Agenda packet — Ontario City Council, December 6, 2022 (part 1 of 2)

CITY OF ONTARIO
Regular City Council/Housing Authority
Meeting

DECEMBER
6, 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.

ACCOMODATIONS

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

ATTACHMENT:

20221206 Closed Session
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 Closed Session and Closed Session Comment at 5:30 p.m., 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. (EQUIPMENT FOR THE HEARING IMPAIRED

AVAILABLE IN THE RECORDS MANAGEMENT OFFICE)

CALL TO ORDER
(OPEN SESSION)

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

CLOSED SESSION PUBLIC COMMENT

The Closed Session Public Comment portion of the Council/Housing Authority meeting is limited to a maximum of 3 minutes for each speaker and comments will be limited to matters appearing on the Closed Session. Additional opportunities for further Public Comment will be given during and at the end of the meeting.

CLOSED SESSION
GC 54956.9(d)(4), CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION Three (3) Cases

GC 54956.9(d)(1), CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Chino Basin Municipal Water District v. City of Chino et al., San Bernardino Superior Court Case No. RCVRS51010

GC 54956.9(d)(1), CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION City of Ontario v. Inland Empire Utilities Agency, San Bernardino Superior Court Case No. CIVSB 2211925

PLEDGE OF ALLEGIANCE
Council Member Bowman

INVOCATION
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:

20221101 Minutes (Not Official Until Approved).pdf
Richard Hernandez The Church of God

REPORT ON CLOSED SESSION
City Attorney
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 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 November 1, 2022 and approving same as on file in the Records Management Department.

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

2. BILLS & PAYROLL

3. AN AMENDMENT TO FIRSTWATCH SOFTWARE, SUPPORT AND MAINTENANCE CONTRACT

4. A DESIGN SERVICES AGREEMENT FOR THE ATP CYCLE 5 - VINE AVENUE & B STREET BIKE

BOULEVARD PROJECT

ATTACHMENT:

ATP 5 - Project Location Map.pdf

5. MASTER SUBSCRIPTION AGREEMENT WITH WORKVIVO LIMITED FOR THIRD PARTY

INTRANET SERVICES

6. AUTHORIZE THE PURCHASE OF MOBILE SOUND SHELL STAGE

7. ADOPTION OF ORDINANCES APPROVING THE 2021 INTERNATIONAL FIRE CODE AND THE 2022 CALIFORNIA BUILDING AND FIRE CODES ADOPTED BY THE CALIFORNIA BUILDING

STANDARDS COMMISSION IN THE CALIFORNIA CODE OF REGULATIONS Bills October 28, 2022 through November 10, 2022, and Payroll October 23, 2022 through November 5, 2022 when audited by the Finance Committee.

That the City Council approve and authorize the City Manager, or his designee, to execute Amendment No. 1 to the Software License Agreement with FirstWatch Solutions, Inc. of Carlsbad, California to provide software, support, and maintenance in the amount of $186,326.

That the City Council approve a Design Services Agreement (on ﬁle in the Records Management Department) with Mark Thomas & Company, Inc., of Rancho Cucamonga, California, to provide Engineering Design Services for the Active Transportation Program (ATP) Cycle 5 - Vine Avenue & B Street Bike Boulevard Project, in the amount of $520,000; and authorize the City Manager, or his designee, to execute said Agreement and future amendments within the authorization limits.

Authorize the City Manager or his designee to execute a Master Subscription Agreement (on ﬁle in the Records Management Department) with Workvivo Limited, Boonton New Jersey, for up to three years, for an amount not to exceed $231,980.

That the City Council authorize the cooperative purchase of the ShowMaster 3000 Series, Mobile Sound Shell Stage for the Recreation & Community Services Department in the amount of $201,985 from Century Industries, LLC of Sellersburg, Indiana, consistent with the terms and conditions of the California Department of General Services, California Multiple Award Schedule No. 4-18-78-0088B.

That the City Council approve and adopt:

A
.

An Ordinance amending Chapter 4, Title 4 of the Ontario Municipal Code entitled "Fire Code" adopting by reference, with certain amendments, additions, deletions, and exceptions, the 2021 International Fire Code and the 2022 California Fire Code (California CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 4

ATTACHMENT:

FIRE CODE ADOPTION 01^ORD^RM

ATTACHMENT:

BUILDING CODE ADOPTION^02^ORD^RM

8. A RESOLUTION ORDERING THE SUMMARY VACATION OF A SEWER EASEMENT

ATTACHMENT:

20221206 Vacation V-303 Exhibit_A^01

ATTACHMENT:

20221206 Vacation V-303 RESO^02^RM

ATTACHMENT:

20221206 Vacation V-303 RESO Exhibit AB^03

9. AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH KOFF AND

ASSOCIATES FOR A CLASSIFICATION AND COMPENSATION STUDY FOR THE PUBLIC WORKS

AGENCY AND SPECIALIZED SUPPORT FOR SPECIALIZED RECRUITMENT ACTIVITIES Code of Regulations, Title 24, Part 9); and
B
.

An Ordinance amending Chapters 1, 2, 3, 4, 5, 6, 7, 10,11, 12, and 14 of Title 8 of the Ontario Municipal Code to adopt the California Building Standards Code by reference, with certain amendments, additions, and deletions.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTER 4 OF TITLE 4 OF THE ONTARIO MUNICIPAL CODE; ADOPTING

BY REFERENCE WITH CERTAIN AMENDMENTS, ADDITIONS, DELETIONS, AND CHANGES THERETO, THE 2022 CALIFORNIA FIRE CODE AND THE 2021

INTERNATIONAL FIRE CODE, PROVIDING FOR THE RECOVERY OF COSTS AND COLLECTION OF FEES; AND REPEALING ORDINANCE NO. 3062 OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTERS 1, 2, 3, 4, 5, 6, 7, 10, 11, 12, AND 14 OF TITLE 8 OF THE ONTARIO MUNICIPAL CODE, ADOPTING BY REFERENCE THE 2022 EDITION OF THE CALIFORNIA BUILDING STANDARDS CODE, INCORPORATING THE 2022 CALIFORNIA ADMINISTRATIVE CODE, THE 2022 CALIFORNIA BUILDING CODE, THE 2022 CALIFORNIA MECHANICAL CODE, THE 1997 CALIFORNIA HOUSING CODE, THE 2022 CALIFORNIA ELECTRICAL CODE, THE 2022 CALIFORNIA RESIDENTIAL CODE, THE 2022 CALIFORNIA PLUMBING CODE, THE 2022 CALIFORNIA ENERGY CODE, THE 2021 INTERNATIONAL PROPERTY MAINTENANCE CODE, THE 2022 CALIFORNIA GREEN BUILDING STANDARDS CODE, THE 2022 HISTORIC BUILDING CODE, 2022 CALIFORNIA EXISTING BUILDING CODE, AND THE 2022 CALIFORNIA REFERENCED STANDARDS, TOGETHER WITH CERTAIN AMENDMENTS THERETO.

That the City Council adopt a Resolution ordering the summary vacation of a sewer easement located approximately 1,000 feet north of Francis Street and approximately 30 feet west of Cucamonga Avenue.

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

ORDERING THE SUMMARY VACATION OF A SEWER EASEMENT LOCATED APPROXIMATELY 1,000 FEET NORTH OF FRANCIS STREET AND APPROXIMATELY 30 FEET WEST OF CUCAMONGA AVENUE.

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

10. A PROFESSIONAL SERVICES AGREEMENT WITH GEORGE HILLS, INC. FOR THIRD-PARTY

LIABILITY CLAIMS ADMINISTRATION SERVICES

11. ACCEPT AND APPROVE LAW ENFORCEMENT GRANT PROGRAM FOR FISCAL YEAR 2022-23

12. ACCEPT AND APPROVE LAW ENFORCEMENT GRANT PROGRAM FOR FISCAL YEAR 2021-22

13. AN AGREEMENT WITH MERCY HOUSE LIVING HOUSE CENTERS FOR ENHANCED SERVICES

AND OPERATION OF THE EMERGENCY MOTEL VOUCHER PROGRAM

14. PURHASE AUTHORIZATION FOR ENGINE OVERHAUL OF A POLICE HELICOPTER

15. STATEWIDE PER CAPITA GRANT PROGRAM FUNDS FOR SAM ALBA MEMORIAL PARK

REHABILITATION

That the City Council approve and authorize the City Manager to execute Amendment No.1 to the Professional Services Agreement (on ﬁle with the Records Management Department) with Koﬀ and Associates, a division of Gallagher Beneﬁt Services Inc., of Berkeley, California, for a total not-to-exceed amount of $242,885 and a term from
December 22, 2022 through
December 22, 2025.

Authorize the City Manager or his designee to execute a Professional Services Agreement (on ﬁle with the Records Management Department) with George Hills, Inc., Ontario California, for up to three years, with the option to automatically renew the agreement for two additional one-year terms, for an amount not to exceed $478,748.

That the City Council

authorize the City Manager or his designee to execute all documents necessary to accept and approve the Citizen's Option for Public Safety (COPS) / Enhancing Law Enforcement Activities Subaccount (ELEAS) Grant for Fiscal Year 2022-23.

That the City Council authorize the City Manager or his designee to execute all documents necessary to accept and approve the Citizen's Option for Public Safety (COPS) / Enhancing Law Enforcement Activities Subaccount (ELEAS) Grant for Fiscal Year 2021-22.

That the City Council approve and authorize the City Manager or designee to execute a one- year agreement with Mercy House Living Centers, of Santa Ana, California, for supplemental hours at the Ontario Access Center, and operate the Emergency Motel Voucher Program, for a not-to-exceed amount of $105,000.

That the City Council authorize the City Manager to execute a sole source purchase contract with Safran Helicopter Engines USA, Inc. of Grand Prairie, Texas in the approximate amount of $500,000 to overhaul the engine of one of the City's Police Air Support helicopters.

That the City Council authorize the City Manager or designee to accept $286,906 of funding provided by the State Department of Parks and Recreation for the Statewide Per Capita Grant Program.

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

16. RESOLUTIONS UPDATING AUTHORIZED DEPUTY CITY TREASURERS AND UPDATED

INVESTMENT POLICY

ATTACHMENT:

20221206 Resolution Updating Authorized Deputy City Treasurers^02 RESO- Local Agency Investment Fund^RM.docx

ATTACHMENT:

20221206 Resolution Updating Authorized Deputy City Treasurers^03 RESO- City Funds^RM.docx

ATTACHMENT:

20221206 Investment Policy (2022)^EXHIBIT A.docx

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

APPROVING A FIFTH AMENDMENT TO DECLARATION OF ANNEXATION AND PROVIDING

CITY MANAGER AUTHORITY REGARDING THE ONTARIO CENTER OWNERS ASSOCIATION

AND THE PIEMONTE AT ONTARIO CENTER OWNERS ASSOCIATION

ATTACHMENT:

TOCOA RESO^01^RM

18. A RESOLUTION APPROVING A DISPOSITION AND

DEVELOPMENT AGREEMENT BETWEEN

THE CITY OF ONTARIO AND EUCLID INVESTMENT GROUP, LLC,

WITH RESPECT TO
APPROXIMATELY 1.19 ACRES OF LAND LOCATED AT THE SOUTHEAST CORNER OF D STREET AND LEMON AVENUE, APN'S: 1048-556-01, 1048-556-02, 1048-556-03, 1048-556-04, 1048- 556-05, AND 1048-556-14,
IN ACCORDANCE WITH GOVERNMENT CODE SECTION 37350 ET.

SEQ.

That the City Council adopt Resolutions rescinding Resolution Nos. 2021-164 and 2021-165; and amending the list of Deputy City Treasurers authorized to invest City funds in the Local Agency Investment Fund (LAIF) and other eligible investment securities and consider and approve the update to the City of Ontario’s Investment Policy.

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

PROVIDING FOR THE INVESTMENT OF INACTIVE FUNDS IN THE LOCAL AGENCY

INVESTMENT FUND OF THE CALIFORNIA STATE TREASURY AND HEREBY RESCINDING RESOLUTION NO. 2021-164.

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

AUTHORIZING THE INVESTMENT OF CITY FUNDS AND HEREBY RESCINDING RESOLUTION NO. 2021-165.

That City Council adopt a resolution approving a Fifth Amendment to the Ontario Center Owner's Association Declaration of Annexation (on ﬁle in the Records Management Department) and authorize the City Manager or his designee to sign all documents necessary to implement said Amendment.

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

APPROVING A FIFTH AMENDMENT TO DECLARATION OF ANNEXATION AND

PROVIDING CITY MANAGER AUTHORITY REGARDING THE ONTARIO CENTER

OWNERS ASSOCIATION AND THE PIEMONTE AT ONTARIO CENTER OWNERS ASSOCIATION.

CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 7

ATTACHMENT:

Euclid Investment Group DDA Reso^02^RM.docx

ATTACHMENT:

Euclid Investment Group DDA Reso Exh A^03

19. A FIRST AMENDMENT TO A PROFESSIONAL SERVICES AGREEMENT FOR ON-CALL LAND

ACQUISITION, RELOCATION AND PROPERTY MANAGEMENT SERVICES

20. A PUBLIC HEARING TO CONSIDER AN ORDINANCE FOR A PLANNED UNIT DEVELOPMENT (FILE NO. PUD20-001) AT 549 WEST HOLT BOULEVARD
That the City Council (“City”) consider and:

A
.

Adopt a Resolution approving the Disposition and Development Agreement (“Agreement”) between the Euclid Investment Group, LLC. (“Developer”) (on ﬁle with the Records Management Department).

B
.

Authorize the City Manager, or his designee, to sign all documents necessary to implement the Agreement.

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

APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY

OF ONTARIO AND EUCLID INVESTMENT GROUP, LLC, WITH RESPECT TO APPROXIMATELY 1.19 ACRES OF LAND LOCATED AT THE SOUTHEAST CORNER OF D STREET AND LEMON AVENUE, APN'S: 1048-556-01, 1048-556-02, 1048-556-03, 1048-556-04, 1048-556-05, AND 1048-556-14,

IN ACCORDANCE WITH
GOVERNMENT CODE SECTION 37350 ET. SEQ.

That the City Council (“City”) approve and authorize the City Manager or his designee to execute Amendment No. 1 to a Professional Services Agreement with Overland, Paciﬁc & Cutler, LLC in the not-to-exceed amount of $200,000.

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 introduce and waive further reading of an Ordinance approving a Planned Unit Development, File No. PUD20-001, establishing development standards, design guidelines, and infrastructure requirements to facilitate the development of a mixed-use project located at 549 West Holt Boulevard.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PUD20-001, A PLANNED UNIT DEVELOPMENT (THE

ROOSEVELT TOWER PLANNED UNIT DEVELOPMENT) ESTABLISHING DEVELOPMENT

STANDARDS, DESIGN GUIDELINES, AND INFRASTRUCTURE REQUIREMENTS FOR CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 8

ATTACHMENT:

File No. PUD20-001^01 PC Backup

ATTACHMENT:

File No. PUD20-001^02^ORD^RM

ATTACHMENT:

File No. PUD20-001^03 ORD-PUD ATTACHMENT A

21. A PUBLIC HEARING TO INTRODUCE AN ORDINANCE ADOPTING A MAP FOR THE DISTRICT-

BASED ELECTIONS UNDER THE CALIFORNIA VOTING RIGHTS ACT

ATTACHMENT:

Changing to By-District Election^ORD^RM

22. ORDINANCES REVISING THE CITY'S MUNICIPAL CODE BY (1) ADDING BARKING DOG VIOLATIONS AND CIVIL FINES, (2) AMENDING VARIOUS CODE ENFORCEMENT PROCEDURES, (3) ADOPTING STANDARDS FOR OVERSIZED VEHICLE PARKING AND FURTHER REGULATING COMMERCIAL VEHICLES, (4) ESTABLISHING ADMINISTRATIVE PENALTIES FOR VIOLATIONS OF THE ONTARIO FIRE CODE, (5) AMENDING PARKING RESTRICTIONS RELATED TO STREET SWEEPING AND TRASH COLLECTION, (6) AMENDING

AND CLARIFYING PERFORMANCE STANDARDS, REPORTING OBLIGATIONS, AND ENFORCEMENT OUTCOMES RELATED TO THE TRANSIENT OCCUPANCY TAX, (7)

IMPLEMENTING REGULATIONS FOR THE SHORT TERM RENTAL OF PROPERTY IN THE CITY, (8) UPDATING PENALTIES FOR THE ILLEGAL CULTIVATION OF CANNABIS, (9)

ESTABLISHING REGULATIONS PROHIBITING THE UNLAWFUL POSSESSION OF CATALYTIC CONVERTERS IN THE CITY; (10) REFLECTING UPDATES TO THE ONTARIO POLICE

DEPARTMENT COMMAND STRUCTURE

0.81-ACRE OF LAND LOCATED AT 549 WEST HOLT BOULEVARD, WITHIN THE MU- 1/LUA-3 (DOWNTOWN MIXED-USE/HOLT BOULEVARD DISTRICT) ZONING DISTRICT - APN: 1049-021-09.

That the City Council introduce an Ordinance adding

a new article 3 to title 2 of volume 1 of
the Ontario Municipal Code to change the city’s electoral system from at-large to by-district elections.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING A NEW ARTICLE 3 TO TITLE 2 OF VOLUME 1 OF THE ONTARIO MUNICIPAL CODE TO CHANGE THE CITY’S ELECTORAL SYSTEM FROM AT-LARGE TO BY-

DISTRICT ELECTIONS WITH RESPECT TO ELECTING CITY COUNCIL MEMBERS AND

MAINTAINING AN ELECTIVE MAYOR, ESTABLISHING DISTRICT BOUNDARIES,

SCHEDULING ELECTIONS WITHIN THE DISTRICTS, AND MAKING CERTAIN FINDINGS PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT.

ADMINISTRATIVE REPORTS/DISCUSSION/ACTION
That the City Council consider and take action in:

A
.

Adopting an Ordinance to repeal certain sections of the Ontario Municipal Code and add a new Article 2.5 to Chapter 1 of Title 6, relating to the City’s regulation of barking dog violations and methods of enforcement related thereto.

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

Adopting an Ordinance to amend certain sections of the Ontario Municipal Code, relating to the City’s code enforcement procedures, including administrative civil penalties, citations, and appeals.

C
.

Adopting an Ordinance to amend Sections 4-6.1009 and 4-6.1016 of Article 10 of Chapter 6 of Title 4 of the Ontario Municipal Code, add Section 4-6.1117 to Article 1 of Chapter 6 of Title 4 of the Ontario Municipal Code, and add Section 4-6.1020 to Article 10 of Chapter 6 of Title 4 of the Ontario Municipal Code adopting standards for oversized vehicle parking and further regulating the parking of commercial vehicles.

D
.

Adopting an Ordinance to add Section 4-4.27 to Chapter 4 of Title 4 of the Ontario Municipal Code, relating to the City’s enforcement of the provisions of the Ontario Fire Code.

E
.

Adopting an Ordinance to amend Section 4-6.1019 of Article 10 of Chapter 6 of Title 4 of the Ontario Municipal Code, relating to parking restrictions on public streets for street sweeping and trash collection.

F
.

Adopting an Ordinance to amend Chapter 6 of Title 3 of the Ontario Municipal Code, relating to performance standards, reporting obligations, and enforcement outcomes related to the transient occupancy tax.

G
.

Adopting an Ordinance to add Section 5.03.363 to Division 5.03 of Chapter 5 of the Ontario Development Code, relating to regulations of short-term rentals.

H
.

Adopting an Ordinance to amend Chapter 18 of Title 6 of the Ontario Municipal Code, relating to penalties for the illegal cultivation of cannabis.

I
.

Adopting an Ordinance to add Chapter 24 to Title 4 of the Ontario Municipal Code relating to the prohibition of unlawful possession of catalytic converters in the City.

J
.

Adopting an Ordinance to amend Section 2-3.210 of Article 2 of Chapter 3 of Title 2 of the Ontario Municipal Code reﬂecting updates to the Ontario Police Department command structure.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, REPEALING SECTIONS 6-1.217 THROUGH 6-1.223 OF ARTICLE 2 OF CHAPTER 1 OF TITLE 6 OF THE ONTARIO MUNICIPAL CODE, AND ADDING ARTICLE 2.5, “BARKING DOG AND NOISY ANIMAL VIOLATIONS AND CIVIL FINES,” TO CHAPTER 1 OF TITLE 6

OF THE ONTARIO MUNICIPAL CODE

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTERS 1-2, 1-4, 1-5, 2-11, 4-6, AND 5-22 OF THE ONTARIO MUNICIPAL CODE RELATED TO VARIOUS CODE ENFORCEMENT PROCEDURES.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING SECTIONS 4-6.1009 AND 4-6.1016 OF ARTICLE 10 OF CHAPTER 6 OF TITLE 4 OF THE ONTARIO MUNICIPAL CODE, ADDING SECTION 4-6.1117 TO ARTICLE 1 OF CHAPTER 6 OF TITLE 4 OF THE ONTARIO MUNICIPAL CODE, AND ADDING SECTION 4-6.1020 TO ARTICLE 10 OF CHAPTER 6 OF TITLE 4 OF THE

ONTARIO MUNICIPAL CODE ADOPTING STANDARDS FOR OVERSIZED VEHICLE PARKING AND FURTHER REGULATING COMMERCIAL VEHICLES.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING SECTION 4-4.27 TO CHAPTER 4 OF TITLE 4 OF THE ONTARIO MUNICIPAL CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 10

ATTACHMENT:

Barking Dog and Noisy Animal Violations and Civil Fines^ORD^01^RM

ATTACHMENT:

Code Enforcement Update Amendment ORD^02^RM

ATTACHMENT:

Oversized Vehicle Parking^ORD^03^RM

ATTACHMENT:

Administrative Citations for Fire Code Violations ORD^04^RM

ATTACHMENT:

Trash Collection Parking Restrictions^ORD^05^RM.docx

ATTACHMENT:

Updating Transient Occupancy Tax Chapter ORD^06^RM

ATTACHMENT:

Short Term Rentals^ORD^07^RM

ATTACHMENT:

Cannabis Enforcement ORD^08^RM

ATTACHMENT:

Catalytic Converter Possession^ORD^09^RM

ATTACHMENT:

Deputy Police Chief Powers and Responsibilities^ORD^10^RM

CODE ESTABLISHING ADMINISTRATIVE PENALTIES FOR VIOLATIONS OF THE ONTARIO FIRE CODE.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING SECTION 4-6.1019, “RESTRICTED PARKING FOR STREET SWEEPING SERVICES,” OF THE CITY’S MUNICIPAL CODE TO PROVIDE FOR RESTRICTED PARKING FOR PURPOSES OF TRASH COLLECTION.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTER 6, “TRANSIENT OCCUPANCY TAXES,” OF TITLE 3 OF THE ONTARIO MUNICIPAL CODE.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING A NEW SECTION 5.03.363, “SHORT TERM RENTALS,” TO DIVISION 5.03 OF CHAPTER 5 OF THE ONTARIO DEVELOPMENT CODE, IMPLEMENTING REGULATIONS FOR THE SHORT TERM RENTAL OF PROPERTY IN THE CITY.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTER 18 OF TITLE 6 OF THE ONTARIO MUNICIPAL CODE UPDATING PENALTIES FOR THE ILLEGAL CULTIVATION OF CANNABIS.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING CHAPTER 24 (UNLAWFUL POSSESSION OF A CATALYTIC CONVERTER PROHIBITED) OF TITLE 4 (PUBLIC SAFETY) OF THE ONTARIO MUNICIPAL CODE,

ESTABLISHING REGULATIONS PROHIBITING THE UNLAWFUL POSSESSION OF CATALYTIC CONVERTERS IN THE CITY.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING SECTION 2-3.210 OF ARTICLE 2 OF CHAPTER 3 OF TITLE 2 OF THE

ONTARIO MUNICIPAL CODE REFLECTING UPDATES TO THE ONTARIO POLICE DEPARTMENT COMMAND STRUCTURE.

STAFF MATTERS

City Manager Ochoa
CITY OF ONTARIO Regular City Council/Housing Authority Meeting CITY HALL 303 EAST B STREET, ONTARIO CA 91764 • www.OntarioCA.gov 11

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 12

Page 1 of 2 ends

CITY OF ONTARIO

CLOSED SESSION REPORT
City Council // Housing Authority // Other // (GC 54957.1) December 6, 2022
ROLL CALL: Wapner _, Bowman _, Dorst-Porada _, Valencia _, Mayor / Chairman Leon _.

STAFF: City Manager / Executive Director __, City Attorney __ In attendance: Wapner _, Bowman _, Dorst-Porada _,Valencia _, Mayor / Chairman Leon _.  GC 54956.9(d)(4), CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION:

Three (3) Cases
No Reportable Action Continue Approved
/ / / / / /
Disposition: _________________________________________________________________ In attendance: Wapner _, Bowman _, Dorst-Porada _,Valencia _, Mayor / Chairman Leon _.  GC 54956.9(d)(1), CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Chino Basin Municipal Water District v. City of Chino et al., San Bernardino Superior Court Case No. RCVRS51010
No Reportable Action Continue Approved
/ / / / / /
Disposition: _________________________________________________________________ 13

Page 2 of 2 ends

CITY OF ONTARIO

CLOSED SESSION REPORT
City Council // Housing Authority // Other // (GC 54957.1) December 6, 2022
(Continued)
In attendance: Wapner _, Bowman _, Dorst-Porada _,Valencia _, Mayor / Chairman Leon _.  GC 54956.9(d)(1), CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION City of Ontario v. Inland Empire Utilities Agency, San Bernardino Superior Court Case No. CIVSB 2211925
No Reportable Action Continue Approved
/ / / / / /
Disposition: _________________________________________________________________ Reported by:
___________________________________________
City Attorney / City Manager / Executive Director
14 ONTARIO CITY COUNCIL/

ONTARIO HOUSING AUTHORITY

MINUTES
NOVEMBER 1, 2022
(Not Official Until Approved)

(Not Official Until Approved)

JOINT MEETINGS

The regular meetings of the Ontario City Council and Housing Authority were held on Tuesday, November 1, 2022 at Ontario City Hall, 303 E. B Street Ontario, California.

CALL TO ORDER

Mayor Leon called the joint meetings to order at 6:30 p.m.

ROLL CALL

PRESENT: Mayor/Chairman Paul S. Leon
Mayor pro Tem/Vice Chair: Alan D. Wapner
Council/Authority Members: Jim W. Bowman, Debra Dorst -Porada and Ruben Valencia

ABSENT: Council/Authority Members: None.

Also present were City Manager / Executive Director Scott Ochoa , City Attorney/Legal Counsel Ruben Duran, and City Clerk / Secretary Sheila Mautz.

PLEDGE OF ALLEGIANCE

The Pledge of Allegiance was led by Council Member Debra-Dorst-Porada.

INVOCATION

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

SPECIAL CEREMONIES

A SPECIAL CEREMONY AND PRESENTATION RECOGNIZING WINNERS OF

RECREATION & COMMUNITY SERVICES PROGRAMMING
City Council recognized the winner s of Recreation & Community S ervices Halloween programs.

Mayor Leon recessed the meeting at 6:53 p.m. and reconvened at 7:00 p.m.

15 Ontario City Council/Ontario Housing
Regular Meeting Minutes – November 1, 2022

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PUBLIC HEARINGS

12. A PUBLIC HEARING TO REVIEW INITIAL DRAFT DISTRICTING MAPS FOR THE

DISTRICT-BASED ELECTIONS UNDER THE CALIFORNIA VOTING RIGHTS

ACT AND INTRODUCE AN ORDINANCE TO ADOPT A MAP

The City Council opened a Public Hearing, review ed, considered, and provided direction regarding the draft maps, and introduced an Ordinance to adopt a map.

ORDINANCE NO. 3224 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, ADDING A NEW ARTICLE 3 TO TITLE 2 OF VOLUME 1 OF THE ONTARIO MUNICIPAL CODE TO CHANGE THE CITY’S

ELECTORAL SYSTEM FROM AT -LARGE TO BY- DISTRICT ELECTIONS WITH

RESPECT TO ELECTING CITY COUNCIL MEMBERS AND MAINTAINING AN

ELECTIVE MAYOR, ESTABLISHING DISTRICT BOUNDARIES, SCHEDULING

ELECTIONS WITHIN THE DISTRICTS, AND MAKING CERTAIN FINDINGS PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT.

Notice of public hearing was duly given and affidavits of compliance are on file in the Records Management Department. There were four written communi cations from the following:

Loree Masonis, in opposition of districting.

Melissa May, in support of Map #17.

Estela Ballon, in support of Map #17.

Rosalina Mira, in support of Maps #10, and #17.

Mayor Leon opened the public hearing.

Assistant City Attorney Guiboa presented Map #17 and a suggested sequencing.

Scott Rafferty, spoke and encouraged City Council to accept Map #17.

Chris Robles, spoke in support of Map #17 and suggested sequence 2 and 4 in 2024 and 1 and 3 in 2026.

Yasmine Ramirez, spoke in support of Map #17.

Gabriela Mendez, spoke in support of Map #17.

Anthony Noriega, spoke in support of Map #17 and suggested sequence 2 and 4 in 2024 and 1 and 3 in 2026.

Yolanda Brown, spoke in support of Map #17 and suggested sequence 2 and 4 in 2024 and 1 and 3 in 2026.

16 Ontario City Council/Ontario Housing
Regular Meeting Minutes – November 1, 2022

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Ana Gonzalez, spoke in support of Map #17 and suggested sequence 2 and 4 in 2024 and 1 and 3 in 2026.

Randy Bekendam, spoke in support of Map #17 and suggested sequence 3 and 4 in 2024 and 1 and 2 in 2026.

Judy Jacobs, spoke in support of Map #17 and suggested sequence 2 and 4 in 2024 and 1 and 3 in 2026.

Maria Galvan, spoke in support of Map # 17 and suggested sequence 2 and 4 in 2024 and 1 and 3 in 2026.

Elizabeth Cena, spoke in support of Map #17.

Andrea Galvan, not present.

Hearing no other speakers, Mayor Leon closed the public hearing and opened the item for Council discussion.

City Council discussed the maps and focused on Map #17.

Mayor Leon recessed the public meeting at 7:42 p.m. and reconvened at 7:46 p.m.

City Council continued discussions of the maps and decided to move Map #17 forward.

MOTION: Moved by Mayor pro Tem Wapner , seconded by Council Member Dorst-Porada and carried by unanimous vote 5-0, to introduce Ordinance No. 3224.

13. A PUBLIC HEARING REGARDING THE ECONOMIC DEVELOPMENT SUBSIDY

REPORT AND A FOURTH AMENDMENT TO THE OPERATING COVENANT

AGREEMENT BETWEEN THE CITY OF ONTARIO AND MARK CHRISTOPHER CHEVROLET, INC. PURSUANT TO GOVERNMENT CODE SECTION 53083;

CONSIDERATION OF RESOLUTIONS ACCEPTING THE ECONOMIC

DEVELOPMENT SUBSIDY REPORT, APPROVING THE OPERATING

COVENANT AGREEMENT, AND MAKING RELATED FINDINGS

The City Council took the following actions:

A. Held the Public Hearing; and
B. Adopted a Resolution accepting the Economic Development Subsidy Report regarding a Fourth Amendment to the Operating Covenant Agreement ("Agreement"), (on file with the Records Management Department) by and between the City of Ontario and Mark Christopher, Inc., and authoriz ed the City Manager to execute the Agreement, and making related findings; and C. Adopted a Resolution approving the Agreement and authoriz ed the City Manager to execute the Agreement, and making related findings; and D. Directed City Staff to file a Notice of Exemption based upon the City Council's 17 Ontario City Council/Ontario Housing
Regular Meeting Minutes – November 1, 2022

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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 effect on the environment.

RESOLUTION NO. 2022-146 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 AN OPERATING COVENANT AGREEMENT BY AND BETWEEN THE CITY OF ONTARIO AND MARK CHRISTOPHER CHEVROLET, INC.

RESOLUTION NO. 2022-147 A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF ONTARIO, CALIFORNIA, APPROVING THE OPERATING COVENANT

AGREEMENT BETWEEN THE CITY OF ONTARIO AND MARK CHRISTOPHER CHEVROLET, INC. AND MAKING RELATED FINDINGS.

Notice of public hearing was 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. Hearing no speakers, Mayor Leon closed the public hearing and opened the item for Council discussion.

MOTION: Moved by Council Member Dorst-Porada, seconded by Council Member Bowman and carried by unanimous vote 5-0, to adopt Resolution Nos. 2022- 146 and 2022-147.

CONSENT CALENDAR

ITEM NO. 11 WAS PULLED FOR A SEPARATE VOTE.

MOTION: Moved by Dorst-Porada, seconded by Mayor Leon and carried by unanimous vote 5-0, to approve the Consent Calendar as presented, with the exception of Item No. 11.

1. APPROVAL OF MINUTES

Minutes for the regular meetings of the City Council and Housing Authority of October 4, 2022 and approving same as on file in the Records Management Department.

2. BILLS & PAYROLL

Bills from September 3 0, 2022 through October 13, 2022 in the amount of $12,997,454.57 and Payroll from September 25, 2022 through October 8, 2022 in the amount of $4,006,493.41 when audited by the Finance Committee.

18 Ontario City Council/Ontario Housing
Regular Meeting Minutes – November 1, 2022

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3. AMENDMENTS TO DESIGN SERVICES AGREEMENTS FOR ON -CALL

LANDSCAPE ARCHITECTURAL SERVICES FOR THE CELEBRATION PARK

NORTH IMPROVEMENTS PROJECT, DE ANZA PARK SPLASH PAD

IMPROVEMENTS PROJEC T, ONTARIO TOWN SQUARE GREEN ROOM AND

RESTROOM IMPROVEMENTS PROJECT, AND DE ANZA PARK SOCCER FIELD

SYNTHETIC TURF PROJECT

The City Council (“City”) took the following action:

A. Authorized the City Manager or his designee to execute Amendment No. 1 to the Design Services Agreement (on file in the Records Management Department) for contract No. PM 1819- 1 with Community Works Design Group of Riverside, California, to provide On- call Landscape Architectural Services for the Celebration Park North Improvements, De Anza Park Splash Pad Improvements, and Ontario Town Square Green Room and Restroom Improvements Projects in a total not-to-exceed amount of $200,000; and B. Authorized the City Manager or his designee to execute Amendment No. 1 to the Design Services Agreement (on file in the Records Management Department) for contract No. PM 1819-1 with RJM Design Group of San Juan Capistrano, California, to provide On- call Landscape Architectural Servic es for the De Anza Park Soccer Field Synthetic Turf Project in a total not -to- exceed amount of $200,000.

4. AMENDMENTS TO THE MAINTENANCE SERVICES AGREEMENT WITH

MERCHANTS FOR LANDSCAPE MAINTENANCE SERVICES FOR

EDENGLEN/SCE WALKING TRAIL AND PARKWAYS IN THE ONTARIO RANCH AREA

The City Council took the following action:

A. Authorized the City Manager or his designee to execute Amendment No. 3 to the Maintenance Services Agreement (on file with Records Management) for contract No. PM 1617-12 with Merchants Landscape Services, Inc. of Rancho Cucamonga, California, for landscape maintenance services for the Edenglen/SEC Walking Trail in the amount of $23,862 for a new not to exceed amount of $1,563,922; and
B. Authorized the City Manager or his designee to execute Amendment No. 4 to the Maintenance Services Agreement (on file with Records Management) for contract No. PM 1920-6 with Merchants Landscape Services, Inc. of Rancho Cucamonga, California, for landscape maintenance services for two parkway planter areas at Park Place located in the Ontario Ranch area in the amount of $24,878 for a new not to exceed amount of $640,209.

19 Ontario City Council/Ontario Housing
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5. AMENDMENTS TO A PROFESSIONAL SERVICES AGREEMENT WITH KLEINFELDER, INC. FOR ON- CALL GEOTECHNICAL CONSULTING, AND

MATERIALS TESTING SERVICES

The City Council took the following action:

A. Authorized the City Manager or his designee to execute Amendment No. 19 to the On -call Professional Services Agreement (on file in the Records Management Department) with Kleinfelder, Inc. of Ontario, California, to provide on-call geotechnical consulting and materials testing for the City Hall Parking Structure Project in the amount of $35,074 for a new not -to-exceed total of $1,677,189; and
B. Authorized the City Manager or his designee to execute Amendment No. 20 to the On -call Professional Services Agreement (on file in the Records Management Department) with Kleinfelder, Inc. of Ontario, California, to provide on- call geotechnical consulting and materials testing for the CNG Compressor Replacement Project in the amount of $13,845 for a new not-to- exceed total of $1,691,034.

6. AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH GO2ZERO STRATEGIES FOR ON -CALL SOLID WASTE CONSULTING

SERVICES

The City Council a uthorized the City Manager or his designee to execute Amendment No. 1 to the Professional Services Agreement with Go2Zero Strategies of Irwindale, California to provide On-call Solid Waste Consulting Services in a total amount not to exceed $300,000.

7. AN AMENDMENT TO ON-CALL DESIGN SERVICES AGREEMENT FOR FISCAL YEAR 2023-24 WATER MAIN REPLACEMENT AND DOWNTOWN WATER MAIN

REPLACEMENT PROJECT

The City Council approved and authorized the City Manager to execute Amendment No. 12 to the On- Call Design Services Agreement with Infrastructure Engineering Corporation, of Irvine, California, for a total not -to-exceed amount of $587,136 for design services and a term from November 1, 2022 to May 6, 2023.

8. APPOINTMENT OF MEMBERS TO THE BUILDING APPEALS BOARD

The City Council approved the appointment of members to the City's Building Appeals Board.

9. AUTHORIZE THE PURCHASE OF FLEET VEHICLES

The City Council authorized the cooperative purchase of six Ford Police utility vehicles in the amount of $330,000 and five Ford Expeditions vehicles for the Police Department in the amount of $290,000 from National Auto Fleet Group of 20 Ontario City Council/Ontario Housing
Regular Meeting Minutes – November 1, 2022

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Watsonville, California, consistent with the terms and conditions of the Sourcewell Cooperative Contract No. 095121-NAF.

10. A RESOLUTION AUTHORIZING AN AMENDMENT TO AND RESTATEMENT OF

AN ACQUISITION AND FUNDING AGREEMENT AND AN AMENDMENT AND

RESTATEMENT OF A MEMORANDUM OF AGREEMENT WITH NMC BUILDERS LLC

The City Council adopted a Resolution to:

A. Authorize the execution of an Amended and Restated Acquisition and Funding Agreement between the City of Ontario and NMC Builders LLC to provide for the future acquisition of completed public facilities constructed by and/or funded directly by NMC Builders LLC members, both as individual members and jointly, with the proceeds of Community Facilities District (CFD) special tax bonds from recently formed and future CFDs; and B. Authorize the execution of an Amended and Restated Memorandum of Agreement between the City of Ontario and NMC Builders LLC regarding the application of the City's Local Goals and Policies for Community Facilities Districts and to provide a priority of uses for the proceeds of bonds issued pursuant to recently formed and future CFDs.

