Modesto City Council
February 8, 2022

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MODESTO CITY COUNCIL
www.modestogov.com
AGENDA
City of Modesto

CITY COUNCIL MEETING
Held Via Teleconference
(To Access Meeting Please See Instructions Below)
Tuesday, February 08, 2022 at 5:30 PM
*Roll Call - Councilmembers Escutia-Braaton, Kenoyer, Madrigal, Ricci, Wright, Zoslocki, Mayor Zwahlen
* Some Councilmembers may be calling in. (Please Note: In order to respond to COVID-19 the City will hold this meeting via teleconference pursuant to AB 361

THIS MEETING WILL NOT BE PHYSICALLY OPEN TO THE PUBLIC
In order to minimize the spread of the COVID-19 virus, this meeting will be conducted pursuant to AB 361, which amended the Brown Act’s teleconferencing provisions and will not be physically open to the public. You may observe a livestream of the meeting at http://media.modestogov.com. You may also participate in the meeting as indicated below.

PARTICIPATING IN CITY COUNCIL MEETINGS IN CONFORMANCE
WITH AB 361
The City of Modesto is providing alternatives to view Council meetings and provide public comments. If you wish to make either a general public comment or to comment on a specific agenda item, you may use one of the following options:

SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Councilmembers and placed in the record, but will not be read aloud during the meeting. Written comments must be received by 3:00 p.m. on the day of the meeting.
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VIRTUAL PARTICIPATION BY ZOOM VIDEO

CONFERENCING AND TELEPHONE
Joining the City Council meeting via Zoom
The City of Modesto is now offering the ability to view and participate in Council meetings via telephonic conferencing via “Zoom” video conferencing computer technology. The meeting may be accessed through the use of Zoom using the following options:
 Enter the following link into an Internet Browser
https://us02web.zoom.us/j/86945970570,
 Enter the following link into an Internet Browser https://zoom.us/ and using the Webinar ID 869 4597 0570
 Passcode 84326
To use Zoom, please visit: https://zoom.us/ and either sign-up for a free Zoom account or continue as a guest. Once you have downloaded the app onto your mobile device, joined from your web browser, or downloaded the Zoom software on your computer you will be ready for the upcoming Council meeting.

Joining the City Council meeting via Telephone
If you don’t have a smart phone or computer to access the meeting via Zoom, you can participate by phone, by calling 1-877-853-5257 (Toll Free) or 1-888-475-4499 (Toll Free) and enter the Webinar ID 869 4597 0570 Passcode 84326
Providing Public Comment on Zoom and by Telephone
The Mayor will request public comment during the Public Comment periods on the meeting agendas and during each Public Hearing and Regular Calendar Item on the Council Agenda.

Once the Mayor has announced the public comment period, please do one of the following.

USING A COMPUTER OR SMART PHONE APP:
 Click on the “Raise Hand” feature in the webinar controls. This will notify City staff that you have raised your hand.
 City staff will unmute your microphone when it is your turn to provide public comment.
 A prompt will appear to confirm you would like to be unmuted and then you will have three minutes to provide public comment.
 Once your public comment has ended, you will be muted again.

USING A REGULAR PHONE (not using a computer or smart phone APP):
 Dial *9 (star 9), this will notify City staff that you have “raised your hand” for public comment.
 City staff will unmute your microphone when it is your turn to provide public comment.
 You will hear “you are unmuted” and then you will have three minutes to provide public comment.
 Once your public comment has ended, you will be muted again. - 2 -
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 If your phone is unmuted, and you are unable to be heard, the host may ask that you Dial *6 to toggle mute on/off in Zoom.

Additional Zoom resources/support
Please visit Zoom’s website support page on helpful tips to prepare for the meeting:
https://support.zoom.us/hc/en-us/categories/201146643
Pledge of Allegiance to the Flag
Invocation: Scott Nelson, Covenant Grove Church
City Clerk’s Announcements
Declaration of Conflicts of Interest
Reports from Closed Session

ACKNOWLEDGEMENTS AND PRESENTATIONS

1. Presentation of Proclamation declaring February 2022 as Black History Month (Funding Source: Not Applicable)
CITY COUNCIL; Kathy Espinoza, 209-571-5597, [email protected]

2. Presentation of Proclamation recognizing February 1, 2022 as Lunar New Year (Funding Source: Not Applicable)
CITY COUNCIL; Kathy Espinoza, 209-571-5597, [email protected]

MISCELLANEOUS
Legislation, Appointments, Other

3. Consider approving the appointment of Maria Apodaca and reappointments of Bart Barringer and David Boring to the Downtown Improvement District Board of Directors for a four-year term to expire January 1, 2026. (Funding Source: Not Applicable) Staff Recommendation:
 Resolution approving the appointment of Maria Apodaca and reappointments of Bart Barringer and David Boring to the Downtown Improvement District Board of Directors for a four-year term to expire January 1, 2026.

CITY CLERK; Dana Sanchez, 209-577-5396, [email protected]

PUBLIC COMMENT PERIOD
Please refer to special public comment instructions above Three minute time limit per speaker
Only interested persons in the audience may present these matters. Under State law, - 3 -
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Councilmembers may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Councilmember or the Council itself may take action to direct staff to place a matter of business on a future agenda.

CONSENT ITEMS – ROLL CALL VOTE REQUIRED
Information concerning the consent items listed below has been forwarded to each Councilmember prior to this meeting for study. Unless some member of the audience or Councilmember has a question concerning an item and asks that it be withdrawn from the consent list, the Council approves the items at one time. The action taken by the Council in approving consent items is set forth in the explanation of this individual item.

Any and all of the following agenda items are subject to action by the Modesto City Council.

This Agenda is on file at the Modesto-Stanislaus Library Reference Room, 1500 I Street, Modesto, in the City Clerk’s Office, Sixth Floor, 10th Street Place, and is available on the City’s Web site at www.modestogov.com.

In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

CONSENT ITEMS
An item may be removed from consent and discussed at the request of an audience member or Councilmember.

Consent

4. Consider approving the minutes from the February 1, 2022 Council Meeting. (Funding Source: Not Applicable)
Staff Recommendation:
 Motion approving the minutes from the February 1, 2022 Council Meeting.

CITY CLERK; Dana Sanchez, 209-577-5396, [email protected] - 4 -
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Consent

5. Consider approving a resolution continuing to authorize remote teleconference meetings pursuant to Assembly Bill 361. (Funding Source: Not Applicable) Staff Recommendation:
 Resolution continuing to authorize remote teleconference meetings of the City of Modesto pursuant to Assembly Bill 361.

CITY ATTORNEY; Jose Sanchez, 209-577-5284, [email protected] Consent

6. Consider approving the City Council Code of Conduct to promote a fair, ethical, and transparent government. (Funding Source: Not Applicable) Staff Recommendation:
 Resolution approving the City Council Code of Conduct and Ethics to promote a fair, ethical, and transparent government.

CITY MANAGER; Edgar Garcia, 209-571-5101, [email protected] Consent

7. Consider approving the recommended budget adjustments to Fiscal Year 2021-22 Annual Operating and Capital Improvement Program Budgets. (Funding Source:

Various Funds)
Staff Recommendation:
 Resolution amending Year 2021-22 Annual Operating and Capital Improvement Project Fund Budgets and authorizing the City Manager, to make the necessary steps to implement the provisions of this resolution.

BUDGET; Steve Christensen, 209-577-5390, [email protected] Consent

8. Consider approving the City of Modesto’s Homekey 2.0 Project Application for the project located at 112 James 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 to the Stanislaus Equity Partners in an amount up to $200,000 in Community Development Block Grant Funds to assist with the acquisition, $50,000 for staff activity, 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 $250,000 from fund fund (1130) – Grants – CDBG Program to Homekey 2.0 project . (Funding Source: Homekey 2.0 Funds and Community Development Block Grant Funds)
Staff Recommendation:
 Resolution approving the City of Modesto’s Homekey 2.0 Project Application for 112 James 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 - 5 -
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Homekey 2.0 Program Grant and authorizing the City Manager or his designee to execute the any documents for the implementation of this Resolution.  Resolution of the Governing body of the City of Modesto authorizing joint to and participation in the Homekey Program.
 Resolution approving a loan to the Stanislaus Equity Partners in an amount up to $200,000 in Community Development Block Grant Funds to assist with the acquisition of 112 James Street and $50,000 for staff activity delivery costs, 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 Community Develoment Block Grant (CDBG) grant 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 $250,000 from fund (1130) – Grants – CDBG Program to the Homekey

2.0 project and authorizing the City Manager or his designee, to take the necessary steps to implement the provisions of this resolution.

CED; Jessica Hill, 209-577-5321, [email protected]
Consent

9. Consider directing staff to prepare and file the Fiscal Year 2022-2023 Engineer’s Annual Report for Landscape Maintenance Assessment District No. 1 (Dry Creek Meadows Subdivisions Nos. 1-6). (Funding Source: Landscape Maintenance Assessment District No. 1)
Staff Recommendation:
 Resolution directing staff to prepare and file the Fiscal Year 2022-2023 Engineer’s Annual Report for City of Modesto Landscape Maintenance Assessment District No. 1 (Dry Creek Meadows Subdivisions Nos. 1-6).

CED; Jessica Hill, 209-577-5321, [email protected]
Consent

10. Consider directing staff to prepare and file the Fiscal Year 2022-2023 Engineer’s Annual Report for Landscape Maintenance Assessment District No. 2 (Dry Creek Meadows Subdivisions Nos. 7-10, Creekwood Meadows Subdivision and Yosemite Meadows Subdivisions Units 1 and 2). (Funding Source: Landscape Maintenance Assessment District No. 2)
Staff Recommendation:
 Resolution directing staff to prepare and file the Fiscal Year 2022-2023 Engineer’s Annual Report for Landscape Maintenance Assessment District No. 2 (Dry Creek Meadows Subdivisions Nos. 7-10, Creekwood Meadows Subdivision and Yosemite Meadows Subdivisions Units 1 and 2).

CED; Jessica Hill, 209-577-5321, [email protected]
Consent

11. Consider directing staff to prepare and file the Fiscal Year 2022-2023 Engineer’s Annual Report for the Shackelford Landscape and Lighting District. (Funding Source:
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Shackelford Landscape and Lighting District)
Staff Recommendation:
 Resolution directing staff to prepare and file the Fiscal Year 2022-2023 Engineer’s Annual Report for the Shackelford Landscape and Lighting District.

CED; Jessica Hill, 209-577-5321, [email protected]
Consent

12. Consider accepting an informational report for the December 2021 Accounts Payable Payment Register and Void report. (Funding Source: Not Applicable) Staff Recommendation:
 Motion accepting an informational report for the December 2021 Accounts Payable Payment Register and Void report.

FINANCE DEPARTMENT; Maria Garnica, 209-577-5249,
[email protected]
Consent

13. Consider accepting the Monthly Investment Report for November 2021. (Funding Source: Various Funds)
Staff Recommendation:
 Motion accepting the Monthly Investment Report for November 2021.

FINANCE DEPARTMENT; Calogero Maniscalco, 209-577-5219,
[email protected]
Consent

14. Consider approving the award of bid for a Low-Profile Dump Truck to Towne Ford Sales, Redwood City, CA for a total amount not to exceed $99,797; approving the award of bid for two One-Ton Extended Cab Trucks to Napa Ford, Napa, CA for a total amount not to exceed $110,114; and approving the competitive bidding process from Sourcewell (formerly National Joint Powers Alliance) with Pape Machinery, French Camp, CA for a John Deere Wheel Loader for a total amount not to exceed $288,135. (Funding Source: Fleet Replacement Fund)
Staff Recommendation:
 Resolution approving the award of bid for a Low-Profile Dump Truck to Towne Ford Sales, Redwood City, CA for a total amount not to exceed $99,797; and authorizing the Purchasing Manager, or her designee, to issue the purchase order.
 Resolution approving the award of bid for two One-Ton Extended Cab Trucks to Napa Ford, Napa, CA for a total amount not to exceed $110,114; and authorizing the Purchasing Manager, or her designee, to issue the purchase order.
 Resolution approving the competitive bidding process from Sourcewell (formerly National Joint Powers Alliance) with Pape Machinery, French Camp, CA for a John Deere Wheel Loader for a total amount not to exceed $288,135; and authorizing the Purchasing Manager, or her designee, to issue the purchase order.

FINANCE DEPARTMENT; Cynthia Kline, 209-577-5412, [email protected] - 7 -
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Consent

15. Consider approving the competitive bidding process from Merced County, Fast Open Contracts Utilization Services (FOCUS), Merced, CA for Cisco Annual Licensing and Support Maintenance with Telcion Communications Group, Turlock, CA for a threeyear Agreement for a total amount not to exceed $554,814. (Funding Source:

Information Technology Fund)
Staff Recommendation:
 Resolution approving the competitive bidding process from Merced County, Fast Open Contracts Utilization Services (FOCUS), Merced, CA for Cisco Annual Licensing and Support Maintenance with Telcion Communications Group, Turlock, CA for a three-year Agreement for a total amount not to exceed $554,814; and authorizing the Purchasing Manager, or her designee, to issue a purchase order.

FINANCE DEPARTMENT; Cynthia Kline, 209-577-5412, [email protected] Consent

16. Consider approving the competitive bidding process from Sourcewell (formerly National Joint Powers Alliance) with Rapid View IBAK North America under authorized dealer Jack Doheny Company, Northville, MI, for a Closed-Circuit Television (CCTV) van for a total amount not to exceed $264,154. (Funding Source:

Wastewater Fund)
Staff Recommendation:
 Resolution approving the competitive bidding process from Sourcewell (formerly National Joint Powers Alliance) with Rapid View IBAK North America under authorized dealer Jack Doheny Company, Northville, MI, for a Closed-Circuit Television (CCTV) van for a total amount not to exceed $264,154; and authorizing the Purchasing Manager, or her designee, to issue the purchase order.

FINANCE DEPARTMENT; Cynthia Kline, 209-577-5412, [email protected] Consent

17. Consider approving an Agreement to provide Fire Administrative Services between the City of Modesto and the City of Turlock for a four-year, four and one-half month term, with one two-year extension option, amending the Position Allocation for Fiscal Year 2021-2022 as adopted in the operating budget, and amending the Fiscal Year 2021-22 Operating Budget by $126,555 in revenues and $107,805 in expenses. (Funding Source: General Fund)
Staff Recommendation:
 Resolution approving an Agreement to provide Fire Administrative Services between the City of Modesto and the City of Turlock for a four-year, four and one-half month term, with one two-year extension option, and authorizing the City Manager, or his designee, to execute the Agreement.  Resolution amending the Position Allocation for Fiscal Year 2021-2022 as adopted in the operating budget.
 Resolution amending the Fiscal Year 2021-22 Operating Budget by $126,555 in - 8 -
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revenues and $107,805 in expenses and authorizing the City Manager, or his designee, to implement the provisions the resolution.

FIRE DEPARTMENT; Alan Ernst, 209-572-9590, [email protected] Consent

18. Consider approving a cell tower lease amendment at Beyer Park with T-Mobile West, LLC, a Delaware limited liability company (T-Mobile), extending the maximum term of the Agreement through December 31, 2043. (Funding Source: Cell Tower Facility Rental Revenue)
Staff Recommendation:
 Resolution approving a cell tower lease amendment at Beyer Park with TMobile West, LLC, a Delaware limited liability company (T-Mobile), extending the maximum term of the Agreement through December 31, 2043 and authorizing the City Manager, or his designee to execute the Agreement.

PRN; Nathan Houx, 209-571-5526, [email protected]
Consent

19. Consider approving a cell tower lease amendment at Davis Park with MetroPCS California, LLC, a Delaware Limited Liability Company (MetroPCS), extending the maximum term of the Agreement through November 30, 2044 and authorizing the replacement of existing ball field lighting infrastructure at the expense of the vendor as necessary. (Funding Source: Cell Tower Facility Rental Revenue) Staff Recommendation:
 Resolution approving a cell tower lease amendment at Davis Park with MetroPCS California, LLC, a Delaware Limited Liability Company (MetroPCS), extending the maximum term of the Agreement through November 30, 2044 and authorizing the replacement of existing ball field lighting infrastructure at the expense of the vendor as necessary; and authorizing the City Manager, or his designee to execute the Agreement.

PRN; Nathan Houx, 209-571-5526, [email protected]
Consent

20. Consider approving a first amendment to cell tower lease at Creekside Golf Course with MetroPCS California, LLC, a Delaware limited liability company (MetroPCS), extending the maximum term of the Agreement through October 31, 2044. (Funding Source: Cell Tower Facility Rental Revenue)
Staff Recommendation:
 Resolution approving a first amendment to the cell tower lease at Creekside Golf Course with MetroPCS California, LLC, a Delaware limited liability company (MetroPCS), extending the maximum term of the Agreement through October 31, 2044, and authorizing the City Manager, or his designee to execute the Agreement.

PRN; Nathan Houx, 209-571-5526, [email protected]
Consent

21. Consider approving the plans and specifications for the Modesto Modular Building - 9 -
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Relocation Project, accepting the bid and awarding a contract to Harris Builders, Inc. of Hilmar, CA to move the Boys and Girls Club modular building from Dr. Martin Luther King, Jr. Park to the undeveloped park property adjacent to Dryden Golf Course in the amount of $458,896 and authorizing the Director of Utilities to approve change orders up to the cumulative amount of $55,068 (12% of the original contract price) if needed for a total amount not to exceed $513,964; and amending the Fiscal Year 21/22 Capital Improvement Program Budget. (Funding Source: Community Development Block Grant Funds)
Staff Recommendation:
 Resolution approving the plans and specifications for the Modesto Modular Relocation Project, accepting the bid and awarding a contract to Harris Builders, Inc. of Hilmar, CA in the amount of $458,896 and authorizing the Director of Utilities to approve change orders up to the cumulative amount of $55,068 (12% of the original contract price) if needed for a total amount not to exceed $513,964 and authorizing the City Manager, or his designee to execute the Agreement.
 Resolution amending the Fiscal Year 2021/22 Capital Improvement Program (CIP) budget, Project 101296 in the amount of $624,464 to recognize Community Development Block Grant (CDBG) funding and fund the PFI First Tee Activity 1373 project construction; and authorizing the City Manager, or his designee, to implement the provisions of this resolution.

PRN; Nathan Houx, 209-571-5526, [email protected]
Consent

22. Consider approving an Agreement with Berry, Dunn, McNeil, and Parker, LLC for professional services to prepare a Fund Development Strategy and Implementation Plan for the Parks, Recreation and Neighborhoods Department in the amount of $49,999, plus a $4,999 contingency if needed, for an Agreement total not to exceed $54,998. (Funding Source: General Fund – Parks, Recreation and Neighborhoods Administration)
Staff Recommendation:
 Resolution approving an Agreement with Berry, Dunn, McNeil, and Parker, LLC for professional services to prepare a Fund Development Strategy and Implementation Plan for the Parks, Recreation and Neighborhoods Department in the amount of $49,999, plus a $4,999 contingency if needed, for an Agreement total not to exceed $54,998, and authorizing the City Manager, or his designee, to execute the Agreement.

PRN; Laurie Smith, 209-577-5347, [email protected]
Consent

23. Consider accepting an update on the Parks, Recreation and Neighborhood Department accounts at the Stanislaus Community Foundation and approve the recommendations for account adjustments. (Funding Source: Stanislaus Community Foundation) Staff Recommendation:
 Resolution accepting an update on the Parks, Recreation and Neighborhood Department accounts at the Stanislaus Community Foundation and approving - 10 -
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the recommendations for account adjustments; and authorizing the Director of Finance, or her designee, to make the account adjustments.

PRN; Laurie Smith, 209-577-5437, [email protected]
Consent

24. Consider approving the City of Modesto Solid Waste Division to apply for a Notice of Intent to Comply with regulations set in Senate Bill 1383, which allows the California Department of Resources Recycling and Recovery to delay administrative civil penalties for non-compliance. (Funding Source: Not Applicable) Staff Recommendation:
 Resolution approving the City of Modesto Solid Waste Division to apply for a Notice of Intent to Comply with regulations set in Senate Bill 1383 which allows for the California Department of Resources Recycling and Recovery (CalRecycle) to delay administrative civil penalties for non-compliance.

PUBLIC WORKS; Myriah Hill, 209-577-5458, [email protected] Consent

25. Consider approving the Sole Source Purchase Agreement with Xylem Water Solutions, Charlotte, NC, for the procurement of Ultraviolet (UV) lamps and parts for an estimated annual amount of $50,000 and a total amount not to exceed $250,000 over five years, and authorizing the Purchasing Manager, or her designee, the ability to add parts based on the department’s needs, ensuring the total amount does not exceed the authorized total. (Funding Source: Wastewater Fund)
Staff Recommendation:
 Resolution approving the sole source purchase Agreement with Xylem Water Solutions, Charlotte, NC, for the procurement of Ultraviolet (UV) lamps and parts for an estimated annual amount of $50,000 and a total amount not to exceed $250,000 over five years, and authorizing the Purchasing Manager, or her designee, the ability to add parts based on the department’s needs, ensuring the total amount does not exceed the authorized total, and authorizing the Director of Finance, or her designee, to execute the Agreement.

UTILITIES; Monte Hamilton, 209-342-4505, [email protected]

COUNCIL COMMENTS & REPORTS

CITY MANAGER COMMENTS & REPORTS

HEARINGS
Published in the Modesto Bee on January 12, 2022

26. Hearing to consider approving an amendment to the Urban Area General Plan to change the designation of approximately 23 acres of land in the Fairview Village Specific Plan area from C, Commercial, to VR, Village Residential; approving an amendment to the Fairview Village Specific Plan to make the Specific Plan consistent - 11 -
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with the General Plan, change the land use and circulation plans, and make other revisions; approving the filing of an application with the Stanislaus Local Agency Formation Commission to annex approximately 177.75 acres located east of Carpenter Road and north of Whitmore Avenue to the City of Modesto; and adopting a resolution finding that the project is within the scope of the General Plan Master Environmental Impact Report. (Funding Source: General Fund)
Staff Recommendation:
 Resolution approving an amendment to the Modesto Urban Area General Plan to change the designation of approximately 23 acres of land in the in the Fairview Village Specific Plan area from C, Commercial, to VR, Village Residential.
 Resolution approving Amendment No. 4 to the Fairview Village Specific Plan to make the Specific Plan consistent with policies in the Urban Area General Plan, change the land use and circulation plans, and make other revisions.  Resolution approving the filing of an application with the Stanislaus Local Agency Formation Commission for the reorganization of approximately 177.75 acres located east of Carpenter Road and north of Whitmore Avenue for annexation to the City of Modesto and Modesto Sewer District No. 1 and simultaneous detachment from the Westport and Burbank-Paradise Fire Protection Districts.
 Resolution finding that the following subsequent project is within the scope of the project covered by the Modesto Urban Area General Plan Master Environmental Impact Report (SCH No. 2014042081): General Plan Amendment from Commercial to Village Residential in the Fairview Village Specific Plan, Specific Plan Amendment No. 4, annexation of 177.75 acres to the City of Modesto and simultaneous detachment from Westport and BurbankParadise Fire Protection Districts.

CED; Cindy van Empel, 209-577-5267, [email protected]

NEW BUSINESS

27. Consider accepting Mayor Sue Zwahlen’s Budget Priority Message as per Charter Section 1302.1 for the upcoming Fiscal Year 2022-23 budget year. (Funding Source:

Not Applicable)
Staff Recommendation:
 Motion to accept Mayor Sue Zwahlen’s Budget Priority Message as per Charter Section 1302.1 for the upcoming Fiscal Year 2022-23 budget year.

BUDGET; Steve Christensen, 209-577-5390, [email protected]

28. Consider providing direction to staff regarding the processing of an application for annexation, specific plan and environmental review for the future development area referred to as Tivoli North, which is bounded by Claribel Road to the north, Roselle Avenue to the east, Claratina Avenue to the south, and Oakdale Road to the west. (Funding Source: Application Filing Fees)
Staff Recommendation:
 Motion directing staff to accept and process an application for annexation, - 12 -
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specific plan and environmental review for Tivoli North.

CED; Brad Wall, 209-577-5273, [email protected]

29. Consider approving revised allocations in the spending plan for the City’s Pandemic Recovery Strategy, Modesto Forward, for the use of American Rescue Plan funds and authorizing the City Manager, or his designee, to carry out the necessary steps to implement the programs and funding allocations; and authorizing the City Manager to negotiate and execute Agreements with the Children’s Museum, Awesome Spot Playground (Valley Mountain Regional Center), and Graffiti Museum for $500,000 each, Convention and Visitor’s Bureau for $250,000, Modesto Neighborhoods Inc. for $120,000, Stanislaus Equity Partners and Opportunity Stanislaus for $100,000 each, Stanislaus Community Foundation for $90,000, and Modesto Art Museum, Opera Theater, Prospect Theater, and State Theater for $50,000 each. (Funding Source:

American Rescue Plan Funding)
Staff Recommendation:
 Resolution approving revised allocations in the spending plan for the City’s Pandemic Recovery Strategy, Modesto Forward, for the use of American Rescue Plan funds and authorizing the City Manager, or his designee, to carry out the necessary steps to implement the programs and funding allocations.  Resolution authorizing the City Manager to negotiate and execute Agreements with the Children’s Museum, Awesome Spot Playground (Valley Mountain Regional Center), and Graffiti Museum for $500,000 each, Convention and Visitor’s Bureau for $250,000, Modesto Neighborhoods Inc. for $120,000, Stanislaus Equity Partners and Opportunity Stanislaus for $100,000 each, Stanislaus Community Foundation for $90,000, and Modesto Art Museum, Opera Theater, Prospect Theater, and State Theater for $50,000 each.

CITY MANAGER; Edgar Garcia, 209-571-5101, [email protected]

MATTERS TOO LATE FOR THE AGENDA
These may be presented by members of the City Council and staff upon determination by a majority vote that an emergency exists, as defined by State law, or by a 2/3 vote that (1) there is a need to take immediate action, and (2) that the need for action came to the City’s attention after the agenda was posted.

ADJOURNMENT

CLOSED SESSION
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Please take notice that a special Closed Session meeting of the Council of the City of Modesto has been called pursuant to Section 2-1.02 of the Modesto Municipal Code to be convened on TUESDAY, FEBRUARY 8, 2022, at 3:30 P.M.
and after the regularly scheduled meeting via Zoom.

Any and all of the following agenda items are subject to action being taken by the Modesto City Council.

The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:

CLOSED SESSION

PUBLIC EMPLOYEE PERFORMANCE EVALUATION
(Pursuant to Section 54957 of the Government Code)
Title: City Manager
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on
at by
date time signature
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 8, 2022
February 2, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Dana Sanchez, Interim City Clerk
SUBJECT: Appointment to Downtown Improvement District Advisory Board and Reappointments to Downtown Improvement District Board of Directors CONTACT: Dana Sanchez, Interim City Clerk
[email protected], 209-577-5397
DESCRIPTION:

Consider approving the appointment of Maria Apodaca and reappointments of Bart Barringer and David Boring to the Downtown Improvement District Board of Directors for a four-year term to expire January 1, 2026. (Funding Source: Not Applicable) BACKGROUND:

The Downtown Improvement District Advisory Board consists of 9 members serving in the role of the City’s concierge. Modesto Downtown Improvement District promotes a positive atmosphere in the downtown by caring for physical space. Their mission is to attract and retain business, employees, residents, and visitors to downtown Modesto.

