Agenda packet — Ontario City Council, May 3, 2022 (part 1 of 2)

CITY OF ONTARIO
Regular City Council/Housing Authority
Meeting
MAY
3, 2022
City Hall
303 East B Street, Ontario, CA 91764

MAYOR PAUL S. LEON • MAYOR PRO TEM ALAN D. WAPNER
COUNCIL MEMBERS JIM W. BOWMAN, DEBRA DORST-PORADA AND RUBEN VALENCIA CITY CLERK SHEILA MAUTZ • TREASURER JAMES R. MILHISER
CITY MANAGER SCOTT OCHOA • CITY ATTORNEY RUBEN DURAN

WELCOME TO A MEETING OF THE ONTARIO CITY COUNCIL

All documents for public review are on ﬁle with the Records Management/City Clerk's Department located at 303 East B Street, Ontario, CA 91764.

Anyone wishing to speak in person during public comment or on a particular item will be required to ﬁll out a blue slip. Blue slips must be turned in prior to public comment beginning or before an agenda item is taken up. The Clerk will not accept blue slips after that time. To comment by email, submit your comments no later than 4:00 p.m. on the day of the meeting by emailing your name, agenda item you are commenting on and your comments to
[email protected].

All
comments received by the deadline will be forwarded to the City Council for consideration before action is taken on the matter and will be entered into the record.

Comments will be limited to 3 minutes. Speakers will be alerted when they have 1 minute remaining and when their time is up. Speakers are then to return to their seats and no further comments will be permitted.

In accordance with State Law, remarks during public comment are to be limited to subjects within Council's jurisdiction. Remarks on other agenda items will be limited to those items.

Remarks from those seated or standing in the back of the chamber will not permitted. All those wishing to speak including Council and Staff need to be recognized by the Chair before speaking.

WEARING A MASK DURING THE PUBLIC MEETING IS STRONGLY
ENCO
URAGED.

If you need special assistance or accommodations to participate in this meeting, please contact CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 1 the City Clerk's oﬃce at 909-395-2009. Notiﬁcation of 48 hours prior to the meeting will help the City make reasonable arrangements. Equipment for the hearing impaired is available in the Records Management Office.

ORDER OF BUSINESS

The regular City Council and Housing Authority meeting begins with Public Comment at 6:30 p.m. immediately followed by the Regular Meeting and Public Hearings. No agenda item will be introduced for consideration after 10:00 p.m. except by majority vote of the City Council.

CALL TO ORDER
(OPEN SESSION)

ROLL CALL
Wapner, Bowman, Dorst-Porada, Valencia, Mayor/Chairman Leon

PLEDGE OF ALLEGIANCE
Mayor Pro tem Wapner

INVOCATION
Pastor Francesca Fajinmi, Dios International Missionary Church PUBLIC COMMENTS 6:30 P.M.

The Public Comment portion of the Council/Housing Authority meeting is limited to 30 minutes with each speaker given a maximum of 3 minutes. An opportunity for further Public Comment may be given at the end of the meeting. Under provisions of the Brown Act, Council is prohibited from taking action on oral requests.

To comment by email, submit your comments by email no later than 4:00 p.m. on the day of the meeting by emailing your name, agenda item you are commenting on and your comment to [email protected]
. All Comments received by the deadline will be forwarded to the City Council for consideration before action is taken on the matter and entered into the record. As previously noted -- if you wish to address the Council, fill out one of the blue slips at the rear of the chambers and give it to the City Clerk.

AGENDA REVIEW/ANNOUNCEMENTS

The City Manager will go over all updated materials and correspondence received after the Agenda was distributed to ensure Council Members have received them. He will also make any necessary recommendations regarding Agenda modiﬁcations or announcements regarding CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 2

1. APPROVAL OF MINUTES

ATTACHMENT:

20220405 (Not official until approved)

2. BILLS & PAYROLL

3. AMENDMENT TO THE PURCHASE AND INSTALLATION OF REPLACEMENT FIRE STATION

ALERTING SYSTEM

4. A RESOLUTION APPROVING THE UPDATED DELEGATION OF AUTHORITY TO REQUEST

DISBURSEMENTS OF CALIFORNIA EMPLOYERS' RETIREE BENEFIT TRUST (CERBT) FUND Agenda items to be considered.

CONSENT CALENDAR

All matters listed under CONSENT CALENDAR will be enacted by one motion in the form listed below – there will be no separate discussion on these items prior to the time Council votes on them, unless a member of the Council requests a specific item be removed from the Consent Calendar for a separate vote.

Each member of the public wishing to address the City Council on items listed on the Consent Calendar will be given a total of 3 minutes.

Minutes for the regular meetings of the City Council and Housing Authority of April 5, 2022, and approving the same as on file in the Records Management Department.

Bills April 1, 2022 through April 14, 2022, and Payroll March 27, 2022 through April 9, 2022 when audited by the Finance Committee.

That the City Council take the following actions:

A
.

Authorize the City Manager to execute an additional sole source purchase with US Digital Designs of Tempe, Arizona, in the amount of $72,900 for a ﬁre station alerting system for a total not to exceed amount to $647,884;
B
.

Authorize a $20,000 contingency to address any unforeseen needs that may arise with US Digital Designs;
C
.

That the City Council approve Amendment No. 1 to increase the contracted dollar amount with Bergelectric Corp. of Encino, California, by $54,999, which would increase the total not to exceed amount to $280,299;
D
.

Authorize a 15% contingency of $41,588 to address any unforeseen issues that may arise with Bergelectric Corp.; and
E
.

Authorize the City Manager or his designee to execute all documents required for the completion of the project, including, but not limited to contracts, agreements, assessments, easements, reduction of retention accounts, and ﬁling notice of completion at the conclusion of all construction related activities.

CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 3

ADMINISTERED BY CALPERS

ATTACHMENT:

20220503 Updating CERBT Delegation^RESO^RM

ATTACHMENT:

20220503 CERBT Delegation of Authority to Request
Disbursements^Exhibit A.pdf

5. AMENDMENT TO THE MAINTENANCE SERVICES AGREEMENT FOR CITYWIDE LANDSCAPE

FERTILIZATION, WEED CONTROL, PEST, AND DISEASE CONTROL SERVICES

6. MAINTENANCE SERVICES AGREEMENT FOR CONCRETE REPAIR AND MAINTENANCE

SERVICES

7. THE RENEWAL OF AN EXISTING AGREEMENT FOR LAND MANAGEMENT SYSTEM FOR

COMMUNITY DEVELOPMENT AGENCY, FIRE PREVENTION, AND THE ONTARIO MUNICIPAL

UTILITIES COMPANY

8. MAINTENANCE SERVICES AGREEMENT FOR GRAFFITI REMOVAL SERVICES AT VARIOUS CITY

LOCATIONS
That the City Council consider and approve a Resolution updating the City's delegation of authority to request disbursements from California Employers' Retiree Benefit Trust (CERBT).

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

APPROVING THE DELEGATION OF AUTHORITY TO ADDITIONAL POSITIONS TO

REQUEST, ON BEHALF OF THE CITY, DISBURSEMENTS FROM THE CALIFORNIA EMPLOYERS’ RETIREE BENEFIT TRUST FUND.

That the City Council authorize the City Manager to execute the optional two (2) one-year terms to the Maintenance Service Agreement (on ﬁle with Records Management) for contract No. PM1617-8 with RPW, Inc. of Fullerton, California, for citywide landscape fertilization, weed control, pest, and disease control services.

That the City Council authorize the City Manager to execute a Maintenance Services Agreement (on ﬁle with the Records Management Department) for Contract No. SM2223-1 with Towo Enterprise Inc. of Fullerton, California, for concrete repair and maintenance in the not to exceed amount of $3,321,000 for a three-year term, with an option to extend for two additional one-year terms at $1,441,700 for the ﬁrst optional year and $1,574,550 for the second optional year, for a total not to exceed amount of $6,337,250, consistent with future budgets approved by the City Council.

That the City Council authorize the City Manager to negotiate and execute a one (1) year agreement, with an optional renewal period for two (2) years (on ﬁle in the Records Management Department) with Accela, Inc. of San Ramon, California, to renew and extend the use of the Accela citizen access, land management, mobile oﬃce and GIS systems used by Community Development, Fire Prevention, and the Ontario Municipal Utilities Company in the amount of $558,480, including an amount of $180,685 for the ﬁrst year and $186,106 and $191,689 for the optional second and third years, subject to City Council approved budgets .

CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 4

9. PRE-AUTHORIZED LIST OF VENDORS TO PROVIDE MAINTENANCE SERVICE AND PARTS FOR

THE POLICE HELICOPTERS

ATTACHMENT:

Pre-Authorized List of Vendors for Police Helicopters 2022

10. AUTHORIZE THE PURCHASE OF FIRE APPARATUSES

11. AMENDMENT NO. 3 TO THE LETTER OF AGREEMENT FOR WORKPLACE INVESTIGATIONS,

CONSULTING AND LEGAL SERVICES

12. A PUBLIC HEARING FOR THE INTRODUCTION OF AN ORDINANCE ADDING CHAPTER 33 TO TITLE 5 OF VOLUME I TO THE ONTARIO MUNICIPAL CODE, ESTABLISHING A PUBLIC ART

PROGRAM, ESTABLISHING A PUBLIC ART ADVISORY COMMITTEE, AND INCLUDING A

DEVELOPMENT FEE TO SUPPORT PUBLIC ART, AND FINDING THE ACTION EXEMPT FROM CEQA
That the City Council authorize the City Manager, or his designee, to execute a ﬁve-year Maintenance Services Agreement (on ﬁle with the Records Management Department) for Contract No. 1617-5 with Graﬃti Protective Coatings of Los Angeles, California, for graﬃti removal services at various city locations for an annual cost of $691,200, with a 5% contingency of $34,560, for a total annual amount of $725,760, or not to exceed of $3,628,800 over a five-year term.

That the City Council approve the attached list of pre-authorized vendors to provide maintenance service, equipment, parts and tools for the Police Helicopters.

That the City Council authorize the purchase and delivery of one (1) KME Fire Pumper in the amount of $971,000 and one (1) KME Fire Aerial Tractor in the amount of $1,917,000 from Kovatch Mobile Equipment (KME) of Fontana, California.

That the City Council authorize the City Manager, or his designee, to execute Amendment No. 3 (on ﬁle in the Records Management Department) adding $100,000 to the existing Letter of Agreement with Atkinson, Andelson, Loya, Ruud & Romo (AALRR) for Workplace Investigations, Consulting and Legal Services for a revised contract authority of $200,000, and to extend the contract term to June 30, 2024. This would extend the contract by 2 additional years, making the life of the contract a total of seven (7) years.

PUBLIC HEARINGS
Pursuant to Government Code Section 65009, if you challenge the City’s zoning, planning or any other decision in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the City Council at, or prior to the public hearing. Affidavits of posting compliance, for all items below, are on file with the Records Management Department.

That the City Council consider and take action to add Chapter 33 to Title 5 of Volume I to the Ontario Municipal Code relating to: establishing a Public Art Program, establishing a Public Art Advisory committee, and a development fee to support public art.

CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 5

ATTACHMENT:

20220503 Public Art Fee^01^ORD^RM

13. A PUBLIC HEARING TO CONSIDER A RESOLUTION CALLING A SPECIAL ELECTION FOR

PROPOSED CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF THE EXISTING SPECIAL TAX OF THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES);

A RESOLUTION OF CHANGE, DECLARING

RESULTS OF A SPECIAL ELECTION, DETERMINING THAT CHANGES TO THE RATE AND

METHOD OF APPORTIONMENT OF THE EXISTING SPECIAL TAX OF COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES) ARE LAWFULLY AUTHORIZED AND DIRECTING THE RECORDING OF AN AMENDMENT TO NOTICE OF SPECIAL TAX LIEN; AND
AN ORDINANCE AMENDING AND RESTATING ORDINANCE NO. 3082 LEVYING SPECIAL TAXES WITHIN THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES); A RESOLUTION DEEMING IT NECESSARY TO AMEND RESOLUTION NO. 2017-124 IN ORDER TO INCREASE THE MAXIMUM AGGREGATE

AMOUNT OF BONDED INDEBTEDNESS THAT CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES) IS AUTHORIZED TO INCUR; A

RESOLUTION CALLING A SPECIAL ELECTION FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES); AND A RESOLUTION DECLARING THE RESULTS OF THE SPECIAL ELECTION.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING CHAPTER 33 TO TITLE 5 OF VOLUME I TO THE ONTARIO MUNICIPAL

CODE, ESTABLISHING A PUBLIC ART PROGRAM, ESTABLISHING A PUBLIC ART

ADVISORY COMMITTEE, AND INCLUDING A DEVELOPMENT FEE TO SUPPORT PUBLIC ART, AND FINDING THE ACTION EXEMPT FROM CEQA.

That the City Council consider and:

A
.

Adopt a
R
esolution calling a special election for proposed changes to the Rate and Method of Apportionment (the "RMA") of the existing Special Tax of City of Ontario Community Facilities District No.
3 5 (Countryside Phase 2 South-Facilities
), (the "CFD")
B
.

Adopt a Resolution declaring results of the special election, determining that changes to the Rate and Method of Apportionment of the existing Special Tax of City of Ontario Community Facilities District No.
35 (Countryside Phase 2 South-Facilities)
are lawfully
authorized and directing recording of an amendment to Notice of Special Tax Lien, C
.

Introduce and waive further reading of an Ordinance amending and restating Ordinance No. 3082 levying special taxes within City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South-Facilities).

D
.

Adopt a resolution deeming it necessary to amend Resolution No. 2017-124 in order to increase the maximum aggregate amount of bonded indebtedness that Community Facilities District No. 35 (Countryside Phase 2 South-Facilities) is authorized to incur; E
.

Adopt a Resolution calling a special election for Community Facilities District No. 35 (Countryside Phase 2 South-Facilities); and
F
.

Adopt a Resolution declaring the results of the special election.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 6

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 01^RESO Calling Special^RM

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 01A^EXH A RMA

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 02^RESO Declaring Results^RM

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 03^ORD^RM

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 04^RESO^Deeming it Necessary to Incur^RM

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 05^RESO Calling Special Election^RM

ATTACHMENT:

20220503 CFD No. 35 Countryside Phase 2 So-Fac 06^RESO^Declaring Results of Special^Election^RM

14. A PUBLIC HEARING TO CONSIDER FILE NO. PCUP21-009, A CONDITIONAL USE PERMIT TO ESTABLISH A 128-ROOM LIMITED-SERVICE HOTEL ON 1.83 ACRES OF LAND LOCATED AT 5060 EAST FOURTH STREET, WITHIN THE FREEWAY COMMERCIAL LAND USE DISTRICT OF

CALLING A SPECIAL ELECTION FOR PROPOSED CHANGES TO THE RATE AND

METHOD OF APPORTIONMENT OF THE EXISTING SPECIAL TAX OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES).

A RESOLUTION OF CHANGE OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, DECLARING RESULTS OF SPECIAL ELECTION, DETERMINING THAT

CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF THE EXISTING SPECIAL TAX OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES) ARE LAWFULLY AUTHORIZED AND DIRECTING RECORDING OF AN AMENDMENT TO NOTICE OF SPECIAL TAX LIEN.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING AND RESTATING ORDINANCE NO. 3082 LEVYING SPECIAL TAXES WITHIN THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES).

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, DEEMING IT NECESSARY TO AMEND RESOLUTION NO. 2017-124 IN ORDER TO

INCREASE THE MAXIMUM AGGREGATE AMOUNT OF BONDED INDEBTEDNESS THAT CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES) IS AUTHORIZED TO INCUR.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

CALLING SPECIAL ELECTION FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES).

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

DECLARING RESULTS OF SPECIAL ELECTION OF COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES).

CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 7 THE EXCHANGE SPECIFIC PLAN (APN: 0238-012-30)

ATTACHMENT:

20220419 File No. PCUP21-009 Extended Stay Hotel^01 PC
BACKUP.pdf

ATTACHMENT:

20220405 File No. PCUP21-009 Extended Stay Hotel^02 RESO^RM

ATTACHMENT:

20220419 File No. PCUP21-009 Extended Stay Hotel^03 Revised COA.pdf

15. A PUBLIC HEARING TO CONSIDER A RESOLUTION REGARDING THE FORMATION OF THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 63 (OLIVE AND OLEANDER); ADOPTION OF A RESOLUTION TO INCUR BONDED INDEBTEDNESS; AND INTRODUCTION

OF AN ORDINANCE LEVYING SPECIAL TAXES
That the City Council consider and adopt a Resolution approving the Conditional Use Permit, File No. PCUP21-009, establishing a 128-room limited-service hotel located at 5060 East Fourth Street.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PCUP21-009, A CONDITIONAL USE PERMIT TO ESTABLISH AND OPERATE A 128-ROOM LIMITED-SERVICE HOTEL ON 1.83 ACRES OF LAND LOCATED AT 5060 EAST FOURTH STREET, WITHIN THE FREEWAY COMMERCIAL

LAND USE DISTRICT OF THE EXCHANGE SPECIFIC PLAN AND MAKING FINDINGS IN SUPPORT THEREOF - APN: 0238-012-30.

That the City Council consider and:

A
.

Adopt a Resolution of formation of Community Facilities District No. 63 (Olive and Oleander), authorizing the levy of special taxes within the community facilities district, and establishing an appropriations limit for the community facilities district; B
.

Adopt a Resolution deeming it necessary to incur bonded indebtedness within Community Facilities District No. 63 (Olive and Oleander); C
.

Adopt a resolution calling a special election for City of Ontario Community Facilities District No. 63 (Olive and Oleander);
D
.

Adopt a resolution declaring the results of the special election and directing the recording of a Notice of Special Tax Lien;
E
.

Introduce and waive further reading of an ordinance levying special taxes within City of Ontario Community Facilities District No. 63 (Olive and Oleander); and F
.

Adopt a resolution authorizing the execution and delivery of an acquisition and funding agreement with Shea Homes Limited Partnership, a
California limited partnership.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, OF FORMATION OF THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 63 (OLIVE AND OLEANDER), AUTHORIZING THE LEVY OF A SPECIAL TAX.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

DEEMING IT NECESSARY TO INCUR BONDED INDEBTEDNESS WITHIN CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 63 (OLIVE AND OLEANDER).

CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 8

ATTACHMENT:

20220503 CFD No. 63 Olive and Oleander 01^RESO Formation^RM

ATTACHMENT:

20220503 CFD No. 63 Olive and Oleander 01A^EXH B RMA

ATTACHMENT:

20220503 CFD No. 63 Olive and Oleander 02^RESO Necessary to Incur RM

ATTACHMENT:

20220503 CFD No. 63 Olive and Oleander 03^RESO Calling Special Election RM

ATTACHMENT:

20220503 CFD No. 63 Olive and Oleander 04^RESO Declaring Election RM

ATTACHMENT:

20220503 CFD No. 63 Olive and Oleander 05^ORD RM

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

CALLING SPECIAL ELECTION FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 63 (OLIVE AND OLEANDER).

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

DECLARING RESULTS OF SPECIAL ELECTION AND DIRECTING RECORDING OF

NOTICE OF SPECIAL TAX LIEN FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 63 (OLIVE AND OLEANDER).

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, LEVYING SPECIAL TAXES WITHIN COMMUNITY FACILITY DISTRICT NO. 63 (OLIVE AND OLEANDER).

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA,

AUTHORIZING THE EXECUTION AND DELIVERY OF AN ACQUISITION AND FUNDING AGREEMENT WITH SHEA HOMES LP OF CALIFORNIA.

STAFF MATTERS

City Manager Ochoa

COUNCIL MATTERS

Mayor Leon
Mayor Pro tem Wapner
Council Member Bowman
Council Member Dorst-Porada
Council Member Valencia

ADJOURNMENT
CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 9

ONTARIO CITY COUNCIL/

ONTARIO HOUSING AUTHORITY

MINUTES
APRIL 5, 2022
(Not official until approved)

JOINT MEETINGS
The regular meetings of the Ontario City Council and Housing Authority were held on Tuesday, April 5, 2022 at Ontario City Hall, 303 E. B Street Ontario, California.

CALL TO ORDER
Mayor Leon called the Joint City Council and Ontario Housing Authority meetings to order at 6:30 p.m.

ROLL CALL
PRESENT: Mayor/Chairman Paul S. Leon
Council/Authority Members: Jim W. Bowman, Debra Dorst-Porada and Ruben Valencia
ABSENT: Mayor pro Tem/Vice Chair: Alan D. Wapner
Also present were City Manager / Executive Director Scott Ochoa, Assistant City Attorney/Legal Counsel Ryan Guiboa, and City Clerk/Secretary Sheila Mautz.

PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by Council Member Dorst-Porada.

INVOCATION
The Invocation was led by Pastor Mike Urciuoli, Calvary Chapel Ontario.

PUBLIC COMMENTS
Two emailed comments were entered into the record as follows:

Jeff L. Lopez, regarding rent increases.

Amanda Rohrer, regarding park safety and security.

Mayor Leon called upon the first speaker:

Andrew Gerardo, with the D’Andre Lampkin Foundation announced upcoming events. 10 Ontario City Council/Ontario Housing
Regular Meeting Minutes – April 5, 2022

Page 2 of 7 ends

Cassandra Sanchez , requested a billboard sign to garner information on the Jesus Sanchez homicide case.

Karen Haughey, representative of San Bernardino County Board Supervisor Hagman’s office, announced upcoming events.

Donna Villareal, spoke regarding truck traffic on Francis Street.

Xochitl Escamilla, spoke on the importance of communication.

AGENDA REVIEW/ANNOUNCEMENTS
City Manager Ochoa requested that Item No. 09 be pulled. He also announced an update to Item No. 10, clarify the updated Government Code Section to 53083 which deals with sales offices versus warehouses.

CONSENT CALENDAR
MOTION: Moved by Council Member Dorst-Porada, seconded by Council Member Bowman and carried by unanimous vote 4-0, to approve the Consent Calendar as presented, with Mayor pro Tem Wapner absent.

1. APPROVAL OF MINUTES
The City Council approved minutes for the regular meetings of the City Council and Housing Authority of March 1, 2022, approving the same as on file in the Records Management Department.

2. BILLS & PAYROLL
Approved Bills from February 25, 2022 through March 17, 2022 in the amount of $24,475,275.04 and Payroll February 25, 2022 through March 12, 2022 in the amount of $7,690,176.37, when audited by the Finance Committee.

3. RIGHTS-OF-WAY JOINT USE AGREEMENTS WITH SOUTHERN CALIFORNIA

EDISON FOR RIGHTS-OF-WAY ON ONTARIO RANCH ROAD AND OLD

EDISON AVENUE AT MILL CREEK AVENUE
The City Council approved and authorized the City Manager to execute Joint Use Agreements with Southern California Edison (SCE) for the rights-of-way on Ontario Ranch Road and Old Edison Avenue at Mill Creek Avenue within the Rich Haven Specific Plan area.
11 Ontario City Council/Ontario Housing
Regular Meeting Minutes – April 5, 2022

Page 3 of 7 ends

4. A RESOLUTION AUTHORIZING SUBMITTAL OF A CLAIM TO THE SAN

BERNARDINO COUNTY TRANSPORTATION AUTHORITY FOR
TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUNDS FOR THE BUS

STOP PAD INSTALLATION PROJECT
The City Council adopted a Resolution approving the submittal of a claim for $67,050 from the San Bernardino County Transportation Authority (SBCTA) for Transportation Development Act (TDA) Article 3 Funds for the Bus Stop Pad Installation Project and authorized the City Manager, or his designee, to execute all necessary documents to submit a reimbursement claim.

RESOLUTION NO. 2022-026 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ONTARIO, CALIFORNIA, AUTHORIZING SUBMITTAL OF A CLAIM TO

THE SAN BERNARDINO COUNTY TRANSPORTATION AUTHORITY FOR
TRANSPORTATION DEVELOPMENT ACT ARTICLE 3 FUNDS FOR THE BUS STOP PAD INSTALLATION PROJECT.

5. A DEVELOPMENT IMPACT FEE CREDIT AGREEMENT (FILE NO. PDIF21-002)

BETWEEN THE CITY OF ONTARIO AND SHEA HOMES LIMITED

PARTNERSHIP, FOR FACILITY CONSTRUCTION ASSOCIATED WITH TRACT MAP 20265 (FILE NO. PMTT19-006), LOCATED ON THE EAST SIDE OF MILL CREEK AVENUE, APPROXIMATELY 670 FEET SOUTH OF ONTARIO RANCH

ROAD, WITHIN THE STANDALONE RESIDENTIAL LAND USE DISTRICT OF

THE RICH HAVEN SPECIFIC PLAN
The City Council approved the Development Impact Fee Credit Agreement (File No.

PDIF21-002) between the City of Ontario and Shea Homes Limited Partnership, for facility construction associated with Tract Map 20265 (File No. PMTT19-006), located on the east side of Mill Creek Avenue, approximately 670 feet south of Ontario Ranch Road, within the Standalone Residential land use district of the Rich-Haven Specific Plan, and have the City Manager execute the Agreement.

6. AN ORDINANCE FOR THE ARTS DISTRICT WEST PLANNED UNIT DEVELOPMENT (FILE NO. PUD22-001), ESTABLISHING DEVELOPMENT

STANDARDS, DESIGN GUIDELINES AND INFRASTRUCTURE
REQUIREMENTS TO FACILITATE A COMMERCIAL DEVELOPMENT ON 0.86- ACRE OF LAND LOCATED AT 125 WEST EMPORIA STREET, WITHIN THE MU- 1/LUA-2N (DOWNTOWN MIXED-USE/ARTS DISTRICT - NORTH) AND EA (EUCLID AVENUE OVERLAY) ZONING DISTRICTS (APN: 1049-059-14) The City Council considered and adopted an Ordinance approving the Arts District West Planned Unit Development, File No. PUD22-001, establishing development standards, design guidelines, and infrastructure requirements to facilitate a commercial development at 125 West Emporia Street. Introduction took place at a regular City Council meeting on March 15, 2022.
12 Ontario City Council/Ontario Housing
Regular Meeting Minutes – April 5, 2022

Page 4 of 7 ends

ORDINANCE NO. 3207 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PUD22-001, THE ARTS

DISTRICT WEST PLANNED UNIT DEVELOPMENT, ESTABLISHING

DEVELOPMENT STANDARDS, DESIGN GUIDELINES, AND INFRASTRUCTURE REQUIREMENTS FOR 0.86-ACRE OF LAND LOCATED AT 125 WEST EMPORIA STREET, WITHIN MU-1/LUA-2N (DOWNTOWN MIXED-USE/ARTS DISTRICT –

NORTH) AND EA (EUCLID AVENUE OVERLAY) ZONING DISTRICTS, AND MAKING FINDINGS IN SUPPORT THEREOF—APN: 1049-059-14.

7. SEWER CONNECTION FEE REIMBURSEMENT PILOT PROGRAM
The City Council considered and approved the adoption of the Sewer Connection Fee Reimbursement Pilot Program and authorized City Manager, or his designee, to make any necessary program adjustments and execute all necessary documents to implement the Sewer Connection Fee Reimbursement Pilot Program.

8. AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH UC

RIVERSIDE CENTER FOR ECONOMIC FORECASTING AND DEVELOPMENT

AT THE SCHOOL OF BUSINESS ADMINISTRATION, FOR THE PURPOSE OF

EXTENDING THE SCOPE, TIME OF PERFORMANCE, AND THE NOT TO

EXCEED AMOUNT
The City Council approved an amendment to the Professional Services Agreement between UC Riverside ("UCR") Center for Economic Forecasting and Development at the School of Business Administration and the City of Ontario for the purpose of extending the time of performance an additional year, updating the Scope of Work, and increasing the not to exceed amount to $109,500.

Mayor Leon spoke in support of Item No. 06. Council Member Dorst-Porada spoke on the positive look the project will bring to the community.

PUBLIC HEARINGS

9. INTRODUCTION OF AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING CHAPTER 33 TO TITLE 5 OF VOLUME I TO

THE ONTARIO MUNICIPAL CODE, ESTABLISHING A PUBLIC ART PROGRAM,

ESTABLISHING A PUBLIC ART ADVISORY COMMITTEE, AND INCLUDING A

DEVELOPMENT FEE TO SUPPORT PUBLIC ART, AND FINDING THE ACTION

EXEMPT FROM CEQA
This item was pulled from the agenda.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING CHAPTER 33 TO TITLE 5 OF VOLUME I TO THE

ONTARIO MUNICIPAL CODE, ESTABLISHING A PUBLIC ART PROGRAM,

ESTABLISHING A PUBLIC ART ADVISORY COMMITTEE, AND INCLUDING A

DEVELOPMENT FEE TO SUPPORT PUBLIC ART, AND FINDING THE ACTION

EXEMPT FROM CEQA
13 Ontario City Council/Ontario Housing
Regular Meeting Minutes – April 5, 2022

Page 5 of 7 ends

10. A PUBLIC HEARING REGARDING AN ECONOMIC DEVELOPMENT SUBSIDY

REPORT AND OPERATING COVENANT AGREEMENT BETWEEN THE CITY OF ONTARIO AND SID TOOL, INC. A SUBSIDIARY OF MSC INDUSTRIAL DIRECT CO., INC. PURSUANT TO GOVERNMENT CODE SECTION 53083.1; AND

CONSIDERATION OF A RESOLUTION ACCEPTING THE ECONOMIC

DEVELOPMENT SUBSIDY REPORT, APPROVING THE OPERATING

COVENANT AGREEMENT
The City Council took the following actions:

A. Held the public hearing;
B. Adopted a resolution accepting the Economic Development Subsidy Report prepared pursuant to Government Code Section 53083.1 regarding an Operating Covenant Agreement by and between the City of Ontario and Sid Tool, Inc. a subsidiary of MSC Industrial Direct Co., Inc. hereafter referred to as "Sid Tool"
C. Adopted a resolution approving the Operating Covenant Agreement and authorizing the City Manager to execute the Agreement, and making related findings; and
D. Directed City sta to file a Notice of Exemption based upon the City Council’s finding that the impacts for this agreement is not a project and subject to environmental review and that there is no possibility that the activity in question may have a significant eect on the environment.

RESOLUTION NO. 2022-027 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ONTARIO, CALIFORNIA, ACCEPTING THE ECONOMIC

DEVELOPMENT SUBSIDY REPORT PREPARED PURSUANT TO
GOVERNMENT CODE SECTION 53083 REGARDING THE DEVELOPMENT AND RETENTION OF A SALES OFFICE LOCATION FOR SID TOOL, INC. A SUBSIDIARY OF MSC INDUSTRIAL DIRECT CO., INC. IN THE CITY OF

ONTARIO AND APPROVING AN OPERATING COVENANT AGREEMENT
BETWEEN THE PARTIES.

Notice of public hearing has been duly given and affidavits of compliance are on file in the Records Management Department.

There were no written communications. Mayor Leon opened the public hearing asking those persons interested in this item to speak. Hearing no one wishing to speak, Mayor Leon opened the item for Council discussion and closed the public hearing.

MOTION: Moved by Council Member Bowman, seconded by Council Member Dorst-Porada and carried by unanimous vote of 4-0, with Mayor pro Tem Wapner absent to adopt Resolution No. 2022-027.

Mayor Leon recessed the meeting at 7:02 p.m. and reconvened at 7:03 p.m. 14 Ontario City Council/Ontario Housing
Regular Meeting Minutes – April 5, 2022

Page 6 of 7 ends

11. PUBLIC HEARING #1 TO RECEIVE PUBLIC COMMENTS ON TRANSITIONING

TO DISTRICT-BASED ELECTIONS UNDER THE CALIFORNIA VOTING RIGHTS ACT
The City Council opened the Public Hearing and received input regarding the formation of districts and closed the public hearing.

Notice of public hearing were duly given and affidavits of compliance are on file in the Records Management Department. There was one written communication.

Sky Allen, concerns over the districting process.

Mayor Leon opened the public hearing asking those persons interested in this item to speak.

Loree Masonis, expressed her opposition to districts.

Xochitl Escamilla, spoke on her expectation of the community workshops.

Council Member Valencia spoke on the importance of providing information in a timely manner.

Mayor Leon spoke on the challenges of transitioning to districts.

Council Member Dorst-Porada noted districts are great for politicians, but not for residents.

Chris Robles, stated he sued the City of Ontario in pursuit of fair representation.

Celina Lopez, spoke on her expectations of the districting process.

Elizabeth Sena, spoke on the Fontana districting process.

Joaquin Castillejos, spoke on the districting process.

Ana Gonzalez, with the Center for Community Action and Environmental Justice announced her intent to host community workshops.

Hearing no one else wishing to speak, Mayor Leon closed the public hearing.

STAFF MATTERS
City Manager Ochoa made no comments.
15 Ontario City Council/Ontario Housing
Regular Meeting Minutes – April 5, 2022

Page 7 of 7 ends

COUNCIL MATTERS
Council Member Valencia stated there are politics on both sides of the districting process.

Council Member Bowman had no comments.

Council Member Dorst-Porada announced the City’s bulky item pick-up, “Spring Cleaning” and an upcoming aviation program in partnership with Mt. San Antonio College, Chaffey College, and the Ontario International Airport.

Mayor Leon expressed his thoughts over the districting process and spoke on the success of the Ontario State of the City event.

ADJOURNMENT
Mayor Leon adjourned the meetings of the Joint Agencies at 7:58 p.m. and announced the next regular meeting to be held on Tuesday, April 19, 2022.

Respectfully submitted,
____________________________________

SHEILA MAUTZ, CITY CLERK/SECRETARY
APPROVED:
________________________________________________
PAUL S. LEON, MAYOR/CHAIRMAN
16 Department: Fire Department
Prepared By: Janny Phan
Staff Member Presenting:

Ray Gayk, Fire Chief
Reviewed By: Jordan T Villwock
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 3
SUBJECT:

AMENDMENT TO THE PURCHASE AND INSTALLATION OF REPLACEMENT FIRE

STATION ALERTING SYSTEM

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council take the following actions:

A
.

Authorize a $20,000 contingency to address any unforeseen needs that may arise with US Digital Designs;
C
.

Authorize a 15% contingency of $41,588 to address any unforeseen issues that may arise with Bergelectric Corp.; and
E
.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
FISCAL IMPACT:

The Fiscal Year 2021-22 Adopted Budget includes appropriations in the General Fund for the purchase of a replacement ﬁre station alerting system in the amount of $24,822.

