Section 4.03 Independent Contractor. In performing this Acquisition Agreement, the Owner is an independent contractor and not the agent or employee of the City or the CFD.
Neither the City nor the CFD shall be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of the Owner.
Section 4.04 Performance and Payment Bonds. The Owner agrees to comply with all applicable performance and payment bonding requirements of the City (and other applicable public entities and/or public utilities) and the California Public Contracts Code with respect to the construction of the City Facilities to be constructed by Owner, acquired by City and funded with the Funding Sources.
Section 4.05 Contracts and Change Orders. The Owner shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as “change orders”) required for the construction of the City Facilities to be constructed by Owner, acquired by City and funded with the Funding Sources, and all such contracts and supplemental agreements shall be submitted to the Director. Prior approval of supplemental agreements by the Director shall only be required for such change orders which in any way materially alter the quality or character of the subject City Facilities, or which involve an amount equal to the greater of ten percent (10%) of the amount of the bid for the Discrete Component involved or $50,000 for supplemental agreements entered into subsequent to the date of this Acquisition Agreement.
The City expects that such contracts and supplemental agreements needing prior approval by the Director will be approved or denied (any such denial to be in writing, stating the reasons for denial and the actions, if any that can be taken to obtain later approval) within fifteen (15) Business Days of receipt by the Director thereof.
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Section 4.06 Time for Completion. The Owner agrees that this Acquisition Agreement is for the benefit of the City and the Owner and, therefore, the Owner represents that it expects that the City Facilities to be constructed by Owner, acquired by City and funded with proceeds of a series of Bonds will be completed and the payment request for such City Facilities submitted within thirty-six (36) calendar months from the date of the closing of such series of Bonds. Any failure to complete such City Facilities within said time period shall not, however, in itself, constitute a breach by the Owner of the terms of this Acquisition Agreement.
The Owner agrees to use its good faith efforts to complete all City Facilities to be constructed by Owner, acquired by City and funded with proceeds of a series of Bonds within thirty-six (36) calendar months from the date of closing of such series of Bonds.
ARTICLE V.
ACQUISITION AND PAYMENT
Section 5.01 Inspection. The City’s inspector shall conduct its inspection within fifteen (15) Business Days following notice from the Owner to the City that the construction of each City Facility or Discrete Component thereof to be acquired with the Funding Sources is complete. Upon the City inspector’s determination that construction of the City Facility or Discrete Component thereof has been completed in accordance with the Plans, the City shall immediately notify Owner in writing that the construction of such City Facility or Discrete Component thereof has been satisfactorily completed. No payment hereunder shall be made by the City to the Owner for a City Facility or Discrete Component thereof until the City Facility or Discrete Component thereof has been inspected and found to be completed in accordance with the approved Plans by the City or other applicable public entity or utility. The City shall make or cause to be made periodic site inspections of the City Facilities to be constructed by Owner and acquired by City with the Funding Sources; provided that in no event shall the City incur any liability for any delay in the inspection of any City Facilities or Discrete Components. For City Facilities to be constructed by Owner, acquired by other public entities or utilities and funded with proceeds of the Bonds, the Owner shall be responsible for obtaining such inspections and providing written evidence thereof to the CFD. The reasonable costs incurred by the City in inspecting and approving the City Facilities to be constructed by Owner, acquired by City and funded with the Funding Sources and all related permit and other similar fees of the City applicable to construction of such City Facilities shall be paid by Owner or, at the election of the City, from the Funding Sources.
Section 5.02 Acquisition of City Facilities. Upon completion of a City Facility to be constructed by Owner, and funded with the Funding Sources, Owner hereby agrees to sell the City Facility to the City (or other applicable public agency that will own such City Facility), and the City hereby agrees to use the Funding Sources to pay the Purchase Prices thereof to the Owner, subject to the terms and conditions hereof. The City shall not be obligated to purchase any City Facility until the City Facility is completed and the Acceptance Date for such City Facility has occurred; provided that the City has agreed hereunder to make payments to the Owner for Discrete Components of City Facilities. The Owner acknowledges that the Discrete Components have been identified for payment purposes only, and that the City (or other applicable public agency that will own a City Facility) shall not accept a City Facility of which a Discrete Component is a part until the entire City Facility has been completed. The City 2047
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acknowledges that the Discrete Components do not have to be accepted by the City (or other applicable public agency that will own a City Facility) as a condition precedent to the payment of the Purchase Price therefor, but the City shall not be obligated to make such payment until the Discrete Component has been Substantially Completed. In any event, the City shall not be obligated to pay the Purchase Price for any City Facility or Discrete Component except from the Funding Sources.
Section 5.03 Payment Requests. In order to receive the Purchase Price for a City Facility or Discrete Component thereof, inspection thereof under Section 5.01 shall have been made and the Owner shall deliver to the Director: (i) a Payment Request in the form of Exhibit “C” hereto for such City Facility or Discrete Component thereof, together with all supporting documentation evidencing the Actual Costs of the City Facility or Discrete Component thereof; (ii) if payment is requested for a completed City Facility, (a) if the property on which the City Facility is located is not owned by the City at the time of the request, a copy of the recorded documents conveying to the City Acceptable Title to the real property on, in or over which such City Facility is located, as described in Section 6.01 hereof, (b) a copy of the recorded notice of completion of such City Facility (if applicable), (c) to the extent paid for with the proceeds of the Bonds, an assignment to the CFD of any reimbursements that may be payable with respect to the City Facility, such as public or private utility reimbursements, and (d) an assignment of the warranties and guaranties for such City Facility, as described in Section 6.05 hereof, in a form acceptable to the City; and (iii) if reimbursement is requested for City Fees advanced by a third party builder, proof acceptable to the City of the assignment of such reimbursement to the Owner.
Section 5.04 Processing Payment Requests. Upon receipt of a Payment Request (including all accompanying supporting documentation evidencing the Actual Costs), the Director shall conduct a review in order to confirm that such request is complete, that such City Facility or Discrete Component thereof and identified therein was constructed in accordance with the Plans therefor, and to verify and approve the Actual Cost of such Discrete Component or City Facility specified in such Payment Request. The Director shall also conduct such review as is required in his discretion to confirm the matters certified in the Payment Request. The Owner agrees to cooperate with the Director in conducting each such review and to provide the Director with such additional information and documentation as is reasonably necessary for the Director to conclude each such review. For any City Facilities to be acquired by a utility, the Owner shall provide evidence acceptable to the Director that such City Facilities are acceptable to such utility. Within fifteen (15) Business Days of receipt of any Payment Request, the Director shall review the request for completeness and notify the Owner whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the Director shall provide a written approval or denial (specifying the reason for any denial) of the request within 30 calendar days of its submittal. If a Payment Request seeking reimbursement for more than one City Facility or Discrete Component is denied, the Director shall state whether the Payment Request is nevertheless approved and complete for any one or more City Facilities or Discrete Components and any such City Facilities or Discrete Components shall be processed for payment under Section 5.05 notwithstanding such partial denial.
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Section 5.05 Payment. Upon approval of the Payment Request by the Director, the Director shall sign the Payment Request and forward the same to the City finance department of the City. Upon receipt of the reviewed and fully signed Payment Request, the City finance department shall, within fifteen (15) Business Days of receipt of the approved Payment Request, cause the same to be paid by the Fiscal Agent under the applicable provisions of the Fiscal Agent Agreement, to the extent of the Funding Sources. Any approved Payment Request not paid due to an insufficiency of Funding Sources, shall be paid promptly following the deposit of additional Funding Sources.
The Purchase Price paid hereunder for any City Facility or Discrete Component (in any number of installments as Funding Sources become available) shall constitute payment in full for such City Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such City Facility or Discrete Component, as specified in the Plans.
Section 5.06 Restrictions on Payments. Notwithstanding any other provisions of this Acquisition Agreement, the following restrictions shall apply to any payments made to the Owner under Sections 5.02 and 5.05 hereof:
A. Amounts of Payments. Subject to the following paragraphs of this Section 5.06, payments for each Discrete Component or City Facility will be made only in the amount of the Purchase Price for the respective Discrete Component or City Facility. Nothing herein shall require the City in any event (i) to pay more than the Actual Cost of a City Facility or Discrete Component or (ii) to make any payment beyond the Funding Sources (at the time of initial payment or later upon subsequent deposits to the Improvement Fund). The parties hereto acknowledge and agree that all payments to the Owner for the Purchase Prices of City Facilities or Discrete Components are intended to be reimbursements to the Owner for monies already expended or for immediate payment by the Owner (or directly by the City) to third parties in respect of such City Facilities and/or Discrete Components.
B. Joint or Third Party Payments. The City may make any payment jointly to the Owner and any mortgagee or trust deed beneficiary, contractor or supplier of materials, as their interests may appear, or solely to any such third party, if the Owner so requests the same in writing or as the City otherwise determines such joint or third party payment is necessary to obtain lien releases.
C. Withholding Payments. The City shall be entitled, but shall not be required, to withhold any payment hereunder for a Discrete Component or a Facility if the Owner or any Affiliate is delinquent in the payment of ad valorem real property taxes, special assessments or taxes, or special taxes levied in the CFD. In the event of any such delinquency, the City shall only make payments under this Section 5.06, should any be made at the City’s sole discretion, directly to contractors or other third parties employed in connection with the construction of the City Facilities or to any assignee of the Owner’s interests in this Acquisition Agreement (and not to the Owner or any Affiliate), until such time as the Owner provides the Director with evidence that all such delinquent taxes and assessments have been paid. 2049
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The City shall be entitled to withhold any payment hereunder for a City Facility or Discrete Component thereof that is the subject of a Payment Request until it is satisfied that any and all claims for labor and materials have been paid by the Owner for the City Facility or Discrete Component thereof that is the subject of a Payment Request, or conditional lien releases have been provided by the Owner for such City Facility or Discrete Component thereof, or until all certificates required by Section 5.03 have been obtained. The City, in its discretion, may waive this limitation upon the provision by the Owner of sureties, undertakings, securities and/or bonds of the Owner or appropriate contractors or subcontractors and deemed satisfactory by the Director to assure payment of such claims.
The City shall be entitled to withhold payment for any City Facility (or the final Discrete Component of any such City Facility) hereunder to be constructed by Owner, acquired by City and reimbursed with the Funding Sources until: (i) the Director determines that the City Facility is ready for its intended use, (ii) the Acceptance Date for the City Facility has occurred and the requirements of Section 6.01, if applicable to such City Facility, have been satisfied, and (iii) a Notice of Completion executed by the Owner, in a form acceptable to the Director, has been recorded for the City Facility and general lien releases conditioned solely upon payment from the Funding Sources to be used to acquire such City Facility (or final Discrete Component) have been submitted to the Director for the City Facility. The City hereby agrees that the Owner shall have the right to post or cause the appropriate contractor or subcontractor to post a bond with the City to indemnify it for any losses sustained by the City because of any liens that may exist at the time of acceptance of such a City Facility, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director. If the Director determines that a City Facility is not ready for intended use under (i) above, the Director shall so notify the Owner as soon as reasonably practicable in writing specifying the reason(s) therefor.
Nothing in this Acquisition Agreement shall be deemed to prohibit the Owner from contesting in good faith the validity or amount of any mechanics or materialman lien nor limit the remedies available to the Owner with respect thereto so long as such delay in performance shall not subject the City Facilities or any Discrete Component thereof to foreclosure, forfeiture or sale. In the event that any such lien is contested, the Owner shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the Director.
D. Retention. The City may withhold in the Improvement Fund an amount equal to ten percent (10%) of the Purchase Price of each City Facility or Discrete Component to be paid hereunder. Any such retention will be released to the Owner upon final completion and acceptance of the related City Facility and the expiration of a maintenance period consistent with applicable City policy thereafter (a one year maintenance period for any landscaping, and upon receipt of a faithful performance bond acceptable to the Director to remain in effect for one year as to other City Facilities).
Notwithstanding the foregoing, the Owner shall be entitled to payment of any such retention upon the completion and acceptance of a Facility or Discrete Component, if a maintenance or warranty bond is posted in lieu thereof in accordance with Section 6.05 hereof.
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Improvement Fund therefore. No retention shall apply if the Owner proves to the Director’s satisfaction that the Owner’s contracts for the City Facilities (or Discrete Components) provide for the same retention as herein provided, so that the Purchase Price paid for the City Facility or Discrete Component is at all times net of the required retention.
E. Frequency. Unless otherwise agreed to by the Director, no more than one Payment Request shall be submitted by the Owner in any calendar month, but the Payment Request may include more than one Facility or Discrete Component or Authorized Fee.
