted.

TOWN OF LOS GATOS, CALIFORNIA

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS
FOR THE FISCAL YEAR ENDED JUNE 30, 2022
10 Section II - Financial Statement Findings
No findings noted.

Section III - Federal Award Findings and Questioned Costs Finding: 2021-001
Condition: On April 21, 2020, the Town Council approved a waiver of rent and utilities for a set of nonprofit lessees. When preparing a listing of grant expenditures for reporting to the State, the Town chose to use their rent and utility waivers as a qualifying expenditure. Per the Coronavirus Relief Fund (Fund) program guidance in the Federal Register dated January 15, 2021, revenue replacement is not a permissible use of Funds under this program.

Status: Implemented.

The Town’s previous independent auditor had opined that the Town’s efforts to provide economic relief in the form of waivers of rent (rent forgiveness) to a number of non-profits and other entities should be considered as “lost revenue” and therefore disallowable because lost revenue is precluded as an expenditure for the CARES act. Based on the Town’s understanding of the CARES act rent forgiveness support was classified as eligible under the Small business assistance category of expenditures. As such, the Town Council opted to assist these groups by forgiving their rent (a voluntary write-off of rents due to the Town) to support these entities during the height of the pandemic. If the Federal Government determines that this cost were to be disallowed, the Town has significant other qualifying expenditures in categories such as payroll for public safety that could be substituted for the small business rental assistance.

In response to the questioned finding on waivers of rent, staff received approval from the State of California Department of Finance to re-allocate the questioned costs amount of $94,988 from business support (rent waivers) to public safety payroll. The department reviewed the Town’s submittal and on June 1, 2022 the Town received the department’s approval of the re-allocation as corrected in the State’s Corona Virus Fund Reporting worksheet.

PREPARED BY: Meredith Johnston
Administrative Technician
Reviewed by: Town Manager, Town Attorney, Finance Director, and Parks and Public Works Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 4
DATE: May 1, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Use Agreement with Los Gatos United Soccer Club
RECOMMENDATION:

Authorize the Town Manager to execute a Use Agreement with Los Gatos United Soccer Club.

BACKGROUND:

Los Gatos United Soccer Club (LGUSC) is a non-profit and is an affiliate of the California Youth Soccer Association (CYSA) and as such, its teams and players are governed by the rules, regulations, and bylaws of the California Youth Soccer Association.

With over 1,700 participants, LGUSC provides youth soccer programs for youth from Los Gatos and the surrounding communities that emphasize the development of soccer skills, promote self-esteem, and encourage good sportsmanship.

LGUSC was one of the community partners that supported the acquisition and development of the Creekside Sports Park. Following construction of the Park, the Town entered into an agreement with LGUSC on 5/23/2013 to coordinate their ongoing use of the field for their programs (Attachment 1) and this agreement expires on June 30, 2023.

In accordance with Council action taken on April 21, 2020 (item #12), use charges were waived during 2020, 2021, and the first 6 months of 2022 due to the impacts of the COVID-19 Pandemic.

PAGE 2 OF 3
SUBJECT: Authorize the Town Manager to Execute a Use Agreement with Los Gatos United Soccer Club
DATE: May 1, 2023
DISCUSSION:

LGUSC is interested in continuing to use the Creekside Sports Park and a draft agreement is included as Attachment 2. The terms are similar to past agreements with LGUSC. The main proposed terms of the agreement are:

1. The term of the agreement is five years and may be extended for up to two additional five-year periods upon mutual written consent of the parties.

2. LGUSC shall have exclusive use of the Park (Premises), except bathrooms and parking, which are open to the public at large, only during those times and dates as shown on “Annual Schedules.” The Annual Schedule shall cover camps and classes for the Winter, Spring, Summer, and Fall sessions.

3. LGUSC shall pay the Town of Los Gatos an Annual Use Fee of $21,590 for the use of the Premises.

4. LGUSC shall pay the Town of Los Gatos a Facility Maintenance Fee (FMF) of $4.00 per participant per season.

5. LGUSC shall perform maintenance as set forth in the Maintenance Responsibilities section of the Agreement.

6. LGUSC shall be obligated to pay its proportional share of utility costs (water, power, and sewer service). The utility costs are prorated based on the total hours of LGUSC field use.

7. LGUSC shall comply, without limitation, with all applicable provisions of the Los Gatos Town Code, with special attention to Chapter 19, Parks and Recreation provisions.

LGUSC shall also comply with any park rules and regulations established by the Director of Parks and Public Works pursuant to Section 19.10.025(17) of the Town Code, including those rules set forth in Town of Los Gatos Park Rules and Regulations and Town of Los Gatos Creekside Sports Park Special Use Policies.

Creekside Sports Park offers a large artificial turf field for year-round sporting activities.

Creekside is open to the general public Monday – Friday from 7:00 a.m. to 3:00 p.m. After 3:00 and on the weekends the field is exclusively used by LGUSC and the Red Hawks. The field use schedule meets the needs of LGUSC, as well as provides designated hours for youth lacrosse.

The allotted field use is divided 80% for LGUSC and 20% for the Red Hawks. This ratio is adjusted yearly between the clubs and the Town based on an agreed schedule.

PAGE 3 OF 3
SUBJECT: Authorize the Town Manager to Execute a Use Agreement with Los Gatos United Soccer Club
DATE: May 1, 2023
CONCLUSION:

Staff is recommending that the Town Council authorize the Town Manager to execute a Use Agreement between the Town of Los Gatos and Los Gatos United Soccer Club.

FISCAL IMPACT:

Approval of the use agreement with LGUSC for the use of Creekside Sports Park would result in annual base revenue of $21,590. On July 1, 2024, and each anniversary thereafter, the Annual User Fee will be adjusted according to the percent change in the U. S. Department of Labor, Bureau of Labor Statistics Consumer Price Index, All Items, All Urban Consumers, San FranciscoOakland-San Jose, 1982-84-100 Index. This payment will be made on an annual basis.

LGUSC shall be obligated to pay its proportional share of utility costs. The Town shall invoice LGUSC annually, no later than March 1 of each calendar year, for a proportional share of utility costs (water, power, and sewer services) for the prior calendar year, calculated by dividing the total hours of exclusive LGUSC field use by the total hours of field use allocated to all permitted users plus any hours the facility is open to the general public.

In addition to the user fee and utility costs, LGUSC will pay the Town $4.00 per participant per season. These payments will be made the Town on a quarterly basis.

ENVIRONMENTAL ASSESSMENT:

The recommended action is not a project defined under CEQA, and no further action is required.

Attachments:

1. Prior Use Agreement

2. Proposed Use Agreement between the Town of Los Gatos and Los Gatos United Soccer Club

ATTACHMENT 1

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

USE AGREEMENT

BETWEEN THE TOWN OF LOS GATOS
AND

LOS GATOS UNITED SOCCER CLUB
THIS AGREEMENT is dated for identification this 1st day of July 2023 and is made by and between TOWN OF LOS GATOS, State of California (“Town”) and LOS GATOS UNITED SOCCER CLUB (“LGUSC”) identified as a California nonprofit corporation and whose address is 15466 Los Gatos Boulevard, Suite 109 Los Gatos, California 95032.

I. RECITALS

1.1 Town is the owner of Creekside Sports Park, located at 930 University Avenue, Los Gatos, California.

1.2 LGUSC is an affiliate of the California Youth Soccer Association (CYSA) and as such, its teams and players are governed by the rules, regulations, and bylaws of the California Youth Soccer Association.

1.3 With over 1700 participants, LGUSC provides high quality youth soccer programs for youth from Los Gatos and the surrounding communities which emphasize the development of soccer skills, promote self-esteem, encourage good sportsmanship, and enhance other development assets.

1.4 LGUSC was a major partner with the Town in marshaling community support for the acquisition and development of the Creekside Sports Park.

1.5 Town and LGUSC each desire an agreement between them setting forth the specific terms and conditions under which the LGUSC may use the Creekside Sports Park, including hours of use; responsibility for maintenance of the fields and adjacent grounds; use and maintenance of associated facilities and structures; including but not limited to the “snack shack” portion of the restroom facility; storage of LGUSC goods and equipment; and other related items.

II. AGREEMENTS

2.1 Subject Premises. The Premises covered by this Agreement is the Creekside Sports Park, located at 930 University Avenue, Los Gatos, California. A drawing depicting the Premises is attached hereto and incorporated by reference (Attachment A).

2.2 Use of Premises. LGUSC shall have exclusive use of the Premises, except bathrooms and parking, which are open to the public at large, only during those times and dates as shown on “Annual Schedules”. LGUSC shall also have exclusive use of the kitchen/snack shack portion of the restroom/kitchen building during exclusive and non-exclusive use times and dates. The Annual Schedule shall cover camps and classes for the Winter, Spring, Summer, and Fall sessions. No later than October 1st of each year this Agreement is in force, LGUSC

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

and Town staff shall meet to develop an Annual Schedule for the following calendar year.

Town has the final say in establishing the master schedule. Town will attempt to accommodate user groups at their requested time but reserves the right to propose use hours that balance the needs of all user groups equitably. Town retains the right to use or authorize the use of the Premises for all dates and times not allocated to LGUSC in the Annual Schedule.

LGUSC may request changes to the Annual Schedule by written notification to the Department of Parks and Public Works but shall endeavor to minimize changes to the schedule during each calendar year. All changes should be made in writing no less than 30 days prior to the effective date of the change. The Town of Los Gatos shall have sole authority to approve the Annual Schedule and any requested changes to the Annual Schedule.

2.3 Term of Agreement. Unless terminated sooner pursuant to Section 4.3 of this Agreement, the Use Agreement remains in effect from July 1, 2023 through June 30, 2028. The term of this Agreement may be extended for up to two additional five-year periods upon mutual written consent of the parties.

2.4 Annual Use Fee. Beginning July 1, 2023, and every year thereafter, LGUSC shall pay the Town of Los Gatos an Annual Use Fee for the use of the Premises. The initial Annual Use Fee shall be $21,590. The Annual Use Fee shall be considered full and fair compensation for the exclusive use of the facility for those days and times indicated on the Annual Schedule and shall be deemed adequate and fair compensation to the Town for its maintenance responsibilities and contribution toward future life-cycle replacement expenses. On July 1, 2024, and each anniversary thereafter, the Annual User Fee shall be adjusted according to the percent change in the U. S. Department of Labor, Bureau of Labor Statistics Consumer Price Index, All Items, All Urban Consumers, San FranciscoOakland-San Jose, 1982-84-100 Index.

2.5 Facility Maintenance Fee. Beginning July 1, 2023, and continuing for the full term of this agreement, including any extensions, each participant in the LGUSC using Creekside Sports Park will be charged a $4.00 Facility Maintenance Fee (FMF) per participant per season.

The Facility Maintenance Fee shall be assessed by LGUSC at the time of registration or any payment of program fees and shall be retained by LGUSC in a separate account and shall be remitted to the Town quarterly. Participants shall be charged an FMF for each distinct season at which registration and fees are typically collected by LGUSC.

FMF revenue received by the Town from LGUSC shall be used solely to fund the cost of maintenance and operations of the Premises.

2.6 Additional Annual Use Fee Adjustment. Should LGUSC increase or decrease its requested hours of use as set forth in the Annual Schedule, by 5% or more, the Annual Use Fee shall be adjusted proportionally based on the percentage change in hours. In no case shall the Annual Use Fee be decreased by more than 10% below the initial Annual Use Fee set forth in Section 2.4.

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

2.7 Maintenance. LGUSC shall be responsible for the maintenance responsibilities set forth in Attachment B, Maintenance Responsibilities.

2.8 Facility Use Policies. LGUSC shall comply, without limitation, with all applicable provisions of the Los Gatos Town Code, with special attention to Chapter 19, Parks and Recreation provisions. LGUSC shall also comply with any park rules and regulations established by the Director of Parks and Public Works pursuant to Section 19.10.025(17) of the Town Code, including those rules set forth in Attachment C, Town of Los Gatos Park Rules and Regulations, and Attachment D, Town of Los Gatos Creekside Sports Park Special Use Policies. LGUSC agrees to apply with the current rules and regulations available at www.losgatosca.gov/parkres as well as any future amendments to those rules and regulations. Failure to comply with these policies may result in suspension and/or termination of this Agreement.

LGUSC agrees to comply with the state “Fair Play in Community Sports Act.” LGUSC will not discriminate on the basis of gender and boys’ and girls’ teams will have equal access to the facilities.

2.9 Utility Costs. In addition to the Annual Use Fee, LGUSC shall be obligated to pay its proportional share of utility costs. The Town shall invoice LGUSC annually, no later than March 1 of each calendar year, for a proportional share of utility costs (water, power, and sewer services) for the prior calendar year, calculated by dividing the total hours of exclusive LGUSC field use by the total hours of field use allocated to all permitted users plus any hours the facility is open to the general public.

2.10 Payment. LGUSC shall make all payments, whether or not invoiced by Town, required pursuant to this Agreement no later than February 1 of each year payments are due. All payments shall be mailed by first class mail or delivered in person at the Town office and addressed as follows:

Town of Los Gatos
Attn: Finance Department
P.O. Box 697
Los Gatos, California 95031

2.11 Assignment. LGUSC shall not assign any portion of this Agreement or allow the use of the Premises by any other person or entity contrary to this Agreement's terms, with the out Town's prior written approval. LGUSC is expressly prohibited from use of the Premises for any activity other than activities sanctioned and associated with LGUSC.

2.12 Personal Property. Personal property of LGUSC shall be LGUSC’s sole responsibility to acquire, repair, replace and store. LGUSC shall remove its personal property at the expiration or termination of this Agreement. Any personal property not so removed shall become the sole property of Town with no compensation

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

III. INSURANCE AND INDEMNIFICATION

3.1 Minimum Scope of Insurance:
i. LGUSC agrees to have and maintain for the duration of this Agreement, General Liability insurance policies insuring LGUSC, its elected and appointed officials, employees, and agents to an amount not less than two million dollars ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. Insurance is to be placed with insurers with a current Best’s rating of no less than B+. ii. LGUSC agrees to have and maintain for the duration of this Agreement, an Automobile Liability insurance policy insuring the LGUSC, its elected and appointed officials, employees, and agents to an amount not less than one million ($1,000,000) combined single limit per accident for bodily injury and property damage.
iii. LGUSC shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. LGUSC shall provide all certificates and endorsements before term of Agreement begins.

General Liability:
i. The Town, its elected and appointed officials, employees, and agents are to be covered as additional insured as respects to liability arising out of activities occurring on or related to the occupancy and use of the Premises by LGUSC.
ii. LGUSC insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurance maintained by the Town, its elected and appointed officials, employees, or agents shall be excess of the LGUSC’s insurance and shall not contribute with it.
iii. Any failure to comply with the reporting provisions of the policies shall not affect coverage provided to the Town, its elected and appointed officials, employees or volunteers.
iv. LGUSC insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

been given to the Town. LGUSC shall ensure that current certification of such insurance is on file at all times with the Town Clerk during the term of this agreement.

3.3 Workers’ Compensation. In addition to these policies, LGUSC shall have and maintain Workers’ Compensation insurance as required by California law. Further, LGUSC shall ensure that all contractors employed on the Premises by the LGUSC provide the required Workers’ Compensation insurance for their respective employees.

3.4 Property Insurance. Town shall have no obligation to maintain any insurance of the Premises or any personal property placed on the Premises. LGUSC shall be solely responsible for obtaining whatever insurance coverage that LGUSC believes may be appropriate to protect and indemnify LGUSC for loss to the Premises or to any personal property that LGUSC may place on the Premises.

3.5 Indemnification. LGUSC agrees to indemnify, hold harmless, and defend the Town, its elected and appointed officials, employees, and agents, from and against any and all damages, claims or liability, penalties, costs or expenses in law or equity that may at any time arise from any loss, damage, or injury to persons or property occurring in or about the Premises that arises out of or incident to the LGUSC’s use of the Premises, including use by anyone that the LGUSC has permitted or allowed to use the Premises. This obligation to indemnify, hold harmless, and defend applies whether or not the incident or claim or liability is or may be related negligence on the part of the Town.

IV. GENERAL TERMS

4.1 Damage and Destruction. Damage or destruction of any portion of the Premises by any cause shall not terminate this Agreement or otherwise affect the respective obligations of the two parties, any present or future law to the contrary notwithstanding, except pursuant to the provisions of this Section 4.1.

If because of the destruction or damage to the Premises, the Premises is entirely unsuitable or inadequate for the use specified herein, LGUSC shall be entitled to a pro rata rebate of the fee paid to the Town calculated by dividing the Annual User Fee by the total number of hours of exclusive use as listed in, Annual Schedule and then multiplying this calculated hourly rate by the number of hours remaining on the Annual Schedule after the date of the damage or destruction of the Premises.

Under no circumstances does the Town have any obligation to provide LGUSC with an alternative property to conduct its operations, and LGUSC is solely responsible for obtaining such insurance as LGUSC deems appropriate to protect its interests should damage or destruction to the Premises occur.

LGUSC shall be liable for any loss, damage or injury to the field and/or Premises as a result of the direct or indirect use of the Premises by LGUSC under this agreement.

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

Compliance with Town Codes. LGUSC shall comply with all provisions of the Town Code, including the provisions of Chapter 19 of the Code concerning Parks and Recreations.

4.2 Compliance with Town Codes. LGUSC shall comply with all provisions of the Town Code, including the provisions of Chapter 19 of the Code concerning Parks and Recreations.

4.3 Termination of Agreement. Should Town terminate prior to the end of the term of this Agreement, LGUSC shall be entitled to a pro rata rebate of the Annual Use Fee calculated by dividing the Annual User Fee by the total number of hours of exclusive use as shown in, Annual Schedule and then multiplying this calculated hourly rate by the number of hours remaining on the Annual Schedule after the effective date of termination.

LGUSC shall promptly terminate its use of the Premises at the termination of this Agreement, leaving the Premises in the same condition it was received, in good order and repair, reasonable wear and tear and damage by the elements excepted. All improvements and alterations made by LGUSC shall become the property of the Town upon termination of the Agreement without compensation by Town. Any personal property not removed by LGUSC within thirty (30) days of the termination of this Use Agreement shall become the property of the Town and may be disposed of as the Town in its sole discretion deems advisable.

This Agreement shall continue in full force and effect unless prior to February 1st of any calendar year, either Party provides written notice to the other Party that it desires to terminate the Agreement for convenience and, upon such notice, the Agreement shall terminate on June 30th of the same calendar year.

If Town in its sole discretion determines that it requires the Premises for any public purpose, Town may terminate this Agreement upon one hundred eighty (180) days written notice. In the event of an emergency, Town may terminate this Agreement upon five (5) days written notice. “Emergency,” for the purpose of this paragraph, is defined as when the Town Council declares a State of Emergency. Upon termination of this Agreement in the event of an Emergency, Town and LGUSC will work cooperatively to develop a written plan for transition of services and vacation of Premises by LGUSC.

In the event of any material default or breach by LGUSC, Town may at any time, thereafter, following any notice required by statute, and without limiting Town in the exercise of any right or remedy which may have reason of such default or breach:

Terminate LGUSC’s right to possession of the Premises by any lawful means, in which case this Agreement shall terminate, and LGUSC shall immediately surrender possession of the Premises to Town. In such event, Town shall be entitled to recover from LGUSC any damages incurred by Town by reason of LGUSC’s default including but not limited to the cost of recovering possession of the Premises and reasonable attorneys’ fees.

Pursue any other remedy now or hereafter available to Town under the laws of the State of California. Town shall have all remedies provided in law and equity.

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

LGUSC waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179, and any other present, and future law, in the event LGUSC is evicted or Town otherwise lawfully takes possession of the Premises by reason of any default or breach of this Agreement by LGUSC.

If LGUSC fails to remove any personal property belonging to LGUSC from the Premises after forty-five (45) days of the expiration or termination of this Agreement, such property shall at the option of the Town be deemed to have been transferred to Town. Town shall have the right to remove and dispose of such property without liability to LGUSC or to any person claiming under LGUSC, and the Town shall have no need to account of such property.

4.4 No Property Rights. Nothing in this Agreement is in any way intended to establish, convey, create or otherwise grant to LGUSC any form of property rights in the Premises, nor shall such rights be established, conveyed, created or otherwise granted by LGUSC use of the Premises pursuant to the Agreement. LGUSC hereby acknowledges that it currently has no property interest in the Premises or any improvements thereto or fixture’s location thereon, and that any claim it may have to same is hereby and forever waived.