Additional appropriation is included in the Fire Mutual Aid Fund in the amount of $132,100. The total not to exceed amount for the project is $1,117,670. Additional funding will be included in Fiscal Year 2022-23 proposed operating budget.

BACKGROUND & ANALYSIS:

Since the 1990's, the Ontario Fire Department utilized Sigler Systems for ﬁre station alerting. While that system served the Fire Department well, it got to the end of its 17 life. Over the last 20 years, technological advancements have also progressed to meet the demands of the modern ﬁre service. An Agency Strategic Objective in FY 2019/2020, detailed the Ontario Fire Department's completion of a Staﬀ Study Report which researched and recommended an up to date ﬁre station alerting system. The research was completed by a team of Ontario Fire Department employees visiting multiple ﬁre agencies of comparative size and complexity to appropriately compare system capabilities.

As a result, the Ontario Fire Department entered into an Agreement with US Digital Designs, Inc. (USDD) for ﬁre station alerting systems for Fire Stations No. 2 through 8. Fire Station No. 1 was not included in the initial Agreement scope, as the relocation of the building was still being discussed.

Additionally, The Ontario International Airport Authority (OIAA) Fire Station will be submitted at a later date during OIAA's budget process.

The USDD station alerting system was selected because it includes a streamlined notiﬁcation system and multimedia monitors throughout the station, which immediately display maps, addresses, and other important call information. The system also includes contingency alerting methods, such as VHF radio activation in the event network communications fail. This feature will bring the Fire Department into compliance with the current industry standard, NFPA 1710.

Additionally, the USDD alerting system utilizes ramped tones and zoned alerting that only notiﬁes required stations and/or individual units. The ramped alerting tones contribute to ﬁreﬁghter wellness by reducing cardiac stress, anxiety, optical shock, and sleep deprivation. Research indicates that adding these capabilities to station alerting will not only improve the eﬃciency of 911 response times, but also improve the health and wellness of our firefighters.

The original Agreement with USDD included equipment purchase in the amount of $575,000 for Fire Stations No. 2 through 8. However, after working with USDD, Staﬀ conﬁrmed that a system installed at Fire Station No. 1 would have the capability to be relocated after installation. This is ideal should the building be relocated. Therefore, Staﬀ recommends an Amendment in the amount of $72,900 to include an alerting system for Fire Station No. 1, as well as additional equipment now needed for Fire Stations No. 2 through 8. The total not-to-exceed amount will be $647,884.

As for system implementation, the Ontario Fire Department has a negotiated sole source contract with Bergelectric Corporation, a certiﬁed G2 installer. The original contract amount with Bergelectric Corporation for installation of equipment at Fire Stations No. 2 through 8 was $225,275. Staﬀ recommends a contract amendment in the amount of $55,022 for install at Fire Station No. 1 and additional work at Fire Station No. 6. The total not-to-exceed for the contract will be $280,322.
18 Department: Investments & Revenue Resources
Prepared By: William B Quan
Staff Member Presenting:

Armen Harkalyan, Executive Director of Finance
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 4
SUBJECT:

A RESOLUTION APPROVING THE UPDATED DELEGATION OF AUTHORITY TO

REQUEST DISBURSEMENTS OF CALIFORNIA EMPLOYERS' RETIREE BENEFIT TRUST (CERBT) FUND ADMINISTERED BY CALPERS

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council consider and approve a Resolution updating the City's delegation of authority to request disbursements from California Employers' Retiree Beneﬁt Trust (CERBT).

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
FISCAL IMPACT:

There is no direct ﬁscal impact associated with this Resolution to update the City's delegation of authority to request disbursements from California Employers' Retiree Beneﬁt Trust (CERBT).

BACKGROUND & ANALYSIS:

The City Council adopted Resolution 2019-096 on July 16, 2019, approving an agreement and election to prefund other post-employment beneﬁts through CalPERS, approving the delegation of authority to request disbursements, and authorizing the City Manager (or his designee) to take any additional actions necessary to participate in the California Employers' Retiree Beneﬁt Trust (CERBT) Fund. An update to Section 2 of the Resolution is recommended at this time. Section 2 of the Resolution lists the City positions who are delegated the authority to request, on behalf of the City, eligible disbursements from the California Employers' Retiree Beneﬁt Trust Fund and to certify as to the purpose for which the disbursed funds will be used.

The current list of positions consists of the Assistant City Manager, Executive Director of Finance, Fiscal Services Director, and the Departmental Administrator of the Financial Services Agency. The recommendation is to add the following positions to the list: Assistant Finance Director, Chief Investment Oﬃcer, and Investment Oﬃcer and delete the position of Fiscal Services Director. A Resolution to update the positions is attached as Exhibit A. 19 RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, APPROVING THE DELEGATION OF AUTHORITY TO

ADDITIONAL POSITIONS TO REQUEST, ON BEHALF OF THE CITY, DISBURSEMENTS FROM THE CALIFORNIA EMPLOYERS’ RETIREE
BENEFIT TRUST FUND.

WHEREAS, the City provides medical benefits to retirees known as Other Post- Employment Benefits (OPEB); and
WHEREAS, the City prefunds OPEB expenses through an irrevocable OPEB trust that allows the City to invest OPEB assets in higher-yield investments; and WHEREAS, on July 16, 2019, the City entered into an agreement with the California Public Employees’ Retirement System (CALPERS) in order to prefund OPEB liabilities through the California Employers’ Retiree Benefit Trust (CERBT) program; and WHEREAS, on July 16, 2019, the Assistant City Manager, Executive Director of Finance, Fiscal Services Director and the Departmental Administrator of the Financial Services Agency were delegated the authority to request, on behalf of the City, eligible disbursements from the CERBT Fund; and
WHEREAS, the City Council now desires to delegate authority to request eligible disbursements to additional positions.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The foregoing recitals are true and correct and are incorporated herein and made an operative part of this Resolution.

SECTION 2. Delegation of Authority. The Assistant City Manager, Executive Director of Finance, Assistant Finance Director, Chief Investment Officer, Departmental Administrator of the Financial Services Agency, and the Investment Officer are delegated the authority to request, on behalf of the City, eligible disbursements from the California Employers’ Retiree Benefit Trust Fund and to certify as to the purpose for which the disbursed funds will be used. A copy of the CERBT resolution is attached to this Resolution as Exhibit “A”.

SECTION 3. Severability. If any provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity, and the provisions of this Resolution are severable.

SECTION 4. Effective Date. This Resolution shall become effective immediately upon its adoption.
20 The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 3rd day of May 2022. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST AND KRIEGER LLP

CITY ATTORNEY
21 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2022-__ was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held May 3, 2022 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2022-__ duly passed and adopted by the Ontario City Council at their regular meeting held May 3, 2022. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
22 EXHIBIT A

CERBT RESOLUTION
23 California Public Employees’ Retirement System
California Employers’ Retiree Benefit Trust (CERBT) 400 Q Street, Sacramento, CA 95811
www.calpers.ca.gov
Delegation of Authority to Request Disbursements
California Employers’ Retiree Benefit Trust
(CERBT)

RESOLUTION
OF THE
(GOVERNING BO DY )
OF THE
(NAME OF EMPL OYER)
The delegates to the incumbents
(GOVERNING BO DY )
in the positions of and/or
(TITLE)
(TITLE)
and/or
and/or
(TITLE)
(TITLE)
(TITLE)
and/or
and/or
authority to request on
behalf of the Employer disbursements from the Other Post Employment Prefunding Plan and to certify as to the purpose for which the disbursed funds will be used.

By
Title
Witness
Date
(TITLE)
24 Department: Parks & Maintenance
Prepared By: Alfredo Banuelos
Staff Member Presenting:

Tito Haes, Executive Director Public Works
Reviewed By: Bonnie Tam
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 5
SUBJECT:

AMENDMENT TO THE MAINTENANCE SERVICES AGREEMENT FOR CITYWIDE

LANDSCAPE FERTILIZATION, WEED CONTROL, PEST, AND DISEASE CONTROL

SERVICES

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT:

The estimated annual base cost of the proposed option Year One and Year Two to the Maintenance Service Agreement is $68,640, plus $3,432 for urgency services, for a total of $72,072 each option year for a new total not to exceed amount of $477,479. Appropriations for maintenance cost for the chemical application services in Facility Maintenance Fund are included in the Fiscal Year 2022-23 Proposed Budget.

BACKGROUND & ANALYSIS:

In March 2017, the City solicited bids for citywide landscape fertilization, weed control, pest, and disease control services. Two bids were received, and both proposals met the bid criteria and standards necessary to perform this work. RPW, Inc. was selected based on their experience, expertise, pricing, equipment, and speciﬁc knowledge of the City. They submitted a proposal that met all the required speciﬁcation with base cost, ﬁve-year total of $317,460 plus $15,875 for urgency services. Based on this, Staﬀ recommended to award RPW, Inc. the Maintenance Services Agreement.

Exercising the option years will allow the City to limit the potential for higher yearly increases to the bid amounts, avoid the costs of re-bidding the contract annually, provide service continuity, and project future costs.
25 Department: Parks & Maintenance
Prepared By: Alfredo Banuelos
Staff Member Presenting:

Tito Haes, Executive Director Public Works
Reviewed By: Bonnie Tam
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 6
SUBJECT:

MAINTENANCE SERVICES AGREEMENT FOR CONCRETE REPAIR AND

MAINTENANCE SERVICES

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
FISCAL IMPACT:

The estimated cost of the proposed maintenance service is $3,321,000 over the initial three-year term. At the City’s discretion, two additional one-year extensions may be exercised at $1,441,700 for the ﬁrst optional year and $1,574,550 for the second optional year, for a total not to exceed amount of $6,337,250. If approved, the Fiscal Year 2022-23 Proposed Budget will include appropriations in the General Fund to complete scheduled projects, such as reconstruction of sidewalk and drive approaches and the reconstruction of curb and gutter. Actual expenditures will be based on the ﬁxed unit pricing applied to the extent of services rendered. Having the ability to exercise the optional years allows Staﬀ to limit the potential for higher yearly increases to the bid amounts and provide service continuity.

BACKGROUND & ANALYSIS:

On February 23, 2022, the City solicited bids for Contract No. SM2223- 1 for citywide concrete repair services. Four (4) bids were received that met the bid criteria and standards necessary to perform the work. The three-year base cost proposals ranged from $3,321,000 to $3,967,040.

Vendor
Location
Bids
26 Towo Enterprise, Inc.

Fullerton, California
$3,321,000
S&H Civilworks

Colton, California
$3,457,900
CT&T Concrete Paving, Inc.

Diamond Bar, California
$3,516,209
Gentry General Engineering,
Inc.

Rancho Cucamonga,
California
$3,967,040

Towo Enterprise, Inc., located in Fullerton, California, submitted the lowest bid that met all the required speciﬁcations. Based on the bid, credentials, pricing and reference checks, Staﬀ recommends award of a Maintenance Services Agreement to Towo Enterprise, Inc. 27 Department: Information Technology
Prepared By: Samantha Robles
Staff Member Presenting:

Colin Fernandes, Executive Director Information
Technology
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 7
SUBJECT:

THE RENEWAL OF AN EXISTING AGREEMENT FOR LAND MANAGEMENT SYSTEM

FOR COMMUNITY DEVELOPMENT AGENCY, FIRE PREVENTION, AND THE

ONTARIO MUNICIPAL UTILITIES COMPANY

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
FISCAL IMPACT:

The term of the subscription agreement will be for one (1) year, with an optional renewal period for two (2) years. Annual software licensing will be $180,685 for year one, $186,106 for year two, and $191,689 for year three. These amounts will be funded through the Information Technology Fund. FY 2021-22 budget includes appropriations for the current contract year. If approved, appropriations will be added to the future years’ budgets consistent with the annual adoption process.

BACKGROUND & ANALYSIS:

The Community Development Agency and Fire Prevention
Department have been using the Accela Automation Land Management Systems since 2010 to manage permits issued by the City. In 2016, the Ontario Municipal Utilities Company Environmental Department also started to use it to manage Wastewater Permits. This software calculates and collects permit fees, manages the permit approval process, and tracks credits issued and used as part of the Developers Impact Fee program. Citizens and Developers can track the status of permits using the Accela Citizen Access website.
28 Department: Parks & Maintenance
Prepared By: Alfredo Banuelos
Staff Member Presenting:

Tito Haes, Executive Director Public Works
Reviewed By: Bonnie Tam
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 8
SUBJECT:

MAINTENANCE SERVICES AGREEMENT FOR GRAFFITI REMOVAL SERVICES AT

VARIOUS CITY LOCATIONS

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council authorize the City Manager, or his designee, to execute a ﬁve-year Maintenance Services Agreement (on ﬁle with the Records Management Department) for Contract No. 1617-5 with Graﬃti Protective Coatings of Los Angeles, California, for graﬃti removal services at various city locations for an annual cost of $691,200, with a 5% contingency of $34,560, for a total annual amount of $725,760, or not to exceed of $3,628,800 over a ﬁve-year term.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
FISCAL IMPACT:

The estimated annual cost of the proposed Maintenance Services Agreement is $691,200 plus a $34,560 contingency for a total annual amount of $725,760, and a total of $3,628,800 over the ﬁve-year term. If approved, the Fiscal Year 2022-23 Proposed Budget will include the appropriations in the General Fund for this Maintenance Services Agreement for Graﬃti Removal Services.

BACKGROUND & ANALYSIS:

The proposed Maintenance Agreement provides routine services, regular route checks in high impact areas throughout the city, a seven (7) days per week and twenty-four (24) hours per day on-call service, with a maximum twenty-four (24) hours response time for routine graffiti abatement request.

In January 2022, the City solicited bids for citywide graﬃti removal services. On February 18, 2022, one (1) bid was received for Bid No. 1617-5. Graﬃti Protective Coatings, located in Los Angeles, California, submitted a proposal that met all the required speciﬁcations with a ﬁve-year cost total of $3,456,000. Having a ﬁve-year term will allow the City to limit the potential for higher yearly increases to the bid amounts and provide service continuity. Based on the credentials, pricing, and favorable reference check, Staﬀ recommends award of a Maintenance Services Agreement to Graffiti Protective Coatings.
29 Department: Police Department
Prepared By: Zina Hullings
Staff Member Presenting:

Mike Lorenz, Chief of Police
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 9
SUBJECT:

PRE-AUTHORIZED LIST OF VENDORS TO PROVIDE MAINTENANCE SERVICE AND

PARTS FOR THE POLICE HELICOPTERS

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council approve the attached list of pre-authorized vendors to provide maintenance service, equipment, parts and tools for the Police Helicopters.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
Operate in a Businesslike Manner
FISCAL IMPACT:

The designation of pre-authorized vendors to provide services and parts for the police helicopters does not commit the
City to any speciﬁc level of future expenditures with these vendors.

Expenditures for each vendor, and in total for each ﬁscal year, will not exceed the Police Department's appropriations limits established by the City Council.

BACKGROUND & ANALYSIS:

The Police Department Air Support Unit maintains three Airbus Helicopters for air patrol. To ensure that the helicopters are safe to operate and readily available (to support police, ﬁre and departmental services), maintenance and repairs are necessary on a regular basis; and undue time delays aﬀect the City’s ability to provide services to the community.

Due to specialized parts used on the helicopters, there is a limited number of authorized vendors that can provide them. In many cases, there is only a single authorized vendor that is qualiﬁed or authorized to provide the part or service.

For these reasons, it is not cost-eﬀective for the City to follow its standard purchasing procedures to solicit bids or requests for proposal. Establishing a pre-authorized list of vendors will facilitate the following:

Ensure that the helicopters are serviced and repaired when needed; Service is performed by qualified vendors familiar with Airbus Helicopters; and Better maintenance because vendors will be familiar with the service and repair history of the helicopters.
30 The attached list of pre-authorized vendors was developed based on authorized vendors and recommendations from Airbus Helicopters Inc., as well as the City’s past experience with previously Council approved vendors.

Ontario Municipal Code Section 2-6.23(b) and 2-6.23(c) authorizes the Purchasing Oﬃcer to make purchases without following the standard purchasing procedures whenever (1) the goods can be obtained from only one source, and/or (2) a breakdown in machinery, equipment or an essential service which requires an immediate purchase of supplies and equipment to protect public health, safety and welfare generates circumstances that a competitive process would be unavailing or would not produce an advantage, and the advertisement for competitive bid would thus be undesirable, impractical, or impossible.
31 APPROVED LIST OF AUTHORIZED VENDORS

FOR SERVICE AND MAINTENANCE OF POLICE HELICOPTER
*Effective July 1, 2022: Not to Exceed for the 5-Year Period Sole Source Vendors Service/Maintenance Performed Not to Exceed* Airbus Helicopters Inc. Aircraft manufacturer and Airbus Helicopter $500,000 2701 Forum Drive parts distribution, repair, paint & service Grand Prairie, TX 75052
(Formerly American Eurocopter Corp.)
Aviation Specialties Unlimited (ASU) Night Vision Goggles (NVG’s), parts, $50,000 4632 West Aeronca St. accessories and recertification options Boise, ID 83705
Bassco Services, Inc. Jet-A Fuel Truck maintenance, parts & $25,000 9219 Viscount Row services
Dallas, TX 75247
Flightdocs, II, LLC Annual helicopter software subscription and $100,000 27598 Riverview Center Blvd. maintenance tracking inventory system Bonita Springs, FL 34134
Freedom Aero Starter/Generator and electric motor $100,000 3200 Howard St. sales, repair and overhaul
McClellan, CA 95652
Hangar One Avionics, Inc. Avionic and mission equipment installation $150,000 2026 Palomar Airport Road & completion, paint, & ongoing maintenance Carlsbad, CA 92011
Heli-Mart, Inc. Airbus Helicopter parts, supplies and service $150,000 3184 Airway Ave. # E
Costa Mesa, CA 92626
Helistream Inc. Specialized helicopter pilot & flight training, $300,000 3000 Airway Ave. Suite #350 and recertification of night vision goggles Costa Mesa, CA 92626
Helitender Inc. Airbus Helicopter service, maintenance $150,000 10300 Airpark Way, Hangar 3 & repairs
Pacoima, CA 91331
Safran Helicopter Engines USA Inc. Turbomeca engine manufacture parts, $700,000 2709 Forum Drive overhauls & repairs
Grand Prairie, TX 75052
(Formerly Turbomeca Corp.)
32 APPROVED LIST OF AUTHORIZED VENDORS

FOR SERVICE AND MAINTENANCE OF POLICE HELICOPTER
*Effective July 1, 2022: Not to Exceed for the 5-Year Period Sole Source Vendors Service/Maintenance Performed Not to Exceed* Spectrolab Inc. Nightsun (spotlight) manufacturer repair $30,000 12500 Gladstone & parts services
Sylmar, CA 91345
Shotover Mapping system manufacturer, repair $150,000 5660 Airport Blvd, Suite 101 services and support
Boulder, CO 80301
(Formerly Churchill Navigation)
Standard Aero Helicopter Services Inc. Engine overhauls, main & tail rotor gear $200,000 4551 Agar Drive boxes & overhaul helicopter components
Richmond, B.C.

Canada V7B 1A4
(Formerly Vector Aerospace)
Troll Systems Downlink manufacturer, repair services $150,000 24950 Anza Dr and support
Valencia, CA 91355
Wescam Inc. Wescam (infrared camera) manufacturer $125,000 649 North Service Road West repair & parts services
Burlington, Ontario, L7P 5B9 Canada
(Formerly L3 Wescam)
Non-Sole Source Vendors Supplies, Parts, Tools & Hardware Not to Exceed* Aircraft Spruce & Specialty Co. Miscellaneous aircraft supplies & hardware $60,000 225 Airport Circle
Corona, CA 92878-4000
McMaster Carr Miscellaneous aircraft supplies & hardware $10,000 9360 Norwalk Blvd.

Santa Fe Springs, CA 90670
33 Department: Fire Department
Prepared By: Brian McFarlane
Staff Member Presenting:

Ray Gayk, Fire Chief
Reviewed By: Belinda Ramirez
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 10
SUBJECT:

AUTHORIZE THE PURCHASE OF FIRE APPARATUSES

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
Operate in a Businesslike Manner
FISCAL IMPACT:

If approved, the funding is available in the NMC - Fire Impact Fund.

A total not to
exceed amount of $2,888,000 will be allocated for the purchase of a KME Fire Pumper and KME Fire Aerial Tractor.

The appropriations for purchase of the vehicles will be included in the FY 2021-22 Year-End Budget Update.

BACKGROUND & ANALYSIS:

On June 1, 2021, City Council approved Kovatch Mobile Equipment (KME) as a sole source vendor for ﬁre apparatus. Due to the development in Ontario Ranch, the Fire Department requires two additional apparatuses to provide ﬁre protection and emergency medical services to the growing community. These two apparatuses will be housed in the future Fire Station 11 located in Ontario Ranch, which is anticipated to be opened in mid/late 2023. 34 Department: Human Resources
Prepared By: Michelle Cervantes
Staff Member Presenting:

Angela C. Lopez, Executive Director Human
Resources
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 11
SUBJECT:

AMENDMENT NO. 3 TO THE LETTER OF AGREEMENT FOR WORKPLACE

INVESTIGATIONS, CONSULTING AND LEGAL SERVICES

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Maintain the Current High Level of Public Safety
FISCAL IMPACT:

The proposed Amendment authorizes services to be provided on an ongoing basis, as needed, with expenditures limited to a not-to-exceed contract amount of $200,000 for the term of the contract. Additional budget allocations are not needed for the increase of the contract amount, it is already included in the General Fund for Fiscal Year 2021-22. These amounts may increase due to the unforeseen circumstances and if such conditions should occur, Staﬀ will present to City Council for approval.

BACKGROUND & ANALYSIS:

In 2017, the City entered into an Agreement with AALRR for consultation, training and investigative services relating to labor relations and other general employment law matters. To date, the firm has primarily provided training and investigation services for the City. The ﬁrm also provides a variety of employer and employee relations legal services including; labor relations, grievances, appeal hearings and litigation defense. John H. Bakhit recently joined the ﬁrm serving as a co-leader of the ﬁrms Public Safety Team and has extensive knowledge in public safety labor relations, negotiations and employment matters. His depth of knowledge and experience is specialized for the City and the
proposed Amendment to the AALRR Agreement will enable the City to have an expanded scope of services.
35 36
Department: Community Life & Culture
Prepared By: Lacey A Rightmer
Staff Member Presenting:

Helen McAlary, Executive Director Community
Life and Culture
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 12
SUBJECT:

A PUBLIC HEARING FOR THE INTRODUCTION OF AN ORDINANCE ADDING CHAPTER 33 TO TITLE 5 OF VOLUME I TO THE ONTARIO MUNICIPAL CODE,

ESTABLISHING A PUBLIC ART PROGRAM, ESTABLISHING A PUBLIC ART ADVISORY

COMMITTEE, AND INCLUDING A DEVELOPMENT FEE TO SUPPORT PUBLIC ART,

AND FINDING THE ACTION EXEMPT FROM CEQA

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Focus Resources in Ontario's Commercial and Residential Neighborhoods Operate in a Businesslike Manner
Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:

Development fees are based on building activity and vary each year. Based on historical data, fees collected for public art from new development and tenant improvements from prior years would have generated: $240,000 in ﬁscal year 2019-20, $290,000 in ﬁscal year 2020-21, and $130,000 for development in fiscal year 2021-22.

BACKGROUND & ANALYSIS:

On December 6, 2016, the City Council introduced a Reference I, Public Art Program, to the City of Ontario Development Code to promote public art. As the City continues to mature, the ﬁner arts have taken on a greater signiﬁcance in the community with the introduction of art into several City projects; most notably in Ontario Town Square, at the Anthony Munoz Community Center, and the increased visitation to our local museums (Ontario Museum of Art & History and the Chaﬀey Community Museum of Art), as well as other art-related events such as the Ontario Festival of the Arts, and the Culture Fest. As a result, the Public Art Program was created to properly outline guidance on the installation of public displays. Since its inception in 2016, Staﬀ has continued to reﬁne the criteria of the Program to address provisions for placement and/or donations of artwork to the City for display on public property in the Ontario Development 37 Code.

The Community Life & Culture Agency and the Planning Department recommend that the Public Art Program is best suited to be placed in the Municipal Code instead of the Development Code. The Public Art Advisory Committee, not the Planning Commission will be the primary body that considers City-commissioned public art projects. The Historic Preservation Commission would still have a role to evaluate public art projects that are proposed in historic districts or upon historic resources.

This Ordinance builds upon the Public Art Program existing in the Development Code but, places the Public Art Program in the Municipal Code. New additions include the following:

A
.

Expand the deﬁnition of Artwork to include additional projects, including earthworks, performing arts, literary arts, special events, festivals, other arts and culture programming, and other visual arts. Art is deﬁned as both temporary and permanent installations and does not include objects that are mass-produced.

B
.

Expand the Public Art Program Advisory Committee from three members to ﬁve.

Members shall be comprised as follows:
1 .

Three (3) of the ﬁve (5) members shall be given priority consideration from each of the following organizations, provided that the City has received an application from at least one representative from each organization. a
.

A representative from the Chaffey Community Museum of Art; b
.

A representative from Ontario Heritage;
c
.

A representative from the Ontario Museum of History & Art Associates;
2 .

The remaining two (2) members, or more if the City has not received an application from each of the three (3) organizations listed above, may be selected from the following:
a
.

Local non-profit historic preservation advocacy organizations; b
.

Local arts educators;
c
.

Local artists;
d
.

Local performers;
e
.

Arts professionals;
f
.

College-level arts students; and
g
.

Architects, landscape architects, and other design professionals C
.

Create a new Public Art in Development program to collect a minimal fee from all new commercial and industrial development valued at $5,000,000 or more, as well as tenant improvements on commercial and industrial developments valued at $500,000 or more, or allow the development or tenant improvement to install art as part of the project. The fee structure is as follows:

38 Eligibility
On-Site Fee Option
City Fee Option
New commercial/industrial
development $5,000,000 or
more.

Developer installs On-Site public
art display valuated at 1% of the
total final project valuation as
determined by the building
official or designee.

Developer provides the City
$10,000 for City to deposit into
the Public Art Fund to be used
for the installation of a new
public art display or maintain,
upgrade, or expand an existing
display.

Tenant Improvement on
commercial/industrial
development $500,000 or more.

Developer installs On-Site public
art display valuated at 1% of the
total final project improvement
valuation as determined by the
building official or designee.

Developer provides the City
$5,000 for City to deposit into
the Public Art Fund to be used
for the installation of a new
public art display or maintain,
upgrade, or expand an existing
display.

D. Establish some basic regulations for the installation of murals. City-commissioned murals on City property will need to be approved by the Public Art Program Advisory Committee, and the Ordinance outlines some basic standards for the Committee to consider when reviewing a mural proposal. Non-City-commissioned murals will be subject to an objective design checklist established, and amended from time to time, by Resolution, and subject to ministerial City review. The Ordinance establishes an application of $100 per non-City-commissioned mural application, which may be amended from time to time by Resolution.

ENVIRONMENTAL REVIEW:

The project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a signiﬁcant eﬀect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a signiﬁcant eﬀect on the environment, the activity is not subject to CEQA.
39 ORDINANCE NO. ________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING CHAPTER 33 TO TITLE 5 OF VOLUME I TO THE

ONTARIO MUNICIPAL CODE, ESTABLISHING A PUBLIC ART

PROGRAM, ESTABLISHING A PUBLIC ART ADVISORY COMMITTEE,

AND INCLUDING A DEVELOPMENT FEE TO SUPPORT PUBLIC ART,
AND FINDING THE ACTION EXEMPT FROM CEQA.

WHEREAS, the City of Ontario (“City”) desires to introduce art and artworks into the community; and
WHEREAS, public art enriches the lives of City residents and visitors by exposure to art in various forms; and
WHEREAS, the City encourages public dialogue and interaction through a public art program; and
WHEREAS, the City desires embracing a broad range of artworks, which are reflective of the overall diversity of the City’s residents and visitors; and WHEREAS, the City desires to establish a public art program that would allow and regulate a variety of artworks, including murals, that are either developed on City-owned public property or on private property as part of a development project; and WHEREAS, the City desires to impose a requirement on certain commercial and/or industrial developments to install public art as part of the project or to pay a fee to the City which would support the City’s efforts in installing public art throughout the City.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ONTARIO DOES ORDAIN AS FOLLOWS:

SECTION 1. The recitals above are true and correct and are hereby incorporated herein by this reference.

SECTION 2. Chapter 33 is hereby added to Title 5 of Volume I of the Ontario Municipal Code to state, in full, as follows:
“Chapter 33: Public Art Program
5-33.01 Purpose
5-33.02 Public Artworks: Definitions
5-33.03 Public Art Program Advisory Committee
5-33.04 Policy for the Gift or Long Term Loan of Public Art 5-33.05 Public Art in Commercial and Industrial Development Projects 5-33.06 Murals
40 Sec. 5-33.01. Purpose
This Chapter may be known and cited as the “Ontario Public Art Program.” It is the goal of the City’s Public Art Program to promote public art and art in public places, as a cultural resource for the community, and act as a mechanism to enhance the City’s commercial vitality and economic stability. Furthermore, it is intended that the Ontario Public Art Program will serve to enrich the community aesthetic and built urban environment, by making available to the public a diverse collection of artworks throughout the City. The aforementioned goals will be realized through bringing contemporary art into the environment and life of Ontario, enriching the lives of City residents and visitors by the exposure to art in various forms, encouraging both emerging and established artists living in Ontario and the Ontario region by supporting and purchasing their work, acquiring a distinguished collection of art representing varying genres, styles, scales, mediums, forms, and intent, and reflective of trends and disciplines in art on a local, regional, national, and international level, integrating artists into the City’s design process, encouraging public dialogue and interaction through a public art program; embracing a broad range of artworks, which are reflective of the overall diversity of current works in the field of visual arts, enriching the quality of life and economic vitality of Ontario, and further defining distinct characteristics of neighborhoods.

Sec. 5-33.02. Public Artworks: Definitions.

As used in this Chapter, the words, terms, and phrases listed below in correct alphabetical order, shall have the following meanings:
(a) “Artworks” means original pieces of art, including limited editions, not limited by medium used. It may include paintings, sculptures, murals, mosaics, and fountains.

These categories may be realized through such media as steel, bronze, stained glass, concrete, wood, ceramic tile, stone, and other suitable materials. Artworks may also include earthworks, performing arts, literary arts, special events, festivals, and other arts and culture programming and/or visual arts not specifically outlined herein, as may be deemed appropriate by the Public Art Program Advisory Committee. Artworks include both temporary and permanent projects. Artworks does not include objects that are mass produced.
(b) “Commercial Message” means any message that advertises a business conducted, services rendered, or goods produced or sold. (c) “Commercial project” means any site, structure, facility, or land use allowed pursuant to Table 5.02-1 (Land Use Matrix) of the City of Ontario Development Code, within any of the commercial zoning districts established under Section 5.01.005.B (Commercial Zoning Districts) of the Development Code, or within the commercial portion of any residential mixed-use development.
(d) “Industrial project” means any site, structure, facility, or land use allowed pursuant to Table 5.02-1 (Land Use Matrix) of the City of Ontario Development Code, within any of the industrial zoning districts established under Section 5.01.005.D (Industrial Zoning Districts) of the Development Code, or within the industrial portion of any nonresidential mixed-use development.
41 (e) “Original Art Mural” means a unique, hand-painted, hand-tiled, or digitally printed image on the exterior wall of a building that does not contain any commercial message.
(f) “Public Place” means any area on public property, either interior or exterior, which must be accessible and visible to the general public. (g) “Project Applicant” means the property owner, developer or other responsible party proposing a project requiring an art component. (h) “Project Improvement Valuation” means the value of the tenant improvements as determined by the then-current City total valuation methodology. (i) “Project Valuation” means the value of the project as determined by the then-current City total valuation methodology.
(j) “Project Site” means the location of the improvements being developed. (k) “Public Art on City Property” means original works of art located on, affixed to, or applied on City-owned property.
(l) “Private Art for Public Enjoyment” means original works of art located on, affixed to, or applied on private property that are accessible and/or visible to the general public.
(m) “Public Art Program Advisory Committee” means the five-member advisory committee appointed by the City Council that is responsible for ensuring that the criteria established by this Public Art Program have been met.
(n) “Vintage Original Art Mural” means an original art mural that existed prior to the enactment of this Chapter.

Sec. 5-33.03. Public Art Program Advisory Committee.
(a) There is hereby created and established a Public Art Program Advisory Committee. The Public Art Program Advisory Committee shall be comprised of five members who shall be appointed by the City Council.
(b) Members of the Public Art Advisory Committee shall be comprised as follows:
(1) Three (3) of the five (5) members shall be given priority consideration from each of the following organizations, provided that the City has received an application from at least one representative from each organization. (A) A representative from the Chaffey Community Museum of Art; (B) A representative from Ontario Heritage;
42 (C) A representative from the Ontario Museum of History & Art Associates;
(2) The remaining two (2) members, or more if the City has not received an application from each of the three (3) organizations listed in Section 5-33.03(b)(1)(A)- (C), may be selected from the following:
(A) Local non-profit historic preservation advocacy organization; (B) Local arts educators;
(C) Local artists;
(D) Local performers;
(E) Arts professionals;
(F) College-level arts students; and
(G) Architects, landscape architects, and other design
professionals.
(3) Notwithstanding any contrary provision in the Ontario Municipal Code, members of the Public Art Advisory Committee may be non-residents of the City, subject to the limitation that no more than two (2) of the five (5) members may be non- residents of the City.
(4) The City Councilmember Liaison to the Ontario Museum of History & Art, shall serve as an ex officio, non-voting member. (c) The process for appointment to the Public Art Advisory Committee shall be as follows. A call for applications will be sent out for interested appointees. Community Life & Culture staff will review the applications received and determine whether the applicants meet the basic requirement from this Section. Community Life & Culture staff will then present the qualified candidates to the City Council for their review and nomination. The Mayor shall appoint the members of the Committee, subject to ratification by a vote of the entire City Council. Each Councilmember may suggest one member from the list of qualified candidates for the Mayor to appoint to the Committee. (d) Members of the Public Art Program Advisory Committee shall serve a term of four (4) years. A person may serve multiple terms.
(e) Powers and Duties. The Public Art Program Advisory Committee shall ensure that all criteria established by this Public Art Program have been complied with.

