Agenda packet — Ontario City Council, December 5, 2023 (part 4 of 4)

3.7.4.3 Right to Use . City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a pro ject other than this Project without employing the services of Consultant shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Consultant’s seal from the Documents & Data and indemnify and hold harmless Consultant and its officers, directors, agents and employees from claims arising out of the negligent use or re -use of the Documents & Data on such other project. Consultant shall be responsible and liable for its D ocuments & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Consultant shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Consultant, a party for whom the Consultant is legally responsible or liable, or anyone approved by the Consultant.

3.7.4.4 Indemnification. Consultant shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

3.7.4.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. C onsultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.7.4.6 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information.

Consultant shall have five (5) working days after receipt of the release notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of an objection notice unless either: (1) Consultant fails to 593
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fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information.

3.7.5 Cooperation; Further Acts . The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.7.6 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements.

3.7.7 Attorneys’ Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing pa rty reasonable attorneys’ fees and all costs of such action.

3.7.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County. In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Consultant must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Consultant. If no such Government Code cl aim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Consultant shall be barred from bringing and maintaining a valid lawsuit against the City.

3.7.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.7.10 City's Right to Employ Other Consultants . City reserves right to employ other consultants in connection with this Project.

3.7.11 Successors and Assigns . This Agreement shall be binding on the successors and assigns of the parties.

3.7.12 Assignment or Transfer. Consultant shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent s hall be void and without legal effect and shall constitute grounds for termination.

Consultant shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

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days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.7.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.7.15 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.7.16 No Third -Party Beneficiaries . There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.7.17 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.7.18 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant, to solicit or secure this Agreement. Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other co nsideration contingent upon or resulting from the award or making of this Agr eement. Consultant further agrees to file, or shall cause its employees or subconsultants to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.7.19 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.7.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

3.7.21 Survival. All rights and obligations hereunder that by their nature are to continue after any expiration or termination of this Agreement, including, but not limited to, the indemnification obligations, shall survive any such expiration or termination.

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SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF ONTARIO AND
NOVA GEOTECHNICAL & INSPECTION SERVICES - SoCal

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written.

CITY OF ONTARIO NOVA GEOTECHNICAL & INSPECTION
SERVICES - SoCal
By:

Its:

Printed Name:

By:

Its:

Printed Name:

Approved By:

Scott Ochoa
City Manager
Approved as to Form:

_____________________________________
Best Best & Krieger LLP
City Attorney

Attested By:

Assistant City Clerk

ONTARIO HOUSING AUTHORITY

Approved By:

Scott Ochoa
Executive Director

Attested By:

Authority Secretary

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BB&K (2023) Exhibit “A”-1 PROFESSIONAL SERVICES AGREEMENT

EXHIBIT "A"

SCOPE OF SERVICES
All qualified consultants must be capable of furnishing all necessary professional and technical services set forth below. The City will be utilizing General, Federal, State and other funds for the projects. The list is not exhaustive and may include other services as directed or requested by City staff. The actual Scope of services will be determined on a project-by-project basis.

WORKING KNOWLEDGE OF THE FOLLOWING:

• Asbestos Surveys and Lead Paint Services (Residential, Commercial, Industrial, etc.) • Environmental Site Assessments (Phase I and Phase II). The assessment must describe and assess any recognized environmental conditions as defined by ASTM Standard E- 1527-00
• Industrial Hygiene and Indoor Air Quality
• Brownsfields Services
• Landfills and Solid Waste
• SWPPP Services
• Remediation Services
• Occupational Health and Safety
• Underground Storage Tanks Close-out Reports
• Soil Analysis Report
• Soil Sampling Report
• Regulatory Compliance
• Mold, Fungal, and Legionella Services
• Peer Reviews
• Expert Witnesses

The Consultant will be expected to work closely with staff for the duration of the assigned projects, and attend all meetings and workshops, as necessary.

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BB&K (2023) Exhibit “B”-1 PROFESSIONAL SERVICES AGREEMENT

EXHIBIT "B"

COMPENSATION
In accordance with section 3.2 of this Agreement, the Consultant shall be compensated for performance of the Services as follows:

Staff Hourly Rate
Principal Engineer $225
Registered Geotechnical Engineer/ Registered Engineering Geologist $175 Sr. Project Manager $170
Project Manager $160
Sr. Staff Professional $135
Lead/Asbestos/Air Sampling $140
Staff Professional (Mapping/Engineer/Geologist/Scientist) $150 CAD/GIS $120
Field Technician $95
Technical Drafter $85
Administration $65

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(BB&K 2017)

Exhibit “B”-2

EXHIBIT "B" CONT’D

COMPENSATION
Equipment Fees Rate
PID $200/day
Water Level Meter $100/day
GEM $500/day
FID $300/day
Air Sample Pump and Vacuum Chamber $100/day
Cassettes $50/day
Draeger Tubes $50/day
Hand Auger $100/day
Lead Wipe Sampling Kit $50/day
Mold/Fungal Sample Kits $50/day
Stormwater Sampling Kit $250/day
Bailers $50/each
Soil Sampling Kits $200/day
Oil/Water Interface Probe $90/day
Multi-Meter w/ Flow Through $200/day
pH/Conductivity/Temp Meter $50/day
DO Meter $50/day
Data Logger/Transducer $80/day
OVM $120/day
Generator $70/day
PetroFlag Kit $20/sample
Single-Use Bailers $12 each

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(BB&K 2017)

Exhibit “B”-3

EXHIBIT "B" CONT’D

COMPENSATION
Equipment Fees Rate
Level B PPE $500/day
Level C PPE $75 each
Level D Tyvex $10 each
Sampling Tubes/Brass $10 each
Sampling Tubes/Stainless $15 each
Submersible Pump $50/day
Peristaltic Pump $60/day
Low Flow Pump $125/day
Air Sample Bag $20 each
Pump Controller $125/day
Powered Drill $50/day
Sub-Slab VaporPin $25/point
Water Sampling Kit $15 each
Trimble GPS Unit $120/day

Reimbursed Items Rate
Mileage Federal Rate
Vehicle Onsite (hourly) $10/hour
Vehicle Onsite (daily) $60/day
Subcontractor Fees Cost + 15%
Per Diem Meals + Incidentals Federal Rate (varies per location) Per Diem Lodging Federal Rate (varies per location)

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(BB&K 2017)

Exhibit “B”-4

EXHIBIT "B" CONT’D

COMPENSATION
Reimbursable cost and expenses, subject to the requirement of prior written authorization by the City, Housing Authority, and/or Agency’s representative pursuant to this Agreement, may include the following:

Actual out-of-pocket costs and expenses, plus handling fees not to exceed ten percent (10%) of the actual out-of-pocket costs and expenses for the following:
• Printing/reproduction
• Graphic aids
• Travel (airfare, meals, etc.), excepting travel to and from Ontario, California, which is specifically excluded
• Fees of governmental entities
• Computer services
• Photography
• Subcontract services
• Postage
• Telephone/facsimile
• Mileage/deliveries-Mileage rate will be adjusted from time to time to equal the U.S.

General Services Administration Mileage Reimbursement Rates • Visual simulation
• CADD/computer time
• Other reimbursable costs and expenses at the discretion of the Ontario Agencies

602
Department: Utilities
Prepared By: Chris Bonadurer
Staff Member Presenting:

Scott Burton, Utilities General Manager
Reviewed By: Dennice Raygoza, Albert G
Gastelum, Michael Sigsbee
Approved By:

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

A PROFESSIONAL SERVICES AGREEMENT WITH FREEDOM AUTOMATION INC. FOR

SUPERVISORY CONTROL AND DATA ACQUISITION COMPUTER PROGRAMMING

AND MAINTENANCE SERVICES

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council approve and authorize the City Manager, or his designee, to execute a Professional Services Agreement with Freedom Automation Inc., of Oceanside, California, for the City’s Supervisory Control and Data Acquisition (SCADA) computer programming and maintenance services in the amount of $200,000 for Fiscal Year 2023-24, and authorize the cost of $200,000 per Fiscal Year (2024-25 to 2027-28) for a total not-to-exceed amount of $1,000,000, with an initial term from December 5, 2023 to June 30, 2024, with the option to extend the Agreement for up to four consecutive one year periods, at the set pricing levels per Bid No. 1676.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

The Fiscal Year 2023-24 Adopted Operating Budget includes appropriations from the Water Operating Fund to cover the cost for computer programming support services. The total cost for Fiscal Year 2023-24 amounts to $200,000, the total cost for the recommended action is $1,000,000. The original term of the Agreement will be from December 5, 2023 to June 30, 2024. At the City’s discretion, up to four additional one year extensions may be executed. Actual expenses will be based on actual worked performed and material billing rates set forth in the bid pricing. There is no impact to the General Fund.

The prior year Agreement for computer programming support services was amended, and $55,800 was approved for Fiscal Year 2023-24. These appropriations were utilized for ﬁnal programming, testing, and communications which were required for Capital Improvement Projects at Wells 37, 39, and 43, which recently had new construction work performed. The requested $200,000 for the current proposed Agreement will cover on-call ﬁeld service calls, SCADA system updates and upgrades, site addition costs, assisting with testing, and other computer programing maintenance services. 603
BACKGROUND & ANALYSIS:

The City utilizes a Supervisory Control and Data Acquisition (SCADA) computer system to monitor and control twenty water production wells, seven water reservoirs, six booster stations, three water treatment plants, four sewer lift stations, and eighteen pressure reducing (PR) stations. The Agreement encompasses programming services associated with several maintenance, operational, and management projects for water and sewer, such as the ethernet radio network upgrade, programmable logic controller and hardware updates, new treatment plant programming and new PR stations. SCADA programming and maintenance services are critical to the operation of the City’s water and sewer infrastructure On August 10, 2023, three bids were received through the City’s electronic bid management system for Bid No. 1676, SCADA Programing and Maintenance Services. Companies that submitted bids are as follows:

Vendor
Location
Freedom Automation Inc.

Oceanside, CA
KDC Systems
Los Alamitos, CA
Northern Digital
Bakersfield, CA

Staﬀ reviewed the bids for responsiveness and recommends awarding the Agreement to Freedom Automation Inc. as they have performed this type of work in the past, including the previous annual Agreement, are familiar with the City’s requirements, have the ability to perform the work in a timely manner, and have the expertise in SCADA computer programming maintenance services.

Freedom Automation Inc. has 20 years of experience in providing the City’s SCADA computer programing maintenance services.
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30, 2024, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement automatically for no more than four additional one- year terms. Contractor shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines. The Parties may, by mutual, written consent, extend the term of this Agreement if necessary to complete the Services.

3.2 Compensation.

3.2.1 Compensation. Contractor shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed Two Hundred Thousand ($200,000) per Fiscal Year (FY), for a total not-to-exceed amount of One Million ($1,000,000) without written approval of the City Council or City Manager, as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.2.2 Payment of Compensation . Contractor shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Contractor. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice.

City shall, within 30 days of receiving such invoice, review the invoice and pay all non -disputed and approved charges. If the City disputes any of Contractor's fees, the City shall give written notice to Contractor within thirty (30) days of receipt of an invoice of any disputed fees set forth therein. Payment shall not constitute acceptance of any Services completed by Contractor. The making of final payment shall not constitute a waiver of any claims by the City for any reason whatsoever.

3.2.3 Reimbursement for Expenses. Contractor shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement.

3.2.4 Extra Work . At any time during the term of this Agreement, City may request that Contractor perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreemen t.

Contractor shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3 Responsibilities of Contractor.

3.3.1 Independent Contractor; Control and Payment of Subordinates . The Services shall be performed by Contractor or under its supervision. Contractor will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Contractor on an independent contractor basis and not as an employee.

Any personnel performing the Services on behalf of Contractor shall not be employees of City and shall at all times be under Contractor's exclusive direction and control. Neither City, or any of its officials, officers, directors, employees or agents shall have control over the conduct of Contractor or any of Contractors officers, employees or agents, except as set forth in this Agreement. Contractor shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law.

Contractor shall be responsible for all reports and obligations respecting such additional 606
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personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

3.3.2 Schedule of Services. Contractor shall perform the Services in a prompt and timely manner and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Contractor represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Contractor shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

3.3.3 Conformance to Applicable Requirements . All work prepared by Contractor shall be subject to the approval of City.

3.3.4 Substitution of Key Personnel . Contractor has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such personnel become unavailable, Contractor may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Contractor cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. The key personnel for performance of this Agreement are as follows:

Harvey Quintero, Vice President.

3.3.5 City's Representative. The City hereby designates Chris Bonadurer, Water Production Manager, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approva l of all products submitted by Contractor but not the authority to enlarge the Scope of Services or change the total compensation due to Contractor under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Services or change the Contractor's total compensation subject to the provisions contained in this Agreement. Contractor shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.3.6 Contractor's Representative . Contractor hereby designates Harvey Quintero, Vice President, or his/her designee, to act as its representative for the performance of this Agreement (" Contractor's Representative"). Contractor's Representative shall have full authority to represent and act on behalf of the Contractor for all purposes under this Agreement.

The Contractor's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.3.7 Coordination of Services. Contractor agrees to work closely with City staff in the performance of Services and shall be available to City's staff, Contractors and other staff at all reasonable times.

3.3.8 Standard of Care; Performance of Employees. Contractor shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Contractor represents and maintains that it is skilled in the professional calling necessary to perform the Services. Contractor warrants that all employees and sub Contractors 607
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shall have sufficient skill and experience to perform the Services assigned to them. Contractor represents that it, its employees and sub Contractors have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. Contractor shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Contractor's failure to comply with the standard of care provided for herein. Any employ ee of the Contractor or its sub Contractors who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptab le to the City, shall be promptly removed from the Project by the Contractor and shall not be re-employed to perform any of the Services or to work on the Project.

3.3.9 Period of Performance.

3.3.9.1 Contractor shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Contractor shall also perform the Services in strict accordance with any completion schedule or Project milestones described in Exhibits “A” or “B” attached hereto, or which may be separately agreed upon in writing by the City and Contractor (“Performance Milestones”). Contractor agrees that if the Services are not completed within the aforementioned Performance Time and/or pursuant to any such Performance Milestones developed pursuant to provisions of this Agreement, it is understood, acknowledged and agreed that the City will suffer damage.

3.3.9.2 Neither City nor Contractor shall be considered in default of this Agreement for delays in performance caused by circumstances beyond the reasonable control of the non-performing Party. For purposes of this Agreement, such circumstances include a Force Majeure Event. A Force Majeu re Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the services); (4) strikes and other organized labor action occurring at the site and the effects thereof on the services, only to the extent such strikes and other organized labor action are beyond the control of Contractor and its subcontractors, and to the extent the effects thereof cannot be avoided by use of replacement workers; and (5) pandemics, epidemics or quarantine restrictions. For purposes of this section, “orders of governmental authorities,” includes ordinances , emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of a public agency applicable to the services and Agreement.

3.3.9.3 Should a Force Majeure Event occur, the non -performing Party shall, within a reasonable time of being prevented from performing, give written notice to the other Party describing the circumstances preventing continued performance and the efforts being made to resume performance of this Agreement. Force Majeure Events and/or delays, regardless of the Party responsible for the delay, shall not entitle Contractor to any additional compensation.

Notwithstanding the foregoing in this section, the City may still terminate this Agreement in accordance with the termination provisions of this Agreement.

3.3.10 Laws and Regulations; Employee/Labor Certification. 608
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3.3.10.1 Compliance with Laws . Contractor shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Contractor shall be liable for all violations of such laws and regulations in connection with the Services and this Agreement. All violations of such laws and regulations shall be grounds for the City to terminate the Agreement for cause.

3.3.10.2 Employment Eligibility; Contractor. Contractor certifies that it fully complies with all requirements and restrictions of state and federal law respecting the employment of undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of 1986, as may be amended from time t o time and shall require all sub Contractors and sub-sub Contractors to comply with the same. Contractor certifies that it has not committed a violation of any such law within the five (5) years immediately preceding the date of execution of this Agreement, and shall not violate any such law at any time during the term of the Agreement.

3.3.10.3 Equal Opportunity Employment. Contractor represents that it is an equal opportunity employer and it shall not discriminate against any sub Contractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non -discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Contractor shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.3.10.4 Air Quality . To the extent applicable, Contractor must fully comply with all applicable laws, rules and regulations in furnishing or using equipment and/or providing services, including, but not limited to, emissions limits and permitting requirements imposed by the South Coast Air Quality Management District (SCAQMD) and/or California Air Resources Board (CARB). Contractor shall indemnify City against any fines or penalties imposed by SCAQMD, CARB, or any other governmental or regulatory agency for violations of applicable laws, rules and/or regulations by Contractor, its sub Contractors, or others for whom Contractor is responsible under its indemnity obligations provided for in this Agreement.

3.3.10.5 Water Quality Management and Compliance . Contractor shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limita tion, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter -Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Contractor must additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges. City may seek damages from Contractor for delay in completing the Services caused by Contractor’s failure to comply with the laws, regulations and policies described in this Section, or any other relevant water quality law, regulation, or policy.

3.3.10.6 Safety. Contractor shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Contractor shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, 609
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and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed.

3.3.11 Insurance.

3.3.11.1 Time for Compliance . Contractor shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Contractor shall not allow any sub Contractor to commence work on any subcontract until it has provided evidence satisfactory to the City that the sub Contractor has secured all insurance required under this section. Failure to provide and maintain all required insurance shall be grounds for the City to terminate this Agreement for cause.

3.3.11.2 Types of Insurance Required . As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Contractor, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Contractor agrees to amend, supplement or endorse the policies to do so.
(A) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 00 01 covering "Any Auto" (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $2,000,000 combined limit for each occurrence. (B) Workers' Compensation: Workers' Compensation
Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease. (C) Professional Liability (Errors & Omissions : Professional Liability insurance or Errors & Omissions insurance appropriate to Contractor’s profession with limits of not less than $ 2,000,000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed (for example, any exclusions relating to lead, asbestos, polluti on, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least five (5) years from termination or expiration of this Agreement.

3.3.11.3 Insurance Endorsements . Required insurance policies shall contain the following provisions, or Contractor shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:
(A) Automobile Liability : (1) Additional Insured: T he City, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Vendor or for which the Vendor is responsible. (2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium.
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(B) Professional Liability (Errors & Omissions): (1) Cancellation:

Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non -payment of premium. (2) This insurance shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of the Contractor. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and include a provision establishing the insurer’s duty to defend.
(C) Workers' Compensation: (1) Cancellation: Required
insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the City, its officials, officers, employees, agents, and volunteers.

3.3.11.4 Primary and Non -Contributing Insurance . All policies of Commercial General Liability and Automobile Liability insurance shall be primary and any other insurance, deductible, or self-insurance maintained by the City, its officials, officers, employees, agents, or volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.

3.3.11.5 Waiver of Subrogation . All required insurance coverages, except for the professional liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Contractor or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. Contractor hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its sub Contractors.

3.3.11.6 Deductibles and Self-Insured Retentions. Any deductible or self- insured retention must be approved in writing by the City and shall protect the City, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the p olicy or policies not contained a deductible or self -insured retention.

3.3.11.7 Evidence of Insurance . The Contractor, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by the City, together with all endorsements affecting each policy. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be fi led with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Contractor shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.
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3.3.11.8 Acceptability of Insurers . Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

3.3.11.9 Enforcement of Agreement Provisions (non estoppel) .

Contractor acknowledges and agrees that actual or alleged failure on the part of the City to inform Contractor of non-compliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

3.3.11.10 Requirements Not Limiting . Requirement of specific coverage or minimum limits contained in this Section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

3.3.11.11 Additional Insurance Provisions
(A) The foregoing requirements as to the types and limits of insurance coverage to be maintained by Contractor, and any approval of said insurance by the City, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Contractor pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
(B) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Contractor or City will withhold amounts sufficient to pay premium from Contractor payments. In the alternative, City may cancel this Agreement.
(C) The City may require the Contractor to provide complete copies of all insurance policies in effect for the duration of the Project. (D) Neither the City nor any of its officials, officers, employees, agents or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.
(E) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Contractor from liability in excess of such coverage, nor shall it limit the Contractor’s indemnification obligations to the City and shall not preclude the City from taking such other actions available to the City under other provisions of the Agreement or law.
(F) Contractor shall report to the City, in addition to Contractor’s insurer, any and all insurance claims submitted by Contractor in connection with the Services under this Agreement.

3.3.11.12 Insurance for Sub Contractors. Contractor shall include all sub Contractors engaged in any work for Contractor relating to this Agreement as additional insureds 612
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under the Contractor's policies, or the Contractor shall be responsible for causing sub Contractors to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City, its officials, officers, employees, agents, and volunteers as additional insureds to the sub Contractor's policies. All policies of Commercial General Liability insurance provided by Contractor’s sub Contractors performing work relating to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. Contractor shall not allow any sub Contractor to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of sub Contractor’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Contractor shall provide satisfactory evidence of compliance with this section upon request of the City.

3.4 Labor Code Requirements.

3.4.1 Prevailing Wages. Contractor is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Contractor agrees to fully comply with such Prevailing Wage Laws. City shall provide Contractor with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Contractor shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Contractor's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Contractor shall therefore comply with such Labor Code sections to the fullest extent required by law. Contractor shall defend, indemnify and hold the City, its officials, officers, employees, agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.4.2 Registration/DIR Compliance. If the Services are being performed on a public works project of over $25,000 when the project is for construction, alteration, demolition, installation, or repair work, or a public works project of over $15,000 when the project is for maintenance work, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Contractor and all sub Contractors must be registered with the Department of Industrial Relations (“DIR”). Contractor shall maintain registration for the duration of the Project and require the same of any sub Contractors.

3.4.3 Compliance Monitoring. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Contractor’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR. Any stop orders issued by the DIR against Contractor or any sub Contractor that affect Contractor’s performance of services, including any delay, shall be Contractor’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Contractor caused delay and shall not be compensable by the City. Contractor shall defend, indemnify and hold the City, its officials, officers, employees and agents free and harmless from any claim or liability arising out of stop orders issued by the DIR against Contractor 613
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or any sub Contractor.

3.4.4 Labor Certification. By its signature hereunder, Contractor certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.5 Termination of Agreement.

3.5.1.1 Grounds for Termination . City may, by written notice to Contractor, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Contractor of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Contractor shall be compensated only for those Services which have been adequately rendered to City, and Contractor shall be entitled to no further compensation. Contractor may not terminate this Agreement except for cause. The rights and remedies of the City provided in this section shall not be exclusive and are in addition to any other rights and remedies provided by law, equity or under this Agreement.

3.5.1.2 Effect of Termination . If this Agreement is terminated as provided herein, City may require Contractor to provide all finished or unfinished Documents and Data and other information of any kind prepared by Contractor in connection with the performance of Services under this Agreement. Contractor shall be required to provide such document and other information within fifteen (15) days of the request.

3.5.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.6 Indemnification.

3.6.1 To the fullest extent permitted by law, Contractor shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers, and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injur y of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any acts, errors or omissions, or willful misconduct of Contractor, its officials, officers, employees, subcontractors, Contractors or agents in connection with the performance of the Contractor’s Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorney’s fees and other related costs and expenses except such loss or damage caused by the sole negligence or willful misconduct of the City. Contractor's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Contractor, the City, its officials, officers, employees, agents, or volunteers.

3.6.2 If Contractor’s obligation to defend, indemnify, and/or hold harmless arises out of Contractor’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Contractor’s indemnification obligation shall be limited to claims that 614
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arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor, and, upon Contractor obtaining a final adjudication by a court of competent jurisdiction, Contractor’s liability for such claim, including the cost to defend, shall not exceed the Contractor’s proportionate percentage of fault.

3.7 General Provisions.

3.7.1 Accounting Records . Contractor shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Contractor shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

3.7.2 Independent Contractors and Subcontracting.

3.7.2.1 Use of Contractors. Contractor is aware of statutory and case law regarding classification of workers as independent contractors, including California Labor Code Section 2750.3 and Dynamex Operations West, Inc. v. Superior Court , 4 Cal. 5th 903 (2018). To ensure that Contractor is in compliance with the California Labor Code, Contractor shall only utilize its employees to provide the Services. Contractor may not provide the services through any independent contractor, subcontractor or sub Contractor (“Subcontractor(s)”) unless approved by the City as set forth in Section 3.7 .2.2 below. Contractor represents and warrants that all personnel who perform the Services on Contractor’s behalf are Contractor’s employees, and that Contractor complies with all applicable laws, rules and regulations governing its employees, including, but not limited to, the California Labor Code, Unemployment Insurance Code and all applicable Industrial Welfare Commission Wage Orders.

3.7.2.2 Prior Approval Required . Contractor shall not use any Subcontractor to provide the Services, or any portion of the work required by this Agreement, without prior written approval of City. In the event that City authorizes Contractor to use a Subcontractor, Contractor shall enter into a written agreement with the Subcontractor, which must include all provisions of the Agreement, including a restriction on the Subcontractor’s use of further independent contractors, subcontractors or sub Contractors without the City’s prior written consent.

3.7.3 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Contractor: Freedom Automation, Inc.
1334 N. Melrose Drive, Suite D
Vista, CA 92083
ATTN: Harvey Quintero
City: City of Ontario
1425 S. Bon View Ave.,
Ontario, CA 91761
ATTN: Chris Bonadurer, Water Production Manager
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Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.7.4 Ownership of Materials and Confidentiality.

3.7.4.1 Documents & Data; Licensing of Intellectual Property . This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are pre pared or caused to be prepared by Contractor under this Agreement ("Documents & Data"). All Documents & Data shall be and remain the property of City, and shall not be used in whole or in substantial part by Contractor on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Contractor shall provide to City reproducible copies of all Documents & Data, in a form and amount required by City. City reserves the right to select the method of document reproduction and to establish where the reproduction will be accomplished. The reproductio n expense shall be borne by City at the actual cost of duplication. In the event of a dispute regarding the amount of compensation to which the Contractor is entitled under the termination provisions of this Agreement, Contractor shall provide all Documents & Data to City upon payment of the undisputed amount. Contractor shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Contractor shall retain copies of all Documents & Data on file for a minimum of fifteen (15) years following completion of the Project, and shall make copies available to City upon the payment of actual reasonable duplication costs. Before destroying the Documents & Data following this retention period, Contractor shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

3.7.4.2 Sub Contractors. Contractor shall require all sub Contractors to agree in writing that City is granted a non -exclusive and perpetual license for any Documents & Data the sub Contractor prepares under this Agreement. Contractor represents and warrants that Contractor has the legal right to license any and all Documents & Data. Contractor makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Contractor or its sub Contractors, or those provided to Contractor by the City.

3.7.4.3 Right to Use . City shall not be limited in any way in its use or reuse of the Documents and Data or any part of them at any time for purposes of this Project or another project, provided that any such use not within the purposes intended by this Agreement or on a pro ject other than this Project without employing the services of Contractor shall be at City’s sole risk. If City uses or reuses the Documents & Data on any project other than this Project, it shall remove the Contractor’s seal from the Documents & Data and indemnify and hold harmless Contractor and its officers, directors, agents and employees from claims arising out of the negligent use or re -use of the Documents & Data on such other project. Contractor shall be responsible and liable for its Documents & Data, pursuant to the terms of this Agreement, only with respect to the condition of the Documents & Data at the time they are provided to the City upon completion, suspension, abandonment or termination. Contractor shall not be responsible or liable for any revisions to the Documents & Data made by any party other than Contractor, a 616
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party for whom the Contractor is legally responsible or liable, or anyone approved by the Contractor.

3.7.4.4 Indemnification. Contractor shall defend, indemnify and hold the City, its directors, officials, officers, employees, volunteers and agents free and harmless, pursuant to the indemnification provisions of this Agreement, for any alleged infringement of any patent, copyright, trade secret, trade name, trademark, or any other proprietary right of any person or entity in consequence of the use on the Project by City of the Documents & Data, including any method, process, product, or concept specified or depicted.

3.7.4.5 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Contractor in connection with the performance of this Agreement shall be held confidential by Contractor. Such materials shall not, without the prior written consent of City, be used by Contractor for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Contractor which is otherwise known to Contractor or is generally known, or has become known, to the related industry shall be deemed confidential. Contractor shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.7.4.6 Confidential Information. The City shall refrain from releasing Contractor’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Contractor of its intention to release Proprietary Information.

Contractor shall have five (5) working days after receipt of the release notice to give City written notice of Contractor's objection to the City's release of Proprietary Information. Contractor shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprie tary Information. City shall not release the Proprietary Information after receipt of an objection notice unless either: (1) Contractor fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non-appealable order by a court of competent jurisdiction requires that City release such information.

3.7.6 Entire Agreement. This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements.

3.7.7 Attorneys’ Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recov er from the losing party reasonable attorneys’ fees and all costs of such action. 617
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3.7.8 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County. In addition to any and all contract requirements pertaining to notices of and requests for compensation or payment for extra work, disputed work, claims and/or changed conditions, Contractor must comply with the claim procedures set forth in Government Code sections 900 et seq. prior to filing any lawsuit against the City. Such Government Code claims and any subsequent lawsuit based upon the Government Code claims shall be limited to those matters that remain unresolved after all procedures pertaining to extra work, disputed work, claims, and/or changed conditions have been followed by Contractor. If no such Government Code claim is submitted, or if any prerequisite contractual requirements are not otherwise satisfied as specified herein, Contractor shall be barred from bringing and maintaining a valid lawsuit against the City.

3.7.9 Time of Essence. Time is of the essence for each and every provision of this Agreement.

3.7.10 City's Right to Employ Other Contractors. City reserves right to employ other Contractors in connection with this Project.

3.7.11 Successors and Assigns . This Agreement shall be binding on the successors and assigns of the parties.

3.7.12 Assignment or Transfer. Contractor shall not assign, sublet, or transfer this Agreement or any rights under or interest in this Agreement without the written consent of the City, which may be withheld for any reason. Any attempt to so assign or so transfer without such consent shall be vo id and without legal effect and shall constitute grounds for termination.

Contractor shall not subcontract any portion of the Services required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

3.7.13 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Contractor include all personnel, employees, agents, and subContractors of Contractor, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.7.14 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.7.16 No Third -Party Beneficiaries . There are no intended third party beneficiaries of any right or obligation assumed by the Parties. 618
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3.7.18 Prohibited Interests . Contractor maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Contractor, to solicit or secure this Agreement. Contractor warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Contractor, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Contractor further agrees to file, or shall cause its employees or sub Contractors to file, a Statement of Economic Interest with the City’s Filing Officer as required under state law in the performance of the Services. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

3.7.19 Authority to Enter Agreement. Contractor has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.7.20 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

SIGNATURES ON NEXT PAGE

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SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF ONTARIO AND

FREEDOM AUTOMATION, INC

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be executed on the day and year first above written.

CITY OF ONTARIO FREEDOM AUTOMATION, INC.

