Agenda packet, first session — Modesto City Council, January 11, 2022 (part 5 of 6)

DISCUSSION:

The proposed revisions to the GCAC bylaws are two-fold: administrative and procedural. The administrative amendments replace all references to the Community and Economic Development Department to the Parks, Recreation and Neighborhoods Department and remove all references to Modesto Municipal Golf Course (also known as Muni). The procedural change is requested by the GCAC. Currently, the GCAC is comprised of eleven members: five (5) who represent several golf organizations (SIRS Golf Club, Modesto Golf Club, Dryden Women’s Golf Club, Muni-Niners Golf Club, and Creekside Golf Club), and six (6) appointed at large. All members are required to reside within Modesto city limits. #19..
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City Council, January 11, 2022
Creekside Golf Clubhouse Fire Repair – Belfor Property Restoration

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Many cities have diversified their boards and commissions with the installment of youth members. Generally speaking, GCAC membership over the past ten years has been made up of seniors and retirees. In the interest of seeking other points of views and perspectives, the GCAC asked staff to pursue adding a youth member. Staff worked with the City Attorney’s Office to amend the bylaws to replace one at-large member with one youth member, between the ages of 16 to 25 years, to be appointed at large. On September 15, 2021, the GCAC unanimously voted to amend the bylaws accordingly.

Proposed Membership:
(1) Member representing the SIRS Golf Club.
(1) Member representing the Modesto Golf Club.
(1) Member representing the Creekside Golf Club.
(1) Member representing the Dryden Golf Club.
(1) Member representing the Muni-Niners Golf Club
(5) Members to be appointed at large (reduced from 6)
(1) Youth Member, age 16-25 years, to be appointed at large (added) FISCAL IMPACT:

There is no fiscal impact regarding this action.

COMMITTEE RECOMMENDATION:

This item was not considered by a Council Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the amended Bylaws for the Golf Courses Advisory Committee.

Approved by:

Laurie A. Smith, Director of Parks, Recreation &
Neighborhoods
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Draft Amended Bylaws
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1 2022

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE AMENDED THE BYLAWS OF THE GOLF

COURSES ADVISORY COMMITTEE
WHEREAS, the City Council has established the Golf Courses Advisory Committee (“GCAC”) to serve as a liaison between the general golfing community, golf organizations, and the City to promote the game of golf in the Modesto area; and WHEREAS, on June 2, 2015, by Resolution No. 2015-177, Council amended the GCAC bylaws; and
WHEREAS, the GCAC Bylaws are in need of minor administrative and procedural updates; and
WHEREAS, in an effort to seek other points of views and perspectives, the Committee desires replacing one at-large member with one youth member, between the age of 16 to 25 years, to be appointed at large; and
WHEREAS, the amended GCAC Bylaws are set forth in the attached “Exhibit A”; and
WHEREAS, on September 15, 2021, the Committee approved the proposed amended GCAC Bylaws and recommended they be forwarded to the City Council for final approval.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto, that it hereby approves the amended Bylaws for the Golf Courses Advisory Committee. #19..
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2 2022
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 11th day of January, 2022, by Councilmember ? , who moved its adoption, which motion being duly seconded by Councilmember ? , was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: ____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

By: ______________________________________
JOSE M. SANCHEZ, City Attorney
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Amended by City Council Resolution No. 2015-177
June 2, 2015

CITY OF MODESTO GOLF COURSES COMMITTEE

CONSTITUTION AND BYLAWS
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE I

DEFINITIONS
Section 1 There is created a Committee to be known and designated as the City of Modesto Golf Courses Committee.

Section 2 As used in these Bylaws, unless a different meaning clearly appears from the context:

A. "Member" shall mean a member of the Modesto Golf Courses Committee.

B. "Modesto Golf Courses Committee" and "Committee" shall mean the City of Modesto Golf Courses Committee.

C. "Modesto golf courses" shall mean Modesto Municipal Golf Course, Dryden Park Golf Course and Creekside Golf Course.

D. "Regular meeting" shall mean the bi-monthly Committee meetings.

Section 3 The fiscal year shall coincide with the City's fiscal year, July 1 to June 30. #19..
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE II

OBJECTIVES
Section 1 The Committee shall be responsible for promotion of the game of golf in the Modesto area.

Section 2 The Committee shall operate as an advisory body for and among organized golf clubs and the general golfing public of the City of Modesto golf courses.

Section 3 The Committee shall act as liaison between the general golfing public, golf clubs, and the City of Modesto Community and Economic DevelopmentParks, Recreation and Neighborhoods Department, and
A. Shall receive and consider all proposals for innovations or material changes in established procedures or the modification of the golf courses.

B. Endorse participation in golf through the Player Development Programs and Tournament activities with a special emphasis on Junior, Senior and Disabled golf.

Section 4 The Committee shall encourage, promote and maintain a high standard of sportsmanship among golfers.

Section 5 The Committee shall consider the annual budget for the Golf Enterprise Fund during the process of its preparation and make recommendations to the Director of Community and Economic DevelopmentParks, Recreation and Neighborhoods concerning the annual budget of the Golf Enterprise Fund, including the fees and rates to be charged for the use of golf course facilities.

Section 6 The Committee shall perform such other duties relating to the Modesto Golf Courses as may be assigned by the Director of Community and Economic DevelopmentParks, Recreation and Neighborhoods.

Section 7 Nothing in this article shall be deemed to invest the Committee with any supervisory powers over the actions and duties of City employees, or of any Lessee of the City, engaged in work relating to the construction, improvement, repair, maintenance or operations of the Modesto golf courses.
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE III

MEMBERSHIP
Section 1 The City of Modesto Golf Courses Committee shall consist of eleven (11) Members.

Section 2 The Members of the Committee shall reside within the city limits of the City of Modesto at the time of appointment and must maintain residence within the City at all times during their service on the Committee.

Section 3 None of the members shall hold any paid office or employment or shall be currently a contractor with the City of Modesto.

Section 4 Five (5) members of the Committee shall represent organized golf clubs at the municipal golf courses, one from each of the following clubs: Muni Niners; SIRS; Modesto Golf Club; Dryden Park Women's Club; and Creekside Golf Club. FiveSix (56) members shall be appointed at large. One (1) youth member, between 16 and 25 years of age, shall be appointed at large.

Section 5 The membership of each organized golf club shall recommend one member to represent their respective clubs, with the remaining six (6) at-large members to be approved by a majority vote of the City Council.

Section 6 The Director of Community and Economic DevelopmentParks, Recreation and Neighborhoods, or his/her designee, will serve as staff to the Committee and represent the City of Modesto, within the limits dictated by fiscal constraints. #19..
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE IV

TERMS OF OFFICE
Section 1 The term of office shall be effective as of the first of January.

Section 2 The terms of office shall be as follows:

A. Ffour (4) years for each Member of the Committee. Members may be re-appointed after their initial term, but in no event shall any person who has served two (2) consecutive terms on the Committee be eligible for re-appointment to the Committee.

Committee members are eligible for re-appointment to the Committee after a two- (2) year absence from the Committee has transpired.

B. One (1) year for each youth member appointed at large. Youth members may be reappointed after their initial term, but in no event shall any youth member who has served two (2) consecutive terms on the Committee be eligible for reappointment to the Committee.

Section 3 Serving any portion of an unexpired term shall not be counted as service of one term.

Members not eligible for re-appointment may continue to serve until their successors are appointed and meet all of the qualifications outlined in Article III Membership of these bylaws. No member shall serve more than a maximum of eight (8) consecutive years.

Section 4 The terms of office for the inaugural Committee will be two (2) years for five (5) members of the Committee, and four (4) years for the remaining six (6) members. Each member's term of office shall terminate on December 31 of their respective year.

Section 5 The Members of the Committee shall receive no compensation for the performance of their official duties.

Section 6 Appointments to fill vacancies on the Committee shall be handled in the same manner as original appointments. When a vacancy occurs during a term, the appointment to fill such vacancy shall be for the unexpired portion of the term.

Section 7 Members of the Committee may be removed by a majority vote of the City Council after a recommendation by the Director of Community and Economic DevelopmentParks, Recreation and Neighborhoods and a majority vote of the Committee. Examples of reasons for removal of a Committee Member from the Committee are:

A. Incompetence, malfeasance, misfeasance, neglect of duty, or conviction of a crime involving moral turpitude.

B. Refusal to resign from the Committee when no longer a resident of the City of Modesto.

C. Automatic removal from the Committee will be required when a member is absent from three (3) meetings within a twelve- (12) month period without official permission expressed in the official minutes.
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE V

ATTENDANCE AT MEETINGS
Section 1 It shall be the responsibility of each Member to know the dates and times of all regular meetings of the Committee. If a Member knows he or she will not be able to attend a regularly scheduled meeting, it shall be his or her responsibility to notify the Committee Chair or Staff Liaison at least forty-eight hours (48 hours) before the meeting, in order for the absence to be recorded as an excused absence.

Section 2 The Recording Secretary will document when any Committee Member is late arriving for a meeting or when a Committee Member leaves a meeting before adjournment. The minutes of each meeting will list those Members in attendance, those who are excused and those who are unexcused.
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE VI

OFFICERS AND THEIR DUTIES
Section 1 Officers shall consist of Chair and Vice-chair, elected by a majority vote of the Members of the Committee. Officers shall serve a one- (1) year term commencing on January 1. The election shall be held at the January meeting, or the first meeting of the year.

Section 2 All officers shall exercise all privileges of membership, including the making of motions, seconding and debate.

Section 3 The Chair may serve consecutive terms. The Vice-Cchair may serve consecutive terms.

Section 4 The Chair shall preside at all meetings and appoint all sub-committees of the Committee and shall ensure that the bylaws, rules and regulations as adopted by the Committee are properly enforced. The Chair shall be an ex-officio member of all sub-committees.

Section 5 The Vice-Cchair shall assist the Chair in his/her duties and in the absence of the Chair shall perform all duties usually performed by the Chair.

Section 6 The Community and Economic DevelopmentParks, Recreation and Neighborhoods Department shall provide a staff member to serve as RecrodingRecording Ssecretary.

He/she shall keep a record of the minutes of all meetings, reports of sub-committees and such other duties as are usually performed by a secretary. He/she shall supply the Members of the Committee and any sub-committees and the Director Community and Economic Developmentof Parks, Recreation and Neighborhoods and his/her designee(s) with copies of all records taken within three (3) weeks after a meeting takes place. He/she shall also assist in publicity releases concerning Committee activities. #19..
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE VII

MEETINGS
Section 1 Regular meetings of the Committee shall be held at such times and places as from time to time may be designated by a majority vote of the Committee.

Section 2 In the event that a regular meeting falls on a holiday, the meeting shall be scheduled by a vote of the Committee. Special meetings shall be called by the Chair as necessary.

Section 3 Notices of all meetings, including an agenda, shall be given to all members of the Committee, to the City Clerk, to the City Manager, to the Director of Community and Economic Development Parks, Recreation and Neighborhoods and to all others as provided by law. All such notices shall be furnished to the Committee in writing at least seventy-two hours (72 hours) prior to the time of such meeting.

Section 4 All meeting agendas will be posted at Tenth Street Place and will be available at the following public facilities: Tenth Street Place, the Main Branch of the Stanislaus County Free Library and at City of Modesto golf courses.

Section 5 All meetings shall comply with the requirements of the Ralph M. Brown Act.

Section 6 A quorum is necessary for the Committee to transact any business. A quorum shall be defined as a simple majority of active Committee members.

Section 7 All meetings of the Committee, or its standing or special sub-committees, shall be open to the public and shall be held at a public facility which is accessible in accordance with the regulations of the Americans with Disabilities Act.
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE VIII

ORDER OF PROCEEDINGS
Section 1 Sturgis' Standard Code of Parliamentary Procedure shall be the guide for parliamentary procedures in the conduct of Committee meetings.

Section 2 The order of proceedings of all meetings shall be as follows, subject to majority vote of the Members present:

A. Call to Order
B. Approval of Minutes
C. Written Communications
D. Old Business
E. New Business
F. Oral Communications
G. Matters Too Late for the Agenda
H. Adjournment
Section 3 Members of the public shall not speak unless recognized by the Chair and shall state their names and addresses before making any statement, which shall become a part of the public record. The Chair may remove any person who refuses to follow these rules or the decision of the Chair.
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Amended by City Council Resolution No. 2015-177
June 2, 2015

ARTICLE IX

AMENDMENTS
Section 1 The Constitution and Bylaws may be recommended for amendment at a regularly scheduled meeting of the Committee. A written notice containing the proposed changes shall be provided to each member at least sixty (60) days prior to the meeting. When all other conditions are met, an amendment requires a simple majority vote of the active members of the Committee.

Section 2 The Constitution and Bylaws and any future amendments shall be subject to the final approval of the City Council and shall not and are not intended to go beyond any of the powers and duties given to the Committee by the City Council. #19..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

January 11, 2022
Date: December 17, 2021
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Laurie A. Smith, Director of Parks, Recreation & Neighborhoods SUBJECT: Creekside Golf Clubhouse Fire Repair – Belfor Property Restoration CONTACT: Laurie A. Smith, Director of Parks, Recreation & Neighborhoods, [email protected], 209-577-5347
DESCRIPTION:

Consider authorizing payment of an insurance deductible in the amount of $100,000 to Belfor Property Restoration, Modesto, CA for the Creekside Golf Clubhouse Fire Repair. (Funding Source: Golf Fund)
STRATEGIC PLAN ELEMENT:

This item is consistent with the following 2020-2025 Strategic Plan Area of Focus: Quality of Life and Governance and Service Delivery.

BACKGROUND:

On October 31, 2021, at approximately 10:00 p.m., the Modesto Fire Department responded to a fire at Creekside Golf Park Clubhouse, located at 701 Lincoln Avenue. The front entrance of the clubhouse was damaged as well as areas inside the restaurant and entry hallway inside the clubhouse
The City contacted Alliant, the City’s property insurance company, to establish a claim and to identify the next steps. The insurance company dispatched Belfor Property Restoration, Modesto, CA (Belfor) to secure the property against further damage, perform environmental testing, and close off the damaged area to protect the public from unnecessary hazards.

DISCUSSION:

The City of Modesto’s property insurance policy establishes a maximum deductible (out-ofpocket cost to the City) of $100,000. In order to ensure that the repair work is covered by the City’s insurance policy, the City must use a repair company approved by the insurance provider.

The City’s insurance provider has identified Belfor as an approved company to perform the repairs. The City has successfully used Belfor on emergency repairs previously. #20..
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City Council, January 11, 2022
Creekside Golf Clubhouse Fire Repair – Belfor Property Restoration

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On November 4, 2021, Belfor provided an initial verbal estimate of $100,000-$200,000 to the insurance adjuster for repair of the burned front entrance of the Clubhouse. On December 15, 2021 Belfor finalized the t estimate at $181,371.11. The insurance adjuster confirmed that once the City has paid its deductible to Belfor Property Restoration, the insurance company will cover the
remainder of the project’s cost and make payments directly to Belfor.

The City Attorney’s Office reviewed the agreement with Belfor and recommended minor changes to the agreement prior to Council. None of these changes affect the deductible amount of $100,000 that the City is responsible for paying.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid. However, exceptions to the formal bidding process are granted in MMC 8-3.204(d) “Where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set for in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality.” This project meets these requirements, as the contractor has been selected directly by the insurance company and it makes the best business sense to utilize their services, given the active insurance claim.

Failure to use the contractor selected by the insurance company could result in the City having to pay for the entire amount of the repair.

FISCAL IMPACT:

The City of Modesto’s cost will be the maximum deductible ($100,000) of the City’s insurance claim. The deductible will be funded by the Golf Operating Budget. All expenses beyond the deductible will be paid by the City’s insurance company.

COMMITTEE RECOMMENDATION:

This item was approved by the Finance Committee on November 22, 2021 which recommended it be forwarded to Council.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution authorizing payment of an insurance deductible in the amount of $100,000 to Belfor Property Restoration, Modesto, CA for the Creekside Golf Clubhouse Fire Repair and authorizing the City Manager, or his designee, to issue the payment and execute the Agreement.

Approved by:

Laurie A. Smith, Director of Parks, Recreation &
Neighborhoods
Joseph P. Lopez, City Manager
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City Council, January 11, 2022
Creekside Golf Clubhouse Fire Repair – Belfor Property Restoration

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Attachments:

1. Resolution

2. Belfor Property Restoration – Commercial Service Contract

3. Belfor Property Restoration - Estimate
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01112022/PRN/LSmith/Item ? 1 2022-?

MODESTO CITY COUNCIL
RESOLUTION NO. 2021-?

RESOLUTION AUTHORIZING PAYMENT OF AN INSURANCE DEDUCTIBLE IN THE AMOUNT OF $100,000 TO BELFOR PROPERTY RESTORATION,

MODESTO, CA FOR THE CREEKSIDE GOLF CLUBHOUSE FIRE REPAIR

AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO ISSUE

THE PAYMENT AND EXECUTE THE AGREEMENT
WHEREAS, on October 31, 2021, the Creekside Golf Clubhouse front entrance was damaged by a fire, and
WHEREAS, the Modesto Fire Department responded to the Clubhouse, located at 701 Lincoln Avenue, and was able to extinguish the fire before there was extensive damage, and
WHEREAS, the City’s property insurance company, Alliant, dispatched Belfor Property Restoration of Modesto, CA (Belfor) to secure the property against additional damages, perform environmental testing, and close off the damaged area to protect the public from unnecessary hazards, and
WHEREAS, Belfor evaluated the site with City staff and Alliant and concluded that although damaged, the facility could be restored, and WHEREAS, in order to ensure that the repair work is covered by the City’s insurance policy, the City must use a repair company approved by the insurance provider.

The City’s insurance provider has identified Belfor as an approved company to perform the repairs, and
WHEREAS, the City of Modesto’s property insurance policy establishes a maximum deductible (out-of-pocket cost to the City) of $100,000, and #20..
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01112022/PRN/LSmith/Item ? 2 2022-?
WHEREAS, on November 4, 2021, Belfor provided a verbal estimate to Alliant for repair of the burned structure with an initial budget estimate between $100,000 and $200,000, and
WHEREAS, on December 15, 2021, Belfor submitted a final estimate to Alliant in the amount of $181,371.11 and
WHEREAS, Alliant confirmed that once the City has paid its deductible to Belfor Property Restoration, the insurance policy will cover the remainder of the project’s cost, and
WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to be formally bid, but exceptions to the formal bidding process are granted in MMC 8-

3.204(d) “Where the Purchasing Manager, in his or her discretion, determines that a process other than the formal bid procedure set for in Section 8-3.203 will result in procurement for the City at the lowest possible cost commensurate with the desired quality,” and
WHEREAS, this project meets these requirements, as the contractor has been selected directly by the City’s insurance provider and it makes the best business sense to utilize their services, given the active insurance claim, and failure to use the contractor selected by the insurance company could result in the City having to pay for the entire amount of the repair.

NOW THEREFORE BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves a payment in the amount of $100,000 to Belfor Property Restoration, Modesto, CA for the Creekside Golf Clubhouse Fire Repair. #20..
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01112022/PRN/LSmith/Item ? 3 2022-?
BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to issue the payment and execute the agreement, in a form approved by the City Attorney.
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01112022/PRN/LSmith/Item ? 4 2022-?
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 117th day of January, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ___________________________________
JOSE M. SANCHEZ, City Attorney
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 1 of 7 Rev. 041519 Bakersfield
3553 Landco Dr.

Suite A
Bakersfield, CA 93308
877.636.0760
F: 661.636.0761
Fresno
3461 W Holland Ave.

Fresno, CA 93722
877.835.0811
F: 559.244.0812
Lake Tahoe
50 Artisan Means Way
Suite B
Reno, NV 89511
877.587.2416
F: 775.588.4997
Los Angeles
3470 E Pico Blvd.

Los Angeles, CA 90023
877.309.0367
F: 323.859-4790
Modesto
4713 Greenleaf Ct.

Unit C
Modesto, CA 95356
888.399.1865
F: 209.236.1133
Orange County
2920 E White Star Ave.

Anaheim, CA 92806
800.421.4112
F: 714.632.7688
Palm Springs
870 E. Research Dr.

Suite 2
Palm Springs, CA 92262
760.832.6964
F: 760.832.7793
Riverside
3443 Durahart St.

Riverside, CA 92507
877.543.8236
F: 951.682.7100
Sacramento
3132 Dwight Rd.

Suite 300
Elk Grove, CA 95758
855.399.1865
F: 916.399.9388
San Diego
9060 Activity Rd.

Suite A
San Diego, CA 92126
866.421.4144
F: 858.847.9878
San Fernando Valley
27 W Easy St.

Suite 403
Simi Valley, CA 93065
866.764.4112
F: 805.584.9987
San Francisco
2365 Industrial
Pkwy. W
Hayward, CA 94545
888.543.3473
F: 510.887.9110
San Jose
2297 Ringwood Ave.

San Jose, CA 95131
888.929.3472
F: 408.929.3477
Santa Rosa
5793 Skylane Blvd.

Suite D
Windsor, CA 95492
800.445-8308
F: 707.684.1850
This Commercial Service Contract (the “Contract”) is entered into on this ____ day of , 20___, by and between BELFOR USA Group, Inc., dba BELFOR PROPERTY RESTORATION (“BELFOR”) and ("Customer"). This Contract is for: Emergency Service;
Remediation; Reconstruction; and Other: _____________________________________ service to be performed at the following address:
(the “Property”).

1. Contract Documents. The Contract Documents include this Contract and the following documents, which shall be deemed attached and incorporated into the Contract:

Yes No
Scope of Work (General Narrative)
Estimate with a Stipulated Sum
Rate and Materials Schedule
Assignment of Benefits and Direction of Pay
Advanced Work Authorization

2. Scope of Work. BELFOR hereby agrees to act as contractor and furnish all labor, materials, equipment, and subcontracted items reasonably necessary to complete the Work described in the attached Scope of Work (the “Work”). BELFOR and Customer may make changes to the Work described in the Scope of Work by executing a Change Order signed by both parties. Environmental sampling and investigation are beyond the scope of BELFOR’s duties. If the Work involves mold or microbial contamination, Customer is advised to hire a qualified independent environmental professional with expertise and training in indoor air quality (“Consultant”) to inspect the Property, advise Customer about potential health hazards and prepare a remediation protocol. BELFOR is not responsible for errors or oversights by Consultants, engineers or other professionals not hired by BELFOR. BELFOR may, at its option, remove contamination in areas beyond those identified by Consultant. In the event Customer elects not to retain a Consultant, Customer shall defend and hold BELFOR harmless from any loss or injury from mold or any other environmental condition that would likely have been detected or discovered in a thorough inspection by a diligent indoor air quality expert. Customer understands and acknowledges that microbial matter such as mold exists naturally in the environment, even in “clean” buildings, and that the goal of remediation is not to remove all mold spores or bacteria but to bring the concentrations to reasonably-acceptable levels. BELFOR will be deemed to have accomplished the objectives of remediation when it has met the criteria set forth in Bioaerosols, Assessment and Control (ACGIH 1999).

3. Exclusions. The Contract Price does not include the following services, which BELFOR may perform in its discretion, but is not required to perform, unless specifically described in the Contract Documents:

A. Code upgrades or the repair of construction defects, code violations or illegal conditions.

COMMERCIAL SERVICE CONTRACT
CA License #810553
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 2 of 7 Rev. 041519 B. Excavation of filled ground or ground of inadequate bearing or rock or any other material not removable by ordinary hand tools.

C. The remedy or repair of any unusual concrete footings, foundations, piers or damage caused by termites, dry rot or wet rot.

D. Environmental inspections, industrial hygiene surveys, sampling, testing, analysis or consultations, including any such service with respect to mold, fungi, bacteria, lead or asbestos.

E. Engineering, architecture, plans, professional design services and the work of Consultants.

F. Replacement, rerouting, or relocation of plumbing, gas, water or sewer lines, vents, pipes, ducts, conduits or wiring.

G. Replacement of any existing electrical service panel other than to add circuit breakers or fuse blocks to distribute electric current to new outlets.

H. Work on city sewer systems.

I. Mold remediation, sewage cleanup, asbestos abatement, lead abatement or environmental decontamination.

J. Any work not specifically identified in the Scope of Work, including without limitation, work required by any public body, utility, inspector or lender.

K. Other:

4. Best Efforts. BELFOR and Customer acknowledge that the Property which is the subject of the Work has been involved in a fire, flood, or other catastrophe. BELFOR will perform the Work on a "best efforts" basis, but cannot, and therefore does not, guarantee that the Property will be operational or free from defects following completion of the Work. The Work will be performed in an expeditious and workmanlike manner.

BELFOR also provides a Warranty, set forth below.

5. Exclusive Warranty. BELFOR warrants that the Work will: (1) Reasonably conform to the Contract Documents and the prevailing standard of care; (2) Will be performed with the skill and diligence normally observed by professionals performing the same service; and (3) Will be free from defects in workmanship.

BELFOR’s warranty obligations are limited as set forth in this paragraph. All claims regarding the materials or equipment must be made directly with the manufacturer of the material or equipment. All remediation work performed by BELFOR decontamination technicians shall be free from the return of corrosion and contamination resulting from defects in BELFOR’s workmanship. BELFOR does not perform environmental surveys and does not warrant the habitability or tenantability of the Property. Any special warranty must be attached to this Contract.

A. Term and Scope. The Warranty takes effect upon BELFOR’s receipt of payment in full for the Work.

The warranty period commences on the date of Substantial Completion of the Work, regardless of when final payment is received. All Warranty claims must be submitted in writing within one (1) year from the date of Substantial Completion of the Work. To the maximum extent permitted by law, this warranty is exclusive and is in lieu of all other warranties, express or implied, oral or written, including statutory warranties and warranties against hidden or latent defects. This warranty is fully transferable to future owners of the property.

B. Limitations and Exclusions. The warranty is subject to and not in place of the limitations of liability, indemnity and right to cure provisions of this Contract. This warranty does not apply to damage, injury or loss caused by or related to any of the following:
 The failure by the Customer, owner or occupant to properly maintain and ventilate the Property, and detect and repair leaks and causes of water intrusion.
 New or subsequent moisture, condensation, water damage or construction defects unrelated to the original loss which was the subject of BELFOR's written contract.  Damages, losses, events and conditions beyond BELFOR's reasonable control, including pre-existing conditions.
 Defects which are the result of characteristics common to building materials, such as warping, deflection, fading and staining.
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 3 of 7 Rev. 041519  Business operations, business interruption, lost profits and consequential and incidental damages.  Damage due to normal wear and tear, abuse or neglect.  Work done by any party other than BELFOR or its subcontractors.  Bodily injury or personal property damage.

C. Mandatory Claims Procedure. Warranty claims must be made in writing to BELFOR within fortyeight (48) hours of discovery. The claim must specify the nature and location of the defect, the date of discovery, and include any reports, sampling data, photographs and all supporting documentation related to each area of defect. Customer shall provide BELFOR a reasonable opportunity to cure any such defect before altering, repairing or addressing the condition. Unless BELFOR has refused to honor this warranty, or there is a true emergency, Customer shall, for a reasonable time, refrain from having repair work performed by any third party and in the event such third party work is undertaken, BELFOR shall be relieved of all financial responsibility to pay for such corrective work. Only emergency claims will be taken by telephone, but must be subsequently confirmed in writing within forty-eight (48) hours.

BELFOR shall have the right to cure any defect within fifteen (15) days of its receipt of written notice of the defect. Customer’s failure to provide notice, access or a reasonable opportunity to cure shall constitute a waiver of the Customer’s rights under this warranty and a waiver of the right, if any, to recover attorneys’ fees in any legal action in which the Customer seeks compensation under this warranty.

6. Right to Cure: Customer shall provide BELFOR a full and fair opportunity to cure any default in performance before altering, repairing or addressing the condition, or commencing legal action at any time during or after the warranty period. BELFOR shall make reasonable efforts to cure such default within fifteen (15) days of receipt of written notice; however, if the default cannot be reasonably cured within such time then BELFOR will commence to cure the default within seven (7) days and will diligently and continuously prosecute such cure to completion within a reasonable time, which shall in no event be later than thirty (30) days after receipt of written notice of the default. Customer waives the right, if any, to the recovery of attorneys’ fees in any legal action alleging defective workmanship if Customer has not complied with this paragraph or such action is commenced before BELFOR has had a full and fair opportunity to cure the defect as set forth in this paragraph. Nothing in this paragraph shall limit BELFOR’S right to recover attorneys’ fees in any matter.

7. Commencement and Completion. The Work shall commence on or about ______________________, unless delayed due to circumstances beyond BELFOR’s reasonable control. Commencement of the Work shall be deemed to have occurred upon issuance of a Building Permit or when BELFOR first delivers equipment, material or laborers to the Property to perform service. The Work shall continue with reasonable diligence until complete, unless otherwise terminated by the Customer or BELFOR. Based on presentlyavailable information, the approximate completion date is estimated at ___________________________, but BELFOR is entitled to a Change Order for delays beyond BELFOR’s reasonable control, and for delays resulting from concealed, unknown or unusual conditions or any force majeure. Substantial completion will have been achieved at the point when the entire Work, including all of its parts, is sufficiently complete in accordance with this Contract so the Work can be reasonably utilized for its intended purpose, except for minor items that would not materially limit or impair the ability to occupy and utilize the entire Work (“Substantial Completion”).