DISCUSSION:

Per their ByLaws, any vacancy occurring in the Board of Directors/Advisory Board, and any directorship to be filled by reason of an increase in the number of Directors, shall be filled and elected annually by the Board of Directors. There are currently four vacancies. The Executive Committee unanimously recommends appointment of Maria Apodaca and with the continued backing of the Downtown Improvement District, the reappointment of Bart Barringer and David Boring; all of whom fall under the requirement of having businesses within the “Area” and pay an additional levy of license tax as provided for by Municipal Code Chapter 6-3.11 Advisory Board.

The attendance rates (2018- 2022) for those being considered for reappointment are as follows:
 Bart Barringer 85%
 David Boring 67%
FISCAL IMPACT:

There is no fiscal impact related to this action.
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City of Modesto, February 8, 2022
Appointment to Downtown Improvement District Advisory Board and Reappointments to Downtown Improvement District Board of Directors

COMMITTEE RECOMMENDATION:

The item was not previously heard by a Council Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the appointment of Maria Apodaca and reappointments of Bart Barringer and David Boring to the Downtown Improvement District Board of Directors for a four-year term to expire January 1, 2026.

Approved by:

Dana Sanchez, Interim City Clerk
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Downtown Improvement District Letter

3. D.I.D. By-Laws 2020
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02/08/2022/CC/DSanchez/Item 1 2022-XX

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION APPROVING THE APPOINTMENT OF MARIA APODACA

AND REAPPOINTMENTS OF BART BARRINGER AND DAVID BORING

TO THE DOWNTOWN IMPROVEMENT DISTRICT BOARD OF
DIRECTORS FOR A FOUR-YEAR TERM TO EXPIRE JANUARY 1, 2026 WHEREAS, Section 1102 of the Charter of the City of Modesto authorizes the City Council to appoint members to various Boards and Commissions, and WHEREAS, Modesto Downtown Improvement District promotes a positive atmosphere in the downtown by caring for physical space, with the mission to attract and retain business, employees, residents, and visitors to downtown Modesto, and WHEREAS, the Downtown Improvement District Advisory Board consists of 9 members serving in the role of the City’s concierge, and WHEREAS, the Downtown Improvement District Board of Directors are recommending the appointment of Maria Apodaca and the reappointments of Bart Barringer and David Boring to a term ending January 1, 2026 to the Downtown Improvement District Board of Directors.

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Modesto that it hereby approves the appointment of Maria Apodaca and reappointments of Bart Barringer and David Boring to the Downtown Improvement District Board of Directors for a four-year term to expire January 1, 2026.

BE IT FURTHER RESOLVED, that the City Clerk is hereby directed to transmit a copy of this Resolution to the reappointed members of the Downtown Improvement District Board of Directors, and as Secretary thereof.
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02/08/2022/CC/DSanchez/Item 2 2022-XX
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of February, 2022, by ___________________, who moved its adoption, which motion being duly seconded by ___________________, 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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2/1/2022 5:30:00 PM

MODESTO CITY COUNCIL
www.modestogov.com

MINUTES
City of Modesto

CITY COUNCIL MEETING
Held Via Teleconference
Modesto, California
Tuesday, February 01, 2022 at 5:30 PM
Roll Call – Present: Councilmembers Escutia-Braaton, Kenoyer, Madrigal, Ricci, Wright, Zoslocki, Mayor Zwahlen
Pledge of Allegiance to the Flag
Invocation: Councilmember Wright gave the invocation in lieu of Ahmad Kayello, Islamic Center of Modesto
City Clerk’s Announcements: None
Declaration of Conflicts of Interest: None
Reports from Closed Session: No reportable action.

ACKNOWLEDGEMENTS AND PRESENTATIONS

1. County/Covid-19 Update (Funding Source: Not Applicable) CITY MANAGER; Joseph Lopez, 209-577-5223, [email protected] ACTION: No update was given.

2. Modesto Convention and Visitor’s Bureau Presentation (Funding Source: Not Applicable)
PRN; Laurie Smith, 209-577-5347, [email protected]
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Laurie Smith and Todd Aaronsen gave Modesto Convention and Visitor's Bureau Presentation.

PUBLIC COMMENT PERIOD
 Richard Anderson spoke regarding a refugee Assyrian family that he is helping, and the need for affordable housing.
 Melissa Cruz spoke regarding the Park Ranger program if it would also be available for small businesses and community churches. She also spoke regarding the homeless and vandalism of local businesses and the need for solutions.  Ramon Rodriguez spoke regarding affordable housing at the Municipal Golf Course, and the need for shelter for the homeless.

CONSENT ITEMS – ROLL CALL VOTE REQUIRED
ACTION CONSENT ITEMS 3-15 (Kenoyer/Wright; 7/0)

CONSENT ITEMS
Consent

3. Consider approving the minutes from the January 25, 2022 Council Meeting. (Funding Source: Not Applicable)
 Motion approving the minutes from the January 25, 2022 Council Meeting.

CITY CLERK; Dana Sanchez, 209-577-5396, [email protected] ACTION: (Kenoyer/Wright; 7/0) Motion approving the minutes from the January 25, 2022 Council Meeting.

Consent

4. Consider final adoption of Ordinance 3741-C.S. amending Section 1-2.10 of Title 1, “General Provisions,” Chapter 2, “Penalty Provisions,” of the Modesto Municipal Code, relating to issuance of citations by designated employees, to include Park Rangers and Police Cadet II’s. (Funding Source: Not Applicable)  Motion approving final adoption of Ordinance 3741-C.S. amending Section 1-

2.10 of Title 1, “General Provisions,” Chapter 2, “Penalty Provisions,” of the Modesto Municipal Code, relating to issuance of citations by designated employees, to include Park Rangers and Police Cadet II’s.

CITY CLERK; Dana Sanchez, 209-577-5396, [email protected] ACTION: (Kenoyer/Wright; 7/0) Motion approving final adoption of Ordinance 3741-C.S. amending Section 1-2.10 of Title 1, “General Provisions,” Chapter 2, “Penalty Provisions,” of the Modesto Municipal Code, relating to issuance of citations by designated employees, to include Park Rangers and Police Cadet II’s.

Consent
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5. Consider amending Section 23 of the Housing and Urban Development Policies and Procedures Manual (Section 3 Compliance). (Funding Source: Not Applicable)  Resolution approving amended Section 23 of the HUD Policies and Procedures Manual (Section 3 Compliance).

CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-057 approving amended Section 23 of the HUD Policies and Procedures Manual (Section 3 Compliance).

Consent

6. Consider approving an Emergency Solutions Grant CARES Act (ESG-CV2) to Center for Human Services for the operation of the Navigation Center – Low Barrier Youth Shelter located at 2008 W. Briggsmore Ave., Modesto, CA 95350 in an amount not to exceed $50,304 to prevent, mitigate, and respond to the spread of COVID-19 as well as $5,000 for activity delivery. (Funding Source: Emergency Solutions Grant CV2)  Resolution approving an Emergency Solutions Grant CARES Act (ESG-CV2) to Center for Human Services for the operation of the Navigation Center – Low Barrier Youth Shelter located at 2008 W. Briggsmore Ave., Modesto, CA 95350 in an amount not to exceed $50,304 to prevent, mitigate, and respond to the spread of COVID-19 as well as $5,000 in activity delivery and authorizing the City Manager or his designee to execute any documents and/or Agreements.

CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-058 approving an Emergency Solutions Grant CARES Act (ESG-CV2) to Center for Human Services for the operation of the Navigation Center – Low Barrier Youth Shelter located at 2008 W. Briggsmore Ave., Modesto, CA 95350 in an amount not to exceed $50,304 to prevent, mitigate, and respond to the spread of COVID-19 as well as $5,000 in activity delivery and authorizing the City Manager or his designee to execute any documents and/or Agreements.

Consent

7. Consider approving the First Amendment to the Center for Human Services ESG CARES Act subrecipient Agreement for youth street outreach by increasing the contract amount from $40,000 to $56,893, extending the term of the Agreement from ending June 30, 2022 to September 30, 2022. (Funding Source: Emergency Solutions Grant CV2)
 Resolution approving the First Amendment to the Center for Human Services ESG CARES Act subrecipient Agreement for youth street outreach by increasing the contract amount from $40,000 to $56,893, extending the term of the Agreement from ending June 30, 2022 to September 30, 2022, and authorizing the City Manager or his designee to execute the amendment.

CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-059 approving the First Amendment to the Center for Human Services ESG CARES Act subrecipient Agreement for youth street outreach by increasing the contract amount from $40,000 to $56,893, extending the term of the #4..
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Agreement from ending June 30, 2022 to September 30, 2022, and authorizing the City Manager or his designee to execute the amendment.

Consent

8. Consider approving the First Amendment to the Haven Women’s Center of Stanislaus ESG CARES Act subrecipient Agreement increasing the contract amount from $36,000 to $98,000, extending the term of the Agreement from ending June 30, 2022 to September 30, 2022 as well as increasing the activity delivery from $5,000 to $7,000. (Funding Source: Emergency Solutions Grant CV2)
 Resolution approving the First Amendment to Haven Women’s Center of Stanislaus ESG CARES Act subrecipient Agreement, increasing the contract amount from $36,000 to $98,000, extending the term of the Agreement from ending June 30, 2022 to September 30, 2022 as well as increasing the activity delivery from $5,000 to $7,000 and authorizing the City Manager or his designee to execute any documents.

CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-060 approving the First Amendment to Haven Women’s Center of Stanislaus ESG CARES Act subrecipient Agreement, increasing the contract amount from $36,000 to $98,000, extending the term of the Agreement from ending June 30, 2022 to September 30, 2022 as well as increasing the activity delivery from $5,000 to $7,000 and authorizing the City Manager or his designee to execute any documents.

Consent

9. Consider approving a Second Amendment to Downtown Streets Inc. ESG CARES Act Program Subrecipient Agreement increasing the contract amount from $450,000 to $900,000 and extending the term of the Agreement from ending June 30, 2022, to September 30, 2022. (Funding Source: Emergency Solutions Grant CV2)  Resolution approving the Second Amendment to Downtown Streets Inc ESG CARES Act Program Subrecipient Agreement increasing the contract amount from $450,000 to $900,000, extending the term of the Agreement from ending June 30, 2022, to September 30, 2022, and authorizing the City Manager or his designee to execute the Agreements.

CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-061 approving the Second Amendment to Downtown Streets Inc ESG CARES Act Program Subrecipient Agreement increasing the contract amount from $450,000 to $900,000, extending the term of the Agreement from ending June 30, 2022, to September 30, 2022, and authorizing the City Manager or his designee to execute the Agreements.

Consent

10. Consider approving an Agreement with Mr. Michael Baldwin Sr. Consultants, LLC to provide cultural relations and community building coaching for a one-year Agreement with two, one-year extension options, for an annual estimated cost of $98,500 and a total amount not to exceed $295,500 over three years. (Funding Source: General Fund, #4..
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Edward Byrne Memorial Justice Assistance Grant (BJAG) Program and Supplemental Law Enforcement Services Funds (SLESF))
 Resolution approving the Agreement with Mr. Michael Baldwin Sr. Consultants LLC to provide cultural relations and community building coaching for a oneyear Agreement with two, one-year extension options for an annual cost not to exceed $98,500 and a total amount not to exceed $295,500 over three years, and authorizing the City Manager, or his designee, to execute the Agreement.

POLICE DEPARTMENT; Brandon Gillespie, 209-572-9500,
[email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-062 approving the Agreement with Mr.

Michael Baldwin Sr. Consultants LLC to provide cultural relations and community building coaching for a one-year Agreement with two, one-year extension options for an annual cost not to exceed $98,500 and a total amount not to exceed $295,500 over three years, and authorizing the City Manager, or his designee, to execute the Agreement.

Consent

11. Consider approving an Agreement with Spatialitics LLC, to provide access to GeoEnabled Software (GeoShield) products and services for a three-year term with two, one-year extension options at an estimated annual cost of $73,500, for an estimated total not to exceed $357,000 over five years. (Funding Source: General Fund)  Resolution approving the Agreement with Spatialitics LLC to provide access to Geo-Enabled Software (GeoShield) for a three-year Agreement with two, oneyear extension options for annual cost not to exceed $73,500, and a total amount not to exceed $357,000 over five years, and to authorizing the City Manager, or his designee, to execute the Agreement.

POLICE DEPARTMENT; Brandon Gillespie, 209-572-9500,
[email protected]
ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-063 approving the Agreement with Spatialitics LLC to provide access to Geo-Enabled Software (GeoShield) for a three-year Agreement with two, one-year extension options for annual cost not to exceed $73,500, and a total amount not to exceed $357,000 over five years, and to authorizing the City Manager, or his designee, to execute the Agreement.

Consent

12. Consider approving the award of bid and Agreement for Fire Safety System Services to The BGR Group, Santa Clara, CA for a two-year Agreement with three one-year extension options, for an annual estimated cost for the first year of $292,370 and a total amount not to exceed $1,024,091 over five years, with any new site additions, removals, or substantive service changes to be authorized by the Director of Finance or her designee. (Funding Source: Various Funds)
 Resolution approving the award of bid and Agreement for Fire Safety System Services to The BGR Group, Santa Clara, CA for a two-year Agreement with three one-year extension options, for an annual estimated cost for the first year of $292,370 and not to exceed amount of $1,024,091 over five years, and #4..
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authorizing the Director of Finance, or her designee, to add new site additions, removals, or substantive service changes without exceeding the estimated annual cost of $1,024,091, and authorizing the City Manager, or his designee, to execute the Agreement.

PUBLIC WORKS; Patrick Crowley, 209-342-2274, [email protected] ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-064 approving the award of bid and Agreement for Fire Safety System Services to The BGR Group, Santa Clara, CA for a twoyear Agreement with three one-year extension options, for an annual estimated cost for the first year of $292,370 and not to exceed amount of $1,024,091 over five years, and authorizing the Director of Finance, or her designee, to add new site additions, removals, or substantive service changes without exceeding the estimated annual cost of $1,024,091, and authorizing the City Manager, or his designee, to execute the Agreement.

Consent

13. Consider authorizing staff to apply for the CalRecycle SB1383 Local Assistance Grant Programs as available; and authorizing staff to apply for any future CalRecycle SB1383 Grants. (Funding Source: CalRecycle)
 Resolution approving applications to the California Department of Resources, Recycling and Recovery (CalRecycle) for Senate Bill (SB1383) Local Assistance Grant Programs, accepting payment, amending the annual budget, and authorizing the City Manager, or his designee, to execute all related documents.
 Resolution approving applications to the California Department of Resources, Recycling and Recovery (CalRecycle) for Senate Bill (SB1383) Grant Programs, accepting payment, amending the annual budget, and authorizing the City Manager, or his designee, to execute all related documents.

PUBLIC WORKS; Vicki Rice, 209-577-5495, [email protected] ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-065 approving applications to the California Department of Resources, Recycling and Recovery (CalRecycle) for Senate Bill (SB1383) Local Assistance Grant Programs, accepting payment, amending the annual budget, and authorizing the City Manager, or his designee, to execute all related documents.

ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-066 approving applications to the California Department of Resources, Recycling and Recovery (CalRecycle) for Senate Bill (SB1383) Grant Programs, accepting payment, amending the annual budget, and authorizing the City Manager, or his designee, to execute all related documents.

Consent

14. Consider approving a Second Amendment to the Agreement with David Keith Todd Consulting Engineers, Inc., DBA Todd Groundwater for the preparation of a Groundwater Sustainability Plan and Related Technical Studies for the Modesto Subbasin, in the amount of $220,015 for the identified scope of services, for an amended total not to exceed $2,689,311 and amending the FY 2021/22 Multi-Year Program Budget in the amount of $70,000. (Funding Source: Water Fund) #4..
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 Resolution approving a Second Amendment to the Agreement with David Keith Todd Consulting Engineers, Inc., DBA Todd Groundwater, for the preparation of a Groundwater Sustainability Plan and Related Technical Studies for the Modesto Subbasin in the amount of $220,015 for the identified scope of services, for an amended total not to exceed $2,689,311 and authorizing the City Manager, or his designee, to execute the Amendment.  Resolution amending the Fiscal Year 2021/22 Multi-Year Program Budget in the amount of $70,000 to be transferred into the Project from Water Fund Reserves in order to fully fund the GSP Modesto Sub-Basin Project and authorizing the City Manager, or his designee to implement the provisions of this resolution.

UTILITIES; Miguel Alvarez, 209-577-5348, [email protected] ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-067 approving a Second Amendment to the Agreement with David Keith Todd Consulting Engineers, Inc., DBA Todd Groundwater, for the preparation of a Groundwater Sustainability Plan and Related Technical Studies for the Modesto Subbasin in the amount of $220,015 for the identified scope of services, for an amended total not to exceed $2,689,311 and authorizing the City Manager, or his designee, to execute the Amendment.

ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-068 amending the Fiscal Year 2021/22 Multi-Year Program Budget in the amount of $70,000 to be transferred into the Project from Water Fund Reserves in order to fully fund the GSP Modesto Sub-Basin Project and authorizing the City Manager, or his designee to implement the provisions of this resolution.

Consent

15. Consider accepting the Headworks, Dryden Box and Influent Flume Improvements project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $18,637,897 to C. Overaa & Co., of Richmond, CA. (Funding Source: Wastewater Fund)
 Resolution accepting the Headworks, Dryden Box and Influent Flume Improvements project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $18,637,897 to C. Overaa & Co., Richmond, CA.

UTILITIES; Jesse Franco, 209-571-5175, [email protected] ACTION: (Kenoyer/Wright; 7/0) Resolution 2022-069 accepting the Headworks, Dryden Box and Influent Flume Improvements project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $18,637,897 to C. Overaa & Co., Richmond, CA.

COUNCIL COMMENTS & REPORTS
Councilmember Wright thanked the Police Department for recent collection of shopping carts and arrests of persons with warrants. He also mentioned affordable apartment complex projects in the works.
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Mayor Zwahlen spoke regarding a Concerned Citizens meeting she attended regarding issues of homelessness downtown. She also spoke regarding the loss of Fire Fighter Max Fortuna who lost his life in the line of duty, and expressed her concern, and love, and well-being to his family.

Councilmember Escutia-Braaton acknowledged Black History Month and encouraged everyone to participate in various community events that will be happening. She also spoke regarding a Blue Mass event she attended to pray for and with law enforcement and first responders. She also offered condolences to the family of fallen Fire Captain Max Fortuna.

Councilmember Ricci also offered his condolences to the family of fallen Fire Fighter Max Fortuna. He was encouraged regarding a City/County meeting regarding efforts towards homelessness such as Safe Parking. And finally he spoke regarding Blighted Commercial Properties.

Councilmember Kenoyer offered her condolences and prayers to the family of fallen firefighter Max Fortuna. She also spoke regarding her own personal health issues, and thanked everyone for their prayers and concerns.

Councilmember Madrigal expressed his condolences to the Fortuna family for their loss, and the fire fighter community. He also expressed his thoughts and prayers to Councilmember Kenoyer. He also asked for an update on surveillance cameras regarding illegal dumping hotspots.

Councilmember Zoslocki expressed his condolences to the family of fallen firefighter Max Fortuna, as well as the other firefighters that were also at risk while doing their work.

CITY MANAGER COMMENTS & REPORTS
None

NEW BUSINESS

16. Consider approving the submission of a grant application for the California Violence Intervention and Prevention Grant Program to the Board of State and Community Corrections for up to $6 million in grant funds with up to $6 million in an in-kind and/or cash match for a maximum commitment of $12 million. (Funding Source:

General Fund)
 Resolution approving the submission of a grant application for the California Violence Intervention and Prevention Grant Program to the Board of State and Community Corrections for up to $6 million in grant funds with up to $6 million in an in-kind and/or cash match for a maximum commitment of $12 million, and authorizing the City Manager, or his designee, to execute and submit all documents which may be necessary for the completion of the grant #4..
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application.

POLICE DEPARTMENT; Robert Reyna, 209-572-9500, [email protected] ACTION: (Wright/Zoslocki; 7/0) Resolution 2022-070 approving the submission of a grant application for the California Violence Intervention and Prevention Grant Program to the Board of State and Community Corrections for up to $6 million in grant funds with up to $6 million in an in-kind and/or cash match for a maximum commitment of $12 million, and authorizing the City Manager, or his designee, to execute and submit all documents which may be necessary for the completion of the grant application.

MATTERS TOO LATE FOR THE AGENDA
None

ADJOURNMENT
This meeting adjourned at 6:44 P.M.

CLOSED SESSION
Please take notice that a special Closed Session meeting of the Council of the City of Modesto has been called pursuant to Section 2-1.02 of the Modesto Municipal Code to be convened on TUESDAY, FEBRUARY 1, 2022, at 4:45 P.M.
and after the regularly scheduled meeting via Zoom.

Any and all of the following agenda items are subject to action being taken by the Modesto City Council.

The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:

CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
One Case (Pursuant to Section 54956.9(d)(1) of the Government Code) Name of Case: City of Modesto, et al. v. Covanta Stanislaus, Inc.

Stanislaus County Superior Court
Case No. CV-20-004932
Attest: ____________________________
Dana Sanchez, Interim City Clerk
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 8, 2022
Date: February 2, 2022
TO: Mayor & City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jose M. Sanchez, City Attorney
CONTACT: Jose M. Sanchez, City Attorney, 209-577-5284, [email protected] DESCRIPTION:

Consider approving a resolution continuing to authorize remote teleconference meetings pursuant to Assembly Bill 361. (Funding Source: Not Applicable) STRATEGIC PLAN ELEMENT:

This item is related to the 2020-2025 Strategic Plan goal of promoting trust and engagement.

BACKGROUND:

On March 4, 2020, Governor Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the State prepare for a broader spread of the novel coronavirus disease 2019 (“COVID-19”). On March 19, 2020, the City Council adopted Resolution Number 2020-140, ratifying the proclamation of a local emergency by the Director of Emergency Services due to COVID-19.

All meetings of the City Council and the City’s other legislative bodies are open and public, as required by the Ralph M. Brown Act, Government Code section 54950 et seq., so that any member of the public may attend, participate, and watch the City’s legislative bodies conduct their business. On March 17, 2020, in response to the COVID-19 pandemic, Governor Newsom issued Executive Order N-29-20 suspending certain provisions of the Ralph M. Brown Act in order to allow local legislative bodies to conduct meetings telephonically or by other means in order to slow the spread of COVID-19. As a result of Executive Order N-29-20, staff set up virtual meetings for all City Council meetings and other City legislative bodies. On June 11, 2021, Governor Newsom issued Executive Order N-08-21, which, effective September 30, 2021, ended the provisions of Executive Order N-29-20 that allowed local legislative bodies to conduct meetings telephonically or by other means.
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City Council, February 8, 2022
Assembly Bill 361-Continued Remote Teleconference Meetings

DISCUSSION:

On September 16, 2021, the Governor signed Assembly Bill (AB) 3611 (2021) which allows for local legislative bodies to continue to conduct meetings via teleconferencing under specified conditions and includes a requirement that the City Council make specified findings. AB 361 took effect immediately. In addition to other circumstances, the City and its legislative bodies will be allowed to continue to meet remotely during a declared state of emergency when state or local health officials have imposed or recommended measures to promote social distancing, or when the Council finds that meeting in person would present imminent risks to the health or safety of attendees.

On Tuesday, September 28, 2021, the City Council adopted Resolution No. 2021-370, finding that a state of emergency exists and that the County of Stanislaus Health Officer had imposed and recommended social distancing measures for residents within the City. On Tuesday, October 5, 2021, the City Council held their first meeting in accordance with the requirements of Government Code section 54953(e).

In order to continue to hold remote meetings, the City Council must reconsider the state of emergency and declare every 30 days that either (i) the state of emergency continues to directly impact the ability of the members to meet safely in person, or (ii) State or local officials continue to impose or recommend measures to promote social distancing.

The state of emergency, as declared by the Governor and City Council, continues in existence.

Health officials continue to recommend measures to slow the spread of COVID-19. On November 15, 2021, the Stanislaus County Health Officer reiterated her recommendation that “[i]ncreasing distance during meetings and indoor gatherings to six feet or more can help stop the spread” of COVID-19.

The proposed resolution includes the necessary findings in order for the City Council and the other legislative bodies of the City to continue holding remote teleconference meetings pursuant to AB 361.

FISCAL IMPACT:

There is no cost associated with this item.

COMMITTEE RECOMMENDATION:

This agenda item was not presented to a Council Committee.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution continuing to authorize remote teleconference meetings of the City of Modesto pursuant to Assembly Bill 361.
1 Assembly Bill No. 361 - An act to add and repeal Section 89305.6 of the Education Code, and to amend, repeal, and add Section 54953 of, and to add and repeal Section 11133 of, the Government Code, relating to open meetings, and declaring the urgency thereof, to take effect immediately. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB361 #5..
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City Council, February 8, 2022
Assembly Bill 361-Continued Remote Teleconference Meetings

Approved by:

Jose M. Sanchez, City Attorney
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Assembly Bill 361
5040861.1
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MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION CONTINUING TO AUTHORIZE REMOTE

TELECONFERENCE MEETINGS OF THE CITY OF MODESTO PURSUANT TO ASSEMBLY BILL 361
WHEREAS, the City of Modesto (the “City”) is committed to preserving and promoting public access and participation in meetings of the legislative bodies; and WHEREAS, all meetings of the City are open and public, as required by the Ralph M.