By: AAA

Its: BBB
Printed Name: CCC
By: DDD

Its: EEE
Printed Name: FFF

[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]

Approved By:

Scott Ochoa
City Manager
Approved as to Form:

_____________________________________
Best Best & Krieger LLP
City Attorney

Attested By:

City Clerk

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BB&K (2023) Exhibit “A”-1 PROFESSIONAL SERVICES AGREEMENT

EXHIBIT "A"

SCOPE OF SERVICES
621

ORIGINAL
Freedom Automation, Inc. 4/20/2022
CITY OF SAN CLEMENTE – SCADA SUPPORT SERVICES PROJECT NO. 24200 622
SCADA Support Services Freedom Automation, Inc. City Of Ontario 1

TABLE OF CONTENTS. 1 COVER LETTER 2 FIRM INTRODUCTION 3 STAFFING RESOURCES / PROJECT TEAM 5 FIRM FINANCIALS 10 RELEVANT EXPERIENCE AND TECHNICAL COMPETENCE 19 PROJECT APPROACH 26 FEE PROPOSAL 29 INSURANCE INFORMATION 31 LITIGATION 38 OTHER INFORMATION/KNOWLEDGE OF EQUIPMENT 40 PROPOSAL CERTIFICATION 43 APPENDIX: REFERENCES 47 APPENDIX: RESUMES 48 APPENDIX: STANDARD SERVICE RATES 54

TABLE OF CONTENTS
623
SCADA Support Services Freedom Automation, Inc. City Of Ontario 2

August 10, 2023 Mr. Chris Bonadurer City of Ontario 4025 Bon View Avenue Ontario, CA. 92673 SUBJECT: 2023/24 “SCADA Programming and Maintenance (1676)" Dear Mr. Bonadurer and Esteemed Selection Committee Members, Freedom Automation, Inc. recognizes the complexities inherent in operating and maintaining a SCADA system. We take pride in our established partnerships with several agencies, including the City of Ontario and the Rainbow Municipal Water District, where we have revamped legacy SCADA systems over time. Bolstered by our impeccable service record, we eagerly look forward to the prospect of collaborating with the SCADA and IT team at the City of Ontario. Our team's association with the City dates back to the initiation of one of the first SCADA system upgrades. We closely collaborated with the Water Production staff on Bon View Avenue, with our proposed Project Manager, Dino Grillo, playing a pivotal role in the SCADA system's construction. Dino Grillo and Harvey Quintero, the stalwarts of Freedom Automation, have consistently provided invaluable support to the City over the years, even maintaining an active presence during the challenging times of the COVID-19 pandemic. This enduring relationship with City staff and your SCADA system positions Freedom Automation uniquely, armed with a clear understanding of the City's vision. Although our Freedom team might seem smaller in size, we assure you that our collective understanding of SCADA systems surpasses the norm. We are confident in our ability to craft a robust, impactful action plan that will propel the City's SCADA system towards the best possible future. We are grateful for the opportunity to propose our services for this pivotal project. For any queries regarding our proposal, please feel free to reach out to Dino Grillo at 760.908.3568 or Harvey Quintero at 760.908.3569. Sincerely, Harvey Quintero Vice President 624
SCADA Support Services Freedom Automation, Inc. City Of Ontario 3

Situated in Vista, California, and merely an hour's drive from the City of Ontario, Freedom Automation Inc. (FAI) boasts an expansive portfolio spanning various industries, with a distinct emphasis on standardizing water and wastewater control systems. Our team comprises of accomplished process control, electrical, and software engineers, all equipped with the requisite knowledge, training, and experience to unravel even the most formidable automation and engineering puzzles. At the heart of Freedom Automation’s mission lies a steadfast commitment to deliver unparalleled customer service and support. Working in synergy with our sophisticated software and hardware products, we ensure our clients receive optimum solutions, no matter the complexity. We employ proven, state-of-the-art technologies and innovative engineering techniques, sustaining a rigorous and formal work ethic throughout. This proposal elucidates Freedom Automation, Inc.'s (FAI) background, qualifications, and experience, along with a detailed profile of our dedicated sub-contractor team. Further, it sheds light on our engineering strategy, approach, and provides a comprehensive cost estimate for the execution of the proposed tasks. Freedom Automation, Inc. 1334 North Melrose Drive, Suite D Vista, CA 92083 Freedom Automation, Inc. is a California “S” Corporation, Federal ID number 02-0600128 Freedom Automation, Inc. is a Licensed California Electrical Contractor, License #838567/C-10 Direct submittal questions to: Harvey Quintero, Vice President/COO P.O. Box 5416, Oceanside, CA 92052 760-639-4100 office 760-639-4101 fax 760-908-3569 mobile Founded in April 2001 in Oceanside, California, Freedom Automation Inc. (FAI) is the brainchild of Dino Grillo, a seasoned software engineer with an illustrious tenure at Rockwell Electric, Inc. as its Software Engineering Manager. Inspired by a vision to redefine the landscape of Systems Integration, Dino brought his rich experience from over four years at Rockwell and over 25 years in the industry to bear in the establishment of FAI. In the summer of 2002, the company's growth trajectory took a significant leap with the joining of Harvey Quintero. As a Senior Software Engineer from Rockwell Electric, Harvey was no stranger to the technical intricacies and business nuances of Systems Integration. His involvement as one of the majority stockholders further cemented the company's leadership standing. Freedom Automation is thrilled to announce the addition of Nick Moceri to spearhead our fiber optic division. As the esteemed president of Atlas, Nick possesses an unparalleled blend of leadership prowess and in-depth technical acumen in fiber optics, capable of adeptly handling projects of all scales.

Firm Introduction
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The duo of Dino and Harvey, having spearheaded some of the most intricate Systems Integration projects during their time at Rockwell, formed the cornerstone of FAI's project team. With a shared commitment to service excellence and a combined experience spanning over three decades, they steered the company towards unprecedented expertise in SCADA systems and their components. Adding Nick Moceri as our data communications manager has increased Freedom's capabilities to better serve the City of Ontario, adding fiber optics design, service, and installation. Since its inception, FAI has been deeply committed to a service-first approach. Our decades-long journey in the industry is characterized by unwavering dedication to our clients, offering unparalleled insights and solutions in the SCADA systems landscape. This extensive experience and unwavering commitment to service, even during challenging times such as the COVID-19 pandemic when many other companies were closed, have firmly established FAI's reputation as an industry leader and trailblazer.

Firm Introduction
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PROJECT TEAM MEET OUR PROJECT TEAM The cornerstone of a successful SCADA support and maintenance project lies in the promptness, proficiency, and dedication of its team members. It is with great pride that Freedom Automation, Inc. introduces Dino Grillo as our proposed Project Manager. The team we have meticulously selected for this project prides itself on an unparalleled understanding of the City's SCADA system. Freedom's unwavering dedication to the City was manifestly evident as we remained operational and in close collaboration with the City throughout the entire COVID-19 pandemic. The following organizational chart outlines the team members and their respective roles, dedicated to delivering comprehensive services for the City of Ontario. This focused, seasoned team is capable of swiftly executing tasks while upholding the highest quality standards. Our core group will be reinforced by a capable cadre of support staff and carefully selected subconsultants. We guarantee complete dedication for the project's entirety, cognizant of the pivotal role that the availability and consistency of the leadership play in ensuring project success. Any changes to personnel will only occur with the City's written approval. Comprehensive resumes of the proposed team members can be found in the appendix for your review. 628
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PROJECT TEAM Dino Grillo Project Manager/Project Engineer Responsibilities: • Project Management • Engineering Development • Engineering Management • Field Service Engineering As the key pillar of this agreement, Dino Grillo will assume the roles of Project Manager and Support Engineer, ensuring seamless orchestration of the project's various facets. His scope of responsibilities will encompass comprehensive engagement with City staff, along with undertaking hardware and software engineering tasks. Dino brings to the table a profound industry tenure of over 30 years in the controls sector. His journey commenced as a Field Engineer, during which he honed his skills in troubleshooting and repairing electromechanical systems. This foundational experience has endowed him with an exemplary understanding of field equipment operations, rendering him exceptionally attuned to field personnel requirements. Having acquired formal Software Engineering education from the esteemed University of Irvine, Dino possesses a diverse programming repertoire. His coding prowess extends to various languages, including but not limited to BASIC, Visual Basic, C in all its versions and revisions, C++, C#, Java, J++, Javascript, Python, SQL, SFC, and Ladder Logic. His proficiency spans multiple platforms, showcasing the depth and versatility of his programming skills. Dino's proficiency in software extends to comprehensive knowledge of Wonderware, covering its evolution from inception to the latest version. This is supplemented by his extensive familiarity with Rockwell Software and Inductive Automation’s Ignition, further broadening his software expertise. Beyond the digital sphere, Dino is a licensed electrical contractor with vast experience in electrical installations, circuit design, and troubleshooting. His valuable inputs have been instrumental in shaping control strategies, designing control panels, and architecting network systems in previous projects. His blend of software and hardware expertise uniquely positions him to deliver exceptional results across all stages of this project. PROJECT TEAM 629
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Harvey Quintero Primary Project Engineer Responsibilities: • Engineering Development • Engineering Management • Field Service Engineering Nick Moceri Support Project Engineer Responsibilities: • Fiber Engineering Development • Field Service Fiber Engineer Throughout the course of this agreement, Harvey Quintero will serve as the Primary Engineer, liaising with the Project Manager and City staff while undertaking assigned tasks. Moreover, he will be accountable for providing both scheduled and unscheduled service, encompassing PLC to HMI programming and electrical troubleshooting, in an effective and timely manner. With a 30-year track record in the water/wastewater sector and 37 years of programming experience, Harvey is well-versed in languages including BASIC, PASCAL, FORTRAN, Assembly, Visual Basic, C#, Python, Interpreted Math and Logic, and C. He excels in ladder logic across numerous platforms, showcasing his adaptability from the early 1980s to present. Harvey's particular expertise lies in the development of human-machine interfaces, proficient in legacy products like US Data’s FactoryLink, Wonderware’s Intouch, Rockwell Software’s RS View, as well as cutting-edge technologies such as Inductive Automation’s Ignition, Wonderware’s System Platform, and FactoryTalk View by Rockwell Software, among others and programming logic controllers, whether a new or existing programs. Nick Moceri, the newest member of the Freedom team, brings with him an impressive portfolio of experience spanning over 17 years in the domain of communication system design, engineering and construction for both land based and undersea systems worldwide. Nick also has considerable experience in the following areas: SCADA systems integration, Commercial Security system and CCTV monitoring systems, MAN, WAN & LAN architecture, RF point to multipoint systems, commercial and municipality rights of way, as well as DoD and DHS design requirements for military base and airport communications security. Nick's leadership skills shine through in his experience with program and project staff management. His business development acumen also covers various disciplines, notably within the renewable energy sector, focusing on SCADA and optimization. 630
SCADA Support Services Freedom Automation, Inc. City Of Ontario 9

Freedom Automation Inc. (FAI) is proud to have established a partnership with Southern Contracting Company, one of the leading contractors based in San Diego. This collaboration is integral to our large-scale project execution, enriching our service offerings with their expertise in electrical engineering and service. The partnership also benefits from their fully equipped UL listed panel shop and a team of skilled technicians and electricians.

Harvey A. Quintero Support Project Technician Responsibilities: • Engineering Development • Engineering Assistance • Field Service Technician Harvey A. Quintero, will be using his expertise in a broad spectrum of tasks throughout this agreement. As an instrumental figure in Freedom for over a decade, his proficiency spans across PLC, HMI, electrical, and communication systems troubleshooting. Harvey's specialized training in SCADA systems, underpinned by his Ignition Engineer certification, elevates his contribution to a higher level of proficiency. His extensive training in fiber optics, encompassing both termination and splicing, further enriches his skill set. Harvey will be spearheading all projects involving electrical panel installations and antenna implementations, bringing his wealth of knowledge and experience to the forefront of these initiatives.

Subcontractors Information Technology Consulting Services, San Marcos, CA IT Engineer Contact: Ando Pilve Think Forward Chino, CA RF Engineer Contact: Michelle Van Wagner Southern Contracting Company San Marcos, CA Electricians/Panel builders Contact: Robert Cobbs ITCS will be working in tandem with Freedom Automation, Inc. to design and implement advanced Layer-3 Ethernet networks tailored to SCADA systems. They will also be handling advanced network and peripheral integration tasks, further bolstering our technological capabilities. This partnership empowers us to deliver a comprehensive, high-performing, and secure network solution for the City's SCADA system. Think Forward will collaborate with Freedom Automation, Inc., providing on-demand support for any challenges related to the legacy radio system. Their expertise will cover both system configuration and troubleshooting to ensure seamless CellNet serial radio communications. Southern Contracting Company will support Freedom Automation, Inc. as needed, handling high-voltage electrical tasks, UL Panel fabrication, control panel installation, termination, and testing.

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We wish to bring to your attention that the Dunn and Bradstreet credit rating for Freedom Automation appears to contain discrepancies. We have proactively reached out to address and rectify this matter. Enclosed, you will find the details as they were presented to us at the time of our report acquisition. Established in 2001, Freedom Automation, Inc. possesses a robust financial foundation, and we can provide unequivocal evidence of our capacity to commence and successfully complete this project. Report as of: 08-08-2023

SCORES AND RATINGS PAYDEX® Score "
NO CHANGE SINCE 2020-07-29
Delinquency Predictor Percentile "

NO CHANGE SINCE 2020-07-29
Financial Stress Percentile "
NO CHANGE SINCE 2020-07-29
Supplier Evaluation Risk Rating "

NO CHANGE SINCE 2020-07-29

COMPANY PROFILE " # D-U-N-S 94-322-3722 Mailing Address PO Box 5416 Oceanside, CA 92052

Annual Sales US$ 133,387
Company Credit Report - Dunn & Bradstreet
Freedom Automation Incorporated
Address

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DINO GRILLO, Principal
Line of Business
LEGAL EVENTS "
Events Open Count Last Filed Bankruptcies 0
Judgments 0
Liens 11-16-2016 Suits 0
UCC 0
TRADE PAYMENTS " Highest Past Due
US$ 0
Highest Now Owing Total Trade Experiences US$ 2,500 1 Largest High Credit Average High Credit US$ 5,000 US$ 5,000 634
SCADA Support Services Freedom Automation, Inc. City Of Ontario 13

12 Month Summary
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Freedom Automation wish to inform the City that our current CPA, E3 Coastal Advisors LLP, does not provide audit/attest services, and as a result, we are unable to furnish an audited financial statement at this juncture. To ensure transparency and in a bid to submit our proposal in a timely manner, we have included both the Profit and Loss reports and balance sheets from the past two years for the City of Ontario's perusal. These documents serve to offer a comprehensive view of Freedom Automation's operational performance, profitability, and financial position. Should Freedom Automation be selected, we will endeavor to provide the actual audited financial statement through an appropriate auditing firm. We kindly request that the enclosed reports be treated with the utmost confidentiality and be exempt from public disclosure.

COMPANY FINANCIAL STATEMENTS
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At Freedom Automation, Inc., we have a robust history of successfully engaging with SCADA master planning and implementation projects. Our competencies extend to SCADA condition assessments, data analytics, establishing HMI and PLC programming standards, and executing software and hardware upgrades. We have played an instrumental role in aiding clients to chart their future course, facilitating the seamless implementation of novel solutions. This is achieved by fostering a close collaboration with staff, often integrating as part of the team, to gain a profound understanding of their concerns and requirements. Leveraging our deep-seated experience, we then proffer solutions tailored to address these concerns. Such immersive experiences have equipped our team with the prowess necessary to execute the "SCADA Programming and Maintenance (1676)" Project for the City. We are pleased to present the following project references, reflecting engagements of similar scope and scale. Freedom Automation takes immense pride in the projects we have successfully delivered and in the faith vested in us by agencies and municipalities. We encourage you to reach out to our references to corroborate our efficiency, meticulous attention to detail, superior communication skills, and unwavering commitment towards the successful culmination of every project.

Freedom Automation serving as project engineers, field service technicians and electricians, and field software engineering on as needed basis. Professional Services Agreement Yearly Contract: $150,000 Hourly Fee: $160.00 per hour All projects and service performed on time and on budget. Implementing a new Layer 3 Ethernet network design across City for SCADA access. FAI is responsible for all communications installations and configuration of antennas, programming of ethernet switches and implementation. Ethernet radios have been implemented at controlling reservoirs and major points of relay. Implemented new valve control sites, reclaimed water and Well 20 modifications. Procured, installed and programmed new City-standard C-MORE operator interface panels at Wells 40, 45, 46, 47. Wells were also modified with improved CL2 management of pumps. Update existing site control systems to new City standard at Well 43, CDA 42” and Reservoir 1348. Integration of Well 37 IX plant, programming of IX plant, Well 37, Well 39 and central Allen Bradley PLCs and Inductive Automation’s Igntion Edge HMI software integration at plant, add site to central and create all displays. Assist City in all troubleshooting of existing sites. Performed field service on an as required basis, provided 24 hour/7 days a week technical support. Made changes to Time-Of-Use with updated zones. Integrated iPads into control system for operations staff. Provided training on all aspects of SCADA system. Assist in termination and communications troubleshooting.

Relevant Experience and Project References
City Of Ontario, California
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Responsible for maintaining and adding new monitoring and control sites to SCADA system for the last twenty plus (20+) years as Freedom Automation and four (4) years as Rockwell Electric, Inc. Assist City with all matters dealing with system, such as reviewing submittals on new projects and attending meetings on additions to SCADA system, such as the AMI tower project, Well 37 IX and PRV upgrade project. PLC Hardware: Allen Bradley SLC 5/03 – 5/05, MicroLogix Series, ControlLogix & 5380 Series HMI Software: Inductive Automation’s Ignition Radio Hardware: Ubiquiti Layer III Ethernet Radios, Mikrotik L3 Switches , Cellnet Serial Radios Staff: Dino Grillo, Harvey Quintero, Harvey A. Quintero, Julio Guerrero Duration of Services Performed: 21 years Relationship: Current Active Customer Contact: Chris Bonadurer, Water Production Supervisor, City Of Ontario, (909)395-2000, [email protected].

Freedom Automation served as project engineers, field service technicians and electricians, and field software engineering. Professional Services Agreement / Improvement Project Yearly Contract: $128,000 / year (3 years) Hourly Fee: $160.00 per hour Project performed under budget and on time. Freedom designed and implemented an upgrade plan for field sites and is a continual project. Currently all sites have been integrated. Freedom has also implemented an upgrade design and plan for central operations, including installation and conversion of human machine interface (HMI) from Wonderware Intouch to Rockwell Automation’s RS View32 to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients (local PC, laptops and remote tablets) implemented new SQL server and assisted with deployment of VPN for SCADA access, converted annunciation system to Igntion and performed consecutive upgrades on HMI system. Freedom assisted in the design and implementation of a Layer 3 communications network including integration of SolarWinds software and is currently working with Rainbow in implementing existing sites. All sites are configured to communicate ethernet. Assist District in all troubleshooting of existing sites (SCADA Pak and Allen Bradley). Performed field service on an as required basis, provided 24 hour/7 days a week technical support. Added and tested lift stations for Collections department. Provided training on many aspects of SCADA system. Assist in termination and communications troubleshooting. Responsible for maintaining and adding new monitoring and control Rainbow Municipal Water District
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sites to SCADA system for the last fifteen (15) years. Assist City with all matters dealing with system. Freedom in the last 15 years has completed many projects for the City. The afore mentioned projects are just a few of the most recent projects. Additional examples can be provided upon request. PLC Hardware: A-B CompactLogix (Central) MicroLogix 1400 (remotes), A-B ControlLogix, SCADA Pak HMI Software: Inductive Automation’s Ignition 7.9 Radio Hardware: Ubiquiti Layer III Ethernet Radios, Mikrotik L3 Switches , Cellnet Serial Radios Staff: Dino Grillo, Harvey Quintero, Harvey A. Quintero Duration of Services Performed: 15 years Relationship: Currently Active Customer Contact: Mark Cline, SCADA Technician, Rainbow Municipal Water District, (760)728-1128, [email protected] Freedom Automation served as project engineers, field service technicians and electricians, and field software engineering. Professional Services Agreement Yearly Contract: $75,000 Hourly Fee: $160.00 per hour The staff at Freedom were the original engineers that created the first Allen Bradley based SCADA system for the City while employed at Rockwell Electric. Freedom for the past 20 years has been in charge of adding all new sites into the districts existing SCADA system. As well as, any modifications to existing sites or removal of abandoned/obsolete sites. Freedom designed and implemented an upgrade plan for central operations, including installing and programming of new ControlLogix redundant PLC’s to handle incomming and outgoing data to remote sites. Implemented a pilot project for the Inductive Automation’s, Ignition software. SCADA system is to be converted over to Ignition beginning next fiscal year. Upgraded human machine interface (HMI) from Wonderware Intouch 7.0 to Wonderware 2012. Converted all screens to new software versions, tested alarms, configured server and clients, implemented new SQL Wonderware Enterprise Historian database, Implemented new reporting module to report from the Historian. Implemented new Win911 Alarm Notification system. Installed and programmed new Ubiquity Radios into the existing SCADA system.

Vallecitos Water District
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Designed and programmed the New San Elijo Pump Station Compactlogix PLC and Allen Bradley Panelview operator interface terminal. Completed communications system to central HMI. Added new database and screens to the new Wonderware Intouch 2012 system, reporting system, and Alarm notification system. Designed and programmed new Twin Oaks Reservoir Compactlogix PLC system. Created interfacing between the districts existing system and PSI Chlorine Generation System. Freedom in the last 20 years has completed many projects for the City. The afore mentioned projects are just a few of the most recent projects. Additional examples can be provided upon request. PLC Hardware: Allen Bradley SLC 5/03 – 5/05, MicroLogix Series, ControlLogix Series, Compactlogix Series HMI Software: Wonderware Intouch 2012, and Inductive Automation’s Ignition Radio Hardware: Cellnet Utilinet Staff: Dino Grillo , Harvey Quintero, Harvey A. Quintero Duration of Services Performed: 20 years Relationship: Customer Contact: Ed Pedrazzi, Operations and Maintenance Manager, Vallecitos Water City, (760)744-0460, [email protected].

Freedom Automation serving as project engineers, field service technicians and electricians, and field software engineering on upgrade project and as needed basis. Upgrade Project Contract: $100,000 Hourly Fee: $160.00 per hour Project performed under budget and completed within the District's timeline. Freedom designed and executed an advancement strategy for central operations of Ramona Municipal Water District's wastewater system, which included the installation and programming of Inductive Automation's Ignition for managing data transfer to and from remote sites. FAI replaced the existing Mission Systems monitoring system with Inductive Automation's Ignition, updating all hardware at remote sites with FAI control panels equipped with Allen Bradley MicroLogix PLCs and 450 MHz ethernet radios, for total of 5 lift stations. In addition to the system upgrade, FAI performed field service on an as required basis, provided 24 hour/7 days a week technical support. Provided training on many aspects of SCADA system. Assist in termination and communications troubleshooting. Responsible for maintaining and adding new monitoring and control sites to SCADA system. Assist District with all matters dealing with SCADA system.

Ramona Municipal Water District
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PLC Hardware: Allen Bradley MicroLogix Series HMI Software: Inductive Automation’s Ignition Radio Hardware: 450 MHz Ethernet Radio Staff: Dino Grillo, Harvey Quintero, Harvey A. Quintero Duration of Services Performed: 5 years Relationship: Current Active Customer Contact: Joe Lomeli, General Manager, Ramona Water District, (760)881-2554, [email protected] Freedom Automation serving as project engineers, field service technicians and electricians, and field software engineering on as needed basis. Ongoing Service Agreement Hourly Fee: $160.00 per hour Freedom Automation, Inc. has been working with the City of Calexico for over 20+ years at the Water Filtration Plant. FAI’s repsonsiblilities stem from electrical and PLC emergency service to new PLC/HMI programming and special projects on the plant’s SCADA system. Freedom also serves as a liason with City during special projects. In the previous five (5) years, FAI has designed, assembled and configured the main network rack with two (2) redundant Ignition v7.9.21 SCADA servers and all peripherals, CISCO switch and MySQL database server for the plant control system. Installed new ethernet inter-plant and remote site ethernet communications system using Ubiquity radios. Assisted City and Prime in major plant upgrades such as the new filter PLCs (6) and filter control PLC cabinet programming and testing and replaced operator interface terminals with panel computers at remote sites for full plant operation using Ignition client software. PLC Hardware: Allen Bradley CompactLogix, CompactLogix, PLC 5 Series HMI Software: Inductive Automation’s Ignition Radio Hardware: Ubiquity 5.8 GHz Ethernet Radios Staff: Dino Grillo, Harvey Quintero, Harvey A. Quintero, Julio Guerrero Duration of Services Performed: 20+ years Relationship: Current Active Customer Contact: Jose Saldana, Utilities Supervisor, City Of Calexico, (760)881-2554, [email protected] City of Calexico
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Freedom Automation serving as project engineers, field service technicians and electricians, and field software engineering on as needed basis. Ongoing Service Agreement Hourly Fee: $160.00 per hour Freedom Automation has been the District's integrator for over a decade and in that time have installed and upgraded two full SCADA systems. The first upgrade was made to the District sites upgade the PLC's from Allen Bradley SLC 5/05 to CompactLogix and updating central data concentrator PLC. Freedom then upgraded the HMI software from RS View32 to FactoryTalk View 7 and most recently upgraded central to FactoryTalk View 13. Freedom is currently working on the upgrade of the central concentrator from Allen Bradley SLC 5/05 to CompactLogix. Performed field service on an as required basis, provided 24 hour/7 days a week technical support. Provided training on many aspects of SCADA system. Assist in termination and communications troubleshooting. Responsible for maintaining and adding new monitoring and control sites to SCADA system for the last ten plus (10+) years. Assist District with all matters dealing with system. PLC Hardware: Allen Bradley SLC 5/05, ControlLogix, CompactLogix HMI Software: Inductive Automation’s Ignition Radio Hardware: Ubiquity 5.8 GHz, Verizon Cellular ethernet radios Staff: Dino Grillo, Harvey Quintero, Harvey A. Quintero, Julio Guerrero Duration of Services Performed: 10+ years Relationship: Current Active Customer Contact: Raul Gonzalez, Operations Manager, City Of Encinitas - San Dieguito Water District, (760)685-3206, [email protected] San Dieguito Water District, City of Encinitas
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Freedom Automation, Inc. (FAI) proposes to maintain the existing operational procedures with the City of Ontario over the following year and consecutive years. We believe efficiency is paramount and will continue to uphold this principle throughout our service delivery. To ensure clarity and effective communication, we request all work orders, whether pertaining to new projects or field troubleshooting, to be provided in written format, preferably via email or SMS text message. In the case of new projects, a comprehensive functional specification is mandatory. If a specification cannot be provided FAI will assist in generating the document together with City staff. Furthermore, the potential introduction of weekly progress reports will be open for discussion prior to initiating any new project. This service plan pertains to standard working hours and projects. Emergency services will be treated as immediate, invoking the minimum four-hour clause. After-hours requests will be treated as normal service calls. We understand that some days may extend beyond the typical eight-hour workday and request that city personnel be available to address any potential emergencies or provide necessary assistance. The proposed operational procedure is as follows: • The City will issue a written work order to FAI, barring emergencies. This order should detail the tasks, urgency, and a tentative time estimate, with an aim for an eight-hour workday, where feasible. For new projects, a specification document (hard copy or .PDF) is required. • FAI will review the scope of work and revise time estimates with the City's consent and input. For projects, FAI will assess the time required for completion after reviewing the specifications and consulting with contractors. • FAI will then schedule the tasks based on their urgency. Typically, work orders will be scheduled within twenty-four (24) hours to one week from the request date, contingent on severity. • Tasks such as project work, multiple site modifications, OIT programming, and others deemed necessary by Freedom, will be conducted at FAI headquarters. • Upon completion of the work, City personnel should review and approve the job. FAI will then provide a field service report and an invoice for the completed work no later than the next business day. Freedom will submit a service report for each site individually to assist the City in keeping track of costs on a per site basis.

Project Approach
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• In emergency scenarios, FAI will deploy an engineer in accordance with the severity of the situation. In most cases, an engineer can be onsite within two (2) hours or less. Emergency notifications can be communicated via SMS, email, or phone call. If the emergency can be addressed remotely without necessitating a site visit, standard service rates will apply. In certain instances, complex work may need to be initially conducted at FAI headquarters by senior engineers and then, following an onsite test, uploaded across multiple sites. In these situations, FAI will assign a junior software engineer to assist with site-to-site visits, thereby minimizing the City's expenditure on senior engineer time. This procedure will also be applicable for changes that originate at one site but affect multiple sites. FAI is prepared to meet or exceed the scheduling requirements for all components listed in "Exhibit A". The City of Ontario will need to prioritize the urgency of each project before FAI can establish an accurate schedule.

Project Approach
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a. Operations Data Management System (ODMS) and Water Quality Reports

DETAILED SCOPE OF WORK

DETAILED SCOPE OF WORK
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We have attached a copy of our current Engineering and Service rates. The key personnel will be software engineers, FAI will utilize, where applicable, Assistant Programmers and Jr. Field Engineers at the lower rate, also with the City’s approval. Software Engineer/Programmer $ 160.00 US DLL / Hour Jr. Field Engineer/Assistant Programmer $ 130.00 US DLL / Hour FEE
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653
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06/14/2023ONE STOP INSURANCE AGENCY, INC322 W KATELLA AVE SUITE 5AORANGE, CA 92867License #: 0C02868One Stop Insurance Agency Inc.949-574-9262(949)[email protected] 00001778-27717582FREEDOM AUTOMATION, INC.P O BOX 5416OCEANSIDE, CA 92052SENTINEL INSURANCE COMPANY11000 AY72SBAIB314806/20/202306/20/2024XXX 2,000,0001,000,00010,0001,000,0004,000,0004,000,000 HARTFORD ACCIDENT AND INDEMNITY COMPANY22357
BY72UECHA855707/24/202307/24/2024XXXXX 1,000,000
HARTFORD CASUALTY INSURANCE COMPANY19682
C72WECES986902/24/202302/24/2024Y X1,000,0001,000,0001,000,000 SENTINEL INSURANCE COMPANY11000
A72SBAIB314806/20/202306/20/2024BUSINESS PERS PROP BPP$40,000The City of Ontario, its officials, officers, employees, agents, and volunteers are listed as additional insured with regards to the General Liability and Automobile Liability insurance policies per the attached endorsements CA0070 00 09 06 and CG 20 10 10 01 WC and GL Waivers of Subrogation attached CITY OF ONTARIO303 EAST B STREETONTARIO, CA 91764
(MMM)Printed by MMM on 06/14/2023 at 10:06AM
ANY PROPRIETOR/PARTNER/EXECUTIVEOFFICER/MEMBER EXCLUDED?

INSRADDLSUBRLTRINSDWVD

DATE (MM/DD/YYYY)
PRODUCERCONTACTNAME:FAXPHONE(A/C, No):(A/C, No, Ext):E-MAILADDRESS:INSURER A :INSUREDINSURER B :INSURER C :INSURER D :INSURER E :INSURER F :

POLICY NUMBERPOLICY EFFPOLICY EXPTYPE OF INSURANCELIMITS(MM/DD/YYYY)(MM/DD/YYYY)

AUTOMOBILE LIABILITY

UMBRELLA LIABEXCESS LIABWORKERS COMPENSATIONAND EMPLOYERS' LIABILITY DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

AUTHORIZED REPRESENTATIVE
EACH OCCURRENCE$DAMAGE TO RENTEDCLAIMS-MADEOCCUR $PREMISES (Ea occurrence)MED EXP (Any one person)$PERSONAL & ADV INJURY$GEN'L AGGREGATE LIMIT APPLIES PER:GENERAL AGGREGATE$PRO-POLICYLOC PRODUCTS - COMP/OP AGG$JECTOTHER: $COMBINED SINGLE LIMIT$(Ea accident)ANY AUTOBODILY INJURY (Per person)$OWNEDSCHEDULEDBODILY INJURY (Per accident)$AUTOS ONLYAUTOSHIREDNON-OWNEDPROPERTY DAMAGE$AUTOS ONLYAUTOS ONLY(Per accident)$OCCUREACH OCCURRENCE$CLAIMS-MADEAGGREGATE$DEDRETENTION$ $PEROTH-STATUTEERE.L. EACH ACCIDENT$E.L. DISEASE - EA EMPLOYEE$If yes, describe underE.L. DISEASE - POLICY LIMIT$DESCRIPTION OF OPERATIONS below INSURER(S) AFFORDING COVERAGENAIC #

COMMERCIAL GENERAL LIABILITY
Y / NN / A(Mandatory in NH)
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS.

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIODINDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

COVERAGESCERTIFICATE NUMBER:REVISION NUMBER:

CERTIFICATE HOLDERCANCELLATION
© 1988-2015 ACORD CORPORATION. All rights reserved.The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03)

CERTIFICATE OF LIABILITY INSURANCE
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Information required to complete this Schedule, if not shown above, will be shown in the Declarations.

POLICY NUMBER: 72UECKC7685 COMMERCIAL AUTO CA 20 48 10 13 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

DESIGNATED INSURED FOR COVERED AUTOS LIABILITY COVERAGE This endorsement modifies insurance provided under the following:

AUTO DEALERS COVERAGE FORM BUSINESS AUTO COVERAGE FORM MOTOR CARRIER COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by this endorsement.

This endorsement identifies person(s) or organization(s) who are "insureds" for Covered Autos Liability Coverage under the Who Is An Insured provision of the Coverage Form. This endorsement does not alter coverage provided in the Coverage Form.

This endorsement changes the policy effective on the inception date of the policy unless another date is indicated below.

SCHEDULE

Each person or organization shown in the Schedule is an "insured" for Covered Autos Liability Coverage, but only to the extent that person or organization qualifies as an "insured" under the Who Is An Insured provision contained in Paragraph A.1. of Section II – Covered Autos Liability Coverage in the Business Auto and Motor Carrier Coverage Forms and Paragraph D.2. of Section I – Covered Autos Coverages of the Auto Dealers Coverage Form.

CA 20 48 10 13 © Insurance Services Office, Inc., 2011 Page 1 of 1 Named Insured: FREEDOM AUTOMATION, INC. Endorsement Effective Date: 06/13/2023 Name Of Person(s) Or Organization(s): CITY OF ONTARIO 1425 SOUTH BON VIEW AVE. ONTARIO, CA 91761 655
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This endorsement modifies insurance provided under the following. BUSINESS AUTO COVERAGE FORM With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement. This endorsement is effective on the inception date of the policy. SECTION II - LIABILITY COVERAGE 1. WHO IS AN INSURED is amended to include as an "insured" the person(s) or organization(s) named in the Schedule below, but only with respect to their legal liability for acts or omissions of a person for whom Liability Coverage is afforded under this policy. You are authorized to act for the additional insured named in the Schedule in all matters pertaining to this insurance. SCHEDULE All other terms and conditions of this Policy remain unchanged.