8. Contract Price. Customer will pay BELFOR the Contract Price, public agency fees required for the Work, and any applicable taxes. The Contract Price may be changed by way of Change Orders signed by both parties. The Contract Price is based on an initial visual observation and is subject to change when and if additional damage is discovered. Customer will be responsible for water, electricity and utility charges. The Contract Price is based on a time and material basis according to the Prevailing Wage Rate and Materials Schedule attached at Exhibit B.

9. Responsibility for Payment. Customer understands acknowledges that BELFOR’s Contract is with Customer and not with Customer’s insurance carrier. Customer agrees to make payment to BELFOR for #20..
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 4 of 7 Rev. 041519 services rendered hereunder in the amounts and on the terms specified above, regardless of whether Customer is entitled to reimbursement from an insurance carrier or any other source.

10. Invoicing and Payment. Customer will pay BELFOR’s fees and charges for the Work, together with all applicable federal, state or local taxes, in accordance with the following schedule:

Date or Description of Phase Amount Payable (in Dollars) A.

BELFOR’s invoices will be submitted with reasonably sufficient supporting documentation. Customer shall pay BELFOR within 30 days of the invoice date, except for Change Order work. Customer will pay BELFOR 50% of the cost of any Change Order prior to the commencement of any change order work. The 50% balance is due upon completion. Customer agrees to pay all costs of collection of past-due payments, including collection agency fees, collection agency commissions, court costs, expert fees, interest at the maximum legal rate, Administrative Service Charges, and reasonable attorneys’ fees, regardless of whether legal action was formally commenced. After full and final payment is received and funds have cleared BELFOR’s financial institution, within a reasonable time of Customer’s written request BELFOR will provide lien releases in the amounts of payments made.

11. Administrative Service Charges. Separate from and in addition to the interest set forth above, Customer shall pay BELFOR an Administrative Service Charge of 1.5% per month on all past-due sums to compensate BELFOR for the time, labor and burden of tracking, accounting for and collecting past-due receivables.

12. Agreed Procedure for Billing Disputes. Customer will review BELFOR’s invoices within five (5) days of the date of the invoice and notify BELFOR of any objection in writing within ten (10) days of the date of the invoice. The written objection will identify each specific billing entry in dispute and set forth a detailed description of the factual basis for the dispute. Customer will promptly pay all undisputed amounts in full. If no objection is made by Customer within this period of time, it is agreed that the invoice shall be deemed accurate and reasonable and Customer shall be obligated to pay the entire invoice amount. ANY

DISPUTE AS TO AN ITEM ON THE INVOICE THAT IS NOT DELIVERED TO BELFOR WITHIN 10 DAYS FROM DATE OF THE INVOICE SHALL BE EXPRESSLY WAIVED. The existence of the dispute will not alter the obligation to pay interest on the disputed amount as set forth in this agreement, unless Customer receives a court judgment in Customer’s favor with respect to such disputed amounts.

13. Credit Check Authorization. Customer hereby authorizes BELFOR to make reasonable credit inquiries and to receive any information regarding Customer’s financial and credit status from creditors or financial institutions which BELFOR deems relevant. Customer hereby authorizes all such creditors and financial institutions to divulge such information to BELFOR. Customer acknowledges and agrees that credit privileges, if granted, may be withdrawn at any time.

14. Mold Notice and Disclaimer. Many believe that the presence of mold creates health risks, but the mere presence of mold spores indoors is normal and expected and does not necessarily indicate that the environment is contaminated. Occupants with health complaints are encouraged to seek an examination from an appropriately-qualified medical professional. BELFOR is not qualified to diagnose medical conditions, and Customer agrees not to interpret any statement by BELFOR as medical advice. It is important that proper diagnosis and treatment of illness not be confused by misdirected attention to indoor air quality issues. Customer understands the importance of prompt drying of water-damaged building materials, and agrees to promptly repair leaks, properly ventilate the structure and take reasonable measures to control humidity and prevent conditions that lead to mold growth. There may be environmental factors and/or other conditions that cause or contribute to mold growth at the Property, the repairs and/or remediation of which #20..
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 5 of 7 Rev. 041519 are not included in the Work. BELFOR cannot control and therefore is not responsible for these factors or conditions. Unless specifically stated in the Contract Documents, BELFOR is not responsible for finding or repairing leaks on the Property or for detecting mold or determining the cause of mold growth. If this is a mold remediation project, Customer understands and acknowledges that the goal is not to create a “moldfree” environment but rather to bring the concentrations of mold to normal levels. Customer is encouraged to seek further information about mold from the United States Environmental Protection Agency at:
www.epa.gov/mold.

15. Limit of Liability for Mold Remediation. BELFOR will have no liability for mold discovered after the Customer’s Consultant has determined that the goals of the mold remediation work have been achieved or if the Consultant has otherwise approved BELFOR’s remedial work, orally or in writing. Customer agrees to pursue any such claim solely against the Consultant or other responsible parties.

16. Safety and Permits. Both BELFOR and Customer will comply with all applicable governmental regulations, statutes, laws, and local ordinances. At Customer’s expense, BELFOR shall obtain all permits required for the Work. Customer represents that the Work is subject to prevailing wage determinations; BELFOR shall comply with applicable prevailing wage laws with respect to the Work.

17. Performance and Payment Bond: Per Customer's request, BELFOR shall obtain performance and payment bonds covering the performance of the Work and payment obligation. The cost and premiums for said bonds will be reimbursed to BELFOR by Customer.

18. Hazardous Substances. If the Work includes the use, storage, handling, disposal, or otherwise involves any “hazardous substance,” as that term is defined under state or federal laws, including without limitation the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, as amended by the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. §§ 6901 et seq. (“Hazardous Substances”), the Customer agrees to immediately disclose any and all known information to BELFOR regarding such Hazardous Substances, including the Customer’s EPA Hazardous Waste Identification number (if applicable). Customer acknowledges that they have exclusive title to all Hazardous Substances and any real or personal property contaminated or affected by such substances. Customer agrees that BELFOR shall not be deemed the generator of any Hazardous Substances on the Property. Customer agrees that BELFOR will only act as Customer’s agent and under the direction of Customer in the provision of such services involving or related to Hazardous Substances. Both parties agree that BELFOR, by providing such services, does not own and is not taking title to any Hazardous Substance from the Customer or the Property.

Disposal of any Hazardous Materials (including specimens or samples) shall be made in the name of the Customer and under any applicable generator number or other identification assigned by the Customer.

Unless specifically listed in the Contract Documents, Customer shall be responsible to execute waste manifests, transport Hazardous Substances, dispose of Hazardous Substances, execute waste profile documents or obtain Hazardous Substance Permits in connection with the Work to be performed by BELFOR.

19. Force Majeure. BELFOR is not liable or responsible for delay, damage, cost, interruption or loss of any kind resulting from or related to acts of God, weather conditions, fire, flood, casualty, labor strikes, lockouts, disturbances, riots, terrorism, civil commotion, government regulation or restriction, acts of Customer, the issuance of permits, shortages or unavailability of materials and/or supplies or other causes beyond BELFOR’S reasonable control.

20. Indemnity.

A. Mutual Indemnity: Subject to the provisions and limitations set forth in the Scope of Work and the Exclusions, each party agrees to indemnify and hold harmless the other party hereto and the other party's shareholders, directors, officers, employees, insurers and agents, from and against any and all claims, demands, causes of action and liabilities of any nature, whether for damages to property and/or the preexisting conditions to which this Contract pertains, to the extent that any such claim, demand, cause of action and/or liability is attributable to the breach of contract, negligence or other fault of the indemnifying party.
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 6 of 7 Rev. 041519 B. Indemnity to BELFOR regarding Environmental Assessors, Engineers and Architects (“Professionals”). To the maximum extent allowed by law, Customer hereby agrees to indemnify and hold harmless BELFOR, its shareholders, directors, officers, employees, insurers, agents and their owners, related and affiliated entities, and BELFOR’s subcontractors of any tier from and against any and all losses, liabilities and damages arising directly or indirectly from: (i) any and all misdiagnosis, errors or omissions by Consultants or the Professionals, (ii) following or complying or acting in accordance with the Consultants’ or Professionals’ directions, protocols or instructions and (iii) the use or reliance on any Consultant’s or Professional’s reports, tests or findings.

21. Insurance. BELFOR will maintain occurrence-based commercial general liability insurance, including Automobile, Worker’s Compensation, General Liability (for both bodily injury and property damage) and Pollution Coverage. Upon written request by Customer, BELFOR will produce a Certificate of Insurance naming Customer as an additional insured.

22. Jurisdiction, Venue and Governing Law. The parties hereby irrevocably consent to the exclusive jurisdiction of the court of the county in which the Work is performed. This Contract shall be construed in accordance with the laws of the State of California, without giving effect to conflict of laws.

23. No Consequential Damages. No party shall in any action or proceeding or otherwise assert any claim for consequential or indirect damages, or business interruption against any other party to this Contract on account of any loss, cost, damage or expense which such party may suffer or incur because of any act or omission of any other party to this Contract or its agents, subcontractors or employees in the performance of a party's obligations under this contract, or any other cause of action (including negligence) arising out of or related to transactions in connection with this Contract, or otherwise, and each party expressly waives and relinquishes all such claims.

24. Integration. This integrated Contract sets forth the complete and final agreement of the parties, and supersedes and replaces all prior negotiations, promises, understandings, warranties and representations, written or oral.

25. Change Orders. Changes to this Contract will be negotiated in good faith between the parties and must be set forth in a written Change Order signed by both parties. However, a contractor’s failure to comply with this requirement does not prevent the contractor from the recovery of compensation for the reasonable value of change order work in the absence of a written change order. BELFOR will provide industry standard documentation to the insurance company, Consultant, Customer or their agents in order to properly document the changed work. Customer agrees not to unreasonably withhold approval of Change Orders.

26. Termination. If Customer fails to make timely payments for services rendered under the terms of this Contract, BELFOR may, in its discretion, suspend the Work or terminate the balance of the Contract upon reasonable written notice to the Customer.

27. Notices. All notices shall be sent via First Class U.S. Mail and via facsimile addressed to BELFOR USA Group, Inc. at the address and fax number indicated on the first page of this Contract. Notices to Customer shall be sent to:

And by Facsimile to:

28. License Board Information. Contractors are required by law to be licensed and regulated by the Contractors' State License Board which has jurisdiction to investigate complaints against contractors if a complaint regarding a patent act or omission is filed within four years of the date of the alleged violation. A #20..
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{41043-2 } Customer Initials: ____; BELFOR Initials: ____ Page 7 of 7 Rev. 041519 complaint regarding a latent act or omission pertaining to structural defects must be filed within 10 years of the date of the alleged violation. Any questions concerning a contractor may be referred to the Registrar, Contractors' State License Board, P.O. Box 26000, Sacramento, CA 95826.

I have reviewed the terms and conditions set forth above and agree to them, effective on the date set forth above.

I warrant and represent that I am authorized to execute this Contract on behalf of the Customer or the legal owner of the Property.

CUSTOMER: BELFOR PROPERTY RESTORATION
By: By:

Name: Name:

Title: Title:

Date: Date:

Print Name of Customer’s Authorized Representative:
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BELFOR USA Modesto  4713 Greenleaf Court, Unit C, Modesto, CA 95356  209-236-1100  fax: 209-236-1133 24/7 Emergency Hotline 800.856.3333  www.BELFORusa.com November 22, 2020
McLarens Global Claims Services
180 Montgomery Street, Ste. 2100
San Francisco, CA. 94104
Attn: Kyle Stanner
Re: City of Modesto – Creekside Golf Course 701 Lincoln Avenue Modesto, CA 95356 Scope and Budget
The following is a scope and preliminary budget for the above referenced property as a result of an exterior trash can fire on Monday, November 1, 2020. This budget is based on our direct physical observation. As with any budget, these projections are not absolute. Methods may change due to efficiency of work or job site considerations.

However, actual invoicing will be produced based on a prevailing wage rate & materials sheet provided by BELFOR USA Group, Inc. to the City of Modesto.

This Preliminary Budget is based on 8 hour shifts commencing on November 3, 2021.

BELFOR to incur minimal OT prevailing wage throughout duration of project if approved.

Mobilization of Equipment and Crews:

BELFOR provided mobilization of equipment and crews to conduct moisture survey, installation of drying equipment, installation of temporary fencing and privacy screen, fire debris removal and clean up and any necessary building restoration procedures associated with the aforementioned fire loss. Electrical subcontractor to test power to make sure all circuits and panel are safe.

Contents Manipulation and Selective Demolition:

Contents manipulation of salvageable contents will be HEPA vacuumed and wiped.

Items will be photo documented and relocated to allow for erection of plastic containment to source contain affected fire area with negative area during dry down and demolition.

Budget Trend – Equipment, Power, Consumables & Crew
$19,000.00 - $20,000.00
Exhibit A
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BELFOR USA Modesto  4713 Greenleaf Court, Unit C, Modesto, CA 95356  209-236-1100  fax: 209-236-1133 24/7 Emergency Hotline 800.856.3333  www.BELFORusa.com Affected Areas Include:
 Dining Room
 Janitors/ Maintenance Closet
 Office
 Kitchen
 Corridor
 Pro Shop
 Club House Exterior
Structural and Replacement of Building Components:

Structural repairs require engineered calculations, permits and plans. Upon receipt, those repairs are subject to change. Code upgrades are yet to be determined. Exact match of building material has not yet been verified. Building components to be replaced under Emergency Services include:
 Batt Insulation
 Drywall and Texture
 Paint (interior and exterior)
 Acoustic Ceiling Tiles
 Commercial Carpet
 Cove Base Molding – 4”
 Electrical
 Stucco
 Final Cleaning
Budget Trend – Building Components
$190,000.00 - $200,000.00
Total Budget Trend - $209,000.00 - $220,000.00
Thank you,
Kim Montgomery
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CALIFORNIA PREVAILING RATE AND MATERIALS SCHEDULE FOR INVOICING (Exhibit B) Effective Date: April 2020
§ I.

CODE REGULAR RATE / HR
APM Assistant Project Manager $ 73.00
PM Project Manager $ 108.00
PE Project Estimator $ 117.00
SPM Senior Project Manager $ 133.00
PC Project Coordinator $ 162.00
GL General Labor $ 111.00
AA Administrative Assistant $ 85.00
LF Labor Foreman $ 120.00
MS Mobilization Support $ 99.00
TD Truck Driver $ 99.00
DMT Demolition Technician $ 119.00
RCO Resource Coordinator (Supply Technician) $ 115.00
PA Project Auditor (Documentation Clerk) $ 90.00
EO Equipment Operator $ 126.00
HSO Health & Safety Officer $ 115.00
RT Restoration Technician $ 122.00
RS Restoration Supervisor $ 122.00
DT Dehumidification Technician $ 122.00
MT Mold Technician (Remediation Technician or Supervisor) $ 122.00 PT Painter $ 115.00
DP Drywall Installer/Finisher $ 126.00
CR Carpenter (Framer/Finish) $ 126.00
TF Trade Foreman (Commercial Supervision) $ 126.00
(Dehumidification, Documents/Media, Electronics, HVAC, Machinery, Mold) TN Technician $ 122.00
TS Technical Specialist $ 122.00
TL Team Leader $ 135.00
TMR Technician, Machinery Rebuild $ 135.00
HT Hazmat/Asbestos Technician $ 116.00
HLT Hazmat/Asbestos Lead Technician $ 122.00
HEO Hazmat/Asbestos Equipment Operator $ 126.00
HS Hazmat/Asbestos Supervisor $ 122.00
HPM Hazmat/Asbestos Project Manager $ 135.00
CVP President & Vice President $ 225.00
CSC Senior Consultant $ 185.00
CCE Consultant / Consulting Estimator $ 145.00
CWP Clerk of the Works-Production Person $ 100.00
CAD Administrative $ 55.00
COC Outside Consultants Actual Billing + 10%
CLG Deposition, Legal Work, & Court Testimony see section I.IV Consulting Expenses $ 300.00 CFE Appraisal & Umpire fees $ 300.00
§ I.II

LABOR CALCULATION POLICY
The guidelines for labor invoicing are as follows: The first eight hours worked on any scheduled shift Monday through Friday will be charged at the regular hourly rate. Any hours worked in excess of eight hours on any scheduled shift Monday through Friday will be charged at 1.5 times the regular hourly rate. All hours worked on Saturday and Sunday will be at 1.5 times the regular hourly rate. All hours worked on Holidays (see §I.III Item 4 for recognized holidays) will be charged at 2 times the regular hourly rate. OT applies to all labor classifications regardless if salary or hourly.

After Hours Emergency Services: In the event that BELFOR personnel are required for emergency services after normal BELFOR business hours (Weekdays 5:00 p.m.-7:00 a.m.), 1.5 times the regular hourly rate will be charged.

CONSULTING SERVICES:

RATES AND INVOICE CONDITIONS

ITEMIZED SCHEDULED LABOR CLASSIFICATIONS
PROJECT MANAGEMENT:

GENERAL CLASSIFICATIONS:

RESTORATION SERVICES (General):

RECONSTRUCTION SERVICES:

TECHNICAL SERVICES:

ENVIRONMENTAL SERVICES:
v1-3
Rate and Materials (Standard) Page 1 of 4 BELFOR Initial:_________ Customer Initial:_________ #20..
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CALIFORNIA PREVAILING RATE AND MATERIALS SCHEDULE FOR INVOICING (Exhibit B) Effective Date: April 2020
§ I.
§ I.III
1). Reproduction of actual drawings at actual cost
2). Automobile mileage at IRS approved rate, tolls at cost with receipts over $25.00 3). Overnight mail is priced at $14.70/small package, $29.40/large package 4). Photographs at $1.00 per picture for standard size
§ I.IV 5). Color copying at $1.00 per page or actual cost if Kinko's or other service 6). Airfare, hotels, rental car rates and other travel expenses are billed at cost + 15% 7). Daily per diem rate at $55.00 a day/based on (8) hour day Note: *Fees for deposition and trial appearances are for a minimum eight-hour day @ $300/hr for all consultants § II.
§ III.
§ IV.
§ V.
§ VI.
§ VII.
§ VIII.

BILLING AND PAYMENT
1). Invoices generated in accordance with the BELFOR Rate and Materials Schedule will be submitted periodically for work that has been performed. As such, all invoices are due and payable upon receipt and will be considered late 30 days after receipt of the invoice. If there are any disputed charges on any invoice these should be clearly identified in writing within 30 days and an additional 30 days will be allowed to resolve disputed charges. Interest charges will begin to accrue after 30 days for undisputed charges and after 60 days for the disputed charges at the rate of: 1) 1% per month or 2) as specified in the terms and conditions of the applicable contract.

The rates contained in this exhibit are exclusive of federal, state and local sales or use taxes and the costs associated with any applicable federal, state or local approvals, consents, permits, licenses and orders incident to performance of the work.

The above rates represent the charges for freeze drying only. Labor, equipment, materials and other document treatments performed will be billed in accordance with the rates herein and any project specific quotations.

Other recovery service charges will be determined per job, based on the following relevant factors:
* Nature of Damage * Degree of soot/char * Intended Use of Document * Moisture Saturation * Mold Contamination * Odor Because the type and level of contamination may vary so greatly and thus affect the resultant recovery protocol required, these additional services will be quoted after examining a sample of the affected documents.

CAT CONSIDERATIONS (Based on Property Claim Services assigning a CAT Serial Number) 1). A 6% fee will be added to the total of each invoice. This fee will cover all of the indirect charges that must be allocated to each job in the CAT. Examples of these charges would be CAT management, CAT office, admin support, warehousing, etc...

Freeze drying charges will range from $45 to $85 per cubic foot based on the volume of documents to be dried, the type of document (bound or loose paper), and the moisture saturation.
4). Scheduled consumables are charged on a "per unit" basis whether consumed by the unit or not.

VENDORS, UNSCHEDULED MATERIALS & UNSCHEDULED EQUIPMENT
1). Contractor's 10% overhead plus 10% profit (21%) will be added to the total of all documented costs for Unscheduled Materials, Unscheduled Equipment, and Subcontractors / Vendors (including DUCTZ HVAC and BELFOR Environmental Services) who are not fulfilling a scheduled Labor Classification.

REIMBURSABLES
1). Contractor's 15% mark-up will be added to the total of all reimbursables. 2). Standard per diem rates are $68.75 per person per day (2019 GSA base rate). The 1.35 multiplier will be applied for NYC, Cape Cod, Martha's Vineyard, Nantucket, AK, HI, Latin America, and the Caribbean ($74.25). Per Diem will be charged for all traveling personnel in § I. Itemized Scheduled Labor Classification. BELFOR charges this daily rate whether the per diem is paid directly to the person, is charged to BELFOR as a separate charge, or is included with other compensation considerations. For multiple jobs on a single day, per diem will be prorated accordingly. 3). Per Diem reimbursement is subject to certain limitations regarding deductibility governed by the Internal Revenue Service, Code of 1986, Section 274(n)(1). Please consult your tax advisor on the appropriate treatment of these costs on your project as it is our policy that any deductibility limitation for income tax purposes is the responsibility of the customer. 4). BELFOR shall be reimbursed for travel expenses (airfare, lodging, rental cars, per diem) for personnel at documented costs plus markup (see item 1). 5). Lodging will be charged in accordance with the published GSA lodging allowance in effect at the time of the stay (https://www.gsa.gov/travel/planbook/per-diem-rates/) plus applicable fees and taxes. As is the case with the Federal Travel Regulations, actual expense reimbursement is allowed when the lodging allowance is insufficient to meet the necessary expenses. 6). An optional methodology for lodging charges is to apply a lodging allowance as follows: Lodging may be charged at the average nightly rate of up to three hotels that house project personnel (BELFOR and/or subcontractors). The full average nightly rate will be charged for single occupancy and 50% of the average nightly rate per person will be charged for double occupancy.

DOCUMENT DRYING AND RECOVERY SERVICES
3). BELFOR reserves the right to change the unit rate of scheduled consumables affected by market conditions. 4). The hourly Scheduled Labor rates will be charged portal to portal for all BELFOR personnel, labor subcontractors, and subcontractors fulfilling any Labor Classifications.
5). If a meeting is requested by the client that involves travel BELFOR will bill for travel expenses at documented cost plus 15%.

CONSULTING EXPENSES
SCHEDULED EQUIPMENT CHARGES (see § II.I Itemized Scheduled Equipment) 1). The Daily Rental Rate is charged for each calendar day equipment is utilized on a project, whether a partial day or complete day. 2). Small Tools Charge: Items such as shovels, ladders, demolition carts, extension cords, small hand tools, etc..., which are provided by BELFOR but are not included in the Scheduled Equipment list will be charged at 3% of total labor charges for all hands-on personnel (EO, GL, LF, RT, RS, DTA, DC, DTL, DMT, DT, MT, PT, DP, CR, TN, TS, HT, HLT, HEO). Any specialty items purchased for a project may be charged as per Section IV. 3). The Safety Equipment Packages (Personal Protection Equipment - PPE, Personal Fall Protection - PFP, and Personal Respiratory Protection - PRP) are inclusive of the reusable components of each package as well as any training, medical, or certification expenses related to their use. They do not include the disposable items within the Scheduled Consumables list. 4). During the course of performance of the work BELFOR may add additional equipment to the schedule.

SCHEDULED CONSUMABLES (see § III.I Itemized Scheduled Consumables) 1). Any scheduled consumables purchased locally where the unit price exceeds 80% of the rate, the item will be invoiced at documented cost plus Contractor's 10% Overhead / 10% Profit (21%).
2). During the course of performance of the work BELFOR may add additional consumables to the Rate Schedule. 3). National holidays recognized by BELFOR for rate (not payroll) purposes are New Years Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas.

RATES AND INVOICE CONDITIONS

LABOR CONSIDERATIONS
1). Work performed under a particular contract that is subject to Federal and State wage and hour laws, prevailing wages, and/or collective bargaining agreements may require negotiated changes to the above stated rates. If necessary, adjustments will be made to the hourly rates and other labor provisions. 2). When circumstances beyond our control require BELFOR personnel to stand-by at the job site, a minimum stand-by charge of 6 hours at the regular hourly rate (no overtime) will be charged.
v1-3
Rate and Materials (Standard) Page 2 of 4 BELFOR Initial:_________ Customer Initial:_________ #20..
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CALIFORNIA RATE AND MATERIALS SCHEDULE FOR INVOICING (Exhibit B) Effective Date: April 2020
§ II.I

EQUIPMENT DESCRIPTION UNIT RATE EQUIPMENT DESCRIPTION UNIT RATE AIR MOVERS/COMPRESSORS/ACCESSORIES TRUCKS, VEHICLES, TRAILERS (rate does not include fuel) Air compressor, gas/electric Ea / Day $ 41.00 BELFOR Command Center Ea / Day $ 550.00 Air compressor, tow behind Ea / Day $ 130.00 Mobile Office Ea / Day $ 72.00 Air movers/carpet blowers Ea / Day $ 33.00 Mobile Warehouse (Trailer Only) Ea / Day $ 171.00 Octidry Bag or Direct it In (attachment) Ea / Day $ 33.00 Trailer, Freezer Ea / Day $ 165.00 Injectidry Unit Ea / Day $ 144.00 Truck, Dump Service (Pickup Truck) Ea / Day $ 105.00 Manometer Ea / Day $ 91.00 Truck, Dump-Trip Charge Ea / Day $ 165.00 Truck, Moving/Box/Board up Ea / Day $ 171.00
BLAST/POWER WASH UNITS Truck (Cab) or Trailer (Flatbed, Transfer, etc) Ea / Day $ 137.00 Blasting Unit, Agri/Soda Ea / Day $ 713.00 Vehicle, Pickup, SUV or Car Ea / Day $ 76.00 Dry Ice Blaster w/Accessories Ea / Day $ 1,071.00 Vehicle, Truck 1 Ton 4x4 Lift gate Ea / Day $ 182.00 Soda Blaster Ea / Day $ 1,063.00 Vehicle, Van (1 per 10 Passenger or Cargo) Ea / Day $ 124.00 Washer, High Pressure (cold) Ea / Day $ 110.00
Washer, High Pressure (hot) Ea / Day $ 137.00 DUMPSTERS & STORAGE Dumpster, 20 yd (max weight 4 Tons) Per Load $ 605.00
CLEANING/VACUUMS/EXTRACTION Dumpster, 30 yd (max weight 6 Tons) Per Load $ 770.00 Buffer, Floor Ea / Day $ 41.00 Dumpster, 40 yd (max weight 8 Tons) Per Load $ 935.00 Carpet Cleaning Machine Ea / Day $ 83.00 BELFOR Pods 8'x7' 12' x 7' Per Month $ 259.00 Dry Cleaning Unit (portable) Ea / Day $ 157.00 BELFOR Pods (set up & breakdown) Per Pod $ 330.00 Extraction Unit (portable) Ea / Day $ 171.00 Storage Vaults Per Month $ 138.00 Extraction Unit (Truck or Trailer Mount) Ea / Day $ 618.00 Floor cleaning system (walk behind) Ea / Day $ 261.00 ELECTRONICS / MECHANICAL HEPA Filtration Unit / Air Scrubber Ea / Day $ 156.00 Cart, Electronic Decontamination Ea / Day $ 69.00 Ion Air Cleaning System Ea / Day $ 52.00 Cleaning Room, HEPA filtered Ea / Day $ 1,076.00 Steam Cleaner (Trailer) Ea / Day $ 267.00 Crane, A-Frame (1 ton) Ea / Day $ 153.00 Upholstery Machine/Lady Vac (steam cleaner) Ea / Day $ 69.00 Crane, Overhead (2 Ton, monorail 38 feet) Ea / Day $ 850.00 Vacuum, HEPA Ea / Day $ 100.00 Decon Room Per Project $ 567.00 Vacuum, Insulation Machine Ea / Day $ 99.00 DI Water System Ea / Day $ 44.00 Vacuum, Upright, Wet/Dry or Canister Ea / Day $ 38.00 Documentation Kit (digital camera/photo printer) Ea / Day $ 76.00 Zip Poles, Set of 6 Ea / Day $ 30.00 Electrical Distribution (120 Amp Panel) Ea / Day $ 206.00 Electrical Test Equipment (Megger, Hi-Pot, Grounding Cables) Ea / Day $ 453.00 LIGHTS Electronic Dehumidification Unit/Heating (KHT) Ea / Day $ 247.00 Light, Balloon Ea / Day $ 121.00 Gas Detector, ATI PortaSens II Ea / Day $ 337.00 Light, Tower Mobile (400 WT diesel) Ea / Day $ 171.00 HEPA Filtered Hood Ea / Day $ 170.00 Light, Wobble (37 Inches) Ea / Day $ 48.00 HEPA Water Displacement Unit Ea / Day $ 103.00 Oven, Convection Drying (ULT) Ea / Day $ 481.00
MISC. Oven, Vacuum Drying Ea / Day $ 685.00
Heat Gun, Shrink Wrap Ea / Day $ 83.00 Quality Control Kit, (scientific instruments) Ea / Day $ 206.00 Ride on Flooring Stripper (includes blades) Ea / Day $ 1,320.00 Reflectoquant Test Device Ea / Day $ 113.00 Saw, Demo Ea / Day $ 117.00 Sealer, Vacuum Ea / Day $ 300.00 Saw, Kett Ea / Day $ 39.00 Spray Booth with 2 sinks (portable) Ea / Day $ 206.00 X-Ray Dryer Ea / Day $ 171.00 Sprayer, Airless H.P. (Wagner) Ea / Day $ 90.00 X-Ray Separation Tank Ea / Day $ 514.00 Tool Handling Charge Per Project $ 510.00 Ultrasonic Bath, Portable Ea / Day $ 357.00
ODOR CONTROL/DISINFECTION Ultrasonic Bath, Bench Top Ea / Day $ 206.00 Fogger, Commercial Ea / Day $ 124.00 Ultrasonic Dip Line, Industrial Multi-step Ea / Day $ 3,702.00 Fogger, ULV / Thermal (electric) Ea / Day $ 44.00 Vacuum, Clean Room Ea / Day $ 170.00 Ozone Generator Ea / Day $ 137.00 Wet Bench (portable) Ea / Day $ 207.00 Smoke Machines (small) Ea / Day $ 110.00 Workstation (table, chair, lights, ESD) Ea / Day $ 27.00 Vapor Shark Ea / Day $ 44.00