Section 5.07 Allocation of Costs. If Owner incurs costs that (1) apply to more than one Facility or Discrete Component (e.g., soft costs) or (2) apply to both Facilities or Discrete Components and improvements other than the Facilities or Discrete Components (e.g., grading), Owner shall allocate, or cause the contractor to reasonably allocate, such costs between the Facilities or Discrete Components (in the case of clause (1)) or between the Facilities or Discrete Components and the improvements other than the Facilities or Discrete Components (in the case of clause (2)) (the “Owner Allocation”). The City shall notify Owner of its good-faith reasonable disapproval of any Owner Allocation within fifteen (15) Business Days of submittal of the payment request. If the City has disapproved the Owner Allocation, then the City and Owner shall promptly allocate such costs, on a reasonable basis, between the Facilities or Discrete Components (in the case of clause (1)) or between the Facilities or Discrete Components and the improvements other than the Facilities or Discrete Components (in the case of clause (2)) (the “Agreed-Upon Allocation”). Based on the Owner Allocation or the AgreedUpon Allocation, if applicable, the City shall include the costs allocated to a specific Facility or Discrete Component as part of the Actual Costs of such Facility or Discrete Component when such Facility or Discrete Component is subject to a payment request.
Section 5.08 Expectations of the Parties. The City understands and agrees that (i) the Owner will be constructing City Facilities (and Discrete Components) prior to the availability of the Funding Sources that will be used to pay for such City Facilities (and Discrete Components), (ii) the City may be inspecting such City Facilities (or Discrete Components) and processing and completing Payment Requests for the payment on such City Facilities (or Discrete Components) with knowledge that there may be insufficient Funding Sources available at such time, (iii) the City Facilities (or Discrete Components) may be conveyed to and accepted by the City when there are insufficient Funding Sources to pay the Purchase Prices of such City Facilities (or Discrete Components), and (iv) in any such case, the payment of any approved Payment Requests for the Purchase Prices of such City Facilities (or Discrete Components) will be deferred until there are sufficient Funding Sources available to pay the Purchase Prices of such City Facilities (or Discrete Components), at which time the City will make such payments in accordance with this Acquisition Agreement. At all times, the Owner will be constructing such City Facilities (or Discrete Components) with the expectation that the Purchase Prices for such City Facilities (or Discrete Components) will be paid from the Funding Sources. The conveyance of City Facilities (or Discrete Components) to the City prior to receipt of the Purchase Prices for such City Facilities (or Discrete Components) shall not be construed as a dedication or gift, or a waiver of the payment of the Purchase Prices, or any part thereof, for such City Facilities (or Discrete Components). The Owner acknowledges that the Funding Sources may not be sufficient to reimburse the Owner for all of its costs incurred to complete or pay for the Facilities.
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Section 5.09 Defective or Nonconforming Work. If any of the work done or materials furnished for a City Facility or Discrete Component are found by the Director to be defective or not in accordance with the applicable Plans: (i) and such finding is made prior to payment for the Purchase Price of such City Facility or Discrete Component hereunder, the City may withhold payment therefor until such defect or nonconformance is corrected to the satisfaction of the Director, or (ii) and such finding is made after payment of the Purchase Price of such City Facility or Discrete Component, the City and the Owner shall act in accordance with the City’s standard specification for public works construction.
Section 5.10 Modification of Discrete Components. Upon written request of the Owner, the Director shall consider modification of the description of any Facility or Discrete Component or the addition or substitution of Facilities and Discrete Components. Any such modification shall be subject to the written approval of the Director, which will not be unreasonably delayed.
ARTICLE VI.
OWNERSHIP AND TRANSFER OF CITY FACILITIES
Section 6.01 Facilities to be Owned by the City - Conveyance of Land and Easements to City. Owner shall provide Acceptable Title to all property on, in or over which each City Facility to be constructed by Owner, acquired by the City and funded out of the Funding Sources will be located, which Acceptable Title shall be deeded over to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such City Facility located therein, thereon or thereover, and to permit the Owner to perform its obligations as set forth in this Acquisition Agreement.
Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for a City Facility and shall be evidenced by recordation of the acceptance thereof by the City Council or the designee thereof.
Section 6.02 Facilities to be Owned by the City - Title Evidence. The Owner shall furnish to the City a preliminary title report for land with respect to City Facilities to be constructed by Owner, acquired by the City and funded out of the Funding Sources and not previously dedicated or otherwise conveyed to the City, for review and approval at least fifteen (15) Business Days prior to the transfer of Acceptable Title to such City Facility to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the reasonable judgment of the City, could materially affect the City’s use and enjoyment of any part of the property or easement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to such City Facility or pay the Purchase Price for such City Facility (or the last Discrete Component thereof) until the Owner has cured such objections to title to the satisfaction of the City. As a further precondition to the payment of the Purchase Price for a City Facility, the Owner shall provide a policy of title insurance on such land, in an amount determined by the Director, which is equal to or, with the consent of the Owner, greater than the Purchase Price for a City Facility and in the form normally required by the City in connection with the dedication of land for subdivision improvements.
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Section 6.03 Facilities Constructed on Private Lands. If any City Facilities to be constructed by Owner, acquired by the City and funded out of the Funding Sources are located on privately-owned land, the owner thereof shall retain title to the land and the completed City Facilities until acquisition of the City Facilities under Article V hereof. Pending the completion of such transfer, the Owner shall not be entitled to receive any payment for any such City Facility or the last Discrete Component thereof. The Owner shall, however, be entitled to receive payment for Discrete Components of City Facilities (other than the last Discrete Component) upon making an irrevocable offer of dedication of such land, or appropriate interest therein, in form and substance acceptable to the Director. Notwithstanding the foregoing, before payment for any Discrete Component of such a City Facility, the Owner shall convey or cause to be conveyed Acceptable Title thereto in the manner described in Sections 6.01 and 6.02 hereof.
If the land is within the boundaries of any existing community facilities district (including the CFD), an assessment district, or other financing district, then the lien of the special taxes or assessments shall be a permitted exception to title so long as the land, while owned by the City or other public agency, is exempt from the special tax or assessments to be levied by the community facilities district, assessment district, or other financing district.
Section 6.04 Facilities Constructed on City Land. If the City Facilities to be constructed by Owner, acquired by the City and funded out of the Funding Sources are on land owned by the City, the City hereby grants to the Owner a license to enter upon such land for purposes related to the construction (and maintenance pending acquisition) of the City Facilities.
The provisions for inspection and acceptance of such City Facilities otherwise provided herein shall apply.
Section 6.05 Maintenance and Warranties. The Owner shall maintain each Discrete Component of a City Facility to be constructed by Owner, acquired by the City and funded out of proceeds of the Funding Sources in good and safe condition until the Acceptance Date of the City Facility of which such Discrete Component is a part. Prior to the Acceptance Date, the Owner shall be responsible for performing any required maintenance on any such completed Discrete Component or City Facility. On or before the Acceptance Date of a City Facility to be constructed by Owner, acquired by City and funded with the Funding Sources, the Owner shall assign to the City all of the Owner’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such City Facility. After the Acceptance Date, and subject to the City’s rules and regulations in effect at the time of this Acquisition Agreement, the acquiring public agency shall be solely responsible for maintenance of the City Facility. With respect to each City Facility constructed by Owner, acquired by City and funded with the Funding Sources, the Owner shall warrant each such City Facility to be free from construction defects (and shall correct or cause to be corrected any such defects) for a period of one year from the Acceptance Date thereof, and shall provide a maintenance bond reasonably acceptable in form and substance to the Director for such period and such purpose to insure that such defects, which appear within said period will be repaired, replaced, or corrected by the Owner, at its own cost and expense, to the satisfaction of the Director. The Owner shall continue to repair, replace or correct any such defects within thirty (30) calendar days after written notice thereof by the City to the Owner, and shall complete such repairs, replacement or correction as soon as practicable. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the City Facilities to be constructed by Owner, acquired by City and funded with the Funding Sources shall be delivered 2053
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to the Director as part of the transfer of title. For purposes of this Acquisition Agreement, following conveyance of a City Facility to the City, the terms “maintain” and “maintenance” mean the repair, replacement, or correction of any defects in the City Facility, and shall not mean the day-to-day upkeep or correction of normal wear and tear of the City Facility (such as watering or weeding for landscape improvements, painting, graffiti removal, etc.).
ARTICLE VII.
PAYMENT OF CITY FEES
Section 7.01 Request for Payment of City Fees. The Owner may request payment of City Fees from the Funding Sources by executing and submitting to the CFD a payment request.
Upon receipt of such payment request, the CFD shall pay, or cause to be paid, to the City the City Fees requested in such payment request, subject to the following conditions:
A. The City Fees shall be payable only to the extent of available Funding Sources; provided that, if tax-exempt Bonds are issued, City Fees shall be financed only if the City shall certify in connection with such financing of City Fees that it reasonably expects to spend Bond proceeds attributable to the financing of such City Fees on public capital improvements within three years from the date of issuance of the Bonds. Notwithstanding the foregoing, the Owner understands that the City Fees are an obligation of the Owner or its assignees for the public impacts created by the Owner’s or its assignees development of the real property within the CFD. Whether or not funds become available from the Funding Sources to pay City Fees, the owner of the property at the time such City Fees are due is obligated to pay the City Fees. Any City Fees paid from the Funding Sources that are in excess of the Deposits will result in a credit being provided to the Property for such City Fees (such that the prepaid City Fees are no longer payable by the property owners).
B. The City Fees shall be payable only to the extent that the City has not provided Development Impact Fee credits for such City Fees pursuant to the Development Agreement. For example, if the City Fee is $3,000 per unit, and the Owner constructs facilities equivalent to $2,000 per unit and the City provides a credit of $2,000 against the City Fee, then only $1,000 per unit may be financed by the Funding Sources.
Section 7.02 Payment of City Fees in Advance of Availability of Funding Sources.
The Owner or a merchant builder may be required pursuant to the conditions of development or the fee ordinance to pay the City Fees prior to the availability of the Funding Sources to pay such City Fees. In the event such City Fees are paid prior to the availability of the Funding Sources, the amounts paid to the City shall be deemed to be deposits (each a “Deposit”) that are subject to refund by the City to Owner (and the Owner only, regardless of the entity that paid the Deposits), upon submission by Owner of Proof of Assignment, in the manner set forth in Section 7.04. The City shall place each Deposit in a capital facilities account(s).
Section 7.03 Return of Deposits. If the Owner or a merchant builder has made any Deposits to the City, then following deposit of Funding Sources with the City for the corresponding City Fees, the City shall return to the Owner (and the Owner only, regardless of the entity that paid the Deposit), upon submission by Owner of Proof of Assignment, from the capital account in which the Deposits were deposited the Deposits not previously returned, 2054
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without interest or other earnings thereon. The City shall be so obligated to return such Deposits only to the extent that an equivalent amount of the Deposits to be returned is deposited with the City from the Funding Sources. The Deposits may be returned from time to time as additional Funding Sources become available.
Section 7.04 Deposits Allocated First. Funding Sources used to pay City Fees shall be allocated first for return of all Deposits prior to being allocated to the payment of City Fees not previously deposited by the Owner or a merchant builder. For example, if the Owner has paid $10,000 in Deposits, and Funding Sources become available in the amount of $15,000, the City shall apply the first $10,000 of the Funding Sources to the payment of the City Fees that were paid by the Deposits (and, thereafter, return the Deposits to the Owner) and use the remaining $5,000 of the Funding Sources to the payment of City Fees identified in the payment requisition.
Section 7.05 Application of Deposits. Any Deposits that have not been returned to the Owner at the time it is determined that there will be no further Funding Sources available (now or in the future) shall be retained by the City and may be used for the purposes for which the City Fee was required, and the unrefunded Deposits shall constitute full and final payment for such City Fees, without any increase of any kind.
Section 7.06 Expectations. The Owner or merchant builder may pay City Fees (as Deposits) prior to the availability of Funding Sources to pay such City Fees. Any City Fees paid (as Deposits) by the Owner or a merchant builder shall be made with the understanding that such Deposits will be returned from the Funding Sources if, and when, such Funding Sources become available. The payment of Deposits prior to the availability of the Funding Sources shall not be construed as a dedication or gift of the City Fees, or a waiver of the return of the Deposits, it being the intention that the City Fees be paid by the Funding Sources to the extent of the Funding Sources.
Section 7.07 Return of Funds Following DIF Fee Credits. If the City provides fee credits against a Development Impact Fee as the result of the Owner constructing Facilities, any deposits made by the Owner or any other party to secure the payment of the subject Development Impact Fee shall be returned in accordance with the City’s procedures for returning deposits following a DIF Fee credit. To the extent that there remains any deposit of the Development Impact Fees that are otherwise City Fees for which credit was not provided, such amounts shall be considered Deposits within the meaning set forth in Section 7.02 and shall be returned to the Owner upon the funding of such differential from Funding Sources, as set forth in this Article VII. Nothing in this Article VII shall adversely affect the financing of Facilities for which a DIF credit is provided. For example, if the City Fee is $3,000 per unit, and the Owner constructs Facilities equivalent to $2,000 per unit and the City provides a credit of $2,000 against the City Fee, both the $1,000 remaining portion of the City Fee as well as the costs of the Facilities from which the credit was derived may be financed by the Funding Sources under this Agreement. The $2,000 portion of the City Fee shall not be financed by the Funding Sources and any deposits returned pursuant to the City’s policies as a result of the DIF Fee credit shall not be considered a Deposit within the meaning of Section 7.02. 2055
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ARTICLE VIII.