Brown Act (Cal. Gov. Code 54950 – 54963), so that any member of the public may attend, participate, and watch the City conduct their business; and WHEREAS, on March 4, 2020, Governor Newsom declared a State of Emergency to make additional resources available, formalize emergency actions already underway across multiple state agencies and departments, and help the State prepare for a broader spread of the novel coronavirus disease 2019 (“COVID-19”); and WHEREAS, on March 19, 2020, the City Council adopted Resolution Number 2020-140, ratifying the proclamation of a local emergency by the Director of Emergency Services due to COVID-19; and
WHEREAS, on March 17, 2020, in response to the COVID-19 pandemic, Governor Newsom issued Executive Order N-29-20 suspending certain provisions of the Ralph M. Brown Act in order to allow local legislative bodies to conduct meetings telephonically or by other means; and
WHEREAS, on June 11, 2021, Governor Newsom issued Executive Order N-08- 21, which, effective September 30, 2021, repealed the provisions of Executive Order N29-20 that allowed local legislative bodies to conduct meetings telephonically or by other means; and
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WHEREAS, on September 16, 2021, Governor Newsom signed Assembly Bill 361 (2021) (“AB 361”), which allows for remote teleconferencing participation in meetings by members of a legislative body without compliance with the requirements of Government Code section 54953(b)(3), subject to the existence of certain conditions; and WHEREAS, a required condition of AB 361 is that a state of emergency is declared by the Governor pursuant to Government Code section 8625, proclaiming the existence of conditions of disaster or of extreme peril to the safety of persons and property within the state caused by conditions as described in Government Code section 8558; and
WHEREAS, AB 361 further requires that state or local officials have imposed or recommended measures to promote social distancing, or, that the legislative body meeting in person would present imminent risks to the health and safety of attendees; and WHEREAS, on September 28, 2021, the City Council adopted Resolution No. 2021-370 authorizing remote teleconference meetings pursuant to AB361 (Government Code section 54953(e)); and
WHEREAS, the City is required to make certain findings every thirty (30) days to continue teleconferencing under Government Code section 54953(e)(3), including reconsideration of the state of emergency declared by the Governor pursuant to Government Code section 8625, and whether State or local officials continue to impose or recommend measures to promote social distancing; and #5..
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WHEREAS, the City Council has considered the circumstances of the Governor’s state of emergency proclamation pursuant to Government Code section 8625, which remains active; and
WHEREAS, on November 15, 2021, the Health Officer of the County of Stanislaus reiterated her recommendation that “[i]ncreasing distance during meetings and indoor gatherings to six feet or more can help stop the spread” of COVID-19; and WHEREAS, the City Council, acting for itself and for the benefit of all of the City’s commissions, committees, and other bodies (collectively referred to as the “Legislative Bodies”), does hereby find that the Legislative Bodies shall continue to conduct their meetings without compliance with Government Code section 54953(b)(3), as authorized by Government Code section 54953(e), and that the Legislative Bodies shall continue to comply with the requirements to provide the public with access to the meetings as prescribed in Government Code section 54953(e)(2) as a consequence of the ongoing state of emergency and the continued social distancing measures required by local officials.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MODESTO DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

Section 2. Consideration of State of Emergency. The City Council has considered the conditions of the state of emergency declared pursuant to Government Code section 8625, and determined that such emergency conditions continue to be present in the City. #5..
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Section 3. Continued Social Distancing Measures by State and Local Officials.

The City Council finds that the County of Stanislaus Health Officer’s recommended measures to promote social distancing remain in effect.

Section 4. Remote Teleconference Meetings. The City Council finds that the conditions continue to exist pursuant to Government Code section 54953(e)(3) to allow Legislative Bodies to use teleconferencing to hold public meetings in accordance with Government Code section 54953(e)(2) to ensure members of the public have continued access to safely observe and participate in local government meetings.

The foregoing Resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 8th day of February 2022, by Council Member ________, who moved its adoption, which motion being duly seconded by Council Member ______, was upon roll call carried and the resolution adopted by the following vote:

AYES: Council Members:

NOES: Council Members:

ABSENT: Council Members:

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

BY: _________________________________
JOSE M. SANCHEZ, City Attorney
5040876.1
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Assembly Bill No. 361
CHAPTER 165
An act to add and repeal Section 89305.6 of the Education Code, and to amend, repeal, and add Section 54953 of, and to add and repeal Section 11133 of, the Government Code, relating to open meetings, and declaring the urgency thereof, to take effect immediately.
[Approved by Governor September 16, 2021. Filed with
Secretary of State September 16, 2021.]
legislative counsel’s digest
AB 361, Robert Rivas. Open meetings: state and local agencies:
teleconferences.
(1)  Existing law, the Ralph M. Brown Act requires, with specified exceptions, that all meetings of a legislative body of a local agency, as those terms are defined, be open and public and that all persons be permitted to attend and participate. The act contains specified provisions regarding the timelines for posting an agenda and providing for the ability of the public to directly address the legislative body on any item of interest to the public.

The act generally requires all regular and special meetings of the legislative body be held within the boundaries of the territory over which the local agency exercises jurisdiction, subject to certain exceptions. The act allows for meetings to occur via teleconferencing subject to certain requirements, particularly that the legislative body notice each teleconference location of each member that will be participating in the public meeting, that each teleconference location be accessible to the public, that members of the public be allowed to address the legislative body at each teleconference location, that the legislative body post an agenda at each teleconference location, and that at least a quorum of the legislative body participate from locations within the boundaries of the local agency’s jurisdiction. The act provides an exemption to the jurisdictional requirement for health authorities, as defined. The act authorizes the district attorney or any interested person, subject to certain provisions, to commence an action by mandamus or injunction for the purpose of obtaining a judicial determination that specified actions taken by a legislative body are null and void.

Existing law, the California Emergency Services Act, authorizes the Governor, or the Director of Emergency Services when the governor is inaccessible, to proclaim a state of emergency under specified circumstances.

Executive Order No. N-29-20 suspends the Ralph M. Brown Act’s requirements for teleconferencing during the COVID-19 pandemic provided that notice and accessibility requirements are met, the public members are allowed to observe and address the legislative body at the meeting, and that a legislative body of a local agency has a procedure for receiving and swiftly

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resolving requests for reasonable accommodation for individuals with disabilities, as specified.

This bill, until January 1, 2024, would authorize a local agency to use teleconferencing without complying with the teleconferencing requirements imposed by the Ralph M. Brown Act when a legislative body of a local agency holds a meeting during a declared state of emergency, as that term is defined, when state or local health officials have imposed or recommended measures to promote social distancing, during a proclaimed state of emergency held for the purpose of determining, by majority vote, whether meeting in person would present imminent risks to the health or safety of attendees, and during a proclaimed state of emergency when the legislative body has determined that meeting in person would present imminent risks to the health or safety of attendees, as provided.

This bill would require legislative bodies that hold teleconferenced meetings under these abbreviated teleconferencing procedures to give notice of the meeting and post agendas, as described, to allow members of the public to access the meeting and address the legislative body, to give notice of the means by which members of the public may access the meeting and offer public comment, including an opportunity for all persons to attend via a call-in option or an internet-based service option, and to conduct the meeting in a manner that protects the statutory and constitutional rights of the parties and the public appearing before the legislative body. The bill would require the legislative body to take no further action on agenda items when there is a disruption which prevents the public agency from broadcasting the meeting, or in the event of a disruption within the local agency’s control which prevents members of the public from offering public comments, until public access is restored. The bill would specify that actions taken during the disruption are subject to challenge proceedings, as specified.

This bill would prohibit the legislative body from requiring public comments to be submitted in advance of the meeting and would specify that the legislative body must provide an opportunity for the public to address the legislative body and offer comment in real time. The bill would prohibit the legislative body from closing the public comment period and the opportunity to register to provide public comment, until the public comment period has elapsed or until a reasonable amount of time has elapsed, as specified. When there is a continuing state of emergency, or when state or local officials have imposed or recommended measures to promote social distancing, the bill would require a legislative body to make specified findings not later than 30 days after the first teleconferenced meeting pursuant to these provisions, and to make those findings every 30 days thereafter, in order to continue to meet under these abbreviated teleconferencing procedures.

Existing law prohibits a legislative body from requiring, as a condition to attend a meeting, a person to register the person’s name, or to provide other information, or to fulfill any condition precedent to the person’s attendance.
92 Ch. 165 — 2 —
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This bill would exclude from that prohibition, a registration requirement imposed by a third-party internet website or other online platform not under the control of the legislative body.
(2)  Existing law, the Bagley-Keene Open Meeting Act, requires, with specified exceptions, that all meetings of a state body be open and public and all persons be permitted to attend any meeting of a state body. The act requires at least one member of the state body to be physically present at the location specified in the notice of the meeting.

The Governor’s Executive Order No. N-29-20 suspends the requirements of the Bagley-Keene Open Meeting Act for teleconferencing during the COVID-19 pandemic, provided that notice and accessibility requirements are met, the public members are allowed to observe and address the state body at the meeting, and that a state body has a procedure for receiving and swiftly resolving requests for reasonable accommodation for individuals with disabilities, as specified.

This bill, until January 31, 2022, would authorize, subject to specified notice and accessibility requirements, a state body to hold public meetings through teleconferencing and to make public meetings accessible telephonically, or otherwise electronically, to all members of the public seeking to observe and to address the state body. With respect to a state body holding a public meeting pursuant to these provisions, the bill would suspend certain requirements of existing law, including the requirements that each teleconference location be accessible to the public and that members of the public be able to address the state body at each teleconference location. Under the bill, a state body that holds a meeting through teleconferencing and allows members of the public to observe and address the meeting telephonically or otherwise electronically would satisfy any requirement that the state body allow members of the public to attend the meeting and offer public comment. The bill would require that each state body that holds a meeting through teleconferencing provide notice of the meeting, and post the agenda, as provided. The bill would urge state bodies utilizing these teleconferencing procedures in the bill to use sound discretion and to make reasonable efforts to adhere as closely as reasonably possible to existing law, as provided.
(3)  Existing law establishes the various campuses of the California State University under the administration of the Trustees of the California State University, and authorizes the establishment of student body organizations in connection with the operations of California State University campuses.

The Gloria Romero Open Meetings Act of 2000 generally requires a legislative body, as defined, of a student body organization to conduct its business in a meeting that is open and public. The act authorizes the legislative body to use teleconferencing, as defined, for the benefit of the public and the legislative body in connection with any meeting or proceeding authorized by law.

This bill, until January 31, 2022, would authorize, subject to specified notice and accessibility requirements, a legislative body, as defined for purposes of the act, to hold public meetings through teleconferencing and 92 — 3 — Ch. 165
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to make public meetings accessible telephonically, or otherwise electronically, to all members of the public seeking to observe and to address the legislative body. With respect to a legislative body holding a public meeting pursuant to these provisions, the bill would suspend certain requirements of existing law, including the requirements that each teleconference location be accessible to the public and that members of the public be able to address the legislative body at each teleconference location.

Under the bill, a legislative body that holds a meeting through teleconferencing and allows members of the public to observe and address the meeting telephonically or otherwise electronically would satisfy any requirement that the legislative body allow members of the public to attend the meeting and offer public comment. The bill would require that each legislative body that holds a meeting through teleconferencing provide notice of the meeting, and post the agenda, as provided. The bill would urge legislative bodies utilizing these teleconferencing procedures in the bill to use sound discretion and to make reasonable efforts to adhere as closely as reasonably possible to existing law, as provided.
(4)  This bill would declare the Legislature’s intent, consistent with the Governor’s Executive Order No. N-29-20, to improve and enhance public access to state and local agency meetings during the COVID-19 pandemic and future emergencies by allowing broader access through teleconferencing options.
(5)  This bill would incorporate additional changes to Section 54953 of the Government Code proposed by AB 339 to be operative only if this bill and AB 339 are enacted and this bill is enacted last.
(6)  The California Constitution requires local agencies, for the purpose of ensuring public access to the meetings of public bodies and the writings of public officials and agencies, to comply with a statutory enactment that amends or enacts laws relating to public records or open meetings and contains findings demonstrating that the enactment furthers the constitutional requirements relating to this purpose.

This bill would make legislative findings to that effect. (7)  Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect. (8)  This bill would declare that it is to take effect immediately as an urgency statute.

The people of the State of California do enact as follows:

SECTION 1. Section 89305.6 is added to the Education Code, to read:
89305.6. (a)  Notwithstanding any other provision of this article, and subject to the notice and accessibility requirements in subdivisions (d) and (e), a legislative body may hold public meetings through teleconferencing 92 Ch. 165 — 4 —
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and make public meetings accessible telephonically, or otherwise electronically, to all members of the public seeking to observe and to address the legislative body.
(b)  (1)  For a legislative body holding a public meeting through teleconferencing pursuant to this section, all requirements in this article requiring the physical presence of members, the clerk or other personnel of the legislative body, or the public, as a condition of participation in or quorum for a public meeting, are hereby suspended.
(2)  For a legislative body holding a public meeting through teleconferencing pursuant to this section, all of the following requirements in this article are suspended:
(A)  Each teleconference location from which a member will be participating in a public meeting or proceeding be identified in the notice and agenda of the public meeting or proceeding.
(B)  Each teleconference location be accessible to the public. (C)  Members of the public may address the legislative body at each teleconference conference location.
(D)  Post agendas at all teleconference locations.
(E)  At least one member of the legislative body be physically present at the location specified in the notice of the meeting.
(c)  A legislative body that holds a meeting through teleconferencing and allows members of the public to observe and address the meeting telephonically or otherwise electronically, consistent with the notice and accessibility requirements in subdivisions (d) and (e), shall have satisfied any requirement that the legislative body allow members of the public to attend the meeting and offer public comment. A legislative body need not make available any physical location from which members of the public may observe the meeting and offer public comment.
(d)  If a legislative body holds a meeting through teleconferencing pursuant to this section and allows members of the public to observe and address the meeting telephonically or otherwise electronically, the legislative body shall also do both of the following:
(1)  Implement a procedure for receiving and swiftly resolving requests for reasonable modification or accommodation from individuals with disabilities, consistent with the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.), and resolving any doubt whatsoever in favor of accessibility.
(2)  Advertise that procedure each time notice is given of the means by which members of the public may observe the meeting and offer public comment, pursuant to paragraph (2) of subdivision (e).
(e)  Except to the extent this section provides otherwise, each legislative body that holds a meeting through teleconferencing pursuant to this section shall do both of the following:
(1)  Give advance notice of the time of, and post the agenda for, each public meeting according to the timeframes otherwise prescribed by this article, and using the means otherwise prescribed by this article, as applicable.
92 — 5 — Ch. 165
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(2)  In each instance in which notice of the time of the meeting is otherwise given or the agenda for the meeting is otherwise posted, also give notice of the means by which members of the public may observe the meeting and offer public comment. As to any instance in which there is a change in the means of public observation and comment, or any instance prior to the effective date of this section in which the time of the meeting has been noticed or the agenda for the meeting has been posted without also including notice of the means of public observation and comment, a legislative body may satisfy this requirement by advertising the means of public observation and comment using the most rapid means of communication available at the time. Advertising the means of public observation and comment using the most rapid means of communication available at the time shall include, but need not be limited to, posting such means on the legislative body’s internet website.
(f)  All legislative bodies utilizing the teleconferencing procedures in this section are urged to use sound discretion and to make reasonable efforts to adhere as closely as reasonably possible to the otherwise applicable provisions of this article, in order to maximize transparency and provide the public access to legislative body meetings.
(g)  This section shall remain in effect only until January 31, 2022, and as of that date is repealed.

SEC. 2. Section 11133 is added to the Government Code, to read:
11133. (a)  Notwithstanding any other provision of this article, and subject to the notice and accessibility requirements in subdivisions (d) and (e), a state body may hold public meetings through teleconferencing and make public meetings accessible telephonically, or otherwise electronically, to all members of the public seeking to observe and to address the state body.
(b)  (1)  For a state body holding a public meeting through teleconferencing pursuant to this section, all requirements in this article requiring the physical presence of members, the clerk or other personnel of the state body, or the public, as a condition of participation in or quorum for a public meeting, are hereby suspended.
(2)  For a state body holding a public meeting through teleconferencing pursuant to this section, all of the following requirements in this article are suspended:
(A)  Each teleconference location from which a member will be participating in a public meeting or proceeding be identified in the notice and agenda of the public meeting or proceeding.
(B)  Each teleconference location be accessible to the public. (C)  Members of the public may address the state body at each teleconference conference location.
(D)  Post agendas at all teleconference locations.
(E)  At least one member of the state body be physically present at the location specified in the notice of the meeting.
(c)  A state body that holds a meeting through teleconferencing and allows members of the public to observe and address the meeting telephonically 92 Ch. 165 — 6 —
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or otherwise electronically, consistent with the notice and accessibility requirements in subdivisions (d) and (e), shall have satisfied any requirement that the state body allow members of the public to attend the meeting and offer public comment. A state body need not make available any physical location from which members of the public may observe the meeting and offer public comment.
(d)  If a state body holds a meeting through teleconferencing pursuant to this section and allows members of the public to observe and address the meeting telephonically or otherwise electronically, the state body shall also do both of the following:
(1)  Implement a procedure for receiving and swiftly resolving requests for reasonable modification or accommodation from individuals with disabilities, consistent with the federal Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12101 et seq.), and resolving any doubt whatsoever in favor of accessibility.
(2)  Advertise that procedure each time notice is given of the means by which members of the public may observe the meeting and offer public comment, pursuant to paragraph (2) of subdivision (e).
(e)  Except to the extent this section provides otherwise, each state body that holds a meeting through teleconferencing pursuant to this section shall do both of the following:
(1)  Give advance notice of the time of, and post the agenda for, each public meeting according to the timeframes otherwise prescribed by this article, and using the means otherwise prescribed by this article, as applicable.
(2)  In each instance in which notice of the time of the meeting is otherwise given or the agenda for the meeting is otherwise posted, also give notice of the means by which members of the public may observe the meeting and offer public comment. As to any instance in which there is a change in the means of public observation and comment, or any instance prior to the effective date of this section in which the time of the meeting has been noticed or the agenda for the meeting has been posted without also including notice of the means of public observation and comment, a state body may satisfy this requirement by advertising the means of public observation and comment using the most rapid means of communication available at the time. Advertising the means of public observation and comment using the most rapid means of communication available at the time shall include, but need not be limited to, posting such means on the state body’s internet website.
(f)  All state bodies utilizing the teleconferencing procedures in this section are urged to use sound discretion and to make reasonable efforts to adhere as closely as reasonably possible to the otherwise applicable provisions of this article, in order to maximize transparency and provide the public access to state body meetings.
(g)  This section shall remain in effect only until January 31, 2022, and as of that date is repealed.

SEC. 3. Section 54953 of the Government Code is amended to read:
92 — 7 — Ch. 165
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54953. (a)  All meetings of the legislative body of a local agency shall be open and public, and all persons shall be permitted to attend any meeting of the legislative body of a local agency, except as otherwise provided in this chapter.
(b)  (1)  Notwithstanding any other provision of law, the legislative body of a local agency may use teleconferencing for the benefit of the public and the legislative body of a local agency in connection with any meeting or proceeding authorized by law. The teleconferenced meeting or proceeding shall comply with all otherwise applicable requirements of this chapter and all otherwise applicable provisions of law relating to a specific type of meeting or proceeding.
(2)  Teleconferencing, as authorized by this section, may be used for all purposes in connection with any meeting within the subject matter jurisdiction of the legislative body. All votes taken during a teleconferenced meeting shall be by rollcall.
(3)  If the legislative body of a local agency elects to use teleconferencing, it shall post agendas at all teleconference locations and conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties or the public appearing before the legislative body of a local agency. Each teleconference location shall be identified in the notice and agenda of the meeting or proceeding, and each teleconference location shall be accessible to the public. During the teleconference, at least a quorum of the members of the legislative body shall participate from locations within the boundaries of the territory over which the local agency exercises jurisdiction, except as provided in subdivisions (d) and (e). The agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3 at each teleconference location.
(4)  For the purposes of this section, “teleconference” means a meeting of a legislative body, the members of which are in different locations, connected by electronic means, through either audio or video, or both.

Nothing in this section shall prohibit a local agency from providing the public with additional teleconference locations.
(c)  (1)  No legislative body shall take action by secret ballot, whether preliminary or final.
(2)  The legislative body of a local agency shall publicly report any action taken and the vote or abstention on that action of each member present for the action.
(3)  Prior to taking final action, the legislative body shall orally report a summary of a recommendation for a final action on the salaries, salary schedules, or compensation paid in the form of fringe benefits of a local agency executive, as defined in subdivision (d) of Section 3511.1, during the open meeting in which the final action is to be taken. This paragraph shall not affect the public’s right under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) to inspect or copy records created or received in the process of developing the recommendation.
92 Ch. 165 — 8 —
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(d)  (1)  Notwithstanding the provisions relating to a quorum in paragraph (3) of subdivision (b), if a health authority conducts a teleconference meeting, members who are outside the jurisdiction of the authority may be counted toward the establishment of a quorum when participating in the teleconference if at least 50 percent of the number of members that would establish a quorum are present within the boundaries of the territory over which the authority exercises jurisdiction, and the health authority provides a teleconference number, and associated access codes, if any, that allows any person to call in to participate in the meeting and the number and access codes are identified in the notice and agenda of the meeting. (2)  Nothing in this subdivision shall be construed as discouraging health authority members from regularly meeting at a common physical site within the jurisdiction of the authority or from using teleconference locations within or near the jurisdiction of the authority. A teleconference meeting for which a quorum is established pursuant to this subdivision shall be subject to all other requirements of this section.
(3)  For purposes of this subdivision, a health authority means any entity created pursuant to Sections 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, and 14087.9605 of the Welfare and Institutions Code, any joint powers authority created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 for the purpose of contracting pursuant to Section 14087.3 of the Welfare and Institutions Code, and any advisory committee to a county-sponsored health plan licensed pursuant to Chapter

2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code if the advisory committee has 12 or more members.
(e)  (1)  A local agency may use teleconferencing without complying with the requirements of paragraph (3) of subdivision (b) if the legislative body complies with the requirements of paragraph (2) of this subdivision in any of the following circumstances:
(A)  The legislative body holds a meeting during a proclaimed state of emergency, and state or local officials have imposed or recommended measures to promote social distancing.
(B)  The legislative body holds a meeting during a proclaimed state of emergency for the purpose of determining, by majority vote, whether as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.
(C)  The legislative body holds a meeting during a proclaimed state of emergency and has determined, by majority vote, pursuant to subparagraph (B), that, as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.
(2)  A legislative body that holds a meeting pursuant to this subdivision shall do all of the following:
(A)  The legislative body shall give notice of the meeting and post agendas as otherwise required by this chapter.
(B)  The legislative body shall allow members of the public to access the meeting and the agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3. 92 — 9 — Ch. 165
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In each instance in which notice of the time of the teleconferenced meeting is otherwise given or the agenda for the meeting is otherwise posted, the legislative body shall also give notice of the means by which members of the public may access the meeting and offer public comment. The agenda shall identify and include an opportunity for all persons to attend via a call-in option or an internet-based service option. This subparagraph shall not be construed to require the legislative body to provide a physical location from which the public may attend or comment.
(C)  The legislative body shall conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties and the public appearing before the legislative body of a local agency. (D)  In the event of a disruption which prevents the public agency from broadcasting the meeting to members of the public using the call-in option or internet-based service option, or in the event of a disruption within the local agency’s control which prevents members of the public from offering public comments using the call-in option or internet-based service option, the body shall take no further action on items appearing on the meeting agenda until public access to the meeting via the call-in option or internet-based service option is restored. Actions taken on agenda items during a disruption which prevents the public agency from broadcasting the meeting may be challenged pursuant to Section 54960.1.
(E)  The legislative body shall not require public comments to be submitted in advance of the meeting and must provide an opportunity for the public to address the legislative body and offer comment in real time.

This subparagraph shall not be construed to require the legislative body to provide a physical location from which the public may attend or comment. (F)  Notwithstanding Section 54953.3, an individual desiring to provide public comment through the use of an internet website, or other online platform, not under the control of the local legislative body, that requires registration to log in to a teleconference may be required to register as required by the third-party internet website or online platform to participate. (G)  (i)  A legislative body that provides a timed public comment period for each agenda item shall not close the public comment period for the agenda item, or the opportunity to register, pursuant to subparagraph (F), to provide public comment until that timed public comment period has elapsed.
(ii)  A legislative body that does not provide a timed public comment period, but takes public comment separately on each agenda item, shall allow a reasonable amount of time per agenda item to allow public members the opportunity to provide public comment, including time for members of the public to register pursuant to subparagraph (F), or otherwise be recognized for the purpose of providing public comment. (iii)  A legislative body that provides a timed general public comment period that does not correspond to a specific agenda item shall not close the public comment period or the opportunity to register, pursuant to subparagraph (F), until the timed general public comment period has elapsed. 92 Ch. 165 — 10 —
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(3)  If a state of emergency remains active, or state or local officials have imposed or recommended measures to promote social distancing, in order to continue to teleconference without compliance with paragraph (3) of subdivision (b), the legislative body shall, not later than 30 days after teleconferencing for the first time pursuant to subparagraph (A), (B), or (C) of paragraph (1), and every 30 days thereafter, make the following findings by majority vote:
(A)  The legislative body has reconsidered the circumstances of the state of emergency.
(B)  Any of the following circumstances exist:
(i)  The state of emergency continues to directly impact the ability of the members to meet safely in person.
(ii)  State or local officials continue to impose or recommend measures to promote social distancing.
(4)  For the purposes of this subdivision, “state of emergency” means a state of emergency proclaimed pursuant to Section 8625 of the California Emergency Services Act (Article 1 (commencing with Section 8550) of Chapter 7 of Division 1 of Title 2).
(f)  This section shall remain in effect only until January 1, 2024, and as of that date is repealed.

SEC. 3.1. Section 54953 of the Government Code is amended to read:
54953. (a)  All meetings of the legislative body of a local agency shall be open and public, and all persons shall be permitted to attend any meeting of the legislative body of a local agency in person, except as otherwise provided in this chapter. Local agencies shall conduct meetings subject to this chapter consistent with applicable state and federal civil rights laws, including, but not limited to, any applicable language access and other nondiscrimination obligations.
(b)  (1)  Notwithstanding any other provision of law, the legislative body of a local agency may use teleconferencing for the benefit of the public and the legislative body of a local agency in connection with any meeting or proceeding authorized by law. The teleconferenced meeting or proceeding shall comply with all otherwise applicable requirements of this chapter and all otherwise applicable provisions of law relating to a specific type of meeting or proceeding.
(2)  Teleconferencing, as authorized by this section, may be used for all purposes in connection with any meeting within the subject matter jurisdiction of the legislative body. All votes taken during a teleconferenced meeting shall be by rollcall.
(3)  If the legislative body of a local agency elects to use teleconferencing, it shall post agendas at all teleconference locations and conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties or the public appearing before the legislative body of a local agency. Each teleconference location shall be identified in the notice and agenda of the meeting or proceeding, and each teleconference location shall be accessible to the public. During the teleconference, at least a quorum of the members of the legislative body 92 — 11 — Ch. 165
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shall participate from locations within the boundaries of the territory over which the local agency exercises jurisdiction, except as provided in subdivisions (d) and (e). The agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3 at each teleconference location.
(4)  For the purposes of this section, “teleconference” means a meeting of a legislative body, the members of which are in different locations, connected by electronic means, through either audio or video, or both.