4.5 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

4.6 Notices. Any written correspondence or Notices given under this Agreement shall be addressed as follows:

To LGUSC: To the Town:

President Director
Los Gatos United Soccer Club Department of Parks and Public Works 15466 Los Gatos Blvd Town of Los Gatos
Suite 109, Box 168 41 Miles Avenue
Los Gatos, CA 95032 Los Gatos, CA 95030
Notices shall be delivered by first class, postage prepaid mail or in person. If mailed, a notice shall be deemed effective on the fifth day following in the U.S. Mail.

4.7 Waiver. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of subsequent breach of the same or any other provision of this License Agreement.

4.8 Entire Agreement. This Agreement constitutes the complete and exclusive statement of the Agreement between Town and LGUSC. No terms, conditions, understanding, or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

ATTACHMENT 2
Use Agreement
Los Gatos United Soccer Club

IN WITNESS WHEREOF, the Town and LGUSC have executed this Use Agreement.

Town of Los Gatos:

Laurel Prevetti, Town Manager

Recommended by:

Nicolle Burnham
Director of Parks and Public Works
Los Gatos United Soccer Club:

Shawn Blakeman, Sporting Director
Approved as to Form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

PREPARED BY: Nicolle Burnham
Director of Parks and Public Works
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 4

ADDENDUM
DATE: May 12, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Use Agreement with Los Gatos United Soccer Club
REMARKS:

Since posting of the staff report, Los Gatos United Soccer Club has requested language changes and an add in the proposed Use Agreement.

Changes are reflected as red lined in Attachment 3.

Attachments received with Staff Report:

1. Prior Use Agreement

2. Proposed Use Agreement between the Town of Los Gatos and Los Gatos United Soccer Club Attachments received with this Addendum Item:

3. Revised language changes are red lined in proposed Use Agreement (Attachment 3)

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

USE AGREEMENT

BETWEEN THE TOWN OF LOS GATOS
AND

LOS GATOS UNITED SOCCER CLUB
THIS AGREEMENT is dated for identification this 1st day of July 2023 and is made by and between TOWN OF LOS GATOS, State of California (“Town”) and LOS GATOS UNITED SOCCER CLUB (“LGUSC”) identified as a California nonprofit corporation and whose address is 15466 Los Gatos Boulevard, Suite 109 Box 168, Los Gatos, California 95032.

I. RECITALS

1.1 Town is the owner of Creekside Sports Park, located at 930 University Avenue, Los Gatos, California.

1.2 LGUSC is an affiliate of the California Youth Soccer Association (CYSA) NorCal Premier Soccer League and as such, its teams and players are governed by the rules, regulations, and bylaws of the California Youth Soccer Association NorCal Premier Soccer League.

1.3 With over 1700 participants 350 participants, LGUSC provides high quality youth soccer programs for youth from Los Gatos and the surrounding communities which emphasize the development of soccer skills, promote self-esteem, encourage good sportsmanship, and enhance other development assets.

1.4 LGUSC was a major partner with the Town in marshaling community support for the acquisition and development of the Creekside Sports Park.

1.5 Town and LGUSC each desire an agreement between them setting forth the specific terms and conditions under which the LGUSC may use the Creekside Sports Park, including hours of use; responsibility for maintenance of the fields and adjacent grounds; use and maintenance of associated facilities and structures; including but not limited to the “snack shack” portion of the restroom facility; storage of LGUSC goods and equipment; and other related items.

II. AGREEMENTS

2.1 Subject Premises. The Premises covered by this Agreement is the Creekside Sports Park, located at 930 University Avenue, Los Gatos, California. A drawing depicting the Premises is attached hereto and incorporated by reference (Attachment A).

2.2 Use of Premises. LGUSC shall have exclusive use of the Premises, except bathrooms and parking, which are open to the public at large, only during those times and dates as shown on “Annual Schedules”. LGUSC shall also have exclusive use of the kitchen/snack shack portion of the restroom/kitchen building during exclusive and non-exclusive use times and dates. The Annual Schedule shall cover camps and classes for the Winter, Spring, Summer, and Fall sessions. No later than October 1st of each year this Agreement is in force, LGUSC

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

and Town staff shall meet to develop an Annual Schedule for the following calendar year.

Town has the final say in establishing the master schedule. Town will attempt to accommodate user groups at their requested time but reserves the right to propose use hours that balance the needs of all user groups equitably. Town retains the right to use or authorize the use of the Premises for all dates and times not allocated to LGUSC in the Annual Schedule.

LGUSC may request changes to the Annual Schedule by written notification to the Department of Parks and Public Works but shall endeavor to minimize changes to the schedule during each calendar year. All changes should be made in writing no less than 30 days prior to the effective date of the change. The Town of Los Gatos shall have sole authority to approve the Annual Schedule and any requested changes to the Annual Schedule.

2.3 Term of Agreement. Unless terminated sooner pursuant to Section 4.3 of this Agreement, the Use Agreement remains in effect from July 1, 2023 through June 30, 2028. The term of this Agreement may be extended for up to two additional five-year periods upon mutual written consent of the parties.

2.4 Annual Use Fee. Beginning July 1, 2023, and every year thereafter, LGUSC shall pay the Town of Los Gatos an Annual Use Fee for the use of the Premises. The initial Annual Use Fee shall be $21,590. The Annual Use Fee shall be considered full and fair compensation for the exclusive use of the facility for those days and times indicated on the Annual Schedule and shall be deemed adequate and fair compensation to the Town for its maintenance responsibilities and contribution toward future life-cycle replacement expenses. On July 1, 2024, and each anniversary thereafter, the Annual User Fee shall be adjusted according to the percent change in the U. S. Department of Labor, Bureau of Labor Statistics Consumer Price Index, All Items, All Urban Consumers, San FranciscoOakland-San Jose, 1982-84-100 Index.

2.5 Facility Maintenance Fee. Beginning July 1, 2023, and continuing for the full term of this agreement, including any extensions, each participant in the LGUSC using Creekside Sports Park will be charged a $4.00 Facility Maintenance Fee (FMF) per participant per season, a season is August 1 to May 31. The Facility Maintenance Fee shall be assessed by LGUSC at the time of registration or any payment of program fees and shall be retained by LGUSC in a separate account and shall be remitted to the Town quarterly. Participants shall be charged an FMF for each distinct season at which registration and fees are typically collected by LGUSC.

FMF revenue received by the Town from LGUSC shall be used solely to fund the cost of maintenance and operations of the Premises.

2.6 Additional Annual Use Fee Adjustment. Should LGUSC increase or decrease its requested hours of use as set forth in the Annual Schedule, by 5% or more, the Annual Use Fee shall be adjusted proportionally based on the percentage change in hours. In no case shall the

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

Annual Use Fee be decreased by more than 10% below the initial Annual Use Fee set forth in Section 2.4.

2.7 Maintenance. LGUSC shall be responsible for the maintenance responsibilities set forth in Attachment B, Maintenance Responsibilities.

2.8 Facility Use Policies. LGUSC shall comply, without limitation, with all applicable provisions of the Los Gatos Town Code, with special attention to Chapter 19, Parks and Recreation provisions. LGUSC shall also comply with any park rules and regulations established by the Director of Parks and Public Works pursuant to Section 19.10.025(17) of the Town Code, including those rules set forth in Attachment C, Town of Los Gatos Park Rules and Regulations, and Attachment D, Town of Los Gatos Creekside Sports Park Special Use Policies. LGUSC agrees to apply with the current rules and regulations available at www.losgatosca.gov/parkres as well as any future amendments to those rules and regulations. Failure to comply with these policies may result in suspension and/or termination of this Agreement.

LGUSC agrees to comply with the state “Fair Play in Community Sports Act.” LGUSC will not discriminate on the basis of gender and boys’ and girls’ teams will have equal access to the facilities.

2.9 Utility Costs. In addition to the Annual Use Fee, LGUSC shall be obligated to pay its proportional share of utility costs. The Town shall invoice LGUSC annually, no later than March 1 of each calendar year, for a proportional share of utility costs (water, power, and sewer services) for the prior calendar year, calculated by dividing the total hours of exclusive LGUSC field use by the total hours of field use allocated to all permitted users plus any hours the facility is open to the general public.

2.10 Payment. LGUSC shall make all payments, whether or not invoiced by Town, required pursuant to this Agreement no later than February 1 of each year payments are due. All payments shall be mailed by first class mail or delivered in person at the Town office and addressed as follows:

Town of Los Gatos
Attn: Finance Department
P.O. Box 697
Los Gatos, California 95031

2.11 Assignment. LGUSC shall not assign any portion of this Agreement or allow the use of the Premises by any other person or entity contrary to this Agreement's terms, with the out Town's prior written approval. LGUSC is expressly prohibited from use of the Premises for any activity other than activities sanctioned and associated with LGUSC.

2.12 Personal Property. Personal property of LGUSC shall be LGUSC’s sole responsibility to acquire, repair, replace and store. LGUSC shall remove its personal property at the

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

expiration or termination of this Agreement. Any personal property not so removed shall become the sole property of Town with no compensation
III. INSURANCE AND INDEMNIFICATION

3.1 Minimum Scope of Insurance:
i. LGUSC agrees to have and maintain for the duration of this Agreement, General Liability insurance policies insuring LGUSC, its elected and appointed officials, employees, and agents to an amount not less than two million dollars ($2,000,000) combined single limit per occurrence for bodily injury, personal injury and property damage. Insurance is to be placed with insurers with a current Best’s rating of no less than B+. ii. LGUSC agrees to have and maintain for the duration of this Agreement, an Automobile Liability insurance policy insuring the LGUSC, its elected and appointed officials, employees, and agents to an amount not less than one million ($1,000,000) combined single limit per accident for bodily injury and property damage.
iii. LGUSC shall provide to the Town all certificates of insurance, with original endorsements effecting coverage. LGUSC shall provide all certificates and endorsements before term of Agreement begins.

General Liability:
i. The Town, its elected and appointed officials, employees, and agents are to be covered as additional insured as respects to liability arising out of activities occurring on or related to the occupancy and use of the Premises by LGUSC.
ii. LGUSC insurance coverage shall be primary insurance as respects the Town, its elected and appointed officials, employees, and agents. Any insurance or self-insurance maintained by the Town, its elected and appointed officials, employees, or agents shall be excess of the LGUSC’s insurance and shall not contribute with it.
iii. Any failure to comply with the reporting provisions of the policies shall not affect coverage provided to the Town, its elected and appointed officials, employees or volunteers.
iv. LGUSC insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the limits of the insurer’s liability.

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

3.2 All Coverages. Each insurance policy required in this item shall be endorsed to state that coverage shall not be suspended, voided, canceled, reduced in coverage or in limits except after thirty (30) days’ prior written notice by certified mail, return receipt requested, has been given to the Town. LGUSC shall ensure that current certification of such insurance is on file at all times with the Town Clerk during the term of this agreement.

3.3 Workers’ Compensation. In addition to these policies, LGUSC shall have and maintain Workers’ Compensation insurance as required by California law. Further, LGUSC shall ensure that all contractors employed on the Premises by the LGUSC provide the required Workers’ Compensation insurance for their respective employees.

3.4 Property Insurance. Town shall have no obligation to maintain any insurance of the Premises or any personal property placed on the Premises. LGUSC shall be solely responsible for obtaining whatever insurance coverage that LGUSC believes may be appropriate to protect and indemnify LGUSC for loss to the Premises or to any personal property that LGUSC may place on the Premises.

3.5 Indemnification. LGUSC agrees to indemnify, hold harmless, and defend the Town, its elected and appointed officials, employees, and agents, from and against any and all damages, claims or liability, penalties, costs or expenses in law or equity that may at any time arise from any loss, damage, or injury to persons or property occurring in or about the Premises that arises out of or incident to the LGUSC’s use of the Premises, including use by anyone that the LGUSC has permitted or allowed to use the Premises. This obligation to indemnify, hold harmless, and defend applies whether or not the incident or claim or liability is or may be related negligence on the part of the Town.

IV. GENERAL TERMS

4.1 Damage and Destruction. Damage or destruction of any portion of the Premises by any cause shall not terminate this Agreement or otherwise affect the respective obligations of the two parties, any present or future law to the contrary notwithstanding, except pursuant to the provisions of this Section 4.1.

If because of the destruction or damage to the Premises, the Premises is entirely unsuitable or inadequate for the use specified herein, LGUSC shall be entitled to a pro rata rebate of the fee paid to the Town calculated by dividing the Annual User Fee by the total number of hours of exclusive use as listed in, Annual Schedule and then multiplying this calculated hourly rate by the number of hours remaining on the Annual Schedule after the date of the damage or destruction of the Premises.

Under no circumstances does the Town have any obligation to provide LGUSC with an alternative property to conduct its operations, and LGUSC is solely responsible for obtaining such insurance as LGUSC deems appropriate to protect its interests should damage or destruction to the Premises occur.

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

LGUSC shall be liable for any loss, damage or injury to the field and/or Premises as a result of the direct or indirect use of the Premises by LGUSC under this agreement.

Compliance with Town Codes. LGUSC shall comply with all provisions of the Town Code, including the provisions of Chapter 19 of the Code concerning Parks and Recreations.

4.2 Compliance with Town Codes. LGUSC shall comply with all provisions of the Town Code, including the provisions of Chapter 19 of the Code concerning Parks and Recreations.

4.3 Termination of Agreement. Should Town terminate prior to the end of the term of this Agreement, LGUSC shall be entitled to a pro rata rebate of the Annual Use Fee calculated by dividing the Annual User Fee by the total number of hours of exclusive use as shown in, Annual Schedule and then multiplying this calculated hourly rate by the number of hours remaining on the Annual Schedule after the effective date of termination.

LGUSC shall promptly terminate its use of the Premises at the termination of this Agreement, leaving the Premises in the same condition it was received, in good order and repair, reasonable wear and tear and damage by the elements excepted. All improvements and alterations made by LGUSC shall become the property of the Town upon termination of the Agreement without compensation by Town. Any personal property not removed by LGUSC within thirty (30) days of the termination of this Use Agreement shall become the property of the Town and may be disposed of as the Town in its sole discretion deems advisable.

This Agreement shall continue in full force and effect unless prior to February 1st of any calendar year, either Party provides written notice to the other Party that it desires to terminate the Agreement for convenience and, upon such notice, the Agreement shall terminate on June 30th of the same calendar year.

If Town in its sole discretion determines that it requires the Premises for any public purpose, Town may terminate this Agreement upon one hundred eighty (180) days written notice. In the event of an emergency, Town may terminate this Agreement upon five (5) days written notice. “Emergency,” for the purpose of this paragraph, is defined as when the Town Council declares a State of Emergency. Upon termination of this Agreement in the event of an Emergency, Town and LGUSC will work cooperatively to develop a written plan for transition of services and vacation of Premises by LGUSC.

In the event of any material default or breach by LGUSC, Town may at any time, thereafter, following any notice required by statute, and without limiting Town in the exercise of any right or remedy which may have reason of such default or breach:

Terminate LGUSC’s right to possession of the Premises by any lawful means, in which case this Agreement shall terminate, and LGUSC shall immediately surrender possession of the Premises to Town. In such event, Town shall be entitled to recover from LGUSC any damages incurred by Town by reason of LGUSC’s default including but not limited to the cost of recovering possession of the Premises and reasonable attorneys’ fees.

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

Pursue any other remedy now or hereafter available to Town under the laws of the State of California. Town shall have all remedies provided in law and equity.

LGUSC waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and 1179, and any other present, and future law, in the event LGUSC is evicted or Town otherwise lawfully takes possession of the Premises by reason of any default or breach of this Agreement by LGUSC.

If LGUSC fails to remove any personal property belonging to LGUSC from the Premises after forty-five (45) days of the expiration or termination of this Agreement, such property shall at the option of the Town be deemed to have been transferred to Town. Town shall have the right to remove and dispose of such property without liability to LGUSC or to any person claiming under LGUSC, and the Town shall have no need to account of such property.

4.4 No Property Rights. Nothing in this Agreement is in any way intended to establish, convey, create or otherwise grant to LGUSC any form of property rights in the Premises, nor shall such rights be established, conveyed, created or otherwise granted by LGUSC use of the Premises pursuant to the Agreement. LGUSC hereby acknowledges that it currently has no property interest in the Premises or any improvements thereto or fixture’s location thereon, and that any claim it may have to same is hereby and forever waived.

4.5 Disputes. In any dispute over any aspect of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees, including costs of appeal.

4.6 Notices. Any written correspondence or Notices given under this Agreement shall be addressed as follows:

To LGUSC: To the Town:

President Director
Los Gatos United Soccer Club Department of Parks and Public Works 15466 Los Gatos Blvd Town of Los Gatos
Suite 109, Box 168 41 Miles Avenue
Los Gatos, CA 95032 Los Gatos, CA 95030
Notices shall be delivered by first class, postage prepaid mail or in person. If mailed, a notice shall be deemed effective on the fifth day following in the U.S. Mail.

4.7 Waiver. No failure on the part of either party to exercise any right or remedy hereunder shall operate as a waiver of any other right or remedy that party may have hereunder, nor does waiver of a breach or default under this Agreement constitute a continuing waiver of subsequent breach of the same or any other provision of this License Agreement.

ATTACHMENT 3
Use Agreement
Los Gatos United Soccer Club

4.8 Entire Agreement. This Agreement constitutes the complete and exclusive statement of the Agreement between Town and LGUSC. No terms, conditions, understanding, or agreements purporting to modify or vary this Agreement, unless hereafter made in writing and signed by the party to be bound, shall be binding on either party.

IN WITNESS WHEREOF, the Town and LGUSC have executed this Use Agreement.

Town of Los Gatos:

Laurel Prevetti, Town Manager

Recommended by:

Nicolle Burnham
Director of Parks and Public Works
Los Gatos United Soccer Club:

Shawn Blakeman, Sporting Director
Approved as to Form:

Gabrielle Whelan, Town Attorney
Attest:

Wendy Wood, CMC, Town Clerk

PREPARED BY: Gary Heap
Town Engineer
Reviewed by: Town Manager, Town Attorney, Finance Director, and Parks and Public Works Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 5/16/2023
ITEM NO: 5
DATE: May 2, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution to Adopt a List of Projects for Fiscal Year 2023/24 Funded by the State Senate Bill 1, the Road Repair and Accountability Act of 2017 RECOMMENDATION:

Adopt a resolution (Attachment 1) to adopt a list of projects for Fiscal Year (FY) 2023/24 funded by the State Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017.

BACKGROUND:

SB 1, the Road Repair and Accountability Act of 2017, was passed by the State Legislature and signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide. SB 1 is intended to enable cities and counties to better address significant maintenance, rehabilitation, and safety needs on their local street systems. Maintenance and rehabilitation projects are used to extend the serviceable life of streets. The Town will receive an estimated $829,760 in Road Maintenance and Rehabilitation Account (RMRA) funding through SB 1 in FY 2023/24.

Built into the Road Repair and Accountability Act are accountability and transparency measures, including a requirement that a list of all streets proposed to receive RMRA funding be adopted by the applicable governing body at a regular meeting. To comply, the Town Council must adopt a resolution with a list of streets that may receive RMRA funding in the upcoming fiscal year, including a description and the location of each proposed street segment, a proposed schedule for the project’s completion, and the estimated useful life of the improvement.

PAGE 2 OF 3
SUBJECT: Adopt a Resolution to Adopt a List of Projects for Fiscal Year 2023/24 Funded by the State Senate Bill 1, the Road Repair and Accountability Act of 2017 DATE: May 4, 2023
DISCUSSION:

In considering which roads may receive RMRA funding, staff recommends Town road segments that carry heavier traffic loads and volumes, such as arterials that may involve more design scope and construction work to repair and maintain compared to other local roadways. Staff has identified the project segments shown in Table 1 for use of SB 1 funding in FY 2023/24 and upcoming years:

Table 1. SB1 Road List Fiscal Year 2023/24
Street Name From To Functional
Classification
Treatment Scheduled
Start and
Completion
Estimated
Useful
Life
Blossom Hill
Road
Los Gatos
Boulevard
Harwood
Road
Arterial Micro-surfacing which is
placement of thin, tough
layer of asphalt emulsion
blended with finely crushed
stone for traction.