INSURANCE
Section 8.01 Insurance Requirements. The Owner shall, at all times prior to the final Acceptance Date of all City Facilities to be constructed by Owner, acquired by City and funded out of the Funding Sources, maintain and deliver to the City evidence of and keep in full force and effect, or cause the general contractor for such City Facilities to maintain and deliver to the City evidence of and keep in full force and effect, not less than the following coverage and limits of insurance, which shall be maintained with insurers and under forms of policies satisfactory to the Director: (i) Workers, Compensation and Employer’s Liability - Workers’ Compensation coverage as required by law; Employer’s Liability - limits of at least $100,000.00 per occurrence; (ii) Comprehensive General Liability - Combined Single Limit - $1,000,000.00; and (iii) Automobile Liability - Combined Single Limit - $1,000,000.00. The automobile and general comprehensive liability policies shall be accompanied by an umbrella policy with a combined limit of $5,000,000.00. All of the Owner’s insurance policies shall contain an endorsement providing that written notice shall be given to the City at least 30 calendar days prior to termination, cancellation, or reduction of coverage in the policy.
The Bodily Injury and Property Damage Liability policies shall contain the following:
A. An endorsement extending coverage to the City and its agents as an insured, in the same manner as the named insured as respects liabilities arising out of the performance of any work related to the City Facilities to be constructed by Owner, acquired by City and funded out of the Funding Sources. Such insurance shall be primary insurance as respects the interest of the City, and any other insurance maintained by the City shall be excess and not contributing insurance with the insurance required hereunder.
B. Severability of Interest clause.
C. Provision or endorsement stating that such insurance, subject to all of its other terms and conditions, applies to the liability assumed by the Owner under this Acquisition Agreement.
Before awarding a contract for the construction of the City Facilities to be acquired with the Funding Sources, the Owner shall deliver to the Director certificates of insurance and endorsements as to such insurance, in a form acceptable to the City and the City Attorney, and Owner shall upon each renewal of such insurance policy provide the City with new certificates of insurance with respect thereto.
The Owner shall require and verify the same insurance on the part of its contractors and subcontractors.
The foregoing requirements as to the types, limits and City approval of insurance coverage to be maintained by the Owner are not intended to and shall not in any manner limit or qualify the liabilities and obligations assumed by the Owner under this Acquisition Agreement.
Any policy or policies of insurance that the Owner or its contractors or subcontractors elect to carry as insurance (i) against loss or damage to their construction equipment and tools or 2056
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other personal property used in fulfillment of this Acquisition Agreement or a contract related to the City Facilities to be constructed by Owner and funded out of the Funding Sources shall include a provision waiving the insurer’s right of subrogation against the City, and (ii) in fulfillment of this Acquisition Agreement involving a dual obligee bond may contain a clause to the effect that: “provided that Principal and Surety shall not be liable to the Obligees or any of them unless the Obligees or any of them have performed the obligations to the Principal in accordance with the terms of said contract; and provided, further, that Principal and Surety shall not be liable to all Obligees in the aggregate in excess of the penal sum above stated.” Section 8.02 Standards Applicable. The Owner may effect such coverage under blanket insurance policies, provided, however, that (i) such policies are written on a per occurrence basis, (ii) such policies comply in all other respects with the provisions of Section 8.01, and (iii) the protection afforded the City under any such policy shall be no less than that which would be available under a separate policy relating only to this Acquisition Agreement. All policies of insurance shall be with companies licensed or approved by the State of California Insurance Commissioner and rated (i) A12 or better with respect to primary levels of coverage, and (ii) B+12 or better with respect to excess levels of coverage, in the most recent edition of Best’s Insurance Guide and shall be issued and delivered in accordance with State law and regulations.
ARTICLE IX.
INDEMNIFICATION
Section 9.01 Indemnification and Hold Harmless. The Owner hereby assumes the defense of, and indemnifies and saves harmless the City, the CFD and each of their respective officers, directors, employees and agents, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from the design, engineering and construction of any of the City Facilities, or arising out of a failure of the Owner to provide notice of the special tax to be levied by the CFD pursuant to Section 53341.5 of the Act (but only if the Owner is required to provide such notice), or arising out of any alleged misstatements of fact or alleged omission of a material fact made by the Owner, its officers, directors, employees or agents to the City, the CFD, the CFD’s underwriter and its counsel, appraiser, special tax consultant, market absorption consultant or bond counsel regarding the Owner, its proposed developments, its property ownership, and any contractual arrangement it may enter into in a disclosure document describing the CFD and the risks relating to the Bonds; provided that the actions, damages, claims, losses and expenses covered by this Section 9.01 which relate to the City Facilities being acquired shall be those arising out of the personal injury or property damage which occurred during the period up to the acceptance of the City Facilities by the City, whether or not an action or claim is filed by the date of acceptance of the City Facilities; and provided, further, that nothing in this Section 9.01 shall limit in any manner the indemnified party’s rights against any of the Owner’s architects, engineers, contractors or other consultants. The Owner shall furnish to the CFD a certificate or certificates of insurance substantiating that it has obtained for the entire period of the construction of the City Facilities a policy of comprehensive general liability insurance with coverage broad enough to include the Owner’s contractual obligations under this section and having a combined single limit of liability meeting the requirements set forth in Article VIII. 2057
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Said certificate of insurance shall include an endorsement naming the parties entitled to indemnity under this Section 9.01 as additional named insureds.
Except as set forth in this Section 9.01, no provision of this Agreement shall in any way limit the extent of the responsibility of the Owner for payment of damages resulting from the operations of the Owner, its agents, employees or contractors. Nothing in this Section 9.01 shall be understood or construed to mean that the Owner agrees to indemnify the City or the CFD, or any of their respective officers, directors, employees or agents, for any negligent or wrongful acts or omissions to act of the City or the CFD, or any of their respective officers, directors, employees or agents.
Section 9.02 Disclosure of Special Tax. Provided the Owner is selling property within the CFD to individual homeowners, the Owner covenants and agrees that it will provide all forms of disclosure of the special tax to be levied by the CFD as required by existing law and by any future laws. In particular, provided the Owner is selling property within the CFD to individual homeowners, the Owner covenants and agrees from and after the date hereof to provide the special tax disclosure notice required by Section 53341.5 of the Act and to retain in its files copies of all notices signed by purchasers in accordance with Section 53341.5. If the Owner is selling property within the CFD to homebuilders, it shall require such homebuilders to provide such disclosures to home purchasers in its purchase and sale agreement. The City shall have the right to inspect and obtain copies of all of the Owner’s records regarding special tax disclosure. The Owner represents that it has included in its contracts with purchasers of land within the CFD, and further agrees to include in its contracts with purchasers of land within the CFD entered into from and after the date hereof, a requirement that such purchasers (i) provide to the City all forms of disclosure of the special tax required by law, including the Section 53341.5 notice, (ii) retain signed copies of the Section 53341.5 notice following the sale of any parcel of land within the CFD to another, and (iii) provide the City on request an opportunity to review and obtain copies of all records relating to disclosure of the special tax.
Such contractual provision shall further provide that the City and the CFD are third party beneficiaries of such disclosure requirements and that the purchaser of land will indemnify the City, the CFD and their respective officers and employees for any failure of such purchaser to disclose the special tax as required by law.
ARTICLE X.
EVENT OF DEFAULT; TERMINATION
Section 10.01 Event of Default. If the City has provided the Owner with written notice that the work to construct the City Facilities is not being timely performed in a satisfactory manner (and providing a description of the defect or failure to timely perform) and the Owner has not commenced actions to cure any such defects identified in such notice within 60 calendar days after the giving of such notice and does not diligently pursue to completion the cure of any such defects as determined by the Director, the City may declare that an “Event of Default” has occurred. The Event of Default may be cured by the Owner by commencing within the 60 calendar day period following receipt of notice of default and diligently pursuing to completion the cure of such defect identified in the notice.
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During the occurrence and continuation of an Event of Default, the City shall have the right but not the obligation to require the Owner to make an irrevocable offer of dedication to the City of the land owned by the Owner for the City Facility identified in the notice and to assume responsibility for the work to be performed thereunder. In the event the City elects to assume the responsibility for any work on a previously awarded contract as described in the preceding sentence, the following will occur:
A. the Owner will make an irrevocable offer of dedication to the City of the land owned by the Owner for such City Facility identified in the notice; B. to the extent permitted by law and the applicable contract, the Owner will assign all of the contracts for the work performed to date on the City Facility identified in the notice to the City, if requested to do so by the Director; C. the City will use its best efforts to complete the City Facility within a reasonable time frame; and
D. upon completion of the City Facility, to the extent there are Funding Sources available following payment to the City for the costs of completing such City Facility, the Owner will be reimbursed for the lesser of the cost or value of the previously unreimbursed satisfactory work performed or paid for by the Owner. The cost of such work will be determined by taking the unreimbursed amounts expended by the Owner under the contract(s) taken over by the City and deducting any incremental cost incurred by the City to complete the work under the contracts in question. Incremental cost shall be costs in excess of the sum of the original contract cost plus change orders approved by the City.
Section 10.02 Owner Termination. This Acquisition Agreement shall terminate and be of no further force as of July 1, 2035, unless extended by agreement of all the parties. If the Acquisition Agreement is terminated as provided herein, neither City nor Owner shall have any further responsibility or liability pursuant to this Acquisition Agreement, except for Owner’s responsibility and liability as set forth in Article IX, which shall continue upon termination of this Acquisition Agreement. Upon the termination of this Agreement, the City shall direct the use of any remaining Bond or Special Tax proceeds to complete any remaining authorized facilities, redeem Bonds or use in any way permitted by the Act.
ARTICLE XI.
EMWD FACILITIES
Section 11.01 EMWD Acquisition Facilities.
A. EMWD Acquisition Facilities shall be acquired from the Funding Sources, and such EMWD Acquisition Facilities shall be bid and constructed in accordance with the EMWD JCFA. EMWD Acquisition Facilities shall be funded from the Funding Sources, to the extent available, pursuant to the Disbursement Request Form set forth as Exhibit E in the EMWD JCFA. Upon receipt of a fully-executed Disbursement Request Form, the City shall pay the amount so requested from the available Funding Sources. With respect to any EMWD Acquisition Facility and EMWD Construction Facility constructed by Owner, acquired by EMWD and funded out of the Funding Sources, the Owner shall comply with EMWD’s rules 2059
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and regulations regarding title and conveyance of the subject EMWD Acquisition Facility and EMWD Construction Facility. The provision of a signed Disbursement Request Form from EMWD shall be evidence of such compliance.
B. EMWD Acquisition Facilities may be financed by the Funding Sources, including Bonds, pursuant to the JCFA. There is no requirement that the City Facilities or City Fees be paid first before financing EMWD Acquisition Facilities. The amount and timing of the financing of the EMWD Acquisition Facilities shall be in the discretion of the Owner.
C. The City understands and agrees that (i) the Owner will be constructing EMWD Facilities prior to the availability of the Funding Sources that will be used to pay for such EMWD Facilities, (ii) EMWD will be inspecting such EMWD Facilities and processing and completing Disbursement Request Forms for the payment on such EMWD Facilities with knowledge that there may be insufficient Funding Sources available at such time, (iii) the EMWD Facilities may be conveyed to and accepted by EMWD when there are insufficient Funding Sources to pay the Purchase Prices of such EMWD Facilities, and (iv) in any such case, the payment of any approved Disbursement Request Forms for the Purchase Prices of such EMWD Facilities will be deferred until there are sufficient Funding Sources available to pay the Purchase Prices of such EMWD Facilities, at which time the City will make such payments in accordance with this Acquisition Agreement. At all times, the Owner will be constructing such EMWD Facilities with the expectation that the Purchase Prices for such EMWD Facilities will be paid from the Funding Sources. The conveyance of EMWD Facilities to EMWD prior to receipt of the Purchase Prices for such EMWD Facilities shall not be construed as a dedication or gift, or a waiver of the payment of the Purchase Prices, or any part thereof, for such EMWD Facilities.
Section 11.02 EMWD Fees.
A. EMWD Fees shall be paid from the Funding Sources. EMWD Fees paid in advance of the availability of Funding Sources shall be deemed deposits and shall be reimbursed to the Owner in accordance with the EMWD JCFA following the funding of such EMWD Fees from the Funding Sources. EMWD Fees shall be funded from the Funding Sources, to the extent available, pursuant to the Disbursement Request Form set forth as Exhibit D in the EMWD JCFA. Upon receipt of a fully-executed Disbursement Request Form, the City shall pay the amount so requested from the available Funding Sources. With respect to any EMWD Fees funded out of the Funding Sources, the Owner shall comply with the provisions of the EMWD JCFA. The provision of a signed Disbursement Request Form from EMWD shall be evidence of such compliance.
