Ontario City Council
October 6, 2026

3737 Birch Street, Suite 250 | Newport Beach, CA 92660 | 949.428.1500 | www.ardurra.com • It is assumed work will not be within Caltrans right of way, therefore an encroachment is not included,
• Traffic control plans are not included,
• Water Quality Management Plan is not included,
• Permits or plan checks associated with Cucamonga Valley Water District are not included,
• Environmental clearance (CEQA/NEPA), amendments or associated services are not included,
• Roadway Improvement Design is not included.
• Items not included in this amendment, or the original proposal are excluded from the scope of work.
• Contractor will provide Ardurra with redlines of built conditions for Ardurra to incorporate into bid plans.

PROPOSED FEE
The maximum authorized compensation for this amendment is $48,739 and will not be exceeded without prior written authorization.
(Please see Exhibit A for a detailed breakdown of hours and fee).

The existing agreement remains unchanged except as specifically modified in this Amendment.

We sincerely appreciate the opportunity to provide this proposal to the City of Ontario.

Please contact me at [email protected] should you have any questions or require additional information.

Respectfully,
Jose Hernandez, PE
Group Leader
cc: Dolores Salgado, PE, Ardurra Group, Inc.
143
Fourth St. Storm Drain and Water Improvements Project
Supplement Budget Request – Amendment
City of Ontario
August 13, 2026

3737 Birch Street, Suite 250 | Newport Beach, CA 92660 | 949.428.1500 | www.ardurra.com Exhibit A

PIC OMUC

PIC QMP OMUC QMP
Project
Manager
OMUC
Project
Engineer
Senior
Designer/
Project
Engineer

OMUC CAD
Designer Engineer I
OMUC
Project
Coordinato
r
Labor
Hrs
Hourly Rates 258$ 280$ 258$ 250$ 227$ 165$ 165$ 165$ 133$ 135$ Task Project Updates
1 Project Management and
Coordination 8 4 12 3,096$
2 Finalize PS&E Docs 8 4 16 20 20 68 12,688$
3 Review of MBI drainage docs 8 32 4 44 9,988$
4 Supplemental ESDC and As-builts 20 1 8 1 20 1 44 23 118 22,778$ 48,550$
44 1 16 1 68 1 68 0 43 0 242
11,352$ 280$ 4,128$ 250$ 15,436$ 165$ 11,220$ -$ 5,719$ -$ 48,550$ 189$
48,739$
ODC (Mileage)
Total
Total Hours:

Total Project Cost:

Fourth Street Storm
Drain Project
Amendment 19
Labor Hours
Total
Project Updates
144
Project
Location
Project
Location
N
NTS

FOURTH STREET STORM DRAIN, WATER

MAIN, AND STREET IMPROVEMENT
PROJECT (SM2301)

EXHIBIT A - LOCATION MAP
145
Department: Utilities
Prepared By: Dennice Raygoza
Staff Member Presenting: Scott Burton, Utilities
General Manager
Reviewed By: Dennice Raygoza, Courtney
Jones, Michael Sigsbee
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 7
SUBJECT: A RESOLUTION ACCEPTING DRINKING WATER STATE REVOLVING FUNDS FOR WELL NO. 53 EQUIPPING PROJECT IN THE AMOUNT OF $8,000,000 FROM THE

STATE OF CALIFORNIA WATER RESOURCES CONTROL BOARD

CITY OF ONTARIO
Agenda Report
October 6, 2026
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council:

A. Adopt a Resolution authorizing to accept funding totaling $8,000,000 from the Drinking Water State Revolving Funds (DWSRF) from the State of California Water Resources Control Board (SWRCB) for Well No. 53 Equipping Project; and
B. Authorize the City Manager, or designee, to execute any documentation necessary for the implementation and completion of the project, but not limited to, Funding Agreement, amendments, loan documents, certifications, reimbursement requests, and all other documents necessary to accept, administer, and receive reimbursement of the DWSRF financing awarded by the SWRCB.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Pursue City's Goals and Objectives by Working with Other Governmental Agencies FISCAL IMPACT: The SWRCB has approved and appropriated $8,000,000 in DWSRF financing for the Well No. 53 Equipping Project. DWSRF financing provides low-interest financing to assist public agencies in the construction of critical drinking water infrastructure. The final financing terms, including the interest rate, repayment period, and principal forgiveness (if applicable), will be established by the SWRCB upon execution of the Funding Agreement. The current interest rate is

2.1% and the typical repayment period is up to 30 years. During construction of the project, the City must pay interest annually until one year after construction completion. Beginning no later than one year after construction completion, the City must make annual payments of principal and interest. If approved, additional revenues and appropriations will be included in the Water Capital fund at a future quarterly budget update to City Council for approval as needed. There is no direct impact to the General Fund.
146
BACKGROUND & ANALYSIS: Staff has actively pursued alternative funding opportunities, including grants, low-interest loans, bond financing, and State appropriations to reduce the financial burden on ratepayers while continuing to invest in critical water infrastructure. In 2024, the City Council authorized Staff to submit a DWSRF application for Well No. 53 Equipping Project. SWRCB has approved $8,000,000 in financing for this project through its Fiscal Year 2025-2026 funding program.

Well No. 53 is a new well, which is located on the southwest side of Doubleday Avenue, approximately 950 feet west of Dupont Avenue, and will serve the 1212 Pressure Zone. This newly constructed well will replace production capacity lost from existing wells in the zone and provide additional capacity needed to maintain reliable water service.

This project was divided into two phases consisting of well drilling and well equipping. The drilling phase included installation of an approximately 1,000-foot-deep groundwater well and has been completed. The equipping phase includes equipping the well with a production pump and motor, an above-ground masonry equipment building, on-site sodium hypochlorite generation system, electrical and instrumentation controls, piping improvements, and associated site improvements necessary to place the well into service.

Upon completion, Well No. 53 will provide an additional groundwater supply source for the City's 1212 Pressure Zone. The well is designed to produce between 2,000 and 3,000 gallons per minute, providing a reliable potable water supply to meet existing and future customer demands within the pressure zone. In addition to restoring and increasing groundwater production capacity, the well will improve overall system reliability, operational flexibility, and resiliency by providing supplemental support to adjacent pressure zones during peak demand periods, maintenance activities, or emergency operations.

The $8,000,000 in DWSRF financing will fund the equipping phase of Well No. 53. Adoption of the attached resolution authorizes the City Manager, or designee, to execute the Funding Agreement, loan documents, certifications, reimbursement requests, and all other documents necessary to accept, administer, and receive reimbursement of the DWSRF financing awarded by the SWRCB. 147

DRINKING WATER
[RECIPIENT CAPS]
AND

CALIFORNIA STATE WATER RESOURCES CONTROL BOARD

CONSTRUCTION

INSTALLMENT SALE AGREEMENT
[PROJECT NO. and NAME]
AGREEMENT NO. [ ]
PROJECT FUNDING AMOUNT: $
ESTIMATED REASONABLE PROJECT COST: $
ELIGIBLE WORK START DATE: ______________
ELIGIBLE CONSTRUCTION START DATE: ______________
COMPLETION OF CONSTRUCTION DATE: ______________
FINAL REIMBURSEMENT REQUEST DATE: _____________
FINAL PAYMENT DATE: _____________
RECORDS RETENTION END DATE: _____________
148

THIS PAGE INTENTIONALLY LEFT BLANK
149
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX
Page i of xx
i

TABLE OF CONTENTS
AGREEMENT ...............................................................................................................................................1

1. AUTHORITY. .........................................................................................................................................1

2. INTENTION............................................................................................................................................1

3. AGREEMENT, TERM, DOCUMENTS INCORPORATED BY REFERENCE. ......................................1

4. PARTY CONTACTS ..............................................................................................................................2

5. DEFINITIONS. .......................................................................................................................................3 EXHIBIT A – SCOPE OF WORK................................................................................................................10 A.1. PROJECT DESCRIPTION, USEFUL LIFE, AND SCOPE OF WORK.........................................10 A.2. STANDARD PROJECT REQUIREMENTS......................................................................................10 A.2.1 Acknowledgements..................................................................................................................................10 A.2.2 Reports.....................................................................................................................................................10 A.2.2.1 Progress Reports. .............................................................................................................................10 A.2.2.2 Project Completion Report. .............................................................................................................11 A.2.2.3 As Needed Reports. .........................................................................................................................11 A.2.2.5 DBE Good Faith Efforts and Reports for SRF Projects...................................................................11 A.2.3 Signage. ...................................................................................................................................................11 A.2.4 Commencement of Operations. ...............................................................................................................13 A.3 DATES & DELIVERABLES..............................................................................................................13 A.4 SCHEDULE......................................................................................................................................13 EXHIBIT B – FUNDING TERMS.................................................................................................................14 B.1. FUNDING AMOUNTS AND REIMBURSEMENTS ......................................................................14 B.1.1 Funding Contingency and Other Sources. ...............................................................................................14 B.1.2 Estimated Reasonable Cost......................................................................................................................14 B.1.3 Project Funding Amount..........................................................................................................................14 B. 1.4 Budget Costs............................................................................................................................................14 B.1.6 Contingent Disbursement. .......................................................................................................................14 B.1.7 Reimbursement Procedure.......................................................................................................................15 B.1.8 Withholding of Disbursements. ...............................................................................................................16 B.1.9 Fraud and Misuse of Public Funds; Enforcement....................................................................................17 B.2 RECIPIENT’S PAYMENT OBLIGATION, PLEDGE, AND RESERVE.............................................17 B.2.1 Project Costs. ...........................................................................................................................................17 B.2.2 Estimated Principal Payment Due. ..........................................................................................................17 B.2.3 Interest Rate and In-Lieu of Interest Charges. .........................................................................................17 B.2.4 Reserved. .................................................................................................................................................18 B.2.5 Obligation Absolute.................................................................................................................................18 B.2.6 Payment Timing.......................................................................................................................................18 B.2.7 Pledged Revenues....................................................................................................................................19 150
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX
Page ii of xx
ii
B.2.7.1 Establishment of Enterprise Fund and Reserve Fund. .........................................................................19 B.2.7.2 Pledge of Net Revenues, Enterprise Fund, and Reserve Fund.............................................................19 B.2.7.3 Application and Purpose of the Enterprise Fund. ................................................................................19 B.2.8 No Prepayment. .......................................................................................................................................19 B.2.9 Reserve Fund. ..........................................................................................................................................19 B.3 RATES, FEES AND CHARGES. .....................................................................................................20 B.4 ADDITIONAL DEBT. ........................................................................................................................20 B.5 NO LIENS.........................................................................................................................................21 EXHIBIT C – GENERAL & PROGRAMMATIC TERMS & CONDITIONS..................................................22 C.1 REPRESENTATIONS & WARRANTIES. ........................................................................................22 C.1.1 Application and General Recipient Commitments. .................................................................................22 C.1.2 Authorization and Validity. .....................................................................................................................22 C.1.3 No Violations...........................................................................................................................................22 C.1.4 No Litigation............................................................................................................................................22 C.1.5 Property Rights and Water Rights. ..........................................................................................................22 C.1.6 Solvency and Insurance. ..........................................................................................................................23 C.1.7 Legal Status and Eligibility......................................................................................................................23 C.1.8 Financial Statements and Continuing Disclosure. ...................................................................................23 C.1.9 System Obligations..................................................................................................................................23 C.1.10 No Other Material Debt. ..........................................................................................................................23 C.1.11 Compliance with State Water Board Funding Agreements. ....................................................................23 C.2 DEFAULTS AND REMEDIES..........................................................................................................23 C.2.1 Return of Funds; Acceleration; and Additional Payments.......................................................................23 C.2.2 Reserved. .................................................................................................................................................24 C.2.3 Administrative remedies..........................................................................................................................24 C.2.4 Judicial remedies. ....................................................................................................................................24 C.2.5 Termination. ............................................................................................................................................24 C.2.6 Damages for Breach of Tax-Exempt Status.............................................................................................25 C.2.7 Damages for Breach of Federal Conditions.............................................................................................25 C.2.8 Remedies and Limitations. ......................................................................................................................25 C.2.9 Non-Waiver. ............................................................................................................................................25 C.2.10 Status Quo................................................................................................................................................25 C.3 STANDARD CONDITIONS..................................................................................................................25 C.3.1 Access, Inspection, and Public Records. .................................................................................................25 C.3.2 Accounting and Auditing Standards; Financial Management Systems; Records Retention....................26 C.3.3 Amendment. ............................................................................................................................................27 C.3.4 Assignability............................................................................................................................................27 C.3.5 Audit. .......................................................................................................................................................27 C.3.6 Bonding. ..................................................................................................................................................27 C.3.7 Competitive Bidding................................................................................................................................27 C.3.8 Compliance with Applicable Laws, Rules, and Requirements. ...............................................................27 C.3.9 Computer Software..................................................................................................................................28 C.3.10 Conflict of Interest...................................................................................................................................28 C.3.11 Continuous Use of Project; No Lease, Sale, Transfer of Ownership, or Disposal of Project. .................28 C.3.12 Data Management....................................................................................................................................28 C.3.13 Disputes. ..................................................................................................................................................28 C.3.14 Reserved. .................................................................................................................................................29 C.3.15 Environmental Clearance.........................................................................................................................29 151
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX
Page iii of xx
iii
C.3.16 Governing Law. .......................................................................................................................................29 C.3.17 Income Restrictions. ................................................................................................................................29 C.3.18 Indemnification and State Reviews. ........................................................................................................29 C.3.19 Independent Actor. ..................................................................................................................................30 C.3.20 Integration................................................................................................................................................30 C.3.21 Leveraging Covenants. ............................................................................................................................30 C.3.22 No Discrimination. ..................................................................................................................................30 C.3.23 No Third Party Rights..............................................................................................................................31 C.3.24 No Obligation of the State. ......................................................................................................................31 C.3.25 Notice.......................................................................................................................................................31 C.3.26 Operation and Maintenance; Insurance....................................................................................................34 C.3.27 Permits, Subcontracting, and Remedies...................................................................................................34 C.3.28 Professionals............................................................................................................................................35 C.3.29 Prevailing Wages. ....................................................................................................................................35 C.3.30 Public Funding.........................................................................................................................................35 C.3.31 Recipient’s Responsibility for Work. ......................................................................................................35 C.3.32 Related Litigation. ...................................................................................................................................35 C.3.33 Rights in Data. .........................................................................................................................................35 C.3.34 State Water Board Action; Costs and Attorney Fees. ..............................................................................36 C.3.35 Timeliness................................................................................................................................................36 C.3.36 Unenforceable Provision..........................................................................................................................36 C.3.37 Venue.......................................................................................................................................................36 C.3.38 Waiver and Rights of the State Water Board...........................................................................................36 C.4 MISCELLANEOUS STATE AND FEDERAL REQUIREMENTS..........................................................36 C.4.1 Reserved. .................................................................................................................................................36 C.4.2 State Cross-Cutters. .................................................................................................................................36 C.4.3 Federal Requirements and Cross-Cutters for SRF Funding.....................................................................37 EXHIBIT D – SPECIAL CONDITIONS........................................................................................................44 EXHIBIT E – PAYMENT SCHEDULE.........................................................................................................46 EXHIBIT F – TAX CERTIFICATE ...............................................................................................................47 F.1 Purpose. ...........................................................................................................................................47 F.2 Tax Covenant. ..................................................................................................................................47 F.3 Governmental Unit. ..........................................................................................................................47 F.4 Financing of a Capital Project. .........................................................................................................47 F.5 Ownership and Operation of Project................................................................................................47 F.6 Temporary Period.............................................................................................................................47 F.7 Working Capital. ...............................................................................................................................48 F.8 Expenditure of Proceeds..................................................................................................................48 F.9 Private Use and Private Payments. .................................................................................................48 F.10 No Sale, Lease or Private Operation of the Project. ....................................................................48 152
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX
Page iv of xx
iv
F.11 No Disproportionate or Unrelated Use. ........................................................................................49 F.12 Management and Service Contracts. ...........................................................................................49 F.13 No Disposition of Financed Property............................................................................................49 F.14 Useful Life of Project.....................................................................................................................49 F.15 Payments......................................................................................................................................49 F.16 No Other Replacement Proceeds.................................................................................................50 F.17 No Sinking or Pledged Fund.........................................................................................................50 F.18 Reserve Amount...........................................................................................................................50 F.19 Reimbursement Resolution. .........................................................................................................50 F.20 Reimbursement Expenditures. .....................................................................................................50 F.21 Change in Use of the Project........................................................................................................50 F.22 Rebate Obligations. ......................................................................................................................51 F.23 No Federal Guarantee..................................................................................................................51 F.24 Amendments.................................................................................................................................51 F.25 Reasonable Expectations.............................................................................................................51 F.26 Assignment. ..................................................................................................................................51 153
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024

AGREEMENT

1. AUTHORITY.
(a) The State Water Resources Control Board (State Water Board) is authorized, and implements its authority, to provide financial assistance under this Agreement pursuant to Section 116760 et seq. of the Health and Safety Code, and Resolution Nos. 2019-0065 and 2023-0021.
(b) The Recipient is authorized to enter into this Installment Sale Agreement (Agreement) pursuant to Resolution No. ________________.

2. INTENTION.
(a) The Recipient desires to receive financial assistance for and undertake work required for the drinking water construction Project according to the terms and conditions set forth in this Agreement. (b) The State Water Board proposes to assist in providing financial assistance for eligible costs of the Project in the amount set forth in Exhibit B, according to the terms and conditions set forth in this Agreement, with the expectation that the Recipient shall repay all of the financial assistance to the State Water Board.
(c) The Recipient intends to evidence its obligation to submit Payments to the State Water Board and secure its obligation with Net Revenues of its water enterprise, as set forth in Exhibit B, according to the terms and conditions set forth in this Agreement.
(d) The Recipient intends to certify and evidence its compliance with the Tax Covenants set forth in Exhibit F.

3. AGREEMENT, TERM, DOCUMENTS INCORPORATED BY REFERENCE.

In consideration of the mutual representations, covenants and agreements herein set forth, the State Water Board and the Recipient, each binding itself, its successors and assigns, do mutually promise, covenant, and agree to the terms, provisions, and conditions of this Agreement. (a) The Recipient hereby sells to the State Water Board and the State Water Board hereby purchases from the Recipient the Project. Simultaneously therewith, the Recipient hereby purchases from the State Water Board, and the State Water Board hereby sells to the Recipient, the Project in accordance with the provisions of this Agreement. All right, title, and interest in the Project shall immediately vest in the Recipient on the date of execution and delivery of this Agreement by both parties without further action on the part of the Recipient or the State Water Board. (b) Subject to the satisfaction of any condition precedent to this Agreement, this Agreement shall become effective upon the signature of both the Recipient and the State Water Board. Conditions precedent are not limited to the following:
i. The Recipient must deliver to the Division a resolution authorizing this Agreement. ii. The Recipient must deliver an opinion of bond counsel and general counsel satisfactory to the State Water Board’s counsel dated on or after the date that the Recipient signs this Agreement.
154
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
(c) Upon execution, the term of the Agreement shall begin on the Eligible Work Start Date and extend through the Final Payment Date.
(d) This Agreement includes the following exhibits and attachments thereto:
i. EXHIBIT A – SCOPE OF WORK
ii. EXHIBIT B – FUNDING TERMS
iii. EXHIBIT C – GENERAL & PROGRAMMATIC TERMS & CONDITIONS iv. EXHIBIT D – SPECIAL CONDITIONS
v. EXHIBIT E – PAYMENT SCHEDULE
vi. EXHIBIT F – TAX CERTIFICATE
(e) This Agreement includes the following documents incorporated by reference, as well as any documents incorporated by reference in Exhibit D:
i. the Final Plans & Specifications, dated __________, which are the basis for the construction contract to be awarded by the Recipient;
ii. the Drinking Water System Permit No. __________, and any amendments thereto; iii. the Recipient’s Reimbursement Resolution No. _______ dated _________________; iv. the Recipient’s Tax Questionnaire dated _________________. v. the Davis-Bacon requirements found at:
https://www.waterboards.ca.gov/water_issues/programs/grants_loans/srf/docs/20 23/2023-dwsrf-governmental-entities-public.pdf
vi. [other incorporated documents, if any]
(f) This Agreement, and any amendments hereto, may be executed and delivered in any number of counterparts, each of which when delivered shall be deemed to be an original, but such counterparts shall together constitute one document. The parties may sign this Agreement, and any amendments hereto, either by an electronic signature using a method approved by the State Water Board or by a physical, handwritten signature. The parties mutually agree that an electronic signature using a method approved by the State Water Board is the same as a physical, handwritten signature for the purposes of validity, enforceability, and admissibility.

4. PARTY CONTACTS
State Water Board [Recipient]
Section: Division of Financial Assistance
Name: xxxx, Project Manager Name: Title
Address: 1001 I Street, ___ Floor Address:

City, State,
Zip:

Sacramento, CA 95814 City, State, Zip:

Phone: (916) Phone:

Fax: (916) Fax:

Email: [PMemail]@waterboards.ca.gov
[[email protected]]
Email:

The Recipient may change its contact upon written notice to the Division, which notice shall be accompanied by authorization from the Recipient’s Authorized Representative. The State Water Board will notify the Recipient of any changes to its contact. 155
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
While the foregoing are contacts for day-to-day communications regarding Project work, the Recipient shall provide official communications and events of Notice as set forth in Exhibit C to the Division’s Deputy Director.

5. DEFINITIONS.

Unless otherwise specified, each capitalized term used in this Agreement has the following meaning:
“Additional Payments" means the reasonable extraordinary fees and expenses of the State Water Board, and of any assignee of the State Water Board's right, title, and interest in and to this Agreement, in connection with this Agreement, including all expenses and fees of accountants, trustees, staff, contractors, consultants, costs, insurance premiums and all other extraordinary costs reasonably incurred by the State Water Board or assignee of the State Water Board. "Allowance" means an amount based on a percentage of the accepted bid for an eligible project to help defray the planning, design, and construction engineering and administration costs of the Project. “Agreement” means this agreement, including all exhibits and attachments hereto. "Authorized Representative" means the duly appointed representative of the Recipient as set forth in the certified original of the Recipient’s authorizing resolution that designates the authorized representative by title.
"Bank" means the California Infrastructure and Economic Development Bank. “Bond Funded Portion of the Project Funds” means any portion of the Project Funds which was or will be funded with Bond Proceeds.
“Bond Proceeds” means original proceeds, investment proceeds, and replacement proceeds of Bonds. "Bonds" means any series of bonds issued by the Bank, the interest on which is excluded from gross income for federal tax purposes, all or a portion of the proceeds of which have been, are, or will be applied by the State Water Board to fund all or any portion of the Project Costs or that are secured in whole or in part by Payments paid hereunder.
“Charge In Lieu of Interest” means any fee or charge in lieu of some or all of, but not to exceed, the interest that would otherwise be owed under this Agreement, as set forth in Exhibit E. "Code" as used in Exhibit F of this Agreement means the Internal Revenue Code of 1986, as amended, and any successor provisions and the regulations of the U.S. Department of the Treasury promulgated thereunder.
"Completion of Construction" means the date, as determined by the Division after consultation with the Recipient, that the work of building and erection of the Project is substantially complete, and is identified in Exhibit A of this Agreement.
“Cover Page” means the front page of this Agreement.
“Days” means calendar days unless otherwise expressly indicated. “Debt Service” means, as of any date, with respect to outstanding System Obligations and, in the case of the additional debt tests in Exhibit B of this Agreement, any System Obligations that are proposed to be outstanding, the aggregate amount of principal and interest scheduled to become due (either at maturity 156
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
or by mandatory redemption), together with any Charge In Lieu of Interest on this Obligation or other System Obligations to the State Water Board, calculated with the following assumptions:
a. Principal payments (unless a different subdivision of this definition applies for purposes of determining principal maturities or amortization) are made in accordance with any amortization schedule published for such principal, including any minimum sinking fund payments; b. Interest on a variable rate System Obligation that is not subject to a swap agreement and that is issued or will be issued as a tax-exempt obligation under federal law, is the average of the SIFMA Municipal Swap Index, or its successor index, during the 24 months preceding the date of such calculation;
c. Interest on a variable rate System Obligation that is not subject to a swap agreement and that is issued or will be issued as a taxable obligation under federal law, is the average of SOFR, or its successor index, during the 24 months preceding the date of such calculation; d. Interest on a variable rate System Obligation that is subject to a swap agreement is the fixed swap rate or cap strike rate, as appropriate, if the variable rate has been swapped to a fixed rate or capped pursuant to an interest rate cap agreement or similar agreement; e. Interest on a fixed rate System Obligation that is subject to a swap agreement such that all or a portion of the interest has been swapped to a variable rate shall be treated as variable rate debt under subdivisions (b) or (c) of this definition of Debt Service; f. Payments of principal and interest on a System Obligation are excluded from the calculation of Debt Service to the extent such payments are to be paid from amounts then currently on deposit with a trustee or other fiduciary and restricted for the defeasance of such System Obligations; g. If 25% or more of the principal of a System Obligation is not due until its final stated maturity, then principal and interest on that System Obligation may be projected to amortize over the lesser of 30 years or the Useful Life of the financed asset, and interest may be calculated according to subdivisions (b)-(e) of this definition of Debt Service, as appropriate.
“Deputy Director” means the Deputy Director of the Division. “District Office” means District Office of the Division of Drinking Water of the State Water Board. "Division" means the Division of Financial Assistance of the State Water Board or any other segment of the State Water Board authorized to administer this Agreement. “Division of Drinking Water” means the Division of Drinking Water of the State Water Board. “Eligible Construction Start Date” means the date set forth on the Cover Page of this Agreement, establishing the date on or after which construction costs may be incurred and eligible for reimbursement hereunder.
“Eligible Work Start Date” means the date set forth on the Cover Page of this Agreement, establishing the date on or after which any non-construction costs may be incurred and eligible for reimbursement hereunder.
“Enterprise Fund” means the enterprise fund of the Recipient in which Revenues are deposited. “Event of Default” means the occurrence of any of the following events:
157
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
a) Failure by the Recipient to make any payment required to be paid pursuant to this Agreement, including Payments;
b) A representation or warranty made by or on behalf of the Recipient in this Agreement or in any document furnished by or on behalf of the Recipient to the State Water Board pursuant to this Agreement shall prove to have been inaccurate, misleading or incomplete in any material respect; c) A material adverse change in the condition of the Recipient, the Revenues, or the System, which the Division reasonably determines would materially impair the Recipient’s ability to satisfy its obligations under this Agreement.
d) Failure by the Recipient to comply with the additional debt test or reserve fund requirement, if any, in Exhibit B or Exhibit D of this Agreement;
e) Failure to operate the System or the Project without the Division’s approval; f) Failure by the Recipient to observe and perform any covenant, condition, or provision in this Agreement, which failure shall continue for a period of time, to be determined by the Division; g) The occurrence of a material breach or event of default under any System Obligation that results in the acceleration of principal or interest or otherwise requires immediate prepayment, repurchase or redemption;
h) Initiation of proceedings seeking arrangement, reorganization, or any other relief under any applicable bankruptcy, insolvency, or other similar law; the appointment of or taking possession of the Recipient’s property by a receiver, liquidator, assignee, trustee, custodian, conservator, or similar official; the Recipient’s entering into a general assignment for the benefit of creditors; the initiation of resolutions or proceedings to terminate the Recipient’s existence, or any action in furtherance of any of the foregoing; i) A determination pursuant to Gov. Code section 11137 that the Recipient has violated any provision in Article 9.5 of Chapter 1 of Part 1 of Division 3 of Title 2 of the Government Code; or j) Loss of the Recipient’s rights, licenses, permits, or privileges necessary for the operation of the System or the Project, or the occurrence of any material restraint on the Recipient’s enterprise by a government agency or court order.
“Final Payment Date” is the date by which all principal and accrued interest due under this Agreement is to be paid in full to the State Water Board and is specified on the Cover Page of this Agreement. “Final Reimbursement Request Date” means the date set forth as such on the Cover Page of this Agreement, after which date, no further Project Funds disbursements may be requested. "Fiscal Year" means the period of twelve (12) months terminating on June 30 of any year, or any other annual period selected and designated by the Recipient as its Fiscal Year in accordance with applicable law.
"Force Account" means the use of the Recipient's own employees, equipment, or resources for the Project.
“GAAP” means generally accepted accounting principles, the uniform accounting and reporting procedures set forth in publications of the American Institute of Certified Public Accountants or its successor, or by any other generally accepted authority on such procedures, and includes, as applicable, the standards set forth by the Governmental Accounting Standards Board or its successor, or the Uniform System of Accounts, as adopted by the California Public Utilities Commission for water utilities. "Initiation of Construction" means the date that notice to proceed with work is issued for the Project, or, if notice to proceed is not required, the date of commencement of building and erection of the Project. “Listed Event” means, so long as the Recipient has outstanding any System Obligation subject to Rule 15c2-12, any of the events required to be reported with respect to such System Obligation pursuant to Rule 15c2-12(b)(5).
158
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
“Material Obligation” means an obligation of the Recipient that is material to this transaction, including System Obligations.
“Maximum Annual Debt Service” means the maximum amount of Debt Service due on System Obligations in a Fiscal Year during the period commencing with the Fiscal Year for which such calculation is made and within the next five years in which Debt Service for any System Obligations will become due. "Net Revenues" means, for any Fiscal Year, all Revenues received by the Recipient less the Operations and Maintenance Costs for such Fiscal Year.
"Obligation" means the obligation of the Recipient to make Payments (including Additional Payments) as provided herein, as evidenced by the execution of this Agreement, proceeds of such obligations being used to fund the Project as specified in the Project Description in Exhibit A and Exhibit B and in the documents thereby incorporated by reference.
"Operations and Maintenance Costs" means the reasonable and necessary costs paid or incurred by the Recipient for maintaining and operating the System, determined in accordance with GAAP, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the System in good repair and working order, and including all reasonable and necessary administrative costs of the Recipient that are charged directly or apportioned to the operation of the System, such as salaries and wages of employees, overhead, taxes (if any), the cost of permits, licenses, and charges to operate the System and insurance premiums; but excluding, in all cases depreciation, replacement, and obsolescence charges or reserves therefor and amortization of intangibles. “Parity Obligation” means a debt obligation of the Recipient on parity with this Obligation. There are no Parity Obligations.
“Payment” means any payment due to the State Water Board from the Recipient pursuant to this Agreement.
"Policy" means the State Water Board's “Policy for Implementing the Drinking Water State Revolving Fund,” as amended from time to time, including the Intended Use Plan in effect as of the execution date of this Agreement.
“Project” means the Project financed by this Agreement as described in Exhibits A and B and in the documents incorporated by reference herein.
"Project Completion" means the date, as determined by the Division after consultation with the Recipient, that operation of the Project is initiated or is capable of being initiated, whichever comes first. "Project Costs" means the incurred costs of the Recipient which are eligible for financial assistance under this Agreement, which are allowable costs as defined under the Policy, and which are reasonable, necessary and allocable by the Recipient to the Project under GAAP, and may include capitalized interest.
“Project Funds” means all moneys disbursed to the Recipient by the State Water Board for eligible Project Costs pursuant to this Agreement.
“Recipient” means [insert Recipient name].
“Records Retention End Date” means the last date that the Recipient is obligated to maintain records and is set forth on the Cover Page of this Agreement.
159
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
“Regional Water Quality Control Board” or “Regional Water Board” means the appropriate Regional Water Quality Control Board.
“Reimbursement Resolution” means the Recipient’s reimbursement resolution identified and incorporated by reference in this Agreement.
“Reserve Fund” means the reserve fund required pursuant to Exhibit B of this Agreement. "Revenues" means, for each Fiscal Year, all gross income and revenue received or receivable by the Recipient from the ownership or operation of the System, determined in accordance with GAAP, including (i) all rates, fees, and charges (including connection fees and charges) as received by the Recipient for the services of the System, and
(ii) all other income and revenue howsoever derived by the Recipient from the ownership or operation of the System or arising from the System, including all income from a. the deposit or investment of any money in the Enterprise Fund or any rate stabilization fund of the Recipient or held on the Recipient’s behalf, b. any refundable deposits made to establish credit, and c. advances or contributions in aid of construction.

For the avoidance of doubt, refundable deposits and advances or contributions are not included in the definition of Revenues.
“Rule 15c2-12(b)(5)” means Rule 15c2-12(b)(5) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. “Senior Obligation” means a debt obligation of the Recipient that is senior to this Obligation. There are no Senior Obligations.
“SRF” means the Drinking Water State Revolving Fund.
“State” means State of California.
“State Water Board” means the State Water Resources Control Board. “Subordinate Obligation” means a debt obligation of the Recipient that is subordinate to this Obligation.

There are no Subordinate Obligations.
“System” means all drinking water collection, transport, treatment, storage, and delivery facilities, including land and easements thereof, owned by the Recipient, including the Project, and all other properties, structures, or works hereafter acquired and constructed by the Recipient and determined to be a part of the System, together with all additions, betterments, extensions, or improvements to such facilities, properties, structures, or works, or any part thereof hereafter acquired and constructed. “System Obligation” means any obligation of the Recipient payable from the Revenues, including but not limited to this Obligation, any Parity Obligation, any Subordinate Obligation, and such additional obligations as may hereafter be issued in accordance with the provisions of such obligations and this Agreement.
160
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
“Useful Life” means the economically useful life of the Project beginning at Completion of Construction and is set forth in Exhibit A.
“Year” means calendar year unless otherwise expressly indicated. 161
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

SRF 08i2024
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto. [RECIPIENTCAPS]:

By:____________________________________
Name: [Officer]
Title: [Title1]
Date:__________________________________
STATE WATER RESOURCES CONTROL BOARD:

By:____________________________________
Name: [Officer]
Title: Deputy Director
Division of Financial Assistance
Date:__________________________________
162
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit A
EXHIBIT A – SCOPE OF WORK
A.1. PROJECT DESCRIPTION, USEFUL LIFE, AND SCOPE OF WORK. (a) The Project is the project set forth on the Cover Page of this Agreement. (b) The Useful Life of this Project is at least ________ years. (c) Scope of Work.
[“to be inserted by DFA”]
A.2. STANDARD PROJECT REQUIREMENTS.

A.2.1 Acknowledgements.

The Recipient shall include the following acknowledgement in any document, written report, or brochure prepared in whole or in part pursuant to this Agreement:
“Funding for this project has been provided in full or in part through an agreement with the State Water Resources Control Board.

California’s Drinking Water State Revolving Fund is capitalized through a variety of funding sources, including grants from the United States Environmental Protection Agency and state bond proceeds.

The contents of this document do not necessarily reflect the views and policies of the foregoing, nor does mention of trade names or commercial products constitute endorsement or recommendation for use.” A.2.2 Reports
A.2.2.1 Progress Reports.
(a) The Recipient must provide a progress report to the Division each quarter, beginning no later than 90 days after execution of this Agreement.
(b) The Recipient must provide a progress report with each reimbursement request. Failure to provide a complete and accurate progress report may result in the withholding of Project Funds, as set forth in Exhibit B.
(c) A progress report must contain the following information:
i. A summary of progress to date including a description of progress since the last report, percent construction complete, percent contractor invoiced, and percent schedule elapsed;
ii. A description of compliance with environmental requirements; iii. A listing of change orders including amount, description of work, and change in contract amount and schedule; and
163
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit A
iv. Any problems encountered, proposed resolution, schedule for resolution, and status of previous problem resolutions.

A.2.2.2 Project Completion Report.
(a) The Recipient must submit a Project Completion Report to the Division with a copy to the appropriate District Office on or before the due date established by the Division and the Recipient at the time of final project inspection. The Project Completion Report must include the following:
i. Description of the Project,
ii. Description of the water quality problem the Project sought to address, iii. Discussion of the Project’s likelihood of successfully addressing that water quality problem in the future, and
iv. Summary of compliance with applicable environmental conditions. (b) If the Recipient fails to submit a timely Project Completion Report, the State Water Board may stop processing pending or future applications for new financial assistance, withhold disbursements under this Agreement or other agreements, and begin administrative proceedings.

A.2.2.3 As Needed Reports.

The Recipient must provide expeditiously, during the term of this Agreement, any reports, data, and information reasonably required by the Division, including but not limited to material necessary or appropriate for evaluation of the funding program or to fulfill any reporting requirements of the state or federal government.

A.2.2.4 DBE Good Faith Efforts and Reports for SRF Projects.

The Recipient shall comply with the Disadvantaged Business Enterprises (DBE) requirements in 40 CFR § 33.301 for the Project and require its contractors and subcontractors on the Project to comply. 40 CFR § 33.301 requires the use of good faith efforts to utilize DBE’s whenever procuring construction, equipment, services, and supplies. The Recipient must report DBE utilization to the Division on the DBE Utilization Report, State Water Board Form DBE UR334. The Recipient must submit such reports to the Division annually within ten (10) calendar days following October 1 until such time as the "Notice of Completion" is issued.

A.2.3 Signage.

The Recipient shall comply with both sections A.2.3.1 and A.2.3.2 unless the Division approves an alternative method of satisfying the applicable signage requirements.

A.2.3.1 General Signage Requirements.

The Recipient shall implement one of the public awareness options provided in the United States Environmental Protection Agency’s (USEPA) memorandum dated June 3, 2015, available at Enhancing Public Awareness of SRF Assistance Agreements | US EPA. If the Recipient chooses to post a physical sign, the Recipient shall comply with the requirements in sections A.2.3.1(a) through (d). If the Recipient chooses an alternative method of satisfying the requirements of the June 3, 2015 memorandum, such as online and social media publicity, then section A.2.3.1(a) shall not apply, but Recipient shall include the logos and statement specified in sections A.2.3.1(b) and (c) when implementing the alternative method. 164
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit A
The Recipient shall inform the Project Manager of the chosen public awareness method and provide documentation if requested. Regardless of the method chosen for this section A.2.3.1, the Recipient shall also comply with the requirements of section A.2.3.2.
(a) If the Recipient chooses to post a physical sign to comply with the requirements of this section, the Recipient shall place a sign at least four feet tall by eight feet wide made of ¾ inch thick exterior grade plywood or other approved material in a prominent location on the Project site and shall maintain the sign in good condition for the duration of the construction period. (b) The sign shall include the following logos:

(c) The sign shall include the following statement:
“Funding for this $xx million [name of project] project has been provided in full or in part by the Drinking Water State Revolving Fund through an agreement with the State Water Resources Control Board. California’s Drinking Water State Revolving Fund is capitalized through a variety of funding sources, including grants from the United States Environmental Protection Agency and state bond proceeds.”
(d) The Project sign may include another agency's required promotional information so long as the above requirements are satisfied. The sign shall be prepared in a professional manner.

A.2.3.2 Bipartisan Infrastructure Law Signage.