RESOLUTION NO. 2022-145 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF ONTARIO, CALIFORNIA, AUTHORIZING THE EXECUTION AND

DELIVERY OF AN AMENDED AND RESTATED ACQUISITION AND FUNDING

AGREEMENT AND AN AMENDED AND RESTATED MEMORANDUM OF

AGREEMENT

ITEM PULLED FOR A SEPARATE VOTE:

11. AN ORDINANCE APPROVING FILE NO. PZC19 -001, A ZONE CHANGE AT 1063

EAST ELMA STREET

The City Council consider ed and adopt ed an Ordinance approving File No.

PZC19-001, a Zone Change amending the zoning designation on 0.07-acres of land from MDR-11 (Low-Medium Density Residential - 5.11 to 11.0 du/ac) to MDR -18 (Medium Density Residential - 11.1 to 18.0 du/ac), for property located at 1063 East Elma Street. Introduction and First reading took place at a regular meeting on October 4, 2022.

ORDINANCE NO. 3223 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PZC19 -001, A ZONE CHANGE AMENDING THE ZONING DESIGNATION ON 0.07 -ACRE OF LAND FROM MDR- 11 (LOW-MEDIUM DENSITY RESIDENTIAL – 5.1 to 11.0 DU/AC) TO MDR -18 (MEDIUM DENSITY RESIDENTIAL – 11.1 to 18.0 DU/AC) TO ENABLE THE RESIDENTIAL DEVELOPMENT OF A 0.28 -ACRE PROJECT SITE, AND MAKING FINDINGS IN SUPPORT THEREOF - APN: 1048-491-23.
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MOTION: Moved by Mayor Leon, seconded by Mayor pro Tem Wapner and carried by a vote of 3 -2, with Council Members Dorst -Porada and Valencia opposed, to adopt Ordinance No. 3223.

ITEM NO. 12 – CONTINUED:

City Attorney Duran noted the requirement of the Ordinance title in Item No. 12 be read for the record and a vote be taken to waive further reading and introduce the Ordinance.

The Ordinance title was read into the record by City Attorney Duran.

MOTION: Moved by Mayor pro Tem Wapner, seconded by Council Member Bowman and carried by unanimous vote of 5-0, to waiver further reading and introduce Ordinance No. 3224.

PUBLIC COMMENTS

Kelly Cavallero, spoke regarding zone changes.

Wendy Cavallero, declined to speak.

Raylene Chavez, was not present.

Stephanie Barbosa, spoke regarding traffic issues.

Barbara Lugo, spoke regarding school safety.

Randy Bekendam, was not present.

Karen Haughey , R epresentative of San Bernardino County Board Supervisor, Curt Hagman, announced upcoming events.

Cadence Casarez , began to c ampaign from the podium . Mayor Leon informed the speaker there was no electioneering permitted at the public meeting.

Frank Montez, began to campaign from the podium. Mayor Leon informed the speaker there was no electioneering permitted at the public meeting.

Mayor Leon recessed the meeting momentarily at 8:29 p.m. and reconvened at 8:29 p.m.

Jesse Fonseca, spoke on his concerns.

Council Member Dorst-Porada left the meeting at 8:31 p.m.

22 Ontario City Council/Ontario Housing
Regular Meeting Minutes – November 1, 2022

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ADJOURNMENT

Mayor Leon adjourned the meetings of the Joint Agencies at 8:31 p.m.

Respectfully submitted,

____________________________________

SHEILA MAUTZ, CITY CLERK/SECRETARY

APPROVED:

______________________________________
PAUL S. LEON, MAYOR/CHAIRMAN
23 Department: Fire Department
Prepared By: Janny Phan
Staff Member Presenting:

Ray Gayk, Fire Chief
Approved By:

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

AN AMENDMENT TO FIRSTWATCH SOFTWARE, SUPPORT AND MAINTENANCE

CONTRACT

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget includes appropriations in the General Fund for the software, support, and maintenance. The total compensation shall not exceed $26,938 annually and the total not-to-exceed is $186,326 for the ﬁve-year term of the Agreement. Future appropriations will be budgeted.

BACKGROUND & ANALYSIS:

The Fire Department has been using FirstWatch since October 2015.

FirstWatch software provides detailed data analytics such as number of calls, response times, and 911 answer times. This data ensures that response time goals and Key Performance Indicators are met and maintained.

The Fire Department has identiﬁed two agreements that are in place between the City and FirstWatch Solutions, Inc. City Staﬀ is recommending the current Agreement be amended to combine the scope of work from both contracts.
24 Department: Engineering
Prepared By: Yesenia Lopez
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Approved By:

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

A DESIGN SERVICES AGREEMENT FOR THE ATP CYCLE 5 - VINE AVENUE & B

STREET BIKE BOULEVARD PROJECT

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Maintain the Current High Level of Public Safety
FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget appropriated funds in the amount of $520,000 in General Fund Grants and Road Maintenance and Rehab Account (RMRA-SB1) for the design phase of the project (ST2302). The total recommended expenditure authorization for Mark Thomas Company & Inc. consists of $486,570, plus a seven percent (7%) contingency of $33,430 for a total amount of $520,000. The City will be reimbursed 90% of the design costs, up to the grant allocation of $468,000, from the State of California.

BACKGROUND & ANALYSIS:

The Active Transportation Program encourages the increased use of active modes of transportation. ATP Cycle 5 will focus on bikeway improvements that will connect points of interest within the City along B Street, Vine Avenue, Phillips Street and Fern Avenue (see attached project location exhibit). The Agreement will provide for engineering design services for preparation of plans, speciﬁcations, estimates (PS&E), permit and utility coordination, design support during construction and public outreach for the bikeway improvements.

In August 2022, the City solicited proposals and received four responses. A selection team comprised of City Staﬀ reviewed the proposals and interviewed the top three scoring ﬁrms in 25 September 2022. After evaluation of the ﬁrms, the selection team recommends Mark Thomas & Company, Inc., based upon the quality of the proposal and interview, favorable references, and past experience on similar projects. Mark Thomas & Company, Inc. has agreed to a base fee of $486,570, which is deemed a fair and reasonable fee for the specified scope of work.

26 De Anza Park
De Anza Middle
Museum
Patton's Steel
De Anza
City Hall
Euclid Elementary School
Town Square
Salvation Army
Emporia Affordable Housing
City Hall Annex
Church and School
Sam Alba Park
Stater Bros Center
Mt Zion Church
Museum
Conservation Park
County Public Health
Sam's Market
First Christian Church
Post Office
Church
Mobility Hub
Juan Pollo
Carniceria Del Valle
Senior Center
Jim's Char Broiled Burgers
Art Gallery
Cal Vine Market
Guadalupe Catholic Church
Neighborhood Commercial
Quick Stop
Juarez Bakery
Malisco Market
NV 99 Center Plus
Coin Op Laundramat
Evelin's Flowers & Gifts
Bonica San Simon
Azteca's Bskery
Vine Barber Shop

S VINE AV

S SULTANA AV

E B ST

E HOLT BL

W B ST

E MAIN ST

E PARK ST

W HOLT BL

W MAIN ST

E STATE ST

W PARK ST

W STATE ST

E ACACIA ST

E NEVADA ST

E MISSION BL

W NEVADA ST

E SUNKIST ST

W MISSION BL

W PHILLIPS ST

W SUNKIST ST

E PHILLIPS ST

S PALM
AV

W RALSTON ST

W BELMONT ST E BELMONT ST

E CARLTON ST

S PLUM
AV

W CARLTON ST

E MAITLAND ST

W MAITLAND ST
S LEM
ON AV

E CALIFORNIA STW CALIFORNIA ST

S OAKLAND AV

S FERN AV

S LAUREL AV

E TRANSIT ST

E RALSTON ST

W TRANSIT ST

S EUCLID AV

S PLEASANT AV

S MONTEREY AV

N VINE AV

E BUDD ST

W BUDD ST

N PALM
AV
N LEM
ON AV

W MONTEZUMA ST

N LAUREL AV

E NOCTA STW VESTA ST

S VINE PL

N SULTANA AV

W SONOMA CT

W BROOKS ST

W EMPORIA ST

E EMPORIA ST

S BONITA PL

N PLEASANT AV

N PLUM
AV

S OAKLAND PL

W ELM ST

S BONITA CT

S BEVERLY AV

S OAKLAND AV

S LAUREL AV

W EMPORIA ST

S PALM
AV

S PLUM
AV

S EUCLID AV

S FERN AV

S PALM
AV

S PLEASANT AV
Project Location - Vine Avenue / B Street Bike Boulevard ¯ Buffered Bike Lane (Class II)
Sharrow Route (Class III)
Future Bike Lane
Proposed Bike Facility
Omnitrans Bus Stops
Rail
Destinations
Affordable Houising
Bike Repair Station
Church
Church & School
Government
Park
Community Center
Community Garden
Library/Museum
Mobility Hub
Neighborhood Commercial
Salvation Army
School
0 740 1,480370 Feet
08-Ontario, City of-01
Attachment C
I-10 FWY E.B.

S.R.-60 FWY E.B.

E G STW I ST

E SIXTH ST

E MISSION BLS OAKS AV

S EUCLID AV

S ETIWANDA AV

E MERRILL AV

S TURNER AV
City of Ontario
Project Location
27 Department: Human Resources
Prepared By: Darron Usher
Department: Human Resources
Prepared By: Jeremy Sanchez
Staff Member Presenting:

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

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

MASTER SUBSCRIPTION AGREEMENT WITH WORKVIVO LIMITED FOR THIRD

PARTY INTRANET SERVICES

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget includes appropriations in the General Fund for the annual subscription and maintenance of the City's existing employee intranet. Staﬀ recommends the current appropriation be modiﬁed to $79,380 annually for a three-year contract, for a not to exceed the amount of $231,980 over three years. If approved, appropriations for future years will be included in subsequent years for City Council approval.

BACKGROUND & ANALYSIS:

The City currently operates a code-based intranet system that provides a central location for employee-related event information, documents, forms, policies. Due to limitations of the current intranet system, necessary changes to the site content cannot be made, sometimes resulting in outdated information being shared with employees.

Workvivo provides an easy-to-use platform. The intention is to keep employees informed, engaged, and connected to the City's culture, values, and goals through one central digital workplace. This software provides an all-in-one platform that employees can utilize to maximize their work experience, where they can engage and access information on any device, including mobile devices and tablets. Workvivo provides data analytics that would be used to track Agency Strategic Objectives (ASOs) and monitor Key Performance Indicators (KPIs). This platform also enables links to key organizational applications that employees can access in one centralized location.

28 Unlike the current intranet system, Workvivo provides around-the-clock security, maintenance, and user support which ensures the privacy and safety of the organization. Each Agency can utilize this system to promote events and provide critical updates through a more centralized communication channel.

Staﬀ recommends purchasing and implementing Workvivo to meet the City's goals of increasing employee engagement and providing an enhanced workplace experience as the Employer of Choice.
29 Department: Recreation & Community Services
Prepared By: Nicholas S Gonzalez
Staff Member Presenting:

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

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

AUTHORIZE THE PURCHASE OF MOBILE SOUND SHELL STAGE

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget includes appropriations of $201,985 in the General Fund for the purchase of a mobile recreation stage.

BACKGROUND & ANALYSIS:

The Recreation & Community Services Department has expanded the number of special events throughout the Ontario community, including a Summer Concerts in the Park Series at park locations that do not have a permanent stage or amphitheater. In the Fiscal Year 2021-22 First Quarter Budget Update, the City Council approved appropriations for procurement of a mobile stage, and the funds were rolled over into FY 2022-23. Recreation & Community Services staﬀ have researched various mobile stages and are recommending the purchase of the ShowMaster 3000 Series ("ShowMaster") from Century Industries.

The ShowMaster oﬀers sight, sound and weather control for outdoor performances. Features include a hydraulically operated canopy for sun and rain protection during performances and extra security when closed, a hydraulically operated stage deck that provides additional performance area, and acoustic body panels for superior sound projection and control. Weather and vandal resistant materials are used throughout the rugged stage body. The ShowMaster 3000 Series is low maintenance due to its highly durable, non-corrosive exterior body panels and frame and a non- skid, weather-resistant stage ﬂoor. When extended the ShowMaster is thirty-six feet long and fourteen feet deep.
30 Recreation & Community Services staﬀ will utilize the ShowMaster at large outdoor special events and will develop a rental policy for outside organizations to rent the mobile sound stage, potentially generating revenue for the City.

In general conformation with the provisions of Government Code Section 54201 through 54204, Ontario Municipal Code Section 2-6.29 allows for the purchase of supplies and equipment through cooperative purchasing programs. Cooperative purchasing allows the City to pool its procurement power with other public agencies to obtain lower pricing than otherwise might be possible.

Recreation & Community Services requests City Council approval to move forward with the cooperative purchase of the ShowMaster 3000 Series, Mobile Sound Shell Stage. 31 Department: Building
Prepared By: James J Caro
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Approved By:

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

ADOPTION OF ORDINANCES APPROVING THE 2021 INTERNATIONAL FIRE CODE AND THE 2022 CALIFORNIA BUILDING AND FIRE CODES ADOPTED BY THE

CALIFORNIA BUILDING STANDARDS COMMISSION IN THE CALIFORNIA CODE OF

REGULATIONS

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council approve and adopt:

A
.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
Operate in a Businesslike Manner
Pursue City's Goals and Objectives by Working with Other Governmental Agencies Invest in the Growth and Evolution of the Cityâ€™s Economy FISCAL IMPACT:

There is not a direct fiscal impact associated with this action.

BACKGROUND & ANALYSIS:

On November 15, 2022, the City Council introduced and waived further reading of an ordinance approving Municipal Code amendments. Every three years, the California Building Standards Commission adopts the California Building Standards Code, which consists of the codes that regulate building construction. The California Health and Safety Code mandates that all public agencies responsible for administering Building and Safety and Fire Codes comply with the State adopted Building & Safety and Fire Codes; and local agencies are required to adopt and enforce the State codes. Local agencies may also adopt amendments to the State Codes based on ﬁndings relative to local geological or topographic conditions. Staﬀ recommends the 32 following amendments to the Codes based upon; certain local conditions to ensure compliance with State mandates, to assure that Ontario's Codes continue to address the latest technological advances, and to provide for the use of companion Fire and Building Codes.

Fire Codes
: The proposed ordinance adopts the 2021 International Fire Code and the 2022 California Fire Code and provides for certain local amendments. These amendments are consistent with other provisions that are in the current version of the City's Fire Code. The State Codes incorporate, by reference, the Model Codes published by the International Code Council (ICC).

Building Codes
: The proposed Ordinance adopts the 2022 California Building Code and related codes and includes a couple of amendments that are a function of Ontario's geography and energy concerns. The amendments include:

1 .

The design criteria for all structures built within the city is 110 MPH winds, Exposure C, seismic zone D;
2 .

Because of proximity to the San Andreas fault, all underground pipe, conduit, and lines will be shaded with cleaned dirt, void of any rocks or clean sand, six inches below and twelve inches above said pipe, conduit, or line. All electrical metal conduit will need a ground conductor, the metal conduit will not act as the ground conductor;
3 .

Retro-ﬁt windows will need a building permit and will need to follow 2022 standards for emergency egress; and
4 .

All walls over 3 ft (36 inches) and retaining walls over 2 ft (24 inches) will need a building permit.

Adoption of the new version of the Building and Fire Codes will provide for proper construction guidelines for the health and safety of occupants and energy conservation. 33 ORDINANCE NO. ________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTER 4 OF TITLE 4 OF THE ONTARIO MUNICIPAL CODE; ADOPTING BY REFERENCE WITH CERTAIN

AMENDMENTS, ADDITIONS, DELETIONS, AND CHANGES THERETO,
THE 2022 CALIFORNIA FIRE CODE AND THE 2021 INTERNATIONAL

FIRE CODE, PROVIDING FOR THE RECOVERY OF COSTS AND
COLLECTION OF FEES; AND REPEALING ORDINANCE NO. 3062 OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA.

WHEREAS, pursuant to Government Code Section 50022.1, et seq., the City of Ontario, California ("City") may adopt by reference the 2022 edition of the California Building Standards Code as provided in Title 24 of the California Code of Regulations; and
WHEREAS, California Health and Safety Code Sections 17958.7 and 18941.5 authorize cities to adopt the California Building Standards Code with modifications that are determined to be reasonably necessary because of local climatic, geological, or topographical conditions; and
WHEREAS, prior to making modifications permitted under California Health and Safety Code Sections 17958.7 and 18941.5, the City Council is required to make express findings that such modifications are needed in accordance with California Health and Safety Code Sections 17958.7; and
WHEREAS, the City held a public hearing on November 15, 2022, at which time all interested persons had the opportunity to appear and be heard on the matter of adopting the Codes as amended herein; and
WHEREAS, the City published notice of the aforementioned public hearing pursuant to California Government Code Section 6066 on November 4, 2022; and WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.

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

SECTION 1. The City Council hereby finds that the following proposed amendments to the 2022 California Fire Code and the 2021 International Code are:
(1) necessary because of local climatic, geological, or topographical conditions, or
(2) are of an administrative or procedural nature, and/or do not modify building standards and are reasonably necessary to safeguard life and property within the City. 34 Amendment Applicable Findings from Listing Below
Sections 102.7, 103.1, 103.2, 104.7,
104.7.1, 104.11, 105.5.55, 111.1, 112.2,
112.4, 113.4
D-1
Section 503.2.1 D-2
Section 503.4 D-2
Section 507.5.1.2 A-1, B-1, B-2, C-1, C-2, C-3
Section 5704.2.9.6.1, 5706.2.4.4, 5806.2 D-2
Section 6104.2 D-2
Sections 2808.1, 2808.3, 2808.4, 2808.5,
2808.10,
C-1, C-2, C-3 & C-4
Appendix B Section B105.2 A-1, B-2, B-3, B-4 & B-5
A. Local Geological Conditions.

A-1. The City of Ontario is subject to moderately strong to severe shaking and surface ruptures resulting from five earthquake faults located within or near the City.

These local earthquake faults have the potential to cause severe personal and property damage and fire hazards. Moreover, there is also a potential for damage to roadways, water supplies, and the impairment of access allowing fire equipment to respond to emergencies in the event of a severe earthquake.

A-2. Adverse geological conditions exist in portions of the City that may cause excessive flooding. Flood control facilities are not adequate to handle the water flow that occurs during major storms or prolonged rains. Some of the streets in the City are actually designed and used for flood control purposes, thus making the fire and emergency access difficult during flood conditions. As a consequence, many of the streets within the City are impaired during such flood conditions and such flooding causes physical damage to the streets and the accumulation of debris, all of which hinder access to fire equipment for the purposes of responding to fire and other emergencies.

B. Local Topographical Conditions.

B-1. The topography of the City of Ontario is generally that of a gently sloping inclined plane that slopes in a southerly direction from an elevation of 1,190 feet to an elevation of 730 feet at the southern boundary of the City resulting in several water pressure zones to serve the City. The elevation changes caused by the mountains and hills creates the geological foundation upon which the City is built and will continue to build.

B-2. Located within the City are three major interstate freeways and a major state highway that provide for limited under crossing access points to traverse the City. 35 These highways also restrict the ability of the water supply grid to provide water from multiple points to all areas of the City and necessitates the use of dead-end water mains to many areas adjacent to highways.

B-3. The City is bisected from east to west by two very active railroad main route tracks used by the Southern Pacific and Union Pacific Railroads. These lines are used for both commuter and large freight transport trains, including the transporting of large quantities of hazardous materials. Limited under-crossings and overcrossings exist within the City for uninterrupted emergency vehicle passage. Moreover, emergency vehicles are routinely delayed at grade crossings until passenger trains or passing freight trains clear the grade crossings.

B-4. Two large petroleum product pipelines bisect the City along the Southern Pacific Railroad right-of-way. The pipelines are used to transport large quantities of gasoline, diesel fuel, and jet fuels under high pressures. Another petroleum pipeline intersects the City along the east side en-route to the Etiwanda electrical generating station north and east of the City. While generally underground, these pipelines pass overhead at several overpasses located over main thoroughfares in the City. Damage to these pipelines during seismic events poses the dual potential of creating a time emergency and at the same time restricting emergency vehicle access within the City.

B-5. Two large, high pressure, natural gas transmission pipelines traverse the easterly part of the City, along the 1-15 Freeway and on the west side along Benson Avenue. These 36" transmission mains transport natural gas at pressures exceeding 500 psi and pass through developed residential and industrial areas. These transmission pipelines also intersect the previously mentioned petroleum pipelines. Interruption of these pipelines due to flooding or seismic events is possible and would result in reduced resources to protect the balance of the City.

B-6. A large commercial airport is located within the central portion of the City providing limited emergency vehicle access from the north to the south-central portions of the City. A majority of the City is located within the approach and/or departure paths of large commercial aircraft exposing a large part of the City to potential aircraft related emergencies. Moreover, Santa Ana Winds frequently require the flight paths of arriving and departing aircraft to be reversed.

C. Local Climatic Conditions.

C-1. The City is subject to extremely strong winds, commonly referred to as "Santa Ana Winds," which can reach speeds in excess of 80 miles per hour and approach the basin from the desert via the Devore Pass. Extensive damage often occurs during such winds, including downed electric wires, downed utility and light poles, fallen trees, blowing debris, sand, and dust. Blowing dust experienced during these winds has reduced visibility near zero and impacted the response times of emergency vehicles.

C-2. During the summer months, the Santa Ana Winds produce a period of 36 extremely low humidity causing an increase in the threat of fire from dry vegetation and other common fuels. These conditions have, in the past, resulted in vegetation and structure fires.

C-3. The City experiences summer temperatures in excess of 100 degrees Fahrenheit. When coupled with severe Santa Ana Winds these conditions can cause a fire to spread quickly throughout portions of the City.

C-4. Weather conditions, coupled with flammable vegetation in bordering cities results in numerous wildland rims, which draw existing fire fighting forces from their structure protection duties for extended periods of time. This results in increased response times to structure fires when fire department personnel and equipment are committed to nonstructural fire protection activities.

D. Administrative/Procedural/Public Safety Amendments.

D-1. This amendment is necessary for administrative or procedural clarification and to establish administrative standards for the effective enforcement or the building standards of the City of Ontario and does not modify a building standard pursuant to California Health & Safety Code sections 17958, 17958.7, and/or 18941.5.

D-2. This amendment does not modify a building standard pursuant to California Health and Safety Code sections 17958, 17958.7, and/or 18941.5 and is reasonably necessary to safeguard life and property within the City of Ontario.

SECTION 2. Chapter 4 of Title 4 of the Ontario Municipal Code is hereby rewritten in its entirety to read as follows:

Chapter 4: Fire Code
Sections:
4-4.01 Adoption of California Fire Code and the International Fire Code 4-4.02 Cost Recovery
4-4.03 Establishment of the Limits of Districts in Which Stationary Containers of Flammable Cryogenic Fluids Are Prohibited 4-4.04 Establishment of the Limits of Districts in Which Storage of Class I and Class II Liquids in Unprotected Aboveground Tanks and in Below Grade Vaulted Tanks is Prohibited
4-4.05 Establishment of the Limits in Which Storage of Liquefied Petroleum Gases Is Restricted for the Protection of Heavily Populated or Congested Areas
4-4.06 Amendments to the 2022 California Fire Code and 2021 International Fire Code
4-4.07 Amendment: Referenced codes and standards
4-4.08 Amendment: General
37 4-4.09 Amendment: Appointment
4-4.10 Amendment: Liability and Legal Defense
4-4.11 Amendment: Investigations
4-4.12 Amendment: Pallets
4-4.13 Amendment: Board of Appeals Established
4-4.14 Amendment: Violation Penalties
4-4.15 Amendment: Failure to Comply
4-4.16 Amendment: Dimensions
4-4.17 Amendment: Obstruction of Fire Apparatus Access Roads 4-4.18 Amendment: Two Points of Connection
4-4.19 Amendment: General
4-4.20 Amendment: Size of Piles
4-4.21 Amendment: Combustible Waste
4-4.22 Amendment: Emergency Plan
4-4.23 Amendment: Buildings Other than One- and Two-Family Dwellings 4-4.24 Remote Annunciation
4-4.25 Monitoring
Section 4-4.01 Adoption of the California Fire Code and the International Code.

The City Council of the City of Ontario hereby adopts by reference with certain amendments, additions, deletions and exceptions, the 2022 California Fire Code with errata, incorporating therein the 2021 International Fire Code, also referred to as Part 9 of Title 24 of the California Code of Regulations, with included appendices, as published by the International Code Council and adopted by the California State Building Standards Commission, (hereinafter also "this Code" or the "Ontario Fire Code",) for the purpose of prescribing regulations governing conditions hazardous to life and property from fire, hazardous materials or explosion.

Section 4-4.2. Cost Recovery.
(A) Expense for Responding to and Securing an Emergency.

1. Fire suppression, investigation and rescue or emergency medical costs shall be recoverable in accordance with Health & Safety Code Sections 13009 and 13009.1.
(1) The date, time and place of the hearing to be held on the claim for reimbursement with a statement describing the rights of the person or entity charged and the procedures for presenting evidence at said hearing; and
(2) The Chief's account of the sum claimed to be due.

2. Any person or entity who negligently or intentionally, or in violation of law, causes an emergency response, including but not limited to, a traffic accident or spill of 38 toxic or flammable fluids or chemicals, is liable for the costs of responding, securing and investigating such emergency, including those costs set out in Health & Safety Code Section 13009, et seq. and Government Code Section 53150, et seq. Any expense incurred by the Fire Department for responding to, securing, or investigating such an emergency situation shall constitute a debt of the person or entity responsible and shall be subject to collection by the City in the same manner as an obligation under contract, expressed or implied.

3. The expense of responding to, securing and investigating any emergency or hazard which is the result of a violation of this Code or any other code, ordinance or state law, or any damages caused by malicious mischief requiring any corrective or preventive actions by the Fire Department shall be a charge against the person(s) or entity whose violation caused the emergency and/or damage. Damages caused by such emergency or action may constitute a debt of such person(s) or entity responsible and shall be collectible as provided below:
ii. Liability for Hazardous Activities and Conditions. The Chief may also impose the reasonable cost of fire prevention, fire suppression, incident investigation and protection of the public from other safety hazards when a fire or hazardous condition results from any of the following activities or conditions:
(1) The manufacture, transportation, storage, handling, or spilling, of hazardous chemicals, flammable or combustible liquids, explosives, or blasting agents as defined in this Code; and
(2) The failure to correct a hazardous condition for which a "Notice of Violation," or equivalent notice, has been
previously given by the Chief; and
(3) The use of welding equipment, cutting torches, tar pot, or other open flame devices; and
(4) Permitting or causing the accumulation of hazardous or flammable materials on property; and
(5) Setting of a fire or allowing a fire to be set in violation of any code, ordinance, law or regulation; and
(6) The possession of, or causing illegal fireworks, explosive devices or destructive devices to ignite, explode or detonate; and
(7) Creating, allowing, or maintaining a hazard as stated in California Fire Code Section 112.2.
iii. Determination of Costs. Whenever the Chief determines that the fire department or other public agency has incurred costs for fire suppression, fire prevention, or protection of the public from a fire or other hazardous condition that results from the activities or conditions described in subsection (a), the Chief shall:
(1) Calculate the costs incurred;
39 (2) Identify the person(s) or entity to be charged for those costs; and
(3) Send a report with this information to the City Clerk. iv. Method of Calculation. In determining costs to be charged a responsible person or entity, the Chief shall include all necessary expenditures to correct the hazardous condition or extinguish the fire, including, but not limited to the following:
(1) The cost of personnel;
(2) The cost of extinguishing agents;
(3) The reasonable value of the use of City equipment;
(4) The cost incurred for the use of any private contractors to mitigate or remove the hazard or condition; and
(5) Any and all administrative costs incurred pursuant to the fee schedule as set by resolution duly adopted by the City
Council.
v. Reimbursement Hearing. The City Clerk shall, thereupon, set the report and account received by the Chief for hearing before the City Council at a regular or adjourned regular meeting to be held at least fourteen (14) calendar days after the date the Clerk mails the notice to the responsible person(s) or entity. The City Clerk shall send by regular mail a Notice of said hearing to the person or entity to be charged at the person's or entity's address as shown on the latest equalized tax assessor's roll, or as otherwise known to the City.
vi. Notice to Person Charged. The Notice sent by the City Clerk to the responsible person(s) or entity shall contain:
(1) The name of the person(s) or entity sought to be charged; (2) The location, date and time of the incident upon which the claim for reimbursement is based;
(3) The amount of, and the basis upon which the claim for reimbursement is made;
vi. Procedure for Hearing Before the City Council. At the hearing on the Chiefs accounting of the costs and other evidence upon which reimbursement is sought, the City Council shall hear and consider evidence by the person or entity against which reimbursement is sought. The City Council shall thereafter confirm or disallow the account, all or in part, and set forth in a resolution the amount of the account confirmed, if any. Thereafter, any amount confirmed by resolution of the City Council shall become a debt owing to the City of Ontario and shall be collectible by the City in the same manner as in the case of an obligation under contract expressed or implied. (B) Service Fees.

1. Permit Fees. Any person, establishment, business, occupancy, or process 40 requiring any permit or utilizing any special service or activity performed by or under the direction of the Fire Department shall compensate the City for the cost of such service or activity, in accordance with the adopted fee and charge schedule and any departmental policy.

2. Service Fee Refunds. The Fire Chief is authorized to refund any fee paid hereunder which is determined to be erroneously paid or collected. i. The Fire Chief is authorized to refund eighty percent (80%) of the service fee paid when the permittee has performed no work nor commenced an operation for which a permit was issued in accordance with this Ordinance. ii. The Fire Chief is authorized to refund eighty percent (80%) of the plan review fee paid when an application for a permit for which a plan review fee has been paid is withdrawn or canceled before any plan review is completed. iii. The Fire Chief shall not authorize the refund of any fee paid except upon written application filed by the original permittee not later than one hundred eighty (180) days after the date the fee was paid. Such written application shall state the reasons for the refund request and be accompanied with a receipt of payment.

Section 4-4.03. Establishment of the Limits of Districts in Which Stationary Containers of Flammable Cryogenic Fluids Are Prohibited.

The limits referred to in Section 5806.2 of the 2022 California Fire Code in which the storage of flammable cryogenic fluids in stationary containers is prohibited are hereby established as follows:

1. All areas and zoning districts of the City except the General Industrial District of the City Development Code, and with the specific approval of the Fire Chief.

Section 4-4.04. Establishment of the Limits of Districts in Which Storage of Flammable or Combustible Class I and Class II Liquids in Outside Unprotected Aboveground Tanks is Prohibited.

The limits referred to in Sections 5704.2.9.6.1 and 5706.2.4.4 of the 2022 California Fire Code in which the storage of flammable or combustible liquids in outside aboveground unprotected tanks are prohibited are hereby established as follows:

1. In all areas of the City unless upon specific written findings, the Chief determines that the installation of flammable and combustible unprotected aboveground storage tanks or below grade vaulted tanks will not create a hazard to occupants and property owners in the surrounding area.

Section 4-4.05. Establishment of the Limits in Which Storage of Liquified Petroleum Gases is Restricted for the Protection of Heavily Populated or 41 Congested Areas.

The limits referred to in Section 6104.2 of 2022 California Fire Code, in which storage of liquefied petroleum gas is restricted, are hereby established as follows:

1. All areas and zoning districts of the City except the General Industrial District of the City zoning ordinance, and with the specific approval of the Fire Chief.

Section 4-4.06. Amendments to the 2022 California Fire Code (CFC) and 2021 International Fire Code (IFC).

Designated portions of the 2022 California Fire Code (CFC) and 2021 International Fire Code (IFC) are amended and changed as set forth in Sections 4-4.07 through 4-4.28.

Section 4-4.07. Amendment: Referenced codes and standards. Section 102.7 of the 2022 CFC is amended to read as follows:
"102.7 Referenced codes and standards. The codes and standards referenced in this code shall be those that are listed in Chapter 80, and such codes and standards shall be considered to be part of the requirements of this code to the prescribed extent of each such reference and as further regulated by Sections 102.7.1 and 102.7.2. The Fire Chief also herby authorizes the use of the Ontario Fire Department Fire Protection Standards for the purposes of interpreting and clarifying requirements of this Code and its referenced codes and standards."
Section 4-4.08. Amendment: General.

Section 103.1 of the 2018 IFC is amended to read as follows:
"103.1 General. The Fire Code as adopted and amended herein shall be enforced by the Bureau of Fire Prevention of the Fire Department of the City of Ontario which is hereby established and shall operate under the supervision of the Chief of the Fire Department."
Section 4-4.09. Amendment: Appointment.

Section 103.2 of the 2022 CFC is amended to read as follows:
"103.2 Appointment. The Fire Marshal shall be responsible for operating the Bureau of Fire Prevention and shall be appointed by the Fire Chief on the basis of examination to determine his or her qualifications
Section 4-4.10. Amendment: Liability and Legal Defense.

Section 104.7 and 104.7.1 of the CFC of the IFC is amended to read as follows:
42 "104.7 and 104.7.1 Liability and legal defense. The Chief and other individuals charged by the Chief with the enforcement of this Code or any other official duties, acting in good faith and without malice in the discharge of their duties, shall not thereby be rendered personally liable for any damage that may accrue to persons or property as a result of any act or by reason of any act or omission in the discharge of their duties. Any suit brought against the Chief or such individuals because of such act or omission performed in the enforcement of any provision of such Code or other pertinent laws or ordinances implemented through the enforcement of this Code or enforced by the code enforcement agency shall be defended by this jurisdiction until final termination of such proceedings, and any judgment resulting there from shall be assumed by this jurisdiction subject to the provisions of Government Code Section 825." Section 4-4.11. Amendment: Investigations.

Section 104.11 of the CFC is amended to read as follows:
"104.11 Investigations. The fire code official, the fire department or other responsible authority shall have the authority to investigate the cause, origin and circumstances of any fire, explosion or other hazardous condition. Information that could be related to trade secrets or processes shall not be made part of the public record, except as directed by a court of law. Fire Investigators shall have the powers of a police officer in performing their duties under this code." Section 4-4.12. Amendment: Pallets.

Section 105.5.55 is added to the CFC to read as follows:
"105.5.55 Pallets. An operational permit is required for idle storage, handling, repair or manufacturing of combustible pallets in excess of one thousand (1,000) units at any one site."
Section 4-4.13. Amendment: Board of Appeals.

Section 111.1 of the CFC is amended to read as follows:
"111.1 Board of Appeals Established. The City Council of the City of Ontario may hear and decide appeals of orders, decisions or determinations made by the fire code official relative to the application and interpretation of this code, pursuant to Chapter 4 of Title 1 of the City of Ontario Municipal Code. An application for appealshall be submitted in writing, in a timely manner, and shall be based on a claim that the intent of this code or the rules, standards and interpretations adopted hereunder have been incorrectly interpreted, the provisions of this code do not fully apply, or an equivalent method of protection or safety is proposed. The Council shall have no authority to waive requirements of this Code. The City Council shall set the matter for hearing and shall give written notice to the appellant. The fire code official shall act as staff in advising the City 43 Council during such hearing. A written copy of the decision shall be mailed to the concerned parties after the conclusion of such proceedings." Section 4-4.14. Amendment: Violation penalties.

Section 112.4 of the CFC is amended to read as follows:
"112.4 Violation penalties. Any person who violates any provision of the Fire Code as adopted and amended herein or fails to comply therewith, or who violates or fails to comply with any order made thereunder, or who builds in violation of any detailed statement of specifications or plans submitted and approved thereunder, or any certificate or permit issued thereunder, and from which no appeal has been taken, or who fails to comply with such an order as affirmed or modified by the Board of Appeals or by a court of competent jurisdiction, within the required time, shall severally for each and every such violation and noncompliance, respectively, be guilty of an infraction or a misdemeanor, punishable as set forth in Chapter 2 of Title 1 of the Ontario Municipal Code. The imposition of one penalty for any violation shall not excuse the violation or permit it to continue; and all such persons shall be required to correct or remedy such violations or defects within a reasonable time; and when not otherwise specified, each day that a prohibited condition is maintained shall constitute a separate offense. The application of this penalty shall not be held to prevent the enforced removal of prohibited conditions. 11 Section 4-4.15. Amendment: Failure to Comply.

Section 113.4 of the CFC is amended to read as follows:
"113.4 Failure to Comply. Any person who shall continue any work after having been served with a stop work order, except that work as that person is directed to perform to remove a violation or unsafe condition, shall be guilty of a misdemeanor, punishable as set forth in Chapter 2 of Title 1 of the Ontario Municipal Code. Each day that any work is done under a stop work order shall constitute a separate offense.11 Section 4-4.16. Amendment: Dimensions.

Section 503.2.1 of the CFC is amended to read as follows:
"503.2.1 Dimensions. Fire apparatus access roads shall have an unobstructed width of not less than 24 feet, exclusive of shoulders or curbs, except for approved security gates in accordance with section 503.6, and an unobstructed vertical clearance of not less than 13 feet 6 inches.

Section 4-4.17. Amendment: Obstruction of Fire Apparatus Access Roads.

Section 503.4 of the CFC is amended to read as follows:
"503.4 Obstruction of fire apparatus access roads. The required width of a fire 44 apparatus access road shall not be obstructed in any manner, including parking of vehicles. Access roads, private roadways and public roadways shall be provided and maintained in a passable condition at all times. Any obstruction or impediment to reasonable access may be removed by any public safety agency with the expense of such removal to be borne by the owner of the roadway, or in the case of an obstructing vehicle or object, by the owner of said vehicle or object." Section 4-4.18. Amendment: Two points of connection. Section 507.5.1.2 of the CFC is added to read as follows:
"507.5.1.2 Redundant water supplies. New on-site fire protection water systems that serve buildings greater than 100,000 square feet in floor area shall have two separate remote connections to the public water system designed and constructed in accordance with recognized standards. The locations of such water connections shall be approved by the fire code official."
Section 4-4.19. Amendment: General.

Section 2808.1 of the CFC is amended to read as follows:
"2808.1 General. The storage and processing of wood chips, hogged materials, fines, compost, solid biomass feedstock, and raw product produced from yard waste, debris, argo industrial, recycling, and green waste processing facilities shall comply with Sections 2808.2 through 2808.1O."
Section 4-4.20. Amendment: Size of piles.

Section 2808.3 of the CFC is amended to read as follows:
"2808.3 Size of piles. Piles shall not exceed 15 feet in height, 50 feet in width and 250 feet in length.

Exception: The fire code official is authorized to allow the pile size to be increased when in accordance with section 2808.3.1."
Section 4-4.21. Amendment: Combustible waste.

Section 2808.5 of the CFC is amended to read as follows:
"2808.5 Combustible waste. The storage, accumulation and handling of combustible materials and control of vegetation shall comply with Chapter 3. All incoming materials shall be ground or incorporated within 10 days. All incoming materials shall be incorporated into windrows within 15 days. Internal temperatures of stockpiles shall be continuously monitored.
45 Section 4-4.22. Amendment: Emergency plan.

Section 2808.10 of the CFC is amended to read as follows:
"2808.10 Emergency plan. The owner or operator shall develop a plan for monitoring, controlling and extinguishing spot fires and submit the plan to the Ontario Fire Department Fire Prevention Bureau for review and approval. The plan shall include, but not be limited to methods and policies for:

1. Monitoring, controlling and extinguishing spot fires.

2. Emergency contact information for personnel who are able to respond to location 24 hours a day, 7 days a week.

3. Onsite equipment to assist with firefighting operations, such as dozers, water tenders, and large tractors.

4. Special considerations for fire safety during extreme weather conditions.

5. Method of providing adequate onsite water supply for firefighting operation. Water system shall have a minimum delivery/replenish capability of 250 gallons per minute for 2 hours."
Section 4-4.23. Amendment: Buildings Other than One- and Two-family Dwellings, Group R-3 and R-4 buildings and townhomes.