Additional Insureds: The City of Ontario, its officials, officers, employees, agents, and volunteers Policy Number: 72UECHA8557 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. ADDITIONAL INSURED ENDORSEMENT 00 CA0070 00 09 06 Page 1 of 1
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Rev 5.14 Page 1 of 2
POLICY NUMBER: 72SBAIB3148 INSURED: FREEDOM AUTOMATION, INC.

BUSINESS LIABILITY COVERAGE SS 00 08 04 05

ADDITIONAL COVERAGES BY WRITTEN CONTRACT, AGREEMENT OR PERMIT This is a summary of the coverage provided under the following form (complete form available):

BUSINESS LIABILITY COVERAGE FORM SS 00 08 04 05
Additional Insured When Required by Written Contract, Written Agreement or Permit WHO IS AN INSURED under Section C. is amended to include as an additional insured, but only with respect to liability for "bodily injury", "property damage" or "personal and advertising injury" caused, in whole or in part, by, acts or omissions or the acts or omissions of those acting on y o u r behalf:
(a) In the performance of your ongoing operations; (b) In connection with your premises owned by or rented to you; or (c) In connection with "your work11 and included within the "products completed operations hazard", but only if (i) The written contract or written agreement requires you to provide such coverage to such additional insured; and (ii) This Coverage Part provides coverage for "bodily injury" or "property damage" included within the "products completed operations hazard".

The person(s) or organization(s) are additional insureds when you have agreed, in a written contract, written agreement or because of a permit issued by a state or political subdivision, that such person or organization be added as an additional insured on your policy, provided the injury or damage occurs subsequent to the execution of the contract or agreement, or the issuance of the permit.

A person or organization is an additional insured under the provision only for that period of time required by the contract, agreement or permit.

With respect to the insurance afforded to the additional insured, this insurance does not apply to: "Bodily injury", "property damage" or "personal and advertising injury" arising out of the rendering of, or failure to render, any professional architectural, engineering or surveying services, including:
(a) The preparing, approving, or failure to prepare or approve, maps, shop drawings, opinions, reports, surveys, field orders, change orders, designs or drawings and specification: or (b) Supervisory, inspection, architectural or engineering activities.

The limits of insurance that apply to additional insureds are described in Section D. Limits of Insurance.

How this insurance applies when other insurance is available to an additional insured is described in the Other Insurance Condition in Section E. Liability And Medical Expenses General Conditions.

No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations.

Other Insurance If other valid and collectible insurance is available for a loss we cover under this Coverage Part, our obligations are limited as follows:

When you add others As an Additional Insured to This Insurance: That is other insurance available to an additional insured. However, the following provisions apply to other insurance available to any person or organization who is an additional insured under this Coverage Part:
(a) Primary Insurance When Required By Contract: This insurance is primary if you have agreed in a written contract, written agreement or permit that this insurance be primary. If other insurance is also primary, we will share with all that other insurance by the method described in c. below. (b) Primary And Non-Contributory To Other Insurance When Required By Contract: If you have agreed in a written contract, written agreement or permit that this insurance is primary and non-contributory with the additional insured's own insurance, this insurance is primary and we will not seek contribution from that other insurance. 657
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WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 00 03 13

(Ed. 4-84)

WAIVER OF OUR RIGHT TO RECOVER FROM OTHERS ENDORSEMENT
We have the right to recover our payments from anyone liable for an injury covered by this policy. We will not enforce our right against the person or organization named in the Schedule. (This agreement applies only to the extent that you perform work under a written contract that requires you to obtain this agreement from us.) This agreement shall not operate directly or indirectly to benefit anyone not named in the Schedule.

Schedule

The endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated.

(The information below required only when this endorsement is issued subsequent to preparation of the policy.)

Endorsement 06/13/2023 Effective Policy No. 72WECES9869 Endorsement No. 001 Insured FREEDOM AUTOMATION, INC. Premium
Insurance Company PROPERTY & CASUALTY INS CO. OF HARTFORD

Countersigned by

WC 00 03 13
(Ed. 4-84)

1983 National Council on Compensation Insurance.

The City of Ontario, its officials, officers, employees, agents, and volunteers 658
SCADA Support Services Freedom Automation, Inc. City Of Ontario 37

659
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660
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Over the past five (5) years, Freedom Automation, Inc. has had no claims filed by or against our firm related to the provision of Services.

LITIGATION
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Freedom Automation stands as a pillar of commitment and support within our local community. We proudly contribute to the future of our youth by making donations to local high schools, fostering education and growth. Our sense of community involvement extends beyond monetary support; we actively volunteer at special events, ensuring we're giving back in ways that strengthen community ties. True to our belief in uplifting the local economy, we prioritize purchasing from community-based suppliers and make a concerted effort to employ local talent for on-site needs. Our engagement with the community is a testament to our dedication to fostering growth, unity, and prosperity within our locality. Freedom Automation has vast experience in utilizing the hardware and software employed at the City Of Ontario. The following is a quick summary of the customers and examples of the hardware and software utilized in their projects, these are examples of projects/services completed by Freedom Automation with the project team stated above. Each have come in under budget and on time: City of Ontario; FAI designed and engineered the entire SCADA system, utilizing Allen Bradley SLC, Control Logix, Compact Logix and the latest 5069 line of PLC platforms. FAI also engineered their original Cellnet Spread Spectrum radio network. FAI has since begun replacing the entire radio communications system with Ubiquiti Radios and Mikrotik Ethernet switches and upgrading legacy sites to new PLC platform. Rainbow Municipal Water District; FAI designed and engineered the entire SCADA system, utilizing Micro Logix, Control Logix, and Compact Logix PLC platforms. FAI also engineered their original Cellnet Spread Spectrum radio network. FAI has for the last several years been assisting the RMWD staff in replacing the Cellnet radio network with an Ubiquiti, Mikrotik Layer III Ethernet radio network. City of Calexico; The staff at FAI engineered the Water Plant SCADA system while working for Rockwell Electric. In 2001, FAI took over the engineering services for the Calexico Water Plant. FAI over the years has upgraded, modified, and maintained the plant control system, in addtion to the remote reservoirs and pump stations. The City of Calexico utilizes Allen Bradley Control Logix PLC’s and Ubiquiti ethernet radios for their SCADA system architecture. Edwards Air Force Base (ONYX Energy); The staff at FAI engineered and is currently installing and integrating a Ubiquiti radio system to gather solar production data from solar panels of compound homes. Using directional and omni directional radios, configured a system to collect data from two (2) different neighborhoods, two hundred total radios, to a central data repository. The base utilizes Ubiquiti ethernet radios and MOXA switches. Santa Fe Irrigation District / R.E. Badger Filtration Plant; The staff at FAI engineered, installed and integrated the plant's current control system from DCS to Allen Bradley platform and have maintained a working relationship with the District for over 20 years actively performing service and upgrades. The district utilizes Allen Bradley Control and Compact Logix PLC's as well as SLC 5/05 series with Rockwell's FactoryTalk View HMI system.

Other Information / Knowledge of Equipment
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At Freedom Automation, Inc., we deeply value our professional partnership with the City of Ontario. This relationship stands as a testament to our unwavering commitment to availability and responsiveness, which was further emphasized during the challenges of the pandemic. We are eager to continue fostering this relationship, and we are dedicated to supporting the City's growth and prosperity well into the future. We have no conflict of interest in connection with providing the services mentioned in this proposal.

Other Information / Knowledge of Equipment
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665
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The undersigned hereby submits its proposal and by doing so, agrees to furnish services to the City in accordance with the Request For Proposal (RFP), and to be bound by the terms and conditions of the RFP. ________________________________ ________________________________ Dino Grillo, President/CEO Harvey Quintero, Vice President/COO

CERTIFICATION OF PROPOSAL
666
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667
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Following is a list of customers FAI has performed similar service for: Company Name Address Function Phone Number Contact Person R.E. Badger Water Filtration Plant 18535 Alison Canyon Rancho Santa Fe, CA 92067 SCADA Service, Project Engineering
(858) 756-2569 Elijah Standing Warrior [email protected] Ramona Municipal Water City 105 Earlham Street Ramona, California 92065 Project Engineering, SCADA Service
(760) 789-1330 Joe Lomeli [email protected]
Rainbow Municipal Water District 3707 Old Highway 395, Fallbrook, CA 92028 Project Engineering, SCADA service
(760) 728-1128 Mark Cline [email protected] San Dieguito Municipal Water City 160 Calle Magdalena, Encinitas, CA 92024 SCADA Service, Project Engineering
(760) 685-3206 Raul Gonzalez [email protected] Vallecitos Water City 201 Vallecitos De Oro, San Marcos, CA 92024 Project Engineering, SCADA Service
(760) 744-0460 Ed Pedrazzi [email protected]
City of Calexico / Water Filtration Plan 545 Pierce Avenue, Calexico, CA 92231 SCADA Service, Project Engineering
(760)455-7454 Jose Alvarado [email protected]

References
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Dino Grillo SCADA Specialist As President/CEO of FAI, Mr. Grillo is responsible for all sales and estimating, as well as, overseeing of all engineering development, factory acceptance testing, and startup. EDUCATION University of California Irvine 1995 to 1998 RELEVANT EXPERIENCE SCADA System, Vallecitos Water District. FAI served as project engineer and field service technicians and electricians, and field software engineering. The staff at FAI were the original engineers that created the first Allen Bradley based SCADA system for the district while employed at Rockwell Electric. FAI for the past 22 years has been in charge of adding all new sites into the districts existing SCADA system. As well as any modifications to existing sites or removal of abandoned/obsolete sites. • Designed and implemented an upgrade plan for central operations, including installing and programming of new ControlLogix redundant PLCs to handle incoming and outgoing data to remote sites. • Upgraded HMI from Wonderware Intouch 7.0 to Wonderware 2012. Converted all screens to new software version, tested alarms, configured server and clients, implemented new SQL Wonderware Enterprise Historian database. • Implemented new reporting module to report from the Historian. Implemented new Win911 Alarm Notification system. • Installed and programmed new Ubiquity Radios into the existing SCADA system. • Designed and programmed the New San Elijo Pump Station Compactlogix PLC and Allen Bradley Panelview operator interface terminal. Completed communications system to central HMI. Added new database and screens to the new Wonderware Intouch 2012 system, reporting system, and Alarm notification system. • Designed and programmed new Twin Oaks Reservoir Compactlogix PLC system. Created interfacing between the districts existing system and PSI Chlorine Generation System. SCADA System, City of Ontario. FAI designed and implemented an upgrade plan for central operations, including installing and programming of new ControlLogix redundant PLCs to handle incoming and outgoing data to remote sites. Upgraded HMI from Rockwell Automation’s RS View32 to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients, implemented new SQL server and assisted with deployment of VPN for SCADA access, converted alarm notification system to Ignition’s built-in system.

RESUMES
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SCADA System, Rainbow Municipal Water District. FAI implemented an upgrade design and plan for central operations, including installation and conversion of HMI from Rockwell Automation’s RS View32 to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients (local PC, laptops, and remote tablets) implemented new SQL server and assisted with deployment of VPN for SCADA access, converted alarm notification system to Ignition’s built-in system. Water Filtration Plant, City of Calexico. FAI implemented an upgrade design and plan for central operations, including installation and conversion of HMI from Wonderware Intouch to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients (local PC, laptops, and remote tablets) implemented new SQL server and assisted with deployment of VPN for SCADA access, converted alarm notification system to Ignition’s built-in system. 670
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Harvey Quintero SCADA Specialist Mr. Quintero is the Vice President of FAI, working as Chief Operating Officer (COO)/Chief Financial Officer (CFO). As CFO responsible for all corporation’s finances. As COO, responsible for all sales and estimating, as well as, managing all software engineering development, factory acceptance testing, programming, and field startup. EDUCATION Inductive University Ignition HMI Training, 2018 Arizona Western College, Yuma, AZ Computer Science, 1992 American Computer Institute, El Centro, CA Business Computer Applications/ Programming, 1989 RELEVANT EXPERIENCE SCADA System, City of Ontario. FAI designed and implemented an upgrade plan for central operations, including installing and programming of new ControlLogix redundant PLCs to handle incoming and outgoing data to remote sites. Upgraded HMI from Rockwell Automation’s RS View32 to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients, implemented new SQL server and assisted with deployment of VPN for SCADA access, converted alarm notification system to Ignition’s built-in system. SCADA System, Vallecitos Water District. FAI served as project engineer and field service technicians and electricians, and field software engineering. The staff at FAI were the original engineers that created the first Allen Bradley based SCADA system for the district while employed at Rockwell Electric. FAI for the past 22 years has overseen adding all new sites into the districts existing SCADA system. As well as any modifications to existing sites or removal of abandoned/obsolete sites. • Upgraded HMI from Wonderware Intouch 7.0 to Wonderware 2012. Converted all screens to new software version, tested alarms, configured server and clients, implemented new SQL Wonderware Enterprise Historian database, implemented new reporting module to report from the Historian. Implemented new Win911 Alarm Notification system. • Installed and programmed new Ubiquity Radios into the existing SCADA system.

RESUMES
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SCADA System, Rainbow Municipal Water District. FAI implemented an upgrade design and plan for central operations, including installation and conversion of HMI from Rockwell Automation’s RS View32 to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients (local PC, laptops, and remote tablets), implemented new SQL server and assisted with deployment of VPN for SCADA access, converted alarm notification system to Igntion’s built-in system. Water Filtration Plant, City of Calexico. FAI implemented an upgrade design and plan for central operations, including installation and conversion of HMI from Wonderware Intouch to Inductive Automation’s Ignition. Converted all screens to new platform, tested alarms, converted reports, configured server and clients (local PC, laptops, and remote tablets), implemented new SQL server and assisted with deployment of VPN for SCADA access, converted alarm notification system to Ignition’s built-in system. Upgraded SCADA system with network rack including, new servers, CISCO switch and all peripherals. 672
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Nick Moceri III Communications System Design Engineer Mr. Moceri has more than 17 years experience in Communication System Design, Engineering and Construction for both Land based and Undersea systems worldwide. Nick also has considerable experience in the following areas: SCADA systems integration, Commercial Security system and CCTV monitoring systems, MAN, WAN & LAN architecture, RF point to multipoint systems, commercial and municipality rights of way, as well as DoD and DHS design requirements for Military Base and Airport communications security and National Broadcast Systems for Digital Signage applications. Program and Project staff management and contract negotiations for large municipal and commercial projects including PLA’s with Unions, various business development disciplines including renewable energy sector SCADA and optimization. Mr. Moceri is currently both the President of Atlas Integrated Systems and a member of Freedom Automation, Inc. EDUCATION Piney Point Maritime: BS Nautical Sciences , U.S.M.M. Officer Third Mate Unlimited. California Contractors Lic. #777306 RELEVANT EXPERIENCE Dutch Energy. Designed and installed communications network between two distinct turbine rows and a central office 1 mile away. Communications network included 5.8 GHz radios, Fiber optic communications and 900 MHz spread Spectrum radios. HAWI Renewable Development (HRD). Upgraded and repaired the Fiber Optic Communications Data Link between the Central SCADA System and the 16 turbines. Design and Build of Next Era Energy’s SEGS Solar plants including new aerial, underground and building entrances, with over 6 miles of fiber optic cabling installed. Mr. Moceri has designed built and retrofitted Communications Systems for multiple Military, Municipal and commercial entities Nationally and abroad. Atlas has been the Maintenance contractor and a consulting group for the City of San Diego Metropolitan Wastewater, Transportation and Engineering Departments for over ten years. Atlas is currently involved in feasibility design, and fiber optic cable construction cost estimates for Improved IT Infrastructure for the DHS and Port Of San Diego. Consulted for San Diego Security Network Consortium (SDSC) Establish IT infrastructure in Port areas that meets IT needs of consortium members for decades to come. 673
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Harvey Alexander Quintero SCADA Specialist, Jr. Mr. Quintero is a multi-facet employee at FAI, working as a Software Engineer, Apprentice Electrician and Fiber Optic Technician. As software engineer, responsible for HMI software engineering development as assigned, assist in factory acceptance testing, and field startups. As an apprentice, assist in formulating plan of installation of control panels at remote sites. construction and wiring of control panels and terminating and splicing single and multi-mode fiber optics. EDUCATION Inductive University Ignition HMI Training, 2023 Palomar College San Marcos, CA Computer Science/Graphic Design, 2016 Orange Glen High School Escondido, CA General Education, 3.0 GPA, 2012 RELEVANT EXPERIENCE Freedom Automation, Inc. Present Oceanside, CA, Started 2011 Technical Assistant – Jr. Software Engineer – During the first years of employment served as assistant to engineering and front office staff, doing jobs as required, ranging from creating SCADA database points lists to answering telephones and bookkeeping duties, installing network cabling, and setting up servers and PC’s. As Software Engineer, developed human machine interface displays with Rockwell Software’s RS View, Inductive Automation’s Ignition and Automation Direct's C-MORE programming for animation, assist in setting up customer computer networks, created control, setpoint and trend screens. Have had extensive training on Inductive Automation’s Ignition and currently certified. Responsible for onsite human machine interface programming during commissioning of recent integrated sites. Assist in the installation and wiring of control panels. Recently, he has undergone training with our fiber department, acquiring the expertise to handle, test, splice, and terminate both single and multi-mode fiber optics. 674
SCADA Support Services
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Automation, Inc.

City Of Ontario 53

STANDARD HOURLY RATES FOR ENGINEERING SERVICES
Business Consulting & Systems Design:

Senior Consultant $ 185/Hour
Consultant $ 165/Hour
Automation Consulting & Systems Design:

Senior Consultant $ 185/Hour
Consultant $ 165/Hour
Electrical Services:

Journeyman Electrician $ 145/Hour
Apprentice $ 95/Hour
Panel Construction/Assistance $ 85/Hour
IT Support, Programming and Engineering:

Design Services $ 175/Hour
Programmer/Software Engineer $ 160/Hour
Engineering Support $ 150/Hour
Other:

IT Technician $ 95/Hour
Jr. Field Eng/Asst. Programmer $ 130/Hour
Drive Time $ 55/Hour
Hourly charges will be billed weekly, portal to portal at the appropriate engineering rate.

Other reimbursable expenses will be billed as incurred.

Two (2) hour minimum charge applies to all service calls.

Time over 8 hours a day on-site is billed at 1.5 times regular hourly rate.

Time over 12 hours a day on-site is billed at 2.0 times regular hourly rate.

Sixth and seventh consecutive days on-site are billed at 1.5 times regular hourly rate for the first eight hours and 2.0 times regular hourly rate after the first eight hours.

Also note that FAI provides services on a Fixed Cost basis when the scope of work is well defined, and engineering estimates can be developed. Fixed Cost projects are often provided at the equivalent of a reduced hourly rate.

Prices effective through December 30, 2023.

Thank you for your proposal request. We feel that our commitment to quality and wide variety of services make us the fit as your systems integrator and look forward to a long- lasting relationship with the City of Ontario.

FREEDOM AUTOMATION, INC. STANDARD SERVICE RATES
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August 10, 2023
l Page 1

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46700.00100\40935195.1

BB&K (2023) Exhibit “B”-1 PROFESSIONAL SERVICES AGREEMENT

EXHIBIT "B"

SCHEDULE OF SERVICES

ON AN AS NEED BASIS

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46700.00100\40935195.1

BB&K (2023) Exhibit “C”-1 PROFESSIONAL SERVICES AGREEMENT

EXHIBIT "C"

COMPENSATION

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Department: Public Works
Prepared By: Gil H Mars
Staff Member Presenting:

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

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

AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH CALTEK TECHNOLOGIES, INC. FOR THE 208 EMPORIA 2ND FLOOR OFFICE RENOVATION

PROJECT

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council take the following actions:

A
.

Authorize the City Manager or his designee to execute Amendment No. 3 to the Professional Services Agreement with CalTek Technologies, of Ontario, California, for the 208 Emporia 2nd Floor Oﬃce Renovation Project in the amount of $13,972 for a total not-to-exceed contract amount of $163,972; and
B
.

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

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

The Fiscal Year 2023-24 Adopted Budget includes appropriations in the General Fund for the 208 Emporia 2nd Floor Oﬃce Renovation Project. If approved, Amendment No. 3 to the Professional Services Agreement with CalTek Technologies will increase the contract value by $13,972 for a total not-to-exceed contract amount of $163,972.

BACKGROUND & ANALYSIS:

There is an increased demand for Housing services as the City has grown, requiring the need to increase the Department’s Staﬀ support. To eﬀectively house and support the increased personnel, 22 cubicle workstations are being added. CalTek Technologies will install and integrate data cables to the new workstations and connect them to all network ports.

Utilizing CalTek Technologies services allows for standardization of cable installation citywide. 679
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BB&K 2020

1. Parties and Date.

This Amendment No. 3 to the Agreement (as defined herein) is made and entered as of ____________, by and between the City of Ontario (“City”) and CalTek T echnologies a CORPORATION, “Consultant”. City and Consultant are sometimes individually referred to as “Party” and collectively as “Parties.”

2. Recitals.

2.1 Agreement. T he City and Consultant have entered into an agreement entitled “Professional Services Agreement” dated March 2, 2022 (“Agreement”).

2.2 Amendment Purpose . T he City and Consultant desire to amend the Agreement to provide for additional compensation of THIRTEEN THOUSAND NINE HUNDRED SEVENTY - TWO DOLLARS ($13,972 ). The Parties have heretofore entered into that Amendme nt No. 1 dated April 4, 2023 and Amendment No. 2 dated July 18, 2023.

2.3 Amendment Authority . This Amendment No. 3 is authorized pursuant to Section

3.2.1 of the Agreement.

3. Terms.

3.1 Amendment. Section 3.2.1 Compensation of the Agreement is hereby amended in its entirety to read as follows:
“Consultant shall receive comp ensation, including authorized reimbursements, for all Services render ed under this Agreement at the rates set forth in Exhibit “A” attached hereto and incorporated herein by referenc e. The total compensation shall not exceed ONE HUNDRED SIXTY-THREE THOUSAND NINE HUNDRED SEVENTY-TWO DOLLARS ($163,972) without written approval of the City Council or City Manager, as applicable. Extra work may be authorized, as described below, and if authorized, will be comp ensated at the rates and manner set f orth in this agreement.”
AMENDMENT NO. 3 TO THE PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF ONTARIO AND

CALTEK TECHNOLOGIES INC
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BB&K 2020

3.2 Continuing Effect of Agreement . Except as amended by this Amendment No. 3, all other provisions of the Agreement rema in in full force and effect and shall govern the actions of the parties under this Amendment No. 3. From and after the date of this Amendment No. 3, whenever the term “Agreement” appears in the Agreement, it shall mean th e Agreement as amended by this Amendment No. 3.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this Amendment No. 3.

3.4 Severability. If any portion of this Amendment No. 3 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.5 Integration. This Am endment represents the entirety of the Parties’ understanding relating to the subject of this Amendment, including written or verbal communications between the Parties, which shall have no relevance unless expressly incorporate d herein. This is an integra ted amendment.

[SIGNATURES ON FOLLOWING PAGE]

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BB&K 2020

SIGNATURE PAGE FOR AMENDMENT NO. 3 TO PROFESSIOAL SERVICES

AGREEMENT BETWEEN THE CITY OF ONTARIO
AND CALTEK TECHNOLOGIES, INC.

IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 3 as of the day and year first above written.

CITY OF ONTARIO CALTEK TECHNOLOGIES, INC.

By:

Its:

Printed Name:

By:

Its:

Printed Name:

[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]

Approved By:

Tito Haes
Executive Director of Public Works
Approved as to Form:

_____________________________________
Best Best & Krieger LLP
City Attorney

Attested By:

City Clerk

682
Department: Planning
Prepared By: Robert Morales
Department: Planning
Prepared By: Thomas Grahn
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Reviewed By: Kimberly Ruddins, Rudy
Zeledon, Scott Murphy
Approved By:

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

A ZONE CHANGE REQUEST (FILE NO. PZC23-003) FOR VARIOUS PROPERTIES

THROUGHOUT THE CITY

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council consider and adopt a
n Ordinance approving a Zone
Change application (File No. PZC23-003) to rezone: [1] 3.8 acres of land from HDR-45 (High-Density Residential, 25.1-45 dus/acre) to MU-1 (Downtown Mixed Use) located north of D Street, south of E Street, and to the west of Laurel Street; [2] 9.8 acres of land from BP (Business Park) to MU-6 (East Holt Mixed Use) located on the north side of Holt Boulevard, 800 feet east of Imperial Street; and [3] 5.75 acres of land from OL (Low-Intensity Oﬃce) to MU-1 (Downtown Mixed Use) located on the southwest corner of Sultana Avenue and D Street.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

There are no direct ﬁscal impacts anticipated with the adoption of the Zone Change application. Any potential long-term fiscal impact and anticipated expenditures to the City would be offset by development impact fees and property tax revenues from the future development.

BACKGROUND & ANALYSIS:

On November 7, 2023, the City Council introduced and waived further reading of an ordinance approving the Zone Change. On August 16, 2022, the City Council adopted the Ontario Plan 2050 Update (TOP 2050) to align the City's Policy Plan with state housing mandates and new legislation addressing various community aspects. This initiative prompted a zoning consistency project to ensure the City's Zoning Map corresponds to the TOP 2050 Policy Plan's goals, as mandated by Government Code Section 65860.

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On March 28, 2023, the Planning Commission conducted a public hearing to discuss proposed Zone Changes (File No. PZC22-001) in line with the adopted TOP 2050 Update Land Use Plan. These changes supported mixed-use development, fulﬁlling Regional Housing Needs Assessment (RHNA) housing requirements, and addressed underutilized properties along the Holt Boulevard Bus Rapid Transit (BRT) route. During the hearing, residents who live near the Project sites A1 (south of 5th Street, west of Mountain Avenue) and C2 (north of Holt Boulevard, west of San Antonio Avenue, and east of Boulder Avenue) expressed concerns about increased traﬃc, potential parking issues, and privacy loss due to higher-density residential development near single-family homes. Despite these concerns, the Planning Commission unanimously recommended City Council approval of the zone changes (6-0) while recommending that the City Council consider retaining the existing zoning for Areas A1 and C2, as a result of public feedback.

On April 18, 2023, the City Council held a public hearing to deliberate on proposed zone changes aimed at updating the oﬃcial Zoning Map. Following deliberations, the City Council unanimously approved all zone changes (6-0), with exception to Areas A1 and C2, which sought to transition Area A1 from LDR-5 (Low-Density Residential) zoning district to MDR-18 (Medium Density Residential) zoning district and Area C2 from MDR-25 (Medium-High Density Residential) zoning district to HDR- 45 (High-Density Residential) zoning district. The City Council instructed Staﬀ to revert the General Plan designations in these areas to their previous land use designations.

Zoning Map Amendment
— The City of Ontario has initiated requests to amend its Oﬃcial Zoning Map, involving changes to zoning districts for multiple parcels of land within the City. The proposed modifications include:

Rezone 3.8 acres of land from HDR-45 (High-Density Residential 25.1-45 dus/acre) to MU-1 (Downtown Mixed Use) located north of D Street, south of E Street, and to the west of Laurel Street. (See Attachment 1, Exhibit D-1)
Rezone 9.8 acres of land from BP (Business Park) to MU-6 (East Holt Mixed Use) located on the north side of Holt Boulevard, 800 feet east of Imperial Street. (See Attachment 1, Exhibit D-2)
Rezone 5.75 acres of land from OL (Low-Intensity Oﬃce) to MU-1 (Downtown Mixed Use) located on the southwest corner of Sultana Avenue and D Street. (See Attachment 1, Exhibit D-3)
Analysis
:

The City's proposal involves revising the land use designations and rezoning of additional properties to mixed-use within speciﬁc areas. These areas encompass properties located in the Downtown area to the north of D Street, south of E Street, and to the west of Laurel Street, extending to include the southwest corner of D Street and Campus Avenue. The City proposes to incorporate Civic Land Uses within the downtown area to foster a more dynamic and adaptable environment, in support of the revitalization of the downtown district.

Rezoning of the properties includes properties located on the north side of Holt Boulevard approximately, 800 feet east of Imperial Street to Mixed Use designation to support opportunities for residential and commercial developments along the East Holt Corridor Bus Rapid Transit (BRT) route.

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In compliance with Senate Bill 330 (known as the Housing Crisis Act of 2019), rezoning of properties to higher residential densities is required to comply with the provision of ‘No Net Loss of Zoning Capacity’, mandating that the City maintain its existing residential capacity. Under SB 330, local governments are prohibited from reducing the zoning capacity for residential development unless they provide equivalent zoning elsewhere within the jurisdiction. This requirement ensures that the overall housing capacity remains consistent.

With the proposed land use changes, the total assumed buildout for the City would result in an additional 58 units, to the City’s total housing capacity of 129,562 units (TOP 2050 Table LU-03). As there is an increase in overall unit capacity, the City remains fully compliant with the provisions of SB 330.

On October 24, 2023, the Planning Commission conducted a public hearing to review the proposed Zone Change application. The Planning Commission concluded the hearing on that date and unanimously voted (7-0) to recommend the approval of the Zone Change to the City Council.

Community Meetings:

Over the past year, the City has organized several neighborhood meetings, one of which took place on November 21, 2022, at City Hall. During this meeting, Staﬀ presented an overview of File No. PDEV22-013, a Development Plan for a 27,835-square-foot, 2-story ﬁre station.

This Project site is the same site where the proposed Zone Change aims to rezone 5.75 acres of land from OL (Low-Intensity Oﬃce) to MU-1 (Downtown Mixed Use) at the southwest corner of D Street and Sultana Avenue. Three community members attended the meeting to learn more about the project, and Staff addressed their questions. Notably, there was no opposition to the Project.

On February 22, 2023, the Planning Department conducted a neighborhood meeting regarding a Project involving Zone Changes (File No. PZC22-001) in diﬀerent areas of the City. The meeting included the participation of 50 community members and City Staﬀ received 6 email inquiries.

Participants included residents from 5
th
Street and Princeton Street (refer to Attachment 1, Exhibit A-2) West Holt (refer to Attachment 1, Exhibit A-3) who shared their concerns during the meeting.

Comments included fears of high-rise multiple-family units negatively impacting existing neighborhoods, increased on-street parking issues, elevated traﬃc congestion, and potential delinquency and loitering problems. In response, the Planning Department clariﬁed that the Project aimed to align with City policies, future developments would adhere to zoning standards, parking concerns would be addressed, traﬃc impacts would be evaluated, and measures to address security and loitering would be taken in coordination with the Police Department and Community Improvement.

On October 5, 2023, the Planning Department conducted an in-person Open House at the Ontario Senior Center, presenting an overview of File Nos. PGPA23-001 and PZC23-003, General Plan Amendment and Zone change for an approximately 10-acre parcel situated near Imperial Avenue and Holt Avenue. Five community members attended the meeting, and they expressed concerns regarding potential construction impacts, including noise, vibration, and traﬃc along Holt Boulevard. Staﬀ clariﬁed that the meeting's primary objective was to inform residents and property owners about the zoning and General Plan change and that no development proposal is currently in place.

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Housing Element Compliance:

As noted previously, local jurisdictions are required to maintain their Housing Element Sites Inventory in compliance with Government Code Section 65583. This inventory must consistently accommodate the jurisdiction's regional housing needs throughout the planning period.

Local jurisdictions have the ﬂexibility to decrease residential density for speciﬁc parcels if they identify suﬃcient alternative sites to ensure that there is no overall reduction in City's Regional Housing Needs Assessment (RHNA) obligations. The removal of the subject property from the inventory will not aﬀect the RHNA capacity, as the City maintains an adequate number of sites to meet the RHNA requirement.

Environmental:

The environmental impacts of this Project were reviewed in conjunction with an Addendum to The Ontario Plan 2050 Supplemental Environmental Impact Report (State Clearinghouse No. 2021070364), certiﬁed by the Ontario City Council on August 16, 2022, in conjunction with File No. PGPA20-002. This Application introduces no new signiﬁcant environmental impacts. All previously adopted mitigation measures are a condition of Project approval and are incorporated herein by this reference.
686
ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PZC-23-003, A ZONE CHANGE REQUEST TO AMEND THE OFFICIAL ZONING MAP: [1] REZONING 3.8 ACRES OF LAND FROM HDR-45 (HIGH-DENSITY RESIDENTIAL) TO MU-1 (DOWNTOWN MIXED USE), [2] REZONING OF 9.8 ACRES OF LAND FROM BP (BUSINESS PARK) TO MU-6 (EAST HOLT MIXED USE), AND [3] REZONING 5.75 ACRES OF LAND FROM OL (LOW-INTENSITY OFFICE) TO MU-1 (DOWNTOWN MIXED USE), AND MAKING FINDINGS IN SUPPORT THEREOF - APNS: 0110-072-25, 0110-081-06,
0110-081-07, 1048-344-03, 1048-353-04, 1048-353-05, 1048-353-09, 1048-353-13, 1048-353-14, 1048-541-15, 1048-576-01, AND 1048-576-02.