Spring - Fall
2024
5-7 years
Lark Avenue Garden Hill
Drive
Los Gatos
Boulevard
Arterial 3" Mill and Overlay with
leveling course and dig-outs
Spring - Fall
2024
10-15
years
Los Gatos
Boulevard
Simons Way Gateway
Drive
Arterial Micro-surfacing which is
placement of thin, tough
layer of asphalt emulsion
blended with finely crushed
stone for traction.

Spring - Fall
2024
5-7 years
Shannon Rd Los Gatos
Boulevard
Hilow Collector Slurry Seal with dig-outs Spring - Fall 2024
7-8 years
Camino Del
Cerro
Los GatosAlmaden
Road
Ross Creek Collector 2" Rubberized Hot Mix
Asphalt (RHMA) or Hot Mix
Asphalt (HMA) with leveling
course and dig-outs
Spring - Fall
2024
10-15
years
The required work on the identified streets may exceed the available SB 1 funding. Funding from other sources would be required to complete the projects, such as the General Fund Appropriated Reserves (GFAR) and the voter-approved 2016 Measure B.

Modifications to the SB 1 funding project list are permitted, and staff may recommend modifications when greater needs for funding emerge; for example, due to winter weather impacts. Staff will return with the final proposed project list for FY 2023/24 for Council’s approval prior to advertising for construction bid. Construction for the FY 2023/24 Street Repair and Resurfacing project is anticipated to start in the spring or summer of 2024.

One important element associated with SB 1 is a continued maintenance of effort (MOE) requirement. The MOE requirement means that local funding for routine street maintenance must not be less than the average of the three base years (2009/10 – 2011/12) as set by SB 1.

The State continues to refine the calculation and reporting requirements for the MOE, and it

PAGE 3 OF 3
SUBJECT: Adopt a Resolution to Adopt a List of Projects for Fiscal Year 2023/24 Funded by the State Senate Bill 1, the Road Repair and Accountability Act of 2017 DATE: May 4, 2023
DISCUSSION (continued):
would be important for the Town to sustain historic maintenance funding levels into the future to avoid risking loss of the annual RMRA appropriation.

CONCLUSION:

Adoption of the recommended resolution would meet the SB 1 RMRA funding requirement to have an adopted project list and allow the continuation of the Town’s roadway maintenance through the Capital Improvement Program.

FISCAL IMPACT:

The Town’s Proposed FY 2023/24 -2027/28 Capital Improvement Program has already included the estimated funds in the Street Repair and Resurfacing project. This action will have no effect on the Town’s budget and only identifies the specific streets.

ENVIRONMENTAL ASSESSMENT:

In accordance with CEQA Guidelines Section 15301, adoption of this resolution is categorically exempt from CEQA, because it involves maintenance of existing roads.

Attachment:

1. Resolution Adopting a List of Projects for Fiscal Year 2023/24 Funded by the State Senate Bill 1: The Road Repair and Accountability Act of 2017.

1 of 3
Resolution 2023- May 16, 2023
ATTACHMENT 1
RESOLUTION 2023-

RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2023/24 FUNDED BY THE STATE SENATE BILL 1: THE ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017 WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and Signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of the Town are aware of the projects proposed for funding in the community and which projects have been completed each fiscal year; and WHEREAS, the Town must adopt a list of all projects proposed to receive funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1 by resolution, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and WHEREAS, the Town, will receive an estimated $829,760 in RMRA funding in Fiscal Year 2023/24 from SB 1; and
WHEREAS, this is the seventh year in which the Town is receiving SB 1 funding and will enable the Town to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and WHEREAS, the Town used a Pavement Management System to develop the SB 1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the communities’ priorities for transportation investment; and WHEREAS, the funding from SB1 will help the Town maintain and rehabilitate streets throughout the Town this year and similar projects into the future; and

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Resolution 2023- May 16, 2023
ATTACHMENT 1
WHEREAS, the 2018 California Statewide Local Streets and Roads Needs Assessment found that the Town’s streets and roads are in a fair condition and this revenue will help increase the overall quality of the road system and over the next decade will bring Town streets and roads into a good condition; and
WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials and practices, will have significant positive co-benefits statewide.

NOW, THEREFORE, BE IT RESOLVED: The foregoing recitals are true and correct, and the following list of projects previously adopted and newly proposed will be funded in-part or solely with Fiscal Year 2023/24 Road Maintenance and Rehabilitation Account revenues:

Street Name From To Functional
Classification
Treatment Scheduled
Start and
Completion
Estimated
Useful life
Blossom Hill
Road
Los Gatos
Boulevard
Harwood
Road
Arterial Micro-surfacing which is
placement of thin, tough
layer of asphalt emulsion
blended with finely crushed
stone for traction.

Spring - Fall
2024
5-7 years
Lark Avenue Garden Hill
Drive
Los Gatos
Boulevard
Arterial 3" Mill and Overlay with
leveling course and dig-outs
Spring - Fall
2024
10-15
years
Los Gatos
Boulevard
Simons Way Gateway
Drive
Arterial Micro-surfacing which is
placement of thin, tough
layer of asphalt emulsion
blended with finely crushed
stone for traction.

Spring - Fall
2024
5-7 years
Shannon Rd Los Gatos
Boulevard
Hilow Collector Slurry Seal with dig-outs Spring - Fall 2024
7-8 years
Camino Del
Cerro
Los GatosAlmaden
Road
Ross Creek Collector 2" RHMA or HMA with
leveling course and dig-outs
Spring - Fall
2024
10-15
years

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Resolution 2023- May 16, 2023
ATTACHMENT 1
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 16th day of May of 2023 by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

PREPARED BY: Jennifer Armer, AICP
Planning Manager
Reviewed by: Town Manager, Town Attorney, and Community Development Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 6
DATE: May 11, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution to Extend the Term of the Housing Element Advisory Board.

RECOMMENDATION:

Adopt a resolution to extend the term of the Housing Element Advisory Board.

BACKGROUND:

On August 3, 2021, Town Council adopted a resolution (Attachment 1) to establish the Housing Element Advisory Board (HEAB) for the 2023-2031 Housing Element update. This resolution stated that the HEAB would sunset on February 1, 2023, unless extended by the Town Council.

On January 17, 2023, Town Council adopted a resolution (Attachment 2) to extend the term of the HEAB to May 31, 2023, to allow them to continue their work.

DISCUSSION:

The HEAB has been working diligently, and additional time may be needed to complete the work on the Housing Element update. The remaining work may include review of future comments received from the California Department of Housing and Community Development (HCD) and revisions in response to those and any future comments. Attachment 3 contains a draft resolution to extend the term of the HEAB until August 30, 2023.

FISCAL IMPACT:

The General Plan Update Fund has monies available to cover the additional HEAB meetings, the overall Housing Element update, and its environmental review.

PAGE 2 OF 2
SUBJECT: HEAB Extension
DATE: May 11, 2023
ENVIRONMENTAL ASSESSMENT:

This action will have no effect on the environment and is not subject to the California Environmental Quality Act.

Attachments:

1. Resolution 2021-032

2. Resolution 2023-003

3. Draft Resolution

ATTACHMENT 1

This Page
Intentionally
Left Blank

ATTACHMENT 2

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Resolution 2023 - May 16, 2023
DRAFT RESOLUTION 2023-

RESOLUTION OF THE TOWN COUNCIL

OF THE TOWN OF LOS GATOS EXTENDING THE TERM OF

THE HOUSING ELEMENT ADVISORY BOARD
WHEREAS, the Housing Element Advisory Board (HEAB) is intended to be an advisory committee created for the purpose of advising Town staff, providing a forum for public involvement, and making recommendations to the Planning Commission and Town Council on updates to the Housing Element; and
WHEREAS, the HEAB was established by Town Council on August 3, 2021, by Resolution 2021-032; and
WHEREAS, the term of the HEAB was extended by Town Council on January 17, 2023, by Resolution 2023-003; and
WHEREAS, the HEAB has worked diligently on their progress in reviewing the updated Housing Element; and
WHEREAS, additional time may be needed for the HEAB to complete their work including review of comments from California Department of Housing and Community Development (HCD) and revisions in response to those and any future comments.

NOW, THEREFORE, BE IT RESOLVED, the Town Council of the Town of Los Gatos extends the term of the Housing Element Advisory Board to August 30, 2023, unless extended by the Town Council.

ATTACHMENT 3
Draft Resolution to
be modified by Town
Council deliberations
and direction.

2 of 2
Resolution 2023 - May 16, 2023
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 16
th day of May, 2023, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

PREPARED BY: Heather St. John
Senior Administrative Analyst
Reviewed by: Town Manager, Police Chief, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 5/16/2023
ITEM NO: 7
DATE: May 8, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Ratify a First Amendment to the Axon Body Worn Camera Agreement for an Increase of $15,095 and Authorize the Town Manager to Execute a Second Amendment for Additional Storage for an increase of $10,000 for a Total Agreement Not-to-Exceed Amount of $275,630
RECOMMENDATION:

Ratify a First Amendment to the Axon Body Worn Camera agreement for an increase of $15,095 and authorize the Town Manager to execute a second amendment for additional storage for an increase of $10,000 for a total agreement not-to-exceed amount of $275,630.

BACKGROUND:

On February 18, 2020, the Town Council approved allocation of $377,130 of total funding to authorize the Town Manager to execute two five-year agreements with Axon Enterprises Inc. for the purchase and maintenance of Body-Worn Cameras (BWC) and conducted energy weapons (Tasers). The Axon Enterprises Inc. BWC original agreement totaled $250,534 of the $377,130 authorized amount, which consisted of body-worn cameras and digital evidence storage and maintenance for the duration of the agreement term through FY 2023/24.

The Los Gatos-Monte Sereno Police Department was a pioneer in Santa Clara County in deploying Officers with body-worn cameras (BWC) beginning in 2008. In 2020, the Town’s Information Technology Department and Police Department identified Axon Enterprises Inc. as a preferred sole source vendor with upgraded BWC technology and a digital evidence storage platform for a successful BWC program, in compliance with best practices in accordance with legislative mandates.

PAGE 2 OF 3
SUBJECT: Ratify a First Amendment and Approval of a Second Amendment to the Axon Body Worn Camera Agreement
DATE: May 8, 2023
BACKGROUND (continued):

The current law enforcement practice is to collect and retain digital evidence on a single operating platform. This allows for seamless collection of BWC audio and video, patrol vehicle in-car camera audio and video as well as other digital evidence. The Axon Enterprise Inc. BWC equipment and data storage platform (Evidence.com) meets these critical needs and benefits the Town, Police Department, and the public through enhanced evidence collection, retention, increased Officer safety, accountability, and transparency.

DISCUSSION:

In 2021, the Town Manager approved a First Amendment with Axon (Attachment 1). The Town Attorney at the time determined that this was within the authority of the Town Manager because the increase in the total agreement was $15,095 and there was an immediate need for the Police Department to implement the new BWC program. At the time, staff recognized that this increase would affect the total dollar amount of the original Axon maintenance agreement and would be required to be brought forward for Council in the future for approval. This item is now before the current Council to provide an opportunity for formal approval of the First Amendment
In 2021, the Department purchased an additional three BWC devices (for a total of 48 total BWC devices), a multi-device charging and digital upload dock, and six individual charging dock replacements. As best practice in accordance with state law and department policies, the additional cameras were purchased to outfit additional field personnel such as Community Service Officers and Reserve Police Officers with BWC technology. In addition, the Department also recognizes that maintaining several readily available replacement cameras allows for individual BWC replacement while faulty equipment is repaired and serviced.

Throughout the past several years, staff has monitored the Axon BWC digital evidence storage use and capacity, and ongoing annual payments for this service. Digital evidence storage capacity requires an increase to accommodate an increase in BWC video within the Axon Evidence.com system. Staff obtained a quote (Exhibit B to Attachment 2) and is requesting approval in a second amendment for a total of up to $10,000 for ongoing payments related to additional storage capacity for the remainder of the original agreement term.

Staff is bringing forward the first amendment to Axon’s Enterprises Inc. original BWC agreement to document the purchase of additional equipment, maintenance services, and a second amendment for additional digital storage capacity.

PAGE 3 OF 3
SUBJECT: Ratify a First Amendment and Approval of a Second Amendment to the Axon Body Worn Camera Agreement
DATE: May 8, 2023
CONCLUSION:

Ratify the first amendment and authorize the Town Manager to execute the second amendment to the Axon Body Worn Camera agreement for an increase of $25,095 for a total agreement not-to-exceed amount of $275,630.

FISCAL IMPACT:

There is sufficient funding in the FY 2022/23 and proposed FY 2023/24 Police Department operating budget to cover the increased cost of the added equipment, maintenance services, and additional digital storage capacity.

ENVIRONMENTAL ASSESSMENT:

This is not a project defined under CEQA, and no further action is required.

Attachment:

1. First Amendment with Original Agreement

2. Draft Second Amendment and Exhibit B

DocuSign Envelope ID: CFD0B8B2-6D2E-4DFD-9A17-2E39EC53F47F AGR J.O. o3 'i IHH ____ _
�AXON Master Services and Purchasing Agreement
This Master Services and Purchasing Agreement ("Agreement") is between Axon Enterprise, Inc::., a Delaware corporation ("Axon"), and the agency on the Quote ("Agency"). This Agreement is effective as of the later of the (a) last signature date on this Agreement or (b) signature date on the quote ("Effective Date"). Axon and Agency are each a "Party" and collectively "Parties•. This Agreement governs Agency's purchase and use of the Axon Devices and Services detailed in the Quote Appendix ("Quote"). The Parties therefore agree as follows:
1 Term. This Agreement begins on the Effective Date and continues until terminated pursuant to this Agreement ("Term"). Agency may renew this Agreement for an additional 5 years upon execution of a new quote. New devices and services may require additional terms. Axon will not authorize services until Axon receives a signed Quote or accepts a purchase order, whichever is first. 2 Definitions.
"Axon Cloud Services" means Axon's web services for Axon Evidence, Axon Records, Axon Dispatch, and interactions between Evidence.com and Axon Devices or Axon client software. Axon Cloud Service excludes third-party applications, hardware warranties, and my.evidence.com. "Axon Devices" means all hardware provided by Axon under this Agreement. "Quote" means an offer to sell and is only valid for devices and services on the quote at the specified prices.

Any terms within Agency's purchase order in response to a Quote will be void. Orders are subject to prior credit approval. Changes in the deployment estimated ship date may change charges in the Quote. Shipping dates are estimates only. Axon is not responsible for typographical errors in any offer by Axon, and Axon reserves the right to cancel any orders resulting from such errors. "Services" means all services provided by Axon under this Agreement, including software, Axon Cloud Services, and professional services.
3 Payment. Axon invoices upon shipment. Payment is due net 30 days from the invoice date. Payment obligations are non-cancelable. Agency will pay invoices without setoff, deduction, or withholding. If Axon sends a past due account to collections, Agency is responsible for collection and attorneys' fees. 4 .Iit!n. Agency is responsible for sales and other taxes associated with the order unless Agency provides Axon a valid tax exemption certificate.
5 Shipping. Axon may make partial shipments and ship Devices from multiple locations. All shipments are FOB shipping point via common carrier. Title and risk of loss pass to Agency upon Axon's delivery to the common carrier. Agency is responsible for any shipping charges in the Quote. 6 Returns. All sales are final. Axon does not allow refunds or exchanges, except warranty returns or as provided by state or federal law.
7 Warranty.

7.1 Hardware Limited Warranty. Axon warrants that Axon-manufactured Devices are free from defects in workmanship and materials for 1 year from the date of Agency's receipt, except Signal Sidearm, which Axon warrants for 30 months from the date of Agency's receipt. Axon warrants its Axon-manufactured accessories for 90-days from the date of Agency's receipt. Used conducted energy weapon ("CEW") cartridges are deemed to have operated properly. Extended warranties run Title: Master Services and Purchasing Agreement between Axon and Agency Department: Legal
Version: 8.0
Release Date: 11/8/2019 Page 1 of 32

Axon, Inc Second Amendment Service and Purchase Agreement – Body Worn Cameras

SECOND AMENDMENT TO AGREEMENT
This SECOND AMENDMENT TO AGREEMENT is dated for identification this 16th day of May, 2023 and amends that certain Master and Service Purchasing Agreement for Axon Body Worn Cameras dated January 18, 2021 made by and between the Town of Los Gatos, ("Town,") and Axon, Inc. (“Supplier.”)

RECITALS
A. Town and Supplier entered into a Service and Purchasing Agreement on April 1, 2020, (“Agreement”), a copy of which is attached hereto and incorporated by reference as Attachment 1 to this Amendment.

B. Town and Supplier entered into a Service and Purchasing First Amendment Agreement on January 18, 2021, (“Agreement”), a copy of which is attached hereto and incorporated by reference as Attachment 2 to this Amendment.

C. Town desires to amend the agreement to add Evidence.com storage capacity and increase the compensation for the additional services.

AMENDMENT

1. Effective April 2023, Supplier herby agrees to provide the service and materials quoted in Exbibit B, which is attached hereto and incorporated by reference. Town shall pay Supplier the amount as described below and referenced in Exhibit B. For a total amendment increase of $10,000.

2. All other terms and conditions of the Agreement remain in full force and effect.

ATTACHMENT 2

Axon, Inc Second Amendment Service and Purchase Agreement – Body Worn Cameras IN WITNESS WHEREOF, the Town and Consultant have executed this Amendment.

Town of Los Gatos Approved as to Consent:

By: _______________________________ By: ______________________________ Laurel Prevetti, Town Manager Robert Driscoll, VP Assoc.Gen Council Department Approval:
_______________________________________
Jamie Field
Chief of Police
Approved as to Form: Attest:
______________________________ ______________________________ Gabrielle Whelan, Town Attorney Wendy Wood, CMC, Town Clerk

PREPARED BY: DAVID NYLANDER

ACTING OPERATIONS CAPTAIN
Reviewed by: Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 8
DATE: May 4, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Adopt a Resolution to Renew an Ordinance Approving a Military Equipment Funding, Acquisition, and Use Policy Pursuant to Assembly Bill 481 and Affirm that Each Type of Military Equipment Identified in the Annual Report Complies with the Standards Set Forth in the Town’s Ordinance on this Matter.

RECOMMENDATION:

Adopt a resolution to renew an ordinance approving a military equipment funding, acquisition, and use policy pursuant to Assembly Bill 481 and affirm that each type of military equipment identified in the annual report complies with the standards set forth in the Town’s Ordinance on this matter.

BACKGROUND:

On September 30, 2021, Governor Newsom signed into law several major peace officer reform bills, including Assembly Bill 481 (AB 481). AB 481 was authored by Assembly member David Chiu (D-San Francisco) to address the funding, acquisition, and use of items deemed to be “military equipment.”
This bill requires law enforcement agencies, including the Los Gatos-Monte Sereno Police Department, “to obtain approval of the applicable governing body, by adoption of a military equipment use policy, as specified, by ordinance at a regular meeting held pursuant to specified open meeting laws, prior to taking certain actions relating to the funding, acquisition, or use of military equipment, as defined.”
Furthermore, AB 481 required similar approval for the continued use of “military equipment” acquired by the Los Gatos-Monte Sereno Police Department prior to January 1, 2022, and

PAGE 2 OF 4
SUBJECT: Adopt a Resolution to Renew an Ordinance Approving a Military Equipment Funding, Acquisition, and Use Policy Pursuant to Assembly Bill 481 and Affirm that Each Type of Military Equipment Identified in the Annual Report Complies with the Standards Set Forth in the Town’s Ordinance on this Matter.

DATE: May 4, 2023
BACKGROUND (continued):
allowed the governing body to approve the funding, acquisition, or use of military equipment within its jurisdiction only if it determined that the military equipment meets specified standards (see Attachment 1).

On April 19, 2022, at a regular meeting of the Town Council of Los Gatos, Ordinance 2329 was adopted approving the use of items possessed by the Los Gatos-Monte Sereno Police Department which are governed under AB 481. This ordinance is required to be renewed annually by the Town Council.

DISCUSSION:

AB 481 requires the governing body that oversees a law enforcement agency to renew its ordinance at a regular meeting of the governing body held in accordance with the Brown Act.

For Los Gatos, this means that the Town Council needs to consider renewing Ordinance 2329 (Attachment 4) by adopting a resolution (Attachment 5). The Assembly Bill has designated certain types of law enforcement equipment as "military equipment." Out of the fifteen categories of “military equipment” listed under AB 481, Los Gatos-Monte Sereno Police Department has items in four of the categories. These items include: a robot, an unmanned aerial vehicle (UAV), rifles and ammunition, noise flash diversionary devices; tear gas and munitions, and 40mm less lethal weapon and munitions.