The Recipient shall comply with the requirements below or with any modified requirements approved by the Division and by the USEPA.
(a) Investing in America Emblem: The Recipient shall ensure that a professionally prepared sign is placed at construction sites supported in whole or in part by this Agreement displaying the official Investing in America emblem and must identify the project as a “project funded by President Biden’s Bipartisan Infrastructure Law.” The sign must be placed at construction sites in an easily visible location that can be directly linked to the work taking place and must be maintained in good condition throughout the construction period. The Recipient shall ensure compliance with the guidelines and design specifications provided by the USEPA for using the official Investing in America emblem available at:
https://www.epa.gov/invest/investing-america-signage.
(b) Logos. The Recipient shall include the USEPA, State Water Board, and DWSRF logos provided in section A.2.3.1(b) in addition to the official Investing in America emblem on the Bipartisan Infrastructure Law signage using the customizable sign template at the link provided in section A.2.3.2(a). (c) Procuring Signs: Consistent with section 6002 of the Resource Conservation and Recovery Act, 42 U.S.C. 6962, and 2 CFR 200.323, Recipients are encouraged to use recycled or recovered materials when procuring signs. Signage costs are considered an eligible cost under this Agreement provided that the costs associated with signage are reasonable. Additionally, to increase public awareness of projects serving communities where English is not the predominant language, Recipients are encouraged to translate the language on signs (excluding the official Investing in America emblem or USEPA logo or 165
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit A
seal) into the appropriate non-English language(s). The costs of such translation are eligible, provided the costs are reasonable.

A.2.4 Commencement of Operations.

Upon Completion of Construction of the Project, the Recipient must expeditiously initiate Project operations.

A.3 DATES & DELIVERABLES.
(a) Time is of the essence.
(b) The Recipient must expeditiously proceed with and complete construction of the Project. (c) The following dates are established as on the Cover Page of this Agreement:
i. Eligible Work Start Date
ii. Eligible Construction Start Date
iii. Completion of Construction Date
iv. Final Reimbursement Request Date
v. Records Retention End Date
vi. Final Payment Date
(d) The Recipient must award the prime construction contract timely. (e) The Recipient agrees to start construction no later than [DFA will insert date that is within 6 months after execution of this Agreement].
(f) The Recipient must deliver any request for extension of the Completion of Construction date no less than 90 days prior to the Completion of Construction date. (g) The undisbursed balance of this Agreement will be deobligated if the Recipient does not provide its final reimbursement request to the Division on or before the Final Reimbursement Request Date.

A.4 SCHEDULE.

Failure to provide items by the due dates indicated in the table below may constitute a material violation of this Agreement. The Project Manager may adjust the dates in the “Estimated Due Date” column of this table, but Critical Due Date adjustments will require an amendment to this Agreement. The Recipient must complete and submit all work in time to be approved by the Division prior to Project Completion. As applicable for specific submittals, the Recipient must plan adequate time to solicit, receive, and address comments prior to submitting the final submittal. The Recipient must submit the final reimbursement request prior to the Final Reimbursement Request Date set forth on the Cover Page. [DFA will insert Schedule of Deliverables]
166
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
EXHIBIT B – FUNDING TERMS
B.1. FUNDING AMOUNTS AND REIMBURSEMENTS
B.1.1 Funding Contingency and Other Sources.
(a) If this Agreement’s funding for any fiscal year expires due to reversion or is reduced, substantially delayed, or deleted by the Budget Act, by Executive Order, or by order or action of the Department of Finance, the State Water Board has the option to either cancel this Agreement with no liability accruing to the State Water Board, or offer an amendment to the Recipient to reflect the reduced amount. (b) If funding for Project Costs is made available to the Recipient from sources other than this Agreement, the Recipient must notify the Division. The Recipient may retain such funding up to an amount which equals the Recipient's share of Project Costs. To the extent allowed by requirements of other funding sources, excess funding must be remitted to the State Water Board to be applied to Payments due hereunder, if any.

B.1.2 Estimated Reasonable Cost.

The estimated reasonable cost of the total Project, including associated planning and design costs, is Written Dollar Amount dollars and no cents ($Dollar Amount).

B.1.3 Project Funding Amount.

Subject to the terms of this Agreement, the State Water Board agrees to provide Project Funds not to exceed the amount of the Project Funding Amount set forth on the Cover Page of this Agreement.

B. 1.4 Budget Costs.
(a) Estimated budget costs are contained in the Summary Project Cost Table below:
[DFA will insert table]
The Division’s Final Budget Approval and related Form 259 and Form 260 will document a more detailed budget of eligible Project Costs and Project funding amounts. Construction of the Project may be completed in phases with written approval of the Division. If construction proceeds under separate phases, the Recipient must submit a Final Budget Approval package and receive Final Budget Approval from the Division for each phase.

Upon written request by the Recipient, the Division may adjust the line items of the budget at the time of Division’s Final Budget Approval(s). Upon written request by the Recipient, the Division may also adjust the line items of the budget at the time of Recipient’s submittal of its final claim. Any line item adjustments to the budget that are due to a change in scope of work will require an Agreement amendment. The sum of adjusted line items in the budget approved through the Final Budget Approval process must not exceed the Project Funding Amount. The Division may also propose budget adjustments. (b) Under no circumstances may the sum of line items in the budget approved through the Final Budget Approval process exceed the Project Funding Amount. Any increase in the Project Funding Amount will require an Agreement amendment.

B.1.5 Contingent Disbursement.
167
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
(a) The State Water Board’s disbursement of funds hereunder is contingent on the Recipient’s compliance with the terms and conditions of this Agreement. (b) The State Water Board's obligation to disburse Project Funds is contingent upon the availability of sufficient funds to permit the disbursements provided for herein. If sufficient funds are not available for any reason, including but not limited to failure of the federal or State government to appropriate funds necessary for disbursement of Project Funds, the State Water Board shall not be obligated to make any disbursements to the Recipient under this Agreement. This provision shall be construed as a condition precedent to the obligation of the State Water Board to make any disbursements under this Agreement.

Nothing in this Agreement shall be construed to provide the Recipient with a right of priority for disbursement over any other entity. If any disbursements due the Recipient under this Agreement are deferred because sufficient funds are unavailable, it is the intention of the State Water Board that such disbursement will be made to the Recipient when sufficient funds do become available, but this intention is not binding.
(c) Construction costs and disbursements are not available until after the Division has approved the final budget form submitted by the Recipient for the corresponding costs. (d) No costs incurred prior to the Eligible Work Start Date are eligible for reimbursement. (e) Construction costs incurred prior to the Eligible Construction Start Date are not eligible for reimbursement.
(f) Failure to proceed according to the timelines set forth in this Agreement may require the Recipient to repay to the State Water Board all disbursed Project Funds. (g) The Recipient agrees to ensure that its final reimbursement request is received by the Division no later than the Final Reimbursement Request Date. If the final reimbursement request is not received timely, the undisbursed balance of this Agreement will be deobligated. (h) The Recipient is not entitled to interest earned on undisbursed funds.

B.1.6 Reimbursement Procedure.

Except as may be otherwise provided in this Agreement, disbursement of Project Funds will be made as follows:
(a) Upon execution and delivery of this Agreement by both parties, the Recipient may request immediate reimbursement of any eligible incurred costs through submission to the State Water Board of the Reimbursement Request Form 260 and Form 261, or any amendment thereto, duly completed and executed. To be eligible for reimbursement, Project Costs, including any planning and design allowance costs, must have been incurred in compliance with all applicable requirements, including the state and federal cross-cutting requirements listed in Exhibit C. (b) The Recipient must submit a reimbursement request for costs incurred prior to the date this Agreement is executed by the State Water Board no later than ninety (90) days after this Agreement is executed by the State Water Board. Late reimbursement requests may not be honored.
(c) The Recipient may request reimbursement of eligible construction and equipment costs consistent with budget amounts approved by the Division in the Final Budget Approval. (d) Additional Project Funds will be promptly disbursed to the Recipient upon receipt of reimbursement request Form 260 and Form 261, or any amendment thereto, duly completed and 168
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
executed by the Recipient for incurred costs consistent with this Agreement, along with receipt of progress reports due under Exhibit A.
(e) The Recipient must not request reimbursement for any Project Cost until such cost has been incurred and is currently due and payable by the Recipient, although the actual payment of such cost by the Recipient is not required as a condition of reimbursement request. Supporting documentation (e.g., receipts) must be submitted with each reimbursement request. The amount requested for administration costs must include a calculation formula (i.e., hours or days worked times the hourly or daily rate = total amount claimed). Disbursement of Project Funds will be made only after receipt of a complete, adequately supported, properly documented, and accurately addressed reimbursement request. Upon request by the Division, supporting documents for professional and administrative services must include the employees’ names, classifications, labor rates, hours worked, and descriptions of the tasks performed.

Reimbursement requests submitted without supporting documents may be wholly or partially withheld at the discretion of the Division.
(f) The Recipient must spend Project Funds within 30 days of receipt. If the Recipient earns interest earned on Project Funds, it must report that interest immediately to the State Water Board. The State Water Board may deduct earned interest from future disbursements. (g) The Recipient shall not request a reimbursement unless that Project Cost is allowable, reasonable, and allocable.
(h) Notwithstanding any other provision of this Agreement, no disbursement shall be required at any time or in any manner which is in violation of or in conflict with federal or state laws, policies, or regulations.
(i) No work or travel outside the State of California is permitted under this Agreement unless the Division provides prior written authorization. Failure to comply with this restriction may result in termination this Agreement, pursuant to Exhibit C. Any reimbursement for necessary travel and per diem shall be at rates not to exceed those set by the California Department of Human Resources at http://www.calhr.ca.gov/employees/Pages/travel-reimbursements.aspx. as of the date costs are incurred by the Recipient.

B.1.7 Withholding of Disbursements.

Notwithstanding any other provision of this Agreement, the State Water Board may withhold all or any portion of the Project Funds upon the occurrence of any of the following events:
(a) The Recipient’s failure to maintain reasonable progress on the Project as determined by the Division;
(b) Placement on the ballot or passage of an initiative or referendum to repeal or reduce the Recipient’s taxes, assessments, fees, or charges levied for operation of the System or payment of debt service on System Obligations;
(c) Commencement of litigation or a judicial or administrative proceeding related to the Project, System, or Revenues that the State Water Board determines may impair the timely satisfaction of Recipient’s obligations under this Agreement; (d) Any investigation by the State Water Board, District Attorney, California State Auditor, Bureau of State Audits, the USEPA Office of Inspector General, the Internal Revenue Service, Securities and Exchange Commission, a grand jury, or any other state or federal agency, relating to the Recipient’s financial management, accounting procedures, or internal fiscal controls;
(e) A material adverse change in the condition of the Recipient, the Revenues, or the System, that the Division reasonably determines would materially impair the Recipient’s ability to 169
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
satisfy its obligations under this Agreement, or any other event that the Division reasonably determines would materially impair the Recipient’s ability to satisfy its obligations under this Agreement;
(f) The Recipient’s material violation of, or threat to materially violate, any term of this Agreement;
(g) Suspicion of fraud, forgery, embezzlement, theft, or any other misuse of public funds by the Recipient or its employees, or by its contractors or agents regarding the Project or the System;
(h) An event requiring Notice as set forth in Exhibit C; (i) An Event of Default or an event that the Division determines may become an Event of Default.

B.1.8 Fraud and Misuse of Public Funds; Enforcement.

All requests for reimbursement submitted must be accurate and signed by the Recipient’s Authorized Representative under penalty of perjury. All costs submitted pursuant to this Agreement must only be for the work or tasks set forth in this Agreement. The Recipient must not submit any invoice containing costs that are ineligible or have been reimbursed from other funding sources unless required and specifically noted as such (i.e., match costs). Any eligible costs for which the Recipient is seeking reimbursement shall not be reimbursed from any other source. Double or multiple billing for time, services, or any other eligible cost is improper and will not be compensated. Any suspected occurrences of fraud, forgery, embezzlement, theft, or any other misuse of public funds may result in suspension of disbursements and, notwithstanding any other section in this Agreement, the termination of this Agreement requiring the repayment of all Project Funds disbursed hereunder. Additionally, the Deputy Director of the Division may request an audit; refer the matter for appropriate administrative action, including but not limited to the recovery of financial assistance provided and the imposition of civil penalties; and/or refer the matter to the Attorney General’s Office or the appropriate district attorney’s office for criminal prosecution or the imposition of civil liability. A person who knowingly makes or causes to be made any false statement, material misrepresentation, or false certification in any submittal may be subject to a civil penalty, criminal fine, or imprisonment. (Wat. Code, § 13490 et seq.) B.2 RECIPIENT’S PAYMENT OBLIGATION, PLEDGE, AND RESERVE B.2.1 Project Costs.

The Recipient must pay any and all costs connected with the Project including, without limitation, any and all Project Costs and Additional Payments. If the Project Funds are not sufficient to pay the Project Costs in full, the Recipient must nonetheless complete the Project and pay that portion of the Project Costs in excess of available Project Funds, and shall not be entitled to any reimbursement therefor from the State Water Board.

B.2.2 Estimated Principal Payment Due.

The estimated amount of principal that will be due to the State Water Board from the Recipient under this Agreement is Written Dollar Amount dollars and no cents ($Dollar Amount).

B.2.3 Interest Rate and In-Lieu of Interest Charges.
(a) The Recipient agrees to make all Payments according to the schedule in Exhibit E, and as otherwise set forth herein, at an interest rate of Written Interest Rate % (X%) per annum. (b) Interest will accrue beginning with each disbursement. 170
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
(c) In lieu of, and not to exceed, interest otherwise due under this Agreement, the Recipient agrees to pay the following charge(s), as further set forth in Exhibit E:
· an Administrative Service Charge
· a Drinking Water Small Community Emergency Grant Fund Charge B.2.4 Reserved.

B.2.5 Obligation Absolute.

The obligation of the Recipient to make the Payments and other payments required to be made by it under this Agreement, from the Net Revenues and/or other amounts legally available to the Recipient therefor, is absolute and unconditional, and until such time as the Payments and Additional Payments have been paid in full, the Recipient must not discontinue or suspend any Payments or other payments required to be made by it hereunder when due, whether or not the Project, or any related part thereof is operating or operable or has been completed, or its use is suspended, interfered with, reduced or curtailed or terminated in whole or in part, and such Payments and other payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party of any agreement for any cause whatsoever.

B.2.6 Payment Timing.
(a) The Recipient must pay interest annually, by [DFA to fill in date] of each year, until one year after Completion of Construction. Beginning no later than one year after Completion of Construction, the Recipient must make annual Payment of the principal of the Project Funds, together with all interest accruing thereon by [DFA to fill in date]. The Recipient must make Payments fully amortizing the total principal of the Project by the Final Payment Date. Payments are based on a standard fully amortized assistance amount with equal annual payments.
(b) The remaining balance is the previous balance, plus the disbursements, plus the accrued interest on both, plus any Charge In Lieu of Interest, less the Payment. Payment calculations will be made beginning one (1) year after Completion of Construction. Exhibit E is a payment schedule based on the provisions of this Exhibit and an estimated disbursement schedule. Actual payments will be based on actual disbursements.
(c) Upon Completion of Construction and submission of necessary reports by the Recipient, the Division will prepare an appropriate payment schedule and supply the same to the Recipient. The Division may amend this schedule as necessary to accurately reflect amounts due under this Agreement. The Division will prepare any necessary amendments to the payment schedule and send them to the Recipient. The Recipient must make each Payment on or before the due date therefor. A ten (10) day grace period will be allowed, after which time a penalty in the amount of costs incurred by the State Water Board will be assessed for late payment. These costs may include, but are not limited to, lost interest earnings, staff time, bond debt service default penalties, if any, and other related costs. For purposes of penalty assessment, payment will be deemed to have been made if payment is deposited in the U.S. Mail within the grace period with postage prepaid and properly addressed. Any penalties assessed will not be added to the assistance amount balance, but will be treated as a separate account and obligation of the Recipient. The interest penalty will be assessed from the payment due date. (d) The Recipient is obligated to make all payments required by this Agreement to the State Water Board, notwithstanding any individual default by its constituents or others in the payment to the Recipient of fees, charges, taxes, assessments, tolls or other charges ("Charges") levied or imposed by the Recipient. The Recipient must provide for the punctual payment to the State Water Board of all amounts which become due under this Agreement and which are received from constituents or others in the payment to the Recipient. In the event of failure, neglect or refusal of any officer of the Recipient to levy or cause to be 171
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
levied any Charge to provide payment by the Recipient under this Agreement, to enforce or to collect such Charge, or to pay over to the State Water Board any money collected on account of such Charge necessary to satisfy any amount due under this Agreement, the State Water Board may take such action in a court of competent jurisdiction as it deems necessary to compel the performance of all duties relating to the imposition or levying and collection of any of such Charges and the payment of the money collected therefrom to the State Water Board. Action taken pursuant hereto shall not deprive the State Water Board of, or limit the application of, any other remedy provided by law or by this Agreement. (e) Each Payment must be paid in lawful money of the United States of America by check or other acceptable form of payment set forth at www.waterboards.ca.gov/make_a_payment.

The Recipient must pay Payments and Additional Payments from Net Revenues and/or other amounts legally available to the Recipient therefor.

B.2.7 Pledged Revenues.

B.2.7.1 Establishment of Enterprise Fund and Reserve Fund.

In order to carry out its System Obligations, the Recipient covenants that it shall establish and maintain or shall have established and maintained the Enterprise Fund. All Revenues received shall be deposited when and as received in trust in the Enterprise Fund. As required in this Exhibit, the Recipient must establish and maintain a Reserve Fund.

B.2.7.2 Pledge of Net Revenues, Enterprise Fund, and Reserve Fund.

The Obligation hereunder shall be secured by a lien on and pledge of the Enterprise Fund, Net Revenues, and any Reserve Fund on parity with the Parity Obligations. The Recipient hereby pledges and grants such lien on and pledge of the Enterprise Fund, Net Revenues, and any Reserve Fund to secure the Obligation, including payment of Payments and Additional Payments hereunder. The Enterprise Fund, Net Revenues in the Enterprise Fund, and any Reserve Fund shall be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the Recipient.

B.2.7.3 Application and Purpose of the Enterprise Fund.

Subject to the provisions of any outstanding System Obligation, money on deposit in the Enterprise Fund shall be applied and used first, to pay Operations and Maintenance Costs, and thereafter, all amounts due and payable with respect to the System Obligations in order of priority. After making all payments hereinabove required to be made in each Fiscal Year, the Recipient may expend in such Fiscal Year any remaining money in the Enterprise Fund for any lawful purpose of the Recipient.

B.2.8 No Prepayment.

Pursuant to State Water Board’s Debt Management Policy, adopted on October 3, 2017, the Recipient may not prepay any portion of the principal and interest due under this Agreement without the written consent of the Deputy Director of the Division.

B.2.9 Reserve Fund.

Prior to Completion of Construction, the Recipient must establish a restricted Reserve Fund, held in its Enterprise Fund, equal to one year’s Debt Service on this Obligation. The Recipient must maintain the Reserve Fund throughout the term of this Agreement. The Reserve Fund is subject to lien and pledged as security for this Obligation, and its use is restricted to payment of this Obligation during the term of this Agreement.
172
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
B.3 RATES, FEES AND CHARGES.
(a) The Recipient must, to the extent permitted by law, fix, prescribe and collect rates, fees and charges for the System during each Fiscal Year which are reasonable, fair, and nondiscriminatory and which will be sufficient to generate Revenues in the amounts necessary to cover Operations and Maintenance Costs, and must ensure that Net Revenues are equal to the sum of:
i. at least [120% or the coverage ratio required by the Recipient’s existing System Obligations, whichever is greater] of the Maximum Annual Debt Service with respect to all outstanding System Obligations senior to and on parity with the Obligation; and ii. at least [100% or the coverage ratio required by the Recipient’s existing System Obligations, whichever is greater] of the Maximum Annual Debt Service with respect to all outstanding System Obligations subordinate to the Obligation, so long as System Obligations other than this Obligation are outstanding.

Upon defeasance of all System Obligations other than this Obligation, this ratio must be at least 120%, except where System Obligations are defeased pursuant to refunding obligations. (b) The Recipient may make adjustments from time to time in such fees and charges and may make such classification thereof as it deems necessary, but shall not reduce the rates, fees and charges then in effect unless the Net Revenues from such reduced rates, fees, and charges will at all times be sufficient to meet the requirements of this section.
(c) Upon consideration of a voter initiative to reduce Revenues, the Recipient must make a finding regarding the effect of such a reduction on the Recipient's ability to satisfy the rate covenant set forth in this Section. The Recipient must make its findings available to the public. The Recipient’s Authorized Representative must request, if necessary, the authorization of the Recipient’s decision-maker or decision-making body to file litigation to challenge any such initiative that it finds will render it unable to satisfy the rate covenant set forth in this Agreement and its obligation to operate and maintain the Project for its Useful Life. The Recipient must diligently pursue and bear any and all costs related to such challenge. The Recipient must notify and regularly update the State Water Board regarding the status of any such challenge.

B.4 ADDITIONAL DEBT.
(a) The Recipient’s future debt that is secured by Revenues pledged herein may not be senior to this Obligation, except where the new senior obligation refunds or refinances a senior obligation with the same lien position as the existing senior obligation, the new senior obligation has the same or earlier repayment term as the refunded senior debt, the new senior debt service is the same or lower than the existing debt service, and the new senior debt will not diminish the Recipient’s ability to satisfy its SRF obligation(s).
(b) The Recipient may issue additional parity or subordinate debt only if all of the following conditions are met:
i. No Event of Default (or no event with respect to which notice has been given and which, once all notice of grace periods have passed, would constitute an Event of Default) has occurred and is continuing;
ii. Net Revenues in the most recent Fiscal Year, excluding transfers from a rate stabilization fund, if any, meet the ratio for rate covenants set forth in this Exhibit with respect to any outstanding and proposed additional obligations; and
iii. The Recipient is in compliance with any reserve fund requirement of this Obligation. 173
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit B
B.5 NO LIENS.

The Recipient must not make any pledge of or place any lien on the Project, System, or Revenues except as otherwise provided or permitted by this Agreement.
174
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
EXHIBIT C – GENERAL & PROGRAMMATIC TERMS & CONDITIONS
C.1 REPRESENTATIONS & WARRANTIES.

The Recipient represents, warrants, and commits to the following as of the Eligible Work Start Date and continuing thereafter for the term of this Agreement.

C.1.1 Application and General Recipient Commitments.

The Recipient has not made any untrue statement of a material fact in its application for this financial assistance, or omitted to state in its application a material fact that makes the statements in its application not misleading.

The Recipient agrees to comply with all terms, provisions, conditions, and commitments of this Agreement, including all incorporated documents.

The Recipient agrees to fulfill all assurances, declarations, representations, and commitments in its application, accompanying documents, and communications filed in support of its request for funding under this Agreement.

C.1.2 Authorization and Validity.

The execution and delivery of this Agreement, including all incorporated documents, has been duly authorized by the Recipient. Upon execution by both parties, this Agreement constitutes a valid and binding obligation of the Recipient, enforceable in accordance with its terms, except as such enforcement may be limited by law.

C.1.3 No Violations.

The execution, delivery, and performance by Recipient of this Agreement, including all incorporated documents, do not violate any provision of any law or regulation in effect as of the date of execution of this Agreement by the Recipient, or result in any breach or default under any contract, obligation, indenture, or other instrument to which Recipient is a party or by which Recipient is bound as of the date of execution of this Agreement by the Recipient.

C.1.4 No Litigation.

There are, as of the date of execution of this Agreement by the Recipient, no pending or, to Recipient’s knowledge, threatened actions, claims, investigations, suits, or proceedings before any governmental authority, court, or administrative agency which materially affect the financial condition or operations of the Recipient, the System, the Revenues, and/or the Project.

There are no proceedings, actions, or offers by a public entity to acquire by purchase or the power of eminent domain the System or any of the real or personal property related to or necessary for the Project.

C.1.5 Property Rights and Water Rights.

The Recipient owns or has sufficient property rights in the Project property for the longer of the Useful Life or the term of this Agreement, either in fee simple or for a term of years that is not subject to third-party revocation during the Useful Life of the Project. 175
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
The Recipient possesses all water rights necessary for this Project.

C.1.6 Solvency and Insurance.

None of the transactions contemplated by this Agreement will be or have been made with an actual intent to hinder, delay, or defraud any present or future creditors of Recipient. The Recipient is solvent and will not be rendered insolvent by the transactions contemplated by this Agreement. The Recipient is able to pay its debts as they become due. The Recipient maintains sufficient insurance coverage considering the scope of this Agreement, including, for example but not necessarily limited to, general liability, automobile liability, workers compensation and employer liability, professional liability.

C.1.7 Legal Status and Eligibility.

The Recipient is duly organized and existing and in good standing under the laws of the State of California. Recipient must at all times maintain its current legal existence and preserve and keep in full force and effect its legal rights and authority. The Recipient acknowledges that changes to its legal or financial status may affect its eligibility for funding under this Agreement and commits to maintaining its eligibility. Within the preceding ten years, the Recipient has not failed to demonstrate compliance with state or federal audit disallowances.

C.1.8 Financial Statements and Continuing Disclosure.

The financial statements of Recipient previously delivered to the State Water Board as of the date(s) set forth in such financial statements: (a) are materially complete and correct; (b) present fairly the financial condition of the Recipient; and (c) have been prepared in accordance with GAAP. Since the date(s) of such financial statements, there has been no material adverse change in the financial condition of the Recipient, nor have any assets or properties reflected on such financial statements been sold, transferred, assigned, mortgaged, pledged or encumbered, except as previously disclosed in writing by Recipient and approved in writing by the State Water Board.

The Recipient is current in its continuing disclosure obligations associated with its material debt, if any.

C.1.9 System Obligations
The Recipient has no System Obligations other than those defined in this Agreement.

C.1.10 No Other Material Obligations.

The Recipient has no Material Obligations other than System Obligations.

C.1.11 Compliance with State Water Board Funding Agreements.

The Recipient represents that it is in compliance with all State Water Board funding agreements to which it is a party.

C.2 DEFAULTS AND REMEDIES
In addition to any other remedy set forth in this Agreement, the following remedies are available under this Agreement.

C.2.1 Return of Funds; Acceleration; and Additional Payments. 176
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
Notwithstanding any other provision of this Agreement, if the Division determines that an Event of Default has occurred, the Recipient may be required, upon demand, immediately to do each of the following:
i. return to the State Water Board any grant or principal forgiveness amounts received pursuant to this Agreement;
ii. accelerate the payment of any principal owed under this Agreement, all of which shall be immediately due and payable;
iii. pay interest at the highest legal rate on all of the foregoing; and iv. pay any Additional Payments.

C.2.2 Reserved.

C.2.3 Administrative remedies.

Whenever the State Water Board determines that the Recipient, the Recipient’s contractor, consultant, employee, agent, assignee, or grantee has violated any requirement or term of the Agreement, the State Water Board may impose civil penalties in accordance with Water Code, section 13497. The State Water Board may impose civil liability administratively against the Recipient or the Recipient’s consultant or contractor or other agent furnishing any information related to funds disbursed or costs claimed for reimbursement if the Recipient or the Recipient’s consultant or contractor or other agent fails to personally attest that the information is true, accurate, and complete the best of one’s knowledge. (Wat.

Code, § 13498.) The State Water Board may impose civil liability administratively against any person who makes a misrepresentation in any submittal to the State Water Board, including, but not limited to, an application, report, certification, record, invoice, form, or other document that is submitted to the State Water Board relating to a financial assistance agreement. (Wat. Code, § 13499.) C.2.4 Judicial remedies.

Whenever the State Water Board determines that an Event of Default shall have occurred, the State Water Board may enforce its rights under this Agreement by any judicial proceeding, whether at law or in equity. Without limiting the generality of the foregoing, the State Water Board may:
i. by suit in equity, require the Recipient to account for amounts relating to this Agreement as if the Recipient were the trustee of an express trust; ii. by mandamus or other proceeding, compel the performance by the Recipient and any of its officers, agents, and employees of any duty under the law or of any obligation or covenant under this Agreement, including but not limited to the imposition and collection of rates for the services of the System sufficient to meet all requirements of this Agreement; and
iii. take whatever action at law or in equity as may appear necessary or desirable to the State Water Board to collect the Payments then due or thereafter to become due, or to enforce performance of any obligation or covenant of the Recipient under this Agreement.

Upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the State Water Board under this Agreement, the State Water Board may make application for the appointment of a receiver or custodian of the Revenues, pending such proceeding, with such power as the court making such appointment may confer.

C.2.5 Termination.

Upon an Event of Default, the State Water Board may terminate this Agreement. Interest shall accrue on all amounts due at the highest legal rate of interest from the date that the State Water Board delivers notice of termination to the Recipient.
177
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
C.2.6 Damages for Breach of Tax-Exempt Status.

In the event that any breach of any of the provisions of this Agreement by the Recipient results in the loss of tax-exempt status for any bonds of the State or any subdivision or agency thereof, or if such breach results in an obligation on the part of the State or any subdivision or agency thereof to reimburse the federal government by reason of any arbitrage profits, the Recipient must immediately reimburse the State or any subdivision or agency thereof in an amount equal to any damages paid by or loss incurred by the State or any subdivision or agency thereof due to such breach.

C.2.7 Damages for Breach of Federal Conditions.

In the event that any breach of any of the provisions of this Agreement by the Recipient results in the failure of Project Funds to be used pursuant to the provisions of this Agreement, or if such breach results in an obligation on the part of the State or any subdivision or agency thereof to reimburse the federal government, the Recipient must immediately reimburse the State or any subdivision or agency thereof in an amount equal to any damages paid by or loss incurred by the State or any subdivision or agency thereof due to such breach.

C.2.8 Remedies and Limitations.

None of the remedies available to the State Water Board shall be exclusive of any other remedy, and each such remedy shall be cumulative and in addition to every other remedy given hereunder or now or hereafter existing at law or in equity. The State Water Board may exercise any remedy, now or hereafter existing, without exhausting and without regard to any other remedy.

Any claim of the Recipient is limited to the rights and remedies provided to the Recipient under this Agreement and is subject to the claims procedures provided to the Recipient under this Agreement.

C.2.9 Non-Waiver.

Nothing in this Agreement shall affect or impair the Recipient’s Obligation to pay Payments as provided herein or shall affect or impair the right of the State Water Board to bring suit to enforce such payment.

No delay or omission of the State Water Board in the exercise of any right arising upon an Event of Default shall impair any such right or be construed to be a waiver of any such Event of Default. The State Water Board may exercise from time to time and as often as shall be deemed expedient by the State Water Board, any remedy or right provided by law or pursuant to this Agreement.

C.2.10 Status Quo.

If any action to enforce any right or exercise any remedy shall be brought and either discontinued or determined adversely to the State Water Board, then the State Water Board shall be restored to its former position, rights and remedies as if no such action had been brought.

C.3 STANDARD CONDITIONS
C.3.1 Access, Inspection, and Public Records.

The Recipient must ensure that the State Water Board, the Governor of the State, the USEPA, the USEPA’s Office of Inspector General, any member of Congress, or any authorized representative of the foregoing, will have safe and suitable access to the Project site at all reasonable times during Project construction and thereafter for the term of the Agreement. The Recipient acknowledges that, except for a subset of information regarding archaeological records, the Project records and locations are public records, including but not limited to all of the submissions accompanying the application, all of the 178
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
documents incorporated into this Agreement by reference, and all reports, reimbursement requests, and supporting documentation submitted hereunder.

C.3.2 Accounting and Auditing Standards; Financial Management Systems; Records Retention. (a) The Recipient must maintain project accounts according to GAAP as issued by the Governmental Accounting Standards Board (GASB) or its successor. The Recipient must maintain GAAP-compliant project accounts, including GAAP requirements relating to the reporting of infrastructure assets. (b) The Recipient must comply with federal standards for financial management systems. The Recipient agrees that, at a minimum, its fiscal control and accounting procedures will be sufficient to permit preparation of reports required by the federal government and tracking of Project funds to a level of expenditure adequate to establish that such funds have not been used in violation of federal or state law or the terms of this Agreement. To the extent applicable, the Recipient must comply with the provisions and requirements of the federal Single Audit Act (SAA) of 1984, 2 CFR part 200, subpart F, and 2 CFR section 200.302, and updates or revisions thereto, including but not limited to:
· Maintain an annual (Fiscal Year) accounting system and identify all expenditures of federal financial assistance;
· Conduct a SAA audit using an independent auditor in those Fiscal Years when expenditures of total federal financial assistance equal or exceed $750,000, and submit the SAA audit to the Federal Audit Clearinghouse within the earlier of thirty (30) calendar days after receipt of the auditor’s report(s) or nine (9) months of the end of the audit period; · Notify the Division when a SAA audit has been conducted and submitted to the Federal Audit Clearinghouse;
· Notify and provide the Division with a copy of the SAA audit within thirty (30) days of completion of the audit;
· Inform the Division of findings and recommendations pertaining to federal financial assistance provided through the State Water Board contained in SAA audits conducted by the Recipient; · Initiate corrective actions for audit reports with findings and recommendations that impact federal financial assistance provided through the State Water Board and notify the Division when corrective actions are complete.
(c) Without limitation of the requirement to maintain Project accounts in accordance with GAAP, the Recipient must:
i. Establish an official file for the Project which adequately documents all significant actions relative to the Project;
ii. Establish separate accounts which will adequately and accurately depict all amounts received and expended on the Project, including all assistance funds received under this Agreement;
iii. Establish separate accounts which will adequately depict all income received which is attributable to the Project, specifically including any income attributable to assistance funds disbursed under this Agreement; iv. Establish an accounting system which will accurately depict final total costs of the Project, including both direct and indirect Costs;
v. Establish such accounts and maintain such records as may be necessary for the State to fulfill federal reporting requirements, including any and all reporting requirements under federal tax statutes or regulations; and vi. If Force Account is used by the Recipient for any phase of the Project, other than for planning, design, and construction engineering and administration provided for by allowance, accounts will be established which reasonably 179
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
document all employee hours charged to the Project and the associated tasks performed by each employee.
(d) The Recipient must maintain separate books, records and other material relative to the Project.

The Recipient must also retain such books, records, and other material for itself and for each contractor or subcontractor who performed or performs work on this project for a minimum of thirty-six (36) years after Completion of Construction. The Recipient must require that such books, records, and other material are subject at all reasonable times (at a minimum during normal business hours) to inspection, copying, and audit by the State Water Board, the California State Auditor, the Bureau of State Audits, the USEPA, the USEPA’s Office of Inspector General, the Internal Revenue Service, the Governor, or any authorized representatives of the aforementioned. The Recipient must allow and must require its contractors to allow interviews during normal business hours of any employees who might reasonably have information related to such records. The Recipient agrees to include a similar duty regarding audit, interviews, and records retention in any contract or subcontract related to the performance of this Agreement. The provisions of this section survive the term of this Agreement.

C.3.3 Amendment.

No amendment or variation of the terms of this Agreement shall be valid unless made in writing and signed by both the Recipient and the Deputy Director or designee.

Requests for amendments must be in writing and directed to the contact listed in Section 4 and to the Division’s Chief of Loans and Grants Administration Section.

C.3.4 Assignability.

This Agreement is not assignable by the Recipient, either in whole or in part, without the consent of the State Water Board in the form of a formal written amendment to this Agreement.

C.3.5 Audit.
(a) The Division may call for an audit of financial information relative to the Project if the Division determines that an audit is desirable to assure program integrity or if an audit becomes necessary because of state or federal requirements. If an audit is called for, the audit must be performed by a certified public accountant independent of the Recipient and at the cost of the Recipient. The audit must be in the form required by the Division.
(b) Audit disallowances must be returned to the State Water Board.

C.3.6 Bonding.

Where contractors are used, the Recipient must not authorize construction to begin until each contractor has furnished a performance bond in favor of the Recipient in the following amounts: faithful performance (100%) of contract value; labor and materials (100%) of contract value. This requirement shall not apply to any contract for less than $25,000.00.

C.3.7 Competitive Bidding
Recipient must adhere to any applicable state law or local ordinance for competitive bidding and applicable labor laws.

C.3.8 Compliance with Applicable Laws, Rules, and Requirements. 180
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
The Recipient must, at all times, comply with and require its contractors and subcontractors to comply with all applicable federal and state laws, rules, guidelines, regulations, and requirements. Without limitation of the foregoing, to the extent applicable, the Recipient must:
(a) Comply with the provisions of the adopted environmental mitigation plan, if any, for the term of this Agreement;
(b) Comply with the Policy; and
(c) Comply with and require compliance with the state and federal requirements set forth elsewhere in this Agreement.

C.3.9 Computer Software.

The Recipient certifies that it has appropriate systems and controls in place to ensure that state funds will not be used in the performance of this Agreement for the acquisition, operation or maintenance of computer software in violation of copyright laws.

C.3.10 Conflict of Interest.

The Recipient certifies that its owners, officers, directors, agents, representatives, and employees are in compliance with applicable state and federal conflict of interest laws.

C.3.11 Continuous Use of Project; No Lease, Sale, Transfer of Ownership, or Disposal of Project.

The Recipient agrees that, except as provided in this Agreement, it will not abandon, substantially discontinue use of, lease, sell, transfer ownership of, or dispose of all or a significant part or portion of the Project during the Useful Life of the Project without prior written approval of the Division. Such approval may be conditioned as determined to be appropriate by the Division, including a condition requiring repayment of all disbursed Project Funds or all or any portion of all remaining funds covered by this Agreement together with accrued interest and any penalty assessments that may be due.

C.3.12 Data Management.

The Recipient will undertake appropriate data management activities so that Project data can be incorporated into statewide data systems.

C.3.13 Disputes.
(a) The Recipient may appeal a staff decision within 30 days to the Deputy Director of the Division or designee, for a final Division decision. The Recipient may appeal a final Division decision to the State Water Board within 30 days. The Office of the Chief Counsel of the State Water Board will prepare a summary of the dispute and make recommendations relative to its final resolution, which will be provided to the State Water Board’s Executive Director and each State Water Board Member. Upon the motion of any State Water Board Member, the State Water Board will review and resolve the dispute in the manner determined by the State Water Board. Should the State Water Board determine not to review the final Division decision, this decision will represent a final agency action on the dispute. (b) This clause does not preclude consideration of legal questions, provided that nothing herein shall be construed to make final the decision of the State Water Board, or any official or representative thereof, on any question of law.
(c) Recipient must continue with the responsibilities under this Agreement during any dispute. 181
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
(d) This section relating to disputes does not establish an exclusive procedure for resolving claims within the meaning of Government Code sections 930 and 930.4.

C.3.14 Reserved.

C.3.15 Environmental Clearance.
(a) No work that is subject to CEQA or NEPA may proceed under this Agreement unless the State Water Board has provided environmental clearance. The State Water Board may require changes in the scope of work or additional mitigation as a condition to providing construction or implementation funding under this Agreement. Recipient shall not perform any work subject to CEQA and/or NEPA before the State Water Board completes its environmental review and specifies any changes in scope or additional mitigation that may be required. Proceeding with work subject to CEQA and/or NEPA without approval by the State Water Board shall constitute a breach of a material provision of this Agreement. (b) If this Project includes modification of a river or stream channel, the Recipient must fully mitigate environmental impacts resulting from the modification. The Recipient must provide documentation that the environmental impacts resulting from such modification will be fully mitigated considering all of the impacts of the modification and any mitigation, environmental enhancement, and environmental benefit resulting from the Project, and whether, on balance, any environmental enhancement or benefit equals or exceeds any negative environmental impacts of the Project.

C.3.16 Governing Law.

This Agreement is governed by and shall be interpreted in accordance with the laws of the State of California.

C.3.17 Income Restrictions.