B. EMWD Fees may be financed by the Funding Sources, including Bonds, pursuant to the JCFA. There is no requirement that the City Facilities or City Fees or EMWD Fees be paid first before financing EMWD Fees. The amount and timing of the financing of the EMWD Fees shall be in the discretion of the Owner.
C. The Owner or merchant builder may pay EMWD Fees (as deposits) prior to the availability of Funding Sources to pay such EMWD Fees. Any EMWD Fees paid (as deposits) by the Owner or a merchant builder shall be made with the understanding that such 2060
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deposits will be returned from the Funding Sources if, and when, such Funding Sources become available. The payment of deposits prior to the availability of the Funding Sources shall not be construed as a dedication or gift of the EMWD Fees, or a waiver of the return of the deposits, it being the intention that the EMWD Fees be paid by the Funding Sources to the extent of the Funding Sources. Prior to the reimbursement of any EMWD Fees to the Owner which were paid by third party merchant builders, the Owner shall provide to the City proof of assignment to the Owner of such reimbursement.
ARTICLE XII.
MISCELLANEOUS
Section 12.01 Limited Liability of City. The Owner agrees that any and all obligations of the City arising out of or related to this Acquisition Agreement are special and limited obligations of the City and the City’s obligations to make any payments hereunder are restricted entirely to the moneys, if any, from the Funding Sources. No member of the City Council, or City staff member, employee or agent shall incur any liability hereunder to the Owner or any other party in their individual capacities by reason of their actions hereunder or execution hereof.
Section 12.02 Audit. The Director and/or the Finance Director or other finance officer of the City shall have the right, during normal business hours and upon the giving of two (2) Business Days prior written notice to the Owner, to review all books and records of the Owner pertaining to costs and expenses incurred by the Owner in the construction of the City Facilities to be funded with the Funding Sources, and any bids taken or received for the construction thereof or materials therefor.
Section 12.03 Attorney’s Fees. In the event that any action or suit is instituted by either party against the other arising out of this Acquisition Agreement, the party in whose favor final judgment shall be entered shall be entitled to recover from the other party all costs and expenses of suit, including reasonable attorneys’ fees.
Section 12.04 Notices. Any notice, payment or instrument required or permitted by this Acquisition Agreement to be given or delivered to any party hereto shall be deemed to have been received when personally delivered, or transmitted by telecopy or facsimile transmission (with telecopy or facsimile confirmation obtained), or seventy-two hours following deposit of the same in any United States Post Office, registered or certified mail, postage prepaid, addressed as follows:
City:
City of Murrieta
1 Town Square
Murrieta, CA 92562
Attention: City Manager
Owner: Discovery Village LLC
c/o Argent Management
2646 Dupont Dr., Suite 60 #520
Irvine, CA 92612
Attention: Travis Devan
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Each party may change its address or addresses for delivery of notice by delivering written notice of such change of address to the other party.
Section 12.05 Severability. If any part of this Acquisition Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Acquisition Agreement shall be given effect to the fullest extent possible.
Section 12.06 Successors and Assigns. This Acquisition Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. The Owner may not assign its rights or obligations hereunder except with the prior written approval of the City Manager, or his designee, which approval shall not be unreasonably withheld, provided such assignment is in whole. Notwithstanding the preceding sentence, the Owner may assign its rights and obligations hereunder as security to lenders for the purpose of obtaining loans to finance development within the CFD, but no such assignment shall release the Owner from its obligations hereunder to the City and the CFD, which the Owner shall remain obligated to perform itself. The Owner shall provide written notice to the City of any assignment of this Agreement as security for lenders.
Section 12.07 Other Agreements. The obligations of the Owner hereunder shall be those of a party hereto and not as an owner of property in the CFD. Nothing herein shall be construed as affecting the City’s or the Owner’s rights, or duties to perform their respective obligations, under other agreements, use regulations or subdivision requirements relating to the development of the lands in the CFD. This Acquisition Agreement shall not confer any additional rights, or waive any rights given, by either party hereto under any development or other agreement to which they are a party.
Section 12.08 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Acquisition Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Acquisition Agreement thereafter.
Section 12.09 Merger. No other agreement, statement or promise made by any party or any employee, officer or agent of any party with respect to any matters covered hereby that is not in writing and signed by all the parties to this Acquisition Agreement shall be binding.
Section 12.10 Binding on CFD. The City Council of the City, acting as the legislative body of the CFD, shall perform all parts of this Acquisition Agreement which require performance on the part of the CFD.
Section 12.11 Amendment. This Acquisition Agreement may be amended, from time to time, by written Supplement hereto and executed by both the City and the Owner.
Section 12.12 Counterparts. This Acquisition Agreement may be executed in counterparts, each of which shall be deemed an original. 2062
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Section 12.13 Governing Law. This Acquisition Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State. 2063
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IN WITNESS WHEREOF, the parties have executed this Acquisition Agreement as of the day and year first-above written.
CITY: CITY OF MURRIETA
For the City of Murrieta Community Facilities
District No. 2025-3 (Discovery Village)
By: __________________________
City Manager
OWNER:
DISCOVERY VILLAGE LLC,
a Delaware limited liability company
By: __________________________
Name: ________________________
Title: ________________________
2064
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Exhibit “A”
PUBLIC FACILITIES AND DISCRETE COMPONENTS ELIGIBLE TO BE FINANCED BY CITY OF MURRIETA COMMUNITY FACILITIES DISTRICT 2025-3 1 Facility Discrete Component
CITY FACILITIES
1. City Fees a. Law Enforcement
b. Fire Facilities
c. Streets and Bridges
d. Traffic Signals
e. Storm Drainage
f. General Facilities
g. Park Land Facilities
h. Community Center
i. Public Library
2. Storm Drainage None
3. Street Improvements None
4. Landscaping/Fencing/Signage None
5. Design & Permit Fees @ 15% None
EMWD FACILITIES
6. EMWD Fees a. Sewer Treatment Plant Capacity Charge
b. Water Financial Participation Charge
c. Water Supply Development Fee
d. (MARS) Area B
7. Sanitary Sewer None
8. Domestic Water None
9. Design & Permit Fees None
1 The description of the Facilities and Discrete Components set forth in this Exhibit “A” are preliminary in some cases. The final plans and specifications may show substitutes or modifications to the proposed Facilities and Discrete Components approved by the applicable public agency. In no event shall any Facility or Discrete Component thereof be 2065
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eligible for acquisition and/or reimbursement to the extent that such Facility or Discrete Component thereof was previously reimbursed to the Owner out of Funding Sources. Unless agreed to otherwise by the Owner and the City, dry utility cost reimbursements shall not exceed 5% of the proceeds of any series of Bonds.
2066
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Exhibit “B”
DESCRIPTION OF PROPERTY
PARCELS 1 AND 2 AND LOTS 4, 5, 6, 7, AND 8, OF THE CITY OF MURRIETA TRACT MAP NO. 38228 RECORDED IN THE OFFICIAL RECORDS OF THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ON THE 13TH DAY OF DECEMBER, 2024, IN BOOK 499 OF MAPS, AT PAGES 71-78, AS DOCUMENT NO. 2024-0379976.
RIVERSIDE COUNTY ASSESSOR’S PARCEL NUMBER: 392-290-049(P) 2067
C-1
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Exhibit “C”
FORM OF PAYMENT REQUEST
City of Murrieta
Community Facilities District No. 2025-3 (Discovery Village) The City of Murrieta (the City”) and Discovery Village LLC (“Owner”) are parties to the Acquisition Agreement, dated as of __________, 2025 (the “Acquisition Agreement”).
Capitalized undefined terms use herein shall have the meanings ascribed thereto in the Acquisition Agreement. Pursuant to the Acquisition Agreement, Owner hereby requests confirmation that the City Facilities (or Discrete Components) described in Attachment A attached hereto (the “City Facilities or Discrete Components”) is [Complete] [Substantially Complete] and hereby further requests approval of the Purchase Price of the City Facilities or Discrete Components. In connection with this Payment Request, Owner hereby represents and warrants to the City as follows:
(a) The person executing this Payment Request on behalf of Owner is qualified to execute this Payment Request on behalf of Owner and knowledgeable as to the matters set forth herein.
(b) Owner has submitted or submits herewith to the Director as-built drawings or similar plans and specifications for the City Facilities or Discrete Components for which payment is requested, and such drawings or plans and specifications, as applicable, are true, correct and complete; provided, however, that if certification is being requested that such City Facilities or Discrete Components is Substantially Complete, such drawings or plans and specifications need not be submitted to the Director until certification is being requested that such City Facilities or Discrete Components is complete.
(c) Each of the City Facilities or Discrete Components described in Attachment A has been constructed in accordance with the Plans therefor, and in accordance with all applicable City standards and the requirements of the Acquisition Agreement, and the as-built drawings or similar Plans and specifications referenced in paragraph (b) above.
(d) The true and correct Actual Cost of each City Facilities or Discrete Components is set forth in Attachment A.
(e) Owner has submitted or submits herewith to the City Engineer invoices, receipts, worksheets and other evidence of costs which are in sufficient detail to allow the City Engineer to verify the Actual Cost of each City Facility or Discrete Component for which payment is requested.
Owner hereby declares that the above representations and warranties are true and correct. 2068
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Owner hereby requests that the Purchase Price be paid to the Person or Persons, in the amounts, set forth in Attachment B hereto.
Date: DISCOVERY VILLAGE LLC,
a Delaware limited liability company
By: __________________________
Name: ________________________
Title: ________________________
APPROVED FOR PAYMENT
Date: CITY OF MURRIETA
By:
Name: ______________________________
Title:
2069
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ATTACHMENT A
City Facilities or
Discrete Components Actual Cost Purchase Price
Total Purchase Price to be Paid:
2070
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ATTACHMENT B
PURCHASE PRICE PAYMENT INSTRUCTIONS
2071
1 JOINT COMMUNITY FACILITIES AGREEMENT
relating to
Community Facilities District No. 2025-3 (Discovery Village) of the City of Murrieta by and among
City of Murrieta, Eastern Municipal Water District and
Discovery Village LLC
THIS JOINT COMMUNITY FACILITIES AGREEMENT (“Agreement”) is entered into effective as of the ___th day of ___________, 2025, by and among CITY OF MURRIETA, a general law city organized and existing under the laws and constitution of the State of California (the “City”), EASTERN MUNICIPAL WATER DISTRICT, a public agency organized and existing pursuant to Division 20 of the California Water Code (“EMWD”), and DISCOVERY VILLAGE LLC, a Delaware limited liability company (“Developer”), and relates to the formation by the City of a community facilities district known as “Community Facilities District No. 2025-3 (Discovery Village) of the City of Murrieta” (the “CFD”) for the purpose of financing certain facilities to be owned, operated or maintained by the City or EMWD from proceeds of bonds issued by the CFD and the proceeds of special taxes levied by the CFD.
R E C I T A L S:
A. The property depicted in Exhibit “A” hereto (“Property”) which is located in the City, County of Riverside, State of California, constitutes the land within the boundaries of the CFD.
B. Developer owns the Property included in the CFD. Developer intends to develop the Property for residential purposes. The Property is described in Exhibit “B” hereto.
C. The City received a petition in accordance with the Act (defined below) to form the CFD for the purpose of financing, among other things, certain public facilities to be constructed and owned and operated by EMWD (the “EMWD Facilities”) in lieu of the payment of EMWD Fees (defined herein) and certain water and sewer facilities to be constructed by Developer and acquired by EMWD (the “Acquisition Facilities”).
D. In conjunction with the issuance of permits for the construction of homes on the Property and/or receipt of water meters for such homes, the Developer, or its successors or assigns, may elect to advance EMWD Facilities costs in lieu of payment of EMWD Fees (the “Advances”) before Bond Proceeds (defined herein) are available in sufficient amounts to pay for EMWD Facilities. In such case, the Developer shall be entitled to (i) reimbursement of such Advances limited to Bond Proceeds available to EMWD, if any (the Advances being considered an interest free loan by the Developer with no repayment obligation except to the extent there are Bond Proceeds received by or made available to EMWD as described herein, all as further described in Section 5(a) below), and (ii) credit against EMWD Fees which would otherwise be due to EMWD equal to the amount of Bond Proceeds disbursed to EMWD or at the direction of EMWD for EMWD Facilities, all as further described herein. 2072
2 E. The City will have sole discretion and responsibility for the formation and administration of the CFD.
F. The City is authorized by Section 53313.5 of the Act to assist in the financing of the acquisition and/or construction of the EMWD Facilities and/or the Acquisition Facilities. This Agreement constitutes a joint community facilities agreement, within the meaning of Section 53316.2 of the Act, by and among EMWD, the Developer and the City, pursuant to which the CFD, when and if formed, will be authorized to finance the acquisition and/or construction of all or a portion of the EMWD Facilities and/or the Acquisition Facilities. As authorized by Section 53316.6 of the Act, responsibility for constructing, providing for and operating the EMWD Facilities and/or the Acquisition Facilities is delegated to EMWD.