Table 8105.2 of Appendix B is hereby deleted and Appendix B Section 8105.2 of the CFC is amended to read as follows:
"8105.2 Buildings other than one- and two-family dwellings. The minimum fire-flow and flow duration for buildings other than one- and two-family dwellings, Group R-3 and R-4 buildings and townhouses shall be as specified in Table 8105.1(2).

Exceptions:

1. A reduction in required fire-flow of up to 50 percent, as approved, is allowed when the building is provided with an approved sprinkler system installed in accordance with Section 903.3.1.1 or 903.3.1.2.

The resulting fire-flow shall not be less than 1,500 gallons per minute (5678 L/min) for the prescribed duration as specified in Table B105.1(2).

2. [SFM] Group B, S-2 and U occupancies having a floor area not exceeding 1,000 square feet, primarily constructed of
noncombustible exterior walls with wood or steel roof framing, having a Class A roof assembly, with uses limited to the following or similar uses:

2.1. California State Parks buildings of an accessory nature (restrooms). 46 2.2. Safety roadside rest areas, (SRRA), public restrooms.

2.3. Truck inspection facilities, (TIF), CHP office space and vehicle inspection bays.

2.4. Sand/salt storage buildings, storage of sand and salt." Section 4-4.24. ADDED: Remote Annunciation
Section 903.4.2.1 of the CFC is hereby added to read as follows:
“903.4.2.1 A dedicated fire alarm control unit for the fire sprinkler monitoring system shall be provided and located in an approved location, near the main entrance into the building for fire department use. An approved remote annunciator may be installed at the approved location in lieu of the fire alarm control unit. Zone indication on the remote annunciator may be required by the fire code official.” Section 4-4.25. Amendment: Monitoring
Section 904.3.5 of the CFC is hereby amended to read as follows:
“904.3.5 When a building fire alarm system or sprinkler monitoring system is installed, automatic fire-extinguishing systems shall be monitored by the building’s fire alarm control unit in accordance with NFPA 72.”
SECTION 3. Filing of Ordinance. The Fire Chief shall transmit a copy of this Ordinance for filing to the State of California Building Standards Commission, pursuant to Health and Safety Code Section 17958.7. One copy of the Ontario Fire Code shall be placed on file in the Office of the City Clerk and is hereby adopted and made a part of this Chapter as if fully set forth at length herein.

SECTION 4. Repeal of Conflicting Ordinances. Ordinance No. 3147, and all former ordinances or parts thereof conflicting or inconsistent with the provisions of this ordinance or of the Fire Code, as adopted and amended herein, are hereby repealed.

SECTION 5. Severability. Any section, paragraph, sentence or word of this ordinance or of the Fire Code as adopted and amended herein that for any reason has been determined to be invalid, it is the intent of the City Council that it will be considered severable from all other portions of this ordinance independent of the elimination therefrom of any such portion as may be declared invalid.

SECTION 6. Effective Date. This Ordinance shall take effect and be in force thirty (30) days after its final passage. From the date on which this Ordinance shall take effect, the provisions of the Ontario Fire Code shall be controlling within the City limits of the City of Ontario.

SECTION 7. CEQA. The City Council finds that the changes made to the California Fire Code and the International Fire Code are enacted to mitigate threats to public peace, health and safety from earthquakes, high winds and fire. Moreover, the 47 amendments are substantially similar to those provisions previously enacted and contained in the current version of the City's Fire Code. Therefore, it can be seen with certainty that the adoption of this Ordinance will not have a significant adverse effect on the environment and is therefore exempt from the California Environmental Quality Act (CEQA) pursuant to section 15061(b)(3) of the CEQA Guidelines. Staff is directed to file a Notice of Exemption within five (5) days of the adopting of this Ordinance.

SECTION 8. 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 6th day of December 2022. ________________________________
PAUL S. LEON, MAYOR
ATTEST:

SHEILA MAUTZ, CTY CLERK
APPROVED AS TO FORM:

BEST BEST & KRIEGER

CITY ATTORNEY
48 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 on November 15, 2022 and adopted at the regular meeting held December 6, 2022 by the following roll call vote, to wit:

AYES: COUNCILMEMBERS:

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 December 6, 2022 and that Summaries of the Ordinance were published on ________________ , 2022 and __________________, 2022, in the Inland Valley Daily Bulletin newspaper.

SHEILA MAUTZ, CITY CLERK
(SEAL)
49 ORDINANCE NO. ________

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING CHAPTERS 1, 2, 3, 4, 5, 6, 7, 10, 11, 12, AND 14 OF TITLE 8 OF THE ONTARIO MUNICIPAL CODE, ADOPTING BY REFERENCE THE 2022 EDITION OF THE CALIFORNIA BUILDING
STANDARDS CODE, INCORPORATING THE 2022 CALIFORNIA
ADMINISTRATIVE CODE, THE 2022 CALIFORNIA BUILDING CODE, THE 2022 CALIFORNIA MECHANICAL CODE, THE 1997 CALIFORNIA HOUSING CODE, THE 2022 CALIFORNIA ELECTRICAL CODE, THE
2022 CALIFORNIA RESIDENTIAL CODE , THE 2022 CALIFORNIA
PLUMBING CODE, THE 2022 CALIFORNIA ENERGY CODE, THE 2021 INTERNATIONAL PROPERTY MAINTENANCE CODE, THE 2022
CALIFORNIA GREEN BUILDING STANDARDS CODE, THE 2022
HISTORIC BUILDING CODE, 2022 CALIFORNIA EXISTING BUILDING CODE, AND THE 2022 CALIFORNIA REFERENCED STANDARDS,
TOGETHER WITH CERTAIN AMENDMENTS THERETO.

WHEREAS, pursuant to Government Code Section 50022.1 et seq., the City of Ontario, California ("City") may adopt by reference the 2022 Edition of the California Building Standards Code as provided in Titles 24 and 25 of the California Code of Regulations and other codes, including, without limitation, the Uniform Housing Code and the Uniform Code for the Abatement of Dangerous Buildings; and WHEREAS, the California Building Standards Commission recently adopted the 2022 Edition of the California Building Standards Code; and WHEREAS, California Health and Safety Code Sections 17958.7 and 18941.5 authorize cities to adopt the California Building Standards Code with modifications that are determined to be reasonably necessary because of local climatic, geological, or topographical conditions; and
WHEREAS, prior to making modifications permitted under California Health and Safety Code Sections 17958.7 and 18941.5, the City Council is required to make express findings that such modifications are needed in accordance with California Health and Safety Code Sections 17958.7; and
WHEREAS, the City desires to adopt the California Building Standards Code with the necessary amendments to assure it is tailored to the safety needs of the City as required by its unique climatic, geological, and topographical conditions; and WHEREAS, the City held a public hearing on November 15, 2022, at which time all interested persons had the opportunity to appear and be heard on the matter of adopting the Codes as amended herein; and
50 WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.

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

SECTION 1. Findings. The City Council hereby finds that the proposed amendments to California Building Code Section 113.4 are necessary for administrative or procedural clarification and to establish administrative standards for the effective enforcement of the building standards of the City of Ontario and does not modify a building standard pursuant to California Health & Safety Code Section 17958, 17958.7, and/or 18941.5.

SECTION 2. Chapter 1 of Title 8 of the Ontario Municipal Code is amended in its entirety to read as follows:

Chapter 1 – Administrative and Building Code
Section 8-1.01. Adoption of the Administrative Code
The 2022 Edition of the California Administrative Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 1, is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

Section 8-1.02. Adoption of the Building Code
The 2022 Edition of the California Building Code , as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 2, Volumes 1 and 2, subject to the amendments set forth in this chapter, is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

Section 8-1.03. Amendment: Section 113.4
Section 113.4 is added to the California Building Code to read as follows:
113.4 Ontario Building Appeals Board. The City Manager shall recommend to the City Council five (5) individuals desirous to serve on the Building Appeals Board who are qualified by experience and training to pass on matters pertaining to building construction and are not employees of the City. Each Board Member's term on the Building Appeals Board shall remain indefinite unless the Board Member resigns, or the City Council wishes to designate a new Board Member in its discretion. Should any Board Member be unable to continue serving on the Building Appeals Board, he or she shall submit a written resignation to the City Manager as soon as possible. The City Manager shall, in turn, present a recommended replacement to the City Council for appointment. 51 Section 8-1.04. Amendment: Part 2, Volume 1, Section 105.2 Section 105.2 is amended as follows - All walls over 3 ft (36 inches) require a building permit and all retaining walls over 2 ft (24 inches) require a building permit.

Section 8-1.05. Amendment: Part 2, Volume 2, Section 1609A Section 1609A is amended as follows -The City of Ontario design criteria for all structures built within the City is 110 MPH winds, Exposure C, Seismic Zone D Section 8-1.06. Amendment: Part 2, Volume 2, Section 1613A Section 1613A is amended as follows –
1) The City of Ontario design criteria for all structures built within the City is 110 MPH winds, Exposure C, Seismic Zone D; and
2) Because of the City’s proximity to the San Andreas fault, all underground pipe, conduit, and lines will be shaded with cleaned dirt void of any rocks or clean sand, six inches below and twelve inches above said pipe, conduit, or line. All electrical metal conduit will need a ground conductor, the metal conduit will not act as the ground conductor.

SECTION 3. Chapter 2 of Title 8 of the Ontario Municipal Code is amended in its entirety to read as follows:

Chapter 2 - Mechanical Code
Section 8-2.01. Adoption of the Mechanical Code
The 2022 Edition of the California Mechanical Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 4 , is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

SECTION 4. Chapter 3 of Title 8 of the Ontario Municipal Code is amended in its entirety to read as follows:

Chapter 3 - Housing Code
Section 8-3.01. Adoption of Housing Code
The 1997 Edition of the Uniform Housing Code, as published by the International Conference of Building Officials, one (1) copy of which is on file for public review in the office of the City Clerk, is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein.
52 SECTION 5. Chapter 4 of Title 8 of the Ontario Municipal Code is amended in its entirety to read as follows:

Chapter 4 - Electrical Code
Section 8-4.01. Adoption of the Electrical Code
The 2022 Edition of the California Electrical Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 3 , is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

SECTION 6. Chapter 5 of Title 8 of the Ontario Municipal Code is hereby amended in its entirety to read as follows:

Chapter 5 - Residential Code
Section 8-5.01. Adoption of the Residential Code
The 2022 Edition of the California Residential Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 2.5 , is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

Section 8-5.02. Amendment: Section R310.5
Section R310.5 is amended as follows - Retro-fit windows require a building permit and shall conform to the 2022 standards for emergency egress.

SECTION 7. Chapter 6 of Title 8 of the Ontario Municipal Code is amended in its entirety to read as follows:

Chapter 6 - General Provisions
Section 8-6.01. Fees
Fees for any permit, license or other approval issued pursuant to any of the codes adopted by this title shall be as set forth by resolution of the City Council.

Section 8-6.02. Violations
Violations of any provision of any of the codes adopted by this title shall subject the violator to any or all of the penalties provided in this code or applicable law.

SECTION 8. Chapter 7 of Title 8 of the Ontario Municipal Code is hereby amended in its entirety to read as follows:
53 Chapter 7 - Plumbing Code
Section 8-7.01. Adoption of the Plumbing Code
The 2022 Edition of the California Plumbing Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 5 , is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

SECTION 9. Chapter 10 of Title 8 of the Ontario Municipal Code is hereby amended in its entirety to read as follows:

Chapter 10 – Energy Code
Section 8-10.01. Adoption of the Energy Code
The 2022 Edition of the California Energy Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 6 , is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

SECTION 10. Chapter 11 of Title 8 of the Ontario Municipal Code is hereby amended in its entirety to read as follows:

Chapter 11 - International Property Maintenance Code
Section 8-11.01. Adoption of the International Property Maintenance Code The 2021 Edition of the International Property Maintenance Code, including the administration chapter, one (1) copy of which is on file for public review in the office of the City Clerk, is hereby adopted by reference and made a part of this chapter as if fully set forth at length herein.

SECTION 11. Chapter 12 of Title 8 of the Ontario Municipal Code is hereby amended in its entirety to read as follows:

Chapter 12 - Green Building Standards Code
Section 8-12.01. Adoption of California Green Building Standards Code The 2022 Edition of the California Green Buildings Standards Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 11, is hereby adopted by reference and made a part of this chapter as if fully set forth as length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

SECTION 12. Chapter 14 of Title 8 of the Ontario Municipal Code is hereby 54 amended in its entirety to read as follows:

Chapter 14 - Historic Building Code, Existing Building Code and Referenced Standards Section 8-14.01. Adoption of California Historic Building Code The 2022 Edition of the California Historic Building Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 8, is hereby adopted by reference and made a part of this chapter as if fully set forth as length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

Section 8-14.02. Adoption of California Existing Building Code The 2022 Edition of the California Existing Building Code, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 10, is hereby adopted by reference and made a part of this chapter as if fully set forth as length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

Section 8-14.03. Adoption of California Referenced Standards The 2022 Edition of the California Referenced Standards, as adopted by the California Building Standards Commission in California Code of Regulations Title 24, Part 12, is hereby adopted by reference and made a part of this chapter as if fully set forth as length herein. One (1) copy of said code is on file in the office of the City Clerk for public review.

SECTION 13. Filing of Ordinance. The Building Official shall transmit a copy of this Ordinance for filing to the State of California Building Standards Commission, pursuant to Health and Safety Code Section 17958.7. One copy of the Ontario Building Code shall be placed on file in the Office of the City Clerk and is hereby adopted and made a part of this Chapter as if fully set forth at length herein.

SECTION 14. Repeal of Conflicting Ordinances. Ordinance No. 3148, all former ordinances or parts thereof conflicting or inconsistent with the provisions of this ordinance, as adopted and amended herein, are hereby repealed.

SECTION 15. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase added by this Ordinance, or any part thereof, is for any reason held to be unconstitutional or invalid or in effective by any court of competentjurisdiction, 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 passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more subsections, subdivisions, paragraphs, sentences, clauses or phrases are declared unconstitutional, invalid or ineffective. 55 SECTION 16. CEQA. The City Council finds that the changes made to the California Building Code and the International Building Code are enacted to mitigate threats to public peace, health and safety from earthquakes, high winds and fire.

Moreover, the amendments are substantially similar to those provisions previously enacted and contained in the current version of the City's Building Code . Therefore, it can be seen with certainty that the adoption of this Ordinance will not have a significant adverse effect on the environment and is therefore exempt from the California Environmental Quality Act (CEQA) pursuant to section 15061(b)(3) of the CEQA Guidelines. Staff is directed to file a Notice of Exemption within five (5) days of the adopting of this Ordinance.

SECTION 17. 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 6th day of December 2022.

PAUL S. LEON, MAYOR
ATTEST:
_____________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
______________________________

BEST BEST & KRIEGER

CITY ATTORNEY
56 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCILMEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

SHEILA MAUTZ, CITY CLERK
(SEAL)
57 Department: Engineering
Prepared By: Antonio Alejos
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Reviewed By: Raymond Lee, Khoi Do
Approved By:

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

A RESOLUTION ORDERING THE SUMMARY VACATION OF A SEWER EASEMENT

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council adopt a Resolution ordering the summary vacation of a sewer easement located approximately 1,000 feet north of Francis Street and approximately 30 feet west of Cucamonga Avenue.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
FISCAL IMPACT:

There is not a direct fiscal impact associated with this action.

BACKGROUND & ANALYSIS:

The applicant, Alere Property Group, LLC, has requested that the City vacate a sewer easement located approximately 1,000 feet north of Francis Street and approximately 30 feet west of Cucamonga Avenue, as shown on Exhibit A, to facilitate the development of the area. The subject easement, neither now nor in the future, will be needed for sewer or public utility purposes. The subject easement does not contain any other public utilities and is determined to be excess.

Section 8333(c) of the California Streets and Highways Code authorizes the City to summarily vacate (by Resolution with no public hearing) a public service easement that has been superseded by relocation or determined to be excess and there are no other public utilities located within the easement.
58 CUCAMONGA AVENUE

FRANCIS STREET

BAKER AVVINEYARD AVE DE MISSIONE RIVERSIDEW DS GROVES EUCLIDS CAMPUSE PHILADELPHIAS MILLIKENN HAVENS MOUNTAINS BENSONE HOLTS SAN ANTONIOE PHILLIPSS MILLIKEN

VICINITY MAP

NOT TO SCALE

EXHIBIT A

VACATION
OF A

SEWER EASEMENT

PROJECT SITE
¹
DATE: 11/10/2022

MAP NOT TO SCALE
VACATION NO.

V-303

EXHIBIT A
PROJECT SITE:
1656 SOUTH CUCAMONGA AVENUE

SEWER EASEMENT

TO BE VACATED
59 RESOLUTION NO. ________

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

CALIFORNIA, ORDERING THE SUMMARY VACATION OF A SEWER
EASEMENT LOCATED APPROXIMATELY 1,000 FEET NORTH OF
FRANCIS STREET AND APPROXIMATELY 30 FEET WEST OF
CUCAMONGA AVENUE.

WHEREAS, the City Council of the City of Ontario, California, pursuant to Division 9, Part 3, Chapter 4, of the Streets and Highways Code, may summarily vacate an easement under certain conditions specified therein; and WHEREAS, the sewer easement located at 1656 South Cucamonga Avenue, shown over portions of Lot 11, Block “G”, Blackburn’s Addition to Ontario, in the City of Ontario, as per map recorded in Book 12, page 55, of Maps, records of San Bernardino County, State of California, is not needed for any present or future sewer and public utility purposes and is determined to be excess; and WHEREAS, Section 8333(c) of the California Streets and Highways Code authorizes the City to summarily vacate (by Resolution with no public hearing) a public service easement that has been superseded by relocation or determined to be excess and there are no other public utilities located within the easement; and NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Ontario, California:

1. That the above recitals are true and correct.

2. That title to the above-described said property, more specifically described in Exhibit “A” and depicted on Exhibit “B” attached hereto, shall be vacated.

3. That the City Clerk of the City of Ontario, California, shall cause a copy of this Resolution to be recorded in the office of the County Recorder of San Bernardino County, California.

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

PASSED, APPROVED, AND ADOPTED this 6th day of December 2022.

PAUL S. LEON, MAYOR
60 ATTEST:
________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO LEGAL 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 December 6, 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 December 6, 2022. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
62 63
64 Department: Human Resources
Prepared By: Darron Usher
Staff Member Presenting:

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

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

AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH KOFF AND

ASSOCIATES FOR A CLASSIFICATION AND COMPENSATION STUDY FOR THE

PUBLIC WORKS AGENCY AND SPECIALIZED SUPPORT FOR SPECIALIZED

RECRUITMENT ACTIVITIES

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Pursue City's Goals and Objectives by Working with Other Governmental Agencies FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget includes appropriations for Koﬀ and Associates in the General Fund, Water Operating, Sewer Operating, and Integrated Waste Fund.

The
proposed Amendment No. 1 increases the existing Agreement amount by $100,922 for a total revised amount of not-to-exceed $242,885. Actual expenditures will be based on services rendered pursuant to Exhibit A – Scope of Services (on file
with the Records Management Department).

BACKGROUND & ANALYSIS:

Koﬀ and Associates was founded in 1984 and has been assisting cities, counties, special districts, and other public agencies with their human resources needs for 37 years. The ﬁrm’s areas of focus are classiﬁcation and compensation studies including providing such services to agencies providing water, recycled water, sewer, waste collection and/or recycling services.

On January 18, 2022, the City Council authorized the award of a Professional Services Agreement with Koﬀ and Associates to conduct a total compensation study for specialized classiﬁcations found in the Ontario Municipal Utilities Company (OMUC) and the Integrated Waste Department. The scope of work included a review of current job descriptions and compensation system to ensure internal equity and external competitiveness; a comprehensive survey of external regional labor 65 market cities impacting the Ontario area job market, including a review of certain salary and beneﬁt programs and a review of the City’s historical practices and recommended survey agencies.

The study is currently in progress; however, the Human Resources/Risk Management Agency is recommending expanding the scope of work to include the additional classiﬁcations found in the Public Works Agency to further assist in the evaluation of the classiﬁcations found in the Integrated Waste Department. Some of these classiﬁcations may be found in the Municipal Services and Parks & Maintenance Departments and will be further reviewed as it relates to the alignment of the Public Works Agency in the City’s overall classiﬁcation structure with current business/operational needs of the City.

In addition to the expanded scope, it is recommended the term of the original agreement be extended from December 21, 2022, to December 22, 2025, to provide additional time to complete the study including specialized support for Citywide recruitment activities during a competitive labor market. These services will include creating candidate profiles and job bulletins, facilitating the application and screening process, and background checks for hard to ﬁll positions in managerial level classifications and above.
66 Department: Human Resources
Prepared By: Jennifer A Collins
Staff Member Presenting:

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

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

A PROFESSIONAL SERVICES AGREEMENT WITH GEORGE HILLS, INC. FOR THIRD-

PARTY LIABILITY CLAIMS ADMINISTRATION SERVICES

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget includes appropriations in the General Liability fund for the current agreement for third-party liability claims administration services. The cost for third-party liability claims administration services would be $478,748 for a three-year agreement, with a maximum 5% annual claims administration fee increase per year for services subsequent to the three-year contract term.

BACKGROUND & ANALYSIS:

Following a review of the services provided by the City’s current third- party liability claims administrator, it was determined that a request for proposals process would allow for a comparison of costs and services for claims administration. In July 2022, the City received three proposals for third-party liability claims administration services. The ﬁrms submitting proposals included:

Innovative Claim Solutions, San Ramon, CA
George Hills Inc., Ontario CA
Carl Warren & Company, Anaheim, CA
After thorough review of the proposals submitted, Staﬀ from the Human Resources/Risk Management Agency interviewed the top two ﬁrms. Consideration was given to overall claims experience in managing liability claims, speciﬁcally for cities in California; the prior experience of each manager and examiner who would be assigned to the City’s account; competitive fees; and completeness and structure of their proposal.
67 In addition to interviewing the top two ﬁrms, Staﬀ completed three reference checks for each ﬁrm.

References were obtained from other local cities, including cities with public safety departments.

Based on the completed interviews and reference checks it was concluded that George Hills Inc., would provide the best overall service, claims management, and supervision of the City’s liability claims program. Reference checks revealed that George Hills Inc., has a reputation of excellent customer service and expedited claims resolution.

The services that will be provided by George Hills Inc. will include monitoring all third-party liability claims, establishing and revising related ﬁnancial reserves, partnering on litigation management related to third-party liability claims, and processing claim expense payments. In addition to providing the listed services, George Hills Inc. will ensure that the City maintains compliance with all applicable statutes and liability laws as recognized by jurisdiction of the state of California’s courts. 68 Department: Police Department
Prepared By: Lizceth Zazueta
Staff Member Presenting:

Mike Lorenz, Chief of Police
Approved By:

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

ACCEPT AND APPROVE LAW ENFORCEMENT GRANT PROGRAM FOR FISCAL YEAR 2022-23

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council

authorize the City Manager or his designee to execute
all documents necessary to accept and approve the Citizen's Option for Public Safety (COPS) / Enhancing Law Enforcement Activities Subaccount (ELEAS) Grant for Fiscal Year 2022-23.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
Pursue City's Goals and Objectives by Working with Other Governmental Agencies FISCAL IMPACT:

As part of the COPS/ELEAS grant program, the City of Ontario is eligible to receive a maximum grant award of $277,260. This amount is based on an estimation of the State's Vehicle License Fee (VLF) revenues for Fiscal Year 2022-23. The allocation may only be re-calculated and adjusted by the State Controller’s Oﬃce. Additionally, the grant funds will be distributed to the City in monthly installments and no matching funds by the City is required. If approved, the associated revenue and expenditure adjustments in the Grants Fund will be presented to Council as part of the Mid-Year budget report.

BACKGROUND & ANALYSIS:

Beginning in FY 2002-03, the State of California allocated grant monies (COPS/ELEAS), formerly known as Supplemental Law Enforcement Services Fund/Citizen’s Option for Public Safety to counties. The County granted those monies to cities for the purpose of supporting front-line law enforcement needs.

On September 14, 2022, the California State Department of Finance announced the estimated funding allocation amounts to be awarded to each participating agency under the COPS/ELEAS grant program. The City of Ontario is eligible to receive a maximum grant award of $277,260. If approved, the associated revenue and expenditure adjustments will be presented as part of the Mid-Year budget report to the City Council.
69 Department: Police Department
Prepared By: Lizceth Zazueta
Staff Member Presenting:

Mike Lorenz, Chief of Police
Approved By:

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

ACCEPT AND APPROVE LAW ENFORCEMENT GRANT PROGRAM FOR FISCAL YEAR 2021-22

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Maintain the Current High Level of Public Safety
Pursue City's Goals and Objectives by Working with Other Governmental Agencies FISCAL IMPACT:

Council previously approved on November 2, 2021 the acceptance of the COPS/ELEAS grant program for ﬁscal year 2021-22 in the amount of $278,823. The program awarded the City an additional $181,991 reallocated from actuals of the State's Vehicle License Fee (VLF) revenues for Fiscal Year 2021-22. If approved, the associated revenue and expenditure adjustments in the Grants Fund will be presented to Council as part of the Mid-Year budget report.

BACKGROUND & ANALYSIS:

Beginning in FY 2002-03, the State of California allocated grant monies (COPS/ELEAS), formerly known as Supplemental Law Enforcement Services Fund/Citizen’s Option for Public Safety to Counties. The County granted those monies to Cities for the purpose of supporting front-line law enforcement needs.

In September 2022, the California State Department of Finance announced the actual funding allocation amounts to be awarded to each participating agency under the COPS/ELEAS grant program. The City of Ontario is receiving an additional award of $181,991. If approved, the associated revenue and expenditure adjustments will be presented as part of the Mid-Year budget report to the City Council.
70 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: 13
SUBJECT:

AN AGREEMENT WITH MERCY HOUSE LIVING HOUSE CENTERS FOR ENHANCED

SERVICES AND OPERATION OF THE EMERGENCY MOTEL VOUCHER PROGRAM

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council approve and authorize the City Manager or designee to execute a one-year agreement with Mercy House Living Centers, of Santa Ana, California, for supplemental hours at the Ontario Access Center, and operate the Emergency Motel Voucher Program, for a not-to-exceed amount of $105,000.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:

The Community Life & Culture Fiscal Year 2022-23 Adopted Operating Budget included appropriations of $105,000 for these services. No additional funds are requested for this Agreement.

BACKGROUND & ANALYSIS:

The Homeless Services Continuum of Care Program ("Continuum of Care") is a multi-phased program that includes the following components: The Homeless Outreach Service Center ("Ontario Access Center"), homeless street outreach services, transitional housing, 62 permanent aﬀordable housing units, a tenant-based rental assistance program, and after-care services.

In May 2005, January 2011 and June 2019, the City Council approved and subsequently modiﬁed the Homeless Services Continuum of Care Program in partnership with Mercy House Living Centers ("Mercy House") which includes services to be provided by Mercy House at the Ontario Access Center.

This Agreement serves to continue supplementing Mercy House's grant-funded hours of service for those clients of the Ontario Access Center and the City's Emergency Motel Voucher program. Of the $105,000 contracted amount, $75,000 is allocated for the Ontario Access Center and $30,000 is allocated to the Emergency Motel Voucher Program.
71 The Ontario Access Center is the entry point for homeless persons seeking assistance. The Ontario Access Center oﬀers showers and laundry services on a scheduled basis, provides food and clothing for clients, and conducts the screening and assessment necessary for clients to access housing programs, such as the Rapid Rehousing subsidy program. Once a client has enrolled in the Ontario Access Center, Mercy House staﬀ work to secure temporary or permanent housing resources for them.

Using grant funding, the Ontario Access Center initially operated between 10 AM and 2 PM on weekdays. In 2020, Ontario City Council approved additional funding to extend weekday hours from 9 AM to 5 PM, and, to better accommodate homeless families, from 10 AM to 2PM on Saturdays. In 2022, Staﬀ approved Mercy House's request to eliminate Saturday hours due to a lack of use from families and challenges with staﬃng during those hours. The FY 2022-23 Agreement provides for Saturday hours until November 1, 2022, and allows for evening hours by appointment after November 2, 2022.

Funding for the Emergency Motel Voucher Program has been reduced dramatically following the end of the 2020 Emergency Solutions Grant – CARES Act Program. The Emergency Motel Voucher Program serves two purposes: to prevent death related to exposure to extreme heat, wind, rain and cold, and to respond to limited emergency situations, such as building closures or ﬁre.

Additional funding for this Emergency Motel Voucher Program will be issued via separate agreements through Community Development Block Grant and Emergency Solutions Grant-CARES Act funding.

Ontario Continuum of Care sets the standards for weather activation following National Weather Service forecasts and coordinates communications with Ontario Emergency Management and Mercy House. Under this Agreement, Mercy House contracts with local motels to secure rooms for persons enrolled in the program.
72 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: 14
SUBJECT:

PURHASE AUTHORIZATION FOR ENGINE OVERHAUL OF A POLICE HELICOPTER

CITY OF ONTARIO
Agenda Report
December
6, 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:

The engine overhaul of one of the City's police helicopters will be funded from the General Fund. The approximate funds of $500,000 will include a complete engine overhaul, temporary engine rental and associated costs.

BACKGROUND & ANALYSIS:

The proposed expenditure includes a complete overhaul of the engine and rental of another engine to minimize the helicopter's down-time. The turbine engine will be sent to the factory and the total cost will not be known until Safran takes the engine apart for a thorough inspection and assesses the necessary replacement parts. Safran Helicopter Engines USA, Inc. is a Council approved sole source vendor and is the original equipment manufacturer and will complete the scheduled maintenance. The engine rental will be used on the existing helicopter to fill the gap during the overhaul project. 73 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: 15
SUBJECT:

STATEWIDE PER CAPITA GRANT PROGRAM FUNDS FOR SAM ALBA MEMORIAL

PARK REHABILITATION

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council authorize the City Manager or designee to accept $286,906 of funding provided by the State Department of Parks and Recreation for the Statewide Per Capita Grant Program.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Pursue City's Goals and Objectives by Working with Other Governmental Agencies Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:

The City of Ontario has been awarded a total of $286,906 from the State Department of Parks and Recreation through the Parks, Environment and Water Bond Act of 2018 (Proposition 68). Appropriations and revenues will be included in the Grants Fund on the next Fiscal Year 2022-23 Quarterly Budget Update. Matching funds are not required.

BACKGROUND & ANALYSIS:

On September 7, 2021, City Council approved the filing of an application for grant funds through the State Department of Parks and Recreation for the Statewide Per Capita Grant Program under the Parks, Environment and Water Bond Act of 2018 (Proposition 68). Under the Prop 68 Per Capita Grant Program, more than 700 agencies were awarded noncompetitive funds on a per capita basis to support the rehabilitation, creation, and improvement of local parks. State Grant recipients are encouraged to utilize awards to rehabilitate existing infrastructures and to address deﬁciencies in neighborhoods that lack access to outdoor recreation facilities. The Sam Alba Park Revitalization Project is consistent with the grant program criteria. The grant amount awarded to the City of Ontario is $286,906.

The new recreation features will enhance this open green space park and add to the children’s playground element. Speciﬁcally, the grant funds will be used for new exercise equipment, a new playground, shade structure, picnic area, and a dog waste station. 74 The Community Life & Culture Agency requests that the Ontario City Council authorize the City of Ontario to accept the grant funds and commence the revitalization of Sam Alba Memorial Park.

75 Department: Financial Services
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: 16
SUBJECT:

RESOLUTIONS UPDATING AUTHORIZED DEPUTY CITY TREASURERS AND

UPDATED INVESTMENT POLICY

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
FISCAL IMPACT:

There is no direct ﬁscal impact associated with these updates to the authorized Deputy City Treasurers and Investment Policy.

BACKGROUND & ANALYSIS:

Recent staﬀ movements have necessitated the need to update Resolutions identifying those individuals authorized to invest City funds and to transact with LAIF.

All other Resolution provisions remain unchanged to ensure continuity in the City Treasury management operations. The authorized individuals will be as follows: City Treasurer, Executive Director of Finance, Departmental Administrator (Financial Services Agency), Chief Investment Officer, and the Senior Financial Analyst assigned to Investments.

Section 53646(a) (2) of the California Government Code states that the Treasurer or Chief Fiscal Oﬃcer of a local agency may annually render to the legislative body of that local agency, a Statement of Investment Policy, which the legislative body of the local agency shall consider at a public meeting. Any change in the policy shall also be considered by the legislative body of the local agency at a public meeting.

The current Investment Policy was approved on December 7, 2021. One update is recommended at this time. Section III (Delegation of Authority) of the Investment Policy is updated to reﬂect change of the responsibility for the day-to-day investment of the City’s funds is delegated to the Chief Investment Oﬃcer instead of the Investment Oﬃcer. No other changes to the Investment Policy are being proposed. The updated Investment Policy is attached as Exhibit A. 76 RESOLUTION NO. ________

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

CALIFORNIA, PROVIDING FOR THE INVESTMENT OF INACTIVE

FUNDS IN THE LOCAL AGENCY INVESTMENT FUND OF THE

CALIFORNIA STATE TREASURY AND HEREBY RESCINDING
RESOLUTION NO. 2021-164.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ONTARIO DOES HEREBY RESOLVE AND FIND AS FOLLOWS:

SECTION 1. The California State Legislature has, pursuant to Chapter 730 of the Statutes of 1976, Sections 16429.1 et seq., added to the Government Code and created the Local Agency Investment Fund as a special fund in the California State Treasury. The pooling of funds by many California local agencies will create a fund allowing for high rates of return due to the use of large denomination instruments.

SECTION 2. The City of Ontario has money in its treasury not required for immediate needs and it is in the best interest of the city to place said money in approved investments yielding maximum returns.

SECTION 3. The City of Ontario, 303 East "B" Street, Civic Center, Ontario, California 91764-4196, will participate in the Local Agency Investment Fund of the California State Treasury.

SECTION 4. The City of Ontario agrees to deposit or withdraw money in the Local Agency Investment Fund in the California State Treasury in accordance with the provisions of Section 16429.1 of the Government Code for the purpose of investment as stated therein.

SECTION 5. The following persons are authorized to order the deposit or withdrawal of money in the Local Agency Investment Fund or their successors.

James R. Milhiser, City Treasurer
Armen Harkalyan, Deputy City Treasurer
Michelle Nguyen, Deputy City Treasurer
William Quan, Deputy City Treasurer
Brendon Fung, Deputy City Treasurer
SECTION 6. Resolution No. 2021-164 is hereby rescinded.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
77 PASSED, APPROVED, AND ADOPTED this 6th day of December 2022. _
PAUL S. LEON, MAYOR
ATTEST:
________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
78 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

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

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

CALIFORNIA, AUTHORIZING THE INVESTMENT OF CITY FUNDS AND HEREBY RESCINDING RESOLUTION NO. 2021-165.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ONTARIO DOES HEREBY RESOLVE AND FIND AS FOLLOWS:

SECTION 1. That the City Treasurer and/or any duly-appointed Deputy City Treasurers whose names appear in this resolution are hereby authorized to open investment accounts for the City of Ontario with any bank, savings and loan association, broker dealer or other financial institution, hereinafter referred to as "broker", to purchase, sell and or deal in such notes, bonds, bills, certificates of indebtedness, warrants or registered warrants and/or other investments as are authorized for general law cities in the State of California by Chapter 4 of Part 1 Division 2 of Title 5 of the Government Code (commencing with section 53600) (hereinafter "authorized investments"), and as limited by the current investment policy of the City Council of the City of Ontario, a copy of which is attached to and made a part of this resolution, and/or such other investment policy which may be adopted by said City Council, and that all orders and instructions, written or oral, which may be given by either the City Treasurer or a duly-appointed Deputy City Treasurer; and each of whom is hereby authorized and directed to purchase, sell and/or deal in authorized investment instruments through said broker on behalf of the City of Ontario, which they may deem necessary or advisable for the City of Ontario for cash and also to make payments and to sign checks or drafts drawn upon the funds of the City of Ontario and also, to withdraw from said broker from time to time, to deliver or accept delivery of, and/or to endorse, and/or to direct the transfer of record title of, all authorized investments, and/or assets or funds that may be carried by said broker for the account of the City of Ontario, and
SECTION 2. That each of the aforesaid officers of the City of Ontario be and hereby authorized and directed to execute and deliver on behalf of the City of Ontario any customer's agreement required by broker and to enter into, execute, and deliver, any and all other agreements, documents, releases, and writings that may be required by said broker for the opening and/or continuing of said account in connection with any transaction relating to said account or to any securities or moneys of the City of Ontario whether or not in said account, provided, however, that no customer's agreement shall authorize investment in other than authorized investments, and
SECTION 3. That until broker shall receive duly written notices of change or rescission of these resolutions, said broker may rely upon the authority contained in this resolution as continuing fully effective, and the said broker may rely upon any certified copy of resolutions, specimen signatures or other writings, signed on behalf of the City of Ontario by any officer thereof; the acceptance of any other form of notice shall not constitute a waiver, of this provision, nor shall the fact that any person hereby empowered ceases to be an officer or becomes an officer under some other title, in any way affect the powers hereby conferred, until broker shall receive due written notice of change or rescission, as 80 aforesaid, and
SECTION 4. That in the event of any change in the office or powers of persons hereby empowered, the City Council shall certify those changes to broker in writing, in the manner herein above specified, which notification, when received, shall be adequate both to terminate the powers of the person theretofore authorized, and to empower the persons thereby substituted, and
SECTION 5. That any and all orders and instructions heretofore given to said broker on behalf of the City of Ontario by any officer of the City of Ontario, are hereby in all respects ratified, confirmed and approved, and
SECTION 6. That the foregoing resolutions and the certificates actually furnished to broker by any officer of the City of Ontario, be and they hereby are made irrevocable, and shall be fully effective as to any transaction for the account of the City of Ontario notwithstanding that the account may have been temporarily closed or inactive, until written notice of the revocation thereof shall have been received by broker.

SECTION 7. That Resolution No. 2021-165 is hereby rescinded.