The Recipient agrees that any refunds, rebates, credits, or other amounts (including any interest thereon) accruing to or received by the Recipient under this Agreement must be paid by the Recipient to the State Water Board, to the extent that they are properly allocable to costs for which the Recipient has been reimbursed by the State Water Board under this Agreement.

C.3.18 Indemnification and State Reviews.

The parties agree that review or approval of Project plans and specifications by the State Water Board is for administrative purposes only, including conformity with application and eligibility criteria, and expressly not for the purposes of design defect review or construction feasibility, and does not relieve the Recipient of its responsibility to properly plan, design, construct, operate, and maintain the Project. To the extent permitted by law, the Recipient agrees to indemnify, defend, and hold harmless the State Water Board, the Bank, and any trustee, and their officers, employees, and agents for the Bonds, if any (collectively, "Indemnified Persons"), against any loss or liability arising out of any claim or action brought against any Indemnified Persons from and against any and all losses, claims, damages, liabilities, or expenses, of every conceivable kind, character, and nature whatsoever arising out of, resulting from, or in any way connected with (1) the System or the Project or the conditions, occupancy, use, possession, conduct, or management of, work done in or about, or the planning, design, acquisition, installation, or construction, of the System or the Project or any part thereof; (2) the carrying out of any of the transactions contemplated by this Agreement or any related document; (3) any violation of any applicable law, rule or regulation, any environmental law (including, without limitation, the Federal Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the California Hazardous Substance Account Act, the Federal Water Pollution Control Act, the Clean Air Act, the Toxic Substances Control Act, the Occupational Safety and Health Act, the Safe Drinking Water 182
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
Act, the California Hazardous Waste Control Law, and California Water Code Section 13304, and any successors to said laws), rule or regulation or the release of any toxic substance on or near the System or the Project; or (4) any untrue statement or alleged untrue statement of any material fact or omission or alleged omission to state a material fact necessary to make the statements required to be stated therein, in light of the circumstances under which they were made, not misleading with respect to any information provided by the Recipient for use in any disclosure document utilized in connection with any of the transactions contemplated by this Agreement, except those arising from the gross negligence or willful misconduct of the Indemnified Persons. The Recipient must also provide for the defense and indemnification of the Indemnified Persons in any contractual provision extending indemnity to the Recipient in any contract let for the performance of any work under this Agreement, and must cause the Indemnified Persons to be included within the scope of any provision for the indemnification and defense of the Recipient in any contract or subcontract. To the fullest extent permitted by law, the Recipient agrees to pay and discharge any judgment or award entered or made against Indemnified Persons with respect to any such claim or action, and any settlement, compromise or other voluntary resolution. The provisions of this section survive the term of this Agreement.

C.3.19 Independent Actor.

The Recipient, and its agents and employees, if any, in the performance of this Agreement, shall act in an independent capacity and not as officers, employees, or agents of the State Water Board.

C.3.20 Integration.

This Agreement constitutes the complete and final agreement between the parties. No oral or written understanding or agreement not incorporated in this Agreement shall be binding on either party.

C.3.21 Leveraging Covenants.
(a) Notwithstanding any other provision hereof, the Recipient covenants and agrees that it will comply with the Tax Covenants set forth in Exhibit F of this Agreement. (b) The Recipient covenants to furnish such financial, operating and other data pertaining to the Recipient as may be requested by the State Water Board to: (i) enable the State Water Board to cause the issuance of Bonds and provide for security therefor; or (ii) enable any underwriter of Bonds issued for the benefit of the State Water Board to comply with Rule 15c2-12(b)(5). (c) The Recipient further covenants to provide the State Water Board with copies of all continuing disclosure documents or reports that are disclosed pursuant to (i) the Recipient’s continuing disclosure undertaking or undertakings made in connection with any outstanding System Obligation, (ii) the terms of any outstanding System Obligation, or (iii) a voluntary disclosure of information related to an outstanding System Obligation. The Recipient must disclose such documents or reports to the State Water Board at the same time such documents or reports are submitted to any dissemination agent, trustee, nationally recognized municipal securities information repository, the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (EMMA) website or other person or entity.

C.3.22 No Discrimination.
(a) The Recipient must comply with Government Code section 11135 and the implementing regulations (Cal. Code Regs, tit. 2, § 11140 et seq.), including, but not limited to, ensuring that no person is unlawfully denied full and equal access to the benefits of, or unlawfully subjected to discrimination in the operation of, the Project or System on the basis of sex, race, color, religion, ancestry, national origin, ethnic group identification, age, mental disability, physical disability, medical condition, genetic information, marital 183
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
status, or sexual orientation as such terms are defined under California law, for as long as the Recipient retains ownership or possession of the Project.
(b) If Project Funds are used to acquire or improve real property, the Recipient must include a covenant of nondiscrimination running with the land in the instrument effecting or recording the transfer of such real property.
(c) The Recipient must comply with the federal American with Disabilities Act of 1990 and implementing regulations as required by Government Code section 11135(b). (d) The Recipient’s obligations under this section shall survive the term of this Agreement. (e) During the performance of this Agreement, Recipient and its contractors and subcontractors must not unlawfully discriminate, harass, or allow harassment against any employee or applicant for employment because of sex, race, color, ancestry, religious creed, national origin, sexual orientation, physical disability (including HIV and AIDS), mental disability, medical condition (cancer), age (over 40), marital status, denial of family care leave, or genetic information, gender, gender identity, gender expression, or military and veteran status.
(f) The Recipient, its contractors, and subcontractors must ensure that the evaluation and treatment of their employees and applicants for employment are free from such discrimination and harassment. (g) The Recipient, its contractors, and subcontractors must comply with the provisions of the Fair Employment and Housing Act and the applicable regulations promulgated thereunder. (Gov. Code, §12990, subds. (a)-(f) et seq.;Cal. Code Regs., tit. 2, § 7285 et seq.) Such regulations are incorporated into this Agreement by reference and made a part hereof as if set forth in full. (h) The Recipient, its contractors, and subcontractors must comply with all applicable federal civil rights regulations, including statutory and national policy requirements. (2 CFR § 200.300). This includes, to the greatest extent practicable and to the extent permitted by law, the requirement to respect and protect the freedom of persons and organizations to engage in political and religious speech. (Executive Order 13798).
(i) The Recipient, its contractors, and subcontractors must give written notice of their obligations under this clause to labor organizations with which they have a collective bargaining or other agreement. (j) The Recipient must include the nondiscrimination and compliance provisions of this clause in all subcontracts to perform work under this Agreement.

C.3.23 No Third Party Rights.

The parties to this Agreement do not create rights in, or grant remedies to, any third party as a beneficiary of this Agreement, or of any duty, covenant, obligation, or undertaking established herein.

C.3.24 No Obligation of the State.

Any obligation of the State Water Board herein contained shall not be an obligation, debt, or liability of the State and any such obligation shall be payable solely out of the moneys encumbered pursuant to this Agreement.

C.3.25 Notice.

Upon the occurrence of any of the following events, the Recipient must provide notice as set forth below. 184
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
(a) Within 24 hours of the following, the Recipient must notify the Division by phone at (916) 327-9978 and by email to [PM email address and senior email address] and [email protected] of:
i. The seizure of, or levy on, any Revenues securing this Agreement; ii. Any discovery of any potential tribal cultural resource, archaeological or historical resource, or human remains in the Project area (also notify the Division’s Senior Cultural Resources Officer, [email protected] or (916) 323- 0626). Should a potential tribal cultural resource or archaeological or historical resource be discovered during construction or Project implementation, the Recipient must ensure that all work in the area of the find will cease until a qualified archaeologist has evaluated the situation and made recommendations regarding preservation of the resource, and the Division has determined what actions should be taken to protect and preserve the resource. The Recipient must implement appropriate actions as directed by the Division. If there are any applicable provisions of a mitigation, monitoring and reporting program adopted for the Project, the Recipient shall comply with such provisions. In the event of the discovery of human remains during construction of the Project, the Recipient shall cease construction and take other action required by any applicable laws, which may include but are not limited to Health and Safety Code, section 7050.5 and Public Resources Code, section 5097.98.
(b) Within five (5) business days, the Recipient must notify the Division by phone at (916) 327-9978; by email to [email protected] [PM email address and senior email address] and [email protected]; and by mail to the contact address set forth in Section 4 of this Agreement of the occurrence of any of the following events:
i. Bankruptcy, insolvency, receivership or similar event of the Recipient, or actions taken in anticipation of any of the foregoing;
ii. Change of ownership of the Project or the System or change of management or service contracts, if any, for operation of the System; iii. Loss, theft, damage, or impairment to Project, the Revenues or the System; iv. Failure to meet any debt service coverage test in Exhibit B of this Agreement; v. Draws on the Reserve Fund;
vi. Listed Events and Events of Default, except as otherwise set forth in this section; vii. Failure to observe or perform any covenant or comply with any condition in this Agreement;
viii. An offer from a public entity to purchase the Project or the System or any portion thereof, or any of the real or personal property related to or necessary for the Project;
ix. A proceeding or action by a public entity to acquire the Project or the System by power of eminent domain;
x. Incurrence of a System Obligation or other Material Obligation by the Recipient; or
xi. A default, event of acceleration, termination event, modification of terms, or other similar event under the terms of a System Obligation or other Material Obligation of the Recipient, any of which reflect financial difficulties. (c) Within ten (10) business days, the Recipient must notify the Division by phone at (916) 327-9978, by email to [PM email address and senior email address] and [email protected], and by mail to the contact address set forth in Section 4 of this Agreement of the following events:
185
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
i. Material defaults on Material Obligations, other than this Obligation; ii. Unscheduled draws on material debt service reserves or credit enhancements, reflecting financial difficulties;
iii. Substitution of credit or liquidity providers, if any or their failure to perform; iv. Any litigation pending or threatened with respect to the Project or the Recipient’s technical, managerial or financial capacity to operate the System or the Recipient’s continued existence, or any judgment or court order relating to such litigation that has a significant effect on the Project or the System; v. Circulation of a petition to repeal, reduce, or otherwise challenge the Recipient’s rates for services of the System;
vi. Consideration of dissolution, or disincorporation, or any other event that could materially impair the Revenues;
vii. Adverse tax opinions, the issuance by the Internal Revenue Service or proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices of determinations with respect to the tax status of any tax-exempt bonds;
viii. Rating changes on outstanding System Obligations, if any; ix. Enforcement actions by or brought on behalf of the State Water Board or Regional Water Board; or
x. Any investigation by the District Attorney, California State Auditor, Bureau of State Audits, USEPA’s Office of Inspector General, the Internal Revenue Service, Securities and Exchange Commission, a grand jury, or any other state or federal agency, relating to the Recipient’s financial management, accounting procedures, or internal fiscal controls;
(d) The Recipient must notify the Division promptly by phone at (916) 327-9978, by email to [PM email address and senior email address] and
[email protected], and by mail to the contact address set forth in Section 4 of this Agreement of any of the following events:
i. The discovery of a false statement of fact or representation made in this Agreement or in the application to the Division for this financial assistance, or in any certification, report, or request for reimbursement made pursuant to this Agreement, by the Recipient, its employees, agents, or contractors; ii. Any substantial change in scope of the Project. The Recipient must undertake no substantial change in the scope of the Project until prompt written notice of the proposed change has been provided to the Division and the Division has given written approval for the change;
iii. Cessation of all major construction work on the Project where such cessation of work is expected to or does extend for a period of thirty (30) days or more; iv. Any circumstance, combination of circumstances, or condition, which is expected to or does delay Completion of Construction for a period of ninety (90) days or more;
v. Discovery of any unexpected endangered or threatened species, as defined in the federal Endangered Species Act. Should a federally protected species be unexpectedly encountered during construction of the Project, the Recipient agrees to promptly notify the Division. This notification is in addition to the Recipient’s obligations under the federal Endangered Species Act; vi. Any Project monitoring, demonstration, or other implementation activities required in Exhibit A or Exhibit D of this Agreement, if any; vii. Any public or media event publicizing the accomplishments and/or results of this Agreement and provide the opportunity for attendance and participation by state and federal representatives with at least ten (10) working days’ notice to the Division;
186
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
viii. Any allegation of research misconduct involving research activities that are supported in whole or in part with USEPA funds under this Project, as required by Exhibit C.4.3(xxvii);
ix. Any events requiring notice to the Division pursuant to the provisions of this Agreement;
x. Completion of Construction of the Project, and actual Project Completion; xi. The award of the prime construction contract for the Project; xii. Initiation of construction of the Project.

C.3.26 Operation and Maintenance; Insurance.

The Recipient agrees to sufficiently and properly staff, operate and maintain all portions of the System during the Useful Life of the Project in accordance with all applicable state and federal laws, rules, and regulations.

The Recipient will procure and maintain or cause to be maintained insurance on the System with responsible insurers, or as part of a reasonable system of self-insurance, in such amounts and against such risks (including damage to or destruction of the System) as are usually covered in connection with systems similar to the System. Such insurance may be maintained by a self-insurance plan so long as such plan provides for (i) the establishment by the Recipient of a separate segregated self-insurance fund in an amount determined (initially and on at least an annual basis) by an independent insurance consultant experienced in the field of risk management employing accepted actuarial techniques and (ii) the establishment and maintenance of a claims processing and risk management program.

In the event of any damage to or destruction of the System caused by the perils covered by such insurance, the net proceeds thereof shall be applied to the reconstruction, repair or replacement of the damaged or destroyed portion of the System. The Recipient must begin such reconstruction, repair or replacement as expeditiously as possible, and must pay out of such net proceeds all costs and expenses in connection with such reconstruction, repair or replacement so that the same must be completed and the System must be free and clear of all claims and liens. If such net proceeds are insufficient to reconstruct, repair, or restore the System to the extent necessary to enable the Recipient to pay all remaining unpaid principal portions of the Payments, if any, in accordance with the terms of this Agreement, the Recipient must provide additional funds to restore or replace the damaged portions of the System.

Recipient agrees that for any policy of insurance concerning or covering the construction of the Project, it will cause, and will require its contractors and subcontractors to cause, a certificate of insurance to be issued showing the State Water Board, its officers, agents, employees, and servants as additional insured; and must provide the Division with a copy of all such certificates prior to the commencement of construction of the Project.

C.3.27 Permits, Subcontracting, and Remedies.

Recipient must procure all permits, licenses and other authorizations necessary to accomplish the work contemplated in this Agreement, pay all charges and fees, and give all notices necessary and incidental to the due and lawful prosecution of the work. Signed copies of any such permits or licenses must be submitted to the Division before any construction begins.

The Recipient must not contract or allow subcontracting with excluded parties. The Recipient must not contract with any party who is debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which this funding is authorized. For any work related to this Agreement, the Recipient must not contract with any individual or organization on the State Water Board’s List of Disqualified Businesses 187
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
and Persons that is identified as debarred or suspended or otherwise excluded from or ineligible for participation in any work overseen, directed, funded, or administered by the State Water Board program for which funding under this Agreement is authorized. The State Water Board’s List of Disqualified Businesses and Persons is located at
http://www.waterboards.ca.gov/water_issues/programs/enforcement/fwa/dbp.shtml C.3.28 Professionals.

The Recipient agrees that only licensed professionals will be used to perform services under this Agreement where such services are called for. All technical reports required pursuant to this Agreement that involve planning, investigation, evaluation, design, or other work requiring interpretation and proper application of engineering, architectural, or geologic sciences, shall be prepared by or under the direction of persons registered to practice in California pursuant to Business and Professions Code, sections 5536.1, 6735, 7835, and 7835.1. To demonstrate compliance with California Code of Regulations, title 16, sections 415 and 3065, all technical reports must contain a statement of the qualifications of the responsible registered professional(s). As required by these laws, completed technical reports must bear the signature(s) and seal(s) of the registered professional(s) in a manner such that all work can be clearly attributed to the professional responsible for the work.

C.3.29 Prevailing Wages.

The Recipient agrees to be bound by all applicable provisions of State Labor Code regarding prevailing wages. The Recipient must monitor all agreements subject to reimbursement from this Agreement to ensure that the prevailing wage provisions of the State Labor Code are being met.

In addition, the Recipient agrees to comply with the Davis-Bacon provisions incorporated by reference in Section 3 of this Agreement.

C.3.30 Public Funding.

This Project is publicly funded. Any service provider or contractor with which the Recipient contracts must not have any role or relationship with the Recipient, that, in effect, substantially limits the Recipient's ability to exercise its rights, including cancellation rights, under the contract, based on all the facts and circumstances.

C.3.31 Recipient’s Responsibility for Work.

The Recipient shall be responsible for all work and for persons or entities engaged in work performed pursuant to this Agreement, including, but not limited to, contractors, subcontractors, suppliers, and providers of services. The Recipient shall be responsible for responding to any and all disputes arising out of its contracts for work on the Project. The State Water Board will not mediate disputes between the Recipient and any other entity concerning responsibility for performance of work.

C.3.32 Related Litigation.

Under no circumstances may the Recipient use funds from any reimbursement under this Agreement to pay costs associated with any litigation the Recipient pursues against the State Water Board or any Regional Water Quality Control Board. Regardless of the outcome of any such litigation, and notwithstanding any conflicting language in this Agreement, the Recipient agrees to repay all of the disbursed funds plus interest in the event that Recipient does not complete the project.

C.3.33 Rights in Data.
188
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
The Recipient agrees that all data, plans, drawings, specifications, reports, computer programs, operating manuals, notes, and other written or graphic work produced in the performance of this Agreement are subject to the rights of the State as set forth in this section. The State shall have the right to reproduce, publish, and use all such work, or any part thereof, in any manner and for any purposes whatsoever and to authorize others to do so. If any such work is copyrightable, the Recipient may copyright the same, except that, as to any work which is copyrighted by the Recipient, the State reserves a royalty-free, nonexclusive, and irrevocable license to reproduce, publish, and use such work, or any part thereof, and to authorize others to do so, and to receive electronic copies from the Recipient upon request.

C.3.34 State Water Board Action; Costs and Attorney Fees.

Any remedy provided in this Agreement is in addition to and not in derogation of any other legal or equitable remedy available to the State Water Board as a result of breach of this Agreement by the Recipient, whether such breach occurs before or after completion of the Project, and exercise of any remedy provided by this Agreement by the State Water Board shall not preclude the State Water Board from pursuing any legal remedy or right which would otherwise be available. In the event of litigation between the parties hereto arising from this Agreement, it is agreed that each party shall bear its own costs and attorney fees.

C.3.35 Timeliness.

Time is of the essence in this Agreement.

C.3.36 Unenforceable Provision.

In the event that any provision of this Agreement is unenforceable or held to be unenforceable, then the parties agree that all other provisions of this Agreement have force and effect and shall not be affected thereby.

C.3.37 Venue
Any action arising out of this Agreement shall be filed and maintained in the Superior Court in and for the County of Sacramento, California.

C.3.38 Waiver and Rights of the State Water Board.

Any waiver of rights by the State Water Board with respect to a default or other matter arising under this Agreement at any time shall not be considered a waiver of rights with respect to any other default or matter. Any rights and remedies of the State Water Board provided for in this Agreement are in addition to any other rights and remedies provided by law.

C.4 MISCELLANEOUS STATE AND FEDERAL REQUIREMENTS
C.4.1 Reserved.

C.4.2 State Cross-Cutters.

Recipient represents that, as applicable, it complies and covenants to maintain compliance with the following with respect to all Project Costs for the term of this Agreement:
i. The California Environmental Quality Act (CEQA), as set forth in Public Resources Code 21000 et seq. and in the CEQA Guidelines at Title 14, Division 6, Chapter 3, Section 15000 et seq. 189
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
ii. Water Conservation requirements, including regulations in Division 3 of Title 23 of the California Code of Regulations.
iii. Monthly Water Diversion Reporting requirements, including requirements set forth in Water Code section 5103.
iv. Public Works Contractor Registration with Department of Industrial Relations requirements, including requirements set forth in Sections 1725.5 and 1771.1 of the Labor Code. v. Volumetric Pricing & Water Meters requirements, including the requirements of Water Code sections 526 and 527.
vi. Urban Water Management Plan requirements, including the Urban Water Management Planning Act (Water Code, § 10610 et seq.).
vii. Urban Water Demand Management requirements, including the requirements of Section 10608.56 of the Water Code.
viii. Delta Plan Consistency Findings requirements, including the requirements of Water Code section 85225 and California Code of Regulations, title 23, section 5002. ix. Agricultural Water Management Plan Consistency requirements, including the requirements of Water Code section 10852.
x. Charter City Project Labor Requirements, including the requirements of Labor Code section 1782 and Public Contract Code section 2503.
xi. The Recipient agrees that it will, at all times, comply with and require its contractors and subcontractors to comply with directives or orders issued pursuant to Division 7 of the Water Code.
xii. Regulations in Division 4 of Title 22 of the California Code of Regulations, including but not limited to California Waterworks Standards in Chapter 16, and Lead and Copper regulations in Chapter 17.5.

C.4.3 Federal Requirements and Cross-Cutters for SRF Funding.

The Recipient acknowledges, warrants compliance with, and covenants to continuing compliance with the following federal terms and conditions with respect to all Project Costs for the term of this Agreement and for the Useful Life of the Project:
i. Unless the Recipient has obtained a waiver from USEPA on file with the State Water Board or unless this Project is not a project for the construction, alteration, maintenance or repair of a public water system or treatment work, the Recipient shall not purchase “iron and steel products” produced outside of the United States on this Project. Unless the Recipient has obtained a waiver from USEPA on file with the State Water Board or unless this Project is not a project for the construction, alteration, maintenance or repair of a public water system or treatment work, the Recipient hereby certifies that all “iron and steel products” used in the Project were or will be produced in the United States. For purposes of this section, the term "iron and steel products" means the following products made primarily of iron or steel: lined or unlined pipes and fittings, manhole covers and other municipal castings, hydrants, tanks, flanges, pipe clamps and restraints, valves, structural steel, reinforced precast concrete, and construction materials. 190
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
“Steel” means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements.
ii. The Recipient acknowledges that funds received under this Agreement are subject to the Build America Buy America (BABA) requirements of Public Law 117-58 (the Infrastructure Investment and Jobs Act, also known as the Bipartisan Infrastructure Law (BIL), signed into law on November 15, 2021), which are in addition to “iron and steel products” requirements described in section C.4.3 (i) above. Specifically, unless (1) the Recipient has requested and obtained a waiver from USEPA on file with the State Water Board pertaining to the Project or the Project is otherwise covered by a general applicability waiver, as confirmed in writing by the State Water Board; or (2) the State Water Board and, to the extent the Project is co-funded by any other agency using federal funds subject to BABA requirements, each such agency, has advised the Recipient in writing that the BABA requirements are not applicable to the Project, the Recipient shall ensure and certifies that, as these terms are defined within and made applicable by Public Law 117-58:
(a) all iron and steel used in the Project are produced in the United States; (b) the manufactured products used in the Project are produced in the United States; and (c) the construction materials used in the Project are produced in the United States.

The Recipient must comply and require its contractors and subcontractors to comply with all applicable BABA requirements and reporting and must inform the State Water Board immediately of any information regarding a violation of the foregoing. iii. The Recipient must include in full the Wage Rate Requirements (Davis-Bacon) language incorporated by reference in Section 3 of this Agreement in all construction contracts and subcontracts.
iv. The Recipient must comply with the signage requirements set forth in Exhibit A. v. The Recipient shall notify the State Water Board and the USEPA contact of public or media events publicizing the accomplishment of significant events related to this Project and provide the opportunity for attendance and participation by federal representatives with at least ten (10) working days’ notice.
vi. The Recipient shall comply with applicable USEPA general terms and conditions found at https://www.epa.gov/grants/epa-general-terms-and-conditions-effective-october-1-2022-or-later. vii. No Recipient may receive funding under this Agreement unless it has provided its Unique Entity Identifier, assigned by the System for Award Management, to the State Water Board. viii. The Recipient represents and warrants that it and its principals are not excluded or disqualified from participating in this transaction as such terms are defined in Parts 180 and 1532 of Title 2 of the Code of Federal Regulations (2 CFR). If the Recipient is excluded after execution of this Agreement, the Recipient shall notify the Division within ten (10) days and shall inform the Division of the Recipient’s exclusion in any request for amendment of this Agreement. The Recipient shall comply with Subpart C of Part 180 of 2 CFR, as supplemented by Subpart C of Part 1532 of 2 CFR. Such compliance is a condition precedent to the State Water Board’s performance of its obligations under this Agreement. When entering into a covered transaction as defined in Parts 180 and 1532 of 2 CFR, the Recipient shall require the other party to the covered transaction to comply with Subpart C of Part 180 of 2 CFR, as supplemented by Subpart C of Part 1532 of 2 CFR.
191
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
ix. To the extent applicable, the Recipient shall disclose to the State Water Board any potential conflict of interest consistent with USEPA’s Final Financial Assistance Conflict of Interest Policy at https://www.epa.gov/grants/epas-final-financial-assistance-conflict-interest-policy. A conflict of interest may result in disallowance of costs.
x. USEPA and the State Water Board have the right to reproduce, publish, use and authorize others to reproduce, publish and use copyrighted works or other data developed under this assistance agreement.
xi. Where an invention is made with Project Funds, USEPA and the State Water Board retain the right to a worldwide, nonexclusive, nontransferable, irrevocable, paid-up license to practice the invention owned by the Recipient. The Recipient must utilize the Interagency Edison extramural invention reporting system at http://iEdison.gov and shall notify the Division when an invention report, patent report, or utilization report is filed.
xii. The Recipient agrees that any reports, documents, publications or other materials developed for public distribution supported by this Agreement shall contain the Disclosure statement set forth in Exhibit A.
xiii. The Recipient acknowledges that it is encouraged to follow guidelines established under Section 508 of the Rehabilitation Act, codified at 36 CFR Part 1194, with respect to enabling individuals with disabilities to participate in its programs supported by this Project. xiv. The Recipient, its employees, contractors and subcontractors and their employees warrants that it will not engage in severe forms of trafficking in persons, procure a commercial sex act during the term of this Agreement, or use forced labor in the performance of this Agreement. The Recipient must include this provision in its contracts and subcontracts under this Agreement. The Recipient must inform the State Water Board immediately of any information regarding a violation of the foregoing. The Recipient understands that failure to comply with this provision may subject the State Water Board to loss of federal funds. The Recipient agrees to compensate the State Water Board for any such funds lost due to its failure to comply with this condition, or the failure of its contractors or subcontractors to comply with this condition. The State Water Board may unilaterally terminate this Agreement if the Recipient that is a private entity is determined to have violated the foregoing.
xv. The Recipient certifies to the best of its knowledge and belief that:
a. No federal appropriated funds have been paid or will be paid, by or on behalf of the Recipient, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement. b. If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress in connection with this Agreement, the Recipient shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions, and notify the State Water Board.

The Recipient shall require this certification from all parties to any contract or agreement that the Recipient enters into and under which the Recipient incurs costs for which it seeks reimbursements under this Agreement.
xvi. The Recipient must comply with the following federal non-discrimination requirements:
192
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
a. Title VI of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, and national origin, including limited English proficiency (LEP). b. Section 504 of the Rehabilitation Act of 1973, which prohibits discrimination against persons with disabilities.
c. The Age Discrimination Act of 1975, which prohibits age discrimination. d. Section 13 of the Federal Water Pollution Control Act Amendments of 1972, which prohibits discrimination on the basis of sex.
e. 40 CFR Part 7, as it relates to the foregoing.
xvii. Executive Order No. 11246. The Recipient shall include in its contracts and subcontracts related to the Project the following provisions:
"During the performance of this contract, the contractor agrees as follows:"(a) The contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin. Such action shall include, but not be limited to the following:
employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause.
"(b) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, creed, color, or national origin. "(c) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers' representative of the contractor's commitments under Section 202 of Executive Order No. 11246 of September 24, 1965, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.
"(d) The contractor will comply with all provisions of Executive Order No. 11246 of Sept. 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. "(e) The contractor will furnish all information and reports required by Executive Order No. 11246 of September 24, 1965, and by the rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the contracting agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.
"(f) In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of such rules, regulations, or orders, this contract may be cancelled, terminated or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order No. 11246 of Sept 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order No. 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law. 193
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
"(g) The contractor will include the provisions of Paragraphs (1) through (7) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to Section 204 of Executive Order No. 11246 of Sept. 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the contracting agency may direct as a means of enforcing such provisions including sanctions for noncompliance: Provided, however, That in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the contracting agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States."
xviii. The Recipient agrees to comply with the requirements of USEPA’s Program for Utilization of Small, Minority and Women’s Business Enterprises.
xix. Procurement Prohibitions under Section 306 of the Clean Air Act and Section 508 of the Clean Water Act, including Executive Order 11738, Administration of the Clean Air Act and the Federal Water Pollution Control Act with Respect to Federal Contracts, Grants, or Loans; 42 USC § 7606; 33 USC § 1368. Except where the purpose of this Agreement is to remedy the cause of the violation, the Recipient may not procure goods, services, or materials from suppliers excluded under the federal System for Award Management: sam.gov
xx. Uniform Relocation and Real Property Acquisition Policies Act, Pub. L. 91-646, as amended; 42 USC §§4601-4655. The Recipient must comply with the Act’s implementing regulations at 49 CFR 24.101 through 24.105.
xxi. The Recipient agrees that if its network or information system is connected to USEPA networks to transfer data using systems other than the Environmental Information Exchange Network or USEPA’s Central Data Exchange, it will ensure that any connections are secure. xxii. All geospatial data created pursuant to this Agreement that is submitted to the State Water Board for use by USEPA or that is submitted directly to USEPA must be consistent with Federal Geographic Data Committee endorsed standards. Information on these standards may be found at www.fgdc.gov.
xxiii. If the Recipient is a water system that serves 500 or fewer persons, the Recipient represents that it has considered publicly-owned wells as an alternative drinking water supply. xxiv. The Recipient represents that it is not a corporation that has any unpaid Federal tax liability that has been assessed, for which all judicial and administrative remedies have been exhausted or have lapsed, and that is not being paid in a timely manner pursuant to an agreement with the authority responsible for collecting the tax liability; and it is not a corporation that was convicted of a felony criminal violation under a Federal law within the preceding 24 months. xxv. The Recipient agrees to immediately notify the Project Manager in writing about any allegation of research misconduct involving research activities that are supported in whole or in part with USEPA funds under this Project, including fabrication, falsification, or plagiarism in proposing, performing, or reviewing research, or in reporting research results, or ordering, advising, or suggesting that subordinates engage in research misconduct. xxvi. The Recipient agrees to comply with, and require all contractors and subcontractors to comply with, USEPA’s Scientific Integrity Policy, available at https://www.epa.gov/osa/policy-epascientific-integrity, when conducting, supervising, and communicating science and when using or applying the results of science. For purposes of this condition scientific activities include, but are 194
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
not limited to, computer modelling, economic analysis, field sampling, laboratory experimentation, demonstrating new technology, statistical analysis, and writing a review article on a scientific issue.

The Recipient shall not suppress, alter, or otherwise impede the timely release of scientific findings or conclusions; intimidate or coerce scientists to alter scientific data, findings, or professional opinions or exert non-scientific influence on scientific advisory boards; knowingly misrepresent, exaggerate, or downplay areas of scientific uncertainty; or otherwise violate the USEPA’s Scientific Integrity Policy. The Recipient must refrain from acts of research misconduct, including publication or reporting, as described in USEPA’s Policy and Procedures for Addressing Research Misconduct, Section 9.C, and must ensure scientific findings are generated and disseminated in a timely and transparent manner, including scientific research performed by contractors and subcontractors.
xxvii. The Recipient agrees to comply with the Animal Welfare Act of 1966 (7 USC 2131-2156).

Recipient also agrees to abide by the “U.S. Government Principles for the Utilization and Care of Vertebrate Animals used in Testing, Research, and Training,” available at http://grants.nih.gov/grants/olaw/references/phspol.htm#USGovPrinciples. xxviii. The Recipient certifies that no Project Funds will be used on:
a. Video surveillance or telecommunications equipment produced by Huawei Technologies Company or ZTE Corporation (or any subsidiary or affiliate of such entities), telecommunications equipment produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company (or any subsidiary or affiliate of such entities);
b. Telecommunications or video surveillance services produced by such entities; c. Telecommunications or video surveillance equipment or services produced or provided by an entity that the Secretary of Defense, in consultation with the Director of the National Intelligence or the Director of the Federal Bureau of Investigation, reasonably believes to be an entity owned or controlled by, or otherwise connected to, the government of a covered foreign country; or
d. Other telecommunications or video surveillance services or equipment in violation of 2 CFR 200.216.
xxix. The Recipient agrees to ensure that if the Project includes lead service line replacement, each lead service line replaced using Project Funds must be replaced in its entirety, unless the remaining portion of that service line has already been replaced or is concurrently being replaced with another funding source.
xxx. The Recipient agrees to comply with all federal environmental cross-cutters, including the following:
a. Archeological and Historic Preservation Act (16 U.S.C. § 469; 54 U.S.C. §§ 312501- 312508)
b. Clean Air Act Conformity (42 U.S.C. § 7401)
c. Coastal Barriers Resources Act (16 U.S.C. § 3501 et seq.) d. Coastal Zone Management Act (16 U.S.C. § 1451 et seq.) e. Endangered Species Act (16 U.S.C. § 1531 et seq.)
f. Farmland Protection Policy Act (7 U.S.C. § 4201 et seq.) g. Floodplain Management [Executive Order 11988 (1997), as amended by Executive Order No. 13690 (2015)]
h. Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. § 1801 et seq.)
195
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit C
i. National Historic Preservation Act (54 U.S.C. §§ 300101 et seq.) j. Sole Source Aquifer, section 1424(e) of Safe Drinking Water Act, 42 U.S.C. 300h3(e) k. Wetlands Protection – Executive Order No. 11990 (1977), as amended by Executive Order no. 12608 (1997)
l. Wild and Scenic Rivers Act (16 U.S.C. § 1271 et seq.) 196
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit D
EXHIBIT D – SPECIAL CONDITIONS
[environmental]
FUNDS RELATED TO CONTAMINATION.
a. As a condition precedent to this Agreement, the Recipient shall (i) notify the Division of any demands, including but not limited to litigation and insurance claims, made by the Recipient against third parties for reimbursement of costs, monetary damages, or other relief, related to drinking water contamination, including but not limited to contamination by 1,2,3- trichloropropane (1,2,3-TCP), perfluoroalkyl and polyfluoroalkyl substances (PFAS), or other contaminants (Contamination-Related Demands); (ii) notify the Division of any payments or funds received by the Recipient, agreements, settlements, and court or administrative orders that have arisen out of or are related to drinking water contamination or ContaminationRelated Demands (Contamination-Related Payments, Agreements, or Orders); and (iii) to the extent requested by the Division or the Division’s counsel, provide information and access to documentation of any Contamination-Related Demands and Contamination-Related Payments, Agreements, or Orders.
b. After execution of this Agreement, the Recipient shall promptly notify the Division of the new occurrence of any Contamination-Related Demands and Contamination-Related Payments, Agreements, or Orders. Upon request, the Recipient shall promptly provide information and access to documents to the extent requested by the Division or the Division’s counsel.
c. The Recipient shall not spend or allocate any funds received as a result of Contamination-Related Demands or Contamination-Related Payments, Agreements, or Orders (Recovered Funds) unless the Recipient has obtained written consent for the use of such Recovered Funds from the Division. At the discretion of the Division, the Project Funding Amount of this Agreement may be reduced, disbursements may be withheld, and the Agreement may be rescinded, to offset the amount of any Recovered Funds or any Contamination-Related Payments, Agreements, or Orders. Upon demand by the Division, the Recipient shall return Project Funds to offset any Recovered Funds or ContaminationRelated Payments, Agreements, or Orders within thirty (30) days or within another time period approved by the Division. The Recipient shall ensure that no duplicative reimbursements of costs occur under this Agreement and any past or future Recovered Funds or Contamination-Related Payments, Agreements, or Orders. Noncompliance with this Funds Related to Contamination section shall be an Event of Default. d. If the Recipient is not regulated by the California Public Utilities Commission (CPUC), the provisions of this paragraph (d) shall apply. If the Division provides written consent, the Recipient may place Recovered Funds into a restricted reserve account to be used for one of the following purposes but only if such purpose is approved by the Division: (1) as co-funding or match funding for the Project, (2) for a capital improvement project other than the Project that addresses the associated drinking water contamination, (3) for Operations and Maintenance Costs related to addressing the associated drinking water contamination, (4) for Operations and Maintenance Costs of the System in general, or (5) for other purposes approved by the Division. To the extent requested by the Division, the Recipient shall provide access to (i) documentation satisfactory to the Division showing the total amount of Recovered Funds deposited into a restricted reserve account prior to the start of construction of the Project and (ii) documentation thereafter of any Recovered Funds that Recipient receives and places into such an account.
e. If the Recipient is regulated by the CPUC, paragraph (d) shall not apply, and the Recipient shall comply with all applicable CPUC rules with respect to the Recovered Funds 197
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit D
and shall provide to the Division copies of all notices, applications, and any other documents filed with the CPUC, and any documents issued by the CPUC, within 10 days of submittal or issuance as applicable, with respect to the receipt and use of Recovered Funds and with respect to any proposed transfer of any assets funded by Recovered Funds.

Executive Order N-6-22 — Russian Sanctions.

On March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-22 (the EO) regarding Economic Sanctions against Russia and Russian entities and individuals. “Economic Sanctions” refers to sanctions imposed by the U.S. government in response to Russia’s actions in Ukraine, as well as any sanctions imposed under state law. The EO directs state agencies to terminate contracts with, and to refrain from entering any new contracts with, individuals or entities that are determined to be a target of Economic Sanctions. Accordingly, should the State Water Board determine Recipient is a target of Economic Sanctions or is conducting prohibited transactions with sanctioned individuals or entities, that shall be grounds for termination of this Agreement. The State Water Board shall provide Recipient advance written notice of such termination, allowing Recipient at least 30 calendar days to provide a written response. Termination shall be at the sole discretion of the State Water Board.

The Recipient represents that the Recipient is not a target of economic sanctions imposed in response to Russia’s actions in Ukraine imposed by the United States government or the State of California. The Recipient is required to comply with the economic sanctions imposed in response to Russia’s actions in Ukraine, including with respect to, but not limited to, the federal executive orders identified in California Executive Order N-6-22, located at https://www.gov.ca.gov/wp-content/uploads/2022/03/3.4.22-RussiaUkraine-Executive-Order.pdf and the sanctions identified on the United States Department of the Treasury website (https://home.treasury.gov/policy-issues/financial-sanctions/sanctions-programs-andcountry-information/ukraine-russia-related-sanctions). The Recipient is required to comply with all applicable reporting requirements regarding compliance with the economic sanctions, including, but not limited to, those reporting requirements set forth in California Executive Order N-6-22 for all Recipients with one or more agreements with the State of California with an aggregated value of Five Million Dollars ($5,000,000) or more. Notwithstanding any other provision in this Agreement, failure to comply with the economic sanctions and all applicable reporting requirements may result in termination of this Agreement.