ENVIRONMENTAL
POWER Cascade Breathing Air System Ea / Day $ 187.00
Electrical Distribution (Spider Box) Ea / Day $ 83.00 Chemical Hose, Hazmat Ea / Day $ 249.00 Generator (portable) Ea / Day $ 137.00 Confined Space Entry System Ea / Day $ 227.00 Decontamination Shower/Filter Ea / Day $ 159.00
PUMPS Jerome Mercury Vapor Analyzer Ea / Day $ 278.00
Pump, Sump / Flood Ea / Day $ 38.00 Mini-Rae (PID) Ea / Day $ 198.00 Pump, Trash with Hose, 2" Ea / Day $ 153.00 MSA Passport (O2, LEL, CO, H2S) Ea / Day $ 227.00 Personal Sample Pump Ea / Day $ 32.00
DRYING/TEMP/HUMIDITY CONTROL Pump, Diaphragm 1", Hazmat Ea / Day $ 227.00 Moisture Meter Ea / Day $ 23.00 Pump, Diaphragm 2", Hazmat Ea / Day $ 340.00 Camera, IR Ea / Day $ 25.00 Self-Contained Breathing Apparatuses (SCBA-30Min) Ea / Day $ 159.00 Dehumidification, Dehumidifier -100 to 140 AHAM Pints Ea / Day $ 150.00 Self-Contained Breathing Apparatuses (SCBA-5Min) Ea / Day $ 125.00 Dehumidification, Desiccant -500/600 cfm Ea / Day $ 446.00 Trailer, Emergency Response, Hazmat Ea / Day $ 340.00 Dehumidification, Desiccant -2000/2250 cfm Ea / Day $ 627.00 Dehumidification, Desiccant -3500 cfm Ea / Day $ 1,105.00 HVAC Dehumidification, Desiccant -5000-6000 cfm Ea / Day $ 1,497.00 HVAC, High Volume Tornado System Ea / Day $ 105.00 Dehumidification, Desiccant -10000-12000 cfm Ea / Day $ 2,352.00 HVAC, Mobile Resource Unit Ea / Day $ 171.00 Dehumidification, Desiccant -15000 cfm Ea / Day $ 4,036.00 HVAC, Power and Manual Hand Tools PP/Day $ 28.00 Dehumidification, Desiccant -25000 cfm Ea / Day $ 6,388.00 HVAC, Rotary Brush Duct Cleaning System Ea / Day $ 50.00 Dehumidification/Cooling - 1 Ton Spot Cooler Ea / Day $ 178.00 HVAC, Service Vehicle / Trailer Combo Ea / Day $ 137.00 Dehumidification/Cooling - DX Unit -20 / 30 ton Ea / Day $ 1,425.00 HVAC, High CFM HEPA Vacuum Collection System Ea / Day $ 215.00 Dehumidification/Cooling - DX Unit -60 / 70 Ton Ea / Day $ 2,246.00 HVAC Video / Tool Robotic Inspection System Ea / Day $ 555.00 Dehumidification/Cooling - Chiller 100 to 400 Ton Ton / Day $ 29.00 HVAC, Viper Duct Cleaning System Ea / Day $ 50.00 Dehumidification, Heater -20 KW Ea / Day $ 176.00
Dehumidification, Heater -50 KW Ea / Day $ 393.00 SAFETY Dehumidification, Heater -100 KW Ea / Day $ 535.00 Personal Fall Protection (PFP) PP / Day $ 9.00 Dehumidification, Heater -150 KW Ea / Day $ 641.00 Personal Protection Equipment (PPE) PP / Day $ 5.00 Dehumidification, Heater, Indirect Fired up to 500,000btu + fuel Ea / Day $ 1,033.50 Personal Respiratory Protection (PRP) PP / Day $ 9.00 Heater, Electric -1500 watt Ea / Day $ 17.00 Respirator, PAPR Ea / Day $ 91.00 Heater, Propane/Torpedo-direct fired + fuel Ea / Day $ 61.00 Electrostatic Sprayer Ea / Day $ 150.00
ITEMIZED SCHEDULED EQUIPMENT 3
The rates contained in this exhibit are exclusive of federal, state and local sales or use taxes and the costs associated with any applicable federal, state or local approvals, consents, permits, licenses and orders incident to performance of the work. v1-3
Rate and Materials (Standard) Page 3 of 4 BELFOR Initial:_________ Customer Initial:_________ #20..
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CALIFORNIA RATE AND MATERIALS SCHEDULE FOR INVOICING (Exhibit B) Effective Date: April 2020
§ III.I

CONSUMABLE DESCRIPTION UNIT RATE CONSUMABLE DESCRIPTION UNIT RATE

BAGS ELECTRONICS / MECHANICAL
Bags, Environmental Trash Bags Ea. $ 3.30 BELFOR-AC 14 Alkaline Cleaner 14 Gal $ 37.00 Bags, Insulation Machine (Vacuum) Ea. $ 34.00 BELFOR-AC 12 Alkaline Cleaner 12 Gal $ 51.00 Bags, Trash (each) 3 mil 0.90 $ 6 mil $ 1.80 BELFOR-CD 04-C Complex Deruster 04 C Gal $ 80.00 BELFOR-CD 13 Complex Deruster 13 Gal $ 126.00
CLEANING-GENERAL BELFOR-EC 12 Electronics Cleaner Gal $ 33.00 Disinfectant, Bioesque Gal $ 45.00
BELFOR-All Natural Citrus Solvent Cleaner Gal $ 37.00 BELFOR-ESL Label Protection Lacquer Ounce $ 19.00 BELFOR-All Purpose Cleaner Gal $ 12.00 BELFOR-FC 10 Energized Cleaner Gal $ 908.00 BELFOR-All Purpose Spotter Gal $ 25.00 BELFOR-GC General Cleaner Gal $ 31.00 BELFOR-Carpet Rinse & Neutralizer 45 $ 20.00 BELFOR-HD 01 Hand Deruster 01 Gal $ 43.00 BELFOR-CIF Citrofix Lemon Scent 50 $ 1.10 BELFOR-LP 40 Light Preserver 40 Gal $ 80.00 BELFOR-Concentrated Odor Counteractant & Smoke Elim. 55 $ 34.00 BELFOR-MPP Metal Polishing Paste Ounce $ 17.00 BELFOR-Extra Duty Cleaner Degreaser 55 $ 19.00 BELFOR-NC CR Neutral Cleaner CR Gal $ 135.00 BELFOR-Glass Cleaner 65 $ 9.00 BELFOR-NK One Step Cleaner and Preserver (electrical) Pint $ 14.00 BELFOR-Hand Cleaning Wipes 65 $ 45.00 BELFOR-OC24 Organic Cleaner 24 Gal $ 51.00 BELFOR-Multi-Enzyme Spotter-Deodorizor-Protector 67.5 $ 34.00 BELFOR-OC62 Organic Cleaner 62 Gal $ 35.00 BELFOR-Multi-Purpose Restroom Cleaner 74 $ 15.00 BELFOR-O-SW Oil Black (Elect. Contacts Only) Ounce $ 37.00 BELFOR-Oil Preserver 77.5 $ 51.00 BELFOR-PM Polish Milk Ounce $ 6.00 BELFOR-Quarry & Hard Tile Cleaner 115 $ 19.00 BELFOR-SD 02 Sulfide Defroster Gal $ 58.00 BELFOR-Rug & Upholstery / Traffic & Bonnet Cleaner Gal $ 28.00 BELFOR-WP Wax Preserver Gal $ 86.00 Adhesive Remover Can $ 16.00 Nitric Acid, Ultra Pure Quart $ 170.00 Alcohol, Isopropyl Gal $ 87.00 Apron, Chemical Ea. $ 6.00 Blocks, Odor Counteractant 67.5 $ 8.00 Arm Sleeves, Chemical Ea. $ 4.40 Boot Covers, Latex 74 $ 12.00 Arsenic Test Kit Per Test $ 6.00 Brush, Scrub 87.5 $ 13.00 Bags, Anti Static Ea. $ 4.40
Brushes, Pipe 87.5 $ 34.00 Brady Cards Ea. $ 8.00
Brushes, Wire Small 5.50 $ Large $ 8.00 Brush, Dispersion (Each) Small 5.50 $ Large $ 15.00 Cleaner, Stainless Steel Can $ 17.00 Brush, Non Conduct Ea. $ 12.00 Disinfectant, Antimicrobial Gal $ 56.00 Chloride Quick Test Strips Ea. $ 1.40 Fogger, Thermo Deodorizer 84 $ 39.00 Cleaning / Decon Sticks Ea. $ 1.50 Mop Heads 91 $ 15.00 Non-Conduct Scrubbers, Green (#7447) Box $ 31.00 Pad, Floor Buffer 97.5 $ 14.00 Non-Conduct Scrubbers, Maroon (#96) Box $ 86.00 Pad, Foam Scrubbing 101 $ 57.00 Non-Conduct Scrubbers, White (#98) Box $ 52.00 Sponge, Particulate Removal (1.5"x3"x6") Ea. $ 4.40 Tape, Clean Room Roll $ 27.00 Sponge, Particulate Removal (3/4"x3"x6") Ea. $ 2.20 Wipes, Lint Free Pak $ 39.00 Steel wool Ea. $ 1.20 Wipes, Presaturated IPA/DI Pak $ 23.00 Thinner, Paint/Mineral Spirits 94 $ 25.00 Wipes, Standard Clean Room Pak $ 32.00 Vapor Shark Membrane 104 $ 58.00 Wipes, Ultra Clean Room Pak $ 68.00 Wipes, Cotton Cloth/Workshop Rags 127.5 $ 6.00
Wipes, Wipe All 127.5 $ 14.00 ENVIRONMENTAL
Asbestos Glove Bag Ea. $ 37.00
CONTENTS/PACK-OUT/STORAGE Breathing Air, Type K Bottle Ea. $ 61.00 BELFOR-Fabric Protector Gal $ 44.00 Cartridge, MSA Combination Ea. $ 18.00 BELFOR-Lemon Oil Furniture Polish 87.5 $ 6.00 Protective Suits (Acid) Ea. $ 93.00 BELFOR-Liquid Laundry Detergent 104 $ 19.00 Protective Suits (Level A, fully encapsulating) Ea. $ 1,728.00 BELFOR-Premium Dish Detergent 119 $ 7.00 Protective Suits (PolyPro Asbestos) Ea. $ 9.00 Boxes, Book 206 $ 6.00 Protective Suits (Saranex Chemical) Ea. $ 34.00 Boxes, Dish Pack Ea. $ 7.00 Sorbent Boom Ea. $ 74.00
Boxes, Slip Covers Ea. $ 3.30 Sorbent Pad Ea. 11.50$ Bale $ 111.00 Boxes, Wardrobe/Specialty Ea. $ 39.00 Sorbent Pillows Ea. $ 28.00 Cloths, Masslinn 87.5 $ 1.50 DRUMS 15g 30g 55g
Foam Blocks 97.5 $ 1.50 Drum, Poly Closed Top Ea. $ 54.00 46.00 $ 77.00 $ Inventory Tags 104 $ 1.50 Drum, Poly Open Top Ea. $ 59.00 50.00 $ 84.00 $ Tape, Poly Box 114 $ 3.30 Drum, Steel Closed Top Ea. $ 44.00 37.00 $ 61.00 $ Wrap, Bubble/Anti Static 135 $ 93.00 Drum, Steel Open Top Ea. $ 52.00 40.00 $ 74.00 $ Wrap, Stretch Roll $ 65.00 Drum, Steel Salvage, 85 Gallon Ea. $ 185.00 Drum, Poly Overpack, 95 Gallon Ea. $ 283.00
FILTERS Drum, Steel Overpack, 110 Gallon Ea. $ 555.00
Filter, Charcoal (Carbon Activated) Ea. $ 72.00
Filter, HEPA Ea. $ 254.00 HVAC
Filter, Pleated Ea. $ 23.00 HVAC Air Blast Nozzle, Replacement Ea. $ 55.00 Filter, Poly (Secondary) Ea. $ 8.00 HVAC Air Whip, Multi Head, Replacement Ea. $ 72.00 HVAC BBJ Freshduct / Microbiocide 15oz $ 55.00
SHEETING/PLASTIC/FLOOR PROTECTION HVAC Cleaner Degreaser Gal $ 19.00 Duct, Lay Flat (500') with hog rings Roll $ 514.00 HVAC Closed Cell Foam Insulation Tape 1/8"x2"x30' Roll $ 27.00 Plastic Sheeting, 1.5 mil (24 x 200) Roll $ 48.00 HVAC Coil Cleaner Gal $ 53.00 Plastic Sheeting, 3 mil (20 x 100) Roll $ 60.00 HVAC Collection Machine Filters (Pleated & Bag) Ea. $ 64.00 Plastic Sheeting, 4 mil (20 x 100) Roll $ 90.00 HVAC Collection Machine HEPA Filter Ea. $ 374.00 Plastic Sheeting, 6 mil (20 x 100) Roll $ 351.00 HVAC Duct Liner 1" - 3'x100' Roll $ 440.00 Plastic Sheeting, 6 mil-Fire Retardant-Black (20 x 100) Roll $ 435.00 HVAC Duct Mastic Gal $ 32.00 Plastic Sheeting, Carpet Protector Roll $ 90.00 HVAC Encapsulant, Antimicrobial (Foster) Gal $ 90.00 Ram Board, (38" X 100') Roll $ 168.00 HVAC Fiberlock Gal $ 79.00 Red Rosin Paper (200 ft. roll) Roll $ 27.00 HVAC HEPA Vac Collection Bag & Filter Protector Ea. $ 11.00 Scrim-Fire Rated (60'x100') Roll $ 2,716.00 HVAC HEPA Vac Filters (Dacron Filter Bag & Impaction) Ea. $ 66.00 Sticky Mat (26"x32") Ea. $ 98.00 HVAC HEPA Vac HEPA Filter Ea. $ 314.00 HVAC Propane Fill Charge Cylinder $ 50.00
SHRINK WRAP HVAC Rotary Brush Head, Replacement Ea. $ 126.00 Strapping, Woven HD LF $ 0.10 HVAC Rotary Brush System, Replacement Core Ea. $ 44.00 Tape, Heat Shrink 2" Roll $ 18.00 HVAC Sheetmetal Blank Ea. $ 19.00 Tape, Heat Shrink 4" Roll $ 36.00 HVAC Sheetmetal Screw Box 100 $ 24.00 Tape, Heat Shrink 6" Roll $ 54.00 HVAC Spray Adhesive Can $ 26.00 Wrap, Shrink, 7 mil (45' x 145") Roll $ 897.00 HVAC Unibit Ea. $ 90.00 Wrap, Shrink, 12 mil (32' x 180") Roll $ 1,667.00 HVAC Vacuum Brush Head - Replacement Ea. $ 26.00

TAPE/ADHESIVE SAFETY
Adhesive, Spray Can $ 8.00 Boots, Chemical PVC Per Pair $ 50.00 Tape, 2-way (2" x 60') Roll $ 33.00 Dust Mask Ea. $ 2.20 Tape, Barricade-Banner Guard (Caution, Danger, etc…) Roll $ 31.00 Gloves, Cotton (includes liners) Per Pair $ 2.50 Tape, Duct (2"x 60') Roll $ 8.00 Gloves, Latex (Surgical) Box 100 $ 45.00 Tape, Global Roll $ 27.00 Gloves, Leather Per Pair $ 9.00 Tape, Painters-blue/red Roll $ 9.00 Gloves, Nitrile Per Pair $ 8.50 Gloves, Nylon Inspection Per Pair $ 0.55
MISC Protective Suits (Tyvek) Ea. $ 30.00
Disposable Decontamination Unit Ea. $ 458.00 Respirator, N95 Ea. $ 12.00 Encapsulant, Antifungicidal Gal $ 90.00 Respirator, P100 Ea. $ 12.00 Encapsulant, Antimicrobial (Zinsser) Gal $ 83.00 Respirator, HEPA + Particulate Replacement Filter Ea. $ 40.00 Encapsulant, Soot Gal $ 48.00 Respirator, HEPA Replacement Pancake Filter Ea. $ 9.00 Fasteners, Misc / Lock & Hasp Ea. $ 33.00
Floor Dry (40#) Bag $ 17.00
Lock Box Ea. $ 50.00
Soda, Soda Blaster Material Bag $ 39.00
Zipper (containment) Ea. $ 13.00
ITEMIZED SCHEDULED CONSUMABLES 3
The rates contained in this exhibit are exclusive of federal, state and local sales or use taxes and the costs associated with any applicable federal, state or local approvals, consents, permits, licenses and orders incident to performance of the work.
v1-3
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

January 11, 2022
Date: December 21, 2021
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Bill Sandhu, Public Works Director
SUBJECT: First Amendment to the Purchase of Renewable Diesel and Bulk Fuels between the City of Modesto and Van De Pol Petroleum
CONTACT: Steve Fischio, Operations Manager, [email protected], 209-342-2222 DESCRIPTION:

Consider approving the First Amendment increasing the agreement amount with Van De Pol Petroleum, Stockton, CA, for Renewable Diesel and Bulk Fuel services by $1,480,796 from $1,270,000 to a new total amount of $2,750,796 annually and a total revised amount from $6,350,000 not to exceed $12,273,184 over the total term of contract, and authorizing the Director of Finance to adjust locations based on an as needed basis, ensuring the combined total cost does not change. (Funding Source: Various Funds) STRATEGIC PLAN ELEMENT:

This item is in conformance with City of Modesto Strategic Plan Area: Governance and Service Delivery: Goals and Strategies: “Build community trust in City government through responsive, transparent and efficient service delivery”; Goal J: “Build a high-performance organization”.

BACKGROUND:

On February 25, 2020, by Resolution No. 2020-098, Council approved an agreement with Van De Pol Petroleum to provide renewable diesel and bulk fuels for the City of Modesto Fleet Services Division for an estimated annual amount of $1,270,000 and a total amount not to exceed $6,350,000 over a five-year period.

The Public Works and Utilities Departments maintain storage tanks for bulk fuels used to fuel buses, fleet vehicles and non-public roadway powered equipment. There are two 12,000-gallon diesel underground storage tanks at the Bus Maintenance Facility located at 1609 8th Street; 1,000-gallon diesel and 2,000-gallon unleaded above ground storage tanks at the Corporation Yard located at 501 N Jefferson Street; and three various sized diesel tanks located at the Primary and Secondary Treatment Plants.
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City Council, January 11, 2022
First Amendment to the Purchase of Renewable Diesel and Bulk Fuels between the City of Modesto and Van De Pol Petroleum

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DISCUSSION:

The purchasing agreement originally established with Van De Pol Petroleum was based on an estimate of purchases from the previous five fiscal years. Since that time, the Fleet Services Division has acquired 150 additional units from Ceres and Oakdale Fire Departments, Ceres and Escalon Transit, as well as City additions. The Fleet Services Division not only provides service and maintenance for the Stanislaus Regional Transit Authority (StanRTA) JPA which includes 25 additional full-size transit buses but their buses are also fueled by the City of Modesto. The Modesto Fire Department, along with Ceres and Oakdale Fire have ConVaults onsite at their fire stations in order to be fueled and ready to respond to citizen calls for emergency services.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to follow formal bid procedures.

However, exceptions to the formal bidding process are granted in MMC 8-3.204 (d) “Where the Purchasing Manager in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in a procurement for the City at the lowest possible commensurate with the desired quality.” In addition, MMC 8-3.202(d) permits the Purchasing Manager to utilize other government agencies competitive bid process when the best cost savings interest of the City would be served. Here this exemption is satisfied because the Twin Rivers Unified School District did a complete competitive process for Fuel, Oil, Coolant and Hazardous Waste Services, and the City’s agreement with Van De Pol Petroleum is based on that process.

FISCAL IMPACT:

Following the start of this agreement with Van De Pol Petroleum on February 25, 2020, fuel prices have increased by approximately 70% within the last year. November 2020 fuel expenditures were $86,298 and November 2021 expenditures are $152,822. With the units that we have recently added to the City’s fleet, and the ever-changing landscape in fuel prices, it is important that the City be able to keep pace with the trending fluctuation in fuel price increases.

Fund Account Number Annual
Budgeted
Amount
FY 19/20
Actuals
(Feb 2020
forward)
FY 20/21
Actuals
FY 21/22
Actuals
Through

12.1.21 Transit
City Services for
StanRTA (BMF)
4540-53244-52225
5400-53243-52225
$ 1,605,277 $ 187,160 $ 988,273 $ 690,582
Fleet Services 5400-53255-52220 $ 150,000 $ 19,313 $ 94,978 $ 37,817 Water Fund 4100-45050-53100 $ 35,000 $ 2,189 $ 4,395 $ 1,403 Wastewater Fund 4210-44313-52220
4210-44314-52220
$ 35,000 $ 10,213 $ 10,878
$ 59,321
$ 7,810
$ 33,777
Oakdale Fire
Department
0100-18212-52220 $ 50,000 $ 5,601 $ 26,149 $ 16,789
Ceres Fire
Department
0100-18213-52220 $ 60,000 $ 0 $ 0 $ 15,282
Modesto Fire
Department
0100-18610-52220 $ 175,000 $ 22,285 $ 112,682 $ 78,744
Total $2,110,277 $246,761 $1,296,676 $882,204
Sufficient funds are budgeted for the remainder of this agreement term to cover the annual cost of the stated increases. Approximately forty percent (40%) of these expenditures will be billed to #21..
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City Council, January 11, 2022
First Amendment to the Purchase of Renewable Diesel and Bulk Fuels between the City of Modesto and Van De Pol Petroleum

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the Stanislaus County Regional Transit Authority Joint Powers Authority, and the Modesto Fire Department will continue to pay for their respective expenses. Expenses related to this agreement are paid from the Fleet Management Fund, Water and Wastewater Funds, and the General Fund which include the fire contract reimbursements from Oakdale and Ceres.

Expenses related to the Stanislaus County Transit Authority vehicles are recovered monthly by direct billing to this agency.

COMMITTEE RECOMMENDATION:

This item was presented to Finance Committee on December 20, 2021 with a recommendation to forward to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the First Amendment increasing the Agreement amount with Van De Pol Petroleum, Stockton, CA, for Renewable Diesel and Bulk Fuel services by $1,480,796 from $1,270,000 to a new total amount of $2,750,796 annually and a total revised amount from $6,350,000 not to exceed $12,273,184 over the total term of the agreement, and authorizing the Director of Finance to adjust locations based on an as needed basis, ensuring the combined total cost does not change and authorizing the Director of Finance, or her designee, to execute the amendment.

Approved by:

Bill Sandhu, Public Works Director
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. First Amendment with Van De Pol Petroleum

3. Original Agreement with Van De Pol Petroleum

4. Modesto Fire Department station locations
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-?

RESOLUTION APPROVING THE FIRST AMENDMENT INCREASING THE

AGREEMENT AMOUNT WITH VAN DE POL PETROLEUM, STOCKTON, CA FOR RENEWABLE DIESEL AND BULK FUEL SERVICES BY $1,480,796 FROM $1,270,000 TO A NEW TOTAL AMOUNT OF $2,750,796 ANNUALLY AND A TOTAL REVISED AMOUNT FROM $6,350,000 NOT TO EXCEED $12,273,796 OVER THE TOTAL TERM OF CONTRACT, AND AUTHORIZING

THE DIRECTOR OF FINANCE TO ADJUST LOCATIONS BASED ON AN AS

NEEDED BASIS, ENSURING THE COMBINED TOTAL COST DOES NOT

CHANGE AND AUTHORIZING THEDIRECTOR OF FINANCE , OR HER

DESIGNEE, TO EXECUTE THE AMENDMENT
WHEREAS, on February 25, 2020, by Resolution NO. 2020-098, Council approved an agreement with Van De Pol Petroleum to provide renewable diesel and bulk fuels for the City of Modesto Public Works Fleet Services Division for an estimated annual amount of $1,270, 000 and a total amount not to exceed $6,350,000 over a fiveyear period; and WHEREAS, the purchasing agreement originally established with Van De Pol Petroleum was based on an estimate of purchases from the previous five fiscal years, and WHEREAS, since that time, the Fleet Services Division has acquired 150 additional units from Ceres and Oakdale Fire Departments, Ceres and Escalon Transit, as well as City additions; and
WHEREAS, the Fleet Services Division not only provides service and maintenance for the Stanislaus Regional Transit Authority (StanRTA) JPA which includes 25 additional full-size transit buses but buses are also fueled by the City of Modesto; and
WHEREAS, the Modesto Fire Department, along with Ceres and Oakdale Fire have ConVaults onsite at their fire stations in order to be fueled and ready to respond to #21..
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citizen calls for emergency services; and
WHEREAS, Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to follow formal bid procedures. However, exceptions to the formal bidding process are granted in MMC 8-3.2049(d) “Where the Purchasing Manager in her discretion, determines that a process other than the formal bid procedure set forth in Section 8-3.203 will result in a procurement for the City at the lowest possible commensurate with the desired quality;” and
WHEREAS, in addition, MMC 8-3.202 (d) permits the Purchasing Manager to utilize other government agencies competitive bid process when the best cost savings interest of the City would be served. Here this exemption is satisfied because the Twin Rivers Unified School District did a complete competitive bid process for Fuel, Oil, Coolant and Hazardous Waste Services, and the City’s agreement with Van De Pol Petroleum is based on that process; and
WHEREAS, following the start of the agreement with Van De Pol Petroleum on February 25, 2020 fuel prices have increased by approximately 70% within the last year; and
WHEREAS, with the units that we have recently added to the City’s fleet and the ever-changing landscape in fuel prices, it is important that the City be able to keep pace with the trending fluctuation in fuel price increases; and WHEREAS, sufficient funds are budgeted for the remainder of this agreement term to cover the annual cost of the stated increases; and WHEREAS, approximately forty percent (40%) of these expenditures will be #21..
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billed to the Stanislaus County Regional Transit Authority Joint Powers Authority, and the Modesto Fire Department will continue to pay for their respective expenses.

NOW THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the first amendment increasing the agreement amount with Van De Pol Petroleum, Stockton, CA for renewable diesel and bulk fuel services by $1,480,796 from $1,270,000 to a new total amount of $2,750,796 annually and a total revised amount from $6,350,000 not to exceed $12,273,796 over the total term of the agreement.

BE IT FURTHER RESOLVED that the Director of Finance is authorized to adjust locations based on an as needed basis, ensuring the combined total cost does not change.

BE IT FURTHER RESOVED that the Director of Finance, or her designee, is authorized to execute the amendment.
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The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 11th day of January, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

DANA SANCHEZ, Interim City Clerk
APPROVED AS TO FORM:

BY:

JOSE M. SANCHEZ, City Attorney
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1 FIRST AMENDMENT TO PURCHASE AGREEMENT

FOR THE PURCHASE AND DELIVERY OF RENEWABLE DIESEL AND BULK FUEL

WITH VAN DE POL PETROLEUM, STOCKTON, CA
This FIRST AMENDMENT to the PURCHASE AGREEMENT, made and entered into in the City of Modesto, State of California, this _____ day of ____, 2022, by and between the City of Modesto, a municipal corporation of the State of California, hereinafter called CITY, and VAN DE POL PETROLEUM, STOCKTON, CA hereinafter collectively referred to as CONTRACTOR.

This FIRST AMENDMENT to the PURCHASE AGREEMENT is made with reference to the following recitals:

A. A Purchase Agreement, hereinafter referred to as AGREEMENT was entered into by and between CITY and CONTRACTOR on the 25th day of February, 2020 to provide the purchase and delivery of renewable diesel and bulk fuel.

B. The AGREEMENT provides that the cost of the AGREEMENT shall not exceed $1,270,000 on an annual basis and $6,350,000, over five years, based on the Public Works and Utilities Departments usage.

C. The CITY has required Modesto Fire Department locations be included on this AGREEMENT, and estimates that an additional amount of $1,480,796 will be needed on an annual basis, to ensure sufficient purchase and delivery of renewable diesel and bulk fuel through the end of the AGREEMENT, dated February 25, 2025.

D. CITY and CONTRACTOR desire to amend the AGREEMENT to increase the annual approved amount by $1,480,796 from $1,270,000 to $2,750,796 for services identified in the AGREEMENT.

E. CITY and CONTRACTOR now desire to memorialize the change to the terms of the #21..
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2 AGREEMENT with this FIRST AMENDMENT.

NOW, THEREFORE, the parties hereto mutually agree to the following:

1. Agreement No. 176713 shall be amended to include the following: increase funding by $1,480,796 on an annual basis from $1,270,000 to $2,750,796 with a total estimated cost not to exceed $12,273,184, over 5 years.