The Advisory Committee shall review all requests for the installation of public art, examining proposals for public safety, weather resistance, balance with the program, public response, proper lighting, public accessibility, installation methods, proportion, composition, the artist’s previous experience, art training, and exhibition record. Advisory Committee support shall be provided by the Museum, Arts & Culture Director. 43 (1) Construction and Installation of Public Artworks (Permanent). The following procedure is to be followed in the construction of on-site permanent public artworks:
(A) The composition of the proposed artwork shall be of a permanent type of material in order to be a durable against vandalism, theft, and weather, and require a low level of ongoing maintenance.
(B) The artwork shall be related in terms of scale, material, form and content to immediate and adjacent buildings and landscaping so that it complements the site and surrounding environment. A Certificate of Appropriateness pursuant to Ontario Development Code Section 4.02.050 may be required to ensure that the artwork does not cause an adverse impact to historic resources. (C) The artwork shall be constructed by persons experienced in the production and installation of such artwork.
(D) The artwork shall be permanently affixed to the property unless it is designated a temporary exhibit in the scope of the project when commissioned. (E) Installation of the artwork shall be planned and implemented to enhance the piece and allow for unobstructed viewing from as many angles as possible.
(F) The City shall obtain from the artist, complete maintenance instructions, including methods to maintain the piece and the frequency of maintenance. (G) Each piece of artwork shall be identified by a plaque at the site of an appropriate size and scale to the piece. The plaque shall be made of cast metal and then placed in a location near the art piece listing the title of the piece, the artist, and the date as well as the city and the art in public places program. (2) Construction and Installation of Public Artworks (Temporary). The following procedure is to be followed in the construction of on-site temporary public artworks:
(A) The composition of the proposed artwork shall be of a type of material in order to be a durable against vandalism, theft, and weather, and require a low level of maintenance.
(B) The artwork shall be related in terms of scale, material, form and content to immediate and adjacent buildings and landscaping so that it complements the site and surrounding environment.
(C) The artworks shall be constructed by persons experienced in the production and installation of such artwork.
44 (D) The method of attachment or securing the artwork shall be identified.
(E) Installation of the artwork shall be planned and implemented to enhance the piece and allow for unobstructed viewing from as many angles as possible.
(F) The City shall obtain from the artist, complete maintenance instructions, including methods to maintain the piece and the frequency of maintenance. (G) Each piece of artwork shall be identified by a plaque at the site of an appropriate size and scale to the piece. The plaque shall be made of cast metal and then placed in a location near the art piece listing the title of the piece, the artist, and the date as well as the city and the art in public places program. (H) Any security measures needed to secure the artwork, the estimated cost of the security, and a source of funding for the security shall be identified. (I) Any temporary artwork must include a deinstallation plan that clearly identifies which parts of the artwork (if any) need to be returned to the artist and which may be disposed of after the term of the installation.

Sec. 5-33.04 Policy for the Gift or Long Term Loan of Public Art. (a) Purpose. Unsolicited gifts or long term loans to the City can be an important part of the City's art collection. The purpose of this Section is to ensure that proposed gifts of public art undergo a review process to ensure that acceptance of such gifts takes place in a fair and uniform manner. Furthermore, it is the intent of this Section to ensure that potential gifts of public artworks are evaluated as carefully as artworks that are commissioned, and that such artworks undergo a careful review process that evaluates a gift based upon acceptance criteria established according to the purposes, guidelines, goals, and selection process that guides artworks that are commissioned. (b) Applicability. This Section applies to all unsolicited offers of donation or long term loans of artworks to the City of Ontario.
(c) Procedures for Gifts or Long Term Loans. For each proposed gift or long term loan of public art, a written proposal or letter of intent shall be submitted to the City Manager. The City Manager shall refer the proposal to the Public Art Advisory Committee for review and recommendation. The City Council’s decision shall be final and conclusive.

The proposal shall consist of the following items:
(1) Completed application form;
(2) Photographs, drawings, models, or designs of proposed artwork; (3) Description and samples (if available) of materials and colors; (4) Appraisal by a professional art appraiser (for long term loans); 45 (5) A site plan, to include photographs of site and neighborhood, drawings of the proposed site with the project to scale. If located within a historic district or on any other historic resource, a Certificate of Appropriateness may be required pursuant to Ontario Development Code Section 4.02.050;
(6) Proposed transportation/delivery schedule, and request of City responsibility for transport of the artwork to the City, if applicable; (7) Proposed installation schedule;
(8) Maintenance manual, including the long-term intent of artist for the preservation and maintenance of artwork;
(9) Maintenance schedule prepared by professional art curator; (10) Estimated budget for installation and maintenance; (11) Resume and examples of artist’s previous work;
(12) Duration of the loan (if applicable)
(13) Proof of insurance sufficient to meet the requirements of the City’s Risk Manager, if necessary; and
(14) Building permits, if necessary.
(d) Criteria for the Evaluation of Proposed Gifts or Long Term Loans of Public Art. The following criteria shall be used in evaluating proposed gifts of long term loans of public art for review and acceptance by the City:
(1) Artworks may be existing or proposed works of art;
(2) Artworks must be one-of-a-kind or part of an original series.

Reproductions of originals are not considered eligible for acceptance; (3) Gifts must maintain high artistic standards and are appropriate in relationship or historical relevance to the City;
(4) The proposed location (if specified) is available and is appropriate to the artwork's content, scale, and material. Factors to be considered in selecting an appropriate site include type of artwork, relationship to architectural and natural features, visibility and public access, traffic patterns, future development plans for the area (if known), and public use patterns of the site and surrounding area. If a location is on a historic building, site, landscape or within a district issuance of a Certificate of Appropriateness may be required pursuant to Ontario Development Code Section

4.02.050;
(5) Restrictions from the donor, if any;
46 (6) Artwork proposals must demonstrate how the surrounding community has been involved and consulted in the process; (7) Costs of installation and maintenance and repair over the expected life of the artwork shall be defined;
(8) Artistic quality (vision, originality and craftsmanship); (9) Context (architectural, historical, geographical and socio-cultural context of the site);
(10) Quality and permanency of materials (if ephemeral material: is appropriate documentation included?);
(11) Safety;
(12) Diversity of artists (gender, race, culture) representation in the existing collection of publicly-accessible artworks; and (13) Diversity of artworks (media, scale, style, intention) in the existing collection of publicly accessible artworks.
(e) Long Term Loans of Artwork. Upon recommendation by the Public Art Program Advisory Committee and acceptance by the City Council, long term loans of artwork may be displayed upon execution of a contract between the City and the artist clearly identifying the terms and conditions of the loan and the rights and responsibilities of all parties.
(f) Acceptance of Gifts of Public Art. Upon recommendation by the Public Art Program Advisory Committee and acceptance by the City Council, gifts of artworks will be deemed part of the permanent collection of the City, and registered with the City’s Department of Museum Arts & Culture, once the donor has supplied the City with the following:
(1) Written certification of the installation of the artwork, if completed by artist;
(2) An executed contract between the City and the artist transferring title of the artwork and clearly defining the rights and responsibilities of all parties; (3) Written instructions for the care, maintenance, preservation, and handling of the artwork, prepared with the assistance of a professional art conservator to be provided by the artist;
(4) A sworn statement of no liens, claims, or other encumbrances associated with the artwork;
(5) A written assignment of any and all warranties for materials used, or labor performed by subcontractors or other persons; and 47 (6) A written assignment conveying, at a minimum, a perpetual license for the City to reproduce the artwork in digital or print medium for City purposes. The written assignment may include, should it be the artist’s desire, the conveying of all rights, including copyrights and waiver of all rights under the Visual Artist's Rights Act of 1990, and its amendments (Section 106A of the United States Copyright Act; Pub. L. No. 101-650).
(g) Title and Ownership. Permanent gifts of artwork to the City shall become the property of the City once an Agreement for Acceptance Donated Artwork has been fully executed and the Donor has delivered the Bill of Sale/Transfer of Title. At such time, all rights of title and ownership shall be conveyed to the City, and all future decisions regarding the use and continued ownership of the artwork shall be under the sole discretion of the City. As owner of the artwork, the City may exercise any and all legal rights of ownership, including, but not limited to, sale, relocation, or removal of the artwork. (h) Maintenance. When artwork gifts are situated at or on City owned or occupied properties or facilities, the City shall assume its continued maintenance. (i) Removal, Relocation, or Deaccession of an Artwork. Artworks gifted to the City may be relocated, removed, or deaccessioned from the City's public art collection if the artwork becomes a hazard or liability, if the approved terms of acceptance are not fulfilled, or for any other reason as determined by the City Council, upon recommendation by the Public Art Program Advisory Committee.
(j) Exemption. Gifts of state presented to the City by foreign governments or by other political jurisdictions of the United States that may be accepted by the City Council or City Manager on behalf of the City. Permanent placement of any such artworks will be determined jointly by the City Manager and the Public Art Program Advisory Committee. If not provided by the donor, maintenance of the art will be the responsibility of the host City department.

Sec. 5-33.05 Private Art for Public Enjoyment in Commercial and Industrial Development Projects.
(a) Purpose.
(1) The purpose of this Section is to establish a program for private art for public enjoyment in which private developers shall be required to integrate artworks throughout the commercial and industrial sectors of the City, for the benefit of the general public. The goals of this program are as follows:
(A) Differentiate the City of Ontario as a special place to live, work, play, visit, and invest;
(B) Strengthen cultural awareness, creativity, and innovative thinking in the community;
(C) Integrate the vision of artists with the perspective of other design professionals into the planning and design of the urban landscape; 48 (D) Ensure public artworks are visually accessible to every member of the community;
(E) Provide an acceptable counterbalance to what many consider to be the undesirable effects of commercial and industrial development (e.g. construction noise, traffic, congestion, and pollution); and
(F) Build a diverse collection of outdoor artworks by qualified artists and ensure the collection is continually maintained. (2) The public art in commercial and industrial development projects program provides developers a way to make a lasting and visible contribution to the community and alleviate the undesirable effects that may be associated with commercial and industrial development.
(b) Applicability.
(1) All new commercial and industrial development projects valued at $5,000,000 or more, and new tenant improvements constructed in or on new or existing commercial and industrial buildings valued at $500,000 or more, shall be subject to the requirements of this Section. This Section does not apply to the residential portion of mixed-use projects.
(2) All residential projects and public facilities projects constructed by the City or by nonprofit organizations shall be exempt from the requirements of this Section.
(c) Minimum Public Art Allocation.
(1) The required minimum public art allocation fees shall be as follows, and may be amended from time to time by Resolution:
49 (2) All projects created through the On-Site Fee Option must be reviewed and approved by the City and shall be installed in compliance with all federal, state, and local applicable laws and regulations.
(3) All projects, whether installed through the On-Site Fee Option or the City Fee Option, must be maintained by the developer during the life of the buildings and structures.
(4) If the artwork installed pursuant to this Section is altered, removed, is not maintained in good condition, or is not provided as required, the City may exercise any and all available legal and/or equitable remedies.
(d) Penalties. Violations of this Section may be subject to the penalties set forth in Chapter 2 of Title 1 of Volume I of the Ontario Municipal Code and/or subject to revocation of the entitlements for the development project.

Sec. 5-33.06 Murals.
(a) Murals commissioned by the City may only be installed and maintained if they have been approved by the Public Art Program Advisory Committee. Other murals not commissioned by the City will be subject to an objective design checklist established, and amended from time to time, by Resolution, and subject to ministerial City review. Murals may only be located in commercial, industrial, city-owned public, and private property. The Advisory Committee shall have the authority to review and approve City commissioned murals in accordance with the procedures and standards outlined in this Chapter. (b) Standards. The Public Art Program Advisory Committee shall ensure that City commissioned murals are consistent with the following standards:

Eligibility On-Site Fee Option City Fee Option
New
commercial/industrial
development
$5,000,000 or more.

Developer installs On-Site
public art display valuated
at 1% of the total final
project valuation as
determined by the building
official or designee.

Developer provides the City
$10,000 for City to deposit
into the Public Art Fund to be
used for the installation of a
new public art display or
maintain, upgrade, or
expand an existing display.

Tenant Improvement
on
commercial/industrial
development
$500,000 or more.

Developer installs On-Site
public art display valuated
at 1% of the total final
project improvement
valuation as determined by
the building official or
designee.

Developer provides the City
$5,000 for City to deposit
into the Public Art Fund to be
used for the installation of a
new public art display or
maintain, upgrade, or
expand an existing display.
50 (1) Murals shall be an original art mural, a work of art, that is hand-painted, hand-tiled or digitally printed image or digital display system on the exterior surfaces of a building or site designed as a work of art. The image cannot be advertising or other commercial message with brand name, product name, abbreviation thereof, company or business name or logo, trademark, brand imagery or products and services for sale. The Public Art Program Advisory Committee will determine if an image, painting pattern, or other element on the exterior of a building or site is a work of art. If the Public Art Program Advisory Committee determines that the image, painting pattern, or other element is not a work of art, then other applicable law may be applied such as sign or building design guidelines by other City departments.
(2) Murals must be durable and capable of being well-maintained. (3) Murals shall not compromise the proper function of any building or use or diminish public safety.
(4) Murals shall not incorporate recognized signs of hatred or discrimination against any race, color, sex, age, national origin, disability, religion, ancestry, marital status, familial status, gender identity or expression, or sexual orientation.
(5) Murals shall not be obscene or harmful to minors as defined by law. (6) A Certificate of Appropriateness shall be required if the mural is on a historic building or site pursuant to Ontario Development Code Section 4.02.050. (c) Application fee. There shall be an application fee of $100 per non-City- commissioned mural application, which may be amended from time to time by Resolution. (d) An Original Art Mural is not considered a sign as defined in the Ontario Development Code. However, nothing contained in this Chapter is intended to change the rules governing the determination of whether a mural may be placed on a historic building.
(e) A City commissioned mural shall remain in place, without alteration, for a minimum of six (6) months.
(f) Removal. A City commissioned mural may be removed after six (6) months from the date of registration, so long as it is not a registered historic landmark itself or associated with a registered historic landmark property, under any the following circumstances as determined by the Executive Director of the Community Life & Culture Agency:
(1) The property is sold;
(2) The structure or property is substantially remodeled or altered in a way that precludes continuance of the mural;
(3) The property undergoes a change of use authorized.” 51 SECTION 3. The City Council hereby directs the Planning Director to proceed with a Development Code Amendment repealing the Public Art provisions from the Development Code following approval of this Ordinance.

SECTION 4. If any section, subsection, subdivision, sentence, clause, or phrase in this Ordinance or any part thereof is for any reason held to be unconstitutional, invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof.

The City Council hereby declares that it would have adopted each section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, or phrases be declared unconstitutional, invalid or ineffective.

SECTION 5. This Ordinance shall become effective thirty (30) days after its adoption by the City Council.

SECTION 6. CEQA. The City Council finds that adoption of this Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15358 (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Moreover, the City Council finds that this Ordinance is also exempt under CEQA pursuant to Guidelines Section 15061(b)(3) (there exists no possibility that the activity will have a significant adverse effect on the environment).

SECTION 7. The Mayor shall sign this Ordinance and the City Clerk shall certify as to the adoption and shall cause a summary thereof to be published at least once, in a newspaper of general circulation in the City of Ontario, California within fifteen (15) days of the adoption. The City Clerk shall post a certified copy of this Ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with Government Code Section 36933.

PASSED, APPROVED, AND ADOPTED this ____ day of ______ 2022. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
_________________________________

SHEILA MAUTZ, CITY CLERK
52 APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
53 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Ordinance No. ____ was duly introduced at a regular meeting of the City Council of the City of Ontario held April 5, 2022 and adopted at the regular meeting held _________, 2022 by the following roll call vote, to wit:

AYES: MAYOR/COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
I hereby certify that the foregoing is the original of Ordinance No. ____ duly passed and adopted by the Ontario City Council at their regular meeting held , 2022 and that Summaries of the Ordinance were published on May 10, 2022 and _________, 2022, in the Inland Valley Daily Bulletin newspaper.
__________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
54 Department: Investments & Revenue Resources
Prepared By: Nicole Phillips
Staff Member Presenting:

Armen Harkalyan, Executive Director of Finance
Reviewed By: Cecilia House, Armen Harkalyan
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 13
SUBJECT:

A PUBLIC HEARING TO CONSIDER A RESOLUTION CALLING A SPECIAL ELECTION

FOR PROPOSED CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF

THE EXISTING SPECIAL TAX OF THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES);

A RESOLUTION OF

CHANGE, DECLARING RESULTS OF A SPECIAL ELECTION, DETERMINING THAT

CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF THE EXISTING SPECIAL TAX OF COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES) ARE LAWFULLY AUTHORIZED AND DIRECTING THE RECORDING OF AN AMENDMENT TO NOTICE OF SPECIAL TAX LIEN; AND AN
ORDINANCE AMENDING AND RESTATING ORDINANCE NO. 3082 LEVYING

SPECIAL TAXES WITHIN THE CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES); A RESOLUTION DEEMING IT NECESSARY TO AMEND RESOLUTION NO. 2017-124 IN ORDER TO INCREASE THE

MAXIMUM AGGREGATE AMOUNT OF BONDED INDEBTEDNESS THAT CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES) IS AUTHORIZED TO INCUR; A RESOLUTION CALLING A SPECIAL ELECTION FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES); AND A RESOLUTION DECLARING THE RESULTS OF THE SPECIAL ELECTION.

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

That the City Council consider and:

A
.

Adopt a Resolution declaring results of the special election, determining that changes to the Rate and Method of Apportionment of the existing Special Tax of City of Ontario Community Facilities District No.
35 (Countryside Phase 2 South-Facilities)
are lawfully authorized and
directing recording of an amendment to Notice of Special Tax Lien, C
.

Adopt a Resolution calling a special election for Community Facilities District No. 35 (Countryside Phase 2 South-Facilities); and
F
.

Adopt a Resolution declaring the results of the special election.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT:

The use of Mello-Roos ﬁnancing for facilities in the residential development of the Countryside Phase 2 South-Facilities project is estimated to generate approximately $42 million in bond proceeds to be used to fund a portion of the public infrastructure improvements needed to serve the project. Mello-Roos bonds are not a direct obligation of the City and are paid from special taxes levied on each taxable parcel in the district; therefore, there is no General Fund impact from the issuance of Mello Roos bonds. City Council approval will be required in future years to process annual special tax levies.

BACKGROUND & ANALYSIS:

The Mello-Roos Community Facilities Act of 1982 (the Act) provides local government the authority to establish a community facilities district (CFD) for the purpose of ﬁnancing various kinds of public infrastructure facilities. In October, 2017, the City established CFD No. 35 (Countryside Phase 2 South-Facilities) to ﬁnance public improvements for the project. The Countryside Phase 2 South-Facilities project addresses the development of approximately 34.22 gross acres located generally east of the Cucamonga Creek Channel, west of Archibald Avenue, south of Chino Avenue, and north of Schaefer Avenue. At build out, the development is projected to include 235 single-family detached units
.

The developer, Lennar Homes of California, LLC (Lennar), has provided a written petition to the City Council to commence change proceedings pursuant to the Act to change the Rate and Method of Apportionment (RMA) of the existing special tax levied within the CFD to reﬂect recent movements in the housing market which may aﬀect the estimated home price of for-sale units within the CFD.

In consideration of such petition, City staﬀ requested a second price point study to be performed by Empire Economics, the City’s Price Point Study and Market Absorption Consultant. The City's study was concluded in January 2022 and found that estimated home prices for market comparables had increased approximately 40.2% for the development, as compared to the initial price point study performed in July 2017.

At the City Council meeting on March 15, 2022, the City Council formally accepted the written petition from Lennar and approved Resolution No. 2022-017, a Resolution of Consideration and a Resolution of Intention on the proposal to increase in the maximum aggregate amount of bonded indebtedness that the CFD is authorized to incur from $27,000,000 to $42,000,000 by amending Resolution No. 2017-124 adopted in October 2017, setting the public hearing on the proposed 56 changes to the RMA for April 19, 2022. City Council opened the hearing on April 19, 2022, and continued the hearing to May 3, 2022. In accordance with the requirements of the Resolution of Consideration, the City Clerk has published a notice of the time and place of this hearing pursuant to Section 53322 of the California Government Code at least seven days before the hearing, and the City’s special tax consultant has prepared the Amended and Restated Rate and Method of Apportionment; which reﬂects the overall estimated price point increase of 40.2%. Under the Amended and Restated RMA, certain special tax rates within CFD No. 35 would be increased.

Attached for consideration is the Amended and Restated RMA, the terms of which are consistent with the City Council's adopted Mello-Roos Local Goals and Policies (Resolution No. 2006-021) in all respects. Also attached are Resolutions and an Ordinance for consideration. The ﬁrst Resolution calls for a special election on the proposition to change the RMA to be held on May 3, 2022. The second Resolution declares the results of the special election and includes a statement from the City Clerk as to the canvass of ballots, and directs the recording of an Amendment to the Notice of Special Tax Lien. The ordinance amends and restates Ordinance No. 3082 levying special taxes within the CFD and reﬂects the updates included in the Amended and Restated RMA. The third R
esolution deems it necessary to amend Resolution No. 2017-124 in order to increase the maximum aggregate amount of bonded indebtedness that the district is authorized to incur from $27,000,000 to $42,000,000. The fourth Resolution calls for a special landowner election be held on May 3, 2022 to approve the proposed increase in the maximum aggregate amount of bonded indebtedness that the CFD is authorized to incur. The ﬁfth Resolution declares the results of the special election, determining that the maximum aggregate amount of bonded indebtedness that the CFD is authorized to incur shall be increased from $27,000,000 to $42,000,000. 57 RESOLUTION NO. ______

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, CALLING A SPECIAL ELECTION FOR PROPOSED

CHANGES TO THE RATE AND METHOD OF APPORTIONMENT OF THE

EXISTING SPECIAL TAX OF CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES).

WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) has previously established City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”); and WHEREAS, on March 15, 2022, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Consideration to Change the Rate and Method of Apportionment of the Existing Special Tax of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)” (the “Resolution of Consideration”) proposing changes to the rate and method of apportionment of the special tax (the “Special Tax”) levied within the Community Facilities District so as to increase certain of the Special Tax rates thereunder and setting the date for a public hearing to be held on such proposed changes; and WHEREAS, pursuant to the Resolution of Consideration, notice of said public hearing was published in the Inland Valley Daily Bulletin , a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; and
WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; and
WHEREAS, at the hearing, the testimony of all persons for or against the proposed changes to the rate and method of apportionment of the Special Tax was heard; and WHEREAS, written protests against the proposed changes to the rate and method of apportionment of the Special Tax tax were not made or filed at or before said hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the Community Facilities District, or the owners of one-half or more of the area of land in the territory included in the Community Facilities District and not exempt from the Special Tax; and
WHEREAS, pursuant to the provisions of the Resolution of Consideration, the proposition to change the rate and method of apportionment of the Special Tax is to be submitted to the qualified electors of the Community Facilities District as required by the Act; and
WHEREAS, the City Council desires to designate the City Clerk of the City (the “City Clerk”) as the election official for the special election provided for herein; and 58 WHEREAS, there has been filed with the City Clerk of the City a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory included in the Community Facilities District as of March 17, 2022, and, accordingly, that 12 or more persons have not been registered to vote within the territory included in the Community Facilities District for each of the 90 days preceding the close of said public hearing; and
WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, consenting to the holding of said special election on May 3, 2022 and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and
WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on May 3, 2022.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

SECTION 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

SECTION 2. The proposed changes to the rate and method of apportionment of the Special Tax are modifications that increase certain of the Special Tax rates thereunder. The proposed changes are reflected in the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Amended and Restated Rate and Method of Apportionment of Special Tax (the “Restated Rate and Method”) attached hereto as Exhibit A, which is by this reference incorporated herein.

SECTION 3. The proposed changes to the rate and method of apportionment of the Special Tax have not been precluded by majority protest pursuant to Section 53338 of the Act.

SECTION 4. Pursuant to Section 53338 of the Act, the proposition to change the rate and method of apportionment of the Special Tax so as to increase certain of the Special Tax rates thereunder, as reflected in the Restated Rate and Method, shall be submitted to the qualified electors of the Community Facilities District at an election called therefor as provided herein.

SECTION 5. The City Clerk is hereby designated as the official to conduct said election.

SECTION 6. The City Council hereby finds and determines that no persons were registered to vote within the territory included in the Community Facilities District as of March 17, 2022, and that 12 or more persons have not been registered to vote within the territory included in the Community Facilities District for each of the 90 days preceding the close of the public hearing heretofore held by the City Council on the proposed changes to the rate and method of apportionment of the Special Tax. Accordingly, 59 pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the Special Tax.

SECTION 7. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, (b) to the holding of said election on May 3, 2022, and (c) to the waiver of any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council herby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on May 3, 2022.

SECTION 8. The City Council hereby calls a special election to submit to the qualified electors of the Community Facilities District the proposition to change the rate and method of apportionment of the Special Tax so as to increase certain of the Special Tax rates thereunder, as reflected in the Restated Rate and Method, which election shall be held at 303 East B Street, Ontario, California, on May 3, 2022. The City Council has caused to be provided to the City Clerk, as the official to conduct said election, the Resolution of Consideration, a certified map of sufficient scale and clarity to show the boundaries of the Community Facilities District, and a sufficient description to allow the City Clerk to determine the boundaries of the Community Facilities District.

The voted ballots shall be returned to the City Clerk not later than 7:30 p.m. on May 3, 2022; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

SECTION 9. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand-delivered ballots pursuant to Section 4000 et. seq. of the California Elections Code. Except as otherwise provided in the Act, the provisions of law regulating elections of the City, insofar as they may be applicable, will govern the election.

SECTION 10. The form of the ballot for said election is attached hereto as Exhibit B and by this reference incorporated herein, and such form of ballot is hereby approved. The City Clerk shall cause to be delivered to each of the qualified electors of the Community Facilities District a ballot in said form. Each ballot shall indicate the number of votes to be voted by the respective landowner to which it pertains.

Each ballot shall be accompanied by all supplies and written instructions necessary for the use and return of the ballot. The identification envelope for return of the ballot shall be enclosed with the ballot, shall have the return postage prepaid, and shall contain (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or the authorized representative of the landowner entitled to vote and is the person whose name appears on the identification envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration described in clause (b), above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board. 60 Analysis and arguments with respect to the ballot proposition are hereby waived, as provided in Section 53327 of the Act.

SECTION 11. The City Clerk shall accept the ballots of the qualified electors in the office of the City Clerk at 303 East B Street, Ontario, California, to and including 7:30 p.m. on May 3, 2022, whether said ballots be personally delivered or received by mail.

The City Clerk shall have available ballots that may be marked at said location on the election day by said qualified electors.

SECTION 12. All actions heretofore taken by the officers, employees and agents of the City with respect to the proposed changes to the rate and method of apportionment of the Special Tax, or in connection with or related to any of the documents referred to herein, are hereby approved, confirmed and ratified.

SECTION 13. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

SECTION 14. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED AND ADOPTED this 3rd day of May 2022.
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
61 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2022- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held May 3, 2022 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
The foregoing is the original of Resolution No. 2022- duly passed and adopted by the Ontario City Council at their regular meeting held May 3, 2022. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
62 A-1
4150-3506-1556.2

EXHIBIT A
CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES) AMENDED AND RESTATED RATE AND METHOD

OF APPORTIONMENT OF SPECIAL TAX
63 4150-3506-1556.2

EXHIBIT B

OFFICIAL BALLOT

CITY OF ONTARIO
May 3, 2022

SPECIAL ELECTION
This ballot is for a special, landowner election. The number of votes to be voted pursuant to this ballot is ____.

INSTRUCTIONS TO VOTERS:

To vote on the measure, mark a cross (+ or X) in the voting square after the word “YES” or after the word “NO”. All distinguishing marks or erasures are forbidden and make the ballot void. If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Ontario and obtain another.

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
MEASURE SUBMITTED TO VOTE OF VOTERS: Shall
the rate and method of apportionment of the special tax levied within City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) be changed so as to increase certain of the special tax rates thereunder, all as specified in the Resolution entitled “A Resolution of the City Council of the City of Ontario, California, Calling A Special Election for Proposed Changes to the Rate And Method of Apportionment of the Existing Special Tax of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities),” adopted by the City Council of the City of Ontario on May 3, 2022?
Yes:
No:
64 City of Ontario CFD No. 35 1 February 17, 2022

EXHIBIT A

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH – FACILITIES)

AMENDED AND RESTATED

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX

A Special Tax shall be levied on all Assessor’s Parcels in the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South – Facilities) (“CFD No. 35”) and collected each Fiscal Year , commencing in Fiscal Year 20 18-19, in an amount determined by the City Council of the City of Ontario through the application of the Rate and Method of Apportionment, as described below. All of the real property in CFD No. 35, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Subdivision Ma p, parcel map, condominium plan, or other recorded County map.

“Act” means the Mello -Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the California Government Code.

“Administrative Expens es” means the follow ing actual or reasonably estimated costs directly related to the administration of CFD No. 35: the costs of computing the Special Taxes and preparing the annual Special Tax collection schedules (whether by the City or CFD No. 35 or both); the costs of collecting the Special Taxes (whether by the County or otherwise); the cost s of remitting the Special Tax es to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the c osts to the City or CFD No. 35 of complying with arbitrage rebate requirements; the costs to the City or CFD No. 35 of complying with City, CFD No. 35, or obligated persons disclosure requirements associated with applicable federal and state securities laws and of the Act; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs of the City or CFD No. 35 related to the analysis and reduction, if any, of the Special Tax on Single Family Property in accordance with Section C.1 herein; the costs of the City or CFD No. 35 related to an appeal of the Special Tax; the costs associated with the release of fun ds from any escrow account; the City’s administr ation fees a nd third party expenses; the costs of City staff time and reasonabl e overhead relating t o CFD No. 35; and amounts estimated or advanced by the City or CFD No. 35 for any other 65 City of Ontario CFD No. 35 2 February 17, 2022
administrative purposes of the CFD , including attorney’s fees and ot her costs re lated to commencing and pursuing to completion any foreclosure of delinquent Special Taxes.

“Assessor’s Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.

“Assessor’s Parcel Map ” means an official m ap of the Assessor of the County designating parcels by Assessor’s Parcel Number.

“Assessor’s Parcel Number” means, with respect to an Assessor’s Parcel, that number assigned to such Assessor’s Parcel by the County for purposes of identification.

“Assigned Special Tax ” means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C.1.a.2 below.

“Backup Special Tax ” means the Special Tax for each Land Use Class of Developed Property, as determined in accordance with Section C.1.a.3 below.

“Bonds” means any bonds or other debt (as defined in Section 53317(d) of the Act) issued by CFD No. 35 under the Act and payable from Special Taxes.

“Buildable Lot” means an individual lot, within a Final Subdi vision Map or an area expected by CFD No. 35 to become Final Mapped Property, such as the area within a Tentative Tract Map , for which a building permit may be issued without further subdivision of such lot.

“CFD Administrator ” means an official of the C ity responsible for determining t he Special Tax Requirement, providing for the levy and collection of the Special Taxes , and performing the other duties provided for herein.

“CFD No. 19” means City of Ontario Community Facilities District No. 19 (Countryside Phase 1 – Services).

“CFD No. 35” means City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South – Facilities).

“City” means the City of Ontario, California.

“City Council” means the City Council of the City, acting as the legislative body of CFD No. 35.

“Contractual Impositions ” means (a) a voluntary contractual assessment establ ished and levied on an Assessor ’s Parcel pursuant to Chapter 29 of Pa rt 3 of Division 7 of the California Streets and Highways Code (commencing with S ection 5898.10 et seq. ), as amended from time to time, (b) a special tax established and levied on an Asse ssor’s Parcel pursuant to Section 53328.1 of the Ca lifornia Government Code and related provisions of the Act, as amended from time to time, and (c) any other fee, charge, tax, or assessment established and levied on an individual Assessor ’s Parcel pursuan t to a 66 City of Ontario CFD No. 35 3 February 17, 2022
contractual agreement or other voluntary c onsent by the owner thereof (e.g., property owner association assessments).

“County” means the County of San Bernardino.

“Designated Buildable Lot” means a Buildable Lot for which a bui lding permit has not been issued by the City as of the date of calculation of the Backup Special Tax.

“Developed Property” means for each Fiscal Year, all Taxable Prope rty, exclusive of Final Mapped Property, Taxable Property Owner Ass ociation Property, a nd Taxable Public Pr operty, for which a building permit or other applicable permit for new construction was issued after January 1, 2017, and before May 1 of the prior Fiscal Year.

“Expected Residential Lot Count” means 235 Buildable L ots of Single Family Property or, as det ermined by the CFD Administrator, the number of Buildable Lots of Single Family Property based on the most recent Tentative Tract Map(s) or most recently recorded Final Subdivision Map(s) or modified Final Subdivision Map(s).

“Facilities” means the public facilities authorized to be financed, in whole or in part, by CFD No. 35.

“Final Mapped Property” means, for each Fiscal Year, all Taxable Property , exclusive of Developed Property, Taxable Property Owner Associati on Property, and Taxable Public Property, which as of January 1 of the previous Fiscal Year was located within a Final Subdivision Map. The term Final Mapped Property shall include any parcel map or Final Subdivision Map, or portion thereof , that creates individual lots for which a building per mit may be issued, including P arcels that are designated as a remainder Parcel (i.e., one where the size, location, etc., precludes any further subdivision or taxable use).

“Final Subdivision Map ” means a final tract map, parcel map, o r lot line adjustmen t approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or a condominium plan recorded in acco rdance with California Civil Code Section 4285 that, in either case, creates indivi dual lots for which building permits may be issued without further subdivision.

“Fiscal Year” means the period starting July 1 and ending on the following June 30.

“Indenture” means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which Bonds are issued, as mo dified, amended, and/or supplemented from time to time.

“Land Use Class” means any of the classes listed in Table 1 below.

“Lower Income Household Welfare Exemption Property” means, for each Fiscal Year, an Assessor’s Par cel wit hin the boundaries of CFD No. 35 that is subject to a welfare exemption under subdivision (g) of Section 214 of the California Revenue and 67 City of Ontario CFD No. 35 4 February 17, 2022
Taxation Code (or any successor stat ute), as indicated in the most recent County assessor’s roll finalized prior to such Fiscal Year.

“Maximum Special Tax ” means, with respect to an Assessor’s Parcel of Taxable Property, the Maximum Special Tax determined in accordance with Section C.1 below that can be levied in any Fiscal Year on such Assessor’s Parcel of Taxable Property.

“Minimum Sale Pric e” means the minimum price at which Units of a given Land Use Class have sold or are expected to be sold in a normal marketing environme nt and shall not include prices for such Units that are sold at a discount to expected sales prices for the purpose of stimulating the initial sales activity with respect to such Land Use Class.