G. The Parties (defined below) hereto find and determine that the residents residing within the boundaries of EMWD, the City and the CFD will be benefited by the construction and/or acquisition of the EMWD Facilities and/or the Acquisition Facilities and that this Agreement is beneficial to the interests of such residents.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the Parties hereto agree as follows:
1. Recitals. Each of the above recitals is incorporated herein and is true and correct.
2. Definitions. Unless the context clearly otherwise requires, the terms defined in this Section shall, for all purposes of this Agreement, have the meanings herein specified. (a) “Acquisition Facility(ies)” means the sewer and water facilities described as such in Exhibit “C” hereto.
(b) “Act” means the Mello-Roos Community Facilities Act of 1982, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code. (c) “Advance” or “Advances” means an amount advanced by Developer to EMWD for EMWD Facilities in lieu of payment of EMWD Fees prior to the availability of sufficient Bond Proceeds.
Advances shall be deemed payment of EMWD Fees to the extent sufficient Bond Proceeds are not received by or made available to EMWD.
(d) “Bond Proceeds” or “Proceeds of the Bonds” shall mean those net funds generated by the sale of the Bonds and investment earnings thereon, net of costs of issuance, reserve fund, capitalized interest and administrative expenses, and may include net funds generated by the levy of Special Taxes and investment earnings thereon.
(e) “Bond Resolution” means that Resolution, Resolution Supplement, Fiscal Agent Agreement, Indenture of Trust or other equivalent document(s) providing for the issuance of the Bonds. (f) “Bonds” shall mean those bonds, or other securities, issued by, or on behalf of the CFD, in one or more series, as authorized by the qualified electors within the CFD. 2073
3 (g) “Disbursement Request” means a request for payment relating to EMWD Facilities in the form attached hereto as Exhibit “D.”
(h) “EMWD Engineer Representative” means an EMWD engineer duly authorized to act on behalf of EMWD or his or her designee.
(i) “EMWD Fees” means water supply development fees, water backup fees, sewer backup fees, sewer treatment capacity charges and all components thereof imposed by EMWD upon the Property to finance EMWD Facilities.
(j) “EMWD Facilities” means those sewer and water facilities listed on Exhibit “C” hereto, which are necessary for the provision of water and sewer services to the Property and paid for with Bond Proceeds in lieu of the payment of EMWD Fees.
(k) “Other Facilities Account of the Improvement Fund” means the fund, account or subaccount of the CFD (regardless of its designation within the Bond Resolution) into which a portion of the Bond Proceeds may be deposited in accordance with the Bond Resolution to finance EMWD Facilities and/or the Acquisition Facilities and which may have subaccounts. (l) “Party” or “Parties” shall mean any one or all of the parties to this Agreement. (m) “Payment Request” means a request for payment relating to Acquisition Facilities in the form attached hereto as Exhibit “E.”
(n) “Rate and Method” means the Rate and Method of Apportionment of the Special Tax authorizing the levy and collection of Special Taxes pursuant to proceedings undertaken for the formation of the CFD pursuant to the Act.
(o) “Special Taxes” means the special taxes authorized to be levied and collected within the CFD pursuant to the Rate and Method.
(p) “State” means the State of California.
3. Formation of the CFD. The City, in its sole discretion, shall determine whether and when it may be appropriate to establish the CFD. The City has and will retain, at the expense of the Developer, the necessary consultants to analyze the formation of the CFD. In no event shall EMWD have any right to compel the City to establish the CFD.
4. Sale of Bonds and Use of Bond Proceeds. In the event that the CFD is formed and Bonds are issued, the City and the Developer shall determine the amount of Bond Proceeds to be deposited in the Other Facilities Account of the Improvement Fund and each subaccount thereof. As Bond Proceeds are transferred to EMWD and reserved to fund EMWD Facilities, as described in Section 5 below, the Developer shall receive a credit in the amount transferred against the payment of EMWD Fees with respect to the Property. Nothing herein shall supersede the obligation of an owner of the Property to make an Advance or pay EMWD Fees to EMWD when due. The purpose of this Agreement is to provide a mechanism by which the CFD may issue the Bonds and levy Special Taxes to provide a source of funds to finance EMWD Facilities and Acquisition Facilities in lieu of the payment of EMWD Fees and provision of Acquisition Facilities. In the event that Bond Proceeds, including investment earnings thereon, are not available or sufficient to satisfy the obligation, then the Developer shall remain obligated to make an Advance for which it will receive no reimbursement (except to the extent Bond Proceeds later 2074
4 become available to EMWD), or pay EMWD Fees to EMWD as a condition of receiving water and sewer service to the Property.
The Bonds shall be issued only if, in its sole discretion, the City Council determines that all requirements of State and federal law and all City policies have been satisfied or have been waived by the City. Nothing in this Agreement shall confer upon EMWD or any owner or developer of the Property, including Developer, a right to compel the issuance of the Bonds or the disbursement of Bond Proceeds to fund EMWD Facilities and/or Acquisition Facilities except in accordance with the terms of this Agreement.
If and when the CFD determines to issue Bonds, the CFD shall take such actions necessary in its reasonable discretion to ensure the total effective tax rate within the CFD does not exceed two percent (2%) at the time of Bond sale. The total effective tax rate shall be based on a method of determination of property values reasonably acceptable to the City. CFD shall not include EMWD’s name on property owners’ special tax bills within the CFD.
By entering into this Agreement and requisitioning Bond Proceeds as described herein, EMWD is not passing upon, determining or assuming the tax-exempt status of the Bonds for federal or California state income tax purposes.
5. Disbursements for EMWD Facilities.
(a) Upon the funding of the Other Facilities Account of the Improvement Fund with funds reserved to fund EMWD Facilities, the Developer shall notify EMWD of the amount of Bond Proceeds reserved to fund EMWD Facilities and the Developer and EMWD may execute and submit a Disbursement Request for payment to the City or the CFD requesting disbursement of an amount equal to all or a portion of Advances from the Other Facilities Account of the Improvement Fund to the extent that Bond Proceeds are available in the Other Facilities Account of the Improvement Fund for such purpose.
Upon EMWD’s receipt of funds pursuant to such Disbursement Request, the Developer shall receive reimbursement of the Advances from EMWD. To facilitate EMWD’s bookkeeping, EMWD may direct in a Disbursement Request, that all or a portion of a payment be made directly from the Other Facilities Account to the Developer as reimbursement for Advances made by the Developer. In the event of a reimbursement to the Developer pursuant to the preceding sentence, EMWD shall account for an equivalent amount of Advances previously received from the Developer in accordance with Section 5(c) below.
To the extent that EMWD expends all or a portion of an Advance pending the deposit of Bond Proceeds in the Other Facilities Account of the Improvement Fund, for purposes of Treasury Regulations regarding investment and expenditure of Bond Proceeds and State law provisions regarding financing of public capital facilities, the Advance shall be a considered an interest free loan by the Developer, which EMWD only agrees to repay to the extent of the deposit, if any, of Bond Proceeds in the Other Facilities Account of the Improvement Fund and EMWD’s written direction as described below to pay all or a portion of such deposit to the Developer as repayment of an Advance. (b) From time to time following the funding of the Other Facilities Account of the Improvement Fund, the Developer may notify EMWD in writing and the Developer and EMWD may jointly request a disbursement from the Other Facilities Account of the Improvement Fund to fund EMWD Facilities by executing and submitting a Disbursement Request. Upon receipt of such Disbursement Request completed in accordance with the terms of this Agreement, the CFD shall wire transfer or otherwise pay to EMWD (or upon EMWD’s written direction pay to the Developer or an EMWD contractor) such 2075
5 requested funds to the extent that Bond Proceeds are available in the Other Facilities Account of the Improvement Fund for such purpose. Upon such notice and EMWD’s receipt of such disbursement (or upon payment to the Developer or an EMWD contractor in accordance with directions from EMWD relating to EMWD Facilities), the Developer shall be deemed to have satisfied the applicable EMWD Fees with respect to the number of dwelling units or lots for which the EMWD Fees would otherwise have been required in an amount equal to such disbursement. (c) EMWD agrees that prior to submitting a Disbursement Request requesting payment from the CFD it shall review and approve all costs included in its request and will have already paid or incurred such costs of EMWD Facilities from its own funds (which may include Advances from the Developer) subsequent to the date of this Agreement, or will disburse such amounts to pay the costs of EMWD Facilities following receipt of funds from the CFD. In the event that EMWD does not disburse any Bond Proceeds (or equivalent amount of Advances repaid pursuant to the second to the last sentence of the first paragraph of Section 5(a) above) received by it to third parties within five banking days of receipt, it will trace and report to the CFD all earnings, if any, earned by EMWD, from the date of receipt of such Bond Proceeds by EMWD (or the date of disbursement pursuant to the second to the last sentence of the first paragraph of Section 5(a) above) to the date of expenditure by EMWD for capital costs of the EMWD Facilities. Such report shall be delivered at least semiannually until all Bond Proceeds are expended by EMWD. EMWD agrees that in processing the above disbursements it will comply with all legal requirements for the expenditure of Bond Proceeds under the Internal Revenue Code of 1986 and any amendments thereto.
(d) EMWD agrees to maintain adequate internal controls over its payment function and to maintain accounting records in accordance with generally accepted accounting procedures. EMWD will, upon request, provide the City and/or the Developer with access to EMWD’s records related to the EMWD Facilities and expenditure of Advances and will provide to the City its annual financial report certified by an independent certified public accountant for purposes of assisting the City in calculating the arbitrage rebate obligation of the CFD, if any.
(e) The City or the CFD agrees to maintain full and accurate records of all amounts, and investment earnings, if any, expended from the Other Facilities Account of the Improvement Fund and expenditure of Advances. The City or the CFD will, upon request, provide EMWD and/or Developer with access to the City’s or the CFD’s records related to the Other Facilities Account of the Improvement Fund.
(f) District and EMWD acknowledge that the City has the ultimate responsibility for issuance of the Bonds, the administration of the CFD, and the tax-exempt status of any Bonds issued by the CFD.
Accordingly, the City Council shall have ultimate responsibility for making all decisions with respect to the issuance of any CFD Bonds and the levy of CFD Special Taxes. (g) In connection with the issuance of any tax-exempt Bonds, a portion of the proceeds of which are to be made available to finance the acquisition, construction and installation of EMWD Facilities and Acquisition Facilities, EMWD agrees to execute and deliver such certifications and agreements as may be reasonably required in order for bond counsel to conclude that interest on such Bonds will be excludable from gross income under Section 103 of the Internal Revenue Code of 1986 and any amendments thereto.
The decision regarding whether to issue Bonds for EMWD Facilities and Acquisition Facilities, and, if so, whether they should be taxable or tax-exempt, shall be the decision of City in its sole discretion.
6. Construction, Ownership and Maintenance of EMWD Facilities and Acquisition Facilities. EMWD shall be solely responsible for the acquisition, construction and installation of the 2076
6 EMWD Facilities and Acquisition Facilities and neither the City nor the CFD shall have any responsibility therefor or liability with respect thereto. The EMWD Facilities and Acquisition Facilities shall be and remain the sole and separate property of EMWD.
7. Acquisition Facilities. The requirements of this Section 7 shall apply to any Acquisition Facility for which a Payment Request is submitted to EMWD pursuant to this Section 7. (a) Design Plans and Specifications. All plans, specifications and bid documents for the Acquisition Facility (“Plans”) constructed or to be constructed by the Developer shall be prepared by the Developer at the Developer’s initial expense, subject to approval by EMWD. Costs for preparation of the Plans shall be included in the acquisition price. Reimbursement of costs for plan revisions will be considered on a case by case basis. The Developer shall not award bids for construction, or commence or cause commencement of construction, of the Acquisition Facility until the Plans and bidding documents have been approved by EMWD. The bid opening for the Acquisition Facility shall be coordinated with and take place at EMWD’s offices, with EMWD personnel in attendance. (b) Construction of Acquisition Facilities. A qualified engineering firm (the “Field Engineer”) shall be employed by the Developer to provide all field engineering surveys determined to be necessary by the EMWD’s inspection personnel. Field Engineer shall promptly furnish to EMWD a complete set of grade sheets listing all locations, offsets, etc., in accordance with good engineering practices, and attendant data and reports resulting from Field Engineer’s engineering surveys and/or proposed facility design changes. EMWD shall have the right, but not the obligation, to review, evaluate and analyze whether such results comply with applicable specifications.