Nothing in this section shall prohibit a local agency from providing the public with additional teleconference locations.
(c)  (1)  No legislative body shall take action by secret ballot, whether preliminary or final.
(2)  The legislative body of a local agency shall publicly report any action taken and the vote or abstention on that action of each member present for the action.
(3)  Prior to taking final action, the legislative body shall orally report a summary of a recommendation for a final action on the salaries, salary schedules, or compensation paid in the form of fringe benefits of a local agency executive, as defined in subdivision (d) of Section 3511.1, during the open meeting in which the final action is to be taken. This paragraph shall not affect the public’s right under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) to inspect or copy records created or received in the process of developing the recommendation.
(d)  (1)  Notwithstanding the provisions relating to a quorum in paragraph (3) of subdivision (b), if a health authority conducts a teleconference meeting, members who are outside the jurisdiction of the authority may be counted toward the establishment of a quorum when participating in the teleconference if at least 50 percent of the number of members that would establish a quorum are present within the boundaries of the territory over which the authority exercises jurisdiction, and the health authority provides a teleconference number, and associated access codes, if any, that allows any person to call in to participate in the meeting and the number and access codes are identified in the notice and agenda of the meeting. (2)  Nothing in this subdivision shall be construed as discouraging health authority members from regularly meeting at a common physical site within the jurisdiction of the authority or from using teleconference locations within or near the jurisdiction of the authority. A teleconference meeting for which a quorum is established pursuant to this subdivision shall be subject to all other requirements of this section.
(3)  For purposes of this subdivision, a health authority means any entity created pursuant to Sections 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, and 14087.9605 of the Welfare and Institutions Code, any joint powers authority created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 for the purpose of contracting pursuant to Section 14087.3 of the Welfare and Institutions Code, and any advisory committee to a county-sponsored health plan licensed pursuant to Chapter 92 Ch. 165 — 12 —
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2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code if the advisory committee has 12 or more members.
(e)  (1)  A local agency may use teleconferencing without complying with the requirements of paragraph (3) of subdivision (b) if the legislative body complies with the requirements of paragraph (2) of this subdivision in any of the following circumstances:
(A)  The legislative body holds a meeting during a proclaimed state of emergency, and state or local officials have imposed or recommended measures to promote social distancing.
(B)  The legislative body holds a meeting during a proclaimed state of emergency for the purpose of determining, by majority vote, whether as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.
(C)  The legislative body holds a meeting during a proclaimed state of emergency and has determined, by majority vote, pursuant to subparagraph (B), that, as a result of the emergency, meeting in person would present imminent risks to the health or safety of attendees.
(2)  A legislative body that holds a meeting pursuant to this subdivision shall do all of the following:
(A)  The legislative body shall give notice of the meeting and post agendas as otherwise required by this chapter.
(B)  The legislative body shall allow members of the public to access the meeting and the agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3.

In each instance in which notice of the time of the teleconferenced meeting is otherwise given or the agenda for the meeting is otherwise posted, the legislative body shall also give notice of the means by which members of the public may access the meeting and offer public comment. The agenda shall identify and include an opportunity for all persons to attend via a call-in option or an internet-based service option. This subparagraph shall not be construed to require the legislative body to provide a physical location from which the public may attend or comment.
(C)  The legislative body shall conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties and the public appearing before the legislative body of a local agency. (D)  In the event of a disruption which prevents the public agency from broadcasting the meeting to members of the public using the call-in option or internet-based service option, or in the event of a disruption within the local agency’s control which prevents members of the public from offering public comments using the call-in option or internet-based service option, the body shall take no further action on items appearing on the meeting agenda until public access to the meeting via the call-in option or internet-based service option is restored. Actions taken on agenda items during a disruption which prevents the public agency from broadcasting the meeting may be challenged pursuant to Section 54960.1.
(E)  The legislative body shall not require public comments to be submitted in advance of the meeting and must provide an opportunity for 92 — 13 — Ch. 165
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the public to address the legislative body and offer comment in real time.

This subparagraph shall not be construed to require the legislative body to provide a physical location from which the public may attend or comment. (F)  Notwithstanding Section 54953.3, an individual desiring to provide public comment through the use of an internet website, or other online platform, not under the control of the local legislative body, that requires registration to log in to a teleconference may be required to register as required by the third-party internet website or online platform to participate. (G)  (i)  A legislative body that provides a timed public comment period for each agenda item shall not close the public comment period for the agenda item, or the opportunity to register, pursuant to subparagraph (F), to provide public comment until that timed public comment period has elapsed.
(ii)  A legislative body that does not provide a timed public comment period, but takes public comment separately on each agenda item, shall allow a reasonable amount of time per agenda item to allow public members the opportunity to provide public comment, including time for members of the public to register pursuant to subparagraph (F), or otherwise be recognized for the purpose of providing public comment. (iii)  A legislative body that provides a timed general public comment period that does not correspond to a specific agenda item shall not close the public comment period or the opportunity to register, pursuant to subparagraph (F), until the timed general public comment period has elapsed. (3)  If a state of emergency remains active, or state or local officials have imposed or recommended measures to promote social distancing, in order to continue to teleconference without compliance with paragraph (3) of subdivision (b), the legislative body shall, not later than 30 days after teleconferencing for the first time pursuant to subparagraph (A), (B), or (C) of paragraph (1), and every 30 days thereafter, make the following findings by majority vote:
(A)  The legislative body has reconsidered the circumstances of the state of emergency.
(B)  Any of the following circumstances exist:
(i)  The state of emergency continues to directly impact the ability of the members to meet safely in person.
(ii)  State or local officials continue to impose or recommend measures to promote social distancing.
(4)  For the purposes of this subdivision, “state of emergency” means a state of emergency proclaimed pursuant to Section 8625 of the California Emergency Services Act (Article 1 (commencing with Section 8550) of Chapter 7 of Division 1 of Title 2).
(f)  This section shall remain in effect only until January 1, 2024, and as of that date is repealed.

SEC. 4. Section 54953 is added to the Government Code, to read:
54953. (a)  All meetings of the legislative body of a local agency shall be open and public, and all persons shall be permitted to attend any meeting 92 Ch. 165 — 14 —
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of the legislative body of a local agency, except as otherwise provided in this chapter.
(b)  (1)  Notwithstanding any other provision of law, the legislative body of a local agency may use teleconferencing for the benefit of the public and the legislative body of a local agency in connection with any meeting or proceeding authorized by law. The teleconferenced meeting or proceeding shall comply with all requirements of this chapter and all otherwise applicable provisions of law relating to a specific type of meeting or proceeding.
(2)  Teleconferencing, as authorized by this section, may be used for all purposes in connection with any meeting within the subject matter jurisdiction of the legislative body. All votes taken during a teleconferenced meeting shall be by rollcall.
(3)  If the legislative body of a local agency elects to use teleconferencing, it shall post agendas at all teleconference locations and conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties or the public appearing before the legislative body of a local agency. Each teleconference location shall be identified in the notice and agenda of the meeting or proceeding, and each teleconference location shall be accessible to the public. During the teleconference, at least a quorum of the members of the legislative body shall participate from locations within the boundaries of the territory over which the local agency exercises jurisdiction, except as provided in subdivision (d). The agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3 at each teleconference location.
(4)  For the purposes of this section, “teleconference” means a meeting of a legislative body, the members of which are in different locations, connected by electronic means, through either audio or video, or both.

Nothing in this section shall prohibit a local agency from providing the public with additional teleconference locations
(c)  (1)  No legislative body shall take action by secret ballot, whether preliminary or final.
(2)  The legislative body of a local agency shall publicly report any action taken and the vote or abstention on that action of each member present for the action.
(3)  Prior to taking final action, the legislative body shall orally report a summary of a recommendation for a final action on the salaries, salary schedules, or compensation paid in the form of fringe benefits of a local agency executive, as defined in subdivision (d) of Section 3511.1, during the open meeting in which the final action is to be taken. This paragraph shall not affect the public’s right under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) to inspect or copy records created or received in the process of developing the recommendation.
(d)  (1)  Notwithstanding the provisions relating to a quorum in paragraph (3) of subdivision (b), if a health authority conducts a teleconference meeting, 92 — 15 — Ch. 165
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members who are outside the jurisdiction of the authority may be counted toward the establishment of a quorum when participating in the teleconference if at least 50 percent of the number of members that would establish a quorum are present within the boundaries of the territory over which the authority exercises jurisdiction, and the health authority provides a teleconference number, and associated access codes, if any, that allows any person to call in to participate in the meeting and the number and access codes are identified in the notice and agenda of the meeting. (2)  Nothing in this subdivision shall be construed as discouraging health authority members from regularly meeting at a common physical site within the jurisdiction of the authority or from using teleconference locations within or near the jurisdiction of the authority. A teleconference meeting for which a quorum is established pursuant to this subdivision shall be subject to all other requirements of this section.
(3)  For purposes of this subdivision, a health authority means any entity created pursuant to Sections 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, and 14087.9605 of the Welfare and Institutions Code, any joint powers authority created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 for the purpose of contracting pursuant to Section 14087.3 of the Welfare and Institutions Code, and any advisory committee to a county-sponsored health plan licensed pursuant to Chapter

2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code if the advisory committee has 12 or more members.
(e)  This section shall become operative January 1, 2024.

SEC. 4.1. Section 54953 is added to the Government Code, to read:
54953. (a)  All meetings of the legislative body of a local agency shall be open and public, and all persons shall be permitted to attend any meeting of the legislative body of a local agency, in person except as otherwise provided in this chapter. Local agencies shall conduct meetings subject to this chapter consistent with applicable state and federal civil rights laws, including, but not limited to, any applicable language access and other nondiscrimination obligations.
(b)  (1)  Notwithstanding any other provision of law, the legislative body of a local agency may use teleconferencing for the benefit of the public and the legislative body of a local agency in connection with any meeting or proceeding authorized by law. The teleconferenced meeting or proceeding shall comply with all requirements of this chapter and all otherwise applicable provisions of law relating to a specific type of meeting or proceeding.
(2)  Teleconferencing, as authorized by this section, may be used for all purposes in connection with any meeting within the subject matter jurisdiction of the legislative body. All votes taken during a teleconferenced meeting shall be by rollcall.
(3)  If the legislative body of a local agency elects to use teleconferencing, it shall post agendas at all teleconference locations and conduct teleconference meetings in a manner that protects the statutory and constitutional rights of the parties or the public appearing before the 92 Ch. 165 — 16 —
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legislative body of a local agency. Each teleconference location shall be identified in the notice and agenda of the meeting or proceeding, and each teleconference location shall be accessible to the public. During the teleconference, at least a quorum of the members of the legislative body shall participate from locations within the boundaries of the territory over which the local agency exercises jurisdiction, except as provided in subdivision (d). The agenda shall provide an opportunity for members of the public to address the legislative body directly pursuant to Section 54954.3 at each teleconference location.
(4)  For the purposes of this section, “teleconference” means a meeting of a legislative body, the members of which are in different locations, connected by electronic means, through either audio or video, or both.

Nothing in this section shall prohibit a local agency from providing the public with additional teleconference locations.
(c)  (1)  No legislative body shall take action by secret ballot, whether preliminary or final.
(2)  The legislative body of a local agency shall publicly report any action taken and the vote or abstention on that action of each member present for the action.
(3)  Prior to taking final action, the legislative body shall orally report a summary of a recommendation for a final action on the salaries, salary schedules, or compensation paid in the form of fringe benefits of a local agency executive, as defined in subdivision (d) of Section 3511.1, during the open meeting in which the final action is to be taken. This paragraph shall not affect the public’s right under the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1) to inspect or copy records created or received in the process of developing the recommendation.
(d)  (1)  Notwithstanding the provisions relating to a quorum in paragraph (3) of subdivision (b), if a health authority conducts a teleconference meeting, members who are outside the jurisdiction of the authority may be counted toward the establishment of a quorum when participating in the teleconference if at least 50 percent of the number of members that would establish a quorum are present within the boundaries of the territory over which the authority exercises jurisdiction, and the health authority provides a teleconference number, and associated access codes, if any, that allows any person to call in to participate in the meeting and the number and access codes are identified in the notice and agenda of the meeting. (2)  Nothing in this subdivision shall be construed as discouraging health authority members from regularly meeting at a common physical site within the jurisdiction of the authority or from using teleconference locations within or near the jurisdiction of the authority. A teleconference meeting for which a quorum is established pursuant to this subdivision shall be subject to all other requirements of this section.
(3)  For purposes of this subdivision, a health authority means any entity created pursuant to Sections 14018.7, 14087.31, 14087.35, 14087.36, 14087.38, and 14087.9605 of the Welfare and Institutions Code, any joint 92 — 17 — Ch. 165
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powers authority created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 for the purpose of contracting pursuant to Section 14087.3 of the Welfare and Institutions Code, and any advisory committee to a county-sponsored health plan licensed pursuant to Chapter

2.2 (commencing with Section 1340) of Division 2 of the Health and Safety Code if the advisory committee has 12 or more members.
(e)  This section shall become operative January 1, 2024.

SEC. 5. Sections 3.1 and 4.1 of this bill incorporate amendments to Section 54953 of the Government Code proposed by both this bill and Assembly Bill 339. Those sections of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2022, but this bill becomes operative first, (2) each bill amends Section 54953 of the Government Code, and (3) this bill is enacted after Assembly Bill 339, in which case Section 54953 of the Government Code, as amended by Sections 3 and 4 of this bill, shall remain operative only until the operative date of Assembly Bill 339, at which time Sections 3.1 and 4.1 of this bill shall become operative.

SEC. 6. It is the intent of the Legislature in enacting this act to improve and enhance public access to state and local agency meetings during the COVID-19 pandemic and future applicable emergencies, by allowing broader access through teleconferencing options consistent with the Governor’s Executive Order No. N-29-20 dated March 17, 2020, permitting expanded use of teleconferencing during the COVID-19 pandemic.

SEC. 7. The Legislature finds and declares that Sections 3 and 4 of this act, which amend, repeal, and add Section 54953 of the Government Code, further, within the meaning of paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the purposes of that constitutional section as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to paragraph (7) of subdivision (b) of Section 3 of Article I of the California Constitution, the Legislature makes the following findings:

This act is necessary to ensure minimum standards for public participation and notice requirements allowing for greater public participation in teleconference meetings during applicable emergencies.

SEC. 8. (a)  The Legislature finds and declares that during the COVID-19 public health emergency, certain requirements of the Bagley-Keene Open Meeting Act (Article 9 (commencing with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code) were suspended by Executive Order N-29-20. Audio and video teleconference were widely used to conduct public meetings in lieu of physical location meetings, and public meetings conducted by teleconference during the COVID-19 public health emergency have been productive, have increased public participation by all members of the public regardless of their location in the state and ability to travel to physical meeting locations, have protected the health and safety of civil servants and the public, and have reduced travel costs incurred by members of state bodies and reduced work hours spent traveling to and from meetings.
92 Ch. 165 — 18 —
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(b)  The Legislature finds and declares that Section 1 of this act, which adds and repeals Section 89305.6 of the Education Code, Section 2 of this act, which adds and repeals Section 11133 of the Government Code, and Sections 3 and 4 of this act, which amend, repeal, and add Section 54953 of the Government Code, all increase and potentially limit the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
(1)  By removing the requirement that public meetings be conducted at a primary physical location with a quorum of members present, this act protects the health and safety of civil servants and the public and does not preference the experience of members of the public who might be able to attend a meeting in a physical location over members of the public who cannot travel or attend that meeting in a physical location. (2)  By removing the requirement for agendas to be placed at the location of each public official participating in a public meeting remotely, including from the member’s private home or hotel room, this act protects the personal, private information of public officials and their families while preserving the public’s right to access information concerning the conduct of the people’s business.

SEC. 9. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect.

The facts constituting the necessity are:

In order to ensure that state and local agencies can continue holding public meetings while providing essential services like water, power, and fire protection to their constituents during public health, wildfire, or other states of emergencies, it is necessary that this act take effect immediately.

O
92 — 19 — Ch. 165
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 8, 2022
Date: January 27, 2022
TO: Mayor and City Council
FROM: Sue Zwahlen, Mayor
THROUGH: Jose M. Sanchez, City Attorney
SUBJECT: City Council Code of Conduct
CONTACT: Edgar R. Garcia, Management Analyst, [email protected], 571-5101 DESCRIPTION:

Consider approving the City Council Code of Conduct to promote a fair, ethical, and transparent government. (Funding Source: Not Applicable)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto Strategic Plan initiative of Governance and Service Delivery.

BACKGROUND:

A 2020 Pew Research study1 reports that public trust in government is at a historic low. The current dearth of public confidence in government requires that legislative bodies lead in an ethical manner to help promote public trust. Many local governments across the country have intended to directly address this issue by setting a standard for behavior through the adoption of a code of conduct and ethics, which serve as the rules and expectations for how they govern.

While the Council has worked collaboratively and effectively to address complex issues, the City Council has found it critical to establish a clear governing structure, with a constructive and collaborative atmosphere in light of the national trend showing a general lack of trust in government. Further, the Modesto City Council held a facilitated Council Workshop on October 15, 2021, to discuss how they can more effectively work together to address community issues, and this included a discussion regarding the development of a code of conduct and ethics to help define roles and responsibilities, clear governing structure, and guidelines for Council behavior with colleagues, staff, and the public.

DISCUSSION
1 Pew Research Center (2020). Americans’ Views of Government: Low Trust, but Some Positive Performance Ratings.
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City Council, February 8, 2022
City Council Code of Conduct

Based on this discussion, staff has prepared the attached Code of Conduct that addresses the following key areas that define a clear governing structure, and define guidelines for conduct between colleagues, staff, and the public:

Key Areas

1. Act in the Public’s Interest.

2. Comply with both the spirit and the letter of the Law and City Policy.

3. Conduct of Members.

4. Respect for Process.

5. Conduct of Public Meetings.

6. Virtual Participation in Public Meetings.

7. Decisions Based on Merit.

8. Communication.

9. Conflict of Interest.

10. Gifts and Favors.

11. Closed Session Matters and Confidential Information.

12. Use of Public Resources.

13. Advocacy.

14. Political Endorsements.

15. Policy Role of Members.

16. Independence of Boards and Commissions.

17. Positive Workplace Environment.

Furthermore, this Code is intended to serve as a standard for behavior that may periodically require changes to ensure it reflects the desire of the Council. Therefore, the regular review of the City Council Code of Conduct by the City Council members is critical to ensure that the document remains helpful to the Council in providing a framework for effective leadership. This document may be amended by a majority vote of the City Council.

FISCAL IMPACT:

There is no fiscal impact associated with this item.

COMMITTEE RECOMMENDATION:

Due to the nature of this item, it was not heard at the Committee level, however, discussion and review was conducted at a City Council Workshop on October 15, 2021.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution approving the City Council Code of Conduct and Ethics to promote a fair, ethical, and transparent government.

Approved by:

Sue Zwahlen, Mayor
Attachment:

1. Resolution

2. Code of Conduct
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1 2022

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-

RESOLUTION APPROVING THE CITY COUNCIL CODE OF CONDUCT TO PROMOTE A FAIR, ETHICAL, AND TRANSPARENT GOVERNMENT.

WHEREAS, a 2020 Pew Research study reports that public trust in government is at a historic low. The current dearth of public confidence in government requires that legislative bodies lead in an ethical manner to help promote public trust, and WHEREAS, many local governments across the country have intended to directly address this issue by setting a standard for behavior through the adoption of a code of conduct and ethics, which serve as the rules and expectations for how they govern, and WHEREAS, while the Council has worked collaboratively and effectively to address complex issues, the City Council has found it critical to establish a clear governing structure, with a constructive and collaborative atmosphere in light of the national trend showing a general lack of trust in government, and WHEREAS, the Modesto City Council held a facilitated Council Workshop on October 15, 2021, to discuss how they can more effectively work together to address community issues, and this included a discussion regarding the development of a code of conduct and ethics to help define roles and responsibilities, clear governing structure, and guidelines for Council behavior with colleagues, staff, and the public, and WHEREAS, this Code is intended to serve as a standard for behavior that may periodically require changes to ensure it reflects the desire of the Council, and WHEREAS, the regular review of the City Council Code of Conduct by the City Council members is critical to ensure that the document remains helpful to the Council in #6..
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2 2022
providing a framework for effective leadership. This document may be amended by a majority vote of the City Council, and
WHEREAS, there is no fiscal impact associated with this item, and WHEREAS, due to the nature of this item, it was not heard at the Committee level, however, discussion and review was conducted at a City Council Workshop on October 15, 2021.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approving the City Council Code of Conduct to promote a fair, ethical, and transparent government.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of February, 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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City of Modesto
City Council Code of Conduct
General Background
The City of Modesto is a Charter City with a City Council comprised of a directly elected at-large Mayor and six (6) Council Members elected from six (6) geographic districts within the City. The City Council is established as the governing body of the City and, subject to the express limitations of the City’s Charter, is vested with all powers of legislation in municipal affairs consistent with the Constitution of the State. The City Council enacts local legislation, adopts budgets, and determines policies.

The Charter for the City of Modesto was adopted in 1911, after the voters of the City approved the City’s first Charter on September 14, 1910, when Modesto’s population was approximately 4,032. There have been several amendments adopted by the voters since the Charter’s adoption. The Charter establishes a Council-Manager form of government, assigning the City Manager as the chief executive officer and head of the “Administrative Branch” of the City government. The Charter provides the City Council with the authority to appoint all Charter Officers, which consists of the City Manager, City Attorney, City Clerk, and City Auditor.

The City’s Charter and the City Municipal Code provide a framework of rules and regulations for the City, including provisions covering the Mayor and Council Members.

The purpose of establishing a City Council Code of Conduct is to provide an effective environment for the City Council to provide leadership. This document may be amended by a majority vote of the City Council and should be reviewed on a regular basis to ensure that the document remains helpful to the Council in providing a framework for effective leadership.

Role and Responsibilities of the Council
Mayor
The Mayor shall be the presiding officer or chairman of the Council and preside over its deliberations. The Mayor shall preserve strict order and decorum at all regular and special meetings of the Council. He or she shall be recognized as head of the City government for all political, representative, and ceremonial purposes and by the Governor for military purposes. The Mayor shall exercise such other powers and perform such other duties as may be prescribed by law or ordinance or by resolution of the Council, except as limited by the City’s Charter. The Mayor shall have no regular administrative duties, such as those assigned to the City Manager. #6..
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Vice Mayor
Pursuant to the City’s Charter, the City Council shall elect one of its Members as Vice Mayor. The Vice Mayor shall act as Mayor during the absence or inability of the Mayor to act. In the case of the temporary absence or disability of both the Mayor and the Vice Mayor, the Council shall designate one of its members to act as Mayor Pro Tempore.

Council Members
The Council is subject to the express limitations of the City’s Charter and is vested with all powers of legislation in municipal affairs adequate to a complete system of local government consistent with the Constitution of the State. #6..
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Code of Conduct
The residents and businesses of Modesto are entitled to have fair, ethical, and accountable local government which has earned the public’s full confidence for integrity. In keeping with the City of Modesto’s commitment to an effective and transparent government, this requires the following:
 public officials comply with both the letter and spirit of the laws and policies affecting the operations of government;
 public officials be independent, impartial, and fair in their judgment and actions;  public office be used for the public good, not for personal gain; and  public deliberations and processes be conducted openly, unless legally confidential, in an atmosphere of respect and civility.

To this end, this Code of Conduct for Members of the City Council serves to ensure public confidence in the integrity of local government and its effective and fair operation and requires that the Council uphold and abide by this Code to promote the commitment of effectiveness and transparency.

1. Act in the Public’s Interest. Recognizing that stewardship of the public’s interest must be their primary concern, Council Members will work for the common good of the people of Modesto and not for any private or personal interest, and they will assure fair and equitable treatment of all persons, claims, and transactions coming before the Modesto City Council.

2. Comply with both the spirit and the letter of the Law and City Policy. Council Members shall comply with the laws of the nation, the State of California, and the City of Modesto in the performance of their public duties. These laws include, but are not limited to: the United States and California Constitutions, the Modesto City Charter; the Modesto Municipal Code; laws pertaining to conflicts of interest, election campaigns, financial disclosures, employer responsibilities, and open processes of government; and City ordinances and policies.

3. Conduct of Members. The professional and personal conduct of Council Members must be above reproach and avoid even the appearance of impropriety. Council Members shall refrain from abusive conduct, personal charges, or verbal attacks upon the character or motives of other Members of the Council, boards and commissions, staff, or public. Council Members shall also refrain from encouraging other individuals to engage in this type of conduct.

4. Respect for Process. Council Members shall perform their duties in accordance with the processes and rules of order established by the City Council. These processes and rules include, but are not limited to, those governing deliberation of items during Council meetings, meaningful involvement of the public, and this Code of Conduct.

5. Conduct of Public Meetings. Council Members shall prepare themselves for public issues, listen courteously and attentively to all public discussions before the body, and focus on the business at hand. They shall refrain from interrupting other speakers, making personal comments not germane to the business of the body, or otherwise interfering with the orderly conduct of meetings.
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6. Decisions Based on Merit. Council Members shall base their decisions on the merits and substance of the matter at hand rather than on unrelated considerations.

7. Communication. During public meetings, Council Members shall keep comments clear, concise, and on-topic to maximize opportunities for all to express themselves.

Moreover, Council Members shall publicly disclose substantive information that is relevant to a matter under consideration by the Council or any board and commission, which they may have received from sources outside of the public decision-making process.

8. Conflict of Interest. In order to assure their independence and impartiality on behalf of the common good, Council Members shall not use their official positions to influence government decisions in which they have a financial interest. Any time a Council Member believes they may have a financial interest, the Council Member shall consult with the City Attorney to determine whether there is a conflict. In accordance with the law, Council Members shall disclose investments, interests in real property, sources of income, and gifts. Council Members shall abstain from participating in deliberations and decision-making where conflicts exist. Council Members shall also consider the possible perception of impropriety in their decision to participate in any government decisions.

9. Gifts and Favors. Council Members shall not take any special advantage of services or opportunities for personal gain, by virtue of their public office, that is not available to the public in general. Council Members shall refrain from accepting any gifts, favors, or promises of future benefits which might compromise their independence of judgment or action or give the appearance of being compromised.

10. Closed Session Matters and Confidential Information. In accordance with State law, Council Members shall respect the confidentiality of information discussed and disclosed during a Closed Session meeting. Further, Council Members shall respect and preserve the confidentiality of information provided to them concerning confidential matters of the City, and refrain from disclosing any information received confidentially without proper legal authorization nor use such information to advance the personal, financial, or private interests of themselves or others

11. Use of Public Resources. Council Members shall not use public resources not available to the public in general, such as City staff time, equipment, supplies, or facilities for private gain or personal purposes.

12. Advocacy. Council Members shall represent the official policies or positions of the City Council to the best of their ability when designated as delegates for this purpose.

When presenting their individual opinions and positions, Council Members shall explicitly state they do not represent their body or the City of Modesto, nor will they allow the inference that they do.

13. Political Endorsements. Council Members have the right to endorse candidates for all Council seats or other elected offices. It is inappropriate to mention or display endorsements, or give the impression of endorsements, during Council meetings, board/commission meetings, or other official City meetings. #6..
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14. Policy Role of Members. Council Members shall respect and adhere to the CouncilManager structure of Modesto City government as outlined by the Modesto City Charter.

In this structure, the City Council determines the policies of the City with the advice, information, and analysis provided by the public, boards, commissions, and City staff.

Except as provided by the City Charter, Council Members shall not interfere with the administrative functions of the City or the professional duties of City staff; nor shall they impair the ability of staff to implement Council policy decisions.

15. Independence of Boards and Commissions. Because of the value of the independent advice of boards and commissions to the public decision-making process, Council Members shall refrain from using their position to unduly influence the deliberations or outcomes of board and commission proceedings.

16. Positive Workplace Environment. Council Members shall support the maintenance of a positive and constructive workplace environment for City employees and for citizens and businesses dealing with the City. Council Members shall recognize their special role in dealings with City employees to in no way create the perception of inappropriate direction to staff.