2. Except as modified and amended by this FIRST AMENDMENT to the PURCHASE AGREEMENT, all other provisions of the Purchase Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the CITY OF MODESTO, a Municipal Corporation, has authorized the execution of this First Amendment to the Purchase Agreement in duplicate by its Director of Finance and attested by its City Clerk under authority of Resolution No. , adopted by the Council of the City of Modesto on the ___ day of ___________, 2021, and VAN DE POL PETROLEUM, STOCKTON, CA has caused this First Amendment to the Purchase Agreement to be duly executed.
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Location
Fire Station 1 1000 gallon tank
610 11 St
Modesto, CA 95354
Fire Station 2 1000 gallon tank
420 Chicago Ave
Modesto CA 95351
Fire Station 3 1000 gallon tank
635 El Vista Ave
Modesto CA 95354
Fire Station 4 1000 gallon tank
1505 Blue Gum Ave
Modesto CA 95351
Fire Station 5 1000 gallon tank
200 W Briggsmore Ave
Modesto CA 95350

Fire Station 6 1000 gallon tank
2700 Standiford Ave
Modesto CA 95350
Fire Station 7 1000 gallon tank
1800 Mable Ave
Modesto CA
Fire Station 9 1000 gallon tank
4025 Fara Biundo Dr
Modesto CA 95355
Fire Station 10 two 1000 gallon tanks
148 Imperial Ave
Modesto CA 95358
Fire Station 11 1000 gallon tank
4225 Carver Rd
Modesto CA 95356
Station 27 500 gallon tank and generator
450 S Willowood Dr.

Oakdale, CA 95361
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Station 28 500 gallon tank and one generator
325 E G Street
Oakdale, CA 95361
Station 29 500 gallon tank
17700 Main St.

Knights Ferry, CA 95361
Station 30 500 gallon tank
13200 Valley Home Rd.

Oakdale, CA 95361
Station 15 1000 gallon tank
2755 Third Street
Ceres
Station 17 1000 gallon tank
420 E. Service Road
Ceres
Station 18 Split tank – 750 diesel; 250 gas
3101 Fowler Rd.

Ceres
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

January 11, 2021
Date: December 21, 2021
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: First Amendment to the Consultant Agreement with Slate Communications CONTACT: William Wong, Director of Utilities, [email protected], 209-571-5801 DESCRIPTION:

Consider approving a First Amendment to the Consultant Agreement with Slate Communications, for Interim Public Relations Consultant Services and Communications and Outreach Support for the Utilities Department, and increasing the amount by $90,000 from $50,000 to a new total amount not to exceed $140,000. (Funding Source: General Fund, Water and Wastewater Funds & Various Departmental Funds)
STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City’s Strategic Plan Initiatives, Goal D:

Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance and sustainability efforts.

BACKGROUND:

The Utilities Department’s One Water Modesto (OWM) initiative is an employee-led effort to tell Modesto’s “Water Story”, and was designed to strengthen the community through awareness of the City’s water resources and infrastructure, with public outreach and engagement. OWM educates the public of the value of water, improves public understanding of our most precious resource, and increases public awareness of the Utilities Department’s role in ensuring uninterrupted services to all our customers.

Slate Communications has helped the Utilities Department and the Community and Media Relations Officer (CMR) to create a programmatic logo and marketing plan that complemented the department activities, including OWM and the recent Department’s “Pride in Every Drop” marketing campaign (Pride campaign). The first phase of the Pride campaign focused on the City’s dedicated staff who are providing essential water related services to the community.

In addition, with the vacancy of the Community and Media Relations Officer, the City had an immediate need to hire an experienced professional consultant firm to provide public relations #22..
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City Council, January 11, 2022
First Amendment to the Consultant Agreement with Slate Communications

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on an interim basis as the City recruits for a permanent Community and Media Relations Officer.

On March 24, 2021, an informal request for proposal (RFP) was sent to fourteen different firms to provide interim Public Relations Consulting services. Two firms chose to respond, with none being local vendors. Based on providing a responsive and responsible proposal that met the requirements of the informal RFP. Staff recommended to enter into an agreement with Slate Communications, Fort Collins, CO., in an amount not to exceed $50,000.

DISCUSSION:

The Utilities Department, is requesting to amend the agreement with Slate Communications to add additional services to include communication support and developing marketing strategies for the additional phases of the Pride campaign and public outreach for the Utilities Rate Studies. Based on these additional services for public relations consulting services, an additional $40,000 will be needed for this effort.

Due to hiring challenges, the Council under Resolution No. 2021-344 approved the reclassification of this position to Communications and Media Relations Officer. The City Manager’s office has coordinated with HR on the recruitment and anticipate filling the position no later than the first quarter of 2022. In addition, with the on-going efforts to permanently fill the position of the Community and Media Relations Officer, it is anticipated an additional $50,000 will be needed to continue with the interim consultant firm to provide public relations for the City Manager’s office. The anticipated combined increase amount is $90,000.

Modesto Municipal Code Section 8-3.203 generally requires all purchases, which meet or exceed $50,000 for material, equipment or contractual services to follow the formal bid procedures. In accordance with Modesto Municipal Code 8-3.204(a), “Exceptions to Formal Bidding Requirements”, agreements for professional services as defined in Section 8-3.103 are exempt from the formal bidding process and requirements. With the informal request for proposals for interim Public Relation consulting services the City conducted a solicitation of firms with expertise in this area and selected Slate Communications based on their expertise and branding background efforts with the City.

FISCAL IMPACT:

Funding for the consultant services agreement for the project, including administrative support and project management is available in the current Fiscal Year 2021-2022 Operating Budget in Cost Center Account:
4100-41010-53300 “UPP.Administration”
4210-42300-53300 “UPP.Capital Improvement Services”
0100-02010-53300 “General Fund”
ANTICIPATED EXPENDITURES:

Agreement for Interim Public Relations Consultant Services (Current) First Amendment to Agreement
$50,000
Utilities - Additional Communication Support Services $40,000 City Manager – Additional Interim Public Relations Consultant Services $50,000 TOTAL ANTICIPATED EXPENDITURES: $140,000
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City Council, January 11, 2022
First Amendment to the Consultant Agreement with Slate Communications

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COMMITTEE RECOMMENDATION:

This item was considered by the Economic Development Committee on December 6, 2021 and was recommended to be forwarded to Council for approval.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving a First Amendment to the Consultant Agreement with Slate Communications, for Interim Public Relations Consultant Services and Communications and Outreach Support for the Utilities Department, and increasing the amount by $90,000 from $50,000 to a new total amount not to exceed $140,000, and authorizing the City Manager, or his designee, to execute the amendment.

Approved by:

William Wong, Director of Utilities
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. First Amendment

3. Consultant Agreement

4. Exhibit A – City Manager’s Office Scope of Work

5. Exhibit B – Utilities Scope of Work
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING A FIRST AMENDMENT TO THE CONSULTANT

AGREEMENT WITH SLATE COMMUNICATIONS, FOR INTERIM PUBLIC

RELATIONS CONSULTANT SERVICES AND COMMUNICATIONS AND

OUTREACH SUPPORT FOR THE UTILITIES DEPARTMENT, AND INCREASING THE AMOUNT BY $90,000 FROM $50,000 TO A NEW TOTAL AMOUNT NOT TO EXCEED $140,000, AND AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE,

TO EXECUTE THE AMENDMENT
WHEREAS, with the vacancy of the City of Modesto Community and Media Relations Officer position became vacant, and
WHEREAS, the City had an immediate need to hire an experienced professional consultant firm to provide public relations on an interim basis while recruiting for a permanent Community and Media Relations Officer, and
WHEREAS, on March 24, 2021, an informal request for proposal (RFP) was sent to fourteen different firms to provide interim Public Relations Consulting services, and WHEREAS, based on providing a responsive and responsible proposal that met the requirements of the informal RFP, Staff recommended to enter into an agreement with Slate Communications, Fort Collins, CO., in an amount not to exceed $50,000, and WHEREAS, Slate Communications has helped the Utilities Department and the Community and Media Relations Officer (CMR) to create a programmatic logo and marketing plan that complemented the department activities, including OWM and the recent Department’s “Pride in Every Drop” marketing campaign (Pride campaign), and WHEREAS, the Utilities Department is requesting to amend the agreement with Slate Communications to add additional services to include communication support and developing #22..
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marketing strategies for the additional phases of the Pride campaign and public outreach for the Utilities Rate Studies, and
WHEREAS, based on these additional services for public relations consulting services, an additional $40,000 will be needed for the Utilities services, and WHEREAS, in addition to the Utilities Department’s service needs, the City Manager’s office requires public relations services to continue until the Human Resource Department has completed recruitment and selection efforts to fill the position of the Community and Media Relations Officer, and
WHEREAS, the Human Resources Department anticipates filling the position no later than the first quarter of 2022, and
WHEREAS, it is anticipated an additional $50,000 will be needed to continue with the interim consultant firm to provide public relations for the City Manager’s office, for a total increase of $90,000, and
WHEREAS, funding is available in the current fiscal year in the General Fund, Water and Wastewater Funds, and various departmental funds, and
WHEREAS, this item was considered by the Economic Development Committee on December 6, 2021, and forwarded to the City Council for approval.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a First Amendment to the Consultant Agreement with Slate Communications, for Interim Public Relations Consultant Services and Communications and Outreach Support for the Utilities Department, and increasing the amount by $90,000 from $50,000 to a new total amount not to exceed $140,000.
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BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to execute the amendment, in a form approved by the City Attorney.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 11th day of January 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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FIRST AMENDMENT TO AGREEMENT

FOR INTERIM PUBLIC RELATIONS CONSULTANT SERVICES WITH SLATE

COMMUNICATIONS
This First Amendment to the Agreement for Interim Public Relations Consultant Services (the “First Amendment”) is entered into between the CITY OF MODESTO, a municipal corporation of the State of California hereinafter referred to as “City” and SLATE COMMUNICATIONS, a Colorado Corporation hereinafter referred to as “Consultant”, as of January ___, 2022.

RECITALS
This First Amendment to Original Agreement entered into on the 17th day of May, 2021 for Interim Public Relations Consultant Services is made with regard to the following recitals:

WHEREAS, City and Consultant entered into an Agreement for Interim Public Relations Consultant Services dated May 17, 2021 (the “Original Agreement”).

WHEREAS, City and Consultant would like to add additional services to the scope of services of the Original Agreement as Exhibit B, which is attached to this First Amendment and incorporated herein; and WHEREAS, City and Consultant desire to amend the Original Agreement by increasing the previously approved amount from $50,000 to $140,000.

NOW, THEREFORE, in consideration of this First Amendment, and the mutual promises, covenants, and stipulations contained in the Original Agreement and this First Amendment, the parties agree as follows:

1. Section 1, Scope of Services, is deleted and replaced in its entirety as follows:
“Consultant shall undertake and complete the preparation of the scope of work as set forth and described in the documents attached hereto and referred to as Exhibit “A” and Exhibit “B” or “projects”. The Consultant shall perform the services as described in Exhibit “A” and Exhibit “B” in a manner compatible with the standards of its profession, and shall produce a fully complete project that is acceptable to City.”

2. Section 3, Paragraph 1, “Compensation”, is deleted and replaced in its entirety as follows:
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“The amount of the agreement is not to exceed $140,000 through the full term of this agreement.”

3. Section 3, Paragraph 3, is deleted and replaced in its entirety as follows:
“For the service specified in Exhibit A, City shall pay consultant according to mutually agreedupon retainer model to allocate 60 hours per month as described in Exhibit “A”. For the services specified in Exhibit B, City shall pay Consultant for added services as described in Exhibit “B”. All work to be performed under this Agreement shall be billed at the rate(s) set forth in Exhibit “A” and Exhibit “B” attached hereto, as applicable. Consultant shall submit invoices to City which include detailed tasks and hours worked for all work completed, and detailed receipts for any out-of-pocket costs paid by Consultant in connection with work performed on this project.”

4. Except as specified in this First Amendment, all other terms and conditions of the Original Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this First Amendment to Original Agreement for Interim Public Relations Consultant Services in duplicate by its City Manager and attestation by its City Clerk on the ________ day of ___________, 2022, and Slate Communication has caused this First Amendment to be duly executed in duplicate as of the Effective Date. #22..
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

January 11, 2022
Date: December 20, 2021
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Non-Emergency Medical Transport Application- Provident Senior Solutions, Inc CONTACT: Brandon Gillespie, Chief of Police, [email protected], 209-572-9500 DESCRIPTION:

Hearing to consider the application of Provident Senior Solutions, Inc and issuing this entity a permit to operate as non-emergency medical transport services in the City of Modesto. (Funding Source: General Fund)
STRATEGIC PLAN ELEMENT:

This item is related to the 2020-2025 Strategic Plan goal of improving community safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues.

BACKGROUND:

The City allows non-emergency medical transport companies to apply for a non-emergency transport permit. In addition to the application, the transport company is required to pay a filing fee of $1,000 and provide all the necessary documents and information as outlined in Modesto Municipal Code 3-9.01 to 3-9.20. Once the application, documentation, and necessary fees have been received by the Modesto Police Department a background investigation must be completed by the department. Upon a successful completion of the background investigation, approval by Council is required. After approval from Council has been provided, the permit will be issued by the Modesto Police Department.

Currently there are ten permitted ambulance companies in Modesto to provide non-emergency transport: Amwest Ambulance, Bay Medic Transportation, Citizens Medical Response, Falcon Critical Care Transport, Medics Plus, Murphy Medical Transportation, NorCal Ambulance, ProTransport, Sacramento Valley Ambulance, and Star Nonemergent Transportation.

DISCUSSION:

Provident Senior Solutions, Inc. has applied to operate a non-emergency medical transportation service in the City of Modesto. Provident Senior Solutions, Inc has paid the $1,000 filing fee to cover administrative, investigative, and other incidental costs associated with the application and have provided all necessary information as outlined in Sections 3-9.01 to 3-9.20 of the Modesto Municipal Code. The Modesto Police Department concluded the required background #23..
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City Council, January 11, 2022
Non-Emergency Medical Transport Application - Provident Senior Solutions, Inc

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investigation for Provident Senior Solutions, Inc. indicating the applicants have complied with the requirements contained in the Modesto Municipal Code 3-9.01 through 3-9.20, and recommended to staff to proceed with Council approval to issue the operational permits to each entity.

FISCAL IMPACT:

Provident Senior Solutions, Inc. will be required to obtain a City Business license and renew it annually – which currently costs $75, and includes a $4 fee to the State of California for Disability Act AB1379. Additionally, Provident Senior Solutions, Inc. will be required to pay mill tax, which is currently at a rate of 0.002, on their gross receipts while operating in the City. Fees and mill tax paid to the City are revenue to the General Fund.

COMMITTEE RECOMMENDATION:

This item was not presented to Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution accepting the application of Provident Senior Solutions, Inc. and authorizing the issuance of a permit to operate as a non-emergency medical transport company in the City of Modesto.

Approved by: ____________________________________
Brandon Gillespie, Chief of Police
____________________________________
Joseph P. Lopez, City Manager
Attachments:

1. Resolution
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE APPLICATION OF PROVIDENT SENIOR

SOLUTIONS INC, AND AUTHORIZING THE ISSUANCE OF A PERMIT TO

OPERATE AS A NON-EMERGENCY MEDICAL TRANSPORT COMPANY IN

THE CITY OF MODESTO
WHEREAS, Provident Senior Solutions, Inc has submitted an application to provide non-emergency medical transport services within the City of Modesto, and WHEREAS, Provident Senior Solutions, Inc. has paid the required $1,000 filing fee and has provided all necessary information as outlined in Modesto Municipal Code Section 3-9.03-3-9.04, and
WHEREAS, the Modesto Police Department has completed background investigations regarding Provident Senior Solutions, Inc. per Modesto Municipal Code Section 3-9.05, and
WHEREAS, Council approval is required for Provident Senior Solutions, Inc. to function as a non-emergency medical transport service provider within the City of Modesto, and
WHEREAS, a duly noticed public hearing was held by the City Council of the City of Modesto on January 11, 2022, at 5:30 p.m. in the Tenth Street Place Chambers located at 1010 Tenth Street, Modesto, California, to consider authorizing the issuance of a permit to Provident Senior Solutions, Inc. for non-emergency medical transport service within the City of Modesto, and
WHEREAS, Modesto City Council finds that Provident Senior Solutions, Inc. will serve the public convenience and necessity requirements. #23..
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NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the application of Provident Senior Solutions, Inc and issues Provident Senior Solutions, Inc a permit to operate as a non-emergency medical transport company in the City of Modesto.

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

January 11, 2022
Date: December 22, 2021
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Approve submittal of Homekey 2.0 Project Application for 1208 9th Street CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5321
DESCRIPTION:

Consider approving the City of Modesto’s Homekey 2.0 Project Application for the project located at 1208 9th Street, authorizing the City Manager, or his designee, to submit the application, applicable documentation, and provide technical alterations, as required by HCD as well as negotiate and execute any related program agreements or documents required for the implementation and acceptance of Homekey 2.0 Program Grant., as required by HCD, approving a loan for the Center for Human Services in an amount up to $500,000 in Permanent Local Housing Allocation Funds to assist with the rehabilitation of 1208 9th Street, , and amending the fiscal year 2021-2022 multi-year fund budget to establish a project for the Homekey 2.0 program as well as to transfer $550,000 from fund (1120) – grants – PLHA Program to Homekey 2.0 project. (Funding Source: Homekey 2.0 Funds and Permanent Local Housing Allocation Funds)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto’s 2020-2025 Strategic Plan Goal C: Develop Homelessness and Housing Plan.

BACKGROUND:

In July 2020, the State of California launched a $750 million program called “Project Homekey”, with the aim of helping local communities rapidly acquire hotels, motels, commercial buildings, and other creative properties in order to rapidly house people experiencing homelessness during the COVID-19 pandemic. By December 29, 2020, the program had resulted in the acquisition of 94 projects statewide, representing 6,029 units of permanent housing for individuals experiencing homelessness.

Given the success of “Homekey 1.0”, in January of 2021, California’s Fiscal Year 2021-22 budget included another $1.4 Billion dollar allocation for “Project Homekey 2.0” (Homekey 2.0).

The Notice of Funding Availability (NOFA) was released September 9, 2021 and applications #24..
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City of Modesto, January 11, 2021
Approve submittal of Homekey 2.0 Project Application for 1208 9th Street

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became available in late September. Applications are being accepted on a rolling basis until funds are exhausted.

DISCUSSION:

The mission of HomeKey 2.0 is to prevent homelessness by rapidly re-housing individuals through the provision of coordinated, compassionate, and high-quality services. During the 2021 strategic planning process conducted by the Stanislaus Community System of Care (CSOC), the number one goal identified was to “Increase the availability of permanent housing for people experiencing homelessness.”
Application Requirements
HomeKey 2.0 funds must be used to provide housing for individuals and families experiencing homelessness or who are at risk of homelessness. Under Homekey, local entities in partnership with a co-applicant (City of Modesto) will acquire and rehabilitate a variety of housing types, including but not limited to hotels, motels, hostels, single-family homes, multifamily apartments, adult residential facilities, manufactured housing, and/or to convert commercial properties and other existing buildings to Permanent or Interim Housing for the Target Population.

To apply for funding, the City will consult with the CSOC, the local Continuum of Care (CoC), for the following items:
 Racial Disparities Analysis
 Coordinated Entry System (CES)
 Homekey Project information on CSOC Website
 Operating Subsidy
 Letter of support for need for an operating subsidy- rental subsidies sought for project but not available for this use
 Community Engagement
 Engaging with population to assist with design of the project Application Project Scoring Criteria
 Homeless or at Risk of Homelessness with bonus consideration for Youth or chronically homeless.
o $150,000 “per door”
o $175,000 for Youth
o $200,000 for Chronically Homeless
 Project complete within 12 months from date of award
 Occupancy 90 days after completion
 Site Control or Sales Contract at the time of application  Proximity to amenities
 55 year affordability covenant
In order to identify and assess projects and potential eligible developers that could meet the strict constraints for completion and occupancy, the City and County issued a joint Request for Information (RFI) on July 20, 2021. This RFI targeted property owners of sites that the City and County have identified as potentially successful Homekey projects. The RFI was open until August 15, 2021 and ultimately nine (9) local properties were interested in having their properties reviewed for eligibility.
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City of Modesto, January 11, 2021
Approve submittal of Homekey 2.0 Project Application for 1208 9th Street

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The City, under its consultation process, has been approached by developer/operators interested in identifying properties that they can use to further serve their clients. One partnership that developed during this process is with Center for Human Services (CHS) – Youth Housing. Youth Housing projects have a special distinction for both operating and capital improvements as part of the HomeKey 2.0 scoring criteria. CHS identified a commercial building located at 1208 9th Street to convert into permanent supportive housing for youth. This project will be designed to serve transitional aged youth ages 18-25 and will be used for the acquisition and commercial conversion of a building that will result in 9 studios and 5 onebedroom apartments.

Staff is seeking approval to submit an application in partnership with Center for Human Services for a grant application to the Homekey 2.0 program, this funding request will provide $175,000 per door plus a $10,000 bonus for early submittal for a total funding request of up to $3,590,000 in acquisition and capital improvements.

To assist with the gap, the City is proposing a $500,000 PLHA loan to the Center for Human Services to complete the rehabilitation for the project.

Project Budget:

Acquisition: $780,000
Pre-Development: $90,000
Rehabilitation: $2,220,000
Contingency: $500,000
Total Cost: $3,590,000
Sources:

Project Homekey per door ($175,000/unit) $2,450,000
Project Homekey early application ($10,000/unit) $140,000 Project Homekey match (50%) gap $500,000
Modesto PLHA Funds $500,000
Total Sources $3,590,000
Project Homekey has funding available to assist with operating subsidies. Additionally, $1,400 per unit per month is available if the funding is matched for three years. CHS has been able to secure the matching funding for four years, and therefore the application will include a request for up to an additional $705,600 in operating subsidies.

Monthly Subsidy per unit: $1,400
Monthly Subsidy for project (14 units): $19,600
Annual Subsidy for project (14 units): $235,200
Three year subsidy for project (14 units): $705,600
The total ask for the Project Homekey funds is $3,795,600. The State required Resolution specifies an amount of $7,591,200, or double the total ask, in case additional funding becomes available through the scoring process by HCD as outlined in the State Resolution’s Notice and Instructions.
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City of Modesto, January 11, 2021
Approve submittal of Homekey 2.0 Project Application for 1208 9th Street

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FISCAL IMPACTS:

Should the City be successful in securing the grant from the State of California’s Department of Housing and Community Development a new fund will be created. There will be no impact to the General Fund.

COMMITTEE RECOMMENDATION:

This item was presented to the Citizens Housing and Community Development Committee on October 14, 2021.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the City of Modesto’s Homekey 2.0 Project Application for the project located at 1208 9th Street, authorizing the City Manager, or his designee, to submit the application, applicable documentation, and provide technical alterations, as required by the State of California Housing and Community Development (HCD) as well as negotiate and execute any related program agreements or documents required for the implementation and acceptance of Homekey 2.0 Program Grant and authorizing the City Manager or his designee to execute any documents in the execution of this Resolution.

Resolution of the Governing body of the City of Modesto authorizing joint application to and participation in the Homekey Program.

Resolution approving a loan for Center for Human Services in an amount up to $500,000 in Permanent Local Housing Allocation Funds to assist with the rehabilitation of 1208 9th Street, and authorizing the City Manager or his designee to execute the Agreements.

Resolution amending the fiscal year 2021-2022 multi-year fund budget to establish a project for the Homekey 2.0 program to be funded with Permanent Local Housing Allocation program grants and authorizing the City Manager or his designee, to take the necessary steps to implement the provisions of this resolution.

Resolution amending the fiscal year 2021-2022 multi-year fund budget to transfer $550,000 from fund (1120) – Grants – PLHA Program to Homekey 2.0 project and authorizing the City Manager or his designee, to take the necessary steps to implement the provisions of this resolution.

Approved By:

Jaylen French, Director of Community and Economic Development Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. State Required Resolution

3. Resolution PLHA Loan

4. Budget Resolution – HomeKey 2.0

5. Budget Resolution – PLHA
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City of Modesto, January 11, 2021
Approve submittal of Homekey 2.0 Project Application for 1208 9th Street

Page 5 of 5 ends

6. PLHA Loan Agreement 1208 9th Street

7. PLHA Regulatory Agreement 1208 9th Street

8. Deed of Trust for PLHA Loan 1208 9th Street

9. Promissory Note for PLHA Loan 1208 9th street

10. Grant Pre-Authorization
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION APPROVING THE CITY OF MODESTO’S HOMEKEY 2.0
PROJECT APPLICATION FOR THE PROJECT LOCATED AT 1208 9TH

STREET, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO

SUBMIT THE APPLICATION, APPLICABLE DOCUMENTATION, AND

PROVIDE TECHNICAL ALTERATIONS, AS REQUIRED BY THE STATE OF

CALIFORNIA HOUSING AND COMMUNITY DEVELOPMENT (HCD) AS

WELL AS NEGOTIATE AND EXECUTE ANY RELATED PROGRAM

AGREEMENTS OR DOCUMENTS REQUIRED FOR THE IMPLEMENTATION AND ACCEPTANCE OF HOMEKEY 2.0 PROGRAM GRANT AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE TO EXECUTE

ANY DOCUMENTS IN THE EXECUTION OF THIS RESOLUTION
WHEREAS, in July of 2020, the State of California launched a $750 million program called “Project Homekey”, with the aim of helping local communities rapidly acquire hotels, motels, commercial buildings, and other creative properties in order to rapidly house people experiencing homelessness during the COVID-19 pandemic, and WHEREAS, by December 29, 2020, the program had resulted in the acquisition of 94 projects statewide, representing 6,029 units of permanent housing for individuals experiencing homelessness, and
WHEREAS, given the success of “Homekey 1.0”, in January of 2021, Governor Newsom’s Fiscal Year 2021-22 budget included another $1.4 Billion dollar allocation for “Project Homekey 2.0” (Homekey 2.0) and a Notice of Funding Availability was released September 9, 2021, applications became available late September, and applications are being accepted on a rolling basis until funds are exhausted, and WHEREAS, the mission of Homekey 2.0 is to prevent homelessness and to make homelessness rare, brief, by rapidly re-housing individuals through the provision of coordinated, compassionate, and high-quality services, and #24..
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WHEREAS during the 2021, strategic planning process conducted by the Stanislaus Community System of Care, the number one goal identified was to “Increase the availability of permanent housing for people experiencing homelessness,” and WHEREAS, under Homekey, local entities in partnership with a co-applicant (City of Modesto) will acquire and rehabilitate a variety of housing types, including but not limited to hotels, motels, hostels, single-family homes, multifamily apartments, adult residential facilities, manufactured housing, and/or to convert commercial properties and other existing buildings to Permanent or Interim Housing for the Target Population, and WHEREAS, in order to identify and assess, projects and developers eligible to meet the strict constraints for completion and occupancy, the City and County issued a joint Request for Information (RFI) on July 20, 2021 and this RFI targeted properties owners that The City and County are interested in sites that include, but are not limited to, hotel/motel properties, residential Single-Room Occupancy (SRO) hotels, multi- unit housing sites, and other properties that could be used for permanent housing, and WHEREAS, the RFI was open until August 15, 2021 and received 9 local properties were interested in having their properties reviewed for eligibility, and WHEREAS, the City under its consultation process has been approached by developer/operators interested in identifying properties that they can use to further serve their clients and one partnership that developed during this process is with Center for Human Services – Youth Housing (CHS), and
WHEREAS, Youth Housing projects have a special distinction for both operating and capital improvements as part of the Homekey 2.0 scoring criteria and CHS identified #24..
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a commercial building located at 1208 9th Street to convert into permanent supportive housing in partnership for youth, and
WHEREAS, this project will be designed to serve transitional aged youth ages 18- 25 and will be used for the acquisition and commercial conversion of a building that will result in 9 studios and 5 one-bedroom apartments, and
WHEREAS, staff is seeking approval to submit an application in partnership in partnership with Center for Human Services for a grant application to the Homekey 2.0 program, with a funding request will provide $175,000 per door plus a $10,000 bonus for early submittal for a total funding request of up to $3,590,000 in acquisition and capital improvements, and
WHEREAS, Project Home key has funding available to assist with operating subsidies as well. $1,400 is available per unit per month if the funding is matched for three years, totaling Center for Human Services has been able to secure the matching funding for four years, and therefore the application will include a request for up to an additional $705,600 in operating subsidies.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approving the City of Modesto’s Homekey 2.0 Project Application for the project located at 1208 9th Street, authorizing the City Manager, or his designee, to submit the application, applicable documentation, and provide technical alterations, as required by HCD as well as negotiate and execute any related program agreements or documents required for the implementation and acceptance of Homekey 2.0 Program Grant.
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BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized and directed to take the necessary steps to implement the provisions of this resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 11th day of January, 2022 by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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AUTHORIZING RESOLUTION
RESOLUTION NO. 2021-
A RESOLUTION OF THE GOVERNING BODY OF THE City of Modesto

AUTHORIZING JOINT APPLICATION TO AND PARTICIPATION IN THE HOMEKEY

PROGRAM
WHEREAS:

A. The Department of Housing and Community Development (“Department”) has issued a Notice of Funding Availability, dated September 9, 2021 (“NOFA”), for the Homekey Program (“Homekey” or “Program”). The Department has issued the NOFA for Homekey grant funds pursuant to Health and Safety Code section 50675.1.3 (Assem. Bill No. 140 (2021-2022 Reg. Sess.), § 20.).