A full-time soil testing firm, approved by EMWD, shall be employed by the Developer to conduct soil compaction testing and certification. The Developer shall promptly furnish results of all such compaction testing to EMWD for its review, evaluation and decision as to compliance with applicable specifications. In the event the compaction is not in compliance with applicable specifications, the Developer shall be fully liable and responsible for the costs of achieving compliance. A final report certifying all required compaction in accordance with the specifications shall be a condition of final acceptance of the Acquisition Facility.
The costs of all surveying, testing and reports associated with the Acquisition Facility furnished and constructed by the Developer’s contractor(s) shall be included in the acquisition price.
EMWD shall not be responsible for conducting any environmental, archaeological, biological, or cultural studies or any mitigation requirements that may be requested by appropriate Federal, State, and/or local agencies with respect to the Acquisition Facility. Any such work shall be paid for and conducted by the Developer and included in the acquisition price of the Acquisition Facility. (c) EMWD Public Works Requirements. In order that the Acquisition Facility may be properly and readily acquired by EMWD, the Developer shall comply with all of the following requirements with respect to the Acquisition Facility, and the Developer shall provide such proof to the EMWD as EMWD may reasonably require and at such intervals and in such form as EMWD may reasonably require, that the following requirements have been satisfied as to the Acquisition Facility:
i. The Developer shall prepare a bid package for review, comment and approval by the General Manager of EMWD or his designee (the “EMWD Representative”). 2077
7 ii. The Developer shall, after obtaining at least three sealed bids for the construction of the Acquisition Facility in conformance with the procedures and requirements of EMWD, submit to EMWD written evidence of such competitive bidding procedure, including evidence of the means by which bids were solicited, a listing of all responsive bids and their amounts, and the name or names of the contractor or contractors to whom the Developer proposes to award the contracts for such construction, which shall be the lowest responsible bidder.
iii. The EMWD Representative shall attend the bid opening. If unable to attend the bid opening, the EMWD Representative shall approve or disapprove of a contractor or contractors, in writing, within five (5) business days after receipt from the Developer of the name or names of such contractor or contractors recommended by the Developer. If the EMWD Representative disapproves of any such contractor; the Developer shall select the next lowest responsible bidder from the competitive bids received who is acceptable to the EMWD Representative.
iv. The specifications and bid and contract documents shall require all such contractors to pay prevailing wages and to otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code relating to public works projects and as required by the procedures and standards of EMWD with respect to the construction of its public works projects. v. The Developer shall submit faithful performance and payment bonds conforming in all respects to the requirements set forth in EMWD’s “Standard Water and/or Sewer Facilities and Service Agreement.” The following documents shall be submitted to EMWD along with the performance and payment bonds:
(1) The original, or a certified copy, of the unrevoked appointment, power of attorney, bylaws, or other instrument entitling or authorizing the person who executed the bond to do so; (2) A certified copy of the certificate of authority of the insurer issued by the State of California’s Insurance Commissioner; and
(3) Copies of the insurer’s most recent annual and quarterly statements filed with the Department of Insurance.
vi. The Developer and its contractor and subcontractors shall be required to provide proof of insurance coverage throughout the term of the construction of the Acquisition Facility, which they will construct in conformance with EMWD’s standard procedures and requirements. EMWD’s insurance requirements are set out in Section 7(n) herein. vii. The Developer and all such contractors shall comply with such other requirements relating to the construction of the Acquisition Facility which EMWD may impose by written notification delivered to the Developer and each such contractor at the time either prior to the receipt of bids by the Developer for the construction of such Acquisition Facility or, to the extent required as a result of changes in applicable laws, during the progress of construction thereof. In accordance with Section 7(f), the Developer shall be deemed the awarding body and shall be solely responsible for compliance and enforcement of the provisions of the Labor Code, Government Code, and Public Contract Code. viii. A “Change Order” is an order from the Developer to a contractor authorizing a change in the work to be performed. The Developer shall receive comments from the EMWD Representative prior to the Developer’s approval of any Change Order. The EMWD Representative shall comment on or deny the Change Order request within five (5) business days of receipt of all necessary 2078
8 information. EMWD’s comments to a Change Order shall not be unreasonably delayed, conditioned or withheld. The Developer shall not be entitled to include in the acquisition price costs associated with a Change Order that have not been approved by the EMWD Representative. (d) Inspection; Completion of Construction. EMWD shall have primary responsibility for inspecting the Acquisition Facility to assure that the work is being accomplished in accordance with the Plans. Such inspection does not include inspection for compliance with safety requirements by the Developer’s contractor(s). EMWD’s personnel shall be granted access to each construction site at all reasonable times for the purpose of accomplishing such inspection. Upon satisfaction of EMWD’s inspectors, the Developer shall notify EMWD in writing that an Acquisition Facility has been completed in accordance with the Plans.
Within three (3) business days of receipt of written notification from EMWD inspectors that an Acquisition Facility has been completed in accordance with the Plans, the EMWD Representative shall notify the Developer in writing that such Acquisition Facility has been satisfactorily completed. Upon receiving such notification, the Developer shall file a Notice of Completion with the County of Riverside Recorder’s Office, pursuant to the provisions of Section 3093 of the Civil Code. The Developer shall furnish to EMWD a duplicate copy of each such Notice of Completion showing thereon the date of filing with the County of Riverside (the “County”). EMWD will in turn file a notice with the County for acceptance.
(e) Liens. With respect to the Acquisition Facility, upon the earlier of (i) receipt of all applicable lien releases, or (ii) expiration of the time for the recording of claim of liens as prescribed by Sections 3115 and 3116 of the Civil Code, the Developer shall provide to EMWD such evidence or proof as EMWD shall require that all persons, firms and corporations supplying work, labor, materials, supplies and equipment for the construction of the Acquisition Facility have been paid, and that no claims of liens have been recorded by or on behalf of any such person, firm or corporation. (f) Acquisition; Acquisition Price; Source of Funds. The costs eligible to be included in the acquisition price of the Acquisition Facility (the “Actual Costs”) shall include:
i. The actual hard costs for the construction of such Acquisition Facility as established by EMWD-approved construction contracts and approved Change Orders, including costs of payment, performance and maintenance bonds and insurance costs, pursuant to this Agreement; ii. The design and engineering costs of such Acquisition Facility including, without limitation, the costs incurred in preparing the Plans. Costs for plan revisions will be considered on a case by case basis;
iii. The costs of environmental evaluations and public agency permits and approvals attributable to the Acquisition Facility;
iv. Costs incurred by the Developer for construction management and supervision of such Acquisition Facility, not to exceed five percent (5%) of the actual construction cost, subject to prior approval by EMWD of any construction management or supervision contract with respect to the Acquisition Facility;
v. Professional costs associated with the Acquisition Facility such as engineering, inspection, construction staking, materials, testing and similar professional services; and 2079
9 vi. Costs approved by EMWD of acquiring from an unrelated third party any real property or interests therein required for the Acquisition Facility including, without limitation, temporary construction easements, temporary by-pass road and maintenance easements.
Provided the Developer has complied with the requirements of this Agreement, EMWD agrees to execute and submit to the City a Payment Request for payment of the acquisition price of the completed Acquisition Facility to the Developer or its designee within thirty (30) days after EMWD has determined Developer’s satisfaction of the preconditions to such payment stated herein.
As a condition to EMWD’s execution of the Payment Request for the acquisition price, the property ownership of the completed Acquisition Facility shall be transferred to EMWD by grant deed, bill of sale or such other documentation as EMWD may require free and clear of all taxes, liens, encumbrances, and assessments, but subject to any exceptions determined by EMWD to not interfere with the actual or intended use of the land or interest therein (including the lien of a community facilities district so long as the subject property is exempt from taxation or is otherwise not taxable by such community facilities district). Upon the transfer of property ownership of the Acquisition Facility or any portion thereof to EMWD, EMWD shall be responsible for the maintenance of such Acquisition Facility or the portion transferred. Notwithstanding the foregoing, the acquisition price of an Acquisition Facility may be paid prior to transfer of property ownership and acceptance of the Acquisition Facility if it is substantially completed at the time of payment. The Acquisition Facility shall be considered “substantially complete” when it has been reasonably determined by EMWD to be usable, subject to final completion of such items as the final lift or any other items not essential to the primary use or operation of the Acquisition Facility.
For purposes of determining the acquisition price to be paid by the CFD for the acquisition of each Acquisition Facility by EMWD, the value of such Acquisition Facility shall include the construction costs specified in EMWD-approved contracts and EMWD-approved change orders conforming to this Section 7, as hereinbefore specified. EMWD approval is a condition prior to initiation of contract work.
However, if EMWD reasonably determines that the additional Actual Costs are excessive and that the value of the Acquisition Facility is less than the total amount of such Actual Costs and such construction costs, the price to be paid for the acquisition of the Acquisition Facility shall be the value thereof as determined by the EMWD Engineer Representative, subject, however, to the Developer’s right to appeal to EMWD’s Board of Directors.
Upon completion of the construction of an Acquisition Facility, the Developer shall deliver or cause to be delivered to EMWD a Payment Request in substantially the form of Exhibit “E,” attached hereto, copies of the contract(s) with the contractor(s) who have constructed the Acquisition Facility and other relevant documentation with regard to the payments made to such contractor(s) and each of them for the construction of the Acquisition Facility, documentation evidencing payment of prevailing wages, and shall also provide to EMWD invoices and purchase orders with respect to all equipment, materials and labor purchased for the construction of the Acquisition Facility. EMWD shall require the EMWD Engineer Representative to complete its determination of the acquisition price of the Acquisition Facility as promptly as is reasonably possible.
Notwithstanding the preceding provisions of this Section, the source of funds for the acquisition of the Acquisition Facility or any portion thereof shall be funds on deposit in the Other Facilities Account of the Improvement Fund. If no such funds are available, EMWD shall not be required to acquire the Acquisition Facility from the Developer. In such event, the Developer shall complete the design and construction and offer to EMWD property ownership of such portions of the Acquisition Facility as are required to be constructed by the Developer as a condition to recordation of subdivision maps for the 2080
10 Property, but need not construct any portion of the Acquisition Facility which it is not so required to construct. Reimbursement for these facilities would be made pursuant to the “Standard Water and/or Sewer Facilities and Service Agreement(s)” by and between EMWD and the Developer. (g) Easements and/or Fee Title Property Ownership Deeds. The Developer shall, at the time EMWD acquires the Acquisition Facility as provided in Section 7(f) hereof, grant or cause to be granted to EMWD, by appropriate instruments prescribed by EMWD, all easements across private property and/or fee title property ownership deeds which may be reasonably necessary for the proper operation and maintenance of such Acquisition Facility, or any part thereof. (h) Permits. The Developer shall be responsible for obtaining all necessary construction permits from the City covering construction and installation of the Acquisition Facility. EMWD will request the City to issue an “operate and maintain permit” to EMWD, which will become effective upon the completion of the Acquisition Facility and acceptance of property ownership therewith by EMWD. (i) Maintenance. Prior to the transfer of property ownership of an Acquisition Facility by the Developer to EMWD, as provided in Section 7(f) hereof, the Developer shall be responsible for the maintenance thereof and shall require its contractor(s) to repair all facilities damaged by any party, prior to acceptance by EMWD and/or make corrections determined to be necessary by EMWD’s inspection personnel.
(j) Inspection of Records. EMWD shall have the right to review all books and records of the Developer pertaining to the costs and expenses incurred by the Developer for the design and construction of the Acquisition Facility during normal business hours by making arrangements with the Developer.
The Developer shall have the right to review all books and records of EMWD pertaining to costs and expenses incurred by EMWD for services of the EMWD Engineer Representative by making arrangements with EMWD.
(k) Property Ownership of Improvements. Notwithstanding the fact that some or all of the Acquisition Facility may be constructed in dedicated street rights-of-way or on property which has been or will be dedicated to EMWD, each Acquisition Facility shall be and remain the property of the Developer until acquired by EMWD as provided in this Agreement. (l) Materials and Workmanship Warranty. Upon the completion of the acquisition of an Acquisition Facility by EMWD, the performance bond related to such individual Acquisition Facility provided by the Developer pursuant to Section 7(c)(v) hereof, shall be reduced by 90%, and the remaining 10% shall serve as a maintenance bond to guarantee that such Acquisition Facility will be free from defects due to faulty workmanship or materials for a period of one year. Release of performance and payment bonds is addressed in the Standard Water and/or Sewer Facilities and Service Agreement, by and between EMWD and the Developer.
(m) Independent Contractor. In performing this Agreement with respect to the Acquisition Facilities, the Developer is an independent contractor and not the agent of EMWD. EMWD shall not have any responsibility for payment to any contractor, subcontractor or supplier of the Developer. It is not intended by the Parties that this Agreement create a partnership or joint venture among them and this Agreement shall not otherwise be construed.