“Non-Residential Property ” means all Assessor’s Parcels of D eveloped Prope rty for which a building permit was issued by the City permitting the construction of one or more non-residential structures or facilities.

“Other Residential Property” means all Assessor’s Parcels of Develope d Property for which a building permit was issued by the City for purposes of constructing Units, excluding Single Family Attached Property and Single Family Detached Property.

“Outstanding Bonds” means all Bonds which are outstanding under and in accorda nce with the provisions of the Indenture.

“Price Point Consultant” means any consultant or firm of s uch consultants selected by CFD No. 35 that (a) has substantial experience in performing price point studies for residential units within community facilities districts established under the Act or otherwise estimating or confirming pricing for residential units in such community facilities districts, (b) has recognized expertise in analyzing economic and real estate data that relates to the pricing of residential units in such community facilities districts, (c) is in fact independent a nd not under the control of CFD No. 35 or the City, (d) does not have any substantial interest, direct or indirect, with or in (i) CFD No. 35, (ii) the City, (iii) any owner of real property in CFD No. 35, or (iv) any real property in CFD No. 35, and (e) is not connected with CFD No. 35 or the City as an offi cer or employee thereof, but who may be regularly retained to make reports to CFD No. 35 or the City.

“Price Point Study” means a price point study or a letter updating a previous price point study prepared by the Price Point Consultant pursuant to Section C herein.

“Property Owner Association Property ” means, for each Fiscal Year, any property within the boundaries of CFD No. 35 that was owned by a prop erty owner asso ciation, including any master or sub-association, as of January 1 of the prior Fiscal Year.

“Proportionately” means (a) for Developed Property in the first step of Section D below, that the ratio of the actual Special Tax levy to the Max imum Special Tax is equal for all Assessor’s Parcels of Developed Property; however, for Developed Propert y in the fourth step of Section D below, Proportionately means that the amount of the increase above the Assigned Special Tax , if necessary, is equal for all Assessor’s Parcels of Developed Property, except that if the Backup Special Tax limits the increase on any 68 City of Ontario CFD No. 35 5 February 17, 2022
Assessor’s Parcel(s) , then the amount of the increase shall be equal for th e remaining Assessor’s Parcels; (b) for Final Mapped Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assessor’s Parcels of Final Mapped Property; (c) for Undeveloped Property, that the ratio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assesso r's Parcels of Undeveloped Property; (d ) for Taxable Property Owner Association Property, that the r atio of the actual Special Tax levy to the Maximum Special Tax is equal for all Assesso r’s Parcels of Taxable Property Owner Association Property; and (e ) for Taxable Publ ic Property, that the ra tio of the actual Special Tax le vy to the Maximum Special Tax is equal for all Assessor’s Parcels of Taxable Public Property.

“Public Property” means, for each Fiscal Year, property within the boundaries of CFD No. 35 that is (a) owned by, irrevocably offered to, or dedicated to the federal government, the State, the County, the City, or any local government or other public agency or (b) encumbered b y an easement for pu rposes of public or utility righ t-of-way that makes impractical its use for any purpose other than that set forth in such easement , provided that any pr operty leased by a public agency to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified according to its use.

“Rate and Method of Apportionment ” means this Amended and Restated Rate and Method of Apportionment of Special Tax.

“Residential Floor Area ” means all of the Square F ootage of living area within the perimeter of a Unit, not incl uding any carport , walkway, gara ge, overhang, patio, enclosed patio, or similar area. The determination of Residential Floor Area shall be as set forth in the building permit(s) issued for such Assessor’s Parcel , or as set forth in other official records maintained by the City’s Building Department or other appropriate means selected by CFD No. 35. The actual Square F ootage shall be round ed up to the next whole square f oot. Once such det ermination has been made for a n Assessor’s Parcel, it shall remain fixed in all future Fiscal Years unless an appeal pursuant to Section F below is approved that results in a change in the actual Square Footage.

“Services” means the services authorized to be financed, in whole or in part, by CFD No.

35. “Single Family At tached Propert y” means all Asses sor’s Parcels of Developed Property for which a building permit or use permit was issued for construction of a residential structure consisting of two or more Units that share common walls, have separate Assessor’s Parcel Nu mbers assigned to them (except f or a duplex unit, which may share an Assessor’s Parcel with another duplex unit), and may be purchased by individual homebuyers (which shall still be the case even if the Units are purchased and subsequently offered for rent by the owner of the Unit), incl uding such residential structures that meet the statutory definition of a condominium contained in California Civil Code Section 4125.

69 City of Ontario CFD No. 35 6 February 17, 2022
“Single Family Detached Property ” means all Assessor’s Parcels of Developed Property for which a building permit was issued for con struction of a Unit , on one legal lot, that does not share a common wall with another Unit.

“Single Family Property” means all Assessor’s Parcels of Single Family Attached Property and Single Family Detached Property.

“Special Tax” means the special tax authorized by the qualified electors of CFD No. 35 to be levied within the boundaries of CFD No. 35.

“Special Tax Requirement” means for any Fiscal Year that amount required, after taking into account available amounts held in the funds and accounts established under the Indenture, for CFD No. 35 to: (i) pay debt service on all Outstanding B onds which is due in the calendar year that commences in such Fiscal Year ; (ii) pay periodic costs on the Bonds, including, but not limi ted to, credit enhancement and rebate payments on the Bonds; (iii) pay Administrative Expenses; (iv) provide any amounts required to establish or replenish any reserve fund for the Bonds; (v) pay directly for acquisition or construction of Facilities, or the cost of Ser vices, to the extent that the inclusion of such amounts does not increase the Special Tax l evy on Final Ma pped Property or Undeveloped Property; (vi) provide an amount equal to Special Tax delinquencies based on the histor ical delinquency rat e for the Special Tax as determi ned by the CFD Administrator.

“Square Footage ” or “Sq. Ft.” means the floor area square footage reflected on the original construction building permit , or as set forth in other official records maintaine d by the City’s Buil ding Department or other appropr iate means s elected by CFD No. 35, issued for construction of Single Family Property, Ot her Residential Property, or Non-Residential Property , plus any square f ootage subsequently added to a building of Non-Residential Property after issuance of a building permit for expansion or renovation of such building.

“State” means the State of California.

“Taxable Property” means, for each Fiscal Year, all of the Assessor’s Parcels within the boundaries of CFD No . 35 that are not ex empt from the Special Tax pursua nt to law or Section E below.

“Taxable Property Owner Association Property ” means, for each Fiscal Year, all Assessor’s Parcels of Property Owner Association Property that are not exempt from the Special Tax pursuant to Section E below.

“Taxable Public Property” means, for each Fiscal Year, all Assessor’s Parcels of Public Property that are not exempt from the Special Tax pursuant to law or Section E below.

“Tentative Tract Map” means a map: (i) showin g a proposed subdivi sion of an Assessor’s Parcel(s) and the conditions pertaining thereto; (ii) that may or may not be based on a detailed survey; and (iii) that is not recorded by the County to create legal lots.

70 City of Ontario CFD No. 35 7 February 17, 2022

“Total Tax Burden ” means, for a Unit within a Land Use Cla ss, for the Fiscal Year in which Total Tax Burden is being calculated, the sum of (a) the Assigned Special Tax for such Land Use Class for such Fiscal Year, plus (b) the CFD No. 19 s pecial tax for such Land Use Class for such Fisc al Year, plus ( c) the ad valorem property taxes, special assessments, special taxes for any other overlapping comm unity facilities districts, and any other governmental fees , charges (ot her than fees or charges for services such as sewer and trash) , taxes , and assessments (which do not inc lude Contractual Impositions) collected by the County on ad valorem tax bills an d that the CFD Administrator estimates would be levied or impose d on such Unit in such Fiscal Year if the residential dwelling unit thereon or therein had been completed and sold, a nd was subject to such fees, charges, taxes, and assessments in such Fiscal Year.

“Trustee” means the trustee or fiscal agent under the Indenture.

“TTM 17449” means Tentative Tract Map No. 17449, the area of which is located within CFD No. 35.

“TTM 17450” means Tentative Tr act Map No. 17450, the area of which is loc ated within CFD No. 35.

“Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property, Final Mapped Prope rty, Taxable Public Property, or Taxable Property Owner Association Property.

“Unit” means an individual single -family detached or atta ched home, townhome, condominium, apartment, or other residential dwelling unit, including each separate living area within a half-plex, duplex, triplex, fourplex, or other residential structure.

B. ASSIGNMENT TO LAND USE CATEGORIES

Each Fiscal Year, beginning with Fiscal Year 201 8-19, all Taxable Property within CFD No. 35 shall be classified as Developed Property, Final Mapped Property, Taxable Public Property, Taxable Property Owner Association Pr operty, or Undeveloped Property and shall be subject to Special Taxes in accordance with the Rate and Method of Apportionment as determined pursuant to Sections C and D below. Assessor’s Parcels of Single Family Property shall be assi gned to Land Use Classes 1 through 7, as listed in Table 1 below based on t he Residential Floor Area of the Units on such Assessor’s Parcels. Other Residential Property shall be assigned to Land Use Class 8, and No n- Residential Property shall be assigned to Land Use Class 9.

C. MAXIMUM SPECIAL TAX

1. Special Tax

At least 30 days prior to the issuance of Bonds, the Assigned Special Tax on Developed Property (set forth in Table 1 below) shall be analyzed in accord ance with and subject to the conditions se t forth in this Section C. At such time, CFD 71 City of Ontario CFD No. 35 8 February 17, 2022
No. 35 shall select and engage a Price Point Consultant and the CFD Administrator shall request the Price Point Consultant to prepare a Price Point Study setting forth the Minimum Sale Price of Units within each Land Use Class.

If based upon such Price Point Study the CFD Adminis trator calculates that the Total Tax Burden applicable to Units within one or more Land Use Classes of Single Family Proper ty to be constructed within CFD No. 35 exceeds 1.95% of the Minimum Sale Price of such Units, the Assigned Special Tax shall be reduced to t he extent necessary to cause the Total Tax Burden that shall apply to Units within such Land Use Class(es) not to exceed 1.95% of the Mi nimum Sale Price of such Units.

Each Assigned Special Tax reduction for a Land Use Class shall be calculated by the CFD Administrator separately, and it shall not be required that such reduction be proportionate among Land Use Classes. In connection with any reduction i n the Assigned Special Tax , the Backup Special Tax shall also be reduced by the CFD Administrator based on the percentage reduction in Maximum Special Tax revenues within the Tentative Tract Map area(s) where the Assigned Special Tax reductions occurred. Upon determining the reduc tions, if any, in the Assigned Special Tax and Backup Special Tax requi red pur suant to this Section C, the CFD Administrator shall complete the Certificate of Modification of Special Tax substantially in the form a ttached hereto a s Exhibit A (the “Certific ate of Modification”), shall execute such completed Certificate of Modi fication, and shall deliver such executed Certificate of Modification to CFD No. 35. Upon receipt thereof, if in satisfactory form, CFD No. 35 shall execute such Certificate of Modific ation. The reduced Assigned Special Tax and Backup Special Tax specified in s uch Certificate of Modification shall become effective upon the execution of such Certificate of Modification by CFD No. 35.

The Special Tax reductions required pursuant to this section shall be reflected in an amended notice of Special Tax lien , which CFD No. 35 shall cause to be recorded with the County Recorder as soon as practicable after execution of the Certificate of Modification by CFD No. 35. T he reductions in this sect ion apply to Single Family Property, but not to Other Residential Prope rty or Non- Residential Property.

a. Developed Property

1) Maximum Special Tax

The Maximum Special Tax that may be levied in any Fiscal Year for each Assessor’s Parcel classified as Devel oped Property shall be the greater of (i) the amount derived by applic ation of the Assigned Special Tax or (ii) the amount derived by application of the Backup Special Tax. The Maximum Special Tax shall not increase in future years , other than as calculat ed pursuant to Section C.1.a.3 below.

72 City of Ontario CFD No. 35 9 February 17, 2022
2) Assigned Special Tax

The Assigned Special Tax that may be levied in any Fiscal Year for each Land Use Class is shown below in Table 1.

TABLE 1
ASSIGNED SPECIAL TAX – DEVELOPED PROPERTY

3) Backup Special Tax

The Backup Special Tax shall be $3,662 per Unit f or Single Family Property. However, if the Expected Residential Lot Count does not equal 235 for Single Family Property , and the City has not issued Bonds , then the Backup Special Tax for Designate d Buildable Lots of Single Family Proper ty shall be calcul ated according to the following formula:

Backup Special Tax = $860,583 ÷ Expected Residential Lot Count for Single Family Property

If any portion of a Final Subdivision Map, or any area expected by CFD No. 35 to become Final Map ped Property, such as the area within TTM 17449, TTM 17450, or a ny other Tentative Tract Map, changes any time after the City has issued Bonds, causing an adjustment to the number of Designated Buildable Lots, then the Backup Special Tax for all Designated Buildable Lots of Single Family Property subject to the change shall be calculated according to the following steps:

Step 1: Determine the total Backup Special Taxes that
could have been collected from Designated

Land
Use
Class

Description

Residential
Floor Area
(Square
Footage)

Assigned
Special Tax
1 Single Family Property < 1,501 $3,175 per Unit
2 Single Family Property 1,501 – 1,700 $3,283 per Unit
3 Single Family Property 1,701 – 1,900 $3,449 per Unit
4 Single Family Property 1,901 – 2,100 $3,665 per Unit
5 Single Family Property 2,101 – 2,300 $3,748 per Unit
6 Single Family Property 2,301 – 2,500 $3,881 per Unit
7 Single Family Property > 2,500 $4,065 per Unit
8 Other Residential Property $50,380 per Acre
9 Non-Residential Property $50,380 per Acre
73 City of Ontario CFD No. 35 10 February 17, 2022
Buildable Lots of Single Family Property prior to
the Final Subdivision Map or expected Final
Mapped Property change.

Step 2: Divide the amount determined in Step 1 by the
number of Designated Bui ldable Lots of Single
Family Property that exists after the Final
Subdivision Map or expected Final Mapped
Property change.

Step 3: Apply the amount determined in Step 2 as the
Backup Special Tax per Unit for Sin gle Family
Property.

The B ackup Special Tax for an Assessor’s Parcel shall not change once an Assessor’s Pa rcel is classified as Developed Property.

b. Final M apped Property, Taxable Public Property, Taxable Property Owner Association Property, and Undeveloped Property

The M aximum Special Tax fo r Final Mapped Property, Taxable Public Property, Taxable Propert y Owner Association Property, and Undeveloped Property shall be $50,380 per Acre, and shall not be subject to increase or reduction and, therefore, shall remain the same in ev ery Fiscal Year.

2. Multiple Land Use Classes on an Assessor’s Parcel

In some instances an Assessor’s Parcel of Developed Property m ay contain more than one Land Use Class. The Maximum Special Tax levied on such Assessor’s Parcel shall be the sum of the Maximum Special Tax for all Units of Single Family Property and Acres of Other R esidential Property and Non -Residential Property (based on the pro rata share of Square Footage between Other Residential Property and Non- Residential Property, acco rding to t he applicable building permits, Final Subdivision Map, parcel map, condominium pl an, or other recorded County map) located on that Assessor’s Parcel.

D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX

Each Fiscal Year, beginning with Fisca l Year 20 18-19, the CFD Administrator shall determine the Special Tax Requirement for such Fiscal Year. The Special Tax shall then be levied as follows:

First: If needed to satisfy the Special Tax Requirement, the Special Tax shall be levied Proportionately on e ach Assess or’s Parce l of D eveloped Property up to 100% of the applicable Assigned Special Tax;

74 City of Ontario CFD No. 35 11 February 17, 2022
Second: If additional monies are needed to sati sfy the Special Tax Requirement after the first step has been completed, then the Special Tax shall be levied Pr oportionately on each Assessor’s Parcel of Final Mapped Property up to 100% of the Maximum Special Tax for Final Mapped Property;

Third: If additional monies are ne eded to satisfy the Special Tax Requirement after the first two steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property up to 100% of the Maxi mum Special Tax for Undeveloped Property;

Fourth: If additional monies are needed to satisfy the Special Tax Requirement after t he first three steps have been completed, then the levy of the Special Tax on each Assessor’s Parcel of Developed Property whose Maximum Special Tax is determined through the application of the Backup Special Tax shall be increased Proportionately from the Assigned Special Tax up to the Maximum Special Tax for each such Assessor’s Parcel;

Fifth: If additional monies are needed to satisfy the Spe cial Tax Requirement after the first four steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor ’s Parcel of Taxable Property Owner Association Property up to the Maximum Special Tax for Taxable Property Owner Association Property;

Sixth: If additional monies are needed to satisfy the Special Tax Requirement after the first five steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Taxable Public Property up to the Maximum Special Tax for Taxable Public Property.

Notwithstanding the above, under no circumstances shall the Special Tax levied in any Fiscal Year on any Assessor’s Parcel of Single Family Proper ty or Other Residential Property fo r which an occupan cy permit for private residential use has been issued be increased as a result of delinquency or default by the owner or owners of any oth er Assessor’s Parcel or Asse ssor’s Parcels within CFD No. 35 by m ore than ten percent above the amount that would have been levied in that Fiscal Year had there never been any such delinquencies or defaults.

E. EXEMPTIONS

No Special Tax s hall be levied o n up to 2.44 Acres of Public Property and up to 14.12 Acres of P roperty Owner Association Property. Tax-exempt status will be assigned by the CFD Administrator in the chronological order in which property becomes Public Property or Property Owner Association Property.

Property Owner Association Property or Public P roperty that is not exempt from the Special Tax under this section shall be subject to the levy of the Special Tax and shall be taxed Proportionately as part of the f ifth or sixth step, respectively, in Section D above, up to 100% of the applicable Maximum Special Tax for Taxable Property Ow ner Association Property and Taxable Public Property. No Special Tax shall be levied in any Fiscal Year on Assessor’s Parcels that have ful ly prepaid the S pecial Tax obligation pursuant to the formula set forth in Section H.
75 City of Ontario CFD No. 35 12 February 17, 2022

No Special Tax shall be levied on L ower Income Household Welfare Exemption Property; provided, however, tha t if, in any Fiscal Year, applicable law does not re quire that Lower Inc ome Ho usehold Welfare Exemption Property be exempt fr om som e portion, or all, of the Special Tax, such portion, or all, of the Special Tax shall be levied on such property in accordanc e with this Rate and Method of Apportionment based on the Land Use Class to which the Assessor’s Parcel is assigned.

F. APPEALS

Any property owner may file a written app eal of the Special Tax with CFD No. 35 claiming that the amount or application of the Special Tax is not correct. T he appeal must be filed not later than one calendar year after having paid the Special Tax that is disputed, and the appellant must be current in all payments of Special Taxes. In addition, during the term of the appeal process, all Special Taxes levied m ust be paid on or bef ore the payment date established when the levy was made.

The appeal must specify the re asons why the appellant claims the Special Tax is in error.

The CFD Administrator shall review the appeal, meet with the appellant if the CFD Administrator deems necessary, and advise the appellant of its determination.

If the property owner disagrees with the CFD Administra tor’s decision relative to the appeal, the owner may then file a written appeal with the City Council whose subsequent decision shall be final and binding on all interes ted parties. If the decision of the CFD Administrator or subsequent decision by the Ci ty Council requires the Special Tax to be modified or changed in favor of the property owner, then the CFD Administrator s hall determine if sufficient Special Tax revenu e is available to make a cash refund . If a cash refund cannot b e mad e, then an adjustm ent shall be made to credit future Special Tax levy(ies).

This procedure shall be exclusive and its exhaustion by any property owner shall be a condition precedent to filing any legal action by such owner.

G. MANNER OF COLLECTION

The Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the Special Taxes may be collected in such other manner as the City Council shall determine, including direct billing of affected property owners.

H. PREPAYMENT OF SPECIAL TAX

The following definitions apply to this Section H:

“CFD Public Facilities ” means $12,110,000 each Prepayment Period, or such lower number as determined by the City Council to be sufficient to fund the Facilities and Services to be provided by CFD No. 35.
76 City of Ontario CFD No. 35 13 February 17, 2022

“Expenditures Fund” means funds or accounts, regardless of their names, that are established to hold moneys that are available to acquire or construct Facilities and to fund Services.

“Future F acilities Costs” means th e CFD Public Facilities minus (i) Facilities and Services costs previously paid from the Expenditures Fund during the Prepayment Period in whi ch the prepayment is being made, (ii) moneys currently on deposit in the Expenditures Fund from deposits made duri ng the Prepayment Period in which the prepayment is being made , and (iii) moneys currently on deposit in an escrow fund that are expected to b e available to finance Facilities costs. In no event shall the amount of Future Facilities Costs be less than zero.

“Prepayment Period” means one of three periods of time during which a Special Tax prepayment may be made.

“Prepayment Period 1” means July 1, 2018, through June 30, 2052.

“Prepayment Period 2” means July 1, 2052, through June 30, 2085.

“Prepayment Period 3” means July 1, 2085, through June 30, 2119.

1. Prepayment in Full

The obligation of an Assessor 's Parcel to pay the Special Tax may be prepaid as described herein, provided that a prepayment may be made only for Ass essor’s Parcels for which a building permit for new construction was issued after Jan uary 1, 2017, and only if there are no delinquent Special Taxes with respect to such Assessor's Parcel at the tim e of prepayment. An owner of an Assessor's Parcel intending to prepay the Special Tax ob ligation shall provide the CFD Administrator with written notice of intent to prepay. Within 30 days of receipt of such w ritten notice, the CFD Administrator shall no tify such owner of the prepayment amount for such Assessor 's Pa rcel. T he CFD Administrator may charge a fee for providing this service. Prepayment in any six month period must be made not less than 45 days pri or to the next occurring date that notice of redemption of Bonds from the proceeds of such prepayment m ay be given to the Trustee pursuant to the Indenture.

The Special Tax Prepayment Amount (defined below) shall be calculated as summarized below (capitalized terms as defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Amount
plus Defeasance Amount
plus Administrative Fees and Expenses
less Reserve Fund Credit
Total Prepayment Amount
77 City of Ontario CFD No. 35 14 February 17, 2022

As of the proposed date of prepayment, the Special Tax Prepayment Amount (defined below) shall be calculated by the CFD Administrator as follows:

Paragraph No.

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel , and determine the Prepayment Period for the proposed prepayment.

2. Compute the Assigned Special Tax and Backup Special Tax for the Assessor’s Parcel to be prepai d based on the Dev eloped Property Speci al Tax which is, or could be, charged in the current Fiscal Year . For Assessor’s Parcels of Final Mapped Property (for which a building permit ha s been issued but which is not yet classified as Developed Property) to be prepaid, compute the Assigned Special Tax and Backup Special Tax for that Assessor’s Parcel as though it was already designated as Devel oped Property, base d upon the building permit which has already been issued for that Assessor’s Parcel.

3. (a) Divide the Assigned Special Tax computed pursuant to Paragraph 2 by the total estimated Assigned Special Tax for CFD No. 35 based on the Developed Property Special Tax which could be charge d in the current Fiscal Year on all expected development through buildout of CFD No. 35, excluding any Assessor’s Parcels which have been prepaid, and

(b) Divide the Backup Special Tax computed pursuant to Para graph 2 by the estimated total Backup Special Tax at buildout of CFD No. 35, excluding any Assessor’s Parcels which have been prepaid.

4. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid (the “Bond Redemption Amount”).

5. Multiply the Bond Redemption Amount computed pursuant to Paragraph 4 by the applicable redemption prem ium (e.g., the redemption price minus 100%), if any, on the Outstanding Bonds to be redeemed (the “Redemption Premium”).

6. Compute the Future Facilities Costs for the applicable Prepayment Period.

7. Multiply the larger quotient computed pursuant to Paragraph 3(a) or 3(b) by the amount determined pursuant to Paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the “Future Facilities Amount”).

8. Compute the am ount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the earliest redemption date for the Outstanding Bonds.

9. Determine the Special Tax levied on the Assessor’s Parce l in the current Fiscal Year which has not yet been paid.
78 City of Ontario CFD No. 35 15 February 17, 2022

10. Add the amounts computed pursuant to Paragraphs 8 and 9 to determine the “Defeasance Amount”.

11. Verify the administrative fees and expenses of CFD No. 35, including the costs to compute the prepayment, the costs to invest the prepayment proceeds, the costs to redeem Bonds, and the costs to record any notices to evidence the prepayment and the redemption (the “Administrative Fees and Expenses”).

12. If reserve f unds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment date, a reserve f und credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the “Reserve Fund Credit ”). No Reserve Fund Credit shall be granted if reserve funds are below 100% of the re serve requirement o n the prepayment date or t he redemption date.

13. The Special Tax prepayment is equal to the sum of the amounts computed pursuant to Paragraphs 4, 5, 7, 10, and 11, less the amount computed pursuant to Paragraph 12 (the “Prepayment Amount”).

14. From the Prepayment Amount, the am ounts computed pursuant to Paragraphs 4, 5, 10, and 12 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make debt service payments. The amount computed pur suant to Paragraph 7 shall be deposited into the Expenditures Fund. The amount computed pursuant to Paragraph 11 s hall be retained by CFD No. 35.

The Special Tax Prepayment Amount may be sufficient to redeem other than a $5,000 increment of Bonds. In such cases, the increment ab ove $5,000, or integral multiple thereof, will be retained in t he appropriate fund establ ished under the Indenture to be used with the next prepayment of Bonds or to make debt service payments.

As a result of t he payment of the c urrent Fiscal Year’s Speci al Tax levy as determined under Paragraph 9 (above), the CFD Administrator shall remove the current Fiscal Year’s Special Tax levy for such Assessor’s Parcel from the County tax rolls. With respect to any Assessor's Parcel that is prepaid during Prepayment Period 3, the CFD Administrator shall cause a suitable notice to be recorded in compliance with the Act to indicate that the Special Tax has been prepaid and that the obligation of such Assessor's Parcel to pa y the Special Tax shall cease.

With respect to the Special Tax for any Assessor’s Parcel that is p repaid during Prepayment Period 1 or Prepayment Period 2, the obligation of such Assessor’s Parcel to pay the Special Tax shall be tolled, or suspended, through the end of such Prepayment Period, but shall resume in the first Fiscal Year of the subsequent Prep ayment Period .

The CFD Adminis trator shall cause a suitable notice to be recorded in compliance with the Act to indicate that the Special Tax has been s atisfied for the re mainder of the applicable Prepayment Period but h as not been permanently satisfied and the obliga tion 79 City of Ontario CFD No. 35 16 February 17, 2022
to pay the Special Tax will resume in the first Fiscal Year of the Prepayment Period following the Prepayment Period in which the prepa yment was made. On ce the obligation of an Assessor’s Parcel to pay the Special Tax resumes, the Special Tax for the then applicable Prepayment Period may be prepaid.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the amount of Maximum Special Tax that may be levied on Taxable Property within CFD No. 35 (after excluding 2.44 Acres of Public Property and 14.12 acres of Property Owner Association Property) both prior to and after the proposed prepayment is at least 1.1 times the maximum annual debt service on all Outstanding Bonds.

2. Prepayment in Part

The Special Tax on an Ass essor’s Parcel for which a building permit for new construction was issued after January 1, 2017, may be partially prepaid. The amount of the prepa yment shall be calculated as in Section H .1, except that a partial prepayment shall be calculated by the CFD Administrator according to the following formula:

PP = (PF – AE) x % + AE.

The terms above have the following meaning:

PP = the partial prepayment
PF = the Prepayment Amount (full prepayment) for the Special Tax calculated according to Section H.1
AE = the Administrative Fees and Expenses determined pursuant to paragraph 11 above % = the percentage by which the owner of the Assessor’s P arcel(s) is partially prepaying the Special Tax

The Special Tax partial prepayment amount must be sufficient to redeem at least a $5,000 increment of Bonds.

The owner of any Assessor’s Parcel who desires such prepayment shall notify the CFD Administrator of such owner’s intent to partially prepay th e Special Tax and the percentage by which the Special Tax shall be pre paid. The CFD Adm inistrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax for an Assessor’s Par cel within thirty (30) days of the request and may charge a fee for providing this servi ce. Wit h respect to any A ssessor’s Parcel that is partially prepaid, the CFD Administrator shall (i) distribute the remitted prepayment funds according to Section H .1, and (ii) indicate in the records of CFD No. 35 that there has been a partial prepa yment of the Special Tax and that a portion of the Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (100% - “%”, as defined above ) of the Maximum Special Tax, s hall continue to be levied on such Assessor’s Parcel pursuant to Secti on D during the Pr epayment Period in which the partial prepayment is made.

For partial prepayments made during Prepayment Period 1 or Prepa yment Period 2, the full amount of the Special Tax shall resume in the first Fiscal Year of the Prepaym ent 80 City of Ontario CFD No. 35 17 February 17, 2022
Period fo llowing the Prepayment Period in which the partial prepayment was made.

Once the obligation of an Assessor’s Parcel to pay the Special Tax resumes, the Special Tax for the then applicable Prepayment Period may be prepaid.

I. TERM OF SPECIAL TAX

The Fiscal Year afte r which no further Special Tax shall be levied or collected is Fiscal Year 2118-2119, except that the Special Tax that was lawfully levied in or bef ore such Fiscal Year and that remains delinquent may be collected in subsequent years.

81 EXHIBIT A

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
(PAGE 1 OF 2)

CITY OF ONTARIO AND CFD NO. 35 CERTIFICATE

1. Pursuant to Section C.1 of the Amended and Restated Rate and Method of Apportionment of Special Tax (the “Rate and Method”) for City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South – Facilities) (“CFD No. 35”) , the Assigned Special Tax and the Backup Special Tax for Developed Property within CFD No. 35 has been modified.

a. The information in Table 1 relating to the Assigned Special Tax for Developed Property within CFD No. 35, as s tated in Section C.1.a.2 of the Rate and Method of Apportionment, has been modified as follows:

TABLE 1
ASSIGNED SPECIAL TAX – DEVELOPED PROPERTY

Land
Use
Class

Description

Residential
Floor Area
(Square
Footage)

Assigned
Special Tax
1 Single Family Property < 1,501 $[ ] per Unit
2 Single Family Property 1,501 – 1,700 $[ ] per Unit 3 Single Family Property 1,701 – 1,900 $[ ] per Unit 4 Single Family Property 1,901 – 2,100 $[ ] per Unit 5 Single Family Property 2,101 – 2,300 $[ ] per Unit 6 Single Family Property 2,301 – 2,500 $[ ] per Unit 7 Single Family Property > 2,500 $[ ] per Unit
8 Other Residential Property $[ ] per Acre
9 Non-Residential Property $[ ] per Acre
82 EXHIBIT A

CERTIFICATE OF MODIFICATION OF SPECIAL TAX
(PAGE 2 OF 2)

b. The Backup Special Tax for Developed Property, as stated in Section C.1.a. 3, shall be modified as follows:

The Backup Special Tax sh all be $[____] per Unit for Single Family Property. However, if the Expected Residential Lot Count does not equ al 235 for Single Family Property, and the City has not issued Bonds , then the Backup Special Tax for Designated Bui ldable Lots of Single Family Property shall be calculated according to the following formula:

Backup Special Tax = $[______] ÷ Expected Residential
Lot Count for Single Family Property

2. The Special Tax for Developed Property may only be modified prior to the first issuance of CFD No. 35 Bonds.

3. Upon execution of this Certificate by CFD No. 35, CFD No. 35 shall cause an amended notice of Special Tax lien for CFD No. 35 to be recorded reflecting the modifications set forth herein.

Capitalized unde fined terms used herein have the meanings ascribed thereto in the Rate and Method. The modifications set forth in this Certificate have been calculated by the CFD Administrator in accordance with the Rate and Method.

GOODWIN CONSULTING GROUP, INC.

CFD ADMINISTRATOR

By:_________________________________ Date:______________________

The undersigned acknowledges receipt of this Certificate and of the modification of the Assigned Special Tax and the Backup Special Tax for Developed Property as set forth in this Certificate.

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH – FACILITIES)

By:_________________________________ Date:______________________ 83 RESOLUTION NO. ________

A RESOLUTION OF CHANGE OF THE CITY COUNCIL OF THE CITY OF

ONTARIO, CALIFORNIA, DECLARING RESULTS OF A SPECIAL

ELECTION, DETERMINING THAT CHANGES TO THE RATE AND

METHOD OF APPORTIONMENT OF THE EXISTING SPECIAL TAX OF
CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES) ARE LAWFULLY

AUTHORIZED AND DIRECTING RECORDING OF AN AMENDMENT TO
NOTICE OF SPECIAL TAX LIEN.

SECTION 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

SECTION 2. The City Council has received, reviewed and hereby accepts the Canvass.

SECTION 3. The City Council hereby finds and declares that the ballot proposition submitted to the qualified electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors in accordance with Section 53338 of the Act.
84 SECTION 4. The City Council hereby finds and determines that the changes to the rate and method of apportionment of the Special Tax so as to increase certain of the Special tax rates thereunder, as described in the Resolution Calling Election, are lawfully authorized.

SECTION 5. The City Clerk is hereby directed to execute and cause to be recorded in the office of the County Recorder of the County of San Bernardino an amendment to the notice of special tax lien for the Community Facilities District in accordance with Section 3117.5 of the California Streets and Highways Code.

SECTION 6. All actions heretofore taken by the officers, employees and agents of the City with respect to the changes to the rate and method of apportionment of the Special Tax, or in connection with or related to any of the documents referred to herein, are hereby approved, confirmed and ratified.

SECTION 7. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things that they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

SECTION 8. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 3rd day of May 2022. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
85 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
86 EXHIBIT A

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)

CANVASS AND STATEMENT OF RESULTS OF ELECTION
I hereby certify that on May 3, 2022, I canvassed the returns of the special election held on May 3, 2022 for the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities), that the total number of ballots cast in said Community Facilities District and the total number of votes cast for and against the proposition are as follows and that the totals as shown for and against the proposition are true and correct:

Qualified
Landowner
Votes
Votes
Cast YES NO
City of Ontario Community Facilities
District No. 35 (Countryside Phase 2
South - Facilities) Special Election,
May 3, 2022
35 ___ ___ ___
MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the rate and method of apportionment of the special tax levied within City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) be changed so as to increase certain of the special tax rates thereunder, all as specified in the Resolution entitled “A Resolution of the City Council of the City of Ontario, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities),” adopted by the City Council of the City of Ontario on May 3, 2022?
IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 3rd day of May 2022.