For Recipients with an aggregated agreement value of Five Million Dollars ($5,000,000) or more with the State of California, reporting requirements include, but are not limited to, information related to steps taken in response to Russia’s actions in Ukraine, including but not limited to:

1. Desisting from making any new investments or engaging in financial transactions with Russian institutions or companies that are headquartered or have their principal place of business in Russia;

2. Not transferring technology to Russia or companies that are headquartered or have their principal place of business in Russia; and

3. Direct support to the government and people of Ukraine. 198
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit E
EXHIBIT E – PAYMENT SCHEDULE
See the attached preliminary Payment Schedule. The final Payment Schedule will be forwarded to the Recipient after all disbursements have been paid and construction of the Project has been completed. 199
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit F
EXHIBIT F – TAX CERTIFICATE
F.1 Purpose.

The purpose of this Exhibit F is to establish the reasonable expectations of the Recipient regarding the Project and the Project Funds, and is intended to be and may be relied upon for purposes of Sections 103, 141 and 148 of the Code and as a certification described in Section 1.148-2(b)(2) of the Treasury Regulations. This Exhibit F sets forth certain facts, estimates and circumstances which form the basis for the Recipient’s expectation that neither the Project nor the Bond Funded Portion of the Project Funds is to be used in a manner that would cause the Obligation to be classified as “arbitrage bonds” under Section 148 of the Code or “private activity bonds” under Section 141 of the Code.

F.2 Tax Covenant.

The Recipient agrees that it will not take or authorize any action or permit any action within its reasonable control to be taken, or fail to take any action within its reasonable control, with respect to the Project which would result in the loss of the exclusion of interest on the Bonds from gross income for federal income tax purposes under Section 103 of the Code.

F.3 Governmental Unit.

The Recipient is a state or local governmental unit as defined in Section 1.103-1 of the Treasury Regulations or an instrumentality thereof (a "Governmental Unit") and is not the federal government or any agency or instrumentality thereof.

F.4 Financing of a Capital Project.

The Recipient will use the Project Funds to finance capital expenditures it has incurred or will incur for the construction, reconstruction, installation or acquisition of the Project in accordance with the terms of this Agreement. Such expenditures shall not have previously been financed with the proceeds of any other issue of indebtedness except for interim financing by the Recipient, the date of maturity, prepayment or redemption of which is within thirty (30) days of the date of disbursement of Project Funds under this Agreement. All Project Funds shall be allocated to expenditures by the Recipient within thirty (30) days of the date of disbursement, including (if at all) Project Funds allocated to repay interim financing of the Recipient. For purposes of this Section F.4, “interim financing” means notes, commercial paper, loans, lines of credit and other forms of short-term borrowing.

F.5 Ownership and Operation of Project.

The Recipient exclusively owns and, except as provided in Section F.12 hereof, operates the Project.

F.6 Temporary Period.

The Recipient reasonably expects that at least eighty-five percent (85%) of the Bond Funded Portion of the Project Funds will be allocated to expenditures for the Project within three (3) years of the earlier of the effective date of this Agreement or the date the Bonds are issued ("Applicable Date"). The Recipient has incurred, or reasonably expects that it will incur within six (6) months of the Applicable Date, a substantial binding obligation (i.e., not subject to contingencies within the control of the Recipient or a related party) to a third party to expend at least five percent (5%) of the Bond Funded Portion of the Project Funds on Project Costs. The completion of acquisition, construction, improvement and equipping 200
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit F
of the Project and the allocation of the Bond Funded Portion of the Project Funds to Project Costs will proceed with due diligence.

F.7 Working Capital.

No operational expenditures of the Recipient or any related entity are being, have been or will be financed or refinanced with Project Funds.

F.8 Expenditure of Proceeds.

The Bond Funded Portion of the Project Funds shall be used exclusively for the following purposes: (i) Reimbursement Expenditures (as defined in Section F.20 below), (ii) Preliminary Expenditures (as defined in Section F.20 below) in an aggregate amount not exceeding twenty percent (20%) of the Bond Funded Portion of the Project Funds, (iii) capital expenditures relating to the Project originally paid by the Recipient on or after the date hereof, (iv) interest on the Obligation through the later of three (3) years after the Applicable Date or one (1) year after the Project is placed in service, and (v) initial operating expenses directly associated with the Project in the aggregate amount not more than five percent (5%) of the Bond Funded Portion of the Project Funds.

F.9 Private Use and Private Payments.

No portion of the Project Funds or the Project is being, has been or will be used in the aggregate for any activities that constitute a Private Use (as defined below). No portion of the principal of or interest with respect to the Payments will be secured by any interest in property (whether or not the Project) used for a Private Use or in payments in respect of property used for a Private Use, or will be derived from payments in respect of property used for a Private Use. "Private Use" means any activity that constitutes a trade or business that is carried on by persons or entities, other than a Governmental Unit. The leasing of the Project or the access by or the use of the Project by a person or entity other than a Governmental Unit on a basis other than as a member of the general public shall constitute a Private Use. Use by or on behalf of the State of California or any of its agencies, instrumentalities or subdivisions or by any local Governmental Unit and use as a member of the general public will be disregarded in determining whether a Private Use exists. Use under an arrangement that conveys priority rights or other preferential benefits is generally not use on the same basis as the general public. Arrangements providing for use that is available to the general public at no charge or on the basis of rates that are generally applicable and uniformly applied do not convey priority rights or other preferential benefits. For this purpose, rates may be treated as generally applicable and uniformly applied even if (i) different rates apply to different classes of users, such as volume purchasers, if the differences in rates are customary and reasonable; or (ii) a specially negotiated rate arrangement is entered into, but only if the user is prohibited by federal law from paying the generally applicable rates, and the rates established are as comparable as reasonably possible to the generally applicable rates. An arrangement that does not otherwise convey priority rights or other preferential benefits is not treated, nevertheless, as general public use if the term of the use under the arrangement, including all renewal options, is greater than 200 days. For this purpose, a right of first refusal to renew use under the arrangement is not treated as a renewal option if (i) the compensation for the use under the arrangement is redetermined at generally applicable, fair market value rates that are in effect at the time of renewal; and (ii) the use of the financed property under the same or similar arrangements is predominantly by natural persons who are not engaged in a trade or business.

F.10 No Sale, Lease or Private Operation of the Project.

The Project (or any portion thereof) will not be sold or otherwise disposed of, in whole or in part, to any person who is not a Governmental Unit prior to the final maturity date of the Obligation. The Project will not be leased to any person or entity that is not a Governmental Unit prior to the final maturity date of the Obligation. Except as permitted under Section F.12 hereof, the Recipient will not enter any contract or 201
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit F
arrangement or cause or permit any contract or arrangement to be entered with persons or entities that are not Governmental Units if that contract or arrangement would confer on such persons or entities any right to use the Project on a basis different from the right of members of the general public. The contracts or arrangements contemplated by the preceding sentence include but are not limited to management contracts, take or pay contracts or put or pay contracts, and capacity guarantee contracts.

F.11 No Disproportionate or Unrelated Use.

No portion of the Project Funds or the Project is being, has been, or will be used for a Private Use that is unrelated or disproportionate to the governmental use of the Project Funds.

F.12 Management and Service Contracts.

The Recipient represents that, as of the date hereof, it is not a party to any contract, agreement or other arrangement with any persons or entities engaged in a trade or business (other than Governmental Units) that involve the management or operation of property or the provision of services at or with respect to the Project that does not comply with the standards of the Treasury Regulations, or Revenue Procedure 2017-13, as applicable. The Recipient represents that it will not be party to any such contract, agreement or arrangement with any person or entity that is not a Governmental Unit for the management of property or the provision of services at or with respect to the Project, while the Obligation (including any obligation or series thereof issued to refund the Obligation, as the case may be) is outstanding, except: (a) with respect to any contract, agreement or arrangement that does not constitute “private business use” of the Project under Code §141(b), or (b) with respect to any contract, agreement or arrangement that complies with (i) Revenue Procedure 97-13, 1997-1 C.B. 632, as amended by Revenue Procedure 2001-39, 2001- 2 C.B. 38, and as amplified by Notice 2014-67, with respect to contracts entered into before August 18, 2017 and not materially modified or extended after August 18, 2017, or (ii) Revenue Procedure 2017-13, with respect to contracts entered into or materially modified or extended on or after August 18, 2017, or (c) with respect to any contract, agreement or arrangement that does not give rise to use of the Bond Funded Portion of the Project Funds or the Project by a non-Governmental Unit of more than the amount of such non-qualified use permitted by the Code, or (d) in the event that the Recipient receives an opinion of counsel, satisfactory to the State Water Board and the Bank and expert in the issuance of state and local government bonds the interest on which is excluded from gross income under Section 103 of the Code (“Nationally-Recognized Bond Counsel”), that such contract, agreement or arrangement will not adversely affect the exclusion of the interest on the Obligation from gross income for federal income taxation purposes.

F.13 No Disposition of Financed Property.

As of the date hereof, the Recipient does not expect to sell or otherwise dispose of any portion of the Project, in whole or in part, prior to the final maturity date of the Obligation.

F.14 Useful Life of Project.

As of the date hereof, the Recipient reasonably expects that the economic useful life of the Project, commencing at Project Completion, will be at least equal to the term of this Agreement, as set forth in Exhibit A hereto.

F.15 Payments.

Payments generally are expected to be derived from assessments, taxes, fees, charges or other current Revenues of the Recipient in each year, and such current Revenues are expected to equal or exceed the Payments during each payment period. Any amounts accumulated in a sinking fund or bona fide debt service fund to pay Payments (whether or not deposited to a fund or account established by the Recipient) will be disbursed to pay Payments within thirteen months of the initial date of accumulation or 202
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit F
deposit. Any such fund used for the payment of Payments will be depleted once a year except for a reasonable carryover amount not exceeding the greater of earnings on such fund or one-twelfth of the Payments in either case for the immediately preceding year.

F.16 No Other Replacement Proceeds.

The Recipient will not use any of the Bond Funded Portion of the Project Funds to replace or substitute other funds of the Recipient that were otherwise to be used to finance the Project or which are or will be used to acquire securities, obligations or other investment property reasonably expected to produce a yield that is materially higher than the yield on the Bonds.

F.17 No Sinking or Pledged Fund.

Except as set forth in Section F.18 below, the Recipient will not create or establish any sinking fund or pledged fund which will be used to pay Payments on the Obligation within the meaning of Section 1.148- 1(c) of the Treasury Regulations. If any sinking fund or pledged fund comes into being with respect to the Obligation before the Obligation has been fully retired which may be used to pay the Payments, the Recipient will invest such sinking fund and pledged fund moneys at a yield that does not exceed the yield on the Bonds.

F.18 Reserve Amount.

The State Water Board requires that the Recipient maintain and fund a separate account in an amount equal to one (1) year of debt service with respect to the Obligation (the “Reserve Amount”) as set forth in Exhibit B. The Recipient represents that the Reserve Amount is and will be available to pay debt service with respect to the Obligation, if and when needed. The Reserve Amount consists solely of revenues of the Recipient and does not include any proceeds of any obligations the interest on which is excluded from gross income for federal income tax purposes or investment earnings thereon. The aggregate of the Reserve Amount, up to an amount not exceeding the lesser of (i) ten percent of the aggregate principal amount of the Obligation, (ii) the maximum annual debt service with respect to the Obligation, or (iii) 125 percent of the average annual debt service with respect to the Obligation, will be treated as a reasonably required reserve fund.

F.19 Reimbursement Resolution.

The “reimbursement resolution” adopted by the Recipient is incorporated herein by reference.

F.20 Reimbursement Expenditures.

Reimbursements are disallowed, except as specifically authorized in Exhibit B or Exhibit D of this Agreement. To the extent so authorized, a portion of the Bond Funded Portion of the Project Funds may be applied to reimburse the Recipient for Project Costs paid before the date hereof, so long as the Project Cost was (i) not paid prior to sixty (60) days before the Recipient’s adoption of a declaration of official intent to finance the Project, (ii) not paid more than eighteen (18) months prior to the date hereof or the date the Project was placed-in-service, whichever is later, and (iii) not paid more than three (3) years prior to the date hereof (collectively, “Reimbursement Expenditures”), unless such cost is attributable to a “preliminary expenditure.” Preliminary expenditure for this purpose means architectural, engineering, surveying, soil testing and similar costs incurred prior to the commencement of construction or rehabilitation of the Project, but does not include land acquisition, site preparation and similar costs incident to the commencement of acquisition, construction or rehabilitation of the Project. Preliminary expenditures may not exceed 20% of the Bond Funded Portion of the Project Funds.

F.21 Change in Use of the Project.
203
Name of Recipient
Agreement No.: XX-XXX-550
Project No.: X-XX-XXXX-XXX

Exhibit F
The Recipient reasonably expects to use all of the Bond Funded Portion of the Project Funds and the Project for the entire stated term to maturity of the Obligation. Absent an opinion of NationallyRecognized Bond Counsel to the effect that such use of the Bond Funded Portion of the Project Funds will not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section 103 of the Code, the Recipient will use the Bond Funded Portion of the Project Funds and the Project solely as set forth in this Agreement.

F.22 Rebate Obligations.

If the Recipient satisfies the requirements of one of the spending exceptions to rebate specified in Section

1.148-7 of the Treasury Regulations, amounts earned from investments, if any, acquired with the Bond Funded Portion of the Project Funds will not be subject to the rebate requirements imposed under Section 148(f) of the Code. If the Recipient fails to satisfy such requirements for any period, it will notify the State Water Board and the Bank immediately and will comply with the provisions of the Code and the Treasury Regulations at such time, including the payment of any rebate amount calculated by the State Water Board or the Bank.

F.23 No Federal Guarantee.

The Recipient will not directly or indirectly use any of the Bond Funded Portion of the Project Funds in any manner that would cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code, taking into account various exceptions including any guarantee related to investments during an initial temporary period until needed for the governmental purpose of the Bonds, investments as part of a bona fide debt service fund, investments of a reasonably required reserve or replacement fund, investments in bonds issued by the United States Treasury, investments in refunding escrow funds or certain other investments permitted under the Treasury Regulations.

F.24 Amendments.

The provisions in this Exhibit may be amended, modified or supplemented at any time to reflect changes in the Code upon obtaining written approval of the State Water Board and the Bank and an opinion of Nationally-Recognized Bond Counsel to the effect that such amendment, modification or supplement will not adversely affect the exclusion from federal gross income of interest on the Bonds pursuant to Section 103 of the Code.

F.25 Reasonable Expectations.

The Recipient warrants that, to the best of its knowledge, information and belief, and based on the facts and estimates as set forth in the tax covenants in this Exhibit, the expectations of the Recipient as set forth in this Exhibit are reasonable. The Recipient is not aware of any facts or circumstances that would cause it to question the accuracy or reasonableness of any representation made in the provisions in this Exhibit.

F.26 Assignment.

The Recipient consents to any pledge, sale, or assignment to the Bank or a trustee for the benefit of the owners of the Bonds, if any, at any time of any portion of the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement and the right to make all related waivers and agreements in the name and on behalf of the State Water Board, as agent and attorney-in-fact, and to perform all other related acts which are necessary and appropriate under this Agreement, if any, and the State Water Board's estate, right, title, and interest and claim in, to and under this Agreement to Payments (but excluding the State Water Board's rights to Additional Payments and to notices, opinions and indemnification under each Obligation).
204
RESOLUTION NO. ________

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

CALIFORNIA, FOR REIMBURSEMENT OF STATE REVOLVING FUNDS
FOR WELL 53 EQUIPPING PROJECT FROM THE STATE OF CALIFORNIA RESOURCES CONTROL BOARD.

WHEREAS, the City of Ontario desires to finance the costs of Well No. 53 Equipping, constructing and/or reconstructing certain public facilities and improvements relating to its water system, including certain treatment facilities, pipelines, and other infrastructure (the "Project"); and
WHEREAS, the City of Ontario intends to finance the construction and/or reconstruction of the Project or portions of the Project with moneys ("Project Funds") provided by the State of California, acting by and through the State Water Resources Control Board (State Water Board); and
WHEREAS, the State Water Board may fund the Project Funds with proceeds from the sale of obligations the interest upon which is excluded from gross income for federal income tax purposes (the "Obligations"), and
WHEREAS, prior to either the issuance of the Obligations or the approval by the State Water Board of the Project Funds, the Agency desires to incur certain capital expenditures (the "Expenditures") with respect to the Project from available moneys of the Agency; and
WHEREAS, the City of Ontario has determined that those moneys to be advanced on and after the date hereof to pay the Expenditures are available only for a temporary period and it is necessary to reimburse the Agency for the Expenditures from the proceeds of the Obligations.

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

SECTION 1. The City of Ontario hereby states its intention and reasonably expects to reimburse Expenditures paid prior to the issuance of the Obligations or the approval by the State Water Board of the Project Funds.

SECTION 2. The reasonably expected maximum principal amount of the Project Funds is $8,000,000.

SECTION 3. This Resolution is being adopted no later than 60 days after the date on which the Agency will expend moneys for the construction portion of the Project costs to be reimbursed with Project Funds.

SECTION 4. Each Agency expenditure will be of a type properly chargeable to a capital account under general federal income tax principles. 205
SECTION 5. To the best of our knowledge, this Agency is not aware of the previous adoption of official intents by the Agency that have been made as a matter of course for the purpose of reimbursing expenditures and for which tax-exempt obligations have not been issued.

SECTION 6. This resolution is adopted as official intent of the Agency in order to comply with Treasury Regulation §1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of Project costs.

SECTION 7. All the recitals in this Resolution are true and correct and this Agency so finds, determines and represents.

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

PASSED, APPROVED, AND ADOPTED this 6
th day of October 2026.
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY
206

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. 2026- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held October 6, 2026 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. 2026- duly passed and adopted by the Ontario City Council at their regular meeting held October 6, 2026. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
207
Attachment F7
(schedule of System Obligations)
208
Attachment F7

SCHEDULE OF SYSTEM OBLIGATIONS
Except for the following and the Obligation evidenced by this Agreement, the Recipient certifies that it has no outstanding System Obligations and that it is in compliance with all applicable additional debt provisions of the following:

The following related debts are senior to the proposed DWSRF financing:

Name of Lender and Title of
Debt or Loan Number
Debt Security or
Source of
Revenue
Debt Service
Coverage
Requirement
Original Debt
Amount Current Balance Payment Amount Interest
Rate Debt Term & Maturity Date
City of Ontario
Water Revenue Refunding
Bonds, Series 2021
Net Water
System
Revenues
125% $67,550,000 $54,785,000 See debt service
schedule
.541% - 2.949% 22 years: 8/01/2043
Installment Purchase
Agreement relating to
Ontario Public Financing
Authority Water
Revenue Bonds, Series
2024A
Net Water
System
Revenues
125% $43,955,000 $42,115,000 See debt service
schedule

5.00% 25 years: 8/01/2049
The following related debts are on parity to the proposed Financing Agreement:

Name of Lender and Title of
Debt or Loan Number
Debt Security or
Source of
Revenue
Debt Service
Coverage
Requirement
Original Debt
Amount Current Balance Payment Amount Interest Rate Debt Term & Maturity Date The following related debts are subordinate to the proposed Financing Agreement:

Name of Lender and Title of
Debt or Loan Number
Debt Security or
Source of
Revenue
Debt Service
Coverage
Requirement
Original Debt
Amount
Current
Balance Payment Amount
Interest Rate
Debt Term & Maturity Date
Attach copies of the debt documents associated with the above debts.

Financial Assistance Application Financial Security Package (Construction) (Rev. 12/2019) Drinking Water State Revolving Fund 209

DEBT SERVICE SCHEDULE

CALIFORNIA OFFICE - LOS ANGELES
Issuer: ONTARIO WATER REV REF BDS SER 2021 9643
Pay# Date Interest Principal Total Payment Balance
1 08/01/2022 957,387.45 2,360,000.00 3,317,387.45 65,190,000.00 2 02/01/2023 759,526.17 0.00 759,526.17 65,190,000.00
3 08/01/2023 759,526.17 2,565,000.00 3,324,526.17 62,625,000.00 4 02/01/2024 751,305.34 0.00 751,305.34 62,625,000.00
5 08/01/2024 751,305.34 2,580,000.00 3,331,305.34 60,045,000.00 6 02/01/2025 738,689.14 0.00 738,689.14 60,045,000.00
7 08/01/2025 738,689.14 2,610,000.00 3,348,689.14 57,435,000.00 8 02/01/2026 721,854.64 0.00 721,854.64 57,435,000.00
9 08/01/2026 721,854.64 2,650,000.00 3,371,854.64 54,785,000.00 10 02/01/2027 702,774.64 0.00 702,774.64 54,785,000.00
11 08/01/2027 702,774.64 2,685,000.00 3,387,774.64 52,100,000.00 12 02/01/2028 680,636.81 0.00 680,636.81 52,100,000.00
13 08/01/2028 680,636.81 2,725,000.00 3,405,636.81 49,375,000.00 14 02/01/2029 655,444.18 0.00 655,444.18 49,375,000.00
15 08/01/2029 655,444.18 2,775,000.00 3,430,444.18 46,600,000.00 16 02/01/2030 628,998.43 0.00 628,998.43 46,600,000.00
17 08/01/2030 628,998.43 2,825,000.00 3,453,998.43 43,775,000.00 18 02/01/2031 600,381.18 0.00 600,381.18 43,775,000.00
19 08/01/2031 600,381.18 2,880,000.00 3,480,381.18 40,895,000.00 20 02/01/2032 569,766.78 0.00 569,766.78 40,895,000.00
21 08/01/2032 569,766.78 2,945,000.00 3,514,766.78 37,950,000.00 22 02/01/2033 535,958.18 0.00 535,958.18 37,950,000.00
23 08/01/2033 535,958.18 3,005,000.00 3,540,958.18 34,945,000.00 24 02/01/2034 499,207.03 0.00 499,207.03 34,945,000.00
25 08/01/2034 499,207.03 3,085,000.00 3,584,207.03 31,860,000.00 26 02/01/2035 459,163.73 0.00 459,163.73 31,860,000.00
27 08/01/2035 459,163.73 3,165,000.00 3,624,163.73 28,695,000.00 28 02/01/2036 416,499.53 0.00 416,499.53 28,695,000.00
29 08/01/2036 416,499.53 3,250,000.00 3,666,499.53 25,445,000.00 30 02/01/2037 371,064.53 0.00 371,064.53 25,445,000.00
31 08/01/2037 371,064.53 3,340,000.00 C 3,711,064.53 22,105,000.00 32 02/01/2038 323,152.23 0.00 323,152.23 22,105,000.00
33 08/01/2038 323,152.23 3,435,000.00 C 3,758,152.23 18,670,000.00 34 02/01/2039 273,877.15 0.00 273,877.15 18,670,000.00
35 08/01/2039 273,877.15 3,530,000.00 3,803,877.15 15,140,000.00 36 02/01/2040 223,239.30 0.00 223,239.30 15,140,000.00
37 08/01/2040 223,239.30 3,625,000.00 C 3,848,239.30 11,515,000.00 38 02/01/2041 169,788.68 0.00 169,788.68 11,515,000.00
210
39 08/01/2041 169,788.68 3,730,000.00 C 3,899,788.68 7,785,000.00 40 02/01/2042 114,789.83 0.00 114,789.83 7,785,000.00
41 08/01/2042 114,789.83 3,835,000.00 C 3,949,789.83 3,950,000.00 42 02/01/2043 58,242.75 0.00 58,242.75 3,950,000.00
43 08/01/2043 58,242.75 3,950,000.00 4,008,242.75 0.00
ROSA MUNOZ on 06/08/22 at 09:48 AM MDT 1Effective: 06/08/2022

DEBT SERVICE SCHEDULE
211

CALIFORNIA OFFICE - LOS ANGELES
Issuer: ONTARIO WATER REV REF BDS SER 2021 9643
Pay# Date Interest Principal Total Payment Balance
Total
21,466,107.95 67,550,000.00 89,016,107.95
ROSA MUNOZ on 06/08/22 at 09:48 AM MDT 2Effective: 06/08/2022 212








 



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Department: Recreation & Community Services
Prepared By: Lacey A Rightmer
Staff Member Presenting: Helen McAlary,
Executive Director Community Life and Culture
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 8
SUBJECT: AMENDMENT NO. 1 TO THE STADIUM OPERATING AND MANAGEMENT

AGREEMENT BETWEEN THE CITY OF ONTARIO AND ASM GLOBAL STADIUM

MANAGEMENT, LLC

CITY OF ONTARIO
Agenda Report
October 6, 2026
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council authorize the City Manager, or his designee, to execute Amendment No. 1 to the Stadium Operating and Management Agreement with ASM Global Stadium Management, LLC (ASM).

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Encourage, Provide or Support Enhanced Recreational, Educational, Cultural and Healthy City Programs, Policies and Activities
FISCAL IMPACT: The proposed Amendment No. 1 to the Stadium Operating and Management Agreement with ASM will increase the annual fixed compensation by $150,000, increasing the Agreement's annual base compensation to $390,000, before applicable annual adjustments. In addition, ASM will receive 5% of OSE's net Food & Beverage Revenue, with the remaining 95% returned to the City as General Fund Revenue. ASM Global will also receive 25% of net sponsorship revenue, with the remaining 75% retained by the City. If approved, additional appropriations will be included in a future quarterly budget update to the City Council for approval as needed.

BACKGROUND & ANALYSIS: The City of Ontario is developing the Ontario Sports Empire (OSE), a 199-acre sports complex located south of Riverside Drive and bordered by Chino Avenue, Vineyard Avenue, and the Cucamonga Creek Flood Channel. OSE will include a variety of multi-sport tournament fields and related facilities and is scheduled to open on October 24, 2026.

OSE is located immediately adjacent to ONT Field, a minor league baseball stadium that opened in April 2026. ONT Field is a separate and distinct facility, anchored on the 199-acre OSE site. The two facilities will operate under separate agreements and have different primary operators.

In July 2023, the City issued a Request for Qualifications (RFQ) seeking proposals from firms to provide services for OSE. The City received proposals from two firms, Sports Facilities Management (SFM) and ASM. Following the evaluation process, the City selected SFC as the primary operator of 215
OSE and subsequently entered into a Management Agreement with SFM. At that time, the City also selected ASM to provide supplemental services, including food and beverage operations.

Since ONT Field is used for events and activities outside of minor league baseball games, the City entered into a Stadium Operating and Management Agreement with ASM to operate and manage ONT Field during non-baseball events. ASM's agreement includes certain services during baseball games, including concessions, parking management, and coordination of traffic and security services. The agreement allows the City to expand ASM's concession services to the adjacent sports complex.

While SFM will remain the primary operator of OSE, Staff proposes Amendment No. 1 to expand ASM's existing scope of services to include certain activities at OSE. Under the proposed Amendment, ASM would provide:

Food and beverage operations, including alcohol service, at City-approved concession stands and mobile concession areas;
Security services required under the applicable Alcohol Beverage Control license; and Supplemental parking, traffic, and security services when requested by the City or SFM, as needed.

Expanding ASM's existing scope would allow the City and SFM to use a service provider that already operates at the adjacent ONT Field and is familiar with the City's expectations and event operations.

It would also allow for greater coordination of services when events occur simultaneously or in close proximity.

The City also has prior experience working with ASM and its affiliated companies at other City facilities, including Toyota Arena and the Ontario Convention Center. Based on ASM's existing presence at ONT Field, familiarity with City operations, and experience providing the services needed to support OSE, Staff recommends that the City Council approve Amendment No. 1 to the Stadium Operating and Management Agreement.
216

FIRST AMENDMENT
TO

STADIUM OPERATING AND MANAGEMENT AGREEMENT

BETWEEN

THE CITY OF ONTARIO
AND

ASM GLOBAL STADIUM MANAGEMENT, LLC
This First Amendment to the Stadium Operating and Management Agreement (“First Amendment”) is made and entered into as of [____], 2026 (“Effective Date”), by and between the City of Ontario (a California municipal corporation, with its principal place of business at 303 East B Street, Ontario, California 91764) (“City”) and ASM Global Stadium Management, LLC (a Delaware limited liability company with its principal place of business at 300 Conshohocken State Road, Suite 770, West Conshohocken, Pennsylvania 19428) (“Manager”). City and Manager are sometimes referred to herein individually as a “Party” and collectively as “Parties”.

RECITALS
A. The Parties entered into a Stadium Operating and Management Agreement effective July 23, 2025 (“Agreement”), pursuant to which Manager was retained to operate, manage, market, and supervise the City's professional baseball stadium currently known as ONT Field; and
B. The City separately entered into a Sports Complex Facility Operating and Management Agreement with Sports Facilities Management, LLC (“SFM”) for the operation and management of the adjacent Ontario Sports Empire (“OSE”); and C. The City and Rancho Baseball, LLC entered into a Stadium Venue Agreement dated October 10, 2024 (“DBH Agreement”) governing the professional baseball team’s use and operation of ONT Field, and the DBH Agreement was assigned to DBH Rancho Cucamonga, LLC (“DBH”) effective January 10, 2025; and D. The City desires to authorize Manager to provide limited supplemental services at the OSE including food and beverage and alcoholic beverage operations, housekeeping and custodial services for concession and food-and-beverage service areas, pest control for such areas, twenty-four (24) hour monitoring and security patrol, specified security services, sponsorship, marketing and digital-display services, and other supplemental services when specifically authorized by the City; and E. The Parties desire to amend the Agreement while preserving SFM as the OSE operator, the City’s rights and obligations under the DBH Agreement and other existing contracts, and the remaining terms of the Agreement except as expressly modified herein.

NOW, THEREFORE, the Parties mutually agree as follows:
217

AGREEMENT

1. Incorporation of Recitals. The recitals listed above are true and correct, and are hereby incorporated herein by this reference.

2. Amendment. The Agreement is hereby amended as set forth in Exhibit A (Amendments to Stadium Operating and Management Agreement), Exhibit B (Schedule I - Matrix of Responsibilities at Ontario Sports Empire), and Exhibit C (Schedule II - Licensed Premises and Service Area Map); all of which are attached hereto and incorporated herein by reference. The Exhibits identify the limited supplemental OSE services authorized by this First Amendment and the terms governing those services.

3. Compensation. Compensation under this First Amendment shall include:
(a) an annual management fee of one hundred fifty thousand dollars ($150,000); (b) a food and beverage incentive equal to five percent (5%) of Net Food and Beverage Operating Income generated exclusively from operations at the adjacent Sports Complex; and (c) a sponsorship commission equal to twenty-five percent (25%) of Net Sponsorship Revenue as defined in Exhibit A actually collected from qualifying sponsorship agreements directly originated, secured, renewed, or expanded by Manager for the adjacent Sports Complex. For the avoidance of doubt, any Net Operating Income (“NOI”) or other NOI-based compensation payable to Manager for ONT Field under the Agreement shall not apply to or be calculated from OSE operations under this First Amendment. Supplemental services outside the base scope shall be compensated only pursuant to the written authorization process in accordance with the Exhibit A, and no compensation shall be due for unauthorized services or charges. Manager shall not be entitled to duplicate compensation for the same service, revenue, or expense under the Agreement, this First Amendment, or any Exhibit or written authorization.

4. Order of Precedence. In the event of a conflict between this First Amendment (including the Exhibits) and the Agreement, this First Amendment shall control solely with respect to the matters expressly addressed herein. In the event of a conflict between Exhibit A and any Schedule, Exhibit A shall control. No Exhibit shall expand Manager’s authority beyond the Authorized OSE Services expressly provided in Exhibit A. In all other respects, the Agreement shall control. For clarity, no Exhibit or written authorization may amend the Agreement or expand Manager’s authority except as expressly permitted by this First Amendment.

5. Continuing Effect of Agreement. Except as amended by this First Amendment, all provisions of the Agreement shall remain in full force and effect; and shall govern the actions of the Parties under this First Amendment. Whenever the term “Agreement” appears in the original Agreement from and after the date of this First Amendment, it shall mean the Agreement as amended.

6. Electronic Transmission. A manually signed copy of this First Amendment transmitted by facsimile, electronic mail, or other electronic means shall have the same legal effect as delivery of an original. This First Amendment may be signed using electronic signatures.
218

7. Counterparts. This First Amendment may be signed in counterparts, each of which shall constitute an original and all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the Parties have executed this First Amendment on the Effective Date.

CITY OF ONTARIO
Approved By:

Scott Ochoa
City Manager
Attested By:

Sheila Maut
City Clerk
Approved as to Form:

City Attorney
Best Best & Krieger LLP

ASM GLOBAL STADIUM

MANAGEMENT, LLC
[__________]
[__________]
219
EXHIBIT A Page 1 of 8

EXHIBIT A

AMENDMENTS TO STADIUM OPERATING AND MANAGEMENT

AGREEMENT
The Stadium Operating and Management Agreement (“Agreement”) between the City of Ontario (“City”) and ASM Global Stadium Management, LLC (“Manager”) is amended to add the following provisions governing Manager’s limited supplemental services at the Ontario Sports Empire (“OSE”), to include coordination with Sports Facility Management, LLC (“SFM”):

1. Authorized OSE Services. Manager shall provide the following base services at the OSE and may provide the supplemental services described below (collectively, “Authorized OSE Services”):
a. Food and beverage operations, including alcohol service, at the fixed concession locations identified in Schedule II and at other temporary or mobile service points within the OSE (as long as proper coordination with SFM occurs) permitted under Manager’s applicable ABC license(s), health permit(s), and other regulatory approvals. b. Housekeeping and custodial services for concession stands, snack bars, service corridors, and other food-and-beverage service areas (together with pest control for those areas) as further provided in Section 4 below. SFM remains responsible for fields, parking areas and structures, landscaping, and pest control outside Manager’s food-and-beverage service areas.
c. Continuous twenty-four (24) hour property security monitoring and patrol of the OSE complex (including parking areas and parking structures/flat lots) in accordance with a City-approved security post order or staffing plan, including security required by applicable law or the terms and conditions of Manager’s California Department of Alcoholic Beverage Control (“ABC”) license(s) as provided in this Exhibit A and Schedule I.
d. Sponsorship, marketing, and digital-display services for the adjacent Sports Complex within City-approved sponsorship guidelines, rate parameters, forms, and delegated authority; and the limitations of this Exhibit A and the City’s existing agreements. Manager may negotiate and secure sponsorships within such approved parameters without separate transaction-by-transaction approval; any material deviation from those parameters or any agreement requiring the City’s signature or otherwise binding the City requires prior written City approval.
e. Parking or traffic-support assistance requested by SFM under Section 2(c), security, special-event, production, or other services specifically requested and approved in writing in accordance with Section 6 below. f. Manager shall not perform any other OSE management or commercial services unless separately authorized by a written amendment approved by the City. Property-security monitoring and patrol under subsection (c) does not include 220
EXHIBIT A Page 2 of 8
gate or bag-check security, ticketing, guest services, event-specific security, or other daily operations security assigned to SFM unless separately authorized through a written authorization under Section 6. SFM shall identify event-specific or additional security needs in the first instance. Manager shall provide such additional staffing only through the authorization process in Section 6, and any outside security provider engaged by Manager remains subject to applicable City approval and procurement requirements. g. Manager shall maintain reasonable security and incident records and promptly notify the City and SFM of material incidents affecting public safety, OSE operations, or ABC compliance.
h. Sponsorship, marketing, and digital-display services under subsection (d) do not grant Manager any new exclusivity or naming rights. Manager may act within the City-approved sponsorship parameters described in subsection (d), but may not bind the City outside those parameters or execute an agreement requiring City execution without prior written City approval. Manager shall provide City a sponsorship report on a quarterly basis.
i. Schedules I and II supplement the Authorized OSE Services by allocating responsibilities and identifying service areas, but do not independently expand Manager’s authority beyond this Exhibit A.

2. Sports Facilities Management, LLC (“SFM”). SFM remains the City’s operator of the OSE. Manager’s role is supplemental and limited to the Authorized OSE Services. Schedule I allocates coordination responsibilities between Manager and SFM; however, the “Lead”, “Support”, and “Joint” designations do not independently grant Manager authority, exclusivity, or compensation beyond the Agreement and this Exhibit A.
a. SFM Coordination. Manager shall coordinate with the City and SFM and shall not direct SFM or assume general OSE operating authority. Nothing herein prohibits the City from authorizing food trucks, culturally specific food vendors, eventspecific food providers, or other outside food-and-beverage providers from time to time.

All such vendors shall coordinate through Manager before operating at the OSE. Manager shall serve as the liaison for such vendors to ensure compliance with applicable health permits, insurance requirements, liquor licensing requirements, and other applicable laws and regulations.
b. Health Permit and ABC License. Where Manager’s health permit or ABC license legally requires oversight of an outside food or beverage vendor, such vendor shall be coordinated through Manager to the extent required by law, permit, or license condition; otherwise, Manager shall not obtain broader management authority over the outside vendor absent separate City authorization. c. Parking. SFM shall serve as the lead for parking and traffic coordination at the OSE. SFM may request Manager’s assistance with parking or traffic operations when operationally necessary. Manager shall reasonably cooperate with such 221
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requests; but shall not be obligated to provide assistance if Manager reasonably determines that it lacks sufficient personnel, equipment, or other resources to do so without adversely affecting its other contractual obligations. Any compensable assistance provided by Manager shall remain subject to the written authorization requirements of Section 6.
d. Personnel Training. Manager shall be the lead for and solely responsible for the training and performance management of Manager’s personnel. SFM shall be the lead for and responsible for the training and performance management of SFM’s personnel under its separate agreement with the City. Neither Manager nor SFM shall have supervisory authority over the other’s personnel solely by virtue of the coordination requirements of this Exhibit A.

3. Food and Beverage; Alcohol Operations; Pricing. Manager shall have only the operational authority reasonably necessary to perform the Authorized OSE Services and comply with applicable food-service laws and its ABC license(s) including responsible-beverage-service, staffing, monitoring, and service requirements. a. The City shall approve an initial menu, alcohol-price, and servicecharge schedule. Thereafter, material pricing changes shall be submitted to the City for prior written approval, while event-specific or temporary pricing within City-approved parameters may be implemented without separate approval. The City shall process pricing requests reasonably and promptly so as not to unreasonably interfere with operations.
b. Pricing shall be commercially reasonable, customer-oriented, and consistent with comparable public sports facilities. The Food and Beverage Incentive and Sponsorship Commission expressly authorized in Section 5 below shall not limit the City’s pricing-approval authority or be structured or administered to reward higher consumer prices without corresponding performance or customer-service benchmarks. No other incentive compensation applies unless separately approved by written amendment.

4. Concession Facilities; Cleaning, Maintenance, and Repairs. Manager shall provide housekeeping and custodial services for the concession stands, snack bars, service corridors, and other areas used for Manager’s food and beverage operations in a clean, sanitary, safe, and operational condition.
a. Manager’s responsibilities include routine cleaning; timely collection and lawful disposal of trash and waste; pest control for those food-and-beverage service areas; and routine upkeep of Manager-operated concession equipment and fixtures. b. Manager shall maintain reasonable maintenance and service records and promptly notify the City and SFM of any condition reasonably requiring maintenance, repair, engineering, structural, capital, landscaping, parking-area, or major building-system work outside Manager’s expressly assigned responsibilities. c. Unless expressly included within the Authorized OSE Services under this Exhibit A or authorized through a written authorization under Section 6, Manager is 222
EXHIBIT A Page 4 of 8
not responsible for structural repairs, roof or building-envelope work, base-building utility infrastructure, capital improvements, replacement of major building systems, landscaping, fields, parking areas or structures, or pest control outside Manager’s foodand-beverage service areas (except to the extent repair is required because of damage caused by Manager or its personnel, contractors, or invitees). d. Manager shall take reasonable interim measures within its control to protect health, safety, and property pending City direction; and shall not undertake structural alterations, capital improvements, or replacement of major building systems without the City’s prior written approval.
e. Facility Maintenance Allocation. For coordination purposes, Manager shall be the lead for facility maintenance matters within Manager’s assigned food-andbeverage and concession areas (and with respect to Manager-operated equipment and fixtures). SFM shall be the lead for facility maintenance matters within SFM’s assigned areas including fields, common areas, parking areas and structures, landscaping, and other areas outside Manager’s assigned food-and-beverage and concession areas (subject to the City’s separate agreement with SFM). Manager shall coordinate with the City and SFM when a maintenance condition affects or crosses their respective areas of responsibility.