(n) Insurance Requirements. Neither the Developer nor its contractor shall commence work on an Acquisition Facility under this Agreement prior to obtaining all insurance required hereunder with a company or companies acceptable to EMWD, nor shall the Developer’s contractor allow any 2081
11 subcontractor to commence work on its subcontract until all insurance required of the subcontractor has been obtained.
The Developer shall, during the life of this Agreement, notify EMWD in writing of any incident giving rise to any potential bodily injury or property damage claim and any resultant settlements, whether in conjunction with this or any other project which may affect the limits of the required coverage, as soon as is reasonable and practical.
Both the Developer and its contractor shall conform in every respect to the requirements set forth in the Standard Water and/or Sewer Facilities and Service Agreement, by and between EMWD and the Developer.
8. Indemnification.
(a) Indemnification by the City. The City shall assume the defense of, indemnify and save harmless, EMWD, its officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of the City with respect to this Agreement and the issuance of the Bonds; provided, however, that the City shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees. (b) Indemnification by Developer. Developer shall assume the defense of, indemnify and save harmless, the City, the CFD and EMWD, their respective officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of Developer with respect to this Agreement; provided, however, that Developer shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees. (c) Indemnification by EMWD. EMWD shall assume the defense of, indemnify and save harmless, the City, the CFD and their respective officers, employees and agents, and each and every one of them, from and against all actions, damages, claims, losses or expenses of every type and description to which they may be subjected or put, by reason of, or resulting from, any act or omission of EMWD with respect to this Agreement, and the design, engineering and construction of the EMWD Facilities and the Acquisition Facilities constructed by EMWD; provided, however, that EMWD shall not be required to indemnify any person or entity as to damages resulting from negligence or willful misconduct of such person or entity or their officers, agents or employees.
9. Allocation of Special Taxes. The entire amount of any Special Taxes levied by the CFD to repay Bonds, or to fund other obligations, shall be allocated to the CFD.
10. Amendment and Assignment. This Agreement may be amended at any time but only in writing signed by each Party hereto. This Agreement may be assigned, in whole or in part, by the Developer to the purchaser of any parcel of land within the Property, provided, however, such assignment shall not be effective unless and until EMWD and the City have been notified, in writing, of such assignment and the assignment specifies whether the Developer or such assignee is authorized to execute disbursement requests.
2082
12 11. Entire Agreement. This Agreement contains the entire agreement between the Parties with respect to the matters provided for herein and supersedes all prior agreements and negotiations between the Parties with respect to the subject matter of this Agreement.
12. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either Party shall be deemed to have been received when personally delivered or seventy-two hours following deposit of the same in any United States Post Office in California, registered or certified, postage prepaid, addressed as follows:
City: City of Murrieta
1 Town Square
Murrieta, CA 92562
Attention: Director of Finance
Email: [email protected]
EMWD: Eastern Municipal Water District
P.O. Box 8300
2270 Trumble Road
Perris, CA 92572-8300
Attention: Special Funding Division
Email: [email protected]
Developer: Discovery Village LLC
c/o Argent Management
2646 Dupont Dr., Suite 60 #520
Irvine, CA 92612
Attention: Travis Devan
Email: [email protected]
Each Party may change its address for delivery of notice by delivering written notice of such change of address to the other Parties hereto. Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier upon the sender’s receipt of written acknowledgement from the addressee, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.
13. Exhibits. All exhibits attached hereto are incorporated into this Agreement by reference.
14. Attorney’s Fees. In the event of the bringing of any action or suit by any Party against any other Party arising out of this Agreement, the Party in whose favor final judgment shall be entered shall be entitled to recover from the losing Party all costs and expenses of suit, including reasonable attorney’s fees.
2083
13 15. Interpretation in the event of Ambiguities or Disputes. The Parties acknowledge and agree that each has been given the opportunity to review this Agreement with legal counsel independently, and/or has the requisite experience and sophistication to understand, interpret, and agree to the particular language of the provisions hereof. In the event of an ambiguity in or dispute regarding the interpretation of same, the interpretation of this Agreement shall not be resolved by any rule of interpretation providing for interpretation against the Party who causes the uncertainty to exist or against the drafter.
16. Severability. If any part of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible.
17. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California.
18. Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by any other Party hereto, or the failure by a Party to exercise its rights upon the default of any other Party, shall not constitute a waiver of such Party’s right to insist and demand strict compliance by such other Party with the terms of this Agreement thereafter.
19. No Third Party Beneficiaries. No person or entity other than the CFD, when and if formed, shall be deemed to be a third party beneficiary hereof, and nothing in this Agreement (either express or implied) is intended to confer upon any person or entity, other than EMWD, the City, the CFD and Developer (and their respective successors and assigns, exclusive of individual homebuyers), any rights, remedies, obligations or liabilities under or by reason of this Agreement.
20. Singular and Plural; Gender. As used herein, the singular of any word includes the plural, and terms in the masculine gender shall include the feminine.
21. Termination. If the City determines and notifies the other Parties in writing that the CFD is unable to complete the sale of the Bonds, any obligation of the Parties, if any, to finance all or any EMWD Facilities with Bond Proceeds pursuant to this Agreement shall automatically terminate and be of no further force or effect. This Agreement shall terminate and be of no further force as of July 1, 2035, unless extended by agreement of all the parties.
22. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute but one instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written above.
CITY OF MURRIETA
a political subdivision of the State of California
By: _____________________________
Justin Clifton, City Manager
2084
14 ATTEST:
By: _____________________________
Cristal McDonald, City Clerk
APPROVED AS TO FORM:
CITY ATTORNEY
By: _____________________________
Tiffany Israel, City Attorney
[SIGNATURES CONTINUED ON NEXT PAGE.]
2085
15 EASTERN MUNICIPAL WATER DISTRICT
By: _________________________________
Joe Mouawad, P.E., General Manager
ATTEST:
By: _____________________________
Sheila Zelaya, Board Secretary
DEVELOPER
DISCOVERY VILLAGE LLC,
a Delaware limited liability company
By: _________________________________
Name: _________________________________
Its: Authorized Signatory
2086
A-1
EXHIBIT “A”
COMMUNITY FACILITIES DISTRICT NO. 2025-3 (DISCOVERY VILLAGE)
OF THE CITY OF MURRIETA
DEPICTION OF PROPERTY
2087
B-1
EXHIBIT “B”
COMMUNITY FACILITIES DISTRICT NO. 2025-3 (DISCOVERY VILLAGE)
OF THE CITY OF MURRIETA
DESCRIPTION OF PROPERTY
PARCELS 1 AND 2 AND LOTS 4, 5, 6, 7, AND 8, OF THE CITY OF MURRIETA TRACT MAP NO. 38228 RECORDED IN THE OFFICIAL RECORDS OF THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ON THE 13TH DAY OF DECEMBER, 2024, IN BOOK 499 OF MAPS, AT PAGES 71-78, AS DOCUMENT NO. 2024-0379976.
RIVERSIDE COUNTY ASSESSOR’S PARCEL NUMBER: 392-290-049(P) 2088
C-1
EXHIBIT “C”
COMMUNITY FACILITIES DISTRICT NO. 2025-3 (DISCOVERY VILLAGE)
OF THE CITY OF MURRIETA
FACILITIES DESCRIPTION
1. EMWD Facilities. The type of EMWD Facilities eligible to be financed by the CFD under the Act are as follows:
Those water and sewer facilities included in EMWD’s water and sewer capacity and connection fee programs used to finance expansion projects, exclusive of in-tract facilities contributed by Developer.
EMWD Facilities include, but are not limited to the following: water and sewer transmission pipelines, sewer treatment plants, disposal ponds, pumping plants, lift stations and water reservoirs, including all costs of site acquisition, planning, design, engineering, legal services, materials testing, coordination, surveying, construction staking, construction, inspection and any and all appurtenant facilities and appurtenant work relating to the foregoing.
2. Acquisition Facilities. The types of Acquisition Facilities eligible to be financed by the CFD under the Act shall consist of sewer and water transmission lines, sewer and water pump stations and water reservoirs, including all costs of site acquisition, planning, design, engineering, legal services, materials testing, coordination, surveying, construction staking, construction inspection and any and all appurtenant facilities to the foregoing required to serve the Property. The facilities listed above are representative of the types of facilities eligible to be financed by the CFD as Acquisition Facilities.
Detailed scope and limits of specific projects will be determined by EMWD as appropriate, consistent with the standards of the EMWD.
2089
D-1
EXHIBIT “D”
COMMUNITY FACILITIES DISTRICT NO. 2025-3 (DISCOVERY VILLAGE)
OF THE CITY OF MURRIETA
DISBURSEMENT REQUEST FORM
(EMWD Facilities)
1. Community Facilities District No. 2025-3 (Discovery Village) of the City of Murrieta (“CFD”) is hereby requested to pay from the CFD bond proceeds (“Bond Proceeds”) to Eastern Municipal Water District (“EMWD”), as Payee, or to EMWD’s designee, the sum set forth in 3 below.
2. The undersigned certifies that the amount requested for EMWD Facilities is due and payable, has not formed the basis of prior request or payment, and is being made with respect to the connection of the property described below to the EMWD system.
3. Amount requested: $________________
For Tract/Lot Nos: _________________
4. The amount set forth in 3 above is authorized and payable pursuant to the terms of the Joint Community Facilities Agreement, by and among the City of Murrieta, EMWD and Discovery Village LLC, dated ___________, 2025 (the “Agreement”). Capitalized terms not defined herein shall have the meaning set forth in the Agreement. EMWD shall spend the Bond Proceeds allocated hereby in accordance with the requirements set forth in Section 5 of the Agreement.
5. By entering into the Agreement and requisitioning Bond Proceeds as described herein, EMWD is not passing upon, determining or assuming the tax-exempt status of the Bonds for federal or California state income tax purposes.
DEVELOPER
DISCOVERY VILLAGE LLC,
a Delaware limited liability company
By: ______________________
Name: ___________________
Its: Authorized Signatory
EASTERN MUNICIPAL WATER DISTRICT
By: _______________________
Name: _____________________
Title: _____________________
Date: _____________________
cc: EMWD Special Funding District
2090
E-1
EXHIBIT “E”
COMMUNITY FACILITIES DISTRICT NO. 2025-3 (DISCOVERY VILLAGE)
OF THE CITY OF MURRIETA
PAYMENT REQUEST FORM
CFD NO. 2025-3– OTHER FACILITIES ACCOUNT
OF THE IMPROVEMENT FUND
City of Murrieta (“City”), Eastern Municipal Water District (“EMWD”) and Discovery Village LLC (“Developer”) are parties to the Joint Community Facilities Agreement, dated as of ___________, 2025 (the “JCFA”). Capitalized undefined terms used herein shall have the meanings ascribed thereto in the JCFA. Pursuant to the JCFA, Developer hereby requests approval of the acquisition price of the Acquisition Facility(ies) described in Attachment A attached hereto. In connection with this Payment Request, Developer hereby represents and warrants to the EMWD as follows:
(a) The person executing this Payment Request is qualified to execute this Payment Request on behalf of Developer and knowledgeable as to the matters set forth herein. (b) The Acquisition Facility(ies) have been constructed in accordance with the Plans therefor, and in accordance with all applicable EMWD standards and the requirements of the JCFA. (c) The true and correct Actual Cost of the Acquisition Facility(ies) is set forth in Attachment A.
(d) Developer has submitted or submits herewith to EMWD the contracts, invoices, receipts, worksheets and other evidence of Actual Costs which are in sufficient detail to allow the EMWD Representative to verify the Actual Cost of the Acquisition Facility(ies) for which payment is requested. (e) There are no liens, rights to lien or attachment upon, or claims affecting the right to receive the payment requested herein which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law. Copies of lien releases for all work for which payment is requested hereunder are attached hereto.
Developer hereby declares under penalty of perjury that the above representations and warranties are true and correct.
Developer hereby requests that the acquisition price be paid to the person or persons, in the amount set forth in Attachment B hereto.
DEVELOPER
DISCOVERY VILLAGE LLC,
a Delaware limited liability company
By: ______________________
Name: ___________________
Its: Authorized Signatory
2091
E-2
CONFIRMATION AND APPROVAL BY EMWD
EMWD has (a) confirmed that the Acquisition Facility(ies) described in Attachment A is complete and was constructed in accordance with the Plans therefor, and (b) reviewed, verified and approved the acquisition price of such Acquisition Facility(ies). Such Acquisition Facility(ies) is/are complete and the acquisition price therefor eligible for payment is $________. The amount to be paid and the payee(s) are described in Attachment B.
Date: AUTHORIZED REPRESENTATIVE OF
EMWD
By:_________________________________
2092
E-3
ATTACHMENT A
Acquisition Facility Actual Cost Acquisition Price*
Total Acquisition Price to be Paid:
2093
E-4
ATTACHMENT B
ACQUISITION PRICE PAYMENT INSTRUCTIONS
[Include name and address of payee and wire transfer instructions] 2094
CITY OF MURRIETA
City Council Meeting Agenda
Report
5/6/2025
Agenda Item No. 20.
