AMENDMENT NO. TWO TO
MEMORANDUM OF UNDERSTANDING
BETWEEN THE CITY OF COSTA MESA AND
THE CITY OF NEWPORT BEACH
This AMENDMENT NO. TWO TO MEMORANDUM OF UNDERSTANDING
(“Amendment No. Two”) isdated as ofDecember 2,2025 (“EffectiveDate of Amendment No. Two”), and entered intoby and among the Cityof Costa Mesa, a municipalcorporationorganized and existingunder Californialaw (“Costa Mesa”) and the Cityof Newport Beach, which isa Californiachartercity(“Newport Beach”), (cumulativelythe “Parties,”and attimes individuallya “Party”),with reference to and in consideration of the following;
RECITALS
On December 15, 2020, Newport Beach and Costa Mesa entered into a Memorandum of Understanding (“Agreement”)forthe provisionof temporary housing,and the provisionofcertainservicesto individualsexperiencing homelessness located within the boundaries of the Parties at the property located at3175 AirwayAvenue, inthe CityofCosta Mesa (“Property”); On July1,2023, Newport Beach and Costa Mesa executedAmendment No. One, amending certainaspects oftheAgreement;
Newport Beach iscurrentlyallocatedtwenty-five(25)beds and Costa Mesa is allocatedseventy-five(75)beds foruse by individualsexperiencing homelessness inNewport Beach and Costa Mesa, respectively;
Newport Beach intendsto reduce theirnumber ofallocatedbeds from twenty-five (25)totwenty(20),withup tofive(5)ofCosta Mesa’s allocatedbeds optionally availableforuse by Newport Beach as provided forherein; The Parties desire to enter into thisAmendment No. Two to decrease Newport Beach’s allocationfrom twenty-five(25)to twenty (20) beds, memorialize availabilityand cost of up to five(5)Costa Mesa beds for use by Newport Beach and, accordingly,adjustNewport Beach OperationsPayment to cover the associated costs.
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AGREEMENT
Section 3.1 of the Agreement shallbe amended initsentiretyand replaced with the following;
“3.1 InitialTerm and Secondary Term. This amendment willhave two (2) terms. The InitialTerm willbe effectiveupon execution of Amendment No. 2 and expire 1 ATTACHMENT A
on June 30, 2026. The Secondary Term willbegin on July 1, 2026, and shallexpire on December 31, 2026. There shallbe no extensions of this MOU.” Section4.3 oftheAgreement shallbe amended initsentiretyand replaced with the following:
“4.3 Newport Beach Annual ContributionforOperational Costs. Upon execution of thisAmendment No. 2, Newport Beach shallbe obligatedto pay a monthly operationalcostofNinety-NineThousand One Hundred Fifty-SixDollarsand Sixty- Seven Cents ($99,156.67)(“Newport Beach Operations Payment”), which isspecifically to provideforthe operationalcostsof Fifty-NineThousand Four Hundred Ninety-Four Dollars($59,494.00)per each ofthetwenty (20)beds of which Newport Beach has use rightsas providedherein,forthe InitialTerm ofthe Agreement. Further,during the Initial Term, Newport Beach’s costshallbe $163.00 per bed, per day, foruse of each Costa Mesa bed made availableto Newport beach as provided for in Section 4.7.
In addition,upon initiationofthe Secondary Term, as provided forinSection 4.7 hereof,Newport Beach shallno longerhave exclusiveaccess for up to twenty (20) beds atthe BridgeShelter,but itshallhave continuedaccess to Costa Mesa beds, as available,and shallpay a costequal to Costa Mesa’s actualdailyper-bed cost (tobe determined by Costa Mesa ata laterdate,subsequent to the execution of updated Shelterand KitchenOperator Agreements) forthe use by Newport Beach referrals.
Newport Beach shallbe billedmonthlyforthe use ofthese Costa Mesa beds.” Section4.4 (“CPI Increases”) isdeletedinitsentiretysince the Agreement ends afterone year.
Section 4.7 oftheAgreement shallbe amended initsentiretyand replaced with the following:
“4.7 Allocation of Beds. Newport Beach willwork collaborativelywith Costa Mesa to ensure the Central SPA citiesare coordinatingwith the County and thatthe shelterbeds addressed inthisAgreement are prioritizedto meet the greatest needs of both Parties.During the InitialTerm, Costa Mesa willhave exclusive access to eighty (80)beds and Newport Beach willhave exclusiveaccess to twenty (20) beds forits referrals.However, at Costa Mesa’s sole discretion,and only afterexhausting the Wait ListforCosta Mesa interestedparties,up to five(5) of Costa Mesa’s beds may be made availableto person(s)referredby Newport Beach atthe rate provided insection 4.3.
Duringthe Secondary Term, Newport Beach willno longerhave exclusive access to beds atthe Bridge Shelter.However, Newport Beach will have continued access to Costa Mesa beds, as available,at a dailyper-bed cost to be determined later, subsequent tothe performance ofan updated costper bed analysis. 2 The Partiesexpresslyagree thatitisthe Parties’intent to transition Shelter Residentsto long-termstablehousing and Newport Beach’s consent shallbe required to continueto house any person referredby Newport Beach at the shelter for more than six(6)months.”
Section4.8 ofthe Agreement shallbe amended initsentiretyand replaced with the following;
“4.8No Subletting. Sublettingof Beds willnot be allowed. Newport Beach shall be allocateduse of twenty (20) beds during the InitialTerm forNewport Beach to refer homeless individualsdeemed by Newport Beach to be highestprioritypersons referred tothe Projectby Newport Beach over time.”
Section 4.9 shallbe added and statethe following:
‘4.9Relocation of Newport Beach Residents. Costa Mesa willmake a good faitheffortto relocateNewport Beach Shelterclientsto alternativehousing accommodations priorto expirationofthe InitialTerm. Newport Beach shallbe solely responsibleforhousingor relocatingany Newport Beach residents who remain at the Shelterat the expirationof thisAgreement.
INTEGRATED AGREEMENT
Exceptas expresslymodifiedherein,allotherprovisions,terms, and covenants set forth intheAgreement and Amendment No. One shallremain unchanged and shallbe infull force and effect.
[SIGNATURE PAGE(S) TO FOLLOW]
3 IN WITNESS WHEREOF, the Partiesto the Agreement have caused this Amendment No. Two to be executed by each of theirduly authorized officers as follows:
CITY OF COSTA MESA,2025Dated: December
By:
CeciliaGallardo Daly
City Manager
APPROVED AS TO FORM
Kimberly HallBarlow
CityAttorney
ATTEST
Brenda Green
City Clerk
CITY OF NEWPORT BEACHDated: December 9, 2025
By:
Grace Leung
City Manager
APPROVED AS TO FORM
/
Aaron C. hlarp
CityAttorjey
ATTEST
Lena Shumway
City Clerk
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