5. Compensation. For purposes of this Section 5, “Sports Complex” means the OSE, excluding ONT Field, and only those OSE areas in which Manager is authorized to perform Authorized OSE Services under this Exhibit A.
a. Annual Management Fee. The City shall pay Manager an annual management fee of one hundred fifty thousand dollars ($150,000) for the base Authorized OSE Services under this Exhibit A, subject to the invoicing and payment provisions of the Agreement. The annual management fee constitutes full compensation for the base services including food and beverage services; housekeeping, custodial services, and pest control within Manager’s food-and-beverage service areas; continuous twenty-four (24) hour property security monitoring and patrol of the OSE complex in accordance with the City-approved security post order or staffing plan; and the sponsorship, marketing, and digital-display services authorized under this Exhibit A. The annual management fee includes the labor, supervision, management, and administrative costs necessary to perform those services; and Manager shall not separately invoice the City or SFM for services included in the annual management fee.
b. Food and Beverage Incentive. Manager shall receive an incentive equal to five percent (5%) of Net Food and Beverage Operating Income generated exclusively from operations at the Sports Complex. “Net Food and Beverage Operating Income” means gross food and beverage revenues actually received from Sports Complex operations less direct operating expenses attributable solely to those operations. Revenues and expenses attributable to ONT Field shall be excluded, and no Stadium revenue, expense, or Net Operating Income shall be allocated to the Sports Complex for purposes of calculating this incentive.
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c. Sponsorship Commission. Manager shall receive a commission equal to twenty-five percent (25%) of Net Sponsorship Revenue actually collected from qualifying sponsorship agreements directly originated, secured, renewed, or expanded by Manager for the Sports Complex. “Net Sponsorship Revenue” means: (1) cash sponsorship revenue actually collected under new sponsorship agreements directly originated and secured by Manager for the Sports Complex; and (2) the incremental cash revenue actually collected from a renewal, extension, or expansion of an existing sponsorship to the extent Manager directly originates and secures additional rights or value specifically attributable to the Sports Complex; in each case less refunds, credits, chargebacks, taxes collected for remittance, and third-party pass-through costs that are either within categories or budgets previously approved by the City or otherwise specifically approved in writing by the City. The commission does not apply to sponsorship revenue attributable to ONT Field or to the pre-existing base value of sponsorship agreements in effect before the Effective Date. Manager’s authority to negotiate and secure sponsorships is subject to Section 1(d) and (h). d. No ONT Field Net Operating Income (“NOI”) Compensation. Any NOI or other NOI-based compensation payable to Manager for ONT Field under the Agreement shall not apply to, be calculated from, or include Sports Complex operations under this First Amendment.
e. Supplemental Services. Services outside the base Authorized OSE Services shall be compensated only pursuant to an approved written authorization under Section 6. No compensation is due for unauthorized services or charges. The Annual Management Fee compensates Manager for the base service obligations identified in this Exhibit A, while the Food and Beverage Incentive and Sponsorship Commission are separate performance-based compensation expressly authorized by this First Amendment. Except for those expressly authorized forms of compensation, no cost, expense, revenue, service, or other amount may be counted, allocated, billed, or recovered more than once under the Annual Management Fee, Food and Beverage Incentive, Sponsorship Commission, any supplemental written authorization, or the compensation provisions applicable to ONT Field.
f. Reporting and Reconciliation. Manager shall provide the City with reasonable calculations and supporting documentation for the Food and Beverage Incentive and Sponsorship Commission. Such amounts are subject to the recordkeeping, reconciliation, and audit requirements of the Agreement and Section 7 below before final payment or reconciliation. Direct operating expenses used to calculate Net Food and Beverage Operating Income must be reasonable, documented, and directly attributable to Sports Complex food and beverage operations; allocated corporate overhead, ONT Field costs, and amounts already recovered through the Annual Management Fee or a supplemental written authorization shall be excluded unless expressly approved in writing by the City. Any later refund, credit, chargeback, or other adjustment affecting a previously paid Food and Beverage Incentive or Sponsorship Commission shall be reflected in the next reconciliation, and any resulting overpayment shall be credited or refunded to the City.
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6. Supplemental Services; Work Authorization and Billing. The City or SFM (as the OSE operator) may request supplemental services outside the base Authorized OSE Services including additional security, parking or traffic-support assistance requested under Section 2(c), special-event, or production services. Manager shall not perform or charge for any supplemental service without advance written authorization under the process set forth below.
a. Each written authorization shall identify the scope, schedule, estimated staffing, applicable rates, responsible payor, and a not-to-exceed amount. The City may approve standing rate schedules and short-form authorization procedures for recurring supplemental services. If SFM is the responsible payor, SFM may authorize services within the approved rate schedule and its contractual authority, with prompt notice to the City. If the City is the responsible payor, the authorization is effective only when approved by a City representative authorized to approve the applicable expenditure. Oral requests, field directions, or course of dealing do not authorize additional compensation. Manager shall not exceed a written authorization’s not-toexceed amount or materially change its scope, staffing, schedule, or rates without prior written approval by the party authorized to approve the applicable expenditure. b. Any material change to an approved written authorization requires further written City approval, and the City is not responsible for unauthorized charges. If an immediate response is reasonably necessary to protect life, safety, property, or regulatory compliance, Manager may take only the minimum action reasonably necessary and shall notify the City as soon as practicable; any continuing or additional billable work remains subject to written authorization under this Section.

7. Revenue Accounting and Reconciliation. Manager shall maintain complete and auditable records of OSE revenues and expenses arising from the Authorized OSE Services. Manager may use its existing cashless operating procedures, generally accepted accounting principles, and City-approved standard operating procedures used at other City facilities; provided those procedures permit the City to verify revenues, expenses, and compensation under this First Amendment. All City revenues collected by Manager remain City property and shall be accounted for separately from Stadium revenues unless the City approves another method in writing.

8. Customer Experience Standards. Manager shall perform the Authorized OSE Services in accordance with first-class venue standards and City-approved customer-experience requirements including reasonable standards for service quality, wait times, cleanliness, food quality, responsible alcohol service, staffing, complaint response, accessibility, and coordination with the City and SFM. The City may establish or revise reasonable customer-experience guidelines applicable to the OSE; provided that any revision materially increasing Manager’s scope or cost shall require the Parties’ written agreement or an approved written authorization as applicable.

9. Security Cameras; City Network and Information Technology (“IT”) Requirements. Any Manager-installed or Manager-operated security cameras, accesscontrol or recording systems, or other technology connected to City-owned infrastructure 225
EXHIBIT A Page 7 of 8
or networks shall comply with applicable City cybersecurity, access-control, retention, and incident-response requirements. Manager’s existing point-of-sale platform and existing video/data-retention practices are deemed approved for OSE use to the extent they are already approved by the City and materially unchanged. Any new system, material change, or new connection to City-owned infrastructure or networks requires prior written City IT approval. Ownership, access, evidence preservation, disclosure, and publicrecords support for security-camera footage and related data shall remain subject to applicable City requirements.

10. Existing Agreements. Nothing in this First Amendment is intended to amend, reinterpret, or impair the Stadium Venue Agreement with DBH Rancho Cucamonga, LLC or the City’s agreement with SFM. The City shall direct Manager’s Authorized OSE Services in a manner consistent with those agreements, and Manager shall reasonably cooperate with the City and SFM to avoid operational conflicts. No provision shall grant Manager rights that the City does not possess under an applicable pre-existing agreement, and nothing in this Exhibit A or the Schedules shall expand or diminish the contractual rights of DBH or SFM. Any conflict among the Agreement, the First Amendment, this Exhibit A, and the Schedules shall be governed by the order-ofprecedence provision in the First Amendment.

11. Future Facilities and Commercial Rights. Manager has no automatic right, exclusivity, right of first negotiation, preferred-provider right, or other entitlement with respect to future OSE facilities or other City sports, entertainment, recreation, convention, hospitality, or event facilities unless expressly granted in a subsequent written agreement approved by the City. Future facilities and future revenue streams are excluded from this First Amendment. Any future systems will be covered under a different agreement.

12. City Remedies. In addition to remedies available under the Agreement, the City may: (a) require corrective action, suspend or reduce an Authorized OSE Service; (b) reject unauthorized charges; (c) withhold approval of proposed pricing or supplemental work; or (d) discontinue Manager’s OSE services for repeated material failure to meet applicable service, safety, licensing, technology, maintenance, or customer-experience requirements subject to applicable notice and cure provisions in the Agreement. The City may immediately suspend an Authorized OSE Service to the extent reasonably necessary to address an imminent health, safety, licensing, cybersecurity, or regulatory risk, subject to prompt notice to Manager. Nothing herein expands Manager’s right to injunctive relief or creates damages based on lost future facilities, future commercial rights, or unapproved exclusivity.

13. Authorized Service Areas. Schedule II identifies existing fixed concession locations and the overall OSE footprint. Manager may provide temporary or mobile foodand-beverage service elsewhere within the OSE only when authorized by the City and permitted by Manager’s applicable ABC license(s), County health permit(s), and other regulatory approvals. Schedule II does not substitute for an ABC-approved premises diagram, health permit, or other regulatory authorization, and no such diagram or permit expands Manager’s contractual authority beyond the Authorized OSE Services. To the extent of any inconsistency concerning the boundaries of licensed alcoholic-beverage 226
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operations, the applicable ABC-approved premises diagram or authorization controls for regulatory purposes.

14. Schedules. Schedule I (Matrix of Responsibilities at Ontario Sports Empire) and Schedule II (Licensed Premises and Service Area Map) are incorporated into this Exhibit A. Schedule I allocates responsibilities for coordination purposes and shall be read consistently with Sections 1 and 2 above; Schedule II identifies the OSE footprint and existing fixed concession locations, and shall be read consistently with Section 13. a. If a Schedule conflicts with this Exhibit A, this Exhibit A controls.

Schedule I or Schedule II may be revised only by a written amendment executed by authorized representatives of both Parties; provided that individual supplemental services may be authorized through a written authorization process as expressly permitted by Section 6.
b. Any Schedule I designation concerning parking or traffic coordination, facility maintenance, or personnel training and performance management shall be interpreted consistently with Sections 2(c), 2(d), and 4(e) of this Exhibit A. c. For the avoidance of doubt, former Schedule III (Scope and Compensation for OSE Services) is not separately attached or operative; its substantive scope, compensation, invoicing, and supplemental written authorization terms are incorporated into this Exhibit A.
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SCHEDULE I

SCHEDULE I
Matrix of Responsibilities at Ontario Sports Empire
This exhibit summarizes the proposed allocation of key workstreams between ASM Global Stadium Management, LLC (“ASM”) and Sports Facilities Management, LLC (“SFM”).

Responsibility key: Lead = primary responsibility | Support = supporting responsibility Work ASM SFM
Property Security - 24/7 monitoring/patrol of the OSE, including parking areas/structures, per City-approved security plan Lead N/A Daily Operations Security - Gate, bag check, ticketing, etc.; SFM lead; ASM only if separately scheduled/authorized Support Lead
Housekeeping/custodial services and pest control (F&B/concession areas) Lead N/A Digital marketing and sponsorship (SFM support only if operationally needed) Lead N/A Sales and business development Support Lead
Event booking and scheduling Support Lead
Event planning and execution Support Lead
Ticketing and box office operations N/A Lead
Guest services and accessibility Support Lead
Parking/traffic coordination - SFM lead; ASM may assist on request if resources are available Support Lead
Food and beverage coordination Lead N/A
Facility maintenance/engineering - each party lead for its own facilities/areas Lead Lead Capital Improvement Projects (“CIP”) - each party lead for its own facilities/areas Lead Lead
Brand standards and public relations Support Lead
Community and stakeholder relations Support Lead
Emergency preparedness and response - each party lead for its own facilities/areas Lead Lead
Insurance risk and regulatory compliance - each party lead for its own facilities/areas Lead Lead
Annual budgeting and financial reporting - each party lead for its own facilities/areas Lead Lead
Vendor (Various) procurement and contract oversight - each party lead for its own facilities/areas Lead Lead
Staff training/performance - each party lead for its own personnel Lead Lead Technology systems and data reporting - each party lead for its own facilities/areas Lead Lead
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Department: Economic Development
Prepared By: Karla Tavera
Department:

Prepared By: Karla Tavera
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 9
SUBJECT: A PROFESSIONAL SERVICE AGREEMENT FOR FILMING AND VIDEO PRODUCTION SERVICES WITH WINDSONG PRODUCTIONS, LLC.

CITY OF ONTARIO
Agenda Report
October 6, 2026
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council take the following actions:

A. Authorize the City Manager, or his designee, to execute a Professional Services Agreement with Windsong Productions, LLC for filming and video production services for a three-year term, with the option to extend for two additional one-year terms, in the amount of $922,745, plus a $25,000 contingency, for a combined total not to exceed $947,745.

B. Reject the bid protest from Eleanor, LLC for RFP No. 2009- Filming and Video Production Services as without merit.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Pursue City's Goals and Objectives by Working with Other Governmental Agencies Operate in a Businesslike Manner
FISCAL IMPACT: The recommended agreement with Windsong Productions, LLC is in the amount of $922,745, plus a $25,000 contingency, for a combined total not-to-exceed $947,745, over a threeyear term with two options to extend. The annual costs are $292,706 for Fiscal Year 2026-27, $307,331 for Fiscal Year 2027-28, and $322,708 for Fiscal Year 2028-29. The Fiscal year 2026-27 adopted Budget includes appropriations in the General Fund for Advertising and Other Professional Services.

BACKGROUND & ANALYSIS: The Economic Development Agency is responsible for the City’s business attraction and retention efforts. As part of these efforts, Economic Development works collaboratively with Communications & Community Relations on various marketing initiatives, including the production of videos that showcase Ontario’s business community and highlight the quality of life within the City.
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In August 2026, the City solicited proposals for filming and video production services (RFP No. 2009).

A total of 15 proposals were received through the City’s electronic bid management system, listed below:

Bellamani Photography, LLC.,
Dynamic Video Communications, LLC.

Eleanor, LLC.

Filmtwist Productions, LLC.

Lab Rat Productions, LLC.

MDG Productions, Inc.

Media Avenue Studios
Mosaic Pictures, Inc.

New Take Films USA, LLC.

NW Collective
Pegasus Studios
Sebaz Video Productions, Inc.

The Delegate, Inc.

Woldwise Productions, LLC
Windsong Productions, LLC.

After thorough review of the proposals submitted, consideration was given to the overall proposal, experience of their staff and portfolio of previous work among other things. Windsong Production was the top ranked firm across all criteria. The Windsong Production team demonstrated creativity, a strong understanding of the City of Ontario and brand itself, and an ability to deliver on a variety of products on time and on budget.

After posting the Notice of Intent to Award as required by our Purchasing Policy, Eleanor, LLC. submitted a bid protest. Following the review of the protest, Staff determined that none of the points presented in the protest indicate noncompliance on the City's behalf.

Based on their qualifications, staff is recommending that the City enter into a Professional Services Agreement with Windsong Productions.
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C I T Y OF O N T A R I O
303 EAST B STREET | ONTARIO, CALIFORNIA 91764 (909) 395-2000 FAX (909) 395-2070 OntarioCA.gov

CITY OF ONTARIO

PROFESSIONAL SERVICES AGREEMENT

1. PARTIES AND DATE.

This Agreement is made and entered as of ____________, by and between the City of Ontario, a municipal corporation organized under the laws of the State of California with its principal place of business at 303 East “B” Street, Ontario, California 91764-4196, County of San Bernardino, State of California ("City") and Windsong Productions, LLC, a corporation with its principal place of business at 351 O Street, Fresno, CA 93721 ("Consultant"). City and Consultant are sometimes individually referred to herein as "Party" and collectively as "Parties."

2. RECITALS.

2.1 Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing filming and video production services to public clients, is licensed in the State of California, and is familiar with the plans of City.

2.2 Project.

City desires to engage Consultant to render such professional services for the filming and video production services project ("Project") as set forth in this Agreement.

3. TERMS.

3.1 Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional filming and video production consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations.

3.1.2 Term. The term of this Agreement shall be from October 6, 2026 to October 6, 2029, PAUL S. LEON
MAYOR

DEBRA PORADA

MAYOR PRO TEM
ALAN D. WAPNER
JIM W. BOWMAN

DAISY MACIAS

COUNCIL MEMBERS

SHEILA MAUTZ

CITY CLERK
JAMES R. MILHISER

CITY TREASURER

SCOTT OCHOA

CITY MANAGER
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2 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 two additional one-year terms. Consultant 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. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "A" attached hereto and incorporated herein by reference. The total compensation shall not exceed nine hundred twenty-two thousand seven hundred forty-five dollars ($922,745) 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. Consultant shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Consultant. 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 Consultant's fees, the City shall give written notice to Consultant 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 Consultant. 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. Consultant shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "A" of this Agreement.

3.2.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant 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 Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.2.5 Automated Clearing House (“ACH”) payments. It is the City’s policy to pay its consultant invoices via electronic fund transfers through the ACH network. All payments due and owing pursuant to a properly issued and correct invoice or under this Agreement shall be made through electronic ACH transfers, unless otherwise agreed upon by both Parties in writing. Consultant shall provide the City with ACH payment details whereby the City shall initiate the ACH transfers to Consultant in the amount required pursuant to a properly issued and correct invoice or under this Agreement. Each Party shall undertake any and all required actions and execute any required documents, instruments, or agreements required to effectuate the requirements of this Section. In the event the City erroneously deposits funds into an account, or otherwise deposits funds to which Consultant is not entitled: (1) Consultant shall immediately notify the City and the financial institution; (2) Consultant shall not withdraw any of the funds which were erroneously deposited or to which Consultant is not entitled; and (3) Consultant authorizes both the City and financial institution to take all actions necessary to correct the error and return to the City all funds erroneously deposited or to which Consultant is not entitled.

3.3 Responsibilities of Consultant.

3.3.1 Independent Contractor; Control and Payment of Subordinates. The Services shall 232
3 be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Any personnel performing the Services on behalf of Consultant shall not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, or any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultants officers, employees or agents, except as set forth in this Agreement. Consultant 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. Consultant shall be responsible for all reports and obligations respecting such additional 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. Consultant shall perform the Services in a prompt and timely manner and in accordance with the Schedule of Services set forth in Exhibit "A" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services expeditiously. Upon request of City, Consultant 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 Consultant shall be subject to the approval of City.

3.3.4 Substitution of Key Personnel. Consultant 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, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant 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: Joann Mercado Hicks, Production Manager and Amber Cruz, Sr. Economic Development Coordinator.

3.3.5 City's Representative. The City hereby designates Amber Cruz, Sr. Economic Development Coordinator, 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 approval of all products submitted by Consultant but not the authority to enlarge the Scope of Services or change the total compensation due to Consultant 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 Consultant's total compensation subject to the provisions contained in this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.3.6 Consultant's Representative. Consultant hereby designates Joann Mercado Hicks, Production Manager, or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant'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. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.
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4 3.3.8 Standard of Care; Performance of Employees. Consultant 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. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Consultant represents that it, its employees and subconsultants 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.

Consultant 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 Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its subconsultants 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 acceptable to the City, shall be promptly removed from the Project by the Consultant 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 Consultant shall perform and complete all Services under this Agreement within the term set forth in Section 3.1.2 above (“Performance Time”). Consultant 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 Consultant (“Performance Milestones”). Consultant 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 Consultant 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 Majeure 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 Consultant 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 Consultant 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. 234
5 3.3.10.1 Compliance with Laws. Consultant 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. Consultant 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; Consultant. Consultant 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 to time and shall require all subconsultants and sub-subconsultants to comply with the same.

Consultant 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. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such nondiscrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant 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, Consultant 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). Consultant 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 Consultant, its subconsultants, or others for whom Consultant is responsible under its indemnity obligations provided for in this Agreement.

3.3.10.5 Water Quality Management and Compliance. Consultant 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 limitation, 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 PorterCologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant 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 Consultant for delay in completing the Services caused by Consultant’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. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, 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.
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6 3.3.11 Insurance.

3.3.11.1 Time for Compliance. Consultant 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, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant 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 Consultant, 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, Consultant agrees to amend, supplement or endorse the policies to do so.
(A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 00 01, or the exact equivalent, with limits of not less than $2,000,000 per occurrence and no less than $4,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); (3) products/completed operations liability; or (4) containing any other exclusion(s) contrary to the terms or purposes of this Agreement. (B) 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.
(C) 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.
(D) Professional Liability (Errors & Omissions): Professional Liability insurance or Errors & Omissions insurance appropriate to Consultant’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, pollution, 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. (E) If umbrella or excess liability coverage is used to meet any required limit(s) specified herein, the Contractor shall provide a “follow form” endorsement satisfactory to the City indicating that such coverage is subject to the same terms and conditions as the underlying liability policy.

3.3.11.3 Insurance Endorsements. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:
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7 (A) Commercial General Liability: (1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement. Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the terms or purposes of this Agreement. For all policies of Commercial General Liability insurance, Consultant shall provide endorsements in the form of ISO CG 20 10 10 01 and 20 37 10 01 (or endorsements providing the exact same coverage) to effectuate this requirement. (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. (B) Automobile Liability: (1) Additional Insured: The 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. (C) 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 Consultant. “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. (D) 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 Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss.

Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

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 policy or policies not contained a deductible or self-insured retention.

3.3.11.7 Evidence of Insurance. The Consultant, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies 237
8 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 filed with the City.

If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant 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.

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). Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of noncompliance 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 Consultant, 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 Consultant 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 Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement. (C) The City may require the Consultant 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 Consultant from liability in excess of such coverage, nor shall it limit the Consultant’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. 238
9 (F) Consultant shall report to the City, in addition to Consultant’s insurer, any and all insurance claims submitted by Consultant in connection with the Services under this Agreement.

3.3.11.12 Insurance for Subconsultants. Consultant shall include all subconsultants engaged in any work for Consultant relating to this Agreement as additional insureds under the Consultant's policies, or the Consultant shall be responsible for causing subconsultants 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 subconsultant's policies.

All policies of Commercial General Liability insurance provided by Consultant’s subconsultants 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. Consultant shall not allow any subconsultant to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of subconsultant’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Consultant shall provide satisfactory evidence of compliance with this section upon request of the City.

3.4 Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant 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, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant 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 Consultant'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 Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant 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 Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the Project and require the same of any subconsultants.

3.4.3 Compliance Monitoring. This Project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Consultant’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 Consultant or any subconsultant that affect Consultant’s performance of services, including any delay, shall be Consultant’s sole responsibility. Any delay arising out of or resulting from such stop orders shall be considered Consultant caused delay and shall not be compensable by the City. Consultant 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 Consultant or any subconsultant.
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10 3.4.4 Labor Certification. By its signature hereunder, Consultant 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 Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those Services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant 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 Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement.

Consultant 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, Consultant 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 injury 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 Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant’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. Consultant's obligation to indemnify shall survive expiration or termination of this Agreement and shall not be restricted to insurance proceeds, if any, received by Consultant, the City, its officials, officers, employees, agents, or volunteers.

3.6.2 If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’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, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault. 240
11 3.7 General Provisions.

3.7.1 Accounting Records. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant 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.

Consultant 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 Consultants. Consultant 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 Consultant is in compliance with the California Labor Code, Consultant shall only utilize its employees to provide the Services. Consultant may not provide the services through any independent contractor, subcontractor or subconsultant (“Subcontractor(s)”) unless approved by the City as set forth in Section

3.7.2.2 below. Consultant represents and warrants that all personnel who perform the Services on Consultant’s behalf are Consultant’s employees, and that Consultant 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. Consultant 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 Consultant to use a Subcontractor, Consultant 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 subconsultants 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:

Consultant: Windsong Productions, LLC
351 O Street
Fresno, CA 93721
ATTN: Joann Mercado Hicks, Production Manager
City: City of Ontario
303 East “B” Street
Ontario, CA 91764
ATTN: Amber Cruz, Sr. Economic Development Coordinator
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.
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12 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 prepared or caused to be prepared by Consultant 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 Consultant on other projects without the City’s express written permission. Within thirty (30) days following the completion, suspension, abandonment or termination of this Agreement, Consultant 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 reproduction 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 Consultant is entitled under the termination provisions of this Agreement, Consultant shall provide all Documents & Data to City upon payment of the undisputed amount. Consultant shall have no right to retain or fail to provide to City any such documents pending resolution of the dispute. In addition, Consultant 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, Consultant shall make a reasonable effort to notify City and provide City with the opportunity to obtain the documents.

3.7.4.2 Subconsultants. Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or its subconsultants, or those provided to Consultant 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 project 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 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. 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 242
13 & 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. Consultant 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 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 party 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 claim 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.
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14 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 shall 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.

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 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 consideration contingent upon or resulting from the award or making of this Agreement. 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.
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15 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.

SIGNATURES ON NEXT PAGE
245
16 SIGNATURE PAGE TO PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF ONTARIO AND

WINDSONG PRODUCTIONS, LLC
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 WINDSONG PRODUCTIONS, LLC.

By:

Its:

Printed Name:

By:

Its:

Printed Name:
[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
246
17 EXHIBIT "A"

SCOPE OF SERVICES
See Scope Attached
247
City of Ontario
United States
Date: 2026-08-11
Title: Made in Ontario: Series 2026-2027 Estimate #: 12452 Prepared By: Joann Mercado Hicks
Project Description: Estimate includes (5) x filming days to complete a shot list, B-ROLL and interviews with organizations & businesses selected by the City of Ontario. Estimate includes the edit of (10) x up to :90 seconds videos + (10) x Social Media exports in 9x16 that educate the public on local businesses and organizations in the City of Ontario and all projected expenses for a quality production. Additional videos and filming days to be estimated separately.

Scope of Work Cost
Video Production $103,162.13
Internal Services
Pre Production
pre-production
Copywriting/Transcribing
transcribing of (10) interviews and scriptwriting of (10) x :90 seconds videos Director
Director to oversee shoot and edit
Producer
Producer, on set and to oversee pre/post production
Production Assistant
production assistant; on-set and prep
Audio Production
audio syncing, studio time and audio mix
Editing
editing of (10) x :90 seconds videos and (10) x social media exports. Includes footage import, edit, color correction, rendering, exporting and proof uploading.

Includes up to (2) rounds of client revisions per spot.

Assistant Editing
assistant editor to cull through the footage, catalog and assemble editing timeline External Expenses
Director of Photography
(1) director of photography with camera package; (5) filming days B Camera Operator
(1) b camera operator with camera package; (5) filming days G&E Swing
(2) x G&E swing; (5) filming days
Music
royalty-free music tracks
Hair + Make Up
1 of 2

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
37 of 57
248
(5) Days of filming w/ HMU + kit
Per Diem
per diem for crew; (5) filming days
Production Management $4,180.00
Internal Services
Client Communication
no charge
Internal Meeting/Communication
Production Management
scheduling, crew communication pre- and post-shoot
Internal Expenses
Project Archive & Storage
ingest footage and meta-tag, make back-ups, compress footage with timecode for transcribing; upkeep of ONT footage library
Total $107,342.13
Terms & Conditions
signature printed name date
Approved to proceed and have read and agree with terms and conditions. signature printed name date
2 of 2

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
Date: 2026-08-11
Title: Made in Ontario: Series 2026-2027 Estimate #: 12452 38 of 57
249
City of Ontario
United States
Date: 2026-08-11
Title: Ontario: 2027 State of the City Video Production PKG Estimate #: 12451 Prepared By: Joann Mercado Hicks
Project Description: Estimate includes (6) total days of filming on-location in Ontario, California. Filming will include Council interviews and b-roll/concept filming for the Ontario State of the City video package. Estimate includes the edit of videos for SOTC 2027 event. Additional videos and filming days to be estimated separately.

Deliverables include:
(1) x up to 20 minutes SOTC Video featuring Council
(1) up to 2 minutes opening video
(1) up to 3 minutes closing video
(4) x :15 seconds SOTC event teaser videos for social.

Voice of God audio files for day of event use
Directional arrows and "screen saver" loop for event day Scope of Work Cost
Video Production
State of the City Video PKG 2027
Internal Services
Pre Production
pre-production
Transcribing & Scriptwriting
transcribing of interviews and scriptwriting
Director
director to oversee shoot and edit; (6) days of filming and post-production Producer
producer to oversee pre/post production
Associate Producer
associate producer to assist in the pre/post production of SOC 2027 Production Assistant
PA; prep and on-location for SOC 2027
Editing
editing of:
(1) x up to 20 minutes SOTC Video featuring Council, (1) up to 2 minutes opening video, (1) up to 3 minutes closing video, and (4) x :15 seconds SOTC teaser videos for social.

Includes footage import, edit, animation, rendering, exporting and proof uploading.

Includes up to (2) round of client revisions per spot.
1 of 3

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
39 of 57
250
Audio Production
audio syncing, studio time and audio mix
Animation
creation and design of SOC 2027 gfx; for videos only
** Includes directional arrows and "screen saver" style event video Color Grading
color correction of final SOC videos.

Assistant Editing
assistant editor to cull through the footage, catalog and assemble editing timeline Audio Engineer
on set audio engineer; (6) days
External Expenses
Director of Photography
(1) camera operator with camera package; (6) days of filming + create look/feel w/ director
B Camera Operator
(1) b camera operator with camera package; (6) days of filming Grip
(2) x grip/gaffer; (6) days + grip truck rentals
Other
Additional crew for filming days for interviews and SOC March 2027 event Music
(12) royalty free music track
Audio/ VO
non-union VO talent; in perpetuity, full-usage buyout for SOC videos, includes VOG recordsings
Photographer
Photographer for SOC March 2027 event; includes full usage buyout of up to (100) finished images
Production Management
Internal Services
Client Communication
no charge
Internal Meeting/Communication
Production Management
scheduling, crew communication pre- and post-shoot
Internal Expenses
Project Archive & Storage
ingest footage and meta-tag, make back-ups, compress footage with timecode for transcribing
Video Production - Event Filming Day
Sponsorship
Internal Services
2 of 3

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
Date: 2026-08-11
Title: Ontario: 2027 State of the City Video Production PKG Estimate #: 12451 40 of 57
251
Pre Production
pre-production for event filming
Director
pre-production and oversight + (1) filming day for SOTC 2027 Event, March 2027 Producer
(1) filming day for SOTC 2027 Event, March 2027
Associate Producer
(1) filming day for SOTC 2027 Event, March 2027
Production Assistant
(1) filming day for SOTC 2027 Event, March 2027
Audio Production
(1) filming day for SOTC 2027 Event, March 2027
Editing
Editing of (1) x up to 90 seconds SOTC Event Highlight Video. Includes up to (2) rounds of revisions, color, gfx pkg and final export for web/tv.

External Expenses
Music
(2) royalty-free music tracks for SOTC Highlight video
Cinematographer
(3) Camera operators for (1) filming day for SOTC 2027 Event, March 2027 Grip
(1) x Grip; (1) filming day for SOTC 2027 Event, March 2027 Sponsorship: State of the City 2027
Internal Services
Sponsorship
Sponsorship: State of the City 2027; [$25,500}
Total $163,888.50
Terms & Conditions
signature printed name date
Approved to proceed and have read and agree with terms and conditions. signature printed name date
3 of 3

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
Date: 2026-08-11
Title: Ontario: 2027 State of the City Video Production PKG Estimate #: 12451 41 of 57
252
Dan Bell, Communications & Community Relations Director City of Ontario
United States
Date: 2026-08-11
Title: ONT: Event Filming & Photography Production PKG Estimate #: 12455 Prepared By: Joann Mercado Hicks
Project Description: Estimate includes the filming and photography of the following events:
(1) x TBD in the 2026 Calendar Year.

Each event includes an edit of (1) x up to 2 minutes highlight video and up to (100) finished photos.

Additional videos, videos and filming days to be estimated separately.

The costs listed in this estimate apply to events scheduled within the 2026 calendar year, provided the event does not land on the Fourth of July or any other federally recognized holiday.

Scope of Work Cost
Video Production
2026 Photography & Production PKG, (1) x TBD Event
The costs listed apply to events scheduled within the 2026 calendar year, provided the event does not fall on the Fourth of July or any other federally recognized holiday.

Internal Services
Pre Production
pre-production
Director
director to oversee shoot and edit
Producer
producer to oversee pre/post production, on location.

Associate Producer
associate producer; on-location
Production Assistant
On-location production assistant + prep
Audio Production
audio syncing, studio time and audio mix
Editing
editing of (1) x up to 2 minutes highlight videos for 2026 (1) x TBD Event. Includes final approved masters formatted for 9x16 Instagram Reels.

Includes footage import, edit, animation, color correction, rendering, exporting and proof uploading. Includes up to (2) round of client revisions per spot. 1 of 2

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
42 of 57
253
Assistant Editing
assistant editor to cull through the footage, catalog and assemble editing timeline External Expenses
Camera Operator
(3) x camera operators w/ camera packages; (1) day of filming Grip
Grip (2) + G&E gear
Photographer
(1) photographer to capture (1) x 2026 TBD Event; includes delivery of up to (100) finished photos.

Music
(3) royalty free music tracks
Production Management
Internal Services
Client Communication
no charge
Internal Meeting/Communication
Production Management
scheduling, crew communication pre- and post-shoot
Internal Expenses
Project Archive & Storage
ingest footage and meta-tag, make back-ups, compress footage with timecode for transcribing
Total $21,475.00
Terms & Conditions
signature printed name date
Approved to proceed and have read and agree with terms and conditions. signature printed name date
2 of 2

ESTIMATE
Windsong Productions
351 O Street
Fresno, CA 93721
TEL. 559.437.3900
Date: 2026-08-11
Title: ONT: Event Filming & Photography Production PKG Estimate #: 12455 43 of 57
254
Department: Economic Development
Prepared By: Charity Hernandez
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 10
SUBJECT: REAL PROPERTY EXCHANGE AGREEMENT BETWEEN THE CITY OF ONTARIO AND

THE ONTARIO-MONTCLAIR SCHOOL DISTRICT

CITY OF ONTARIO
Agenda Report
October 6, 2026
SECTION:

CONSENT CALENDAR
RECOMMENDATION: That the City Council adopt a Resolution:

A. Declaring certain City-owned real property to be exempt surplus land; B. Approving a Real Property Exchange Agreement with Ontario-Montclair School District; C. Authorizing the City Manager to take all actions necessary with respect thereto; and authorize the City Manager or his designee, to finalize and implement non-substantive revisions to the Exchange Agreement, and execute and implement any and all contracts, agreements, and other documents required to effectuate the Agreement; and D. Finding that no further California Environmental Quality Act analysis is necessary.

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: As this is an even exchange of properties, there is no fiscal impact associated with this action.

BACKGROUND & ANALYSIS: On February 24, 2025, the City of Ontario (City) and the OntarioMontclair School District (OMSD) executed a Letter of Intent (LOI) to explore the viability of exchanging properties for the purpose of expanding the City of Ontario’s Civic Center Campus while enabling OMSD to relocate its District Headquarters to Downtown Ontario. This LOI enabled the City and OMSD an opportunity to negotiate terms in good faith.

The City, for its part, envisions a robust Civic Center Campus – one that modernizes facilities for public employees, brings more people to the downtown area, and better utilizes all space in the downtown core. The City expansion project (Expansion Project) includes the Ontario MontclairSchool District Headquarters, a modern City Services Building, which would centralize and expand City Hall services, a 865-space parking structure, and a new state-of-the-art fire station. The parking 255
structure was completed earlier this year and the new City Services Building is under construction with an anticipated completion date of August 2027.

With the City and OMSD negotiations completed, the next step is to enter into a Real Property Exchange Agreement and Joint Escrow Instructions (Agreement). City Staff is recommending the following terms that would ultimately result in the exchange between one City-owned parcel and associated parking for one OMSD-owned parcel.

OMSD agrees to deed to the City a vacant 13.46-acre site zoned medium density residential located at 1375 East 6th Street on the northeast corner of 6th Street and Amador Avenue (APN: 0108-461- 01, 02, 03 and 04) (OMSD Property). The exchange of this site will enable the City to expand required housing stock north of the 1-10 Freeway. The future development may include a lowmoderate income residential project adding much need affordable housing to this area of the City.

In exchange for 1375 East 6th Street, the City will agree to convey the current City Hall Annex Building located at 200 North Cherry Avenue and former Fire Station No. 1 located at 425 East B Street (APN:1048-545-16) (City Property) to OMSD. The site encompasses 0.59-acres and a 47,500 square foot three-story office building. The Agreement also includes a Parking License that runs for 99 years, allowing OMSD exclusive use of 200 parking spaces in the new Civic Center parking structure. Upon completion of the new City Services Building and relocation of the City services housed in the current City Hall Annex, OMSD will move their current District Headquarters, ancillary uses, and all personnel to the City Property.

One term to note is that if the City sells the OMSD Property in the future, the City agrees to a 50/50 split of any profits generated from such sale with OMSD.

The City Property, to the extent is no longer necessary for the City’s use, is exempt from the Surplus Land Act, pursuant to Section 54221(f)(1)(C) of the Surplus Land Act.

In summary, the proposed exchange of the properties is in the City's best interest because it achieves the City's goals of attracting workforce population to the downtown area, removing blight, activating underutilized assets in the City, and incentivizing the development of a pipeline of talent that adds more high paying wage jobs to the City. Therefore, Staff recommends that the City Council approve and enter into this Real Property Exchange Agreement and Joint Escrow Instructions.
256
RESOLUTION NO. _______

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

CALIFORNIA, (I) DECLARING CERTAIN CITY-OWNED REAL
PROPERTY TO BE EXEMPT SURPLUS LAND; (II) APPROVING AN

EXCHANGE AGREEMENT AND JOINT ESCROW INSTRUCTIONS WITH
THE ONTARIO-MONTCLAIR SCHOOL DISTRICT; (III) AUTHORIZING

THE CITY MANAGER TO TAKE ALL ACTIONS NECESSARY WITH
RESPECT THERETO; AND (IV) FINDING THAT NO FURTHER CEQA
ANALYSIS IS NECESSARY.