WHEREAS, City of Ontario ("Applicant") has filed an Application for the approval of a Zone Change application, File No. PZC-23-003, as described in the title of this Ordinance (hereinafter referred to as "Application" or "Project"); and WHEREAS, The Zoning Map amendment includes the following:

1. Rezone 3.8 acres of land from HDR-45 (High-Density Residential) to MU-1 (Downtown Mixed Use). Located on properties in the Downtown area to the north of D Street, south of E Street, and to the west of Laurel Street.

2. Rezone 9.8 acres of land from BP (Business Park) to MU-6 (East Holt Mixed Use).

Located on the north side of Holt Boulevard 800 feet east of Imperial Street.

3. Rezone 5.75 acres of land from OL (Low-Intensity Office) to MU-1 (Downtown Mixed Use). Located on the southwest corner of Sultana Avenue and D Street.

WHEREAS, on October 5, 2023, the Planning Department held an in-person community meeting attended by 5 community members; and
WHEREAS, on October 24, 2023, the Planning Commission conducted a public hearing and approved Resolution No. PC23-084, recommending the City Council approve a Resolution adopting an Addendum to the Ontario Plan 2050 Supplemental Environmental Impact Report (State Clearinghouse No. 2021070364), certified by the City Council on August 16, 2022, in conjunction with File No. PGPA20-002. The Addendum finds that the proposed project introduces no new significant environmental impacts.

Furthermore, all mitigation measures previously adopted with the Certified Environmental Impact Report are incorporated into the Project by reference; and WHEREAS, the City's "Local Guidelines for the Implementation of the California Environmental Quality Act (CEQA)" provide for the use of a single environmental assessment in situations where the impacts of subsequent projects are adequately analyzed; and
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WHEREAS, the Application is a project pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA") and an initial study has been prepared to determine possible environmental impacts; and WHEREAS, Ontario Development Code Table 2.02-1 (Review Matrix) grants the City Council the responsibility and authority to review and act on the subject Application; and
WHEREAS, the Project is located within the Airport Influence Area of Ontario International Airport ("ONT"), which encompasses lands within parts of San Bernardino, Riverside, and Los Angeles Counties, and is subject to, and must be consistent with, the policies and criteria set forth in the Ontario International Airport Land Use Compatibility Plan (ALUCP), which applies only to jurisdictions within San Bernardino County, and addresses the noise, safety, airspace protection, and overflight impacts of current and future airport activity; and
WHEREAS, City of Ontario Development Code Division 2.03 (Public Hearings) prescribes the manner in which public notification shall be provided and hearing procedures to be followed, and all such notifications and procedures have been completed; and
WHEREAS, on October 24, 2023, the Planning Commission of the City of Ontario conducted a hearing to consider the Addendum and the Project, and concluded said hearing on that date, voting to issue Resolution Nos. PC23-084 and PC23-086, recommending the City Council approve the Application; and WHEREAS, as the first action on the Project, on November 21, 2023, the City Council approved a resolution adopting an Addendum to a previous Certified EIR prepared pursuant to CEQA, the State CEQA Guidelines and the City of Ontario Local CEQA Guidelines, which indicated that all potential environmental impacts from the Project were less than significant or could be mitigated to a level of significance; and WHEREAS, on November 21, 2023, the City Council of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date; and
WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.

NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND ORDAINED by the City Council of the City of Ontario, as follows:

SECTION 1. Environmental Determination and Findings. As the decision- making body for the Project, the City Council has reviewed and considered the information contained in the previous Certified EIR and supporting documentation. Based upon the facts and information contained in the previous Certified EIR and supporting documentation, the City Council finds as follows:
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(1) The environmental impacts of this project were reviewed in conjunction with an Addendum to The Ontario Plan 2050 Supplemental Environmental Impact Report, certified by the City of Ontario City Council on August 16, 2022, in conjunction with File No. PGPA20-002.
(2) The Addendum and administrative record have been completed in compliance with CEQA, the State CEQA Guidelines, and the City of Ontario Local CEQA Guidelines; and
(3) The City's "Guidelines for the Implementation of the California Environmental Quality Act (CEQA)" provide for the use of a single environmental assessment in situations where the impacts of subsequent projects are adequately analyzed. This Application introduces no new significant environmental impacts; and (4) The Addendum contains a complete and accurate reporting of the environmental impacts associated with the Project, and reflects the independent judgment of the recommended bodies; and
(5) There is no substantial evidence in the administrative record supporting a fair argument that the project may result in significant environmental impacts; and (6) The proposed project will introduce no new significant environmental impacts beyond those previously analyzed in the Certified EIR, and all mitigation measures previously adopted by the Certified EIR, are incorporated herein by this reference.

SECTION 2. Additional Environmental Review Not Required.Based on the Addendum, all related information presented to the City Council, and the specific findings set forth in Section 1, above, the City Council finds that the preparation of a subsequent or supplemental Certified EIR is not required for the Project, as the Project:
(1) Does not constitute substantial changes to the Certified EIR that will require major revisions to the Certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and
(2) Does not constitute substantial changes with respect to the circumstances under which the Certified EIR was prepared, that will require major revisions to the Certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of the previously identified significant effects; and (3) Does not contain new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the Certified EIR was certified/adopted, that shows any of the following:
(a) The project will have one or more significant effects not discussed in the Certified EIR; or
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(b) Significant effects previously examined will be substantially more severe than shown in the Certified EIR; or
(c) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the Project, but the City declined to adopt such measures; or (d) Mitigation measures or alternatives considerably different from those analyzed in the Certified EIR would substantially reduce one or more significant effects on the environment, but which the City declined to adopt.

SECTION 3. Airport Land Use Compatibility Plan ("ALUCP") Compliance.

The California State Aeronautics Act (Public Utilities Code Section 21670 et seq.) requires that an Airport Land Use Compatibility Plan be prepared for all public use airports in the State; and requires that local land use plans and individual development proposals must be consistent with the policies set forth in the adopted Airport Land Use Compatibility Plan.
(1) On April 19, 2011, the City Council of the City of Ontario approved and adopted the Ontario International Airport Land use Compatibility Plan, establishing the Airport Influence Area for Ontario International Airport, which encompasses lands within parts of San Bernardino, Riverside, and Los Angeles Counties, and limits future land uses and development within the Airport Influence Area, as they relate to noise, safety, airspace protection, and overflight impacts of current and future airport activity. As the decision-making body for the Project, the City Council has reviewed and considered the facts and information contained in the Application and supporting documentation against the ONT ALUCP compatibility factors, including [1] Safety Criteria (ONT ALUCP Table 2-2) and Safety Zones (ONT ALUCP Map 2-2), [2] Noise Criteria (ONT ALUCP Table 2-3) and Noise Impact Zones (ONT ALUCP Map 2-3), [3] Airspace protection Zones (ONT ALUCP Map 2-4), and [4] Overflight Notification Zones (ONT ALUCP Map 2-5). As a result, the CITY COUNCIL, therefore, finds and determines that the Project, when implemented in conjunction with the conditions of approval, will be consistent with the policies and criteria set forth within the ONT ALUCP; and SECTION 4. Concluding Facts and Reasons. Based upon the substantial evidence presented to the City Council during the above-referenced hearing, and upon the specific findings set forth in Section 1 through 3, above, the City Council hereby concludes as follows:
(1) The proposed Zone Change is consistent with the goals, policies, plans and exhibits of the Vision, Policy Plan (General Plan), and City Council Priorities components of The Ontario Plan.

Land Use Element:
 Goal LU1: A community that has a spectrum of housing types and price ranges that match the jobs in the City and that make it possible for people to live and work in Ontario and maintain a quality of life.
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 LU-1.6: Complete Community. We incorporate a variety of land uses and building types in our land use planning efforts that result in a complete community where residents at all stages of life, employers, workers, and visitors have a wide spectrum of choices of where they can live, work, shop and recreate within Ontario.

Compliance: The proposed Zone Change will reflect the existing uses of the properties or closely coordinates with land use designations in the surrounding area and provides opportunities for choice in living environments.
 Goal LU2: Compatibility between a wide range of uses.  LU-2.1: Land Use Decisions . We minimize adverse impacts on adjacent properties when considering land use and zoning requests.

Compliance: The proposed Zone Change reflects the existing uses of the properties or closely coordinates with land use designations in the surrounding area and will not create adverse impacts on adjacent properties.
 Goal LU5: Integrated airport systems and facilities that minimize negative impacts to the community and maximize economic benefits.  LU-5.7: ALUCP Consistency with Land Use Regulations . We comply with state law that requires general plans, specific plans and all new development be consistent with the policies and criteria set forth within an Airport Land Use Compatibility Plan for any public use airport.

Compliance: The proposed Zone Change is consistent with the Ontario Airport ALUCP.

Safety Element — Noise Hazards:
 Goal S4: An environment where noise does not adversely affect the public’s health, safety, and welfare.
 S-4.6: Airport Noise Compatibility. We utilize information from Airport Land Use Compatibility Plans to prevent the construction of new noise sensitive land uses within airport noise impact zones.

Compliance: The City is proposing zone changes across the City, as illustrated in Exhibit A, to align with the TOP Vision. Furthermore, these zoning adjustments are an integral component of the City's continuous endeavors to influence and improve future development and land use patterns as outlined in The Ontario Plan. (2) The proposed Zone Change would not be detrimental to the public interest, health, safety, convenience, or general welfare of the City. The proposed zone changes are compatible with the existing zoning and land uses in the surrounding area. In addition, Land Use Policies LU-2.3, LU-2.4, LU-2.5, and LU-2.6 would reduce the amount of conflict between contradicting land uses.
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(3) The proposed Zone Change will not adversely affect the harmonious relationship with adjacent properties and land uses. The implementation of the Project would not lead to physical improvements that could potentially divide an established community. Moreover, the Land Use Policies LU-2.3, LU-2.4, LU-2.5, and LU-2.6 would serve to minimize conflicts between conflicting land uses. As a result, no adverse impacts are anticipated.
(4) The subject site is physically suitable, including, but not limited to, parcel size, shape, access, and availability of utilities, for the request and anticipated development. The proposed zone changes are aimed at facilitating the systematic development of the Project sites. This will be achieved by rezoning parcels that constitute the Project sites, rendering it physically conducive for any anticipated future development and associated permitted land uses.

SECTION 5. City Council Action. Based upon the findings and conclusions set forth in Sections 1 through 4, above, the City Council hereby APPROVES the herein described Application.

SECTION 6. Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings have been based are located at the City of Ontario City Hall, 303 East "B" Street, Ontario, California 91764. The custodian for these records is the City Clerk of the City of Ontario.

SECTION 7. Severability. If any section, sentence, clause or phrase of this Ordinance or the application thereof to any entity, person or circumstance is held for any reason to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. The People of the City of Ontario hereby declare that they would have adopted this Ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.

SECTION 8. Effective Date. This Ordinance shall become effective 30 days following its adoption.

SECTION 9. Publication and Posting. 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 15 days following 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. 692
PASSED, APPROVED, AND ADOPTED this ____ day of _________ 2023. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
_________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
693

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 November 21, 2023 and adopted at the regular meeting held ___________, 20___ by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_________________________________

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

SHEILA MAUTZ, CITY CLERK
(SEAL)
694
Exhibit A: File No. PZC-23-003 Proposed Zone Changes
Existing Zone: HDR-45 (High Density Residential—25.1 to 45.0 DU/Acre) Zoning District Proposed Zone: MU-1 (Downtown Mixed Use) Zoning District. 695
Existing Zone: BP (Business Park) Zoning District.

Proposed Zone: MU-6 (East Holt Mixed Use) Zoning District. 696
Existing Zone: OL (Low Intensity Office) Zoning District.

Proposed Zone: MU-1 (Downtown Mixed Use) Zoning District. 697
Department: Recreation & Community Services
Prepared By: Danielle Guevara
Staff Member Presenting:

Nicholas S. Gonzalez, Recreation & Community
Services Director
Approved By:

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

A RESOLUTION APPROVING THE FILING OF AN APPLICATION FOR GRANT FUNDS

FOR OUTDOOR EQUITY GRANTS PROGRAM

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council take the following actions:

A
.

Adopt a Resolution approving the ﬁling of an application for grant funds through the Outdoor Equity Grants Program;
B
.

Authorize the City Manager, or his designee, to execute any documents or agreements needed to complete the application and implement the grant; and C
.

If awarded, accept funding of $100,000 provided by the Outdoor Equity Grants Program.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Pursue City's Goals and Objectives by Working with Other Governmental Agencies Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT:

The Outdoor Equity Grants Program cost is estimated to be $100,000. The grant funding will cover 100% of the costs. There is no match requirement. All expenses related to these outdoor activities, including part-time staﬃng, will be supported by grant funds. If approved and awarded, revenue (and associated expenditures) will be included in a subsequent quarterly budget report to City Council.

BACKGROUND & ANALYSIS:

The Outdoor Equity Grants Program, overseen by the California Department of Parks and Recreation, aims to improve the health and well-being of Californians. It achieves this by fostering new educational and recreational activities, service learning, career pathways, and leadership opportunities that strengthen a connection to the natural world. The primary goal is to empower residents in underserved communities, enabling greater engagement in outdoor experiences within their community at state parks and other public lands.

698
A condition of the grant requires that the awardee establish a "community home base" to provide services in an underserved community. Recreation & Community Services Department staﬀ have determined that the Veterans Memorial Community Center is an ideal "community home base" and coincides with the recent remodel and reopening of the facility.

This grant will provide additional recreational opportunities for Veterans Memorial Community Center attendees and will support additional excursions to nature spots, state parks, and beaches to beneﬁt youth and teens. All expenses related to these outdoor activities, including staﬃng, will be supported by grant funds. Additionally, grant funding may be used to create Administrative Intern positions to coordinate the program's day-to-day operations and programming. 699
RESOLUTION NO. ________

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

CALIFORNIA, APPROVING THE APPLICATION FOR OUTDOOR
EQUITY GRANTS PROGRAM GRANT FUNDS.

WHEREAS, the State Department of Parks and Recreation has been delegated the responsibility by the Legislature of the State of California for the administration of the Outdoor Equity Grants Program, setting up necessary procedures governing the application; and
WHEREAS, said procedures established by the State Department of Parks and Recreation require the Applicant to certify by resolution the approval of the application before submission of said application to the State; and WHEREAS, successful Applicants will enter into a contract with the State of California to complete the Grant Scope program;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:

SECTION 1. Certifies that said Applicant has or will have available, prior to commencement of any work on the program(s) included in this application, the sufficient funds to complete the program(s); and
SECTION 2. Certifies that if the grant is awarded, the Applicant has or will have sufficient funds to operate the program(s) as described in the Grant Selection Criteria response, and
SECTION 3. Certifies that the Applicant has reviewed, understands, and agrees to the General Provisions contained in the contract shown in the Grant Administration Guide; and
SECTION 4. Delegates the authority to City Manager or a designee to conduct all negotiations, sign and submit all documents, including, but not limited to applications, agreements, amendments, and payment requests, which may be necessary for the completion of the Grant Scope; and
SECTION 5. Agrees to comply with all applicable federal, state, and local laws, ordinances, rules, regulations and guidelines.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
700
PASSED, APPROVED, AND ADOPTED this 5th day of December 2023. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
701

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. 2023- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held December 5, 2023, 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. 2023- duly passed and adopted by the Ontario City Council at their regular meeting held December 5, 2023. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
702
Department: Planning
Prepared By: Gwen Berendsen
Staff Member Presenting:

Scott Murphy, Executive Director Community
Development
Approved By:

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

AN AMENDMENT TO SECTION 5.03.363, "SHORT TERM RENTALS," OF DIVISION

5.03 OF CHAPTER 5 OF THE ONTARIO DEVELOPMENT CODE, UPDATING

REGULATIONS FOR THE SHORT-TERM RENTAL OF PROPERTY IN THE CITY

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

Tha
t the City Council adopt an Ordinance amending subsections C, D, E, F, I, J and K of Section 5.03.363 of the Ontario Development Code, relating to regulations of short-term rentals.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

Stricter regulation of short-term rental operations pursuant to the Ontario Development Code may result in increased collection of permit fees and administrative ﬁnes which are payable to the City. Staﬀ does not anticipate any increased enforcement cost on the staﬃng side, as current staffing levels support the need for stricter regulation.

BACKGROUND & ANALYSIS:

On November 21, 2023, the City Council introduced and waived further reading of an ordinance approving the Amendment to the Development Code regarding short-term rentals. While short-term rentals provide options to the traveling public and income to the affected host property owner or tenant, they can also impact the community. Over the past few years, there has been an increase in the number of properties in the City being oﬀered on websites such as Airbnb, VRBO, and Homeaway. In December 2022, the City Council adopted Ordinance No. 3235, adding a new Section 5.03.363 to the Ontario Development Code to regulate short-term rentals in the City. The regulations adopted at that time:

Established a requirement that operators obtain a short-term rental permit from the City; Set forth the process for permit applications, investigations, issuance, expiration, renewal, and revocation;
Created an appeals procedure for aggrieved applicants;
Established a series of operating requirements for short-term rentals, including limiting the locations where short-term rentals may be located (zoning districts AR-2, RE-2, RE-4, LDR-5, 703
MDR-11, MDR-18, MDR-25, HDR-45, LUA-3, and MU-2);
Established a series of requirements applicable to hosting platforms such as AirBNB and VRBO; and
Established the City’s procedures for enforcement of violations of the Ordinance.

The proposed updates to Section 5.03.363 will make updates to strengthen the regulations for permit revocation, operating requirements, enforcement and penalties. In addition, updates are proposed to how the City processes permit applications; allow for short-term rental permit applications to be ﬁled while the applicant is awaiting a pending business license; and clarify the areas of the City in which short-term rentals are allowed (all areas not speciﬁcally named in the Ordinance will not allow for short-term rentals).
704
ORDINANCE NO. _______

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING SECTION 5.03.363, “SHORT-TERM
RENTALS,” OF DIVISION 5.03 OF CHAPTER 5 OF THE ONTARIO

DEVELOPMENT CODE, UPDATING REGULATIONS FOR THE
SHORT-TERM RENTAL OF PROPERTY IN THE CITY.

WHEREAS, the growing popularity of “home-sharing” and other short-term vacation rentals, through the use of websites such as Airbnb, VRBO, and Homeaway, allow individual homeowners, landlords, and tenants to list homes, apartments, and rooms for rent at the price and duration of their choosing; and WHEREAS, on December 20, 2022, the City Council adopted Ordinance No. 3235, adding Section 5.03.363 to the Ontario Development Code to establish a regulatory framework applicable to all short-term rentals within the City; and WHEREAS, the City has determined that certain minor clarifying revisions are necessary to Section 5.03.363, including an update to the areas of the City in which short-term rentals are expressly authorized; and
WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.

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

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

SECTION 2. Amendment. Subsections C, D, E, F, I, J and K of Section

5.03.363 (“Short Term Rentals”) of the Ontario Municipal Code is hereby revised to read as follows (deletions shown in strikethrough, additions shown in underline):
"5.03.063: Short Term Rentals
A. Definitions. As used in this Section, the words or phrases listed below shall have the meanings thereafter specified:

1. Booking transaction means any reservation or payment service provided by a person who facilitates a short-term rental, home sharing, or similar transaction between a prospective guest and a host.

2. Director means the finance director of the City of Ontario.

3. Dwelling unit means a structure or portion thereof which is used for human habitation.
705

4. Guest means a person who rents a short -term rental for a period of less than 30 days.

5. Group means a single guest or any number of guests who are occupying a short-term rental on a single rental agreement.

6. Host means a person engaged in providing short-term rental at their primary residence.

7. Hosted stay means short -term rental activity whereby the host remains on the site of his or her primary residence throughout the duration of the guest's stay, expect during daytime and/or work hours.

8. Hosting platform means a marketplace in whatever form or format which facilitates the short -term rental activity, through advertising, match -making, or any other means, using any medium of facilitation, and from which the operator of the hosting platform derives revenues, including booking fees or advertising revenues, from providing or maintaining the marketpla ce.

9. Primary residence means the dwelling unit used as the permanent residence or usual place of return for housing by the host. A person may have only one primary residence.

10. Short-term rental means a dwelling unit, or any portion thereof, that is rented by the host to another party for a period of not more than 30 consecutive days in exchange for any form of monetary or non -monetary consideration, including trade, fee, swap or any other consideration in lieu of cash payment. Hosted stays, Un-hosted stays, and vacation rentals are types of short-term rental.

11. Transient occupancy tax or "TOT' means the tax imposed on occupancies of 30 consecutive calendar days or less under Chapter 6 of Title 3 of the Ontario Municipal Code.

12. Un-hosted stay means a short-term rental activity whereby the host remains off the site of his or her primary residence-site for some or all of the duration of the guest's stay.

13. Vacation rental means a dwelling unit that is not a primary residence, and which is available for temporary lodging, for compensation or any form of consideration. The term "vacation rental" shall not include: single-room occupancy buildings, bed and breakfast inns, hotels, a dwelling unit for which a tenant has a month-to-month rental agree ment and the rental payments are made on a monthly basis, or corporate housing.

B. Permit required for authorized short-term rental
706
No person, either for themselves or any other person, shall cause, allow, conduct, permit, maintain, or facilitate short-term rental at any dwelling unit within the city without first obtaining a short-term rental permit pursuant to this chapter, and complying with all other applicable provisions of this code. A short-term rental permit shall only be issued to authorize hosted stays and un-hosted stays. Vacation rentals are prohibited.

C. Permit application
To apply for a short-term rental permit, a person seeking to become a host must file an application with the directorCity, accompanied by a nonrefundable processing fee in an amount established by resolution of the city council. The application shall be in a form prescribed by the directorCity and shall contain, at a minimum, the following:

1. The legal name, current address and telephone number of the applicant;

2. Address of the short-term rental property, and if applicable, location telephone number;

3. An index of all residents of the property with name and date of birth, juveniles may be listed by title and age only;

4. A diagram of the property indicating areas intended for use as short-term rental;

5. Documentation indicating the number of bedrooms within the dwelling unit, such as a record from the County Assessor's Office;

6. A parking plan indicating sufficient lawful parking on the property for all vehicles belonging to residents and one additional space for each bedroom of the house to be used for short-term rental;

7. Evidence that the applicant has applied for and is in the process of obtaining A copy of a valid business license issued pursuant to Chapter 1 of Title 3 of the Ontario Municipal Code;

8. A home occupation permit pursuant to Section 5.03.240 of the Ontario Development Code is not required;

9. Emergency contact information for 24-hour response within 30 minutes;

10. Certification by the applicant that the information contained in the application is true to his or her knowledge and belief;

11. Documentation establishing that the dwelling unit proposed to be used as a short-term rental is the host's primary residence. Such documentation shall include at least two of the following and be in the name of the host: Motor vehicle registration, driver's license, voter registration, or tax documents showing the residential unit as the residence of the host;
707

12. Two passport size photographs of the applicant; and

13. Any other information required by regulations promulgated pursuant to this chapter or deemed necessary by the director.

D. Application investigation and criteria for approval or denial or permit Upon receipt of a completed application, the director, or his or her designeeCity, shall cause an investigation of the applicant and the application as submitted. The investigation shall be completed in a timely manner as follows and the applicant shall be notified of the result in writing in a timely manner:

1. The applicant shall be required to pay the established fees for such service in addition to the permit fee.

2. Inspection of the property by city staff shall be scheduled within 30 days of application. Annual inspections will be required upon renewal of a short-term rental permit.

3. If, as a result of this investigation, the applicant is found to satisfy all of the requirements of Section 5.03.063.D., and no grounds for denial exist, the application shall be approved, and a short-term rental permit shall be issued to the applicant. The permit shall contain the name, address of the permittee, a description of the short-term rental to be offered, the date of issuance and term of the permit, photograph of the permittee, and the signature of the Planning Director director or his or her designee.

4. A short-term rental permit application may be denied for any of the following reasons:
a. Information contained in the application, or supplemental information requested from the applicant, is false or misleading in any material detail; b. The applicant failed to provide a complete application, after having been notified of the requirement to produce additional information or documents; c. The applicant is delinquent in payment of any city or county taxes, fines, or penalties in relation to short-term rental; d. The applicant has previously held a short-term rental permit which was revoked by the city during the year prior to the application; e. The applicant has failed to pay any previous administrative fines, remediate any other violations, and/or complete any other alternative disposition associated with a previous violation of this chapter; or f. The applicant has failed to demonstrate an ability to conform to the operating standards set forth in Section 5.03.063.1 5.03.363.1. 708
If the permit application is denied, written notice of such denial and the reasons therefore shall be provided to the applicant.

E. Permit expiration and renewal
A short -term rental permit shall be valid for 12 months from the date of issuance and shall expire and become null and void on the first anniversary date of its issuance. A person may apply for a permit renewal on a form provided by the city prior to the expiration of his or her active short -term rental permit and upon successfully completing an inspection by city staff. The applicant shall be required to pay the administrative fee for the permit renewal fee in the amount established by city council resolution at the time the renewal application is filed. In addition, the applicant shall renew their business license. Failure of the applicant to submit a complete application prior to the expiration date of the existing short-term rental permit shall be a basis for denial of the renewal.

F. Permit revocation
Two (2) violations of any provision of this chapter or this code within one (1) year by any applicant, occupant, responsible person, local contact person, owner, or owner's authorized agent or representative, with respect to any one (1) residential dwelling shall result in an immediate suspension of the short-term vacation rental permit. The director may revoke a short-term rental permit issued to a short-term rental host for a third or subsequent violation of this chapter within any period of time or for any violation of Chapter 6 of Title 3 of the Ontario Municipal Code relating to transient occupancy tax. A short-term rental host whose permit is revoked may apply for a new short-term rental permit one year after the revocation of the permit. A revocation under this section may be appealed in accordance with the procedure set forth in Section 5.03.363(G), below.

G. Appeals
Any person whose short -term rental permit is denied or revoked may file an appeal of the decision in writing with the city clerk within 15 days following the date of the director's decision stating the grounds for said appeal. The appellant shall pay a non-refundable fee in an amount established by resolution of the city council for such appeal. The city clerk shall schedule an appeal hearing with the city manager or his or her designee within 15 days of an appeal being filed. The decision of the city manager or the designee shall be final.

H. Permits nontransferable
A short -term rental permit granted pursuant to this chapter shall not be transferable to another person, parcel number, or to another property owner. Said permit shall not run with the land or property to which it applies. 709
I. Operating requirements
Short-term rental hosts shall comply with the following requirements:

1. The host shall be:
a. The property owner or the spouse, parent, or adult
child of the property owner.
b. A tenant of the property who has occupied the
property as his or her primary residence prior to
making application for a short-term rental permit and
who has submitted written authorization from the
property owner to operate short -term rental at the
residence.

2. The dwelling unit shall be the primary residence of the host.

3. The dwelling unit must be located within the following zones:

AR-2, RE-2, RE-4, LDR-5, MDR-11, MDR-18, MDR-25, HDR-45, LUA-3, MU-2, MU-11, MU-1, MU-3, MU-6, MU-8B, MU-8C, MU-8D and MU-8E, including residential and mixed- use zoning districts within specific plan and planned unit development areas. Dwelling units are not permitted to be used as short-term rentals in any other zones.

4. All advertising for the dwelling unit as a short-term rental that is displayed on a hosting platform or other media shall display the number of the current and valid permit as issued by the city, a street-view photo of the front of the house and the maximum number of guests based on the occupancy limit set forth in subsection 1.5.

5. The dwelling unit's occupancy, including the host, other residents of the dwelling unit, and guests, during a short-term rental shall not exceed two times the number of bedrooms of the dwelling unit.

6. The short-term rental permit shall be conspicuously displayed in each area of the dwelling unit available for occupancy.

7. Any accessory dwelling unit subject to a covenant that specifically prohibits rentals of 30 days or less may not be used as a short-term rental.

8. A single dwelling unit shall be limited to two groups of any number concurrently or two concurrent booking transactions.

9. The short-term rental shall comply with all applicable provisions of this Code and State law.

10. Conditions that cause a public nuisance, as defined by this code or state law, are prohibited at the dwelling unit during a short-term rental. 710

11. Un-hosted stays shall be limited to a total of 90 days within a calendar year at the same dwelling unit. Hosted stays shall not be limited.

12. Excessive traffic to and from the short-term rental that significantly impairs the quiet enjoyment of neighboring properties is prohibited.

13. Excessive noise that significantly impairs the quiet enjoyment of neighboring properties is prohibited. The amplification of sound by any device outside the short-term rental is prohibited. Quiet hours during which noise must be restricted to the interior of the short-term rental shall be between 10:00 p.m. and 7:00 a.m. the following morning.

14. The obstruction of any public right-of-way, road, street, highway, or private road by occupants of the unit is prohibited.

15. No event, including a conference, wedding, fundraiser, or similar gathering, or any commercial event, may be held at a short-term rental.

16. The permittee shall install at least one (1) public-facing camera at or near the front entrance of the home that enables the host or manager to remotely monitor the number of individuals entering the home and activity in the front yard. The permittee shall install at least one (1) public-facing camera over the garage of the home that enables the host or manager to remotely monitor the activity in the front driveway and street in front of the residence. The permittee shall maintain video recordings from both required cameras for a minimum of 30 days.

17. A permittee shall, for a period of at least one year after the date of each stay, keep written rental records that document the following information:
a. All dates on which the permittee rented the short-term rental to one or more guests;
b. The name and contact information for each renter; and c. The license plate(s) of vehicles associated with the renter stored at or near the short-term rental during
their stay.

18. Short-term rentals, within those neighborhood communities with established Homeowner Associations (HOAs), shall comply with any HOA Short- Term Rental provisions and/or regulations.

19. Off-street parking spaces shall be provided on the property sufficient for all vehicles associated with the short-term rental property or its occupants in accordance with the Ontario Development Code Section 6.03.015. Parking is allowed only in designated driveways and garages. The maximum number of vehicles at a Short- Term rental property at any time is equivalent to the minimum number of parking spaces required for that property.
711
J. Hosting platform requirements

1. Hosting platforms shall be responsible for collecting all applicable TOTs and remitting the same to the city. TOT remittance is due monthly, in accordance with Chapter 6 of Title 3 of the Ontario Municipal Code. The hosting platform shall be considered a managing agent of the host for purpose of TOT collections and remittance responsibilities as set forth in Chapter 6 of Title 3 of the Ontario Municipal Code.

2. Subject to applicable laws, hosting platforms shall disclose to the city on a regular basis each short-term rental listing located in the city, the names of the persons responsible for each such listing, the address of each such listing, the length of stay for each such listing and the price paid for each stay.

3. Hosting platforms shall require hosts to include the city-issued registration number in their listing(s), in a format designated by the city. Upon notice from the city that a listing is non-compliant, hosting platforms shall cease any short-term rental booking transactions for said listing(s) within five business days. A hosting platform shall not complete any booking transaction for a residential property or unit subject to a city notice until notified by the city that the residential property or unit is in compliance with the local registration requirement.

4. Hosting platforms shall not collect or receive a fee, directly or indirectly through an agent or intermediary, for facilitating or providing services ancillary to a vacation rental or unregistered short-term rental, including, but not limited to, insurance, concierge services, catering, restaurant bookings, tours, guide services, entertainment, cleaning, property management, or maintenance of the dwelling unit.

5. A hosting platform operating exclusively on the internet, which operates in compliance with subsections 1., 2., 3., and 4. above, shall be presumed to be in compliance with this chapter.

6. The provisions of this section shall be interpreted in accordance with otherwise applicable state and federal law(s) and will not apply if determined by the city to be in violation of, or preempted by, any such law(s).

K. Enforcement and penalties.

1. Operating a short-term rental without a valid short-term rental permit and business license is prohibited. Advertising shall be considered prima facie evidence of operation. Additional evidence of operation may include, but shall not be limited to, guest testimony, online reviews, rental agreements, receipts, or any other information deemed relevant by the city.

2. A violation of this chapter shall constitute a public nuisance, which may be abated by any means provided by law, including, but not limited to, injunctive relief, issuance of administrative fines pursuant to Chapter 2 of Title 1 of the Ontario Municipal Code, and shall also constitute a misdemeanor punishable pursuant to 712
Chapter 2 of Title. The city may issue an administrative citation to any applicant, occupant, responsible person, local contact person, owner, owner's authorized agent or representative, or hosting platform of this code, if there is any violation of this chapter committed, caused or maintained by any of the above parties. Nothing in this section shall preclude the city from also issuing a citation upon the occurrence of the same offense on a separate day.

3. An administrative citation may impose a civil penalty for one (1) or more violations of this chapter in the maximum amount allowed by state law or this code. A civil penalty issued in accordance with this code shall be in the amount of one thousand dollars ($1,000.00) for the first violation, two thousand dollars ($2,000.00) for the second violation, and three thousand dollars ($3,000.00) for the third and all subsequent violations.