17. Virtual Participation in Public Meetings. Council Members who choose to participate in public meetings virtually, such as in Council or Committee meetings, shall participate in a manner that is professional and demonstrates to the public that that they are attentive and present during the meeting. Council Members participating virtually shall:
a. When a video option is provided, Council Members shall make a good faith effort to turn their camera on and display their personal image live during the meeting so that the public and Members of the Council can see them; b. Council Members may utilize a “still” photo of themselves if circumstances exist preventing the Council Member from turning on their camera; and c. Council Members shall refrain from using unprofessional or politically related “virtual backgrounds” or “still” images. Council Members shall not use “virtual backgrounds” or “still” images to influence the outcome of any decision before the Council.

Conduct Between Colleagues, Staff, and Public
This Section of the City Council Code of Conduct is designed to describe the manner in which Council Members should treat one another, staff, constituents, and others they come into contact with while representing the City of Modesto.

1. Conduct Between Colleagues, Stakeholders, and Staff
All elected officials are also people and have unique backgrounds, personalities, values, opinions, and goals. Despite this diversity, all have chosen to serve in public office in order to preserve and protect the present and the future of the community. In all cases, this common goal should be acknowledged even though individuals may “agree to disagree” on contentious issues. To promote this, #6..
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Council Members shall value all opinions and treat each other, staff, and the public with dignity, courtesy, and respect.

Commitments to each other, as a Council
The Council shall commit to strive to improve how they can work more effectively as a team by: building trust, being candid about feelings and ideas in appropriate forums, being solution-oriented, being accountable to each other, and treating each other with respect and dignity.

Use formal titles
The Council should refer to one another formally during public meetings, such as Mayor, Vice Mayor, Chair, or Council Member followed by the individual’s last name.

Practice civility and decorum in discussions and debate Difficult questions, tough challenges to a particular point of view, and criticism of ideas and information are legitimate elements of a free democracy in action. This does not allow, however, the City Council to make belligerent, personal, impertinent, slanderous, threatening, abusive, or disparaging comments. No shouting or physical actions that could be construed as threatening will be tolerated.

Honor the role of the Chair in maintaining order
It is the responsibility of the Mayor serving as Chair to keep the comments of Council Members on track during public meetings. Council Members should honor efforts by the Mayor to focus discussion on current agenda items. If there is disagreement about the agenda or the Mayor’s actions, those objections should be voiced politely and with reason, following procedures outlined in parliamentary procedure.

Conduct with City Staff
Governance of a City relies on the cooperative efforts of elected officials, who set policy, appointed officials who advise the elected, and City staff who implements and administer the Council’s policies. Therefore, every effort should be made to be cooperative and show mutual respect for the contributions made by each individual for the good of the community.

Treat all staff as professionals
Clear, honest communication that respects the abilities, experience, and dignity of each individual is expected. Poor behavior towards staff is not acceptable.

Do not disrupt City staff from their jobs
Council Members should not disrupt City staff while they are in meetings, on the phone, or in the performance of their job functions in order to have their individual #6..
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needs met. Council Members shall not attend City staff meetings unless requested by staff – even if the Council Member does not say anything, his or her presence implies support, shows partiality, intimidates staff, and hampers staff’s ability to do their job objectively.

Never publicly criticize an individual employee
Council Members should never express concerns about the performance of a City employee in public, to the employee directly, or to the employee’s manager.

Comments about staff performance should only be made to the City Manager through private correspondence or conversation. Comments about staff in the office of the City Attorney should be made directly to the City Attorney.

Do not get involved in administrative functions
Council Members must not attempt to influence City staff on the making of appointments, awarding of contracts, selecting of consultants, processing of development applications, or granting of City licenses and permits. Council Members shall refer inquiries and requests from vendors to the City Manager and refrain from any negotiations with potential vendors in order to avoid the perception of impropriety.

Check with City staff on correspondence before taking action Before sending correspondence, Council Members should check with City staff to see if an official City response has already been sent or is in progress.

Limit requests for staff support
Routine secretarial support is provided to all Council Members by the Executive Assistant to the Council. Requests for additional staff support – even in high priority or emergency situations – should be made to the City Manager, who is responsible for allocating City resources in order to maintain a professional, wellrun City government.

2. Member Questions and Direction to Staff
a. General. Council communications with City staff should be limited to normal City business hours unless the circumstances warrant otherwise (this does not pertain to email correspondence). Responses to Council questions posed outside of normal business hours should be expected no earlier than the next business day.
b. Routine Requests for Information and Inquiries. Council Members may contact staff directly for information made readily available to the general public on a regular basis (e.g., “What are the library’s hours of operation?” or “How does one reserve a tee time at the golf course?”). Under these circumstances, staff shall treat the Council Member no differently than they #6..
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would the general public, and the Council Member shall not use their elected status to secure preferential treatment.
c. Non-Routine Requests for Readily Available Information. Council Members may also contact staff directly for easily retrievable information not routinely requested by the general public so long as it does not require staff to discuss the issue or express an opinion (e.g., “How many traffic lights are there in the City?” or “Under what circumstances does the City lower its flags to halfmast?”). d. Non-Routine Requests Requiring Special Effort. Any Council Member request or inquiry that requires staff to compile information that is not readily available or easily retrievable and/or that requests staff to express an opinion (legal or otherwise) must be directed to the City Manager, or to the City Attorney, as appropriate (e.g., “How many Study Issues completed over the past five years have required 500 or more hours of staff time?” or “What is the logic behind the City’s sign ordinances affecting businesses?”). The City Manager shall be responsible for distributing such requests to his/her staff for followup. e. Meeting Requests. Any Council Member must direct a meeting request with staff through the City Manager. Council Members shall also coordinate with other Charter Officers to meet with their respective staff.

3. Conduct with the Media
The Mayor is the designated representative of the Council to present and speak on the official City position. If an individual Council Member is contacted by the media, the Council Member should be clear about whether their comments represent the official City position or a personal viewpoint. Council Members contacted by the media on a City matter shall inform the City Manager and/or the city’s designated Public Information Officer.
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Code of Ethics
Integrity
Demonstrate professional and personal Integrity
 Be honest and truthful.
 Give appropriate credit for contributions.
 Take responsibility for your actions.
 Demonstrate courage to do the right thing.
 Lead by example.

Respect
Demonstrate respect
 Exhibit compassion, wisdom, and commitment to all.
 Diligently manage public assets, property, and resources.  Embrace diversity.
 Foster constructive expression of opinion; dissenting viewpoints are respected.

Public Trust
Maintain the Public Trust
 Commit to honesty, honor, and personal integrity (excellence).  Avoid conflict of interest or its appearance.
 Protect the public’s resources and use them only for public purposes, not for personal gain.  Avoid embarrassing or discrediting our organizations, our community, or ourselves.  Abide by all local, state, and federal laws.

Public Service
Provide quality public service
 Treat all we serve with courtesy, respect, and dignity.  Strive for excellence while performing our jobs to the best of our ability.  Demonstrate a positive professional attitude.
 Provide open access to city services for all.

Justice
Assure Justice is provided to all.
 Apply all laws consistently and without favoritism.
 Act in a fair and impartial manner.
 Act without prejudice and discrimination
 Assure due process and equal protection.
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 8, 2022
Date: January 19, 2022
TO: Mayor and City Council
FROM: Joseph P. Lopez, City Manager
SUBJECT: Monthly Budget Adjustment Report – January 2022 CONTACT: Steve Christensen, Budget Manager, [email protected] 209-577-5390
DESCRIPTION:

Consider approving the recommended budget adjustments to Fiscal Year 2021-22 Annual Operating and Capital Improvement Program Budgets. (Funding Source: Various Funds)
STRATEGIC PLAN ELEMENT:

This item supports the City of Modesto 2020-2025 Strategic Plan focus on Governance and Service Delivery under Goal H: Achieve Financial Sustainability.

BACKGROUND:

Each month City staff presents a variety of budget adjustments requiring the approval of Council. These changes are submitted to the Finance Committee for review prior to submission to Council and include an explanation and justification for each transaction.

This report includes a number of adjustments that have been identified by monitoring department budgets. Due to the number of adjustments, they have been included as an attachment to this report (Exhibit A). As in past reports, adjustments are separated by fund and department as appropriate. The adjustments are reflected in a more summarized version and supporting documentation is available for review upon request.

Also included in this report as an attachment (Exhibit B) is a summary of the budget adjustments approved by the City Manager and/or Budget Manager consistent with the change in authority levels that was approved by Council with the passing of the Fiscal Year 2019-20 Operating Budget via Resolution No. 2019-305.

DISCUSSION:

The monthly budget adjustments attached as Exhibit A in this item include adjustments across various departments. These adjustments are explained in further detail within Exhibit A. #7..
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City Council, February 8, 2022
Monthly Budget Adjustment Report – January 2022

FISCAL IMPACT:

The fiscal impact of each item is noted in the attachments to this report. The adjustments are for Fiscal Year 2021-22.

COMMITTEE RECOMMENDATION:

This item was presented to the Finance Committee on January 24, 2022 and was recommended to be forwarded to Council for approval. It must be noted that since the recommendation of the Finance Committee, one item has been added due to an urgent need to budget for a settlement agreement that was approved by City Council and the Redevelopment (RDA) Successor Agency. The additional item is listed below and is reflected in Exhibit A:
 A budget adjustment is necessary in the amount of $300,000 to establish a loan from the General Fund to the RDA Successor Agency Administration Fund (Fund 1910) to cover the costs of a settlement agreement between the former City of Modesto Redevelopment Agency and Civic Partners. This loan will be paid back in Fiscal Year 2022-23, pending State Department of Finance approval, with funds from the Redevelopment Property Tax Trust Fund (RPTTF) which is collected by the RDA Successor Agency to pay for approved obligations. This adjustment will also increase the expenditure budget in account 1910-14860-54250 (Settlements) to allow for the payment of the settlement agreement.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution amending Year 2021-22 Annual Operating and Capital Improvement Project Fund Budgets and authorizing the City Manager, to make the necessary steps to implement the provisions of this resolution.

Approved by:

Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Exhibit A – Budget Adjustments Requiring Council Approval

3. Exhibit B - Staff Approved Budget Adjustments
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION AMENDING THE FISCAL YEAR 2021-22 ANNUAL

OPERATING AND CAPITAL IMPROVEMENT FUND BUDGETS AND

AUTHORIZING THE CITY MANAGER, TO TAKE THE NECESSARY

STEPS TO IMPLEMENT THE PROVISIONS OF THIS RESOLUTION
WHEREAS, a financial analysis has been completed and it has been determined that a budget adjustment is required to the Annual and Capital Improvement Budgets of the City of Modesto for Fiscal Year 2021-22.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year 2021-22 Annual Operating and Capital Improvement budget as shown in Exhibit A, which is attached hereto and incorporated by reference herein.

BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby 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 8th day of February 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 votes:

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 Council, February 8, 2022
Monthly Budget Adjustment Report

EXHIBIT A
FISCAL YEAR 2021-22

COMMUNITY & ECONOMIC DEVELOPMENT
 A budget adjustment is needed to recognize revenue and amend the discretionary expense budget in the newly created Agricultural Mitigation Fund 3520 in the amount of $353,421. The funds will be received as part of the agricultural mitigation fee that developers will pay. The revenue will be used to pay for setting up and administering an agricultural mitigation program utilizing land owned by the City at the Jennings Road treatment plant, including start-up costs, on-going monitoring, legal costs, and potential agreements with outside parties for on-going administration.  A budget adjustment is needed to reduce the budget for project 101293, South Modesto Community Center. At this time, the project will not be moving forward with HUD CDBG funding. All expenses that had been incurred with this project will be funded by HUD CDBG Admin funding for FY22. There is no impact to the General Fund.  A budget adjustment is necessary to add the revenue and expenditure budget for the Modesto Downtown Community Benefit District in FY 2021-22. This budget is a passthrough budget in which an assessment is collected and then the expenditures are paid directly out of the assessment through the fiscal year. This budget was mistakenly not included in the Adopted FY 2021-22 Operating Budget that was approved by Council but this adjustment will correct that oversight. The adjustment will increase the revenue budget for the Special Assessments account (47051) by $780,150 in cost center 80035 (CED-Downtown Modesto Community Benefit District) in fund 1210 (Downtown Modesto Community Benefit District). The adjustment will also increase the budget in expense account 53505 (Intergovernmental Services – Other) by $780,150.

PUBLIC WORKS
 The following adjustments are being made from the various city Fleet Replacement subfunds to the Fleet Replacement Fund (5409). This action is being done to reimburse the Fleet Replacement Fund (5409) for vehicle purchases that had been made as required by fund accounting rules in FY 21-22 for the activity through December 2021. Below is a table showing the net effect in each sub-fund as a result of the various adjustments.

Fund Fund Name Net Impact
of
Adjustments
4219 Wastewater Fleet Replacement $68,107
5410 General Fund Equipment Fleet Replacement $58,829
Total Transfer Outs $126,936
5409 Transfer In – Fleet Management Fleet Replacement $126,936 Total Transfer Ins $126,936
A budget adjustment is necessary to establish a transfer in the amount of $68,107 from Wastewater Fleet Replacement Fund 4219 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (2) Compressor Trailer.
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City Council, February 8, 2022
Monthly Budget Adjustment Report

A budget adjustment is necessary to establish a transfer in the amount of $58,829 from General Fund Equipment Fleet Replacement Fund 5410 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (1) SUV Patrol and Police build out equipment.
 A budget adjustment is necessary to recognize $59,000 for Federal Aviation Administration revenue in the Special Aviation Fund, Fund 4320, to the American Rescue Plan Act ARPA – FAA Airport Non-Capital Project, #101378, and reallocate to the project discretionary expenses tasks. Funding was recently awarded and accepted by the City from the Federal Aviation Administration (FAA) as part of the Airport Rescue Grant program.

REDEVELOPMENT SUCCESSOR AGENCY
 A budget adjustment is necessary in the amount of $300,000 to establish a loan from the General Fund to the RDA Successor Agency Administration Fund (Fund 1910) to cover the costs of a settlement agreement between the former City of Modesto Redevelopment Agency and Civic Partners. This loan will be paid back in Fiscal Year 2022-23, pending State Department of Finance approval, with funds from the Redevelopment Property Tax Trust Fund (RPTTF) which is collected by the RDA Successor Agency to pay for approved obligations. This adjustment will also increase the expenditure budget in account 1910-14860-54250 (Settlements) to allow for the payment of the settlement agreement.
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Acco
unt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-077 BM 0100 General Fund FIN - Accounting Interfund Charges - Service Credit labor charges Rev $ 549,755 697 $ $ 550,452
A budget adjustment of $697 is necessary to establish a direct charge agreement between Finance- Revenue Collections and Compliances and City Services for StanRTA - Transit Fare Media Sales. Finance will be providing the services of a Financial Analyst to determine the total monthly payment to the JPA and a Senior Financial Analyst to confirm accuracy.

AT-081 DD 0100 General Fund CED - Building Safety Budget Only - Salary Adjustment Decrease Exp $ - (34,650) $ $ (34,650)
AT-081 DD 0100 General Fund CED - Building Safety Budget Only - Benefit Adjustment Decrease Exp $ - (14,850) $ $ (14,850)
AT-081 DD 0100 General Fund CED - Land Development Professional Services Exp $ 30,000 49,500 $ $ 79,500 Total Changes for Fund 0100 $ 579,755 $ 697 $ 580,452
AT-082 BM 1130 CDBG Direct Program HUD Direct Program Direct Program Intergov - Downtown Streets Team Rev $ - 20,987 $ $ 20,987
AT-082 BM 1130 CDBG Direct Program HUD Direct Program Services City Forces - Interfund - Downtown Streets Team Exp $ - 4,368 $ $ 4,368
AT-082 BM 1130 CDBG Direct Program HUD Direct Program Direct Grants - Downtown Streets Team Exp $ - 16,619 $ $ 16,619
Total Changes for Fund 1130 $ - $ 41,974 $ 41,974
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01359 Rev $ 800,000 (108,482) $ $ 691,518 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01390 Rev $ - 11,417 $ $ 11,417 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01391 Rev $ - 11,075 $ $ 11,075 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01392 Rev $ - 11,598 $ $ 11,598 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01393 Rev $ - 11,031 $ $ 11,031 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01394 Rev $ - 10,967 $ $ 10,967 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01395 Rev $ - 8,732 $ $ 8,732 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01396 Rev $ - 11,234 $ $ 11,234 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01397 Rev $ - 10,921 $ $ 10,921 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01398 Rev $ - 10,435 $ $ 10,435 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program Federal Intergov - Activity 01399 Rev $ - 11,072 $ $ 11,072 AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1359
AD Exp $ 32,357 (11,318) $ $ 21,039
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1390
AD Exp $ - 1,417 $ $ 1,417
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1391
AD Exp $ - 1,075 $ $ 1,075
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1392
AD Exp $ 1,423 175 $ $ 1,598
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1393
AD Exp $ - 1,031 $ $ 1,031
A budget adjustment of $49,500 is necessary to cover costs associated with an Engineering Contract with NorthStar.

A budget adjustment in the amount of $20,987 is needed to increase the amount budgeted for FY22 Downtown Streets Team. The agreement has been extended through June 2022, and this is the remaining amount of the agreement.

A budget adjustment is necessary to clean up the project budget in order to close the project. There is no change to the total amount budgeted. #7..
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Acco
unt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1394
AD Exp $ - 967 $ $ 967
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1395
AD Exp $ - 513 $ $ 513
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1396
AD Exp $ - 1,234 $ $ 1,234
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1397
AD Exp $ - 921 $ $ 921
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1398
AD Exp $ - 435 $ $ 435
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1399
AD Exp $ - 1,072 $ $ 1,072
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1400
AD Exp $ - 532 $ $ 532
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1401
AD Exp $ - 846 $ $ 846
AT-087 BM 1180 CDBG Direct Program 101256 - Small Business Assistance Program
Services Interfund - Activity 1402
AD Exp $ - 1,100 $ $ 1,100
Total Changes for Fund 1180 $ - $ - $ 1,946
AT-079 BM 3460 Parks Capital Facility Fee
Fund Transfer Out Fund 3460 Transfer Out to Fund 3140 Exp $ - 450,000 $ $ 450,000 AT-079 BM 3460 Parks Capital Facility Fee
Fund Transfer Out Fund 3460 Transfer Out to Fund 3140 Exp $ - 392,834 $ $ 392,834 AT-079 BM 3460 Parks Capital Facility Fee
Fund Transfer Out Fund 3460 Transfer Out to Fund 6710 Exp $ - 20,050 $ $ 20,050 AT-079 BM 3460 Parks Capital Facility Fee
Fund Transfer Out Fund 3460 Transfer Out to Fund 6710 Exp $ - 150,000 $ $ 150,000 AT-079 BM 3460 Parks Capital Facility Fee
Fund Transfer Out Fund 3460 Transfer Out to Fund 6710 Exp $ - 153,867 $ $ 153,867 AT-080 BM 3460 Parks Capital Facility Fee
Fund
100945 - Hetch-Hetchy
Crossing Eng/Design/Admin Exp $ 270,772 100,000 $ $ 370,772 AT-080 BM 3460 Parks Capital Facility Fee
Fund
100945 - Hetch-Hetchy
Crossing Construction Admin Exp $ 650,000 (170,000) $ $ 480,000 AT-080 BM 3460 Parks Capital Facility Fee
Fund
100945 - Hetch-Hetchy
Crossing Land Acquisition Exp $ 809,228 70,000 $ $ 879,228 Total Changes for Fund 3460 $ 1,730,000 $ 1,166,751 $ 2,896,751 AT-077 BM 4100 Water Fund
FIN - City Services for
StanRTA - Transit Fare
Media Sales
Services City Forces - Interfund Exp $ 852 697 $ $ 1,549 A budget adjustment of $697 is necessary to establish a direct charge agreement between Finance- Revenue Collections and Compliances and City Services for StanRTA - Transit Fare Media Sales. Finance will be providing the services of a Financial Analyst to determine the total monthly payment to the JPA and a Senior Financial Analyst to confirm accuracy.

Total Changes for Fund 4100 $ 852 $ 697 $ 1,549
AT-084 BM 4330 County Aircraft Tax Fund PW-Transportation Airport Special Fund Operations
Repair and Maintenance
Services Exp $ 2,749 10,000 $ $ 12,749
A budget adjustment is necessary to increase the Repair and Maintenance account in the County Aircraft Tax Fund by $10,000 for purchase of K-rail to protect the fence at the City-County Airport. The fund reserves will be used for the increase in expense budget.

Total Changes for Fund 4330 $ 2,749 $ 10,000 $ 12,749
AT-086 BM 5510 Employee Benefit Fund HR - EBF Leave Replacement Benefit Contribution Expense Exp $ - 6,000 $ $ 6,000 A budget adjustment in the amount of $6,000 is needed to budget CalPERS replacement contribution expense in the employee benefits fund.

Total Changes for Fund 5510 $ - $ 6,000 $ 6,000
A budget adjustment is necessary to re-establish the remaining projects transfers outs from Fund 3460 to Project 101231, 101233, 101135, 101230, and 101232. The remaining transfer out budget of $1,166,751 total for all 5 projects is being reestablished. As the transfer out lapses each fiscal year, the budget needs to be reestablished.

A budget adjustment is necessary to re-allocate funds from the Construction Administration task to the Eng/Design/Admin and Land Acquisition tasks to account for additional property acquisitions and TCE's remaining. #7..
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Acco
unt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-083 BM 6700 TRRP Operation Fund TRRP Operations Repair and Maintenance Services - Real Property Exp $ 15,020 (20) $ $ 15,000
AT-083 BM 6700 TRRP Operation Fund TRRP Operations Insurance Premium Exp $ 15,381 (6,880) $ $ 8,501 Total Changes for Fund 6700 $ 30,401 $ (6,900) $ 23,501 A budget adjustment is necessary to reduce expense appropriation for TRRP Operations (6700-80300) by $6,900 due to encumbrance rollovers so that revenues and expense appropriations match.
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CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

February 8, 2022
Date:February 2, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Approve the submittal 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 112 James 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 to the Stanislaus Equity Partners in an amount up to $200,000 in Community Development Block Grant Funds to assist with the acquisition, $50,000 for staff activity, 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 $250,000 from fund fund (1130) – Grants – CDBG Program to Homekey 2.0 project (Funding Source: Homekey 2.0 Funds and Community Development Block Grant 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 #8..
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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 from CSOC outlining the need for an operating subsidy  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 “per door” for Youth
o $200,000 “per door” 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.

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 #8..
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partnership that developed during this process is with Stanislaus Equity Partners- STEP, who approached the City regarding the purchase of newly constructed seven-units at 112 James Street. As a Community Development Corporation, STEP works to empower Stanislaus residents with access to asset building opportunities through housing, small business services and affordable lending. Stanislaus Equity Partners was formed with the support of several stakeholders and partners, including a feasibility study grant provided by the Stanislaus Community Foundation.

The James St, Apartments project is a seven unit, newly constructed complex that will provide permanent supportive housing for Stanislaus County BHRS clients who are at risk or experiencing homelessness.

Stanislaus County Affordable Housing Corporation (STANCO) will also serve as a co-applicant.

STANCO has demonstrated a successful track record in providing transitional and permanent supportive housing to persons with mental health disabilities, as well as owning and operating housing units at rents below market rates for persons who meet certain income eligibility as required by various governmental regulatory agreements. STANCO also has extensive experience with property management and will provide property management services to the James St. Apartments Project.

Individuals will be referred to the James St. Project through the Coordinated Entry System.

Once a referral has been made Behavioral Health & Recovery Services (BHRS) will screen for eligibility, criteria; adults, older adults, transition age young adults with serious mental illness or children with severe emotional disorders and their families whom are homeless, chronically homeless or at risk of chronic homelessness. BHRS will refer certified eligible applicants to Stanco for the application process, BHRS housing staff will assist the applicant with the paperwork if necessary. All eligible tenants total household income, at time of move-in, shall not exceed the 30 percent AMI limit for all Homekey assisted units.

Staff is seeking approval to submit an application in partnership with Stanislaus Equity Partners and STANCO for a grant to the Homekey 2.0 program, for a total funding request of up to $1,752,000 in acquisition and operating subsidy.

To assist with the gap, the City is proposing a $200,000 CDBG Loan to Stanislaus Equity Partners to assist with the acquisition costs of the project.

Project Budget:

Acquisition: $1,600,000
Pre-Development: $ 100,000
Total Cost: $1,700,000
Sources:

Project Homekey per door
($150,000/1 bed, $175,000/2 bed $200,000/3 bed) $1,250,000 Project Homekey early occupancy ($10,000/unit) $ 70,000 Project Homekey match (50%) gap $ 180,000
Modesto CDBG Funds $ 200,000
Total Sources $1,700,000
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Project Homekey has funding available to assist with operating subsidies of $1,000 per month per unit if the funding is matched for three years, STEP has been able to secure the matching funding for four years, and therefore the application will include a request for up to an additional $252,000 in operating subsidies.

Monthly Subsidy $1,000 for project (7 units): $ 7,000
Annual Subsidy for project (7 units): $ 84,000
Three year subsidy for project (7 units): $252,000
The total ask for the Project Homekey funds is $1,752,000. The State required Resolution specifies an amount of $3,504,000, 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.

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 January 13, 2022.

RECOMMENDED COUNCIL ACTION:

Staff Recommendation:

Resolution approving the City of Modesto’s Homekey 2.0 Project Application for 112 James 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 and authorizing the City Manager or his designee to execute the any documents for the implementation of this Resolution.

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

Resolution approving a loan to the Stanislaus Equity Partners in an amount up to $200,000 in Community Development Block Grant Funds to assist with the acquisition of 112 James Street and $50,000 for staff activity delivery costs, 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 Community Develoment Block Grant (CDBG) grant 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 $250,000 from fund (1130) – Grants – CDBG Program to the 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 #8..
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Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. State Required Resolution

3. Resolution CDBG Loan

4. Budget Resolution – HomeKey 2.0

5. Budget Resolution – CDBG

6. Stanislaus Equity Partners Loan Agreement

7. Stanislaus Equity Partners Regulatory Agreement

8. Stanislaus Equity Partners Deed of Trust for CDBG Loan

9. Stanislaus Equity Partners Promissory Note for CDBG Loan

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 112 JAMES 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 AND AUTHORIZING THE CITY

MANAGER OR HIS DESIGNEE TO EXECUTE THE ANY DOCUMENTS FOR

THE IMPLEMENTATION 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 #8..
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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 Stanislaus Equity Partners-STEP that identified the property of 112 James Street, Modesto for purchase, and
WHEREAS, as a Community Development Corporation, STEP works to empower Stanislaus residents with access to asset building opportunities through #8..
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housing, small business services and affordable lending, so Stanislaus Equity Partners was formed with the support of several stakeholders and partners, including a feasibility study grant provided by the Stanislaus Community Foundation, and WHEREAS, the James St, Apartments project is a seven unit, newly constructed complex that will provide permanent supportive housing for Stanislaus County BHRS clients who are at risk or experiencing homelessness, and WHEREAS, individuals will be referred to the James St. Project through the Coordinated Entry System, and
WHEREAS, once a referral has been made Behavioral Health & Recovery Services (BHRS) will screen for eligibility, criteria will be; adults, older adults, transition age young adults with serious mental illness or children with severe emotional disorders and their families whom are homeless, chronically homeless or at risk of chronic homelessness, and
WHEREAS, BHRS will refer certified eligible applicants to Stanislaus Affordable Housing Corporation (STANCO) for the application process, BHRS housing staff will assist the applicant with the paperwork if necessary and all eligible tenant’s total household income, at time of move-in, shall not exceed the 30 percent AMI limit for all Homekey assisted units, and
WHEREAS, STANCO will be co-applicant and provide property management services to the James St. Apartments Project and has demonstrated a successful track record in providing transitional and permanent supportive housing to persons with mental health disabilities, as well as owning and operating housing units at rents below market #8..
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rates for persons who meet certain income eligibility as required by various governmental regulatory agreements, and
WHEREAS, Staff is seeking approval to submit an application in partnership with Stanislaus Equity Partners for a grant application to the Homekey 2.0 program, for a total funding request of up to $1,752,000 in acquisition and operating subsidy, and WHEREAS, Project Homekey has funding available to assist with operating subsidies. Additionally, $1,000 per unit one-bedroom units if the funding is matched for three years, STEP has been able to secure the matching funding for four years, and therefore the application will include a request for up to an additional $252,000 in operating subsidies, and
WHEREAS, The State required Resolution specifies an amount of $3,504,000, 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.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves the City of Modesto’s Homekey 2.0 Project Application for 112 James Street, and authorizes 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.