Renewal of this Ordinance would approve the military equipment funding, acquisition, and use policy pursuant to Assembly Bill 481 to continue. The ordinance must be renewed for the Los Gatos-Monte Sereno Police Department to request, seek funds, acquire, collaborate to deploy, use, or solicit a proposal for any type of military equipment. AB 481 outlined the requirements of the Police Department so that ongoing access to the items mentioned can continue and for future acquisition process and the transparency requirements. Los GatosMonte Sereno Police contracts with Lexipol, a public safety policy and training organization, for policy development and implementation. Lexipol Policy 704-Military Equipment outlines purpose,scope, definitions, and categories deemed as military equipment (Attachment 2).

The governing body’s ordinance renewal must include certain standards of approval, including:

A. The “military equipment” identified in Los Gatos-Monte Sereno Police Department Lexipol Policy 704 is necessary because there are no reasonable alternatives that can achieve the same objectives of Officer and civilian safety.

PAGE 3 OF 4
SUBJECT: Adopt a Resolution to Renew an Ordinance Approving a Military Equipment Funding, Acquisition, and Use Policy Pursuant to Assembly Bill 481 and Affirm that Each Type of Military Equipment Identified in the Annual Report Complies with the Standards Set Forth in the Town’s Ordinance on this Matter.

DATE: May 4, 2023
DISCUSSION (continued):

B. Los Gatos-Monte Sereno Police Department Lexipol Policy 704 will safeguard the public’s welfare, safety, civil rights, and civil liberties.

C. The “military equipment” identified in Los Gatos-Monte Sereno Police Department Lexipol Policy 704 isreasonably cost effective compared to available alternativesthat can achieve the same objectives of officer and civilian safe.

In addition to posting the “military equipment” use policy on the law enforcement agency’s website, each agency must submit an annual “Military Equipment” Report to the governing body detailing the equipment used in the preceding year. This report must include a summary of how the equipment was used, a summary of complaints received, the result of any internal audit and actions taken in response, the total annual cost and the quantity possessed of each type of “military equipment,” and any additional equipment the agency intends to acquire in the next year.

Each year the governing body must review the annual report (see Attachment 3) and determine whether each type of military equipment identified in that report has complied with the standards for approval set forth above and vote on whether to renew it, in accordance with Government Code Section 7071 (e)(2).

Los Gatos-Monte Sereno Police Department held a community outreach meeting to discuss AB 481 on April 26, 2023 (see Attachment 6 for presentation). Lexipol Policy 704, and Attachment 3 with the detailed list of military equipment is posted on the Police Department website.

CONCLUSION:

The adoption of the resolution would renew Ordinance 2329 and continue the military equipment use policy as set forth in the Los Gatos- Monte Sereno Police Department’s Lexipol Policy 704. The consideration of the resolution would also affirm that the Town Council finds that the equipment meets the standards set forth in Ordinance 2329.

ALTERNATIVES:

If this ordinance is not renewed, Los Gatos-Monte Sereno Police Department will cease the use of equipment designated by AB 481 as military equipment on May 31, 2023. Los GatosMonte Sereno Police Department will be required to redesign policies, procedures, and operations for critical incident response; this includes our ability to provide and receive

PAGE 4 OF 4
SUBJECT: Adopt a Resolution to Renew an Ordinance Approving a Military Equipment Funding, Acquisition, and Use Policy Pursuant to Assembly Bill 481 and Affirm that Each Type of Military Equipment Identified in the Annual Report Complies with the Standards Set Forth in the Town’s Ordinance on this Matter.

DATE: May 4, 2023
mutual aid, address an immediate threat, or have a more expansive de-escalation option.

ALTERNATIVES (continued):

Public safety may be negatively impacted with diminished access to the resources currently in the Police Department’s inventory. For this reason, staff is not recommending the nonrenewal.

FISCAL IMPACT:

There is no fiscal impact in renewing this ordinance and the military equipment use policy Attachments:

1. Assembly Bill 481

2. LGMSPD Lexipol Policy 704 and AB 481 Defined list of Military Equipment in LGMSPD possession

3. 2023 Annual Report on Military Equipment Inventory

4. Ordinance 2329

5. Resolution to Renew Ordinance 2329

6. AB 481 Update Presentation 2023

Policy
704
Los Gatos-Monte Sereno Police Department
Los Gatos-Monte Sereno Police Department Policy Manual
Copyright Lexipol, LLC 2022/12/16, All Rights Reserved.

Published with permission by Los Gatos-Monte Sereno Police Department
Military Equipment - 511
Military Equipment
704.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072).
704.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):

Governing body – The elected or appointed body that oversees the Department.

Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units. • Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray.
• TASER® Shockwave, microwave weapons, water cannons, and long-range acoustic devices (LRADs).
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.

ATTACHMENT 2

Los Gatos-Monte Sereno Police Department
Los Gatos-Monte Sereno Police Department Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/12/16, All Rights Reserved.

Published with permission by Los Gatos-Monte Sereno Police Department
Military Equipment - 512
704.2 POLICY
It is the policy of the Los Gatos-Monte Sereno Police Department that members of this department comply with the provisions of Government Code § 7071 with respect to military equipment. 704.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police should designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
(a) Acting as liaison to the governing body for matters related to the requirements of this policy.
(b) Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
(c) Conducting an inventory of all military equipment at least annually. (d) Collaborating with any allied agency that may use military equipment within the jurisdiction of Los Gatos-Monte Sereno Police Department (Government Code § 7071).
(e) Preparing for, scheduling, and coordinating the annual community engagement meeting to include:

1. Publicizing the details of the meeting.

2. Preparing for public questions regarding the department’s funding, acquisition, and use of equipment.
(f) Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072).
(g) Establishing the procedure for a person to register a complaint or concern, or how that person may submit a question about the use of a type of military equipment, and how the Department will respond in a timely manner.
704.4 MILITARY EQUIPMENT INVENTORY
The following constitutes a list of qualifying equipment for the Department:
[Insert attachment here] See attachment: Military Equipment Inventory.pdf 704.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the department website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):

Los Gatos-Monte Sereno Police Department
Los Gatos-Monte Sereno Police Department Policy Manual
Military Equipment
Copyright Lexipol, LLC 2022/12/16, All Rights Reserved.

Published with permission by Los Gatos-Monte Sereno Police Department
Military Equipment - 513
(a) Requesting military equipment made available pursuant to 10 USC § 2576a. (b) Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
(c) Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
(d) Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department. (e) Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
(f) Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
(g) Acquiring military equipment through any means not provided above. 704.6 COORDINATION WITH OTHER JURISDICTIONS
Military equipment should not be used by any other law enforcement agency or member in this jurisdiction unless the military equipment is approved for use in accordance with this policy. 704.7 ANNUAL REPORT
Upon approval of a military equipment policy, the Chief of Police or the authorized designee should submit a military equipment report to the governing body for each type of military equipment approved within one year of approval, and annually thereafter for as long as the military equipment is available for use (Government Code § 7072).

The Chief of Police or the authorized designee should also make each annual military equipment report publicly available on the department website for as long as the military equipment is available for use. The report shall include all information required by Government Code § 7072 for the preceding calendar year for each type of military equipment in department inventory. 704.8 COMMUNITY ENGAGEMENT
Within 30 days of submitting and publicly releasing the annual report, the Department shall hold at least one well-publicized and conveniently located community engagement meeting, at which the Department should discuss the report and respond to public questions regarding the funding, acquisition, or use of military equipment.

2023 MILITARY EQUIPMENT INVENTORY
Prior year (April 1, 2022 to April 1, 2023) usage summary, complaints received, audits and actions taken as a result.

The quantities associated with each item may have changed from the previous year due to training usage. The robot was used once in an armed suspect barricade situation. The drone was used for natural disaster infrastructure reconnaissance and to check on the safety of unhoused individuals during storms. None of the other possessed items were used other than for training purposes since the last report. There were no complaints received on complaints regard this equipment. No internal or external audits were conducted or required as a result of not receiving complaints. There were no actions taken as a result. The items categories and types remain the same from the previous year.

1. Robot (Category 1)
a. Description, quantity, capabilities, and purchase cost:

This equipment is a battery powered, remote operated device. Equipped with two cameras and two-way radio capabilities. This equipment is for (potential) use during high-risk incidents. Use is limited to members of the Departments Crisis Response Unit.

Incidents that may qualify for its use include, but are not limited to, a high-risk warrant service, barricaded subject, and hostage negotiation/rescue. Before entering a structure, particularly in a tactically compromised and dangerous situation, knowledge of a subject’s location is very important, and the robot can provide that without placing anyone at risk. Cameras can also help determine if a subject is armed and if there are other subjects inside that need assistance. The two-way speakers can be used to deescalate and determine resistance level.

I. Robotex Avatar Tactical Robot, cost: $12,389.21 quantity: 1. b. Purpose:

To be used to remotely gain visual/audio data, deliver Crisis Negotiation Team (CNT) phone, disrupt packages, and clear buildings.
c. Authorized Use:

ATTACHMENT 3

Only assigned operators who have completed the required training shall be permitted to operate the robot. Use is established by the Incident Commander. All other applicable LGMSPD policies remain in effect, to include, but not limited to, LGMSPD Policy 309 – Search and Seizure, LGPD Policy 404 – Crisis Response Unit (CRU) Team. d. Expected Lifespan:
10-15 years
e. Fiscal Impact:

No known annual maintenance cost.

2. Unmanned Aerial Vehicles (Category 1)
a. Description, quantity, capabilities, and purchase cost:

The Skydio 2 pro is a small non- commercial grade UAV. This UAV is a battery powered, remote operated device. Controller: Apple I pad. The controller allows the operators to control UAV and view live feed from UAV-mounted camera. Camera: Sony IMX577 camera. The camera provides operators ability to switch between standard Flight time of approximately 25-30 minutes per battery, depending on weather and flight conditions. The UAV has also proven to be useful to public safety agencies in firefighting, search and rescue, pre-operational surveillance, and other tactical situations where aerial views enhance the safety and efficiency of law enforcement and fire personnel.

I. Skydio 2 Pro unmanned aerial vehicle (UAV), cost: $6,902.35 quantity: 1. b. Purpose:

To be deployed when its view would assist officers or incident commanders with the following situations, which include but are not limited to:

I. major collision investigations.

II. search for missing persons.

III. natural disaster management.

IV. crime scene photography.

V. CRU, tactical or other public safety and life preservation missions.

VI. In response to specific requests from local, state or federal fire authorities for fire response and/or prevention.

c. Authorized Use:

Only assigned operators who have completed the required training shall be permitted to operate the Skydio 2 pro during approved missions. All other applicable LGMSPD policies remain in effect, to include, but not limited to, LGMSPD Policy 309 – Search and Seizure, LGMSPD Policy 314 – Missing Persons, LGMSPD Policy 608 – Unmanned Aerial System Operations, LGMSPD Policy 404 – Crisis Response Unit (CRU).
d. Expected Lifespan:
5 years
e. Fiscal Impact:

No known annual maintenance cost.

3. Specialized Firearms and Ammunition (Equipment Category 10) a. Description, quantity, capabilities, and purchase cost:

The Carbine Rifle is a firearm, capable of accurately stopping an armed subject at various distances. The Carbine Rifle is a lightweight, air-cooled, gas operated, magazine fed, shoulder fired weapon, designed for semi-automatic & selective fire. The Carbine Rifle does not have an expiration and will need to be serviced or replaced when the rifle fails or breaks. The .223 / 5.56 cartridge is used as a lethal option designed to stop a violent encounter. The projectile is capable of penetrating soft body armor being worn by armed subjects.

I. Colt AR-15/M4, Lewis Machine & Tool AR-15, and Aero Precision AR-15, cost: $54,635 quantity:49
The Speer .223 Remington, 62 grain, GDSP cartridge is the primary duty ammunition deployed during potential lethal encounters.

II. Speer .223 Remington, 62 grain GDSP cartridge, cost: $4,182.64, quantity: 7,000.

The Federal .223 Remington, 55 grain cartridge is the primary training ammunition for the Department.

III. Federal .223 Remington, 55 grain cartridge, cost: $3,913.11, quantity: 9,000.

The Los Gatos-Monte Sereno Police Department Crisis Response Unit (CRU)

was formed in 1985, in response to very dangerous or violent tactical encounters. The Sniper element deploys with precision rifles, which enables the stopping of an armed subject at a safe distance. The Sniper Rifle does not have an expiration and will need to be serviced or replaced when the Rifle fails or breaks. The .308 Winchester cartridge: is a rimless, bottlenecked rifle cartridge. The .308 WIN. cartridge is used as a lethal option designed to stop a violent encounter. The projectile is capable of penetrating soft body armor being worn by armed subjects.

IV. Aero Precision 308 Rifle, cost: $5,362.80, quantity: 2.

The Federal .308 WIN., 168 grain tactical tip, cartridge is ammunition deployed during potential lethal encounters at longer distances. The 168-grain projectile maintains accuracy, while resulting in higher impact velocities, less drop, less wind drift, and more energy on target.

V. Federal .308 WIN., 168 grain tactical tip, cost: $1,716.00, quantity: 2,000.

The Federal .308 WIN., 168 grain tactical bonded cartridge is ammunition deployed during potential lethal encounters, when shooting through barriers. The 168-grain Tactical Bonded projectile is capable of accurately striking targets behind an angled window or windshield, without the risk of unpredictable bullet deflection. Conventional bullets break apart or fragment when penetrating glass, which does not allow an accurate impact.

VI. Federal .308 WIN., 168 grain tactical bonded cartridge, cost: $1,520.00, quantity:
1,000.
b. Purpose:

To be used as precision weapons to address a threat with more precision and/or greater distances than a handgun, if present and feasible. c. Authorized Use:

Only members that are POST certified are authorized to use a particular rifle. All other applicable LGMSPD policies remain in effect, to include, but not limited to, LGMSPD Policy 300 – Use of Force, LGMSPD Policy 305 – Firearms Training and Qualifications, LGMSPD Policy 404 – Crisis Response Unit (CRU) d. Expected Lifespan:

I. Carbine Rifle – No expiration
II. The Speer .223 Remington, 62 grain, – No expiration III. The Federal .223 Remington, 55 grain, – No expiration

IV. Sniper Rifles – No expiration
V. The Federal .308 WIN. Tactical Tip, 168 grain – No expiration VI. The Federal .308 WIN Tactical Bonded Tip, 168 Grain- No expiration e. Fiscal Impact:

I. Carbine Rifle – Annual cost between $0-$3,000
II. The Speer .223 Remington, 62 grain- Annual cost between $0-$6,000.

III. The Federal .223 Remington, 55 grain – Annual cost between $0 -$9,000.

IV. Sniper Rifle – Annual cost between $0-unknown for maintenance.

V. The Federal .308 WIN. Tactical Tip, 168 grain – Annual cost between $0 - $2,000.

VI. The Federal .308 WIN Tactical Bonded Tip, 168 Grain-Annual cost between $0-$2000.

4. Flashbangs (Category 12)
a. Description, quantity, capabilities, and purchase cost:

A Noise Flash Diversionary Devices (NFDD) is a device that creates a bright flash and loud sound to temporarily divert the attention of subjects in the immediate area. NFDD are used to distract and temporarily incapacitate dangerous suspects by overwhelming their senses of vision and hearing. The distraction allows officers to seize a moment of opportunity to take control of high-risk situations. Def Tech 11 Gr mini NFDD emits a loud “bang” and a flash of light
I. Def Tech 11 Gr mini NFDD, cost: $2,612.50, quantity: 50 b. Purpose:

To produce atmospheric over-pressure and brilliant white light and, as a result, can cause short-term (6 - 8 seconds) physiological/psychological sensory deprivation to give officers a tactical advantage.
c. Authorized Use:

Diversionary Devices shall only be used:

I. By CRU officers who have been trained in their proper use.

II. In hostage and barricaded subject situations.

III. In high-risk warrant (search/arrest) services where there may be extreme hazards to officers.

IV. During other high-risk situations where their use would enhance officer safety.

V. During training exercises.

All other applicable LGMSPD policies remain in effect, to include, but not limited to, LGMSPD Policy 300 – Use of Force, LGMSPD Policy 404 – Crisis Response Unit. d. Expected Lifespan:

Def Tech 11-gram mini NFDD – 5 years
e. Fiscal Impact:

Def Tech 11 Gram mini NFDD – Annual cost between $0 - $2,612.50

5. Tear Gas (Category 12)
a. Description, quantity, capabilities, and purchase cost:

Chemical agent munitions, which are commonly referred to as “tear gas,” are used by the Los Gatos-Monte Sereno Police Department as a non-lethal tool to disperse rioting subjects and on barricaded suspects. The Los Gatos-Monte Sereno Police Department uses chemical agents which are used by law enforcement across the United States: CS (2-Chlorobenzylidenemalononitrile)and OC (Oleoresin Capsicum)CS is an irritating agent and lachrymator (irritates the eyes and causes tears to flow). CS has been medically tested in the UK and US, specifically by the U.S. Army. There are no known allergic reactions to CS. OC was de-regulated in California in 1996, is endorsed by the FBI, and is available to civilians to legally possess (2.5oz or less). OC is an inflammatory agent which causes involuntary closure of eyes (open in 2-5 minutes) and respiratory inflammation (subsides in approximately 2 minutes).

I. Def Tech handheld OC/CS canisters, model #1050 Cost: $ 361.50, quantity: 6 b. Purpose:

To limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use of the less lethal weapon systems may include, but are not limited to:

I. Self-destructive, dangerous and/or combative individuals.

II. Riot/crowd control and civil unrest incidents.

III. Circumstances where a tactical advantage can be obtained.

IV. Potentially vicious animals.

V. Training exercises or approved demonstrations.
c. Authorized Use:

Only officers who have received POST certification in the use of chemical agents are authorized to use chemical agents. All other applicable LGMSPD policies remain in effect, to include, but not limited to, LGMSPD Policy 300 – Use of Force, LGMSPD Policy 404 – Crisis Response Unit (CRU).
d. Expected Lifespan:

Def Tech handheld OC/CS canisters, model #1050 – 5 years e. Fiscal Impact:

Def Tech handheld OC/CS canisters, model #1050 – estimated between $0 and $450 annually

6. Projectile Launch platforms and associated munitions (Category 14) a. Description, quantity, capabilities, and purchase cost:

The Lewis Machine & Tool Launcher is not a firearm, but a Less-Lethal systems that uses smokeless powder to deliver 40MM projectiles from a safe distance. The Less-Lethal launcher is capable of launching 40MM munitions at a subject up to 25 yards. The LessLethal launcher is a single launcher, which allows the Officer to assess after every spent munition. Less-Lethal launcher does not have an expiration and will need to be serviced or replaced when the launcher fails or breaks. The 40MM munition is a Direct Impact Spin Stabilized Smokeless Sponge Munition. The Sponge Baton and Impact OC munition is used as a Less-Lethal weapon designed to de-escalate a potentially violent encounter.

Liquid Ferret Barricade munition are a less lethal 40mm round that is used to penetrate barriers such as windows, hollow core doors, wallboard, and thin plywood.