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Bernard Molloy, Fire Chief
PREPARED BY: Doug Strosnider, Fire Marshal
SUBJECT:
Introduction of Ordinance 619-25 Updating the City’s Fire Hazard Severity Zone Map
RECOMMENDATION
Conduct the first reading and introduce Ordinance No. 619-25 entitled: An Ordinance of the City Council of the City of Murrieta, California, Adopting A New Map with Updated Fire Hazard Severity Zones As Recommended by the California Department of Forestry and Fire Protection.
PRIOR ACTION/VOTE
None.
CITY COUNCIL GOAL
Provide a high level of innovative public safety.
BACKGROUND
California Government Code Sections 51175 through 51189 mandate that the California Department of Forestry and Fire Protection (CAL FIRE) identify and map areas of significant fire hazard Statewide. These areas are designated as Fire Hazard Severity Zones and are categorized as Moderate, High, or Very High based on fuels, terrain, weather, and other factors influencing wildfire behavior.
CAL FIRE is updating all fire hazard severity zone maps in California. The updated map for Murrieta (Exhibit A to the Ordinance No. 619-25) was released to the City of Murrieta (City) on March 24, 2025. The map has been reviewed and approved by City staff, including the Fire Department. The new map adds portions of the City to the High Fire Severity Zone.
State law gives the City three options to respond to the map. First, adopt the map as recommended. Second, add additional areas to the designation of Very High Fire Severity Zone if findings can be made, supported by substantial evidence, that such action is necessary for effective fire protection within the area. Third, add areas to the designation of Moderate and High Fire Severity Zones if findings can be made, supported by substantial evidence, that such action is necessary for effective fire protection within the area. Staff does not recommend CITY OF MURRIETA Page 1 of 2 Printed on 5/1/2025
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5/6/2025
Agenda Item No. 20.
evidence, that such action is necessary for effective fire protection within the area. Staff does not recommend that additional areas be added to the map.
Pursuant to Government Code §51178.5, the map was made available on the City and Fire Department’s websites for public review and comment within 30 days of publication by the State Fire Marshal. There is a feature on the websites that allows residents to zoom in to determine if their property is within a fire hazard severity zone. The Fire Department also provided information about it to the public at the City Council meeting on April 15, 2025. The City is required to adopt the updated map by ordinance within 120 days of the map’s release.
New development will be allowed to occur in High Fire Severity Zones as long as each project complies with all applicable fire hazard regulations, including:
· Building Standards - The project must meet the latest fire-resistant building codes, such as those outlined in the California Building Code and Chapter 7A for construction in high fire hazard severity zones.
· Defensible Space Requirements - The project must ensure adequate defensible space around structures, as required by Public Resources Code 4291.
· Access and Egress Standards - The development must provide proper emergency access for firefighting equipment and evacuation routes in compliance with local and state fire codes. · Fire Protection Measures - The project may need enhanced fire mitigation measures, such as fireresistant landscaping, automatic sprinkler systems, and water supply requirements for firefighting. · The City may also require a fire hazard assessment or an Environmental Impact Report (EIR) to determine project feasibility.
Ultimately, each new project will be reviewed based on compliance with State and local fire regulations, and denial would be based on failure to meet those standards rather than the mere presence of the project in a fire zone.
Lastly, if a project is proposed within a designated fire zone, the applicant may also face challenges obtaining property insurance. Many insurance companies have become increasingly cautious about insuring properties in high fire hazard areas due to the rising risk of wildfires. This could result in higher premiums, limited coverage options, or outright denial of coverage through the California FAIR Plan, which provides basic fire insurance but often at higher costs and with limited coverage compared to standard policies.
FISCAL IMPACT
None.
ATTACHMENTS
1. Ordinance No. 619-25 (w/Exhibit A: Updated Map)
CITY OF MURRIETA Page 2 of 2 Printed on 5/1/2025
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01375.0025 2000699.1
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ORDINANCE NO. 619-25
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
MURRIETA, CALIFORNIA, ADOPTING A NEW MAP WITH UPDATED
FIRE HAZARD SEVERITY ZONES AS RECOMMENDED BY THE
CALIFORNIA DEPARTMENT OF FORESTRY AND FIRE
PROTECTION
Summary: This ordinance updates the City’s Fire Hazard Severity Zone map by adopting the map prepared by the California Department of Forestry and Fire Protection.
WHEREAS, the California Department of Forestry and Fire Protection has, pursuant to Government Code § 51175 through 51189 and Public Resources Code § 4201 through § 4204, conducted a review and update of the Fire Hazard Severity Zone maps for jurisdictions throughout the State of California; and
WHEREAS, these updated maps are intended to reflect current scientific data, fire behavior modeling, vegetation conditions, and topography; and WHEREAS, Government Code § 51179 requires each city to post the map on its website, answer questions on the map, and to adopt, by ordinance, the updated Fire Hazard Severity Zone map for their jurisdiction within 120 days of receiving the proposed map; and WHEREAS, the updated Fire Hazard Severity Zone map was made available to the public for review and comment as required Government Code § 51178.5. The map was posted on the City and Murrieta Fire Department’s websites and the Fire Department give a public information briefing at the City Council meeting on April 15, 2025; and WHEREAS, adoption of the updated Fire Hazard Severity Zone map attached hereto as Exhibit “A” will support the enhanced fire planning, building code application, public awareness, and emergency preparedness within areas of elevated fire risk.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MURRIETA, CALIFORNIA DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The recitals above are true and correct and incorporated herein.
SECTION 2. That the City Council hereby adopts the Fire Hazard Severity Zones as recommended by the California Department of Forestry and Fire Protection pursuant to Government Code section 51178 as shown on Exhibit “A”.
SECTION 3. This ordinance is exempt from the California Environmental Quality Act (“CEQA”) under Section 15061(b)(3) of the CEQA Guidelines, which provides that CEQA only applies to projects that have the potential for causing a significant effect on the environment. 2097
01375.0025 2000699.1
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Where, as here, it can be seen with certainty that there is no possibility that the activity in question would have a significant effect on the environment, the activity is not subject to CEQA.
SECTION 4. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance, and each and every section, subsection, sentence, clause and phrase thereof not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.
SECTION 5. This Ordinance shall become effective on the thirty-first (31st) day after its passage and adoption, and within fifteen (15) days after its final passage and the City Clerk shall cause it to be posted and published in a newspaper of general circulation, printed, published and circulated in the City in the manner required by law and shall cause a copy of this Ordinance and its certification, to be entered in the Book of Ordinances of the City.
PASSED AND ADOPTED this ___ day of ________, 2025.
Cindy Warren, Mayor
ATTEST:
Cristal McDonald, City Clerk
APPROVED AS TO FORM:
Tiffany J. Israel, City Attorney
2098
01375.0025 2000699.1
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STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE )§
CITY OF MURRIETA )
I, Cristal McDonald, City Clerk of the City of Murrieta, California, do hereby certify that the foregoing Ordinance No. 619-25 was duly passed and adopted by the City Council of the City of Murrieta at the regular meeting thereof, held on the ___th day of _______, 2025, and was signed by the Mayor of the said City, and that the same was passed and adopted by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Cristal McDonald, City Clerk
I, Cristal McDonald, City Clerk of the City of Murrieta, California further certify that Ordinance No. 619-25 was duly published according to law and the order of the City Council of said City and the same was so published in Press Enterprise, a newspaper of general circulation on the following date(s):
Adopted Ordinance: , 2025.
In witness whereof, I have hereunto subscribed my name this __ day of ______________, 2025.
Cristal McDonald, City Clerk
2099
ADAMS AVE
WHITEWOOD RD
JEFFERSON AVE
LOS ALAMOS RD
IVY ST
WASHINGTON AVE
ANTELOPE RD
KALMIA ST
MADISON AVE
CLINTON KEITH RD
NUTMEG ST
HAYES AVE
HANCOCK AVE
JACKSON AVE
MURRIETA HOT SPRINGS RD
MONROE AVE
FIG ST
ELM ST
C
A
LIFORNIA
OAKS
R
D
WINCHESTER RD
JUNIPER ST
KELLER RD
MAGNOLIA ST
HUNTER RD
GUAVA ST
LINNEL LN
CAL LE DEL OS O ORO
LINCOLN AVE
VINEYARD PKY
LEMON ST
LAS BRISAS RD
ALTA MURRIETA DR
MARGARITA RD
MC ELWAI
N
R
D
VIA PRINCESA
STEPP RD
CLINTON KEITH RD
ELM ST
MONROE AVE
HAYES AVE
JACKSON AVE
ELM ST
GUAVA ST
2 1 0 2 Miles
Legend
Municipal Boundary
VHFHSZ 2009
City Parcels
Fire Hazard Severity Zone-LRA
Moderate
High
Very High
.
State of California
Office of the State Fire Marshal
Date Released:
March 24, 2025
2100
Assembly Bill No. 2561
CHAPTER 409
An act to add Section 3502.3 to the Government Code, relating to public employment.
[Approved by Governor September 22, 2024. Filed with
Secretary of State September 22, 2024.]
legislative counsel’s digest
AB 2561, McKinnor. Local public employees: vacant positions.
Existing law, the Meyers-Milias-Brown Act (act), authorizes local public employees, as defined, to form, join, and participate in the activities of employee organizations of their own choosing for the purpose of representation on matters of labor relations. The act requires the governing body of a public agency to meet and confer in good faith regarding wages, hours, and other terms and conditions of employment with representatives of recognized employee organizations and to consider fully presentations that are made by the employee organization on behalf of its members before arriving at a determination of policy or course of action.
This bill would, as specified, require a public agency to present the status of vacancies and recruitment and retention efforts at a public hearing at least once per fiscal year, and would entitle the recognized employee organization to present at the hearing. If the number of job vacancies within a single bargaining unit meets or exceeds 20% of the total number of authorized full-time positions, the bill would require the public agency, upon request of the recognized employee organization, to include specified information during the public hearing. By imposing new duties on local public agencies, the bill would impose a state-mandated local program. The bill would also include related legislative findings.
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.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement shall be made pursuant to these statutory provisions for costs mandated by the state pursuant to this act, but would recognize that a local agency or school district may pursue any available remedies to seek reimbursement for these costs.
92 1777 2101
The people of the State of California do enact as follows:
SECTION 1. The Legislature finds and declares as follows:
(a) Job vacancies in local government are a widespread and significant problem for the public sector affecting occupations across wage levels and educational requirements.
(b) High job vacancies impact public service delivery and the workers who are forced to handle heavier workloads, with understaffing leading to burnout and increased turnover that further exacerbate staffing challenges. (c) There is a statewide interest in ensuring that public agency operations are appropriately staffed and that high vacancy rates do not undermine public employee labor relations.
SEC. 2. Section 3502.3 is added to the Government Code, to read:
3502.3. (a) (1) A public agency shall present the status of vacancies and recruitment and retention efforts during a public hearing before the governing board at least once per fiscal year.
(2) If the governing board will be adopting an annual or multiyear budget during the fiscal year, the presentation shall be made prior to the adoption of the final budget.
(3) During the hearing, the public agency shall identify any necessary changes to policies, procedures, and recruitment activities that may lead to obstacles in the hiring process.
(b) The recognized employee organization for a bargaining unit shall be entitled to make a presentation at the public hearing at which the public agency presents the status of vacancies and recruitment and retention efforts for positions within that bargaining unit.
(c) If the number of job vacancies within a single bargaining unit meets or exceeds 20 percent of the total number of authorized full-time positions, the public agency shall, upon request of the recognized employee organization, include all of the following information during the public hearing:
(1) The total number of job vacancies within the bargaining unit. (2) The total number of applicants for vacant positions within the bargaining unit.
(3) The average number of days to complete the hiring process from when a position is posted.
(4) Opportunities to improve compensation and other working conditions. (d) This section shall not prevent the governing board from holding additional public hearings about vacancies.
(e) The provisions of this section are severable. If any provision of this section or its application is held invalid, the invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(f) For purposes of this section, “recognized employee organization” has the same meaning as defined in subdivision (a) of Section 3501.
SEC. 3. The Legislature finds and declares that Section 2 of this act, which adds Section 3502.3 to the Government Code, furthers, within the 92 Ch. 409 — 2 —
1778 2102
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:
It is in the public interest, and it furthers the purposes of paragraph (7) of subdivision (b) of Section (3) of Article I of the California Constitution, to ensure that information concerning public agency employment is available to the public.
SEC. 4. No reimbursement shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code for costs mandated by the state pursuant to this act. It is recognized, however, that a local agency or school district may pursue any remedies to obtain reimbursement available to it under Part 7 (commencing with Section 17500) and any other law.
O
92 — 3 — Ch. 409
1779 2103