BE IT FURTHER RESOLVED that the City Manager, or his designee, are authorized to execute any documents for the implementation of this Resolution.

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of February, 2022 by Councilmember ?, who #8..
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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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AUTHORIZING RESOLUTION
RESOLUTION NO. 2022-
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 Stanislaus Equity Partners and Stanislaus County Affordable Housing Corporation (“Corporations”). Therefore, Co-Applicant is joining Corporations 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 $3,504,000.

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 $3,504,000, 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 #8..
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Agreement. Funds are to be used for the allowable expenditures and activities identified in the Standard Agreement.

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 8th day of February, 2022, 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________ #8..
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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 TO THE STANISLAUS EQUITY
PARTNERS LOAN IN AN AMOUNT UP TO $200,000 IN COMMUNITY

DEVELOPMENT BLOCK GRANT FUNDS TO ASSIST WITH THE
ACQUISITION OF 112 JAMES STREET AND $50,000 FOR STAFF ACTIVITY

DELIVERY COSTS, AND AUTHORIZING THE CITY MANAGER OR HIS

DESIGNEE TO EXECUTE THE AGREEMENTS
WHEREAS, the City of Modesto is an entitlement community under three U.S. Department of Housing and Urban Development (HUD) programs within its Office of Community Planning and Development (CPD), and WHEREAS, as an entitlement community, the City annually receives entitlement funds from the Community Development Block Grant, Emergency Solutions Grant, and HOME Investment Partnerships Program (HOME) programs, and WHEREAS, the City of Modesto’s Program Year (PY) 2021-2022 Annual Action Plan represents the second (2nd) plan of the City of Modesto’s 2020-2024 Consolidated Plan, and
WHEREAS, the PY 2021-2022 AAP identifies the expected resources to be available and the projects to be funded during the program year to address community priority needs as identified in the Consolidated Plan, and WHEREAS, CDBG funds support a range of eligible projects to benefit low and moderate income individuals, families, and neighborhoods, and WHEREAS, CDBG funds must be allocated to eligible activities within the allowable project categories to support the goals and objectives identified within the Consolidated Plan to address community needs, and
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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, as a Community Development Corporation, STEP works to empower Stanislaus residents with access to asset building opportunities through housing, small business services and affordable lending, so Stanislaus Equity Partners was formed with the support of several stakeholders and partners, including a feasibility study grant provided by the Stanislaus Community Foundation, and WHEREAS, the James St, Apartments project is a seven unit, newly constructed complex that will provide permanent supportive housing for Stanislaus County BHRS clients who are at risk or experiencing homelessness, and WHEREAS, individuals will be referred to the James St. Project through the Coordinated Entry System, and
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WHEREAS, once a referral has been made Behavioral Health & Recovery Services (BHRS) will screen for eligibility, criteria will be; adults, older adults, transition age young adults with serious mental illness or children with severe emotional disorders and their families whom are homeless, chronically homeless or at risk of chronic homelessness, and
WHEREAS, BHRS will refer certified eligible applicants to Stanislaus Affordable Housing Corporation (STANCO) for the application process, BHRS housing staff will assist the applicant with the paperwork if necessary and all eligible tenant’s total household income, at time of move-in, shall not exceed the 30 percent AMI limit for all Homekey assisted units, and
WHEREAS, to assist with the gap, the City is proposing a $200,000 CDBG Loan to Stanislaus Equity Partners to assist with the acquisition costs of the project.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a loan to the Stanislaus Equity Partners in an amount up to $200,000 in Community Development Block Grant Funds to assist with the acquisition of 112 James Street and $50,000 for staff activity delivery costs.

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

The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 8th day of February, 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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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 COMMUNITY DEVELOPMENT

BLOCK GRANT (CDBG) 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 Stanislaus Equity Partners (STEP) for the Homekey 2.0 Program, and WHEREAS, if approved the fiscal year 2021-2022 Multi-Year budget must be amended, and
WHEREAS, the project will be funded with approximately $1,500,000 in Homekey 2.0 Program funds and $200,000 in CDBG funds for property acquisition and capital improvements and $50,000 in CDBG funds for administration, and WHEREAS, the project will also be eligible for $252,000 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 CDBG 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 8th day of February, 2022, by Councilmember ?, who #8..
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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:

NOES:

Councilmembers:

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 TRANSFER $250,000 FROM FUND (1130) – GRANTS – CDBG 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 Stanislaus Affordable Housing Corporation (STANCO) 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 $1,752,000 in Homekey 2.0 funds and $200,000 in Community Development Block Grant (CDBG) 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 $250,000 from fund (1130) – Grants – CDBG 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 8th day of February, 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:

NOES:

Councilmembers:

Councilmembers:
?
?
ABSENT: Councilmembers: ?
ATTEST:

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

BY:

JOSE M. SANCHEZ, City Attorney
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3336859.2 1

CITY LOAN AGREEMENT
(City of Modesto CDBG Loan)
(112 James Street)
This Loan Agreement (this “Agreement”) is entered into as of _________, 2022, by and between the City of Modesto, a California charter city (the “City”) and Stanislaus Equity Partners, a California non-profit corporation (“Borrower”). City and Borrower are collectively referred to in this Agreement as the “Parties.”

RECITALS
A. Defined terms used but not defined in these recitals have the meaning ascribed to them in Article 1 of this Agreement.

B. The City has received funds from HUD under Title I of the Housing and Community Development Act of 1974, as amended (the “CDBG Funds”). The CDBG Funds must be used by the City in accordance with 24 CFR 570 et seq. and the CDBG Regulations.

C. The Borrower intends to acquire that certain real property located at 112 James Street, Modesto, California, known as Stanislaus County Assessor’s Parcel Number 107-008- 015, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”).

D. The Recipient has proposed to develop permanent supportive housing units that will serve persons with serious mental illness who are at risk of homelessness, at risk for involuntary inpatient hospitalization, or at risk for incarceration, and who have household incomes at or below sixty percent (60%) of the median income for Stanislaus County, as defined by HUD, who are experiencing crisis, housing instability, and or/homelessness, as more particularly Described in the project summary attached hereto as Exhibit B and incorporated herein by this reference (the “Project”).

E. Borrower wishes to borrow from the City and the City wishes to extend to Borrower a loan of One Hundred and Sixty Thousand Dollars ($200,000) (the “Loan”) of CDBG funds to help finance the acquisition of the Property for the purposes of constructing the Project thereon.

F. Concurrently herewith: (i) Borrower shall execute a secured promissory note (the “Note”) in the amount of the Loan and a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”), which shall provide City with a security interest in the Property and the Project, and (ii) Borrower and City shall execute a Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”), which shall be recorded against the Property and which shall restrict the use of the Property. The Note, the Regulatory Agreement and Deed of Trust are collectively hereinafter referred to as the “Loan Documents.”
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G. The Loan is being made to finance acquisition of the Property in order to help achieve financial feasibility for the Project and to increase the supply of continuum of care services of homeless or at-risk youth in in the City.

H. The California Environmental Quality Act (Public Resources Code Sections 21000 et seq.) (“CEQA”) imposes no conditions on the City's consideration and approval of this Agreement because the Project is exempt from CEQA requirements under the categorical exemption set forth in 14 California Code of Regulations Section 15303(b).

I. In accordance with the National Environmental Policy Act of 1969, as amended (42 USC 4321-4347) (“NEPA”), the City has completed and approved all applicable environmental review for the activities proposed to be undertaken under this Agreement.

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 1 DEFINITIONS AND EXHIBITS
Section 1.1 Definitions
The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided:
(a) “Agreement” means this Loan Agreement.
(b) “Approved Project Budget” means the proforma development budget, including sources and uses of funds, as approved by the City, and attached hereto and incorporated herein as Exhibit C.
(c) “Approved Financing” means all of the funds acquired by the Borrower and approved by the City for the purpose of financing the acquisition of the Property and development of the Project, in addition to the Loan from the City and other loans which are secured by the Project as of the date of this Agreement. (d) “Bid Package” means the package of documents Borrower's general contractor is required to distribute to potential bidders as part of the process of selecting subcontractors for the construction of the Project. The Bid Package is to include the following:
(i) an invitation to bid, (ii) copy of the proposed construction contract; (iii) a form of bid guarantee that is reasonably acceptable to the City that guarantees, at a minimum, an amount equal to five percent (5%) of the bid price, and (iv) all Construction Plans (as defined in Section

3.2 below).
(e) “Borrower” has the meaning set forth in the first paragraph of this Agreement.
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(f) “CDBG” means the Community Project Block Grant program under Title I of the Housing and Community Project Act of 1974 (42 U.S.C. 5301 et. seq.), as amended. (g) “CDBG Funds” has the meaning set forth in Recital B. (h) “CDBG Regulations” means the statutory and regulatory provisions that govern the CDBG program under Title I of the Housing and Community Project Act of 1974 (42 U.S.C. 5301 et. seq.), as amended including 24 C.F.R. Part 570 et seq. (i) “City” means the City of Modesto, a California Charter City. (j) “Deed of Trust” is defined in Recital G.
(k) “Default” has the meaning set forth in Section 6.1 below. (l) “Default Rate” has the meaning set forth in Section 6.2(c). (m) “Hazardous Materials” has the meaning set forth in Section 4.9 below. (n) “Hazardous Materials Claim” has the meaning set forth in Section 4.9 below.
(o) “Hazardous Materials Law” has the meaning set forth in Section 4.9 below.
(p) “HUD” means the U.S. Department of Housing and Urban Development. (q) “Loan” means the City's loan to Borrower pursuant to this Agreement in the total principal amount of Five Hundred Thousand Dollars ($200,000) consisting of CDBG Funds.
(r) “Loan Documents” means this Agreement, the Note, the Regulatory Agreement, the Deed of Trust, and any other document or agreement evidencing the Loan. (s) “Note” means the promissory note dated of even date herewith, executed by Borrower, evidencing Borrower's obligation to repay the Loan. The form of the Note will be provided by the City.
(t) “Parties” mean the City and Borrower.
(u) “Project” has the meaning set forth in Recital E.
(v) “Property” has the meaning set forth in Recital C.
(w) “Regulatory Agreement” means the Regulatory Agreement and Declaration of Restrictive Covenants dated of even date herewith between the City and the Borrower associated with the Loan, to be recorded against the Property. The form of the Regulatory Agreement will be provided by the City.
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(x) “Term” means the term of this Agreement, the Regulatory Agreement, and the Loan which commences as of the date of this Agreement and shall expire fifty-five (55) years from the date a certificate of occupancy is issued for the Development, but in no event later than December 31, 2075.
(y) “Transfer” has the meaning set forth in Section 4.15 below.

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

Exhibit A: Legal Description of the Property
Exhibit B: Project Summary
Exhibit C: Approved Project Budget
Exhibit D: Federal Award Identification Information
ARTICLE 2 LOAN PROVISIONS
Section 2.1 Loan.

Upon satisfaction of the conditions set forth in Section 2.5 and Section 2.6 of this Agreement, the City shall loan to the Borrower the Loan for the purposes set forth in Section 2.3 of this Agreement. The Borrower's obligation to repay the Loan is evidenced by the Note.

2.1.1 Federal Award Identification. Federal award identification information regarding the funding provided to Borrower by this Agreement, as required by 24 CFR 200.331, is included in Exhibit D, attached hereto and incorporated herein.

Section 2.2 Interest & Late Payment.
(a) Subject to the provisions of Section 2.2(b) below, commencing on the date that the proceeds of the Loan are advanced to Borrower, the outstanding principal balance of the Loan will accrue simple interest at the rate zero percent (0%) per annum. (b) If Borrower fails to pay any principal balance and interest by the 15th calendar day after the date such funds are due, Borrower shall pay to City a late fee of five percent (5%) of the amount unpaid. Borrower and City agree that the actual damages and costs sustained by City due to failure to make timely payments would be extremely difficult to measure and that the charges specified in this Paragraph represent a reasonable estimate by Borrower and City of fair average compensation for such damages and costs.

Section 2.3 Use of Loan Funds.
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The Borrower shall use the proceeds of the Loan solely to acquire the Property. The Borrower shall not use the Loan proceeds for any other purposes without the prior written consent of the City.

Section 2.4 Security.

As security for repayment of the Note, Developer shall execute the Deed of Trust pursuant to which City shall be provided a lien against the Property and the Project. The Deed of Trust shall be recorded in the Official Records of the County of Stanislaus. The Deed of Trust may be subordinated only to such liens and subject only to such title exceptions as City may approve in writing as set forth below.

Section 2.5 Subordination.
(a) Any agreement by the City to subordinate the Deed of Trust and/or Regulatory Agreement to the lien of Approved Financing (in each case, a “Senior Loan”), will be subject to the satisfaction of the following conditions:
(i) All of the proceeds of the proposed Senior Loan, less any transaction costs, are used to provide construction and/or permanent financing for the Project. (ii) The proposed lender of a Senior Loan (each, a “Senior Lender”) is a state or federally chartered financial institution, a nonprofit corporation or a public entity that is not affiliated with Borrower or any of Borrower's affiliates, other than as a depositor or a lender. (iii) Borrower demonstrates to the City's reasonable satisfaction that subordination of the Deed of Trust and/or Regulatory Agreement is necessary to secure adequate acquisition, construction and/or permanent financing to ensure the viability of the Project, including the operation of the Project as a navigation center, as required by the Loan Documents. To satisfy this requirement, Borrower must provide to the City, in addition to any other information reasonably required by the City, evidence demonstrating that the proposed amount of the Senior Loan is necessary to provide adequate acquisition, construction, construction and/or permanent financing to ensure the viability of the Project, and adequate financing for the Project would not be available without the proposed subordination.
(iv) The subordination agreement(s) is structured to minimize the risk that the Deed of Trust and/or Regulatory Agreement will be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Loan. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by Borrower, including:
(i) providing the City or its successor with copies of any notices of default at the same time and in the same manner as provided to Borrower; and (ii) providing the City with a cure period of at least sixty (60) days to cure any default.
(v) The subordination(s) of the Loan is effective only during the original term of the Senior Loan and any extension of its term that is approved in writing by the City. #8..
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(vi) The subordination does not limit the effect of the Deed of Trust and/or Regulatory Agreement before a foreclosure, nor require the consent of the Senior Lender prior to the City exercising any remedies available to the City under the Loan Documents. (b) Upon a determination by the City that the conditions in this Section have been satisfied, the City Manager or the City Manager's designee will be authorized to execute the approved subordination agreement without the necessity of any further action or approval. (c) The City agrees to subordinate the Deed of Trust and Regulatory Agreement to the lien of the deed of trust and any regulatory agreement securing the Senior Loan, subject to the conditions set forth in this Section 2.5.

Section 2.6 Conditions Precedent to Disbursement of Loan Funds.

The maximum amount of funds to be disbursed pursuant to this Section 2.6 shall not exceed the amount of the Loan. The City shall not be obligated to make any disbursements of Loan funds for acquisition of the Property or take any other action under the Loan Documents unless the following conditions precedent have been and continue to be satisfied prior to each such disbursement of Loan funds:
(a) There exists no Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement; (b) The Borrower holds title to the Property or is acquiring title simultaneously with the disbursement of the Loan proceeds; (c) Borrower has delivered to the City a copy of a corporate resolution authorizing Borrower's execution of the Loan Documents; (d) There exists no material adverse change in the financial condition of Borrower from that shown by the financial statements and other data and information furnished by Borrower to the City prior to the date of this Agreement; (e) The Borrower has furnished the City with evidence of the insurance coverage meeting the requirements of Section 4.16 below; (f) Borrower has caused to be executed and delivered to the City all City Loan Documents and any other instruments, and policies required under the Loan Documents; (g) The Deed of Trust and the Regulatory Agreement have been recorded against the Property in the Office of the Recorder of the County of Stanislaus or will be recorded simultaneous to the disbursement of the Loan funds;
(h) A title insurer reasonably acceptable to the City is unconditionally and irrevocably committed to issuing an LP-10 2006 ALTA Lender's Policy of title insurance insuring the priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and exclusions as may be reasonably acceptable to the City, and containing such endorsements as the City may reasonably require;
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(i) The City has completed and approved all environmental reviews under NEPA, as necessary for the construction of the Project, and Borrower has provided the City evidence of compliance with all approved NEPA requirements and mitigation measures required by the NEPA environmental documentation;
(j) The City has reasonably determined that the undisbursed proceeds of the Loan, together with other funds or firm commitments for funds that the Borrower has obtained in connection with the Project, are not less than the amount that is necessary for Borrower to acquire the Property and pay for development of the Project and to satisfy all of the covenants contained in this Agreement and the Regulatory Agreement; (k) Borrower has provided documentation reasonably satisfactory to the City demonstrating that Borrower has sufficient funds to purchase the Property; (l) The City has received a written draw request from the Borrower, including certification that the condition set forth in Section 2.6(a) continues to be satisfied, and setting forth the proposed uses of funds consistent with the Approved Project Budget, the amount of funds needed, and, where applicable, a copy of the bill or invoice covering a cost incurred or to be incurred.

Section 2.7 Reserved.

Section 2.8 Repayment Schedule. The Loan shall be repaid as follows:
(a) Repayment. Repayment of principal and interest on the Loan shall be due and payable at the end of the Term of the Loan (the “Maturity Date”), except as otherwise provided herein.
(b) Loan Forgiveness. On the Maturity Date, all principal and interest due under this Agreement and the Promissory Note will be forgiven, provided that Borrower is not in default under the terms of this Agreement, the Promissory Note or the Deed of Trust. (c) Payment in Full. The entire unpaid principal balance and all accrued interest on the Loan and all other sums accrued under the Note shall be due and payable upon the earlier of: (i) the date of any Transfer, absent the prior written consent of City of all or any part of or interest in the Property, except as otherwise permitted pursuant to this Agreement, and (ii) the date of any Default, subject to any applicable cure periods provided herein, or (iii) the Maturity Date.
(d) Prepayment. The Borrower shall have the right to prepay the Loan at any time without premium or penalty. However, the Regulatory Agreement and the Deed of Trust shall remain in effect for the entire Term, regardless of any prepayment.

Section 2.9 Non-Recourse.

Except as provided below, neither the Borrower, nor any general or limited partner of the Borrower, shall have any direct or indirect personal liability for payment of the principal of, and #8..
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interest on, the Loan or the performance of the covenants of the Borrower under the Deed of Trust. Following recordation of the Deed of Trust, the sole recourse of the City with respect to the principal of, and interest on, the Note and defaults by Borrower in the performance of its covenants under the Deed of Trust shall be to the property described in the Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall (i) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the City thereunder, or (ii) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto.

The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note and the performance of the Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the Borrower of its obligation to indemnify the City under Sections 3.7,

4.8(b)(vi), 4.9(c) and 7.4 of this Agreement, or liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by Borrower other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property.

ARTICLE 3 CONSTRUCTION OF THE IMPROVEMENTS
Section 3.1 Permits and Approvals.

Borrower shall obtain all permits and approvals necessary for the construction of the Project on the Property.

Section 3.2 Construction Plans.
(a) Borrower shall submit to the City a copy of the Construction Plans for the Project and Bid Package. As used in this Agreement, “Construction Plans” shall mean all construction documentation upon which Borrower and Borrower's contractor shall rely in rehabilitating and constructing all the improvements on the Property (including any landscaping, parking, and common areas) and shall include, but not necessarily be limited to, final architectural drawings, landscaping plans and specifications, final elevations, and building plans and specifications (also known as “working drawings”).
(b) The Construction Plans shall be deemed approved by the City unless rejected by the City in writing for their failure to comply with the foregoing requirements within thirty (30) days after receipt by the City. Such approval of the Construction Plans by the City shall not relieve Borrower's Obligation to obtain any and all approvals required by the City or the City Building Services Department.
(c) If rejected by the City in whole or in part, Borrower shall submit new or corrected Construction Plans within thirty (30) days after notification of the City's rejection and the reasons therefor. The City shall then have thirty (30) days to review and approve Borrower's #8..
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new or corrected Construction Plans. The provisions of this Section relating to time periods for approval, rejection, or resubmission of new or corrected Construction Plans shall continue to apply until the Construction Plans have been approved by the City.

Section 3.3 Construction Contract.
(a) Not later than ten (10) days prior to the proposed commencement of construction of the Project, the Borrower shall submit to the City the proposed construction contract for the Project. All construction work and professional services shall be performed by persons or entities licensed or otherwise authorized to perform the applicable construction work or service in the State of California. Each contract that the Borrower enters for construction of the Project shall provide that at least five percent (5%) of the costs incurred shall be payable only upon completion of construction, subject to early release of retention for specified subcontractors upon approval by the City. The construction contract shall include all applicable CDBG requirements set forth in Section 4.8 below.
(b) Upon receipt by the City of the proposed construction contract, the City shall promptly review same and approve or disapprove it within ten (10) days. If the construction contract is not approved by the City, the City shall set forth in writing and notify the Borrower of the City's reasons for withholding such approval. The Borrower shall thereafter submit a revised construction contract for City approval, which approval shall be granted or denied in ten (10) working days in accordance with the procedures set forth above. Any construction contract executed by the Borrower for the Project shall be in the form approved by the City. The City's approval of the construction contract shall in no way be deemed to constitute approval of or concurrence with any term or condition of the construction contract except as such term or condition may be required by this Agreement.

Section 3.4 Reserved
Section 3.5 Commencement of Construction.

Borrower shall cause the commencement of construction of the Project no later than August 1, 2020 or such later date that the City may approve.

Section 3.6 Completion of Construction.

Borrower shall diligently prosecute construction of the Project to completion, and shall cause the completion of the construction of the Project no later than twelve (12) months from construction commencement or such later date that the City may approve.

Section 3.7 Construction Pursuant Applicable Laws
(a) Borrower shall cause all work performed in connection with the Project to be performed in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, City or municipal governments or agencies now in force or that may be enacted hereafter, including without limitation and to the extent applicable, the prevailing wage provisions of the federal Davis-Bacon Act and implementing rules and regulations and state prevailing wages pursuant to Labor Code Section 1770 et seq., and the regulations pursuant #8..
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thereto, as further set forth in subsection (c) below; (ii) the property standards set out in 24 CFR

5.701 et seq., and 24 CFR 92.251; and (iii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and Borrower shall be responsible to the City for the procurement and maintenance thereof, as may be required of Borrower and all entities engaged in work on the Project.

Section 3.8 Accessabililty.

To the extent applicable, Borrower shall construct the Project 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 (“Section 504”); Title II and/or Title III of the Americans with Disabilities Act; and Title 24 of the California Code of Regulations (collectively, the “Accessibility Requirements”). In compliance with Section 504 Borrower shall provide the City with a certification from the Project architect that to the best of the architect's knowledge, the Project comply with all federal and state accessibility requirements applicable to the Project. Borrower shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the City) the City against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including Borrower, its architect, contractor and subcontractors) to construct the Project in accordance with the Accessibility Requirements. The requirements in this Subsection survive repayment of the Loan and the reconveyance of the Deed of Trust.

Section 3.9 Equal Opportunity.

During the construction of the Project there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.

Section 3.10 Minority and Women-Owned Contractors.

Borrower will use its best efforts to afford minority-owned and women-owned business enterprises the maximum practicable opportunity to participate in the construction of the Project.

Borrower shall, at a minimum, notify applicable minority-owned and women-owned business firms located in Stanislaus County of bid opportunities for the construction of the Project.

Documentation of such notifications shall be maintained by Borrower and available to the City as requested.

Section 3.11 Progress Reports.

Until such time as Borrower has received a certificate of occupancy from the City for the Project, Borrower shall provide the City with quarterly progress reports regarding the status of the construction of the Project.

Section 3.12 Construction Responsibilities.
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(a) It shall be the responsibility of Borrower to coordinate and schedule the work to be performed so that commencement and completion of the construction of the Project will take place in accordance with this Agreement.
(b) Borrower shall be solely responsible for all aspects of Borrower's conduct in connection with the Project, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by the City with reference to the Project is solely for the purpose of determining whether Borrower is properly discharging its obligations to the City, and should not be relied upon by Borrower or by any third parties as a warranty or representation by the City as to the quality of the design or construction of the Project.

Section 3.13 Mechanics Liens, Stop Notices, and Notices of Completion. (a) If any claim of lien is filed against the Property or a stop notice affecting the Loan is served on the City or any other lender or other third party in connection with the Project, then Borrower shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the City a surety bond in sufficient form and amount, or provide the City with other assurance satisfactory to the City that the claim of lien or stop notice will be paid or discharged. (b) If Borrower fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the City may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at Borrower's expense. Alternately, the City may require Borrower to immediately deposit with the City the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof.

The City may use such deposit to satisfy any claim or lien that is adversely determined against Borrower.
(c) Borrower shall file a valid notice of cessation or notice of completion upon cessation of construction on the Project for a continuous period of thirty (30) days or more, and take all other reasonable steps to forestall the assertion of claims of lien against the Property.

Borrower authorizes the City, but without any obligation, to record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Project and Property.

Section 3.14 Inspections.

Borrower shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection at the Project by the City and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement. #8..
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ARTICLE 4 LOAN REQUIREMENTS
Section 4.1 Reserved.

Section 4.2 Financial Accountings and Post-Completion Audits.

No later than sixty (60) days following completion of construction of the Project, Borrower shall provide to City a financial accounting of all sources and uses of funds for the Project.

Section 4.3 Annual Operating Budget.

At least one hundred fifty (150) days prior to the end of each year of the Term, Borrower shall provide to the City an annual budget for the operation of the Project. Unless rejected by the City in writing within fifteen (15) days after receipt of the budget, said budget shall be deemed accepted. If rejected by the City in whole or in part, Borrower shall submit a new or corrected budget within thirty (30) calendar days of notification of the City's rejection and the reasons therefor. The provisions of this Section relating to time periods for resubmission of new or corrected budgets shall continue to apply until such budget has been approved by the City.

Section 4.4 Information.

Borrower shall provide any information reasonably requested by the City in connection with the Project, including (but not limited to) any information required by HUD in connection with Borrower's use of the Loan funds.