SECTION 8. I DO FURTHER CERTIFY that the following are the signatures and titles of the persons authorized and empowered to act on behalf of the City of Ontario, pursuant to the foregoing resolutions, and this resolution is in accordance with and does not conflict with the existing ordinances and/or resolutions. ________________________________ ________________________________ James R. Milhiser, City Treasurer Armen Harkalyan, Deputy City Treasurer _________________________________ ________________________________ Michelle Nguyen, Deputy City Treasurer William Quan, Deputy City Treasurer _________________________________
Brendon Fung, Deputy City Treasurer
SECTION 9. 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. 81 PASSED, APPROVED, AND ADOPTED this 6th day of December 2022. _
PAUL S. LEON, MAYOR
ATTEST:
________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
82 STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
83 December 6, 2022
City of Ontario
303 East B Street
Ontario, CA 91764
909-395-2000
www.ontarioca.gov

I N V E S T M E N T P O L I C Y
84 Investment Policy Statement
page 1
City of Ontario
Investment Policy Statement

TABLE OF CONTENTS
1 Purpose …........................................................................................................................ 2 2 Scope .….......................................................................................................................... 2 3 Delegation of Authority …...........................................….................................................. 2 4 Prudence …............................................…...................................................................... 3 5 Investment Objectives …............................................…................................................. 3 6 Ethics and Conflicts of Interest …................................................................................... 4 7 Internal Controls ….............................................….......................................................... 4 8 Safekeeping of Securities …............................................…............................................. 4 9 Reporting ….............................................…..................................................................... 5 10 Qualified Dealers ….............................................…......................................................... 5 11 Competitive Bidding …..............................................….................................................... 6 12 Purchase and Sale of Securities …............................….................................................. 6 13 Policy Review …..............................................…............................................................. 6 14 Diversification ….............................................….............................................................. 6 15 Maximum Maturities …..............................................….................................................... 6 16 Table of Authorized Investments …....................................….......................................... 7 17 Description of Authorized Investments …...............................…..................................... 8 18 Investment Pools/Mutual Funds …........................................…....................................... 11 19 Collateralization ….............................................…........................................................... 11 20 Ineligible Investments ….............................................….................................................. 12 21 Glossary of Investments Terms …............................................…................................... 13 APPENDIX A – List of Resolutions for Investment of Inactive Funds in LAIF…..................... 21 APPENDIX B – List of Resolutions for Investment of City Funds ........................................... 22 85 Investment Policy Statement
page 2

CITY OF ONTARIO

INVESTMENT POLICY STATEMENT

1. PURPOSE
This statement is intended to: (a) describe the policies and procedures utilized in the City’s investment management system; (b) put in place guidelines for the prudent investment of the City’s funds, and (c) list and describe suitable investments.

The goals of the City’s investment policy and investment management function are enhancement of the economic status of the City and protection of the City’s funds.

The investment policies and practices of the City of Ontario are based upon federal and state law and prudent money management principles. The primary goals of these policies are:

A. To assure compliance with all laws governing the investments under the control of the City Treasurer.

B. To protect the principal monies entrusted to this office.

C. To generate the maximum amount of investment income consistent with the parameters established in this Statement of Investment Policy.

2. SCOPE
This investment policy applies to all monies belonging to the City of Ontario, and proceeds from bonds or notes issued by the City of Ontario and any authorized special districts. Bond proceeds and any funds associated with bond issues and other monies arising from bond indebtedness are further restricted by the pertinent bond indenture. Funds described above are accounted for in the City’s Annual Comprehensive Financial Report.

The City will comply with all applicable sections of the Internal Revenue Code of 1986, Arbitrage Rebate Regulations and bond covenants with regards to the investment of bond proceeds.

All monies entrusted to the City Treasurer will be pooled in an actively managed portfolio and will be referred to as the “fund” or the “portfolio” throughout the remainder of this document.

3. DELEGATION OF AUTHORITY
In accordance with State law (see California Government Code Sec. 53607) and under the authority granted by the City Council (refer to appendix A and B for list of resolutions), the City Treasurer and Deputy City Treasurer(s) are authorized to invest the unexpended cash in the City treasury. The responsibility for the day-to-day investment of the City’s funds is delegated to the Chief Investment Officer. In the absence of the Chief Investment Officer, the Deputy City Treasurers will be responsible for the investment function. 86 Investment Policy Statement
page 3
The City may engage the services of one or more external investment advisers, who are registered under the Investment Advisers Act of 1940, to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. External investment advisers may be granted discretion to purchase and sell investment securities in accordance with this investment policy.

4. PRUDENCE
Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs; not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. The standard of prudence to be used by investment officials shall be the “prudent investor” standard (California Government Code Section 53600.3) and shall be applied in the context of managing an overall portfolio.

Investment officers, acting in accordance with written procedures and the investment policy and exercising due diligence, shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

5. INVESTMENT OBJECTIVES
A. Safety of Principal
Safety of principal is the foremost objective of the investment policies and practices of the City of Ontario. Investment decisions shall seek to minimize net capital losses on a portfolio basis. This policy recognizes that market conditions may warrant the sale of individual securities incurring losses in order to protect against further and more substantial capital losses. The intent of this policy is to ensure that capital losses are minimized on a portfolio level rather than on each transaction. The City shall seek to preserve principal by mitigating credit risk and market risk.
1) Credit Risk – Defined as the risk of loss due to failure or insolvency of an issuer; shall be mitigated by diversifying the fund so that the failure of any one issuer would not unduly harm the City’s cash flow. No more than 5% of the portfolio may be invested (at time of purchase) in the securities of any one single issuer except the U.S. Government, its agencies, supranational organizations, or the State of California Local Agency Investment Fund.
2) Market Risk – Defined as the risk of market value fluctuations due to changes in the general level of interest rates. Because longer maturity fixed-income securities have greater market risk than shorter maturity securities, market risk will be mitigated by limiting the weighted average maturity of the fund to 2 ½ years. It is explicitly recognized that in an active portfolio, occasional losses are inevitable and must be considered within the context of the overall investment return.
87 Investment Policy Statement
page 4
B. Liquidity
The City’s fund will be structured to ensure that the projected expenditure requirements of the City for the next six months can be met with a combination of anticipated revenues, maturing securities, principal and interest payments and liquid instruments as required by California Government Code Section 53646.

C. Performance Measurement (Yield)
The performance of the City’s investment portfolio will be measured on a total return basis.

The portfolio’s performance will be measured against a benchmark of the ICE BofAML1-3 year Treasury Index. The index’s returns are reported monthly on the City’s current portfolio report.

6. ETHICS AND CONFLICTS OF INTEREST
All participants in the investment process shall act as custodians of the public trust. Investment officials shall recognize that the investment portfolio is subject to public review and evaluation.

Thus employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

Employees and investment officials shall disclose to the Investment Officer any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City.

7. INTERNAL CONTROLS
The City Treasurer is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The internal control structure shall be designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.

Periodically, as deemed appropriate by the City, an independent analysis by an external auditor shall be conducted to review internal controls, account activity and compliance with policies and procedures.

8. SAFEKEEPING OF SECURITIES
With the exception of insured Certificates of Deposit and the Local Agency Investment Fund of the State of California, all securities owned by the City, including collateral for repurchase 88 Investment Policy Statement
page 5
agreements, shall be held in safekeeping by the City’s custodial bank or a third-party bank trust department acting as agent for the City under terms of a custody or trustee agreement executed by the bank and the City. All securities will be received and delivered using standard delivery versus payment (DVP) procedures and in accordance with State Code.

9. REPORTING
The City Treasurer is required to submit an investment report on a quarterly basis to the City Manager, the Internal Auditor, and the City Council, in accordance with California Government Code, Section 53646. The report is required to be submitted within 30 days of the end of the quarter. The City Treasurer has elected to provide this report monthly. This report will include the following information:
 Type of investment instrument (i.e. Treasury Bill, CD)  Issuer name (i.e. US Treasury Note)
 Purchase date (trade and settlement date)
 Maturity date
 Par value
 Purchase price
 Current market value and source of valuation
 Overall portfolio yield based on cost
 Statement of compliance of the portfolio to the investment policy or an explanation of the manner in which the portfolio is not in compliance
 Description of any of the City’s funds that are under the management of contracted parties.
 Statement denoting the ability of the City to meet its expenditure requirements for the next six months, or an explanation as to why sufficient money may not be available.

10.QUALIFIED DEALERS
The Investment Officer shall maintain a list of financial institutions qualified to do business with the City. Banks and broker/dealers will be selected on the basis of creditworthiness, experience, and capitalization. Prior to approval, they must read and sign the City’s Broker/Dealer Questionnaire and Certification. In accordance with California Government Code, Section 53601, a bank or broker/dealer must be qualified as a dealer regularly reporting to the New York Federal Reserve Bank (a “primary dealer”) to conduct repurchase agreements with the City.

Selection of financial institutions and broker/dealers authorized to engage in transactions will be at the sole discretion of the City, except where the City utilizes an external investment adviser in which case the City may rely on the adviser for selection.

Selection of broker/dealers used by an external investment adviser retained by the City will be at the sole discretion of the adviser. Where possible, transactions with broker/dealers shall be selected on a competitive basis and their bid or offering prices shall be recorded. If there is no other readily available competitive offering, best efforts will be made to document quotations 89 Investment Policy Statement
page 6
for comparable or alternative securities. When purchasing original issue instrumentality securities, no competitive offerings will be required as all dealers in the selling group offer those securities at the same original issue price.

11.COMPETITIVE BIDDING
It will be the policy of the City to transact all securities purchases and sales through a formal and competitive process requiring the solicitation and evaluation of at least three bids/offers whenever possible. The City will accept the offer, which provides (a) the highest rate of return; and (b) optimizes the investment objectives of the overall portfolio. On transactions where three bids/offers are not available, the Investment Officer shall make an evaluation regarding the relative attractiveness of various offer using factors such as maturity date, credit ratings, structure and other factors which influence pricing. It will be the responsibility of the City’s staff involved to produce and retain written records, including the name of the financial institutions solicited, price/rate quoted, description of the security, bid/offer selected, and any special considerations that had an impact on their decision.

12.PURCHASE AND SALE OF SECURITIES
Unless the services of an external investment adviser are used, purchases and sales of securities will be executed only by the Investment Officer and in his absence the Deputy City Treasurer. All transactions will be reviewed and approved by the City Treasurer.

13.POLICY REVIEW
The City Treasurer shall annually render to the City Council an investment policy statement, which shall be considered at a public meeting. Any changes in the policy shall also be considered by the City Council at a public meeting.

14.DIVERSIFICATION
The City will diversify use of investment instructions to avoid unreasonable risks inherent in over-investing in specific instruments, individual financial institutions, or maturities. Market price volatility shall be controlled through maturity diversification, as well as ensuring adequate liquidity is available to meet cash flow requirements, thereby precluding the need to sell instruments at a market loss.

15.MAXIMUM MATURITIES
In accordance to California Government Code Section 53601, the City will not invest in any securities maturing more than five (5) years from the settlement date of purchase. If there is a desire to make investments longer than five years, express authority to make those investments, either specifically or as part of an investment program, must be approved by the City Council no less than three months prior to the investment. 90 Investment Policy Statement
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16.TABLE OF AUTHORIZED INVESTMENTS

INVESTMENT TYPE MAXIMUM

MATURITY
MAXIMUM SPECIFIED %

OF PORTFOLIO

MINIMUM QUALITY

REQUIREMENTS

CA GOVERNMENT

CODE SECTIONS
U.S. Treasury Obligations 5 years None None 53601(b)
U.S. Agency Obligations 5 years None, but no more than
20% in any one issuer None 53601(f)
Bankers' Acceptances 180 days 40% and no more than 5%
in any one single bank
Short-term debt rate "A-1" or
better by at least one
NRSRO, Long-term debt
rated "A" or better by at least
one NRSRO
53601(g)
Commercial Paper-Non Pooled Funds 270 days 15% and no more than 10% in any one issuer
Rate "A-1" or better by at
least two NRSRO and rated
"A" or better on long-term
debentures by a NRSRO
53601(h)(2)(c)
Commercial Paper-Pooled Funds 270 days 15% and no more than 10% in any one issuer
Rate "A-1" or better by at
least two NRSRO and rated
"A" or better on long-term
debentures by a NRSRO
53635(a)(1)
Negotiable Certificates of Deposit 5 years 30% Rate "A-1" or better by at least two NRSRO 53601(i)
Repurchase Agreements 1 year
None, but no more than
20% of the cost value of the
fund
Collateral rate shall be
valued at 102% or greater of
the value of the repurchase
agreement
53601(j)(1)(2)
Local Agency Investment Fund (LAIF) N/A None None 16429.1 Time Deposits (Non-Negotiable
Certificate of Deposit) 5 years 25% of the fund None 53630 et seq.

Medium-Term Notes 5 years
30% and no more than 15%
rated below "AA" by at least
two NRSRO; No more than
5% may be in any one
corporate name
Must have rate of "A" or
better by at least two
NRSRO, 30% max and no
more than 15% rated below
"AA" by at lease two
NRSRO; No more than 5%
may be in any one corporate
name
53601(k)
Collateralized Mortgage Obligations,
Mortgage-Backed or Other Pay-
Through Bond, Equipment Leased-
Backed Certificate (Asset-Backed
Securities), or Consumer Receivable-
Back Bond
5 years 20% of the fund Rate "AA" 53601(o)
California Local Agency Obligations 5 years None None 53601(e) California State Obligations 5 years None None 53601(d) Supranational Obligations 5 years 10% Rate "AA" or better by NRSRO 53601(q)
Mutual Funds N/A
20% and no more than 10%
of total portfolio in any one
mutual fund
Attain highest ranking by at
least two NRSROs or have
retained a registered
investment advisor
53601(l) 53601.6(b)
Money Market Mutual Funds N/A
20% and no more than 20%
of total portfolio in any one
money market mutual fund
Attain highest ranking by at
least two NRSROs or have
retained a registered
investment advisor
53601(l) 53601.6(b)
91 Investment Policy Statement
page 8

17.DESCRIPTION OF AUTHORIZED INVESTMENTS
A. The City’s Investment Portfolio is governed by California Government Code, Section 53600 et seq. Percentage holding limits listed in this section apply at the time the security is purchased. Within the context of these limitations, the following investments are authorized, as further limited herein:
1) United States Treasury Bills, Notes, and Bonds, or those securities for which the full faith and credit of the United States are pledged for payment of principal and interest. There is no limitation as to the percentage of the fund, which can be invested in this category.
2) Obligations—including U.S. Government Agency Mortgage pass-through securities- issued by various agencies of the Federal Government including, but not limited to, the Federal Farm Credit Bank System (FFCB), the Federal Home Loan Bank (FHLB), the Federal National Mortgage Association (FNMA), the Federal Home Loan Mortgage Corporation (FHLMC) as well as such agencies or enterprises which may be created. There is no percentage limitation on the dollar amount which can be invested in Agency issues in total, no more than 20% of the cost value of the portfolio may be invested in the securities of any one issuer. 3) Bills of exchange or time drafts drawn on and accepted by a commercial bank, commonly known as banker’s acceptances. Banker’s acceptances may not exceed 180 days to maturity. To be eligible for purchase, banker’s acceptances must have short-term debt obligations rated “A-1” or its equivalent or better by at least one NRSRO; or long-term debt obligations which are rated in a rating category of “A” or its equivalent or better by at least one NRSRO. No more than 40% of the cost value of the portfolio may be invested in banker’s acceptances and no more than 5% of the cost value of the portfolio may be invested in banker’s acceptances of any single bank.
4) Commercial paper rated “A-1” or its equivalent by at least two NRSROs and issued by a domestic corporation having assets in excess of $500 million and having at least an “A” or its equivalent rating on its long-term debentures as provided by a NRSRO. Purchases of eligible commercial paper may not exceed 270 days maturity nor represent more than 10% of the outstanding paper on an issuing corporation.

Purchases of commercial paper may not exceed 15% of the portfolio, which may be invested pursuant to this section. An additional 15% or a total of 30% of the City’s money may be invested pursuant to this subdivision. The additional 15% may be so invested only if the dollar weighted average maturity of the entire amount does not exceed 31 days.
5) Negotiable certificates of deposit issued by a nationally or State chartered bank or a State or Federal savings institution, or a State licensed branch of a foreign bank (“Yankee”). Purchases of negotiable certificates of deposit may not exceed 30% of the cost value of the portfolio. To be eligible for purchase by the City, the certificate of deposit must be rated “A-1” or its equivalent by at least two NRSROs. 92 Investment Policy Statement
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6) Repurchase Agreements – The City may invest in repurchase agreements with primary dealers of the Federal Reserve Bank of New York with which the City has entered into a master repurchase agreement. The Public Securities Association master repurchase agreement is the “master repurchase agreement”. The maturity of repurchase agreements shall not exceed one year. The market value of securities used as collateral for repurchase agreements shall be valued at no less than 102% of the value of the repurchase agreement. Collateral pricing will be monitored no less than monthly by the investment staff and not be allowed to fall below 102% of the value of the repurchase agreement. In order to conform to provisions of the Federal Bankruptcy Code which provide for the liquidation of securities held as collateral for repurchase agreements, the only securities acceptable to the city as collateral shall be securities that are direct obligations of, or that are fully guaranteed as to principal and interest, by the United States or any agency thereof. Investments in repurchase agreements may not exceed 20% of the cost value of the fund. 7) Local Agency Investment Fund - The City may invest in the Local Agency Investment Fund (“LAIF”) established by the State Treasurer for the benefit of local agencies up to the maximum permitted under Section 16429.1 of the California Government Code.
8) Time Deposits – The City may invest in non-negotiable time deposits collateralized in accordance with the California Government Code, which meet the requirements for investment in negotiable certificates of deposit. The City may invest in insured certificates of deposit with individual depository institutions up to the insured limit.

No more than 25% of the fund may be invested in this category. 9) Medium-term notes of a maximum of five years maturity issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any State and operating within the United States.

The issuing corporation must have a minimum rating of “A” or its equivalent by at least two NRSROs and have in excess of $500 million in shareholder equity.

Purchase of medium-term notes may not exceed 30% of the cost value of the portfolio with no more than 15% of the cost value of the portfolio rated below “AA” or its equivalent by at least two NRSROs. No more than 5% of the portfolio (at time of purchase) may be invested in any one corporate name, including the parent corporation or subsidiaries.
10)Asset Backed Securities - Any collateralized mortgage obligations, mortgage- backed or other pay-through bond, equipment lease-backed certificate, or consumer receivable-backed bond. Securities eligible for investment under this section shall be rated in a rating category of “AA” by a nationally recognized statistical rating organization and have a maximum remaining maturity of 5 years or less. Purchase of securities authorized by this subdivision may not exceed 20% of the cost value of the portfolio.
93 Investment Policy Statement
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11)Bonds, notes, warrants or other evidences of indebtedness of any local agency of this state, including bonds payable solely out of the revenues from a revenue producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. 12)Registered state warrants or treasury notes or bonds of this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled or operated by the state or by a department, board, agency or authority of the state.
13)Supranational Obligations - United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated "AA" or better by an NRSRO and shall not exceed 10 percent of the City's moneys that may be invested pursuant to this section.
14)Mutual Funds and Money Market Mutual Funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940, provided that:
a) Mutual Funds that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) inclusive and that meet either of the following criteria:
i. Attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
ii. Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience investing in the securities and obligations authorized by California Government Code, Section 53601 and with assets under management in excess of $500 million. iii. No more than 10% of the total portfolio may be invested in shares of any one mutual fund.
b) Money Market Mutual Funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 and issued by diversified management companies and meet either of the following criteria:
i. Have attained the highest ranking or the highest letter and numerical rating provided by not less than two (2) NRSROs; or
94 Investment Policy Statement
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ii. Have retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five years’ experience managing money market mutual funds with assets under management in excess of $500 million. iii. No more than 20% of the total portfolio may be invested in the shares of any one Money Market Mutual Fund.
c) No more than 20% of the total portfolio may be invested in these securities.

B. In the event of a rating downgrade of security in the City’s portfolio by any of the applicable rating agencies (Standard and Poor’s or Moody’s) to a rating category below the minimum required for purchase, the Investment Officer will document such downgrade in writing. The Investment Officer will also communicate to the City Treasurer a recommended course of action for said security.

18.INVESTMENT POOLS/MUTUAL FUNDS
The City shall conduct a thorough investigation of any pool or mutual fund prior to making an investment, and on a continual basis thereafter. The Treasurer shall develop a questionnaire which will answer the following general questions:
 A description of eligible investment securities, and a written statement of investment policy and objectives.
 A description of interest calculations and how it is distributed, and how gains and losses are treated.
 A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.  A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.
 A schedule for receiving statements and portfolio listings.  A description of how the pool/fund utilizes reserves, retained earnings, etc.  A fee schedule, including when and how is it assessed.  The eligibility of the pool/fund to invest in bond proceeds and special district funds, and a description of its practices.

19.COLLATERALIZATION
Certificates of Deposit (CDs). The City shall require any commercial bank or savings and loan association to deposit eligible securities with an agency of a depository approved by the State Banking Department to secure any uninsured portion of a Non-Negotiable Certificate of Deposit. The value of eligible securities as defined pursuant to California Government Code, Section 53651, pledged against a Certificate of Deposit shall be equal to 150% of the face value of the CD if the securities are classified as mortgages and 110% of the face value of the CD for all other classes of security. 95 Investment Policy Statement
page 12
Collateralization of Bank Deposits. This is the process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing repayment of deposited funds. The City shall require any bank or financial institution to comply with the collateralization criteria defined in California Government Code, Section 53651.

Repurchase Agreements. The City requires that Repurchase Agreements be collateralized only by securities authorized in accordance with California Government Code:

1. The securities which collateralize the repurchase agreement shall be priced at Market Value, including any Accrued Interest plus a margin. The Market Value of the securities that underlie a repurchase agreement shall be valued at 102% or greater of the funds borrowed against those securities.

2. Financial institutions shall mark the value of the collateral to market at least monthly and increase or decrease the collateral to satisfy the ratio requirement described above.

3. The City shall receive monthly statements of collateral.

20.INELIGIBLE INVESTMENTS
Ineligible investments – investments not described herein-, are prohibited for purchase in the City’s portfolio. Specifically prohibited as of January 1, 1996 are: Inverse floaters, range notes, interest-only strips derived from a pool of mortgages, or any security that could result in zero interest accrual if held to maturity.
96 Investment Policy Statement
page 13

21.GLOSSARY OF INVESTMENT TERMS
Agencies. Shorthand market terminology for any obligation issued by a government- sponsored entity (GSE), or a federally related institution. Most obligations of GSEs are not guaranteed by the full faith and credit of the US government. Examples are:

FFCB. The Federal Farm Credit Bank System provides credit and liquidity in the agricultural industry. FFCB issues discount notes and bonds.

FHLB. The Federal Home Loan Bank provides credit and liquidity in the housing market.

FHLB issues discount notes and bonds.

FHLMC. Like FHLB, the Federal Home Loan Mortgage Corporation provides credit and liquidity in the housing market. FHLMC, also called “FreddieMac” issues discount notes, bonds and mortgage pass-through securities.

FNMA. Like FHLB and FreddieMac, the Federal National Mortgage Association was established to provide credit and liquidity in the housing market. FNMA, also known as “FannieMae,” issues discount notes, bonds and mortgage pass-through securities.

GNMA. The Government National Mortgage Association, known as “GinnieMae,” issues mortgage pass-through securities, which are guaranteed by the full faith and credit of the US Government.

Asset Backed Securities. Securities supported by pools of installment loans or leases or by pools of revolving lines of credit.

Banker’s Acceptance. A money market instrument created to facilitate international trade transactions. It is highly liquid and safe because the risk of the trade transaction is transferred to the bank which “accepts” the obligation to pay the investor.

Basis Point. One one-hundredth of a percent (i.e., 0.01 percent) Benchmark. A comparison security or portfolio. A performance benchmark is a partial market index, which reflects the mix of securities allowed under a specific investment policy.

Bond Equivalent Yield. The basis on which yields on notes and bonds are quoted.

Book Value (Cost Value). The purchase price of the security as recorded on the City’s books.

Broker. A broker brings buyers and sellers together for a transaction for which the broker receives a commission. A broker does not sell securities from his own position.

California Debt & Investment Advisory Commission (CDIAC). The California Debt and Investment Advisory Commission (CDIAC) provides information, education and technical assistance on debt issuance and public fund investments to local public agencies and other public finance professionals. The Commission was created in 1981 with the passage of Chapter 1088, Statutes of 1981 (Assembly Bill (AB) 1192, Costa). This legislation established the California Debt Advisory Commission as the State's clearinghouse for 97 Investment Policy Statement
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public debt issuance information and required it to assist state and local agencies with the monitoring, issuance and management of public debt.

Callable. A callable security gives the issuer the option to call/redeem it from the investor prior to its maturity. The main cause of a call is a decline in interest rates. If interest rates decline, the issuer will likely call its current securities and reissue them at a lower rate of interest.

Certificate of Deposit (CD). A time deposit with a specific maturity evidenced by a certificate.

Collateral. Securities or cash pledged by a borrower to secure repayment of a loan or repurchase agreement. Also, securities pledged by a financial institution to secure deposits of public monies.

Collateralized Bank Deposit. A bank deposit that is collateralized at least 100% (principal plus interest to maturity). The deposit is collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

Collateralized Mortgage Obligations (CMO). Classes of bonds that redistribute the cash flows of mortgage securities (and whole loans) to create securities that have different levels of prepayment risk, as compared to the underlying mortgage securities.

Collateralized Time Deposit. Time deposits that are collateralized at least 100% (principal plus interest to maturity). These instruments are collateralized using assets set aside by the issuer such as Treasury securities or other qualified collateral to secure the deposit in excess of the limit covered by the Federal Deposit Insurance Corporation.

Commercial Paper. The short-term unsecured debt of corporations.

Corporate Medium Term Note. A security issued by a corporation doing business in the U.S. with a maturity not to exceed five years.

Cost Value (Book Value). The purchase price of the security as recorded on the City’s books.

Coupon. The rate of return at which interest is paid on a bond.

Credit Risk. The risk that principal and/or interest on an investment will not be paid in a timely manner due to changes in the condition of the issuer.

Dealer. A dealer acts as a principal in security transactions, selling securities from and buying securities for his own position.

Debenture. A bond secured only by the general credit of the issuer. 98 Investment Policy Statement
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Delivery vs. Payment (DVP). A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser’s agent.

Derivative. Any security that has principal and/or interest payments which are subject to uncertainty (but not for reasons of default or credit risk) as to timing and/or amount, or any security which represents a component of another security which has been separated from other components (“Stripped” coupons and principal). A derivative is also defined as a financial instrument the value of which is totally or partially derived from the value of another instrument, interest rate, or index.

Discount. The difference between the par value of a bond and the cost of the bond, when the cost is below par. Some short-term securities, such as T-bills and banker’s acceptances, are known as discount securities. They sell at a discount from par and return the par value to the investor at maturity without additional interest. Other securities, which have fixed coupons, trade at a discount when the coupon rate is lower than the current market rate for securities of that maturity and/or quality.

Diversification. Dividing investment funds among a variety of investments to avoid excessive exposure to any one source of risk.

Duration. The weighted average time to maturity of a bond where the weights are the present values of the future cash flows. Duration measures the price sensitivity of a security to changes interest rates.

Federal Deposit Insurance Corporation (FDIC).The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices.

Federal Open Market Committee (FOMC). Consists of seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank Presidents. The President of the New York Federal Reserve Bank is a permanent member, while the other presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of Government Securities in the open market as a means of influencing the volume of the bank credit and money.

Federally Insured Time Deposit. A time deposit is an interest-bearing bank deposit account that has a specified date of maturity, such as a certificate of deposit (CD). These deposits are limited to funds insured in accordance with FDIC insurance deposit limits.

Fiscal Agent. A financial institution which performs payment of principal and interest to bondholders, and certain administrative duties on the bond issuer’s behalf. 99 Investment Policy Statement
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Liquidity. The speed and ease with which an asset can be converted to cash.

Local Agency Investment Fund (LAIF) . A voluntary investment fund open to government entities and certain non-profit organizations in California that is managed by the State Treasurer’s Office.

Local Agency Investment Guidelines (LAIG). Published by CDIAC, these guidelines are intended to aid local officials in their efforts to implement existing laws pertaining to the investment of public funds. Each year, CDIAC staff convenes a working group of public- and private-sector professionals to support its efforts to revise and update these Guidelines Local Government Investment Pool. Investment pools that range from the State Treasurer’s Office Local Agency Investment Fund (LAIF) to county pools, to Joint Powers Authorities (JPAs). These funds are not subject to the same SEC rules applicable to money market mutual funds.

Make Whole Call. A type of call provision on a bond that allows the issuer to pay off the remaining debt early. Unlike a call option, with a make whole call provision, the issuer makes a lump sum payment that equals the net present value (NPV) of future coupon payments that will not be paid because of the call. With this type of call, an investor is compensated, or "made whole."
Margin. The difference between the market value of a security and the loan a broker makes using that security as collateral.

Market Risk. The risk that the value of securities will fluctuate with changes in overall market conditions or interest rates.

Market Value. The price at which a security can be traded.

Master Repurchase Agreement. A written contract covering all future transactions between the parties to repurchase-reverse repurchases agreements that establishes each party’s rights in the transactions. A master agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller borrower.

Maturity. The final date upon which the principal of a security becomes due and payable.

Medium Term Notes. Unsecured, investment-grade senior debt securities of major corporations which are sold in relatively small amounts on either a continuous or an intermittent basis. MTNs are highly flexible debt instruments that can be structured to respond to market opportunities or to investor preferences. 100
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Modified Duration. The percent change in price for a 100-basis point change in yields.

Modified duration is the best single measure of a portfolio’s or security’s exposure to market risk.

Money Market. The market in which short-term debt instruments (T-bills, discount notes, commercial paper, and banker’s acceptances) are issued and traded.

Money Market Mutual Fund. A mutual fund that invests exclusively in short-term securities.

Examples of investments in money market funds are certificates of deposit and U.S.

Treasury securities. Money market funds attempt to keep their net asset values at $1 per share.

Mortgage Pass-Through Securities. A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

Municipal Securities. Securities issued by state and local agencies to finance capital and operating expenses.

Mutual Fund. An entity which pools the funds of investors and invests those funds in a set of securities which is specifically defined in the fund’s prospectus. Mutual funds can be invested in various types of domestic and/or international stocks, bonds, and money market instruments, as set forth in the individual fund’s prospectus. For most large, institutional investors, the costs associated with investing in mutual funds are higher than the investor can obtain through an individually managed portfolio.

Nationally Recognized Statistical Rating Organization (NRSRO). A credit rating agency that the Securities and Exchange Commission in the United States uses for regulatory purposes. Credit rating agencies provide assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. The three most prominent NRSROs are Fitch, S&P, and Moody's.

Negotiable Certificate of Deposit (CD). A short-term debt instrument that pays interest and is issued by a bank, savings or federal association, state or federal credit union, or state- licensed branch of a foreign bank. Negotiable CDs are traded in a secondary market and are payable upon order to the bearer or initial depositor (investor).

Paper Gain Or Loss. Term used for unrealized gain or loss on securities being held in a portfolio based on comparison of current market quotes and their original cost. This situation exists as long as the security is held while there is a difference between cost value (book value) and the market value.

Portfolio. Collection of securities held by an investor. 101
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Primary Dealer. A financial institution (1) that is a trading counterparty with the Federal Reserve in its execution of market operations to carry out U.S. monetary policy, and (2) that participates for statistical reporting purposes in compiling data on activity in the U.S.

Government securities market.

Prudent Person (Prudent Investor) Rule. A standard of responsibility which applies to fiduciaries. In California, the rule is stated as “Investments shall be managed with the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent person, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of like character and with like aims to accomplish similar purposes.” Rate of Return. The yield obtainable on a security based on its purchase price or its current market price. This may be the amortized yield to maturity; on a bond, the current income return.

Repurchase Agreement (REPO). Short-term purchases of securities with a simultaneous agreement to sell the securities back at a higher price. From the seller’s point of view, the same transaction is a reverse repurchase agreement.

Reverse Repurchase Agreement (Reverse REPO). A reverse-repurchase agreement (reverse repo) involves an investor borrowing cash from a financial institution in exchange for securities. This investor agrees to repurchase the securities at a specific date for the same cash value plus an agreed upon interest rate. Although the transaction is similar to repo, the purpose of entering into a reverse repo is quite different. While a repo is straightforward investment of public funds, the reverse repo is a borrowing.

Safekeeping. A service to bank customers whereby securities are held by the bank in the customer’s name.

Securities and Exchange Commission (SEC). The U.S. Securities and Exchange Commission (SEC) is an independent federal government agency responsible for protecting investors, maintaining fair and orderly functioning of securities markets and facilitating capital formation. It was created by Congress in 1934 as the first federal regulator of securities markets. The SEC promotes full public disclosure, protects investors against fraudulent and manipulative practices in the market, and monitors corporate takeover actions in the United States.

Securities and Exchange Commission SEC) Rule 15c3-1. An SEC rule setting capital requirements for brokers and dealers. Under Rule 15c3-1, a broker or dealer must have sufficient liquidity in order to cover the most pressing obligations. This is defined as having a certain amount of liquidity as a percentage of the broker/dealer's total obligations. If the percentage falls below a certain point, the broker or dealer may not be allowed to take on new clients and may have restrictions placed on dealings with current client. 102
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Spread. a) The yield or price difference between the bid and offer on an issue. b) The yield or price difference between different issues.

Structured Note. A complex, fixed income instrument, which pays interest, based on a formula tied to other interest rates, commodities or indices. Examples include inverse floating rate notes which have coupons that increase when other interest rates are falling, and which fall when other interest rates are rising, and "dual index floaters," which pay interest based on the relationship between two other interest rates - for example, the yield on the ten-year Treasury note minus the Libor rate. Issuers of such notes lock in a reduced cost of borrowing by purchasing interest rate swap agreements.

Supranational. A Supranational is a multi-national organization whereby member states transcend national boundaries or interests to share in the decision making to promote economic development in the member countries. There are three supranational institutions that issue obligations that are eligible investments for California local agencies: the International Bank of Reconstruction and Development (IBRD), International Finance Corporation (IFC), and Inter-American Development Bank (IADB).

Swap. The sale of one issue and the simultaneous purchase of another for some perceived advantage.

Total Rate of Return. A measure of a portfolio’s performance over time. It is the internal rate of return, which equates the beginning value of the portfolio with the ending value; it includes interest earnings, realized and unrealized gains, and losses in the portfolio.

U.S. Treasury Obligations. Securities issued by the U.S. Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the US and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.

Treasury Bills. All securities issued with initial maturities of one year or less are issued as discounted instruments and are called Treasury bills. The Treasury currently issues three- and six-month T-bills at regular weekly auctions. It also issues “cash management” bills as needed to smooth out cash flows.

Treasury Bonds. All securities issued with initial maturities greater than ten years are called Treasury bonds. Like Treasury notes, they pay interest semi-annually.

Treasury Notes. All securities issued with initial maturities of two to ten years are called Treasury notes and pay interest semi-annually.

Trustee. A financial institution with trust powers that acts in a fiduciary capacity for the benefit of the bondholders in enforcing the terms of the bond contract. 103
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Yield Curve. Yield calculations of various maturities at a given time to observe spread difference.

Yield to Maturity. The annualized internal rate of return on an investment which equates the expected cash flows from the investment to its cost.
104
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APPENDIX A – LIST OF RESOLUTIONS FOR INVESTMENT OF INACTIVE FUNDS IN LAIF Resolution Number City Council Approval Date
2021-164 November 2, 2021
2020-171 October 20, 2020
2020-128 July 21, 2020
2019-090 July 2, 2019
2019-008 February 19, 2019
2018-154 November 20, 2018
105
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APPENDIX B – LIST OF RESOLUTIONS FOR INVESTMENT OF CITY FUNDS Resolution Number City Council Approval Date
2021-165 November 2, 2021
2020-172 October 20, 2020
2020-129 July 21, 2020
2019-091 July 2, 2019
2019-009 February 19, 2019
2018-155 November 20, 2018
106
Department: Economic Development
Prepared By: Charity Hernandez
Staff Member Presenting:

Jennifer McLain Hiramoto, Economic
Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 17
SUBJECT:

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

APPROVING A FIFTH AMENDMENT TO DECLARATION OF ANNEXATION AND

PROVIDING CITY MANAGER AUTHORITY REGARDING THE ONTARIO CENTER

OWNERS ASSOCIATION AND THE PIEMONTE AT ONTARIO CENTER OWNERS

ASSOCIATION

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods FISCAL IMPACT:

There is not a direct fiscal impact associated with this action.

BACKGROUND & ANALYSIS:

The City of Ontario (“City”) owns various parcels of property within the area of the City more commonly known as The Ontario Center (collectively, the “City Property”) bound by Fourth Street, Milliken Avenue, Interstate 10, and Haven Avenue. The City Property is subject to recorded master Covenants, Conditions and Restriction (“C&Rs”) (as amended) referred to as “The Ontario Center Owners’ Association ‘TOCOA’ Declaration,” and a recorded sub- association of CC&Rs referred to as the “Piemonte at Ontario Center Association ‘POCOA’ Declaration.” The City is the successor Declarant under the TOCOA Declaration.

One residential parcel owned by LEWIS PIEMONTE 3 ACRES, LLC., a Delaware limited liability company (“Lewis”), which is also subject to the TOCOA Declaration and the POCOA Declaration, has been approved by the City for development of an 84-unit residential condominium project. The parcel is in escrow to be sold to and developed by Shea Homes Limited Partnership. The condominium project is subject to the Davis-Stirling Common Interest Development Act (Division 4, Park 5 of the California Civil Code at Sections 4000 to 6150) and to other regulations of the California Department of Real Estate (“DRE”), which will require the formation of residential 107
homeowners associations.

Certain provisions of the TOCOA Declaration require modiﬁcations in order for the DRE to issue the required public reports for these residential projects. These modiﬁcations are set forth in a draft proposed Fifth Amendment to Declaration of Annexation (the “TOCOA Document”). The TOCOA Document will, among other things, accommodate the for-sale project and also provide ﬂexibility for future residential development (rental and/or for-sale) in The Ontario Center.

Shea Homes Limited Partnership is in agreement with the terms of the TOCOA Document. While not required by the TOCOA Declaration, the TOCOA Document was provided to The Ontario Center Owners’ Association Board of Directors to provide an opportunity for review, and all concerns, questions, and comments were addressed.

In addition, as successor Declarant under the TOCOA CC&Rs and as owner of property subject to the TOCOA CC&Rs and the POCOA CC&Rs, the City is requested from time to time to take certain actions and/or consent to or approve certain documents or agreements as successor Declarant and/or as a property owner. These actions or consents/approvals are not done by the City in its municipal or regulatory capacity, but rather in its capacity as property owner or successor Declarant. It would be eﬃcient and cost-saving for future items requiring City action, consent or approval in the City’s capacity as property owner in The Ontario Center or successor Declarant to be delegated to the City Manager. This item would authorize such delegation provided there is approval by the City Attorney or City special legal counsel and any such action, consent, or approval did not increase any existing or create any new or additional City obligations, liabilities or duties. 108
RESOLUTION NO. ________

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

CALIFORNIA, APPROVING A FIFTH AMENDMENT TO DECLARATION

OF ANNEXATION AND PROVIDING CITY MANAGER AUTHORITY

REGARDING THE ONTARIO CENTER OWNERS ASSOCIATION AND
THE PIEMONTE AT ONTARIO CENTER OWNERS ASSOCIATION.