I. Lewis Machine & Tool Launcher, cost: $4,514.55. quantity: 5 II. Def Tech 40mm Direct Impact Sponge #6325, cost: $360.00 quantity: 20 III. Def Tech 40mm Direct Impact OC #6320LE, cost: $315.00, quantity: 15 IV. Def Tech 40mm CS liquid ferret rounds, model #1262, cost: $72.00, quantity: 3 V. Def Tech 40mm CS powder rounds, model #1292, cost: $ 120.00, quantity: 5 b. Purpose:

To limit the escalation of conflict where employment of lethal force is prohibited

or undesirable.
c. Authorized Use:

Situations for use of the less lethal weapon systems may include, but are not limited to:

I. Self-destructive, dangerous and/or combative individuals.

II. Riot/crowd control and civil unrest incidents.

III. Circumstances where a tactical advantage can be obtained.

IV. Potentially vicious animals.

V. Training exercises or approved demonstrations.

All other applicable LGMSPD policies remain in effect, to include, but not limited to, LGMSPD Policy 300 – Use of Force.
d. Expected Lifespan:

I. 40mm Launcher: No expiration
II. 40mm Sponge Round: 5 years
III. 40mm OC: 5 years
IV.40mm CS liquid ferret rounds: 5years
V. 40mm CS powder: 5 years
e. Fiscal Impact:

I. 40mm Launcher: estimated between $0 and $5,000.00 annually II. 40mm Sponge Round: estimated between $0 and $500.00 annually III. 40mm Direct Impact OC: estimate between $0 and $300.00 annually IV. 40mm CS liquid ferret rounds: estimate between $0 and $360.00 annually V. 40mm CS powder rounds: estimate between $0 and $360.00

ORDINANCE 2329

AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS, STATE OF CALIFORNIA, ADDING ARTICLE III TO CHAPTER 21 TO THE TOWN CODE GOVERNING

THE USE OF MILITARY EQUIPMENT BY THE POLICE DEPARTMENT
WHEREAS, on September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481, (creating Government Code Section 7070, et seq.) relating to the use of military equipment by law enforcement agencies; and
WHEREAS, Assembly Bill No. 481 ("AB 481"), requires law enforcement agencies to obtain approval of the applicable governing body, by an ordinance adopting a "military equipment" use policy, at a regular meeting held pursuant to open meeting laws, prior to taking certain actions relating to the funding, acquisition, or use of military equipment. The term "military equipment" is defined in California Government Code section 7070; and WHEREAS, AB 481 allows the governing body of a Town to approve the funding, acquisition, or use of military equipment within its jurisdiction only if it makes specified determinations; and
WHEREAS, the proposed Military Equipment Use Policy is attached hereto as Exhibit "A" and incorporated herein by this reference (the "Military Equipment Use Policy"); and WHEREAS, the proposed Military Equipment Use Policy was published on the Los Gatos Police Department's internet website on March 3, 2022, more than 30 days before the Military Equipment Use Policy was considered at a public hearing before the Town Council on April 5, 2022;and
WHEREAS, the Military Equipment Use Policy meets the requirements of California Government Code section 7070, subdivision (d).

NOW THEREFORE, THE TOWN COUNCIL OF THE TOWN OF LOS GATOS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION I: That a new Article Ill is added to Chapter 21 (entitled "Police") of the Town Code of the Town of Los Gatos to read as follows:

CHAPTER 21, ARTICLE Ill. - MILITARY EQUIPMENT USE POLICY.

Sec. 21.30.010 - Findings and Purpose.
(a) The Town Council has made the following determinations:
1 of 3
Ordinance 2329 April 29, 2022
ATTACHMENT 4

(1) The military equipment inventoried and presented to the Town Council is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety; and
(2) The Military Equipment Use Policy ("Policy") will safeguard the public's welfare, safety, civil rights, and civil liberties; and (3) The military equipment identified in the Military Equipment Use Policy is reasonably cost effective compared to available alternatives that can achieve the same objective of Officer and civilian safety; and
(4) Prior military equipment use complied with the applicable Equipment Use Policy (which included equipment now defined as military equipment) that was in effect at the time, or if prior uses did not comply with the accompanying Military Equipment Use Policy, corrective action has been taken to remedy nonconforming uses and ensure future compliance.
(b) The Police Department has submitted a proposed Policy to the Town Council and has made those documents available on the Police Department's website for at least 30 days prior to the public hearing concerning the military equipment at issue. (c) The Policy was considered by the Town Council as an agenda item in an open session of a regular meeting, noticed in accordance with the Ralph M. Brown Act, at which public comment was permitted.
(d) The Policy shall be made publicly available on the Police Department's website for as long as the military equipment is available for use.
(e) The Police Department shall submit an annual military equipment report to the Town Council, containing the information required in Government Code Section 7072, and the Town Council shall determine whether each type of military equipment identified in that report has complied with the standards for approval set forth in (a}{l}-(4) above. (f) The Town Council shall review this ordinance, and vote on whether to renew it, on an annual basis at a regular meeting, in accordance with Government Code Section 7071(e}{2)
(g) The Town Council approves the use of the Policy and finds that it satisfies the requirements of Government Code Section 7070{d)."
SECTION II. CEQA FINDINGS. This Ordinance is not a project within the meaning of Section 15378 of the California Environmental Quality Act {CEQA) Guidelines because it has no potential to result in physical change in the environment, directly or indirectly. This Ordinance is also exempt under CEQA Guideline 15061(b)(3) because it can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment. 2 of 3
Ordinance 2329 April 29, 2022

SECTION Ill. SEVERABILITY. If any section, subsection, sentence, clause, phrase or portion of this Ordinance or its application to any person or circumstance is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance or its application to other persons and circumstances. The Town Council of the Town of Los Gatos declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof despite the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional and, to that end, the provisions hereof are hereby declared to be severable.

SECTION IV. EFFECTIVE DATE AND PUBLICATION. This Ordinance was introduced at a regular meeting of the Town Council of the Town of Los Gatos on the 5th day of April 2022 and adopted by the following vote as an ordinance of the Town of Los Gatos at a regular meeting of the Town Council of the Town of Los Gatos on the 19th day of April 2022. This ordinance takes effect 30 days after it is adopted. In lieu of publication of the full text of the ordinance within fifteen (15) days after its passage a summary of the ordinance may be published at least five (5) days prior to and fifteen (15) days after adoption by the Town Council and a certified copy shall be posted in the office of the Town Clerk, pursuant to GC 36933(c)(l).

PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 19th day of April 2022, by the following vote:

AYES
NAYS:

Mary Badame, Matthew Hudes, Maria Ristow, Marico Sayoc, Mayor Rob Rennie None
ABSENT: None
ABSTAINING: None
ATTEST:
��t�
TOWl\l CLERK OF THE TOWN OF LOS GATOS
LOS GA"!/
S
!
CALIF�
RNIA
DATE: ,-p)Q cx.0-;}."J.. I
Ordinance 2329
3 of 3

MAYOR OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFO��IA
DA TED: 'i I ;l? 11?-d-,
April 29, 2022

1 of 2
Resolution 2023 - May 15, 2023
RESOLUTION 2023-xx

RESOLUTION OF THE TOWN COUNCIL OF THE TOWN OF LOS GATOS, RENEWING ITS

ORDINANCE GOVERING THE USE OF MILITARY EQUIPMENT
WHEREAS, on September 30, 2021, Governor Gavin Newsom signed into law Assembly Bill 481 ("AB 481 "), adding Chapter 12.8, "Funding, Acquisition and Use of Military Equipment", to Division 7 of Title 1 of the Government Code (sections 7070 - 7075), relating to the use of military equipment by California law enforcement agencies; and WHEREAS, AB 481 seeks to provide transparency, oversight, and an opportunity for meaningful public input on decisions regarding whether and how military equipment is funded, acquired, or used; and
WHEREAS, AB 481 requires, inter alia, the Police Department submit to the Town Council an annual military equipment report for each type of military equipment approved by the Town Council; and
WHEREAS, the Town has codified its “Military Equipment Use Policy” in Chapter 21, Article III, of the Town Code; and
WHEREAS, Town Code Section 21.30.010 sets forth the standards for approval of the use of military equipment; and
WHEREAS, the Town Council shall review its Ordinance approving the funding, acquisition, or use of military equipment at least annually and vote on whether to renew the Ordinance at a regular meeting; and
WHEREAS, the Town Council shall determine, based on the annual military equipment report submitted, whether each type of military equipment identified in that report has complied with the standards for approval set forth in its Ordinance; and WHEREAS, the Town Council has reviewed the annual military report submitted by the Police Department and determined the military equipment has complied with the standards for approval set forth in its Ordinance; and
NOW, THEREFORE, BE IT RESOLVED:

SECTION 1. The above recitals are true and correct and are substantial part of this resolution.

ATTACHMENT 5

2 of 2
Resolution 2023 - May 15, 2023
SECTION 2. The Town Council determines that the military equipment identified in the annual military equipment report complies with the standards for approval set forth in Town Code Section 21.30.010.

SECTION 3. Town of Los Gatos Ordinance No. 2329 is hereby renewed.

PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on the 16
th day of May, 2023, by the following vote:

COUNCIL MEMBERS:

AYES:

NAYS:

ABSENT:

ABSTAIN:

SIGNED:

MAYOR OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________
ATTEST:

TOWN CLERK OF THE TOWN OF LOS GATOS

LOS GATOS, CALIFORNIA
DATE: __________________

Facilitated by
Acting Captain David Nylander
AB 481: Military
Equipment Funding,
Acquisition and Use
ATTACHMENT 6 Page 186
Why AB
481?
• Governor Gavin Newsom passed several police reform bills, including AB 481
September , 2021
Increase transparency, accountability, oversight
for acquisition and use of equipment
• Equipment usage and updates
• Document internal concerns
• Summarize community feedback
Requires an annual report to summarize
Create public forum for input and engagement

AB 481
Requires
Initial
Approval
and Annual
Reporting
and approval
AB 481 requires approval for continued use of
items purchased prior to January 1, 2022
• How equipment is being used
• Maintenance and use costs
• Internal concerns
• Community feedback on use
It also requires an annual report which will
include:

Why do we
need this
equipment?
• Safe, peaceful resolution for the involved parties, the public and officers
Goal
• Actions, capabilities and intentions
Concerns
• Time, distance and cover
Factors that influence sound decisions

CRITICAL INCIDENTS IN SANTA CLARA
COUNTY

DATE INCIDENT BRIEF SUMMARY
July 2019
Gilroy Garlic Festival Gunman killed 3 people and wounded 17 May-June, 2020
County-wide protests in response to
George Floyd murder
Riots, fires and looting ensued, resulting in a
community-wide curfew. Officers were injured
after being hit with objects thrown at them
during protests
May 2021
VTA Railyard Shooting 9 people killed
NovemberDecember, 2021 Retailer break-ins Organized groups of 15-30 people breaching

CATEGORY 1 : Unmanned, remotely piloted, powered aerial or ground vehicles CATEGORY 2: Mine-resistant ambush-protected vehicles or armed personnel carriers CATEGORY 3: High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached
CATEGORY 4: Tracked armored vehicles that provide ballistic protection to their occupants CATEGORY 5: Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units CATEGORY 6: Weaponized aircraft, vessels, or vehicles of any kind CATEGORY 7: Battering rams, slugs, and breaching apparatuses that are explosive in nature CATEGORY 8: Firearms of .50 caliber or greater
CATEGORY 9: Ammunition of .50 caliber or greater
CATEGORY 10: Specialized firearms and ammunition of less that .50 caliber CATEGORY 11: Any firearm or firearm accessor that is designed to launch explosive projectiles CATEGORY 12: Noise-flash diversionary devices and explosive breaching tools, munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray
CATEGORY 13: Taser Shockwave, microwave weapons, water cannons, and long-range acoustic devices CATEGORY 14: Kinetic energy weapons and munitions
CATEGORY 15: Any other equipment as determined by a governing body or a state agency to require additional oversight Equipment Categories per AB 481

LGMSPD’S EQUIPMENT INVENTORY

EQUIPMENT

CATEGORY ITEM(S)

FUNDING SOURCE FOR

ACQUISITION

PRIOR COUNCIL

APPROVAL

IN USE BY LGMSPD
SINCE
1 Robot Operating
budget Yes 2010
1 Unmanned Aircraft/Drone Grant Yes 2021
10 Rifles, ammunition Operating
Budget Yes 1985
12 Noise flash diversionary
device, tear gas
Operating
Budget Yes 2015
14 40 mm less lethal platform Operating
Budget Yes 2016

LGMSPD Operating Budget
Local, State and Federal Grants
LGMSPD has NOT sought out or received the
transfer of Department of Defense
equipment that qualifies under AB 481
through the 1208 or 1033 Programs
How
Equipment
Can Be Funded
*

How does this
affect our
community?
• LGMSPD will continue to have access to each of the resources currently available. In addition, the corresponding policies and procedures would remain in effect; this includes our ability to provide and receive mutual aid
With Town Council renewal of AB 481
ordinance:
• LGMSPD would cease the use of equipment designated by AB 481 in May, 2023
• LGMSPD would be required to redesign our policies,
procedures and operations for critical incident response; this includes our ability to provide and receive mutual aid
• Public safety would be negatively impacted
Without Town Council renewal of AB 481
ordinance:

Community
Engagement
Activities
• Meeting notice on LGMSPD website and social media
Full text of AB 481
AB 481 defined list of military equipment currently in LGMSPD’s inventory
Lexipol Policy 704
April 12th , 2023
• Community meeting
April 26th , 2023
• Town Council to renew an ordinance approving a military equipment funding, acquisition, and use policy pursuant to Assembly Bill 481.
• The AB 481 Staff Report will be made available for public notice.

May 16th, 2023

Thank you for
partnering with us!
Questions?

PREPARED BY: James Watson
Senior Engineer
Reviewed by: Town Manager, Finance Director, Parks and Public Works Director, Town Engineer, and Town Attorney
110 E. Main Street Los Gatos, CA 95030 ● (408) 354-6832 www.losgatosca.gov

TOWN OF LOS GATOS

COUNCIL AGENDA REPORT
MEETING DATE: 05/16/2023
ITEM NO: 9
DATE: May 11, 2023
TO: Mayor and Town Council
FROM: Laurel Prevetti, Town Manager
SUBJECT: Authorize the Town Manager to Execute a Notice of Completion and Certificate of Acceptance for Specified Improvements Completed by SummerHill N40 LLC for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and Authorize the Town Clerk to Submit for Recordation
RECOMMENDATION:

Authorize the Town Manager to execute a Notice of Completion and Certificate of Acceptance (Attachment 1) for specified improvements completed by SummerHill N40 LLC (“SummerHill”) for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and authorize the Town Clerk to submit for recordation.

BACKGROUND:

On August 1, 2017, the Town Council adopted Resolution 2017-045 approving the construction of a new multi-use, multi-story development consisting of 320 residential units, which includes 50 affordable senior units; approximately 66,800 square feet of commercial floor area including a market hall; on-site and off-site improvements; and a vesting tentative map on property zoned as part of North 40 Specific Plan.

On September 7, 2018, the Town Council approved the final map for Tract 10441 – North 40 Phase 1, accepting the dedications, and authorizing the Town Manager to execute a Subdivision Improvement Agreement (“Agreement”)(Attachment 2), Landscape Maintenance Agreement, Public Storm Drainage Conveyance Agreement, and Agreement for Private Improvements in the Public Right of Way.

PAGE 2 OF 4
SUBJECT: Authorize the Town Manager to Execute a Notice of Completion and Certificate of Acceptance for Specified Improvements Completed by SummerHill N40 LLC for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and Authorize the Town Clerk to Submit for Recordation
DATE: May 11, 2023
BACKGROUND (continued):

On October 4, 2018, the Town Manager executed the Agreement between the Town and SummerHill for the construction of certain improvements required by various Conditions of Approval (“Required Improvements”) stipulated in the Architectural and Site Plan Review process. The Agreement stipulated 18 “Plans”, identified as “a” through “r”, to be prepared by SummerHill to complete the Required Improvements.

The Agreement required SummerHill to furnish the Town bonds with each bond guaranteeing the subdivider performance of the Plans. Nine Faithful Performance Bonds and nine Labor and Material Bonds were included in the Agreement as shown in Table 1 below. Both bond types were assigned the same number for each group of Plans insured. The Faithful Performance Bond and Labor and Materials Bond with number 748731 were not assigned a Plan and will not be released until the completion of all required improvements.

Plan(s) Faithful Performance Bond and
Labor and Materials Bond Number
Plan(s) Status
“a”, “b”, “c” 728666 Incomplete
“d” 748728 Complete – Bonds to be released
“e”, “f”, “g” 748729 Complete – Bonds to be released
“h”, “i”, “j”, “k”, “l” 748730 Incomplete
None specified 748731 Incomplete; won’t be released until the completion of all required
improvements
“m” 748732 Complete – Bonds to be released
“n”, “o”, “p”, “q” 748733 Incomplete
“r” 748734 and 748735 Complete – Bonds to be released
Table 1: North 40 Summerhill Bond Summary
DISCUSSION:

The improvements described in the Agreement included landscaping, street lighting, traffic signal modifications, storm and sanitary sewer improvements, utility connections and modifications, pavement, curb, gutter, striping, and signage, bike lane improvements, and rough grading.

SummerHill has now completed the work described in 13 of the 18 Plans identified in the Agreement. Plans still in the process of completion are “a”, “b”, “c”, “j”, and “o”. Staff

PAGE 3 OF 4
SUBJECT: Authorize the Town Manager to Execute a Notice of Completion and Certificate of Acceptance for Specified Improvements Completed by SummerHill N40 LLC for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and Authorize the Town Clerk to Submit for Recordation
DATE: May 11, 2023
DISCUSSION (continued):
recommends that the Town Council issue a Notice of Completion and Certificate of Acceptance for the Plans described in the Agreement listed below:
d. Los Gatos North 40 Tract 10441 In tract Rough Grading Plans dated August 14, 2018 by Mackay & Somps;
e. Los Gatos North 40 Phase 1 Offsite Los Gatos Blvd Phase A Improvement Plans dated July 27, 2018 by Mackay & Somps;
f. Los Gatos Blvd & Walker Street Traffic Signal Plan dated August 2018 by Fehr & Peers; g. Walker Street & Los Gatos Blvd Phase A Signing and Striping Plan dated August 2018 by Fehr & Peers;
h. Los Gatos North 40 Phase 1 Offsite Lark Avenue and Los Gatos Boulevard Improvement Plans dated June 4, 2018 by Mackay & Somps;
i. North 40 Phase 1 Public Street Lighting Plans dated June 2018 by Giacalone; k. Lark Avenue & Los Gatos Boulevard Traffic Signal plans dated June 2018 by Fehr & Peers; l. Lark Ave & Los Gatos Blvd Signing and Striping Plans dated June 2018 by Fehr & Peers; m. Los Gatos North 40 Offsite Lark Avenue Caltrans Right of Way Improvement Plans dated March 12, 2018 including plans by Mackay & Somps, Finn Design Group, Van Dorn Abed, Fehr & Peers, and Giacalone;n. Los Gatos North 40 Phase 1 Lark Avenue Bike Lane Improvement Plans dated March 15, 2018 by Mackay & Somps; p. Lark Ave & Oka Road Traffic Signal Plans dated June 2018 by Fehr & Peers; q. Lark Avenue Signing and Striping Plans dated June 2018 by Fehr & Peers; and r. Los Gatos North 40 Phase 1 Off Site Storm and Sanitary Sewer Improvement Plans dated September 13, 2017.

The execution and recordation of the Notice of Completion and Certificate of Acceptance is required to finalize the Town’s acceptance of the Subdivision Improvements and release of the eight bonds. The bonds for the improvements that still need to be completed will remain in place and will not be released until those improvements have been completed.

The requested Council action would initiate a two-year warranty period and permits the Town Clerk’s Office to release the eight associated bonds securing the above listed plans (see Table 1 above). The four Labor and Materials bonds and four Faithful Performance bonds would be released in full, and SummerHill N40 LLC will issue a 2-year Guarantee and Warranty Security in the amount of 10 percent of the original value to guarantee the repair and/or replacement of defective materials and workmanship, as described in the Agreement.

PAGE 4 OF 4
SUBJECT: Authorize the Town Manager to Execute a Notice of Completion and Certificate of Acceptance for Specified Improvements Completed by SummerHill N40 LLC for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and Authorize the Town Clerk to Submit for Recordation
DATE: May 11, 2023
CONCLUSION:

Authorize the Town Manager to execute a Notice of Completion and Certificate of Acceptance for specified improvements completed by SummerHill for the North 40 Phase 1 Development at Lark Avenue and Los Gatos Boulevard, and authorize the Town Clerk to submit the documents to the County for recordation.

FISCAL IMPACT:

The improvements within the public right-of-way are dedicated to and accepted by the Town through the subdivision process and the approval of the final map. These improvements become part of the Town’s infrastructure to be maintained after the expiration of the two-year warranty period. However, pursuant to a Landscape Maintenance Agreement, SummerHill Homes is responsible to install and maintain the landscaping improvements and utilities that provide utility service to the landscape improvements along Lark Avenue and Los Gatos Boulevard. This Landscape Maintenance Agreement contains a provision to allow SummerHill to transfer this responsibility to a future property owners association.

ENVIRONMENTAL ASSESSMENT:

An Environmental Impact Report (EIR) for the project was certified by Town Council on January 20, 2015.