Section 4.5 Records.
(a) The Borrower shall keep and maintain at the Project, or elsewhere with the City's written consent, full, complete and appropriate books, record and accounts relating to the Project, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Borrower's compliance with the terms and provisions of this Agreement. Books, records and accounts relating to Borrower's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement. All such books, records, and accounts shall be open to and available for inspection and copying by the HUD, the City, its auditors or other authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that Borrower may be required to furnish to any governmental agency shall at all reasonable times be open for inspection by the City at the place that the books, records and accounts of the Borrower are kept. The Borrower shall preserve such records for a period of not less than five (5) years after the creation of such records in compliance with all HUD records and accounting requirements. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loan is pending at the end of the record retention period stated herein, then the Borrower shall retain such records until such action and all related issues are resolved. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate #8..
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and current and in such a form as to allow the City to comply with the recordkeeping requirements contained in 24 CFR 92.506. Such records shall include but not be limited to:
(i) Records providing a full description of the activities undertaken with the use of the Loan funds;
(ii) Records demonstrating the eligibility of activities under CDBG Regulations set forth in 24 CFR 570 et seq. and that use of the CDBG Funds meets at least one of the national objectives of the CDBG program set forth in 24 CFR 570.208; (iii) Records demonstrating compliance with the HUD property standards and lead-based paint requirements;
(iv) Records demonstrating compliance with the income requirements for occupants;
(v) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing requirements; (vi) Financial records as required by 24 C.F.R. 570.502, and OMB Circular A-110 (24 C.F.R. Part 84);
(vii) Records demonstrating compliance with applicable relocation requirements which must be retained for at least five (5) years after the date by which persons displaced from the property have received final payments; (viii) Records demonstrating compliance with Section 3, and labor requirements, including certified payrolls from the Borrower's general contractor evidencing that applicable prevailing wages have been paid; and
(b) The City shall notify Borrower of any records it deems insufficient.

Borrower shall have fifteen (15) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the City in such notice, or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Borrower shall begin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible.

Section 4.6 City Audits.

Each year, Borrower shall provide the City with a copy of Borrower's annual audit, which shall include information on all of Borrower's activities and not just those pertaining to the Project. In addition, the City or any designated agent or employee of the City at any time shall be entitled to audit all of Borrower's books, records, and accounts pertaining thereto. Such audit shall be conducted during normal business hours at the principal place of business of Borrower and other places where records are kept. Immediately after the completion of an audit, the City shall deliver a copy of the results of such audit to Borrower. The Borrower shall also follow audit requirements of the Single Audit Act and OMB Circulars A-122 and 110, to the extent required by applicable law and HUD regulations.
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Section 4.7 CDBG Requirements.
(a) Borrower shall comply with all applicable laws and regulations governing the use of the CDBG funds, as set forth in 24 CFR Part 570, including but not limited to the requirements of the Regulatory Agreement. In the event of any conflict between this Agreement and applicable laws and regulations governing the use of the Loan funds, the applicable laws and regulations shall govern.
(b) The laws and regulations governing the use of the Loan funds include (but are not limited to) the following:
(i) Environmental and Historic Preservation. Section 104 (f) of the Housing and Community Project Act of 1974 and 24 CFR Part 58, which prescribe procedures for compliance with the National Environmental Policy Act of 1969 (42 USC 4321-4361), and the additional laws and authorities listed at 24 CFR 58.5.
(ii) Applicability of OMB Circulars. The applicable policies, guidelines, and requirements of OMB Circulars Nos. A-87, A-102, Revised, A-110, A-122, and A-133. (iii) Debarred, Suspended or Ineligible Contractors. The prohibition on the use of debarred, suspended, or ineligible contractors set forth in 24 CFR Part 24. (iv) Civil Rights, Housing and Community Project, and Age Discrimination Acts. The Fair Housing Act (42 USC 3601 et seq.) and implementing regulations at 24 CFR Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the Housing and Community Project Act of 1974 as amended; Section 504 of the Rehabilitation Act of 1973 (29 USC 794, et seq.); the Age Discrimination Act of 1975 (42 USC 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and implementing regulations at 24 CFR Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608.
(v) Lead-Based Paint. The requirement of the Lead-Based Paint Poisoning Prevention Act, as amended (42 USC 4821 et seq.), the Residential Lead-Based Paint Hazard Reduction Act (42 USC 4851 et seq.), and implementing regulations at 24 CFR Part 35. (vi) Relocation. The requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 USC 4601, et seq.) and implementing regulations at 49 CFR Part 24; Section 104(d) of the Housing and Community Project Act of 1974 and implementing regulations at 24 CFR Part 42; and 24 CFR 92.353; and California Government Code Section 7260 et seq. and implementing regulations at 25 California Code of Regulations Sections 6000 et seq. If and to the extent that construction of the Project results in the permanent or temporary displacement of residential occupants, homeowners, or businesses, then Borrower shall comply with all applicable local, state, and federal statutes and regulations with respect to relocation planning, advisory assistance, and payment of monetary benefits. Borrower shall prepare and submit a relocation plan to the City for approval. Borrower shall be solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying #8..
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with such relocation laws. The Borrower shall indemnify, defend (with counsel reasonably chosen by the City), and hold harmless the City against all claims which arise out of relocation obligations to residential occupants, homeowners, or businesses permanently or temporarily displaced by the Project.
(vii) Discrimination against the Disabled. The requirements of the Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100, Section 504 of the Rehabilitation Act of 1973 (29 USC 794), and federal regulations issued pursuant thereto, which prohibit discrimination against the disabled in any federally assisted program, the requirements of the Architectural Barriers Act of 1968 (42 USC 4151-4157) and the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990 (42 USC 12131 et seq.), and federal regulations issued pursuant thereto. (viii) Clean Air and Water Acts. The Clean Air Act, as amended, 42 USC 7401 et seq., the Federal Water Pollution Control Act, as amended, 33 USC 1251 et seq., and the regulations of the Environmental Protection Agency with respect thereto, at 40 CFR Part 1500, as amended from time to time.
(ix) Uniform Administrative Requirements. The requirements of 24 CFR

92.505 and 24 CFR Part 570.502 regarding cost and auditing requirements. (x) Training Opportunities. The requirements of Section 3 of the Housing and Urban Project Act of 1968, as amended, 12 USC 1701u (“Section 3”), requiring that to the greatest extent feasible opportunities for training and employment be given to lower income residents of the project area and agreements for work in connection with the project be awarded to business concerns which are located in, or owned in substantial part by persons residing in, the areas of the project. Borrower agrees to include the following language in all subcontracts executed under this Agreement:
(1) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Project Act of 1968, as amended, 12 USC 1701u. The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD-assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low- and very low-income persons, particularly persons who are recipients of HUD assistance for housing. (2) The parties to this contract agree to comply with HUD's regulations in 24 CFR Part 135, which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. (3) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers' representative of the contractor's commitments under this Section 3 clause; and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference; shall set forth minimum number and job titles subject to hire; availability of apprenticeship and #8..
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training positions; the qualifications for each; the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. (4) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 CFR Part 135, and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 CFR Part 135. The contractor will not subcontract with any subcontractor where the contractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 CFR Part 135.
(5) The contractor will certify that any vacant employment positions, including training positions, that are filled (1) after the contractor is selected but before the contract is executed, and (2) with persons other than those to whom the regulations of 24 CFR Part 135 require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 CFR Part 135.
(6) Noncompliance with HUD's regulations in 24 CFR Part 135 may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.
(7) With respect to work performed in connection with Section 3 covered Indian housing assistance, section 7(b) of the Indian Self-Determination and Education Assistance Act (25 USC 450e) also applies to the work to be performed under this contract.

Section 7(b) requires that to the greatest extent feasible (i) preference and opportunities for training and employment shall be given to Indians, and (ii) preference in the award of contracts and subcontracts shall be given to Indian organizations and Indian-owned Economic Enterprises.

Parties to this contract that are subject to the provisions of Section 3 and section 7(b) agree to comply with Section 3 to the maximum extent feasible, but not in derogation of compliance with section 7(b).
(xi) Labor Standards. The applicable labor requirements set forth in 24 CFR Section 570.603, as such require compliance with the prevailing wage requirements of the Davis-Bacon Act and implementing rules and regulations (40 USC 3141-3148); the Copeland “AntiKickback” Act (40 USC 276(c)) which requires that workers be paid at least once a week without any deductions or rebates except permissible deductions; the Contract Work Hours and Safety Standards Act – CWHSSA (40 USC 3701-3708) which requires that workers receive “overtime” compensation at a rate of 1-1/2 times their regular hourly wage after they have worked forty (40) hours in one (1) week; and Title 29, Code of Federal Regulations, Subtitle A, Parts 1, 3 and 5 are the regulations and procedures issued by the Secretary of Labor for the administration and enforcement of the Davis-Bacon Act, as amended.
(xii) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 CFR Part 24. (xiii) Anti-Lobbying; Disclosure Requirements. The disclosure requirements and prohibitions of 31 USC 1352 and implementing regulations at 24 CFR Part 87. #8..
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(xiv) Historic Preservation. The Borrower shall comply with the historic preservation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 USC Section 470) and the procedures set forth in 36 CFR Part 800. If archeological, cultural, or historic period resources are discovered during construction, all construction work must come to a halt and Borrower shall immediately notify the City. Borrower shall not shall alter or move the discovered material(s) until all appropriate procedures for “post-review discoveries” set forth in Section 106 of the National Historic Preservation Act have taken place, which include, but are not limited to, consultation with the California State Historic Preservation Officer and evaluation of the discovered material(s) by a qualified professional archeologist. (xv) Faith Based Activities. If applicable, the 24 CFR Section 570.200(j) regarding eligible use of funds by organizations that are religious or faith-based. (xvi) Flood Disaster Protection. This Agreement is subject to the requirements of the Flood Disaster Protection Act of 1973 (P.L. 93-234). No portion of the assistance provided under this Agreement is approved for acquisition or construction purposes as defined under Section 3(a) of said Act, for use in an area identified by HUD as having special flood hazards which is located in a community not then in compliance with the requirements for participation in the national flood insurance program pursuant to Section 201(d) of said Act. The use of any assistance provided under this Agreement for such acquisition or construction in such identified areas in communities then participating in the national flood insurance program shall be subject to the mandatory purchase of flood insurance requirements of Section 102(a) of said Act.

Any contract or Agreement for the sale, lease, or other transfer of land acquired, cleared or improved with assistance provided under this Agreement shall contain certain provisions. These provisions will apply if such land is located in an area identified by HUD as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, 42 USC 4001 et seq. These provisions shall obligate the transferee and its successors or assigns to obtain and maintain, during the ownership of such land, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under -Section 102(s) of the Flood Disaster Protection Act of 1973. Such provisions shall be required notwithstanding the fact that the construction on such land is not itself funded with assistance provided under this Agreement.
(xvii) Program Income. The Borrower shall report monthly, on a monthly basis, all program income as defined at 24 CFR 570.500(a) generated by activities carried out with Loan funds made available under this contract. The use of program income by the Borrower shall comply with the requirements set forth at 24 CFR 570.504. By way of further limitations, the Borrower may use such income during the contract period for activities permitted under this contract, which shall be CDBG-Eligible activities related to the operation of the Project, as mutually agreed upon by the City and Borrower, and shall reduce requests for additional funds by the amount of any such program income balance on hand. All unused program income shall be returned to the City at the end of the contract period. Any interest earned on cash advances from the U.S. Treasury is not program income and shall be remitted promptly to the Grantee. (xviii) Reversion of Assets. Upon expiration of this Agreement, Borrower shall transfer to City any unused Loan funds on hand and any accounts receivable attributable to the use of Loan Funds in accordance with 24 CFR § 570.503(b)(7). #8..
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(xix) HUD Regulations. Any other HUD regulations present or as may be amended, added, or waived in the future pertaining to the Loan funds, including but not limited to HUD regulations as may be promulgated regarding subrecipients.

Section 4.8 Hazardous Materials.
(a) Borrower 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.

Borrower 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 may be customarily used in the construction of projects like the Project or kept and used in and about residential property of this type.
(b) Borrower shall immediately advise the City in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Borrower or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, (“Hazardous Materials Law”); (ii) all claims made or threatened by any third party against Borrower or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as “Hazardous Materials Claims”); and (iii) Borrower'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) The City shall have 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.
(d) Borrower shall indemnify and hold harmless the City and its council 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:
(i) all foreseeable consequential damages; (ii) 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 (iii) all reasonable costs and expenses incurred by the City in connection with clauses (i) and (ii), including but not limited to reasonable attorneys' fees and consultant's fees. This indemnification applies whether or not any government agency has issued #8..
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a cleanup order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Property; (2) loss or restriction of use of rentable space on the Property; (3) adverse effect on the marketing of any rental space on the Property: and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the Property and surrounding properties). This obligation to indemnify shall survive termination of this Agreement.
(e) Without the City's prior written consent, which shall not be unreasonably withheld, Borrower shall 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 the City's reasonable judgment, impair the value of the City's security hereunder; provided, however, that the City's prior consent shall not be 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 the City's consent before taking such action, provided that in such event Borrower shall notify the City as soon as practicable of any action so taken. The City agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) Borrower will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) Borrower establishes to the reasonable satisfaction of the City that there is no reasonable alternative to such remedial action which would result in less impairment of the City's security hereunder; or (iv) the action has been agreed to by the City. (f) Borrower hereby acknowledges and agrees that (i) this Section is intended as the City's written request for information (and Borrower's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Property is intended by the Parties to be an “environmental provision” for purposes of California Code of Civil Procedure Section 736. (g) 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 City's or the trustee's rights and remedies under the Deed of Trust, the City 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 borrower to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the City's right to proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the Borrower shall be deemed to have willfully permitted or acquiesced in a release or threatened release of Hazardous Materials, within the meaning of California Code of #8..
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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 Borrower knew or 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' fees, incurred by the City 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%) and the maximum rate permitted by law, until paid, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the City upon its demand made at any time following the conclusion of such action.

Section 4.9 Maintenance and Damage.
(a) During the course of both construction and operation of the Project, Borrower shall maintain the Property and the Project in good repair and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if Borrower has not cured such condition within thirty (30) days after receiving a City notice of such a condition, then in addition to any other rights available to the City, the City shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property.
(b) Subject to the requirements of Senior Lenders, and if economically feasible in the City's reasonable judgment after consultation with the Borrower, if any improvement now or in the future on the Property is damaged or destroyed, then Borrower shall, to the extent of available insurance proceeds, diligently undertake to repair or restore such improvement consistent with the plans and specifications approved by the City with such changes as have been approved by the City. Such work or repair shall be commenced no later than the later of one hundred twenty (120) days, or such longer period approved by the City in writing, after the damage or loss occurs or thirty (30) days following receipt of the insurance proceeds, and shall be complete within one (1) year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then Borrower shall make up the deficiency. If Borrower does not make repairs, then any insurance proceeds collected for such damage or destruction shall be retained for repayment to Lender, if repayment of the Loan is required under this Agreement, subject to the rights of the Senior Lenders.

Section 4.10 Fees and Taxes.

Borrower shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Project to the extent owned by Borrower, and shall pay such charges prior to delinquency.

However, Borrower shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the City, Borrower deposits with the City any funds or other forms of assurance that the City in good faith from time to time determines appropriate to protect the City from the consequences of the contest being unsuccessful. #8..
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Section 4.11 Notice of Litigation.

Borrower shall promptly notify the City in writing of any litigation which has the potential to materially affect Borrower or the Property and of any claims or disputes that involve a material risk of such litigation.

Section 4.12 Operation of Project.

Promptly after completion of construction, the Borrower shall operate the Project as a youth navigation center that will serve as a service hub providing a continuum of services for young people age 18-25 years old at or below sixty percent (60%) of the median income for Stanislaus County, as defined by HUD, who are experiencing crisis, housing instability, and or/homelessness, as more particularly Described in the project summary attached hereto as Exhibit B.

Section 4.13 Nondiscrimination.
(a) Borrower 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. Borrower 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 group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property or part thereof, nor shall Borrower or any person claiming under or through Borrower 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, subtenants, sublessees or vendees in, of, or for the Property or part thereof. Borrower shall include such provision in all deeds, leases, contracts and other instruments executed by Borrower, and shall enforce the same diligently and in good faith. The foregoing covenant shall run with the land. If and for so long as the Project is assisted with Section 8 Project-based vouchers, the Borrower may apply such tenant selection standards as are permitted under the Section 8 Project-based voucher program regulations.

Section 4.14 Transfer.
(a) For purposes of this Agreement, “Transfer” shall mean any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any rights and/or duties under this Agreement, and/or (ii) any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Project is transferred and Borrower retains title. “Transfer” shall exclude the occupancy of any Unit in the Project by a household in compliance with the Regulatory Agreement. The City Manager is authorized to execute assignment and assumption agreements on behalf of the City to implement any approved Transfer.
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(b) No Transfer shall be permitted without the prior written consent of the City, which the City may withhold in its sole discretion. The Loan shall automatically accelerate and be due in full upon any Transfer made without the prior written consent of the City. (c) The City approves the grant of the security interests described in Section

1.1(c) above.
(d) The term “Transfer” excludes the lease to a qualified tenant of the Property in compliance with the Regulatory Agreement.

Section 4.15 Insurance Requirements.

The Borrower shall maintain the following insurance coverage throughout the Term of the Loan:
(a) Worker's Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident.
(b) Comprehensive General Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations.
(c) Comprehensive Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable. (d) Builders' risk insurance during the course of the construction, and, upon completion of construction, property insurance covering the Project, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations.
(e) Property insurance covering the Property, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the City, naming the City as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations.
(f) Commercial crime insurance covering all officers and employees, for loss of Loan proceeds caused by dishonesty, in an amount not less than the amount of the Loan, naming the City as a Loss Payee, as its interests may appear. (g) The Borrower shall cause any general contractor, agent, or subcontractor working on the Project under direct contract with the Borrower or subcontract to maintain insurance of the types and in at least the minimum amounts described in subsections (a), (b), and #8..
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(c) above, except that the limit of liability for comprehensive general liability insurance for subcontractors shall be One Million Dollars ($1,000,000), and shall require that such insurance shall meet all of the general requirements of subsections (g), (h), and (i) below. (h) The required insurance shall be provided under an occurrence form, and Borrower shall maintain the coverage described in subsections (a) through (d) continuously throughout the Term. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above.
(i) Comprehensive and General Liability and Comprehensive Automobile Liability insurance policies shall be endorsed to name as an additional insured the City and its officers, agents, employees and members of the City Council. (j) All policies and bonds shall contain (i) the agreement of the insurer to give the County at least thirty (30) days' notice prior to cancellation (including, without limitation, for non-payment of premium) or any material change in said policies (ii) an agreement that such policies are primary and non-contributing with any insurance that may be carried by the City; (iii) a provision that no act or omission of the Borrower shall affect or limit the obligation of the insurance carrier to pay the amount of any loss sustained; and (iv) a waiver by the insurer of all rights of subrogation against the City and its authorized parties in connection with any loss or damage thereby insured against.

Section 4.16 Anti-Lobbying Certification.

The Borrower certifies, to the best of Borrower's knowledge or belief, that:
(a) No Federal appropriated funds have been paid or will be paid, by or on behalf of it, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement;
(b) If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying, in accordance with its instructions.

This certification is a material representation of fact upon which reliance was placed when this Agreement was made or entered into. Submission of this certification is a prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less #8..
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than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for such failure.

Section 4.17 Payment of Other Indebtedness; Notice of Defaults. (a) Borrower shall promptly pay the principal and interest when due on any other indebtedness related to the Project.
(b) Borrower shall promptly notify the City in writing of any defaults declared under any other financing for the Project by the lender of such financing.

Section 4.18 Prevailing Wage Requirements. To the extent, and if, required by applicable federal and state laws, rules and regulations, Developer and its contractors and agents shall comply with California Labor Code Section 1720 et seq. and applicable federal labor laws and standards, and the regulations adopted pursuant thereto (“Prevailing Wage Laws”), and shall be responsible for carrying out the requirements of such provisions. Developer shall submit to City a plan for monitoring payment of prevailing wages and shall implement such plan at Developer’s expense.

Developer shall indemnify, defend (with counsel approved by City) and hold the City, and its respective elected and appointed officers, officials, employees, agents, consultants, and contractors (collectively, the “Indemnitees”) harmless from and against 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”) which directly or indirectly, in whole or in part, are caused by, arise in connection with, result from, relate to, or are alleged to be caused by, arise in connection with, or relate to, the payment or requirement of payment of prevailing wages or the requirement of competitive bidding in the construction of the Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with this Agreement, including but not limited to the Prevailing Wage Laws, or any act or omission of Developer related to this Agreement with respect to the payment or requirement of payment of prevailing wages or the requirement of competitive bidding, whether or not any insurance policies shall have been determined to be applicable to any such Claims. It is further agreed that City does not and shall not waive any rights against Developer which they may have by reason of this indemnity and hold harmless agreement because of the acceptance by City, or Developer’s deposit with City of any of the insurance policies described in this Agreement. The provisions of this Section 4.18 shall survive the expiration or earlier termination of this Agreement and the issuance of a Certificate of Completion for the Project. Developer’s indemnification obligations under this Section 4.18 shall not apply to any Claim which arises as a result of an Indemnitee’s gross negligence or willful misconduct.

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5.1 Representations and Warranties.

Borrower hereby represents and warrants to the City as follows:
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(a) Organization. Borrower is a duly formed California non-profit benefit corporation, validly existing and in good standing under the laws of the State of California and has the power and authority to own its property and carry on its business as now being conducted.
(b) Authority of Borrower. Borrower has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of Borrower, and all actions required under Borrower's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken. (d) Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of Borrower enforceable against it in accordance with their respective terms.
(e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on Borrower, or conflict with any provision of the organizational documents of Borrower, or will conflict with or constitute a breach of or a default under any agreement to which Borrower is a party, or will result in the creation or imposition of any lien upon any assets or property of Borrower, other than liens established pursuant hereto. (f) Compliance With Laws; Consents and Approvals. The construction of the Project will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of the fire marshal, health officer, building inspector and other officers of any such government or agency.
(g) Pending Proceedings. Borrower is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting Borrower or the Property, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to Borrower, materially #8..
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affect Borrower's ability to repay the Loan or impair the security to be given to the City pursuant hereto.
(h) Title to Land. At the time of recordation of the Deed of Trust, Borrower will have good and marketable fee title to the Project and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than liens for current real property taxes and liens in favor of the City or approved in writing by the City, including documents associated with the Approved Financing further described in Section

1.1(c) above.
(i) Financial Statements. The financial statements of Borrower and other financial data and information furnished by Borrower to the City fairly and accurately present the information contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of Borrower from that shown by such financial statements and other data and information.
(j) Sufficient Funds. Borrower holds sufficient funds, binding commitments for sufficient funds, and/or access and ability to borrow sufficient funds to complete the acquisition of the Property and the construction of the Project in accordance with the terms of this Agreement.
(k) Taxes. Borrower and its subsidiaries have filed all federal and other material tax returns and reports required to be filed, and have paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against Borrower or any of its subsidiaries that could, if made, be reasonably expected to have a material adverse effect on the Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries, taken as a whole, which would be expected to result in a material impairment of the ability of Borrower to perform under any Loan Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against Borrower of any Loan Document.

ARTICLE 6 DEFAULT AND REMEDIES
Section 6.1 Events of Default.

Each of the following shall constitute a “Default” by Borrower under this Agreement:
(a) Failure to Construct. Failure of Borrower to commence and complete construction of the Project within the times set forth in Article 3 above; (b) Failure to Make Payment. Failure to repay the principal and any interest on the Loan within ten (10) days after receipt of written notice from the City that such payment is due pursuant to the Loan Documents.
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(c) Breach of Covenants. Failure by Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Borrower or, if the breach cannot be cured within thirty (30) days, the Borrower shall not be in breach so long as Borrower is diligently undertaking to cure such breach and such breach is cured within ninety (90) days; provided, however, that if a different period or notice requirement is specified under any other section of this Article 6, the specific provisions shall control.
(d) Default Under Other Loans. A default is declared under any other financing for the Project by the lender of such financing and such default remains uncured following any applicable notice and cure period.
(e) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability company, to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability company, or seeking any arrangement for Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability company, under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability company, in bankruptcy or insolvency or for any of their properties, (iv) directing the winding up or liquidation of Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability company, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) calendar days; or (v) Borrower or Borrower's general partner, if Borrower is a partnership, or Borrower's managing member, if Borrower is a limited liability company, shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note.
(f) Assignment; Attachment. Borrower shall have assigned its assets for the benefit of its creditors 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 ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the City, the indebtedness evidenced by the Note. (g) Suspension; Termination. Borrower shall have voluntarily suspended its business or, if Borrower is a partnership, the partnership shall have been dissolved or terminated, other than a technical termination of the partnership for tax purposes. #8..
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(h) Liens on Property and the Project. There shall be filed any claim of lien (other than liens approved in writing by the City) against the Project or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the City. (i) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Project.
(j) Unauthorized Transfer. Any Transfer other than as permitted by Section 4.14.
(k) Representation or Warranty Incorrect. Any Borrower representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the City in connection with any of the Loan Documents, proving to have been incorrect in any material respect when made. After issuance of the certificates of occupancy for the Project, Default may be declared under this subsection only if the failure of representation or warranty also has a material adverse effect on the operation of the Project.

Section 6.2 Remedies.

The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the City or automatically where so specified, relieve the City of any obligation to make or continue the Loan and shall give the City the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following:
(a) Acceleration of Note. The City shall have the right to cause all indebtedness of the Borrower to the City under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. The Borrower waives all right to presentment, demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the City as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. The Borrower shall be liable to pay the City on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney's fees and expenses) paid or incurred by the City in connection with the collection of the Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Loan.
(b) Specific Performance. The City shall have the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents.
(c) Right to Cure at Borrower's Expense. The City shall have the right (but not the obligation) to cure any monetary default by Borrower under a loan other than the Loan.

The Borrower agrees to reimburse the City for any funds advanced by the City to cure a #8..
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monetary default by Borrower upon demand therefor, together with interest thereon at the lesser of the maximum rate permitted by law and ten percent (10%) per annum (the “Default Rate”) from the date of expenditure until the date of reimbursement.

Section 6.3 Right of Contest.

Borrower shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder.

Section 6.4 Remedies Cumulative.

No right, power, or remedy given to the City by the terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Borrower and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.

ARTICLE 7 GENERAL PROVISIONS
Section 7.1 Relationship of Parties.

Nothing contained in this Agreement shall be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the City and Borrower or its agents, employees or contractors, and Borrower shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Borrower has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the construction and operation of the Project, Borrower shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. Borrower shall be solely responsible for its own acts and those of its agents and employees.

Section 7.2 No Claims.

Nothing contained in this Agreement shall create or justify any claim against the City by any person that Borrower may have employed or with whom Borrower may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the construction or #8..
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operation of the Project, and Borrower shall include similar requirements in any contracts entered into for the construction or operation of the Project.

Section 7.3 Amendments.