WHEREAS, the City of Ontario (the “City”) owns in fee simple approximately 2.569 acres of real property identified as Assessor’s Parcel Number 1048-545-16, located at 425 East B Street, Ontario, California 91764, and improved with an approximately 43,000- square-foot building commonly known as the City Hall Annex Building (the “City Property”), provided that the portion of the City Property described and identified in Exhibit E to the Agreement defined below (the “Excluded Portion”) will remain with the City and will not be conveyed as part of the exchange; and
WHEREAS, the Ontario-Montclair School District (the “District”) owns in fee simple four vacant parcels of land identified as Assessor’s Parcel Numbers 0108-461-01, 0108-461-02, 0108-461-03, and 0108-461-04, totaling approximately 13.46 acres and generally bounded by 6th Street to the south and Amador Avenue to the west (collectively, the “District Property”); and
WHEREAS, the District desires to acquire the City Property to relocate certain administrative departments from the Briggs Educational Center located at 950 West D Street, Ontario, California 91762, and to obtain a license to use approximately two hundred (200) parking spaces in a multi-level parking structure developed by the City (the “Parking License”), which uses directly further the District’s work and operations; and WHEREAS, the City and the District desire to exchange the City Property, excluding the Excluded Portion, for the District Property, and the City desires to grant the Parking License to the District as additional consideration for the exchange, pursuant to the terms and conditions of that certain Exchange Agreement and Joint Escrow Instructions, substantially in the form attached hereto as Exhibit A and on file with the City Clerk (the “Agreement”); and
WHEREAS, the Agreement requires the parties to comply with Education Code section 17536 et seq., the Surplus Land Act (Government Code section 54220 et seq.) (the “Act”), and the Final Updated Surplus Land Act Guidelines dated August 1, 2024, and provides that the exchange will not proceed unless the California Department of Housing and Community Development approves, or is deemed to have approved, the District’s exempt surplus land declaration as provided in the Agreement; and 257
WHEREAS, the City Property to be conveyed under the Agreement is not necessary for the City’s use, and the District will acquire and use the City Property for an agency use that directly furthers the express purpose of the District’s work and operations; and
WHEREAS, the City has determined, pursuant to Government Code sections 37350 and 37351, that exchanging the City Property, excluding the Excluded Portion, for the District Property and granting the Parking License pursuant to the Agreement are for the common benefit and in the best interests of the City and its residents; and

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

SECTION 1. Recitals. The above recitals are true and correct and incorporated into this Resolution by reference.

SECTION 2. Finding of Exemption from Surplus Land Act. Based on the written findings set forth in this Resolution, the City Council hereby declares that the City Property, excluding the Excluded Portion, is not necessary for the City’s use and is exempt surplus land pursuant to Government Code section 54221(f)(1)(D) because it will be transferred to the District, another local agency, for the District’s agency use. The City Council further finds that the District’s use of the City Property to house its administrative departments directly furthers the express purpose of the District’s work and operations within the meaning of Government Code sections 54221(c)(1) and 54221(c)(2)(B)(i).

SECTION 3. Approval of Agreement. The City Council hereby approves the Agreement, including the form of Parking License Agreement attached as Exhibit D thereto, in substantially the form attached hereto as Exhibit A and on file with the City Clerk, subject to the approval or deemed approval of the California Department of Housing and Community Development as provided in the Agreement and together with such additions thereto and changes therein as the City Attorney shall deem necessary, desirable, or appropriate, the execution of which by the City Manager shall be conclusive evidence of the approval of any such additions and changes.

SECTION 4. City Manager Authorization. The City Manager is hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest to, the final form of the Agreement for and in the name and on behalf of the City.

The City Council hereby authorizes the delivery and performance of the Agreement and the transactions contemplated thereby. The City Manager and the City Manager’s designees are hereby authorized and directed, in consultation with City staff and the City Attorney, to execute and deliver the Parking License, grant deeds, escrow instructions, certificates, and any other documents, and to take any and all actions, that they may deem necessary or advisable to effectuate the purposes of this Resolution and consummate the transactions contemplated by the Agreement, including accepting conveyance of the District Property on behalf of the City. Any such actions previously taken by such officers are hereby ratified and confirmed. 258
SECTION 5. CEQA. The City Council finds that the declaration of the City Property, excluding the Excluded Portion, as exempt surplus land under the Act, approval of the Agreement, and authorization of the actions described in this Resolution do not constitute a “project” as defined in California Code of Regulations, title 14 (the “CEQA Guidelines”), section 15378 because those actions do not approve or commit the City to any specific development project and, standing alone, have no potential to result in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. In the alternative, even if such actions constitute a project, they are exempt under CEQA Guidelines section 15061(b)(3) because there is no possibility that they may have a significant effect on the environment. Any future discretionary approval for development of either property is not approved by this Resolution and will be subject to any environmental review required by the California Environmental Quality Act (Public Resources Code section 21000 et seq.).

SECTION 6. Effective Date. This Resolution shall take effect upon adoption.

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

PASSED, APPROVED, AND ADOPTED this 6
th day of October, 2026.
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
____________________________________

BEST BEST & KRIEGER, LLP

CITY ATTORNEY
259

STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )
I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that the foregoing Resolution No. 2026-____ was duly passed and adopted by the City Council of the City of Ontario at its regular meeting held October 6, 2026, 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. 2026-____ duly passed and adopted by the Ontario City Council at its regular meeting held October 6, 2026. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
260

EXCHANGE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS
Between

ONTARIO-MONTCLAIR SCHOOL DISTRICT
and

CITY OF ONTARIO
[City Hall Annex Building]
Effective Date: September ____, 2026
261

EXCHANGE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

THIS EXCHANGE AGREEMENT AND JOINT ESCROW INSTRUCTIONS
(“Agreement”) is entered into this _____ day of September 2026 (“Effective Date”) by and between the ONTARIO-MONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and the laws of the State of California (“District”) and the CITY OF ONTARIO, a California municipal corporation (“City”).

District and City are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”

RECITALS
A. WHEREAS, District is the owner in fee of real property consisting of four (4) vacant parcels of land identified with assessor’s parcel numbers (“APN”) 0108-461-01, 0108-461-02, 0108-461-03, and 0108-461-04, totaling approximately 13.46 acres, generally bounded by 6th Street to the south and Amador Avenue to the west, as more particularly described and delineated in Exhibit “A” attached hereto and incorporated herein by reference (“District Property”). The District Property shall include District’s right, title and interest, if any, in permits, utility agreements, entitlements, fixtures, equipment, approvals, reports, studies, and architectural and engineering work completed to date.

B. WHEREAS, City is the owner in fee of real property consisting of approximately

2.569-acres of land identified with APN 1048-545-16, located at 425 East B Street, Ontario, California 91764, on which is improved with an approximately 43,000-square-foot building commonly known as the City Hall Annex Building (“Annex Building”), as more particularly described and delineated in Exhibit “B” attached hereto and incorporated herein by reference (“City Property”). The City Property shall include City’s right, title and interest, if any, to all permits, utility agreements, entitlements, fixtures, equipment, approvals, reports, studies, and architectural and engineering work completed to date. District Property and City Property are sometimes hereinafter referred collectively as the “Properties.” C. WHEREAS, City has developed a multi-level parking structure at the real property consisting of approximately ____ identified with APN ______, located at _____________, (“Parking Structure”) (as more particularly described in Exhibit “C”), and as part of the consideration for the exchange, City shall grant District certain rights to use a portion of the Parking Structure pursuant to a separate parking license agreement (defined below).

D. WHEREAS, the Parties have agreed to exchange ownership of the respective Properties in accordance with the processes set forth herein and pursuant to the requirements set forth in Education Code section 17536 et seq. and the Surplus Land Act (“SLA” – as further defined below).

E. WHEREAS, District desires to acquire the City Property for relocating certain administrative departments from Briggs Educational Center located at 950 West D Street, Ontario, California 91762, to the City Property, and to obtain the Parking License, which constitutes a valid agency use pursuant to provisions of the SLA - Government Code sections 54221(c)(1), 54221(c)(2)(B), and 54221(f)(1)(C), as such use will directly further the District’s work and operations. Thus, District finds that the proposed exchange qualifies for exemption from the SLA. _____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 1 262
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 2

AGREEMENT
NOW, THEREFORE, based upon the foregoing Recitals, which are incorporated herein by this reference, and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, District and City agree as follows:

1. EXCHANGE OF DISTRICT PROPERTY AND CITY PROPERTY.

1.1. Agreement to Exchange. Subject to all the terms, conditions, and provisions of this Agreement, and for the consideration herein set forth, District and City agree to exchange the District Property and the City Property (“Property Exchange”), respectively, each including, without limitation, such Party’s interest in all mineral, oil, gas, and other hydrocarbon substances on and under the Properties as well as all development rights, air rights, water, water rights, and water stock relating to the Properties and any other easements, rights-of-way, or appurtenances used in connection with the beneficial use and enjoyment of the Properties. In addition to conveyance of the City Property, City shall provide District with a Parking License as additional consideration for the exchange.

1.2. Portion of City Property Excluded from Exchange. Notwithstanding anything to the contrary contained herein, the Parties agree that the portion of the City Property more particularly described and identified in Exhibit E attached hereto and incorporated herein by reference (the "Excluded Portion") shall be expressly excluded from the Property Exchange contemplated under this Agreement. Title to, ownership of, and all rights and interests in the Excluded Portion shall remain with the City and shall not be conveyed, transferred, exchanged, assigned, or otherwise included as part of the consideration or subject matter of the property exchange. The Parties shall take all necessary actions and execute such documents as may be required to ensure that the Excluded Portion is omitted from any deed, conveyance instrument, survey, or other document effectuating the exchange.

1.3. District Property Price. The District Property Price shall be determined by a mutually agreed-upon appraisal conducted in 2026 (“District Property Appraisal”) by a Member of the Appraisal Institute (MAI) appraiser mutually selected by the Parties (“Appraiser”). Any prior appraisal or valuation data shall not be binding, or have any further meaning, effect, or applicability to this Agreement. The District Property Appraisal shall assume final approval by all required government entities of the legal permissions including, without limitation, zoning, permits, entitlements, and environmental review (“City Entitlements”) necessary for the development and use of the District Property as ___________ (“City Project”). The Parties acknowledge that the District Property Appraisal assumes that the City Entitlements will permit the construction by City of Ontario of the City Project.

1.4. City Property Price. The value of the City Property shall be determined based upon a mutually agreed-upon appraisal conducted by an Appraiser in 2026 (“City Property Appraisal”). The City Property Appraisal assumes Final Approval of the City Entitlements for the City Project.

1.4.1. As additional consideration, City shall grant District rights to use a portion of the Parking Structure pursuant to a Parking License Agreement. The Parties agree that the Parking License Agreement shall provide approximately two hundred (200) parking spaces, subject to final design and allocation, and shall be 263
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 3 substantially in the form of Exhibit “D” attached hereto (the “Parking License”).

The value of the Parking License shall be determined pursuant to a mutually agreedupon appraisal conducted in 2026 by an Appraiser (the “Parking License Appraisal”).

1.4.2. The aggregate values determined by the City Property Appraisal and the Parking License Appraisal shall collectively constitute the “City Property Price.”

1.5. Appraisal. The Parties shall jointly select a mutually acceptable Appraiser to conduct both the District and City Property appraisals, including the valuation of the Parking License. The Parties shall confer in good faith to agree upon such Appraiser within a reasonable period of time. If the Parties cannot agree within such period, each Party shall select an Appraiser and the two Appraisers shall select a third Appraiser who shall perform the appraisal and whose determination shall be final. The appraisals shall determine fair market value of the District Property, the City Property, and the License in accordance with generally accepted appraisal standards and methodologies at or near the time of the exchange.

1.6. Meet and Confer Value Equalization Process.

1.6.1. This Section (Meet and Confer Value Equalization Process)shall apply only if the District Property Price exceeds the City Property Price by ten percent (10%) or more. Upon the occurrence of such event, all provisions of this Section shall immediately become effective and be enforceable by the Parties.

1.6.2. If the District Property Price does not exceed the City Property Price by ten percent (10%) or more, this Section (Meet and Confer Value Equalization Process) shall be null and void and of no further force or effect. The District Property Appraisal, City Property Appraisal and Parking License Appraisal shall be final, binding, and controlling for purposes of determining the District Property Price and City Property Price, respectively.

1.6.3. Within thirty (30) days of the Parties’ receipt of the District Property Appraisal, City Property Appraisal and Parking License Appraisal the District may deliver written notice requesting a meet-and-confer session (“Notice”). Within sixty (60) days following receipt of the Notice (the “Meet and Confer Period”), the City Manager and the District Superintendent shall promptly meet and confer in good faith to establish a mutually agreed valuation adjustment formula or other mechanism to equalize the value disparity between the City Property Price and the District Property Price (the “Valuation Adjustment Formula”).

1.6.4. If, after the Meet and Confer Period, the Parties do not agree upon a Valuation Adjustment Formula, Section 5.4 (Future Sale Participation) and all other terms and conditions of this Agreement shall immediately, without further written notice, remain fully enforceable, and the Parties shall continue to work in good faith to close escrow and finalize the Exchange Agreement.
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1.6.5. If, after the Meet and Confer Period, the Parties do agree upon a Valuation Adjustment Formula, the Parties shall memorialize such agreement in a written amendment to this Agreement, subject to approval by the governing bodies of both the City and the District and execution by their duly authorized representatives.

1.7. No Deposits. The Parties acknowledge and agree that no earnest money, security deposit, or other form of deposit shall be required or made by either Party in connection with this Agreement. Each Party expressly waives any requirement for a deposit, and the obligations of the Parties hereunder are not contingent upon payment or receipt of any such deposit.

1.8. Education Code/Surplus Land Act. The Parties agree to comply with and take all actions required by California Education Code section 17536 et seq. for the Property Exchange.

The Parties shall further comply with and take all actions required by Government Code section 54220 et seq. and the related Final Updated Surplus Land Act Guidelines dated August 1, 2024 (“SLA Guidelines”), for the District Property to be deemed “exempt surplus land” for exchange to City in accordance with Government Code sections 54221(f)(1)(C) and/or 54221(f)(1)(D).

Without limiting any of the other terms of this Agreement, District agrees that the City Property will be acquired by District solely for its “Agency Use” as defined in Government Code section 54221(c)(2)(B). District shall provide City with no indemnity from any claims, actions, losses, or liabilities made against or suffered by City by reason of SLA compliance, except to the extent a claim results solely from District’s intentional misconduct, including District’s failure to comply with any decision by the California Department of Housing and Community Development (“HCD”) regarding this Agreement after the District submits its SLA Resolution to HCD for final approval in accordance with Sections 103(e) and 400(e) of the SLA Guidelines. Without limiting the foregoing, within ninety (90) days after the Effective Date, District’s Board of Trustees (“Board”) shall consider adopting a resolution finding that the District Property is “exempt surplus land” in accordance with Government Code sections 54221(b)(1), 54221(f)(1)(C) (or 54221(f)(1)(D)), and 54221(c)(2)(B)(i) (“SLA Resolution”) and approve the Agreement (subject to HCD Approval, defined below), and deliver a copy of the SLA Resolution to HCD in accordance with Sections 103(e) and 400(e) of the SLA Guidelines, and shall take all other actions required by HCD for HCD’s approval or deemed approval of the SLA Resolution (“HCD Approval”).

District agrees that no affordable housing covenant or restriction under Government Code sections 54233 or 54233.5 shall be recorded against the District Property before the Closing; provided, however, that the City Project shall be subject to any inclusionary housing requirements, if any, of the City. District, prior to the Effective Date, has submitted a draft of the SLA Resolution and this Agreement to HCD’s Technical Assistance staff for informal review. Last, the City Property shall satisfy the requirements set forth in Title 5 of the California Code of Regulations section 14010 et seq.

1.9. Community Outreach. As part of the Agreement, the Parties shall negotiate and agree upon a community outreach program, which shall include a proposed plan for conducting outreach to various community groups and stakeholders for educating and soliciting input from the public with respect to the City Project, and for informing the Board, regulatory agencies, and stakeholders about the City Project during the term of the Agreement (“Community Outreach Program”). All public communications relating to the District Property or the proposed exchange shall be subject to prior review by the District, and nothing herein shall limit the District’s authority to conduct public outreach consistent with its obligations under the Brown Act and Education Code.
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2. INSPECTIONS AND REVIEW/ENTITLEMENTS.

2.1. Delivery of Due Diligence Materials. Within ten (10) days of the Effective Date, the Parties shall deliver to the other Party, without representation or warranty of completeness or accuracy, copies of the documents, reports, agreements, or other items in their respective possession or control relating to the Properties and which may include the following (collectively, “Due Diligence Materials”): (i) all licenses, leases, and permits affecting or relating to the ownership, subdivision, possession, or development of the Properties or the construction of improvements thereon, and all amendments and modifications thereto; (ii) applications and correspondence or other written communications to or from any governmental entity, department, or agency, regarding any permit, approval, consent, or authorization with respect to the development of the Properties or the construction of improvements thereon; (iii) the most recent survey, if any, pertaining to the Properties or any portion thereof; and (iv) soils reports, engineering data, environmental reports, and other data or studies pertaining to the Properties or any portion thereof that have not been previously delivered to the other Party. The Parties shall deliver to the other Party, without representation or warranty of completeness or accuracy, copies of all Due Diligence Materials relating to the Properties. Any Due Diligence Materials shall be provided to the other Party without any recourse or liability of any type or nature. Each Party assumes all risk of any kind with regard to the use of and reliance upon any of the Due Diligence Materials provided by the other Party. Neither Party is relying upon the other Party for any information related to, concerning, or involving the respective Properties for this Exchange, including, without limitation, the fair market value of the Properties.

2.2. Inspections. During the term of this Agreement, the Parties and their representatives, agents, engineers, consultants, contractors, and designees shall have the continuing right to enter onto the Properties after a minimum of two (2) business days’ prior written notice to the other Party, for the purposes of examining, inspecting, and investigating the Properties, including the site, soil, subsurface soils, drainage, seismic, and other geological and topographical matters, location of asbestos, toxic substances, hazardous materials, or wastes, if any, and, at each Party’s sole and absolute discretion, determining whether the Properties are acceptable, in accordance with that certain Right of Entry Agreement dated as of ___________ (“Entry License Agreement”) attached hereto and made a part hereof as Exhibit “F”. City and District hereby confirm the Entry License Agreement and agree that the term of the Entry License Agreement is hereby extended and shall remain in effect for the term of this Agreement, notwithstanding anything to the contrary set forth in the Entry License Agreement. In the event any provision of the Entry License Agreement conflicts with any provision herein, the terms of the Entry License Agreement shall control.

2.2.1. Each Party shall, in a timely manner, repair any and all damage to the respective Properties caused by any such inspection or investigation described herein, to a condition substantially the same as the condition of the respective Property prior to such inspection or investigation. Further, the indemnity and release and waiver terms of the Entry License Agreement shall apply to City in the case of its due diligence activities under this Section 2 with regards to the District Property and shall likewise apply to District in the case of its due diligence activities under this Section 2 with regards to the City Property. The foregoing indemnities shall survive the close or the termination of this transaction.
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2.3. As-Is. Based on the inspection rights set forth in the preceding paragraph and in reliance on the due diligence of each Party, the District and City acknowledge and agree that, except for the limited warranties and representations expressly set forth in this Agreement, the Exchange is made solely on an AS-IS, WHERE-IS BASIS, WITH ABSOLUTELY NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED. But for the foregoing understanding and agreement, the Parties would not have entered into this transaction. Each Party acknowledges that because of the expertise, experience and business acumen of both Parties and their respective consultants, each Party has the ability to conduct a complete and thorough due diligence of the respective Properties and would not close the transaction unless satisfied, in its sole discretion, with the condition of the respective Properties.

2.4. Due Diligence/Disapproval/Termination. The Parties shall have one hundred twenty (120) days after the Opening of Escrow during which the Parties shall be provided access to the Properties to review all of the Due Diligence Materials for the Properties, review the results of their inspections and testing of the Properties and otherwise determine the feasibility of the Properties (“Parties’ Due Diligence Period”). On or before the expiration of the Parties’ Due Diligence Period, each Party shall deliver to the other Party and Escrow Holder written notice of the Party’s approval or disapproval of the feasibility of the Properties (the “Party’s Due Diligence Notice”). If a Party’s Due Diligence Notice disapproves the feasibility of the Properties, or if a Party fails to timely deliver the Party’s Due Diligence Notice on or before the expiration of the Parties’ Due Diligence Period, then that Party shall be conclusively deemed to have disapproved the feasibility of the Properties and this Agreement shall terminate and neither Party shall have any further rights or obligations under this Agreement, except those expressly stated to survive termination.

2.4.1. During the term of this Agreement, District shall use its good faith efforts to conduct and complete its due diligence as to the City Property in sufficient time to permit the Closing of the Exchange to occur by the Closing Date (“District Due Diligence Period”).

2.5. Title Review.

2.5.1. City shall obtain a preliminary title report for the District Property current as of the Effective Date, together with copies of all written instruments creating the exceptions specified therein, and plat maps plotting all easements specified therein (collectively, “City Title Report”). City shall notify District in writing (“City’s Title Objection Notice”) within sixty (60) days after the Effective Date of any objections City may have to the title exceptions contained in the City Title Report for the District Property. City’s failure to provide District with City’s Title Objection Notice within said period shall constitute City’s approval of all exceptions to title shown on the Title Report for the District Property. District shall have a period of ten (10) days after receipt of City’s Title Objection Notice in which to deliver written notice to City of District’s election to either: (i) agree to remove or cure the objected-to items prior to the Close of Escrow, or (ii) decline to remove or cure any such title exceptions. If District notifies City of its election to not remove and cure the objected-to items, City shall have the right to either accept the District Property subject to the objected-to items or to terminate the Escrow under Section 2.4. For the purpose of this paragraph, District’s cure of any title objections 267
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 7 may include the acquisition by District, at District’s expense, of a title insurance endorsement related to the objected to exception reasonably acceptable to City.

2.5.2. Upon the issuance of any amendment or supplement to the Title Report for the District Property which adds additional exceptions, or adds any new requirement, the foregoing right of review and approval shall also apply to said amendment or supplement; provided, however, that City’s initial period of review and approval or disapproval of any such additional exceptions shall be limited to fifteen (15) days following City’s and its counsel’s receipt of the instrument(s) creating such additional exceptions.

The foregoing extension shall only be allowed for and pertain to the review of any new matter and City shall not be entitled to object to any previously known exception or requirement for which the time for objection has already come and passed.

2.5.3. For the City Property, in reciprocal fashion, District shall notify City in writing (“District’s Title Objection Notice”) within sixty (60) days of its receipt of a preliminary title report for the City Property, together with copies of all written instruments creating the exceptions specified therein, and plat maps plotting all easements specified therein (the “District Title Report”). District’s failure to provide City with District’s Title Objection Notice within said period shall constitute District’s approval of all exceptions to title shown on the Title Report for the City Property. City shall have a period of ten (10) days after receipt of District’s Title Objection Notice in which to deliver written notice to District of City’s election to either (i) agree to remove or cure the objected to items prior to the Close of Escrow, or (ii) decline to remove or cure any such title exceptions. If City notifies District of its election to not remove and cure the objected-to items, District shall have the right to either accept the City Property subject to the objected to items or to terminate the Escrow under Section 2.4. For the purpose of this paragraph, City’s cure of any title objections may include the acquisition by City at City’s expense a title insurance endorsement related to the objected-to exception reasonably acceptable to the District.

2.5.4. Upon the issuance of any amendment or supplement to the Title Report for the City Property which adds additional exceptions, or adds any new requirement, District’s foregoing review and approval rights shall also apply to said amendment or supplement; provided, however, that District’s initial period of review and approval or disapproval of any such additional exceptions shall be limited to fifteen (15) days following District’s and its counsel’s receipt of the instrument(s) creating such additional exceptions.

The foregoing extension shall only be allowed for and pertain to the review of any new matter and District shall not be entitled to object to any previously known exception or requirement for which the time for objection has already come and passed.
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3. ESCROW.

3.1. Opening of Escrow. Within five (5) business days following District’s receipt of HCD Approval, the Parties shall execute this Agreement and deliver fully executed counterparts to Escrow Holder, at which time Escrow shall be deemed opened (“Opening of Escrow”). The Parties shall open an escrow (“Escrow”) with First American Title Company (“Escrow Holder”), located at 4210 Riverwalk Parkway, Suite 200, Riverside, California 92505, attn. ___________, Escrow Officer, email address: ___________, and telephone number ___________, by causing an executed copy of this Agreement to be deposited with Escrow Holder. Escrow Holder shall provide the Parties with written confirmation of the date of the Opening of Escrow in accordance with Section 8.3. Fidelity National Title Company (“Title Company”) shall also provide title insurance services related to this Agreement.

3.2. Close of Escrow; Closing Date. Escrow shall close no later than thirty (30) days after the Parties Due Diligence Notice is received approving the Properties (“Closing Date”).

3.3. Escrow Instructions. This Agreement, together with any standard instructions of Escrow Holder, shall constitute the joint escrow instructions of District and City to Escrow Holder as well as an agreement between District and City. In the event of any conflict between the provisions of this Agreement and Escrow Holder’s standard instructions, this Agreement shall prevail.

3.4. Deliveries by City. No later than 10:00 am on the Closing Date, City shall deliver to Escrow Holder:
(a) A grant deed in the form of Exhibit “G” attached to this Agreement (“City Property Grant Deed”) conveying to District, City’s fee simple title to the City Property, duly executed and acknowledged by City;
(b) A certificate of non-foreign status in the form attached hereto as Exhibit “H” and California Franchise Tax Board Form 590-RE, each executed by City;
(c) Any and all other sums and documents required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement, including City’s portion of prorations, if any, and the City Closing Payment (if applicable).

3.5. Deliveries by District. No later than 1:00 p.m. on the business day preceding the Closing Date, District shall deliver to Escrow Holder:
(a) A grant deed in the form of Exhibit “I” attached to this Agreement (“District Property Grant Deed”) conveying to City, District’s fee simple title to the District Property, duly executed and acknowledged by District; (b) A Public Agency Certificate of Acceptance for the City Property Grant Deed in the form attached hereto as Exhibit “J”;
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_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 9 (c) A certificate of non-foreign status in the form attached hereto as Exhibit “K” and California Franchise Tax Board Form 590-RE, each executed by District;
(d) All other sums and documents required by Escrow Holder to carry out and close the Escrow pursuant to this Agreement, including the Escrow fees and District’s portion of prorations, if any, and the District Closing Payment (if applicable).

3.6. Closing, Recording, and Disbursements. On or before the Closing Date, and when all of the conditions precedent to the Close of Escrow set forth in Section 4 have been satisfied or waived in writing, Escrow Holder shall take the actions set forth herein.

3.6.1. Recording. Escrow Holder shall cause the City Property Grant Deed and District Property Grant Deed (collectively, “Grant Deeds”) to be recorded in the Office of the County Recorder of the County in which the Properties are located.

3.6.2. Disbursement of Funds. Escrow Holder shall either disburse or hold the City Closing Payment, less prorations chargeable to District, if any, in accordance with the District’s instructions, or, if applicable, disburse any District Closing Payment to City.

3.6.3. Title Policy. Escrow Holder shall deliver to both Parties a commitment to issue Title Policies for the respective Properties, as referred to in Section 4.

3.6.4. Delivery of Documents to District and City. Escrow Holder shall deliver to the respective Parties, a conformed copy of the respective Grant Deeds, and any other documents (or copies thereof) deposited by the other Party with Escrow Holder pursuant to this Agreement. The originals of the Grant Deeds shall be returned to the respective Parties after recordation.

3.6.5. Real Property Taxes. All non-delinquent general and special real property taxes and assessments shall be prorated as of the Close of Escrow.

3.7. Payment of Costs. The District shall pay all applicable documentary transfer taxes and costs associated with recording the District Property Grant Deed for the District Property. City shall pay all title insurance premiums for the ALTA standard owner’s form policy for the District Property, and City shall pay all charges associated with the title insurance premium for any additional cost of obtaining any additional coverage requested by City, including the difference between an ALTA standard owner’s policy and an ALTA extended owner’s policy. City shall pay all applicable documentary transfer taxes and costs associated with recording the City Property Grant Deed. District shall pay all title insurance premiums for the ALTA standard owner’s form policy for the City Property, and District shall pay all charges associated with the title insurance premium for any additional cost of obtaining any additional coverage requested by District, including the difference between an ALTA standard owner’s policy and an ALTA extended owner’s policy. The Parties shall pay the Escrow fees and any Escrow Holder’s termination fees, in equal shares, unless one Party is solely in default and upon such default, in which event, the defaulting Party shall be solely liable for all Escrow costs and fees. The Parties shall each be 270
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 10 responsible for their respective attorneys’ fees. All other costs of Escrow not specifically allocated in this Agreement shall be prorated as of the Close of Escrow, if applicable, and otherwise paid in equal amounts by the Parties.

4. CONDITIONS PRECEDENT TO CLOSE OF ESCROW.

4.1. Conditions to District’s Obligations. District’s obligation to exchange for the City Property, upon the Close of Escrow, shall be subject to the satisfaction or written waiver by District of each of the conditions precedent set forth herein.

4.1.1. City’s Performance. City is not in material default of any term or condition of this Agreement. In the event District alleges that City is in material default, District shall notify City in writing and describe the alleged default in detail. City shall have a reasonable time, but not less than fifteen (15) days, to cure any alleged default.

4.1.2. City Deliveries Made. City has deposited with Escrow Holder all documents required of City by this Agreement.

4.1.3. Title Policy. Title Company has committed to issue to District an ALTA standard, or at District’s choice, an ALTA extended coverage owner’s policy of title insurance (“District’s Title Policy”), with liability in the amount of the City Property Price, or greater if required in District’s sole discretion, showing fee title to the City Property vested in the District, subject only to:
(a) The standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company; title exceptions approved by District pursuant to Section 2 of this Agreement;
(b) Title exceptions resulting from documents being recorded or delivered through Escrow pursuant to this Agreement; and (c) Any other exceptions approved in writing by District in its sole and absolute discretion.
(d) No mechanic’s liens, monetary encumbrances, or financing liens affecting the City Property shall remain unsatisfied at Closing other than those approved by District as District Permitted Exceptions.

The terms of sub-sections (a) through (d), inclusive, being herein collectively referred to as the “District Permitted Exceptions”.

4.1.4. Representations and Warranties. All representations and warranties made by City in this Agreement, to City’s actual knowledge, are true and correct as of the Closing as though made at that time.

4.1.5. City Property Condition. City Property must: a) comply with Government Code 54221(f)(1)(C) and/or (D), as applicable; (b) be capable of satisfying 271
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 11 the applicable requirements of Title 5 of the California Code of Regulations, including Section 14010 et seq.; and (c) be free and clear of monetary liens and encumbrances other than non-delinquent taxes and District-approved exceptions.

4.1.6. Parking Structure Condition. City shall demonstrate that the Parking Structure is constructed to a stage reasonably acceptable to District, and is available for District use in accordance with the Parking License at or before Closing, as applicable.

4.2. Conditions to City’s Obligations. City’s obligation to exchange for the District Property, upon the Close of Escrow, shall be subject to the satisfaction or written waiver by City of each of the conditions precedent set forth in this Section 4.

4.2.1. District’s Performance. District is not in material default of any term or condition of this Agreement. In the event City alleges that District is in material default, City shall notify District in writing and describe the alleged default in detail. District shall have a reasonable time, but not less than fifteen (15) days, to cure any alleged default.

4.2.2. District Deliveries Made. District has deposited with Escrow Holder all documents required of District by this Agreement.

4.2.3. Title Policy. Title Company has committed to issue to City an ALTA standard, or at City’s choice, an ALTA extended coverage owner’s policy of title insurance (“City’s Title Policy”), with liability in the amount of the District Property Price, showing fee title to the District Property vested in City, subject only to:
(a) The standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company; (b) Title exceptions approved by City pursuant to Section 2 of this Agreement;
(c) Title exceptions resulting from documents being recorded or delivered through Escrow pursuant to this Agreement; and (d) Any other exceptions approved in writing by City in its sole and absolute discretion. The terms of sub-sections (a) through (d), inclusive, being herein collectively referred to as the “City Permitted Exceptions”.

4.2.4. Representations and Warranties. All representations and warranties made by District in this Agreement, to District’s actual knowledge, are true and correct as of the Closing as though made at that time.

4.2.5. Education Code/Surplus Land Act. The completion by District of all of its requirements under this Agreement, including obtaining HCD Approval. 272
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4.3. Mutual Conditions. The obligations of each Party to consummate the Exchange are conditioned upon satisfaction or waiver of the following:

4.3.1. Completion or near-completion of construction of the new Annex to a stage reasonably acceptable to District;

4.3.2. Completion and mutual acceptance of updated appraisals of the Properties conducted by a mutually agreed upon Appraiser in 2026; and

4.3.3. Completion of an updated financial feasibility analysis based on the appraisals, reasonably acceptable to each Party.

4.4. Hazardous Materials; Environmental Compliance. As a result of the Parties’ respective inspections pursuant to Section 2, each Party intends to satisfy itself that the District Property and City Property, as applicable, is not in violation of any federal, state, or local law, ordinance, or regulation relating to Hazardous Materials, industrial hygiene, or to the environmental conditions on, under, or about the respective District Property or City Property, or any portion thereof, including, but not limited to, soil and groundwater conditions (“Environmental Laws”). If, at any time prior to the expiration of the Parties’ Due Diligence Period, a Party determines that the Properties, or any portion thereof, is in violation of any Environmental Laws, that Party may elect to terminate this Agreement and cancel the Escrow by delivering written notice to that effect to the other Party and Escrow Holder, thereby rendering this entire Agreement invalid, void, and unenforceable. The term “Hazardous Materials” when used in this Agreement shall mean any hazardous waste, hazardous substance, hazardous materials or toxic substances as defined, as of the Closing Date, in any federal, state, or local statute, ordinance, rule, or regulation applicable to the Property, including, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (Title 42 United States Code Sections 9601-9675), the Resource Conservation and Recovery Act (Title 42 United States Code Sections 6901-6992k), the Carpenter-Presley-Tanner Hazardous Substance Account Act (Health and Safety Code Sections 25300-25395), Hazardous Waste Control Law (Health and Safety Code Section 25100-25250.25); the Hazardous Materials Transportation Act, as amended (Title 49 United States Code Sections 1801-1819); and any substance defined as “hazardous waste” in Health and Safety Code Section 25117 or as a “hazardous substance” in Health and Safety Code Section 25316, and in the regulations adopted and publications promulgated under these laws. “Hazardous Materials” shall also include asbestos or asbestos-containing materials, radon gas, and petroleum or petroleum fractions, whether or not defined as a hazardous waste or hazardous substance in any such statute, ordinance, rule, or regulation as of the Closing Date.

4.5. Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by District or City, each Party shall use its diligent, best efforts, in good faith, and at its own cost, to satisfy such condition. Where satisfaction of any of the foregoing conditions requires the approval of a Party, such approval shall be in such Party’s sole and absolute discretion.

4.6. Waiver. District may at any time or times, at its election, waive any of the conditions set forth in Section 4.1 to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by District and delivered to City. City may at any time or times, at its election, waive any of the conditions set forth in Section 4.2 to its obligations 273
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 13 hereunder, but any such waiver shall be effective only if contained in a writing signed by City and delivered to District.

4.7. Termination. In the event all of the conditions set forth in Section 4 are not fulfilled within the time provided by the terms of this Agreement or waived by a Party pursuant to Section

4.6, that Party may, at its option, terminate this Agreement and the Escrow, thereby releasing the Parties from further obligations related to the exchange of the Properties hereunder. Furthermore, in the event this Agreement is terminated by either Party, all documents delivered by any Party to Escrow Holder shall be returned within a reasonable time to the original Party. Nothing in this Section 4.7 shall be construed as releasing any Party from liability for any default of its obligations hereunder or breach of its representations and warranties under this Agreement occurring prior to the termination of this Agreement and/or the Escrow to be opened hereunder.

5. REPRESENTATIONS AND WARRANTIES-BROKERAGE COMMISSIONS.

5.1. District’s Representations and Warranties. District hereby makes the following representations and warranties to City, each of which: (i) is material and relied upon by City in making its determination to enter into this Agreement, (ii) is to the actual knowledge of District true in all respects as of the Effective Date and shall be true in all respects on the Closing Date, and (iii) shall survive the Close of Escrow for one (1) year:
(a) District has full right, power, and authority to enter into this Agreement and to perform District’s obligations hereunder. This Agreement and all other documents delivered by District to City now or at the Close of Escrow, have been or will be duly executed and delivered by District and are legal, valid, and binding obligations of District, sufficient to convey to City good and marketable title to the District Property, are enforceable in accordance with their respective terms, and do not materially violate any provision of any agreement to which District is a party.
(b) Other than those matters known and disclosed by the Parties as of the Effective Date, there are no pending or known threatened actions, suits, writs, injunctions, decrees, legal proceedings or governmental investigations against or affecting the District Property or relating to the ownership, maintenance, use or operation of the District Property. Other than those matters known and disclosed by the Parties as of the Effective Date, District has not received any written notices nor has any actual knowledge of any violation of any laws, ordinances, rules, regulations or requirements of any governmental agency, body or subdivision affecting or relating to the District Property.
(c) Other than those matters known and disclosed by the Parties as of the Effective Date, District has not received any written notices nor has any actual knowledge of any violation of any laws, ordinances, rules, regulations or requirements of any governmental agency, body, or subdivision affecting or relating to the District Property. 274
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 14 (d) Other than those matters known and disclosed by the Parties as of the Effective Date, there are no written leases, rights of first refusal, or other agreements relating to the right of possession and/or occupancy of the District Property by any person or entity, except for matters of record approved by City.
(e) Other than those matters known and disclosed by the Parties as of the Effective Date, District is not actually aware that the District Property, or District, are in violation of any applicable federal, state, or local statute, ordinance, order, requirement, law, or regulation materially adversely affecting the District Property or construction of any improvement thereon.

District has received no written notice of any such violation of applicable law. City shall make its own independent determination of the feasibility of the use of the District Property for City’s intended use. (f) District has not caused or knowingly permitted any contamination by Hazardous Materials (as defined in herein) to occur on, at, about, or within the District Property, or any portion thereof, or otherwise knows of any such contamination of Hazardous Materials on, at, about, or within the District Property, or any portion thereof.
(g) For the purpose of the foregoing District warranties and representations, “knowledge” shall be limited to actual written notice received by the District’s designated person in a manner reasonably calculated to provide actual notice, without any duty of inquiry or investigation. District’s designated representatives are solely limited to ___________ in their individual capacity, and do not include any of the District’s other agents, advisors, or consultants. Any knowledge obtained by District prior to the Closing Date which is contrary or inconsistent with any representation or warranty of District shall not release District of any liabilities or obligations with respect thereto.