WHEREAS, the City of Ontario (“City”) owns various parcels of property within the area of the City more commonly known as The Ontario Center (collectively, the “City Property”); and
WHEREAS, the City Property is subject to that certain Declaration of Conditions, Easements and Restrictions – The Ontario Center, recorded on December 28, 1983 as Instrument No. 83-304769, as amended by the First Amendment to Declaration of Covenants, Conditions, Easements and Restrictions, recorded on December 3, 1985, as Instrument No. 85-305152, the Second Amendment to Declaration of Covenants, Conditions, Easements and Restrictions, recorded on March 24, 1986, as Instrument No. 86-075242, the Third Amendment to Declaration of Covenants, Conditions, Easements and Restrictions, recorded on November 16, 1987, as Instrument No. 87-406521, the Fourth Amendment to Declaration of Covenants, Conditions, Easements and Restrictions, recorded on May 16, 2003, as Instrument No. 2003-0330335, and the Fifth Amendment to Declaration of Covenants, Conditions, Easements and Restrictions, recorded on March 19, 2007, as Instrument No. 2007-0171241, all in the Official Records of San Bernardino County, California (“Official Records”) (collectively, the “TOCOA Declaration”); and
WHEREAS, the City is the successor Declarant under the TOCOA Declaration; and
WHEREAS, the City Property and other real property was annexed into the property subject to the jurisdiction of the TOCOA Declaration by the City as successor Declarant under the TOCOA Declaration pursuant to that certain Declaration of Annexation recorded on October 16, 2006 as Document No. 2006-0704823 in the Official Records of the Recorder of San Bernardino County, as amended by that certain Amendment to Declaration of Annexation recorded on August 26, 2009 as Document No. 2009-0377607, as amended by that certain Second Amendment to Declaration of Annexation recorded on December 16, 2009 as Document No. 2009-0557948, as amended by that certain Third Amendment to Declaration of Annexation recorded on April 9, 2014 as Document No. 2014-0125385, and as amended by that certain Fourth Amendment to Declaration of Annexation recorded on July 15, 2021 as Document No. 2021-0319926 (the “Fourth Annexation Amendment”) all in the Official Records (collectively, the “Declaration of Annexation”); and
109
WHEREAS, the City Property is also subject to that certain Amended and Restated Declaration of Covenants, Conditions and Restrictions and Reservation of Easements for Piemonte at Ontario Center, recorded on September 14, 2017, as Instrument No. 2017- 0381173, in the Official Records, as it may be amended from time to time (the “POCOA Declaration”); and
WHEREAS, as successor Declarant under the TOCOA Declaration and as owner of property subject to the TOCOA Declaration and the POCOA Declaration, the City is tasked or requested from time to time to take certain actions and/or consent to or approve certain documents or agreements as successor Declarant and/or as such property owner; and
WHEREAS, The City, in its municipal capacity, has approved certain parcels subject to the TOCOA Declaration for residential development. Consequently, the Fourth Annexation Amendment needs to be amended by the City as successor Declarant to designate and include these parcels as “Residential Parcels” for all purposes set forth in the Declaration of Annexation and the Fourth Annexation Amendment; and WHEREAS, these amendments are set forth in a draft proposed Fifth Amendment to Declaration of Annexation (the “Fifth Annexation Amendment”).

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

SECTION 1. The City Council of the City of Ontario hereby finds and determines that the foregoing recitals are true and correct.

SECTION 2. The City Council hereby approves the Fifth Annexation Amendment in the form presented to the City Council.

SECTION 3. Without the requirement of any further approval of the City Council, the City Manager or designee is authorized to do all of the following: (a) execute the Fifth Annexation Amendment on behalf of the City; (b) make non-substantive changes or modifications to the Fifth Annexation Amendment deemed necessary by the City Manager; and (c) take any action and execute any and all documents and agreements necessary to implement this Resolution and the Fifth Annexation Amendment, and to administer the City’s obligations, responsibilities, and duties to be performed thereunder.

SECTION 4. Without the requirement of any further approval of the City Council, the City Manager or designee is authorized to do all of the following: (a) as successor Declarant under the TOCOA Declaration, negotiate, consent to or approve, and execute on behalf of the City from time to time any future documents or agreements as may be permitted by the TOCOA Declaration as approved by the City Manager and City Attorney or City special legal counsel and which do not increase any existing or create any new or additional City obligations, liabilities or duties; (b) as owner of the City Property (and not in its municipal or regulatory capacity), negotiate, consent to or approve, and execute on behalf of the City from time to time any future documents or 110
agreements under either the TOCOA Declaration and/or the POCOA Declaration as approved by the City Manager and City Attorney or City special legal counsel and which do not increase any existing or create any new or additional City obligations, liabilities or duties; (c) make non-substantive changes or modifications to any such documents or agreements as approved by the City Manager and City Attorney or City special legal counsel; and (d) take any action necessary to implement and to administer the City’s responsibilities, and duties to be performed under any such documents or agreements.

SECTION 5. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City declares that the City would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

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.

PASSED, APPROVED, AND ADOPTED this 6th day of December 2022.

PAUL S. LEON, MAYOR
ATTEST:

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO LEGAL FORM:

BEST BEST & KRIEGER LLP

CITY ATTORNEY
111

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
112
Department: Economic Development
Prepared By: Charity Hernandez
Staff Member Presenting:

Jennifer McLain Hiramoto, Economic
Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 18
SUBJECT:

A RESOLUTION APPROVING A DISPOSITION AND

DEVELOPMENT AGREEMENT

BETWEEN THE CITY OF ONTARIO AND EUCLID INVESTMENT GROUP, LLC, WITH
RESPECT TO APPROXIMATELY 1.19 ACRES OF LAND LOCATED AT THE SOUTHEAST CORNER OF D STREET AND LEMON AVENUE, APN'S: 1048-556-01, 1048-556-02, 1048-556-03, 1048-556-04, 1048-556-05, AND 1048-556-14,

IN ACCORDANCE WITH
GOVERNMENT CODE SECTION 37350 ET. SEQ.

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council (“City”) consider and:

A
.

Adopt a Resolution approving the Disposition and Development Agreement (“Agreement”) between the Euclid Investment Group, LLC. (“Developer”) (on ﬁle with the Records Management Department).

B
.

Authorize the City Manager, or his designee, to sign all documents necessary to implement the Agreement.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

The Developer will purchase 1.19 acres of real property for $1,088,564 which represents fair market value. The funds will be included in the Economic Development Fund in the next Quarterly Budget Update.

BACKGROUND & ANALYSIS:

The Downtown Euclid Avenue Mixed-Use Development
(“Development”) is located on approximately 1.19 acres of land, containing an area bordered by "D" Street to the north, Plum Avenue to the east, the Ovitt Family Community Library to the south, and Lemon Avenue to the west.

The Development oﬀers an opportunity to continue Ontario’s eﬀorts to revitalize downtown Ontario with high-density residential units, which will in turn bring more pedestrians and visitors to 113
create a vibrant downtown. The Ontario Plan (“TOP”) identiﬁes this area as the Downtown Mixed- Use District ("District"), which is intended to create an intensive mixture of retail, oﬃce, and residential uses in a pedestrian friendly atmosphere, while ensuring that the historic character of the District is enhanced.

The Development will result in the construction of approximately 73 market rate rental housing units. The development will consist of one-and two-bedroom units. O ne-bedroom units range
from 674-697 square feet, and two-bedroom units will range in size from 864-986 square feet.

The
project also includes open space area for residents.

The Developer is Euclid Investment Group, LLC, located in Anaheim, California. The Developer has developed, owned and managed residential, mixed-use and oﬃce/commercial projects at various locations throughout Southern California.

The estimated total development construction cost is $22,000,000. The Development will be designed with the highest level of architectural features and quality to provide exceptional beneﬁts to the City and to serve as a catalyst for future development in the Downtown/Civic Center area.

The site plan has been prepared to be consistent with the development and design guidelines as will be contained in the Town Center Planned Unit Development.

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.

The proposed development occurs within City limits and the area being developed is 1.19-acre, less than the maximum five-acre threshold, and is substantially surrounded by urban land uses. 114
RESOLUTION NO. ________

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

CALIFORNIA, APPROVING A DISPOSITION AND DEVELOPMENT

AGREEMENT BETWEEN THE CITY OF ONTARIO AND EUCLID

INVESTMENT GROUP, LLC, WITH RESPECT TO APPROXIMATELY

1.19 ACRES OF LAND LOCATED AT THE SOUTHEAST CORNER OF D STREET AND LEMON AVENUE, APN'S: 1048-556-01, 1048-556-02, 1048-556-03, 1048-556-04, 1048-556-05, and 1048-556-14, IN ACCORDANCE WITH GOVERNMENT CODE SECTION 37350 ET. SEQ.

WHEREAS, the City of Ontario (“City”) currently owns in fee that certain 1.19 acres of land located at the northeast corner of D Street and Lemon Avenue, Assessor Parcel No’s 1048-556-01, 1048-556-02, 1048-556-03, 1048-556-04, 1048-556-05, and 1048- 556-14, within the MU-1 (Downtown Mixed Use) zoning district, which is presently vacant (the “Property”); and
WHEREAS, the City desires to sell the Property by entering into a Disposition and Development Agreement (“Agreement”) with Euclid Investment Group, LLC (“Developer”), a form of which is attached hereto as Exhibit “A” and incorporated into this Resolution by reference.

WHEREAS, the Developer proposes to construct a multi-story residential development consisting of 73 multi-family residential dwelling units (the “Project”); and WHEREAS, the Agreement provides for the sale of the Property at fair market value, and binds Developer to construct the Project, subject to all required approvals and environmental compliance, in a timely manner, and in accordance with the terms therein; and
WHEREAS, the proposed sale of the Property pursuant to the Agreement is authorized by Government Code Section 37350, as it is for the common benefit, because Developer intends to build multi-family housing on the Property, which would further the goals and objectives of the City’s General Plan and the goals and objectives of the City by: (i) strengthening the City’s land use and social structure, (ii) increasing the housing supply; (iii) alleviating economic and physical blight on the Property and in the surrounding community; (iv) eliminating a vacant site that creates nuisance conditions; and (v) creating an increase in property taxes, all of which accrue to the common benefit of the City and its residents.

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

SECTION 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. 115
SECTION 2. Findings. The City Council finds that the sale of the Property pursuant to the Agreement will further the goals and purposes of the City, and is in the common interest of the City and its residents.

SECTION 3. CEQA. 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. The proposed project is consistent with the applicable general plan designation and all applicable general plan policies as well as with applicable zoning designation and regulations. The proposed development occurs within city limits and the area being developed is 1.19-acres, less than the maximum five-acre threshold, and is substantially surrounded by urban land uses. The project site has no value as habitat for endangered, rare, or threatened species. Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. The site is adequately served by all required utilities and public services.

SECTION 4. Approval of Agreement. The City Council hereby approves the Agreement in substantially the form attached hereto as Exhibit A, subject to any non- substantive revisions which do not increase the City’s liability and are approved by the City Attorney, and authorizes the City Manager to sign and enter into the Agreement and perform the obligations of the City under the Agreement.

SECTION 5. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council declares that the City Council would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

SECTION 6. Effective Date. This Resolution shall become effective 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 6th day of December 2022. _____________________________________
PAUL S. LEON, MAYOR
116
ATTEST:
________________________________

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

BEST BEST & KRIEGER LLP

CITY ATTORNEY
117

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 ___________, 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 _____________, 2022. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
118
46700.12001\34952026.1
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
between

THE CITY OF ONTARIO
a California municipal corporation
and

EUCLID INVESTMENT GROUP, LLC
a Delaware limited liability company
119
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1 This 2022 DISPOSITION AND DEVELOPMENT AGREEMENT (Southeast Corner of D Street and Lemon Avenue) (“ Agreement”) is dated as of __________, 2022 (“ Effective Date”), for reference purposes only, and is entered into by and between the City of Ontario, a California municipal corporation (“ City”), and EUCLID INVESTMENT GROUP, LLC, a Delaware limited liability company (“ Developer”). The City and the Developer are sometimes referred to in this Agreement, each individually, as a “Party,” or collectively, as the “Parties.”

RECITALS
This Agreement is entered into with reference to the following recitals of fact (“Recitals”) that City and Developer believe to be true as of the Effective Date of this Agreement:

A. The City owns and controls that certain approximately 1.19-acre property (APNs 1048-556-01,1048-556-02, 1048-556-03, 1048-556-04, 1048-556-05, 1048-556-14), commonly known as 206-218 East D Street, Ontario, CA 91762, bounded by Lemon Avenue on the west, D Street on the north, Plum Avenue on the east, and the Ovitt Family Community Library to the south, more specifically described in Exhibit A attached hereto and incorporated herein by this reference (the “Property”); and
B. The Developer proposes to construct a three-story multi-family residential project, consisting of approximately 73 market-rate residential dwelling units (the “Project”). The site plan for the proposed Project is attached hereto as Exhibit B and incorporated herein by this reference; and
C. Parking for the Project will be on-site, and accessed from the Property’s Lemon Avenue frontage or the south side adjacent to the Ovitt Family Community Library; and C. The Developer’s proposed acquisition of the Property and subsequent construction and completion of the Project on the Property pursuant to the terms of this Agreement is in the best interest of the City and the health, safety and welfare of the City’s taxpayers and residents and is in accordance with the public purposes set forth in applicable law. Implementation of this Agreement will further the goals and objectives of the City’s general plan by: (i) strengthening the City’s land use and social structure, and (ii) alleviating economic and physical blight on the Property and in the surrounding community; and
D. The City desires to sell the Property to the Developer for the development of the Project and the Developer desires to purchase the Property from the City for the same purpose.

NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by City and Developer, the Parties agree as follows:
120
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2 TERMS AND CONDITIONS

ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES;

EFFECTIVE DATE

1.1 Definitions. All initially capitalized terms not otherwise defined in this Agreement shall have the following meanings:

1.1.1 “Additional Insureds ” has the meaning ascribed to such term in Section 5.10.

1.1.2 “Affiliate” means and refers to any person or entity, directly or indirectly, Controlling or Controlled by or under common Control with Developer’s parent company (Hutton Companies) or the Developer, whether by direct or indirect ownership of equity interests, by contract or otherwise.

1.1.3 “CEQA” means the California Environmental Quality Act, Public Resources Code Sections 21000, et seq.

1.1.4 “Certificate of Completion” means the written certification of City that the construction of the Project has been completed in compliance with the terms and conditions of this Agreement, substantially in the form of Exhibit H attached to this Agreement.

1.1.5 “City” means the City of Ontario, California, a California municipal corporation.

1.1.6 “City Manager ” means the City Manager of the City or his or her designee or successor in function.

1.1.7 “City Requirements” has the meaning ascribed to the term in Section

2.5.1. 1.1.8 “City’s Title Notice Response” means the written response of the City to the Developer’s Title Notice, in which the City either (i) elects to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice, or (ii) elects not to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice.

1.1.9 “Close of Escrow” or “Closing” means the recording of the Grant Deed for the Property in the Official Records of the Recorder of the County, and completion of each of the actions set forth in Article III by the Escrow Holder for the City to sell the Property to the Developer and the Developer to purchase the Property from the City. 121
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3 1.1.10 “Closing Date” means the date that the Closing occurs, which date shall be no later than ten (10) business day following Escrow Holder’s receipt of written confirmation from both City and Developer of the satisfaction or waiver of all conditions precedent to the Close of Escrow for the Property .

1.1.11 “Completion of Construction” means the issuance of a Certificate of Completion confirming that the final certificate of occupancy for the Project, based on the plans submitted by the Developer to the City, has been issued.

1.1.12 “Construction Commencement Date” means the date that is no later than thirty (30) days from Permit Issuance Date.

1.1.13 “Construction Costs” means the total cost incurred by Developer in acquiring the Property and constructing the Project in accordance with this Agreement.

1.1.14 “Construction Drawings Submittal Date ” means the date when Developer submits to the City its Plans and Specifications, which date shall be no later than one hundred eighty (180) days from Entitlement Obtainment Date.

1.1.15 “Construction Lender ” means a Lender(s) that provide(s) a Construction Loan to the Developer to pay the Construction Costs of all or a portion of the Project.

1.1.16 “Construction Loan ” means a Loan obtained by Developer from a Construction Lender to finance all or part of the Construction Costs in conformity with the Financing Plan.

1.1.17 “Construction Loan Deed of Trust(s)” means the Lien(s) required by a Construction Lender to secure the Developer’s performance under the associated Construction Loan.

1.1.18 “Control” means and refers to possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether by ownership of equity interests, by contract or otherwise.

1.1.19 “Controlling” and “Controlled” mean and refer to exercising or having Control.

1.1.20 “County” means the County of San Bernardino, California.

1.1.21 “Developer’s Title Notice” means a written notice from the Developer to the City indicating the Developer’s acceptance of the state of the title to the Property, as described in the Preliminary Report, or the Developer’s objection to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for the Property, describing in suitable detail the actions that the Developer reasonably believes are indicated to cure or correct each of the Developer’s objections.

1.1.22 “Developer’s Title Notice Waiver ” means a written notice from the Developer to the City waiving the Developer’s previous objection in the Developer’s Title Notice 122
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4 to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for the Property.

1.1.23 “Due Diligence Investigations ” means the Developer’s due diligence investigations of the Property to determine the suitability of the Property for development and operation of the Project, including, without limitation, investigations of the environmental and geotechnical suitability of the Property, as deemed appropriate in the reasonable discretion of the Developer, all at the sole cost and expense of the Developer.

1.1.24 “Due Diligence Investigation Conclusion Notice ” means a written notice of the Developer delivered to the City and the Escrow Holder, prior to the end of the Due Diligence Period, indicating the Developer’s acceptance of the condition of the Property or indicating the Developer’s rejection of the condition of the Property and refusal to accept a conveyance of fee title to the Property, describing in reasonable detail the actions that the Developer reasonably believes are indicated to allow the Developer to accept the condition of the Property.

1.1.25 “Due Diligence Period ” means the date commencing on the Escrow Opening Date and ending at 5:00 p.m. on the ninetieth (90 th) day following the Escrow Opening Date.

1.1.26 “Earnest Money Deposit” means Fifty Thousand Dollars ($50,000.00) payable in cash or other immediately available funds.

1.1.27 “Effective Date” has the meaning ascribed to the term in Section 1.3.

1.1.28 “Entitlement(s)” shall have the meaning ascribed to the term in Section

2.6.2. 1.1.29 “Entitlement Application Date ” means the date when Developer submits its application(s) to the City to obtain all necessary Entitlements to commence construction of the Project, which date shall be no later than thirty (30) days from the Effective Date.

1.1.30 “Entitlement Obtainment Date ” means the date when Developer obtains all necessary Entitlements to commence construction of the Project, which date shall be no later than nine (9) months from the Entitlement Application Date.

1.1.31 “Environmental Claims ” has the meaning ascribed to the term in Section 5.9.

1.1.32 “Environmental Laws ” means all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerning any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, 123
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5 Compensation and Liability Act of 1980 (“CERCLA”) [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”) [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use.

1.1.33 “Environmental Matters ” has the meaning ascribed to the term in Section 5.9.

1.1.34 “Escrow” has the meaning ascribed to the term in Section 2.1.

1.1.35 “Escrow Closing Date” has the meaning ascribed to the term in Section

3.6. 1.1.36 “Escrow Holder ” means Land American Commercial Services, in Ontario, California. Janette DeLap is the contact, or such other escrow holder as Developer chooses, with the mutual agreement of City.

1.1.37 “Escrow Opening Date ” has the meaning ascribed to the term in Section 3.1.

1.1.38 “Event of Default” has the meaning ascribed to the term in Section 7.1.

1.1.39 “Financing Commitment” means (a) one or more commitment(s) from one or more Construction Lender(s) agreeing to provide sufficient funds which, when combined with the Developer’s equity contribution and the financial assistance to be provided by the City pursuant to this Agreement, is sufficient, as determined by the City in its reasonable discretion, to fully fund the Project’s Construction Costs, or (b) a letter from one or more Construction Lender(s) indicating approval of a loan to the Developer for the development of the Property.

1.1.40 “FIRPTA Affidavit” means an affidavit complying with Section 1445 of the United States Internal Revenue Code.
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6 1.1.41 “Grant Deed” means a deed in the form of Exhibit E to this Agreement, conveying all of the City’s interest in the Property to the Developer.

1.1.42 “Governmental Agency” means any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city, or otherwise) whether now or later in existence.

1.1.43 “Governmental Requirements” means all codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental Agency.

1.1.44 “Hazardous Substances ” means, without implied limitation, substances defined as “hazardous substances,” “hazardous material,” “toxic substance,” “solid waste,” or “pollutant or contaminate” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Toxic Substances Control Act (“TSCA”) [15 U.S.C. Sections 2601, et seq.]; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor authority, as hazardous substances [40 CFR Part 302]; and those substances defined as “hazardous waste” in Section 25117 of the California Health and Safety Code or, as “hazardous substances” in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shall also include manure, asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317.

1.1.45 “Indemnified Parties” has the meaning ascribed to the term in Section

5.9. 1.1.46 “Lender” means any state or federally chartered bank, savings and loan, capital investment group, or other third-party financial institution which routinely makes Loans to developments and developers such as the Project and the Developer in the normal course of business and which has been approved by the City pursuant to Section 6.3.

1.1.47 “Lien” means any mortgage, deed of trust, or other security instrument encumbering Developer’s fee interest in the Property and/or Project, or any part thereof, or any pledge or other agreement given as security for the repayment of a Loan and by which a Lender would be able to acquire any interest in the Developer upon the Developer’s breach of any obligation under the Lender’s Loan Documents.

1.1.48 “Loan” means any loan or third-party equity/capital contribution (e.g. mezzanine financing) for the Project other than that provided by the City.

1.1.49 “Loan Documents ” means the various documents and instruments made by and between the Developer and a Lender that evidence a Loan and the security for repayment of such Loan.
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7 1.1.50 “Maintenance Deficiency ” has the meaning ascribed to the term in Section 5.4.1.

1.1.51 “Normal Business Hours ” means the normal business hours of the City. As of the Effective Date, the City’s normal business hours are Monday through Thursday, between the hours of 7:30 a.m. and 5:30 p.m. Pacific Time; and Friday between the hours of 8:00 a.m. and 5:00 p.m. Pacific Time.

1.1.52 “Notice of Agreement ” means the notice in the form of Exhibit F to this Agreement to be recorded against the Property at the Close of Escrow to provide constructive record notice of the existence and application of this Agreement to the Property.

1.1.53 “Official Records ” means the Official Records of San Bernardino County.

1.1.54 “Party” means, individually, the City or the Developer, as applicable.

1.1.55 “Parties” means, collectively, the City and the Developer.

1.1.56 “PCO Statement” means a preliminary change of ownership statement provided for in California Revenue and Taxation Code Section 480.3.

1.1.57 “Permit Issuance Date” means the date when the City issues the first building permit to Developer, which date shall be no later than five (5) months from the Construction Drawings Submittal Date.

1.1.58 “Permitted Exceptions” means (i) any and all items shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that the Developer accepts, pursuant to Section 2.3; (ii) any exceptions from coverage under the proposed Title Policy resulting from the Developer’s activities on the Property; (iii) non-delinquent property taxes and assessments; (iv) this Agreement; or (v) the Grant Deed.

1.1.59 “Permitted Transfer” means and refers to any of the following types of Transfers by Developer, where the person or entity to which such Transfer is made expressly assumes the obligations of Developer under this Agreement in a written instrument that is first approved in writing by the City, which approval the City may not unreasonably withhold, delay, or condition.

1.1.59.1 Any Transfer of stock or equity of Developer that does not change management or operational Control of the Properties or the Project;

1.1.59.2 Any Transfer of any interest in the Developer or the Property or Project or any portion thereof irrespective of the percentage of ownership (i) to any other owner of any interest in the Developer; or (ii) to any Affiliate, or (iii) to any other person or entity in which any holder of an interest (including any beneficial interest) in the Developer is a manager, officer or partner or in which any of the aforementioned is a shareholder, member or partner (including a beneficial owner); and
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8 1.1.59.3 Any Lien given to Lender in connection with a Loan approved by the City pursuant to Section 6.3.

1.1.59.4 Any lease or sublease that conveys the use and occupancy of any separate retail space (including but not limited to any subdivided commercial condominium unit duly formed pursuant to Civil Code section 4000 et seq. and any other applicable law) on the Properties as part of the Project.

1.1.59.5 Any transfer in a real property interest for an individual residential unit that has obtained or, by completion of any “punch-list” items in order to obtain, a Completion of Construction pursuant to this Agreement and receipt of a certificate of occupancy, including but not limited to a transfer to a purchaser by sale, a renter by lease or sublease, or other real property interest that conveys ownership, right of ownership, use and occupancy, or right of use and occupancy, in a residential unit (including but not limited to any subdivided residential condominium unit duly formed pursuant to Civil Code section 4000 et seq. and any other applicable law).

1.1.59.6 Any transfer to any joint venture entity or entities duly organized under law in which Developer (or any of its Affiliates) exercises Control.

1.1.59.7 Notwithstanding any provisions in this Agreement to the contrary, the following entities are pre-approved by City for Transfers of any interest, in whole or in part, of this Agreement or the Properties, provided that Developer delivers to the City and Agency written notification of said Transfer from the assignee to assignor entities within a reasonable time, not to exceed thirty (30) days from date of assignment: Hutton Companies and any Affiliates of Hutton Companies and Euclid Investment Group, LLC.

1.1.60 “Plans and Specifications ” has the meaning ascribed to the term in Section 2.5.1.

1.1.61 “Preliminary Report” means a preliminary report issued by the Title Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Title Policy. The Parties acknowledge that they may prepare one (1) or more Preliminary Reports for each parcel, or group of parcels, comprising the Property. In such case, all reports, notices, and objection letters which pertain to the Preliminary Report for the entirety of the Property shall apply separately to each Preliminary Report associated with a parcel or a group of parcels.

1.1.62 “Project” means the construction and development of the Property as a multi-story, residential development, including all required or associated on-site and off-site improvements, all hardscape and all landscaping, all as specifically described in the Scope of Development, and all to be developed in accordance with the Plans and Specifications to be approved by the City and any conditions imposed by the City in its approval of the Plans and Specifications.

1.1.63 “Project Completion Date” means that date set forth therefor by which a Certificate of Completion shall be issued for the Project, as more particularly provided in the 127
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9 Schedule of Performance. The Project Completion Date shall be no later than eighteen (18) months from the Construction Commencement Date.

1.1.64 “Property” means that real property, and all current and future improvements thereon (including, without implied limitation, the Project), legally described in Exhibit A and depicted in Exhibit B.

1.1.65 “Property Transfer” means and refers to any “change in ownership,” as defined in Revenue and Taxation Code Sections 60, et seq., of all or any portion of the Property.

1.1.66 “Purchase Price ” means the amount of One Million Eighty Eight Thousand Five Hundred Sixty Four Dollars ($1,088,564).

1.1.67 “Record”, “recorded”, “recording” or “recordation” each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of San Bernardino, California.

1.1.68 “Schedule of Performance” means the schedule for the performance of certain actions by the Parties pursuant to this Agreement, attached to this Agreement as Exhibit D.

1.1.69 “Scope of Development” means the detailed description of the Project attached to this Agreement as Exhibit C.

1.1.70 “Title Approval Date ” means the date when Developer submits the Developer’s Title Notice, which date shall be no later than sixty (60) days from the Escrow Opening Date.

1.1.71 “Title Company ” Fidelity National Title, in Newport Beach, California. Ginger McCully is the contact, or such other title company as Developer chooses, with the mutual agreement of City.

1.1.72 “Title Policy” means a standard CLTA owners’ policy of title insurance issued by the Title Company, with coverage in the full amount of the Purchase Price and insuring fee title to the Property, subject only to the Permitted Exceptions. However, at Developer’s option, Developer may acquire an ALTA extended coverage policy. City shall pay for the standard CLTA policy. Developer shall pay for any additional or ALTA extended coverage policy.

1.1.73 “Transfer” means any of the following:

1.1.73.1 Any total or partial sale, assignment, conveyance, trust, power, or transfer in any other mode or form, by the Developer of more than a 49% interest in the Developer’s interest in this Agreement, the Property, or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in the Developer’s interest in this Agreement, the Property or the Project; or

1.1.73.2 Any total or partial sale, assignment, conveyance, or transfer in any other mode or form, of or with respect to any interest in the Developer or a series of such sales, 128
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10 assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in any interest in the Developer; or

1.1.73.3 Any merger, consolidation, sale, or lease of all or substantially all of the assets of the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer; or

1.1.73.4 Any Property Transfer; or

1.1.73.5 The recordation of any deed of trust, mortgage, Lien or similar encumbrance against all or any portion of the Property or the Project.

1.1.74 “Unavoidable Delay” means any delay that is caused by the exclusively by the other party or that is beyond the control of the City or the Developer, including delay caused by strikes, acts of God, weather, inability to obtain labor or materials, inability to obtain governmental permits or approvals, governmental restrictions, civil commotion, fire or similar causes, but excluding circumstances subject to Section 8.7.2.

1.2 Representations and Warranties.

1.2.1 City Representations and Warranties. The representations and warranties of City contained in this Section 1.2.1 shall be based upon the actual knowledge of the City Manager as of the Effective Date, without any duty of investigation or inquiry. All representations and warranties contained in this Section 1.2.1 are true and correct as of the Effective Date. City’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. City hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations and warranties:

1.2.1.1 City is a California municipal corporation, duly formed and operating under the laws of the State of California. City has the legal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby.

1.2.1.2 The persons executing any instruments for or on behalf of City have been authorized to act on behalf of City and this Agreement is valid and enforceable against City in accordance with its terms and each instrument to be executed by City pursuant hereto or in connection therewith will, when executed, shall be valid and enforceable against City in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by City.

1.2.1.3 City has taken all requisite action and obtained all requisite consents for agreements or matters to which City is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby.
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11 1.2.1.4 If the City becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the City under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the City’s knowledge and/or belief as of a certain date, the City will give immediate written notice of such changed fact or circumstance to the Developer.

1.2.2 Developer Representations and Warranties. The representations and warranties of Developer contained in this Section 1.2.2 shall be based upon the actual knowledge of [INSERT NAME] as of the Effective Date, without any duty of investigation or inquiry. All representations and warranties contained in this Section 1.2.2 are true and correct as of the Effective Date. Developer’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by City has been made in material reliance by City on such covenants, representations and warranties:

1.2.2.1 Developer is a California limited liability company, lawfully entitled to do business in the State of California and the City. Developer has the legal right, power and authority to enter into this Agreement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of Developer hereby represent and warrant that such persons have the power, right and authority to bind Developer.

1.2.2.2 Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for Developer’s authorization to enter into Agreement.

1.2.2.3 Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which Developer is a party or by which Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to Developer or to the Property.

1.2.2.4 This Agreement is, and all agreements, instruments and documents to be executed by Developer pursuant to this Agreement shall be, duly executed by and shall be valid and legally binding upon Developer and enforceable in accordance with their respective terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of in compliance with this Agreement by Developer.

1.2.2.5 If the Developer becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer’s knowledge and/or belief as 130
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12 of a certain date, the Developer will give immediate written notice of such changed fact or circumstance to the City.

1.3 Effective Date. This Agreement is dated [TBD], 2022 for reference purposes only.

This Agreement shall not become effective until the date on which all of the following are true (“Effective Date”): (i) this Agreement is approved and executed by the appropriate authorities of Developer and delivered to City; (ii) Developer has delivered to City a certified copy of the official action taken by all of the members of the Developer approving this Agreement, in the form attached to this Agreement as Exhibit G; (iii) following all legally required notices and hearings, this Agreement is approved by the City Council; and (iv) this Agreement is executed by the authorized representatives of City.

1.4 Exhibit List. The following is a list of the Exhibits attached to this Agreement.

Each of the Exhibits is incorporated by this reference into the text of this Agreement.

Exhibit A Legal Description of Property
Exhibit B Property Site Plan
Exhibit C Scope of Development
Exhibit D Schedule of Performance
Exhibit E Form of Grant Deed
Exhibit F Form of Notice of Agreement
Exhibit G Form of Official Action of Developer
Exhibit H Form of Certificate of Completion

ARTICLE II

PROPERTY DISPOSITION

2.1 Purchase and Sale. Developer agrees to purchase, and City agrees to sell, the Property for the Purchase Price. For the purposes of exchanging funds and documents to complete the sale from the City to the Developer and the purchase by the Developer from the City of the Property pursuant to the terms of this Agreement, the City and the Developer agree to open an escrow (“Escrow”) with the Escrow Holder. ARTICLE III of this Agreement constitutes the joint escrow instructions of the Parties to the Escrow Holder for completion of the Escrow for the sale of the Property, as contemplated by this Agreement. The Developer and the City shall execute such further escrow instructions, consistent with the provisions of this Agreement, as may be reasonably requested by the Escrow Holder. In the event of any conflict between the provisions of this Agreement and any other escrow instructions requested by the Escrow Holder, the provisions of this Agreement shall control.

2.2 Earnest Money Deposit. Concurrent with its opening of the Escrow, the Developer shall deposit into Escrow the Earnest Money Deposit. The Escrow Holder shall deposit the Earnest Money Deposit into an interest-bearing account. All interest earned on such funds shall be added to the original principal amount of the Earnest Money Deposit and be considered part of the same.

The Earnest Money Deposit shall be nonrefundable upon the conclusion of the Due Diligence Period. Should Escrow fail to close after the conclusion of the Due Diligence Period, the Earnest 131
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13 Money Deposit shall be forfeited by Developer and shall be paid to the City upon the cancellation of Escrow in accordance with Section 3.10.

2.3 Title Approval. As soon as practicable following the opening of the Escrow, the City shall obtain from Title Company the Preliminary Report and deliver a copy of the Preliminary Report to the Developer. Within sixty (60) days following the Escrow Opening Date (defined at Section 3.1), the Developer shall deliver the Developer’s Title Notice to the City. If the Developer fails to deliver the Developer’s Title Notice to the City by the Title Approval Date, the Developer will be deemed to disapprove the status of title to the Property and refuse to accept title to the Property, in which case the City shall have the right, subject to Section 2.3.2, to cancel the Escrow and terminate this Agreement, in the City’s sole discretion, without liability to the Developer or any other person, by delivery of a written notice of termination to the Developer and Escrow Holder. Within twenty (20) days following receipt by the City of Developer’s Title Notice, if any, the City shall serve City’s Title Notice Response. If Developer’s Title Notice does not object to any matter in the Preliminary Report, the City shall not be required to serve City’s Title Notice Response. If the City does not serve City’s Title Notice Response, if necessary, within twenty (20) days following its receipt of Developer’s Title Notice, the City shall be deemed to elect not to remove any matter objected to in Developer’s Title Notice, if any, from the Preliminary Report. If the City elects in City’s Title Notice Response to cause the removal of any matter objected to in Developer’s Title Notice from the Preliminary Report, the City shall cause the removal of each such objectionable matter from the Preliminary Report within sixty (60) days following receipt by the Developer of City’s Title Notice Response or such other period of time that may be agreed to in writing by both the City and the Developer. If the City is unwilling or unable to cause the removal of any matter objected to in Developer’s Title Notice from the Preliminary Report, then, within ten (10) days following the Developer’s receipt of City’s Title Notice Response stating that the City is unwilling to remove or cause the removal of any matter objected to in Developer’s Title Notice or upon the expiration of the above sixty (60) day time period during which the City elected to remove such objectionable matters from the Preliminary Report and was unable to do so, the Developer may either (1) refuse to accept title to and conveyance of the Property, in which case the Parties shall have the right, subject to Section 2.3.2, to cancel the Escrow and terminate this Agreement without liability to either Party or any other person, by delivery of a written notice of termination to the Escrow Holder, or (2) waive its objection to any items set forth in Developer’s Title Notice by delivering Developer’s Title Notice Waiver to the City. Failure by the Developer to deliver Developer’s Title Notice Waiver, where City’s Title Notice Response or the City’s failure to serve City’s Title Notice Response indicates the City’s election not to cause the removal of any matter objected to in Developer’s Title Notice from the Preliminary Report, for the City to deliver City’s Title Notice Response under this Agreement, will be deemed the Developer’s continued refusal to accept the title to and conveyance of the Property, in which case the City shall have the right, subject to Section 2.3.2, to cancel the Escrow and terminate this Agreement, in the City’s sole discretion, without liability to the Developer or any other person, by delivery of a written notice of termination to the Developer and Escrow Holder.

2.3.1 If at any time prior to the Close of Escrow the Title Company issues an updated Preliminary Report containing any previously undisclosed matter affecting title to the Property, or the City becomes aware of any previously undisclosed matter affecting title to the Property, following the delivery of the Developer’s Title Notice, the City shall provide written notice to the Developer of such matter, together with any updated Preliminary Report related to 132
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14 such matter. The City and the Developer shall have such rights and obligations with respect to such previously undisclosed title matters as they did with respect to any title matters set forth in the original Preliminary Report as set forth in this Section 2.3.

2.3.2 Before exercising any right a Party may have under this Section 2.3 to cancel the Escrow and terminate this Agreement, such Party shall notify the non-terminating Parties in writing of its election to terminate and shall, upon a non-terminating Party’s request, which must be delivered, if at all, within three (3) days following its receipt of the terminating Party’s notice of election to terminate, meet and confer with the non-terminating Parties for a period of thirty (30) days. During such time, the Parties shall meet as often as reasonably requested by any Party to negotiate, in good faith, methods and means by which the objectionable title matter may be eliminated or mitigated. Nothing herein shall constitute an agreement, representation, or warranty by any Party that an acceptable resolution of the objectionable title matter will be achieved, nor shall any Party be obligated to expend any funds or undertake any other action whatsoever with respect to such title matter unless such agreement is reduced to a writing which is approved by all Parties, in their sole and absolute discretion. If, at the end of such thirty (30) day period, the Parties have not been able to agree on a mutually acceptable method of resolving such title matter, or if any proposed agreement is disapproved by the City Council, the Escrow shall be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties shall proceed pursuant to Section 3.10. The phrase “without liability to any party” includes return of Developer’s Earnest Money Deposit, subject to Sections 2.3 and 3.10.

2.4 Developer Investigations.

2.4.1 The Developer shall have until the expiration of the Due Diligence Period to complete all of its Due Diligence Investigations with respect to the entirety of the Property. The Developer shall complete all of its Due Diligence Investigations within the Due Diligence Period and shall conduct all of its Due Diligence Investigations at its sole cost and expense. The Developer shall rely solely and exclusively upon the results of its Due Diligence Investigations of the Property, including, without limitation, investigations regarding geotechnical soil conditions, compliance with applicable laws pertaining to the use of the Property by the Developer and any other matters relevant to the condition or suitability of the Property for the Project, as the Developer may deem necessary or appropriate. City makes no representation or warranty to the Developer relating to the condition of the Property or suitability of the Property for any intended use or development by the Developer. The Developer shall deliver a Due Diligence Investigation Conclusion Notice to the City and the Escrow Holder prior to the end of the Due Diligence Period. If the Developer does not unconditionally accept the condition of the Property by delivery of its Due Diligence Investigation Conclusion Notice indicating such acceptance prior to the end of the Due Diligence Period, the Developer shall be deemed to have rejected the condition of the Property and refused to accept conveyance of title to the Property. If the condition of the Property is rejected or deemed rejected by the Developer, then the City shall have the right, subject to Section 2.4.3, to cancel the Escrow and terminate this Agreement, in the City’s sole discretion, without liability to the Developer or any other person, by delivery of a written notice of termination to the Developer and Escrow Holder. The Developer shall accept all conditions of the Property, without any liability of the City whatsoever, upon the Developer’s acceptance of the condition of the Property indicated in its Due Diligence Investigation Conclusion Notice. The Developer’s delivery of its Due Diligence Investigation Conclusion Notice indicating 133
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15 the Developer’s unconditional acceptance of the condition of the Property shall evidence the acceptance of the condition of the Property by the Developer in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, as of the last day of the Due Diligence Period.