BY:

SHEILA MAUTZ, CITY CLERK
87 ORDINANCE NO. ________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING AND RESTATING ORDINANCE NO. 3082

LEVYING SPECIAL TAXES WITHIN THE CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES).

WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) previously established City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”);
WHEREAS, the qualified electors of the Community Facilities District authorized the levy of a special tax (the “Special Tax”) within the Community Facilities District to pay, in whole or in part, the cost of providing certain facilities (the “Facilities”) and certain services (the “Services”) and incidental expenses pursuant to the Act referenced in the proposition submitted to such qualified electors;
WHEREAS, pursuant to Section 53340 of the Act, the City Council, on November 7, 2017, adopted Ordinance No. 3082, entitled “An Ordinance of the City Council of the City of Ontario, California, Levying Special Taxes within the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)” (the “Levy Ordinance”), levying the Special Tax at the rate and in accordance with the method of apportionment referenced therein (the “Original Rate and Method”); WHEREAS, on March 15, 2022, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, of Consideration to Change the Rate and Method of Apportionment of the Existing Special Tax of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)” proposing changes to the Original Rate and Method so as to increase certain of the Special Tax rates thereunder;
WHEREAS, on May 3, 2022, the City Council, pursuant to the Act, adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Calling a Special Election for Proposed Changes to the Rate and Method of Apportionment of the Existing Special Tax of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)” (the “Resolution Calling Election”) calling for a special election of the qualified electors within the Community Facilities District and submitting to such qualified electors the proposition to change the Original Rate and Method so as to increase certain of the Special Tax rates thereunder, as reflected in the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Amended and Restated Rate and Method of Apportionment of Special Tax (the “Restated Rate and Method”) attached thereto and incorporated therein; WHEREAS, on May 3, 2022, the City Council adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Declaring Results of a Special Election, Determining That Changes to the Rate and Method of Apportionment of 88 the Existing Special Tax of City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) Are Lawfully Authorized and Directing Recording of an Amendment to Notice of Special Tax Lien,” declaring that the ballot proposition submitted to the qualified electors of the Community Facilities District pursuant to the Resolution Calling Election has been passed and approved by such electors and finding and determining that that the changes to the Original Rate and Method, as reflected in the Restated Rate and Method, were lawfully authorized; and WHEREAS, this Ordinance amends and restates the Levy Ordinance in order to reflect such changes;
THE CITY COUNCIL OF THE CITY OF ONTARIO DOES ORDAIN AS FOLLOWS:

SECTION 1. The Levy Ordinance is hereby amended and restated to read in full as set forth herein.

SECTION 2. The City Council hereby authorizes and levies the Special Tax within the Community Facilities District pursuant to Sections 53328 and 53340 of the Act, at the rate and in accordance with the method of apportionment set forth in the Restated Rate and Method. The Special Tax is hereby levied in each fiscal year until the last fiscal year in which the Special Tax is authorized to be levied pursuant to the Restated Rate and Method.

SECTION 3. The City Council may, in accordance with subdivision (b) of Section 53340 of the Act, provide, by resolution, for the levy of the Special Tax in future tax years at the same rate or at a lower rate than the rate provided by this Ordinance. In no event shall the Special Tax be levied on any parcel within the Community Facilities District in excess of the maximum tax specified therefor in the Restated Rate and Method.

SECTION 4. The Special Tax shall be levied on all of the parcels in the Community Facilities District, unless exempted by law or by the Restated Rate and Method.

SECTION 5. The proceeds of the Special Tax shall only be used to pay, in whole or in part, the cost of providing the Facilities and Services and incidental expenses pursuant to the Act.

SECTION 6. The Special Tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in the case of delinquency as is provided for ad valorem taxes, unless another procedure is adopted by the City Council.

SECTION 7. If for any reason any portion of this Ordinance is found to be invalid, or if the Special Tax is found inapplicable to any particular parcel within the Community Facilities District, by a court of competent jurisdiction, the balance of this Ordinance and the application of the Special Tax to the remaining parcels within the Community Facilities District shall not be affected.
89 SECTION 8. The Mayor shall sign this Ordinance and the City Clerk shall certify as to the adoption and shall cause a summary hereof to be published at least once in a newspaper of general circulation in the City of Ontario, California within fifteen (15) days of the adoption. The City Clerk shall post a certified copy of this Ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with California Government Code Section 36933.

The City Clerk of the City of Ontario shall certify as to the adoption of this Ordinance.

PASSED, APPROVED, AND ADOPTED this ________ day of _________ 2022. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
_________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
90 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Ordinance No. _______ was duly introduced at a regular meeting of the City Council of the City of Ontario held _____________ and adopted at the regular meeting held ___________, 2022 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
I hereby certify that the foregoing is the original of Ordinance No. _______ duly passed and adopted by the Ontario City Council at their regular meeting held ____________ and that Summaries of the Ordinance were published on ___________ and _____________, in the Inland Valley Daily Bulletin newspaper.
__________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
91 RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, DEEMING IT NECESSARY TO AMEND RESOLUTION NO. 2017-124 IN ORDER TO INCREASE THE MAXIMUM AGGREGATE

AMOUNT OF BONDED INDEBTEDNESS THAT CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES) IS AUTHORIZED TO INCUR.

WHEREAS, on October 17, 2017, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted Resolution No. 2017-123, entitled “A Resolution of the City Council of the City of Ontario, California, of Formation of the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities), Authorizing the Levy of a Special Tax within the Community Facilities District and Establishing an Appropriations Limit for the Community Facilities District,” Resolution No. 2017-124, entitled “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary to Incur Bonded Indebtedness within the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)” (the “Resolution Deeming it Necessary to Incur”), and Resolution No. 2017-125, entitled “A Resolution of the City Council of the City of Ontario, California, Calling Special Election for City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities),” which resolutions established City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”), authorized the levy of a special tax within the Community Facilities District and called an election within the Community Facilities District on the proposition of incurring indebtedness, levying a special tax and establishing an appropriations limit for the Community Facilities District, respectively, for the purpose of financing certain public facilities and services, as further provided in the Resolution of Formation; and
WHEREAS, on October 17, 2017, an election was held in which the qualified electors of the Community Facilities District approved said proposition by more than the two-thirds vote required by the Act; and
WHEREAS, pursuant to the Resolution Deeming it Necessary to Incur and said election, the Community Facilities District is authorized to incur bonded indebtedness in a maximum aggregate amount of not to exceed $27,000,000; and WHEREAS, on March 15, 2022, the City Council, pursuant to the Act, adopted a Resolution entitled “A Resolution of the City Council of the City Of Ontario, California, of Intention to Amend Resolution No. 2017-124 In Order to Increase the Maximum Aggregate Amount of Bonded Indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) is Authorized to Incur” (the “Resolution of Intention”), declaring the necessity to increase the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur from $27,000,000 to $42,000,000 and setting the date for a public hearing to be held on the proposed increase in the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur; and 92 WHEREAS, pursuant to the Resolution of Intention, notice of said public hearing was published in the Inland Valley Daily Bulletin , a newspaper of general circulation published in the area of the Community Facilities District, in accordance with the Act; and WHEREAS, on this date, the City Council opened, conducted and closed said public hearing; and
WHEREAS, at said public hearing, any person interested, including persons owning property within the Community Facilities District and desiring to appear and present any matters material to the questions set forth in the Resolution of Intention appeared and presented such matters; and
WHEREAS, oral or written protests against the proposed increase in the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur were not made or filed at or before said public hearing by 50% or more of the registered voters, or six registered voters, whichever is more, residing within the territory of the Community Facilities District, or the owners of one-half or more of the area of land in the territory of the Community Facilities District and not exempt from the special tax; and
WHEREAS, there has been filed with the City Clerk of the City a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the Community Facilities District as of March 17, 2022, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of said public hearing.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

SECTION 1. The foregoing recitals are true and correct, and the City Council so finds and determines.

SECTION 2. The City Council deems it is necessary that the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur be increased from $27,000,000 to $42,000,000.

SECTION 3. In order to increase the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur from $27,000,000 to $42,000,000, Section 5 of the Resolution Deeming it Necessary to Incur shall be amended to read in full as follows:
“SECTION 5. The maximum aggregate amount of debt to be incurred is $42,000,000.”
SECTION 4. Pursuant to the provisions of the Act, the proposal to increase the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur from $27,000,000 to $42,000,000 by amending Section 5 of 93 the Resolution Deeming it Necessary to Incur shall be subject to the approval of the qualified electors of the Community Facilities District at a special election. The City Council hereby finds and determines that no persons were registered to vote within the territory of the Community Facilities District as of March 17, 2022, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing held by the City Council on the proposed increase in the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the special tax. The voting procedure shall be by mailed or hand-delivered ballot.

SECTION 5. The date of the special community facilities district election at which time the proposition shall be submitted to the voters is May 3, 2022.

SECTION 6. The election is to be conducted by mail ballot. The mailed ballots are required to be received in the office of the City Clerk no later than 7:30 p.m. on May 3, 2022; provided, however, that if all of the qualified electors have voted prior to such time, the election may be closed with the concurrence of the City Clerk.

SECTION 7. All actions heretofore taken by the officers, employees and agents of the City with respect to the proposed increase in the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur, or in connection with or related to any of the documents referred to herein, are hereby approved, confirmed and ratified.

SECTION 8. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

SECTION 9. This Resolution shall take effect immediately upon its adoption.

PASSED, APPROVED, AND ADOPTED this 3th day of May 2022. _____________________________________
PAUL S. LEON, MAYOR
94 ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
95 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
96 RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, CALLING SPECIAL ELECTION FOR CITY OF ONTARIO COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH - FACILITIES).

WHEREAS, on this date, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary to Amend Resolution No. 2017-124 In Order to Increase the Maximum Aggregate Amount of Bonded Indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) is Authorized to Incur” (the “Resolution Deeming it Necessary ”), deeming it necessary that the maximum aggregate amount of bonded indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) is authorized to incur be increased from $27,000,000 to $42,000,000; and WHEREAS, pursuant to the provisions of said resolution, the proposition to increase the maximum aggregate amount of bonded indebtedness the Community Facilities District is authorized to incur is to be submitted to the qualified electors of the Community Facilities District as required by the Act; and WHEREAS, the City Council desires to designate the City Clerk of the City (the “City Clerk”) as the election official for the special election provided for herein; and WHEREAS, there has been filed with the City Clerk a letter from the Registrar of Voters of the County of San Bernardino indicating that no persons were registered to vote within the territory of the Community Facilities District as of March 17, 2022, and, accordingly, that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing on the proposed increase in the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur; and WHEREAS, there has been filed with the City Clerk consents and waivers of all of the landowners of record in the Community Facilities District waiving any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said special election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), consenting to the holding of said special election on May 3, 2022 and waiving any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act; and WHEREAS, the City Clerk has concurred in said waivers and has concurred in holding said special election on May 3, 2022.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:
97 SECTION 1. The foregoing recitals are true and correct.

SECTION 2. Pursuant to the Act, the proposition to increase the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur shall be submitted to the qualified electors of the Community Facilities District at an election called therefor as provided below.

SECTION 3. The City Clerk is hereby designated as the official to conduct said election.

SECTION 4. The City Council hereby finds and determines that no persons were registered to vote within the territory of the Community Facilities District as of March 17, 2022, and that 12 or more persons have not been registered to vote within the territory of the Community Facilities District for each of the 90 days preceding the close of the public hearing heretofore held by the City Council on the proposed increase in the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur. Accordingly, pursuant to Section 53326 of the Act, the vote shall be by the landowners of the Community Facilities District and each person who is the owner of land as of the close of said public hearing, or the authorized representative thereof, shall have one vote for each acre or portion of an acre that he or she owns within the Community Facilities District not exempt from the special tax.

SECTION 5. The City Council hereby finds and determines that the qualified electors of the Community Facilities District have unanimously consented (a) to the waiver of any time limit specified by Section 53326 of the Act and any requirement pertaining to the conduct of said election, including any time limit or requirement applicable to an election pursuant to Article 5 of the Act (commencing with Section 53345 of the Act), (b) to the holding of said election on May 3, 2022, and (c) to the waiver of any impartial analysis, arguments or rebuttals, as set forth in Sections 53326 and 53327 of the Act. The City Council herby finds and determines that the City Clerk has concurred in said waivers and has concurred in holding said election on May 3, 2022.

SECTION 6. The City Council hereby calls a special election to increase the maximum aggregate amount of bonded indebtedness that the Community Facilities District is authorized to incur from $27,000,000 to $42,000,000, which election shall be held at 303 East B Street, Ontario, California, on May 3, 2022. The City Council has caused to be provided to the City Clerk, as the official to conduct said election, the Resolution of Deeming it Necessary, a certified map of sufficient scale and clarity to show the boundaries of the Community Facilities District, and a sufficient description to allow the City Clerk to determine the boundaries of the Community Facilities District.

SECTION 7. Pursuant to Section 53326 of the Act, the election shall be conducted by mail or hand-delivered ballot pursuant to Section 4000 et. seq. of the California Elections Code. Except as otherwise provided in the Act, the provisions of law regulating elections of the City, insofar as they may be applicable, will govern the election. 98 SECTION 8. The form of the ballot for said election is attached hereto as Exhibit A and by this reference incorporated herein, and such form of ballot is hereby approved. The City Clerk shall cause to be delivered to each of the qualified electors of the Community Facilities District a ballot in said form. Each ballot shall indicate the number of votes to be voted by the respective landowner to which it pertains.

Each ballot shall be accompanied by all supplies and written instructions necessary for the use and return of the ballot. The identification envelope for return of the ballot shall be enclosed with the ballot, shall have the return postage prepaid, and shall contain: (a) the name and address of the landowner, (b) a declaration, under penalty of perjury, stating that the voter is the owner of record or the authorized representative of the landowner entitled to vote and is the person whose name appears on the identification envelope, (c) the printed name, signature and address of the voter, (d) the date of signing and place of execution of the declaration described in clause (b) above, and (e) a notice that the envelope contains an official ballot and is to be opened only by the canvassing board.

Analysis and arguments with respect to the ballot proposition are hereby waived, as provided in Section 53327 of the Act.

SECTION 9. The City Clerk shall accept the ballots of the qualified electors in the office of the City Clerk at 303 East B Street, Ontario, California, to and including 7:30 p.m. on May 3, 2022, whether said ballots be personally delivered or received by mail. The City Clerk shall have available ballots which may be marked at said location on the election day by said qualified electors.

SECTION 10. All actions heretofore taken by the officers, employees and agents of the City with respect to the special election called for herein, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

SECTION 11. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

SECTION 12. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 3rd day of May 2022. _____________________________________
PAUL S. LEON, MAYOR
99 ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
100

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
101
4160-1653-8933.2

EXHIBIT A

OFFICIAL BALLOT

CITY OF ONTARIO
May 3, 2022

SPECIAL ELECTION
This ballot is for a special, landowner election. The number of votes to be voted pursuant to this ballot is ____.

INSTRUCTIONS TO VOTERS:

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)
MEASURE SUBMITTED TO VOTE OF VOTERS: Shall
the maximum aggregate amount of bonded indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) is authorized to incur be increase from $27,000,000 to
$42,000,000, as specified in the Resolution entitled “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary to Amend Resolution No. 2017-124 In Order to Increase the Maximum Aggregate Amount of Bonded Indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) is Authorized to Incur,” adopted by the City Council of the City of Ontario on May 3, 2022?
Yes:
No:
102
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, DECLARING RESULTS OF SPECIAL ELECTION OF
COMMUNITY FACILITIES DISTRICT NO. 35 (COUNTRYSIDE PHASE 2 SOUTH-FACILITIES).

WHEREAS, on May 3, 2022, the City Council (the “City Council”) of the City of Ontario (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982 (the “Act”), adopted a resolution entitled “A Resolution of the City Council of the City of Ontario, California, Calling Special Election for City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities)” (the “Resolution Calling Election”), calling for a special election of the qualified electors within City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”); and WHEREAS, pursuant to the terms of the Resolution Calling Election and the provisions of the Act, the special election was held on May 3, 2022; and WHEREAS, the City Clerk of the City (the “City Clerk”) has certified the canvass of the returns of the election and has filed a Canvass and Statement of Results of Election (the “Canvass”), a copy of which is attached hereto as Exhibit A; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

SECTION 1. The foregoing recitals are true and correct.

SECTION 2. The City Council has received, reviewed and hereby accepts the Canvass.

SECTION 4. All actions heretofore taken by the officers, employees and agents of the City with respect to the special election, or in connection with or related to any of the matters referred to herein, are hereby approved, confirmed and ratified.

SECTION 5. The officers, employees and agents of the City are hereby authorized and directed to take all actions and do all things which they, or any of them, may deem necessary or desirable to accomplish the purposes of this Resolution and not inconsistent with the provisions hereof.

SECTION 6. This Resolution shall take effect immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
103
PASSED, APPROVED, AND ADOPTED this 3rd day of May 2022. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
104

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
105

EXHIBIT A

CITY OF ONTARIO
COMMUNITY FACILITIES DISTRICT NO. 35
(COUNTRYSIDE PHASE 2 SOUTH - FACILITIES)

CANVASS AND STATEMENT OF RESULTS OF ELECTION
I hereby certify that on May 3, 2022, I canvassed the returns of the special election held on May 3, 2022, for the City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities), that the total number of ballots cast in said Community Facilities District and the total number of votes cast for and against the proposition are as follows and that the totals as shown for and against the proposition are true and correct:

Qualified
Landowner
Votes
Votes
Cast YES NO
City of Ontario Community Facilities
District No. 35 (Countryside Phase 2
South - Facilities) Special Election,
May 3, 2022
35 ___ ___ ___
MEASURE SUBMITTED TO VOTE OF VOTERS: Shall the maximum aggregate amount of bonded indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) (the “Community Facilities District”) is authorized to incur be increase from $27,000,000 to $42,000,000, as specified in the Resolution entitled “A Resolution of the City Council of the City of Ontario, California, Deeming it Necessary to Amend Resolution No. 2017-124 In Order to Increase the Maximum Aggregate Amount of Bonded Indebtedness that City of Ontario Community Facilities District No. 35 (Countryside Phase 2 South - Facilities) is Authorized to Incur,” adopted by the City Council of the City of Ontario on May 3, 2022? IN WITNESS WHEREOF, I HAVE HEREUNTO SET MY HAND this 3rd day of May 2022.

BY:

SHEILA MAUTZ, CITY CLERK
106
Department: Planning
Prepared By: Luis Batres
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 14
SUBJECT:

A PUBLIC HEARING TO CONSIDER FILE NO. PCUP21-009, A CONDITIONAL USE PERMIT TO ESTABLISH A 128-ROOM LIMITED-SERVICE HOTEL ON 1.83 ACRES OF LAND LOCATED AT 5060 EAST FOURTH STREET, WITHIN THE FREEWAY COMMERCIAL LAND USE DISTRICT OF THE EXCHANGE SPECIFIC PLAN (APN: 0238- 012-30)

CITY OF ONTARIO
Agenda Report
May
3, 2022
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

That the City Council consider and adopt a Resolution approving the Conditional Use Permit, File No. PCUP21-009, establishing a 128-room limited-service hotel located at 5060 East Fourth Street.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods FISCAL IMPACT:

The proposed hotel is expected to open in the Summer of 2024 and is projected to have an occupancy rate of 83 percent. The hotel is estimated to generate approximately $3.5 million dollars in revenue the ﬁrst year and $4.5 million by the ﬁfth year. Based on the projected revenues, the project will generate approximately $411,250 in estimated transient occupancy tax revenue the ﬁrst year and $528,750 by the ﬁfth year. In addition, the project will generate approximately
$ 2.1 million
in Development Impact Fees. Moreover, the project will also result in increased property tax revenues.

BACKGROUND & ANALYSIS:

On June 4, 2021, the Applicant submitted a Conditional Use Permit application (File No. PCUP21-009) requesting approval to establish and operate a 128-room limited- service hotel on 1.83 acres of land located at 5060 East Fourth Street, within the Freeway Commercial land use district of The Exchange Speciﬁc Plan. The Conditional Use Permit was ﬁled in conjunction with a Development Plan application (File No. PDEV21-021) requesting approval to construct a 4-story, 128-room Extended Stay hotel on the Project site.

On February 22, 2022, the Planning Commission conducted a duly noticed public hearing to consider the proposed Conditional Use Permit and Development Plan and upon conclusion of the 107
hearing, voted unanimously (7-0) to approve the Development Plan and recommend that the City Council approve the Conditional Use Permit.

The City’s Development Code requires that all new hotels must be reviewed under concurrently ﬁled Conditional Use Permit and Development Plan applications and that the Conditional Use Permit requires City Council action. The purpose of the Conditional Use Permit application and review is to conﬁrm compliance with the City's Development Code required minimum amenity package for hotels, and to ensure the project’s market feasibility.

Minimum Amenity Package
. The Development Code provides that no Conditional Use Permit shall be approved for a hotel, motel, residence inn, or other similar traveler accommodation, unless certain specific amenities are provided, as follows:

Each guestroom must include voicemail, wired or wireless internet access, desk with chair, hairdryer, retractable magnifying (10X) and lighted makeup mirror, iron and ironing board, high deﬁnition television, and alarm clock or wake-up service. Compliance with these requirements will be veriﬁed by the Planning Department during building plan check and at time of final building inspection.

For limited-service hotels, meeting space equal to 15 square feet per guestroom must be provided, requiring the Project provide a minimum of 1,920 square feet of meeting/gathering area. The Project exceeds the minimum requirement, incorporating a total of 2,250 square feet of available meeting/gathering area.

Both active and passive leisure amenities are required. At a minimum, the Project must provide a swimming pool, whirlpool/spa or furnished cabana, and ﬁtness room. The Project exceeds the minimum requirement, providing a pool and spa, poolside cabana, outdoor seating areas, and a fitness room.

A guest courtesy lounge for the serving of light meals and snacks is required to be provided in conjunction with limited-service hotels. The Project has provided a 331-square-foot café/snack room for hotel guests, meeting the minimum requirement.

In reviewing the proposed Project, the Planning Commission determined that all of the minimum amenity package requirements stipulated by Section 5.03.250.D (Minimum Amenity Package) of the City’s Development Code, have been met or exceeded.

Market Demand
. As a requirement of Conditional Use Permit submittal, the developer of a hotel must submit a Market Feasibility Study, which demonstrates that the local market can support the development of a new hotel. Veritas Development Advisors has prepared a Market Feasibility Study (dated October 21, 2021), which includes analysis and market research related to the proposed Project. The study found that the local market can support a limited-service hotel on the Project site. The study’s conclusions are based primarily upon the growth in the Inland Empire, the area’s proximity to the Los Angeles area, the Ontario Convention Center, the Ontario International Airport, California Speedway in Fontana, and the Project’s proximity to the Ontario Mills Mall (see Exhibit K - Hotel Market Study, of the attached Planning Commission Staﬀ Report). The Market Study includes an analysis of other similar hotels in the area, long-term viability, and overall demand due to new businesses and activities in and around the City.

108
HOUSING ELEMENT COMPLIANCE:

The Project is consistent with the Housing Element of the Policy Plan (General Plan) component of The Ontario Plan, as the Project site is not one of the properties in the Available Land Inventory contained in Table A-3 (Available Land by Planning Area) of the Housing Element Technical Report Appendix.

AIRPORT LAND USE COMPATIBILITY PLAN (ALUCP) COMPLIANCE:

The project site is located
within the Airport Inﬂuence Area of the Ontario International Airport and has been found to be consistent with the policies and criteria set forth within the Ontario International Airport Land Use Compatibility Plan.

ENVIRONMENTAL REVIEW:

The Project is categorically exempt from the requirements of the California Environmental Quality Act (“CEQA”) pursuant to Section 15332 (Class 32, Inﬁll Development Projects) of the CEQA Guidelines, which consists of projects characterized as inﬁll development projects. Furthermore, the Project meets all of the following conditions: (a) the Project is consistent with the applicable general plan designation and all applicable general plan policies, as well as the applicable zoning designation and regulations; (b) the proposed development occurs within city limits, on a project site of no more than ﬁve acres, and is substantially surrounded by urban uses; (c) the Project site has no value as habitat for endangered, rare, or threatened species; (d) approval of the Project will not result in any signiﬁcant eﬀects relating to traﬃc, noise, air quality, or water quality; and (e) the Project site is adequately served by all required utilities and public services.
109
Case Planner: Luis E. Batres Hearing Body Date Decision Action Planning Director
Approval:

DAB 2/7/22 Approved Recommend
PC 2/22/22 Final
/Recommend
Submittal Date: 6/4/21 CC CUP- Final
FILE NOS: PCUP21-009 and PDEV21-021
SUBJECT: A Conditional Use Permit (File No. PCUP21-009) to establish and operate a limited-service hotel and a Development Plan (File No. PDEV21-021) to construct a 4-story, 128-room Extended Stay hotel on 1.83 acres of land located at 5060 East Fourth Street, within the Freeway Commercial land use district of The Exchange Specific Plan (APN:
0238-012-30); submitted by Roger Barbosa. City Council action is required for File No.

PCUP21-009.

PROPERTY OWNER: Jara Hospitality
RECOMMENDED ACTION: That the Planning Commission consider and approve File No.

PDEV21-021, and recommend approval to City Council for File No. PCUP21-009, pursuant to the facts and reasons contained in the staff report and attached resolutions, and subject to the conditions of approval contained in Attachment A to each resolution.

PROJECT SETTING: The Project site is comprised of 1.83 acres of land located at 5060 East Fourth Street , within the Freeway
Commercial land use district of The
Exchange Specific Plan and is depicted
in Figure 1: Project Location . The site is
bounded by Interstate 15 to the west,
Fourth Street to the north, Southern
California Edison (“SCE”) transmission
lines to the east and Ontario Mills Parkway
to the south. The surrounding area is
currently developed with Arizona Tile,
Baker’s Drive -Thru Restaurant, AM/PM
Service Station, a multi -tenant retail
building that includes WaBa Grill, and a
four-building industrial business park
located within the southern portion of the
specific plan . The existing surrounding
land uses, zoning, and general plan and
specific plan land use designations are
summarized in the “Surrounding Zoning &
Figure 1: Project Location
303 East B Street, Ontario, California 91764 Phone: 909.395.2036 / Fax: 909.395.2420

PLANNING COMMISSION

STAFF REPORT
February 22, 2022
Approved
110
Planning Commission Staff Report
File Nos.: PCUP21-009 and PDEV21-021
February 22, 2022

Page 2 of 23 ends

Land Uses” table located in the Technical Appendix of this report.

PROJECT ANALYSIS:

(1) Background — In 2003, the City approved The Exchange Specific Plan, a 23.60 - acre master plan for the Project area. The Exchange Specific Plan is composed of two land use districts, including the Freeway Commercial land use district , which comprises the northerly 12.03 acres of the Specific Plan , and the Industrial Park land use district , which comprises the southerly 11.57 acres of the Specific Plan (see Exhibit B —The Exchange Specific Plan Land Use Plan, attached).

In 2007, two development plans were approved within The Exchange Specific Plan master plan area, including a 15,705 square foot sit-down restaurant (Blue Sandias) and a 74-room, 3-story hotel (Candlewood Suites). Blue Sandias and Candlewood Suites were never constructed due to a downturn in the economy.

On June 4, 2021, the Applicant submitted a Conditional Use Permit application (File No.

PCUP21-009) requesting approval to establish and operate a limited -service hotel land use, together with a Development Plan application (File No . PDEV21-021) requesting approval to construct a 4-story, 128-room Extended Stay hotel on the Project site.

Guest amenities proposed for the Project include:

▪ Swimming pool with an accompanying pool side cabana;
▪ Outdoor seating area;
▪ Porte-cochere for arriving guests;
▪ Meeting rooms (two rooms totaling 1,850 square feet) and adjacent outdoor gathering area (400 square feet);
▪ Fitness room (331 square feet);
▪ Café/Snack room (331 square feet);
▪ Guest laundry facilities (437 square feet); and
▪ On-site business center, including office equipment (copying, printer, and scanner) and supplies

Guestrooms range from 2 77 square feet (Queen Suites) to 432 square feet (Double Queen Suites) in area. Four room configurations are proposed:

▪ Queen Suites (61 rooms)
▪ Double Queen Suites (61 rooms)
▪ ADA Queen Suites (3 rooms)
▪ ADA Double Queen Suites (3 rooms)

(2) Conditional Use Permit — The City’s Development Code requires that all new hotels must be reviewed under concurrently filed Conditional Use Permit and Development Plan applications. The purpose of the Conditional Use Permit application 111
Planning Commission Staff Report
File Nos.: PCUP21-009 and PDEV21-021
February 22, 2022

Page 3 of 23 ends

and review is to ensure that the proposed use will be operated in a manner consistent with all local regulations, and to ensure the use will not be detrimental to the public health, safety, or welfare, or materially injurious to uses, properties or improvements in the vicinity. More specifically, in the case of hotels, the Conditional Use Permit is required to establish the Project’s market feasibility and ensure on -going compliance with the minimum amenity package required by the Development Code.

(a) Market Demand — As a requirement of Conditional Use Permit submittal, the developer of a hotel must submit a Market Feasibility Study, which demonstrates that the local market can support the development of a new hotel. For this Application, Veritas Development Advisors has prepared a Market Feasibility Study (dated October 21, 2021), which includes analysis and market research related to the proposed Project.

The study found that the local market can support a limited-service hotel on the Project site. The study’s conclusions are based primarily upon the growth in the Inland Empire, the area’s proximity to the Los Angeles area, the Ontario Convention Center, the Ontario International Airport, California Speedway in Fontana, and the Project’s proximity to the Ontario Mills Mall (see Exhibit K —Hotel Market Study, attached ). The Market Study includes an analysis of other similar hotels in the area, long -term viability, and overall demand due to new businesses and activities in and around the City.

(b) Minimum Amen ity Package —The Development Code provides that no Conditional Use Permit shall be approved for a hotel, motel, residence inn, or other similar traveler accommodation, unless certain specific amenities are provided, as follows

▪ Each guestroom must include voicemail, wired or wireless internet access, desk with chair, hairdryer, retractable magnifying (10X) and lighted makeup mirror, iron and ironing board, high definition television, and alarm clock or wake-up service.

Compliance with these requirements will be verified by the Planning Department during Building Department plan check and at time of final building inspection. ▪ For limited-service hotels, meeting space equal to 15 square feet per guestroom must be provided, requiring that a minimum of 1 ,920 square feet of meeting/gathering area must be provided for the Project. The Project exceeds the minimum requirement, incorporating a total of 2,250 square feet of available meeting/gathering area.
▪ Both active and passive leisure amenities are required, at a minimum, a swimming pool, whirlpool/spa or furnished cabana, and fitness room. The Project exceeds the minimum requirement, providing a pool /spa, poolside cabana, outdoor seating areas, and a fitness room.
▪ A guest courtesy lounge for the serving of light meals and snacks is required to be provided in conjunction with limited-service hotels. A 331-square-foot café/snack room is provided for hotel guests, meeting the minimum requirement.

It is the determination of Planning Department staff that the proposed Project has met or exceeded the minimum amenity package requirements, as stipulated by Section

5.03.250.D (Minimum Amenity Package) of the City’s Development Code. 112
Planning Commission Staff Report
File Nos.: PCUP21-009 and PDEV21-021
February 22, 2022

Page 4 of 23 ends

(3) Development Plan —

(a) Site Design/Building Layout. The proposed hotel is located approximately 1,000 feet south of Fourth street, with the building’s primary entrance facing north. The building is in a L -shaped configuration, which wraps around an outdoor amenity area containing the pool/spa and outdoor gathering/seating areas ( see Exhibit A —Project Location Map, attached).

(b) Site Access/Circulation. Off-street parking is distributed along the north and west sides of the building and a guest drop -off area under a porte-cochere has been provided at the front of the building. Ample landscaped areas have been provided immediately adjacent to the hotel and throughout the off -street parking areas.

Additionally, decorative hardscape treatments have been provided at the main building entrance, throughout the pool/spa and outdoor gathering/seating areas and at the vehicle turn-around area in front of the hotel (see Figure 2: Site Plan, above).

(c) Site Access/Circulation. Primary vehicular access to the proposed hotel is provided from an existing common drive aisle that inters ects Fourth Street at a fully signalized intersection that is common with the Interstate 15 southbound exit to Fourth Street. Secondary access is provided from Ontario Mills Parkway via a common drive aisle through the industrial park to the south. Additio nally, ample maneuvering space has been provided for service. Service vehicles will be able to access the hotel along the east side of the building via a 24-foot-wide service drive.

Figure 2: Site Plan
113
Planning Commission Staff Report
File Nos.: PCUP21-009 and PDEV21-021
February 22, 2022

Page 5 of 23 ends

(d) Parking. The Project is required to provide a total of 128 off -street parking spaces, at the rate of one space per guestroom, and the Project is proposing a total of 118 spaces. The Exchange Specific Plan and the Ontario Development Code allow the Planning Commission to approve a reduction in parking, if the reduction is validated by a parking study. To support the requested reduction in parking, a parking study was prepared by Trames Solutions Inc. (see Exhibit L—Parking Study, attached). The parking study concluded that the number of parking spaces provided is adequate. The study found that the hotel will have a peak demand of 94 spaces at 8 AM on weekday s and 105 spaces at 8 AM on weekend s (see Table 1: Parking Study Peak Demand, below). In addition, the City’s Traffic Manager has reviewed the parking study and is in support of the study’s findings. However, to mitigate any potential parking shortages in the future, staff has conditioned the Project so that, if additional parking is found to be necessary, the Appli cant must enter into a reciprocal parking agreement with adjacent developments to provide additional parking.

Table 1: Parking Study Peak Demand
Demand Peak Time Required Parking Parking Provided
Weekdays: 8 AM 94 118
Weekends: 8 AM 105 118

(e) Architecture. The Extended Stay hotel will be a signature building. The hotel will feature a contemporary architecture style that exemplifies the high -quality architecture promoted by The Exchange Specific Plan and the Ontario Plan. Since the Project will be visible from all four sides, staff has worked closely with the architect to provide 360-degree architecture. Special attention has been given to the use of color s, massing, building form, materials, and architectural details (see Figure 3: Front Elevation, below, and Exhibit F—Building Elevations, attached).