5.2. City’s Representations and Warranties. City hereby makes the following representations and warranties to District, each of which: (i) is material and relied upon by District in making its determination to enter into this Agreement, (ii) is to the actual knowledge of City true in all respects as of the Effective Date and shall be true in all respects on the Closing Date, and (iii) shall survive the Close of Escrow for one (1) year:
(a) City has full right, power, and authority to enter into this Agreement and to perform City’s obligations hereunder. This Agreement and all other documents delivered by City to District now or at the Close of Escrow, have been or will be duly executed and delivered by City and are legal, valid, and binding obligations of City, sufficient to convey to District good and marketable title to the City Property, are enforceable in accordance with their respective terms, and do not materially violate any provision of any agreement to which City is a arty.
(b) Other than those matters known and disclosed by the Parties as of the Effective Date, City has not received any written notices and has no actual 275
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 15 knowledge of any pending or threatened actions, suits, writs, injunctions, decrees, legal proceedings, governmental investigations, or violations of any laws, ordinances, rules, regulations, or requirements of any governmental agency, body, or subdivision affecting or relating to the City Property or relating to the ownership, maintenance, use, or operation of the City Property.
(c) Other than those matters known and disclosed by the Parties as of the Effective Date, City has not received any written notices nor has any actual knowledge of any violation of any laws, ordinances, rules, regulations or requirements of any governmental agency, body, or subdivision affecting or relating to the City Property.
(d) Other than those matters known and disclosed by the Parties as of the Effective Date, there are no written leases, rights of first refusal, or other agreements relating to the right of possession and/or occupancy of the City Property by any person or entity, except for matters of record approved by District.
(e) Other than those matters known and disclosed by the Parties as of the Effective Date, City is not actually aware that the City Property or City are in violation of any applicable federal, state, or local statute, ordinance, order, requirement, law, or regulation materially adversely affecting the City Property or construction of any improvement thereon. City has received no written notice of any such violation of applicable law. District shall make its own independent determination of the feasibility of the use of the City Property for District’s intended use.
(f) City has not personally caused or knowingly permitted any contamination by Hazardous Materials (as defined in Section 4.4) to occur on, at, about, or within the City Property, or any portion thereof, or otherwise knows of any such contamination of Hazardous Materials on, at, about, or within the City Property, or any portion thereof.
(g) For the purpose of the foregoing City warranties and representations, “knowledge” shall be limited to actual written notice received by the City’s designated person in a manner reasonably calculated to provide actual notice, without any duty of inquiry or investigation. City’s designated representatives are solely limited to ___________ in their individual capacity, and do not include any of the City’s other agents, advisors, or consultants. Any knowledge obtained by District prior to the Closing Date which is contrary or inconsistent with any representation or warranty of City shall not release City of any liabilities or obligations with respect thereto.

5.3. If either Party becomes aware of any act or circumstance which would change or render incorrect, in whole or in part, any representation or warranty made by the Parties hereunder, whether as of the Effective Date or any time thereafter through the Closing Date, that Party will give immediate written notice of such changed fact or circumstance to the other Party, but such notice shall not release the Party of any liabilities or obligations with respect thereto. For the 276
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 16 purpose of the foregoing warranties and representations, the knowledge requirement shall be based on actual written notice to a Party’s designated person in a form which would provide actual notice to a person without a duty of inquiry.

5.4. Future Sale Participation.

5.4.1. City presently contemplates disposing of the District Property pursuant to the Surplus Land Act for affordable housing purposes. If City voluntarily sells, exchanges, transfers or otherwise disposes of the District Property whether in a single transaction or a series of related transactions in an arm’s-length transaction to an unaffiliated third party within ten (10) years following the Close of Escrow, and the value of the consideration received by the City in such transaction exceeds the District Property Price as set forth in this Agreement, City shall pay to District an amount equal to fifty percent (50%) of the difference between the gross sale price and the District Property Price (the “Excess Value”). For purposes of this Section, Excess Value shall be determined as of the date of such disposition and shall include all forms of consideration received or to be received by City, whether cash or non-cash.

5.4.2. Notwithstanding the foregoing, Excess Value shall exclude: (i) the portion of any increase in value attributable to specific actions, expenditures, investments, improvements, approvals, entitlements, incentives, or other affirmative efforts undertaken, funded, or obtained by City after the Close of Escrow, including any value created directly by City or indirectly through the efforts of a developer, consultant, contractor, affordable housing sponsor, or other third party, to the extent the costs of such efforts, improvements, approvals, or activities were paid for, reimbursed, funded, subsidized, or otherwise borne by City (collectively, the “CityCreated Value”); (ii) customary and reasonable transaction costs actually incurred in connection with the disposition of the District Property demonstrated through reasonable supporting documentation, including, without limitation, brokerage commissions, marketing expenses, escrow fees, title charges, transfer taxes, recording fees, legal fees, due diligence costs, closing costs, and other customary real estate transaction expenses (collectively, “Transaction Costs”); and (iii) the aggregate amount of any grants, loans subject to forgiveness, rebates, credits, incentives, fee waivers, infrastructure contributions, direct payments, or other financial assistance provided, funded, reimbursed, or otherwise borne by City in connection with the ownership, development, improvement, operation, or disposition of the District Property (collectively, “City Subsidies”). City Subsidies shall be deducted from Excess Value on a dollar-for-dollar basis, regardless of whether or to what extent such City Subsidies resulted in a corresponding increase in the value of the District Property; provided, however, that no amount shall be excluded or deducted more than once under this provision.

5.4.3. Determination of Excess Value

5.4.3.1. Within thirty (30) days following execution of a definitive agreement for any disposition subject to this Section, and in any event no later than ninety (90) days prior to the
anticipated closing date, City shall deliver to District written notice of the proposed disposition together with copies of 277
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 17 all material transaction documents and a preliminary
calculation of Excess Value, including any claimed CityCreated Value and Transaction Costs. Within fifteen (15) days after receipt of such notice, the Parties shall jointly select an Appraiser as set forth in the Section above titled “Appraisal.”

5.4.3.2. The Appraiser shall determine or, in the case of (iii) and (iv), below, verify: (i) the fair market value of the District Property as of the date of the proposed disposition; (ii) the portion of such value, if any, attributable to City-Created Value; (iii) the amount of allowable Transaction Costs; (iv) the amount of any City Subsidies; and (v) the resulting Excess Value. In making such determination, the Appraiser shall consider all information reasonably relevant to the valuation, including appraisals, market data, entitlement history, development approvals, infrastructure
improvements, public investments, development
agreements, financing arrangements, affordability
restrictions, and any other factors affecting value.

5.4.3.3. Excess Value shall be calculated as follows: Excess Value = Gross Sale Price minus the District Property Price, minus City-Created Value as determined by the Appraiser, minus City Subsidies, minus allowable Transaction Costs. No
other deductions, offsets, or adjustments shall be permitted unless expressly agreed to in writing by the Parties.

5.4.3.4. Any Excess Value to be paid to District pursuant to this Section shall be paid from closing proceeds concurrently with the closing of the applicable disposition. If the
appraisal is not completed prior to closing, City shall deposit the amount reasonably estimated by District to be payable under this Section into an escrow account with a mutually acceptable escrow holder pending final
determination by the Appraiser. Upon issuance of the
Appraiser's determination, the escrowed funds shall be
disbursed accordingly, and any deficiency shall be paid by the City to the District within ten (10) business days of the Appraiser’s issuance of a report determining the Excess Value.

5.4.3.5. The costs of the appraisal shall be shared equally by the Parties; provided, however, that if the Appraiser determines that either Party's proposed calculation of Excess Value differed by more than ten percent (10%) from the
Appraiser's final determination, such Party shall reimburse the other Party for its share of the appraisal costs.
278
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 18

5.4.4. Failure by City to comply with the notice requirements or to timely pay any amounts due shall constitute a material breach of this Agreement; provided, however, that City shall have no liability unless and until District provides written notice of such failure and City fails to cure the same within sixty (60) days after receipt of such notice. In such event, (i) all unpaid amounts shall accrue interest at the maximum rate permitted by law from the date due until paid, (ii) District shall have the right to audit City’s records relating to the transaction upon reasonable prior written notice during normal business hours solely for purposes of verifying amounts payable under this Section, provided that District shall bear the costs of such audit unless an underpayment of more than five percent (5%) is discovered, and (iii) City shall be responsible for all costs and expenses incurred by District in enforcing this Section, including reasonable attorneys’ fees. District shall also be entitled to pursue all available legal and equitable remedies; provided that District shall have no right to seek rescission of any transfer or otherwise impair title to the District Property or any subsequent transfer thereof.

5.4.5. No payment shall be owed if (i) it is determined by the Appraiser there is no Excess Value, or (ii) no such disposition occurs within ten (10) years following the Close of Escrow City shall not structure any transaction with the primary intent of avoiding the obligations set forth herein, and any series of related transactions for the District Property shall be aggregated and treated as a single disposition for purposes of this Section.

5.4.6. The provisions of this Section shall survive the Close of Escrow and shall remain valid, binding, and enforceable for a period of ten (10) years following the Close of Escrow. District acknowledges and agrees that this Section creates only a contractual payment right and does not create any lien, encumbrance, covenant running with the land, restriction on transfer, or other property interest affecting the District Property.

5.5. Brokerage Commissions. Each Party represents and warrants to the other that it has not engaged, dealt with, or been represented by any real estate broker, finder, or other intermediary in connection with the negotiation or consummation of this Agreement or the transaction contemplated herein. Each Party agrees to indemnify, defend, and hold harmless the other Party and its officers, directors, employees, and agents from and against any and all claims, demands, liabilities, damages, losses, costs, and expenses (including, without limitation, reasonable attorneys’ fees) arising out of or related to any claim for a commission, fee, or other compensation asserted by any broker, finder, or intermediary claiming by, through, or under the indemnifying Party.

6. DEFAULT.

6.1. In the event City defaults under any of the terms and provisions of this Agreement (after expiration of the applicable notice and cure period), District shall have the right, but not the obligation, in addition to any other rights or remedies which it may have at law or in equity, to either: (i) terminate this Agreement and the Escrow created hereby, in which event District shall be entitled to the immediate refund of any other funds deposited by District into Escrow or released to City for or related to the City Property, and thereafter neither Party will have any further rights or obligations hereunder except those which are expressly stated to survive such termination, or 279
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 19 (ii) pursue the right of specific performance to obtain the City Property in accordance with the terms and conditions of this Agreement, which includes the requirement to pay to City the City Property Price.

6.2. Liquidated Damages. BOTH PARTIES ACKNOWLEDGE AND AGREE THAT

DAMAGES THE DISTRICT MAY SUSTAIN AS A RESULT OF ANY SUCH DEFAULT WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN.

ACCORDINGLY, IN THE EVENT OF A DEFAULT BY CITY FOLLOWING THE EXPIRATION OF ANY APPLICABLE NOTICE AND CURE PERIOD, DISTRICT’S SOLE

MONETARY REMEDY SHALL BE RECOVERY OF ITS ACTUAL OUT-OF-POCKET

THIRD-PARTY COSTS AND EXPENSES INCURRED IN CONNECTION WITH THIS TRANSACTION, NOT TO EXCEED TEN THOUSAND DOLLARS ($10,000) IN THE AGGREGATE (“LIQUIDATED DAMAGES AMOUNT”). THE PARTIES HEREBY AGREE THAT THE LIQUIDATED DAMAGES AMOUNT REPRESENTS THE PARTIES’ BEST AND

MOST ACCURATE ESTIMATE OF THE DAMAGES DISTRICT WOULD SUFFER IN SUCH

EVENT AND THAT SUCH ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT. IF THIS AGREEMENT IS

TERMINATED FOLLOWING SUCH A DEFAULT BY CITY, THE PARTIES SHALL

THEREAFTER BE RELIEVED OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER EXCEPT THOSE EXPRESSLY STATED TO SURVIVE TERMINATION. CITY AND DISTRICT AGREE THAT DISTRICT’S RIGHT TO RECOVER THE LIQUIDATED DAMAGES AMOUNT SHALL BE DISTRICT’S SOLE AND EXCLUSIVE MONETARY

REMEDY AT LAW IN THE EVENT OF SUCH A DEFAULT BY CITY UNDER THIS AGREEMENT. THE PAYMENT OF SUCH AMOUNT IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE §§ 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES UNDER CALIFORNIA CIVIL CODE §§ 1671, 1676, AND 1677. THE DISTRICT WAIVES ANY

RIGHT TO SEEK, CLAIM, OR OBTAIN PUNITIVE DAMAGES OR SPECIAL, CONSEQUENTIAL, OR SPECULATIVE DAMAGES FOR SUCH A BREACH BY CITY.

NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO LIMIT CITY’S LIABILITY TO

DISTRICT UNDER THE INDEMNIFICATION PROVISION(S) OF THIS AGREEMENT OR FOR ATTORNEYS’ FEES AND COSTS AS PROVIDED IN SECTION 7.2.

6.3. District’s Default. In the event District shall default under any of the terms and provisions of this Agreement (after expiration of the applicable notice and cure period set forth in Section 4), City shall have the right, but not the obligation, in addition to any other rights or remedies which it may have at law or in equity, to either: (i) terminate this Agreement and the Escrow created hereby, in which City shall be entitled to the immediate refund of any other funds deposited by City into Escrow or released to District for or related to the District Property, and thereafter neither Party will have any further rights or obligations hereunder except those which are expressly stated to survive such termination, or (ii) pursue the right of specific performance to obtain the District Property in accordance with the terms and conditions of this Agreement, which includes the requirement to pay to District the District Property Price.

7. MISCELLANEOUS.

7.1. Costs of Conveyance. All costs related to the Parties’ due diligence inspections and testing, and production of and/or reproduction of the Due Diligence Materials shall be the sole responsibility of the Party expending such costs.
280
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 20

7.2. Attorneys’ Fees; Litigation. In the event either Party to this Agreement should default under any of the provisions hereof, and the non-defaulting Party should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting Party herein contained, the defaulting Party agrees that it will on demand therefor pay to the non-defaulting Party the reasonable fees of such attorneys and such other expenses so incurred by the non-defaulting Party.

7.3. Notices. All notices required to be delivered under this Agreement to the other Party must be in writing and shall be effective: (i) when personally delivered by the other Party or messenger or courier thereof; (ii) three (3) business days after deposit in the United States mail, registered or certified; (iii) twenty-four (24) hours after deposit before the daily deadline time with a reputable overnight courier or service; or (iv) upon receipt of an electronic mail transmission, provided a hard copy of such transmission shall be thereafter delivered in one of the methods described in the foregoing (i) through (iii); in each case postage fully prepaid and addressed to the respective Parties as set forth below or to such other address and to such other persons as the Parties may hereafter designate by written notice to the other Party hereto:

To District: Ontario-Montclair School District
Chief Business Official Phil Hillman, CPA
950 West D Street
Ontario, CA 91762
Email: [email protected]
With copy to: Orbach Huff & Henderson, LLP
Sarine A. Abrahamian, Partner
1901 Avenue of the Stars, Suite 575
Los Angeles, CA 90067
Email: [email protected]
To City: City of Ontario
Scott Ochoa, City Manager
303 East B Street
Ontario, CA 91764
Email:

With copy to: Best Best & Krieger, LLP
Todd Gee, City Attorney
500 Capitol Mall, Suite 2500
Sacramento, CA 95814
Email: [email protected]
The Parties, by notice given hereunder, may designate different addresses to which subsequent notices, certificates, or other communications will be sent.

7.4. Authority. The person(s) executing this Agreement on behalf of the Parties hereto warrant that: (i) such Party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said Party, (iii) by so executing this Agreement, such Party 281
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 21 is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which said Party is bound.

7.5. Execution in Counterpart/Electronic Signatures. This Agreement may be executed in multiple counterparts, shall be deemed to be an original and all of which together shall constitute one document. A copy of this Agreement executed and delivered by electronic mail in “.pdf” format, or any electronic signature complying with the California Uniform Electronic Transactions Act (Civ. Code, § 1633.1 et seq.) and the U.S. federal ESIGN Act of 2000 (e.g., www.docusign.com) will be deemed to have the same legal effect as delivery of an original signed copy of this Agreement and shall be admissible into evidence as an original hereof to prove the contents hereof.

7.6. Assignment. City shall not assign this Agreement or any right or privilege City might have under this Agreement without the prior written consent of District, which consent shall not be unreasonably withheld, provided that the assignee agrees in a written notice to District to carry out and observe each of City’s obligations hereunder, including all Exhibits hereto. District shall not assign this Agreement or any right or privilege District might have under this Agreement without the prior written consent of City, which consent shall not be unreasonably withheld, provided that the assignee agrees in a written notice to City to carry out and observe each of District’s obligations hereunder, including all Exhibits hereto.

7.7. Third Party Beneficiaries. Nothing in this Agreement shall be construed to confer any rights upon any party not signatory to this Agreement.

7.8. Binding on Heirs. This Agreement shall be binding upon the Parties hereto and their respective heirs, representatives, transferees, successors, and assigns.

7.9. Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Agreement.

7.10. Condemnation. In the event the District Property is taken, in whole or in part, or designated to be taken by condemnation proceedings other than condemnation proceedings instigated by District, or proceedings in lieu thereof, prior to the Close of Escrow, City shall have the right to terminate this Agreement and cancel Escrow by delivering to District and Escrow Holder written notice thereof.

7.11. Entire Agreement, Waivers and Amendments. This Agreement and any written agreement entered into by the Parties with respect to the Property, incorporate all of the terms and conditions mentioned herein, or incidental hereto, and supersede all negotiations and previous agreements between the Parties with respect to all or part of the subject matter thereof. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Party to be charged. Any amendment or modification to this Agreement must be in writing and executed by both Parties.

7.12. Exhibits. The Exhibits attached to this Agreement are incorporated herein by this reference and made a part hereof. Said Exhibits are identified as follows:
282
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 22 “A” DESCRIPTION OF DISTRICT PROPERTY
“B” DESCRIPTION OF CITY PROPERTY
“C” DEPICTION OF CITY PARKING GARAGE
“D” DISTRICT PARKING LICENSE
“E” EXCLUDED PORTION OF CITY PROPERTY FROM EXCHANGE
“F” ENTRY LICENSE AGREEMENT
“G” GRANT DEED – CITY PROPERTY
“H” NON-FOREIGN AFFIDAVIT – CITY PROPERTY
“I” GRANT DEED – DISTRICT PROPERTY
“J” PUBLIC AGENCY CERTIFICATE OF ACCEPTANCE – DISTRICT
“K” NON-FOREIGN AFFIDAVIT – DISTRICT PROPERTY

7.13. Effect of Recitals. The Recitals above are deemed true and correct and are hereby incorporated into this Section as though fully set forth herein, and the Parties acknowledge and agree that they are each bound by same.

7.14. Section References. Any reference to any section of this Agreement cited without a decimal includes all sections following the cited section. For example, a reference to Section 5 includes 5.1, 5.1(a) et seq.

7.15. Severability. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way.

7.16. Interpretation; Governing Law. This Agreement shall be construed according to its fair meaning and as if prepared by both Parties hereto. This Agreement shall be construed in accordance with the laws of the State of California, in effect on the Effective Date, with venue in San Bernardino County.

7.17. Covenants to Survive Escrow. The covenants and agreements contained in this Agreement shall survive the Close of Escrow, but only to the extent such survival is expressly provided herein or is necessary to give effect to obligations that by their nature are intended to survive Closing.

7.18. Conflicts of Interest. No director, officer, official, representative, agent, or employee of District or City shall have any financial interest, direct or indirect, in this Agreement.

7.19. Nondiscrimination. There shall be no discrimination by the Parties against any person on account of race, color, religion, sex, marital status, national origin, or ancestry in the performance of their respective obligations under this Agreement.

7.20. Rights and Remedies Are Cumulative. Except as may be otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by any Party of one or more of its rights or remedies shall not preclude the exercise by it, at the same time or at different times, of any other rights or remedies for the same default or any other default by another Party.

7.21. Provisions Required by Law Deemed Inserted. Each and every provision of law and clause required by law to be inserted in this Agreement shall be deemed to be inserted herein 283
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 23 and the Agreement shall be read and enforced as though it were included herein, and if through mistake or otherwise any such provision is not inserted, or is not correctly inserted, then upon application of either Party the Agreement shall forthwith be physically amended to make such insertion or correction. The foregoing shall not be read in a manner which works to strike or modify a negotiated term of this Agreement.

7.22. Force Majeure/Litigation. If either Party is delayed at any time in meeting its obligations under this Agreement by any act or neglect of the other Party, or its architect, or by any agent or employee of either, or by any separate contractor of either Party, or by changes ordered or approved by the other Party, or by labor disputes, governmental and/or quasigovernmental processing or approval delays, fire, unusual delay in transportation, adverse weather conditions not reasonably foreseeable, unavoidable casualties, pandemic, epidemic, or any causes beyond the Party’s reasonable control, or by delay authorized by either Party pending arbitration, or by any other cause (other than the Party’s financial inability to perform) (each, a “Force Majeure” delay), then the time for completion shall be extended for such reasonable time as may compensate for such occurrences. Any claim for extension of time shall be made in writing by the affected Party not more than twenty (20) days after the delay is discovered; otherwise, delays incurred prior to delivery of such claim shall be waived. In the case of a continuing delay, only one (1) claim is necessary.

7.23. Cooperation. The Parties acknowledge that it may be necessary to execute documents other than those specifically referred to herein in order to complete the exchange of the District Property and City Property and/or to accomplish the objectives and requirements that are set out in this Agreement. Both Parties hereby agree to cooperate with each other by executing such other documents or taking such other actions as may be reasonably necessary to complete this transaction in accordance with the intent of the Parties as evidenced in this Agreement and attached Exhibits hereto.
[Signatures Immediately on Next Page]
284
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 24 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers, as of the Effective Date.

DISTRICT:

ONTARIO-MONTCLAIR SCHOOL

DISTRICT
a public school district duly organized and
validly existing under the Constitution and
laws of the State of California
By: ___________________________
Name: ___________________________
Its: ___________________________
CITY:

CITY OF ONTARIO,
a California municipal corporation
By: ___________________________
Name: ___________________________
Its: ___________________________
APPROVED AS TO FORM:

BEST BEST & KRIEGER LLP
By: _______________________________
Ruben Duran
City Attorney
285
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 25 EXHIBIT “A”
Legal Description of District Property
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
286
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 26 EXHIBIT “B”
Legal Description of City Property
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
287
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 27 EXHIBIT “C”
Depiction of City Parking Garage
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
288
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 28 EXHIBIT “D”
District Parking License

PARKING LICENSE AGREEMENT
This PARKING LICENSE AGREEMENT (“Agreement”) is entered into this ________ day of ________________ 2026 (“Effective Date”), by and between the CITY OF ONTARIO, a California general law city and municipal corporation (“City”), and the ONTARIOMONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and laws of the State of California (“District”). City and District may be referred to individually as a “Party” and collectively as the “Parties.”

RECITALS
WHEREAS, City is a municipal corporation duly organized under the California Constitution and laws of the State of California;
WHEREAS, City and District entered into that certain Exchange Agreement and Joint Escrow Instructions, dated as of ________________________________, 2026 (“Exchange Agreement”);
WHEREAS, City is developing a multi-level parking structure consisting of approximately ____________________________________ [description], located at ____________________________________ [address] (APN __________________) (“Parking Structure”), as more particularly described in Exhibit A; and WHEREAS, as part of the consideration for the City Property, as defined in the Exchange Agreement, City desires to grant District a limited, personal license to use up to two hundred (200) parking spaces in the Parking Structure, subject to the terms, restrictions, and operatingexpense obligations set forth in this Agreement.

NOW, THEREFORE, based on the foregoing recitals, the Parties agree as follows:

AGREEMENT

1. Grant of License

1.1. Subject to the terms and conditions of this Agreement, City grants District a limited, nonexclusive, personal contractual license to use up to two hundred (200) parking spaces at any one time in locations designated by City within the Parking Structure for use by District’s employees, students, contractors, invitees, and visitors in connection with District’s operations, programs, and events (collectively, the “District Use”). City may designate and relocate the spaces made available for the District Use from time to time, provided that City continues to make available up to two hundred (200) parking spaces within the Parking Structure. The license commences on the Effective Date and expires [on the date that is ________ years after the Effective Date], unless earlier terminated in accordance with this Agreement (the “Term”). Any extension or renewal of the Term must be set forth in a written amendment approved and executed by both Parties. District acknowledges that this Agreement does not grant District exclusive possession or control of any portion of the Parking Structure. City retains possession, 289
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 29 dominion, and control of the Parking Structure and may enter, inspect, operate, manage, maintain, repair, alter, improve, regulate, or temporarily close all or any portion of the Parking Structure. City may permit other persons to use the Parking Structure, provided that City makes the required number of spaces available for the District Use.

1.2. District shall not modify or change the Parking Structure without the prior written consent of City. District shall not install any improvement, fixture, sign, equipment, or other property in or on the Parking Structure without City’s prior written consent, which City may grant, condition, or withhold in its discretion. District shall keep the Parking Structure free and clear of any mechanic’s or materialmen’s liens directly arising out of the exercise of District’s rights under this Agreement; provided, however, District shall have no obligation with respect to any mechanic’s or materialmen’s liens caused by the acts or omissions of City.

1.3. The license granted under this Agreement is personal to District. District shall not sell, assign, transfer, convey, sublicense, encumber, pledge, or otherwise dispose of this Agreement or any right granted under this Agreement, whether for consideration or otherwise, and any attempted sale, assignment, transfer, conveyance, sublicense, encumbrance, pledge, or other disposition is void. District shall not market, advertise, or otherwise offer any such right for sale, transfer, or other disposition to any third party.

No successor to District’s ownership or use of the City Property acquires any right under this Agreement unless City expressly agrees otherwise in a written amendment approved and executed by City.

1.4. No license is granted under this Agreement for use of the Parking Structure for any purpose other than in connection with the District Use. District shall comply with all reasonable rules, regulations, parking-control measures, hours of operation, access procedures, and safety requirements established by City from time to time for the Parking Structure. This Agreement creates only a contractual privilege to use parking spaces and does not create a leasehold, tenancy, easement, possessory interest, real property interest, or other estate in land.

2. Compensation and Operating Expenses [USE IF COMPENSATION FREE LICENSE CREATES UNEVEN EXCHANGE]

2.1. Compensation. The Parties acknowledge that the license granted under this Agreement constitutes part of the consideration provided by City under the Exchange Agreement. [Except for District’s obligation to pay the District Share of Operating Expenses under this Section 2, District shall not be required to pay a separate license fee][ADD LICENSE FEE IF NECESSARY TO PRESERVE EVEN EXCHANGE].

2.2. [Operating Expenses. During the Term, District shall pay its proportionate share of the Operating Expenses incurred by City in connection with the operation and maintenance of the Parking Structure. “District Share” means a fraction, expressed as a percentage, the numerator of which is two hundred (200) and the denominator of which is the total number of parking spaces in the Parking Structure during the applicable period. If the total number of parking spaces changes, the District Share shall be adjusted prospectively as of the date of the change. “Operating Expenses” means the actual, reasonable, and documented costs incurred by City to operate, maintain, repair, clean, light, secure, manage, and administer the Parking Structure, including costs for utilities, 290
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 30 routine maintenance and repairs, janitorial services, security services, parking-control systems, striping, signage, insurance attributable to the Parking Structure, and governmental fees and assessments relating to the operation of the Parking Structure.

Operating Expenses shall not include: (a) debt service or financing costs; (b) depreciation or amortization; (c) the original costs of designing or constructing the Parking Structure; (d) capital improvements, structural replacements, or additions to the Parking Structure, except as otherwise agreed by the Parties in writing; (e) costs reimbursed by insurance or another third party; (f) penalties, fines, or interest resulting from City’s failure to timely perform an obligation; or (g) costs arising from City’s gross negligence or willful misconduct].

2.3. [Payment and Reconciliation. City shall invoice District quarterly for the District Share of Operating Expenses. Each invoice shall include reasonable supporting detail regarding the Operating Expenses included in the invoice and the calculation of the District Share. District shall pay each undisputed invoice within thirty (30) days after receipt. Within one hundred twenty (120) days after the end of each fiscal year, City shall provide District with a reconciliation of the actual Operating Expenses incurred during the preceding fiscal year, the District Share of those Operating Expenses, the amounts previously paid by District, and any resulting balance or credit. District shall pay any balance within thirty (30) days after receipt of the reconciliation. City shall apply any credit against the next amount due from District or, following expiration or termination of this Agreement, refund the credit to District.]

3. City Control of Parking Structure. City shall retain possession, dominion, and control of the Parking Structure at all times. City shall have the sole right to operate, manage, maintain, repair, alter, improve, regulate, and control the Parking Structure and may establish and modify reasonable rules, regulations, hours of operation, access procedures, parking-control measures, and safety requirements applicable to its use. City may temporarily close, restrict access to, or suspend use of any portion of the Parking Structure when reasonably necessary for maintenance, repairs, construction, emergencies, public safety, special events, or governmental operations. When reasonably practicable, City shall provide District advance notice of any planned closure or material restriction and shall use reasonable efforts to make other spaces within the Parking Structure available for the District Use. City may relocate the spaces made available for the District Use from time to time, provided that City continues to make available up to two hundred (200) parking spaces within the Parking Structure. No temporary interruption, restriction, closure, or relocation permitted under this Section shall constitute an eviction, constructive eviction, interference with possession, or breach of any covenant of quiet enjoyment.

4. Books and Records. City shall maintain books and records reasonably sufficient to substantiate the Operating Expenses charged to District under Section 2 for a period of not fewer than four (4) years after the end of the applicable fiscal year. Upon not fewer than ten (10) business days’ prior written notice, District may inspect those books and records during City’s regular business hours, not more than once with respect to any fiscal year. Any inspection shall be conducted at District’s expense and in a manner that does not unreasonably interfere with City’s operations.

5. Rights. District agrees that the Parking Structure is, and shall remain, the property of City and that District obtains no right, title, or interest in or to the Parking Structure except for the limited rights to use the Parking Structure as set forth in this Agreement. The rights granted to 291
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 31 District under this Agreement are personal contractual rights only and do not constitute or create a lease, tenancy, easement, covenant running with the land, possessory interest, ownership interest, or other estate or interest in real property. District shall have no right to exclude City or any person authorized by City from any portion of the Parking Structure and shall have no right to control the operation, management, maintenance, repair, alteration, improvement, or regulation of the Parking Structure. This Agreement shall not run with the land and shall not be recorded. Neither Party shall record this Agreement or any memorandum, notice, or other instrument relating to this Agreement without the other Party’s prior written consent. District shall not, during the Term or at any time thereafter, dispute or contest, directly or indirectly, City’s ownership of the Parking Structure, nor shall District assist or aid others in doing so.

6. Licensee’s Indemnification and Insurance

6.1. Indemnification. To the fullest extent permitted by law, each Party shall defend, with counsel reasonably acceptable to the indemnified Party, indemnify, and hold harmless the other Party and its officers, officials, directors, members, managers, partners, shareholders, employees, agents, representatives, successors, and assigns (collectively, “Indemnified Parties”) from and against any and all claims, demands, actions, causes of action, liabilities, losses, damages, judgments, fines, penalties, costs, and expenses, including reasonable attorneys’ fees and costs of investigation (collectively, “Claims”), arising out of or relating to the indemnifying Party’s use or occupancy of the Parking Structure, except to the extent caused by the gross negligence or willful misconduct of the indemnified Party. This indemnity includes Claims for injury to or death of persons, damage to or loss of property, and Claims arising under applicable laws, including the Americans with Disabilities Act. The obligations of this Section shall survive expiration or termination of this Agreement.

6.2. Insurance. During the Term, each Party shall procure and maintain, at its sole cost and expense, the following insurance coverages: (a) Commercial General Liability Insurance (occurrence form, ISO CG 00 01 or equivalent) covering bodily injury, personal and advertising injury, and property damage, including contractual liability, products/completed operations, and premises/operations, with limits of not less than $1,000,000 per occurrence and $2,000,000 general aggregate; (b) Automobile Liability Insurance covering all owned, non-owned, and hired vehicles with a combined single limit of not less than $1,000,000 per accident; and (c) Workers’ Compensation Insurance as required by California law and Employer’s Liability Insurance with limits of not less than $1,000,000 per accident or disease.

6.2.1. The Commercial General Liability and Automobile Liability policies shall name the other Party and its officers, officials, directors, members, managers, partners, shareholders, employees, and agents as additional insureds using ISO forms CG 20 10 and CG 20 37, or equivalent forms. Such insurance shall be primary and non-contributory with respect to any insurance maintained by the other Party. The Parties waive all rights of subrogation against each other and the Indemnified Parties and shall cause their insurers to do the same.

6.2.2. The required coverage may be provided through a licensed insurance carrier authorized to do business in the State of California and having an A.M. Best rating of not less than A-:VII or through a Joint Powers Authority or other self-insurance 292
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 32 or risk-sharing program authorized by applicable law, provided that the coverage affords protection substantially comparable to that required under this Agreement.

6.2.3. Failure to maintain the required insurance shall constitute a material breach of this Agreement. The insurance requirements set forth in this Agreement shall not limit the Parties’ indemnity obligations under this Agreement.

7. City’s Warranty. City represents and warrants to District that it has the power and authority to enter into and perform this Agreement. Should any third party assert a claim, demand, or cause of action against District contesting City’s ownership of the Parking Structure in relation to District’s use of the Parking Structure under this Agreement, City shall have the option to undertake and conduct the defense of the claim, demand, or cause of action. District may, but is not obligated to, join in the defense and be represented by its own legal counsel at District’s expense. District may consult with City concerning disposition of the action, but City shall have the sole and final decision concerning disposition of any action involving the Parking Structure. City may, in its discretion, institute and prosecute actions against third persons for unauthorized use of the Parking Structure. Any such action shall be prosecuted solely at City’s cost and expense, and all sums recovered, whether by judgment, settlement, or otherwise, shall be retained solely by City. Upon City’s request, District shall reasonably cooperate in any such action, and City shall reimburse District for its reasonable expenses incurred as a result of that cooperation.

8. Licensee’s Warranty. District represents and warrants to City that: (a) District is a public school district duly organized and validly existing under the Constitution and laws of the State of California; (b) District has full power and authority to execute, deliver, and perform its obligations under this Agreement; (c) the execution, delivery, and performance of this Agreement have been duly authorized by all necessary action of District’s governing board and do not require any further approval or consent; (d) the individual executing this Agreement on behalf of District is duly authorized to bind District; (e) this Agreement constitutes a valid and binding obligation of District, enforceable against District in accordance with its terms; and (f) District’s execution, delivery, and performance of this Agreement do not violate District’s governing documents, any applicable law, or any agreement or obligation binding upon District.

9. No Partnership, Tenancy, or Real Property Interest. This Agreement does not constitute and shall not be construed as constituting a partnership, agency, or joint venture between the Parties. Nothing contained in this Agreement creates a landlord-tenant relationship, grants District exclusive possession of any portion of the Parking Structure, or gives District any estate or interest in real property. District shall have no right to obligate or bind City in any manner whatsoever, and nothing contained in this Agreement gives or is intended to give any right of any kind to any third party.

10. No Assignment. Without limiting Section 1.3, the license granted under this Agreement is personal to District and shall not be assignable by any action of District or by operation of law, and any attempted assignment shall be void. No purchaser, successor, transferee, tenant, occupant, or other person claiming through District shall acquire any right under this Agreement. This Agreement shall not run with the land or inure to the benefit of any successor to District’s ownership or use of any property. City may assign this Agreement to a successor public owner or operator of the Parking Structure, provided that the successor assumes City’s obligations under this Agreement.
293
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 33

11. Termination

11.1. Termination for Cause. Either Party may terminate this Agreement for cause by written notice describing the alleged default in reasonable detail. Except as otherwise provided in this Section, the defaulting Party shall have thirty (30) days after receipt of the notice to cure the default. If the default cannot reasonably be cured within thirty (30) days, the defaulting Party shall not be in default if it commences the cure within that period and thereafter diligently completes the cure. Cause includes: (a) a material breach of this Agreement that is not timely cured in accordance with this Section; (b) conduct by a Party that creates an imminent and material risk of personal injury or property damage; (c) District’s failure to pay an undisputed amount due under Section 2 within thirty (30) days after receipt of written notice of nonpayment; or (d) District’s attempted sale, assignment, transfer, conveyance, sublicense, encumbrance, pledge, or other disposition of this Agreement or any right granted under this Agreement. City may immediately suspend District’s use of all or any portion of the Parking Structure to the extent reasonably necessary to address an emergency, an imminent threat to health or safety, unlawful conduct, or material interference with operation of the Parking Structure. Any suspension under this Section shall not waive City’s right to terminate this Agreement or exercise any other available remedy.

11.2. Termination by District. District may terminate this Agreement without cause upon not fewer than ninety (90) days’ prior written notice to City. District shall remain responsible for the District Share of Operating Expenses incurred through the effective date of termination.

11.3. Effect of Expiration or Termination. Upon expiration or termination of this Agreement, District shall immediately discontinue use of the Parking Structure, remove any property installed or placed by District with City’s approval, repair any damage caused by that removal, and pay all amounts accrued through the effective date of expiration or termination. Upon expiration of this Agreement at the end of the Term or termination of this Agreement by District without cause under Section 11.2, District shall not be entitled to compensation for the loss of any remaining or future parking rights and shall be deemed to have waived the value of those rights. Nothing in this Section 11.3 limits any right or remedy available to District arising from City’s breach of this Agreement or any termination of this Agreement resulting from City’s breach.

12. Notice. Whenever notice is required under this Agreement, it shall be deemed good and sufficient notice if in writing, signed by an officer or authorized agent of the Party giving notice, and sent by electronic mail or mailed to the other Party at the following addresses:

TO DISTRICT:

Ontario-Montclair School District
950 West D Street
Ontario, CA 91762
Attn: Phil Hillman, CPA
Email: [email protected]
With copy to:

Orbach Huff & Henderson, LLP
1901 Avenue of the Stars, Suite 575
TO CITY:

City of Ontario
303 B Street
Ontario, CA 91764
Attn: City Manager
With copy to:

Best Best & Krieger LLP
2855 East Guasti Road, Suite 400
Ontario, CA 91761
294
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 34 Los Angeles, CA 90067
Attn: Sarine A. Abrahamian, Esq.

Email: [email protected]
Attn: Ruben Duran, Esq.

Email: __________________________

13. Severability. If any term or provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, that holding shall not affect any remaining term or provision, which shall continue in effect to the fullest extent permitted by law.

14. Miscellaneous Provisions

14.1. Entire Agreement. This Agreement contains the entire understanding of the Parties concerning its subject matter. There are no representations, warranties, promises, covenants, or understandings concerning its subject matter other than those contained in this Agreement and the Exchange Agreement.

14.2. Governing Law. This Agreement shall be governed by the laws of the State of California, without regard to choice-of-law provisions.

14.3. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together constitute one agreement.

This Agreement may be signed by DocuSign or a similar recognized electronic or digital verified document-execution platform, and faxed, photocopied, scanned, emailed, or similarly transmitted or reproduced copies of signatures shall have the same force and effect as original signatures for all purposes.

14.4. Waiver. No waiver of any provision of this Agreement shall be deemed or constitute a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. No waiver shall be binding unless executed in writing by the Party making the waiver.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
[Signatures follow on next page]
295
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 35

CITY OF ONTARIO
_________________________________
By: Scott Ochoa, City Manager
ATTEST:
_________________________________
Sheila Mautz, City Clerk
APPROVED AS TO FORM:
_________________________________
Ruben Duran, City Attorney

ONTARIO-MONTCLAIR SCHOOL DISTRICT
_________________________________
By: Phil Hillman, CPA
_________________________________
_________________________________
Sarine A. Abrahamian, Esq.
296
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 36

EXHIBIT A

DEPICTION AND DESCRIPTION

OF PARKING STRUCTURE
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
297
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 37 EXHIBIT “E”
Excluded Portion of City Property from Exchange
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
298
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 38 EXHIBIT “F”
Right of Entry Agreement
This Right of Entry Agreement (“Agreement”) is made and entered into on this ______ day of ___________, 2026, by and between _______________________ (“Licensor”) and ______________________ (“Licensee”), to grant Licensee permission under certain terms and conditions to enter Licensor’s real property as described below.