In its sole discretion, the Developer may accept the Property in its “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition at any time before the end of the Due Diligence Period.

The Developer shall conduct during the Due Diligence Period such environmental assessment(s) of the Property as the Developer deems appropriate. If such assessment(s) do not reveal the presence of any Hazardous Substances on the Property in levels that exceed applicable Governmental Requirements, then the City shall promptly and at its sole cost and expense install security fencing around the Property. If such assessment(s) do reveal the presence of any Hazardous Substances on the Property in levels that exceed applicable Governmental Requirements, then the City and the Developer shall negotiate in good faith in an effort to reach agreement as to the allocation of responsibility and cost of remediation thereof.

2.4.2 Any Due Diligence Investigations of the Property by the Developer shall not unreasonably disrupt any then-existing use or occupancy of the Property or the operations of the City. The Developer shall be liable for any damage or injury to any person or property arising from the acts of the Developer, its employees, agents or representatives during the course of any Due Diligence Investigations on the Property and the Developer shall indemnify, defend (with counsel reasonably acceptable to the City), and hold harmless the City and its elected officials, officers, directors, attorneys, contractors, agents and employees from any and all actual or alleged liens, claims, demands or liability arising from any Due Diligence Investigations by the Developer on the Property. Prior to commencing any Due Diligence Investigations on the Property, the Developer shall deliver copies of policies or certificates of insurance to the City evidencing compliance by the Developer with the insurance requirements of Section 5.10.

2.4.3 Before exercising any right a Party may have under this Section 2.4 to cancel the Escrow and terminate this Agreement, such Party shall notify the non-terminating Parties in writing of its election to terminate and shall, upon a non-terminating Party’s request, which must be delivered, if at all, within three (3) days following its receipt of the terminating Party’s notice of election to terminate, meet and confer with the non-terminating Parties for a period of thirty (30) days. During such time, the Parties shall meet as often as reasonably requested by any Party to negotiate, in good faith, methods and means by which the objectionable Due Diligence matter may be eliminated or mitigated. Nothing herein shall constitute an agreement, representation, or warranty by any Party that an acceptable resolution of the objectionable Due Diligence matter will be achieved, nor shall any Party be obligated to expend any funds or undertake any other action whatsoever with respect to such Due Diligence matter unless such obligation is reduced to a writing which is approved by all Parties, in their sole and absolute discretion. If, at the end of such thirty (30) day period, the Parties have not been able to agree on a mutually acceptable method of resolving the objectionable Due Diligence matter, or if any proposed agreement is disapproved by the City Council, the Escrow shall be cancelled, this Agreement shall be terminated without liability to any Party, and the Parties shall proceed pursuant to Section 3.10.

2.5 Developer to Obtain all Project Entitlements.
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16 2.5.1 By the Construction Drawings Submittal Date, Developer shall submit to City staff and the City Council, for review, the following (collectively, the “ Plans and Specifications”):

2.5.1.1 A proposed complete conceptual development plan for the Project on the Property that describes and depicts: (1) the location and placement of proposed buildings and (2) the architecture and elevations of the proposed buildings;

2.5.1.2 Proposed zoning change or changes to the City’s General Plan, if any, necessary to accommodate the Project on the Property;

2.5.1.3 A list of potential users or tenants and anticipated lease rates and resale land prices for the Property, as developed with the Project;

2.5.1.4 A proposed time schedule and cost estimates for the development of the Project on the Property;

2.5.1.5 A proposed financing plan identifying financing sources for all private and public improvements proposed for the Project; and

2.5.1.6 A preliminary financial analysis demonstrating the costs and benefits to the City and the City regarding all construction, maintenance and operations of all proposed public improvements, the costs of additional or increased levels of public services and any new public revenues anticipated to be generated by the Project.

2.5.2 The City’s zoning, building and land use regulations (whether contained in ordinances, the City’s municipal code, conditions of approval, policies, practice or elsewhere) (collectively, the “City Requirements”), shall be applicable to the use and development of the Project on the Property by the Developer. The Developer acknowledges that all Plans and Specifications and any changes to the Plans and Specifications shall be subject to the City Requirements. No action by the City with reference to this Agreement or any related documents shall be deemed to constitute a waiver of any City Requirements regarding the Property, the Project, the Developer, any successor-in-interest of the Developer or any successor-in-interest to the Property. The City Requirements may only be changed or waived by modification or variance approved by the City and consistent with this Agreement. No entitlement, permit or other approval from the City for development of the Project on the Property (collectively, the “ Entitlements”) shall attach to any portion of the Property or otherwise become effective to allow the Developer to develop the Project on the Property until after the Developer owns fee title to that portion of the Property to which such Entitlement pertains. Under no circumstances shall the Developer commence development of any portion of the Project on the Property prior to the Developer owning fee title to the Property.

2.5.3 The approval of the Scope of Development shall not be binding on the City Council or the Planning Commission of the City regarding any approvals of the Project required by such bodies. the Developer obtains no right to develop the Project on the Property or any portion of the Property by virtue of this Agreement, except that following the Close of Escrow, the Developer shall possess the same rights as any other owner of property within the Property that desires to develop its property in a manner consistent with the City’s General Plan. If any revisions 135
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17 of the Scope of Development are required by a Governmental Agency (other than the City) having jurisdiction over the Property or the Project, the Developer shall promptly make any such revisions that are generally consistent with the Scope of Development.

2.5.4 Notwithstanding any provision to the contrary in this Agreement, following the Close of Escrow, the Developer agrees to accept and comply fully with any and all conditions of approval applicable to all approvals, permits and other governmental actions regarding the development or operation of the Project on the Property, so long as such conditions of approval are consistent with the Scope of Development and this Agreement in all material respects.

2.5.5 Developer to Pay All Costs and Expenses . The Parties agree that the City shall not provide any financial assistance to the Developer in connection with the Project except as may be expressly set forth in this Agreement. The Developer shall be solely responsible for paying for the costs of all design work, construction, labor, materials, fees and permit expenses associated with the Project. The Developer shall pay any and all fees pertaining to the review and approval of the Project by the City, any other Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required by a Governmental Agency pertinent to the development or operation of the Project on the Property, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review and disclosure documents and design review documents. The Developer shall pay for any and all costs, including, but not limited to, the costs of design, construction, relocation and securing of permits for sewer or utility improvements and connections, that may be required in development of the Project, whether located on or off of the Property. By no later than the Entitlement Application Date, the Developer shall apply to obtain any and all necessary Entitlements, and by no later than the Entitlement Obtainment Date obtain any and all necessary Entitlements, prior to the commencement of applicable portions of construction, and the Developer shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction.

In accordance with this Section 2.5.5, Developer shall be responsible for the costs, or immediate reimbursement to the City upon delivery of an invoice for the costs, of the following:

2.5.5.1 all fees or expenses of engineers, architects, financial consultants, legal, planning or other consultants or contractors, retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Property or the Project or the negotiation of this Agreement that may be undertaken by the Developer;

2.5.5.2 all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City of any and all applications and other documents and information to be submitted to the City by the Developer pursuant to this Agreement or otherwise associated with the Project; and

2.5.6 The Developer shall obtain all Entitlements for use and development of the Project on the Property from each Governmental Agency, within the time period for such actions specifically set forth in the Schedule of Performance, subject to any extensions of time authorized by this Agreement upon the occurrence of an Unavoidable Delay. 136
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18 2.5.7 The Developer will prior to close of escrow seek to obtain building permits issued by the City, and other governmental agencies as required, for construction of the Project to proceed. Parties hereto agree that the time for Developer to Close Escrow shall be extended until seven (7) days after such necessary building permits are issued for construction, or all needed plans for construction of the Project are fully approved by all required governmental agencies and have achieved “ready to issue permit” status. Developer may waive this condition and Close Escrow without such permits or “ready to issue” plans at its sole discretion.

ARTICLE III

ESCROW INSTRUCTIONS

3.1 Opening of Escrow. For purposes of this Agreement, the opening of Escrow shall be the first date on which a fully executed copy of this Agreement and Earnest Money Deposit are deposited with Escrow Holder (“Escrow Opening Date”). The Developer shall cause the Escrow to be opened within fourteen (14) days following the Effective Date. Escrow Holder shall promptly confirm in writing to each of the Parties the date of the Escrow Opening Date. This ARTICLE III shall constitute the joint escrow instructions of the City and the Developer to Escrow Holder for conduct of the Escrow to complete the purchase and sale of the Property between them, as contemplated in this Agreement.

3.2 Conditions to Close of Escrow. The conditions set forth below shall be satisfied or waived in writing by the respective benefited Party on or before the Escrow Closing Date or the Party benefited by any unsatisfied condition shall not be required to proceed to close Escrow.

3.2.1 Developer’s Conditions to Close of Escrow. The Developer’s obligation to purchase the Property from the City on the Escrow Closing Date shall be subject to the satisfaction of the following conditions precedent, each of which can only be waived in writing by the Developer:

3.2.1.1 The Developer agrees to accept the title to and conveyance of the Property, pursuant to Sections 2.3 and 2.3;

3.2.1.2 The Developer delivers its Due Diligence Investigation Conclusion Notice to both the City and Escrow Holder indicating the Developer’s unconditional acceptance of the condition of the Property, prior to the expiration of the Due Diligence Period;

3.2.1.3 The City’s planning commission finds, pursuant to Government Code Section 65402, that the Project is consistent with the City’s General Plan;

3.2.1.4 The Title Company is unconditionally committed to issue the Title Policy for the Property, subject to any Permitted Exceptions, to the Developer;

3.2.1.5 The City deposits the items into the Escrow required by Section

3.4;
137
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19 3.2.1.6 The representations, warranties and covenants of the City set forth in Section 1.2.1 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date;

3.2.1.7 The Developer has obtained all Entitlements, subject to conditions of approval acceptable to Developer in Developer’s sole discretion, any applicable appeal period has expired without appeal having been filed or, if an appeal is filed, such appeal has been denied, and no legal action has been instituted against Developer or the City alleging the invalidity of such Entitlements; and

3.2.1.8 The City has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow.

3.2.1.9 The City has issued approved Building Permits, or stamped and issued plans in “Ready to Issue Permits” status.

3.2.2 City’s Conditions to Close of Escrow. The City’s obligation to sell the Property to the Developer on or before the Escrow Closing Date shall be subject to the satisfaction of the following conditions precedent, which can only be waived in writing by the City:

3.2.2.1 The Developer agrees to accept the title to and conveyance of the Property, pursuant to Sections 2.3 and 2.3;

3.2.2.2 The Developer delivers its Due Diligence Investigation Conclusion Notice to both the City and Escrow Holder indicating the Developer’s unconditional acceptance of the physical condition of the Property, prior to the expiration of the Due Diligence Period;

3.2.2.3 The City’s planning commission finds, pursuant to Government Code Section 65402, that the Project is consistent with the City’s General Plan;

3.2.2.4 The City has taken the necessary actions to comply with CEQA;

3.2.2.5 The Title Company is unconditionally committed to issue the Title Policy for the Property, subject to any Permitted Exceptions, to the Developer;

3.2.2.6 The Developer submits to the City, at least five (5) business days prior to the Escrow Closing Date, evidence satisfactory to the City, in the City’s reasonable discretion, that the Developer has obtained all Entitlements, including but not limited to a condominium map, from each applicable Governmental Agency, including the City;

3.2.2.7 The Developer delivers to the City, at least thirty (30) days prior to the Escrow Closing Date, in form and substance acceptable to the City, the Financing Commitment(s) applicable to the Property;

3.2.2.8 The Developer obtains the City’s approval of the Construction Loan and Construction Lender applicable to the Property, in accordance with Section 6.3, which approval shall not be unreasonably withheld;
138
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20 3.2.2.9 The Developer has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow;

3.2.2.10 The representations, warranties and covenants of the Developer set forth in Section 1.2.2 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date; and

3.2.2.11 The Developer deposits the funds and items into the Escrow required by Section 3.3 for the Escrow.

3.3 Developer’s Escrow Deposits. Following satisfaction or waiver of each of the Developer’s conditions to Close of Escrow set forth in Sections 3.2.1, as applicable, the Developer shall deposit the following funds and documents into Escrow at least two (2) business days prior to the Escrow Closing Date in a writing delivered to the Parties:

3.3.1 Earnest Money Deposit. The Earnest Money Deposit, plus any additional funds required to be deposited into Escrow by the Developer under the terms of this Agreement to close the Escrow, all in immediately available funds.

3.3.2 PCO Statement. A PCO Statement executed by the authorized representative(s) of the Developer.

3.3.3 Acceptance of Grant Deed. The Certificate of Acceptance of the Deed, in the form attached to the Grant Deed, executed by the authorized representative(s) of the Developer in recordable form.

3.3.4 Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the Developer in recordable form.

3.4 City’s Escrow Deposits. Following satisfaction or waiver of each of the City’s conditions to Close of Escrow set forth in Sections 3.2.2, as applicable, the City shall deposit the following documents into Escrow at least two (2) business days prior to the Escrow Closing Date:

3.4.1 Grant Deed. The Grant Deed executed by the authorized representative(s) of the City in recordable form.

3.4.2 FIRPTA Affidavit (City). The FIRPTA Affidavit completed and executed by the authorized representative(s) of the City.

3.4.3 Notice of Agreement. The Notice of Agreement executed by the authorized representative(s) of the City in recordable form.

3.5 Closing Procedure. When each of the Developer’s Escrow required deposits, as set forth in Section 3.3, and each of the City’s Escrow required deposits, as set forth in Section

3.4, are deposited into Escrow, Escrow Holder shall request confirmation in writing from both the City and the Developer that each of their respective conditions to the Close of Escrow, as set forth in Section 3.2, are satisfied or waived. Upon Escrow Holder’s receipt of written confirmation from both the City and the Developer that each of their respective conditions to the Close of Escrow are 139
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21 either satisfied or waived, Escrow Holder shall close the Escrow for the Property by doing all of the following:

3.5.1 Recordation of Documents. File the following with the Office of the Recorder of the County, for recordation in the order set forth in Section 3.7 (i) the Grant Deed, with the Developer’s certificate of acceptance attached, (ii) the Notice of Agreement, and (iii) if applicable, the Construction Loan Deed of Trust.

3.5.2 Distribution of Recorded Documents. Distribute each recorded document to the Party or person designated for such distribution in Section 3.7.

3.5.3 PCO Statement. File the PCO Statement with the Office of the Recorder of the County.

3.5.4 FIRPTA Affidavit. File the FIRPTA Affidavit with the United States Internal Revenue Service.

3.5.5 Title Policy. Obtain and deliver the Title Policy to the Developer.

3.6 Close of Escrow. Close of Escrow shall occur no later than the tenth (10th) business day following Escrow Holder’s receipt of written confirmation from both the City and the Developer of the satisfaction or waiver of all conditions precedent to the Close of Escrow for the Property (the “Escrow Closing Date”). If for any reason the Close of Escrow has not occurred by the Escrow Closing Date, then any Party not then in default of this Agreement may cancel the Escrow and terminate this Agreement, subject to the notice and cure provisions of Section 7.1 (to the extent applicable), without liability to any other Party or any other person for such termination and cancellation, by delivering written notice of termination to the other Party(ies) and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 3.10 if the non-terminating Party is not in default or pursuant to Section 7.2 or 7.3 (as applicable) if the non-terminating Party is in default. Without limiting the right of any Party to terminate this Agreement, pursuant to the preceding sentence, if Escrow does not close on or before the Escrow Closing Date, and no Party has exercised its contractual right to cancel Escrow and terminate this Agreement before such time, then Escrow shall close as soon as reasonably possible following the first date on which Escrow Holder is in a position to close the Escrow pursuant to the terms and conditions of this Agreement.

3.7 Recordation and Distribution of Documents. As applicable, Escrow Holder shall cause the following documents to be recorded in the official records of the Recorder of the County in the following order of priority at the Close of Escrow: (i) the Grant Deed, with the Developer’s certificate of acceptance attached, (ii) the Notice of Agreement; (iii) the Construction Loan Deed of Trust, if applicable, and (iv) any other documents to be recorded through Escrow upon the joint instructions of the Parties. All recorded documents shall provide that they are to be returned to Escrow Holder after recordation. When originals of such recorded documents are returned to Escrow Holder, Escrow Holder shall deliver: (i) the original Grant Deed, with the Developer’s original certificate of acceptance attached, to the Developer and copies to the City, each showing all recording information, (ii) the original of the Notice of Agreement to the City, with copies to the Developer, each showing all recording information, (iii) the Construction Loan Deed of Trust to the Construction Lender for the Project, with copies to the Developer and the City, each showing 140
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22 all recording information, and (iv) the original of any other document recorded at the close of Escrow to the Party or other person designated in the joint escrow instructions of the Parties for such recordation and a copy of each such document to the other Party or Parties, each showing all recording information.

3.8 Escrow Closing Costs, Taxes and Title Policy Premium. The City and the Developer shall each pay one-half (1/2) of the Escrow fees and such other costs as Escrow Holder may charge for the conduct of the Escrow. Escrow Holder shall notify the Developer and the City of the costs to be borne by each of them at the Close of Escrow by delivering the Escrow Holder’s estimated closing/settlement statement to both the City and the Developer at least four (4) business days prior to the Escrow Closing Date. The City shall pay the premium charged by the Title Company for the standard Title Policy for the Property, exclusive of any endorsements or other supplements to the coverage of such Title Policy that may be requested by the Developer, as well as documentary transfer taxes and any and all other charges, fees and taxes levied by a Governmental Authority relative to the conveyance of any portion of the Property through the Escrow transaction contemplated in this Agreement. The Developer shall pay any and all recording fees relative to the conveyance of any portion of the Property through the Escrow transaction contemplated in this Agreement.

3.9 Escrow Cancellation Charges. If the Escrow fails to close due to either the City’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, the City shall pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close due to the Developer’s material default under this Agreement and the Escrow is cancelled and this Agreement is terminated, the Developer shall pay all ordinary and reasonable Escrow and title order cancellation charges. If the Escrow fails to close for any reason other than the material default of either the Developer or the City and the Escrow is cancelled and this Agreement is terminated, the Developer and the City shall each pay one-half (1/2) of any ordinary and reasonable Escrow and title order cancellation charges.

3.10 Escrow Cancellation. If this Agreement is terminated and the Escrow cancelled pursuant to a contractual right granted to a Party in this Agreement to terminate this Agreement and cancel the Escrow, other than due to the material default of another Party, the Parties shall do each of the following:

3.10.1 Cancellation Instructions. The Parties shall, within three (3) business days of receipt of Escrow Holder’s written request, execute any reasonable Escrow cancellation instructions requested by Escrow Holder;

3.10.2 Return of Funds and Documents. Within ten (10) days of receipt by the Parties of a settlement statement of Escrow and title order cancellation charges from Escrow Holder: (i) the Developer or Escrow Holder shall return to the City any documents previously delivered by the City to the Developer or Escrow Holder, (ii) the City or Escrow Holder shall return to the Developer all documents previously delivered by the Developer to the City or Escrow Holder; (iii) Escrow Holder shall return to the Developer any funds deposited by Developer into Escrow, including the Earnest Money Deposit (subject to Section 2.2), less the Developer’s share of customary and reasonable Escrow and title order cancellation charges, if any; and (iv) Escrow Holder shall return to the City any funds deposited by City into Escrow if it has already been 141
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23 deposited, less the City’s share of customary and reasonable Escrow and title order cancellation charges, if any.

3.11 Report to IRS. Following the Close of Escrow and prior to the last date on which such report is required to be filed with the Internal Revenue Service, if such report is required pursuant to Section 6045(e) of the Internal Revenue Code, Escrow Holder shall report the gross proceeds of the purchase and sale of the Property to the Internal Revenue Service on Form 1099- B, W-9 or such other form(s) as may be specified by the Internal Revenue Service pursuant to Section 6045(e). Upon the filing of such reporting form with the Internal Revenue Service, Escrow Holder shall deliver a copy of the filed form to the City and the Developer.

ARTICLE IV

PROJECT DEVELOPMENT

4.1 Developer Covenant to Undertake Project. Upon Close of Escrow the Developer covenants, for itself, its successors and assigns, to and for the exclusive benefit of the City, that the Developer shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. Upon Close of Escrow the Developer covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance, any and all plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section 4.1 shall run with the land of the Property until the earlier of the date of recordation of the Certificate of Completion or the fifteenth (15th) anniversary of the date of the Close of Escrow.

4.2 Developer Changes to Plans and Specifications During Course of Construction. The Developer shall have the right during the course of construction of the Project to make “minor field changes,” without seeking the approval of the City, if such changes do not affect the type of use to be conducted within all or any portion of a structure. “ Minor field changes” shall be defined as those changes from the approved Plans and Specifications that have no substantial effect on the Project or are made in order to expedite the work of construction in response to field conditions. The Developer shall submit all other changes, i.e. those changes which are not “minor field changes”, to the City for its review and approval no less than fifteen (15) days prior to the date that the Developer intends to implement such changes. The City shall have ten (10) days from its receipt of such proposed changes to review the same and advise the Developer in writing whether such changes are acceptable to the City in its reasonable discretion.

Any proposed changes which are not disapproved by the City within such ten (10) day period shall be deemed approved. Nothing contained in this Section 4.2 shall be deemed to constitute a waiver of or change in the City Requirements governing “ minor field changes” or other changes or in any approvals by the City otherwise required for “minor field changes.” or other changes.

4.3 Construction Start and Completion of Project. The Developer shall commence construction of the Project in accordance with the Schedule of Performance and, thereafter, shall 142
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24 diligently proceed to complete the construction of the Project in a good and workmanlike manner in substantial conformity with the approved plans, specifications, and conditions for the Project approved by the City and the Schedule of Performance. The Developer shall obtain a Certificate of Completion on or before the Project Completion Date. The Developer will, promptly upon completion of construction of the Project, cause the Project to be inspected by each Governmental Agency with jurisdiction over the Project, shall correct any defects and deficiencies that may be disclosed by any such inspection and shall cause to be duly issued all occupancy certificates and other licenses, permits and authorizations necessary for the operation and occupancy of the completed Project. The Developer shall do and perform all of the foregoing acts and things and cause to be issued and executed all such occupancy certificates, licenses, and authorizations for the Project on or before the date set forth therefor in the Schedule of Performance as the completion date for the Project. After commencement of the work of improvement of the Project, the Developer shall not permit the work of improvement of the Project to cease or be suspended for a time period in excess of thirty (30) consecutive calendar days, subject to Unavoidable Delays.

4.4 Compliance with Laws. All work performed in connection with the development of the Project shall comply with all Governmental Requirements.

4.5 Schedule of Performance. The Schedule of Performance establishes various dates and times for the accomplishment of various tasks assigned to the City and the Developer and the satisfaction of the conditions precedent to the close of the Escrow. The Parties agree that time is of the essence in the performance of such tasks and the satisfaction of conditions precedent, in view of the large investment of resources that all Parties recognize will be required for assembly of the Property and the undertaking of the Project. If the date or time for the performance of a task or the satisfaction of a condition, as set forth in either the text of this Agreement or in the Schedule of Performance, may not be achieved, then prior to such date or time set forth in the text of this Agreement or the Schedule of Performance, the Parties shall consider whether a modification to the text of this Agreement or to the Schedule of Performance is warranted. Any decision to approve a modification to a time or date established in either the text of this Agreement or the Schedule of Performance shall be subject to the sole discretion of each Party. Any modification of a time or date for performance of a particular task or satisfaction of a particular condition that does not result in a change of more than one hundred eighty (180) days may be approved on behalf of the City by the City Manager, in his or her reasonable discretion. A modification of a time or date for performance of a task or satisfaction of a condition (or a series of such modifications) that results in an aggregate change of more than one hundred eighty (180) days shall be subject to the approval of the City Council, in its sole and absolute discretion. If performance of a task or satisfaction of a condition in the Schedule Performance is prevented or delayed by Unavoidable Delays, the deadline for completion of such task or satisfaction of such condition shall be extended by the period of such Unavoidable Delays.

4.6 Developer Attendance at City Meetings. The Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such person(s) can meaningfully respond to City questions regarding the progress of the Project, attend City Council meetings, when requested to do so on not less than ten (10) days prior written notice by City staff. 143
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25 4.7 City’s Right to Inspect Project and Property. Officers, employees, agents and representatives of the City shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours, during the period of construction of the Project. Such officers, employees, agents or representatives of the City shall be those persons who are designated by the City Manager. Any and all officers, employees, agents or representatives of the City who enter the Property shall identify themselves at the construction management office on the Property, upon their entrance on to the Property, and shall at all times be accompanied by a representative of the Developer, while on the Property. The Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours, upon reasonable notice from the City. The City shall indemnify and hold the Developer harmless from injury, property damage or liability arising out of the exercise by the City of the right of access to the Property provided in this Section 4.7, other than injury, property damage or liability arising from the negligence or willful misconduct of the Developer or its officers, agents or employees.

The City shall inspect relevant portions of the Property, prior to issuing any written statements reflecting adversely on the Developer’s compliance with the terms and conditions of this Agreement pertaining to development of the Project. If in the City’s reasonable judgment it is necessary, the City shall have the further right, from time to time, to retain a consultant or consultants to inspect the Project and verify compliance by the Developer with the provisions of this Agreement. The Developer acknowledges and agrees that any such inspections are for the sole purpose of protecting the City’s rights under this Agreement, are made solely for the City’s benefit, that the inspections may be superficial and general in nature, and are for the purposes of informing the City of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement, and that the Developer shall not be entitled to rely on any such inspection(s) as constituting an approval, satisfaction or acceptance of any materials, workmanship, conformity of the Project with this Agreement or otherwise. The Developer agrees to make its own regular inspections of the work of construction of the Project to determine that the quality of the Project and all other requirements of the work of construction of the Project are being performed in a manner satisfactory to the Developer. The Developer also agrees to immediately notify the City in writing should the Developer’s inspections show any matters that will prevent the entire Project from being completed by the Project Completion Date set forth therefore in the Schedule of Performance. Without limiting the foregoing, the Developer shall permit the City upon reasonable notice to examine and copy all books and account records and other papers relating to the Property and the construction of the Project. The Developer will use commercially reasonable efforts to cause all contractors, subcontractors and materialmen to cooperate with the City to enable such examination.

4.8 Cost of Construction. The cost and expense of undertaking and completing the Project, including, without limitation, constructing all legally imposed on- and off-site improvements, and providing all utilities therefor, shall be borne by Developer at its sole cost, expense and liability. Developer shall be solely responsible for payment of all City land use, construction, inspection, plan check and development impact fees (collectively, “ Development Fees”) imposed by the City with respect to the development of the Project. Developer shall bear all costs and expenses associated with the processing and obtaining of the Entitlements and shall bear all costs and expenses (except to the extent expressly set forth otherwise in this Agreement), associated with any and all terms, conditions, requirements, mitigation measures and other exactions imposed on, or required in connection with, the Entitlements. 144
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26 4.9 Prevailing Wages.

4.9.1 The Developer acknowledges that the City has not made any representation, express or implied, to the Developer or any person associated with the Developer regarding whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to Labor Code Sections 1720, et seq. The Developer agrees with the City that the Developer shall assume the responsibility and be solely responsible for determining whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification.

4.9.2 The Developer, on behalf of itself, its successors, and assigns, waives and releases the City from any right of action that may be available to it pursuant to Labor Code Sections 1726 and 1781. The Developer acknowledges the protections of Civil Code Section 1542 relative to the waiver and release contained in this Section 4.9, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING

THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST

HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.”

BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN

CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION

4.9.2. _________________
Developer’s Initials

4.9.3 Additionally, in accordance with Section 7.7, the Developer shall indemnify, defend with counsel acceptable to the City and hold the City harmless against any claims pursuant to Labor Code Sections 1726 and 1781 arising from this Agreement or the construction or operation of the Project.

4.10 Certificate of Completion.

4.10.1 Following the substantial completion of construction of the Project, and upon written request from the Developer for issuance of a Certificate of Completion for the Project, the City shall inspect the Project to determine whether or not the Project has been substantially completed in compliance with this Agreement. If the City determines that the Project is complete and in compliance with this Agreement, the City Manager shall furnish the Developer with a Certificate of Completion for the Project. If the City determines that the Project is not in compliance with this Agreement, the City Manager shall send written notice of each non- conformity to the Developer. Upon issuance of the final certificate of occupancy for the development of the Project, based on the plans submitted by the Developer to the City, the City 145
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27 shall furnish the Developer with a Certificate of Completion for the Project. Until the issuance of the final certificate of occupancy, the City shall retain of right of reverter in the Property pursuant to Section 7.6. The City shall not unreasonably interfere with the usual inspections by City agencies or other typical governmental inspections related to requirements for a certificate of occupancy.

4.10.2 The City shall not unreasonably withhold the issuance of a Certificate of Completion. A Certificate of Completion shall be evidence of the City’s conclusive determination of satisfactory completion of the Project to which it pertains pursuant to the terms of this Agreement. After the recordation of a Certificate of Completion for the Project, any person then owning or thereafter purchasing, leasing or otherwise acquiring any interest in the Property improved with the Project shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement regarding construction or installation of the Project except that such person shall be bound by any reservations, covenants, conditions, restrictions and other interests recorded against the Property pursuant to this Agreement and the Grant Deed.

4.10.3 If the City fails or refuses to issue a Certificate of Completion following written request from the Developer within fifteen (15) calendar days of the Developer’s written request or within three (3) calendar days after the next regular meeting of the City Council, whichever date occurs later, the City shall provide the Developer with a written statement setting forth the reasons for the City’s failure or refusal to issue a Certificate of Completion. The statement shall also contain the City’s opinion of the action(s) the Developer must take to obtain a Certificate of Completion from the City. If the reason for the Developer’s failure to complete the Project is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building “ punch- list” items, the City may issue its Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by the Developer in a form reasonably acceptable to the City in an amount representing the fair value of the work on the Project remaining to be completed, as reasonably determined by the City. If the City fails to provide such written statement, within the specified time period, the Developer shall be deemed conclusively and without further action of the City to have satisfied the requirements of this Agreement with respect to the Project, as if a Certificate of Completion had been issued by the City pursuant to this Agreement.

4.10.4 A Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Project, or any parts thereof. A Certificate of Completion shall not be deemed to constitute a notice of completion under Section 3093 of the California Civil Code, nor shall it act to terminate the continuing covenants, restrictions or conditions contained in the Grant Deed or any other instruments recorded against the Property pursuant to this Agreement. A Certificate of Completion is not evidence of the compliance of the Project with any City Requirements or any building code, conditions of approval, land use, zoning or other requirements of the City or any Governmental Agency with jurisdiction over the Property, other than the City.
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28 ARTICLE V

DEVELOPER COVENANTS

5.1 Covenant to Maintain Property on Tax Rolls. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.1.1 The entire Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance of a certificate of occupancy for the Project.

5.1.2 The Developer shall pay all property tax bills with respect to the Property and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 during such time period and to timely pay all supplemental tax bills regarding the Property issued by the County. The Developer further covenants and agrees to provide to the City, on or before July 31 of each year, commencing in the calendar year following the calendar year in which a Certificate of Completion is recorded and in each calendar year, thereafter, for the full term of this covenant: (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Developer and the County regarding the Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Developer in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon (or other reasonably acceptable evidence of such payment), with respect to the preceding County fiscal year.

5.1.3 The covenants of this Section 5.1 shall run with the land of the Property, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.2 No Conveyance to Tax Exempt Entity. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.2.1 The Developer shall not use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, the Project, or any portion of any of the foregoing to any entity or person, or for any use of the Property, the Project, or any portion of any of the foregoing, that is partially or wholly exempt from the payment of real or personal property taxes or that would cause the exemption of the payment of all or any portion of real or personal property taxes otherwise assessable regarding the Property, the Project, or any portion of any of the foregoing, without the prior written consent of the City, which may be withheld in the City’s sole and absolute discretion for a period of 20 years from the date of issuance of the Certificate of Completion for the Project by the City.

5.2.2 If the Property, or any portion of the Property, shall be conveyed, transferred or sold to any entity or person that is partially or wholly exempt from the payment of real or personal property taxes otherwise assessable against the Property, or any portion thereof, without the prior written consent of the City, then, at the City’s election and in addition to all other remedies available to the City under this Agreement or at law or in equity, the Developer shall pay 147
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29 to the City a fee in lieu of payment of such taxes each year in an amount determined by the City to be one percent (1%) of the “ full cash value ” of the Property, or portion thereof, as may be subject to such exemption from payment of real or personal property taxes. The City’s determination of “full cash value” for in-lieu payment purposes under this Section 5.2.2 shall be established by the City each year, if necessary, by reference to the real or personal property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The City’s determination of “ full cash value” and that an in-lieu payment is due shall be conclusive on such matters. If the City determines that an amount is payable as an in-lieu payment under this Section 5.2.2 in any tax year, then such amount shall be paid to the City for that tax year within forty-five (45) days following transmittal by the City to the Developer of an invoice for payment of the in-lieu amount.

5.2.3 The covenants of this Section 5.2 shall run with the land of the Property, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.3 Maintenance Condition of the Property. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that after Close of Escrow:

5.3.1 The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maintenance standard described above (a “ Maintenance Deficiency ”), then the City shall notify the Developer in writing of the Maintenance Deficiency. If the Developer fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the City shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the City to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 5.3.1 shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the City to the Developer, the City shall have the right to enforce the lien in the manner provided in Section 5.3.3.

5.3.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint that has been color-matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti is not removed within ninety-six (96) hours following the time of the discovery of the graffiti, the City shall have the right to enter the Property and remove the graffiti, without notice to the Developer. Any sum reasonably expended by the City for the removal of graffiti from the Property pursuant to this Section 5.3.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after 148
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30 written demand to the Developer from the City, the City shall have the right to enforce its lien in the manner provided in Section 5.3.3.

5.3.1 or Section 5.3.2, including the reasonable attorneys’ fees and costs of the City associated with the abatement of a Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the City” mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney.

5.4 shall be deemed to preclude the Developer from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City.

5.4 Obligation to Refrain from Discrimination. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.4.1 There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Developer, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property. The covenant of this Section 5.5 shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of Agreement.

5.4.2 The covenant of this Section 5.5 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.5 Form of Non-Discrimination and Non-Segregation Clauses. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.5.1 The Developer, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the Property 149
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31 shall contain or be subject to substantially the following non-discrimination or non-segregation covenants:

5.5.1.1 In deeds: “The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”

5.5.1.2 In leases: “The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased.”

5.5.1.3 In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub-lessees, sub-tenants, or vendees of the premises herein transferred.” The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument.

5.5.2 The covenant of this Section 5.6 shall run with the land of the Property in perpetuity, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed.

5.6 Survival of Special Development Covenants. All of the covenants set forth in ARTICLE V, inclusive, shall be a covenant running with the land of the Property and each such special development covenant shall survive the Close of Escrow, execution and recordation of the Grant Deed, and issuance and recordation of any Certificate of Completion for the time period specifically set forth in each such special development covenant. The Parties acknowledge that although the special development covenants apply to the entirety of the Property, portions of the Project and Property may, in accordance with the Permitted Transfer requirements, be sold or otherwise transferred to various successors and assigns of the Developer. Accordingly, the City agrees that with respect to enforcement of any of the special development covenants, it is understood and agreed that, in the event of a breach of any of the special development covenants, 150
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32 the City will seek to enforce those covenants only against the then-current owner(s) of that portion of the Property which is not in compliance with any one or more the special development covenants. No owner of any portion of the Property which is in compliance with the special development covenants shall be liable for the breach of any of the special development covenants by any other owner of any other portion of the Property; provided, however, that the foregoing shall not preclude City from seeking damages against any prior owner of any portion of the Property if, during the tenure of such owner’s ownership, such owner’s portion of the Property was not in compliance with any one or more of the special development covenants.

5.7 Developer Covenant to Defend this Agreement. The Developer acknowledges that the City is a “ public entity” and/or “public agency” as defined under applicable California law. Therefore, the City must satisfy the requirements of certain California statutes relating to the actions of public entities and public agencies including, without limitation, CEQA. Also, as a public body, the City’s action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Developer assumes the risk of delays and damages that may result to the Developer from any third-party legal actions related to the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the City is determined to have occurred. If a third- party files a legal action regarding the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, either the City may terminate this Agreement on thirty (30) days written notice to the Developer of the City’s intent to terminate this Agreement, referencing this Section 5.8, without any further obligation to perform the terms of this Agreement and without any liability to the Developer resulting from such termination, unless the Developer unconditionally agrees to indemnify and defend the City, with legal counsel acceptable to the City, against such third-party legal action, as provided in the next sentence. Within thirty (30) days of receipt of the City’s notice of intent to terminate this Agreement, as provided in the preceding sentence, the Developer may offer to defend the City, with legal counsel reasonably acceptable to the City, in the third-party legal action and pay all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action.

Any such offer from the Developer must be in writing and reasonably acceptable to the City in both form and substance. Nothing contained in this Section 5.8 shall be deemed or construed to be an express or implied admission that the City is liable to the Developer or any other person or entity for damages alleged from any alleged or established failure of the City to comply with any statute, including, without limitation, CEQA. The Developer’s defense of such third-party actions as described in this Section 5.8 shall constitute an Unavoidable Delay.

5.8 Environmental Indemnity of the City by the Developer. The Developer agrees that after Close of Escrow, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel selected by the Developer and approved by the City) the City and its commissions, agents, attorneys, officers, employees, and authorized representatives (collectively, the “Indemnified Parties ”), from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of action, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, attorney fees, disbursements and costs of attorneys, environmental consultants and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever (collectively, “Environmental Claims”) that may, at any time, be imposed upon, incurred or suffered by, or 151
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33 claimed, asserted or awarded against, the Indemnified Parties, directly or indirectly relating to or arising from any of the following “ Environmental Matters ” existing or occurring during or arising from the Developer’s ownership of the Property or construction or operation of the Project:

5.8.1 The presence of Hazardous Materials on, in, under, from or affecting all or any portion of the Property or the Project.

5.8.2 The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal or transportation of any Hazardous Materials on, in, under, from or affecting the Property or the Project.

5.8.3 The violation of any law, rule, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement or the like by the Developer, its agents or contractors, relating to or governing in any way Hazardous Materials on, in, under, from or affecting the Property or the Project.

5.8.4 The failure of the Developer, its agents or contractors, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants and the like in connection with the Developer’s activities on the Property or regarding the Project.

5.8.5 The implementation and enforcement by the Developer, its agents or contractors of any monitoring, notification or other precautionary measures that may, at any time, become necessary to protect against the release, potential release or discharge of Hazardous Materials on, in, under, from or affecting the Property or the Project.

5.8.6 The failure of the Developer, its agents or contractors, in compliance with all applicable Environmental Laws, to lawfully remove, contain, transport or dispose of any Hazardous Materials existing, stored or generated on, in, under or from the Property or the Project.

5.8.7 Any investigation, inquiry, order, hearing, action or other proceeding by or before any governmental agency in connection with any Hazardous Materials on, in, under, from or affecting the Property or the Project or the violation of any Environmental Law relating to the Property or the Project.

5.8.8 The Developer shall pay to the Indemnified Parties all costs and expenses including, without limitation, reasonable attorneys’ fees and costs, incurred by the Indemnified Parties in connection with enforcement of the aforementioned environmental indemnity.