B. City of Modesto (“Co-Applicant”) desires to jointly apply for Homekey grant funds with CENTER FOR HUMAN SERVICES (“Corporation”). Therefore, CoApplicant is joining Corporation in the submittal of an application for Homekey funds (“Application”) to the Department for review and consideration.

C. The Department is authorized to administer Homekey pursuant to the Multifamily Housing Program (Chapter 6.7 (commencing with Section 50675) of Part 2 of Division 31 of the Health and Safety Code). Homekey funding allocations are subject to the terms and conditions of the NOFA, the Application, the Department-approved STD 213, Standard Agreement (“Standard Agreement”), and all other legal requirements of the Homekey Program.

THEREFORE, IT IS RESOLVED THAT:

1. Co-Applicant is hereby authorized and directed to submit a joint Application to the Department in response to the NOFA, and to jointly apply for Homekey grant funds in a total amount not to exceed $7,591,200.

2. If the Application is approved, Co-Applicant is hereby authorized and directed to enter into, execute, and deliver a Standard Agreement in a total amount not to exceed $7,591,200, any and all other documents required or deemed necessary or appropriate to secure the Homekey funds from the Department and to participate in the Homekey Program, and all amendments thereto (collectively, the “Homekey Documents”).

3. Co-Applicant acknowledges and agrees that it shall be subject to the terms and conditions specified in the Standard Agreement, and that the NOFA and Application will be incorporated in the Standard Agreement by reference and made a part thereof. Any and all activities, expenditures, information, and timelines represented in the Application are enforceable through the Standard Agreement. Funds are to be used for the allowable expenditures and activities identified in the Standard Agreement.
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4. City Manager, or his designee, is authorized to execute the Application and the Homekey Documents on behalf of Co-Applicant for participation in the Homekey Program.

PASSED AND ADOPTED this 14th day of December, 2021, by the following vote:

AYES: [ #_] NAYES: [ #_] ABSTAIN: [ #_] ABSENT: [ #_]
ATTEST: ____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
The undersigned, Dana Sanchez, Interim City Clerk of the City of Modesto, does hereby attest and certify that the foregoing is a true and full copy of a resolution of the governing body adopted at a duly convened meeting on the date above-mentioned, and that the resolution has not been altered, amended, or repealed.

SIGNATURE: ________________________ DATE: _____________________ NAME: Dana Sanchez_________________ TITLE: Interim City Clerk________ #24..
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NOTICE AND INSTRUCTIONS

1. Notice. The Department is providing this template Authorizing Resolution as informational guidance only. The Department encourages each Co-Applicant to consult with professional legal counsel during the development of its own formal, legally binding statement that it is authorized to apply to and participate in the Homekey Program.
a. Please note, however, that any limitations or conditions on the authority of the signatory or signatories to execute the Application or the Homekey Documents may result in the Department rejecting the Authorizing Resolution.

2. Accuracy, Verification. The Department will verify that this Authorizing Resolution comports with the legal authority and composition of Co-Applicant’s governing body.

Co-Applicant must timely notify the Department, in writing, of any factors that limit its ability to provide an Authorizing Resolution which is materially in line with this template.

3. Dollar Amounts of Grant Awards. The Department recommends identifying an authorized dollar amount that is at least double the anticipated award (based on current formula calculations). Award amounts are subject to change. If Co-Applicant is ultimately awarded an amount in excess of the amount identified in the Authorizing Resolution, the Department will require a new Authorizing Resolution from CoApplicant before execution of a Standard Agreement.

4. Authorized Signatory or Signatories, Designee. Co-Applicant, as a state, regional, or local public entity, may designate an authorized signatory by title only. In addition, Co-Applicant may authorize multiple signatories, so long as there is clarifying language as to whether the signatories are authorized to execute the Homekey Documents individually or collectively. In addition, Co-Applicant may authorize a designee of the authorized signatory to execute the Homekey Documents. In such case, Co-Applicant must append a supporting document (e.g., memorandum, meeting notes of official action), which indicates the name and title of the designee who is authorized to legally bind the governing body.

5. Vote Count. Please fill out the field by every voting category (i.e., Ayes, Nayes, Abstain, Absent). If none, please indicate zero (0) for that field. The vote count must comport with the legal authority and membership of the Co-Applicant’s governing body.

6. Certification of Authorizing Resolution. The individual who certifies the Authorizing Resolution cannot also be authorized to execute the Homekey Documents on behalf of Co-Applicant.
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING A LOAN FOR CENTER FOR HUMAN SERVICES IN AN AMOUNT UP TO $500,000 IN PERMANENT LOCAL HOUSING
ALLOCATION FUNDS TO ASSIST WITH THE REHABILITATION OF 1208 9 TH STREET AND AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE

TO EXECUTE THE AGREEMENTS
WHEREAS, in September 2017, the California Legislature approved Senate Bill 2 (SB 2), known as the Building Homes and Jobs Act (Act), which established a $75 recording fee on real estate documents to increase the supply of affordable housing and the Act established the Permanent Local Housing Allocation (PLHA) Program administered by the California Department of Housing and Community Development (HCD), and
WHEREAS, the PLHA Program provides a permanent source of funding to cities and counties to help meet the unmet need for affordable housing and increase the supply of affordable housing units, and
WHEREAS, on July 14, 2020 by Resolution number 2020-318, the City of Modesto adopted the five-year PLHA Plan, and
WHEREAS, under Homekey, local entities in partnership with a co-applicant (City of Modesto) will acquire and rehabilitate a variety of housing types, including but not limited to hotels, motels, hostels, single-family homes, multifamily apartments, adult residential facilities, manufactured housing, and/or to convert commercial properties and other existing buildings to Permanent or Interim Housing for the Target Population, and WHEREAS, in order to identify and assess, projects and developers eligible to meet the strict constraints for completion and occupancy, the City and County issued a joint Request for Information (RFI) on July 20, 2021 and this RFI targeted properties #24..
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owners that The City and County are interested in sites that include, but are not limited to, hotel/motel properties, residential Single-Room Occupancy (SRO) hotels, multi- unit housing sites, and other properties that could be used for permanent housing, and WHEREAS, the RFI was open until August 15, 2021 and received 9 local properties were interested in having their properties reviewed for eligibility, and WHEREAS, the City under its consultation process has been approached by developer/operators interested in identifying properties that they can use to further serve their clients and one partnership that developed during this process is with Center for Human Services – Youth Housing, and
WHEREAS, Youth Housing projects have a special distinction for both operating and capital improvements as part of the Homekey 2.0 scoring criteria and CHS identified a commercial building located at 1208 9th Street to convert into permanent supportive housing in partnership for youth, and
WHEREAS, this project will be designed to serve transitional aged youth ages 18- 25 and will be used for the acquisition and commercial conversion of a building that will result in 9 studios and 5 one-bedroom apartments, and
WHEREAS, to assist with the gap, the City is proposing a $500,000 PLHA loan to complete the rehabilitation for the project, and
WHEREAS, the loan will be for a term of fifty-five (55) years, accruing three percent (3%) simple annual interest, with interest on the Loan deferred until the end of the term of the Loan, and the Loan will be subject to all of the requirements of the PLHA program.
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NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a loan for the Center for Human Services in an amount up to $500,000 in Permanent Local Housing Allocation Funds to assist with the rehabilitation of 1208 9th Street.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is authorized to execute the agreements related to the Loan, with such changes as determined by the City Attorney.

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION AMENDING THE FISCAL YEAR 2021-2022 MULTI-YEAR FUND BUDGET TO ESTABLISH A PROJECT FOR THE HOMEKEY 2.0 PROGRAM TO BE FUNDED WITH HOMEKEY 2.0 AND PERMANENT LOCAL HOUSING

ALLOCATION PROGRAM (PLHA) GRANTS AND AUTHORIZING THE CITY

MANAGER OR HIS DESIGNEE, TO TAKE THE NECESSARY STEPS TO

IMPLEMENT THE PROVISIONS OF THIS RESOLUTION
WHEREAS, the City of Modesto is applying to receive funding from the State of California Housing and Community Development Department (HCD) in partnership with the Center for Human Services (CHS) for the Homekey 2.0 Program, and WHEREAS, if approved the fiscal year 2021-2022 Multi-Year budget must be amended as outlined in Exhibit A, and
WHEREAS, the project will be funded with approximately $3,090,000 in Homekey 2.0 Program funds and $500,000 in PLHA funds for property acquisition and capital improvements and $50,000 in PLHA funds for administration, and WHEREAS, the project will also be eligible for $705,600 in operating subsidies funded by the Homekey 2.0 Program.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby amends the fiscal year 2021-2022 multi-year fund budget to establish a project for the Homekey 2.0 Program to be funded with HCD Homekey 2.0 Grant funds and PLHA Grant funds.

BE IT FURTHER RESOLVED that the City Manager or his designee is authorized to take the necessary steps to implement the provisions of this resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 11th day of January, 2022, by Councilmember ?, who #24..
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moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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Exhibit A
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION AMENDING THE FISCAL YEAR 2021-2022 MULTI-YEAR FUND BUDGET TO TRANSFER $550,000 FROM FUND (1120) – GRANTS – PLHA PROGRAM TO HOMEKEY 2.0 PROJECT AND AUTHORIZING THE CITY

MANAGER OR HIS DESIGNEE, TO TAKE THE NECESSARY STEPS TO

IMPLEMENT THE PROVISIONS OF THIS RESOLUTION
WHEREAS, the City of Modesto is applying to receive funding from the State of California Housing and Community Development Department (HCD) in partnership with the Center for Human Services (CHS) for the Homekey 2.0 program, and WHEREAS, if approved the fiscal year 2021-2022 Multi-Year budget must be amended, and
WHEREAS, the Homekey 2.0 project will be funded with approximately with $3,795,600 in Homekey 2.0 funds and $550,000 in Permanent Local Housing Assistance (PLHA) funds for acquisition and capital improvements.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby amends the fiscal year 2021-2022 multi-year fund budget to transfer $550,000 from fund (1120) – Grants – PLHA Program to the Homekey 2.0 project.

BE IT FURTHER RESOLVED, that the City Manager or his designee is authorized to take the necessary steps to implement the provisions of this resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 11th day of January, 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:
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AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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1 5028599.1
THIS AFFORDABLE HOUSING LOAN AGREEMENT (this “Agreement”) is entered into effective as of ____________________, 2022 (the “Effective Date”) by and between the City of Modesto, a California charter city (“City”) and Center for Human Services, a California non-profit corporation (“Developer”). City and Developer are hereinafter collectively referred to as the “Parties.”

RECITALS
A. The City has received funding from the California Department of Housing and Community Development (“HCD”) under the Permanent Local Housing Allocation (“PLHA”) program.

B. On July 14, 2020, by Resolution number 2020-318, the City Council of the City of Modesto adopted the City’s five-year PLHA Plan. The Plan identifies that the City will use the PLHA funds to expand and enhance the access to and number of affordable housing units within the City.

C. The Borrower intends to acquire that certain real property located at 1208 9th Street, Modesto, California, known as Stanislaus County Assessor’s Parcel Numbers 105-044- 006, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”).

D. Developer intents to rehabilitate into 13 permanent supportive housing units on the Property (the “Project”). The Project will serve as permanent supporting housing for 18-24 years old at risk of homelessness.

E. All units in the Project, except for one manager’s unit in the, are proposed to serve households at risk for homelessness with incomes that at or below 50% of the Area Median Income for Stanislaus County.

F. The Developer has requested, and the City has agreed to provide the Developer with a loan of Five Hundred Thousand Dollars ($500,000) in PLHA funds (the “Loan”). The Loan shall be for a term of fifty-five (55) years, accruing three percent (3%) simple annual interest. Interest on the Loan shall be deferred until the end of the term of the Loan.

G. The purpose of this Agreement is to establish the terms conditions for advancing the Loan to Developer and, among other things, require mechanisms to secure the City’s financial interest in the Project.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.

ARTICLE I
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DEFINITIONS

1. Definitions. The following terms shall have the meanings set forth in the Sections referenced below whenever used in this Agreement and the Exhibits attached hereto. Additional terms are defined in the Recitals and text of this Agreement.

1.1 “Claims” is defined in Section 8.2.

1.2 “Deed of Trust” is defined in Section 3.1.

1.3 “Environmental Laws” is defined in Section 8.4.

1.4 “Hazardous Materials” is defined in Section 8.3.

1.5 “Indemnitees” is defined in Section 8.2.

1.6 “Note” is defined in Section 3.1.

1.7 “Project” is defined in Recital C and in Section 4.1.

1.8 “Property” is defined in Recital C.

1.9 “City Documents” is defined in Section 2.3.

ARTICLE II
REPRESENTATIONS; EFFECTIVE DATE

2.1 Developer's Representations. Developer represents and warrants to City as follows, and Developer covenants that until the expiration or earlier termination of this Agreement, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 2.1 not to be true, Developer shall immediately give written notice of such fact or condition to City. Developer acknowledges that City shall rely upon Developer’s representations made herein notwithstanding any investigation made by or on behalf of City. (i) Authority. The Developer is a duly organized California public body corporate and politic validly existing and in good standing under the laws of the State of California and has the power and authority to own the Property and carry on its business as now being conducted. Developer has the full right, power and authority to undertake all obligations of Developer as provided herein, and the execution, performance and delivery of this Agreement by Developer has been duly authorized by all requisite actions. The persons executing this Agreement on behalf of Developer have been duly authorized to do so. This Agreement and the other City Documents constitute valid and binding obligations of Developer. #24..
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(ii) No Conflict. Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. (iii) No Litigation or Other Proceeding. No litigation or other proceeding (whether administrative or otherwise) is outstanding or has been threatened which would prevent, hinder or delay the ability of Developer to perform its obligations under this Agreement. (iv) No Developer Bankruptcy. Developer is not the subject of a bankruptcy or insolvency proceeding.

2.2 Effective Date. The obligations of Developer and City hereunder shall be effective as of the Effective Date set forth in the preamble to this Agreement.

2.3 Execution and Delivery of Documents. Developer shall execute, acknowledge as required, and deliver to City or deposit into escrow this Agreement and all other documents required in connection with the transactions contemplated by this Agreement, including without limitation the Note, the Deed of Trust, and the Regulatory Agreement (defined below), all of the foregoing identified hereinafter as the “City Documents.”

ARTICLE III

CITY FINANCIAL ASSISTANCE

3.1 Loan. In order to assist Developer to develop the Project, City agrees to provide a Loan to Developer in the principal amount of Five Hundred Thousand Dollars ($500,000). The Loan shall be evidenced by a secured promissory note dated as of the Effective Date and executed by Developer substantially in the form attached hereto as Exhibit B (the “Note”) in the amount of the Loan, upon the terms and conditions and for the purposes set forth in this Agreement. Developer’s obligations pursuant to this Agreement will be secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing to be executed by Developer as Trustor for the benefit of City, substantially in the form attached hereto as Exhibit C (the “Deed of Trust”) and recorded against the Property to secure repayment of the Loan. The Deed of Trust will be recorded against the Property subordinate only to such liens and encumbrances as City shall approve in writing, pursuant to Section 3.6.

Provided that Developer has complied with all conditions precedent to disbursement of the Loan set forth in Section 3.3, the proceeds of the Loan (“Loan Proceeds”) shall be disbursed in accordance with Section 3.2 hereof.

3.2 Use and Disbursement of Proceeds. The Loan Proceeds shall be used solely to develop the Project. Upon satisfaction of the conditions set forth in Section 3.3, City shall deposit the Loan Proceeds into escrow for development of the Project, or to such other fund reasonably acceptable to the City.
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3.3 Conditions to Disbursement of Loan Proceeds. City’s obligation to provide the Loan and disburse the Loan Proceeds is conditioned upon the satisfaction of all of the following conditions:
(a) Developer’s execution and delivery to City of this Agreement, the Note, the Deed of Trust, and the Regulatory Agreement;
(b) Recordation of this Agreement, the Deed of Trust, and the Regulatory Agreement in the Official Records of Stanislaus County (the “Official Records”); (c) The closing and loan of financing in an amount which together with the Loan Proceeds will be sufficient to fully finance the development of the Project; (d) The issuance by an insurer satisfactory to City of an A.L.T.A. lender’s policy of title insurance (“Title Policy”) for the benefit of City in the amount of the Loan, insuring that the lien of the Deed of Trust is subject only to those defects, liens, conditions, encumbrances, restrictions, easements and exceptions as City may approve in writing (“Permitted Exceptions”) and containing such endorsements as City may reasonably require, with the cost of such Title Policy to be paid by Developer; (e) Developer’s delivery to the City of evidence of property and liability insurance coverage in accordance with the requirements set forth herein; (f) Developer’s delivery to City of each of the following a certified resolution indicating that Developer has authorized this transaction and that the persons executing the City Documents on behalf of Developer have been duly authorized to do so; (g) Developer’s delivery to City of detailed Project plans, consistent with the Project representations made to the City in furtherance of this Loan, and City’s approval of same.

The City shall have the right to waive any changes in Project plans that it deems appropriate as well as the right to reject any changes that it deems inappropriate; (h) Developer’s delivery, and City’s approval, which approval shall not be unreasonably withheld, conditioned or delayed of time frames for: (i) submittal of a full entitlement application for the Project; (ii) commencement of construction of the Project; and (iii) completion of the Project for issuance of a Certificate of Occupancy; (i) Developer’s delivery to City of a Financing Plan for the full development, construction and operation of the Project, satisfactory to City and updated as requested by City; and,
(j) Developer’s delivery to City of evidence satisfactory to the City that Developer has obtained all required Project construction financing.

3.4 No Obligation to Disburse Proceeds Upon Default. Notwithstanding any other provision of this Agreement, the City shall have no obligation to disburse or authorize the disbursement of any portion of the Loan Proceeds following:
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(i) the failure of any of Developer’s representations and warranties made in this Agreement or in connection with the Loan to be true and correct in all material respects when made;
(ii) the termination of this Agreement by mutual agreement of the Parties; (iii) the failure of Developer to satisfy the conditions to disbursement of the Loan set forth in Section 3.3 within twelve (12) months following the Effective Date unless an extension of such date is approved by City in writing; or
(iv) the occurrence of an Event of Default which remains uncured beyond any applicable cure period.

3.5 Interest Rate; Payment Dates; Maturity Date. The outstanding principal balance of the Note will accrue interest annually at a rate of three percent (3%) simple interest. The entire outstanding principal balance of the Loan and all accrued interest shall be payable in full on the fifty-fifth (55th) anniversary of the date the Loan Proceeds are disbursed, but in no case later than the fifty-seventh (57th) anniversary of the date the Regulatory Agreement is recorded against the Property. Notwithstanding the foregoing, the City shall have the right to accelerate the maturity date and declare all sums payable under the Note upon the occurrence of (i) an Event of Default; (ii) the sale or other Transfer of the Property or any portion thereof (other than as permitted or approved pursuant to Article VI); or (iii) the recapitalization of the Project, other than as permitted or approved by the City.

3.6 Security; Subordination. As security for repayment of the Note, Developer shall execute the Deed of Trust in favor of City as beneficiary pursuant to which City shall be provided a lien against Developer’s interest in the Property and the Project. The Deed of Trust may be subordinated only to Permitted Exceptions and such liens and encumbrances as City shall approve in writing. The City agrees that it will not withhold consent to reasonable requests for subordination of this Agreement to deeds of trust provided for the benefit of lenders in a Cityapproved Financing Plan, provided that the instruments effecting such subordination include reasonable protections for the City in the event of default, including without limitation, extended notice and cure rights. Developer acknowledges that the Deed of Trust secures Developer’s performance of Developer’s obligations pursuant to this Agreement and the Regulatory Agreement which may survive repayment of the Note, and the Deed of Trust shall not be reconveyed prior to Developer’s satisfaction of such obligations.

3.7 Prepayment. Developer shall have the right to prepay the Loan at any time and from time to time, without penalty or premium.

ARTICLE IV

USE OF THE PROPERTY

4.1 Use Restrictions. Developer hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the construction and operation #24..
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of the Project, which shall consist of nine (9) studio units and four (4) one-bedroom attached units. Thirteen (13) of the units will be reserved for occupancy by households with incomes that are at or below fifty percent (50%) of the Area Median Income for Stanislaus County, and one (1) unit will be an unrestricted manager’s unit, in accordance with the terms and conditions of this Agreement and an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants which the City and Developer shall execute substantially in the form attached hereto as Exhibit D (“Regulatory Agreement”) concurrently with the execution of this Agreement, and which shall be recorded in the Official Records. Developer represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the restrictions set forth in this Agreement, and Developer covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City.

4.2 Occupancy Requirements. For a term of fifty-five (55) years commencing upon the issuance of a Final Certificate of Occupancy for the Project, the Project shall be dedicated for use as affordable rental housing as described in Section 4.1.

4.3 Reports; Inspections. On an annual basis, Developer shall submit a written report (“Annual Report”) to the City in a form satisfactory to City. The Annual Report shall, at a minimum, include the following information: (i) total number of Project residents, and (ii) resident income.

Upon not less than forty-eight (48) hours advance notice to Developer or Developer’s management agent, Developer shall permit City representatives to enter and inspect the Property and the Project during reasonable business hours in order to monitor compliance with this Agreement.

4.4 Management Responsibilities. Developer shall be responsible for all management functions with respect to the Property and the Project, including without limitation client intake, property maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. City shall have no responsibility for management or maintenance of the Property or the Project.

4.5 Management Entity. City shall have the right to review and approve the qualifications of any management entity proposed by Developer for the Project which approval shall not be unreasonably withheld, conditioned or delayed. The contracting of management services to a management entity shall not relieve Developer of its primary responsibility for proper performance of management duties. City hereby approves Developer as the initial management entity for the Project.

4.6 Maintenance. Developer shall at its own expense, maintain the Property, the improvements located thereon (the “Improvements”) and related landscaping and common areas in good physical condition, in good repair, and in decent, safe, sanitary, habitable and tenantable living conditions in conformity with all applicable state, federal, and local laws, ordinances, codes, and regulations. Without limiting the foregoing, Developer agrees to maintain the Project and the Property (including without limitation, the residence, common areas, landscaping, driveways, parking garage and walkways) in a condition free of all waste, #24..
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nuisance, debris, unmaintained landscaping, graffiti, disrepair, abandoned vehicles/appliances, and illegal activity, and shall take all reasonable steps to prevent the same from occurring on the Property. Developer shall prevent and/or rectify any physical deterioration of the Property and the Project and shall make all repairs, renewals and replacements necessary to keep the Property and the improvements located thereon in good condition and repair. Developer shall provide adequate security services for occupants of the Project.

4.6.1 City’s Right to Perform Maintenance. In the event that Developer breaches any of the covenants contained in Section 4.6, and such default continues for a period of ten (10) days after written notice from City (with respect to graffiti, debris, and waste material) or thirty (30) days after written notice from City (with respect to landscaping, building improvements and general maintenance), then City, in addition to any other remedy it may have under this Agreement or at law or in equity, shall have the right, but not the obligation, to enter upon the Property and perform all acts and work necessary to protect, maintain, and preserve the improvements and the landscaped areas on the Property. All costs expended by City in connection with the foregoing, shall constitute an indebtedness secured by the Deed of Trust, and shall be paid by Developer to City upon demand. All such sums remaining unpaid thirty (30) days following delivery of City’s invoice therefor shall bear interest at the rate of the lesser of 10% per annum or the maximum rate permitted by law.

4.7 Management Plan. Prior to occupancy of the Project, Developer shall submit for City review and approval, a plan for managing the Property and Project ("Management Plan") which approval shall not be unreasonably withheld, conditioned or delayed. The Management Plan shall describe the management team, shall address how the Developer and the management entity plan to manage and maintain the Property and the Project, and shall include the proposed management agreement. Developer shall abide by the terms of the Management Plan in managing and maintaining the Property and the Project, and throughout the term of this Agreement, shall submit proposed modifications to City for its review and approval.

4.8 Taxes and Assessments. Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, payroll, withholding, sales, and other taxes assessed against the Property and payable by Developer, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, the Developer, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.

4.9 Property Damage or Destruction. If any part of the Project is damaged or destroyed, Developer shall repair or restore the same, consistent with the occupancy requirements set forth in this Agreement. Such work shall be commenced within one hundred twenty (120) days after the damage or loss occurs and shall be completed within one year thereafter, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible. #24..
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4.10 Obligation to Refrain from Discrimination. Developer shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin of any person. Developer covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or of a group of persons on account of race, color, religion, creed, sex, sexual orientation, disability, marital status, ancestry, or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Property, or any portion thereof, nor shall Developer or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the property herein transferred. The foregoing provisions shall run with the land, be binding upon any subcontracting parties, successors, assigns and other transferees under this Agreement and shall remain in effect in perpetuity.

4.11 Compliance with Laws. Developer shall carry out and shall cause its contractors to carry out the Project, including but not limited to, any activities for which the Loan is being provided, in conformity with all applicable federal, state and local laws, rules, ordinances and regulations, including without limitation, all applicable federal and state labor laws and standards (including but not limited to, California Labor Code Section 1720 et seq. and the regulations adopted pursuant thereto (“Prevailing Wage Laws”)), applicable provisions of the California Public Contracts Code (if any), Article 34 of the California Constitution, the City zoning and development standards, building, plumbing, mechanical and electrical codes, all other provisions of the City Code, and all applicable disabled and handicapped access requirements, including without limitation, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450 et seq., Government Code Section 11135 et seq., and the Unruh Civil Rights Act, Civil Code Section 51 et seq.

ARTICLE V

TERM OF AGREEMENT

5.1 Term of Restrictions. This Agreement shall remain in effect through the fifty-fifth (55th) anniversary of issuance of a Final Certificate of Occupancy for the Project, unless sooner terminated by written instrument executed by City.

ARTICLE VI

LIMITATIONS ON CHANGE IN OWNERSHIP, MANAGEMENT

AND CONTROL

6.1 Change Pursuant to this Agreement. Developer and its principals have represented that they possess the necessary expertise, skill and ability to own and operate the Project on the Property pursuant to this Agreement. The qualifications, experience, financial capacity and expertise of Developer and its principals are of particular concern to the City. It is because of these qualifications, experience, financial capacity and expertise that the City has #24..
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entered into this Agreement with Developer. No voluntary or involuntary successor, assignee or transferee of Developer shall acquire any rights or powers under this Agreement, except as expressly provided herein.

6.2 Prohibition on Transfer. Developer shall not, except as expressly permitted by this Agreement, directly or indirectly, voluntarily, involuntarily or by operation of law make or attempt any total or partial sale, transfer, conveyance, assignment or lease (collectively, “Transfer”) of the whole or any part of the Property, the Project, the improvements, or this Agreement, without the prior written approval of City. Any such attempt to assign this Agreement without the City’s consent shall be null and void and shall confer no rights or privileges upon the purported assignee.

6.3 Permitted Transfers. Notwithstanding any contrary provision hereof, the prohibitions set forth in this Article shall not be deemed to prevent: (i) the granting of temporary easements or permits to facilitate development of the Property; (ii) the lease of individual residences in accordance with the Regulatory Agreement to tenants for occupancy as their principal residence; (iii) assignments creating security interests for the purpose of financing the construction or permanent financing of the Project (iv) the dedication of any property required pursuant to this Agreement; (v) a Transfer to an entity which is under the direct control of Developer; (vi) a Transfer of limited partner interests in Developer; (vii) the removal and replacement of a general partner of Developer for cause by its limited partner pursuant to the terms of Developer’s Amended and Restated Agreement of Limited Partnership; or (viii) the exercise of rights under that certain Purchase Option and Right of First Refusal Agreement dated on or about the date hereof.

6.4 Requirements for Proposed Transfers. The City may, in the exercise of its sole discretion, consent to a proposed Transfer of this Agreement, the Property or portion thereof if all of the following requirements are met (provided however, the requirements of this Section 6.4 shall not apply to Transfers described in Section 6.3:
(i) The proposed transferee demonstrates to the City’s satisfaction that it has the qualifications, experience and financial resources necessary and adequate as may be reasonably determined by the City to competently manage the Project and to otherwise fulfill the obligations undertaken by the Developer under this Agreement. (ii) The Developer and the proposed transferee shall submit for City review and approval all instruments and other legal documents proposed to effect any Transfer of this Agreement, the Property or interest therein together with such documentation of the proposed transferee’s qualifications as the City may reasonably request. (iii) The proposed transferee shall expressly assume all of the rights and obligations of the Developer under this Agreement and the other City Documents arising after the effective date of the Transfer and all obligations of Developer arising prior to the effective date of the Transfer (unless Developer expressly remains responsible for such obligations) and shall agree to be subject to and assume all of Developer’s obligations and restrictions set forth in this Agreement and the other City Documents. #24..
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(iv) The Transfer shall be effectuated pursuant to a written instrument satisfactory to the City in form recordable in the Official Records.

Consent to any proposed Transfer may be given by the City Manager unless the City Manager, in his or her discretion, refers the matter of approval to the City Council. If a proposed Transfer has not been approved by City in writing within thirty (30) days following City’s receipt of written request by Developer, it shall be deemed rejected.

6.5 Effect of Transfer without City Consent. In the absence of specific written agreement by the City, no Transfer by Developer other than a Transfer that does not require consent of the City pursuant to Section 8 of the Regulatory Agreement shall be deemed to relieve the Developer or any other party from any obligation under this Agreement. Transfer in violation of this Agreement shall constitute an Event of Default permitting the City to exercise its remedies hereunder.