4. Each and every day, or portion thereof, a violation of this chapter exists shall constitute a separate and distinct violation.

5. The remedies provided herein are intended to be cumulative and may be used in lieu of or in addition to any other remedy provided by this chapter or other law."
SECTION 3. If any section, subsection, subdivision, sentence, clause, or phrase in this Ordinance or any part thereof is for any reason held to be unconstitutional, invalid or ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this ordinance or any part thereof.

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

SECTION 4. This Ordinance shall become effective thirty (30) days after its adoption by the City Council.

SECTION 5. The City Council finds that adoption of this Ordinance is exempt from the California Environmental Quality Act ("CEQA") pursuant to Section 15358 (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Moreover, the City Council finds that this Ordinance is also exempt under CEQA pursuant to Guidelines Section 15061(b)(3) (there exists no possibility that the activity will have a significant adverse effect on the environment).

SECTION 6. The Mayor shall sign this Ordinance and the City Clerk s hall 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 o f this Ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with Government Code Section 36933.
713
PASSED, APPROVED, AND ADOPTED this 5th day of December 2023. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
_________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
714

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. 3264 was duly introduced at a regular meeting of the City Council of the City of Ontario held November 21, 2023 and adopted at the regular meeting held December 5, 2023 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
_________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
I hereby certify that the foregoing is the original of Ordinance No. 3264 duly passed and adopted by the Ontario City Council at their regular meeting held December 5, 2023, and that Summaries of the Ordinance were published on November 28, 2023 and December 12, 2023, in the Inland Valley Daily Bulletin newspaper. __________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
715
Department: Public Works
Prepared By: Adrian Escamilla
Staff Member Presenting:

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

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

AN AMENDMENT TO THE ON-CALL MAINTENANCE SERVICES AGREEMENT WITH

WESTERN ALLIED CORPORATION FOR VARIOUS ONTARIO POLICE DEPARTMENT

TENANT IMPROVEMENT PROJECTS

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council take the following actions:

A
.

Authorize the City Manager or his designee to execute Amendment No. 1 to the On-Call Maintenance Services Agreement with Western Allied Corporation, of Santa Fe Springs, California, for Ontario Police Department (OPD) Tenant Improvement Projects in the amount of $135,000 for a total not-to-exceed contract amount of $1,560,000; and B
.

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)
FISCAL IMPACT:

The Fiscal Year 2023-24 Adopted Budget includes appropriations in the Facilities & Parks Maintenance Fund for the OPD Tenant Improvement Projects. The total cost of the project will increase the contract amount by $135,000 for a total contract amount not-to-exceed $1,560,000.

BACKGROUND & ANALYSIS:

In preparation for various OPD tenant improvement projects such as the Real Time Information Center, Training Division, and Master Plan, Western Allied Corporation will provide services to pre-read the HVAC equipment to provide the Architect an understanding of how the existing systems are currently operating. This data, in conjunction with the load analysis, will determine what modifications will be recommended to provide thermal comfort for occupants. 716
46700.00100\33287662.1

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BB&K 2020

AMENDM
ENT NO. 1

TO THE MAINTENANCE SERVICE AGREEMENT

BETWEEN THE CITY OF ONTARIO AND

WESTERN ALLIED CORPORATION

1. Part
ies and Date.

This
Amendment No. 1 to the Agreement (as defined herein) is made and entered into as of this ____ day of ___________ 2023, by and between the City of Ontario (“City”) and Western Allied Corporation, a Corporation (“Contractor”). City and Contractor are sometimes individually referred to as “Party” and collectively as “Parties.”

2. Recit
als.

2.1 Agreement. T he City a nd Contractor h ave entered i nto an agr eem ent ent itled “Maintenance Service Agreement” dat ed July 15, 2021 ( “A greement”).

2.2 Amendment Purpose. The City and Contractor desire to amend the Agr eement to the s
cope of services and the not-to-exceed compensation amount t o test t he HVAC System at Ontario Police Department 2500 S. Archibald Ave. The not-to-exc eed amount w i ll be i ncrease by One Hundred Thirty-Fi ve Thousand Dollars ($135,000), pursuant to Contractor’s proposal (Exhibit "A").

2.3 Amendment Authority. This Amendment No. 1 is authorized pursuant to Section 3 of the Agreement.

3. Terms
.

3.1 Amendment. Section 3.3.1 of the Agreement is hereby amended in i ts entir ety to read as follows:
“Com
pensation. Contractor shall receive compensation, including authorized reimbursement, for all services rendered under this Agreement as described throughout this Agreement, including Exhibit "A" attached hereto an d incorporated herein by reference. The total compensation shall not exceed One Million Five Hundred Sixty Thousand Dollars and 00/100 ($1,560,000) ("Total 717
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BB&K 2020

Compensation") without the City Manager's written approval. Extra Work may be authoriz ed, as described under the task list in Exhibit “A”, and if authorized, wil l be compensated at the rates and manner set forth in this Agreement.”

Task list and not-to-exceed fees are included in Exhibit “A”.

3.2 Continuing Effect of Agreement . Except as amended by this Amendment No. 1, all other provisions of the Agreement re main in full force and effect and shall govern the actions of the parties under this Amendment No. 1. From and after the date of this Amendment No. 1, whenever the term “Agreement” appears in the Agreement, it shall mean the Agreement as amended by this Amendment No. 1.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they have each received adequate and independent consideration for the perfor mance of the obligations they have undertaken pursuant to this Amendment No. 1.

3.4 Severability. If any portion of this Amendment No. 1 is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisi ons shall continue in full force and effect.

3.5 Integration. This Am endment r epresents the entirety of the Parties’ understanding relating to the subject of this Amendment, including written or verbal communications between the Parties, which shall have n o relevance unless expressly incorporated herein. This is an integra ted amendment.

[SIGNATURES ON FOLLOWING PAGE]

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BB&K 2020

SIGNATURE PAGE FOR AMENDMENT NO. 1 TO MAINTENANCE SERVICES

AGREEMENT BETWEEN THE CITY OF ONTARIO

AND WESTERN ALLIED CORPORATION

IN WITNESS WHEREOF, the Parties have entered into this Amendment No. 1 as of the day and year first above written.

CITY OF ONTARIO WESTERN ALLIED CORPORATION

[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
Signature:

Title:

Printed Name:

Signature:

Title:

Printed Name:

Approved By:

Scott Ochoa
City Manager
Approved as to Form:

_____________________________________
Best Best & Krieger LLP
City Attorney

Attested By:

City Clerk

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BB&K 2020

EXHIBIT A

720

P.O. Box 3628
12046 E. Florence Ave
Santa Fe Springs, CA 90670
(562) 944-6341
CA# 198821

October 10, 2023

Ontario Police Dept.
2500 S. Archibald Avenue
Ontario, CA, 91761

Proposal Number:
4439
Subject: Air Readings-related Work

Attn: Mr. Adrian Escamilla

Dear Adrian:

This letter is to follow up on our various job walks and discussions. After reviewing the 2004 plans and the subsequent 911 dispatch remodel, we believe that you have approximately 93 VAV boxes and about 430 supply air diffusers. There are also 11 rooftop AC units, 2 split DX units, a boiler with a circulating pump and a house pump, 13 roof mounted exhaust fans and 7 in line fans. As we’ve discussed, the VAV boxes were not calibrated at the time of the digital controls conversion (that would have required air flow readings at each VAV box and was not in that scope of work), so we’d strongly recommend that this item take place at this time, since each VAV box cfm is already to be read per the request by Design West. It is our understanding that the Women’s locker expansion and its related VAV boxes & supply air diffusers will be handled separately, so the 5 VAV boxes associated with that project are not included in this proposal.

Based on the above and the September 20 letter from Design West Engineering, we propose the following scope of work:

For the rooftop AC units: Because supply air cfm cannot be read directly due to the unit’s configuration and location, we propose to determine the supply cfm at full load by putting the unit into full economizer mode with the VAV boxes full open and reading the outside air intake. This action will also confirm economizer operation. The return air will be determined by putting the VAV boxes into full open position and measuring at the return air opening of the short duct extension that drops a short distance from the unit in the high ceiling; we will be on either lift or ladder with measuring extensions.

The outside air will be measured at the unit’s outside air inlet with the boxes full open.

Boiler: With all VAV box heating valves open, we propose to read both the circulating pump and house pump by flow meter (if taps are available) or ultrasonic if taps are not present.

DX Split units for 24 hour operation: Supply, return and OSA airflow for ducted units, as well as entering and leaving air temperatures with condensing units fully loaded. Ductless units will not be measured.

Roof mounted exhaust fans: Exhaust cfm by traverse if possible, if not by reading at exhaust grilles and summing them. Static pressure will be read from fan inlet to atmospheric.

In line exhaust fans: Exhaust cfm and differential static pressure.

VAV boxes: The VAV box procedure will be:

Exhibit "A"
721
- Log on to BMS, download VAV’s of interest. - Visually inspect that dampers are not closed 100%, also verify inlet size of VAV and size on BMS is correct. At this point, verify main static pressure and document.- Read all supply registers for the particular VAV at MAX CFM.- Input new k-factor on BMS to calibrate VAV for accurate reading. - Read entering / leaving air temperature for max cooling. - Set VAV to minimum, read CFM, confirm calibration is correct on BMS. - Activate HW coil, read leaving air temperature. At heating cfm set point)- If a circuit setter is installed on VAV, read pressure drop at this point and calculate GPM.- Release VAV to normal operation and move to next VAV. Air distribution: We propose to read the cfm value at all supply air diffusers. The return system is notducted (open ceiling return), so we do not anticipate taking return air readings. We also do notanticipate taking individual exhaust air grill readings. It is not our intent to perform any air balancework, but in the event that no cfm is measured at any supply diffuser, we will investigate to see if abalancing damper has gone closed and if so we will open it as a part of this scope of work. Our proposal includes ladders and man lifts as required and is based upon regular hours work. Asdiscussed, due to the difficulty in anticipating exact time requirements, we will approach the projecton a time and material basis and only work during regular working hours unless you specificallyrequest otherwise. To help keep the City’s cost as low as possible, we will pair a service technicianwith a TAB (test and balance) technician, rather than utilize two TAB technicians. Your current contractrate for a service tech is $144/hour. Air balance techs are billed out at $169/hr. Controls engineers arebilled at $209/hr. Your contract truck charge rate will apply. You’ve noted that you will want specific areas measured first so Design West can proceed with theirwork for various projects you have begun. We are happy to proceed in what ever order seems mostbeneficial to you, and provide partial results for specific areas. Depending upon how smoothly things go, how accessible all the equipment is, the accuracy of theVAV box and diffuser count, and how efficiently we are permitted to operate while being as little aninterruption to the Police Department personnel as possible, a reasonable budget range for the totalscope of work as defined above is $115,000 - $135,000. Please let me know if you have any questions, or if we are authorized to proceed with some or all ofthe proposed work at this time. Best Regards, Mike Gallagher
[email protected]
Clarifications & Exclusions
This proposal shall be valid for a period of 60 days.

Our offer is predicated upon a clear and accessible area that will be made available by others, where our work is to be performed.

Unless otherwise noted and accepted above, our work will be performed during our normal working hours of 6am - 3pm Mon. – Fri.)
Any additional repairs or work outside the specific defined scope is not included.

722
Department: Public Works
Prepared By: Niles Boyer
Staff Member Presenting:

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

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

A CONSTRUCTION CONTRACT WITH MC ELECTRIC FOR THE PARKS POLE

REPLACEMENT PROJECT

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council take the following actions:

A
.

Authorize the City Manager or his designee to execute a Construction Contract with MC Electric, of Chino, California, for the Parks Pole Replacement Project in the amount of $984,300;
B
.

Authorize a 10% contingency of $98,430 to address any unforeseen issues that may arise during construction, for a total contract amount not-to-exceed $1,082,730; and C
.

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

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

The Fiscal Year 2023-24 Adopted Budget includes appropriations in the Facilities and Parks Maintenance Fund and Grants Fund for this project in the amount of $984,300 plus a 10% contingency of $98,430 for a total contract amount not-to-exceed $1,082,730.

BACKGROUND & ANALYSIS:

The Public Works Department conducted a Notice Inviting Bid to replace sports ﬁelds light poles and ﬁxtures at two City parks and sports ﬁeld netting poles at another City park. The description of work for each location is as follows:

De Anza Park
Demolition of six existing baseball ﬁeld light poles and ﬁxtures and demolition of eight existing soccer ﬁeld light poles and ﬁxtures. Installation of six new baseball ﬁeld light poles and ﬁxtures and installation of one new controller cabinet.
723

Bon View Park

Demolition of one wooden light pole and ﬁxture and installation of one new metal light pole and fixture.

Jay Littleton Ball Park
Removal of two existing baseball ﬁeld sports net wooden poles and replacement with two new like kind net poles.

On September 25, 2023, the City solicited bids for the Parks Pole Replacement Project at De Anza Park, Bon View Park, and Jay Littleton Ball Field. The following is a summary of the bid results:

VENDOR

LOCATION
AMOUNT
M
C Electric
Chino, CA
$984,300
Southern Contracting Company
San Marcos, CA
$1,175,000
BWW & Company, Inc.

Redlands, CA
$1,431,954

MC Electric’s bid submittal of $984,300 was the lowest responsive and responsible bid. Staﬀ recommends the City Council award the Construction Contract to MC Electric for the Parks Pole Replacement Project.
724
PARKS POLE REPLACEMENT -1- SECTION 00500 – CONTRACT FOR

CONSTRUCTION
SEC
TION 00500 – CONTRACT FOR CONSTRUCTION
This Contract for Construction (“Contract”), No.PA 2201 is made and entered as of , by and between City of Ontario, with its principal place of business at 303 East “B” Street, Ontario, CA 91764, sometimes hereinafter called the “City” and MC Electric sometimes hereinafter called “Contractor.”
WITNESSETH: That the parties hereto have mutually covenanted and agreed, and by these presents do covenant and agree with each other as follows:

ARTICLE 1. SCOPE OF WORK.

The Contractor shall perform all Work within the time stipulated in the Contract, and shall provide all labor, materials, equipment, tools, utility services, and transportation to complete all of the Work required in strict compliance with the Contract Documents as specified in Article 5, below, for the following Project:

PARKS POLE REPLACEMENT
Contractor is an independent contractor and not an agent of the City. The Contractor and its surety shall be liable to the City for any damages arising as a result of the Contractor’s failure to comply with this obligation.

ARTICLE 2. TIME FOR COMPLETION.

Time is of the essence in the performance of the Work. The Work shall be commenced on the date stated in the City’s Notice to Proceed. The Contractor shall complete all Work required by the Contract Documents within 120 calendar days from the commencement date stated in the Notice to Proceed. By its signature hereunder, Contractor agrees the time for completion set forth above is adequate and reasonable to complete the Work.

ARTICLE 3. CONTRACT PRICE.

The City shall pay to the Contractor as full compensation for the performance of the Contract, subject to any additions or deductions as provided in the Contract Documents, and including all applicable taxes and costs, the sum of Nine Hundred Eighty -Four Thousand and Three Hundred Dollars ($984,300.00). Payment shall be made as set forth in the General Conditions.

The City will pay to Contractor compensation based upon the prices set forth in the Bid Schedule.

ARTICLE 4. LIQUIDATED DAMAGES.

Contractor acknowledges that the City will sustain actual damages for each and every Day completion of the Project is delayed beyond the Contract Time. Because of the nature of the Project, it would be impracticable or extremely difficult to determine the City’s actual damages.

Accordingly, in accordance with Government Code section 53069.85, it is agreed that the 725
PARKS POLE REPLACEMENT -2- SECTION 00500 – CONTRACT FOR

CONSTRUCTION
Contractor will pay the City the sum of $150.00 for each and every calendar day of delay beyond the time prescribed in the Contract Documents for finishing the Work, as Liquidated Damages and not as a penalty or forfeiture. In the event this is not paid, the Contractor agrees the City may deduct that amount from any money due or that may become due the Contractor under the Contract. This Section does not exclude recovery of other damages specified in the Contract Documents. Liquidated damages may be deducted from progress payments due Contractor, Project retention or may be collected directly from Contractor, or from Contractor's surety. These provisions for liquidated damages shall not prevent the City, in case of Contractor's default, from terminating the Contractor.

ARTICLE 5. COMPONENT PARTS OF THE CONTRACT.

The “Contract Documents” include the following:

Notice Inviting Bids
Instructions to Bidders
Bid Forms
Bid Acknowledgement
Bid Schedule
Bid Guarantee
Designation of Subcontractors
Information Required of Bidders
Non-Collusion Declaration Form
Iran Contracting Act Certification
Public Works Contractor DIR Registration Certification
Performance Bond
Payment (Labor and Materials) Bond
Contract for Construction
General Conditions
Special Conditions
Specifications
Addenda
Construction Plans and Drawings
Standard Specifications for Public Works Construction “Greenbook”, latest edition, Except Sections 1-9
Applicable Local Agency Standards and Specifications, as last revised Reference Specifications
Approved and fully executed Change Orders
Permits
Any other documents contained in or incorporated into the Contract

The Contractor shall complete the Work in strict accordance with all of the Contract Documents.

All of the Contract Documents are intended to be complementary. Work required by one of the Contract Documents and not by others shall be done as if required by all. In the event of conflict, the various Contract Documents will be given effect in the order set forth in the General Conditions. This Contract shall supersede any prior agreement of the parties.

ARTICLE 6. PROVISIONS REQUIRED BY LAW AND CONTRACTOR COMPLIANCE.

Each and every provision of law required to be included in these Contract Documents shall be deemed to be included in these Contract Documents. The Contractor shall comply with all 726
PARKS POLE REPLACEMENT -3- SECTION 00500 – CONTRACT FOR

CONSTRUCTION
requirements of applicable federal, state and local laws, rules and regulations, including, but not limited to, the provisions of the California Labor Code and California Public Contract Code which are applicable to this Work.

ARTICLE 7. INDEMNIFICATION.

Contractor shall provide indemnification and defense as set forth in the General Conditions.

ARTICLE 8. PREVAILING WAGES.

Contractor shall be required to pay the prevailing rate of wages in accordance with the Labor Code which such rates shall be made available at the City’s Office or may be obtained online at http://www.dir.ca.gov and which must be posted at the job site.

ARTICLE 9. FALSE CLAIMS.

Contractor acknowledges that if a false claim is submitted to the City, it may be considered fraud and Contractor may be subject to criminal prosecution. Contractor acknowledges that the False Claims Act, California Government Code sections 12650, et seq., provides for civil penalties where a person knowingly submits a false claim to a public entity. These provisions include within their scope false claims made with deliberate ignorance of the false information or in reckless disregard of the truth or falsity of the information. In the event the City seeks to recover penalties pursuant to the False Claims Act, it is entitled to recover its litigation costs, including attorneys’ fees. Contractor hereby acknowledges that the filing of a false claim may the Contractor to an administrative debarment proceeding wherein Contractor may be prevented from further bidding on public contracts for a period of up to five (5) years.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
727
PARKS POLE REPLACEMENT -4- SECTION 00500 – CONTRACT FOR

CONSTRUCTION
IN WITNESS WHEREOF, this Contract has been duly executed by the above-named parties, on the day and year above written.

CITY OF ONTARIO

By:

Scott Ochoa
City M anager

ATTEST:

By:

Sheila Mautz, City Clerk

APPROVED AS TO FORM:

By:

Best Best & Krieger LLP
City A ttorney
MC Electric

By:

Its:

Printed N ame:

[DELETE THE FOLLOWING SIGNATURE
LINE IF NOT REQUIRED]
By:

Its:

Printed N ame:

Contractor’s License Number and
Classification

DIR Registration Number

[IF CORPORATION, TWO SIGNATURES,

PRESIDENT OR VICE PRESIDENT AND

SECRETARY OR TREASURER
REQUIRED]

END OF CONTRACT
728
PARKS POLE REPLACEMENT -5- SECTION 00500 – CONTRACT FOR

CONSTRUCTION
Notary Acknowledgment
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA

COUNTY OF

On , 20 , before me, , Notary Public, personally
appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature of Notary Public

OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document.

CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT  Individual
 Corporate Officer
Title(s) Title or Type of Document
 Partner(s)  Limited
 General Number of Pages
 Attorney-In-Fact
 Trustee(s)
 Guardian/Conservator Date of Document
 Other:

Signer is representing:

Name Of Person(s) Or Entity(ies)

Signer(s) Other Than Named Above

729
Department: Human Resources
Prepared By: Reed Sigler
Staff Member Presenting:

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

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

ADOPT A RESOLUTION TO CONFIRM THE APPOINTMENT OF A NEW FIRE CHIEF

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council a
dopt a Resolution conﬁrming the appointment of a
new Fire Chief at a salary range consistent with range EX 9.

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 no direct fiscal impact associated with this action.

BACKGROUND & ANALYSIS:

Fire Chief Ray Gayk, announced his retirement eﬀective December 30, 2023. Pursuant to Ontario Municipal Code Section 2-3.305(a): "Fire Chief. The Fire Chief shall be appointed by the City Manager for an indeﬁnite term, subject to conﬁrmation by the Council... " It is recommended that Chief Deputy Michael G. Gerken, be conﬁrmed as Fire Chief beginning December 31, 2023.

Government Code Section 36506 requires the City Council to set the salaries for appointive positions in the Executive Management group by Resolution, and such salaries are consistent with the salary range table contained in the Executive Management Compensation and Beneﬁts Proﬁle (Proﬁle). Consistent with the Executive Compensation and Beneﬁts Proﬁle, that the City Manager has the authority to set the base salary for the Fire Chief within the previously approved EX 9 base salary range.

Chief Deputy Gerken, is a graduate of Arcadia High School and holds a Bachelor of Science Degree in Business / Management from San Diego State University. He began his professional ﬁre career in 1996 as a Fireﬁghter with the City of Alhambra where he had previously worked as a volunteer Fire Auxiliary since 1994. He began working as a Fireﬁghter at the City of Ontario in 1998 and was promoted to the rank of Fire Captain in 2010. He was promoted to the rank of Fire Battalion Chief 730
in 2017, Deputy Fire Chief in 2020, and to the rank of Chief Deputy in January 2023. Chief Deputy Gerken has worked in a variety of assignments including hazmat team liaison and the coordinator of the department's Captain Workshop / Mentor Program.
731
RESOLUTION NO. ________

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

CALIFORNIA, TO CONFIRM THE APPOINTMENT OF FIRE CHIEF
WHEREAS, the Municipal Code of the City of Ontario, California (the "City") provides at Sections 2-3.204 and 2-3.305, respectively, that the position of Fire Chief shall be appointed by the City Manager; and
WHEREAS, California Government Code Section 36506 requires the City Council to fix the compensation of appointive officers; and
WHEREAS, the City Manager has recommended that the City's Council confirm the appointment of Micheal G. Gerken, as Fire Chief effective December 31, 2023.

WHEREAS, the base salary range for the position of Fire Chief was previously assigned to range EX 9 of the Executive Management Compensation Ranges effective August 13, 2023.

NOW THEREFORE, be it resolved, by the City Council of the City of Ontario that Micheal G. Gerken, is confirmed as the Fire Chief effective December 31, 2023.

Consistent with the Compensation and Benefits Profile for Executive Management Employees, the City Manager shall determine Chief Gerken’s salary rate within the range EX 9 of the Executive Management Compensation Ranges.

SECTION 1. Signature and Attestation. The Mayor of the City shall sign this Resolution and the City Clerk shall attest and certify to the passage and adoption thereof.

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

PASSED, APPROVED, AND ADOPTED this 5th day of December 2023. _____________________________________
PAUL S. LEON, MAYOR
732
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
733

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
734

APPENDIX A
*Actual rates will be calculated by the City's payroll system and may vary by a fraction of a cent.

RANGE MINIMUM MEDIAN MAXIMUM
EX1 14,972.79$ 17,443.30$ 19,913.81$
EX2 15,721.43$ 18,315.47$ 20,909.50$
EX3 16,507.50$ 19,231.24$ 21,954.98$
EX4 17,332.88$ 20,192.80$ 23,052.73$
EX5 18,199.52$ 21,202.44$ 24,205.36$
EX6 19,109.50$ 22,262.56$ 25,415.63$
EX7 20,064.97$ 23,375.69$ 26,686.41$
EX8 21,068.22$ 24,544.48$ 28,020.73$
EX9 22,121.63$ 25,771.70$ 29,421.77$
EX10 23,227.71$ 27,060.29$ 30,892.86$
EX11 24,389.10$ 28,413.30$ 32,437.50$

RANGE MINIMUM MEDIAN MAXIMUM
EX1 16,395.21$ 13,911.47$ 21,805.62$ EX2 17,214.97$ 14,607.04$ 22,895.91$ EX3 18,075.72$ 15,337.39$ 24,040.70$ EX4 18,979.50$ 16,104.26$ 25,242.74$ EX5 19,928.48$ 16,909.47$ 26,504.87$ EX6 20,924.90$ 17,754.95$ 27,830.12$ EX7 21,971.14$ 18,642.69$ 29,221.62$ EX8 23,069.70$ 19,574.83$ 30,682.70$ EX9 24,223.19$ 20,553.57$ 32,216.84$ EX10 25,434.35$ 21,581.25$ 33,827.68$ EX11 26,706.06$ 22,660.31$ 35,519.06$

EXECUTIVE MANAGEMENT COMPENSATION RANGES
EFFECTIVE AUGUST 13, 2023

EXECUTIVE MANAGEMENT COMPENSATION RANGES
EFFECTIVE JULY 14, 2024
*These ranges are pre-approved by the City Council for executive compensation. The City Manager shall determine assignment to a range based on market and/or experience.
735
Department: Planning
Prepared By: Elly Antuna
Staff Member Presenting:

Scott Murphy, AICP, Executive Community
Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 15
SUBJECT:

A PUBLIC HEARING TO CONSIDER A MILLS ACT CONTRACT (PRESERVATION AGREEMENT), FILE NO. PHP23-007, FOR A DESIGNATED HISTORIC PROPERTY

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

That the City Council consider and adopt a Resolution approving and authorizing the City Manager or designee to enter into a Mills Act Contract (Preservation Agreement), for the designated historic property
located at 311 West H Street (APN: 1048-271-09),
Michael Kerby and Cynthia L. Kerby.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

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

The projected net impact of the proposed contract to the City is $755 in the ﬁrst year and approximately $7,550 over the ﬁrst ten years of the contract from a reduction in property tax revenue. This minimal reduction in property tax revenue will be accounted for in the revenue estimates as part of the annual budget process. In exchange for this property tax reduction, $94,000 in private property investments will be made over a ten-year period.

BACKGROUND & ANALYSIS:

A Mills Act Contract is being proposed for this year representing a total investment of $94,000 of private funds into the City’s neighborhoods over the next ten years.

The Contract calls for improvements to exterior ﬁnishes ( tree maintenance and trimming, concrete
repair, window and siding restoration, and repairs to front porch railing and posts ), interior ﬁnishes
(repair to interior
ﬂooring, ceilings, doors and built-in cabinetry
), and systems upgrades (electrical
and plumbing).

A Mills Act Contract is a contract between the City and a property owner whereby the property owner agrees to certain improvements that preserve the historic integrity and character of the building and keep the property in good repair. In exchange for the investments, State law requires the San Bernardino County Assessor to reassess the property’s value based on an alternative formula. The new assessed value may result in a signiﬁcant reduction in the owner’s property taxes.

The Mills Act does not require investment in the property to be equal to the amount of the tax savings. The purpose is to provide a ﬁnancial incentive to the owners of historic properties to 736
maintain their properties consistent with its historic context.

Upon City Council approval, the City Clerk will inform the San Bernardino County Assessor that the property owners have entered into a Mills Act Contract. The Contract is a perpetual 10-year contract that automatically renews annually. If a property with a recorded Mills Act Contract is sold, the County of San Bernardino will continue to assess the property using the alternate formula and the new owner will be required to fulﬁll the Contractual Preservation Agreement. A contract can be “non-renewed” by either party upon written notice. If a contract is cancelled as a result of non- compliance with the conditions of the contract, a cancellation fee of 12.5% of the market value (as of the time of cancellation) is assessed by the County Assessor and shall be paid by the property owner to the County Auditor.

The City has 83 approved Mills Act contracts and one proposed, for a total of 84 Mills Act contracts.

Of the 84 properties, six are commercial, one is multiple-family residential, and 77 are single-family residential. The contract proposed this year is an owner occupied, single-family residence. Property tax impacts are summarized below:

Existing
Proposed
Total
Number of Contracts
83 1
84 Estimated Annual Total Tax Savings to Owners
$156,131
$4,498
$160,629
Estimated Annual Cost to City (first year)
$26,230
$755
$26,985
Estimated Cost to City (over ten years)
$262,300
$7,550
$269,850
The estimated cost of the 84 Mills Act contracts over a ten-year period is $269,850. In exchange for this decrease in property tax revenues, approximately $3,720,540 will be reinvested into historic buildings in Ontario neighborhoods over a ten-year period – a ratio of $13.79 in private funds spent for every dollar the City foregoes in property tax revenue.

The Mills Act Contract is in compliance with the provisions of Article 12 (commencing with Section 50280), Chapter 1, Part 1, Division 1, Title 5 of the Government Code of the State of California, which establishes the Mills Act program. The property is a contributor to a locally designated historic district and, therefore, is a qualified property eligible for a Mills Act contract.

On October 24, 2023, the Historic Preservation Commission voted unanimously (7-0) to recommend City Council approval of the proposed Mills Act contract.

ENVIRONMENTAL REVIEW:

The application was reviewed pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA"). Pursuant to Section 21065 of the CEQA Guidelines, the Historic Preservation Agreement (Mills Act Contract) is not considered a project. Therefore, no further environmental review is required. 737
Case Planner: Elly Antuna, Associate Planner Hearing Body Date Decision Action Planning Director
Approval:

HPSC 10/18/23 Approval Recommend
PC 10/24/23 Recommend
Submittal Date: 07/03/23 CC 12/05/23 Final
FI
LE NO.: PHP23-007
SU
BJECT: A Mills Act Contract (Preservation Agreement) for a 3,414 square foot Craftsman style single-family residence, a Contributor to the Villa Historic District, located at 311 West H Street, within the MDR-11 (Medium Density Residential-5.1 to 11.0 du/ac) zoning district.

City Council action is required.

P
ROPERTY OWNER: Michael and Cynthia Kerby
R
ECOMMENDED ACTION : That the Historic Preservation Commission consider and approve File No. PHP23-007 recommending approval to the City Council, pursuant to the facts and reasons contained in the staff report and attached resolution . The Historic Preservation Subcommittee reviewed this application on October 1 8, 2023 and is recommending approval.

B
ACKGROUND: Effective March 7, 1973, Chapter 1442 of the Statutes of 1972 (also known as the Mills Act) added Sections 50280 through 50289 to the Government Code to allow an owner of a qualified historical property to enter into a preservation contract with a local government. The City of Ontario established the Mills Act program in 1997 to provide an economic inc entive for the preservation of designated historic l andmarks and/or contributing structures within a designated historic d istrict. Since inception of the City’s program, 83 Mills Act Contracts have been approved and recorded. There is one contract proposed at this time, for a single-family residence designated as a Contributor to the Villa Historic District.

I
n order for the historic property to be eligible for the program , it must meet the requirements outlined in the guidelines and standards set by the State of California, Board of Equalization, and the City’s Development Code (Sec. 4.02.065). The historic property must be either a local, state, or nationally designated property or a contributor within a locally designated historic district whereby the property owner agrees to certain improvements to restore, rehabilitate, or preserve a qualified historic bu ilding. In exchange, the San Bernardino County Tax Assessor reassesses the property’s value based on an alternative formula that may result in a significant reduction in the owner’s property taxes.

Pu
rsuant to State law, a Mills Act Contract is recorded on the property and is a perpetual 10-year contract that automatically rene ws annually, unless the property owner or the City requests notice of non -renewal. The Mills Act C ontract and all benefits and 303 East B Street, Ontario, California 91764 Phone: 909.395.2036 / Fax: 909.395.2420

HISTORIC PRESERVATION COMMISSION

STAFF REPORT
October 24, 2023
Approval
738
Historic Preservation Commission Staff Report
File No. PHP23-007
October 24, 2023

Page 2 of 4 ends

responsibilities remain with the land, even aft er a ch ange of ownership. If a c ontract is cancelled for any reason, including non-compliance with the conditions of the contract, or upon the request of the property owner or City, a cancellation fee of 12.5 percent of the market value (as of the time of cancellation) is assessed.