5.9 Insurance. In order to protect the City and its commissions, agents, attorneys, officers, employees and authorized representatives (collectively, “Additional Insureds”) against any and all claims and liability for death, injury, loss and damage resulting from the Developer’s actions in connection with this Agreement, the Property, and the Project, the Developer shall secure and maintain the insurance coverage, described in and required by this Section 5.10. The City shall not have any obligation under this Agreement until the Developer provides the required policies and/or certificates evidencing the insurance required by this Section 5.10 to the City and the City approves such evidence of insurance. The Developer shall pay any deductibles and self- 152
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34 insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement.

Developer shall retain all insurance policies as set forth in this Section 5.10 until recordation of the Certificate of Completion.

5.9.1 Workers’ Compensation Insurance Requirement. The Developer shall submit written proof that the Developer is insured against liability for workers’ compensation in accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of the Agreement.”
The Developer shall require each contractor and sub-contractor performing work on the Project to provide workers’ compensation coverage for all of such contractor’s or sub-contractor’s employees, unless the contractor’s or sub-contractor’s employees are covered by workers’ compensation insurance provided by the Developer. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, the Developer shall provide and/or require each contractor or sub-contractor to provide adequate workers’ compensation insurance covering such employees. Each workers’ compensation policy procured pursuant to this Section 5.9.1 shall contain a full waiver of subrogation clause in favor of the Additional Insureds.

5.9.2 Liability and Permanent Insurance Requirements.

5.9.2.1 The Developer shall maintain in full force and effect, until the issuance of the Certificate of Completion, subject to Section 5.9.2.4, the following insurance coverage:

5.9.2.1.1 Commercial General Liability Insurance coverage, including, but not limited to, Premises-Operations, Contractual Liability Insurance (specifically covering all indemnity obligations of the Developer pursuant to this Agreement), Products- Completed Operations Hazards, Personal Injury (including bodily injury and death), and Property Damage for liability arising out of the construction of the Project and/or the Developer’s operations concerning the Property or the Project. The commercial general liability insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability of TWO MILLION DOLLARS ($2,000,000) each occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate.

5.9.2.1.2 Automobile Liability Insurance against claims of Personal Injury (including bodily injury and death) and Property Damage covering all owned, leased, hired and non-owned vehicles used by the Developer with minimum limits for Bodily Injury and Property Damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and 153
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35 TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy.

5.9.2.1.3 If the Developer hires a consultant to provide design services, such as architectural or engineering services in connection with the Project, or any portion of the Project, the Developer shall require each such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000).

5.9.2.1.4 Upon acceptance of the Project or any portion thereof, from each contractor, the Developer shall maintain Fire and Extended Coverage Insurance on the Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of all portions of the Project so accepted.

5.9.2.2 During the construction of the Project, the Developer shall require that each contractor performing work on the Project maintain the following insurance coverage, as specified below, at all times during the performance of said work, or the Developer shall provide for such contractors “wrap” coverage, as specified below, at all times during the performance of said work:

5.9.2.2.1 The Developer shall maintain Builder’s Risk
Insurance to be written on an All Risk Completed Value form, in an aggregate amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work.

5.9.2.2.2 Each general contractor and each sub-contractor shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect the Developer during the construction of the Project from claims involving bodily injury and/or death and damage to the property of others.

5.9.2.2.3 Each general contractor and each sub-contractor shall maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non-owned vehicles used in the performance of the contractor’s obligations with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such automobile liability insurance shall be provided by a business or commercial vehicle policy.

5.9.2.3 The insurance required in Section 5.9.2.1 and Section 5.9.2.2 above shall include endorsements naming the Additional Insureds as additional insured for liability arising out of this Agreement and any operation related to this Agreement.

5.9.2.4 Any insurance coverage required under this Agreement shall not be written on a “claims made” basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. The requirements of this Section 5.9.2.4 shall survive 154
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36 any expiration or termination of this Agreement and the recordation of the Grant Deed and any Certificate of Completion.

5.9.2.5 Receipt by the City of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.

5.9.2.6 Subject to Section 5.9.2.4, all of the insurance coverage required under this Section 5.10 shall be maintained by the Developer or its contractors, as required by the terms of this Agreement, until the issuance of the Certificate of Completion and shall not be reduced, modified, or canceled without, at least, thirty (30) days prior written notice to the City.

Also, phrases such as “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates of insurance or any coverage for the Additional Insureds. The Developer shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.

5.9.2.7 All insurance to be obtained and maintained by the Developer under this Section 5.10 shall be issued by a company or companies listed in the then current “Best’s Key Rating Guide” publication with a minimum of an “A:VII” rating and be admitted to conduct business in the State of California by the State of California Department of Insurance.

5.9.2.8 The City will not accept self-insurance in satisfaction of the insurance requirements of this Section 5.10.

5.9.2.9 All insurance obtained and maintained by the Developer in satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.

5.9.2.10 Insurance coverage in the minimum amounts set forth in this Section 5.10 shall not be construed to relieve the Developer of any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the Additional Insureds from taking such other actions as are available to them under any other provision of this Agreement or otherwise at law.

5.9.3 Failure by the Developer to maintain all insurance coverage required by this Section 5.10 in effect shall be an Event of Default by the Developer. The City, at its sole option, may exercise any remedy available to them in connection with such an Event of Default.

Alternatively, the City may, at its sole option, purchase any such required insurance coverage and the City shall be entitled to immediate payment from the Developer for any premiums and associated costs paid by the City for such insurance coverage. Any election by the City to purchase or not to purchase insurance otherwise required to be carried by the Developer shall not relieve the Developer of its obligation to obtain and maintain the insurance coverage required by this Agreement.
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37 ARTICLE VI

PROJECT FINANCING

6.1 Recordation of Construction Loan Deed of Trust. The Developer covenants to the City that, if Developer has arranged any secured Construction Loan, the Developer shall cause the Construction Loan Deed of Trust(s) to be recorded against the Property within sixty (60) days following the Close of Escrow.

6.2 Unauthorized Liens. Except as provided in Section 6.3, until recordation of the Certificate of Completion, the Developer shall not record, and shall not allow to be recorded, against the Property, or any portion thereof, any Lien not expressly authorized by this Agreement.

Until recordation of the Certificate of Completion, the Developer shall remove, or shall have removed, any unauthorized Lien made or recorded against the Property or any portion of the Property, or shall assure the satisfaction thereof to the satisfaction of the City. After one hundred twenty (120) calendar days prior written notice to the Developer, the City shall have the right, but not the obligation, to satisfy any unauthorized Lien made or recorded prior to recordation of the Certificate of Completion and receive reimbursement from the Developer for any amounts paid or incurred in satisfying any such Lien, upon demand. Nothing in this Section 6.2, though, shall require the Developer to pay or make provisions for the payment of any tax, assessment, lien, or charge that the Developer is in the process of contesting the validity or amount thereof, in good faith, and so long as such contest shall not subject the Property, or any portion thereof, to forfeiture or sale.

6.3 Rights of Lenders and City Regarding Permitted Loans and Liens.

6.3.1 The City shall have the right of reasonable review and approval of any Lender from which the Developer proposes to obtain any Loan, whether or not such Loan is secured by a Lien against the Property or any portion thereof. The City shall not unreasonably withhold, condition or delay its approval of any proposed Lender or Loan. In deciding whether to give, condition or withhold such approval, the City may consider, among other matters, whether or not the proposed Lender is a state or federally chartered bank, savings and loan, or other financial institution which routinely provides construction financing to development projects such as the Project, whether the terms of the Loan are reasonable and customary when compared to the financing terms of similar development projects in the County, the size and financial strength of the proposed Lender, and what effect, if any, any changes requested by the Lender to either this Agreement or any of the exhibits to this Agreement may have upon the City’s rights and remedies hereunder. In connection therewith, in any notice requesting approval of a proposed Lender and Loan, the Developer shall include a statement identifying any amendments, modifications, or other changes to this Agreement or its exhibits which the proposed Lender will request in connection with the Developer’s obtaining of the Loan. The City agrees to reasonably consider, but shall not be obligated to accept, any amendment, modification, or other change to this Agreement or any of the exhibits to this Agreement which materially restricts, diminishes, or burdens the City’s rights and remedies.

6.3.2 Whenever the City delivers any notice or demand to the Developer regarding any breach or default by the Developer under this Agreement that, if not timely cured 156
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38 by the Developer, would entitle the City to terminate this Agreement, the City shall send a copy of such notice to each affected Lender of which the City has received notice and a contact address for transmittal of such notices. Whenever the City delivers any notice or demand to the Developer regarding any breach or default by the Developer under this Agreement that, if not timely cured by the Developer, would entitle the City to exercise its power of termination of the fee estate of all or any portion of the Property pursuant to Section 7.6, the City shall at the same time send a copy of such notice or demand to each affected Lender of which the City has received notice and a contact address for transmittal of such notice. Each affected Lender receiving a copy of any such notice shall have the right, at its option, to commence the cure or remedy of any such default of the Developer and to diligently and continuously proceed with such cure or remedy, within one hundred eighty (180) calendar days following its receipt of notice of the default. If a default of the Developer under this Agreement cannot, with diligence, be remedied or cured, or the remedy or cure of such default cannot be commenced, within such one hundred eighty (180) calendar day period, the Lender shall have such additional time as is reasonably necessary to remedy or cure such default of the Developer, but in no event beyond three hundred sixty-five (365) calendar days following its receipt of notice of the default. If such default of the Developer can only be remedied or cured by the Lender upon obtaining possession of the Property, the Lender shall seek to obtain possession of the Property with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default of the Developer within one hundred eighty (180) calendar days after obtaining possession of the Property. Nothing contained in this Agreement shall be deemed to permit or authorize any Lender to undertake or continue the construction of any portion of the Project (beyond the extent necessary to conserve or protect improvements or construction already made), without expressly assuming the Developer’s obligations under this Agreement by written agreement approved by the City, in which the Lender agrees to complete, in the manner provided in this Agreement, the improvements to which the Lien or title of the Lender relates, which approval shall not unreasonably be withheld, delayed, or conditioned by the City.

6.3.3 In any case where, one hundred eighty (180) calendar days after delivery of notice of a default of the Developer under Section 6.3.2, an affected Lender has not exercised the option provided in Section 6.3.2 to construct the applicable portions of the Project, or has exercised the option, but has not proceeded diligently and continuously with construction, the City shall have the option, in the City’s sole and absolute discretion, to purchase the Loan of such Lender and any security interest of such Lender under its Loan Documents by payment to the Lender of the amount of the unpaid Loan, including principal, accrued and unpaid interest, late charges, costs, expenses and other amounts payable to the Lender by the Developer under its Loan Documents and, if the ownership of the Property or any portion of the Property has previously vested in such Lender, the City, at its option but not as its obligation, shall be entitled to a conveyance of any title or interest in the Property vested in such Lender from such Lender.

6.3.4 After expiration of the one hundred eighty (180) calendar day period provided for in Section 6.3.3, any affected Lender may demand, in writing, that the City act to exercise or forego the option granted in Section 6.3.3. If the City fails to exercise the right granted in Section 6.3.3 within sixty (60) calendar days from the date of the City’s receipt of such written demand from a Lender, the City shall be conclusively deemed to have waived its right of purchase of that Lender’s interest pursuant to Section 6.3.3.
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39 6.3.5 In the event of a default or breach by the Developer under any Loan Documents, where the Lender has not exercised its option to complete the Project under Section

6.3.3, the City may cure the default of the Developer under the applicable Loan Documents, but is under no obligation to do so, prior to completion of any sale or foreclosure of the Property or any portion thereof under the applicable Loan Documents. The City shall be entitled to reimbursement from the Developer of all costs and expenses incurred by the City in curing any default of the Developer under any Loan Documents.

6.3.6 In any case where a Lender has acquired title to all or any portion of the Property or Project through foreclosure, deed in lieu of foreclosure, or any other means, and such Lender proposes to enter into an agreement to transfer the Property and/or Project, or any portion thereof, to a third-party transferee, the Lender shall provide the City with written notice thereof, which notice shall include a reasonably detailed description of the terms and conditions of the proposed transaction. The City shall have the option, but not the obligation, to purchase the Property and/or Project on substantially the same terms as described in the Lender’s notice, which option, if ever, shall be exercised by written notice from the City to the Lender within twenty (20) days following the City’s receipt of the Lender’s notice. If the City elects not to exercise its option, then, subject to Section 8.2.2, the Lender may complete the transaction described in its notice, provided that such transaction is closed on materially identical terms and conditions as those described in the Lender’s notice to the City. If the Lender and third-party transferee desire to materially amend the terms of their proposed transaction, the Lender shall give the City written notice of the proposed modifications and the City shall once again have the right to elect to acquire the Property and the Project (or portion thereof) on terms and conditions substantially similar to those modified terms. If, for any reason, the proposed transaction between the Lender and third party transferee fails to close within two hundred forty (240) days following the date on which the City first receives notice of the proposed transaction (or notice of the proposed modified transaction, whichever is later), then the City once again have the right to elect to acquire the Property and/or Project pursuant to this Section 6.3.6.

6.3.7 The restrictions set forth in this Section 6.3 shall remain in effect only until the recordation of the Certificate of Completion for the Project.

ARTICLE VII

DEFAULTS, REMEDIES AND TERMINATION

7.1 Defaults - General.

7.1.1 Subject to any extensions of time provided for in this Agreement, failure or delay by any Party to perform any term or provision of this Agreement shall constitute an “Event of Default” under this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt of written notice from the injured Party specifying such default, and shall diligently and continuously prosecute such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, 158
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40 then within said time limits), such Party shall not be deemed to be in default under this Agreement and no Event of Default shall be deemed to have occurred.

7.1.2 The injured Party shall give written notice of default to the Party in default, specifying the default complained of by the non-defaulting Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

7.1.3 Any failure or delays by any Party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by any Party in asserting any of its rights and/or remedies shall not deprive that Party of its right to institute and maintain any actions or proceedings that it may deem necessary to protect, assert or enforce any such rights or remedies.

7.1.4 In addition to other acts or omissions of the Developer that may legally or equitably constitute a default or breach of this Agreement, the occurrence of any of the following specific events, prior to the issuance of a Certificate of Completion for the Project, shall constitute an “Event of Default” under this Agreement and shall not be subject to the notice and cure provisions of Section 7.1.1:

7.1.4.1 Any material default by the Developer under any Loan Documents for any purpose or reason that remains uncured following any applicable notice and expiration of any applicable cure period under such Loan Documents.

7.1.4.2 Any representation, warranty or disclosure made to the City by the Developer regarding this Agreement or the Project is materially false or misleading, whether or not such representation or disclosure appears in this Agreement.

7.1.4.3 The construction of the Project is delayed or suspended for a period in excess of that permitted under Section 4.3 or the Developer has not been issued, or entitled to be issued, a Certificate of Completion by the Project Completion Date.

7.1.4.4 There occurs any event of dissolution, reorganization or termination of the Developer that adversely and materially affects the operation or value of the Property or the Project, and such event is not corrected within five (5) days following written notice of such event from the City to the Developer.

7.1.4.5 The Developer Transfers its interest in this Agreement, the Property, or the Project, or any portion thereof, whether voluntarily or involuntarily or by operation of law, in violation of the terms and conditions of this Agreement and such action is not cured within the period prescribed in Section 8.2.2.

7.1.4.6 The Developer becomes insolvent or a receiver is appointed to conduct the affairs of the Developer under state or federal law.

7.1.4.7 The Developer’s legal status as a California limited liability company authorized by the Secretary of State of the State of California to transact business in California is suspended or terminated.
159
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41 7.2 LIQUIDATED DAMAGES TO THE CITY. UPON THE OCCURRENCE OF

AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO

THE CLOSE OF ESCROW, THE CITY MAY CANCEL THE ESCROW PURSUANT TO SECTION 3.10, AND UPON CANCELLATION OF THE ESCROW, THE CITY SHALL BE

RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT TO SELL OR CONVEY

THE PROPERTY OR ANY PORTION THEREOF AND ANY SUCH ESCROW

CANCELLATION SHALL BE WITHOUT ANY LIABILITY OF THE CITY TO THE DEVELOPER OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS. THE CITY

AND THE DEVELOPER ACKNOWLEDGE THAT IT IS EXTREMELY DIFFICULT AND

IMPRACTICAL, IF NOT IMPOSSIBLE, TO ASCERTAIN THE AMOUNT OF DAMAGES

THAT WOULD BE SUFFERED BY THE CITY IN THE EVENT OF A CANCELLATION OF

THE ESCROW DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW. HAVING

MADE DILIGENT BUT UNSUCCESSFUL ATTEMPTS TO ASCERTAIN THE ACTUAL

DAMAGES THE CITY WOULD SUFFER IN THE EVENT OF A CANCELLATION OF THE

ESCROW DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE

DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE

CITY AND THE DEVELOPER AGREE THAT A REASONABLE ESTIMATE OF THE CITY’S DAMAGES IN SUCH EVENT IS THE TOTAL SUM OF THE EARNEST MONEY DEPOSIT OR FIFTY THOUSAND AND NO/100 DOLLARS ($50,000) (THE “LIQUIDATED DAMAGES AMOUNT”). THEREFORE, UPON THE CANCELLATION OF THE ESCROW

BY THE CITY DUE TO THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE

DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF THE ESCROW,

ESCROW HOLDER SHALL IMMEDIATELY CANCEL THE ESCROW AND PAY THE LIQUIDATED DAMAGES AMOUNT (I.E., THE EARNEST MONEY DEPOSIT) TO THE CITY WITHIN FIVE (5) DAYS OF ESCROW CANCELLATION. RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT SHALL BE THE CITY’S SOLE AND EXCLUSIVE

REMEDY UPON THE CANCELLATION OF THE ESCROW DUE TO THE OCCURRENCE

OF AN EVENT OF DEFAULT BY THE DEVELOPER UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW.

CITY’S INITIALS: _____ DEVELOPER’S INITIALS: _____

7.3 DEVELOPER’S ELECTION RE: SPECIFIC ENFORCEMENT OF

AGREEMENT OR WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND LIMITATION ON RECOVERY OF DAMAGES PRIOR TO CLOSE OF ESCROW. UPON

THE OCCURRENCE OF AN EVENT OF DEFAULT PERTAINING TO THE CONVEYANCE

OF THE PROPERTY BY THE CITY UNDER THIS AGREEMENT PRIOR TO CLOSE OF

ESCROW, THE DEVELOPER SHALL, AS ITS SOLE AND EXCLUSIVE REMEDY, HAVE

THE RIGHT TO EXERCISE ONE OF THE ALTERNATIVE REMEDIES DESCRIBED IN SECTIONS 7.3.1 AND 7.3.2. THE DEVELOPER’S ELECTION, ONCE MADE, SHALL BE IRREVOCABLE.

7.3.1 WAIVER OF RIGHT TO SPECIFIC PERFORMANCE AND
LIMITATION ON RECOVERY OF DAMAGES. THE DEVELOPER MAY WAIVE THE REMEDIES SET FORTH IN SECTION 7.3.2 AND MAY CANCEL THE ESCROW 160
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42 PURSUANT TO SECTION 3.10, AND UPON CANCELLATION OF THE ESCROW, THE

DEVELOPER SHALL BE RELIEVED OF ANY OBLIGATION UNDER THIS AGREEMENT

TO PURCHASE OR ACCEPT TITLE TO THE PROPERTY AND ANY SUCH ESCROW

CANCELLATION SHALL BE WITHOUT ANY LIABILITY OF THE DEVELOPER TO THE CITY OR ANY OTHER PERSON ARISING FROM SUCH ACTIONS. THE DEVELOPER

SHALL BE LIMITED TO RECOVERING ANY AMOUNTS ACTUALLY EXPENDED BY

THE DEVELOPER IN REASONABLE RELIANCE ON THIS AGREEMENT PRIOR TO THE

DATE OF THE OCCURRENCE OF THE EVENT OF DEFAULT BY THE CITY, NOT TO EXCEED THREE HUNDRED FIFTY THOUSAND DOLLARS ($350,000). THE DEVELOPER

WAIVES ANY RIGHT TO RECOVER ANY OTHER SUMS FROM THE CITY ARISING FROM AN EVENT OF DEFAULT BY THE CITY PRIOR TO THE CLOSE OF ESCROW. THE DEVELOPER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 7.3.1, WHICH CIVIL CODE SECTION READS AS FOLLOWS:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR

RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER

FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM

OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 7.3.1.

DEVELOPER’S INITIALS ____________
IN CONNECTION WITH THE WAIVERS OF THIS SECTION 7.3.1, THE

DEVELOPER FURTHER WAIVES THE RIGHT TO RECORD A NOTICE OF PENDENCY

OF ACTION AGAINST ALL OR ANY PORTION OF THE PROPERTY EXCEPT

DEVELOPER MAY RECORD SUCH A NOTICE IN CONNECTION WITH ANY SUIT FOR

SPECIFIC PERFORMANCE PERMITTED HEREUNDER IN THE EVENT DEVELOPER

ELECTS NOT TO WAIVE ITS RIGHT TO SEEK SPECIFIC PERFORMANCE UNDER SECTION 7.3.2.

7.3.2 SPECIFIC PERFORMANCE. IN THE ALTERNATIVE TO

THE RIGHT OF THE DEVELOPER CANCEL AND RECEIVE LIQUIDATED DAMAGES,

UPON THE OCCURRENCE OF AN EVENT OF DEFAULT BY THE CITY UNDER THIS

AGREEMENT PRIOR TO THE CLOSE OF ESCROW, THE DEVELOPER SHALL HAVE

THE RIGHT NOT TO CANCEL THE ESCROW, DEPOSIT THE BALANCE OF THE FUNDS

FOR THE PURCHASE PRICE INTO ESCROW, AND SHALL HAVE THE RIGHT TO

INSTRUCT THE ESCROW HOLDER TO PROCEED TO CLOSE BY EXERCISING THE RIGHT AND REMEDY OF SPECIFIC PERFORMANCE. IF DEVELOPER EXERCISES ITS

RIGHT AND REMEDY OF SPECIFIC PERFORMANCE, THE CITY SHALL HAVE THE

OBLIGATION TO EXECUTE, HAVE NOTARIZED (IF REQUIRED), AND DELIVER TO 161
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43 ESCROW HOLDER ANY AND ALL DOCUMENTS REQUIRED FOR ESCROW TO

PROCEED TO CLOSE PURSUANT TO THIS AGREEMENT, IN ADDITION TO ANY

OTHER AUTHORIZATION THE ESCROW HOLDER MAY HAVE BY LAW TO PROCEED TO CLOSING UPON EXERCISING DEVELOPER’S RIGHT AND REMEDY OF SPECIFIC PERFORMANCE.

RECEIPT OF THE LIQUIDATED DAMAGES AMOUNT OR ENFORCEMENT OF THE RIGHT OF SPECIFIC PERFORMANCE SHALL BE THE DEVELOPER’S SOLE AND

EXCLUSIVE REMEDIES UPON THE CANCELLATION OF THE ESCROW DUE TO THE

OCCURRENCE OF AN EVENT OF DEFAULT BY THE CITY OR AGENCY UNDER THIS AGREEMENT PRIOR TO THE CLOSE OF ESCROW.

CITY’S INITIALS: ____________
DEVELOPER’S INITIALS: ____________

7.4 Legal Actions.

7.4.1 Except as otherwise provided by Section 7.3, any Party may institute legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy available to that Party under this Agreement or at law or in equity. Such legal actions must be instituted in the Superior Court of the State of California in and for the County of San Bernardino, California, in any other appropriate court within the County of San Bernardino, California.

7.4.2 The procedural and substantive laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflicts of laws principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in the City of Ontario, County of San Bernardino, California.

7.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this ARTICLE VII are non- exclusive and cumulative, and the exercise by any Party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party(ies).

7.6 City Power of Termination and Reverter Regarding the Property.

7.6.1 Subject to the notice and right to cure provisions set forth in Section 7.1 of this Agreement, whereby Developer shall have a right to cure any alleged defaults prior to the commencement of City’s right under this Section 7.6, the City hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq., exercisable by the City, in its sole and absolute discretion, upon sixty (60) calendar days written notice to the Developer referencing this Section 7.6, to terminate the fee interest of the Developer in the Property and/or any improvements to the Property and revest such fee title in the City and take possession of all or any portion of such real property and improvements, without compensation to the Developer, upon the 162
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44 occurrence of an Event of Default by the Developer following the Close of Escrow and prior to the issuance of the Certificate of Completion.

7.6.2 The sixty (60) calendar day written notice specified in Section 7.6.1 shall specify the Event of Default by the Developer triggering the City’s exercise of its power of termination. The City shall proceed with its remedy set forth in Section 7.6.1 only if the Developer continues in default for a period of sixty (60) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion.

7.6.3 The rights of the City under this Section 7.6 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit:

7.6.3.1 Each Lien recorded against the Property and specifically authorized by this Agreement as a Permitted Transfer;

7.6.3.2 Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded documents or interests applicable to the Property and specifically authorized by this Agreement as a Permitted Transfer.

7.6.4 Upon the City’s exercise of its power of termination pursuant to this Section 7.6, the Developer or its successors or assigns shall convey by grant deed to the City title to the Property, as specified in the City’s notice pursuant to Section 7.6.1, and all improvements thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the Developer and a notary in a manner suitable for recordation. The City may enforce its rights pursuant to this Section 7.6 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction.

7.6.5 Upon the revesting in the City of title to the Property, whether by grant deed or court decree, the City shall exercise its reasonable good faith efforts to resell the Property at its then fair market value, as soon and in such manner as the City shall, in its sole discretion, find feasible and consistent with the objectives of the City’s General Plan, to a qualified and responsible person or persons (as reasonably determined by the City) who will assume the Developer’s obligations to begin and/or complete and/or operate that portion of the Project located on the Property, or such other replacement development acceptable to the City, in its sole and absolute discretion. Upon any such resale of the Property (or any portion thereof), the proceeds to the City from such sale shall be applied as follows:

7.6.5.1 First, to pay any and all amounts required to release/reconvey any Lien recorded against all or any portion of the Property; and

7.6.5.2 Second, to reimburse the City on its own behalf or on behalf of the City for all actual internal and third-party costs and expenses previously or currently incurred by the City related to the Property, the Project, or this Agreement, including, but not limited to, customary and reasonable fees or salaries to third-party personnel engaged in such actions, in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the City with respect to the Property or portion thereof; 163
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45 any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Developer with respect to the acquisition of the Property or the construction of the Project; and amounts otherwise owing to the City by the Developer or its successors or assigns pursuant to the terms of this Agreement; and

7.6.5.3 Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse the Developer, or its successors in interest to the equal to the sum of: (1) the Purchase Price; and (2) the third-party costs actually incurred and paid by the Developer regarding the development of the Project located on the Property, including, but not limited to, pro rata costs of carry, taxes, and other items as set forth in a cost certification to be made by the Developer to the City prior to any such reimbursement, which certification shall be subject to the City’s reasonable approval; provided, however, that the Developer shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, Liens or other encumbrances that are paid by the City pursuant to the provisions of sub-sections 7.6.5.1 or 7.6.5.2 above.

7.6.5.4 Any portion of the proceeds from the resale of the Property remaining after the foregoing applications shall be retained by the City as their sole and exclusive property.

7.6.6 IMMEDIATELY FOLLOWING THE SIXTY (60) DAY PERIOD
SPECIFIED IN SECTION 7.6.1, ABOVE, THE CITY, ITS EMPLOYEES AND AGENTS

SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE PROPERTY

AND ANY IMPROVEMENTS THEREON, WITHOUT FURTHER NOTICE OR COMPENSATION TO THE DEVELOPER. BY INITIALING BELOW, THE DEVELOPER

HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY

AND ALL RIGHTS THAT THE DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162,

AS THOSE STATUTES MAY BE AMENDED, REPLACED, RENUMBERED OR

SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

DEVELOPER’S INITIALS ____________

7.6.7 THE DEVELOPER ACKNOWLEDGES AND AGREES THAT THE
CITY’S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 7.6 MAY WORK A FORFEITURE OF THE ESTATE IN THE

DEFAULTED PORTION OF THE PROPERTY CONVEYED TO THE DEVELOPER THROUGH THE GRANT DEED. THE DEVELOPER HEREBY EXPRESSLY WAIVES, TO

THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL EQUITABLE AND

LEGAL DEFENSES THAT THE DEVELOPER MAY HAVE TO SUCH FORFEITURE,

INCLUDING, BUT NOT LIMITED TO, THE DEFENSES OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. THE

DEVELOPER FURTHER EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED

BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE DEVELOPER MAY HAVE 164
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46 UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. THE DEVELOPER ACKNOWLEDGES

THAT THE TERMS AND CONDITIONS OF THIS AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE CITY’S POWER OF TERMINATION PROVIDED IN THIS SECTION 7.6 AND FURTHER ACKNOWLEDGE

THAT IT HAS RECEIVED INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS

WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO SECTION 7.6.6. AND THIS SECTION 7.6.7. THESE WAIVERS DO NOT EXTEND TO ANY

RIGHT OF REDEMPTION THAT THE DEVELOPER MAY HAVE UNDER APPLICABLE

LAW IN THE CASE OF A FORECLOSURE WHICH ARISES FROM UNPAID MONETARY AMOUNTS.

DEVELOPER’S INITIALS ____________

7.7 Developer Indemnification of the City. In addition to any other specific indemnification or defense obligations of the Developer set forth in this Agreement, the Developer agrees to indemnify, defend (upon written request by the City and with counsel reasonably acceptable to the City and hold harmless the Indemnified Parties, from any and all losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and expenses, including, but not limited to reasonable attorney’s fees of counsel retained by the Indemnified Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or nature, that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part, through any act, omission, fault or negligence, whether active or passive, of the Developer or the Developer’s officers, agents, employees, independent contractors or subcontractors of any tier, relating in any manner to this Agreement, any work to be performed by the Developer related to this Agreement, the Property, or the Project, or any authority or obligation exercised or undertaken by the Developer under this Agreement. Without limiting the generality of the foregoing, the Developer’s obligation to indemnify the Indemnified Parties shall include injury or death to any person or persons, damage to any property, regardless of where located, including the property of the Indemnified Parties, any workers’ compensation or prevailing wage determination, claim or suit or any other matter arising from or connected with any goods or materials provided or services or labor performed regarding the Project or the Property on behalf of the Developer by any person or entity. The indemnity obligations in this paragraph shall not extend to losses, liabilities, charges, damages, claims, liens, causes of action, awards, judgments, costs and expenses, including, but not limited to reasonable attorney’s fees of counsel retained by the Indemnified Parties, expert fees, costs of staff time, and investigation costs, which are caused by the sole negligence or willful misconduct of the City or its agents.

ARTICLE VIII
GENERAL PROVISIONS.

8.1 Incorporation of Recitals. The Recitals of fact set forth preceding this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference. 165
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47 8.2 Restrictions on Transfers.

8.2.1 The Developer acknowledges that the qualifications and identity of the Developer are of particular importance to the City. The Developer further recognizes and acknowledges that the City has relied and is relying on the specific qualifications and identity of the Developer in entering into this Agreement with the Developer and, as a consequence, Transfers are permitted only as expressly provided in this Agreement, such as Permitted Transfers. Except for Permitted Transfers as set forth in this Agreement, Developer shall promptly notify the City in writing of any and all changes whatsoever in the identity of the business entities or individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such person, of which information the Developer or any of its partners, members or officers are notified or may otherwise have knowledge or information.

8.2.2 Except as expressly permitted in this Agreement, the Developer represents to the City that it has not made and agrees that it will not make or create, or suffer to be made or created, any Transfer other than a Permitted Transfer, either voluntarily, involuntarily or by operation of law, until after the recordation of a Certificate of Completion for the Project subject to the Transfer; provided, however, that the City may approve in its reasonable discretion, Transfers other than Permitted Transfers prior to the recordation of a Certificate of Completion. In deciding whether to approve or disapprove any proposed Transfer, the City may consider the proposed transferee’s financial strength and the experience of the proposed transferee and its senior management in undertaking and successfully completing projects of a similar type and size as the Project or that portion of the Project proposed to be transferred. Any Transfer made in contravention of this Section 8.2 shall be voidable at the election of the City and this Agreement may be terminated by the City or the City may exercise any other remedy available to the City under the terms of this Agreement, provided, however, that (i) the City shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have twenty (20) calendar days following its receipt of such written notice to commence and, thereafter, diligently and continuously proceed to cure the default of the Developer and submit evidence of the initiation and satisfactory completion of such cure to the City, in a form and substance reasonably satisfactory to the City.

8.2.3 The Developer shall provide the City no less than thirty (30) days prior written notice of any proposed Transfer which the Developer desires to enter into prior to the recordation of a Certificate of Completion for the Project subject to the Transfer, other than a Permitted Transfer for which no notice shall be required. The Developer shall have the burden of demonstrating to the City’s reasonable satisfaction that the proposed Transfer meets the conditions and requirements of this Agreement.

8.2.4 In connection with the City’s review of any request for approval of any proposed Transfer under this Section 8.2, or of any Lender or Loan under Section 6.3, the Developer agrees to reimburse the City for those third party costs and expenses incurred by the City in connection with its review of the Developer’s request for approval, including, without implied limitation, the reasonable fees and costs of those outside consultants and legal counsel retained by the City to assist it in its review of the Developer’s request, including the City Attorney. 166
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48 8.2.5 Anything in this Agreement to the contrary notwithstanding, the restrictions and prohibitions on Transfers contained in this Section 8.2 shall terminate upon issuance of a Certificate of Completion for the Project.

8.3 Notices, Demands and Communications Between the Parties.

8.3.1 Any and all notices, demands or communications submitted by any Party to another Party pursuant to or as required by this Agreement shall be proper, if in writing and dispatched by messenger for immediate personal delivery, by a nationally recognized overnight courier service or by registered or certified United States Mail, postage prepaid, return receipt requested, to the principal office of the City or the Developer, as applicable, as designated in Section 8.3.2. Such written notices, demands or communications may be sent in the same manner to such other addresses as either Party may from time to time designate. Any such notice, demand or communication shall be deemed to be received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that it is delivered by personal delivery, on the date of delivery by a nationally recognized overnight courier service or three (3) calendar days after it is placed in the United States Mail, as provided in this Section 8.3.

8.3.2 The following are the authorized addresses for the submission of notices, demands or communications to the Parties:

TO DEVELOPER: Euclid Investment Group, LLC
c/o Hutton Companies
2100 South State College Boulevard
Anaheim, California 92806
Attn: Scott Felix
(T) (714) 921-1200
COPY TO: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attn: J.R. Sechrist, Esq.

William H. Ihrke, Esq.
(T) (714) 641-5100
TO CITY:

COPY TO:

City of Ontario
Attention: City Manager
303 East B Street
Ontario, CA 91764
(T) (909) 395-2000
Best Best & Krieger, LLP
18101 Von Karman Ave, Suite 1000
Irvine, CA 92614
Attention: Elizabeth Wagner Hull
(T) 949-263-2600
167
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49 8.4 Conflict of Interest. No member, official or employee of the City, having any conflict of interest, direct or indirect, related to this Agreement, the Property, or the development or operation of the Project shall participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of any such conflict of interest.

8.5 Warranty Against Payment of Consideration for Agreement. The Developer warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement. Third parties, for the purposes of this Section 8.5, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by the Developer.

8.6 Non-liability of City, Officials and Employees. No member, official or employee of the City shall be personally liable to the Developer, or any successor in interest of the Developer, in the event of any default or breach by the City under this Agreement or for any amount that may become due to the Developer or to its successor, or on any obligations under the terms of this Agreement, except as may arise from the gross negligence or willful acts of such member, official or employee.

8.7 Unavoidable Delay; Extension of Time of Performance.

8.7.1 Subject to specific provisions of this Agreement, performance by any Party under this Agreement shall not be deemed, or considered to be, in default where any such default is due to an Unavoidable Delay that is not attributable to the fault of the Party claiming an extension of time to perform. An extension of time for any Unavoidable Delay shall be for the period of the Unavoidable Delay and shall commence to run from the date of occurrence of the Unavoidable Delay, if the Party asserting the existence of the Unavoidable Delay provides the other Parties with written notice of the occurrence of the Unavoidable Delay, within ten (10) days of the commencement of such asserted Unavoidable Delay. Otherwise, the extension of time for an Unavoidable Delay shall commence on the date of receipt of written notice of the occurrence of the Unavoidable Delay by the Parties not requesting an extension of time to perform due to such Unavoidable Delay.

8.7.2 The Parties expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of either of them that may have provided a basis for entering into this Agreement and that occur at any time after the execution of this Agreement, do not constitute an Unavoidable Delay and do not provide any Party with grounds for asserting the existence of an Unavoidable Delay in the performance of any covenant or undertaking arising under this Agreement. Each Party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such Party under this Agreement.

8.8 Inspection of Books and Records. The City shall have the right at all reasonable times, at the City’s cost and expense, to inspect the books and records of the Developer pertaining to the Property and/or the Project. The Developer shall also have the right at all reasonable times, 168
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50 at the Developer’s sole cost and expense, to inspect the books and records of the City pertaining to the Property and/or the Project, to the extent relevant to the Developer’s obligations under this Agreement. Nothing in this Section 8.8 or elsewhere in this Agreement shall, however, constitute a waiver or modification of any right or privilege which any Party may have with respect to any document, statement, or other record, including, without implied limitation, the attorney-client privilege, the attorney-work product privilege, any privilege arising under any state or federal evidentiary code or rule, or any privilege or exclusionary right arising under any state or federal freedom of information or public records disclosure law.

8.9 Real Estate Commissions. The City shall not be liable for any real estate commissions, brokerage fees or finder fees that may arise from or be related to this Agreement.

The Developer shall pay any fees or commissions or other expenses related to its retention or employment of real estate brokers, agents or other professionals.

8.10 Binding on Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns.

8.11 Entire Agreement.

8.11.1 This Agreement shall be executed in three (3) duplicate originals, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. This Agreement including all exhibits shall constitute the entire understanding and agreement of the Parties regarding the Property, the Project, and the other subjects addressed in this Agreement.

8.11.2 This Agreement integrates all of the terms and conditions mentioned in this Agreement or incidental to this Agreement, and supersedes all negotiations or previous agreements between the Parties with respect to the Property, the Project, and the other subjects addressed in this Agreement.

8.11.3 None of the terms, covenants, agreements or conditions set forth in this Agreement shall be deemed to be merged with any deed conveying title to the Property and this Agreement shall continue in full force and effect before and after such conveyances.

8.11.4 All waivers of the provisions of this Agreement and all amendments to this Agreement must be in writing and signed by the authorized representative(s) of all Parties.

8.12 Execution of this Agreement. Following execution of three (3) originals of this Agreement by the authorized representative(s) of the Developer and prompt delivery of such originals, thereafter, to the City, accompanied by an official action of the governing body of the Developer authorizing the individuals executing this Agreement on behalf of the Developer to execute and perform this Agreement, in form and substance acceptable to the City, this Agreement shall be subject to the review and approval by the City Council, in their sole and absolute discretion, no later than forty-five (45) calendar days after such date of delivery to the City. If the City have not approved, executed, and delivered an original of this Agreement to the Developer within the foregoing time period, then no provision of this Agreement shall be of any force or effect for any purpose.
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51 8.13 Survival of Indemnity Obligations. All general and specific indemnity and defense obligations of the Parties set forth in this Agreement shall survive the expiration or termination of this Agreement, the execution or recordation of the Grant Deed, and/or the issuance and recordation of any Certificate of Completion.