6.6 Recovery of City Costs. Unless City agrees otherwise in writing, Developer shall reimburse City for all City costs, including but not limited to attorneys’ fees, incurred in reviewing instruments and other legal documents proposed to effect a Transfer under this Agreement and in reviewing the qualifications and financial resources of a proposed successor, assignee, or transferee within ten (10) days following City’s delivery to Developer of an invoice detailing such costs.

ARTICLE VII

SECURITY FINANCING AND RIGHTS OF MORTGAGEES

7.1 Mortgages and Deeds of Trust for Development. Mortgages and deeds of trust, or any other reasonable security instrument are permitted to be placed upon the Property only for the purpose of securing loans approved by the City in writing for the purpose of financing the construction and operation of the Project. Developer shall not enter into any conveyance for such financing without the prior written approval of City Manager or his or her designee. As used herein, the terms “mortgage” and “deed of trust” shall mean any security instrument used in financing real estate acquisition, construction and land development.

7.1.1 Agreement to be Senior to Mortgages. This Agreement shall be recorded in the Official Records. Developer covenants and agrees that unless otherwise agreed upon by City pursuant to a written instrument and including without limitation, the provisions set forth in Section 7.2 below, this Agreement shall be senior in priority to any mortgage, deed of trust, or other security instrument recorded against the Property, and that if any such instrument has been recorded against the Property prior to recordation of such instruments, Developer shall promptly secure execution of such subordination agreements as may be necessary to ensure that City’s interests shall not be defeated as a result of foreclosure of any such instrument. #24..
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7.1.2 Encumbrances. Developer agrees to use best efforts to ensure that any deed of trust secured by the Project for the benefit of a lender other than City (“Third-Party Lender”) shall contain each of the following provisions: (i) Third-Party Lender shall use its best efforts to provide to City a copy of any notice of default issued to Developer concurrently with provision of such notice to Developer (provided however, the failure to do so shall not impair such Third-Party Lender’s rights and remedies); (ii) City shall have the reasonable right, but not the obligation, to cure any default by Developer within the same period of time provided to Developer for such cure extended by an additional sixty (60) days; (iii) provided that City has cured any default under Third-Party Lender’s deed of trust and other loan documents, City shall have the right to foreclose City’s Deed of Trust and take title to the Project without acceleration of Third-Party Lender’s debt; and (iv) City shall have the right to transfer the Project without acceleration of Third-Party Lender’s debt to a nonprofit corporation or other entity which shall own and operate the Project as a shelter, subject to the prior written consent of the Third-Party Lender. Developer agrees to provide to City a copy of any notice of default Developer receives from any Third-Party Lender within three (3) business days following Developer’s receipt thereof.

7.1.3 Mortgagee Protection. No violation of any provision contained herein shall defeat or render invalid the lien of any mortgage or deed of trust made in good faith and for value upon all or any portion of the Project or the Property, and the purchaser at any trustee’s sale or foreclosure sale shall not be liable for any violation of any provision hereof occurring prior to the acquisition of title by such purchaser. Such purchaser shall be bound by and subject to this Agreement from and after such trustee’s sale or foreclosure sale. Promptly upon determining that a violation of this Agreement has occurred, City shall give written notice to the holders of record of any mortgages or deeds of trust encumbering the Project or the Property that such violation has occurred.

7.2 Notice of Default and Right to Cure. Whenever City delivers any notice of default hereunder, City shall concurrently deliver a copy of such notice to each holder of record of any mortgage or deed of trust secured by the Property provided that City has been provided with the address for delivery of such notice. City shall have no liability to any such holder for any failure by the City to provide such notice to such holder. Each such holder shall have the right, but not the obligation, at its option, within sixty (60) days after the receipt of the notice, to cure or remedy any such default or breach. In the event that possession of the Property (or any portion thereof) is required to effectuate such cure or remedy, the holder shall be deemed to have timely cured or remedied the default if it commences the proceedings necessary to obtain possession of the Property within sixty (60) days after receipt of the City’s notice, diligently pursues such proceedings to completion, and after obtaining possession, diligently completes such cure or remedy. A holder who chooses to exercise its right to cure or remedy a default or breach shall first notify City of its intent to exercise such right prior to commencing to cure or remedy such default or breach.

7.3 City’s Right to Cure Defaults. In the event of a breach or default by Developer under a mortgage or deed of trust secured by the Property, City may cure the default following prior notice thereof to the holder of such instrument and Developer. In such event, Developer shall be liable for, and City shall be entitled to reimbursement from Developer for all costs and #24..
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expenses incurred by City associated with and attributable to the curing of the default or breach and such sum shall constitute indebtedness secured by the City’s Deed of Trust.

7.4 Holder to be Notified. Developer, for itself, its successors and assigns hereby warrants and agrees that each term contained herein dealing with security financing and rights of holders shall be either inserted into the relevant deed of trust or mortgage or acknowledged by the holder prior to its creating any security right or interest in the Property.

7.5 Modifications to Agreement. City shall not unreasonably withhold its consent to modifications of this Agreement requested by Project lenders or investors provided such modifications do not alter City’s substantive rights and obligations under this Agreement.

7.6 Estoppel Certificates. Either Party shall, at any time, and from time to time, within thirty (30) days after receipt of written request from the other Party, execute and deliver to such Party a written statement certifying that, to the knowledge of the certifying Party: (i) this Agreement is in full force and effect and a binding obligation of the Parties (if such be the case), (ii) this Agreement has not been amended or modified, or if so amended, identifying the amendments, and (iii) the requesting Party is not in default in the performance of its obligations under this Agreement, or if in default, describing the nature of any such defaults.

ARTICLE VIII

ENVIRONMENTAL MATTERS

8.1 No City Liability; Developer’s Covenants. City shall not be responsible for the cost of any soil, groundwater or other environmental remediation or other response activities for any Hazardous Materials existing or occurring on the Property or any portion thereof, and Developer shall be solely responsible for all actions and costs associated with any such activities required for the development of the Project, the Property, or any portion thereof. Upon receipt of any notice regarding the presence, release or discharge of Hazardous Materials in, on or under the Property, or any portion thereof, Developer (as long as Developer owns the property which is the subject of such notice) agrees to timely initiate and diligently pursue and complete all appropriate response, remediation and removal actions for the presence, release or discharge of such Hazardous Materials within such deadlines as specified by applicable Environmental Laws.

Developer hereby covenants and agrees that:
(1) Developer shall not knowingly permit the Project or the Property or any portion of either to be a site for the use, generation, treatment, manufacture, storage, disposal or transportation of Hazardous Materials or otherwise knowingly permit the presence or release of Hazardous Materials in, on, under, about or from the Project or the Property with the exception of cleaning supplies and other materials customarily used in construction, rehabilitation, use or maintenance of residential property and used, stored and disposed of in compliance with Hazardous Materials Laws, and #24..
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(2) Developer shall keep and maintain the Project and the Property and each portion thereof in compliance with, and shall not cause or permit the Project or the Property or any portion of either to be in violation of, any Hazardous Materials Laws.

8.2 Environmental Indemnification. Developer shall indemnify, defend (with counsel approved by City and hold the City, and its elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) harmless from and against any and all liability, loss, cost, expense (including without limitation attorneys’ fees and costs of litigation), claim, demand, action, suit, judicial or administrative proceeding, penalty, deficiency, fine, order, and damage (all of the foregoing collectively “Claims”) including without limitation any expenses associated with the investigation, assessment, monitoring, response, removal, treatment, abatement or remediation of Hazardous Materials and administrative, enforcement or judicial proceedings resulting, arising, or based directly or indirectly in whole or in part, upon (i) the presence, release, use, generation, discharge, storage or disposal or the alleged presence, release, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Property, or (ii) the failure of Developer, Developer’s employees, agents, contractors, subcontractors, or any person acting on behalf of any of the foregoing to comply with Hazardous Materials Laws or the covenants set forth in Section 8.1. The foregoing indemnity shall further apply to any residual contamination in, on, under or about the Property or affecting any natural resources, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, treatment, storage, transport or disposal of any such Hazardous Materials, and irrespective of whether any of such activities were or will be undertaken in accordance with Hazardous Materials Laws. The provisions of this Section 8.2 shall survive the expiration or earlier termination of this Agreement.

8.2.1 No Limitation. Developer hereby acknowledges and agrees that Developer’s duties, obligations and liabilities under this Agreement, including, without limitation, under Section 8.2 above, are in no way limited or otherwise affected by any information the City may have concerning the Property and/or the presence in, on, under or about the Property of any Hazardous Materials, whether the City obtained such information from the Developer or from its own investigations. It is further agreed that City does not and shall not waive any rights against Developer that they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement.

8.3 Hazardous Materials. As used herein, the term “Hazardous Materials” means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “toxic waste”, “toxic pollutant”, “toxic substance”, “solid waste” or “pollutant or contaminant” in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. 2601 et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601 et seq.], the Hazardous Materials Transportation #24..
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Authorization Act [49 U.S.C. Section 5101 et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901 et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401 et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280 et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300 et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100 et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5 et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000 et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any “Superfund” or “Superlien” law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products.

8.4 Environmental Laws. As used herein, the term “Environmental Laws” means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to Hazardous Materials (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601 et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601 et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101 et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901 et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401 et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280 et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300 et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100 et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5 et seq.], and the PorterCologne Water Quality Control Act [California Water Code Section 13000 et seq.], as each of the foregoing now exist or are hereafter amended, together with any regulations promulgated thereunder.

ARTICLE IX

DEFAULTS, REMEDIES AND TERMINATION
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9.1 Events of Default. The following events shall constitute an event of default on the part of Developer (“Event of Default”):
(a) A Transfer occurs, either voluntarily or involuntarily, in violation of Article VI; (b) Developer fails to maintain insurance on the Property and the Project as required pursuant to this Agreement, and Developer fails to cure such default within ten (10) days; (c) Subject to Developer’s right to contest the following charges pursuant to Section 4.8, if Developer fails to pay prior to delinquency taxes or assessments due on the Property or the Project or fails to pay when due any other charge that may result in a lien on the Property or the Project, and Developer fails to cure such default within thirty (30) days of date of delinquency, but in all events upon the imposition of any such tax or other lien; (d) A default arises under any loan secured by a mortgage, deed of trust or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to accelerate repayment of such loan;
(e) Any representation or warranty contained in this Agreement or in any application, financial statement, certificate or report submitted to the City in connection with this Agreement or Developer’s request for the Loan proves to have been incorrect in any material and adverse respect when made and continues to be materially adverse to the City; (f) If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Developer (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Developer in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Developer; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; (g) A court of competent jurisdiction shall have made or entered any decree or order (1) adjudging the Developer to be bankrupt or insolvent, (2) approving as properly filed a petition seeking reorganization of the Developer or seeking any arrangement for Developer under bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (3) appointing a receiver, trustee, liquidator, or assignee of the Developer in bankruptcy or insolvency or for any of its properties, or (4) directing the winding up or liquidation of the Developer;
(h) Developer shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within sixty (60) days after such event (unless a lesser time period is permitted for cure under any other mortgage on the Property, in which event such #24..
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lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution;
(i) The Developer shall have voluntarily suspended its business or Developer shall have been dissolved or terminated;
(j) An event of default arises under any City Document and remains uncured beyond any applicable cure period; or
(k) Developer defaults in the performance of any term, provision, covenant or agreement contained in this Agreement other than an obligation enumerated in this Section 9.1 and unless a shorter cure period is specified for such default, the default continues for ten (10) days in the event of a monetary default or thirty (30) days in the event of a nonmonetary default after the date upon which City shall have given written notice of the default to Developer; provided however, if the default is of a nature that it cannot be cured within thirty (30) days, a Developer Event of Default shall not arise hereunder if Developer commences to cure the default within thirty (30) days and thereafter prosecutes the curing of such default with due diligence and in good faith to completion and in no event later than sixty (60) days after receipt of notice of the default.

9.2 Remedies. Upon the occurrence of an Event of Default and the expiration of any applicable cure period, City shall have all remedies available to it under law or equity, including, but not limited to the following, and City may, at its election, without notice to or demand upon Developer, except for notices or demands required by law or expressly required pursuant to the City Documents, exercise one or more of the following remedies:
(a) Seek specific performance to enforce the terms of the City Documents; (b) Foreclose on the Property pursuant to the Deed of Trust; (c) Pursue any and all other remedies available under law to enforce the terms of the City Documents and City’s rights thereunder.

9.3 Remedies Cumulative; No Consequential Damages. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different time, of any other rights or remedies for the same or any other default by the other Party. Notwithstanding anything to the contrary set forth herein, a party’s right to recover damages in the event of a default shall be limited to actual damages and shall exclude consequential damages.

9.4 Inaction Not a Waiver of Default. No failure or delay by either Party in asserting any of its rights and remedies as to any default shall operate as a waiver of such default or of any such rights or remedies, nor deprive either Party of its rights to institute and maintain any action #24..
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or proceeding which it may deem necessary to protect, assert or enforce any such rights or remedies in the same or any subsequent default.

ARTICLE X
INDEMNITY AND INSURANCE.

10.1 Indemnification. To the fullest extent permitted by law, Developer shall indemnify, defend (with counsel approved by City), and hold Indemnitees harmless from and against all losses, damages, fines, deficiencies, penalties, claims, demands, suits, actions, causes of action, legal or administrative proceedings, judgments, costs and expenses (including without limitation reasonable attorneys’ fees and court costs) or liabilities of any kind (all of the foregoing, collectively “Claims”) arising directly or indirectly in any manner in connection with or resulting from (a) any and all predevelopment, development or construction activities conducted in connection with the Property or the Project, including without limitation, site investigations conducted by or for Borrower, (b) any failure of any of Developer’s representations or warranties set forth in the City Documents, or made by Developer in connection with the execution and delivery of the City Documents or in any certificate furnished pursuant hereto, or in connection with any request for disbursement of Loan proceeds to be correct in all material respects, (c) any failure of Developer to comply with applicable laws pursuant to Section 4.11, including but not limited to, failure to comply with California Prevailing Wage Laws and (c) any Claim, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises in connection with the Loan, the City Documents, or any transaction contemplated thereby, or the relationship between Developer and City.

Developer’s obligations under this Section shall survive the making and disbursement of the Loan and the expiration or termination of this Agreement. It is further agreed that City does not and shall not waive any rights against Developer that it may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or the deposit with City by Developer, of any of the insurance policies described in this Agreement. Developer’s indemnity obligations shall not apply to Claims arising solely as a result of the willful misconduct or gross negligence of the Indemnitees, and shall not be construed to require repayment of principal or interest on the Loan.

10.2 Liability and Workers Compensation Insurance.
(a) Developer shall maintain a commercial general liability policy in the amount of One Million Dollars ($1,000,000) combined single limit per occurrence, Two Million Dollars ($2,000,000) annual aggregate, or such other policy limits as City may require in its reasonable discretion, including coverage for bodily injury, property damage, products, completed operations and contractual liability coverage. Such policy or policies shall be written on an occurrence basis and shall name the Indemnitees as additional insureds. (b) Developer shall maintain a comprehensive automobile liability coverage in the #24..
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amount of One Million Dollars ($1,000,000), combined single limit including coverage for owned and non-owned vehicles and shall furnish or cause to be furnished to City evidence satisfactory to City that Developer and any contractor with whom Developer has contracted for the performance of work on the Property or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. Automobile liability policies shall name the Indemnitees as additional insureds.
(c) Developer shall maintain property insurance covering all risks of loss (other than earthquake), including flood (if required) for not less than ninety percent (90%) of the replacement value of the Project with deductible, if any, in an amount acceptable to City, naming City as loss payee.
(d) Companies writing the insurance required hereunder shall be licensed to do business in the State of California. Insurance shall be placed with insurers with a current A.M.

Best's rating of no less than A: VII. The Commercial General Liability and comprehensive automobile policies required hereunder shall name the Indemnitees as additional insureds.

Property insurance shall name City as loss payee as its interests may appear. (e) Developer shall furnish City with certificates of insurance in form acceptable to City evidencing the required insurance coverage and duly executed endorsements evidencing such additional insured status. The certificates shall contain a statement of obligation on the part of the carrier to notify City of any material adverse change, cancellation, termination or nonrenewal of the coverage at least thirty (30) days in advance of the effective date of any such material adverse change, cancellation, termination or non-renewal. (f) If any insurance policy or coverage required hereunder is canceled or reduced, Developer shall, within fifteen (15) days after receipt of notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with City a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, City may, without further notice and at its option, procure such insurance coverage at Developer’s expense, and Developer shall promptly reimburse City for such expense upon receipt of billing from City. (g) Coverage provided by Developer shall be primary insurance and shall not be contributing with any insurance, or self-insurance maintained by City, and the policies shall so provide. The insurance policies shall contain a waiver of subrogation for the benefit of the City.

Developer shall furnish the required certificates and endorsements to City prior to the commencement of construction of the Project, and shall provide City with certified copies of the required insurance policies upon request of City.

ARTICLE XI

MISCELLANEOUS PROVISIONS

11.1 No Brokers. Each Party warrants and represents to the other that no person or entity can properly claim a right to a real estate commission, brokerage fee, finder's fee, or other #24..
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compensation with respect to the transactions contemplated by this Agreement. Each Party agrees to defend, indemnify and hold harmless the other Party from any claims, expenses, costs or liabilities arising in connection with a breach of this warranty and representation. The terms of this Section shall survive the expiration or earlier termination of this Agreement.

11.2 Enforced Delay; Extension of Times of Performance. Subject to the limitations set forth below, performance by either Party shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended where delays are due to: war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, casualties, acts of God, acts of the public enemy, epidemics, quarantine restrictions, freight embargoes, governmental restrictions or priority, litigation, including court delays, unusually severe weather, acts or omissions of the other Party, acts or failures to act of the City or any other public or governmental agency or entity (other than the acts or failures to act of City which shall not excuse performance by City), or any other cause beyond the affected Party’s reasonable control.

An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other Party within thirty (30) days of the commencement of the cause and such extension is not rejected in writing by the other Party within ten (10) days of receipt of the notice. Neither Party shall unreasonably withhold consent to an extension of time pursuant to this Section.

11.3 Notices. Except as otherwise specified in this Agreement, all notices to be sent pursuant to this Agreement shall be made in writing, and sent to the Parties at their respective addresses specified below or to such other address as a Party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery; (ii) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered on receipt if delivery is confirmed by a return receipt; (iii) nationally recognized overnight courier, with charges prepaid or charged to the sender’s account, in which case notice is effective on delivery if delivery is confirmed by the delivery service;
(iv) facsimile transmission, in which case notice shall be deemed delivered upon transmittal, provided that (a) a duplicate copy of the notice is promptly delivered by first-class or certified mail or by overnight delivery, or (b) a transmission report is generated reflecting the accurate transmission thereof. Any notice given by facsimile shall be considered to have been received on the next business day if it is received after 5:00 p.m. recipient’s time or on a nonbusiness day.

City: City of Modesto
1010 Tenth Street, Suite 4400
Modesto, CA 95354
Attn: Community Development Manager
Developer: Center for Human Services
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2000 W. Briggsmore Avenue, Ste. 1
Modesto, CA 95350
Attn: Executive Director

11.4 Attorneys’ Fees. If either Party fails to perform any of its obligations under this Agreement, or if any dispute arises between the Parties concerning the meaning or interpretation of any provision hereof, then the prevailing party in any proceeding in connection with such dispute shall be entitled to the costs and expenses it incurs on account thereof and in enforcing or establishing its rights hereunder, including, without limitation, court costs and reasonable attorneys' fees and disbursements.

11.5 Waivers; Modification. No waiver of any breach of any covenant or provision of this Agreement shall be deemed a waiver of any other covenant or provision hereof, and no waiver shall be valid unless in writing and executed by the waiving party. An extension of time for performance of any obligation or act shall not be deemed an extension of the time for performance of any other obligation or act, and no extension shall be valid unless in writing and executed by the waiving party. This Agreement may be amended or modified only by a written instrument executed by the Parties.

11.6 Binding on Successors. Subject to the restrictions on Transfers set forth in Article VI, this Agreement shall bind and inure to the benefit of the Parties and their respective permitted successors and assigns. Any reference in this Agreement to a specifically named party shall be deemed to apply to any permitted successor and assign of such party who has acquired an interest in compliance with this Agreement or under law.

11.7 Survival. All representations made by Developer hereunder and Developer’s obligations pursuant to Sections 8.2, 10.1, and 11.1 shall survive the expiration or termination of this Agreement.

11.8 Construction. The section headings and captions used herein are solely for convenience and shall not be used to interpret this Agreement. The Parties acknowledge that this Agreement is the product of negotiation and compromise on the part of both Parties, and the Parties agree, that since both Parties have participated in the negotiation and drafting of this Agreement, this Agreement shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it.

11.9 Action or Approval. Whenever action and/or approval by City is required under this Agreement, the City Manager or his or her designee may act on and/or approve such matter unless specifically provided otherwise herein, or unless the City Manager determines in his or her discretion that such action or approval requires referral to the City Council for consideration.

11.10 Entire Agreement. This Agreement, including Exhibits A through D attached hereto and incorporated herein by this reference, together with the other City Documents, contains the entire agreement between the Parties with respect to the subject matter hereof, and supersedes #24..
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all prior written or oral agreements, understandings, representations or statements between the Parties with respect to the subject matter hereof.

11.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original and all of which taken together shall constitute one instrument.

11.12 Severability. If any term, provision, or condition of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall continue in full force and effect unless an essential purpose of this Agreement is defeated by such invalidity or unenforceability.

11.13 No Third Party Beneficiaries. Nothing contained in this Agreement is intended to or shall be deemed to confer upon any person, other than the Parties and their respective successors and assigns, any rights or remedies hereunder.

11.14 Parties Not Co-Venturers. Nothing in this Agreement is intended to or shall establish the Developer and the City as partners, co-venturers, or principal and agent with one another.

11.15 Non-Liability of Officials, Employees and Agents. No officer, official, employee or agent of City shall be personally liable to Developer or its successors in interest in the event of any default or breach by City or for any amount which may become due to Developer or its successors in interest pursuant to this Agreement.

11.16 Time of the Essence; Calculation of Time Periods. Time is of the essence for each condition, term, obligation and provision of this Agreement. Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is not a business day, in which event the period shall run until the next business day. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a “business day” means a day that is not a Friday, Saturday, Sunday, a federal holiday or a state holiday under the laws of California.

11.17 Governing Law; Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard to principles of conflicts of laws. Any action to enforce or interpret this Agreement shall be filed in the Superior Court of Stanislaus County, California or in the Federal District Court for the Eastern District of California.

11.18 Further Assurances. The Parties shall execute, acknowledge and deliver to the other such other documents and instruments, and take such other actions, as either shall reasonably request as may be necessary to carry out the intent of this Agreement; provided, however, that such documents or instruments shall not expand the liability of Developer or City hereunder.
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11.19 Refinancing of Senior Debt. Notwithstanding anything to the contrary contained in the City Documents, Borrower may refinance that certain senior loan made by Golden State Finance Authority, as assigned to, Bank of America, N.A. to Developer on or about the date hereof (the “Senior Indebtedness”) without the prior consent of the City (the “Refinanced Indebtedness”), and the City hereby agrees to subordinate the Loan and all documents securing or evidencing the Loan, including, but not limited to, the Deed of Trust, the Note, the Regulatory Agreement and this Agreement, to the Refinanced Indebtedness and the lien of any deed of trust or mortgage securing the Refinanced Indebtedness, provided that the principal balance of the Refinanced Indebtedness does not exceed the then outstanding principal balance of the Senior Indebtedness plus the costs of refinancing the Senior Indebtedness.

SIGNATURES ON FOLLOWING PAGE.
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IN WITNESS WHEREOF, the Parties have entered into this Agreement effective as of the date first written above.

DEVELOPER:

CENTER FOR HUMAN SERVICES, a California nonprofit corporation By: ______________________________________
___________, Executive Director
Date: ______________________________________
[City Signature Follows]
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CITY:

CITY OF MODESTO, a California charter city
By: _____________________________________
Joseph P. Lopez, City Manager
Date:
______________________________________
ATTEST:
________________________________
Dana Sanchez, Interim City Clerk
APPROVED AS TO FORM:

By: ___________________________
Jose M. Sanchez, Acting City Attorney
APPROVED AS TO RISK MANAGEMENT:

By: _________________________________
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Exhibit A

LEGAL DESCRIPTION
(Attach Legal Description.)
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B-1
Exhibit B

FORM OF SECURED PROMISSORY NOTE
(Attach form of Note.)
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C-1
Exhibit C

FORM OF DEED OF TRUST
(Attach form of Deed of Trust.)
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D-1
Exhibit D

FORM OF REGULATORY AGREEMENT
(Attach form of Regulatory Agreement.)
5028599.1
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Recording requested by and when recorded
mail to:

City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN:_105-044-006_ Space above this line for Recorder’s use.

REGULATORY AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS
(Youth Housing – PLHA Loan)
This Regulatory Agreement and Declaration of Restrictive Covenants (the "Regulatory Agreement") is dated as of ________, 2022, and is between the City of Modesto, a California charter city (“City”) Center for Human Services, a California non-profit corporation (“Developer” or “Owner”). City and Developer are hereinafter collectively referred to as the “Parties.”

RECITALS
A. Defined Terms used but not defined in these recitals are as defined in Article 1 of this Agreement.

B. Developer owns fee simple title to certain real property located at 1208 9th Street, Modesto, California, known as Stanislaus County Assessor’s Parcel Numbers 105-044-006, , as further described in Exhibit A, attached hereto and incorporated herein (the “Property”).

Developer intends to develop permanent supportive housing development on the Land consisting of consist of nine (9) studio units and four (4) one-bedroom attached units. (the “Development”).

C. Pursuant to that certain Affordable Housing Loan Agreement dated __________ by and between the City and Developer (the "Agreement"), the City has made a loan of Five Hundred Thousand Dollars ($500,000) to fund the development of the Development (the "Loan").

D. The Loan is being made to increase the supply of affordable rental housing in the City of Modesto as part of the Permanent Local Housing Allocation (“PLHA”) program #24..
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managed by the California Department of Housing and Community Development (“HCD”).

Due to the assistance provided Developer pursuant to the Agreement, Developer has agreed that seventeen of the units in the Development shall be shall be affordable to and occupied by or available for occupancy by Low-Income Households for a period of not less than fifty-five (55) years.

E. The City has agreed to make the Acquisition Loan on the condition that the Property and Development be maintained and operated in accordance with restrictions concerning affordability, operation, and maintenance that are set forth in this Regulatory Agreement and in the related documents evidencing the Acquisition Loan.

F. In consideration of receipt of the Acquisition Loan, Developer agrees to observe all the terms and conditions set forth below.

The parties therefore agree as follows.

ARTICLE 1
DEFINITIONS; EXHIBITS

1.1 Definitions. The following terms have the following meanings:
(a) "Actual Household Size" means the actual number of persons in the applicable household.
(b) “Assumed Household Size" means the household size "adjusted for family size appropriate to the unit" in accordance with the California Tax Credit Allocation Committee rules and regulations.
(c) "Area Median Income” means the area median income for Stanislaus County, California, adjusted for household size, as published by the California Department of Housing and Community Development (“HCD”). If HCD ceases to make such determination, Area Median Income shall be the median income applicable to Stanislaus County, with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development ("HUD") pursuant to the United States Housing Act of 1937 as amended, or such other method of median income calculation applicable to the City that HUD may hereafter adopt in connection with such Act.
(d) “Assisted Units" means the thirteen (13) Units within the Development designated as assisted by the City pursuant to this Regulatory Agreement. (e) "City" means the City of Modesto, a California charter city. (f) "Completion of Construction" means the date the construction of the Development is completed as evidenced by the issuance of a certificate of occupancy or equivalent document issued by the City, to certify completion of the construction of the Development.
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(g) "Deed of Trust" means the Deed of Trust with Assignment of Rents, Security Agreement and Fixture Filing of even date herewith by and among Developer, as trustor, _______________, as trustee, and the City, as beneficiary, that will encumber the Property to secure repayment of the Loan and Developer's performance of the covenants set forth in the documents evidencing the Acquisition Loan as well as this Regulatory Agreement. (h) "Development" has the meaning set forth in Paragraph B of the Recitals. (i) "Loan Documents" means the documents executed by Developer evidencing the Loan including this Regulatory Agreement, the Note, Deed of Trust, and the Agreement.
(j) "Low Income Household" means a Tenant household with an Adjusted Income that does not exceed eighty percent (80%) of Area Median Income, adjusted for actual household size.
(k) "Low Income Units" means the Units which, pursuant to Section 2.1(b) below, are required to be occupied by Low Income Households. (l) "Management Agent" has the meaning set forth in Section 5.2. (m) "Note" means the secured promissory note, dated as of ________, that evidences Developer's obligation to repay the Loan, as such may be amended form time to time. (n) "Rent" shall mean the total of monthly payments by the tenants of a Unit for the following: use and occupancy of the Unit and land and associated facilities, including parking; any separately charged fees or service charges assessed by Owner which are required of all tenants, other than security deposits; the cost of an adequate level of service for utilities paid by the tenant, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuel, but not cable or telephone service; any other interest, taxes, fees or charges for use of the land or associated facilities and assessed by a public or private entity other than Owner, and paid by the Tenant. Utility allowances may be determined by use of the utility allowance published by the local public housing authority or the California Utility Allowance Calculator ("CUAC") model allowed by the California Tax Credit Allocation Committee regulations, if the Property qualifies.
(o) "Services Provider" has the meaning set forth in Section 5.6. (p) "Tenant" means the tenant household that occupies a Unit in the Development.
(q) "Term" means the term of this Regulatory Agreement which commences as of the date of this Regulatory Agreement, and unless sooner terminated pursuant to the terms of this Agreement, expires on the date fifty-five (55) years from the Competition of Construction, but in no event later than December 31, 2079 (subject to extensions agreed upon by the Partners).
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(r) "Unit(s)" means one (1) or more of the units in the Development.