P
ROJECT ANALYSIS: Staff provides estimates of potential tax savings for the property owner, but ultimately, only the San Bernardino County Assessor can determine the actual Mills Act adjusted value. The Mills Act assessment involves many variables that are typically determined by market forces such as interest rates, capitalization rates, and fair market rental rates. The average property tax savings for the proposed Mills Act Contracts roughly range between 30 and 55 percent in the initial year, with a tax savings decrease each passing year. According to the Cit y budget, Ontario receives 16.8 percent of the property taxes collected. Using that percentage, staff has also calculated the estimated reduction in property tax revenue, the “City cost,” and has included that in the analysis.

U
pon City Council approval, the City Clerk informs the San Bernardino County Assessor that the property has entered into a Mills Act Contract. The Assessor valuates the historic property with the Mills Act assessment the following tax year, which may differ from the Planning Department estimates.

A. F
ILE NO.: PHP23-007
P
ROPERTY OWNER: Michael and Cynthia Kerby
L
OCATION: 311 West H Street
H
ISTORIC NAME: Reverend Jean F. Loba House
D
ESIGNATION DATE: September 20, 2005
(Villa Historic District)
[1
] Work Program — The Applicants are proposing both exterior and interior work as part of the Contract that qualifies under the guidelines and standards set by the State of California. Exterior work includes tree maintenance and trimming, concrete repair, window and siding restoration, and repairs to front porch railing and posts. Interior work includes new plumbing, electrical, repair to interior flooring, ceilings, doors and built- in cabinetry. The improvements are valued at an estimated $94,000. [2
] Property Owner Savings — The following Mills Act savings to the property owner are based on estimates calculated by the Planning Department. 739
Historic Preservation Commission Staff Report
File No. PHP23-007
October 24, 2023

Page 3 of 4 ends

Current Annual Taxes Paid: $7,878
Mills Act Annual Taxes Estimated: $3,380
Potential Total Annual Tax Savings: $4,498
Estimated Savings over 10 years: $44,980
Estimated Savings Percentage: 57%
[3
] City Cost — According to the City budget, Ontario receives approximately

16.8 percent of the property taxes collected. The following shows the cost to the City for this contract and is based on estimates calculated by the Planning Department.

Current Annual City Tax Revenue: $1,323
Mills Act Annual City Tax Revenue Estimated: $568
Estimated Total Annual Cost to the City: $755
Estimated Cost to the City over 10 years: $7,550
T
his contract provides for $12.44 in improvements for every $1 in estimated property tax cost to the City.
(
4) Cumulative Impacts – The City currentl y has 83 approved Mills Act Contracts and one proposed contract. The cumulative impacts are based on the initial projected assessment of each contract for the proposed year.

Existing Proposed
Number of contracts: 83 84
Average Estimated Annual Tax Saving to Property Owners: $1,904 $1,935 Estimated Annual Cost to the City: $26,230 $26,985
Estimated Cost to the City over 10 Years: $262,300 $269,850 Estimated Total Value of Improvements over 10 Years: $3,626,540 $3,720,540 Estimated Loss of Revenue to Improvement Ratio: $1/13.83 $1/13.79 C
OMPLIANCE WITH THE ONTARIO PLAN: The Mills Act Contract Program is consistent with the principles, goals and policies contained within the Vision, Governance, Policy Plan (General Plan), and City Council Priorities components of The Ontario Plan (TOP). More specifically, the goals and policies of TOP that are furthered by the proposed project are as follows:
[1
] City Council Goals.
 I
nvest in the Growth and Evolution of the City’s Economy  Operate in a Businesslike Manner
 Focus Resources in Ontario’s Commercial and Residential Neighborhoods  Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities 740
Historic Preservation Commission Staff Report
File No. PHP23-007
October 24, 2023

Page 4 of 4 ends

[2] Policy Plan (General Plan)

Community Design Element – Historic Preservation

 Goal CD4: Historic buildings, streets, landscapes, and neighborhoods, as well as the story of Ontario’s people, businesses, and social and community organizations, have been preserved and serve as a focal point for civic pride and identity.

 CD-4.2 Collaboration wit h Property Owners and Developers . We educate and collaborate with property owners and developers to implement strategies and best practices that preserve the character of our historic buildings, streetscapes, and unique neighborhoods.

 CD-4.4 Incentives . We use the Mills Act and other federal, state, regional and local programs to assist property owners with the preservation of select properties and structures.

 CD-4.6 Promotion of Public Involvement in Preservation. We engage in programs to publicize and promote the City’s and the public’s involvement in preservation efforts.

Community Design Element – Protection of Investment

 Goal CD -5: A sustained level of maintenance and improvement of properties, buildings and infrastructure that protects the property values and encourages additional public and private investments.

 CD-5.1 Maintenance of Buildings and Property. We require all public and privately owned buildings and property (including trails and easements) to be properly and consistently maintained.

 CD-5.3 Improvements to Property & Infrastructure . We provide programs to improve property and infrastructure.

 CD-5.4 Neighborhood Involvement . We encourage active community involvement to implement programs aimed at the beautification and improvement of neighborhoods.

ENVIRONMENTAL REVIEW: A Mills Act Contract will not result in a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment and, therefore, is not a project subject to The California Environmental Quality Act, pursuant to Section 21065 of the California Public Resources Code.

741
RESOLUTION NO. PC23-076

A RESOLUTION OF THE HISTORIC PRESERVATION COMMISSION OF

THE CITY OF ONTARIO, CALIFORNIA, RECOMMENDING THAT THE
CITY COUNCIL APPROVE FILE NO. PHP2 3-007, THE MILLS ACT CONTRACT FOR THE REVEREND JEAN F. LOBA HOUSE, LOCATED
AT 311 WEST H STREET (APN: 1048-271-09).

WHEREAS, MICHAEL KERBY AND CYNTHIA L. KERBY ("Applicant") has filed an Application for the approval of a Mills Act Contract, File No. PHP23-007, as described in the title of this Resolution (hereinafter referred to as "Application" or "Project"); and

WHEREAS, the City’s character and history are reflected in its cultural, historical, and architectural heritage with an emphasis on the “Model Colony” as declared by an act of the Congress of the United States and presented at the St. Louis World’s Fair in 1904; and

WHEREAS, the City’s historical foundations should be preserved as living parts of community life and development in order to foster an understanding of the City’s past so that future generations may have a genuine opportunity to appreciate, enjoy, and understand Ontario’s rich heritage; and

WHEREAS, the Community Development and the Aesthetic, Cultural, Open Space and Recreational Resources Elements of the Ontario Plan (Policy Plan) sets forth Goals and Policies to conserve Ontario’s historic buildings and districts; and

WHEREAS, the Reverend Jean F. Loba House, a Craftsman style single-family residence constructed in 1 915, located at 311 West H Street (APN: 1048-271-09) is worthy of preservation and was designated by City Council on September 20, 2005, as a Contributor within the Villa Historic District; and

WHEREAS, the Application is not a project pursuant to Section 21065 of the California Environmental Quality Act (Publ ic Resources Code Section 21000 et seq.) ("CEQA") Guidelines. The Mills Act Contract will not result in a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment; and

WHEREAS, Ontario Development Code Table 2.02- 1 (Review Matrix) grants the Historic Preservation Commission the responsibility and authority to review and make recommendation to the City Council on the subject Application; and

WHEREAS, City of Ontario Development Code Division 2.03 (Public Hearings) prescribes the manner in which public notification shall be provided and hearing procedures to be followed, and all such notifications and procedures have been 742
Historic Preservation Commission Resolution
File No. PHP23-007
October 24, 2023

Page 2 ends

completed; and

WHEREAS, on October 18, 2023, the Historic Preservation Subcommittee of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date, voting to issue Decision No. HPSC23-015, recommending the Historic Preservation Commission recommend to the City Council approval of the Application; and

WHEREAS, on October 2 4, 2023, the Historic Preservation Commission of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date; and

WHEREAS, the Historic Preservation Commission has reviewed this application and determined it to be to the mutual benefit to the City and property owner to enter into a Historic Property Preservation Agreement; and

WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND RESOLVED, the Historic Preservation Commission of City of Ontario, as follows:

SECTION 1 . Environmental Determination and Findings . As the recommending body for the Project, the Historic Preservation Commission has reviewed and considered the information contained in the administrative record for the Project.

Based upon the facts and information contained in the administrative record, including all written and oral evidence presented to the Historic Preservation Commission, the Historic Preservation Commission finds that the Mills Act Contract will not result in a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment and, therefore, is not a project subject to The California Environmental Quality Act, pursuant to Section 21065 of the California Public Resources Code.

SECTION 2. Concluding Facts and Reasons. Based upon the substantial evidence presented to the Historic Preservation Commission during the above- referenced hearing and upon the specific findings set forth in Section 1 above, the Historic Preservation Commission hereby concludes as follows:

(1) California Government C ode Section 50280, et seq., authorizes cities to enter into contracts with the owners of a qualified historical property to provide for the use, maintenance and restoration of such historical property so as to retain its characteristics as a property of historical significance; and

(2) The Reverend Jean F. Loba House, located at 311 West H Street , was 743
Historic Preservation Commission Resolution
File No. PHP23-007
October 24, 2023

Page 3 ends

designated by City Council on September 20 , 2005 as a Contributor within the Villa Historic District; and

(3) The Applicant has set forth a work program for this specific property to ensure the preservation of this historic resource that qualifies under the guidelines and standards set by the State of California.

SECTION 3. Historic Preservation Commission Action. Based upon the findings and conclusions set forth in Sections 1 and 2 above, the Historic Preservation Commission hereby RECOMMENDS THE CITY COUNCIL APPROVE THE REQUEST FOR A MILLS ACT CONTRACT.

SECTION 4. Indemnification. The Applicant shall agree to defend, indemnify and hold harmless, the City of Ontario or its agents, officers, and employees from any claim, action or proceeding against the City of Ontario or its agents, officers or employees to attack, set aside, void or annul this approval. The City of Ontario shall promptly notify the applicant of any such claim, action or proceeding, and the City of Ontario shall cooperate fully in the defense.

SECTION 5. Custodian of Records . The documents and materials that constitute the record of proceedings on which these findings have been based are located at the City of Ontario City Hall, 303 E. B Street, Ontario, California 91764. The custodian for these records is the City Clerk of the City of Ontario.

SECTION 6. Certification to Adoption. The Secretary shall certify to the adoption of the Resolution.

- - - - - - - - - - - - - -

744
745
746

RECORDING REQUESTED BY
And When
RECORDED MAIL TO:

City Clerk, City of Ontario
303 East “B” Street
Ontario, CA 91764

Exempt Recording Fees Pursuant to Government
Code Section 6103 & 27383

HISTORIC PROPERTY PRESERVATION AGREEMENT

THIS AGREEMENT is made and entered into this 5th day of December 2023, by and between the City of Ontario, a municipal corporation (hereinafter referred to as the “City”) and Michael Kerby and Cynthia L. Kerby (hereinafter referred to as the “Owner”).

WITNESSETH:

A. R ecitals.

(I) California Government Code Section 50280, et seq., authorizes cities to enter into contracts with the owners of qualified historical property to provide for the use, maintenance and restoration of such historical property so as to retain its characteristics as property of historical significance;

(ii) Owner possesses fee title in and to that certain real property, together with associated structures and improvements thereon, commonly known as the Benton Ballou House, generally located at the street address 311 West H Street, Ontario, CA 9176 2 (hereinafter such property shall be referred to as the “Historic Property”). A legal description of the Historic Property is attached hereto, marked as Exhibit “A” and is incorporated herein by this reference;
747

(iv) On September 20, 2005, the City Council of the City of Ontario designated the Historic Property as a Contributor to the Villa Historic District pursuant to the terms and provisions of Title 9, Chapter 1, Chapter 4 of the Ontario Municipal Code; and,

(v) The City and Owner, for their mutual benefit, now desire to enter into this agreement both to protect and preserve the characteristics of historical significance of the Historic Property and to qualify the Historic Property for an assessment of valuation pursuant to the Provisions of Chapter 3, of Part 2, of Division 1 of the California Revenue and Taxation Code.

B. A
greement

NOW, THEREFORE, City and Owner, in consideration of the mutual covenants and conditions set forth herein, do hereby agree as follows:

1. E ffective Date and Term of Agreement. This Agreement shall be effectiv e and commence on December 5, 2023 and shall remain in effect for a term of ten (10) years thereafter. Each year upon the anniversary of the effective date, such initial term will automatically be extended as provided in paragraph 2, below.

2. Renewal.

Each year on the anniversary of the effective date of this Agreement (hereinafter referred to as the “renewal date”), a year shall automatically be added to the initial term of this Agreement unless notice of non- renewal is mailed as provided herein.

If either Owner or City desires in any year not to renew the Agreement, Owner or City shall serve written notice of non-renewal of the Agreement on the other party in advance of the annual renewal date of the Agreement. Unless such notice is served by Owner to City at least ninety (90) days prior to the annual renewal date, or served by City to Owner at least sixty (60) days prior to the annual renewal date, one (1) year shall automatically be added to the term of the Agreement provided herein. Owner may make a written protest of the notice. Upon receipts by the Owner of a notice from the City of non-renewal, the City may, at any time prior to the annual renewal date of the Agreement, withdraw its 748
notice to Owner of non-renewal. If either City or Owner serves notice to the other of non- renewal in any year, the Agreement shall remain in effect for the balance of the term then remaining, either from its original execution or from the last renewal of the Agreement, whichever may apply.

3 . Fees. Prior to recordation the A pplicant shall pay the applicable fee in effect at the time recordation is requested.

4. Standards for Historical Property. During the term of this Agreement, the Historic Property shall be subject to the following conditions, requirements and restrictions:

A
. Owner shall preserve and maintain the characteristics of historical significance of the Historic Property. Attached hereto, marked as Exhibits “B”, and incorporated herein by this reference, is a list of those minimum standards and conditions for maintenance, use and preservation of the Historic Property, which shall apply to such property throughout the term of this Agreement.

B. Owner shall, where necessary, restore and rehabilitate the property according to the rules and regulations of the Office of Historic Preservation of the Department of Parks and Recreation, the United States Secretary of the Interior’s Rehabilitation Standards , the State Historical Building Code, and the Ontario Development Code and in accordance with the attached schedule of potential improvements, drafted by the applicant and approved by the City Council, attached hereto as Exhibit “C”.

D. Owner shall allow reasonable periodic examinations, by prior appointment, of the interior and exterior of the Historic Property by representatives of the County Assessor, State Department of Parks and Recreation, State Board of Equalization, and the City, as may be necessary to determine Owner’s compliance with the terms and provisions of this Agreement.

5. Provision of Information of Corporation. Owner hereby agrees to furnish City with any and all information requested by the City, which may be necessary or advisable to determine compliance with the terms and provision of this Agreement.

6. Ca
ncellation . City, following a duly noticed public hearing as set forth in California Government Code Sections 50280, et seq., may cancel this Agreement if it determines that Owner breached any of the conditions of this Agreement or has allowed the property to deteriorate to the point that it no longer meets the standards for a qualified historic property. City may also cancel this Agreement if it determines that the Owner has failed to restore or rehabilitate the property in the manner specified in subparagraph 4(B) of this Agreement. In the event of cancellation, Owner may be subject to payment of those cancellation fees set forth in California Government Code Sections 50280, et seq.

7. Enforcement of Agreement .

In lieu of and/or in addition to any provision to
cancel the Agreement as referenced herein, City may specifically enforce, or enjoin the breach of, the terms of this Agreement. In the event of a default, under the provisions of this Agreement by Owner, City shall give written notice to Owner by registered or certified mail addressed to the address stated in this Agreement, and if such a violation is not corrected to the reasonable satisfaction of the City within thirty (30) days thereafter, or if not corrected within such reasonable time as may be required to cure the breach or default if said breach or default cannot be cured within thirty (30) days (provided that acts to cure the breach of default may be commenced within thirty (30) days and must be pursued to completion by Owner), then City may, without further notice, declare a default under the terms of this Agreement and may bring any action necessary to specifically enforce the obligations of Owner growing out of the terms of this Agreement, apply to any 750
court, state or federal, for injunctive relief against any violation by Owner or apply for such other relief against any violation by Owner or apply for such other relief an may be appropriate.

City does not waive any claim of default by Owner if City does not enforce or cancel this Agreement. All other remedies at law or in equity which are not otherwise provided for in this Agreement or in City’s regulations governing historic properties are available to the City to pursue in the event that there is a breach of this Agreement. No waiver by City of any breach or default under this agreement shall be deemed to be a waiver of any other subsequent breach thereof or default herein under.

8. Binding Effect of Agreement. The Owner hereby subjects the Historic Property described in Exhibit “A” hereto to the covenants, reservations and restriction as set forth in this Agreement. City and Owner hereby declare their specific intent that the covenants, reservations and restrictions as set forth herein shall be deemed covenants running with the land and shall pass to and be binding upon the Owner’s successors and assigns in title or interest to the Historic Property. Each and every contract, deed or other instrument hereinafter executed, covering or conveying the Historic Property, or any portion thereof, shall conclusively be held to have been executed, delivered and accepted subject to the covenants, reservations and restrictions expressed in this Agreement regardless of whether such covenants, reservations and restrictions are set forth in such contract, deed or other instrument.

C
ity and Owner hereby declare their understanding and intent that the burden of the covenants, reservations and restrictions set forth herein touch and concern the land in that Owner’s legal interest in the Historic Property is rendered less valuable thereby. City and Owner hereby further declare their understanding and intent that the benefit of such covenants, reservations and restrictions touch and concern the land by enhancing and maintaining the historic characteristics and significance of the Historic Property for the benefit of the public and the Owner.

9. Notice.

Any notice required to be given by the terms of this Agreement shall be 751
provided at the address of the respective parties as specified below or at any other address as may be later specified by the parties hereto.

To City: City of Ontario
303 East “B” Street
Ontario, CA 91764

Attention: Planning Director

To Owner: Michael Kerby and Cynthia L. Kerby
311 West H Street
Ontario, CA 91762

10. General Provisions.

A. None of the terms, provisions or conditions of this Agreement shall be deemed to create a partnership between the parties hereto and any of their heirs, successors or assigns, nor shall such terms, provisions or conditions cause them to be considered joint ventures or members of any joint enterprise.

B. Owner agrees to and shall h old City and its elected officials, officers, agents, and employees harmless from liability for damage or claims for damage for personal injuries, including death, and claims for property damage which may arise from the direct or indirect use or operations of Owner or those of his contractor, subcontractor, agent, employee or other person acting on his behalf which relates to the use, operation and maintenance of the Historic Property. Owner hereby agrees to and shall defend the City and its elected officials, officers, agents, and employees with respect to any and all actions for damages caused by, or alleged to have been caused by, reason of Owner’s activities in connection with the Historic Property. This hold harmless provision applies to all damages and claims for damages suffered, or alleged to have been suffered, by reason of the operations referred to in this Agreement regardless of whether or not the City prepared, supplied or approved the plans, specifications or other documents for the Historic Property.

C. All of the agreements, rights, covenants, reservations and restrictions 752
contained in this Agreement shall be binding upon and shall inure to the benefit of the parties herein, their heirs, successors, legal representatives, assigns and all persons acquiring any part or portion of the Historic Property, whether by operation of law or in any manner whatsoever.

D. In the event legal proceedings are brought by any party or parties to enforce or restrain a violation of any of the covenants, reservations or restrictions contained herein, or to determine the rights and duties of any party hereunder, the prevailing party in such proceeding may recover all reasonable attorney’s fees to be fixed by the court, in addition to court costs and other relief ordered by the court.

E. In the event that any of the provisions of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, or by subsequent preemptive legislation, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected thereby.

F. This Agreement shall be construed and governed in accordance with the laws of the State of California.

11. Recordation. No later than twenty (20) days after the parties ex ecute and
enter into this Agreement, the City shall cause this Agreement to be recorded in the office of the County Recorder of the County of San Bernardino.

12. Amendments. This Agreement may be amended, in whole or in part, only by a written recorded instrument executed by the parties hereto.

753

IN WITNESS WHEREOF, City and Owner have executed this Agreement on the day and year first written above.

CITY OF ONTARIO

Dated: By:

City Manager

Attest

City Clerk

Approved as to Form

City Attorney

754

Dated: By:

Michael Kerby, Owner

Dated: By:

Cynthia L. Kerby, Owner

755
Exhibit A: Historic Property Preservation Agreement
Legal Description

Address: 311 West H Street
Ontario, CA 91762
APN: 1048-271-09 File No.: PHP23-007

The property located at: 311 West H Street
Ontario, CA 91762

is legally described as: THAT PORTION OF VILLA LOT 1, IN BLOCK 905, ONTARIO COLONY LANDS, AS PER PLAT RECORDED IN BOOK 9 OF
MAPS, PAGE 43, RECORDS OF SAID COUNTY, PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE NORTH LINE OF SAID LOT 1,
495 FEET EAST OF THE NORTHWEST CORNER OF LOT 2 OF

SAID BLOCK, THENCE SOUTH AND PARALLEL TO THE EAST
LINE OF SAID LOT 1, TO A POINT ON THE SOUTH LINE OF SAID LOT 1, 495 FEET EAST TO THE SOUTHWEST CORNER OF VILLA
LOT 2, THENCE EAST, ON THE SOUTH LINE OF SAID LOT 1, 80 FEET, THENCE NORTH TO THE NORTH LINE OF SAID LOT 1,
THENCE WEST ON THE NORTH LINE OF SAID LOT 1, 80 FEET

TO THE PLACE OF BEGINNING

APN: 1048-271-09-0-000
756
Exhibit B: Historic Property Preservation Agreement
Property Maintenance

Address: 311 West H Street
Ontario, CA 91762
APN: 1048-271-09 File No.: PHP23-007

All buildings, structures, yards and other improvements shall be maintained in a manner which does not detract from the appearance of the immediate neighborhood. The following conditions are prohibited:

1. Dilapidated, deteriorating, or unrepaired structures, such as fences, roofs, doors, walls, and windows;

2. Scrap lumber, junk, trash or debris;

3. Abandoned, discarded or unused objects or equipment, such as automobiles, automobile parts, furniture, stoves, refrigerators, cans, containers, or similar items;

4. Stagnant water or excavations, including unmaintained pools or spas;

5. Any device, decoration, design, structure or vegetation which is unsightly by reason of its height, condition, or its inappropriate location.

757
Exhibit C: Historic Property Preservation Agreement
Proposed Improvements

Address: 311 West H Street
Ontario, CA 91762
APN: 1048-271-09 File No.: PHP23-007

Contract
Year Description

2024: Update electrical, install new receptacles (outlets), switches and wiring. Install new electrical panel.
2025: Replace plumbing throughout the house. Repair water damage to the ceiling in laundry room.
2026: Replace damaged redwood siding tiles lifting on west and south facades.

Repair, or replace if needed, broken glass in windows throughout house. Repair porch handrail and paint wood at front porch.
2027: Repair damaged walls in downstairs master bedroom and sunroom, rebuild custom wainscoting to match original.
2028: Restore original wood frame windows at first floor sunroom that have been removed or enclosed.
2029: Restore original hardwood floors throughout the house, including downstairs living areas, stairs, upstairs hallways and bedrooms.
2030: Repair front yard scored walkways where concrete has cracked and lifted. 2031: Remove stipple (popcorn) ceiling from sunroom and restore original lath and plaster.
2032: Restore 5 original interior doors and built-ins at upstairs hallway and repair hardware as needed.
2033: Tree trimming of mature oak tree in rear yard by certified arborist. Remove river rock from front porch posts and foundation and restore to original condition of wood shingle posts and concrete foundation.

758
RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, APPROVING FILE NO. PHP23-007, AND AUTHORIZING

THE CITY OF ONTARIO TO ENTER INTO A HISTORIC PROPERTY

PRESERVATION AGREEMENT (MILLS ACT CONTRACT) WITH
MICHAEL KERBY AND CYNTHIA L. KERBY, FOR THE PROPERTY
LOCATED AT 311 WEST H STREET (APN: 1048-271-09).

WHEREAS, California Government Code Section 50280, et seq., authorizes cities to enter into contracts with the owners of a qualified historical property to provide for the use, maintenance, and restoration of such historical property so as to retain its characteristics as a property of historical significance; and WHEREAS, Michael Kerby and Cynthia L. Kerby possess fee title in and to that certain real property, together with associated structures and improvements thereon, located at the street address commonly known as 311 West H Street, Ontario, California (hereinafter referred to as the “Property”); and
WHEREAS, on September 20, 2005, the City Council of the City of Ontario designated the Property as a Contributor within the Villa Historic District pursuant to the terms and provisions of Chapter 4, of the Ontario Development Code; and WHEREAS, the City and Michael Kerby and Cynthia L. Kerby, for their mutual benefit, now desire to enter into a Historic Property Preservation Agreement, a copy of which is attached hereto as Exhibit “A” and incorporated herein by reference (hereinafter referred to as the “Preservation Agreement”); and
WHEREAS, the Application is a project pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA"); and WHEREAS, the Project is exempt from CEQA pursuant to a categorical exemption (listed in CEQA Guidelines Article 19, commencing with Section 15300) and the application of that categorical exemption is not barred by one of the exceptions set forth in CEQA Guidelines Section 15300.2; and
WHEREAS, Ontario Development Code Table 2.02-1 (Review Matrix) grants the City Council the responsibility and authority to review and act on the subject Application; and
WHEREAS, City of Ontario Development Code Division 2.03 (Public Hearings) prescribes the manner in which public notification shall be provided and hearing procedures to be followed, and all such notifications and procedures have been completed; and
WHEREAS, on October 18, 2023, the Historic Preservation Subcommittee conducted a hearing and issued Decision No. HPSC23-015, recommending the Historic 759
Preservation Commission recommend the City Council approve the Application; and WHEREAS, on October 24, 2023, the Historic Preservation Commission conducted a hearing and issued Resolution No. PC23-076, recommending the City Council approve the Application; and
WHEREAS, on December 5, 2023, the City Council of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

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

SECTION 1. Environmental Determination and Findings . As the decision- making body for the Project, the City Council has reviewed and considered the information contained in the administrative record for the Project. Based upon the facts and information contained in the administrative record, including all written and oral evidence presented to the City Council, the City Council finds as follows:
(1) The Mills Act contract is not considered a project pursuant to Section 21065 of the CEQA Guidelines. The Mills Act contract will not result in a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment; and
(2) The determination of CEQA exemption reflects the independent judgement of the City Council.

SECTION 2. Concluding Facts and Reasons. Based upon the substantial evidence presented to the City Council during the above-referenced hearing and upon the specific findings set forth in Section 1 above, the City Council hereby concludes as follows:
(1) California Government Code Section 50280, et seq., authorizes cities to enter into contracts with the owners of a qualified historical property to provide for the use, maintenance, and restoration of such historical property so as to retain its characteristics as a property of historical significance; and (2) Pursuant to California Government Code Section 50280, et seq., qualified historical properties are designated historic landmarks, contributing structures within designated historic districts, and properties listed on the National Register of Historic Places or the California Register of Historic Resources; and (3) The Reverend Jean F. Loba House, a Craftsman style single-family residence located at 311 West H Street, was designated as a Contributor within the Villa Historic District; and
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(4) The Applicant has set forth a work program for this specific property to ensure the preservation of this historic resource that qualifies under the guidelines and standards set by the State of California.

SECTION 3. City Council Action. Based upon the findings and conclusions set forth in Sections 1 and 2 above, THE CITY COUNCIL APPROVES AND RATIFIES the historic property preservation agreement and authorizes the City Manager to execute the agreement, which is subject to the provisions of the City’s Development Code (Sec.

4.02.065) and to each and every condition set forth in the Preservation Agreement, attached hereto as Exhibit “A” and incorporated herein by this reference; and SECTION 4. Indemnification. The Applicant shall agree to defend, indemnify and hold harmless, the City of Ontario or its agents, officers, and employees from any claim, action or proceeding against the City of Ontario or its agents, officers or employees to attack, set aside, void or annul this approval. The City of Ontario shall promptly notify the applicant of any such claim, action or proceeding, and the City of Ontario shall cooperate fully in the defense.

SECTION 5. Recordation of Agreement. That the City Clerk of the City of Ontario, California, shall cause the Historic Preservation Agreement to be recorded in the office of the County Recorder of San Bernardino County.

SECTION 6. Notification of Assessor . That the City Clerk of the City of Ontario, California, shall notify the San Bernardino County Assessor in writing that the property has entered into a Preservation Agreement within 30 days of the recordation of the contract.

SECTION 7. 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 5th day of December 2023. _____________________________________
PAUL S. LEON, MAYOR
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ATTEST:
________________________________

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

BEST BEST AND KRIEGER LLP

CITY ATTORNEY
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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.2023 was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held December 5, 2023, 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. 2023 duly passed and adopted by the Ontario City Council at their regular meeting held December 5, 2023. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
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Exhibit “A”
Preservation Agreement
764

RECORDING REQUESTED BY
And When
RECORDED MAIL TO:

City Clerk, City of Ontario
303 East “B” Street
Ontario, CA 91764
Exempt Recording Fees Pursuant to Government
Code Section 6103 & 27383

HISTORIC PROPERTY PRESERVATION AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of December 2023, by and between the City of Ontario, a municipal corporation (hereinafter referred to as the “City”) and Michael Kerby and Cynthia L. Kerby (hereinafter referred to as the “Owner”).

WITNESSETH:

A. Recitals.
(I) California Government Code Section 50280, et seq., authorizes cities to enter into contracts with the owners of qualified historical property to provide for the use, maintenance and restoration of such historical property so as to retain its characteristics as property of historical significance;
(ii) Owner possesses fee title in and to that certain real property, together with associated structures and improvements thereon, commonly known as the Benton Ballou House, generally located at the street address 311 West H Street, Ontario, CA 91762 (hereinafter such property shall be referred to as the “Historic Property”). A legal description of the Historic Property is attached hereto, marked as Exhibit “A” and is incorporated herein by this reference;
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(iv) On September 20, 2005, the City Council of the City of Ontario designated the Historic Property as a Contributor to the Villa Historic District pursuant to the terms and provisions of Title 9, Chapter 1, Chapter 4 of the Ontario Municipal Code; and, (v) The City and Owner, for their mutual benefit, now desire to enter into this agreement both to protect and preserve the characteristics of historical significance of the Historic Property and to qualify the Historic Property for an assessment of valuation pursuant to the Provisions of Chapter 3, of Part 2, of Division 1 of the California Revenue and Taxation Code.

B. Agreement
NOW, THEREFORE, City and Owner, in consideration of the mutual covenants and conditions set forth herein, do hereby agree as follows:

1. Effective Date and Term of Agreement. This Agreement shall be effective and commence on December 5, 2023 and shall remain in effect for a term of ten (10) years thereafter. Each year upon the anniversary of the effective date, such initial term will automatically be extended as provided in paragraph 2, below.

2. Renewal. Each year on the anniversary of the effective date of this Agreement (hereinafter referred to as the “renewal date”), a year shall automatically be added to the initial term of this Agreement unless notice of non-renewal is mailed as provided herein.

If either Owner or City desires in any year not to renew the Agreement, Owner or City shall serve written notice of non-renewal of the Agreement on the other party in advance of the annual renewal date of the Agreement. Unless such notice is served by Owner to City at least ninety (90) days prior to the annual renewal date, or served by City to Owner at least sixty (60) days prior to the annual renewal date, one (1) year shall automatically be added to the term of the Agreement provided herein. Owner may make a written protest of the notice. Upon receipts by the Owner of a notice from the City of non-renewal, the City may, at any time prior to the annual renewal date of the Agreement, withdraw its 766
notice to Owner of non-renewal. If either City or Owner serves notice to the other of non- renewal in any year, the Agreement shall remain in effect for the balance of the term then remaining, either from its original execution or from the last renewal of the Agreement, whichever may apply.

3. Fees. Prior to recordation the Applicant shall pay the applicable fee in effect at the time recordation is requested.

4. Standards for Historical Property. During the term of this Agreement, the Historic Property shall be subject to the following conditions, requirements and restrictions:

A. Owner shall preserve and maintain the characteristics of historical significance of the Historic Property. Attached hereto, marked as Exhibits “B”, and incorporated herein by this reference, is a list of those minimum standards and conditions for maintenance, use and preservation of the Historic Property, which shall apply to such property throughout the term of this Agreement.

B. Owner shall, where necessary, restore and rehabilitate the property according to the rules and regulations of the Office of Historic Preservation of the Department of Parks and Recreation, the United States Secretary of the Interior’s Rehabilitation Standards, the State Historical Building Code, and the Ontario Development Code and in accordance with the attached schedule of potential improvements, drafted by the applicant and approved by the City Council, attached hereto as Exhibit “C”.

C. Pursuant to Section 4.02.050 of the Ontario Development Code, Owner shall obtain a Certificate of Appropriateness for any alteration, addition, restoration, rehabilitation, repainting, resurfacing, and for each and every item listed in Exhibit “C”, prior to commencement of work. Failure to obtain all necessary permits, including building permits, and approvals may result in cancellation of this Agreement as set forth on Paragraph 6, Cancellation herein.
767
D. Owner shall allow reasonable periodic examinations, by prior appointment, of the interior and exterior of the Historic Property by representatives of the County Assessor, State Department of Parks and Recreation, State Board of Equalization, and the City, as may be necessary to determine Owner’s compliance with the terms and provisions of this Agreement.