8.14 Time Declared to be of the Essence. As to the performance of any obligation hereunder as to which time is a component thereof, the performance of such obligation within the time provided is of the essence.
[Signatures on Following Pages]
170
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52 SIGNATURE PAGE
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
CITY:

THE CITY OF ONTARIO
a California municipal corporation
By: ___________________
City Manager
Dated: _________________, 2022
ATTEST:
____________________________
City Clerk
APPROVED AS TO LEGAL FORM:

BEST BEST & KRIEGER LLP
By: _______________________
City Attorney
171
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53 SIGNATURE PAGE
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
DEVELOPER:

Euclid Investment Group, LLC, a Delaware
limited liability company
By: Hutton Ontario, Inc.

Its Managing Member
By: ___________________
Scott C. Felix, President
Dated: _________________, 2022
172
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EXHIBIT A

EXHIBIT A
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Legal Description of the Property
[TO BE INSERTED]
173
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EXHIBIT B

EXHIBIT B
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Project Site Plan
[TO BE INSERTED]
174
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EXHIBIT C

EXHIBIT C
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Scope of Development
[TO BE INSERTED]
175
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EXHIBIT D

EXHIBIT D
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Schedule of Performance
Action Date Action to
be Completed
By
Agreement
Section(s)

1. Effective Date. See Section 1.3 1.3

2. Developer to open Escrow and, concurrently,
deposit Earnest Money Deposit into Escrow.

Within 14 days
following the
Effective Date
(“Escrow
Opening Date”)

1.1.37, 3.1

3. Due Diligence Period commences. The date of the
Escrow Opening
Date

1.1.25, 2.4

4. Developer to submit application(s) for Entitlements. Within 30 days following the
Effective Date
(“Entitlement
Application
Date”)

1.1.29 5. Developer to deliver Developer’s Title Notice to City
Within 60 days
following Escrow
Opening Date

1.1.70, 2.3

6. City to deliver City’s Title Notice Response to
Developer, if appropriate.

Within 20 days
following City’s
receipt of
Developer’s Title
Notice

2.3 7. Developer to deliver Developer’s Title Notice
Waiver, if appropriate.

Within 10 days
following
Developer’s
receipt of City’s
Title Notice
Response

2.3 8. Developer to deliver its Due Diligence Investigation Conclusion Notice.

On or before the
end of the Due
Diligence Period

2.4.1 176
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Action Date Action to
be Completed
By
Agreement
Section(s)

9. Due Diligence Period ends. On the 90th day
following the
Escrow Opening
Date

1.1.25, 2.4

10. Developer to obtain Entitlements. Within 9 months
following
Entitlement
Application Date
(“Entitlement
Obtainment
Date”)

1.1.30 11. Developer to submit Plans and Specifications to City.

Within 180 days
following
Entitlement
Obtainment Date
(“Construction
Drawings
Submittal Date”)

1.1.14, 2.5.1

12. Developer to pull building permit. Within 5 months
following
Construction
Drawings
Submittal Date
(“Permit
Issuance Date”)

1.1.57 13. Escrow Closing Date -- Except that such closing date will be extended until seven (7) days after
Building Permits have been issued or seven (7) days
after plans for Project are approved and “ready to
issue permits” status is achieved.

The tenth (10th)
business day
following Escrow
Holder’s receipt
of written
confirmation
from both City
and Developer of
the satisfaction or
waiver of all
conditions
precedent to the
Close of Escrow
for the Property

1.1.10 (building
permits), 3.6
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Action Date Action to
be Completed
By
Agreement
Section(s)

14. Developer to commence construction of the Project. No later than 30 days following
Permit Issuance
Date
(“Construction
Commencement
Date”)

1.1.12, 4.3

15. Developer to complete construction of the Project
(issuance of certificate of occupancy for the entire
Project by the City)
Within 18
months following
Construction
Commencement
Date

1.1.63, 4.3
178
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EXHIBIT E

EXHIBIT E
TO 2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Form of Grant Deed
[Attached Behind This Page]
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RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
_____________

THE CITY OF ONTARIO

GRANT DEED

PART ONE
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, THE CITY OF ONTARIO, a California municipal corporation (“ Grantor”), hereby grants to _____________, a California limited liability company (“ Grantee”), that certain real property located in the City of Ontario, County of San Bernardino, State of California, specifically described in Exhibit “A” attached to this Grant Deed (“ Property”) and made a part of this Grant Deed by this reference.

PART TWO
The conveyance of the Property by the Grantor to the Grantee in Part One is subject to the following community development terms, conditions, covenants and restrictions:

Section 1. Conveyance Subject to Terms of a Disposition and Development Agreement. The Property is conveyed subject to that certain 2022 Disposition and Development Agreement (Southeast Corner of D Street and Lemon Avenue), dated as of _______, 2022, between the Grantor and the Grantee (the “ Agreement”). The provisions of the Agreement are incorporated into this Grant Deed by this reference and are deemed to be a part of this Grant Deed, as though fully set forth in this Grant Deed.

Section 2. Condition of Property. The Grantee acknowledges and agrees that the Property is conveyed by the Grantor to the Grantee in its “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS CONDITION,” as of the date of recordation of this Grant Deed, with no warranties, expressed or implied, as to the environmental or other physical condition of the Property, the presence or absence of any patent or latent environmental or other physical condition on or in the Property, or any other matters affecting the Property.

Section 3. Obligation to Refrain from Discrimination . The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

3.1 There shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, race, color, religion, creed, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the Grantee, itself or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessees or vendees of the Property.

The covenant of this Section 3 shall run with the land of the Property and shall be enforceable 180
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against the Grantee and its successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of Agreement.

3.2 The covenant of this Section 3 shall run with the land of the Property in perpetuity, shall be enforceable against the Grantee and its successors and assigns, and shall be covenants set forth in the Grant Deed.

Section 4. Form of Non-Discrimination and Non-Segregation Clauses. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

4.1 The Grantee, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property (or any portion thereof) on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to the Property shall contain or be subject to substantially the following non-discrimination or non-segregation covenants:
(a) In deeds: “The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub-tenants, sub-lessee, or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.”
(b) In leases: “The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants lessees, sub-lessee, sub-tenants, or vendees in the premises herein leased.” (c) In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub-lessees, sub-tenants, or vendees of the premises herein transferred.” The foregoing provision shall be binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 181
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4.2 The covenants of this Section 4 shall run with the land of the Property in perpetuity.

Section 5. Covenant to Maintain Property on Tax Rolls. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.1 The entire Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance of the certificate of completion for the Project.

5.2 The Grantee shall pay all property tax bills with respect to the Property and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 during such time period and to timely pay all supplemental tax bills regarding the Property issued by the County. The Grantee further covenants and agrees to provide to the Grantor, on or before July 31 of each year, commencing in the calendar year following the calendar year in which a Certificate of Completion for the Project is recorded and in each calendar year, thereafter, for the full term of this covenant: (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Grantee and the County regarding the Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Grantee in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon, with respect to the preceding County fiscal year.

5.3 The covenants of this Section 5 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns.

Section 6. No Conveyance to Tax Exempt Entity. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

6.1 The Grantee shall not use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, the Project, or any portion of any of the foregoing to any entity or person, or for any use of the Property, the Project, or any portion of any of the foregoing, that is partially or wholly exempt from the payment of real or personal property taxes or that would cause the exemption of the payment of all or any portion of real or personal property taxes otherwise assessable regarding the Property, the Project, or any portion of any of the foregoing, without the prior written consent of the Grantor, which may be withheld in the Grantor’s sole and absolute discretion, for twenty years from the date of issuance of the certificate of completion for the Project.

6.2 If the Property, or any portion of the Property, shall be conveyed, transferred or sold to any entity or person that is partially or wholly exempt from the payment of real or personal property taxes otherwise assessable against the Property, or any portion thereof, without the prior written consent of the Grantor, then the Grantee shall pay to the Grantor a fee in lieu of payment of such taxes each year in an amount determined by the Grantor to be one percent (1%) of the “full cash value” of the Property, or portion thereof, as may be subject to such exemption from payment of real or personal property taxes. The Grantor’s determination of “full cash value” 182
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for in-lieu payment purposes under this Section 6 shall be established by the Grantor each year, if necessary, by reference to the real or personal property tax valuation principles and practices generally applicable to a county property tax assessor under Section 1 of Article XIIIA of the California Constitution. The Grantor’s determination of “full cash value” and that an in-lieu payment is due shall be conclusive on such matters. If the Grantor determines that an amount is payable as an in-lieu payment under this Section 6 in any tax year, then such amount shall be paid to the Grantor for that tax year within forty-five (45) days following transmittal by the Grantor to the Grantee of an invoice for payment of the in-lieu amount.

6.3 The covenants of this Section 6 shall run with the land of the Property, shall be enforceable against the Grantee and its successors and assigns of the Property.

Section 7. Maintenance Condition of the Property. The Grantee for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

7.1 The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maintenance standard described above (a “ Maintenance Deficiency ”), then the Grantor shall notify the Grantee in writing of the Maintenance Deficiency. If the Grantee fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the Grantor shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the Grantor to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the Grantor for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 7.1 shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the Grantor to the Grantee, the Grantor shall have the right to enforce the lien in the manner provided in Section 7.3.

7.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Grantee by either painting over the evidence of such vandalism with a paint that has been color- matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti and is not removed within ninety-six (96) hours following the time of the discovery of the graffiti, the Grantor shall have the right to enter the Property and remove the graffiti, without notice to the Grantee. Any sum expended by the Grantor for the removal of graffiti from the Property pursuant to this Section 7.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Grantee from the Grantor, the Grantor shall have the right to enforce its lien in the manner provided in Section 7.3.

7.3 The Parties further mutually understand and agree that the rights conferred upon the Grantor under this Section 7.3 expressly include a grant by the Grantee of a security 183
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interest in the Property with the power to establish and enforce a lien or other encumbrance against the Property or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure the obligations of the Grantee and it successors under Section 7.1 or Section

7.2, including the reasonable attorneys’ fees and costs of the Grantor associated with the abatement of a Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the Grantor ” mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney.

7.4 The provisions of this Section 7.4, shall be a covenant running with the land of the Property, shall be enforceable against the Grantee and its successors and assigns in perpetuity. Nothing in the foregoing provisions of this Section 7 shall be deemed to preclude the Grantee from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City.

Section 8. Grantor Power of Termination Regarding the Property.

8.1 The Grantor hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq., exercisable by the Grantor, in its sole and absolute discretion, upon sixty (60) calendar days written notice to the Grantee referencing this Section 8.1, to terminate the fee interest of the Grantee in the Property and/or any improvements to the Property and revest such fee title in the Grantor and take possession of all or any portion of such real property and improvements, without compensation to the Grantee, upon the occurrence of an Event of Default by the Grantee following the Close of Escrow and prior to the issuance of the Certificate of Completion for Property.

8.2 The sixty (60) calendar day written notice specified in Section 8.1 shall specify the Event of Default by the Grantee triggering the Grantor’s exercise of its power of termination. The Grantor shall proceed with its remedy set forth in Section 8.1 only if the Grantee continues in default for a period of sixty (60) calendar days following such notice or, upon commencing to cure such default, fails to diligently and continuously prosecute said cure to satisfactory conclusion.

8.3 The rights of the Grantor under this Section 8 shall be subject and subordinate to, shall be limited by and shall not defeat, render invalid or limit:
(1) Each Lien recorded against the Property and specifically authorized by this Agreement as a Permitted Transfer;
(2) Any leases, declarations of covenants, conditions and restrictions, easement agreements or other recorded
documents or interests applicable to the Property and
specifically authorized by this Agreement as a Permitted Transfer.

8.4 Upon the Grantor’s exercise of its power of termination pursuant to this Section 8, the Grantee or its successors or assigns shall convey by grant deed to the Grantor title to the Property, as specified in the Grantor’s notice pursuant to Section 8.1, and all improvements 184
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thereon, in accordance with Civil Code Section 1109, as such code section may hereafter be amended, renumbered, replaced or substituted. Such conveyance shall be duly acknowledged by the Grantee and a notary in a manner suitable for recordation. The Grantor may enforce its rights pursuant to this Section 8.4 by means of an injunctive relief or forfeiture of title action filed in any court of competent jurisdiction.

8.5 Upon the revesting in the Grantor of the Property, whether by grant deed or court decree, the Grantor shall exercise its reasonable good faith efforts to resell the Property at its then fair market value, as soon and in such manner as the Grantor shall, in its sole discretion, find feasible and consistent with the objectives of the City’s General Plan, to a qualified and responsible person or persons (as reasonably determined by the Grantor) who will assume the Grantee’s obligations to begin and/or complete and/or operate the Project located on the Property, or such other replacement development acceptable to the Grantor, in its sole and absolute discretion. Upon any such resale of the Defaulted Portion of the Property (or any portion thereof), the proceeds to the Grantor from such sale shall be applied as follows:
(1) First, to pay any and all amounts required to
release/reconvey any Lien recorded against all or any portion of the Property; and
(2) Second, to reimburse the Grantor on its own behalf or on behalf of the City for all actual internal and third-party costs and expenses previously or currently incurred by the
Grantor, or the City related to the Property, the Project, or this Agreement, including, but not limited to, customary and reasonable fees or salaries to third-party personnel engaged in such actions, in connection with the recapture,
management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the City and/or the Grantor or authority with respect to the Property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Grantee with respect to the acquisition of the Property or the construction of the Project and amounts otherwise owing to the Grantor or authority by the Grantee or its successors or assigns pursuant to the terms of this Agreement; and
(3) Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior
encumbrances with a claim thereto, to reimburse the
Grantee, or its successors in interest to the equal to the sum of: (1) Purchase Price; and (2) the third-party costs actually incurred and paid by the Grantee regarding the development of the Project, including, but not limited to, pro rata costs of carry, taxes, and other items as set forth in a cost certification 185
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to be made by the Grantee to the Grantor prior to any such reimbursement, which certification shall be subject to the Grantor’s reasonable approval; provided, however, that the Grantee shall not be entitled to reimbursement for any
expenses to the extent that such expenses relate to any loans, Liens or other encumbrances that are paid by the Grantor pursuant to the provisions of sub-sections (1) or (2) above. (4) Any portion of the proceeds from the resale of the Property remaining after the foregoing applications shall be retained by the Grantor as its sole and exclusive property.

8.6 IMMEDIATELY FOLLOWING THE SIXTY (60) DAY PERIOD
SPECIFIED IN SECTION 8.1, ABOVE, THE GRANTOR, ITS EMPLOYEES AND AGENTS

SHALL HAVE THE RIGHT TO REENTER AND TAKE POSSESSION OF THE PROPERTY

AND ANY IMPROVEMENTS THEREON, WITHOUT FURTHER NOTICE OR COMPENSATION TO THE GRANTEE. BY INITIALING BELOW, THE GRANTEE HEREBY

EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY LAW, ANY AND

ALL RIGHTS THAT THE GRANTEE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS

THOSE STATUTES MAY BE AMENDED, REPLACED, RENUMBERED OR

SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.

GRANTEE’S INITIALS ____________

8.7 THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE
GRANTOR’S EXERCISE OF ITS POWER OF TERMINATION AND RIGHT OF REENTRY PURSUANT TO THIS SECTION 8.7 MAY WORK A FORFEITURE OF THE ESTATE IN THE PROPERTY CONVEYED TO THE GRANTEE THROUGH THE GRANT DEED. THE

GRANTEE HEREBY EXPRESSLY WAIVES, TO THE MAXIMUM EXTENT ALLOWED BY

LAW, ANY AND ALL EQUITABLE AND LEGAL DEFENSES THAT THE GRANTEE MAY

HAVE TO SUCH FORFEITURE, INCLUDING, BUT NOT LIMITED TO, THE DEFENSES

OF LACHES, WAIVER, ESTOPPEL, SUBSTANTIAL PERFORMANCE OR COMPENSABLE DAMAGES. THE GRANTEE FURTHER EXPRESSLY WAIVES, TO THE

MAXIMUM EXTENT ALLOWED BY LAW, ANY AND ALL RIGHTS AND DEFENSES THAT THE GRANTEE MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 3275 OR ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT. THE

GRANTEE ACKNOWLEDGES THAT THE TERMS AND CONDITIONS OF THE

AGREEMENT REFLECT THE POSSIBILITY OF FORFEITURE BY VIRTUE OF THE EXERCISE OF THE GRANTOR’S POWER OF TERMINATION PROVIDED IN THIS SECTION 8.7 AND FURTHER ACKNOWLEDGE THAT IT HAS RECEIVED

INDEPENDENT AND ADEQUATE CONSIDERATION FOR ITS WAIVER AND RELINQUISHMENT OF RIGHTS AND REMEDIES PURSUANT TO SECTION 8.6 AND THIS SECTION 8.7.

GRANTEE’S INITIALS ____________
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EXHIBIT E

PART THREE
Section 9. Developer Covenant to Undertake Project. The Developer covenants, for itself, its successors and assigns, to and for the exclusive benefit of the City, that the Developer shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Developer covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance, any and all plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section 9 shall run with the land of the Property until the earlier of the date of recordation of the Certificate of Completion or the fifteenth (15th) anniversary of the date of the Close of Escrow.

Section 10. Covenants Run with the Land of the Property. Each of the covenants and agreements contained in this Grant Deed touch and concern the Property and each of them is expressly declared to be a community development covenant that runs with the land for the benefit of the Grantor or the City of San Bernardino, as the successor public agency to the Grantor, and such covenants run with the land in favor of the Grantor for the entire period that such covenants are in full force and effect, regardless of whether the Grantor is or remains an owner of any land or interest in land to which such covenants relate. The Grantor, in the event of any breach of any such covenants, has the right to exercise all of the rights and remedies, and to maintain any actions at law or suits in equity or other proper proceedings, to enforce the curing of such breach, as provided in the Agreement or by law. The covenants contained in this Grant Deed are for the benefit of and are enforceable only by the Grantor or the City of San Bernardino, as the successor public agency to the Grantor, and shall survive the execution and recordation of this Grantor Deed and the issuance and recordation of each and every Certificate of Completion, for the time period set forth above for each covenant.

Section 11. Costs and Attorneys’ Fees for Enforcement Proceeding. If legal proceedings are initiated to enforce the rights, duties or obligations of any of the covenants set forth in this Grant Deed, then the prevailing party in such proceeding shall be entitled to collect its reasonable attorney fees and costs from the other party in addition to any other damages or relief obtained in such proceedings.

Section 12. Effect of Unlawful Provision; Severability. In the event that any provision of this Grant Deed is held to be invalid or unlawful by a final judgment of a court of competent jurisdiction, such invalidity shall not affect the validity of any other provision of this Grant Deed. 187
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EXHIBIT E
IN WITNESS WHEREOF, the Grantor has caused this Grant Deed to be executed by its authorized representative(s) on this ____ day of _____________, 2022.

GRANTOR:

THE CITY OF ONTARIO
a California municipal corporation
By: ___________________________
City Manager
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
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EXHIBIT E

EXHIBIT A
TO

GRANT DEED
Property Legal Description
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EXHIBIT E

CERTIFICATE OF ACCEPTANCE OF

GRANT DEED
The undersigned hereby acknowledges acceptance by _____________, a California limited liability company, the Grantee in the within Grant Deed, of the delivery of the subject Property described in the within Grant Deed from the City of Ontario.

GRANTEE:
[INSERT], A CALIFORNIA LIMITED

LIABILITY COMPANY
By: ___________________________
[TITLE]
Dated: _____________________
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
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EXHIBIT F

EXHIBIT F
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Form of Notice of Agreement
[Attached Behind This Page]
191
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EXHIBIT F

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

The City of Ontario
303 East B Street
Ontario, California 91764
Attn: City Manager
Exempt from Recording fee
pursuant to Gov’t Code § 27383

NOTICE OF AGREEMENT
2022 Disposition and Development Agreement
(Southeast Corner of D Street and Lemon Avenue)
TO ALL INTERESTED PERSONS PLEASE TAKE NOTICE that _____________, a California limited liability company (the “ Developer”) and the City of Ontario, a California municipal corporation (the “ City”) entered into an agreement entitled 2022 Disposition and Development Agreement (Southeast Corner of D Street and Lemon Avenue), dated as of ______, 2022 (the “Agreement”). A copy of the Agreement is on file with the City and is available for inspection and copying by interested persons as a public record of the City at the City’s offices located at 303 East B Street, Ontario, California 91764, during the City’s regular business hours.

The Agreement affects the real property described in Exhibit A attached to this Notice of Agreement (the “ Property”). The meaning of defined terms, indicated by initial capitalization, used in this Notice of Agreement shall be the same as the meaning ascribed to such terms in the Agreement.

PLEASE TAKE FURTHER NOTICE that the Agreement contains certain development covenants running with the land of the Property and other agreements between the Developer and the City affecting the Property, as set forth below (all section references are to the Agreement):

Section 4.1 of the Agreement provides:

4.1 Developer Covenant to Undertake Project. The Developer covenants, for itself, its successors and assigns, to and for the exclusive benefit of the City, that the Developer shall commence and complete the development of the Project on the Property within the time period for such actions set forth in the Schedule of Performance. The Developer covenants and agrees for itself, its successors, and assigns, that the Property shall be improved and developed with the Project in substantial conformity with the terms and conditions of this Agreement, the Scope of Development, the Schedule of Performance, any and all plans, specifications and similar development documents required by this Agreement, except for such changes as may be mutually agreed upon in writing by and among the Parties, and all applicable laws, regulations, orders and conditions of each Governmental Agency with jurisdiction over the Property or the Project. The covenants of this Section 4.1 shall run with the land of the Property until the earlier of the date of 192
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EXHIBIT F
recordation of the Certificate of Completion or the fifteenth (15th) anniversary of the date of the Close of Escrow.

Section 5.1 of the Agreement provides:

5.1 Covenant to Maintain Property on Tax Rolls . The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.1.1 The entire Property shall remain on the County secured real property tax rolls for twenty years from the date of issuance of a certificate of occupancy for the Project. the full term of this Agreement.

Section 5.2 of the Agreement provides:

5.2 No Conveyance to Tax Exempt Entity . The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.2.1 The Developer shall not use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property, the Project, or any portion of any of the foregoing to any entity or person, or for any use of the Property, the Project, or any portion of any of the foregoing, that is partially or wholly exempt from the payment of real or personal property taxes or that would cause the exemption of the payment of all or any portion of real or personal property taxes otherwise assessable regarding the Property, the Project, or any portion of any of the foregoing, without the prior written consent of the City, which may be withheld in the City’s sole and absolute discretion for a period of 20 years from the date of issuance of the certificate of completion for the Project by the City.

Section 5.3 of the Agreement provides:
193
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EXHIBIT F

5.3 Maintenance Condition of the Property. The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

5.3.1 The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean and orderly condition, ordinary wear and tear excepted. If there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maintenance standard described above (a “Maintenance Deficiency”), then the City shall notify the Developer in writing of the Maintenance Deficiency. If the Developer fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of its receipt of notice of the Maintenance Deficiency, the City shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the City to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance Deficiency on the Property pursuant to this Section 5.4.1 shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the City to the Developer, the City shall have the right to enforce the lien in the manner provided in Section 5.4.3.

5.3.2 Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint that has been color- matched to the surface on which the paint is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti is not removed within ninety-six (96) hours following the time of the discovery of the graffiti, the City shall have the right to enter the Property and remove the graffiti, without notice to the Developer. Any sum reasonably expended by the City for the removal of graffiti from the Property pursuant to this Section 5.4.2, shall be a lien on the Property. If the amount of the lien is not paid within thirty (30) days after written demand to the Developer from the City, the City shall have the right to enforce its lien in the manner provided in Section 5.4.3.

5.3.3 The Parties further mutually understand and agree that the rights conferred upon the City under this Section 5.4 expressly include a grant by the Developer of a security interest in the Property with the power to establish and enforce a lien or other encumbrance against the Property or any portion thereof, in the manner provided under Civil Code Sections 2924, 2924b and 2924c, to secure the obligations of the Developer and it successors under Section 5.4.1 or Section 5.4.2, including the reasonable attorneys’ fees and costs of the City associated with the abatement of a Maintenance Deficiency or removal of graffiti. For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the City” mean and include the salaries, benefits and costs of the City Attorney and the lawyers employed in the Office of the City Attorney.

5.3.4 The provisions of this Section 5.4, shall be a covenant running with the land of the Property, shall be enforceable against the Developer and its successors and assigns, and shall be covenants set forth in the Grant Deed. Nothing in the foregoing provisions of this Section 5.3 shall be deemed to preclude the Developer from making any alteration, addition, or other change 194
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EXHIBIT F
to any structure or improvement or landscaping on the Property, provided that any such changes comply with applicable zoning and building regulations of the City.

Section 5.5 of the Agreement provides:

5.4 Obligation to Refrain from Discrimination . The Developer for itself, its successors and assigns to all or any part or portion of the Property and/or Project, covenants and agrees that:

The covenant of this Section 5.5 shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns in perpetuity and be a covenant in the Grant Deed and the Notice of Agreement.

EXHIBIT F
This NOTICE OF AGREEMENT is dated as of _________________, 2022, and has been executed on behalf of the Developer and the City by and through the signatures of their authorized representative(s) set forth below. This Notice of Agreement may be executed in counterparts and when fully executed each counterpart shall be deemed to be one original instrument.

Dated:_________________, 2022
CITY:

THE CITY OF ONTARIO
a California municipal corporation
By: ___________________
City Manager
ATTEST:
____________________________
City Clerk
APPROVED AS TO LEGAL FORM:

BEST BEST & KRIEGER LLP
By: _______________________
City Attorney
Dated: _________________, 2022
DEVELOPER:
[INSERT], a California limited liability
company
By: ___________________
[TITLE]
[ALL SIGNATURES MUST BE NOTARY ACKNOWLEDGED]
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EXHIBIT F

EXHIBIT A
TO

NOTICE OF AGREEMENT
Legal Description of Property
197
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EXHIBIT H

EXHIBIT G
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Form of Official Action of Developer

CERTIFICATION OF LLC AUTHORITY
The undersigned members of _____________, a California limited liability company (the “LLC”), do certify that we are all of the members of the LLC and that there are no other members.

We further certify that any one (1) of the following named persons, individually:
[INSERT NAMES]
be, and they are, authorized and empowered for and on behalf of and in the name of the LLC to execute and deliver that certain 2022 Disposition and Development Agreement (Southeast Corner of D Street and Lemon Avenue), dated ______, 2022, between the City of Ontario, a California municipal corporation, (“City”) and the LLC (the “ Agreement”), to purchase certain real property located in the City of Ontario, California, as specifically described in the Agreement, and all other documents to be executed by the LLC in connection with the transactions contemplated in the Agreement, and to take all actions that may be considered necessary to conclude the transactions contemplated in the Agreement and perform the other obligations of the LLC pursuant to the Agreement.

The authority conferred shall be considered retroactive, and any and all acts authorized in this document that were performed before the execution of this Certificate are approved and ratified. The authority conferred shall continue in full force and effect until the City of Ontario, a California municipal corporation shall have received notice in writing from the LLC of the revocation of this Certificate.

We further certify that the activities covered by the foregoing certifications constitute duly authorized activities of the LLC; that these certifications are now in full force and effect; and that there is no provision in any document under which the LLC is organized and/or that governs the LLC’s continued existence, limiting the power of the undersigned to make the certifications set forth in this certificate, and that such certifications are in conformity with the provisions of all such documents.

LLC Members:
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EXHIBIT H

EXHIBIT H
TO
2022 DISPOSITION AND DEVELOPMENT AGREEMENT
(Southeast Corner of D Street and Lemon Avenue)
Form of Certificate of Completion
[Attached Behind This Page]
199
46700.12001\34952026.1

EXHIBIT H

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

The City of Ontario
303 East B Street
Ontario, California 91764
Attn: City Manager
Exempt from Recording fee
pursuant to Gov’t Code § 27383
I, Scott Ochoa, City Manager of the City of San Bernardino (the “City”) certify that:

1.1. The Project described as [______________________] required to be constructed in accordance with that certain 2022 Disposition and Development Agreement (Southeast Corner of D Street and Lemon Avenue), dated _______, 2022 (“DDA”), between the City and Ontario [INSERT], a California limited liability company (the “Developer”), on that certain real property specifically described in the legal description(s) attached to this Certificate of Completion as Exhibit A (the “Property”), is complete in accordance with the provisions of the Agreement.

This Certificate of Completion constitutes conclusive evidence of the City’s determination of the Developer’s satisfaction of its obligation under the Agreement to construct and install the Project on the Property, including any and all buildings, parking areas, landscaping areas and related improvements necessary to support or meet any requirements applicable to the Project and its use and occupancy on the Project, whether or not such improvements are located on or off the Property or on other property subject to the Agreement. Notwithstanding any provision of this Certificate of Completion, the City may enforce any covenant surviving this Certificate of Completion in accordance with the terms and conditions of the Agreement and the Grant Deed by which the Property was conveyed to the Developer by the City under the Agreement. The Agreement is an official record of the City and a copy of the Agreement may be inspected at the City’s office located at 303 East B Street, Ontario, California 91764, during the City’s regular business hours.

DATED AND ISSUED this _____ day of ______________, _____.

THE CITY OF ONTARIO
a California municipal corporation
By: ___________________________
City Manager
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EXHIBIT H

EXHIBIT A
TO

CERTIFICATE OF COMPLETION
Legal Description of the Property
201
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EXHIBIT H

STATE OF CALIFORNIA )
ss)
COUNTY OF ________________)
On ________________, before me, , Notary Public, personally appeared , personally known to me to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.
_____________________________
Notary Public
202
Department: Economic Development
Prepared By: Charity Hernandez
Staff Member Presenting:

Jennifer McLain Hiramoto, Economic
Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 19
SUBJECT:

A FIRST AMENDMENT TO A PROFESSIONAL SERVICES AGREEMENT FOR ON-CALL

LAND ACQUISITION, RELOCATION AND PROPERTY MANAGEMENT SERVICES

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods FISCAL IMPACT:

The Fiscal Year 2022-23 Adopted Budget includes, and any subsequent Adopted Budget shall include appropriations from General Fund for these services. In no event shall the proposed amendment with Overland, Paciﬁc & Cutler exceed $200,000. The consultant has agreed to the proposed ﬁxed billing rates and will be compensated for the scope of work at the approved billing rates, as set forth in the subject agreements.

BACKGROUND & ANALYSIS:

On August 20, 2019, after an extensive solicitation and procurement selection process, the City entered into an on-call Professional Services Agreement with Overland, Paciﬁc & Cutler for land acquisition, relocation and property management services. The selection was based on the firm's experience, knowledge and qualifications.

The City continues working on high-proﬁle economic development and redevelopment projects that require the need for property acquisition, relocation activities, and property management assistance. These projects include, but are not limited to, areas on or near Holt Boulevard, South Euclid Avenue, Mission Boulevard, Downtown Ontario, Mountain Avenue, and east of the Ontario International Airport.

There is a current need to amend this on-call Professional Services Agreement to extend the term and increase the not-to-exceed amount to use this ﬁrm to advance ongoing projects with the overall goal of implementing the City's Economic Development Program. The goal of this program is to improve the quality of life for the residents and businesses by redeveloping blighted areas, 203
enhancing public amenities, encouraging private investment, creating jobs, and enhancing a robust sale tax and property tax revenue stream.
204
Department: Planning
Prepared By: Luis Batres
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Reviewed By: Charles Mercier, Rudy Zeledon
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 20
SUBJECT:

A PUBLIC HEARING TO CONSIDER AN ORDINANCE FOR A PLANNED UNIT DEVELOPMENT (FILE NO. PUD20-001) AT 549 WEST HOLT BOULEVARD

CITY OF ONTARIO
Agenda Report
December
6, 2022
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

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:

There is not a direct fiscal impact associated with this action.

BACKGROUND & ANALYSIS:

The project site is composed of 0.81 acres of vacant land located at 549 West Holt Boulevard, within the MU-1/LUA-3 (Downtown Mixed-Use/Holt Boulevard District) zoning district. Property to the north of the Project site is within the MU-1/LUA-3 (Downtown Mixed- Use/Holt Boulevard District) zoning district and is developed with the Ontario Village Commercial Shopping Center. The property to the south is within the IL (Light Industrial) zoning district and is developed with a mix of industrial uses. The properties to the east and west are within the MU- 1/LUA-3 (Downtown Mixed-Use/Holt Boulevard District) zoning district and are developed with multi-tenant commercial uses.

The Ontario Plan Policy Plan (General Plan) designates the project area as Mixed-Use, permitting residential uses at a density of 25.0 to 75.0 du/ac and commercial development at an intensity of up to 2.0 FAR for oﬃce and retail developments. The Ontario Plan ("TOP") describes the Downtown Mixed-Use Area as an intensive vertical and horizontal mixture of retail, oﬃce and residential uses in a pedestrian friendly atmosphere. The most intensive uses are envisioned along Euclid and Holt Avenue. The Downtown Mixed-Use District is also intended to provide new housing opportunities that will provide increased demand for retail at more concentrated, strategic locations. The 205
densities and intensities of the Mixed-Use land use designation represented within TOP are the range of anticipated development; however, individual projects may vary depending upon an approved master plan, such as an area plan, specific plan, or planned unit development (PUD).

The Policy Plan speciﬁes that the Downtown Mixed-Use Area is to be implemented through the approval of an Area Plan or PUD prior to the development of properties within the area. In compliance with this requirement, the Applicant has submitted “The Roosevelt Tower Planned Unit Development” (included as Attachment “A” to the Ordinance), which is consistent with the vision and the goals and policies of the Policy Plan.

The purpose of the Roosevelt Tower PUD is to
implement TOP vision for the Downtown Mixed-Use Area as an intensive vertical and horizontal mixture of retail, oﬃce and residential uses in a pedestrian friendly atmosphere; to promote high standards in urban design; and, to encourage the development of exceptionally high quality residential and commercial uses, while establishing regulations and standards for uses with special conditions and regulatory needs to ensure harmonious relationships with other surrounding land uses. The PUD will establish the development standards, design guidelines and infrastructure to serve the site and to
facilitate the development of a mixed-use development project at a density of

72.8 dwelling units per acre. In conjunction with the PUD submittal, the applicant has submitted a Development Plan application (File No. PDEV20-009)
to construct a 5-story (three-stories of
residential units over two-stories of podium parking), 59-unit apartment project with 2,500 square feet of ﬁrst ﬂoor retail space. Consistent with the requirements of the MU-1 (Downtown Mixed-Use) zoning district, the proposed PUD allows for uses intended to encourage retail and commercial uses to service local residents, visitors and employees, and attract pedestrian traﬃc along Holt Boulevard. The development regulations set forth in the PUD will govern the placement, height, and bulk of permitted buildings and structures; establish locational criteria for vehicular access to the site; establish parking and loading requirements; and, establish landscape and sign standards.

On July 26, 2022, the Planning Commission conducted
a public hearing to consider the above-
described PUD and concluded the hearing on that date. After considering all public testimony on the application, the Planning Commission unanimously approved (7-0) Resolution No. PC22-037,
recommending that the City Council approve the PUD document and adopted Resolution No. PC22- 038 approving the Development Plan, contingent on City Council approval of the PUD.

HOUSING ELEMENT COMPLIANCE:

The project is consistent with the Housing Element of the Policy Plan (General Plan) component of TOP, as the project site is not one of the properties in the Housing Element Sites Inventory contained in Tables B-1 and B-2 of the Housing Element Technical Report.

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, In-Fill Development Projects) of the CEQA Guidelines and meets each of the following conditions:
(a)
The Project is consistent with the applicable General Plan designation and all applicable General 206
Plan policies, as well as with applicable zoning designation. The proposed Project is located within the MU (Mixed Use) land use district of the Policy Plan Land Use Map and the MU-1/LUA-3 (Downtown Mixed-Use/Holt Boulevard District) zoning district. The proposed project is consistent with all applicable Policy Plan (general plan) policies, as well as with the requirements of the Roosevelt Tower PUD, and applicable Development Code regulations;

(b)
The proposed development occurs within city limits on a project site of no more than ﬁve acres substantially surrounded by urban uses. The Project is proposed within the established boundaries of the City of Ontario, on a project site totaling 0.81-acre of land, which is surrounded by established commercial land uses;

(c)
The Project site has no value as habitat for endangered, rare, or threatened species. The site is void of any ﬂora or fauna, was previously graded, and is regularly maintained to prevent the growth of weeds and grasses;

(d)
Approval of the project would not result in any signiﬁcant eﬀects relating to traﬃc, noise, air quality, or water quality. The proposed mixed-use development is similar to, and of no greater impact than other allowed residential uses and commercial development projects within the MU- 1/LUA-3 (Downtown Mixed-Use/Holt Boulevard District) zoning district; and

(e)
The site can be adequately served by all required utilities and public services. The site is located within an area that is currently served by all required utilities and public services, including, but not limited to sewer, water, gas, electric and municipal solid waste services. 207
Case Planner: Luis E. Batres Hearing Body Date Decision Action Planning Director
Approval:

DAB 7/6/22 Approval Recommend
PC 7/26/22 Recommend (PUD)
Final (PDEV)
Submittal Date: 4/13/20 CC 9/6/22 Final (PUD)
F
ILE NOS: PUD20-001 and PDEV20-009
SU
BJECT: A Planned Unit Development (File No. PUD20 -001) to establish development standards, design guidelines and infrastructure requirement for 0.81 -acres of land, in conjunction with a Development Plan (File No. PD EV20-009) to construct a mixed -use project consisting of 59 multiple -family dwellings (three-stories of residential units ) over two-stories of podium parking and 2,500 square feet of first floor retail space, on property located at 549 West Holt Boulevard, within the MU-1/LUA-3 (Downtown Mixed -Use/Holt Boulevard District) zoning district ; (APN: 1049-021-09) submitted by Kathy Huynh. City Council action required for PUD only.

PR
OPERTY OWNER: Roosevelt Property Management
R
ECOMMENDED ACTION: That the Planning Commission consider and 1) adopt the resolution recommending the City Council approve the Planned Unit Development, File No. PUD20-001, and 2) adopt the resolution approving the Development Plan, File No.

PDEV20-009, pursuant to the facts and reasons contained in the staff report and resolution, and subject to the departmental conditions of approval included as Attachment A to the
resolution.

P
ROJECT SETTING: The
project site is comprised of

0.81-acres of vacant land
located at 549 West Holt
Boulevard, within the MU -
1/LUA-3 (Downtown Mixed -
Use/Holt Boulevard ) zoning
district and is depicted in
Figure 1: Project Location
Map. The property is
relatively flat, with a gentle
slope to the southwest
corner of the site and is
covered with perennial
303 East B Street, Ontario, California 91764 Phone: 909.395.2036 / Fax: 909.395.2420

PLANNING COMMISSION

STAFF REPORT
July 26, 2022

HOLT BOULEVARD

SAN ANTONIO AVENUE

VINE AVENUE

BROOKS STREET

BONITA COURT
Figure 1: Project Location

PROJECT SITE
N
Approval /
Approved
208
Planning Commission Staff Report
File Nos.: PUD20-001 and PDEV20-009
July 26, 2022

Page 2 ends

Ontario City CouncilDecember 6, 2022

Ontario City Council
December 6, 2022