No alteration or variation of the terms of this Agreement shall be valid unless made in writing by the Parties. The City Manager is authorized to execute on behalf of the City amendments to the Loan Documents or amended and restated Loan Documents as long as any material change in the amount or terms of this Agreement is approved by the City Council, or in the event the amounts or terms of financing provided by other parties for the Project is revised, requiring conforming amendments to the Loan Documents.

Section 7.4 Indemnification.

The Borrower shall indemnify, defend and hold the City harmless against any and all claims, suits, actions, losses and liability of every kind, nature and description made against it and expenses (including reasonable attorneys' fees) which arise out of or in connection with this Agreement, including but not limited to the purchase of the Property, development, construction, marketing and operation of the Project, except to the extent such claim arises from the grossly negligent or willful misconduct of the City, its agents, and its employees. The provisions of this Section shall survive the expiration of the Term and the reconveyance of the Deed of Trust.

Section 7.5 Non-Liability of City Officials, Employees and Agents.

No member, official, employee or agent of the City shall be personally liable to Borrower in the event of any default or breach by the City or for any amount which may become due to Borrower or its successor or on any obligation under the terms of this Agreement.

Section 7.6 No Third Party Beneficiaries.

There shall be no third party beneficiaries to this Agreement.

Section 7.7 Discretion Retained By City.

The City's execution of this Agreement in no way limits the discretion of the City in the permit and approval process in connection with development of the Project.

Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in Section 7.8(b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person's tenure. Borrower shall exercise due diligence to ensure that the prohibition in this Section 7.8(a) is followed.
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(b) The conflict of interest provisions of Section 7.8(a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the City, or any person related within the third (3rd) degree of such person.
(c) In accordance with Government Code Section 1090 and the Political Reform Act, Government Code section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of the Borrower, or immediate family member of any of the preceding, shall make or participate in a decision, made by the City or a City board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Borrower. Interpretation of this section shall be governed by the definitions and provisions used in the Political Reform Act, Government Code Section 87100 et seq., its implementing regulations manual and codes, and Government Code Section 1090. (d) The Borrower shall comply with the conflict of interest provisions set forth in 24 CFR Section 570.611.

Section 7.9 Notices, Demands and Communications.

Formal notices, demands, and communications between the Parties shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows:

City: City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager
Borrower: Center for Human Services
2000 W. Briggsmore Avenue, Ste. 1
Modesto, CA 95350
Attn: Executive Director
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).

Section 7.10 Applicable Law.

This Agreement shall be governed by and construed in accordance with California law. #8..
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Section 7.11 Parties Bound.

Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, executors, administrators, legal representatives, successors, and assigns. This Agreement is intended to run with the land and shall bind Borrower and its successors and assigns in the Property and the Project for the entire Term, and the benefit hereof shall inure to the benefit of the City and its successors and assigns.

Section 7.12 Attorneys' Fees.

If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party.

Section 7.13 Severability.

If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.

Section 7.14 Force Majeure.

In addition to specific provisions of this Agreement, performance by either Party shall not be deemed to be in Default where delays or defaults are due to war, insurrection, strikes, lockouts, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, lack of transportation, or court order. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) days of receipt of the notice. In no event shall the City be required to agree to cumulative delays in excess of one hundred eighty (180) days.

Section 7.15 City Approval.

The City has authorized the City Manager to execute the Loan Documents and deliver such approvals or consents as are required by this Agreement, and to execute estoppel certificates concerning the status of the Loan and the existence of Borrower defaults under the Loan Documents. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies. The City shall not unreasonably delay in reviewing and approving or disapproving any proposal by Borrower made in connection with this Agreement.

Section 7.16 Waivers.

Any waiver by the City of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the City to take action on any breach or default of Borrower or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to Borrower to perform any obligation under this #8..
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Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the City to any act or omission by Borrower shall not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City's written consent to future waivers.

Section 7.17 Title of Parts and Sections.

Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions.

Section 7.18 Entire Understanding of the Parties
This Agreement, together with the Loan Documents executed in connection with the Loan, constitutes the entire understanding and agreement of the Parties with respect to the Loan.

Section 7.19 Multiple Originals; Counterpart.

This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
[Signature Page Follows]
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WHEREAS, this Agreement has been entered into by the undersigned as of the date first above written.

STANISLAUS EQUITY PARTNERS:

By: ________________________________

Title: ________________________________

CITY OF MODESTO
By: _______________________________
Joseph P. Lopez, City Manager
ATTEST:

By:

Dana Sanchez, Interim City Clerk
(SEAL)

APPROVED AS TO LEGAL FORM
Jose M. Sanchez, City Attorney
By: _______________________________
Jose M. Sanchez, City Attorney
APPROVED AS TO RISK MANAGEMENT:

By:

Name: __________________________
Risk Manager
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EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
The land is situated in the State of California, County of Stanislaus, City of Modesto, and is described as follows:
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2 EXHIBIT B

PROJECT SUMMARY
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EXHIBIT C

APPROVED PROJECT BUDGET
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EXHIBIT D

FEDERAL AWARD IDENTIFICATION INFORMATION
i) Participant’s name:
ii) Participant’s DUNS:
iii) Federal Award Identification Number (FAIN):
iv) Federal Award Date:
v) Subaward Period of Performance Start and End Date:
vi) Amount of Federal Funds Obligated by this action by the CITY entity to the Participant:
vii) Total Amount of Federal Funds Obligated to the Participant by the CITY including the current obligation:
viii) Total Amount of the Federal Award committed to the Participant by the CITY:
ix) Federal award project description, as required to be responsive to the Federal Funding Accountability and Transparency Act (FFATA):
x) Name of Federal awarding agency:
xi) Contact information for CITY official responsible for awarding funding:
xii) CFDA Number and Name:
xiii) Identification of whether the award is R&D:
xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged per 24 CFR 200.414 Indirect (F&A) costs):
3336859.2
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3337561.2

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

City of Modesto
1010 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Jessica Narayan - CEDD
No fee for recording pursuant to
Government Code Section 27383
__________________________________________________________________________ APN: 107-008-015

REGULATORY AGREEMENT AND

DECLARATION OF RESTRICTIVE COVENANTS
(112 James Street)
This Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into as of ________ __, 2022, by and between the City of Modesto, a California charter city (the “City”) and Stanislaus Equity Partners, a California non-profit corporation (the “Borrower”). City and Borrower are collectively referred to herein as the “Parties.”

RECITALS

1. City and Borrower have entered into certain loan agreement pursuant to which the City loaned to Borrower Two Hundred Thousand Dollars ($200,000) (the “Loan”).

2. The Loan are funded with Community Development Block Grant (“CDBG”) funds received by the City from HUD pursuant to Title I of the Housing and Community Development Act of 1974.

3. The Borrower owns certain property located in the City of Modesto, California, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”).

4. The Recipient has proposed to develop permanent supportive housing units that will serve persons with serious mental illness who are at risk of homelessness, at risk for involuntary inpatient hospitalization, or at risk for incarceration, and who have household incomes at or below sixty percent (60%) of the median income for Stanislaus County, as defined by HUD, who are experiencing crisis, housing instability, and or/homelessness, as more particularly Described in the project summary attached hereto as Exhibit B and incorporated herein by this reference (the “Project”); and
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5. In consideration of receipt of the Loan, the Borrower agrees to observe all the terms and conditions set forth in this Agreement.

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 1

DEFINITIONS

1.1 Definitions.

When used in this Agreement, the following terms shall have the respective meanings assigned to them in this Article 1:
(a) “Agreement” means this Regulatory Agreement and Declaration of Restrictive Covenants.
(b) “Borrower” means Center for Human Services, a California non-profit corporation.
(c) “CDBG” means the Community Development Block Grant program under Title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et. seq.), as amended.
(d) “CDBG Regulations” means the statutory and regulatory provisions that govern the CDBG program under Title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et. seq.), as amended including 24 C.F.R. Part 570 et seq. (e) “Certificate of Occupancy Date” means after completion of the renovation work funded by the Loan, the date of issuance of a Certificate of Occupancy for the Property.
(f) “Deed of Trust” means the deed of trust dated of even date herewith in favor of the City to be recorded on the Property and which secures repayment of the Loan and the performance the terms and conditions of the Note and this Agreement. (g) “City” means the City of Modesto.
(h) “Development” means the Property, as well as any improvements, and all landscaping, roads and parking spaces existing thereon, as the same may from time to time exist. (i) “Grant” means all funds granted to the Borrower by the City pursuant to the Grant Agreement.
(j) “Grant Agreement” means the Loan Agreement between Borrower and City, dated of even date herewith, evidencing the Loan. #8..
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(k) “HUD” means the United States Department of Housing and Urban Development.
(l) “Loan” means all funds loaned to the Borrower by the City pursuant to the Note.
(m) “Loan Agreement” means the Loan Agreement between Borrower and City, dated of even date herewith, evidencing the Loan. (n) “Median Income” means the median gross yearly income, adjusted for Actual Household Size as specified herein, in Stanislaus County, California, as published from time to time by HUD. In the event that such income determinations are no longer published, or are not updated for a period of at least eighteen (18) months, the City shall provide the Borrower with other income determinations which are reasonably similar with respect to methods of calculation to those previously published by HUD.
(o) “Note” means the promissory note in the amount of One Hundred and Sixty Thousand Dollars ($160,000) executed by the Borrower to the City evidencing the Loan, dated ___________, 2022.
(p) “Official Records” means the official land records of the County of Stanislaus, California
(q) “Property” means the property described in the attached Exhibit A. (r) “Term” means the term of this Agreement, which shall commence on the date of this Agreement and shall expire thirty (30) years from the date a certificate of occupancy is issued for the Development, but in no event later than December 31, 2051.

ARTICLE 2

OPERATION OF PROJECT

2.1 Permitted Use.

The Property shall be used to develop the Project, as more particularly described int the Loan Agreement, along with other compatible and related uses, such as office space for Borrower. The Property shall not be used for any other purpose without the prior written consent of the City.

2.2 Compliance with Note and Deed of Trust.

Borrower shall comply with all the terms and provisions of the Loan Agreement, Grant Agreement, the Note and Deed of Trust.

2.3 Fair Housing.
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The Property shall be operated at all times in compliance with the provisions of: (i) the Unruh Act; (ii) the California Fair Employment and Housing Act, (iii) Section 504 of the Rehabilitation Act of 1973; (iv) the United States Fair Housing Act, as amended, and (v) any other applicable law or regulation (including the Americans With Disabilities Act, to the extent applicable to the Property). Borrower agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to City) City, and its council members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Borrower's failure to comply with applicable legal requirements related to housing for persons with disabilities. The provisions of this subsection shall survive expiration of the Term or other termination of this Agreement, and shall remain in full force and effect.

ARTICLE 3

REPORTING

3.1 Annual Report to City.

Borrower shall submit to the City annual reports in a form approved by the City, no later than sixty (60) days after the end of Borrower's fiscal year. The reports shall contain such information as the City may require, including, but not limited to, the following:
(a) A statistical report regarding the individuals served at the Project. (b) A statement of the fiscal condition of the Property, including a financial statement indicating surpluses or deficits in operating accounts, a detailed itemized listing of income and expenses, and the amounts of any fiscal reserves. The report due after the end of each fiscal year shall contain an audited version of this statement. Such audit shall be prepared in accordance with the requirements of the City and certified at the Property's expense by an independent Certified Public Accountant licensed by the State of California. The Borrower shall also follow audit requirements of the Single Audit Act and OMB Circular A-122 and 110. (c) The substantial physical defects in the Property, if any, including a description of any major repair or maintenance work undertaken in the reporting period.

Within fifteen (15) days after receipt of a written request from the City, Borrower shall also submit, any other information or completed forms requested by the City in order to comply with reporting requirements of HUD (provided, however, that the Borrower shall in no event be obligated to provide any information that it cannot legally obtain as a housing provider), the State of California or any other government entity or lender to Borrower.

3.2 Additional Information.

The Borrower shall provide any additional information reasonably requested by the City.

The City shall have the right to examine and make copies of all books, records or other documents of the Borrower that pertain to the Property. #8..
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3.3 Records.

The Borrower shall maintain complete, accurate and current records pertaining to the Property and all those records set forth in the Loan Agreement, and shall permit any duly authorized representative of the City to inspect records. The Borrower 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.

3.4 On-site Inspection.

The City shall have the right to perform an on-site inspection of the Project, when deemed necessary by the City, at least one time per year. The Borrower agrees to cooperate in such inspection and request tenants cooperate with such inspections.

ARTICLE 4
TAXES

4.1 Taxes and Assessments.

Borrower 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 Borrower shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Borrower exercises its right to contest any tax, assessment, or charge against it, Borrower, 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.

4.2 Property Tax Exemption.

Borrower shall not apply for a property tax exemption for the Property under any provision of law except California Revenue and Taxation Section 214(g), without the prior written consent of the City.

ARTICLE 5

PROPERTY MANAGEMENT AND MAINTENANCE

5.1 Management Responsibilities.

The Borrower is responsible for all management functions with respect to the Property, including without limitation maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The City shall have no responsibility over management of the Property or the Project. Borrower may retain a professional property #8..
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management company approved by the City in its reasonable discretion to perform its management duties hereunder (“Management Agent”).

5.2 Management Agent; Periodic Reports.

The Borrower shall submit for the City's approval the identity of any proposed Management Agent and if applicable, the management agreement between Borrower and the Management Agent (the “Management Agreement”). The Borrower 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 approve the proposed management agent by notifying the Borrower in writing. Unless the proposed management agent and proposed management agreement is disapproved by the City within thirty (30) days, which disapproval shall state with reasonable specificity the basis for disapproval, it shall be deemed approved.

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 Property. The purpose of each periodic review will be to enable the City to determine if the Property is being operated and managed in accordance with the requirements and standards of this Agreement.

The Borrower shall cooperate with the City in such reviews.

5.4 Replacement of Management Agent.

If, as a result of a periodic review, the City determines in its reasonable judgment that the Property is not being operated and managed in accordance with any of the material requirements and standards of this Agreement, or, if applicable, the Management Agreement, the City shall deliver notice to Borrower of its determination that the Property does not satisfy the requirements of this Agreement, such notice may include a request to cause replacement of the Management Agent, including the reasons therefor. Within fifteen (15) days after receipt by Borrower of such written notice, City staff and the Borrower shall meet in good faith to consider methods for improving the financial and operating status of the Property, including, without limitation, replacement of the Management Agent.

5.5 Property Maintenance.

The Borrower agrees, for the entire Term of this Agreement, to maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials, and in accordance with the maintenance conditions in this Section. #8..
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The Borrower shall, for the entire Term of this Agreement, maintain all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition) and in accordance with 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 accordance with the following maintenance conditions:
(a) Landscaping. The Borrower shall have landscape maintenance performed on a regular basis, including replacement of dead or diseased plants with comparable plants.

Borrower agrees to adequately water the landscaping on the Property. No improperly maintained landscaping on the Property is to be visible from public streets and/or rights of way; (b) Yard Area. Borrower shall not leave any yard areas on the Property unmaintained, including:
(1) broken or discarded furniture, appliances and other, household equipment stored in yard areas for a period exceeding one (1) week; (2) packing boxes, lumber trash, dirt and other debris in areas visible from public property or neighboring properties; and
(3) vehicles parked or stored in other than approved parking areas. (c) Building. The Borrower shall not leave any buildings located on the Property in an unmaintained condition so that any of the following exist:
(1) violations of state law, uniform codes, or City ordinances; (2) conditions that constitute an unsightly appearance that detracts from the aesthetics or value of the Property or constitutes a private or public nuisance; (3) broken windows;
(4) graffiti (must be removed within 72 hours); and
(5) conditions constituting hazards and/or inviting trespassers, or malicious mischief.
(d) Sidewalks. The Borrower shall maintain, repair, and replace as necessary all public sidewalks adjacent to the Development.

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 Property will be acceptable to the City assuming the Borrower agrees to provide all necessary improvements to #8..
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assure the Property is maintained in good condition. The Borrower shall make all repairs and replacements necessary to keep the improvements in good condition and repair.

In the event that the Borrower breaches any of the covenants contained in this Section and such default continues for a period of seven (7) 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, shall have 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 shall be permitted (but is not required) to enter upon the Property and 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, including a ten percent (10%) administrative charge, which amount shall be promptly paid by the Borrower to the City upon demand.
(e) Safety Conditions. The Borrower acknowledges that the City places a prime importance on the security of City-assisted projects and the safety of the residents and surrounding community. The Borrower shall implement and maintain throughout the Term the following security measures in the Development:
(1) to the extent feasible employ defensible space design principles and crime prevention measures in the operation of the Development including, but not limited to, maintaining adequate lighting in parking areas and pathways; (2) use its best efforts to work with the City Police Department to implement and operate an effective neighborhood watch program; and (3) provide added security including dead-bolt locks for every entry door, and where entry doors are damaged, replace them with solid-core doors. (f) The City shall have the right to enter on the Property and/or contact the City Police Department if it becomes aware of, or is notified of, any conditions that pose a danger to the peace, health, welfare or safety of the Tenants and/or the surrounding community, and to perform, or cause to be performed, such acts as are necessary to correct the condition.

ARTICLE 6

MISCELLANEOUS

6.1 Nondiscrimination.
(a) The Property shall be operated at all times in compliance with the provisions of: (i) the Unruh Act; (ii) the California Fair Employment and Housing Act; (iii) Section 504 of the Rehabilitation Act of 1973; (iv) the Fair Housing Act, as amended; and (v) any other applicable law or regulation (including the Americans With Disabilities Act, to the #8..
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extent applicable to the Property). Borrower shall agree to indemnify, protect, hold harmless and defend (with counsel reasonably satisfactory to City) City, and its board members, officers and employees, from all suits, actions, claims, causes of action, costs, demands, judgments and liens arising out of Borrower'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 Agreement, and remain in full force and effect.

6.2 Term.

The terms of this Agreement shall expire thirty (30) years from the date a certificate of occupancy is issued for the Development, but in no event later than December 31, 2051. The provisions of this Agreement shall apply to the Property for the entire Term even if the Loan is paid in full prior to the end of the Term. This Agreement shall bind any successor, heir or assign of the Borrower, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by the City. The City makes the Loan on the condition, and in consideration of, this provision, and would not do so otherwise.

6.3 Compliance with Program Requirements.

Borrower actions with respect to the Property shall at all times be in full conformity with:
(i) all requirements of the Loan Agreement all requirements imposed on projects assisted under the CDBG Program as contained in the CDBG Regulations and other implementing rules and regulations. Without limiting the forgoing, Borrower, and Borrower's employees, agents, officers, and board members shall comply with the conflict of interest requirements set forth in 24 CFR 611.

6.4 Covenants to Run With the Land.

The City and the Borrower hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall run with the land, and shall bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof, shall be held conclusively to have been executed, delivered and accepted subject to such 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 Agreement. Notwithstanding the automatic expiration of this Agreement set forth above, upon the expiration of the Term, the Parties hereby agree to execute and record in the Official Records such document(s) as may be necessary to evidence the termination and release of this Agreement as an encumbrance against the Property.

6.5 Enforcement by the City.

Subject to the notice and cure rights of Borrower's limited partner set forth in the Loan Agreement, if the Borrower fails to perform any obligation under this Agreement, and fails to cure the default within thirty (30) days after the City has notified the Borrower in writing of the #8..
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default or, if the default cannot be cured within thirty (30) days, failed to commence to cure within thirty (30) days and thereafter diligently pursue such cure and complete such cure within ninety (90) days, the City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law:
(a) Calling the Loan. The City may declare a default under the Loan Agreement, declare a default under the Loan Agreement, accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the City Deed of Trust. City and Borrower agree and acknowledge that the enforcement by the City of Borrower's obligation to repay the Grant shall in no event constitute the collection of, or enforcement of, monetary damages. (b) Action to Compel Performance or for Damages. The City may bring an action at law or in equity to compel the Borrower's performance of its obligations under this Agreement, for damages, or for injunctive relief.
(c) Remedies Provided Under Note or Deed of Trust. The City may exercise any other remedy provided under the Note or Deed of Trust. (d) Special Remedy for Breach of Use Requirement. Pursuant to 24 C.F.R. 570.503(b)(7)(ii), if Borrower substantially changes the use of the Property to a use that fails to meet a national objective as defined in 24 C.F.R 570.208, City may require Borrower to pay to City the fair market value of the Property based on an appraisal. Such appraisal shall be performed by an appraiser selected by the City and shall take into consideration the Borrower's new use of the Property (that is not permitted by this Agreement). Funds recovered from Borrower pursuant to this subsection shall be credited: (1) by the City against any remaining amount of the CDBG Grant.

6.6 Attorneys Fees and Costs.

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

6.7 Recording and Filing.

The City and the Borrower shall cause this Agreement, and all amendments and supplements to it, to be recorded in the Official Records.

6.8 Governing Law.

This Agreement shall be governed by the laws of the State of California.

6.9 Waiver of Requirements.
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Any of the requirements of this Agreement may be expressly waived by the City in writing, but no waiver by the City of any requirement of this Agreement shall, or shall be deemed to, extend to or affect any other provision of this Agreement.

6.10 Amendments.

This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the Official Records.

6.11 Notices.

Any notice requirement set forth herein shall 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 10th Street
P. O. Box 642
Modesto, CA 95353
Attention: Community Development Manager
Borrower: Stanislaus Equity Partners
Attn: Executive Director
Such addresses may be changed by notice to the other party given in the same manner as provided above.

6.12 Severability.

If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby.

6.13 Multiple Originals; Counterparts.

This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.

6.14 Revival of Agreement after Foreclosure.

This Agreement shall be revived according to its original terms if, during the original Term, the Borrower of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former Borrower or those with whom the former Borrower has or had family or business ties, obtains an ownership interest in the Property or Project. #8..
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6.15 Indemnification.

Borrower shall indemnify, defend and hold the City harmless against all claims made against it and expenses (including reasonable attorneys' fees) which arise out of or in connection with the development, construction, marketing and operation of the Property, except to the extent such claim arises from the grossly negligent or willful misconduct of the City, its agents, and its employees. The provisions of this Section shall survive the expiration of the Term and the reconveyance of the City Deed of Trust.

6.16 Encumbrances.

Borrower shall not encumber the Property, including the granting of commercial leases, or permit the conveyance, transfer or encumbrance of such Property (except by qualified tenants) or to allow the placement of any liens, notes or deeds or use the Property as security for a note or loan except: (i) with the written consent of the City or (ii) upon a sale or transfer of the Property in accordance with the terms of this Regulatory Agreement.

6.17 Subordination Agreement.

If necessary to secure other financing, City may subordinate this Agreement, resulting in this Agreement becoming subject to and of lower priority than the lien of some other security instrument, subject to the conditions to subordination in Section 2.5 of the Loan Agreement.

6.18 Notice of Litigation.

Borrower shall promptly notify the City in writing of any litigation materially affecting Borrower or the Property and of any claims or disputes that involve a material risk of such litigation.

6.19 CDBG Funds.

Upon the expiration of the Agreement, the Borrower shall transfer to the City any remaining CDBG funds and any accounts receivable attributable to the use of CDBG funds. [Signature Pages Follow]
[SIGNATURES MUST BE NOTARIZED]
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333756.1
IN WITNESS WHEREOF, the City and the Borrower have executed this Agreement by duly authorized representatives, all on the date first written above.

STANISLAUS EQUITY PARTNERS:

By:________________________________

Title: ________________________________

CITY OF MODESTO
By: _______________________________
Joseph P. Lopez, City Manager
Date: ______________________________
ATTEST:

By:

Dana Sanchez, Interim City Clerk
Date: _______________________________
(SEAL)

APPROVED AS TO LEGAL FORM
By: _______________________________
Jose M. Sanchez, City Attorney
Date:_______________________________
APPROVED AS TO RISK MANAGEMENT:

By:

Name: __________________________
Risk Manager
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333756.1
Date: _______________________________

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_____________________________
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1669\01\1593246.2 B-1
Exhibit A
Legal Description of the Property
The land is situated in the City of Modesto, County of Stanislaus, State of California, and is described as follows:
3337561.3
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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: 107-008-015 Space above this line for Recorder’s use.

DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is entered into as of ______________, 2022, by Stanislaus Equity Partners, a California non-profit public benefit corporation (“Trustor”) to First American Title Company as trustee (“Trustee”), for the benefit of the City of Modesto, a California charter city (“Beneficiary”).

RECITALS
A. Trustor owns fee simple title to the land located at 112 James Street, Modesto, California, known as Stanislaus County Assessor’s Parcel Number 107-008-015, as more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”). Trustor intends to develop a youth navigation center on the Property that will serve as a service hub providing a continuum of services for young people (the “Project”).

B. Beneficiary and Trustor have entered into a Loan Agreement dated as of ____________, 2022 (the “Loan Agreement”) pursuant to which Beneficiary will provide a loan to Trustor in the amount of up to Two Hundred Thousand Dollars ($200,000) (“Loan”) for the purpose of partially financing the acquisition of the Property. 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 Loan.

C. As a condition precedent to the making of the 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 Loan Agreement and the other City 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 #8..
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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”);
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, #8..
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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 Loan Agreement, the Grant Agreement, the Regulatory Agreement 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 City 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, 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 #8..
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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 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. #8..
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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 City 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 Obligations or the City 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 City 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 #8..
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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 City 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 City Documents.

7.4 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if any Transfer (as defined in the Loan Agreement) of the Property, any part thereof or any interest therein occurs in violation of the requirements of the City 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 City 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 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 #8..
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the requirements set forth in the City 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 City 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 City 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 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. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has #8..
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disclosed to Beneficiary all information, records, and studies in Trustor’s possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials.

Trustor shall not cause or permit any Hazardous Material (as defined in Section 9.3 of the Loan Agreement) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in the construction and operation of residential developments in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below).

Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, “Indemnitees”) harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually “Claim” and collectively “Claims”) arising in connection with the breach of Trustor’s covenants and obligations set forth in this Section 7.10 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources.

Without limiting the generality of the foregoing, Trustor shall, at Trustor’s own cost and expense, do all of the following:
a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without limitation outof-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding.

Trustor’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any City Document; (ii) any extensions of time #8..
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for performance required by any City Document; (iii) any provision in any of the City Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any City Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any City Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary’s failure to properly perfect any lien or security interest given as security for the Secured Obligations.

The provisions of this Section 7.10 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the City Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust.

Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.10 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the “Environmental Provisions”), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure (“Section 736”) for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. “Environmental Law” 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 any Hazardous Material (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 #8..
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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 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.

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 #8..
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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 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 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 City 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 #8..
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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

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; #8..
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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;
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 Loan Agreement; d. Trustor fails to maintain the insurance coverage required under the City 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 #8..
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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 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.
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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 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 City 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 #8..
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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 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.
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10. Miscellaneous Provisions.

10.1 Additional Provisions. The City Documents grant further rights to Beneficiary 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: Stanislaus Equity Partners
Attn: Executive Director
Trustee:

10.3 Binding on Successors. The terms, covenants and conditions of this Deed of #8..
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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 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 City 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 #8..
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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 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.

Stanislaus Equity Partners,
a California non-profit benefit corporation
By: ________________________________

Title: ________________________________
SIGNATURES MUST BE NOTARIZED.
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Exhibit A
LAND
(Attach legal description.)
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3336861.2 21

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_____________________________
3336861.3
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Secured Promissory Note