This is exemplified by the use of:

▪ Decorative architectural towers on all four building sides; ▪ Articulated roof line;
▪ Articulated footprint;
▪ Decorative cornice treatment along the edge of the architectural towers; ▪ Vertical and horizontal reveal lines;
▪ Variation in building massing;
▪ Cantilevered building elements;
▪ Incorporation of insets and pop-outs;
▪ Extensive use of glass;
▪ Smooth-painted walls;
▪ Decorative lighting fixtures;
▪ Fiber cement vertical siding panels;
▪ Decorative metal wall panels;
114
Planning Commission Staff Report
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February 22, 2022

Page 6 of 23 ends

▪ Decorative painted steel canopies along the north elevation; ▪ Incorporation of a stone veneer along the full height of the first floor (French Limestone);
▪ Incorporation of decorative eyebrows over key windows; and ▪ Color blocking implementing exterior colors of varying tone, shade, and brightness.

(f) Landscaping. The Exchange Specific Plan requires 15 percent of the site to be landscaped and the Applicant proposes to landscape 15.5 percent of the Project site. Palm trees, accent trees, and ground cover have been selected to enhance the Project site, along with Aust ralian Willow, Brisbane Box, Coast Live Oak, Date Palms, Agave Blue Clone, Dwarf Myrtle, Amazing Red Flax, Indian Hawthorn, Texas Privet, and Orange Drop Lily. To enhance the Project at night, staff has worked with the Applicant to also provide enhanced lighting at key landscape areas.

(g) Utilities (drainage, sewer). Public utilities (water and sewer) are available to serve the Project site. Additionally, the applicant has submitted a Preliminary Water Quality Management Plan (“PWQMP”), which establishes the Project’s compliance with storm water discharge/water quality requirements. The PWQMP includes site design measures that capture runoff and pollutant transport by minimizing impervious surfaces and maximizes low impact development (“LID”) best management p ractices (“BMPs”), such as retention and infiltration, bio treatment, and evapotranspiration. The PWQMP proposes an underground infiltration basin located beneath the parking lot , along the west of the hotel structure. The basin is designed to accept runoff from the building’s roof and parking lot.

COMPLIANCE WITH THE ONTARIO PLAN: The proposed Project is consistent with the principles, goals and policies contained within the Vision, Governance, Policy Plan (General Plan), and City Council Priorities compo nents of The Ontario Plan (TOP). More specifically, the goals and policies of TOP that are furthered by the proposed Project are as follows:

Figure 3: Front (North) Elevation
115
Planning Commission Staff Report
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February 22, 2022

Page 7 of 23 ends

(1) City Council Goals.

▪ Invest in the Growth and Evolution of the City’s Economy ▪ Operate in a Businesslike Manner
▪ Focus Resources in Ontario’s Commercial and Residential Neighborhoods

(2) Vision.

Distinctive Development:

▪ Commercial and Residential Development

➢ Development quality that is broadly recognized as distinctive and not exclusively tied to the general suburban character typical of much of Southern California.

(3) Governance.

Decision Making:

▪ Goal G1: Sustained decision-making that consistently moves Ontario towards its Vision by using The Ontario Plan as a framework for assessing choices.

➢ G1-2 Long-term Benefit . We require decisions to demonstrate and document how they add value to the community and support the Ontario Vision

(4) Policy Plan (General Plan)

Land Use Element:

▪ Goal LU2: Compatibility between a wide range of uses.

➢ LU2-6: Infrastructure Compatibility : We require infrastructure to be aesthetically pleasing and in context with the community character.

Community Economics Element:

▪ Goal CE2: A City of distinctive neighborhoods, districts, and corridors, where people choose to be.

➢ CE2-1 Development Projects . We require new development and redevelopment to create unique, high-quality places that add value to the community.

➢ CE2-2 Development Review . We require those proposing new development and redevelopment to demonstrate how their projects will create 116
Planning Commission Staff Report
File Nos.: PCUP21-009 and PDEV21-021
February 22, 2022

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appropriately unique, functional, and sustainable places that will compete well with their competition within the region.

➢ CE2-4 Protection of Investment . We require that new development and redevelopment protect existing invest ment by providing architecture and urban design of equal or greater quality.

➢ CE2-5 Private Maintenance. We require adequate maintenance, upkeep, and investment in private property because proper maintenance on private property protects property values.

▪ Goal CE3: Decision-making deliberations that incorporate the full short -term and long-term economic and fiscal implications of proposed City Council actions. ➢ CE3-1 Fiscal Impact Disclosures. We require requests for City Council action to disclose the full fiscal impacts, including direct and indirect costs.

Safety Element:

▪ Goal S1: Minimized risk of injury, loss of life, property damage and economic and social disruption caused by earthquake-induced and other geologic hazards.

➢ S1-1 Implementation of Regulations and Standards. We require that all new habitable structures be designed in accordance with the most recent California Building Code adopted by the City, including provisions regarding lateral forces and grading.

Community Design Element:

▪ Goal CD1: A dynamic, progressive city containing distinct neighborhoods and commercial districts that foster a positive sense of identity and belonging among residents, visitors, and businesses.

➢ CD1-1 City Identity. We take actions that are consistent with the City being a leading urban center in Southern California while recognizing the diverse character of our existing viable neighborhoods.

➢ CD1-2 Growth Areas . We require development in growth areas to be distinctive and unique places within which there are cohesive design themes.

➢ CD1-3 Neighborhood Improvement. We require viable existing residential and non -residential neighborhoods to be preserved, protected, and enhanced in accordance with our land use policies.

▪ Goal CD2 : A high level of design quality resulting in public spaces, streetscapes, and developments that are attractive, safe, functional, and distinct. 117
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➢ CD2-1 Quality Architecture . We encourage all development projects to convey visual interest and character through:

• Building volume, massing, and height to provide appropriate scale and proportion;
• A true architectural style which is carried out in plan, section, and elevation through all aspects of the building and site design and appropriate for its setting; and
• Exterior building materials that are visually interesting, high quality, durable, and appropriate for the architectural style.

➢ CD2-8 Safe Design. We incorporate defensible space design into new and existing developments to ensure the maximum safe travel and visibility on pathways, corridors, and open space and at building entrances and parking areas by avoiding physically and visually isolated spaces, ma intenance of visibility and accessibility, and use of lighting.

➢ CD2-9 Landscape Design. We encourage durable landscaping materials and designs that enhance the aesthetics of structures, create, and define public and private spaces, and provide shade and environmental benefits.

➢ CD2-10 Surface Parking Areas. We require parking areas visible to or used by the public to be landscaped in an aesthetically pleasing, safe and environmentally sensitive manner. Examples include shade trees, pervious surfaces, urban run-off capture and infiltration, and pedestrian paths to guide users through the parking field.

➢ CD2-11 Entry Statements . We encourage the inclusion of amenities, signage, and landscaping at the entry to neighborhoods, commercial centers, mixed use areas, industrial developments, and public places that rei nforce them as uniquely identifiable places.

➢ CD2-12 Site and Building Signage. We encourage the use of sign programs that utilize complementary materials, colors, and themes. Project signage should be designed to effectively communicate and direct users t o various aspects of the development and complement the character of the structures.

➢ CD2-13 Entitlement Process. We work collaboratively with all stakeholders to ensure a high degree of certainty in the efficient review and timely processing of all development plans and permits.

▪ Goal CD3 : Vibrant urban environments that are organized around intense buildings, pedestrian and transit areas, public plazas, and linkages between and within developments that are conveniently located, visually appealing and safe during all hours.

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➢ CD3-1 Design . We require that pedestrian, vehicular, bicycle and equestrian circulation on both public and private property be coordinated and designed to maximize safety, comfort, and aesthetics.

➢ CD3-2 Connectivity Between Streets, Sidewalks, Walkways and Plazas. We require landscaping and paving be used to optimize visual connectivity between streets, sidewalks, walkways, and plazas for pedestrians.

➢ CD3-3 Building Entrances . We require all building entrances to be accessible and visible from adjacent streets, sidewalks, or public open spaces.

➢ CD3-5 Paving. We require sidewalks and road surfaces to be of a type and quality that contributes to the appearance and utility of streets and public spaces.

➢ CD3-6 Landscaping. We utilize landscaping to enhance the aesthetics, functionality and sustainability of streetscapes, outdoor spaces, and buildings.

▪ Goal CD5: A sustained level of maintenance and improvement of properties, buildings and infrastructure that protects the property values and encourages additional public and private investments.

➢ CD5-1 Maintenance of Buildings and Property . We require all public and privately-owned buildings and property (including trails and easements) to be properly and consistently maintained.

➢ CD5-2 Maintenance of Infrastructure . We require the continual maintenance of infrastructure.

HOUSING ELEMENT COMPLIANCE: The Project is consistent with the Housing Element of the Policy Plan (General Plan) component of The Ontario Plan, as the Project site is not one of the properties in the Available Land Inventory contained in Table A-3 (Available Land by Planning Area) of the Housing Element Technical Report Appendix.

AIRPORT LAND USE COMPATIBILITY PLAN (ALUCP) COMPLIANCE: The California State Aeronautics Act (Public Utilities Code Section 21670 et seq.) requires that an Airport Land Use Compatibility Plan be prepared for all public use airports in the State; and requires that local land use plans and individual development proposals must be consistent with the policies set forth in the adopted Airport Land Use Compatibility Plan. On April 19, 2011, the City Council of the City of Ontario approved and adopted the Ontario International Airport Land use Compatibility Plan (“ALUCP”), establishing the Airport Influence Area for Ontario International Airport, which encompasses lands within parts of San Bernardino, Riverside, and Los Angeles Counties, and limits future land uses and development within the Airport Influence Area , as they relate to noise, safety, airspace protection, and overflight impacts of current and future airport activity. The proposed Project is located within the Airport Influence Area of Ontario International Airport and was evaluated and 119
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found to be consistent with the policies and criteria of the ALUCP. Any special conditions of approval associated with uses in close proximity to the airport are included in the conditions of approval provided with the attached Resolution.

ENVIRONMENTAL REVIEW: The Project is categorically exempt from the requirements of the California Environmental Quality Act ( “CEQA”) pursuant to Section 15332 (Class 32, Infill Development Projects) of the CEQA Guidelines, which consists of projects characterized as infill development projec ts. Furthermore, the Project meets all of the following conditions: (a) t he Project is consistent with the applicable general plan designation and all applicable general plan policies, as well as the applicable zoning designation and regulations; (b) the proposed development occurs within city limits, on a project site of no more than five acres, and is substantially surrounded by urban uses; (c) the Project site has no value as habitat for endangered, rare, or threatened species; (d) approval of the Project will not result in any significant effects relating to traffic, noise, air quality, or water quality; and (e) the Project site is adequately served by all required utilities and public services.

CONDITIONS OF APPROVAL: See attached department reports. 120
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TECHNICAL APPENDIX:

Surrounding Zoning and Land Use:

Existing Land Use General Plan
Designation Zoning Designation Specific Plan Land Use
Site Vacant Planned Commercial SP (Specific Plan) The Exchange SP / Freeway Commercial
North Multi-tenant retail &
Vacant Land Planned Commercial SP (Specific Plan) The Exchange SP / Freeway Commercial
South Vacant Land Planned Commercial SP (Specific Plan) The Exchange SP / Freeway Commercial
East SCE Transmission Lines Non-Recreational Open
Space Open Space (OS) N/A
West I-15 Freeway Right-of-way Right-of-way N/A

General Site & Building Statistics
Item Proposed Min./Max. Standard Meets
Y/N
Project Area: 1.83 Acres N/A Y
Lot/Parcel Size: 1.83 Acres N/A Y
Building Area: 56,406 Sq. Ft. N/A Y
Building Height: 53’ 55’ Y

Off-Street Parking:

Type of Use Building Area Parking Ratio Spaces
Required
Spaces
Provided
Hotel (128 Rooms) 56,406 Sq. Ft. 1 Space per Guest Room 128 118 Note: Per Parking Study Prepared 105 118
TOTAL 105 118

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Exhibit A—PROJECT LOCATION MAP
122
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Exhibit B—THE EXCHANGE SPECIFIC PLAN LAND USE PLAN
123
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February 22, 2022

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Exhibit C—SITE PLAN
124
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Exhibit D—LANDSCAPE PLAN
125
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Exhibit E—POOL AREA
126
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Exhibit F—EXTERIOR ELEVATIONS
North Elevation
South Elevation
127
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February 22, 2022

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Exhibit F—EXTERIOR ELEVATIONS (CONTINUED)
West Elevation
East Elevation
128
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February 22, 2022

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Exhibit G—FIRST FLOOR
129
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Exhibit H—SECOND FLOOR
130
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February 22, 2022

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Exhibit I—THIRD FLOOR
131
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February 22, 2022

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Exhibit J—FOURTH FLOOR

132
Planning Commission Staff Report
File Nos. PDEV21-021 and PCUP21-009
February 22, 2022
Exhibit K—HOTEL MARKET STUDY
(Document follows this page)
133
for the planned construction and operation of a 128-room extended stay hotel to be located in Ontario, CA
Market Feasibility Study
October 21, 2021
134
This report is for the use of the party to whom it is addressed only and no liability is accepted to any third party for the whole or any part of its contents. It may not be reproduced, either in whole or in part, nor altered in any way, without the prior written consent of Veritas Development Advisors, LLC. The information and analysis contained in this report has been obtained from or based on information from a variety of sources generally regarded to be reliable and assumptions which are considered reasonable, and which was current at the time of undertaking market research. However, no representation is made, or responsibility is accepted by Veritas Development Advisors, LLC, in respect of the accuracy or currency of this information. Potential investors or developers are encouraged to carry out their own assessment of market potential and development feasibility.

The report and analysis does not purport to represent a formal valuation of any land or property interest and must not be construed as such. Such analysis including forward looking statements are opinions and estimates only and are based on a wide range of variables which may not be capable of being determined with accuracy. Variation in any one of these variables can have a material impact on the analysis and we draw your attention to this.

It should be noted that the estimation of future sales prices, rental levels, development and investment returns and development viability is a very problematic exercise which at best should be regarded as an indicative assessment of possibilities rather than absolute values. The process of making forward projections for such key elements involves assumptions which are acutely sensitive to changing conditions, variations in any one of which factors may significant effect the viability of a project and we draw your attention to this factor. Veritas Development Advisors, LLC does not accept any liability for negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this report other than as specified in the contract of engagement.

Effect of global and local economic conditions
The continued turmoil and instability in the financial markets is continuing to cause volatility and uncertainty in the world’s capital markets and real estate markets. In these circumstances the assessment or feasibility may be affected by rapidly changing global and local economic market conditions, socio-economic changes, political conditions and other risks.

Availability and Cost of Finance
Due to the current situation of the global and local capital markets, interest rates have been volatile there has been a significant reduction in the availability of and increase in the cost of debt to the real estate sector and the mortgage market.

Supply & Demand Analysis
The supply and demand analyses set out in the report are based on current and historic trends and may be impacted significantly by factors such as unforeseen delays in supply, decreasing demand levels and changes in investor, business and consumer sentiment as well as the outlook for economic growth at local, regional and global levels.

Demand in the Market Area
Currency volatility together with job security, economic growth changing oil prices and deteriorating employment conditions across much of the globe may impact the propensity to travel and affect the purchasing power of prospective visitors to the region. This is likely to materially impact the performance of the hospitality and retail sector in particular.

Veritas Development Advisors, LLC does not accept any liability for any changes in the market conditions which may have occurred in the time elapsed between the rendering of the report and the use of it. Nor can Veritas Development Advisors, LLC accept any liability for discrepancies between our assumptions, which lie at the basis of the report, and actual market conditions which are not available to any qualified real estate consultant as a result of the market’s inherent limited transparency. 2 Disclaimer
135
The Great Smoky Mountains
Executive Summary
136
October 21, 2021
Private and Confidential
Mr. Luis Batres, Senior Planner
City of Ontario (“Company”)
303 East B Street
Ontario, California 91764
Re: Market Feasibility Study for the planned construction and operation of a 128-room extended stay hotel to be located at 5060 East 4th Street in Ontario, CA 91764. (“Subject Project”).

Dear Mr. Batres:

The enclosed Market Feasibility Study is for the planned 128-room extended stay hotel to be located in Ontario, CA. Demand factors were analyzed in detail as presented herein. The Subject Project’s industry and its relevant leveraged structure indicates that the Company’s revenue should follow trends in the overall economy, including disposable income of end-users/consumers. Based on the analysis, the market area economy appears to be growing which indicates reasonable potential for the Subject Project.

The market area for the Subject Project appears stable. The Subject Project’s rooms are expected to be absorbed in the market area based on the STR report analysis conducted herein. Based on the supply and demand analysis (pre-COVID) within the market area, it appears as though occupancy will likely remain above 65 percent over the next five years. Analyses of the market appears to indicate that development of the Subject Project, as planned, would yield about a 0.8 percent market share in the Subject Project’s market area.

Primary and secondary research was used to carry out the analyses related to the Subject Project.

Steve Alves, Managing Partner
Veritas Development Advisors, LLC
4 Executive Summary
137
5 Statement of Work
Scope of Work
// Market Feasibility Study //

1. A complete listing of proposed facilities, amenities, and services (i.e.: number and type of rooms, meeting space square footage, recreational amenities, business services such as data ports-workstations-etc., refrigerators in room, laundry service, restaurant-coffee shop- food service, etc.);

2. History of proposed developer and potential operators (i.e.: years in business, principals, capitalizing, experience, listing of projects, number of units owned, average rates charged, occupancy rates, etc.);

3. Analysis of economic environment projecting likely future economic conditions as they relate to the operation of the subject hotel;

4. Subjects competitive market (i.e.: identification of their market, 3 and 5 year history of occupancy- average daily rate-revenue per available room trends for that market, estimated share of the market the hotel will capture during the first five years of operation, etc.);

5. Analysis of the economic impacts on existing hotel markets within Ontario (i.e.: estimate of the dilution of the market due to addition of proposed hotel, etc.). Note: new hotel projects should only be approved if competitive market occupancy remains at or above 65 percent for a five year projection period;

6. Relationship to demand generators (i.e.: airport, convention center, corporate market, shopping and entertainment);

7. Public cost/revenue projections.
138
The Great Smoky Mountains
Market Feasibility Study
139
US Economy
Gross Domestic Product (GDP)
Current Numbers
• 2nd quarter 2019: 2.1 percent
• 1st quarter 2019: 3.1 percent
Real gross domestic product (GDP) increased
at an annual rate of 2.1 percent in the second
quarter of 2019, according to the "advance"
estimate released by the Bureau of Economic
Analysis. In the first quarter, real GDP increased

3.1 percent.

The Bureau emphasized that the third-quarter
advance estimate released today is based on
source data that are incomplete or subject to
further revision by the source agency. The
"second" estimate for the third quarter, based
Analysis. Disposable personal income (DPI)
increased $69.7 billion (0.4 percent) and
personal consumption expenditures (PCE)
increased $41.0 billion (0.3 percent).

Industry Economic Accounts
Finance and insurance; retail trade; and health
care and social assistance were the leading
contributors to the increase in U.S. economic
growth in the first quarter of 2019. Overall, 16 of
22 industry groups contributed to the 3.1
percent increase in real GDP in the first quarter.

According to gross domestic product (GDP) by
the Bureau of Economic Analysis, 16 of 22
industry groups contributed to the overall 3.1
percent increase in real GDP in the first quarter.
7 Market Feasibility
on more complete data, will be released on
August 29, 2019.

Personal Income
• June 2019: 0.4 percent
• May 2019: 0.4 percent
Personal income increased 0.4 percent in June,
the same increase as in May. Wages and
salaries, the largest component of personal
income, increased 0.5 percent in June after
increasing 0.2 percent in May.

Personal income increased $83.6 billion (0.4
percent) in June according to estimates
released today by the Bureau of Economic
140
Retail trade increased 11.9 percent in the first
quarter, after decreasing 2.5 percent in the
fourth. This primarily reflected an increase in
other retail, which includes gasoline stations
and pharmacies and drug stores.

U.S. Balance of Payments (International
Transactions)
Current Account Balance:
• 1st quarter 2019: -$130.4 billion
• 4th quarter 2018: -$143.9 billion
• Annual 2017: -$466.2 billion
• Annual 2016: -$451.7 billion
The U.S. current-account deficit decreased to
$130.4 billion (preliminary) in the first quarter of
2019 from $143.9 billion (revised) in the fourth
quarter of 2018.

International Investment Position
Net International Investment Position at End of
Period:
• End of 1st quarter 2019: -$9.93 trillion
• End of 4th quarter 2018: -$9.55 trillion
May to $76.1 billion. The services surplus
increased $0.1 billion in May to $20.6 billion.

New Foreign Direct Investment in the United
States
Annual Data: Expenditures by foreign direct
investors to acquire, establish, or expand U.S.
businesses totaled $296.4 billion (preliminary) in
2018. Expenditures were up 8.7 percent from
$272.8 billion (revised) in 2017 but were below
the annual average of $338.1 billion for 2014–
2017.

As in previous years, acquisitions of existing
businesses accounted for a large majority of
total expenditures.

In 2018, expenditures for acquisitions were
$287.3 billion, expenditures to establish new U.S.
businesses were $5.3 billion, and expenditures
to expand existing foreign-owned businesses
were $3.8 billion. Planned total expenditures,
which include both first-year and planned
future expenditures, were $318.1 billion.
8 Market Feasibility
• End of year 2018: -$9.55 trillion
• End of year 2017: -$7.74 trillion
Quarterly data: The U.S. net international
investment position decreased to -$9.93 trillion
(preliminary) at the end of the first quarter of
2019 from -$9.55 trillion (revised) at the end of
the fourth quarter of 2018, according to
statistics released by the Bureau of Economic
Analysis (BEA).

International Trade in Goods and Services
Trade Balance:
• May 2019: -$55.5 billion
• April 2019: -$51.2 billion
The U.S. monthly international trade deficit
increased in May 2019 according to the U.S.

Bureau of Economic Analysis and the U.S.

Census Bureau. The deficit increased from $51.2
billion in April (revised) to $55.5 billion in May, as
imports increased more than exports. The
previously published April deficit was $50.8
billion. The goods deficit increased $4.4 billion in
141
California
Economy
California has an unemployment rate of 8.2%.

The US average is 6.3% (Jan 2021).

California has seen the job market increase by

1.3% over the last year. Future job growth over
the next ten years is predicted to be 34.0%,
which is higher than the US average of 33.5%.

Tax Rates for California
– The Sales Tax Rate for California is 8.5%. The
US average is 7.3%.
- The Income Tax Rate for California is 9.3%. The
US average is 4.6%.
- Tax Rates can have a big impact when
Comparing Cost of Living.

Income and Salaries for California
- The average income of a California resident is
$29,906 a year. The US average is $28,555 a
year.
9 Market Feasibility
San Bernardino
County Economy
San Bernardino County has an unemployment
rate of 7.8%. The US average is 6.3% (Jan 2021).

San Bernardino County has seen the job
market increase by 2.3% over the last year.

Future job growth over the next ten years is
predicted to be 38.7%, which is higher than the
US average of 33.5%.

Tax Rates for San Bernardino County
- The Sales Tax Rate for San Bernardino County is

7.8%. The US average is 7.3%.
- The Income Tax Rate for San Bernardino
County is 9.3%. The US average is 4.6%.
- Tax Rates can have a big impact when
Comparing Cost of Living.

Income and Salaries for San Bernardino
County
- The average income of a San Bernardino
County resident is $21,384 a year. The US
average is $28,555 a year.

Ontario
Economy
Ontario has an unemployment rate of 6.9%.

The US average is 6.3% (Jan 2021).

Ontario has seen the job market increase by -

2.3% over the last year. Future job growth over
the next ten years is predicted to be 40.6%,
which is higher than the US average of 33.5%.

Tax Rates for Ontario
- The Sales Tax Rate for Ontario is 7.8%. The US
average is 7.3%.
- The Income Tax Rate for Ontario is 9.3%. The
US average is 4.6%.
- Tax Rates can have a big impact when
Comparing Cost of Living.

Income and Salaries for Ontario
- The average income of a Ontario resident is
$17,137 a year. The US average is $28,555 a
year.

Source: Best Places to Live | Compare Cost of Living, Crime, Cities, Schools and More. Sperling's BestPlaces, https://www.bestplaces.net/. 142
10 Market Feasibility
Economy At Glance California Mar 2021 Apr 2021 May 2021 June 2021 July 2021 Aug 2021 Labor Force Data
Civilian Labor Force(1) 18920.6 18895.2 18863.2 18877.2 18927.5 (p)18,982.8 Employment(1) 17341.3 17378.5 17417.3 17437.6 17493.6 (p)17,551.1 Unemployment(1) 1579.3 1516.7 1445.9 1439.6 1433.8 (p)1,431.6 Unemployment Rate(2) 8.3 8 7.7 7.6 7.6 (p)7.5
Nonfarm Wage and Salary Employment
Total Nonfarm(3) 16146.4 16248.4 16343.1 16414.6 16527.8 (p)16,632.1 12-month % change -7.7 8.7 8 5.1 5.5 (p)5.5
Mining and Logging(3) 19.2 19 18.7 18.6 18.8 (p)18.9
12-month % change -13.9 -6.9 -1.6 0 0.5 (p)-0.5
Construction(3) 886.3 884.1 879.8 877.1 877.8 (p)878.4
12-month % change -0.8 19.7 6.3 3.2 4.7 (p)4.3
Manufacturing(3) 1250.7 1253.7 1256.6 1258.3 1255.7 (p)1,258.6 12-month % change -5.4 3.9 2.4 0.8 1.2 (p)1.1
Trade, Transportation, and Utilities(3) 2982.5 2982.6 2987.7 2988.4 2991.3 (p)2,990.5 12-month % change -2.3 13.4 12.2 5.9 5.3 (p)3.8
Information(3) 529.2 527.3 538.6 539.6 545 (p)547.2
12-month % change -8.9 3.4 6.1 7.6 7.7 (p)7.7
Financial Activities(3) 809.5 810.7 811.8 808.8 806.6 (p)809.8 12-month % change -4.3 1.3 1.2 0.8 0.5 (p)0.7
Professional & Business Services(3) 2643.9 2662.4 2669.7 2672.2 2680.6 (p)2,694.6 12-month % change -3.3 7.6 6.5 5.9 6.1 (p)6.2
Education & Health Services(3) 2747.5 2762.5 2772.9 2782.1 2793.3 (p)2,787.0 12-month % change -3.8 7.2 5.9 3.6 3.4 (p)2.6
Leisure & Hospitality(3) 1418 1478.4 1531.1 1574.6 1627.4 (p)1,660.5 12-month % change -28.6 37.8 36.7 20.2 24.8 (p)27.7
Other Services(3) 458.7 466.6 471 482 491.9 (p)500.3
12-month % change -20.8 18 14.7 10.1 10.3 (p)17.4
Government(3) 2400.9 2401.1 2405.2 2412.9 2439.4 (p)2,486.3 12-month % change -8.1 -4.7 -1.1 0 0 (p)0.3
Footnotes
(1) Number of persons, in thousands, seasonally adjusted. (2) In percent, seasonally adjusted.
(3) Number of jobs, in thousands, seasonally adjusted.
(P) Preliminary
(r) Revised
143
11 Market Feasibility
California Demographics Summary
144
12 Market Feasibility
San Bernardino County Demographics Summary
145
San Bernardino County │Demographic Tables
13 Market Feasibility
San Bernardino County, California Estimate Margin of
Error Percent
Percent
Margin of
Error

SEX AND AGE
Total population 2,180,085 ***** 2,180,085 (X)
Male 1,086,226 ±637 49.8% ±0.1
Female 1,093,859 ±637 50.2% ±0.1
Sex ratio (males per 100 females) 99.3 ±0.1 (X) (X)
Under 5 years 151,731 ±767 7.0% ±0.1
5 to 9 years 155,183 ±5,575 7.1% ±0.3
10 to 14 years 167,305 ±5,539 7.7% ±0.3
15 to 19 years 155,930 ±671 7.2% ±0.1
20 to 24 years 159,148 ±594 7.3% ±0.1
25 to 34 years 336,303 ±942 15.4% ±0.1
35 to 44 years 283,746 ±873 13.0% ±0.1
45 to 54 years 262,434 ±1,127 12.0% ±0.1
55 to 59 years 131,001 ±4,218 6.0% ±0.2
60 to 64 years 116,492 ±4,317 5.3% ±0.2
65 to 74 years 160,976 ±331 7.4% ±0.1
75 to 84 years 72,827 ±2,680 3.3% ±0.1
85 years and over 27,009 ±2,622 1.2% ±0.1
Median age (years) 33.8 ±0.1 (X) (X)
Under 18 years 569,638 ***** 26.1% *****
16 years and over 1,675,554 ±2,740 76.9% ±0.1
18 years and over 1,610,447 ***** 73.9% *****
21 years and over 1,516,148 ±3,660 69.5% ±0.2
62 years and over 325,655 ±3,200 14.9% ±0.1
65 years and over 260,812 ±181 12.0% ±0.1
18 years and over 1,610,447 ***** 1,610,447 (X)
Male 794,408 ±248 49.3% ±0.1
Female 816,039 ±247 50.7% ±0.1
Sex ratio (males per 100 females) 97.3 ±0.1 (X) (X)
65 years and over 260,812 ±181 260,812 (X)
Male 117,464 ±303 45.0% ±0.1
Female 143,348 ±247 55.0% ±0.1
Sex ratio (males per 100 females) 81.9 ±0.3 (X) (X)
RACE
Total population 2,180,085 ***** 2,180,085 (X)
One race 2,065,464 ±10,275 94.7% ±0.5
Two or more races 114,621 ±10,275 5.3% ±0.5
One race 2,065,464 ±10,275 94.7% ±0.5
White 1,351,926 ±19,123 62.0% ±0.9
Black or African American 181,122 ±6,792 8.3% ±0.3
American Indian and Alaska Native 17,061 ±2,855 0.8% ±0.1 San Bernardino County, California Estimate Margin of
Error Percent
Percent
Margin of
Error
Asian 160,336 ±3,361 7.4% ±0.2
Asian Indian 12,729 ±3,707 0.6% ±0.2
Chinese 46,366 ±6,124 2.1% ±0.3
Filipino 45,503 ±6,076 2.1% ±0.3
Korean 16,352 ±3,171 0.8% ±0.1
Vietnamese 13,759 ±3,622 0.6% ±0.2
Other Asian 21,927 ±3,830 1.0% ±0.2
Native Hawaiian and Other Pacific
Islander 8,247 ±1,747 0.4% ±0.1
Some other race 346,772 ±19,715 15.9% ±0.9
Two or more races 114,621 ±10,275 5.3% ±0.5
White and Black or African American 23,047 ±5,659 1.1% ±0.3 White and American Indian and Alaska
Native 15,701 ±4,414 0.7% ±0.2
White and Asian 18,340 ±3,382 0.8% ±0.2
Race alone or in combination with one
or more other races
Total population 2,180,085 ***** 2,180,085 (X)
White 1,443,800 ±21,302 66.2% ±1.0
Black or African American 218,705 ±4,427 10.0% ±0.2
American Indian and Alaska Native 42,582 ±5,350 2.0% ±0.2 Asian 193,095 ±3,808 8.9% ±0.2
Native Hawaiian and Other Pacific
Islander 18,578 ±3,520 0.9% ±0.2
Some other race 386,752 ±19,791 17.7% ±0.9

HISPANIC OR LATINO AND RACE
Total population 2,180,085 ***** 2,180,085 (X)
Hispanic or Latino (of any race) 1,186,808 ***** 54.4% ***** Mexican 1,019,547 ±12,689 46.8% ±0.6
Puerto Rican 18,118 ±5,000 0.8% ±0.2
Cuban 5,076 ±1,669 0.2% ±0.1
Other Hispanic or Latino 144,067 ±12,471 6.6% ±0.6
Not Hispanic or Latino 993,277 ***** 45.6% *****
White alone 591,879 ±1,432 27.1% ±0.1
Black or African American alone 168,946 ±5,476 7.7% ±0.3 Asian alone 157,172 ±3,372 7.2% ±0.2
Two or more races 56,208 ±6,563 2.6% ±0.3
Two races excluding Some other race,
and Three or more races 53,338 ±6,419 2.4% ±0.3
Total housing units 731,393 ±941 (X) (X)

CITIZEN, VOTING AGE POPULATION
Citizen, 18 and over population 1,399,650 ±11,326 1,399,650 (X) Male 690,022 ±7,363 49.3% ±0.3
Female 709,628 ±5,924 50.7% ±0.3
146
14 Market Feasibility
Ontario Demographics Summary
147
Ontario │ Demographic Tables
15 Market Feasibility
Ontario, California Estimate Margin of
Error Percent
Percent
Margin of
Error

SEX AND AGE
Total population 184,999 ±52 184,999 (X)
Male 90,016 ±2,978 48.7% ±1.6
Female 94,983 ±2,979 51.3% ±1.6
Sex ratio (males per 100 females) 94.8 ±6.2 (X) (X)
Under 5 years 13,807 ±2,207 7.5% ±1.2
5 to 9 years 13,395 ±2,197 7.2% ±1.2
10 to 14 years 14,699 ±2,234 7.9% ±1.2
15 to 19 years 11,933 ±1,926 6.5% ±1.0
20 to 24 years 12,797 ±2,017 6.9% ±1.1
25 to 34 years 36,105 ±2,930 19.5% ±1.6
35 to 44 years 23,624 ±2,617 12.8% ±1.4
45 to 54 years 21,931 ±2,607 11.9% ±1.4
55 to 59 years 10,116 ±1,566 5.5% ±0.8
60 to 64 years 10,241 ±1,799 5.5% ±1.0
65 to 74 years 9,450 ±1,706 5.1% ±0.9
75 to 84 years 5,685 ±1,147 3.1% ±0.6
85 years and over 1,216 ±612 0.7% ±0.3
Median age (years) 32.1 ±1.0 (X) (X)
Under 18 years 49,419 ±3,954 26.7% ±2.1
16 years and over 140,404 ±3,957 75.9% ±2.1
18 years and over 135,580 ±3,957 73.3% ±2.1
21 years and over 128,868 ±3,898 69.7% ±2.1
62 years and over 21,918 ±2,316 11.8% ±1.3
65 years and over 16,351 ±2,133 8.8% ±1.2
18 years and over 135,580 ±3,957 135,580 (X)
Male 67,143 ±3,245 49.5% ±1.8
Female 68,437 ±2,965 50.5% ±1.8
Sex ratio (males per 100 females) 98.1 ±7.0 (X) (X)
65 years and over 16,351 ±2,133 16,351 (X)
Male 7,032 ±1,287 43.0% ±4.8
Female 9,319 ±1,357 57.0% ±4.8
Sex ratio (males per 100 females) 75.5 ±14.7 (X) (X)
RACE
Total population 184,999 ±52 184,999 (X)
One race 174,511 ±2,287 94.3% ±1.2
Two or more races 10,488 ±2,290 5.7% ±1.2
One race 174,511 ±2,287 94.3% ±1.2
White 114,932 ±6,968 62.1% ±3.8
Black or African American 8,225 ±3,180 4.4% ±1.7
American Indian and Alaska Native 1,010 ±716 0.5% ±0.4
Ontario, California Estimate Margin of
Error Percent
Percent
Margin of
Error
Asian 12,600 ±3,018 6.8% ±1.6
Asian Indian 599 ±952 0.3% ±0.5
Native Hawaiian and Other Pacific Islander 1,278 ±1,300 0.7% ±0.7 Some other race 36,466 ±5,923 19.7% ±3.2
Two or more races 10,488 ±2,290 5.7% ±1.2
White and Black or African American 2,137 ±1,513 1.2% ±0.8 White and American Indian and Alaska
Native 1,026 ±699 0.6% ±0.4
White and Asian 949 ±607 0.5% ±0.3
Black or African American and American
Indian and Alaska Native 172 ±282 0.1% ±0.2
Race alone or in combination with one or
more other races
Total population 184,999 ±52 184,999 (X)
White 123,478 ±6,651 66.7% ±3.6
Black or African American 11,048 ±3,643 6.0% ±2.0
American Indian and Alaska Native 3,080 ±1,145 1.7% ±0.6 Asian 14,468 ±3,225 7.8% ±1.7
Native Hawaiian and Other Pacific Islander 2,206 ±1,656 1.2% ±0.9 Some other race 42,377 ±5,894 22.9% ±3.2

HISPANIC OR LATINO AND RACE
Total population 184,999 ±52 184,999 (X)
Hispanic or Latino (of any race) 132,110 ±6,159 71.4% ±3.3 Mexican 114,053 ±6,540 61.7% ±3.5
Puerto Rican 1,793 ±1,419 1.0% ±0.8
Cuban 813 ±716 0.4% ±0.4
Other Hispanic or Latino 15,451 ±4,228 8.4% ±2.3
Not Hispanic or Latino 52,889 ±6,164 28.6% ±3.3
White alone 27,667 ±4,260 15.0% ±2.3
Black or African American alone 7,443 ±3,037 4.0% ±1.6
American Indian and Alaska Native alone 363 ±373 0.2% ±0.2 Asian alone 12,472 ±3,039 6.7% ±1.6
Native Hawaiian and Other Pacific Islander
alone 1,049 ±1,246 0.6% ±0.7
Some other race alone 123 ±199 0.1% ±0.1
Two or more races 3,772 ±1,632 2.0% ±0.9
Two races including Some other race 350 ±401 0.2% ±0.2
Two races excluding Some other race, and
Three or more races 3,422 ±1,541 1.8% ±0.8
Total housing units 52,886 ±2,128 (X) (X)

CITIZEN, VOTING AGE POPULATION
Citizen, 18 and over population 108,478 ±5,132 108,478 (X) Male 53,030 ±3,426 48.9% ±2.1
Female 55,448 ±3,429 51.1% ±2.1 148
16 Market Feasibility
rate of about 14.5 percent in July 2010. Based on the current unemployment rate, the County retains about 74,303 job seekers.