1.2 Exhibits. The following exhibits are attached to this Regulatory Agreement and incorporated into this Regulatory Agreement by this reference:

Exhibit A: Legal Description of the Property
Exhibit B: Certificate of Continuing Program Compliance Exhibit C: Form of Certification of Tenant Eligibility
ARTICLE 2

AFFORDABILITY AND OCCUPANCY COVENANTS

2.1 Occupancy Requirements.
(a) Low Income Units. During the Term, Developer shall rent Seventeen (7) of the units in the Development to, and ensure that these Units are occupied or, if vacant, available for occupancy, by Low Income Households (the “Assisted Units”). The Assisted Unis shall be broken down as follows:

Attached Units
7 units
(b) Intermingling of Units. The Assisted Units are required to be intermingled throughout the Development and of comparable quality to all other Units. All Tenants must have equal access to and enjoyment of all common facilities in the Development. (c) Disabled Persons Occupancy. Developer shall cause the Development to be operated at all times in compliance with the provisions of: (1) the Unruh Act; (2) the California Fair Employment and Housing Act; (3) Section 504 of the Rehabilitation Act of 1973; (4) the United States Fair Housing Act, as amended; and (5) the Americans With Disabilities Act of 1990, which relate to disabled persons access. Developer shall indemnify, protect, hold harmless and defend (with counsel reasonably satisfactory to the City) the City, and its council members, board members, officers agents and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Developer's failure to comply with applicable legal requirements related to housing for persons with disabilities. The provisions of this subsection will survive expiration of the Term or other termination of this Regulatory Agreement, and remain in full force and effect.

2.2 Allowable Rent.
(a) Rent for Assisted Units. Subject to the provisions of Section 2.3 below, the Rent paid by Tenants of Assisted Units shall not exceed one-twelfth (1/12th) of thirty percent (30%) of the seventy percent (70%) of Area Median Income, adjusted for Assumed Household Size.
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(b) No Additional Fees. Developer may not charge any fee, other than Rent, to any Tenant of the Units for any housing or other services provided by Developer.

2.3 Rent Increases; Increased Income of Tenants.
(a) Rent Increases. The proposed initial Rents and subsequent Rents for all Assisted Units shall be provided to the Developer by the City prior to initial or subsequent occupancy and prior to a rent increase, and shall be subject to the requirements of this Agreement. Developer shall only impose Tenant Rent increases on the Assisted Units that are consistent with the applicable statutes, laws, and regulations of the State of California and City of Modesto. The Rent for such Assisted Units may be increased no more than once annually based upon the annual income certification described in Article 3. Tenants shall be given at least sixty (60) days written notice prior to any Rent increase. The City will provide Developer with a schedule of maximum permissible Rents for the Assisted Units annually. (b) Non-Qualifying Household. If, upon the annual certification of the income a Tenant of an Assisted Unit, Developer determines that the income of a Low Income Household has increased above the qualifying limit for a Low Income Household, such Tenant shall be permitted to retain the Unit and upon expiration of the Tenant's lease and upon sixty (60) days written notice, the Rent may be increased to the lesser of one-twelfth (1/12th) of thirty percent (30%) of the actual Adjusted Income of the Tenant, and Developer shall rent the next available Unit to a Low Income Household to comply with the requirements of Section 2.1 above, at a Rent not exceeding the maximum Rent specified in Section 2.2. Upon renting the next available Unit in accordance with Section 2.1, the Unit with the over-income Tenant will no longer be considered an Assisted Unit.
(c) Termination of Occupancy. Upon termination of occupancy of an Assisted Unit by a Tenant, such Unit will be deemed to be continuously occupied by a household of the same income level as the initial income level of the vacating Tenant, until such Unit is reoccupied or another Unit is re-designated as an Assisted Unit, at which time categorization of the Unit will be established based on the occupancy requirements of Section 2.1.

2.4 Units Available to the Disabled. Developer shall construct the Development in compliance with all applicable federal and state disabled persons accessibility requirements including but not limited to the Federal Fair Housing Act; Section 504 of the Rehabilitation Act of 1973; Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the California Code of Regulations.

ARTICLE 3

INCOME CERTIFICATION AND REPORTING

3.1 Income Certification. Developer shall obtain, complete, and maintain on file, immediately prior to initial occupancy and annually thereafter, income certifications from each Tenant renting any of the Assisted Units. Developer shall cause each Tenant in an Assisted Unit to execute a Certification of Tenant Eligibility in the form attached as Exhibit C. Developer shall fill out the "Development Owner" portion of the Certification of Tenant Eligibility and #24..
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provide it to the City along with supporting documentation collected by Developer. Developer shall make a good faith effort to verify the accuracy of the income provided by all applicants or all members of the occupying household, as the case may be, in the income certification. To verify the information Developer shall take two or more of the following steps: (a) obtain pay stubs for the most recent two months; (b) obtain an income tax return for the most recent tax year; (c) conduct a credit agency or similar search; (d) obtain an income verification form from the applicant's current employer verifying employment for the last two months; (e) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, verifying assistance for the last two months; or (f) if the applicant is unemployed and does not have a tax return, obtain another form of independent verification. Copies of the Certifications of Tenant Eligibility and accompanying documentation must be submitted to the City annually for each of the Assisted Units.

3.2 Reporting Requirements. Developer shall submit to the City: (a) not later than the ninety (90th) day after the close of each calendar year, or such other date as may be requested by the City, a signed copy of the Certification of Program Compliance in the form attached as Exhibit B; and (b) within fifteen (15) days after receipt of a written request, any other information or completed forms requested by the City in order to comply with reporting requirements of HUD, the State of California, and the City; including but not limited to reports, records, surveys evidencing compliance with the Agreement.

3.3 Additional Information. Developer shall provide any additional information reasonably requested by the City.

3.4 Records. Developer shall maintain complete, accurate and current records pertaining to the Development, and shall permit any duly authorized representative of the City to inspect records, including records pertaining to income and household size of Tenants and Rent charged to such Tenants. All Tenant lists, applications and waiting lists relating to the Development are to be at all times: (a) separate and identifiable from any other business of Developer; (b) maintained as required by the City, in a reasonable condition for proper audit; and (c) subject to examination during business hours by representatives of the City. Developer shall retain copies of all materials obtained or produced with respect to occupancy of the units for a period of at least five (5) years. The City may audit, examine and make copies of all books, records or other documents of Developer that pertain to the Development.

3.5 On-Site Inspection.
(a) The City may perform, or cause to be performed, an on-site inspection of the Development (including Units, subject to the rights of Tenants) at least one (1) time per year during all business hours and upon reasonable notice (if such inspection includes entering any occupied Unit, then twenty-four hours' notice shall be considered reasonable) to monitor compliance with this Regulatory Agreement and any other requirements of the Agreement.

Developer shall cooperate in making the Property available for such inspection. (b) After the completion of an inspection the City shall deliver a copy of the inspection report to the Developer. If the City determines as a result of such inspection that there #24..
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are any life-threatening health and safety related deficiencies, Developer has the obligation to correct such deficiencies immediately. If the City determines as a result of the inspection that there are any deficiencies for any of the inspectable items in the Development, the Developer shall correct such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Developer must begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition, the Developer acknowledges that the City may re-inspect the Development to verify all deficiencies have been corrected or rely on third party documentation submitted by the Developer for non-hazardous deficiencies.

ARTICLE 4

OPERATION OF THE DEVELOPMENT

4.1 Residential Use. Developer shall operate the Development for residential use only, and such ancillary uses permitted at the Development as approved by the City. No part of the Development may be operated as emergency shelters (including shelters for disaster victims) or facilities such as nursing homes, convalescent homes, hospitals, residential treatment facilities, correctional facilities, halfway houses, housing for students, or dormitories (including farmworker dormitories).

4.2 Compliance with Loan Documents and Program Requirements. Developer's actions with respect to the Property shall at all times be in full conformity with: (a) all requirements of this Regulatory Agreement; (b) the Agreement; (c) the Loan Documents; and (d) any other regulatory requirements imposed on Developer.

4.3 Taxes and Assessments. Developer shall pay all real and personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Developer may apply for a property tax exemption for the Property under any provision of law or contest in good faith, any such taxes, assessments, or charges. In the event Developer exercises its right to contest any tax, assessment, or charge against it, Developer, on final determination of the proceeding or contest, will immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.

4.4 Insurance Coverage. Prior to issuance of building permits for the Development, and continuing throughout the term of this Agreement Owner shall obtain and maintain property insurance for the risks of direct physical loss, with minimum coverage being the perils insured under the standard Causes of Loss - Special form (ISO Form CP 10 30) or its equivalent, covering all improvements, all fixtures, equipment and personal property, located on or in, or constituting a part of, the Property (“Improvements”), in an amount equal to one hundred percent (100%) of the full replacement cost of all such property. Insurance shall be provided by insurers licensed to do business in the State of California and having a rating of A-VII or better in Best Insurance Guide. Notwithstanding the forgoing, during such time that lenders providing financing for the Development impose insurance requirements that are inconsistent with the requirements set forth herein, Owner may satisfy the requirements of this Section by meeting the #24..
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requirements of such lenders. Any insurance required for the Development shall name the City, and its officers, officials, employees and agents as an additional insured. Owner shall provide proof of required insurance to City upon request.

4.5 Property Damage or Destruction. If any part of the Development is damaged or destroyed, Owner shall repair or restore the same, consistent with the occupancy and rent restriction requirements set forth in this Agreement. Such work shall be commenced within 120 days after the damage or loss occurs and shall be completed within two year thereafter, provided that insurance proceeds are available to be applied to such repairs or restoration within such period and the repair or restoration is financially feasible.

4.6 Property Tax Exemption. Developer may apply for a property tax exemption for the Property under any provision of law, including but not limited to, California Revenue and Taxation Section 214(g).

ARTICLE 5

PROPERTY MANAGEMENT, MAINTENANCE AND RESIDENT SERVICES

5.1 Management Responsibilities. The Developer shall submit to the City an initial proposed Management Plan no later than six (6) months after the commencement of construction of the Development as set forth in the Agreement. The Developer shall submit to the City for approval the name and qualifications of a proposed management agent, a proposed management agreement and written guidelines or procedures for tenant selection (in compliance with the Agreement), operation and management of the Development, and implementation of the income certification and reporting requirements of this Regulatory Agreement (collectively, the “Management Plan”). The City shall approve or disapprove the Management Plan in writing within fifteen (15) calendar days following the City's receipt of the complete Management Plan, which approval shall not be unreasonably denied. If the Management Plan is disapproved by the City, the City shall deliver a written notice to the Developer setting forth, in reasonable detail, the reasons for such disapproval. The Developer shall have fifteen (15) calendar days following the receipt of such notice to submit a revised Management Plan. The provisions of this Section relating to time periods for approval, disapproval, and resubmission of the new Management Plan shall continue to apply until the Management Plan has been approved by the City. The Developer shall submit to the City any proposed changes to the Management Plan, which shall be reviewed and approved by the City as set forth above.

5.2 Management Agent. Developer shall cause the Development to be managed by an experienced management agent reasonably acceptable to the City, with a demonstrated ability to operate residential facilities like the Development in a manner that will provide decent, safe, and sanitary housing (the "Management Agent"). The City hereby approves EAH Inc. as the initial Management Agent. Developer shall also submit such additional information about the background, experience and financial condition of any proposed Management Agent as is reasonably necessary for the City to determine whether the proposed Management Agent meets the standard for a qualified Management Agent set forth above. If the proposed Management Agent meets the standard for a qualified Management Agent set forth above, the City shall #24..
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approve the proposed Management Agent by notifying Developer in writing. Unless the proposed Management Agent is disapproved by the City within thirty (30) days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed approved. Pursuant to California Code of Regulations title 25, Section 42 all projects with 16 or more units must have a resident manager living on the Property. The City will not consider maintenance personnel as a substitute or equivalent to a trained, in residence property manager.

5.3 Periodic Performance Review. The City reserves the right to conduct an annual (or more frequently, if deemed necessary by the City) review of the management practices and financial status of the Development. The purpose of each periodic review will be to enable the City to determine if the Development is being operated and managed in accordance with the requirements and standards of this Regulatory Agreement. Developer shall cooperate with the City in such reviews.

For purposes of such periodic reviews, the Developer and the Management Agent shall make available to the City for inspection all books and records with respect to the Development.

In addition, the Developer shall provide the City with: (1) by not later than thirty (30) days prior to commencement of each Fiscal Year, the annual budget for the upcoming Fiscal Year; (2) within ninety (90) days following the end of each Fiscal Year, a report showing the actual income and expenditures with respect to the Development for the immediately preceding Fiscal Year and the status of all reserve funds; and (3) within one hundred twenty (120) days following the end of each Fiscal Year, a copy of the Developer's federal income tax filings for the Fiscal Year

5.4 Replacement of Management Agent.
(a) If, as a result of a periodic review, the City determines in its reasonable judgment that the Development is not being operated and managed in accordance with any of the material requirements and standards of this Regulatory Agreement, the City shall deliver notice to Developer of its intention to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days after receipt by Developer of such written notice, the City staff and Developer shall meet in good faith to consider methods for improving the financial and operating status of the Development, including, without limitation, replacement of the Management Agent.
(b) If, after such meeting, City staff recommends in writing the replacement of the Management Agent, Developer shall promptly dismiss the then current Management Agent, and must take steps to appoint as the Management Agent a person or entity meeting the standards for a management agent set forth above and approved by the City, and shall promptly and as soon as practicable dismiss the then-current Management Agent. (c) Any contract for the operation or management of the Development entered into by Developer shall provide that the Management Agent may be dismissed and the contract terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section constitutes a default under this Regulatory Agreement, and the City may enforce this provision through legal proceedings as specified in Section 6.7 below. #24..
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5.5 Approval of Management Policies. Developer shall submit its written management policies with respect to the Development to the City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Regulatory Agreement.

5.6 Resident Services Provider.
(a) The Developer will be providing on-site services which Developer will make available to all residents in the Development (the "Resident Services"). Developer hereby agrees to contract for a resident services coordinator at least one (1) month prior to completion of the Development. The Developer shall submit to the City for approval the name and qualifications of any proposed services provider (the "Services Provider"). The Services Provider shall have demonstrated the ability to provide Resident Services in residential facilities like the Development in an effective manner. The Developer shall submit such additional information about the background, experience and financial condition of any proposed Services Provider as is reasonably necessary for the City to determine whether the proposed Services Provider meets the standards for a qualified Services Provider of developments of this type. If the proposed Services Provider meets the standard for a qualified Services Provider set forth above, the City shall approve the proposed Services Provider by notifying Developer in writing.

Unless the proposed Services Provider is disapproved by the City within thirty (30) days, which disapproval is to state with reasonable specificity the basis for disapproval, it shall be deemed approved. The City hereby approves EAH Inc. as the initial Services Provider for the Development.
(b) The Developer shall submit to the City and initial proposed Resident Services Plan and Resident Services Budget no later than six (6) months after the commencement of construction of the Development. Each year thereafter, within sixty (60) days of the end of the Developer's fiscal year, the Developer shall furnish to the City a draft Resident Services Plan and Resident Services Budget. Upon receipt by the City of the proposed Resident Services Plan and Resident Services Budget, the City shall promptly review the same and approve or disapprove the Resident Services Plan and the Resident Services Budget within ten (10) working days. If the Resident Services Plan or Resident Services Budget are not approved by the City, the City shall set forth in writing and notify the Developer of the City's reasons for withholding such approval, which may include a request by the City for a change in the nature or scope of resident services or a change in service provider. The Developer shall thereafter submit a revised Resident Services Plan and Resident Services Budget for City approval, which approval shall be granted or denied within five (5) working days in accordance with the procedures set forth above. The Resident Services Budget shall show required expenditures from Annual Operating Expenses, and may include an annual sum dedicated for Resident Services consistent with the Developer's commitment to the Tax Credit Allocation Committee and subject to the approval of the City, provided however the Operating Expenses line item for Resident Services may be increased in such amount approved by the City prior to commencement of the Fiscal Year, pursuant to the procedure for submission and approval of the Resident Services Plan and Resident Services Budget as set forth above.

5.7 Property Maintenance.
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(a) Developer shall maintain, for the entire Term of this Regulatory Agreement, all interior and exterior Improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition), subject to reasonable wear and tear, and in accordance with the approved Management Plan, and all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, and in a decent, safe, sanitary condition and in good repair. (b) The City places prime importance on quality maintenance to protect its investment and to ensure that all City and City-assisted affordable housing projects within the City are not allowed to deteriorate due to below-average maintenance. Normal wear and tear of the Development will be acceptable to the City assuming Developer agrees to provide all necessary improvements to assure the Development is maintained in good condition. In addition, the Developer shall keep the Development free from all graffiti, and any accumulation of shopping carts, debris or waste material. The Developer shall promptly make all repairs and replacements necessary to keep the Development in first-class condition and repair and shall promptly eliminate all graffiti and replace dead and diseased plants and landscaping with comparable approved materials.
(c) In the event that Developer breaches any of the covenants contained in this section and such default continues for a period of five (5) days after written notice from the City with respect to graffiti, debris, waste material, and general maintenance or thirty (30) days after written notice from the City with respect to landscaping and building improvements, then the City, in addition to whatever other remedy it may have at law or in equity, has the right to enter upon the Property and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, the City is permitted (but is not required) to enter upon the Property and to perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by the City and/or costs of such cure, which amount shall be promptly paid by Developer to the City upon demand.

5.8 Crime Prevention Program. During the Term of this Regulatory Agreement Developer agrees to participate in the City of Modesto Police Department's Crime Free MultiHousing program or similar program administered by the City (the "Crime Prevention Program"). Information on the City's Crime Prevention Program is currently available at https://www.modestogov.com/mpd/programs/cfmh/. The City's periodic review of the management of the Development pursuant to Section 5.3 will include an evaluation of Developer's participation in the Crime Prevention Program.

ARTICLE 6

MISCELLANEOUS

6.1 Lease Provisions. In leasing the Units within the Development, Developer shall use a form of written lease approved by the City. The form of lease must comply with all #24..
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requirements of this Regulatory Agreement, the other Loan Documents and must, among other matters:
(a) Provide for termination of the lease for failure to: (1) provide any information required under this Regulatory Agreement or reasonably requested by Developer to establish or recertify the Tenant's qualification, or the qualification of the Tenant's household, for occupancy in the Development in accordance with the standards set forth in this Regulatory Agreement; or (2) qualify as a Low Income Household as a result of any material misrepresentation made by such Tenant with respect to the income computation. (b) Be for an initial term of not less than one (1) year, unless by mutual agreement between the Tenant and Developer, and provide for no increase in Rent during such year. After the initial year of tenancy, the lease may be month-to-month by mutual agreement of Developer and the Tenant. Notwithstanding the above, any rent increases are subject to the requirements of Section 2.3 (a) above.
(c) Include a provision which requires a Tenant who is residing in a Unit required to be accessible pursuant to Section 2.4 and who is not in need of an accessible Unit to move to a non-accessible Unit when a non-accessible Unit becomes available and another Tenant or prospective Tenant is in need of an accessible Unit.

6.2 Lease Termination. Any termination of a lease or refusal to renew a lease for an Assisted Unit within the Development must be preceded by not less than sixty (60) days written notice to the Tenant by Developer specifying the grounds for the action.

6.3 Nondiscrimination.
(a) All of the Units must be available for occupancy on a continuous basis to members of the general public who are income eligible. Except as provided in subsection (c) below, Developer may not give preference to any particular class or group of persons in renting or selling the Units, except to the extent that the Units are required to be leased to income eligible households pursuant to this Regulatory Agreement. Developer herein covenants by and for Developer, assigns, and all persons claiming under or through Developer, that there exist no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, source of income (e.g., SSI), ancestry, disability, age, or military and veteran status, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor will Developer or any person claiming under or through Developer, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the construction, operation and management of any Unit. Developer shall comply with Executive Orders 11246, 11375, 11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964, the California Fair Housing and Employment Act and other applicable Federal, State and local laws and regulations and policies relating to equal employment and contracting opportunities, including laws and regulations hereafter enacted.
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(b) Developer shall accept as Tenants, on the same basis as all other prospective Tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. Developer may not apply selection criteria to Section 8 certificate or voucher holders that is more burdensome than criteria applied to all other prospective Tenants, nor will Developer apply or permit the application of management policies or lease provisions with respect to the Development which have the effect of precluding occupancy of units by such prospective Tenants.

6.4 Term. The provisions of this Regulatory Agreement apply to the Property for the entire Term even if the Acquisition Loan is paid in full prior to the end of the Term. This Regulatory Agreement binds any successor, heir or assign of Developer, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City. City is making the Loan on the condition, and in consideration of, this provision, and would not do so otherwise.

6.5 Notice of Expiration of Term.
(a) At least six (6) months prior to the expiration of the Term, Developer shall provide by first-class mail, postage prepaid, a notice to all Tenants containing: (1) the anticipated date of the expiration of the Term; (2) any anticipated increase in Rent upon the expiration of the Term; (3) a statement that a copy of such notice will be sent to the Count; and (4) a statement that a public hearing may be held by the City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. Developer shall also file a copy of the above-described notice with the City Manager, or the Community Development Manager.
(b) In addition to the notice required above, Developer shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (1) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a)) prior to the expiration of the Term; (2) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (3) a notice of an offer to purchase the Development to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Development is to be sold within five (5) years of the end of the Term; and (4) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Development.

6.6 Covenants to Run With the Land. The City and Developer hereby declare their express intent that the covenants and restrictions set forth in this Regulatory Agreement run with the land, and bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Regulatory Agreement said covenants and restrictions expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, is to be held conclusively to have been executed, delivered and accepted subject to the covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless the City expressly releases such conveyed portion of the Property from the requirements of this Regulatory Agreement. #24..
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6.7 Enforcement by the City. If Developer fails to perform any obligation under this Regulatory Agreement, and fails to cure the default within thirty (30) days after the City has notified Developer in writing of the default or, if the default cannot be cured within thirty (30) days, fails to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City may enforce this Regulatory Agreement by any or all of the following actions, or any other remedy provided by law:
(a) Calling the Acquisition Loan. The City may declare an Event of Default under the Note, accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed of Trust.
(b) Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel Developer's performance of its obligations under this Regulatory Agreement, and may seek damages.
(c) Remedies Provided Under Loan Documents. The City may exercise any other remedy provided under the Loan Documents, including the Deed of Trust.

6.8 Attorneys' Fees and Costs. In any action brought to enforce this Regulatory Agreement, the prevailing party must be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section must be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.

6.9 Recording and Filing. The City and Developer shall cause this Regulatory Agreement, and all amendments and supplements to it, to be recorded in the Official Records of Stanislaus County.

6.10 Governing Law. This Regulatory Agreement is governed by the laws of the State of California.

6.11 Waiver of Requirements. Any of the requirements of this Regulatory Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Regulatory Agreement extends to or affects any other provision of this Regulatory Agreement, and may not be deemed to do so.

6.12 Amendments. This Regulatory Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title that is duly recorded in the official records of Stanislaus County.

6.13 Notices. Any notice requirement set forth herein will be deemed to be satisfied three (3) days after mailing of the notice first-class United States certified mail, postage prepaid, addressed to the appropriate party as follows:

City: City of Modesto
1010 Tenth Street, Suite 4400
Modesto, CA 95354
Attn: Community Development Manager
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Developer: Center for Human Services
2000 W. Briggsmore Avenue, Ste. 1
Modesto, CA 95350
Attn: Executive Director
Such addresses may be changed by notice to the other party given in the same manner as provided above.

6.14 Severability. If any provision of this Regulatory Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Regulatory Agreement will not in any way be affected or impaired thereby.

6.15 Multiple Originals; Counterparts. This Regulatory Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

6.16 Revival of Agreement after Foreclosure. In the event there is a foreclosure of the Property, this Regulatory Agreement will revive according to its original terms if, during the Term, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the Development or Property. [Remainder of Page Left Intentionally Blank]
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Regulatory Agreement
Signature Page
WHEREAS, this Agreement has been entered into by the undersigned as of the date first written above.

SIGNATURES MUST BE NOTARIZED
DEVELOPER:

CITY OF MODESTO, a California charter city
By: _____________________________________
Joseph Lopez, City Manager
Date: ______________________________________
ATTEST:
________________________________
Dana Sanchez, Acting City Clerk
APPROVED AS TO FORM:

By: ___________________________
Jose M. Sanchez, Acting City Attorney
APPROVED AS TO RISK MANAGEMENT:

By: _________________________________

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

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

WITNESS my hand and official seal.
______________________________________
Name: ______________________________
Notary Public
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. #24..
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A-1

EXHIBIT A

LEGAL DESCRIPTION
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C-1

EXHIBIT B

INITIAL/ANNUAL CERTIFICATE OF

PROGRAM COMPLIANCE
CENTER FOR HUMAN SERVICES, a California non-profit corporation ("Owner"), hereby certifies that it will comply with all applicable, ongoing requirements for the Property's Affordability Period which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of Occupancy for the above-described Development. Affordability shall be maintained as follows:

Seven (7) units are being made available to Very Low Income Households.

During the term of the Regulatory Agreement the Owner will ensure that these units are occupied or, if vacant, available for occupancy, by Very Low Income Households. .

Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity.

Completion of the Department's four (4) training phases, a Final Certification has been achieved and will be maintained by the owner/representative and/or regional/onsite property manager.

Owner is maintaining and attaching the following records and reports in order to assist the City in meeting its record keeping and reporting requirements under and City Regulatory Agreement:

1. Files on the annual review and certification of tenant income;

2. All information on the qualification of affordable rents;

3. Terms and conditions of all signed leases between Tenants and Owner;

4. All other reports and records requested by City pursuant to the Loan Documents.

Dated: _______________
OWNER:

By: ________________________________
Title: ________________________________
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C-2
1669\01\2466400.1

CERTIFICATE OF

CONTINUING PROGRAM COMPLIANCE
The following information is being provided by CENTER FOR HUMAN SERVICES, a California non-profit corporation (the "Owner") to the City of Modesto, (the "City"), pursuant to that certain Agreement dated as of _________, 2022, as such may be amended from time to time, and the Regulatory Agreement dated as of ________. 2022, as such may be amended from time to time, with respect to the Development:
(A) Owner will comply with all applicable, ongoing requirements for the fifty-five (55) year Term from the date of issuance of the certificate of occupancy for the abovedescribed project, and the ongoing City imposed affordability requirements for balance of the Property's Affordability Period which has been determined to be fifty-five (55) years from the date of issuance of the Certificate of Occupancy for the above-described project.
(B) The total number of residential units which are completed and available for occupancy is .

The total number of such units occupied is .
(C) The following residential units (identified by unit number) have been designated Assisted Units, as described in the Regulatory Agreement (for a total of ); (D) The following residential units which are included in (B) above, have been designated as Assisted Units since , 20____, the date on which the last "Certificate of Continuing Program Compliance" was filed with the City by ; Unit Number Previous Designation of
Unit (if any) Replacing Unit Number
(E) The following residential units are considered to be occupied by Low Income Households based on the information set forth below:
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1669\01\2466400.1
Number
of Unit
Date of
Unit
No.

Name of Tenant
Persons
Residing
in Unit
Total
Adjusted
Gross
Income
Initial
Occupancy
Monthly
Rental
Amount
Attach a Separate Sheet if Necessary
(F) In renting the residential units in the Development, Owner has not given preference to any particular group or class of persons not allowed under the Regulatory Agreement (except for persons who qualify as qualified Low Income Households). All of the residential units in the Development have been rented pursuant to a written lease, and the term of each lease is at least twelve months. A copy of the form lease for Assisted Units is attached.
(G) Property owners and managers have participated in the Modesto Police Department's Crime Free Multi-Housing Unit Program, wherein specialized training and other resources are provided to multi-family property owners and managers to reduce the potential for onsite criminal activity. Completion of the Department's three (3) training phases, a Final Certification (Phase V) has been achieved and is being maintained by the owner/representative and/or regional/-onsite property manager. (H) Each building in the Development and all Assisted Units in the Development are suitable for occupancy and comply with all applicable State and local health, safety and other applicable codes, ordinances, and requirements and the ongoing property standards, as specified in the Regulatory Agreement.
(I) The information provided in this "Certificate of Continuing Program Compliance" is accurate and complete, and no matters have come to the attention of Owner which would indicate that any of the information provided herein, or in any "Certification of Tenant Eligibility" obtained from the tenants named herein, is inaccurate or incomplete in any respect.
[Signature Page Follows.]
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C-4
1669\01\2466400.1
IN WITNESS WHEREOF, I have hereunto affixed my signature, on behalf of Owner, on this day of , 20 .