6. Cancellation. City, following a duly noticed public hearing as set forth in California Government Code Sections 50280, et seq., may cancel this Agreement if it determines that Owner breached any of the conditions of this Agreement or has allowed the property to deteriorate to the point that it no longer meets the standards for a qualified historic property. City may also cancel this Agreement if it determines that the Owner has failed to restore or rehabilitate the property in the manner specified in subparagraph 4(B) of this Agreement. In the event of cancellation, Owner may be subject to payment of those cancellation fees set forth in California Government Code Sections 50280, et seq.

7. Enforcement of Agreement. In lieu of and/or in addition to any provision to cancel the Agreement as referenced herein, City may specifically enforce, or enjoin the breach of, the terms of this Agreement. In the event of a default, under the provisions of this Agreement by Owner, City shall give written notice to Owner by registered or certified mail addressed to the address stated in this Agreement, and if such a violation is not corrected to the reasonable satisfaction of the City within thirty (30) days thereafter, or if not corrected within such reasonable time as may be required to cure the breach or default if said breach or default cannot be cured within thirty (30) days (provided that acts to cure the breach of default may be commenced within thirty (30) days and must be pursued to completion by Owner), then City may, without further notice, declare a default under the terms of this Agreement and may bring any action necessary to specifically enforce the obligations of Owner growing out of the terms of this Agreement, apply to any 768
court, state or federal, for injunctive relief against any violation by Owner or apply for such other relief against any violation by Owner or apply for such other relief an may be appropriate.

City and Owner hereby declare their understanding and intent that the burden of the covenants, reservations and restrictions set forth herein touch and concern the land in that Owner’s legal interest in the Historic Property is rendered less valuable thereby. City and Owner hereby further declare their understanding and intent that the benefit of such covenants, reservations and restrictions touch and concern the land by enhancing and maintaining the historic characteristics and significance of the Historic Property for the benefit of the public and the Owner.

9. Notice. Any notice required to be given by the terms of this Agreement shall be 769
provided at the address of the respective parties as specified below or at any other address as may be later specified by the parties hereto.

To City: City of Ontario
303 East “B” Street
Ontario, CA 91764
Attention: Planning Director
To Owner: Michael Kerby and Cynthia L. Kerby
311 West H Street
Ontario, CA 91762

10. General Provisions.

B. Owner agrees to and shall hold City and its elected officials, officers, agents, and employees harmless from liability for damage or claims for damage for personal injuries, including death, and claims for property damage which may arise from the direct or indirect use or operations of Owner or those of his contractor, subcontractor, agent, employee or other person acting on his behalf which relates to the use, operation and maintenance of the Historic Property. Owner hereby agrees to and shall defend the City and its elected officials, officers, agents, and employees with respect to any and all actions for damages caused by, or alleged to have been caused by, reason of Owner’s activities in connection with the Historic Property. This hold harmless provision applies to all damages and claims for damages suffered, or alleged to have been suffered, by reason of the operations referred to in this Agreement regardless of whether or not the City prepared, supplied or approved the plans, specifications or other documents for the Historic Property.

C. All of the agreements, rights, covenants, reservations and restrictions 770
contained in this Agreement shall be binding upon and shall inure to the benefit of the parties herein, their heirs, successors, legal representatives, assigns and all persons acquiring any part or portion of the Historic Property, whether by operation of law or in any manner whatsoever.

F. This Agreement shall be construed and governed in accordance with the laws of the State of California.

11. Recordation. No later than twenty (20) days after the parties execute and enter into this Agreement, the City shall cause this Agreement to be recorded in the office of the County Recorder of the County of San Bernardino.

12. Amendments. This Agreement may be amended, in whole or in part, only by a written recorded instrument executed by the parties hereto. 771
IN WITNESS WHEREOF, City and Owner have executed this Agreement on the day and year first written above.

CITY OF ONTARIO
Dated: By:

City Manager
Attest

City Clerk
Approved as to Form

City Attorney
772
Dated: By:

Michael Kerby, Owner
Dated: By:

Cynthia L. Kerby, Owner
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Exhibit A: Historic Property Preservation Agreement
Legal Description
Address: 311 West H Street
Ontario, CA 91762
APN: 1048-271-09 File No.: PHP23-007
The property located at: 311 West H Street
Ontario, CA 91762
is legally described as: THAT PORTION OF VILLA LOT 1, IN BLOCK 905, ONTARIO COLONY LANDS, AS PER PLAT RECORDED IN BOOK 9 OF
MAPS, PAGE 43, RECORDS OF SAID COUNTY, PARTICULARLY
DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE NORTH LINE OF SAID LOT 1,
495 FEET EAST OF THE NORTHWEST CORNER OF LOT 2 OF

TO THE PLACE OF BEGINNING
APN: 1048-271-09-0-000
774
Exhibit B: Historic Property Preservation Agreement
Property Maintenance
Address: 311 West H Street
Ontario, CA 91762
APN: 1048-271-09 File No.: PHP23-007
All buildings, structures, yards and other improvements shall be maintained in a manner which does not detract from the appearance of the immediate neighborhood. The following conditions are prohibited:

1. Dilapidated, deteriorating, or unrepaired structures, such as fences, roofs, doors, walls, and windows;

2. Scrap lumber, junk, trash or debris;

3. Abandoned, discarded or unused objects or equipment, such as automobiles, automobile parts, furniture, stoves, refrigerators, cans, containers, or similar items;

4. Stagnant water or excavations, including unmaintained pools or spas;

5. Any device, decoration, design, structure or vegetation which is unsightly by reason of its height, condition, or its inappropriate location.

The property owner shall also comply with the provisions of the Duty to Keep in Good Repair Section of the Historic Preservation Ordinance (Sec. 9-1.7.01.045 of the Ontario Development Code) and all other applicable provisions of the City’s Property Appearance – Nuisance Ordinance (Chapter 22 of Title 5 of the Ontario Municipal Code, Commencing at Sec. 5-22.02). 775
Exhibit C: Historic Property Preservation Agreement
Proposed Improvements
Address: 311 West H Street
Ontario, CA 91762
APN: 1048-271-09 File No.: PHP23-007
Contract
Year Description
2024: Update electrical, install new receptacles (outlets), switches and wiring. Install new electrical panel.
2025: Replace plumbing throughout the house. Repair water damage to the ceiling in laundry room.
2026: Replace damaged redwood siding tiles lifting on west and south facades.

Jennifer McLain Hiramoto, Economic
Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 16
SUBJECT:

A PUBLIC HEARING REGARDING AN ECONOMIC DEVELOPMENT SUBSIDY

REPORT, RESOLUTION, AND OPERATING COVENANT AGREEMENT BETWEEN THE CITY OF ONTARIO AND HOME DEPOT U.S.A., INC.

CITY OF ONTARIO
Agenda Report
December
5, 2023
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

That the City Council take the following actions:

A
.

Adopt a Resolution accepting the Economic Development Subsidy Report prepared pursuant to Government Code Section 53083.1 regarding an Operating Covenant Agreement with Home Depot U.S.A., Inc.
;
B
.

Adopt a Resolution approving the Operating Covenant Agreement and authorizing the City Manager or his designee to execute the Agreement; and
C
.

Direct City Staﬀ to ﬁle a Notice of Exemption based upon the City Council’s ﬁnding that the impacts for this Agreement is not a project and subject to environmental review and that there is no possibility that the activity in question may have a signiﬁcant eﬀect on the environment.

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:

Pursuant to the terms of the proposed Operating Covenant Agreement (Agreement), the payment between the City and Home Depot U.S.A. (Home Depot) is calculated based on the Sales Tax Revenues received by the City. An amount equal to the sum of ﬁfty percent of the Sales Tax Revenues, based on the City’s current sales tax rate at the time of execution of this Covenant Agreement, attributable to annual taxable sales at the Stocking Distribution Center received by the City (Covenant Payment). The City estimates that the annual payments to Home Depot will be approximately $100,000 and shall not exceed $400,000. General Fund appropriations will be included in the quarterly budget update following the first computation quarter.

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BACKGROUND & ANALYSIS:

The Bradley-Burns Uniform Local Sales and Use Tax Law authorizes counties and cities to impose local sales and use taxes in conformity with the Sales and Use Tax Law. The City of Ontario receives one percent of all taxable sales generated within the City under this law. Sales and Use Tax revenues are an important source of revenue for the City, which are used to provide essential City services, such as police, ﬁre, and infrastructure maintenance and community facilities.

Home Depot, a Delaware corporation, is going to lease a build-to-suit 2,000,000 square foot facility at
East Borba Street, Buildings 4 & 5
to be occupied as a Stocking Distribution Center. This facility would be a new point of sale resulting in additional sales tax revenue for the City, and would be the second Home Depot distribution center in Ontario. The intention of this Agreement is to incentivize Home Depot to lease the facility, expand, and continue its operations within the City for 15 years.

Home Depot estimates that the proposed Stocking Distribution Center will generate approximately 300 permanent jobs that will revitalize an underserved area of the City, and result in community and public improvements that might not otherwise be available to the community for many years.

In light of the economic development beneﬁts this facility will have on the community, Staﬀ recommends an Operating Covenant Agreement to incentivize Home Depot, to move forward with leasing the facility and operate in the City.
778
RESOLUTION NO. ________

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

CALIFORNIA, ACCEPTING THE ECONOMIC DEVELOPMENT SUBSIDY

REPORT PREPARED PURSUANT TO GOVERNMENT CODE SECTION
53083.1 REGARDING THE DEVELOPMENT AND RETENTION OF A
STOCKING DISTRIBUTION CENTER BY HOME DEPOT U.S.A., INC, IN

THE CITY OF ONTARIO AND APPROVING AN OPERATING COVENANT AGREEMENT BETWEEN THE PARTIES.

WHEREAS, the City of Ontario (“City”) and Home Depot U.S.A, Inc.(“Owner”) have negotiated an Operating Covenant Agreement (“Agreement”) with respect to the establishment and retention of an Stocking Distribution Center (“Facility”) within the City; and
WHEREAS, pursuant to that Agreement, Owner is committed to operating the Facility in the City for at least 15 years following the Agreement’s effective date; and WHEREAS, Owner is also covenanted to, among other things, designate the City as the point of sale for sales transactions out of that Facility; and WHEREAS, the City has agreed to purchase those covenants through quarterly payments equal to:
 Fifty percent (50%) of the all sales tax revenue not to exceed $400,000 over the 15-year term; and
WHEREAS, based on information provided by City staff, and other such written and oral evidence as presented to the City, the City finds and determines that the allocation of funds to Owner pursuant to the Agreement is reasonably related to a legitimate governmental purpose in that the establishment and retention of the Facility will provide numerous public benefits including:
 Generating substantial revenue for the City through additional Local Sales Tax Revenue which may be used by the City for the funding of necessary public services and facilities, including but not limited to, public safety services and facilities, public improvements and recreational opportunities that otherwise may not be available to the community for many years; and  The creation of hundreds of full-time, seasonal or temporary jobs throughout the term of this Agreement.
 Helping the City achieve the building blocks set forth in the Ontario Plan (adopted by the City Council in 2010) including taking actions that help to achieve a “Dynamic Balance” that enables the community to confront the continued dynamic growth of the region and technological change with confidence and a sense of opportunity and a “Prosperous Economy” that sustains prosperity across our entire community; and
779
 Entering into this Agreement and ensuring the Facility’s presence in Ontario may attract additional businesses and investment in the community due to increased services and economic activity in the area.

WHEREAS, in accordance with Government Code Section 53083.1, the City provided certain information in written form to the public and on its website, a copy of which is attached hereto as Exhibit A and incorporated herein by this reference, and held a public hearing on December 5, 2023 to consider all written and oral comments on the Economic Development Subsidy Report; and
WHEREAS, Owner is a duly formed Delaware corporation and the establishment and retention of the Facility serves Owner’s business purposes in that the advantageous location of the City and its business conducive environment will permit Owner to operate more efficiently and effectively, will better serve its customers, and may provide an avenue for business expansion in the future; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

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

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

SECTION 2. Findings. The City Council hereby finds that:
(a) Entering into this Agreement will serve the following public purposes:
(1) Through this Agreement, Owner, will be committed to operating a Home Depot Stocking Distribution Center in the City.
(2) The establishment and retention of the Facility within the City will generate substantial revenue for the City, create new jobs, revitalize an area of the City which has suffered a loss of jobs and businesses during the economic downturn of the mid-2000’s, and result in community and public improvements that might not otherwise be available to the community for many years.
(3) By having a company like Home Depot establish and retain an Stocking Distribution Center in the City, the City will be adding diversity to and generating new opportunities for economic growth.
(4) Further, the establishment of the Facility serves the public purpose of fostering a business and civic environment that may attract additional businesses and investment in the community due to the availability of the increased public and private services and economic activity resulting therefrom, thereby assisting the City in its goal of furthering the development of the community. The increased economic activity resulting from the Facility and Owner’s increased footprint in the City will improve the economic and social viability and vitality of the local community. 780
(5) Entering into this Covenant Agreement will also further the City’s efforts to achieve certain goals set forth in the 2010 Ontario Plan. The Ontario Plan included certain building blocks for the economic growth and improvement of the community. The Plan called upon the City to take actions that help to achieve a “Dynamic Balance” that enables the community to confront the continued dynamic growth of the region and technological change with confidence and a sense of opportunity and a “Prosperous Economy” that sustains prosperity across our entire community. The establishment of the Facility is another step in achieving those goals. (b) Based upon these and other public benefits the public purposes of the Agreement outweigh any private benefit to private persons or entities. (c) Contingent Obligations. The City finds that each City obligation is contingent upon separate consideration by Owner including but not limited to quarterly sales tax generation.

SECTION 3. CEQA. The City Council hereby finds that pursuant to the California Environmental Quality Act (“CEQA”) (Pub. Res. Code, § 21000 et seq.) and the State CEQA Guidelines (Cal. Code Regs, tit. 14 § 15000 et seq.), approval of the Agreement and acceptance of the Economic Development Subsidy Report is not a “project” for purposes of CEQA and therefore is not subject to CEQA review. The Agreement and acceptance of the Economic Development Subsidy Report is not a project pursuant to State CEQA Guidelines section 15378(b)(4), which states that government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant environmental impact are not subject to CEQA. Further, the Agreement and acceptance of the Economic Development Subsidy Report is not a project under State CEQA Guidelines section 15061(b)(3), which states that CEQA does not apply where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.

SECTION 4. Acceptance of Economic Development Subsidy Report. The City Council finds and determines that the Economic Development Subsidy Report (Exhibit A) is in compliance with applicable law and specifically Government Code Sections 53083 and 53083.1.

SECTION 5. Approve Agreement. The City Council hereby approves the Operating Covenant Agreement in substantially final form as attached to this Resolution as Exhibit B. The City Council hereby authorizes the City Manager, with the concurrence of the City Attorney, to make any non-financially substantive changes determined to be appropriate and in the City’s interest and execute said Agreement. City Manager is hereby authorized to take any additional steps necessary to facilitate the intent of this action.

SECTION 6. Severability. If any provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity, and the provisions of this Resolution are severable.

SECTION 7. Effective Date. This Resolution shall become effective immediately upon its adoption.
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The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

PASSED, APPROVED, AND ADOPTED this 5th day of December 2023. _____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST AND KRIEGER LLP

CITY ATTORNEY
782

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. 2023 was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held December 5, 2023 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:
____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
783

EXHIBIT A

ECONOMIC DEVELOPMENT SUBSIDY REPORT
[Attached behind this cover page]
784

EXHIBIT B

OPERATING COVENANT AGREEMENT
[Attached behind this cover page]
785
46700.00320\41827973.1

ECONOMIC DEVELOPMENT SUBSIDY REPORT
PURSUANT TO GOVERNMENT CODE SECTION 53083.1

FOR A STOCKING DISTRIBUTION CENTER OPERATING COVENANT

AGREEMENT

BY AND BETWEEN

CITY OF ONTARIO
AND
HOME DEPOT U.S.A., INC.

Pursuant to Government Code Section 53083.1, the City Council of the City of Ontario must hold a noticed public hearing and, prior to the public hearing, provide all of the following information in written form and available to the public and through the City’s website, regarding a proposed economic development subsidy to be provided by the City pursuant to an Operating Covenant Agreement by and between the City of Ontario (“City”) and Home Depot U.S.A., INC. (Home Depot”) (the “Agreement”). The Agreement provides an economic subsidy by the City to Home Depot to incentivize the leasing of a new build-to-suit facility compromising 2,000,000 square feet, or locate a new point of sale in an existing facility, to operate a Stocking Distribution Cetner (“Facility”).

Notice was published in the local newspaper for a public hearing to be held on (November 21, 2023).

The purpose of this report is to provide the information required pursuant to Government Code Section 53083.1 in regards to the Agreement. This report shall remain available to the public and posted on the City’s website until the end date of the economic development subsidy, as further described in number 2 below.

1. The name and address of all corporations, including members of a commonly controlled group or members of a combined reporting group of which the corporation is a member, or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy.

The Agreement is with Home Depot U.S.A., INC., a Delaware corporation (“Home Depot”). Home Depot is the sole beneficiary of the economic development subsidy.

Home Depot U.S.A., INC.
2455 Paces Ferry Road,
Atlanta, Georgia 30339
(770) 384-2864

2. The name and address of all warehouse distribution centers that are the beneficiary of the economic development subsidy.

The site being considered for the Stocking Distribution Center is located on East Borba Street, Buildings 4 & 5 in Ontario.
786
46700.00320\41827973.1

3. The start and end dates and schedule, if applicable, for the economic development subsidy.

The Effective Date of the Agreement, and the obligations of the parties therein, begins once Home Depot has entered into a lease for the Facility, and the Facility has begun generating sales tax revenues for the City.

The term will begin on the Effective Date of the Agreement and continue for 15 years. The first Covenant Payment will be paid following the first Covenant Quarter in which Home Depot has performed its covenants and other obligations pursuant to the Agreement, including that the Facility has begun generating sales tax revenues for the City.

4. A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.

The economic development subsidy shall be the sum of fifty percent (50%) of the Sales Tax Revenues attributable to annual taxable sales received by the City, quarterly, following the Effective Date.

The City’s estimates that the annual payment to Home Depot will be approximately one hundred thousand dollars ($100,000), and that the total amount of the expenditure or loss of revenue of public funds as a result of the economic development subsidy will be up to four hundred thousand dollars ($400,000). However, Home Depot covenants to City will cause Home Depot Taxable Sales to be paid to the City which is estimated to be four million dollars ($4,000,000) over the 15-year term of the agreement.

5. A statement of the public purposes for the economic development subsidy.

Home Depot is the largest home improvement retailer in the United States, supplying tools, construction products, and services to the building industry and consumer alike. Through this agreement, Home Depot will lease a new build-to-suit facility to be occupied as a Stocking Distribution Center within the City subject to the economic subsidy and the Agreement. Without an agreement, Home Depot would not consider locating its Facility in the City and possibly not in the State of California. The economic development subsidy in this Agreement is intended to ensure Home Depot leases the Facility of approximately 2,000,000 square feet and expands its operations as appropriate and remains in Ontario for no less than 15 years.

The City has determined that the expansion of Home Depot, as described in the preceding paragraph, will generate substantial revenue for the City, allow for the creation of new jobs, revitalize an area of the City which has suffered a loss of jobs and businesses during the economic downturn of the mid-2000’s, and result in community and public improvements that might not otherwise be available to the community for many years.

Further, the expansion of Home Depot serves the additional public purpose of fostering a business and civic environment that may attract additional businesses and investment in the community due to the availability of the increased public and private services and 787
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economic activity resulting therefrom, thereby assisting the City in its goal of furthering the development of the community. This Agreement furthers the policies of the City to be business friendly and support economic growth including the creation of new job opportunities and new sources of revenue that support residents and city services.

6. The projected tax revenue to the local agency as a result of the economic development subsidy.

The City anticipates that the expansion of Home Depot that will occur with the operation of the Facility within the City will result in an approximate increase of annual sales tax revenue in the amount of one hundred thousand dollars ($100,000), minus the covenant payments to be paid to Home Depot, as set forth in number 2 above.

In addition, Home Depot estimates that they will pay real and personal property taxes for the Facility and the value of those new improvements associated with the business is expected to be valued at approximately one hundred forty million dollars ($140,000,000) and will result in additional real and personal property taxes in the amount of approximately one million four hundred thousand ($1,400,000) annually.

The City will receive an estimated twenty thousand dollars ($20,000) in business license tax from Home Depot annually for the Facility. Currently Home Depot pays approximately twelve thousand one hundred dollars ($12,100) in business license fees to the City for their facilities.

7. The estimated number of jobs created by the economic development subsidy, including wage scale, broken down by full-time, part-time, and temporary positions.

The expansion of Home Depot within the City is anticipated to result in the creation of three hundred (300) jobs at the facility, as follows:
 Approximately 300 full-time jobs
 Up to 100 seasonal positions
 Up to 240 construction/temporary positions
Full-time employees are compensated approximately $17-$19 per hour with the opportunity to earn overtime hours. Managerial positions average approximately $75,0000 annually.

8. The estimated number of workers employed through temporary agencies.

Home Depot does not anticipate using temporary agencies on site.

9. Whether any benefit package is offered, including health benefits, fringe benefits, and defined benefit pensions.

Home Depot offers a full benefits plan for eligible full-time associates. Home Depot offers medical benefits and they subsidize more than 50% of their employees’ premiums. Home 788
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Depot also offers dental and vision coverage options, a 401K savings plan with Company match, paid parental leave, tuition reimbursements, employee stock purchase plan, and bonus and merit increases.

10. Both of the following regarding each warehouse distribution center that is the beneficiary of the economic development subsidy:
a. A description of the outreach, training, and hiring plans, including plans to hire disadvantaged workers.

As expressed in the Agreement, Home Depot acknowledges that a goal of the City is to foster employment opportunities for City’s residents. Home Depot will use commercially reasonable efforts to recruit and hire employees and City’s residents for any full and part time employment opportunities. Home Depot will partner with the City and authorize the City to post and advertise job recruitment information on the City’s website or with other regional recruitment services.

Upon hire, all new associates will go through a several day training process (depending on job classification) to be acclimated with the company and their specific job functions.

While Home Depot does not specifically target disadvantaged workers, as defined under Government Code section 53083.1(j)(1), Home Depot will accommodate disadvantaged workers if they are otherwise qualified for employment at the facility (i.e. meet job requirements). Any offers of employment will be at Home Depot’s sole discretion and all employment will be at-will employment.
b. A description and total value of any state or federal subsidies in the process of being applied for, or received by, the Stocking Distribution Center.

None

11. A description of any accountability measures, including, but not limited to, claw backs of subsidies, provided in the contract if the Stocking Distribution Center does not meet the goal outlined in the contract for subsidies.

If Home Depot does not meet any of the covenants required by Agreement, City may automatically terminate its obligations with respect to Covenant Payments without cost, expense or liability, after providing Home Depot an opportunity to cure. Home Depot’s contractual covenants include an operating and use covenant for the new Stocking Distribution Center, a required designation of City as point of sale for the Facility, and 789
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obligations against solicitation or acceptance of financial assistance, as defined. Home Depot also covenants that the Facility shall not be used for any purpose outside of that set forth in the Agreement, as Stocking Distribution Center. 790
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OPERATING COVENANT AGREEMENT
between

THE CITY OF ONTARIO
a California municipal corporation,
and
HOME DEPOT U.S.A., INC., a Delaware corporation
[Dated as of _____________ , for reference purposes only] 791
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RECITALS
WHEREAS, Home Depot U.S.A., Inc., a Delaware corporation (“Owner”), is considering leasing a new build-to-suit facility comprising 2,000,000 square feet or locating a new point of sale in an existing facility, to be occupied as a Stocking Distributing Center (as defined herein), within the City of Ontario (“City”); and
WHEREAS, the incentives provided in this Operating Covenant Agreement (“Covenant Agreement”) are intended to encourage and incentivize Owner to (1) lease a new build-to-suit facility of 2,000,000 square feet or locate a new point of sale in an existing facility, for purposes of operating a Stocking Distribution Center within the City, (2) expand its operations within the City as appropriate, and (3) serve as a community partner and remain in the City for 15 years; and WHEREAS, the City has determined that the establishment by Owner of a Stocking Distribution Center that participates in the sales process within the City will generate substantial revenue for the City, create approximately 200 permanent jobs that will revitalize an underserved area of the City, and result in community and public improvements that might not otherwise be available to the community for many years; and
WHEREAS, the Owner desires to apply for and obtain a Direct Pay Permit to self-assess and pay use taxes directly to California Department of Tax and Fee Administration (CDTFA) instead of to the vendor or lessor from whom the property is purchased or leased; and WHEREAS, Owner wishes to locate in the City because of the operational advantages including, but not limited to, a qualified workforce, cost advantages, access to customers, and capacity to staff a certain number of jobs in said City; and WHEREAS, the incentives herein are intended exclusively to reward and encourage the Owner for job creation within the City of Ontario. The incentives are available to Owner for job creation regardless of where within the City the jobs are located (excluding jobs created at retail storefronts).

NOW, THEREFORE, in consideration of the mutual promises contained herein, and for such other good and valuable consideration, the receipt of which is hereby acknowledged, the City of Ontario and Owner agree as follows:

ARTICLE 1. EFFECTIVE DATE; PARTIES; DEFINITIONS

1.1 Effective Date of Covenant Agreement. This Covenant Agreement is dated [ __________ ], for reference purposes only. This Covenant Agreement will not become effective until the date (“Effective Date”) on which all of the following are true:

1.1.1 This Covenant Agreement has been approved and executed by an authorized signatory of Owner and delivered to the City;

1.1.2 Following all legally required notices and hearings, this Covenant Agreement has been approved by the City Council;

1.1.3 This Covenant Agreement has been executed by the appropriate authorities of the City and delivered to Owner;
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1.1.4 Owner has entered into an agreement to lease a Stocking Distribution Center within the City; and

1.1.5 The Stocking Distribution Center is generating Sales Tax Revenues for the City, with sales directly to the consumer.

If all of the foregoing conditions precedent have not been satisfied within five (5) years of the Effective Date then this Covenant Agreement shall not thereafter become effective and any prior signatures and approvals of the Parties will be deemed void and of no force or effect.

The City Manager shall be able to administratively extend this Section 1.1.5 beyond that initial five (5) year term, annually. Owner will provide quarterly updates on the status of site selection to City until that time the site selection for Facility has been completed.

1.2 Parties to Covenant Agreement.

1.2.1 The City. The address of the City is 303 East B Street, Ontario, California 91764, Attention: Scott Ochoa, City Manager; with copies to Ruben Duran, City Attorney, 2855 E. Guasti Rd., Suite 400, Ontario, CA 91761, Telephone: (213) 787-2569.

The City represents and warrants to Owner that, to the best of City’s actual current knowledge:
(a) The City is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the laws of the State of California;
(b) The City has taken all actions required by law to approve the execution of this Covenant Agreement;
(c) The City’s entry into this Covenant Agreement and/or the performance of the City’s obligations under this Covenant Agreement does not violate any contract, agreement or other legal obligation of the City; (d) The City’s entry into this Covenant Agreement and/or the performance of the City’s obligations under this Covenant Agreement does not constitute a violation of any state or federal statute or judicial decision to which the City is subject; (e) There are no pending lawsuits or other actions or proceedings which would prevent or impair the timely performance of the City’s obligations under this Covenant Agreement;
(f) The City has the legal right, power and authority to enter into this Covenant Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Covenant Agreement has been duly authorized and no other action by the City is requisite to the valid and binding execution, delivery and performance of this Covenant Agreement, except as otherwise expressly set forth herein; and
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(g) The individual executing this Covenant Agreement is authorized to execute this Covenant Agreement on behalf of the City.

The representations and warranties set forth above are material considerations to Owner and the City acknowledges that Owner is relying upon the representations set forth above in undertaking Owner’s obligations set forth in this Covenant Agreement.

As used in this Covenant Agreement, the term “City’s actual current knowledge” shall mean, and shall be limited to, the actual current knowledge of the City Manager as of the Effective Date, without having undertaken any independent inquiry or investigation for the purpose of making such representation or warranty and without any duty of inquiry or investigation.

All of the terms, covenants and conditions of this Covenant Agreement shall be binding on and shall inure to the benefit of the City and its nominees, successors and assigns.

1.2.2 Owner. The address of Owner for purposes of this Covenant Agreement is 2455 Paces Ferry Road, Atlanta, Georgia, 30339; Attn: Property Management; with a copy to Home Depot U.S.A., Inc., 2455 Paces Ferry Road, Atlanta, Georgia, 30339; Attn: John Chescavage, Esq.; telephone (770) 384-2864.

Owner represents and warrants to the City that, to the best of its actual current knowledge:
(a) Owner is a duly formed Delaware corporation, qualified and in good standing to do business under the laws of the State of California; (b) The individual(s) executing this Covenant Agreement is/are authorized to execute this Covenant Agreement on behalf of Owner; (c) Owner has taken all actions required by law to approve the execution of this Covenant Agreement;
(d) Owner’s entry into this Covenant Agreement and/or the performance of its obligations under this Covenant Agreement does not violate any contract, agreement or other legal obligation of Owner; (e) Owner’s entry into this Covenant Agreement and/or the performance of its obligations under this Covenant Agreement does not constitute a violation of any state or federal statute or judicial decision to which Owner is subject; (f) There are no pending lawsuits or other actions or proceedings which would prevent or impair the timely performance of Owner’s obligations under this Covenant Agreement; and
(g) Owner has the legal right, power and authority to enter into this Covenant Agreement and to consummate the transactions contemplated hereby, and the execution, delivery and performance of this Covenant Agreement have been duly 794
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authorized and no other action by Owner is requisite to the valid and binding execution, delivery and performance of this Covenant Agreement, except as otherwise expressly set forth herein;
(h) Owner’s managerial personnel located, or to be located, at the Stocking Distribution Center possess, or will possess, sufficient experience and qualifications necessary, as determined by Owner in its sole discretion, to conduct Owner’s Sales Activities (hereinafter defined) as required by this Covenant Agreement; and (i) Owner covenants that nothing in this Covenant Agreement or the implementation thereof shall violate the provisions or intent of Government Code Section 53084.5.

The representations and warranties set forth herein are material considerations to the City and Owner acknowledges that the City is relying upon the representations set forth above in undertaking the City’s obligations set forth above.

As used in this Covenant Agreement, the term “actual current knowledge of Owner” shall mean, and shall be limited to, the actual current knowledge of John Chescavage, the individual executing this Covenant Agreement on behalf of Owner, as of the Effective Date, without having undertaken any independent inquiry or investigation for the purpose of making such representation or warranty and without any duty of inquiry or investigation.

All of the terms, covenants and conditions of this Covenant Agreement shall be binding on and shall inure to the benefit of Owner and its permitted nominees, successors and assigns. Wherever the term “Owner” is used herein, such term shall include any permitted nominee, assignee or successor of Owner.

The qualifications and identity of Owner are of particular concern to the City, and it is because of such qualifications and identity that the City has entered into this Covenant Agreement with Owner. No voluntary or involuntary successor-in-interest of Owner shall acquire any rights or powers under this Covenant Agreement except as expressly set forth herein.

1.2.3 The City and Owner are sometimes individually referred to as a “Party” and together as the “Parties.”

1.3 Definitions.

1.3.1 “CDTFA” means the California Department of Tax and Fee Administration.

1.3.2 “City” means the City of Ontario, a California municipal corporation, and any nominee, assignee of, or successor to, its rights, powers and responsibilities.

1.3.3 “Computation Quarter” means each three-month period within the Covenant Term beginning on the first day of each Fiscal Quarter, and ending on the last day of such Fiscal Quarter. The first Computation Quarter within the Eligibility Period is referred to herein as “Computation Quarter 1,” with each succeeding Computation Quarter within the 795
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Eligibility Period being consecutively numbered, concluding with Computation Quarter 60. The first Computation Quarter within the Eligibility Period shall commence at the time that all the conditions are met under Section 1.1, including that the E-Commerce Facility is generating Sales Tax Revenue for the City, with sales directly to the consumer. After the Effective Date, Computation Quarter 1 shall start at the next subsequent Fiscal Quarter.

1.3.4 “Covenant Payment(s)” means those contingent payments to be made by the City to the Owner pursuant to Section 3.2 of this Covenant Agreement in consideration of the Covenants and Owner’s timely and faithful performance thereunder.

1.3.5 “Covenant Term” means, a period of fifteen (15) years following the Effective Date (unless terminated sooner pursuant to specific provisions of this Covenant Agreement.

1.3.6 “Covenants” means those five (5) covenants described in Section 3.1 herein.