The Company intends to manage the Subject Project with the years of operations and management experience that principals of the Company has. This item does not appear to be a risk for the Subject Project.

Availability of Trained or Trainable
Labor
According to the Federal Reserve Bank of St. Louis Economic Data, the unemployment rate for San Bernardino County (latest data) was recorded at about 7.6 percent.

The civilian Labor Force in the subject County according to the Federal Reserve Bank of St. Louis Economic Data and US Bureau of Labor and Statistics was about 977,677. The unemployment rate reached its highest 820,000
840,000
860,000
880,000
900,000
920,000
940,000
960,000
980,000
1,000,000
1/1/2010
6/1/2010
11/1/2010
4/1/2011
9/1/2011
2/1/2012
7/1/2012
12/1/2012
5/1/2013
10/1/2013
3/1/2014
8/1/2014
1/1/2015
6/1/2015
11/1/2015
4/1/2016
9/1/2016
2/1/2017
7/1/2017
12/1/2017
5/1/2018
10/1/2018
3/1/2019
8/1/2019
1/1/2020
6/1/2020
11/1/2020
4/1/2021
Civilian Labor Force
0 2
4 6
8 10
12 14
16 1/1/2010
6/1/2010
11/1/2010
4/1/2011
9/1/2011
2/1/2012
7/1/2012
12/1/2012
5/1/2013
10/1/2013
3/1/2014
8/1/2014
1/1/2015
6/1/2015
11/1/2015
4/1/2016
9/1/2016
2/1/2017
7/1/2017
12/1/2017
5/1/2018
10/1/2018
3/1/2019
8/1/2019
1/1/2020
6/1/2020
11/1/2020
4/1/2021
Unemployment Rate
COVID-19 Impact
149
17 Market Feasibility
Gross Domestic Product: Accommodation and Food Services in California 30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
The industry and its relevant leveraged structure indicates that the Company’s revenue should follow trends in the overall economy, including disposable income of end-users/consumers. Based on the analysis, the market area economy appears to be growing which indicates reasonable potential for the Subject Project.

Source: Veritas Development Advisors Secondary Research Analysis 1,500,000
1,700,000
1,900,000
2,100,000
2,300,000
2,500,000
2,700,000
2,900,000
3,100,000
3,300,000
Gross Domestic Product: All Industry Total in California 150
The Great Smoky Mountains
Hotel Market Overview
Hotels & Motels in the US
• IBISWorld's analysts constantly monitor the industry impacts of current events in real-time – here is an update of how this industry is likely to be impacted as a result of the global COVID-19 pandemic:
• Recovery for the Hotels and Motels industry is anticipated to be skewed toward domestic, leisure markets where COVID-19 (coronavirus) restrictions have been lifted. • Operators that cater to business customers such as, truckers, contractors, construction workers, healthcare workers and others that must travel for work and do not have the ability to conduct their work remotely are anticipated to experience an increase in demand.
• International travel to the United States has remained subdued, as restrictions remain in place on travelers from key markets such as, Canada and the European Union. This is anticipated to decelerate revenue growth for the industry in 2021.
151
Hotels & Motels in the US
Checking in: Industry players will likely continue expanding abroad into emerging economies. The Hotels and Motels
industry is highly susceptible to changes in the domestic and global economic environments, which has caused the industry to experience substantial volatility due to the onset of the COVID-19 (coronavirus) pandemic in 2020. Over most of the five years to 2021, the industry has benefited from increases in travel spending, corporate profit and general consumer
spending. These factors were all affected substantially by the coronavirus pandemic. IBISWorld expects industry revenue to fall at an annualized rate of 7.6% to $133.0 billion over the five years to 2021, despite an anticipated increase of 42.9% in 2021 amid a strong recovery in domestic leisure travel.
19 Market Feasibility
Growth,21-26

10.8% (Annual)
Revenue
$133.0 bn
Profit Margin

3.1%
Wages Share
$43.0 bn
Growth,14-19
--15.3% (Annual)
Growth,21-26

7.8%
• Over the past five years, rising external competition has increased pressure on many hotel and motel operators, leading to competitive room rates. While some operators have shifted to offer premium services and accommodations to increase their rates or diversify revenue streams, not all operators have been able to make this shift. This has led to declines in industry profit.
• Additionally, the industry has been substantially affected by the onset and spread of coronavirus.
• Although domestic leisure travel has rebounded strongly in 2021, both international and business travel remain significantly below prepandemic levels amid the emergence of the Delta variant.
• Over the five years to 2026, IBISWorld projects that the industry will rebound and expand, with particularly strong growth in extended-stay hotels, boutique hotels, spa and health retreats and resorts segments.
• As demand for these auxiliary services picks up, industry employment is anticipated to recover and rise over the next five years. Industry players are also expected to continue expanding abroad into emerging economies, such as Asia, Eastern Europe and South America.
• These foreign markets are expected to somewhat detract from domestic investment, as they offer higher growth prospects for industry operators. • Nonetheless, industry revenue is estimated to increase at an annualized rate of

10.8% to $222.0 billion over the five years to 2026.

Key Points
Source: IBISWorld, US Industry (NAICS) Report 72111, September 2021 152
Key External Drivers
Domestic trips by US residents
Trends in domestic travel, especially business
travel, and total nights spent away from home
directly affect demand for accommodation.

As the number of trips made by US citizens rises,
demand for hotels and models increases, while
the inverse is also true. The number of domestic
trips by US residents is expected to increase in
2021, representing a potential opportunity for
the industry.

Consumer spending
Consumer spending levels have a direct effect
on travel demand. When consumers spend
more overall, they are more likely to spend on
travel and accommodations. Therefore, a rise
in consumer spending benefits demand for
hotels and motels. Conversely, as consumers
reduce spending, they decrease excess
spending on travel, reducing demand for
hotels and motels. Consumer spending is
expected to increase in 2021.

External competition for the Hotels and Motels
Industry
The Hotels and Motels industry experiences
competition from lodging alternatives, such as
RV parks, bed-and-breakfast establishments,
room rental services and hostels. Travelers are
increasingly comparing prices across these
alternatives when booking travel arrangements.

External competition for the Hotels and Motels
industry is expected to increase in 2021, posing
a potential threat to the industry.
20 Inbound trips by non-US residents
Trends in international visitor arrivals and their
lengths of stay influence demand for
accommodation. A rise in inbound trips
positively affects demand for hotels and motels.

The number of inbound trips by non-US residents
is expected to increase in 2021.

Consumer confidence index
The Consumer Confidence Index measures
consumer sentiment regarding the current
economic outlook. Changes in consumer
confidence influence decisions that individuals
make concerning current and future
expenditure on entertainment and travel.

When consumers feel optimistic regarding the
economic outlook, they are more likely to plan
travel arrangements and book nights at hotels
or motels. However, as consumers grow
increasingly skeptical of the economic outlook,
they forego spending on travel and
accommodations. The Consumer Confidence
Index is expected to increase in 2021.

Market Feasibility
153
Key External Drivers
21 Market Feasibility
-100
-50
0 50
100
150
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Key External Drivers % Change 2013 - 2026
Consumer confidence index
Consumer spending
Domestic trips by US residents
Inbound trips by non-US residents
Industry revenue is expected industry revenue to fall at an annualized rate of 7.6% to $133.0 billion over the five years to 2021, despite an anticipated increase of 42.9% in 2021 amid a strong recovery in domestic leisure travel.
154
Current Performance
The Hotels and Motels industry has
experienced elevated volatility over the five
years to 2021.

Hotels and motels primarily provide short-term
lodging to consumers; however, many also
offer other services and accommodations as a
way to diversify revenue. During most of the
period, industry revenue grew at a steady rate,
driven by positive economic factors that were
favorably affecting the domestic economy as
a whole. However, in early 2020, as the COVID-
19 (coronavirus) pandemic spread across the
globe, this trend sharply reversed, resulting in a
sharp decline in industry revenue that year
overall.

Economic indicators, such as per capita
disposable income and consumer confidence,
rose early during the period, only to
experience sharp decline later during the
period. Thus, all forms of short-term
accommodation have experienced a
most of the period, the United States has been
negatively affected by the coronavirus
outbreak.

The coronavirus spread rapidly within the
United States, forcing many state and local
governments, with the aid of the federal
government, to take action.

Many state and local governments
implemented stay-at-home orders, mandating
the closure of nonessential businesses. This
caused a shock to the US economy, and many
companies were forced to lay off employees
and temporarily shut down, while consumer
sentiment declined, causing a near halt to
domestic travel. The federal government also
banned travel from international visitors
originating from countries and regions that
were drastically affected by the virus.

Consequently, demand for hotels and motels
has decreased, eliminating all growth
experienced between 2016 and 2019. However,
in 2021 domestic travel is estimated to sharply
22 Market Feasibility
substantial decrease in demand. Consumers
that had previously increased spending on
travel for both business and leisure purposes
have abruptly curbed that, causing industry
revenue to decline. Since destination hotels
and motels rely heavily on domestic and
foreign tourism, any changes in domestic and
international travel substantially contribute to
the industry's bottom line. Industry revenue is
expected to decrease an annualized 7.6% to
$133.0 billion over five years to 2021, despite an
estimated increase of 42.9% in 2021 alone due
to the expulsion pent-up domestic travel
demand.

Changing Direction And The Coronavirus
The industry is particularly sensitive to
macroeconomic factors, which can negatively
affect consumers' tendency to travel.

Unexpected changes in geopolitical order can
potentially affect revenue growth should travel
restrictions arise or consumer sentiment sour.

Although the US economy has improved during
155
rise, in line with the cessation of government
restrictions on businesses and travel.

Furthermore, the coronavirus vaccination
campaign has resulting in a rising percentage
of the population successfully vaccinated,
which has contributed to a surge in domestic
leisure travel during summer 2021, benefiting
industry operators. However, restrictions
regarding international visitors entering the
United States remain in place for several key
markets such as the European Union and
Canada.

Consequently, demand from international
travelers is anticipated to rise at a much slower
rate than demand from domestic travelers.

Moreover, although business travel has
rebounded somewhat from lows endured
during the coronavirus pandemic, the spread
of the Delta variant has delayed the return to
the office for many employees as well as
business conferences and trips.
property value cycles and economic
conditions, in addition to any imbalances in
hotel room demand and supply influences.

Similarly, Wyndham Worldwide Corporation
separated into two separate holdings,
Wyndham Hotels and Resorts Inc. and
Wyndham Destinations. This separation aimed
to enable each segment to grow and operate
independently. Nevertheless, the industry is still
largely property-based, with hotels and motels
owning or leasing property specifically for hotel
and motel operation.

Declining Profit
Profit has fallen over the past five years,
partially because many operators have been
unable to increase room rates amid increased
competition.

While the rate of construction and
development to get new rooms on the market
has not kept up with increased demand,
operators have experienced substantial
external competition from companies such as
23 Market Feasibility
Industry Structure
Over the past five years, the structure of the
industry has shifted.Many major operators have
altered their business structure, through actions
such as forming real estate investment trusts to
raise funds.

Additionally, major operators have restructured
operations to solely provide specialist services
in hotel management through increased
franchising opportunities. While revenue from
hotel management has declined, such services
have provided an opportunity to generate
higher profit due to the elimination of many
property-related costs. In 2017,
Hilton Worldwide Holdings Inc. separated into
three separate entities to capitalize on growth
opportunities and increase its competitiveness.

The company spun-off its domestically owned
and leased properties into a real estate
investment trust.

Ultimately, owners are subject to changes in
156
Airbnb Inc. and VRBO. These services permit
consumers to rent rooms, apartments or whole
houses online rather than a traditional hotel
room. Such services provide a wide range of
options to consumers and can play into a
variety of different price points.

This has forced many operators to offer
competitive pricing to maintain high demand
or to provide upscale amenities to compensate
for the price difference.

Furthermore, the crippling effect on the industry
from the coronavirus pandemic, which caused
rapid declines in occupancy rates and revenue
per available room, coupled with rising
operating costs due to the implementation of
pandemic-related sanitation measures, has
also contributed to a sharp decline in profit.

Consequently, profit, measured as earnings
before interest and taxes, is estimated to
account for 3.1% of revenue in 2021, down from

18.4% in 2016.

The decline in establishments resulting from the
pandemic in 2020 is anticipated to outweigh
strong establishment growth early during the
period. Similarly, industry employment has
decreased an annualized 3.3% to 1.4 million
workers over the five years to 2021. IBISWorld
estimates that industry employment declined

34.5% in 2020 alone.
24 Market Feasibility
Declining revenue and profit have led many
small operators to close locations either
temporarily or permanently.

Consequently, the number of industry
establishments has decreased an annualized

0.4% to 92,746 locations over the five years to
2021.
157
Products & Services (Market Share)
25 Market Feasibility

20.2%

44.4%

6.9%

8.4%

9.3% 10.8%
Guest room rentals from properties with under 75 rooms Guest room rentals from properties with between 75 and 299 rooms Guest room rentals from properties with between 300 and 500 rooms Guest room rentals from properties with over 500 rooms Restaurants and bars Other services
158
Demand
Determinants
Domestic travel
Demand for hotel and motel accommodation
is dependent on factors that affect travel, such
as disposable income, which is influenced by
changes in general employment growth and
movements in interest and tax rates.

Changes in disposable income affect the
number of trips a household takes and its
expenditures while traveling, which, in turn,
affects the growth and economic effect of the
hospitality tourism industry.

The COVID-19 (coronavirus) pandemic in 2020
resulted in a surge in the unemployment rate,
widespread economic uncertainty and
restrictions on domestic travel. These factors
resulted in a decline in domestic travel in 2020.

Nonetheless, in 2021, demand from domestic
travel is anticipated to rise from 2020 lows, as
individuals seek to travel after a year where
movements, the availability of inexpensive
airfares and holiday packages and the supply
of airline seats. If traveling domestically
becomes more expensive relative to
international trips, individuals may choose to
travel internationally, affecting the growth of
domestic industry operators.

Finally, tourism promotions by private operators
and federal and state governments, including
through TV programs and special sporting
events, also stimulates travel. However,
individual state government promotions
typically influence domestic travel patterns to
favor only their state, rather than the entire
industry.

Business travel
Business travel is greatly influenced by changes
in economic growth, business confidence and
corporate profit. Economic conditions directly
affect the number of business trips taken, the
length of stay and budgeted travel spending.
26 Market Feasibility
Consequently, demand for these products has
increased among both nontraditional and
travel was largely restricted.

The price of fuel is also important, which affects
disposable income and general travel demand.

When fuel prices increase, it reduces
disposable income and consumers' willingness
to spend on long car trips.

Changes in the availability of leisure time also
affects the industry. As the unemployment rate
falls, time available for leisure activities, such as
travel also declines, despite the increased
disposable income. It also adds more tradeoffs
to consumers who have to use limited paid
vacation days to travel. Holiday expenditure
also competes with other leisure and
recreational industries and competes for a
share of household disposable income.

A longer-term influence on travel patterns is the
cost of taking a domestic trip compared with
an international one. The difference between
the two is influenced by exchange rate
159
Business travel has experienced growth
throughout most of the five years to 2021 as
many corporations have benefited from the
growth in the domestic economy.

However, the spread of the coronavirus
throughout the United States in 2020 has
resulted in a sharp contraction in business travel,
as employees increasingly work from home and
avoid nonessential travel.

Additionally, technology such as
teleconferencing and conference calling has
replaced business travel during the pandemic,
as it is cost-effective and safer. In 2021 business
travel levels have remained subdued due to
the spread of the delta variant of the
coronavirus and a continuation of many
employees working from home.

This trend of companies restricting travel
spending and conference attendance to focus
more technology-based alternatives in an
effort to preserve capital is likely to be
United States in 2020. Widespread global
economic uncertainty has also limited
international tourism.

Although restrictions have been somewhat
eased in 2021, international travel demand is
anticipated to return at a slower rate
compared with domestic travel.

Other factors, such as heightened geopolitical
tensions including wars and terrorism, whether
feared or actual, affect international travel
plans. Many of the top tourist locations have
struggled to regain traction for industry
operators following terrorism or other negative
events or geopolitical issues.

Promotional expenditures and activities, such
as major or special events, on the part of
governments and other organizations, can
raise awareness and interest in travel. Finally,
supply factors are also of critical importance,
including the availability of airline flights and
seats at the times people want to travel, and
accommodations to and at their selected
destination.
27 Market Feasibility
continued during the outlook period, however
at a decreasing rate.

International tourism
International tourism is one of the most
competitive industries. International tourism is
affected by factors similar to domestic travel
and global economic conditions, especially
changes in economic growth.

Furthermore, international tourism is affected
by changes in the US dollar against other major
currencies, which has an effect on the cost of
travel and the relative attractiveness of
traveling to competing destinations. The
coronavirus pandemic has resulted in a sharp
decline in international tourism. There are still
restrictions placed on individuals attempting to
enter the United States who have been in
countries experiencing more severe outbreaks
of the coronavirus.

Additionally, many states implemented stay-at-
home mandates and restrictions on businesses,
further reducing the allure of traveling to the
160
External factors
Several external factors can severely affect the
industry either directly or indirectly. Such factors
include public health crises, government
regulation, geopolitical tensions and other
macroeconomic factors.

Global or national pandemics can cause
increased concern among US and international
travelers.

Traveling amid public health crises may place
consumers at further risk of catching the
ailment, especially when staying at shared
locations, such as hotels and motels, or
traveling by airplane or train and other shared
transportations.

Many hotel and motel guests are traveling far
distances, which is the reason they required
accommodation services.

As health concerns increase, consumers are
more inclined to stay closer to home, limiting
demand for travel. Similarly, government
28 Market Feasibility
regulations that effect travel indirectly
influences demand for hotels and motels.

When any government restricts travel for
individuals to or within the United States,
demand will likely be negatively affected, as it
reduces the volume of consumers needing
industry services.

This has been apparent with the effect of the
coronavirus. Hotels and motels experienced a
sharp decline in occupancy rates in 2020 as
consumers opted to forego travel and stay at
home.
161
Major Markets (Market Share)
29 Market Feasibility

67.7%

17.1%

8.9% 6.3%
Domestic leisure travelers International leisure travelers Business travelers Meetings, events and incentive travelers 162
Key Success Factors
30 Market Feasibility
•Access to multiskilled and well-trained staff is vital to success in the industry.

Access to multiskilled and flexible workforce:
•There are many benefits to being part of a chain or franchised group, namely brand recognition, national marketing and quality control.

Being part of a franchising chain:
•Good word-of-mouth recommendations are quite often the most successful promotional tool.

Receiving the benefit of word-of-mouth recommendations:
•The location, facilities and services offered to hotel and motel guests are very important.

Proximity to key markets:
•It is essential to be aware of the new technology available in this industry for information, promotions, bookings and general management control systems
Ability to quickly adopt new technology:
• Understanding the various room stock, availability and tariff mechanisms used in this industry is important.

Ability to control stock on hand:
163
Cost Structure
Benchmarks
Profit
Profit, measured as earnings before interest
and taxes, is expected to account for 3.1%
of industry revenue in 2020, driven by the
economic damage of the COVID-19
(coronavirus) pandemic.

Purchases
In 2019, wages are expected to account
for 21.4% of industry revenue.

Wages
Wages represent 32.3% of industry revenue
in 2020.

Marketing
Marketing costs account for 2.1% of
industry revenue in 2021.

Depreciation
Depreciation represents an estimated 8.5%
of industry revenue in 2020.
31 Market Feasibility
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Industry Sector
Sector versus Industry Costs
Wages
Purchases
Profit
Depreciation
Marketing
Rent
Utilities
Other
164
Major Companies
There are no major players in this industry.

Other Companies
Marriott International Inc.

Market Share: 0.4%
Marriott International Inc. (Marriott) is a lodging
company based in Bethesda, MD, with 7,797
global properties in 80 countries and territories.

The United States is home to 62.3% of Marriott's
rooms.

Marriott operates and franchises its hotels
under various brands, including Marriott, the
Ritz-Carlton, Renaissance, Courtyard,
TownePlace Suites and Bulgari. It also develops
and operates vacation ownership resorts under
the Marriott Vacation Club, Horizons, the Ritz-
Carlton Club and Grand Residences brands,
while also running Marriott Executive
Apartments. The company employs an
estimated 121,000 people worldwide across its
various hotels and other locations in 2020 (latest
data available).
fees, but enables individuals to take
advantage of the parent company's network,
branding and other features. While these
establishments are considered independent
enterprises, they have increased Marriott's
operations across the United States.

Due to the nature of Marriott's business
structure, with its focus on management,
franchising and licensing,
IBISWorld uses company reported revenue
from owned and leased locations to project
the company's market share.

However, IBISWorld also reports and estimates
total network sales. Network sales further
include revenue generated by the company's
franchise operations. In 2021,
Marriott is expected to generate $509.3 million
in industry-relevant revenue. This includes an
estimated decline in 2020 due to the COVID-19
(coronavirus) pandemic as domestic and
32 Market Feasibility
Marriott's operations extend over most
segments of the accommodation market,
including luxury, full service and limited service,
to suit a variety of travelers and budgets.

While such diversity typically provides some
insulation from economic downturns, many of
the company's hotels still endure severely cut
room rates to remain competitive and maintain
positive cash flow during difficult economic
periods.

Consequently, Marriott has significantly
expanded its US portfolio over the past five
years to further inoculate itself from downturns
and better position itself to compete with its
traditional competitors and also with newer,
nontraditional competitors, such as Airbnb Inc.

Most of this expansion has been through
franchise operations. Franchise agreements are
contracts that enable individuals to create a
business establishment under the branding of
an existing company. This often requires upfront
165
international travel sharply contracted amid
travel restrictions and stay-at-home mandates.

In 2021, the company is anticipated to
experience a rebound in demand, driven
primarily by robust leisure demand.

Hilton Worldwide Holdings Inc.

Market Share: 0.2%
Brand Names: Hilton, Hilton Garden Inn,
Doubletree, Embassy Suites, Hampton,
Homewood Suites by Hilton, Conrad
Hilton Worldwide Holdings Inc. (Hilton), formerly
Hilton Hotels Corporation, is a McLean, VA-
based lodging company that owns, manages
or franchises more than 6,500 hotels with over

1.0 million rooms worldwide.

An estimated 71.0% of Hilton's rooms are based
in the United States, which has increased over
the five years to 2021. Hilton employs 141,000
people worldwide at its managed, owned,
leased and corporate locations, while 173,000
individuals work in the company's franchised
locations.
its core segments to act on opportunities faster
than before. These spin-offs were completed in
early 2017. The two new segments include Park
Hotels & Resorts Inc. and Hilton Grand
Vacations Inc. These segments comprised the
company's previous timeshare rentals and
various resorts segments. The company's
remaining portfolio is focused on luxury and
lifestyle hotel brands, with global properties
remaining within the traditional company
structure.

In 2021, Hilton is estimated to generate $219.5
million in industry-relevant revenue. This does
not include revenue from its franchised
operations, as Hilton does not release revenue
figures for its franchised and managed
locations in its publicly available financials.

The company's continued shift toward
franchising has been a large driver behind its
declining industry-relevant revenue. The
company's revenue is expected to decline in
2020 due to the negative effect of COVID-19
(coronavirus) pandemic. However, based on
33 Market Feasibility
Hilton has undergone a series of ownership
changes since it was first listed on the New York
Stock Exchange in 1970. Most recently, the
company was purchased by private equity firm
Blackstone Group Inc. (Blackstone) in 2007 for
$26.0 billion, initially pulling it off of public
exchanges.

Blackstone took Hilton public again in late 2015,
listing the company on the New York Stock
Exchange under the name of Hilton Worldwide
and using the proceeds to pay down the
substantial debt the group had taken on during
the initial purchase of Hilton. During its
ownership tenure,
Blackstone increased the chain's room count,
which was mainly achieved through franchised
and managed hotels, which require limited
capital investment. In February 2016, the
company announced plans to break into three
separate entities to capitalize on growth
opportunities, increase its competitiveness
within the Hotels and Motels industry and
create internal efficiencies that would enable
166
RevPAR figures and the company's reported
number of rooms to determine its total system-
wide sales, IBISWorld estimates that Hilton's US
system-wide sales have grown throughout most
of the five years to 2021, prior to the
coronavirus pandemic, and system-wide sales
remain important to Hilton's growth post-
pandemic.

Moreover, Hilton is anticipated to experience
an increase in demand in 2021 amid the easing
of travel restrictions and anticipated pent-up
travel demand amid the broader distribution of
the coronavirus vaccination.

InterContinental Hotels Group PLC
Brand Names: InterContinental
InterContinental Hotels Group PLC (IHG) is a UK-
based company and one of the largest hotel
chains in the world as measured by total
number of rooms. IHG owns, manages and
franchises 5,964 hotels throughout 100 countries
under major brands, including Holiday Inn,
Kimpton Hotels, Crowne Plaza and
targets travelers with a preference for edgy art
and design. These locations are predominantly
located in urban areas and target high-end
consumers between the ages of 20 and 50.

RevPAR for all of IHG's brands has increased
strongly during most of the period, as travel
across all major markets has increased.

Similar to other service industries, IHG was
heavily affected by the onset of the COVID-19
(coronavirus) pandemic in the United States
and throughout the globe.

As people self-isolated and sheltered in place,
they canceled travel plans, and thus, did not
book stays at hotels and motels, causing sharp
declines in occupancy rates in 2020.

However, in 2021 IHG has experienced a
recovery in its occupancy rates, which has
been skewed toward domestic leisure markets
where restrictions have been lifted. IHG's
business market occupancy levels have
remained an estimated 30.0% below pre-
pandemic levels.
34 Market Feasibility
InterContinental. It also employs more than
400,000 individuals across all hotels and
countries. IHG divides its hotels into segments
based on ownership and management
structures. Hotels are either franchised,
managed or owned.

Consistent with IHG's low-asset business model,
most of the company's hotels operate under a
franchise agreement or are managed by IHG
on behalf of the owner. Due to the low capital
investment and minimal wage costs required
for franchising, the company's franchise
business is its most profitable segment.

IHG's portfolio of brands covers a wide range of
key consumer segments active in the Hotels
and Motels industry. High-end luxury travelers
visiting major cities are catered to by IHG's five-
star InterContinental locations, while its Holiday
Inn brand accommodates mid-market
consumers traveling for business or leisure.

IHG's most recent project, Hotel Indigo, is a
boutique hotel concept with 50 locations that
167
IHG's industry-relevant hotels are located within
the company's Americas segment, which
includes all properties located in North, South
and Central America. The Americas segment
represents over 4,200 hotels and 514,000 rooms.

Properties located in the United States
represent an estimated 58.0% of total
properties.

While the United States still accounts for the
majority of revenue within the Americas
segment, Canada, Mexico and the Caribbean
are also key players that significantly contribute
to the company's profit, mainly because more
than 90.0% of rooms in the Americas segment
operate under a franchise business model.

IHG's asset-light business model means it owns
nine hotels, as most hotels operate under a
franchise agreement or are managed by IHG
on behalf of owners. Additionally, the global
effect of coronavirus is forecast to substantially
affect the industry, further reducing growth.

Nonetheless, IHG experienced significant
based in Parsippany, NJ, but operates globally.

Wyndham is one of the largest franchised-hotel
operators in the United States. In 2006, its
parent company, Cendant Corporation, split
into discrete companies operating in specific
industries, and its hotel operation was renamed
Wyndham Worldwide.

During the second quarter of 2017, the
company decided to further divide the
company, and announced its intent to spin-off
of the hotel business segment. This spin-off was
completed in June 2018 and resulted in the
hotel business operation being held as its own
publicly traded entity named Wyndham Hotel
and Resorts. Wyndham states that the spin-off
aimed to enable a greater focus on the
individual functions of each business segment,
enhancing their potential for success and
growth.

In the United States, Wyndham has 8,941
properties with a total of 484,800 rooms. In 2021,
IBISWorld estimates that Wyndham will derive

60.8% of its revenue in the United States.
35 Market Feasibility
growth during the most of the period, which is
expected to somewhat mitigate loss that has
been incurred in 2020.

Therefore, the company is expected to
generate $4.5 million in industry-relevant
revenue in 2021. The figure is relatively low
because industry-relevant revenue does not
include franchise revenue, as franchises are
considered independent operators, according
to the Bureau of Labor Statistics.

Nonetheless, IHG's total network sales in the
United States, which includes sales garnered
from owned, leased and managed hotels and
sales earned by third-party-owned franchised
hotels, are estimated to fall over the five years
to 2021 due to the coronavirus pandemic
induced decline in 2020.

Wyndham Hotel and Resorts
Brand Names: Super 8 Motels, Knights Inn,
Days Inn, Travelodge
Wyndham Hotels and Resorts (Wyndham),
previously Wyndham Worldwide Corporation, is
168
Wyndham's brands include Days Inn, Knights
Inn, Ramada, RCI, Super 8 Motels, Travelodge,
Howard Johnson's and Wingate by Wyndham.

Its two largest brands, Super 8 and Days Inn,
have an estimated 2,000 locations each.

Wyndham's brands mainly cater to the
economy and midscale markets. It is also
involved in the timeshare market via its RCI and
Fairfield Communities brands.

Wyndham earns one of the lowest RevPARs in
the industry due to the budget-focused nature
of its lodgings.

In 2021, Wyndham is expected to generate
$2.9 million in industry-relevant revenue. This
does not include revenue generated by the
company's franchised establishments.

US-network sales have fallen over the five years
to 2021. This is largely due to an anticipated
decline in 2020, as many consumers throughout
the globe and in the United States were placed
under stay-at-home orders, and significantly
Consequently, the company's economy and
midscale brands have outperformed the
industry's higher-end brands during the
pandemic. Moreover, leisure travel demand
has recovered strongly in 2021, with
occupancy rates reaching 95.0% of their pre-
pandemic levels during the second quarter of
2021.
36 Market Feasibility
reduced and canceled most traveling.

However, in 2021,
Wyndham has benefited from strong demand
from its business customers, which largely are
comprised of truckers, contractors, construction
workers, healthcare workers and others who
must travel for work and do not have the ability
to conduct their work remotely.
169
Operating Conditions
The level of capital intensity is Medium
The Hotels and Motels industry is subject to a
moderate to level of capital intensity. In 2021,
for every $1.00 spent on wages, the average
industry operator is expected to spend an
estimated $0.26 on capital. Capital intensity is
expected to remain stable moving forward as
labor and capital both play an important role
in the industry.

As a service-based industry, hotel and resort
operators are highly dependent on direct labor
input across all areas of operation. Individuals
are needed in areas such as front-desk service,
reservations, room service and cleaning, food
preparation, liquor and beverage service and
back of house operational management. Due
to the service-based nature of the industry,
many of these labor-intensive functions cannot
be substituted by technology or machinery
and are a key foundation in the day-to-day
functions. To meet customers' expectations of
quality and provide a hospitable stay, trained
staff are required.
37 Market Feasibility
0 0.05

0.1 0.15

0.2 0.25

0.3 0.35

0.4 0.45
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Capital Intensity Ratio - Industry
170
Revenue Volatility
The level of volatility is Very High
Over much of the five years to 2021, Hotels and
Motels industry revenue volatility has been
moderate to very high.

Volatility was low during most of the period due
to the consistent growth industry operators
have been able to capitalize on. However, with
the onset of the COVID-19 (coronavirus)
pandemic, industry revenue is anticipated to
rapidly decline in 2020 and strongly rebound in
2021, introducing greater volatility to the
industry.