Attachments:

1. Certificate of Acceptance and Notice of Completion

2. Subdivision Improvement Agreement

Recording Requested by:

TOWN OF LOS GATOS
WHEN RECORDED MAIL TO:

TOWN CLERK

TOWN OF LOS GATOS
110 E MAIN ST
LOS GATOS, CA 95030
______________________________________________________________________________ (SPACE ABOVE BAR FOR RECORDER’S USE)
(RECORD WITHOUT FEE UNDER GOVERNMENT CODE SECTIONS 27383 AND 6103)

TYPE OF RECORDING

NOTICE OF COMPLETION AND CERTIFICATE OF ACCEPTANCE
NORTH 40 – PHASE 1

LARK AVENUE AND LOS GATOS BOULEVARD, LOS GATOS, CA
TO WHOM IT MAY CONCERN:

I do hereby certify that SummerHill N40 LLC completed the work described on Plans “d” through Plan “i”, Plans “k” through “n”, and Plans “p” through “r” as defined in the Subdivision Improvement Agreement, specifically located in the TOWN OF LOS GATOS, County of Santa Clara, State of California executed October 4, 2018. The work was completed in May 2023, and approved and accepted on May 16, 2023.

Bond No.: 748728, 748729, 748731, 748732, 748734, and 748735 Date: October 11, 2018

INTERNATION FIDELITY INDEMNITY COMPANY
One Network Center, 20th Floor, Newark, New Jersey 07102-5207

TOWN OF LOS GATOS
By: __________________________________
Laurel Prevetti, Town Manager
Acknowledgement Required

ATTACHMENT 1

Recording Requested by:

TOWN OF LOS GATOS
WHEN RECORDED MAIL TO:

CLERK ADMINISTRATOR

TOWN OF LOS GATOS
110 E MAIN ST
LOS GATOS, CA 95030
24041269
Regina Alcomendras
Santa Clara County - Clerk-Recorder
10/11/2018 01:23 PM

CONFORMED COPY
Copy of document recorded.

Has not been compared with original.
{SPACE ABOVE BAR FOR RECORDER'S USE)
(RECORD WITHOUT FEE UNDER GOVERNMENT CODE SECTIONS 27383 and 6103)

SUBDIVISION IMPROVEMENT AGREEMENT
North 40 Phase 1
Los Gatos, CA 95032
APNs: 424-07-024 through 424-07-027, 424-07-031 through 424-07-035, 424-07-070, 424-07-084 through 424-07-086, 424-07-090, and 424-07-113 through 424-07-114

SUBDIVISION IMPROVEMENT AGREEMENT

BETWEEN

THE TOWN OF LOS GATOS
AND
SUMMERHILL N40 LLC

LOS GATOS, CALIFORNIA

EXECUTION COPY
This agreement, made and entered into effective upon the last date this document is signed by the parties hereto, by and between the TOWN OF LOS GATOS, a municipal corporation of the State of California, hereinafter "Town," and SUMMERHILL N40 LLC, after this called "Subdivider," whose principal place of business is 3000 Executive Parkway, Suite 450, San Ramon, CA 94583.

WITNESSETH
WHEREAS, a Final Map (hereinafter "Map") of Tract 10441 (the "Subdivision") owned by Subdivider and commonly known as "North 40 Phase 1," has been filed with the Town, which Map is incorporated herein by reference;
WHEREAS, the Conditions of Approval of the Subdivision Application (A&S Cond. 163) require the Subdivider to construct and complete certain improvements according to the following plans and specifications ("Improvement Plans" or "Plans"):
a. Los Gatos North 40 - Phase I Tract 10441 Improvement Plans dated August 24, 2018 by Mackay & Somps
b. North 40- Onsite Private Street Lighting Plans dated August 23, 2018 byGiacalone c. North 40 lntract/Phase One Landscape Construction Plans dated August 24, 2018 by Van Dorn Abed
d. Los Gatos North 40 Tract 10441 In tract Rough Grading Plans dated August 14, 2018 by Mackay & Somps
e. Los Gatos North 40 Phase 1 Offsite Los Gatos Blvd Phase A Improvement Plans dated July 27, 2018 by Mackay & Somps
f. Los Gatos Blvd & Walker Street Traffic Signal Plan dated August 2018 by Fehr & Peers g. Walker Street & Los Gatos Blvd Phase A Signing and Striping Plan dated August 2018 by Fehr & Peers
h. Los Gatos North 40 Phase 1 Offsite Lark Avenue and Los Gatos Boulevard Improvement Plans dated June 4, 2018 by Mackay & Somps
i. North 40 Phase 1 Public Street Lighting Plans dated June 2018 byGiacalone j. North 40 Offsite Lark Avenue and Los Gatos Blvd Landscaping plans dated June 1, 2018 by Van Dorn Abed
k. Lark Ave & Los Gatos Blvd Traffic Signal plans dated June 2018 by Fehr & Peers I. Lark Ave & Los Gatos Blvd Signing and Striping Plans dated June 2018 by Fehr & Peers SMHH\54443\1441213.12 1

m. Los Gatos North 40 Offsite Lark Avenue Caltrans Right of Way Improvement Plans dated March 12, 2018 including plans by Mackay & Somps, Finn Design Group, Van Dorn Abed, Fehr & Peers, and Giacalone
n. Los Gatos North 40 Phase 1 Lark Avenue Bike Lane Improvement Plans dated March 15, 2018 by Mackay & Somps
o. North 40 Offsite Lark Avenue Landscape Construction Drawings dated June 6, 2018 by Van Dorn Abed
p. Lark Ave & Oka Road Traffic Signal Plans dated June 2018 by Fehr & Peers q. Lark Avenue Signing and Striping Plans dated June 2018 by Fehr & Peers r. Los Gatos North 40 Phase 1 Off Site Storm and Sanitary Sewer Improvement Plans dated September 13, 2017
The foregoing improvements are hereinafter referred to as "Required Improvements"; WHEREAS, the Subdivider has prepared, and the Town Engineer has substantially approved, Improvement Plans for the completion of the Required Improvements in connection with the Subdivision. The Plans are on file in the Office of the Town Engineer and are incorporated into this agreement by this reference, along with any changes or modifications as may be required by the Town Engineer or designee due to errors, omissions, or changes in conditions;
WHEREAS, Subdividerrecognizes that, by approval of the Map for Subdivision, Town has conferred substantial rights upon Subdivider, including the right to sell, lease, or finance lots and/or condominiums within the Subdivision. As a result, Town will be damaged to the extent of the cost of installation of these Required Improvements by Subdivider's failure to perform its obligations to commence construction of the Required Improvements by the lime established in this agreement. The Town shall be entitled to all remedies available to it pursuant to this agreement and law in the event of default by Subdivider; and WHEREAS, Subdivider has asked Town to review and approve the Map and accept the dedications therein offered, subject to and on condition that the Subdivider, prior to issuance of a building permit for the Required Improvements, enter into this agreement with the Town, and provide the Town with such security for performance and insurance and all other things as required by this agreement; NOW, THEREFORE, to insure satisfactory performance by Subdivider of these obligations, and in consideration of the approval of the Map, the parties now agree as follows:

1. PERFORMANCE OF WORK
Subdivider agrees to furnish, construct and install at Subdivider's own expense the Required Improvements. The Plans and specification of the Required Improvements may be modified by the Subdivider as th.e Subdivision progresses, subject to prior written approval of the Town Engineer.

SMHH\54443\1441213.12 2

2. WORK; SATISFACTION OF TOWN ENGINEER
All the work on the Required Improvements is lo be done at the places, of the materials, and in the manner and at the grades, shown upon approved Plans and specifications and the Town's Ordinances, Improvement Standards and Specifications, to the satisfaction of the Town Engineer.

Work shall be completed within two (2) years from the date of this agreement, subject to extension due to force majeure event under Section 1 0(a).

3. INSPECTION BY TOWN
Subdivider shall at all times provide safe access for inspection by the Town to all parts of the Required Improvements and to all places where the Required Improvements are in preparation.

4. SURVEY MONUMENTS
Subdivider shall install all Subdivision monuments required by law prior to recordation of the Notice of Acceptance.

5. DEDICATION OF EASEMENTS OR RIGHT-OF-WAY
The Town acknowledges that Subdivider has offered lo the Town lo dedicate fee title to all streets subject to public access easement (PAE) shown on the Map.

6. IMPROVEMENT SECURITY
Concurrently with the execution of this agreement, the Subdivider shall furnish the Town:
a. Faithful Performance Security: Pursuant to California Government Code section 66499.3(a) Subdivider shall, before the release of the Map by the Town for filing for record and as a condition precedent to the recordation of it, furnish to the Town and file with the Town Clerk cash, an instrument of credit, or a bond as provided by the Subdivision Map Act, in a form approved by the Town Attorney, securing performance by Subdivider of all work shown on the Plans and completion within the agreed lime. The security shall be in the amount of one hundred percent (100%) of the total estimated cost of the Required Improvements, as determined by the Director. The amount of cash, instrument of creditor bond shall be $20,585,000 based on individual bonds as follows:
(1) North 40 Phase 1 Tract 10441 In tract Private Improvements ($6,655,000)- based on improvement plans (a), (b) and (c) noted on page 1.
(2) North 40 In tract Tract 10441 Rough Grading ($6,430,000)-based on improvement plans (d) noted on page 1.
(3) North 40 Phase 1 Offsite Los Gatos Blvd Phase A Improvements ($710,000) - based on improvement plans (e), (f) and (g) noted on page 1. (4) North 40 Phase 1 Offsite Lark and Los Gatos Blvd Improvements ($1,938,000) - based on improvement plans (h), (i), OJ, (k) and (0 noted on page 1. (5) North 40 Phase 1 Offsite Lark and Los Gatos Blvd - Pavement Replacement ($3,262,000)
(6) North 40 Offsite Lark Avenue Improvements within Caltrans Right-of-Way ($799,000) - based on improvement plans (m) noted on page 1.

SMHH\54443\1441213.12 3

(7) North 40 Offsite Lark Avenue Bike Lane Improvements ($390,000) - based on improvement plans (n}, (o}, (p) and (q) noted on page 1. (8) North 40 Offsite Storm and Sanitary Sewer Improvement Plans ($94,000) - based on improvement plans (r) noted on page 1.
(9) North 40 Offsite Storm and Sanitary Sewer Improvement Plans ($307,000)- based on improvement plans (r) noted on page 1.
b. Payment Security: Subdivider shall furnish to the Town and file with the Town Clerk cash, an instrument of credit, or a bond as provided by the Subdivision Map Act, in a form approved by the Town Attorney, securing the obligations for payment to the contractor, subcontractors and to persons renting equipment or furnishing labor or materials for the completion of the Required Improvements. The security shall be in the amount of one hundred percent (100%) of the total estimated cost of the Required Improvements, as determined by the Director. The amount of cash, instrument of credit or bond shall be $20,585,000 based on the individual bonds described in Section 6(a). c. Guarantee and Warranty Security: It is further agreed that a "guarantee and warranty security" in the amount of ten (10%) percent of the total estimated cost of the Required Improvements for a period of two (2) years following their completion and acceptance by the Town against any defective work or labor done, or defective materials furnished, by the Subdivider. This limitation on the security does not shorten any time during which the Town may act to enforce the Subdivider's obligations under the terms of this agreement, nor shorten any time during which Town may bring an action in an appropriate court regarding the subject or performance of this agreement.
d. Monument Security: It is further agreed that a "monument security" in the amount of one hundred percent ( 100%) of the total estimated cost of the installation of survey monuments in the Subdivision within the period of time specified in the Surveyor's Statement on the approved Final Map. The Monument Bond is included in various other line items within the distributed bonds.
e. Any bonds submitted as security pursuant to this section shall be executed by a surety company authorized to transact a surety business in the State of California. f. No change, alteration, or addition to the terms of this agreement or the Plans and specifications incorporated herein shall in any manner affect the obligation of the sureties, except as otherwise provided by the Subdivision Map Act. g. The securities shall be irrevocable, shall not be limited as to time except as to the two (2) year guarantee and warranty period) and shall provide that they may be released, in whole or part, only upon the written approval of the Director and as provided in Section 7-Release of Security. All securities provided pursuant to this agreement shall expressly obligate the surety for any extension authorized by the Town for Subdivider's completion of the Required Improvements, whether or not the surety is given notice of such an extension by the Town.

7. RELEASE OF SECURITY
a. Guarantee and Warranty Security: Any unused portion of the guarantee and warranty security shall be released two (2) years after acceptance of the Required Improvements by the Town Council. The amount to be released shall first be reduced by the amount deemed necessary by the Town to correct any defects in the Required Improvements that are known or believed by the Town to exist at the end of the guarantee and warranty period.

SMHH\54443\1441213.12 4

b. Payment Security: Security securing the payment to the contractor, his or her subcontractors, and to persons furnishing labor, materials or equipment shall, after acceptance of the work, be reduced to an amount equal to the total timely claimed by all claimants for whom claims of lien have been recorded and notice thereof given in writing to the legislative body (with the balance of the Payment Security being released) and, if no such claims have been timely recorded, the security shall be release in full. c. Faithful Performance Security: The faithful performance security shall be released upon acceptance of the Required Improvements by the Town Council. d. Monument Security: The monument security may be released upon acceptance of the required monument installation by the Director.

8. HOLD HARMLESS
Subdivider does expressly agree to protect, defend, indemnify and hold harmless {hereinafter, "hold harmless") the Town, its Town Council Members, Boards, Commissions, employees and agents (hereinafter, the "Town"), from any and all loss or damage, and from any and all liability, including cost of defense, for any and all loss or damage, and from any and all suits, actions or claims filed or brought by any or all persons or person (hereinafter, "Claim") because of or resulting from the acts by Subdivider of any and all things required of Subdivider by this agreement, or because of or arising or resulting from the failure or omission by Subdivider to do any and all things necessary to and required by this agreement or by law, or arising or resulting from the negligent acts by Subdivider, Subdivider's agents, employees or subcontractors of any and all things required to be done by this agreement, or arising or resulting from any dangerous or defective condition arising or resulting from any of the above said acts or omissions of Subdivider, Subdivider's agents or employees. Subdivider shall not be required to hold harmless (as described above) the Town for Claims caused or arising out of the sole negligence or willful misconduct of the Town.

9. INSURANCE
Subdivider shall furnish to the Town and file with the Town Clerk evidence of, and at all times during the performance of its obligations under this agreement maintain, the insurance described in Exhibit A.

10. TIME EXTENSIONS
a. If performance of this agreement actually should be delayed by inclement weather, riots, strikes, lockouts, fires, earthquakes, floods and conditions resulting therefrom, subcontractor delays, labor shortages, material shortages or delays, Town delays, or for other reasons beyond the control of the Subdivider, the time for the construction of same may be extended by the Town Engineer for such period of time as is reasonable. b. Requests for extension of the commencement and/or completion date shall be in writing and delivered to the Town in the manner hereinafter specified for service of notices. An extension of time, if any, shall be granted only in writing. · c.

In the event the Town extends the time of commencement and/or completion of the Required Improvements, such extension shall be granted in writing by the Town to the Subdivider pursuant to this agreement, and/or without relieving or releasing those providing an improvement security pursuant to this agreement. The surety or sureties, if any, in executing the securities shall be deemed to have expressly agreed to any such extension of time.

SMHH\54443\1441213.12 5

d. In granting any extension of time, the Town may require new or amended improvement security in amounts increased to reflect increases in the costs of constructing the incomplete Required Improvements, taking into account all Required Improvements that have been completed.

11. MAINTENANCE OF PUBLIC INFRASTRUCTURE
The Subdivider shall maintain all Required Improvements (streets, sidewalks, right-of-way, street light, storm drainage facility, sanitary sewer, etc.) in a safe and usable condition at all times during construction. Should any Required Improvements become unsafe, unusable or inoperable because of the Subdivider's activities, the Subdivider shall immediately cease all work on the Subdivision until the public infrastructure is made safe and usable, for which the Subdivider shall be solely responsible. Additionally, notwithstanding acceptance by Town, Subdivider shall maintain and perform or cause to be performed repairs, additions, or corrective work necessitated by Subdivider's omission or deficient performance for one (1) year after acceptance. If the Subdivider fails to act promptly or in accordance with this agreement, or if the exigencies of the situation require repairs or replacements to be made before the Subdivider can be notified, then the Town may, at its option, make the necessary repairs or replacements or perform the necessary work, and Subdivider shall pay the Town the actual cost of such repairs plus fifteen percent ( 15%) within thirty (30) days of the date of billing for such work by Town.

12. DEFAULT BY SUBDIVIDER
a. Default of Subdivider shall include, but not be limited to:
(1) Subdivider's failure to timely commence construction of Required Improvements under this agreement;
(2) Subdivider's failure to complete construction of the Required Improvements within the lime period provided by this agreement or any extensions thereof; (3) Subdivider's failure to timely cure any defect in the Required Improvements during the two (2) year guaranty and warranty period where such failure continues beyond thirty (30) days after written notice thereof from the Town, or if such failure is not susceptible to cure within such thirty (30) day period, Subdivider has not commenced to cure within such thirty (30) day period and does not thereafter continue to diligently proceed to cure; (4) Subdivider's failure to perform substantial construction work for a period of 30 consecutive calendar days after commencement of the work, for reasons other than force majeure events;
(5) Subdivider's insolvency, appointment of a receiver, or the filing of any petition in bankruptcy, either voluntary or involuntary, which Subdivider fails to discharge within 30 days;
(6) The commencement of a foreclosure action against the subdivision or a portion thereof, or any conveyance in lieu or in avoidance of foreclosure; or (7) Subdivider's failure to perform any other obligation under this agreement within thirty (30) days after written notice thereof from the Town, or if such failure is not susceptible to cure within such 30-day period, Subdivider has not commenced to cure within such 30-day period and does not thereafter continue to diligently proceed to cure. b. The Town reserves all remedies available to ii at law or in equity for breach of Subdivider's obligations under this agreement. The Town shall have the right, subject to this Section, to SMHH\54443\1441213.12 6

draw upon or use the appropriate security to mitigate the Town's damages in the event of default by Subdivider. The Town's right to draw upon or use the security is in addition to any other remedy available to Town. The parties acknowledge that the estimated costs and security amounts may not reflect the actual cost of construction of the Improvements and, therefore, Town's damages for Subdivider's default shall be measured by the cost of completing the Required Improvements. The Town may use the sums provided by the securities for the completion of the Required Improvements in accordance with the Plans and specifications contained herein. In the event Subdivider fails to cure any default under this agreement within thirty (30) days after the Town mails written notice of such default to the Subdivider and the Subdivider's surety, Subdivider authorizes Town to perform the obligation for which Subdivider is in default and agrees to pay the entire cost of such performance by the Town. The Town may take over the work and complete the Required Improvements, by contract or by any other method the Town deems appropriate, at the expense of Subdivider.

In such event, the Town, without liability for so doing, may complete the Required Improvements using any of Subdivider's materials, appliances, Plans and other property that are at the work site and that are necessary to complete the Required Improvements.

13. NOTICES
Notices regarding this agreement shall be given as follows and shall be considered effective upon either personal delivery or five (5) days following deposit in the U.S. Mail:

To SUBDIVIDER:

To TOWN:

SummerHill N40 LLC
3000 Executive Parkway, Suite 450
San Ramon, CA 94583
Parks and Public Works Department
Town of Los Gatos
41 Miles Avenue
Los Gatos, California 95030
Any party may change such address by notice in writing to the other party and thereafter notices shall be addressed and transmitted to the new address.

14. WAIVER
Waiver of a breach of default under this agreement shall not form a continuing waiver or a waiver of a subsequent breach of the same or any other provision of the agreement.

15. SEVERABILITY
If any term of this agreement is held invalid by a court of competent jurisdiction, the remainder of this agreement shall remain in effect.

16. ENTIRE AGREEMENT AND AMENDMENT
This agreement constitutes the complete and exclusive statement of the agreement between the Town and Subdivider. No verbal agreement or conversation with any officer, agent, or employee of the Town, either before, during or after the execution of this agreement, shall affect or modify any of the terms or obligations contained in the agreement. There are no intended third party beneficiaries to this Agreement.

SMHH\54443\1441213.12 7

17. PAYMENT OF OUTSTANDING FEES
Prior to acceptance of Required Improvements for permanent maintenance by the Town. Subdivider shall pay all outstanding fees that are due in accordance with this agreement and the Town Code of the Town of Los Gatos.