1.3.7 “Direct Pay Permit” means a permit issued by the CDTFA allowing the applicant to self-assess and pay use taxes directly to CDTFA instead of to the vendor or lessor from whom the property is purchased or leased.

1.3.8 “Eligibility Period” means the period commencing as of the first (1st) day of Computation Quarter 1 and ending the last day of the final Computation Quarter contemplated by the lease of the Stocking Distribution Center, but not less that Computation Quarter 60.

1.3.9 “Fiscal Quarter” means one three-month period, or portion thereof, within the Covenant Term and commencing on February 1, May 1, August 1, or November 1, and ending on, as applicable, the immediately following April 30, July 31, October 31, or January 31..

1.3.10 “Fiscal Year” means Owner’s fiscal year for financial accounting purposes beginning on the Monday following the Sunday nearest January 31 of each year and ending on the Sunday nearest January 31 of the following year.

1.3.11 “Material” means any and all tangible personal property offered for to Owner’s customers/clients distributed through the Stocking Distribution Center which is subject to the Sales Tax Law.

1.3.12 “Owner” means and refers to Home Depot U.S.A., Inc., a Delaware corporation, and its successors and assigns, cumulatively.

1.3.13 “Owner’s Sales Activities” means all sales of Material conducted electronically on the internet to any person or entity distributed through the Stocking Distribution Center. “Owner’s Sales Activities” also include any of the above-described activities which are conducted by a parent, subsidiary or wholly or partially owned affiliate of Owner, provided that such parent, subsidiary or affiliate did not previously conduct such activities in the City, which is subject to the Sales Tax Law and which generates Sales Tax Revenues subject to this Covenant Agreement.
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1.3.14 “Penalty Assessments” means and refers to penalties, assessments, collection costs and other costs, fees or charges resulting from late or underpaid payments of Sales Tax and which are levied, assessed or otherwise collected from Owner.

1.3.15 “Property” means that real property at East Borba Street, Buildings 4 & 5 within the City of Ontario on which the Stocking Distribution Center is located.

1.3.16 “Sales Tax” means and refers to all sales and use taxes levied under the authority of the Sales Tax Law attributable to the Stocking Distribution Center in City and Owner’s Sales Activities excluding that which is to be refunded to Owner because of an overpayment of such tax.

1.3.17 “Sales Tax Law” means and refers to: (a) California Revenue and Taxation Code Section 7200 et seq., and any successor law thereto; (b) any legislation allowing City or other public agency with jurisdiction in City to levy any form of local Sales Tax on the operations of Owner; and (c) regulations of CDTFA and other binding rulings and interpretations relating to (a) and (b) of this Section 1.3.17 by relevant California State authorities.

1.3.18 “Sales Tax Revenues” means the net Sales Tax actually received by the City from the CDTFA pursuant to the application of the Sales Tax Law (as such statutes may hereafter be amended, substituted, replaced, re-numbered, moved or modified by any successor law) attributable to the Stocking Distribution Center in City in a particular Computation Quarter. Sales Tax Revenues shall not include: (i) Penalty Assessments; (ii) any Sales Tax levied by, collected for or allocated to the State of California, the County of San Bernardino, or a district or any entity (including an allocation to a statewide or countywide pool); (iii) any administrative fee charged by the CDTFA; (iv) any Sales Tax subject to any sharing, rebate, offset or other charge imposed pursuant to any applicable provision of federal, state or local (except City’s) law, rule or regulation; (v) any Sales Tax attributable to any transaction not consummated within the Eligibility Period; or (vi) any Sales Tax (or other funds measured by Sales Tax) required by the State of California to be paid over to another public entity (including the State) or set aside and/or pledged to a specific use other than for deposit into or payment from the City’s general fund.

1.319 “Stocking Distribution Center” means a 2,000,000 square-foot new build to suit facility, or new point of sale in an existing facility located at (East Borba Street, Buildings 4 & 5), within the City of Ontario that Owner will lease for 15 years.

ARTICLE 2. ADDITIONAL RECITALS

2.1 The previously stated Recitals are incorporated herein and made a part hereof as though fully set forth.

2.2 The City has determined that the long-term operation of the Stocking Distribution Center will result in substantial benefits to the City, and its citizens including, without limitation, the creation of significant new numbers of employment opportunities, property tax revenues, sales tax revenues and other ancillary benefits. Accordingly, the City has also determined that its entry into this Covenant Agreement and the performance of the Covenants by Owner serve a significant public purpose, while providing only incidental benefits to a private party. 797
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ARTICLE 3. COVENANTS RUNNING WITH THE LAND; COVENANT PAYMENTS; REMEDIES FOR BREACH.

3.1 Covenants Running with the Land.

3.1.1 Operating and Use Covenant. Owner covenants and agrees that for the Covenant Term Owner shall take all actions and to do all things necessary, proper, or advisable to operate, or cause to be operated upon the Property, the Stocking Distribution Center in City, consistent with all applicable provisions of federal, state and local laws and regulations. Owner will operate its business at the Stocking Distribution Center in a commercially reasonable manner.

Owner’s obligations pursuant to the immediately preceding sentence include, without limitation, the obligation to obtain all federal, state and local licenses and permits required for the operation of the business at the Stocking Distribution Center. For the term of this Operating Covenant, the Owner may use the Property for the purposes of the operation of Stocking Distribution Center or comparable function, with the intent, but subject to Owner’s exercise of its business judgement to modify operations from time to time, of generating the greatest feasible amount of Sales Tax Revenues over the Covenant Term, and otherwise conducting Owner’s Sales Activities in accordance with this Covenant Agreement.

3.1.2 Covenant to Designate City as Point of Sale. Owner covenants and agrees that, for the term of the Operating and Use Covenant as described in Section 3.1.1, Owner shall maintain such licenses and permits as may be required by any governmental agency to conduct Owner’s Sales Activities related to the Stocking Distribution Center and shall consummate at the Stocking Distribution Center all taxable sales transactions resulting from Owner’s Sales Activities and identify the City as such in all reports to the CDTFA in accordance with the Bradley-Burns Uniform Local Sales and Use Tax Law (Revenue and Taxation Code 7200, et seq.), as it may be amended or substituted. Owner shall designate City as a point of sale for Owner’s products sold, including but not limited to, through an internet website or phone sales which are designated within California at the Stocking Distribution Center in the City. Owner shall maintain the appropriate master sales permits applicable to and required for the operation of the Stocking Distribution Center. The Owner shall consummate all taxable sales transactions for Owner’s Sales Activities at the Stocking Distribution Center, consistent with all applicable statutory and CDTFA regulatory requirements applicable to Owner’s Sales Activities and the designation of the City as the “point of sale” for all Owner’s taxable sales occurring as a result of Owner’s Sales Activities.

3.1.3 Economic Subsidy Reporting Obligations. Owner covenants and agrees that for the term of the Operating Use Covenant, Owner shall assist City by providing the requisite information relevant to Owner’s operation of the Stocking Distribution Center, required by California Government Code section 53083.1, upon written request of City, and in advance of the requisite reporting obligations described therein.

3.1.4 Covenant Against Solicitation and Acceptance of Economic Incentives During the Term of the Operating Use Covenant. Owner covenants and agrees that, during the Covenant Term, Owner will not directly or indirectly solicit or accept any “Financial Assistance” from any other public or private person or entity, if such Financial Assistance is given for the purpose of causing or would result in an Owner Default (as defined herein). For purposes of this Section 3.1.4 the term “Financial Assistance” means any direct or indirect payment, subsidy, rebate, or other 798
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similar or dissimilar monetary or non-monetary benefit, including, without implied limitation, payment of land subsidies, relocation expenses, public financings, property or sales tax relief, rebates, exemptions or credits, relief from public improvement obligations, and payment for public improvements to or for the benefit of Owner.

3.1.5 Covenant With Respect to Other Owner Agreements. City understands, acknowledges and agrees that Owner has established and may establish other distribution centers outside the City (“Additional Offices”). Subject to Section 3.1.4, nothing in this Covenant Agreement limits Owner’s right to conduct sales and other business and operations at or from the Additional Offices, but City makes no representations or warranties with respect to Owner’s operations with respect to Additional Offices. Owner covenants and agrees that under no circumstances will Owner’s agreements with respect to Additional Offices impact Owner’s obligations under Section 3.1.2 with respect to City’s designation as point of sale for Owner’s Sales Activities consummated at or through the Stocking Distribution Center in the City, and, subject to this Section 3.1.5, any other representations, warranties and covenants of Owner contained in this Covenant Agreement.

3.2 Covenant Payments.

3.2.1 Statement of Intent. The consideration to be paid to the Owner in exchange for the Covenants and Owner’s performance of its obligations set forth in this Covenant Agreement, and subject to satisfaction of all conditions precedent thereto, shall consist of City’s payment to the Owner for each Computation Quarter during the Eligibility Period that the City receives Sales Tax Revenue, an amount equal to the sum of fifty percent (50%) of the Sales Tax Revenues, based on the City’s current sales tax rate at the time of execution of this Covenant Agreement, attributable to annual taxable sales at the Stocking Distribution Center received by the City (“Covenant Payment”).

The City’s payments to Owner under this section 3.2.1 shall not exceed $400,000. The City’s obligations under this Section 3.2 are contingent on a Computation Quarter-to-Quarter basis and, for each Computation Quarter, City’s obligations to make any payments hereunder are expressly contingent upon the Owner having, for the entirety of such Computation Quarter, completely fulfilled its material obligations under this Covenant Agreement, including, without limitation, the Covenants. Should such condition precedent not be satisfied for each Computation Quarter, then City shall have no obligation under this Section 3.2 to make any Covenant Payments to Owner in such Computation Quarter.

3.2.2 Computation Quarter Covenant Payments. Within thirty (30) days following the end of each Computation Quarter, Owner shall submit to City copies of its quarterly reports to the CDTFA for the applicable Computation Quarter arising from Owner’s Sales Activities conducted at the Stocking Distribution Center. Within one hundred twenty (120) days following the end of each Computation Quarter, City shall pay to Owner any Computation Quarter Covenant Payment due for such Computation Quarter. City’s first payment to Owner shall be made following the first Computational Quarter in which the Owner has performed its obligations under this Covenant Agreement and the Stocking Distribution Center generates sales or use tax revenue.

3.2.3 No Carry Forward or Back. The determination of the Covenant Payment(s) shall be determined and calculated on a Computation Quarter to Computation Quarter basis. Except as provided in Section 3.2.4, no Sales Tax Revenue which is generated in a Computation Quarter other than the Computation Quarter for which the Covenant Payment is being determined shall be 799
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used or considered in the calculation of any Covenant Payment which may be due for that Computation Quarter.

3.2.4 CDTFA Determination of Improperly Allocated Local Sales Tax Revenues. If, at any time during or after the Eligibility Period of this Covenant Agreement, the CDTFA determines that all or any portion of the Sales Tax Revenues received by the City improperly allocated and/or paid to the City, and if the CDTFA requires repayment of, offsets against future sales tax payments, or otherwise recaptures from the City those improperly allocated and/or paid Sales Tax Revenues, then Owner shall, within thirty (30) calendar days after written demand from the City, repay all Covenant Payments (or applicable portions thereof) theretofore paid to Owner which are attributable to such repaid, offset or recaptured Sales Tax Revenues. If Owner fails to make such repayment within thirty (30) calendar days after the City’s written demand, then Owner shall be in breach of this Covenant Agreement and such obligation shall accrue interest from the date of the City’s original written demand at the then-maximum legal rate imposed by the California Code of Civil Procedure on prejudgment monetary obligations, compounded monthly, until paid. Additionally, the City may deduct any amount required to be repaid by Owner under this Section 3.2.4 from any future Covenant Payments otherwise payable to Owner under this Covenant Agreement.

3.2.5 Not a Pledge of Sales Tax. Owner acknowledges that the City is not making a pledge of Sales Tax Revenues, or any other particular source of funds; the definition of Sales Tax Revenues, as used herein, is used merely as a measure of the amount of the payment due hereunder and as means of computing the City’s payment in consideration for the Covenants. It is acknowledged by Owner that, as to each Computation Quarter, the City’s obligation to make payments is specifically contingent upon receipt by the City of the Sales Tax Revenues derived from the operation of the Stocking Distribution Center for such Computation Quarter.

3.3 Default.

3.3.1 Owner Default. City shall provide Owner with written notice of Owner’s failure (“Owner Default”) to comply with any material provision of this Covenant Agreement, including, without limitation, the Covenants. Owner shall have thirty (30) days from the date of such notice to either cure such Owner Default, or, if such Owner Default cannot be reasonably cured during such thirty (30) day period, to commence to cure within said thirty (30) day period and diligently prosecute such cure to completion thereafter.

3.3.2 City Default. Owner shall provide City with written notice of City’s failure (“City Default”) to strictly abide by any material provision of this Covenant Agreement. City shall have thirty (30) days from the date of such notice to either cure such City Default, or, if such City Default cannot be reasonably cured during such thirty (30) day period, to commence to cure within said thirty (30) day period and diligently prosecute such cure to completion thereafter. If Owner intends to terminate this Covenant Agreement resulted from an uncured City Default, it shall provide City 6 months’ notice.

3.4 General Remedies for Default. Upon either a City or an uncured Owner Default, after expiration of all applicable notice and cure periods, Owner or City (as applicable) shall have the right to seek all available legal and equitable remedies, unless otherwise expressly provided to the contrary herein. Notwithstanding anything in this Covenant Agreement to the contrary, (a) 800
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neither Party shall be liable to the other Party for consequential damages and (b) in no event shall the City have the right of specific performance or other mandatory injunctive relief to compel the Owner to operate the Stocking Distribution Center. Unless prohibited by law or otherwise provided by a specific term of this Covenant Agreement, the rights and remedies of the City and the Owner under this Covenant Agreement are nonexclusive and all remedies hereunder may be exercised individually or cumulatively, and either Party may simultaneously pursue inconsistent and/or alternative remedies. Either Party may, upon the default of the other Party, after expiration of all applicable notice and cure periods, and in addition to pursuing all remedies otherwise available to it, terminate this Covenant Agreement and all of its obligations hereunder without cost, expense or liability to itself.

3.5 The City’s Rights to Terminate its Obligations under Section 3.2. The City’s obligations under Section 3.2 shall automatically terminate without cost, expense, or liability to City, upon the occurrence of any one or more of the following: (i) Owner Default, as to which any applicable notice and cure period provided for herein has expired; (ii) the end of the Eligibility Period; or (iii) upon the final determination by a court of competent jurisdiction that any one or more of the Covenants are void, voidable, invalid, or even unenforceable for any reason whatsoever, including, without limitation, legal infirmity. Termination of the City’s obligations under Section 3.2 in accordance with this Section 3.5 shall not operate to forgive, modify, discharge or excuse Owner’s obligations arising under this Covenant Agreement.

3.6 Owner Termination. Notwithstanding any other provisions of this Covenant Agreement, Owner may, at its option, upon written notice to City, terminate this Covenant Agreement and/ or relocate the Stocking Distribution Center to any other city or county in California or elsewhere and reallocate Owner’s Sales Activities accordingly and in conformance with applicable Sales Tax Law. Owner shall provide at least three (3) months of written notice to the City prior to termination.

ARTICLE 4. GENERAL TERMS

4.1 Tax Consequences. Owner acknowledges that it may experience tax consequences as a result of its receipt of the payments provided for in this Covenant Agreement and agrees that it shall bear any and all responsibility, liability, costs, and expenses connected in any way therewith.

4.2 Rights Not Granted Under Covenant Agreement. This Covenant Agreement is not, and shall not be construed to be, a Development Agreement under Government Code Section 65864 et seq., or a disposition and development agreement under Health and Safety Code Section 33000 et seq. This Covenant Agreement is not, and shall not be construed to be, an approval or an agreement to issue permits or a granting of any right or entitlement by the City concerning the Stocking Distribution Center, Owner’s Sales Activities or any other project, development, or construction by the Owner in the City. This Covenant Agreement does not, and shall not be construed to, exempt Owner from the application and/or exercise of the City’s or City’s power of eminent domain or its police power, including, but not limited to, the regulation of land uses and the taking of any actions necessary to protect the health, safety, and welfare of its citizenry.

4.3 Consent Whenever consent or approval of any party is required under this Covenant Agreement, that party shall not unreasonably withhold, delay or condition such consent or approval unless otherwise allowed by a specific provision of this Covenant Agreement. 801
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4.4 Notices and Demands. All notices or other communications required or permitted between the City and Owner under this Covenant Agreement shall be in writing, and may be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested, or (iii) sent by nationally recognized overnight courier service (e.g., Federal Express), addressed to the Parties at the addresses provided in Article 1, subject to the right of either party to designate a different address for itself by notice similarly given. Any notice so given by registered or certified United States mail shall be deemed to have been given on the second business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by courier service (e.g., Federal Express), shall be deemed given upon receipt of the same by the party to whom the notice is given.

4.5 Nonliability of the City or City Officials and Employees . No board member, official, contractor, consultant, attorney or employee of the City or City shall be personally liable to Owner, any voluntary or involuntary successors or assignees, or any lender or other party holding an interest in the Property, in the event of any default or breach by the City, or for any amount which may become due to the Owner or to its successors or assignees, or on any obligations arising under this Covenant Agreement.

4.6 Conflict of Interests. No board member, official, contractor, consultant, attorney or employee of the City or City shall have any personal interest, direct or indirect, in this Covenant Agreement nor shall any such board member, official or employee participate in any decision relating to this Covenant Agreement which affects his/her personal interests or the interests of any corporation, partnership or association in which he/she is directly or indirectly interested.

4.7 Pledge or Hypothecation of Covenant Payments. Owner may assign any Covenant Payment(s) due in accordance with the terms of this Covenant Agreement (but not any other right or obligation of this Covenant Agreement) upon thirty (30) days’ prior written notice to City as collateral for any loan or financing obtained by the Owner in connection with the Stocking Distribution Center; provided that nothing in this Section 4.7 shall be deemed to limit the operation of Section 4.16. Without limiting the general applicability of the foregoing, Owner acknowledges that Owner’s lender and any transferee of Owner’s lender shall be subject to the transfer restrictions of Section 4.16.

4.8 Entire Agreement; Disclosure. This Covenant Agreement contains all of the terms and conditions agreed upon by the Parties and supersedes any previous agreements between the Parties concerning the subject matter of this Covenant Agreement. No other understanding, oral or otherwise, regarding the subject matter of this Covenant Agreement shall be deemed to exist or to bind any of the parties hereto. All prior written or oral offers, counteroffers, memoranda of understanding, proposals and the like are superseded by this Covenant Agreement. The terms and existence of this Covenant Agreement will not be publicized or made public beyond what is required by applicable Federal and State law, including but not limited to City approval of this Covenant Agreement and the California Public Records Act (Gov. Code § 6250, et seq.).

The Parties acknowledge that this Covenant Agreement is the product of mutual arms-length negotiations and that each party has been, or has had the opportunity to have been, represented by legal counsel in the negotiation and drafting of this Covenant Agreement. Accordingly, the rule of judicial construction which provides that ambiguities in a document are to be construed against the drafter of that document shall have no application to the interpretation or enforcement of this Covenant Agreement. In any action or proceeding to interpret and/or enforce this Covenant 802
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Agreement, the trier of fact may refer to extrinsic evidence not in conflict with any specific provision of this Covenant Agreement to ascertain and give effect to the intent of the Parties hereto.

4.9 Time Deadlines Critical; Extensions and Delays; No Excuse Due to Economic Changes. Time is of the essence in the performance of the City’s and Owner’s obligations under this Covenant Agreement. In addition to specific provisions of this Covenant Agreement providing for extensions of time, times for performance hereunder shall be extended where delays or defaults are due to war; insurrection; any form of labor dispute; lockouts; riots; floods; earthquakes; fires; acts of God or of third parties; third party litigation; acts of a public enemy; initiative or referenda; acts of governmental authorities (except that the failure of the City to act as required hereunder shall not excuse its performance); moratoria; epidemics; quarantine restrictions; and freight embargoes (collectively, “Enforced Delays”) provided, however, that the Party claiming the extension notify the other Party of the nature of the matter causing the default; and, provided further, that the extension of time shall be only for the period of the Enforced Delays. However, deadlines for performance may not be extended as provided above due to any inability of the Owner to obtain or maintain acceptable financing for the operation of the Stocking Distribution Center.

ANYTHING IN THIS COVENANT AGREEMENT TO THE CONTRARY

NOTWITHSTANDING, OWNER ASSUMES THE RISK OF UNFORESEEABLE

CHANGES IN ECONOMIC CIRCUMSTANCES AND/OR MARKET

DEMAND/CONDITIONS AND WAIVES, TO THE GREATEST LEGAL EXTENT, ANY

DEFENSE, CLAIM, OR CAUSE OF ACTION BASED IN WHOLE OR IN PART ON

ECONOMIC NECESSITY, IMPRACTICABILITY, FRUSTRATION OF PURPOSE, CHANGED ECONOMIC CIRCUMSTANCES OR SIMILAR THEORIES.

OWNER EXPRESSLY AGREES THAT ADVERSE CHANGES IN ECONOMIC

CONDITIONS, EITHER OF OWNER SPECIFICALLY OR THE ECONOMY

GENERALLY, OR CHANGES IN THE MARKET CONDITIONS OR DEMANDS, SHALL

NOT OPERATE TO EXCUSE OR DELAY THE STRICT OBSERVANCE OF EACH AND

EVERY OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND REQUIREMENTS OF THIS COVENANT AGREEMENT. OWNER EXPRESSLY ASSUMES THE RISK OF

SUCH ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER OR NOT FORESEEABLE AS OF OWNER’S EXECUTION OF THIS COVENANT AGREEMENT.

OWNER’S INITIALS

4.10 Attorneys’ Fees. In the event of the bringing of an arbitration, action or suit by a Party hereto against another Party hereunder by reason of any breach of any of the covenants or agreements or any intentional inaccuracies in any of the representations and warranties on the part of the other Party arising out of this Covenant Agreement or any other dispute between the Parties concerning this Covenant Agreement or the Property, then, in that event, each party shall be responsible for its own costs at the outset of any arbitration, action or suit between the Parties. Any judgment, order or award entered in any final judgment or award in favor of one Party shall contain a specific provision providing for the recovery of all costs and expenses of suit or claim, including actual attorneys’ fees (collectively, the “Costs”) incurred in enforcing, perfecting and executing such judgment or award. For the purposes of this Section 4.10, “Costs” shall include, without implied limitation, attorneys’ and experts’ fees, costs and expenses incurred in the following: (i) post judgment motions and appeals, (ii) contempt proceedings, (iii) garnishment, levy and debtor 803
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and third-party examination, (iv) discovery; and (v) bankruptcy litigation. This Section 4.10 shall survive any termination of this Covenant Agreement.

4.11 Amendments to This Covenant Agreement . Any amendments to this Covenant Agreement must be in writing and signed by the appropriate authorities of both the City and Owner.

The City Manager is authorized on behalf of the City to approve and execute minor amendments to this Covenant Agreement, including, but not limited to, the granting of extensions of time to Owner, not to exceed ninety (90) days in the aggregate.

4.12 Jurisdiction and Venue. Any legal action or proceeding concerning this Covenant Agreement shall be filed and prosecuted in the appropriate California state court in the County of San Bernardino, California. Both Parties hereto irrevocably consents to the personal jurisdiction of that court. The City and Owner each hereby expressly waive the benefit of any provision of federal or state law or judicial decision providing for the filing, removal, or change of venue to any other court or jurisdiction, including, without implied limitation, federal district court, due to any diversity of citizenship between the City and Owner, due to the fact that the City is a party to such action or proceeding or due to the fact that a federal question or federal right is involved or alleged to be involved. Without limiting the generality of the foregoing, the City and Owner specifically waive any rights provided to it pursuant to California Code of Civil Procedure Section 394. Owner acknowledges that the provisions of this Section 4.12 are material consideration to the City for its entry into this Covenant Agreement, in that the City will avoid the potential cost, expense and inconvenience of litigating in a distant forum.

4.13 Interpretation. The City and Owner acknowledge that this Covenant Agreement is the product of mutual arms-length negotiation and drafting and that both Parties have been represented by legal counsel in the negotiation and drafting of this Covenant Agreement.

Accordingly, the rule of construction which provides that ambiguities in a document shall be construed against the drafter of that document shall have no application to the interpretation and enforcement of this Covenant Agreement. In any action or proceeding to interpret or enforce this Covenant Agreement, the finder of fact may refer to any extrinsic evidence not in direct conflict with any specific provision of this Covenant Agreement to determine and give effect to the intention of the Parties.

4.14 Counterpart Originals; Integration. This Covenant Agreement may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument. This Covenant Agreement and any exhibits represent the entire understanding of the Parties and supersedes all negotiations, letters of intent, memoranda of understanding or previous agreements between the parties with respect to all or any part of the subject matter hereof.

4.15 No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times.

4.16 Successors and Assigns. The terms, covenants and conditions of this Covenant Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns. Owner may not assign, transfer, encumber or hypothecate its rights or obligations under 804
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this Covenant Agreement to any person or entity, without the written consent of City, which may not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Owner shall have the right to assign this Covenant Agreement or any right or obligation hereunder to its immediate or ultimate parent, or to an affiliate, by providing advance written notice to City. An “affiliate” shall mean any legal entity that, at the applicable time, directly or indirectly controls, is controlled with or by, or is under common control with, Owner. Upon the permitted sale, transfer or conveyance by Owner of its interest therein, such owner shall thereupon be relieved of its obligations under this Covenant Agreement from and after the date of sale, transfer or conveyance except with respect to any defaults in the performance of its obligations hereunder or thereunder which occurred prior to such sale, transfer or conveyance, and the transferee shall thereafter be solely responsible for the performance of all of the duties and obligations of Owner under this Covenant Agreement.

4.17 No Third Party Beneficiaries. The performance of the respective obligations of the City and Owner under this Covenant Agreement are not intended to benefit any party other than the City or Owner, except as expressly provided otherwise herein. No person or entity not a signatory to this Covenant Agreement shall have any rights or causes of action against any party to this Covenant Agreement as a result of that party’s performance or non-performance under this Covenant Agreement, except as expressly provided otherwise herein.

4.18 No Effect on Eminent Domain Authority. Nothing in this Covenant Agreement shall be deemed to limit, modify, or abridge or affect in any manner whatsoever the City’s or City’s eminent domain powers with respect to the Stocking Distribution Center, or any other property owned by the Stocking Distribution Center.

4.19 Warranty Against Payment of Consideration for Covenant Agreement. Owner 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 Covenant Agreement. Third parties, for the purposes of this Section

4.19, 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 Owner.

4.20 Severability. The City and Owner declare that the provisions of this Covenant Agreement are severable. If it is determined by a court of competent jurisdiction that any term, condition or provision hereof is void, voidable, or unenforceable for any reason whatsoever, then such term, condition or provision shall be severed from this Covenant Agreement and the remainder of the Covenant Agreement enforced in accordance with its terms.

4.21 Further Acts and Releases. The City and Owner each agree to take such additional acts and execute such other documents as may be reasonable and necessary in the performance of their obligations hereunder.

4.22 Estoppels. At the request of Owner or any holder of a mortgage or deed of trust secured by all or any portion of the Property, the City shall promptly execute and deliver to Owner or such holder a written statement of the City as to any of the following matters as to which Owner or such holder may inquire: (i) that no default or breach exists, or would exist with the passage of time, or giving of notice, or both, by Owner pursuant to this Covenant Agreement, if such be the case; (ii) the total amount of Covenant Payments made by the City to Owner pursuant to this Covenant Agreement prior to the date of such written statement; (iii) the amount of any Covenant Payments earned by or 805
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due and owing to Owner pursuant to this Covenant Agreement as of the date of such written statement; (iv) the Covenant Payments for a particular Computation Quarter; (v) if the City has determined that Owner is in default or breach hereunder, the nature of such default and the action or actions required to be taken by Owner to cure such default or breach; and (vi) any other matter affecting the rights or obligations of Owner hereunder as to which Owner or such holder may reasonably inquire. The form of any estoppel letter shall be prepared by Owner or such holder at its sole cost and expense and shall be reasonably acceptable in form and content to the City and Owner. The City may make any of the representations described above based on the actual current knowledge of the then-current City Manager.

4.23 Indemnity. Owner shall defend (using counsel of City’s choosing), indemnify and hold harmless the City, its elected officials, officers, employees and agents from and against any and all third party claims, losses, proceedings, damages, causes of action, liability, cost and expense (including reasonable attorney’s fees) arising from, in connection with or related to this Covenant Agreement or the functions or operations of the Stocking Distribution Center (other than to the extent arising as a result of the City’s active negligence or willful misconduct). The City shall fully cooperate in the defense of any such actions and upon written request of Owner shall provide to Owner such documents and records in possession of the City that are relevant to such actions and not otherwise protected by law. Notwithstanding the foregoing, should any third party bring any such action or proceeding Owner shall have the right to terminate this Covenant Agreement, and as of such date of termination, all unaccrued liabilities of the parties under this Covenant Agreement shall cease except for Owner’s obligation of indemnity owned to the City as provided in this Section 4.23.

4.24 Public Benefits.

4.24.1 Community Participation . As additional consideration for the benefits conferred under this Covenant Agreement, Owner further agrees to participate in supporting community benefit events and activities consistent with Owner’s practices and policies.

4.24.2 Employment Outreach for Local Residents. A goal of the City in entering into this Covenant Agreement is to foster employment opportunities for City’s residents. To that end, Owner will use commercially reasonable efforts to recruit and hire City’s residents for any full and part time employment opportunities as determined Owner in its sole discretion. The City shall be authorized to post and advertise any job recruitment information provided to the City on the City’s website and other jobs available and job recruitment sites within the region. Any offers of employment will be at Owner’s sole discretion and all employment will be at-will employment.

Nothing in this paragraph will require Owner to offer employment to individuals who are not otherwise qualified for such employment. Without limiting the generality of the foregoing, the provisions of this Section are not intended, and will not be construed, to benefit or be enforceable by any person whatsoever other than City.

4.25 State of California Legislation Impact on Covenant Payment. Owner acknowledges that the California Legislature has in the past adopted certain legislation which diverted to the State of California a portion of the Sales Tax Revenues which were otherwise payable to the City. Owner acknowledges that it is possible that the legislature may enact similar legislation in the future which would cause a corresponding reduction of and/or delay in the payment of the Sales Tax Revenues and that such reduction will cause Owner a corresponding reduction and/or delay in the payment of the Covenant Payments due to Owner during such time as such legislation is in effect. Furthermore, 806
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Owner acknowledges that it is possible that the legislation described above, or some variant thereof, may be enacted and effective during one or more subsequent times during the Eligibility Period and may materially and negatively impact the amount of Sales Tax Revenues and, accordingly, Covenant Payments. The City does not make any representation, warranty or commitment concerning the future actions of the California legislature with respect to the allocation of Sales Tax Revenues to the City. Owner agrees that it is undertaking its obligations under this Covenant Agreement after having considered, and is expressly assuming the risk of, the possibility of the enactment of such legislation.

The foregoing paragraph notwithstanding, City acknowledges that the California legislature may provide for the payment to City of other revenues for the purpose of offsetting any losses in Sales Tax Revenues resulting from the enactment of legislation of the type described in the immediately preceding paragraph. City agrees that, should the California legislature provide for such offsetting revenues, then for purposes of this Covenant Agreement and the computation of any Covenant Payments which may become due to Owner hereunder, City will consider any such offsetting revenues which are (i) indexed to Sales Tax and offset the loss of Sales Tax Revenues to the City on a dollar for dollar basis, (ii) actually received by the City, and (iii) not subject to any restrictions on use beyond those which are otherwise generally applicable to sales tax revenues received by California municipalities, to be Sales Tax Revenues within the meaning of this Covenant Agreement.

4.26 Direct Pay Permit Obligations. Owner shall apply for a Direct Pay Permit from CDTFA, and shall be solely responsible for self-assessing state, local, and any other use taxes quarterly to CDTFA associated with the interior build-out of the Stocking Distribution Center.

Owner will take all necessary steps to establish and implement the necessary controls and processes to track purchases eligible for direct allocation. Owner shall further certify to the CDTFA that it has purchased or leased the real property for the Stocking Distribution Center pursuant to any state requirements.
[Signatures on the following pages]
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SIGNATURE PAGE TO THE
HOME DEPOT U.S.A., INC.

OPERATING COVENANT AGREEMENT

CITY OF ONTARIO
a California municipal corporation
By:

ATTEST:

By:

APPROVED AS TO FORM:

By:

Ruben Duran
City Attorney
808

SIGNATURE PAGE TO THE
HOME DEPOT U.S.A., INC.

OPERATING COVENANT AGREEMENT
HOME DEPOT U.S.A., INC. a
Delaware corporation
Dated: ______________________________By:_________________________________ Name:

Title:
809

Ontario City CouncilDecember 5, 2023

Ontario City Council
December 5, 2023