Industry revenue grew as much as 42.9% in
2021 and declined as much as 55.8% in 2020.

Prior to 2020, there was little variability. However,
this new instability in revenue growth derived
from global economic and public health issues
has affected the United States in 2020.

This has led to steep declines in the previously
steady increase in inbound tourism, volumes of
38 Market Feasibility
domestic travel and general weakening of
economic conditions. The introduction and
spread of coronavirus in the United States
caused implementations of travel bans, limited
domestic travel and a downturn in the US
economy. However, revenue is estimated to
rebound in 2021 in line with the cessation of
domestic travel restrictions and an increase in
the percentage of the domestic population
which has been vaccinated. This moderate to
high level of volatility is still subject to change if
economic conditions change over the five
years to 2026, especially as the effect of the
virus is fully realized.

Regulation & Policy
The level of regulation is Medium and this trend
is Steady.

The Hotels and Motels industry is subject to a
medium and steady level of regulation at the
federal and state level.

Several states regulate the activities of
hospitality properties and restaurants, including
safety and health standards, and the sale of
liquor, by requiring licensing, registration,
disclosure statements and compliance with
specific standards of conduct. There are also
extensive state and federal laws and
regulations relating to selling and marketing
timeshare intervals for those hotels that offer
such arrangements.

LABOR RELATIONS
Operators of hotels and motels are also subject
to laws governing their relationship with
employees, including minimum wage
requirements, overtime, working conditions and
work permit requirements.

The industry employs a high number of young
and low-skilled workers at hourly rates, and
therefore, is subject to minimum wage and
employee benefits regulations.

Workers in the United States are entitled to be
paid no less than the statutory minimum wage,
which is $7.25 per hour in 2021. Each state also
formulates and regulates its own minimum
171
wage, with most states implementing rates
higher than the federal rate. National operators
that have establishments in various states must
comply with each individual state's
requirements for each location.

Food Safety And Standards
As many hotels and motels prepare and sell
food on premises, the industry is subject to laws
and regulations relating to the preparation and
sale of food, including regulations regarding
product safety, nutritional content and menu
labeling.

The Food and Drug Administration (FDA) is the
main agency responsible for providing
guidance and regulation. The FDA's Model
Food Code, which is a best-practice guide to
food handling and presentation, applies to this
industry and is updated each year.

The FDA Nutritional Value applies as well. Since
1996, the FDA regulations have set standards
for nutritional values of individual foods and
meals. If claims such as “low-fat” or
39 Market Feasibility
“heart-healthy” are on a menu, an owner must
be able to demonstrate to officials that there is
a reasonable basis for the claim.

For instance, the meal may be based on a
recipe from a health association or a
recognized dietary group. Complete nutritional
information, however, is not required to be on
menus.

The Affordable Care Act requires restaurant
companies to disclose calorie information on
their menus.

The Food and Drug Administration has
proposed rules to implement this provision that
would require restaurants to post the number of
calories for most items on menus or menu
boards and to make available more detailed
nutrition information upon request. FDA
regulations require that restaurants and similar
retail food establishments that are part of a
chain with 20.0 or more locations are required
to provide nutrition information for standard
menu items on menus and menu boards.

However, during the coronavirus pandemic the
FDA has granted restaurants flexibility in
implementing these changes and will not
object if establishments do not meet labeling
requirements during the public health
emergency.

Liquor Licensing
A license is required to serve liquor and the
issuing of licenses may be restricted in some
states, such as limiting the number of licenses in
a given area or by population.

For example, in Wisconsin, there is a license
quota of one license per 500 people.

Additionally, states are able to mandate hours
of operation, the price of each drink, which
establishments are able to serve and how long
an unfinished bottle of wine may be used in the
bar. Hotel and motel operators must comply
with state and local service laws, commonly
called dram shop statutes. Dram shop statutes
generally prohibit serving alcoholic beverages
to certain persons such as an individual who is
172
intoxicated or a minor. In the United States, a
person must be 21 years of age to be legally
served alcohol, which has been in place since
the passing of the National Minimum Drinking
Age Act of 1984
Cybersecurity
After Wyndham Hotels and Resorts
experienced a breach in its data systems, the
Federal Trade Commission (FTC) has increased
its powers and regulations on cybersecurity.

While no regulation has yet to be passed that
outlines exactly the level of cybersecurity a
hotel or motel must have, it has become
increasingly pertinent. The FTC can still fine an
operator if they experience a high-level
security breech. This increases the need for
hotels and motels to implement high level of
data security.

Smoking Bans
Smoking laws are generally enforced at the
state level as the US Congress has not
attempted to enact any nationwide federal
smoking ban.
40 Market Feasibility
Smoking is banned in restaurants, bars and non
hospitality workplaces in many states and some
local jurisdictions ban smoking in outdoor areas.

Each jurisdiction has developed legislation
separately; however, most laws are relatively
consistent.

There are some differences pertaining to the
circumstances in which ventilated smoking
rooms are permitted and the distance smoking
is banned outside a building.

A growing number of cities and states now
require hotels to be 100.0% smoke-free indoors,
including guest rooms. Currently, all hotels and
motels, including guest rooms, must be smoke-
free in Wisconsin, Michigan and Nebraska.

Over the past decade, smoke-free hotels have
gone from being almost nonexistent to the
national norm. The Westin, a Marriott
International Inc. (Marriott) brand, announced
the first national 100.0% smoke-free hotel policy
for all its properties in the United States in 2006
following a report from the Surgeon General
that exposure to secondhand smoke is
damaging to health. This marked a turning
point for the industry and a domino effect led
Marriott to adopt a similar policy across its
portfolio of brands.

Franchising Laws
A large proportion of industry establishments
are operated under franchise agreements.

There are both federal and state laws
governing franchising, which vary from state to
state. Franchising is regulated at the federal
level by the US Federal Trade Commission and
applied in any region within the United States.

At the state level, various state agencies
regulate franchises and laws vary between
states.

A state's franchise laws usually only apply if the
sale of a franchise is made in the state and the
business is located in the state. Laws generally
fall into three categories, which include
disclosure laws, registration laws and
relationship laws.
173
Under the FTC Franchise Rule there are three
elements of a franchise, which include the
franchise has a trademark under which the
franchisee is given the right to distribute goods
and services; the franchisor has significant
control of or provides significance to the
franchisee's method of operation; and the
franchisee is required to pay the franchisor at
least $600.00 within the first six months of
opening for business.

COVID-19
In early 2020, the United States was affected by
the global COVID-19 (coronavirus) pandemic.

While many industries have been affected
heavily by this pandemic, industries related to
hospitality and tourism have been hit especially
hard due to travel bans and stay-at-home
restrictions.

There has been no direct legislation on hotels
and motels in the United States, however, there
has been broad sweeping regulation that
affected industry operators and employees.
41 Market Feasibility
This included the Families First Coronavirus
Response Act. This act required specified
employers to provide their employees with paid
sick leave or expanded family and medical
leave for specified reasons related to
coronavirus.

This regulation likely affected operators that fell
under the designated categories specified by
the act. However, the FFCRA leave
requirements expired December 31st, 2020. In
2021, operators still are contending with
regulations such as the limitation of foreign
travelers into the United States. For example, as
of August, U.S. borders remain closed to most
European travelers, even those with
vaccinations.

Industry Assistance
The level of industry assistance is Low and the
trend is Increasing
As a whole, the Hotels and Motels industry does
not receive on-going and continuous direct
support from local or state governments.

In early 2020, however, many hotel and motel
operators were given stimulus in the form of
money from the US government due to the
COVID-19 (coronavirus) pandemic.

The US Coronavirus Aid, Relief, and Economic
Security (CARES) Act, which was introduced
and signed into law in March 2020, is a $2.0
trillion economic relief package designed to
provide direct economic assistance for
American workers, families and small businesses
as well as preserve jobs for American industries.

The Paycheck Protection Program (PPP), which
was established by the CARES Act, is
implemented by the Small Business
Administration (SBA) and provides small
businesses with funds to pay up to eight weeks
of payroll costs including benefits.

Funds can also be used to pay interest on
mortgages, rent and utilities. Furthermore, in
December 2020, the government passed an
additional $900.0 billion in a COVID-19
(coronavirus) relief bill. The legislation included
another $300.0 billion for the PPP and
174
expanded the kinds of businesses that can
qualify for forgivable loans and grants. Lastly, in
March 2021, a third, $1.9 trillion coronavirus
relief plan was signed into law.

The plan provides $15.0 billion to the
Emergency Injury Disaster Loan program, which
provides long-term, low-interest loans from the
SBA. Moreover, the PPP will receive an
additional $7.0 billion in funds under this relief
plan.

Many industry operators were severely
affected by the coronavirus pandemic as
travel from many international locations was
suspended for months and domestic travel
declined as people were ordered to
quarantine and self-isolate at home throughout
most of the United States.

Aside from direct stimulus provided on rare
occasions, the industry receives other indirect
assistance regularly. In many states, some of
the funds collected by lodging taxes are spent
on promoting local tourism, which can directly
42 Market Feasibility
and indirectly benefit the Hotels and Motels
industry. This tax is often used to promote
tourism within the state. Thus, the industry is an
indirect beneficiary of any promotional tourism
spending by governments, to which operators
may or may not have contributed funds. The
more local tourism is promoted, the more likely
people might be to travel to that location
which typically benefits the region's overall
economy.

Trade groups such as the American Hotel &
Lodging Association also lobby on the industry's
behalf. This is the sole national association that
represents all components of the lodging
industry. This association includes individual
hotel property members, hotel companies,
training organizations, students and suppliers. Its
activities incorporate national advocacy,
public relations and image management,
education and research and information. It
also operates through 43 partner state
associations to provide local representation to
members.
175
The Great Smoky Mountains
Nature and Extent of the
Market and Market Area
176
44 Market Feasibility
Source: Veritas Development Advisors Primary Research
Top 10 things to do in Ontario, CA (per TripAdvisor)
No Name
1 Ontario Mills
2 Toyota Arena
3 Escape Lounge
4 Ontario Convention Center
5 Museum of History and Art, Ontario
6 Animanga
7 Cucamonga-Guasti Regional Park
8 Treasures N Junk
9 K1 Speed Ontario
10 Scandia
1 2
3 4
5 6
7 8
9 10
177
Major Airports Near the Subject Project Data Table and Map 45 Market Feasibility
No. Name Address Miles Away from the Subject Project
1 Ontario International Airport Ontario, CA 91761 3.2
2 Los Angeles International Airport 1 World Way, Los Angeles, CA 90045 58.5 Source: Google Maps, Veritas Development Advisors Primary Research Analysis 178
Significant Demand Generators Near the Subject Project Data Table and Map 46 Market Feasibility
No. Name Address Miles from Subject Project Overnight Stays Demanded Annually 1 Toyota Arena 4000 Ontario Center, Ontario, CA 1.6 Left voice msg with Ontario Econ. Dev. 2 Ontario Convention Center 2000 E Convention Center Way, Ontario, CA 4.9 Left voice msg with Ontario Econ. Dev.

Source: Google Maps, Veritas Development Advisors Primary Research Analysis 179
Restaurants Near the Subject Project Data Table
47 Market Feasibility
No. Name Address Miles Away from the
Subject Project
1 El Chilitos Mexican Restaurant 1630 E 4th St K, Ontario, CA 91764 1.49 2 Zeke's Eatin' Place 1855 E 4th St, Ontario, CA 91764, 1.92 3 Johnny O's Café 8890 8th St, Rancho Cucamonga, CA 91730 2.20 4 Spires Restaurant 104 N Vineyard Ave, Ontario, CA 91764 2.25 5 Ontar Thai Restaurant 750 Archibald Ave, Ontario, CA 91764 3.10 6 Chasqui 8880 Archibald Ave, Rancho Cucamonga, CA 91730 3.12 7 Panda Inn 3223 E, N Centre Lake Dr, Ontario, CA 91761 3.77 8 Jikan Japanese Restaurant 3495 Concours St suite e, Ontario, CA 91764 3.97 9 Benihana 3760 Inland Empire Blvd, Ontario, CA 91764 4.39 10 @ Home Thai Fusion bistro 4275 Concours St Suite 130, Ontario, CA 91764 4.93 11 Chili Bistro-湘巴佬 765 N Milliken Ave ste a, Ontario, CA 91764 4.98 12 Applebee's Grill + Bar 1021 N Milliken Ave, Ontario, CA 91764 5.02 13 Olive Garden Italian Restaurant 4403 Mills Cir, Ontario, CA 91764 5.07 14 Big Wok Mongolian Grill BWRC 11334 Fourth St Ste 103, Rancho Cucamonga, CA 91730 5.08 15 In-N-Out Burger 4310 Ontario Mills Pkwy, Ontario, CA 91764 5.13 16 BJ's Restaurant & Brewhouse 11520 Fourth St, Rancho Cucamonga, CA 91730 5.28 17 Lazy Dog Restaurant & Bar 11560 Fourth St, Rancho Cucamonga, CA 91730 5.40 18 The Sweet Spot Ontario, CA 91764 5.45
19 Rainforest Café 4810 Mills Cir, Ontario, CA 91764 5.59 20 Rubio's Coastal Grill 980 Ontario Mills Dr Suite A, Ontario, CA 91764 5.71 Source: Google Map, Veritas Development Advisors Primary Research Analysis 180
Restaurants Near the Subject Project Map
48 Market Feasibility
Source: Google Map, Veritas Development Advisors Primary Research Analysis 181
Medical Facilities Near the Subject Project Data Table
49 Market Feasibility
No. Name Address Miles Away from the
Subject Project
1 Kindred Hospital Ontario 550 N Monterey Ave, Ontario, CA 91764 0.71 2 San Antonio Regional Hospital 999 San Bernardino Rd, Upland, CA 91786 1.66 3 Chaparral Medical Group 585 N Mountain Ave, Upland, CA 91786 2.09 4 Montclair Hospital Medical Center 5000 San Bernardino St, Montclair, CA 91763 2.87 5 Casa Colina Hospital and Centers for Healthcare 255 E Bonita Ave, Pomona, CA 91767 5.70 6 Pomona Valley Hospital Medical Center 1798 N Garey Ave, Pomona, CA 91767 6.10 7 Emanate Health Inter-Community Hospital 210 W San Bernardino Rd, Covina, CA 91723 14.18 8 Monrovia Memorial Hospital 323 S Heliotrope Ave, Monrovia, CA 91016 20.05 9 Methodist Hospital 300 Huntington Dr, Arcadia, CA 91007 22.54 Source: Google Map, Veritas Development Advisors Primary Research Analysis 182
Medical Facilities Near the Subject Project Map
50 Market Feasibility
Source: Google Map, Veritas Development Advisors Primary Research Analysis 183
Golf Courses Near the Subject Project Data Table
51 Market Feasibility
No. Name Address Miles Away from the Subject Project
1 Red Hill Country Club 8358 Red Hill Country Club Dr, Rancho Cucamonga, CA 91730 2.09 2 Upland Hills Country Club 1231 E 16th St, Upland, CA 91784 2.60 3 Whispering Lakes Golf Course 2525 E Riverside Dr, Ontario, CA 91761 5.23 4 Mountain Meadows Golf Course 1875 Fairplex Dr, Pomona, CA 91768 7.37 5 Marshall Canyon Golf Course 1135, 6100 Stephens Ranch Rd, La Verne, CA 91750 7.45 6 San Dimas Canyon Golf Course 2100 Terrebonne Ave, San Dimas, CA 91773 8.69 7 El Prado Golf Courses 6555 Pine Ave, Chino, CA 91708 9.61 8 Goose Creek Golf Club 11418 68th St, Mira Loma, CA 91752 10.72 9 Sierra Lakes Golf Club 16600 Clubhouse Dr, Fontana, CA 92336 12.41 10 Indian Hills Golf Club 5700 Club House Dr, Riverside, CA 92509 12.79 11 Oak Quarry Golf Club 7151 Sierra Ave, Riverside, CA 92509 12.96 12 Jurupa Hills Country Club 6161 Moraga Ave, Riverside, CA 92509 14.13 13 Van Buren Golf Center 6720 Van Buren Boulevard, Riverside, CA 92503 14.28 14 Colton Golf Course 1901 W Valley Blvd, Colton, CA 92324 16.49 15 Fairmount Golf Course 2681 Dexter Dr, Riverside, CA 92501 16.51 Source: Google Map, Veritas Development Advisors Primary Research Analysis 184
Golf Courses Near the Subject Project Map
52 Market Feasibility
Source: Google Map, Veritas Development Advisors Primary Research Analysis 185
Museums Near the Subject Project Data Table
53 Market Feasibility
No. Name Address Miles Away from the Subject
Project
1 Cooper Regional History Museum 217 E A St, Upland, CA 9178 0.82 2 Ontario Museum of History & Art 225 Euclid Ave, Ontario, CA 91762 1.48 3 Chaffey Community Museum of Art 217 S Lemon Ave, Ontario, CA 91761 1.49 4 Sasse Museum of Art 1334 N Benson Ave STE D, Upland, CA 91786 2.79 5 Cucamonga Service Station 9670 Foothill Blvd, Rancho Cucamonga, CA 91730 3.38 6 The African-American Museum of Beginnings 1460 E Holt Ave Suite 188, Pomona, CA 91767 4.56 7 Petterson Museum of Intercultural Art 730 Plymouth Rd, Claremont, CA 91711 4.70 8 Chino's Old Schoolhouse Museum 5493 B St, Chino, CA 91710 5.19 9 Wignall Museum & Gallery 5885 Haven Ave, Rancho Cucamonga, CA 91737 6.19 10 Latino Art Museum 281 S Thomas St, Pomona, CA 91766 6.31 Source: Google Map, Veritas Development Advisors Primary Research Analysis 186
Museums Near the Subject Project Map
54 Market Feasibility
Source: Google Map, Veritas Development Advisors Primary Research Analysis 187
4th Street Hotel (Subject Project)
55 Market Feasibility

SUITE AMENITIES INCLUDE
Spacious Kitchens
• Stove
• Microwave Oven
• Toaster
• Refrigerator (Full)
• Icemaker In Refrigerator
• Dishwasher
• Pots/Pans/Serving Dishes
• Plates/Glassware
• Silverware
• Dining Table
Flexible Workspaces
• Work Desk With Lamp
• Desk Level Electrical Outlet
• Spare Electrical Outlet at Desk
Connectivity
• Wired Internet Available in Rooms, Suites,
Business Center, Public Areas and Meeting
Convention Spaces.
• Wireless Internet Available in Rooms, Suites,
Business Center, Public Areas and Meeting
Convention Spaces.
• Standard Wireless Internet service is free for
all members
• Two-Line Phone
• Phone with Voicemail

HOTEL AMENITIES INCLUDE
Connectivity
• Wired Internet Available in Rooms, Suites,
Business Center, Public Areas and Meeting
Convention Spaces.
• Wireless Internet Available in Rooms, Suites,
Business Center, Public Areas and Meeting
Convention Spaces.

Housekeeping and Laundry Services
• On-site Guest Self-Laundry Facilities
• Weekly Housekeeping
• Housekeeping Full Service
• Full service - complete room clean.

Site Info
Location 5060 E. 4th Street, Ontario,
California 91764
Rooms 128 (planned)
Room Types
61 Queen Suites
61 DBL Queen Suites
3 ADA DBL Queen Suites
3 ADA Queen Suites
Site Area • 80,000 sq. ft
GBA • 55,250 sq. ft
Story • Four
Parking Area • 19,106 sq. ft
Meeting Room • 1,824 sq. ft
Seating Area • 300 sq. ft
Café/Snack • 331 sq. ft
Fitness • 331 sq. ft
Pool Deck/Spa • 2,353 sq. ft
Lobby • 504 sq. ft
Reception • 110 sq. ft
Laundry • 437 sq. ft
188
Business Services
• On-Site Business Center
• Business Services are available
• Copying
• Office supplies available
• Printer
• Scanner
Entertainment and Recreation
On-site Fitness Center Available
• Limited Offering
• Available Equipment: Elliptical Machines,
Treadmill, Free Weights, Stationary Bicycle
Outdoor Pool Available
• Outdoor Gazebo Grill
56 Market Feasibility
189
The Great Smoky Mountains
Competitive
Market Area Analysis
190
58 Market Feasibility
Home2 Suites by Hilton Azusa
Site Info
Location 229 S Azusa Ave , Azusa, CA 91702
Room 110
Built July 2017
Miles (away) from the
Subject Project 15.23
Room Types
• King Studio Suite -Hearing Accessible
• King Studio Suite- Non-Smoking
• King Studio Suite -Mobility Access/Non-Smoking
• One-bedroom King Suite - Non-Smoking
• King Suite - Mobility Accessible/Non-Smoking
• King Accessible Roll In Shower Suite With Sofa Bed -
Non-Smoking
• King Suite -Hearing Accessible/Non-Smoking
Value
Min Asking Rate $146.00
Max Asking Rate $297.00
Min Mean Asking Rate $175.44
Max Mean Asking Rate $228.86
Mean Asking Rate $203.72
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
Room Rates
Online Survey
$203.72
191
59 Market Feasibility
Homewood Suites by Hilton Ontario Rancho Cucamonga
Site Info
Location 11433 Mission Vista Drive, Rancho Cucamonga,
CA 91730
Room 103
Built November 2005
Miles (away) from the
Subject Project 5.14
Room Types
• Studio Suite, 1 Queen Bed, Non-smoking
• Suite, 2 Queen Beds, Non-Smoking
• Suite, 2 Queen Beds, Accessible , Bathtub (Mobility & Hearing)
• Suite, 1 King Bed, Non-Smoking
• Suite, 1 King Bed, Hearing Accessible
• Suite, 1 King Bed, Accessible, Bathtub (Mobility &
Hearing)
• Suite, 1 King Bed, Accessible (Mobility & Hearing , Roll In Shower)
• Premium Suite, 1 King Bed, Accessible, Bathtub
• Premium Suite, 1 King Bed, Accessible , Non- Smoking
(Hearing)
• Room. 2 Bedrooms. Non-Smoking
• Suite, Accessible, Non - Smoking
• Suite, 2 Queen Beds, Accessible (Roll-in Shower
Value
Min Asking Rate $156.00
Max Asking Rate $537.00
Min Mean Asking Rate $190.00
Max Mean Asking Rate $350.50
Mean Asking Rate $230.38
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
Room Rates
Online Survey
$230.38
192
60 Market Feasibility
TownePlace Suites Ontario Airport
Site Info
Location 9625 Milliken Avenue, Rancho
Cucamonga, CA 91730
Room 112
Built November 2005
Miles (away) from the Subject
Project 5.05
Room Types
• Studio, 1 Queen Bed, Non-Smoking
• Studio, 2 Queen Beds, Non-Smoking
• Suite, 1 Bedroom, Non-Smoking
• Suite 2 Bedrooms, Non-Smoking
Value
Min Asking Rate $167.00
Max Asking Rate $482.00
Min Mean Asking Rate $218.09
Max Mean Asking Rate $359.00
Mean Asking Rate $280.16
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
Room Rates
Online Survey
$280.16
193
61 Market Feasibility
Residence Inn Ontario Rancho Cucamonga
Site Info
Location 9299 Haven Avenue, Rancho Cucamonga,
91730
Room 126
Built December 2018
Miles (away) from the
Subject Project 4.11
Room Types
• Studio, 1 King Bed, Non-Smoking
• Studio, 2 Queen Beds, Non-Smoking
• Suite, 1 Bedroom, Non-Smoking
Value
Min Asking Rate $234.00
Max Asking Rate $448.00
Min Mean Asking Rate $269.91
Max Mean Asking Rate $324.82
Mean Asking Rate $297.69
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
$450.00
$500.00
Room Rates
Online Survey
$297.69
194
62 Market Feasibility
Extended Stay America Los Angeles - Ontario Airport
Site Info
Location 3990 Inland Empire Blvd, Guasti, CA 91764
Room 127
Built May 1997
Miles (away) from the
Subject Project 4.49
Room Types
• Studio, 1 Queen Bed, Non-Smoking
• Studio, 1 Queen Bed, Accessible Non-Smoki
• Studio, 1 King Bed, Non-Smoking
• Studio, 2 Double Beds, Non-Smoking
Value
Min Asking Rate $118.00
Max Asking Rate $169.00
Min Mean Asking Rate $122.64
Max Mean Asking Rate $145.30
Mean Asking Rate $131.32
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
Room Rates
Online Survey
$131.32
195
63 Market Feasibility
Element Ontario
Site Info
Location 900 Via Piemonte, Ontario, 91764
Room 131
Built May 2020
Miles (away) from the
Subject Project 4.65
Room Types
• Room,1 King Bed, Non-Smoking
• Studio,1 King Bed, Non-Smoking
• Studio,1 King Bed, Non-Smoking
• Suite, 1 Bedroom, Non-Smoking
Value
Min Asking Rate $184.00
Max Asking Rate $399.00
Min Mean Asking Rate $214.18
Max Mean Asking Rate $278.09
Mean Asking Rate $242.86
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$400.00
$450.00
Room Rates
Online Survey
$242.86
196
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$100.00 $120.00 $140.00 $160.00 $180.00 $200.00 $220.00 $240.00 $260.00 Min, Max and Mean Asking Rates of Hotels Compared to Subject Project 64 Market Feasibility
Summary of ADR in the Market
Subject Project ADR $120.00
The Company’s ADR
assumption/expectation for
the Subject Project appears
reasonable when compared
to market rates.

ADR: $242.86
ADR: $131.32
ADR: $120.00
ADR: $203.72
Excellent Very good Medium Weak
ADR: $230.38
ADR: $297.69
Max Asking Rate
Min Asking Rate
ADR: $280.16
197
The Great Smoky Mountains
Smith Travel
Research Report Analysis
198
66 Market Feasibility
Smith Travel Research STR Report – Hotels in the Market Area

0.0 20.0 40.0 60.0 80.0 100.0
2017
2018
2019
2020
2021
Avg
Occupancy
December November October September August July
June May April March February January

53.1 Percent
May 2020
Min
Occupancy

93.4 Percent
March 2021
Max
Occupancy

81.5 Percent
Aug 2017 – April 2021
Avg.

Occupancy
Company Projections Vs. Market Area
OptimisticConservative Reasonable

82.0 – 85.0 Percent
Stabilized
Company
Expectations
Average
199
67 Market Feasibility
Smith Travel Research STR Report – Hotels in the Market Area -10.00 10.00 30.00 50.00 70.00 90.00 110.00 130.00 2017
2018
2019
2020
2021
Avg
ADR
December November October September August July
June May April March February January
$96.44
May 2020
Min
ADR
$129.26
August 2019
Max
ADR
$118.10
Aug 2017 – April 2021
Avg.

ADR
200
68 Market Feasibility
Smith Travel Research STR Report –Hotels in the Market Area -10.00 10.00 30.00 50.00 70.00 90.00 110.00
2017
2018
2019
2020
2021
Avg
RevPAR
December November October September August July
June May April March February January
$51.17
May 2020
Min
RevPAR
$114.72
October 2018
Max
RevPAR
$96.76
Aug 2017 – April 2021
Avg.

RevPAR
201
69 Market Feasibility
Smith Travel Research STR Report – Hotels in the Market Area

65.00 70.00

75.00 80.00

85.00 90.00
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
January February March April May June July August September October November December Demand Versus Supply (Average 2017 - 2021)
Demand Supply Occupancy
202
70 Market Feasibility
Market Area Dilution Analysis

50.00%

55.00%

60.00%

65.00%

70.00%

75.00%

80.00%

85.00%
Year 1 Year 2 Year 3 Year 4 Year 5
Occupancy

65.00 Percent
Threshold
Based on the supply and demand analysis (pre-COVID) within the market area, it appears as though occupancy will likely remain above 65 percent over the next five years. 203
71 Market Feasibility
Summary of Occupancy, RevPAR, ADR and Demand in the Market Area

81.5%
Smith Travel
Research Report
Occupancy Rate
-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%
Occupancy ADR RevPAR Demand
Percentage Change from Previous Year (Average)

82.0%
to

85.0%
Company
Forecasts
Excellent Very good Medium Weak

80.4 Percent Weekend
Occupancy

78.4 Percent Weekday
Occupancy
No Risks
Identified
All Key
Parameters
Room: 124
Room Nights: 45,260
Subject
Project
Based on the STR report, the Subject Project’s rooms are expected to be absorbed in the market area.

Approx. 124-Keys
Construction Pipeline
New Hospitality
Supply Units
204
3,937 584 2,755 749 2,947 4,242 124
15,338
Current Room Counts within 15 Mile Radius
72 Market Feasibility
Subject Project Penetration Rate:
• The graph, derived from data obtained from Smith Travel Research, shows hotel types and room counts in a 15-mile radius from the Subject Project.
• This geographic footprint contains about 15,338 total rooms which accounts for about 5,460,328 total room nights.
• The Subject Project plans call for 128 keys, which is 46,720 room nights, and represents a penetration rate of ~ 0.8 percent of the total market. • Based on the STR report, it appears as though the Subject Project rooms will be absorbed in the market area as the demand for the market appears to be growing at a CAGR of ~16.30 percent.

3.25%

21.92%

4.65%

17.09%

4.34%

3.02%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%
Subject Project Penetration of Various
Hotel Classes Within 15 Miles
Independent
Upper Upscale
Upscale
Midscale
Economy
Upper Midscale

25.67%

3.81%

17.96%

4.88%

19.21%

27.66%

0.81%
Room Stocks Percentage
Independent
Upper Upscale
Upscale
Midscale
Economy
Upper Midscale
Under Construction
Total Room
Nights
5,460,328
room nights15,338 keys

0.80 Percent of the
total market area
Subject Project
Market Share
205
Discuss adequacy of management (experience, training, and education of management).

Leadership Team
73 Market Feasibility
Hero Hotels, LLC
The Company is a fully integrated real estate development company specializing in hotel development with a focus in the California and Texas market areas. The Company also specializes in asset management, hotel property management, and revenue management, with a strong focus on an aggressive sales and marketing strategies, so that their hotels are run at maximum efficiencies.

Company principals have owned, operated, and developed real estate assets for the last thirty years and have partnered with well-known franchises such as Holiday Inn Express, Best Western, Days Inn, Ramada, Four Points and Choice.

Dipak Patel| Founder &
Principal- Operations
Focus: Hotel Operations
Education: UCLA, Bachelors of Science- Bachelors of Science in Economics Other: Owner and Operator of Hotels for 30 plus years in Southern California; liaison to the community relations and experience entrepreneur.

Amar Patel| Founder &
Principal- Development
Focus: Acquisitions, real estate development, construction, design & architecture Education: University of Southern California (USC), Bachelors in Business Administration, Real Estate Finance, Masters of Science (USC) for Construction Management
Other: USC Construction Alumni Group, Founder; 10 plus years in Project Management with RD Olson Construction. 206
A complete listing of proposed facilities,
amenities, and services (i.e.: number and type
of rooms, meeting space square footage,
recreational amenities, business services such
as data ports-workstations-etc., refrigerators in
room, laundry service, restaurant-coffee shop-
food service, etc.);
See PP55, 56.

History of proposed developer and potential
operators (i.e.: years in business, principals,
capitalizing, experience, listing of projects,
number of units owned, average rates charged,
occupancy rates, etc.);
See P73.

Analysis of economic environment projecting
likely future economic conditions as they
relate to the operation of the subject hotel;
See PP9-17.
74 Market Feasibility
Subjects competitive market (i.e.: identification
of their market, 3 and 5 year history of
occupancy, average daily rate, revenue per
available room trends for that market,
estimated share of the market the hotel will
capture during the first five years of operation,
etc.);
See PP57-72.

Analysis of the economic impacts on existing
hotel markets within Ontario (i.e.: estimate of
the dilution of the market due to addition of
proposed hotel, etc.). Note: new hotel projects
should only be approved if competitive market
occupancy remains at or above 65 percent for
a five year projection period;
See PP70-72.

Relationship to demand generators (i.e.: airport,
convention center, corporate market,
shopping and entertainment);
See PP45-54.

Public cost/revenue projections.

This item does not apply to the Subject Project
as planned.
207
The Great Smoky Mountains
Project Experience (Partial List)
• Upscale Hotels in California
• Midscale Hotels in California
• Midscale Hotels in Arizona
• Luxury Hotels in Florida
• Luxury Hotels in California
• Midscale Hotels in Texas
• Upper Midscale Hotels in California
• Cannabis Grow House Expansion in Florida
• Hydroponic Facility acquisition in Puerto Rico
• Hydroponic in Florida
• Retail Fruits and Vegetables project in Hurst, Texas
• Indoor Sports Complex in Texas
• Indoor Sports Complex in North Carolina
• Indoor Game Center in New Jersey
• Squash Academy in New Jersey
• Neighborhood Retail Center in Florida
• Biofuel Facility in Hawaii
• Hospitals in Louisiana
• Mobile Home Parks in Louisiana
• Cold Storage Facility in Wisconsin
• Cold Storage Facility in New Jersey
• Self Storage Facility in Texas
• Car Wash in California
• Medical Waste to Energy in Rhode Island
• Wheat, Corn and Forage Operation
• Frac Sand Manufacturing Plant
• 52 Oil and Gas Wells in Kentucky
• Golf Center and Hotel in Colorado
• Indoor Gym & Wellness Center in Idaho
• Indoor Sports Complex in North Carolina
• Nursery and Landscaping in Maryland
• Assisted Living and Memory Care in Michigan
• Marina Expansion in Kentucky
• Apartment Complex in Texas
• Football Stadium in Riyadh
• Pipe Factory in Sweden
208
Resume of the Analyst
International Publications/Awards
― Investment Foundations certificate by CFA Institute, ID: 204095 ― Financial Modelling and Valuation Analyst, ID: 21257732 ― Capital Market and Securities Analyst, ID: 22013916
― Certified Banking and Credit Analyst, ID: 22717302
― Hotel Valuation, American Appraisal Institute, ID: 2637 ― Forecasting Revenue, American Appraisal Institute, ID: 2637 ― CFA level 1 (Passed), ID: 9445336
― Project Management (University of New South Wales), ID: 3250978 ― Business Management (University of New South Wales), ID: 3250978 ― Crystal Ball (Oracle), ID: 41909
― University of New South Wales, Australia– Master with Business Management, ID: 3250978
― University of Engineering and Technology, ID: 100312
― International Merger & Acquisition Expert ID: 592
― Merger & Acquisition Professional ID: 593
Standardizing your
expectations
May 8, 2016 publication

Page 64 ends

Ontario City CouncilMay 3, 2022

Ontario City Council
May 3, 2022