18. ACTIONS TO ENFORCE
If any action at law or equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this agreement, the prevailing party shall be entitled to reasonable attorneys' fees, expert witness fees and costs, in addition to any other relief to which they may be entitled.

19. REIMBURSEMENT OF ATTORNEYS FEES
In the event of any third party claim or legal challenge to any action taken by the Town with regard to any procedure or aspect of this agreement, including approval or environmental review process, the Town may choose to defend the claim or action with the prior written approval of the Subdivider, the Subdivider, if it has consented to the defense of the claim or action, agrees to reimburse the Town for attorneys' fees, expert witness fees, and any other costs the Town may incur in connection with iis retention of legal counsel, and for any award of court costs and fees against the Town.

20. AGREEMENT BINDS SUCCESSORS
This agreement pertains to and runs with the land benefited by the privileges it grants and binds the successors in interest of the parties to this agreement.

21. MORTGAGE PROTECTION
No breach of this agreement shall defeat or render invalid the lien of any deed of trust or mortgage recorded against all or any portion of the Subdivision. No lender taking title to all or any portion of the Subdivision through foreclosure or deed in-lieu of foreclosure shall be liable for any defaults or monetary obligations of Subdivider arising prior to acquisition of possession of such property by such lender. The foreclosing lender shall have the right to find a substitute developer to assume the obligation of Subdivider, which substitute shall be considered for approval by Town pursuant to this agreement, which approval shall not be unreasonably withheld, conditioned or delayed. Town agrees to provide any lender who has recorded a deed of trust or mortgage against all or any portion of North 40 Phase 1 of which Town has been given notice (each, a "Lender'') with written notice of any default relating to the Subdivider and/or North 40 Phase 1 given by Town to Subdivider. Town agrees that, notwithstanding anything to the contrary contained in this Agreement, Lender shall have an additional sixty (60) days from the date Lender receives notice of a default to cure any such default, provided that Lender shall not have any obligation to cure any such default.

If a Lender or an affiliate of such Lender succeeds to the interest of Subdivider through foreclosure or deed in-lieu of foreclosure, then the time periods for performance of Subdivider's obligations set forth in this agreement (if any) shall be extended for a period of time reasonable under the circumstances to permit such Lender or such affiliate to perform Subdivider's obligations under this agreement.

SMHH\54443\1441213.12 8

TOWN Of LOS GATOS
TOWN Ml1i.NAGER .,
ATTEST:

APPROVED AS TO FORM:
/
DATE: /O- '-f- /J
RECOMMENDED BY:

DATE: _______ _
SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
Its Manager
Laurel Prevetti

CLERK ADMINJST TOR
She 11 ey Neis

SUBQIYIPEB
By: f@;nc //tu
Its: Executive Vice� -� DATE: _'1--1/�1t-1---;-/ \_'o_
By: DATE: _q�{_a-_=t-�f (_B _ Jason Bigs
Secretary Its: ____ _
SMHH\54443\1441213.12 9

LICWORKS

CALIFORNIA ALLm PURPOSE

CERTIFICATE OF 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 �n +u C Ltu ,� }
)-ti t 8' before me s\., \ 11 L£._, ko,A ss-cl l()ultff p_, 6 I,� '-��+,---,H"-e�ce�lc�s�srthc�,m�e�a�c"d!;frr;,e�o�t�e�o�,�ecrt--'--::....:--, personally appeared __ L_l_L_�l_l' 1':_-_l __ P_re_. _v_e._t-h_· _· ____________ _ who proved to me on the basis of satisfactory evidence to be the person(s) whose name($') is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in-flis/her/their authorized capacity(ie5t, and that by his/her/t+teir 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 PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
:g,;t"J@--:-:: ___ ,,.
:::-"··_-_-. --::S::::-YL:-:::VIE:-::R::::OU�SS::,EL,---,[ = COMM.# 2106517 � NOTARYPUBUNALIFORNIA �
I · _
, SANTA CLARA COUNTY
_
My Comm. Exp. April 11, 2019 j
INSTRUCTIONS FOR COMPLETING THIS FORM ADDITIONAL OPTIONAL I Ill F O RMA Tf O Ill Th;s form comp hes whh current Californ;a statutes regard;ng not a')• wo,d;ng and, DESCRIPTION OF THE ATTACHED DOCUMENT if needed, should be completed and attached to the document. Acknowledgments from other states may be completed for documents being sent to that state so long as the wording does not require the California notmy to violate California notary law.
(Title or description of attached document)
(Title or description of attached document continued)
Number of Pages __ Document Date ___ _

CAPACITY CLAIMED BY THE SIGNER
□ Individual (s
)
□ Corporate Officer
{Title)
□ Partner(s)
□ Attorney-in-Fact
□ Trustee(s)
0 Other _________ _
2015 Version W'<>'W NotaryC!2-ssm\ccrr: BOD-873-9865
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The notary public must print his or her name as it appears within his or her commission followed by a comma and then your title (notary public).

Print the name(s) of document signer(s) who personally appear at the time of notarization.
• Indicate the correct singular or plural forms by crossing off incorrect forms (i.e. he/she/they, is /are) or circling the correct fonns. Failure to correctly indicate this infonnation may lead to rejection of document recording. • The notary seal impression must be clear and photographically reproducible.

Impression must not cover text or lines. If seal impression smudges, re-seal if a sufficient area pennits, otherwise complete a different acknowledgment form. o Signature of the notaiy public must match the signature on file with the office of the county clerk.
❖ Additional information is not required but could help to ensure this acknowledgment is not misused or attached to a different document. ❖ Indicate title or type of attached document, number of pages and date. ❖ Indicate the capacity claimed by the signer. If the claimed capacity is a corporate officer, indicate the title (i.e. CEO, CFO, Secretary). • Securely attach this document to the signed document with a staple.

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189 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 Stv\,t\_, � )
On � i 1-, Ull't before rne, � Pelici,r'\.";;,, �� PvJJtf.c.- Date Here Insert Narng_ � of the Officer
personally appeared ��AY tv1)_ J� �"2
Name(s) of S1gner(s)
who proved to rne 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.

BRIANA PERKINS
Notary Pubtic • California z.

Santa Clara County !
Commission# 2245007
My Comm, Expires Jun 30, 2022
Place Notary Seal Above
I certify under PENALTY OF PERJURY under the laws
of the State of California that the foregoing paragraph is true and correct.

WITNESS rny hand and official seal.

Signatur�M Vo
Signature of Notary Public
---------------OPTIONAL---------------
Though this section is optional, completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.

Description of Attached Document
Title or Type of Document: _____________ Document Date: _______ _ Number of Pages: Signer(s) Other Than Named Above: ____________ _ Capacity{ies) Claimed by Signer{s)
Signer's Name: ____________ _
□ Corporate Officer - Title(s): ______ _
□ Partner - □ Limited □ General
□ Individual □ Attorney in Fact
□ Trustee □ Guardian or Conservator
□ Other: ______________ _
Signer Is Representing: __ _______ _
Signer's Name:
.
::---c=-:-.,---------
□ Corporate Officer - Title(s): ______ _ □ Partner - □ Limited □ General □ Individual □ Attorney in Fact
□ Trustee □ Guardian or Conservator
□ Other:=----,-----------
Signer Is Representing: _________ _
©2014 National Notary Association· www.NationalNotary.org • 1-800-US NOTARY (1-800-876-6827) Item #5907

CALIFORNIA ACKNOWLEDGMENT CIVIL CODE § 1189
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 ___ S_a_n_ta_C_la_r_a _______ _ }
On ----"O'--'C1b=YW=_1-"--'- _7J)�\ s�-- before me, __ S_te_f_a_ni_e_D_._H_o_c_k_em_e�ye_r�, _N_o_ta_ry�P_u-'-b-'-lic:_ __ _ Date Here Insert Name and Title of the Officer
personally appeared ____ ___cM=a:c:ttc:M=o-'-'rl-=-eLy _____________________ _ Name(s) of Signer(s)
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 STEFANIE D. HOCKEMEYER
Commission # 2086033
Notary Public � California i
7 Santa Clara County � $J - My Comm. Expires Oct 14, 2016 [, �T?'';.7"'ZP",l''"'B'C"��'w"'"'i' ' �
:m.;_1,'Si;.:�,q;r�:;:;;::,;5-""'✓,;'�.;..,�,
Place Notary Seal and/or Stamp Above
I certify under PENAL TY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.

WITNESS my hand and official seal.

OPTIONAL ---------------­
Completing this information can deter alteration of the document or fraudulent reattachment of this form to an unintended document.

Description of Attached Document
Title or Type of Document: ____________________________ _ Document Date: ______ ______________ Number of Pages: ____ _ Signer(s) Other Than Named Above: ________________________ _ Capacity(ies) Claimed by Signer(s)
Signer's Name: ____________ _
D Corporate Officer - Title(s): _______ _
D Partner - □ Limited D General
D Individual
D Trustee
D Attorney in Fact
□ Guardian or Conservator
D Other: ______________ _
Signer is Representing: _________ _
Signer's Name: ____________ _
D Corporate Officer - Title(s): ______ _
□ Partner - □ Limited D General
D Individual □ Attorney in Fact
□ Trustee □ Guardian or Conservator
□ Other: ______________ _
Signer is Representing: _________ _
�;":�����.:.�.J[���:®._����.®����:_�
©2018 National Notary Association

FAITHFUL PERFORMANCE BOND

EXECUTION COPY
BOND NUMBER: 0728666
PREMIUM: $63,223
WHEREAS, the Town of Los Gatos, State of California (hereinafter called "Town"), and SUMMERHILL N40 LLC (herein designated as "Principal") have entered an agreement by which Principal agrees to install and complete certain designated public improvements, which agreement, dated September [DAY], 2018, and identified as the "Subdivision Improvement Agreement" is hereby referred to and made a part hereof; and
WHEREAS, said Principal is required under the terms of the Subdivision Improvement Agreement to furnish a bond for the faithful performance of said agreement.

NOW, THEREFORE, we, the Principal and INTERNATIONAL FIDELITY INDEMNITY COMPANY, as Surety, are held and firmly bound unto the Town, in the penal sum of six million, six hundred and fiftyfive thousand ($6,655,000) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, formally by these presents.

The condition of this obligation is such that if the above bounded Principal, its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Subdivision Improvement Agreement and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless Town, its officers, agents and employees, as therein stipulated, and this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

Principal and Surety further agree that, upon Town's final approval of the work, ten percent (10%) of this bond shall remain in effect to guarantee the repair and/or replacement of defective materials and/or construction, one (1) year after Town's final acceptance of the work, unless Principal posts a separate warranty bond instead.

As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by Town in successfully enforcing such obligation, all to be taxed as costs and included in any judgement rendered.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Subdivision Improvement Agreement or to the work or to the specifications.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on September 7th, 2018.

SMHH\5444311441213.9 1

PRINCIPAL:

SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
Its Manager
By:

By:

Its·
{/ /---,'-l-<4-------- .,
// ------
Its 00
SMHH\54443\1441213.9 2
SURETY:

IN�DELITY INDEMNITY

COMPANY
By: Rachel A Portger
Its: Attorney-In-Fact
2999 Oak Rd. #820
[Address]
Walnut Creek CA 94597
[City, State, ZIP]

EXECUTION COPY
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 CaliforlJ,\,'l ,1 ~ /. County of a a--fn;_.- L..JJ�7?<._• On :5epf /,J 1 2,.t}I) , before me /Yl · fCn,,el/i · a Notary Public, personally appeared ' ��,; C SZ-1-D , who proved to me on the basis of satisfactory evidence to be the person(sj-whos �ame(.s) is/ai:e subscribed to the within instrument and acknowledged to me that Re/she/tl:le.y executed the same in Ri5/her/tl:le-ir authorized capacity(ies).,_ and that by l,j,;/her/tbeir signature(s� on the instrument the person(,+,- or the entity upon behalf of which the person(.s) acted, executed the instrument.

I certify under PENAL TY 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
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 CaliforlJi
a
County /JJ ��-'- _ of (,_b�� c,.,...,, o-----
On =��.:..!.��'?t-.9--�· before m , /J?-�, he-6{ · , a Notary Public, personally appeared n •){ v , who proved to me on the basis of satisfactory evidence to be the personis) whose name( is/afe subscribed to the within instrument and acknowledged to me that he.'sh@{lhey executed the same in his/heri'tRsir authorized capacity(is&}, and that by his/hei:LllJgir signature(sl, on the instrument the person(sr, or the entity upon behalf of which the person(s.) acted, executed the instrument.

I certify under PENAL TY 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 '--Jn · �
SMHH\54443\1441213.9 1
j'®®eeeemeeee @ M. RINETTI f
<
Notsry PubNc - California
� Coritra Ccsta County j Commission# 2220824 -

1.1� Comm. E.xpires Nov 5. 2021

LABOR AND MATERIALS BOND

EXECUTION COPY
BOND NUMBER: 0728666
PREMIUM: Included
WHEREAS, the Town of Los Gatos, State of California (hereinafter called "Town"), and SummerHill N40 LLC (hereinafter designated as "Principal") have entered an agreement whereby Principal agrees to install and complete certain designated public improvements, which agreement, dated September [DAY], 2018, and identified as the "Subdivision Improvement Agreement" is hereby referred to and made a part hereof; and
WHEREAS, under the terms of the Subdivision Improvement Agreement, Principal is required, before entering upon the performance of the work, to file a good and sufficient payment bond with the Town to secure the claims to which reference is made in Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code of the State of California; NOW, THEREFORE, said Principal and the undersigned as Corporate Surety are held firmly bound unto the Town and all contractors, subcontractors, laborers, material suppliers and other persons employed in the performance of the Subdivision Improvement Agreement and referred to in the aforesaid Civil Code in the sum of six million, six hundred and fifty-five thousand ($6,655,000) for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in an amount not exceeding the amount herein above set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by the Town in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.

It is hereby expressly stipulated and agreed that this bond shall inure to the benefit of any and al l
persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.

Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Subdivision Improvement Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension, alteration or addition.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on September 7th, 2018.

SMHH\54443\1441213.9 1

PRINCIPAL: SURETY:

SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
By: Rachel A Portger
Its: Attorney-In-Fact
B
lts
y
:

Manager
( �-
1'frorie L. Szto 2999 Oak Rd. #820
By:

Its: / sz;r.�
r Vice President [;';A"'d�d�re
S<
s
�
s';-] '-"'""--""'="---------
/ / Walnut Creek CA 94597 f .1 ' [City, State, ZIP]
J I ' �1v�--
1JJ UJ0
SMHH\54443\1441213.9 2

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

State of Califo�
a
County of l'vfrtiOn � /{), ?£;/°j , before me, fn • f<:',nc-1/, · a Notary _
Public, personally
appeared 7 ma...p ,r C :52 +tJ , who proved to me on the basis of satisfactory evidence to be the person(sl-whose name(st is/ai.. subscribed to the within instrument and acknowledged to me that �he/lRe'f executed the same in his/her/tl.eir authorized capacity(i&s}, and that by hisfher/theirsignaturefs) on the instrument the person{&r, or the entity upon behalf of which the person(&) 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 �' � ·
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 docwnent.

State of Califon}ijl ..47
�,J County of r2__nfr,c_ C:.bo:!.!J!c
On���_!_���L_, befor7,m , rrl · K.,ht:..,/4; , a
_
Notary Public, personally
appea d ----'-='.!l..L-L.£.&<...JL'/1.-""',1;"""--� who proved to me on the basis of satisfactory evidence to be the person(s) whose name( is/= subscribed to the within instrument and acknowledged to me that he.'sh.i'lhey executed the same in his/h� authorized capacity(ies-), and that by his/h� 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 PENAL TY 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
SMHH\54443\1441213.9
eeeeeeeeeef M. RINETTI
Notary Public - California 2
Contra Ccs:a County �
Commission# 2220824 -
My Comm, Expires Nov 5. 2021
September 7, 2018

POWER OF ATTORNEY

INTERNATIONAL FIDELITY INSURANCE COMPANY

ALLEGHENY CASUAL TY COMPANY
Bond#
One Newark Center, 20th Floor, Newark, New Jersey 07102-5207 PHONE: (973) 624-7200 0728666
KNOW ALL MEN BY THESE PRESENTS: That INTERNATIONAL FIDELITY INSURANCE COMPANY, a corporation organized and existing under the laws of the State of New Jersey, and ALLEGHENY CASUALTY COMPANY a corporation organized and existing under the laws of the State of New Jersey, having their principal office in the City of Newark, New Jersey, do hereby constitute and appoint IVAN M. MAROEVICH, JR., RACHEL A. PORTER, WILLIAM R. GRINDELL, VALERIE D. WILLIAMS-COLE PAUL F. PERLITE.

San Francisco, CA.
their true and la\Nfu! attorney(s)-in-fact to execute, seal and deliver for and on its behalf as surety, any and all bonds and undertakings, contracts of indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, ru!e, regulation, contract or otherwise, and the execution of such instrument(s) in pursuance of these presents, shall be as binding upon the said INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUAL TY COMPANY, as fully and amply, to all intents and purposes, as if the same had been duly executed and acknowledged by their regularly elected officers at their principal offices.

This Power of Attorney is executed, and may be revoked, pursuant to and by authority of the By-Laws of INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUAL TY COMPANY and is granted under and by authority of the following resolution adopted by the Board of Directors of INTERNATIONAL FIDELITY INSURANCE COMPANY at a meeting duly held on the 20th day of July, 2010 and by the Board of Directors of ALLEGHENY CASUALTY COMPANY at a meeting du!y held on the 1oth day of July, 2015 "RESOLVED, that (1) the Chief Executive Officer, President, Executive Vice President, Vice President, or Secretary of the Corporation shall have the power to appoint, and to revoke the appointments of, Attorneys-in-Fact or agents with power and authority as defined or limited in their respective powers of attorney, and to execute on behalf of the Corporation and affix the Corporation's seal thereto, bonds, undertakings, recognizances, contracts of indemnity and other written obligations in the nature thereof or related thereto; and (2) any such Officers of the Corporation may appoint and revoke the appointments of joint-control custodians, agents for acceptance of process, and Attorneys-in-fact with authority to execute waivers and consents on behalf of the Corporation; and (3) the signature of any such Officer of the Corporation and the Corporation's seal may be affixed by facsimile to any power of attorney or certification given for the execution of any bond, undertaking, recognizance, contract of indemnity or other written obligation in the nature thereof or related thereto, such signature and seals when so used whether heretofore or hereafter, being hereby adopted by the Corporation as the original signature of such officer and the original seal of the Corporation, to be valid and binding upon the Corporation with the same force and effect as though manually affixed."
IN WITNESS WHEREOF. INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUAL TY COMPANY have each executed and attested these presents on this 31st day of December, 2016

STATE OF NEW JERSEY
County of Essex
cJXSUA(J-y
"a
George R. James
Executive Vice President (International Fidelity Insurance Company) and Vice President (Allegheny Casualty Company)
1936 !
*
<l,j, JE\lslc--\
On this 31st day of December, 2016 , before me came the individual who executed the preceding instrument, to me personally known, and, being by me duly sworn, said he is the therein described and authorized officer of INTERNATIONAL FIDELITY INSURANCE COMPANY and of ALLEGHENY CASUAL TY COMPANY; that the seals affixed to said instrument are the Corporate Seals of said Companies; that the said Corporate Seals and his signature were duly affixed by order of the Boards of Directors of said Companies. !N TESTIMONY WHEREOF, I have hereunto set my hand affixed my Official Seal, at the City of Newark, New Jersey the day and year first above written.

CERTIFICATION
Cathy Cruz a Notary Public of New Jersey
My Commission Expires April 16, 2019
I, the undersigned officer of INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUAL TY COMPANY do hereby certify that [ have compared the foregoing copy of the Power of Attorney and affidavit, and the copy of the Sections of the By-Laws of said Companies as set forth in said Power of Attorney, with the originals on file in the home of said companies, and that the same are correct transcripts thereof, and of the whole of the said originals, and that the said Power of Attorney has not been revoked and is now in full force and effect.

IN TESTIMONY WHEREOF, I have hereunto set my hand on this day, A00436/MOC Insurance Services.

ACKNOWLEDGMENT
A notary public or ot her officer completing this
certificate verifies only the identity of t he individual who signed t he document to which this certificate is
attac hed, and not the truthfulness, accuracy, or
validity of that document.