OWNER:

CENTER FOR HUMAN SERVICES, a California nonprofit corporation By: ______________________________________
___________, Executive Director
Date: ______________________________________
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EXHIBIT C

FORM OF CERTIFICATION OF TENANT ELIGIBILITY
Rental Unit
Street Address Unit No
City Zip Code
I/We, the undersigned, being first duly sworn, state that I/we have read and answered fully and truthfully each of the following questions for all persons who are to occupy the unit in the above Development for which application is made, all of whom are listed below:

1. 2. 3. 4. 5.

Name of Members
in the Household
Relationship to
Head of Household Age Ethnicity Place of Employment
Ethnicity: ❑ White ❑ Black or African American ❑ Asian ❑ Asian & White ❑ American Indian or Alaska Native
❑ Native Hawaiian or Other Pacific Islander ❑ American Indian or Alaska Native & White ❑ Black or African American & White
❑ American Indian or Alaska Native & Black or African American ❑ Other Multi Race ❑ Hispanic
Date of Occupancy of Rental Unit by Tenant:

Date of Lease Signed for Rental Unit by Tenant:

Amount of Rent Paid Per Month:

Certification Date (Earlier of Date of Occupancy or Date Lease signed):

6. Anticipated Annual Income. The anticipated total annual income from all sources of each person listed in Section 1 for the twelve (12) month period beginning on the Certification Date listed above, including income described in (a) below, but excluding all income described in (b) below, is $ .
(a) The amount set forth above includes all of the following income (unless such income is described in (b) below): all wages and salaries, overtime pay, commissions, fees, tips and bonuses before payroll deductions; net income from the operation of a business or profession or from the rental of real or personal property (without deducting expenditures for business expansion or amortization #24..
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of capital indebtedness or any allowance for depreciation of capital assets); interest and dividends (including income from assets as set forth in item 7(b) below); full amount of periodic payments received from Social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts; payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay; the maximum amount of public assistance available to the above persons; periodic and determinable allowances, such as alimony and child support payments and regular contributions and gifts received from persons not residing in the dwelling; all regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is the head of the household or spouse; and any earned income tax credit to the extent it exceeds income tax liability.
(b) The following income is excluded from the amount set forth above: casual, sporadic or irregular gifts; amounts that are specifically for or in reimbursement of medical expenses; lump sum additions to family assets, such as inheritances, insurance payment (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; amounts of educational scholarships paid directly to student or educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment, but in either case only to the extent used for such purposes; hazardous duty pay to a member of the household in the armed forces who is away from home and exposed to hostile fire; relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970; income from employment of children (including foster children) under the age of eighteen (18) years; foster child care payments; the value of coupon allotments under the Food Stamp Act of 1977; payments to volunteers under the Domestic Volunteer Service Act of 1973; payments received under the Alaska Native Claims Settlement Act; income derived from certain submarginal land of the United States that is held in trust for certain Indian tribes; payments on allowances made under the Department of Health and Human Services' Low-Income Home Energy Assistance Program; and payments received from the Job Partnership Training Act.

7. Net Family Assets. If any of the persons described in item 1 above (or any person whose income or contributions were included in item 6) has any savings, stocks, bonds, equity in real property or other form of capital investment (excluding interests in Indian trust lands), provide:
(a) the total value of all such assets owned by all such persons: $ , and
(b) the amount of income expected to be derived from such assets in the twelve (12) month period commencing this date: $ . #24..
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8. Students
(a) Will any of the persons listed in item 1 above be or have they been full-time students during five (5) calendar months of this calendar year at an educational institution (other than a correspondence school) with regular faculty and students?
Yes No
(b) (Complete only if the answer to Question 8(a) is "Yes"). Is any such person (other than nonresident aliens) married and eligible to file a joint federal income tax return, a veteran of the U.S. military?
Yes No
The above information is full, true, and complete to the best of my knowledge. I have no objections to inquiries being made for the purpose of verifying the statements made herein.

Signature: Date
(Signature Must be Notarized)
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I certify UNDER PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

A. Calculation of eligible income:
(1) Enter amount entered for entire household in 6 above: $ (2) If the amount entered in 7(a) above is greater than $5,000, enter $ (i) the product of the amount entered in 7(a) above multiplied by the current passbook savings rate as determined by HUD: $ (ii) the amount entered in 7(b) above: $
(iii) enter the greater of line (i) or line (ii): $
(3) TOTAL ELIGIBLE INCOME (Line A(1) plus line A(2)(iii)): $ B. Enter number of family members listed in item 1 above:

C. The amount entered in A(3) (Total Eligible Income) is: $ Less than $__________ of median income for the area in which the Development is located, which is the maximum income at which a household may be determined to be a qualifying tenant as that term is defined in the Agreement.

More than the above-mentioned amount.

D. Number of units assigned:

E. Monthly rent: $
F. This unit (was/was not) last occupied for a period of thirty-one (31) consecutive days by a person or persons whose adjusted income, as certified in the above manner, was equal to or less than the amount at which a person would have qualified as a qualifying tenant under the terms of the Agreement.

G. Applicant:

Qualifies as a qualifying tenant.

Does not qualify as a qualifying tenant.
5028667.1
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5028657.1 1
Recording requested by and when recorded
mail to:

City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager

EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383
APN: 105-044-006 Space above this line for Recorder’s use.

DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING
(Youth Housing)

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is entered into as of ______________, 2022, by Center for Human Services, a California non-profit corporation (“Trustor”) to _________________ (“Trustee”), for the benefit of the City of Modesto, a California charter city (“Beneficiary”).

RECITALS
A. Trustor owns fee simple title to certain real property located at 1208 9th Street, Modesto, California, known as Stanislaus County Assessor’s Parcel Numbers 105-044-006, as further described in Exhibit A, attached hereto and incorporated herein (the “Land”). Trustor intends to develop permanent supportive housing development on the Land consisting of consist of nine (9) studio units and four (4) one-bedroom attached units. (the “Project”).

B. Beneficiary and Trustor entered into that certain Affordable Housing Loan Agreement dated __________ (the “Agreement”). Pursuant to the Agreement, Beneficiary provided a loan to Trustor in the amount of up to Five Hundred Thousand Dollars ($500,000) (“ Loan”) for the purpose of acquiring the Land. Trustor has issued to Beneficiary a secured promissory note dated as of the date hereof (the “Note”) to evidence Trustor’s obligation to repay the Acquisition Loan.

C. This Deed of Trust, the Agreement, the Note, and the Regulatory Agreement (defined below) are collectively referred to herein as the “Loan Documents.” D. As a condition precedent to the making of the Acquisition Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Project and in Trustor’s fee simple interest in the Land to secure repayment of the Note and performance of Trustor’s obligations under the #24..
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5028657.1 2
Agreement and the other Loan Documents.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.

1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land (“Improvements”);
b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, “Appurtenances”); c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, “Equipment”);
d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, “Leases”), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, “Rents”); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding (“Proceeds”);
f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor (“Gross Revenues”);
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5028657.1 3
g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, “Plans”); and
h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, “Financing”).

All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the “Property.”

2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Agreement, the Regulatory and Declaration of Restrictive Covenants dated as of the date hereof, executed by and between City and Trustor and recorded substantially concurrently herewith (the “Regulatory Agreement”) or the other Loan Documents; (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust or any other City Document as such may be modified, supplemented, amended, renewed or extended.

3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, #24..
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including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary’s written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month.

4. Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an assignment of the Rents and Leases, all in favor of Beneficiary, subject to the rights of any beneficiaries under deeds of trust senior in priority to this Deed of Trust (“Senior Deeds of Trust”). The parties acknowledge that some of the Property may be determined under applicable law to be personal property or fixtures. To the extent that any Property may be or be determined to be personal property, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the “UCC”), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, it is the intention of the parties that such Property shall constitute "proceeds, products, offspring, rents, or profits" (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements.

5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it.

Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property #24..
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5028657.1 5
conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary’s lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government.

6. Fixture Filing. Subject to the rights of beneficiaries under Senior Deeds of Trust, this Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Stanislaus County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the "debtor" and Beneficiary shall be deemed to be the "secured party" for all purposes under the UCC.

7. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.

7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a fee simple interest in the Land and the Improvements, (ii) Trustor has good and marketable title to all of the Property; (iii) Trustor has the full and unlimited power, right and authority to encumber the Property and assign the Rents; (iv) subject only to encumbrances of record and senior liens permitted pursuant to the Loan Documents or otherwise approved in writing by Beneficiary (“Permitted Encumbrances”), this Deed of Trust creates a valid first lien on Trustor’s entire interest in the Property; (v) except with respect to Permitted Encumbrances, Trustor owns the Property free and clear of any deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vi) there is no financing statement affecting the Property on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor’s chief executive office is specified in Section 10.2.

Trustor further represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property.

Trustor further represents and warrants that there are no pending, or to Trustor’s knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor’s ownership of the Property.

7.2 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and any interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured #24..
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Obligations or the Loan Documents in accordance with the respective terms thereof.

7.3 Use of Loan Proceeds; Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall use the proceeds of the Loan (the “Loan Proceeds”) solely for purposes authorized by the Loan Documents. Trustor shall keep the Land and Improvements in good repair and condition, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained.

Trustor covenants to comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary’s consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor. Trustor shall use the Land and Improvements solely for purposes authorized by the Loan Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the Loan Documents.

7.4 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if any Transfer other than a Transfer permitted or approved by the City (as provided in the Agreement) of the Property, any part thereof or any interest therein occurs in violation of the requirements of the Loan Documents. If any such Transfer occurs in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period.

7.5 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the Loan Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the use of the Loan Proceeds and the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection at any reasonable time by Beneficiary following two business days prior notice.

7.6 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor’s expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any #24..
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part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.

7.7 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust.

7.8 Hazard, Liability and Workers’ Compensation Insurance. At all times during the term hereof, Trustor shall at Trustor’s expense, maintain insurance policies in accordance with the requirements set forth in the Loan Documents. Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may reasonably require, including without limitation copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required pursuant to the Loan Documents, and such certificates (or policies) shall provide that at least thirty (30) days’ prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy. If any insurance policy required pursuant to the Loan Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within ten (10) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor’s expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary.

7.9 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health code violation or violation of other governmental regulations concerning the Land that has not previously been corrected, and no condition on the Land violates any health, safety, fire, environmental, sewage, building, or other federal, state or local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no, to Trustor’s best knowledge, threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Land or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor’s agents have disclosed to Beneficiary all material facts concerning the Property.

7.10 Hazardous Materials.
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(a) Trustor shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Trustor shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined as or included in the definition of "hazardous substances," hazardous wastes," "hazardous materials," or "toxic substances" under any applicable federal or state laws or regulations (collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as are used in construction of projects of the improvements on the Property or as may be customarily kept and used in and about residential property.
(b) Trustor shall immediately advise Beneficiary in writing if at any time it receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Trustor or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ("Hazardous Materials Law"); (2) all claims made or threatened by any third party against Trustor or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (1) and (2) above are hereinafter referred to as "Hazardous Materials Claims"); and (3) Trustor's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" (as defined in California Health and Safety Code Section 25117.4) under the provision of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) Beneficiary has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by Trustor. Trustor shall indemnify and hold harmless Beneficiary and its board members, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (1) all foreseeable consequential damages; (2) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (3) all reasonable costs and expenses incurred by Beneficiary in connection with clauses (1) and (2), including but not limited to reasonable attorneys' fees and consultant's fees. This indemnification applies whether or not any government agency has issued a cleanup order.

Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (i) losses attributable to diminution in the value of the Property; (ii) loss or restrictions or use of rentable space on the Property; (iii) adverse effect on the marketing of any rental space on the Property; and (iv) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not #24..
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limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the property and surrounding properties). (d) Without Beneficiary's prior written consent, which may not be unreasonably withheld, Trustor may not take any remedial action in response to the presence of any Hazardous Materials on, under, or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in Beneficiary's reasonable judgment, impairs the value of the Beneficiary's security hereunder; provided, however, that Beneficiary's prior consent is not necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain Beneficiary's consent before taking such action, provided that in such event Trustor notifies Beneficiary as soon as practicable of any action so taken. Beneficiary agrees not to withhold its consent, where such consent is required hereunder, if either: (1) a particular remedial action is ordered by a court of competent jurisdiction; (2) Trustor will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (3) Trustor establishes to the reasonable satisfaction of Beneficiary that there is no reasonable alternative to such remedial action which would result in less impairment of Beneficiary's security hereunder; or (4) the action has been agreed to by Beneficiary. (e) The Trustor hereby acknowledges and agrees that: (1) this Article is intended as the Beneficiary's written request for information (and the Trustor's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5; and (2) each representation and warranty in this Deed of Trust or any of the other Loan Documents (together with any indemnity applicable to a breach of any such representation and warranty) with respect to the environmental condition of the property is intended by the Beneficiary and the Trustor to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the Beneficiary's or the Trustee's rights and remedies under this Deed of Trust, the Beneficiary may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to: (1) waive its lien on such environmentally impaired or affected portion of the Property; and (2) exercise (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the Trustor to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the Beneficiary's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Trustor will be deemed to have willfully permitted or acquiesced in a release or threatened release of hazardous materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the Trustor knew or in the exercise of reasonable diligence should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) attorneys' #24..
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fees, incurred by the Beneficiary in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the lesser of ten percent (10%) or the maximum rate permitted by law, until paid, will be added to the indebtedness secured by this Deed of Trust and will be due and payable to the Beneficiary upon its demand made at any time following the conclusion of such action.

7.11 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within five (5) business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three business days of Trustor’s receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof.
b. Defense of Security. At Trustor's sole expense, Trustor shall protect, preserve and defend the Property and title to and right of possession of the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims.
c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.17 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property.

7.12 Indemnification. Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Indemnitees (as defined in Section 7.10) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor’s covenants under any City Document, (b) any representation by Trustor in any City Document which proves to be false or misleading in any material respect #24..
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when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, or any City Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, provided that no Indemnitee shall be entitled to indemnification under this Section for matters caused by such Indemnitee's gross negligence or willful misconduct. The obligations of Trustor under this Section shall survive the repayment of the Acquisition Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust.

7.13. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, unless the loss is caused by the willful misconduct, gross negligence, or bad faith of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.13, and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary.

7.14 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders, and notwithstanding anything contained in any of the Loan Documents, unless Beneficiary and Trustor otherwise agree in writing, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof shall be applied to restoration or repair of the Property, provided Trustor determines that such restoration or repair is economically feasible and there is no default under any City Document that is continuing beyond the expiration of all applicable cure periods. If Trustor determines that such restoration or repair is not economically feasible or if a default exists after expiration of all applicable cure periods, the insurance proceeds shall be applied to the sums secured by this Deed of Trust, with the excess, if any, paid to Trustor. In the event funds for such work are insufficient, Beneficiary may, in its sole discretion and subject to the approval of Beneficiary’s governing board, advance such additional funds as may be necessary to allow the Property to be repaired or restored, and may add the amount thereof to the principal balance of the Note. If the Property is abandoned by Trustor, or if Trustor fails to respond to Beneficiary within 30 days from the date notice is mailed by Beneficiary to Trustor that the insurance carrier offers to settle a claim for insurance benefits, Beneficiary is authorized to collect and apply the insurance proceeds at Beneficiary's option either to restoration or repair of the Property or to the sums secured by this Deed of Trust
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7.15 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations.

7.16 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been satisfied in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance.

7.17 Cure; Protection of Security. Beneficiary may cure any breach or default of Trustor, and if it chooses to do so in connection with any such cure, Beneficiary may also enter the Property and/or do any and all other things which it may in its reasonable discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary’s sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary. Beneficiary may take any of the actions permitted under this Section 7.17 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.

8. Default and Remedies.

8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of any one or more of the following events:
a. Beneficiary’s declaration of an Event of Default under any City Document, subject to the expiration of any applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee;
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c. If Trustor’s interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of Section 7.4 hereof or if any other Transfer occurs in violation of the Agreement; d. Trustor fails to maintain the insurance coverage required under the Loan Documents or otherwise fails to comply with the requirements of Section 7.8 hereof and Trustor fails to cure such default within the time specified in Section 7.8; e. Subject to Trustor’s right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay any other charge that may result in a lien on the Land or the Improvements, and Trustor fails to cure such default within ten (10) days.
f. Any representation or warranty of Trustor contained in or made in connection with the execution and delivery of this Deed of Trust or in any certificate or statement furnished pursuant hereto or in any other City Document proves to have been false or misleading in any material adverse respect when made;
g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within 60 days after its issuance.
i. The holder of any other debt instrument secured by a mortgage or Deed of Trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents; or j. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary’s reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such #24..
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cure to completion with due diligence and in good faith and in no event later than ninety (90) days, or such longer period as the City may approve, following receipt of notice of default.

8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any City Document, and any other remedy existing at law or in equity or by statute, subject to the nonrecourse provisions set forth in the Note. All of Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs.
a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately.
b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor’s or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments.
d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any #24..
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manner permitted by applicable law.

Trustor’s limited partners (the “Limited Partners”) shall have the right to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor. Provided that Beneficiary has been given written notice of the address for delivery of notices to the Limited Partners, Beneficiary shall provide any notice of default hereunder to the Limited Partners concurrently with the provision of such notice to Trustor, and as to the Limited Partners, the cure periods specified herein shall commence upon the date of delivery of such notice in accordance with Section 10.2.

8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust.

Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust.

Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale.

After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.

Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the Loan Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other #24..
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amounts due under the Note.

At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law.

Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations:
a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.11(c); and
b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose.

8.4 Trustor’s Right to Reinstate. Notwithstanding Beneficiary’s acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the Loan Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary’s and Trustee’s remedies as provided herein, including, but not limited to, reasonable attorney’s fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary’s interest in the Property and Trustor’s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.

Nothing contained in Sections 8.3 and 8.4 is intended to expand upon or limit the rights of Trustor and Beneficiary under California law regarding Beneficiary’s exercise of the power of sale or Trustor’s reinstatement rights.

9. Trustor's Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.

10. Miscellaneous Provisions.

10.1 Additional Provisions. The Loan Documents grant further rights to Beneficiary #24..
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and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property.

10.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary’s address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by:
a. personal delivery, in which case notice shall be deemed delivered upon receipt;
b. certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit, postage prepaid in the United States mail;
c. nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier; or d. facsimile transmission, in which case notice shall be deemed delivered on transmittal, provided that a transmission report is generated reflecting the accurate transmission thereof.

Beneficiary: City of Modesto
Community & Economic Development Department
1010 Tenth Street, Suite 4400
P O Box 642
Modesto, CA 95353
Attn: Community Development Manager
Trustor: Center for Human Services
2000 W. Briggsmore Avenue, Ste. 1
Modesto, CA 95350
Attn: Executive Director
Trustee: ____________
____________
____________

10.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided #24..
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however this Section 10.3 does not waive the provisions of Section 7.4.

10.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of Stanislaus County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.

10.5 Attorneys’ Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys’ fees.

10.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws.

Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in the jurisdiction where the Land is located (the “Property Jurisdiction”).

The state and federal courts and authorities with jurisdiction in the Property Jurisdiction shall have exclusive jurisdiction over all controversies which shall arise under or in relation to the Loan Documents. Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural.

10.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary’s or Trustee’s consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.

10.8 Action By Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary’s Executive Director or by any person who shall have been designated by Beneficiary’s Executive Director, without further approval by the governing board of Beneficiary. Beneficiary shall use reasonable best efforts to respond to requests for any such approval, notice, direction, or consent in a timely manner. In any approval, consent, or other #24..
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determination by Beneficiary required hereunder, Beneficiary shall act reasonably and in good faith.

10.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor’s obligations under this Deed of Trust.

10.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust.

IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first written above.

TRUSTOR:

STANISLAUSCENTER FOR HUMAN SERVICES, a California nonprofit corporation By: ______________________________________
___________, Executive Director
Date: ______________________________________
SIGNATURES MUST BE NOTARIZED.
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Exhibit A
LAND
(Attach legal description.)
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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 Stanislaus )
On_____________ before me, _____________________________, Notary Public, , personally appeared, ___________________________________, who proved to me the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under penalty of perjury under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature_____________________________
5028657.1
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SECURED PROMISSORY NOTE
(Youth Housing - PLHA Loan)
$500,000 Modesto, California
_______________, 2022
FOR VALUE RECEIVED, CENTER FOR HUMAN SERVICES, a California nonprofit corporation (“Borrower”), promises to pay to the City of Modesto, a California charter city (“City”), in lawful money of the United States of America, the principal sum of Five Hundred Thousand Dollars ($500,000), or so much thereof as may be advanced by City pursuant to the Agreement referred to below, with three percent (3%) simple annual interest accruing on the outstanding principal balance, and in accordance with the terms and conditions described herein.

This Secured Promissory Note (this “Note”) has been executed and delivered pursuant to and in accordance with that certain Affordable Housing Loan Agreement executed by and between the City and Borrower dated ____________ (the “Agreement”), and is subject to the terms and conditions of the Agreement, which is by this reference incorporated herein and made a part hereof. Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Agreement.

This Note is secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) dated as of the date hereof, executed by Borrower for the benefit of City and encumbering the property described therein. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, the Regulatory Agreement and the other City Documents. The Regulatory Agreement shall remain effective for the full term thereof and shall survive the repayment of this Note.

I. INTEREST. Interest shall accrue annually at the rate of three percent (3%) simple interest on the outstanding principal balance of this Note; provided however, that upon the occurrence of an Event of Default and continuing until such time as the Loan is repaid in full or the default is cured, interest shall automatically be charged without notice to the lesser of (i) ten percent (10%), compounded annually, or (ii) the highest rate permitted by law (the “Default Rate").

The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies.

Interest shall be calculated on the basis of a year of three hundred sixty-five (365) days, and charged for the actual number of days elapsed.

II. TERM. The entire outstanding principal balance of this Note, together with any interest accrued thereon and any other sums accrued hereunder shall be payable in full on the fifty-fifth (55th) anniversary of the date the Loan Proceeds are disbursed, but in no case later than the fifty- #24..
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seventh (57th) anniversary of the date the Regulatory Agreement is recorded against the Property (“Term”).

III. DUE ON SALE. The entire unpaid principal balance and all interest and other sums accrued hereunder shall, at the option of the City, be due and payable upon the earliest of: (1) a Transfer other than a Transfer permitted or approved by the City as provided in the Agreement; (2) the occurrence of an uncured Event of Default by the Borrower for which the City exercises its right to cause the Loan indebtedness to become immediately due and payable; or (3) the expiration of the Term.

IV. PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by accrued interest (if any) on the amount of principal prepaid calculated to the date of such prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal. The Regulatory Agreement shall remain in full force for the entire term thereof regardless of any prepayment of this Note.

V. TERMS OF PAYMENT.
(a) Borrower shall make all payments due under this Note in currency of the United States of America to Holder at City of Modesto, 1010 Tenth Street, Suite 4400, Attn:

Community Development Manager, or to such other place as Holder may from time to time designate.
(b) All payments due under this Note shall be paid in currency of the United State of America, which at the time of payment is lawful for the payment of public and private debts. (c) All payments on this Note shall be without expense to the City, and the Borrower agrees to pay all costs and expenses, including re-conveyance fees and reasonable attorney’s fees of the City, incurred in connection with the payment of this Note and the release of any security hereof.
(d) Notwithstanding any other provision of this Note, or any instrument securing the obligations of the Borrower under this Note, if, for any reason whatsoever, the payment of any sums by the Borrower pursuant to the terms of this Note would result in the payment of interest which would exceed the amount that the City may legally charge under the laws of the State of California, then the amount by which payments exceeds the lawful interest rate shall automatically be deducted from the principal balance owing on this Note, so that in no event shall the Borrower be obligated under the terms of this Note to pay any interest which would exceed the lawful rate.

VI. DEFAULTS AND REMEDIES.
(a) The occurrence of any one or more of the following events shall constitute an event of default hereunder ("Event of Default"):
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(i) Any failure to pay, in full, any payment required under this Note when due and such failure continues for ten (10) days after City notifies Borrower thereof in writing; (ii) Any failure in the performance by the Borrower of any other terms, condition, provision or covenant set forth in this Note and such failure continues for thirty (30) days after City notifies Borrower thereof in writing; and (iii) The occurrence of an Event of Default under the Agreement, the Deed of Trust, the Regulatory Agreement, or any other instrument securing the obligations of the Borrower under this Note or under any other promissory notes hereafter issued by the Borrower to the City pursuant to the Agreement or the Deed of Trust, subject to any applicable cure periods set forth therein.
(b) Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under this Note and the other City Documents, including without limitation the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note, regardless of whether suit is filed to seek enforcement, and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. The rights and remedies of City under this Note shall be cumulative and not alternative. (c) The failure to exercise the remedy set forth in above or any other remedy provided by law upon the occurrence of one or more of the Events of Default shall not constitute a waiver of the right to exercise any remedy at any subsequent time with respect to the same or any other default. The acceptance by the City hereof of any payment which is less than the total of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or any subsequent time, or nullify any prior exercise of any such remedy or option, without the express consent of the City, except as and to the extent otherwise provided by law. Notwithstanding anything to the contrary contained herein, City agrees that any cure made or tendered by Borrower’s limited partner hereunder shall be accepted or rejected by the City on the same basis as if made or tendered by Borrower.

VII. WAIVERS.
(a) No waiver by City of any right or remedy under this Note shall be effective unless in writing signed by City. Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.

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of Borrower or of the right of City to take further action without notice or demand as provided in this Note
(b) To the maximum extent permitted by applicable law, Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice. Borrower expressly agrees that City may accept further security or release any security for this Note, all without in any way affecting the liability of the Borrower. (c) No extension of time for payment of this Note or any installment hereof made by agreement by the City with any person now or hereafter liable for payment of this Note shall operate to release, discharge, modify, change or affect the original liability of the Borrower under this Note, either in whole or in part, except as otherwise approved in writing. (d) The obligations of the Borrower under this Note shall be absolute and the Borrower waives any and all rights to offset, deduct or withhold any payments or charges due under this Note for any reason whatsoever.

VIII. MISCELLANEOUS.
(a) Any notice required or permitted to be given hereunder shall be given in accordance with the Agreement, except that notices to Borrower shall be sent to:

Developer: Center for Human Services
2000 W. Briggsmore Avenue, Ste. 1
Modesto, CA 95350
Attn: Executive Director.
(b) If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable. (c) This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Any legal action filed in connection with this Note shall be filed in the Superior Court of Stanislaus County, California, or in the Federal District Court for the Northern District of California.
(d) This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns. Without limiting the generality of the foregoing, except in the case of a Transfer permitted or approved by the City as provided in Article 7 of the Agreement, this Note shall not be assumable without City’s prior written consent, which consent may be granted or denied in City’s sole discretion. #24..
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(e) The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and City. (f) The relationship of Borrower and City under this Note is solely that of borrower and lender, and the Loan evidenced by this Note and secured by the Deed of Trust will in no manner make City the partner or joint venturer of Borrower. (g) Time is of the essence with respect to every provision of this Note. (h) The Loan is a nonrecourse obligation of Borrower. Neither the Borrower nor any of its partners or any other party shall have any personal liability for repayment of the Loan. The City’s sole recourse under the Agreement, Note, Deed of Trust and other City Documents for repayment of the Loan shall be the exercise of the City’s rights against the Development and related security therefor.

IN WITNESS WHEREOF, Borrower has executed and delivered this Note as of the date first written above.

BORROWER
CENTER FOR HUMAN SERVICES, a California nonprofit corporation By: ______________________________________
___________, Executive Director
Date: ______________________________________
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

January 11, 2022
Date: November 24, 2021
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Christina Alger, Director of Human Resources
SUBJECT: Establishing a Section 115 Trust
CONTACT: Christina Alger, Director Human Resources,
[email protected] 209-571-5126
DESCRIPTION:

Consider approving a Professional Services Agreement with Public Agency Retirement Services (PARS), Newport Beach, CA for a three-year Agreement with four one-year extensions to provide administrative and management services of a Section 115 Trust for an amount determined based on the fee schedule defined under Exhibit A and funding a Pension Trust in the amount of $2,345,594 and an OPEB Trust in the amount of $1,387,280 and amending the Fiscal Year 2021-22 annual operating budget to transfer funds in the amount of $2,345,594 and $1,387,280 from various funds to the employee benefits fund. (Funding Source: Various Funds) STRATEGIC PLAN ELEMENT:

This item supports the 2020-2025 Strategic Plan’s Service and Delivery Goals & Strategies - Achieve Financial Sustainability by mitigating the volatility of the City’s pension obligation.

BACKGROUND:

The City is contracted with the California Public Employees Retirement System (CalPERS) to provide employees with a pension upon vested retirement. The City holds two separate contracts, one for Safety and one for Miscellaneous employees. Both the employer and the employee are required to make contributions to the system based on a formula established by CalPERS. These funds are then invested into the market, making up a substantial portion of funding the final liability.

CalPERS funds approximately 58% of the full liability of their pension obligation through investment returns and determines employer and employee contributions based on an assumed rate of return. This causes volatility in the fund and has created a shortfall over the past several years. Currently the City’s full liability is $775,371,267 for the Safety contract and $575,792,719 for the Miscellaneous contract for a total of $1,351,164,986. They are 63.8% and 70.5% funded respectively, creating an Unfunded Accrued Liability (UAL). #25..
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City Council, January 11, 2022
Establishing a Section 115 Trust

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Modesto City CouncilJanuary 11, 2022

Modesto City Council
January 11, 2022