State of California
County of_
San Francisco
On September 07 , 2018 before me , -�□
;,--=
a�ra�T-:---co=uc=h�,�N�o=t
;"'
a
:::
ry�P�u
:=
b
,;-
lic"---=--,-----­ (insert name and title of the officer )
personally appeared ---'-R
:"
a�c
':'
h�e�l
:-'-
P�o
'-:
rt�e�r
-:-:--;--:---:-:-----,----,-------,;--------,---,----,--------­ who proved to me on the basis of satisfactory evidence to be the personfst whose namefst isi'afe subscribed to the within instrument and acknowledg ed to me th at RelsheAAey executed the same in flis,,'herltlleif aut horized capacityfiest, and that by--A-is,lhefl#leif signaturefst on the instrument the person{s},-or the entity upon behalf of which the personfst acted, executed the instrume nt.

I c ertify under PENAL TY 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 _ ___:/j=---_,.,,.,_�--+--:::.""c::..__,l,c::__:::,_� __ _ (Seal)

DARA TOUCH
Notary Public -'cau.tornia
!fl San Francis.co County j Commission# 2159426 !: My Comm. Expires Jul 9, 2020

FAITHFUL PERFORMANCE BOND

EXECUTION COPY
BOND NUMBER: 0748728
PREMIUM: $61,085
WHEREAS, the Town of Los Gatos, State of California (hereinafter called "Town"), and SUMMERHILL N40 LLC (herein designated as "Principal") have entered an agreement by which Principal agrees to install and complete certain designated public improvements, which agreement, dated September [DAY], 2018, and identified as the "Subdivision Improvement Agreement" is hereby referred to and made a part hereof; and
WHEREAS, said Principal is required under the terms of the Subdivision Improvement Agreement to furnish a bond for the faithful performance of said agreement.

NOW, THEREFORE, we, the Principal and INTERNATIONAL FIDELITY INDEMNITY COMPANY, as Surety, are held and firmly bound unto the Town, in the penal sum of six million, four hundred and thirty thousand ($6,430,000) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, formally by these presents.

The condition of this obligation is such that if the above bounded Principal, its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Subdivision Improvement Agreement and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless Town, its officers, agents and employees, as therein stipulated, and this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

Principal and Surety further agree that, upon Town's final approval of the work, ten percent (10%) of this bond shall remain in effect to guarantee the repair and/or replacement of defective materials and/or construction, one (1) year after Town's final acceptance of the work, unless Principal posts a separate warranty bond instead.

As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by Town in successfully enforcing such obligation, all to be taxed as costs and included in any judgement rendered.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Subdivision Improvement Agreement or to the work or to the specifications.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on September 7th, 2018.

SMHH\54443\1441213.9

PRINCIPAL:

SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
Its Manager
By: C ;; . /. jorie L. s�
By:

Its: /2t)() ----
SMHH\54443\1441213.9 2
SURETY:

INTERNATIONAL FIDELITY INDEMNITY

COMPANY
By:

Its:

Rachel A Portger
Attorney-In-Fact
2999 Oak Rd. #820
(Address]
Walnut Creek CA 94597
[City, State, ZIP]

EXECUTION COPY
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 CaliforniaA ..1-.r /I -LCounty of { IJn; ru_.t. t).5 I t:A-- On !:/epl-: JI)/ ZlJ J) , before me, d'.1 - te, neg{ · , a _
Notary
_
Public, personally
appeared /1'Uw-7Pr r C $:t,. !z> , who proved to me on the basis of satisfactory evidence to be the person(� whose name(-s) is/= subscribed to the within instrument and acknowledged to me that be/she/!Aey executed the same in �/her/tlaeir authorized capacity(-i@sj, and that by Ris/her/tl..lir signature(.;.) on the instrument the person(.:.), or the entity upon behalf of which the person(sr 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
lmeeczeeeeeeeef M. RINETTI _ __ .... ,
..
.

Not,1ry P. ub. lic - California 2
:2 �� Contra Cost• County �
-" � · .. :· Comm1ss1cn :r/. 2220824 -
My Comm. Expires Nov 5. 2021
A notary public or other officer completing this ce1tificate 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// -"'-�- A. .L County of L1n1 • p(__ LO.ST"<-- ,(/1 · ,e,, nell,
On Zell 1 , before me, 7J\Ud 1� ,6.,., f!>'C.,. , a Notary Public, personally appeared ' '"),/,g,- who pro d to me on the basis of satisfactory evidence to be the person(s}whose name( is/ai:e subscribed to the within instrument and acknowledged to me that he/sl:le/tl'ley executed the same in his/her41:leiF authorized capacity(ies), and that by hi�lherttheir signature(s.) on the instrument the person(sl, or the entity upon behalf of which the person(s1--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 '-7r; -¥�
SMHH\54443\1441213.9 1

LABOR AND MATERIALS BOND

EXECUTION COPY
BOND NUMBER: 0748728
PREMIUM: Included
WHEREAS, the Town of Los Gatos, State of California (hereinafter called "Town"), and SummerHill N40 LLC (hereinafter designated as "Principal") have entered an agreement whereby Principal agrees to install and complete certain designated public improvements, which agreement, dated September [DAY], 2018, and identified as the "Subdivision Improvement Agreement" is hereby referred to and made a part hereof; and
WHEREAS, under the terms of the Subdivision Improvement Agreement, Principal is required, before entering upon the performance of the work, to file a good and sufficient payment bond with the Town to secure the claims to which reference is made in Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code of the State of California; NOW, THEREFORE, said Principal and the undersigned as Corporate Surety are held firmly bound unto the Town and all contractors, subcontractors, laborers, material suppliers and other persons employed in the performance of the Subdivision Improvement Agreement and referred to in the aforesaid Civil Code in the sum of six million, four hundred and thirty thousand ($6,430,000) for materials-.furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in an amount not exceeding the amount herein above set forth and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by the Town in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.

It is hereby expressly stipulated and agreed that this bond shall inure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.

Should the condition of this bond be fully performed, then this obligation shall become null and void otherwise it shall be and remain in full force and effect.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Subdivision Improvement Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension, alteration or addition.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on September 7th, 2018.

SMHH\5444311441213.9 1

PRINCIPAL:

SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
Its Manager
( 4.:f&,s.o By:

Senior Vice President
By:
f���
I � Ji
SMHH\54443\1441213.9
SURETY:

IN,�ELITY INDEMNITY

COMPANY
By: Rachel A Portger
Its: Attorney-In-Fact
2999 Oak Rd. #820
[Address]
Walnut Creek CA 94597
.[City, State, ZIP]
2

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 Califo3
a (j _J. Gou nty of 1>ftc., tz.SfA.___,.

On �h lo / 2o JJ , before me, )YI • ;€, ,,, e lh . a Notary Public, personally appeare /12/4 �, c.. who proved to me on the basis of satisfactory evidence to be the person(.& hose name(&) is/a... subscribed to the within instrument and acknowledged to me that be/she/tl:+@y executed the same in hl£/her/t�ir authorized capacity(.ieaj,. and that by l:!i!;/her/tl¾,.j;­ signature(s-) on the instrument the person(&), or the entity upon behalf of which the person(s.). acted, executed the instrument.

I certify under PENAL TY 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�•�
J:reeeer-eeereem: .. .... M. RINETTI •@"�'. · NotaN Public - California � i i�< �? Co�tra Costa County i
� ... , . Commission # 2220824 �
My Comm. Expires Nov 5, 2021
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 Californn -1 _
. A _,. County of 11·rr<'L CdS ,.....__
On --"'""c:i�-'--'-"'+<"""�i'-' before me, /rl .;e_, �e_ /4 , a Notary Public, personally appearea ,.s /l. 6,.,.- , who proved to rne on the basis of satisfactory evidence to be the person(st whose name(.;;) is/ subscribed to the within instrument and acknowledged to me that he/sl,e,'lhey executed the same in his/�ir authorized capacity(ies), and that by his/h�r signature(-&) on the instrument the person(s), or the entity upon behalf of which the person(&) acted, executed the instrument.

I certify under PENAL TY 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
SMHH\54443\1441213.9
e e e e e r O e 0
M. RINETTI f Notary Public -Caiifornia
Contra Costa Coumv f Commissior: � 22208.24 My Comm. Expires Nov 5. 2021 September 7, 2018

POWER OF ATTORNEY

INTERNATIONAL FIDELITY INSURANCE COMPANY

ALLEGHENY CASUAL TY COMPANY
Bond#
One Newark Center, 20th Floor, Newark, New Jersey 07102-5207 PHONE: (973) 624-7200 0748728
KNOW ALL MEN BY THESE PRESENTS: That INTERNATIONAL FIDELITY INSURANCE COMPANY, a corporation organized and existing under the raws of the State of New Jersey, and ALLEGHENY CASUAL TY COMPANY a corporation organized and existing under the laws of the State of New Jersey, having their principal office in the City of Newark, New Jersey, do hereby constitute and appoint IVAN M. MAROEVICH, JR., RACHEL A. PORTER, WILLIAM R. GRINDELL, VALERIE D. WILLIAMS-COLE PAUL F. PERLITE.

San Francisco, CA.
their true and lawful attorney(s)-in-fact to execute, seal and deliver for and on its behalf as surety, any and all bonds and undertakings, contracts of indemnity and other writings obligatory in the nature thereof, which are or may be allowed, required or permitted by law, statute, rule, regulation, contract or otherwise, and the execution of such instrument(s) in pursuance of these presents, shall be as binding upon the said INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUAL TY COMPANY, as fully and amply, to all lntents and purposes, as if the same had been duly executed and acknowledged by their regularly elected officers at their principal offices.

This Power of Attorney is executed, and may be revoked, pursuant to and by authority of the By-Laws of INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUALTY COMPANY and is granted under and by authority of the following resolution adopted by the Board of Directors of INTERNATIONAL FIDELITY INSURANCE COMPANY at a meeting duly held on the 2oth day of July, 2010 and by the Board of Directors of ALLEGHENY CASUAL TY COMPANY at a meeting duly held on the 10th day of July, 2015 "RESOLVED, that (1) the Chief Executive Officer, President, Executive Vice President, Vice President, or Secretary of the Corporation shall have the power to appoint, and to revoke the appointments of, Attorneys-in-Fact or agents with power and authority as defined or limited in their respective powers of attorney, and to execute on behalf of the Corporation and affix the Corporation's seal thereto, bonds, undertakings, recognizances, contracts of indemnity and other written obligations in the nature thereof or re!ated thereto; and (2) any such Officers of the Corporation may appoint and revoke the appointments of joint-control custodians, agents for acceptance of process, and Attorneys-in-fact with authority to execute waivers and consents on behalf of the Corporation; and (3) the signature of any such Officer of the Corporation and the Corporation's seal may be Elffixed by facsimile t0 any power of attorney or certification given for the execution of any bond, undertaking, recognizance, contract of indemnity or other written obligation in the nature thereof or related thereto, such signature and seals when so used whether heretofore or hereafter, being hereby adopted by the Corporation as the original signature of such officer and the original seat of the Corporation, to be valid and binding upon the Corporation with the same force and effect as though manually affixed."
IN WITNESS WHEREOF, INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUALTY COMPANY have each executed and attested these presents on this 31st day of December, 2016

STATE OF NEW JERSEY
County of Essex
George R. James
Executive Vice President (International Fidelity Insurance Company) and Vice President (Allegheny Casualty Company)
On this 31st day of December, 2016 , before me.came the individual who executed the preceding instrument, to me personally known, and, being by me duly sworn, said he is the therein described and authorized officer of INTERNATIONAL FIDELITY INSURANCE COMPANY and of ALLEGHENY CASUAL TY COMPANY; that the seals affixed to said instrument are the Corporate Seals of said Companies; that the said Corporate Seals and his signature were duly affixed by order of the Boards of Directors of said Companies.

IN TESTIMONY WHEREOF, I have hereunto set my hand affixed my Official Seal, at the City of Newark, New Jersey the day and year first above written.

CERTIFICATION
Cathy Cruz a Notary Public of New Jersey
My Commission Expires April 1.6, 2019
I, the undersigned officer of INTERNATIONAL FIDELITY INSURANCE COMPANY and ALLEGHENY CASUALTY COMPANY do hereby certify that I have compared the foregoing copy of the Power of Attorney and affidavit, and the copy of the Sections of the By-Laws of said Companies as set forth in said Power of Attorney, with the originals on file in the home of said companies, and that the same are correct transcripts thereof, and of the whole of the said originals, and that the said Power of Attorney has not been revoked and is now in full force and effect.

IN TESTIMONY WHEREOF,! have hereunto set my hand on this day, A00436/MOC Insurance Services.

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_ San Francisco
On September 07 • 2018 before rne , ------;D
c--
a=r=a
'-c
T�o=u=c=h=·�N�o�t
c"
a�ryc..c...P
c;
u"':blc-'
ic"----=--,----­
(insert name and title of the officer)
personally appeared ...,
R
:"
a=c
':'
h�e�l
:-'
P_,o
'-:
rt�e�r
-::---:--:---:---:-----,------,--cc-------,---,--,--------­ who proved to m e on the basis of satisfac tory evidence to be the personw whose namew ist'afe subscribed to the within instrument and acknowledged to me that fl6i'shel#\ey executed the same in flislherl#leif authorized capacityfiesh and that by-hls!hefltRe.if signaturew on the instrument the personfst, or the entity upon behalf of whi c h the personw acted, executed the instrument.

I certify under PENAL TY OF PER JU R Y under the laws of the State of California that the foregoing paragraph is true and correct.

WITN ESS my hand and official seal.

Signature __ J_.....-_L-+--u�.J.--�------ (Seal)

FAITHFUL PERFORMANCE BOND

EXECUTION COPY
BOND NUMBER: 0748729
PREMIUM: $6,745
WHEREAS, the Town of Los Gatos, State of California (hereinafter called "Town"), and SUMMERHILL N40 LLC (herein designated as "Principal") have entered an agreement by which Principal agrees to install and complete certain designated public improvements, which agreement, dated September [DAY], 2018, and identified as the "Subdivision Improvement Agreement" is hereby referred to and m.,de a part hereof; and
WHEREAS, said Principal is required under the terms of the Subdivision Improvement Agreement to furnish a bond for the faithful performance of said agreement.

NOW, THEREFORE, we, the Principal and INTERNATIONAL FIDELITY INDEMNITY COMPANY, as Surety, are held and firmly bound unto the Town, in the penal sum of seven hundred and ten thousand ($710,000) lawful money of the United States, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, formally by these presents.

The condition of this obligation is such that if the above bounded Principal, its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Subdivision Improvement Agreement and any alteration thereof made as therein provided, on his or their part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless Town, its officers, agents and employees, as therein stipulated, and this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

Principal and Surety further agree that, upon Town's final approval of the work, ten percent (10%) of this bond shall remain in effect to guarantee the repair and/or replacement of defective materials and/or construction, one (1) year after Town's final acceptance of the work, unless Principal posts a separate warranty bond instead.

As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by Town in successfully enforcing such obligation, all to be taxed as costs and included in any judgement rendered.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the agreement or to the work to be performed thereunder or the specifications accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Subdivision Improvement Agreement or to the work or to the specifications.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on September 7th, 2018.

SMHH\54443\1441213.9

PRINCIPAL:

SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
Its Manager
By:
ar orie L. Szto
/
lts:+-
/--H--ll---------
By:

SMHH\54443\1441213.9 2
SURETY:

IN�IDELITY INDEMNITY

COMPANY
By: Rachel A Portger
Its: Attorney-In-Fact
2999 Oak Rd. #820
[Address]
Walnut Creek CA 94597
[City, State, ZIP]

EXECUTION COPY
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 U ,ir'r--,._.

On W /tJ Vlj , before rne, ,41, K,ke/1..,; ·
. a Notary Public, personally
appeared ¼;;-; T?Jrn:: $2.-1--,;, , who proved to me on the basis of satisfactory evidence to be the person(s) whk name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/tRey executed the same in his/her/tooir authorized capacity(i06}-, and that by hislher/tli-eir signature(s) on the instrument the personfs), or the entity upon behalf of which the person(-st 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
M. RINETTI
Ncrarv Public - California z ., � Contra Cost� County
Commission � 2220S24
My Comm, E�pires Nov 5. 2021
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 Californi?, A -L County of l.On-frtL LlJ,£,lt:,<._.., On -=cc..e'----'--'-'-h-F=�-· beforp vie, f>1 • '1!:, ·.,chi· , a Notary Public, personally appeared YI S rt-el h.6 ,Ir who proved to me on the basis of satisfactory evidence to be the person(-s) whose name s-) is/ai:,, subscribed to the within instrument and acknowledged to me that heh,l:i@ltl:l"'-1/ executed the same in his/h�ir authorized capacity(iest, and that by his/�r signaturet,s) on the instrument the person(sj', or the entity upon behalf of which the person(sl-,acted, executed the instrument.

I certify under PENAL TY 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
SMHH\5444311441213.9
�oeeeeeeeeeee� M. RINETTI : . - Notary Public- California , f · Contra Costa Cou�ty �
J <e,-,.,:;-,v I Commission : 2220824 -
't My Comm. Expires Nov 5. 2021

LABOR AND MATERIALS BOND

EXECUTION COPY
BOND NUMBER: 0748729
PREMIUM: Included
WHEREAS, the Town of Los Gatos, State of California (hereinafter called "Town"), and SummerHill N40 LLC (hereinafter designated as "Principal") have entered an agreement whereby Principal agrees to install and complete certain designated public improvements, which agreement, dated September [DAY], 2018, and identified as the "Subdivision Improvement Agreement" is hereby referred to and made a part hereof; and
WHEREAS, under the terms of the Subdivision Improvement Agreement, Principal is required, before entering upon the performance of the work, to file a good and sufficient payment bond with the Town to secure the claims to which reference is made in Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code of the State of California; NOW, THEREFORE, said Principal and the undersigned as Corporate Surety are held firmly bound unto the Town and all contractors, subcontractors, laborers, material suppliers and other persons employed in the performance of the Subdivision Improvement Agreement and referred to in the aforesaid Civil Code in the sum of seven hundred and ten thousand ($710,000) for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in an amount not exceeding the amount herein above set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by the Town in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.

It is hereby expressly stipulated and agreed that this bond shall inure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 15 (commencing with Section 3082) of Part 4 of Division 3 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.

Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Subdivision Improvement Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension, alteration or addition.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on September 7th, 2018.

SMHH\54443\1441213.9

PRINCIPAL:

SUMMERHILL N40 LLC,
a California limited liability company
By: SummerHill Homes LLC,
a California limited liability company
Its Manager
By:

By:

SMHH\54443\1441213.9 2
SURETY:

INTERI\JATIONAL FIDELITY INDEMNITY

COMPANY
By: Rachel A Portger
Its: Attorney-In-Fact
2999 Oak Rd. #820
[Address]
Walnut Creek CA 94597
[City, State, ZIP]

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 AJ -�-' County of l'.'.}n-'fy--,;. CO� )
)
On __;,��C4pe&'.!...1.__ /h. • K:..rrJ.ct/2 • , a Notary Public, personally appearea r c who proved to me on the basis of satisfactory evidence to be the person(s) hose name(.&) is/o!f6 subscribed to the within instrument and acknowledged to me that he-lshe/tb.ey executed the same in Ris/her/toor authorized capacityfiesh-and that by h-ie/her/tl.w signature(st on the instrument the person(st, or the entity upon behalf of which the person{&) acted, executed the instrument.

I certify under PENAL TY 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�- �
e :e e e e e e e *l M. RINETTI
Notary Public - California :

Contra Ccs!.s Courity §;
Commission '1 2220824 -
My Comm, E�pires Nov 5. 2021
A notary public or other officer completing this ce11ificate verifies only the identity of the individual who signed the document to which this certificate is attached, aod not the truthfulness, accuracy, or validity of that document.

County
State of
of
Califort'.3nfr�
On �./. 1(), 2JtJ , beforJ;l me, /71 · /-(,h c. /1, · , a Notary Public, personally appearei:i ZVAn:s: t1e:Ji,/2 bc,c/ , who proved to me on the basis of satisfactory evidence to be the person(-&) whose na(.-) is/are subscribed to the within instrument and acknowledged to me that he/sbelthey executed the same in his/R-9-Fltl:leir authorized capacity(ieaj,. and that by his/�ir signaturefs) on the instrument the personfs), 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 '----Jn · fd6=
SMHH\54443\1441213.9 September 7, 2018