Licensor and Licensee agree as follows:

Section 1. Recitals. This Agreement is made and entered into with respect to the following facts:
(a) Licensor holds title interest to that certain real property located at (Street Address, [APN: ]) in the City of Ontario, California, and legally described in Exhibit "A" attached hereto and incorporated herein by reference (“Property”). (b) Licensee and Licensee’s consultants, agents, contractors and representatives require access to enter the Property for the purpose of conducting due diligence and investigating the Property, including, without limitation conducting building inspections, environmental assessments and testing, surveying and examining books and records kept on site (the “Investigations”).
(c) The parties wish to enter into this Agreement whereby Licensor will allow Licensee to enter onto the Property, on a temporary basis, for the purposes of carrying out the Investigations.

Section 2. Grant of Permission. Licensor hereby grants to Licensee and to Licensee’s officials, employees, agents, consultants and contractors (“Licensee Designees”) permission to enter onto and over and to use the Property as needed for the purpose of carrying out the Investigations.

Section 3. Condition of Property. Licensee will comply with, and will cause all Licensee Designees entering upon the Property pursuant to this Agreement to comply with, all applicable governmental laws and regulations concerning the work to be performed by the Licensee. Licensor understands that Licensee may disturb private improvements and landscaping during the course of its work, which private improvements and landscaping will be restored at the conclusion of the Investigations.

Section 4. Term. The term of this Agreement shall commence upon Licensee’s first entry onto the Property, which is expected to occur in or around __________ 2026. Licensee will provide Licensor with reasonable advance notice of such first entry. The rights and obligations provided in this Agreement shall terminate at the close of the 60th day following the date of commencement unless otherwise extended by further agreement of the parties.

Section 5. Authority to Enter into Right of Entry. Licensor hereby warrants that it is the owner of the Property and that the undersigned is authorized to grant Licensee permission to enter onto the Property for the use specified in this Agreement. 299
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 39 Section 6. Termination. This Agreement may be terminated at any time by Licensee.

Section 7. Modification. This Agreement shall not be modified except by written agreement of the parties.

Section 8. Incorporation of Recitals. The Recitals set forth above are true and correct and are incorporated into this Right of Entry by this reference.

Section 9. Attorneys’ Fees, Governing Law. In the event of a dispute between the parties with respect to the terms or conditions of this Agreement, the prevailing party shall be entitled to collect from the other its reasonable attorneys’ fees as established by the judge or arbitrator presiding over such dispute. This Agreement shall be governed by the laws of the State of California.

Section 10. Legal Representation. The parties, and each of them, acknowledge that in connection with the negotiation and execution of this Agreement, they have each had the opportunity to be represented by independent counsel of their own choosing and the parties executed the Agreement after review by such independent counsel, or, if they were not so represented, said non-representation is and was the voluntary, intelligent and informed decision and election of any of the parties not so represented; and, prior to executing this Agreement, each of the parties has had an adequate opportunity to conduct an independent investigation of all the facts and circumstances with respect to the matters that are the subject of this Agreement.

Section 11. Severability. If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any law, the validity of the remaining provisions will not be affected, and the rights and obligations of the parties will be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be invalid.
[Signatures on following page]
300
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 40 IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date as indicated beside each party’s signature.

LICENSOR
By:

Date:

LICENSEE
By:

Date:
301
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 41 Exhibit A to Right of Entry Agreement
Description / Depiction of Property
[to be attached]
302
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 42 EXHIBIT “G”
City Property Grant Deed
Ontario-Montclair School District
Attn: Dr. James Q. Hammond, Superintendent
______________________________________________________________________________ _______
(Space Above For Recorder’s Use)
The undersigned grantor(s) declare(s):

This conveyance is exempt from the payment
of a documentary transfer tax pursuant to
Revenue and Taxation Code section 11922.

This document is being recorded for the
benefit of the Ontario-Montclair School
District and is exempt from the payment of a
recordation fee pursuant to Gov. Code
section 6103.
______________________________________________________________________________ _______

FORM OF GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the CITY OF ONTARIO, a municipal corporation duly organized and validly existing under the Constitution and the laws of the State of California, hereby grants to the ONTARIO-MONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and the laws of the State of California, that certain real property located in the City of Ontario, County of San Bernardino, State of California, described in the legal description and depicted in the map attached hereto as Exhibit “A” and incorporated herein by this reference.

Dated: ______________
[Insert Name/Signature Block of Grantor]
303
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 43 EXHIBIT “1” TO GRANT DEED
Description of City Property
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
304
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 44 EXHIBIT “H”
Non-Foreign Affidavit
Section 1445 of the Internal Revenue Code provides that the transferee of an interest in real property located in the United States must withhold tax if the transferor is a foreign person. To inform the ONTARIO-MONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and the laws of the State of California, (“Transferee”), that withholding of tax is not required upon the transfer by the CITY OF ONTARIO, a California municipal corporation (“Transferor”) of its fee simple interest in that certain real property sold pursuant to the Exchange Agreement and Joint Escrow Instructions dated ___________________, 2026, which real property is described in the legal description and depicted in the map attached to this Agreement as Exhibit “A,” and incorporated herein by this reference, the undersigned hereby certifies the following:

1. The Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and the income tax regulations promulgated thereunder);

2. The Transferor’s United States Taxpayer Identification Numbers are _________________;

3. The Transferor’s office address is 303 E. B Street, Ontario, CA 91764; and

4. The Internal Revenue Service has not issued any notice with respect to Transferor or listed Transferor as a person whose affidavit may not be relied upon for purposes of Section 1445 of the Internal Revenue Code.

The Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment or both.

Under penalty of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I am the ___________ of the Transferor, and that I have authority to sign this document on behalf of the Transferor.

Dated: _______________ CITY OF ONTARIO
a California municipal corporation
By: _____________________________________
Its: _____________________________________
ATTEST:

By: _____________________________________
_________________
305
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 45 EXHIBIT “1” TO NON-FOREIGN AFFIDAVIT
Legal Description of City Property
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
306
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 46 EXHIBIT “I”
District Property Grant Deed

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

CITY OF ONTARIO
Attn: City Clerk
303 East B Street
Ontario, CA 91764
______________________________________________________________________________ _______
(Space Above For Recorder’s Use)
The undersigned grantor(s) declare(s):

This conveyance is exempt from the payment
of a documentary transfer tax pursuant to
Revenue and Taxation Code section 11922.

This document is being recorded for the
benefit of the City of Ontario and is exempt
from the payment of a recordation fee
pursuant to Gov. Code section 6103.
______________________________________________________________________________ _______

FORM OF GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the ONTARIO-MONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and the laws of the State of California, hereby grants to the CITY OF ONTARIO, a municipal corporation duly organized and validly existing under the Constitution and the laws of the State of California, that certain real property located in the City of Ontario, County of San Bernardino, State of California, described in the legal description and depicted in the map attached hereto as Exhibit “1,” and incorporated herein by this reference.

Dated: _______________ ONTARIO-MONTCLAIR SCHOOL DISTRICT a public school district duly organized and validly existing under the Constitution and the laws of the State of California By: _____________________________________
Its: _____________________________________
ATTEST:

By: _____________________________________
Clerk of the Governing Board of the
Ontario-Montclair School District
307
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 47 EXHIBIT “1” TO GRANT DEED
Legal Description of District Property
(To be determined based on the information obtained from the preliminary title report after escrow is opened)
308
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 48 EXHIBIT “J”
Public Agency Certificate of Acceptance
(Government Code Section 27281)
This is to certify that the interest in real property conveyed by the Grant Deed dated _______________________, from the CITY OF ONTARIO, a municipal corporation duly organized and validly existing under the Constitution and the laws of the State of California, to the ONTARIO-MONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and the laws of the State of California, is hereby accepted by the undersigned officer on behalf of the ONTARIO-MONTCLAIR SCHOOL DISTRICT pursuant to authority conferred by the California Constitution and Board action dated ___________, 2026, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: _______________ ONTARIO-MONTCLAIR SCHOOL DISTRICT By: _____________________________________
Its: _____________________________________
ATTEST:

By: _____________________________________
Clerk of the Governing Board of the
Ontario-Montclair School District
309
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 49 EXHIBIT “K”
Non-Foreign Affidavit
Section 1445 of the Internal Revenue Code provides that the transferee of an interest in real property located in the United States must withhold tax if the transferor is a foreign person. To inform the CITY OF ONTARIO, a municipal corporation duly organized and validly existing under the Constitution and the laws of the State of California (“Transferee”), that withholding of tax is not required upon the sale by ONTARIO-MONTCLAIR SCHOOL DISTRICT, a public school district duly organized and validly existing under the Constitution and the laws of the State of California (“Transferor”), of its fee simple interest in that certain real property sold pursuant to the Exchange Agreement and Joint Escrow Instructions dated ___________________, 2026 which real property is described in the legal description and depicted in the map attached to this Agreement as Exhibit “A,” and incorporated herein by this reference, the undersigned hereby certifies the following:

1. The Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and the income tax regulations promulgated thereunder);

2. The Transferor’s United States Taxpayer Identification Numbers are _________________;

3. The Transferor’s office address is _____________________; and

4. The Internal Revenue Service has not issued any notice with respect to Transferor or listed Transferor as persons whose affidavit may not be relied upon for purposes of Section 1445 of the Internal Revenue Code.

The Transferor understands that this certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment or both.

Under penalty of perjury, I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I am the ___________ of the Transferor, and that I have authority to sign this document on behalf of the Transferor.

Dated: _______________ ONTARIO-MONTCLAIR SCHOOL DISTRICT a public school district duly organized and validly existing under the Constitution and the laws of the State of California By: _____________________________________
Its: _____________________________________
ATTEST:

By: _____________________________________
Clerk of the Governing Board of the
Ontario-Montclair School District
310
_____________________________________________________________________________________________ OMSD & City of Ontario – Exchange Agreement and Joint Escrow Instructions Page 50 EXHIBIT “1” TO NON-FOREIGN AFFIDAVIT
Legal Description Of District Property
(To be inserted based on the information obtained from the preliminary title report after escrow is opened)
311
Department: Economic Development
Prepared By: Thailin Martin
Department:

Prepared By: Thailin Martin
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 11
SUBJECT: A PUBLIC HEARING REGARDING A RESOLUTION APPROVING THE LIST OF

PARTICIPATING DEALERS AND A RESOLUTION APPROVING A RESIDENT VEHICLE

INCENTIVE PROGRAM (VIP), APPROVING THE TERMS AND PROVISIONS AS

PROVIDED IN ITS PARTICIPATION AGREEMENT, APPROVING PROGRAM

GUIDELINES, AND APPROVING AN ECONOMIC DEVELOPMENT SUBSIDY REPORT PURSUANT TO CALIFORNIA GOVERNMENT CODE 53083, AND MAKING RELATED

FINDINGS

CITY OF ONTARIO
Agenda Report
October 6, 2026
SECTION:

PUBLIC HEARINGS
RECOMMENDATION:

That the City Council take the following actions:

A. Adopt a Resolution approving the list of qualifying dealers in a Resident Vehicle Incentive Program (VIP); and
B. Adopt a Resolution approving the Participation Agreement, the Program Guidelines and, the Economic Development Subsidy Report.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
FISCAL IMPACT: Pursuant to the terms of the proposed Participation Agreement (Agreement), the economic development subsidy to Ontario residents is calculated at $500 per new purchased or leased vehicle and $250 per pre-owned purchased vehicle from a participating dealership, for an estimated annual subsidy of approximately $3.5 million and an estimated cumulative subsidy of approximately $35.0 million over the proposed 10-year term. An additional $50,000 per year will be budgeted for City marketing and administration of the Resident VIP.

Per the Economic Development Subsidy Report, the City anticipates that the program will generate $35 million over the 10-year term commencing upon the effective date of the Agreement, and the total amount of the expenditure of public funds as a result of the economic development subsidy 312
will not exceed $35 million over the 10-year term. General Fund appropriations will be included in a future quarterly budget update to the City Council as needed.

BACKGROUND & ANALYSIS: With the proposed sales tax measure set for the November 3, 2026, ballot, local dealerships have expressed concern that a citywide sales tax increase could lead to a decrease in the potential number of cars sold to residents. A City of Ontario Resident VIP has been developed to address the potential shift of local automotive purchases to outside jurisdictions. This represents a shifting in local revenues, as well as the loss of funds needed for vital City services, to outside jurisdictions, resulting in a negative impact on the City's local economy. To spur residents to continue to purchase from Ontario dealerships, the Resident VIP incentive is proposed.

The proposed Resident VIP is a buy-local economic development initiative designed to encourage City of Ontario residents to purchase or lease vehicles from participating franchised dealerships located within the City. The Resident VIP would provide a $500 rebate toward the qualifying purchase or lease of a new vehicle and $250 rebate toward the purchase of a qualifying pre-owned vehicle. The proposed Participation Agreement would commence on April 1, 2027, and end on March 31, 2037, for a ten-year term, with a formal review at the five-year mark. Pursuant to California Government Code Section 53083, the City will also hold a public hearing at the conclusion of the Program 10 year term. By encouraging local vehicle purchases, the Resident VIP is intended to protect the City’s Measure Q and proposed Measure H local transactions and use tax, support local automobile dealerships, and the jobs they provide, and preserve the revenues that help fund essential City services.

The Resident VIP is contingent upon voter approval of the proposed Half-cent Transaction and Use Tax Measure, Measure H, anticipated for the November 3, 2026, ballot and Measure Q remaining in place. Pursuant to California Government Code Section 53083, the City Council must conduct a noticed public hearing and review the attached Economic Development Subsidy Report before approving the Participation Agreement and establishing the Resident VIP.

Staff recommends adopting a Resolution approving list of qualifying dealers, and a Resolution approving the Participation Agreement, Program Guidelines, and Economic Development Subsidy Report to incentivize Ontario residents to continue to purchase or lease from participating franchised dealerships located within the City of Ontario, contingent upon voter approval of Measure H, and Measure Q remaining in place.
313
RESOLUTION NO. _____

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

CALIFORNIA, APPROVING A LIST OF ELIGIBLE DEALERS IN A

RESIDENT VEHICLE INCENTIVE PROGRAM, AND MAKING RELATED
FINDINGS.

WHEREAS, the City of Ontario (“City”), a municipal corporation organized and existing under the laws of the State of California, desires to implement a Resident Vehicle Incentive Program (“VIP” or the “Program”) with the franchised vehicle dealers in Exhibit A, corporations of the states identified therein and auto dealerships located in the City of Ontario (“City”), whereby the City shall provide a rebate to eligible City of Ontario residents for the purchase or lease of a new vehicle, or purchase of a pre-owned vehicle, from a participating franchised vehicle dealership located in the City of Ontario; and WHEREAS, the City seeks to establish the eligibility of the franchised vehicle dealers in Exhibit A for participation in a Resident VIP, by such dealers being located in the City of Ontario and holding a valid City business license; being in good standing with respective manufacturers and the Inland Empire Automobile Dealers Association, and having no unresolved code violations or legal or administrative proceedings with the City; and
WHEREAS, maintaining such eligibility requirements are intended to promote investment in the local economy, encourage job creation and retention, incentivize residents to shop local, and maintain a strong retail sales base in the City; and WHEREAS, maintaining such eligibility requirements are further intended to maintain a robust automotive sales base within the City that will generate substantial revenue for the City, to encourage vehicle purchases and leases within the City, and to avoid leakage of such transactions to other cities; and WHEREAS, dealer eligibility is not indicative of actual participation in a Resident VIP and may change from time to time, such that a list of eligible dealers may accordingly be amended from time to time, independent of the terms and provisions of a Resident VIP; and
WHEREAS, all 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. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by reference.

SECTION 2. Findings. The City Council hereby finds that:
314
(a) Each franchised vehicle dealer in Exhibit A is located in the City of Ontario and holds a valid City business license; is a successful auto dealership in good standing with its manufacturer and the Inland Empire Automobile Dealers Association; and has no unresolved code violations or legal or administrative proceedings with the City.
(b) Partnership with eligible dealers will serve the public purposes of developing the local economy, jobs, and City revenue, as described in the above recitals.

SECTION 3. CEQA Compliance. 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.), adoption of this resolution and approval of the List of Eligible Ontario Franchised Vehicle Dealers are each not a “project” for purposes of CEQA and therefore is not subject to CEQA review. Neither is a project pursuant to State CEQA Guidelines section 15378(b)(4), which states that governmental 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, neither is 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.

In addition, the City Council will direct staff to file a categorical exemption with the County of San Bernardino for this location upon adoption of this Resolution.

SECTION 4. Approve List of Eligible Dealers. The City Council hereby approves the list of Eligible Dealers as provided in Exhibit A. The City Council hereby authorizes the City Manager, with the concurrence of the City Attorney, to take any additional steps necessary to facilitate the intent of this action.

SECTION 5. Implementation. The City Manager, or his or her designee, is hereby authorized to and directed to, on behalf of the City, execute and/or amend any and all documents in accordance with this Resolution and applicable law.

SECTION 6. CEQA Exemption. The City Manager, or his or her designee, is hereby authorized to and directed to, on behalf of the City, file a Notice of Exemption from the California Environmental Quality Act with the Clerk of the County of San Bernardino in accordance with this Resolution and applicable law.

SECTION 7. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

SECTION 8. Certification. The City Clerk shall certify to the adoption of this Resolution.

SECTION 9. Effective Date. This Resolution shall become effective immediately upon its adoption.
315
PASSED, APPROVED, AND ADOPTED this 6
th day of October 2026.
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST AND KRIEGER LLP

CITY ATTORNEY
316

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. 2026-__ was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held October 6, 2026 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. 2026-__ duly passed and adopted by the Ontario City Council at their regular meeting held October 6, 2026. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
317

EXHIBIT A

LIST OF ELIGIBLE ONTARIO FRANCHISED VEHICLE DEALERS

1. Kienle Motors Sports LLC, dba Audi Ontario, a California limited liability company and auto dealer located at 2272 Inland Empire Blvd., Ontario, CA 91764

2. PAG Ontario B1, Inc., dba BMW of Ontario, a Delaware corporation and auto dealer located at 1301 Auto Center Dr., Ontario, CA 91761

3. Citrus Motors Ontario, Inc., dba Citrus Motors Ford, a California corporation and auto dealer located at 3627 E. Tenandhaven Paseo, Ontario, CA 91761

4. Ontario L, LLC, dba Crown Lexus, a California limited liability company and auto dealer located at 1125 Kettering Dr., Ontario, CA 91761

5. Swickard Crown, LLC, dba Crown Toyota, a Delaware limited liability company and auto dealer located at 1201 Kettering Dr., Ontario, CA 91761

6. Oremor of Ontario EN, LLC, dba Empire Nissan, a California limited liability company and auto dealer located at 1377 Kettering Dr., Ontario, CA 91761

7. Rusnak/Ontario, a California corporation, dba Genesis of Ontario, and auto dealer located at 2100 Inland Empire Blvd., Ontario, CA 91764

8. Montclair Automotive Services, Inc., dba Infiniti of Ontario, a California corporation and auto dealer located at 2192 Inland Empire Blvd., Ontario, CA 91764

9. Oremor of Ontario JCDR,LLC, dba Jeep Chrysler Dodge RAM Fiat of Ontario, a California corporation and auto dealer located at 1202 Auto Center Dr., Ontario, CA 91761

10.Mark Christopher Chevrolet Inc., dba Mark Chrisotpher Auto Center, a Delaware corporation and auto dealer located at 2131 E. Convention Center Way, Ontario, CA 91764

11.Jones Ontario Acquisition, LLC, dba Mercedes-Benz of Ontario, a California limited liability company and auto dealer located at 3787 E. Guasti Rd., Ontario, CA 91761

12.PAG Ontario B1, Inc. dba MINI of Ontario, a Delaware corporation and auto dealer located at 1251 Auto Center Dr., Ontario, CA 91761

13.Romero Motors Corporation, dba Ontario Hyundai, a California corporation and auto dealer located at 1307 Kettering Dr., Ontario, CA 91761

14.Shayco, Inc., dba Ontario Volkswagen, a California corporation and auto dealer located at 701 Kettering Dr., Ontario, CA 91761

15.Ontario Automotive, LLC, dba Penske Honda Ontario, a California limited liability company and auto dealer located at 1401 Auto Center Dr., Ontario, CA 91761

16.Kienle Motors Sports LLC, dba Porsche Ontario, a California limited liability company and auto dealer located at 2262 Inland Empire Blvd., Ontario, CA 91764

17.Martin Saturn of Ontario, Inc., dba Subaru of Ontario and Ontario Mitsubishi, a Delaware corporation and auto dealer located at 1195 Auto Center Dr., Ontario, CA 91761

18.GNH, Inc., dba Volvo Cars Ontario, a California corporation and auto dealer located at 1300 Auto Center Dr., Ontario, CA 91761
318
RESOLUTION NO. _____

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

CALIFORNIA, APPROVING THE TERMS AND PROVISIONS OF A

RESIDENT VEHICLE INCENTIVE PROGRAM AS PROVIDED IN ITS

PARTICIPATION AGREEMENT, APPROVING PROGRAM GUIDELINES,

APPROVING AN ECONOMIC DEVELOPMENT SUBSIDY REPORT, AND
MAKING RELATED FINDINGS.

WHEREAS, the City of Ontario (“City”), a municipal corporation organized and existing under the laws of the State of California, desires to implement a Resident Vehicle Incentive Program (“VIP” or the “Program”) with franchised vehicle dealers located in the City of Ontario (“City”), whereby the City shall provide a rebate to eligible City of Ontario residents for the purchase or lease of a new vehicle, or purchase of a pre-owned vehicle, from a participating franchised vehicle dealership located in the City of Ontario; and WHEREAS, the City maintains a 1% point-of-sale tax under Revenue and Taxation Code section 7200 et seq., currently implements a 1% transaction and use tax under section 7251 et seq. approved by Ontario residents in 2022 (“Measure Q”), and is proposing a .5% increase in the transaction and use tax for voter approval on November 3, 2026 (“Measure H”), to generate revenue to provide vital City services and support City growth and development; and
WHEREAS, the City has the regulatory authority to engage in economic development activities to promote investment in the local economy and build the local tax base, such as an economic development subsidy as defined and approved under Government Code section 53083, subject to public notice and hearing under section 53083(b); and
WHEREAS, the City has established Resident VIP Program Guidelines (Exhibit B) summarizing the terms and provisions of the Participation Agreement (Exhibit A) and the details of the economic development subsidy, to promote awareness and facilitate administration of the Program; and
WHEREAS, the City must issue a report for any economic development subsidy within the term of the subsidy, containing certain required information under Government Code section 53083(d), and has prepared such a report for future public notice and hearing within the subsidy term, under section 53083(e)(1); and WHEREAS, to promote investment in the local economy, encourage job creation and retention, incentivize residents to shop local, and maintain a strong retail sales base in the City, the City intends to establish an economic development subsidy that will help counterbalance potential incidental effects of the proposed tax increase; and WHEREAS, the City has determined that maintaining a robust automotive sales base within the City will generate substantial revenue for the City, and that rebates to residents on qualifying transactions will encourage vehicle purchases and leases within the City and will avoid leakage of such transactions to other cities; and 319
WHEREAS, establishing a Resident Vehicle Incentive Program issuing such rebates and entering into Participation Agreements with eligible Ontario vehicle dealerships will help achieve the foregoing City objectives, maintain both dealer and City revenues, and attract other types of businesses and investment to the community due to increased services and economic activity in the area; and WHEREAS, all 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. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by reference.

SECTION 2. Findings. The City Council hereby finds that:
(a) Establishing a Resident Vehicle Incentive Program and entering into Participation Agreements with Ontario franchised vehicle dealers will serve the following public purposes:
(1) Partnering with these City businesses on resident rebates for qualifying transactions will generate substantial revenue for the City, promote jobs, maintain economic diversity in the community, and stimulate the local economy. (2) Entering into the Participation Agreements and supporting local auto sales transactions may attract other types of businesses and investment in the community due to increased services and economic activity in the area. (b) Based on these and other public benefits, the public purposes of the Resident Vehicle Incentive Program and the Participation Agreements outweigh any private benefit to private persons or entities.
(c) Contingent Obligations. The City finds that each City obligation within each Participation Agreement is contingent upon continued participation of such agreement’s franchised vehicle dealer in the Resident Vehicle Incentive Program, as well as Measure H being approved, and Measure Q and Measure H remaining in effect.

SECTION 3. CEQA Compliance. 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.), adoption of this resolution and approval of the Resident Vehicle Incentive Program, Program Guidelines, and Economic Development Subsidy Report (Exhibit C) are each not a “project” for purposes of CEQA and therefore is not subject to CEQA review. None of the foregoing is a project pursuant to State CEQA Guidelines section 15378(b)(4) which states that governmental 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, none of the foregoing is a project under State CEQA Guidelines section 320
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.

In addition, the City Council will direct staff to file a categorical exemption with the County of San Bernardino for this location upon adoption of this Resolution.

SECTION 4. Approve Resident Vehicle Incentive Program. The City Council hereby approves the terms and provisions of the Resident Vehicle Incentive Program as provided under the Participation Agreement. The City Council hereby authorizes the City Manager, with the concurrence of the City Attorney, to implement the Resident Vehicle Incentive Program and to take any additional steps necessary to facilitate the intent of this action.

SECTION 5. Approve Program Guidelines. The City Council hereby approves the Program Guidelines for the Resident Vehicle Incentive Program. The City Council hereby authorizes the City Manager, with the concurrence of the City Attorney, to take any additional steps necessary to facilitate the intent of this action.

SECTION 6. Approve Economic Development Subsidy Report. The City Council hereby approves the Economic Development Subsidy Report for the Resident Vehicle Incentive Program. The City Council hereby authorizes the City Manager, with the concurrence of the City Attorney, to take any additional steps necessary to facilitate the intent of this action.

SECTION 7. Implementation. The City Manager, or his or her designee, is hereby authorized to and directed to, on behalf of the City, execute and/or amend any and all documents in accordance with this Resolution and applicable law.

SECTION 8. CEQA Exemption. The City Manager, or his or her designee, is hereby authorized to and directed to, on behalf of the City, file a Notice of Exemption from the California Environmental Quality Act with the Clerk of the County of San Bernardino in accordance with this Resolution and applicable law.

SECTION 9. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

SECTION 10. Certification. The City Clerk shall certify to the adoption of this Resolution.

SECTION 11. Effective Date. This Resolution shall become effective immediately upon its adoption.

PASSED, APPROVED, AND ADOPTED this 6
th day of October 2026.
321
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________

SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________

BEST BEST AND KRIEGER LLP

CITY ATTORNEY
322

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. 2026- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held October 6, 2026 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. 2026- duly passed and adopted by the Ontario City Council at their regular meeting held October 6, 2026. _____________________________________

SHEILA MAUTZ, CITY CLERK
(SEAL)
323

EXHIBIT A

PARTICIPATION AGREEMENT FOR THE CITY OF ONTARIO

RESIDENT VEHICLE INCENTIVE PROGRAM

WITH ONTARIO FRANCHISED VEHICLE DEALERS
[Attached behind this cover page]
324

EXHIBIT B

VIP PROGRAM GUIDELINES
[Attached behind this cover page]
325

EXHIBIT C

ECONOMIC DEVELOPMENT SUBSIDY REPORT
[Attached behind this cover page]
326
09957.00000\45487916.1

PARTICIPATION AGREEMENT FOR THE CITY OF ONTARIO

RESIDENT VEHICLE INCENTIVE PROGRAM

WITH ONTARIO FRANCHISED VEHICLE DEALERS
This Participation Agreement for the City of Ontario Resident Vehicle Incentive Program (“Agreement”) is entered into this ____ day of ________, 2026, by and between the City of Ontario, a municipal corporation organized and existing under the laws of the State of California (“City”), and the franchised vehicle dealers located in the City of Ontario identified herein (“Dealership(s)”), all collectively referred to hereafter as the “Parties.”

RECITALS

1. The Parties desire to implement a City of Ontario Resident Vehicle Incentive Program (“VIP” or the “Program”) whereby the City shall provide a rebate to eligible City of Ontario residents for the purchase or lease of a new vehicle, or purchase of a pre-owned vehicle, from a participating franchised vehicle dealership located in the City of Ontario, pursuant to the terms defined herein. This Agreement governs the process of reimbursement to participating Dealerships that provide a corresponding discount on the agreed upon purchase or lease price of any qualifying vehicle purchased or leased in the City of Ontario by an eligible resident.

2. The Dealerships participating in the Resident VIP shall include: Audi Ontario, BMW of Ontario, Citrus Motors Ford, Crown Lexus, Crown Toyota, Empire Nissan, Genesis of Ontario, Infiniti of Ontario, Jeep Chrysler Dodge RAM Fiat of Ontario, Mark Christopher Auto Center, Mercedes-Benz of Ontario, MINI of Ontario, Ontario Hyundai, Ontario Volkswagen, Penske Honda Ontario, Porsche of Ontario, Subaru of Ontario, and Volvo Cars Ontario.

AGREEMENT

3. Rebate Program. The City of Ontario hereby agrees to provide to the participating Dealerships a rebate for each qualifying vehicle purchase or lease by an eligible City of Ontario resident, in the following amounts: (i) $500.00 per qualifying new vehicle purchased or leased; and (ii) $250.00 per qualifying pre-owned vehicle purchased.

Motorcycles, off-road vehicles, and watercraft are not eligible. Each rebate is subject to the following conditions:

A. The Dealership documents the sale of the new or pre-owned vehicle to an eligible City of Ontario resident under the Program Guidelines;
B. The Dealership discounts the purchase or lease price of the qualifying vehicle by an additional amount equal to the applicable rebate ($500 for a new vehicle purchase or lease, or $250 for a pre-owned vehicle purchase) from the agreed upon price, identified on the final sales contract on a separate line under “Other” with an “Ontario Resident VIP Rebate” description; and
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09957.00000\45487916.1
C. The Dealership submits all required rebate forms to the City on a monthly basis, providing the rebate request and corresponding proof-of-sale documentation and registration documents under the Program Guidelines established by the City for administration of the Resident VIP. (See attached Ontario Resident VIP Rebate Form.)

4. Dealership Responsibilities. The Dealership shall meet all of the following requirements:

A. Dealership must be a franchised vehicle dealer located in the City of Ontario and hold a valid City of Ontario business license;
B. Dealership must be in good standing with its manufacturer and the Inland Empire Automobile Dealers Association, and have no unresolved code violations or legal or administrative proceedings with the City;
C. Dealership shall document the sale of each qualifying vehicle using the applicable Ontario Resident VIP Rebate Form, including the final sales invoice showing proof of purchase or lease and proof of registration of the vehicle in the City of Ontario; D. Dealership shall identify the applicable rebate ($500 for a new vehicle or $250 for a pre-owned vehicle) on the final sales contract on a separate line under “Other” with an “Ontario Resident VIP Rebate” description, and apply it toward the purchase or lease price;
E. Dealership shall collect and submit all required documentation as proof of eligibility:
a valid California driver's license, utility bill, property tax bill, proof of insurance, or bank statement; and
F. Dealership shall submit all rebate forms and required documentation to the City on a monthly basis, together with a completed Ontario Resident VIP Summary Form (see attached), and shall meet the requirements of the City under the Resident VIP Program Guidelines established by the City Manager or designee. Any rebate provided by a dealership to a non-Ontario resident will not be reimbursed by the City.

5. City of Ontario Resident Responsibilities.

A. The qualified resident applicant must be able to prove City of Ontario residency under the Program Guidelines by registering the purchased or leased vehicle to an address within the City of Ontario and providing one of the following: a valid California driver's license, utility bill, property tax bill, proof of insurance, or bank statement; and B. The City-sponsored rebate is available only for the purchase or lease of a new vehicle, or the purchase of a pre-owned vehicle, from a participating Dealership.

6. Term. This Agreement shall commence on April 1, 2027, and continue for a ten (10) year term ending March 31, 2037, established to align with the anticipated implementation date of Measure H, a City of Ontario transactions and use tax (sales tax) measure, if approved. 328
09957.00000\45487916.1
Commencement and continued implementation of this Agreement is contingent upon: (i) voter approval of Measure H; and (ii) Measure H and Measure Q (approved in 2022) remaining in effect throughout the initial ten (10) year term and any extended term thereof.

In accordance with Government Code Section 53083, the City will conduct a formal program review, issue a follow-up report, and hold a public hearing within the term of the Program, five (5) years after approval of the economic development subsidy, and no later.

Notwithstanding the foregoing, the City will not unreasonably withhold extension at the five (5) year mark. Because the Program has a term of ten (10) years or more, the City will also hold a public hearing at the conclusion of the Program term. Any extension, renewal, or material amendment of the Program shall be made by written amendment approved by the City Council and executed by the authorized representatives of the Parties, subject to applicable law.

The Dealership may terminate its participation in the program by providing the City thirty (30) days written notice to the attention of the City Manager.

7. Reimbursement by City. Dealerships shall submit requests for reimbursement to the City on a monthly basis, together with all required documentation necessary to verify the sale of a qualifying vehicle under the Resident VIP guidelines, within thirty (30) days of the last day of the reportable month. Within five (5) business days of receipt, the City will review the rebate applications and supporting documentation; if documentation is missing, the City will request the additional documentation to provide the opportunity to resubmit with completed documentation, which may delay processing of the deficient applications but will not delay applications that are complete. Upon approval, the City shall reimburse the Dealership within thirty (30) days of the rebate submissions, provided that all required documentation is complete and submitted. The maximum amount of reimbursements by the City for the Resident VIP shall not exceed $3,500,000 in any year of the Agreement or $35,000,000 over the ten (10) year term. All reimbursements are subject to annual appropriation by the City Council and the availability of legally available funds.

8. Administration. The City Manager is hereby appointed to administer this Agreement and take all necessary actions to implement this Agreement on behalf of the City.

9. Interpretation of the Agreement.

A. This Agreement constitutes the entire agreement between the Parties and supersedes all prior discussions, negotiations, and agreements, whether oral or written. Any amendment to this Agreement, including an oral modification supported by new consideration, must be reduced to writing and signed by both Parties before it will be effective.

B. This Agreement and all amendments and supplements to it may be executed in counterparts, and all counterparts together shall be construed as one document.

C. This Agreement is to the benefit of, and is binding on, the Parties and their respective heirs, personal representatives, successors, and assigns. 329
09957.00000\45487916.1
D. The captions heading the various paragraphs of this Agreement are for convenience and shall not be considered to limit, expand, or define the contents of the respective paragraphs. Masculine, feminine, or neuter gender and the singular and the plural number shall each be considered to include the other whenever the context so requires.

If either Party consists of more than one person, each such person shall be jointly and severally liable. This Agreement shall be interpreted under California law and according to its fair meaning, and not in favor of or against any Party.

10. Governing Law. This Agreement is executed and intended to be performed in the State of California, and the laws of that State shall govern its interpretation and effect. Any legal proceedings on this Agreement shall be brought under the jurisdiction of the Superior Court of the County of San Bernardino, State of California.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement the date and year first above written.

CITY OF ONTARIO:

Scott Ochoa
City Manager
ATTEST:

Sheila Mautz
City Clerk
APPROVED AS TO FORM:

Ruben Duran
City Attorney
DEALERSHIP:
[Dealership Owner Name]
[Title, Dealership Name]
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09957.00000\45487916.1

ONTARIO RESIDENT VIP REBATE FORM
VEHICLE I.D. NUMBER MAKE AND MODEL RETAIL DELIVERY DATE CUSTOMER INFORMATION FOR VALIDATION:

CUSTOMER LAST NAME FIRST NAME, M.I. TELEPHONE NUMBER

STREET ADDRESS CITY, STATE ZIP CODE

DEALERSHIP NAME PURCHASE/LEASE PRICE AND REBATE
Initial: I, the customer and Ontario resident, have applied the Ontario Resident VIP Rebate towards the purchase or lease of my vehicle. Therefore, I have assigned the cash payment directly to the dealer. I release the City of Ontario from any further claim or obligation for payment to me for this vehicle.

I, the customer, give the dealership named above permission to share this form, the final sales contract and a copy of my valid identification to the City of Ontario to process the rebate. I declare under penalty of perjury that the above information is true and correct.

CUSTOMER SIGNATURE DATE

SALES MANAGER NAME (PLEASE PRINT) DEALERSHIP NAME DATE

SALES MANAGER SIGNATURE DATE

THIS COMPLETE FORM MUST BE FORWARDED TO THE CITY OF ONTARIO WITH THE VEHICLE SALES DOCUMENTS. BY SIGNING THE ABOVE DOCUMENT, THE DEALER

IS VERIFYING THAT THE RESIDENT LIVES IN THE CITY OF ONTARIO AND QUALIFIES FOR THE REBATE.
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09957.00000\45487916.1

ONTARIO RESIDENT VIP SUMMARY FORM
DEALERSHIP NAME:

PREPARED BY:

MONTH/YEAR:

PHONE:

EMAIL:
#

DATE OF

PURCHASE / LEASE RESIDENT NAME NEW / PRE-OWNEDPURCHASE / LEASE REBATE TOTAL VEHICLES:

NEW: PRE-OWNED: LEASE:

TOTAL REBATES REQUESTED:

PREPARER SIGNATURE DATE
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09957.00000\45488048.1

CITY OF ONTARIO

RESIDENT VEHICLE INCENTIVE PROGRAM GUIDELINES
To maintain and spur growth of the local tax base, and to encourage Ontario residents to “buy local” and invest in the local economy, the City has developed the Resident Vehicle Incentive Program (VIP) that incentivizes Ontario residents to purchase or lease a car or truck (“vehicle”) from one of 18 franchised Ontario auto dealerships.

The Resident VIP provides a $500 rebate to an Ontario resident who purchases or leases a new vehicle, or a $250 rebate to an Ontario resident who purchases a pre-owned vehicle, from a franchised Ontario auto dealer. The rebates are designed to encourage residents to Purchase vehicles from participating franchised dealerships within the local community. The VIP has been developed to avoid leakage of local automotive purchases to outside jurisdictions and would ensure that future revenue generated by this sector will be available to provide vital City services.

Program Objectives
 Reinvest in the local economy.
 Encourage job creation and retention.
 Incentivize residents to shop local.
 Avoid leakage of automotive purchases to other cities.  Maintain a strong retail sales base in the City.

Eligible Participants
Any resident of the City of Ontario that purchases or leases a new vehicle, or purchases a preowned vehicle, from the eligible dealership is eligible to receive the rebate.  Qualified residents must be able to provide proof of Ontario residency to the dealership by registering their new purchase in Ontario and one of the following:
 Valid California Driver’s License
 Utility Bill
 Property Tax Bill
 Proof of insurance
 Bank statement
 Qualified residents must sign an Ontario Resident VIP Rebate Form verifying residency in Ontario.
 Rebate will be applied towards the agreed upon purchase or lease price in the final sales contract.
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Eligible Dealerships
The Resident Vehicle Incentive Program (VIP) has been designed to encourage residents to purchase or lease a car or truck from one of the 18 franchised auto dealers in the City of Ontario. A list of eligible dealerships is provided below.

1. Audi Ontario – 2272 Inland Empire Blvd., Ontario, CA 91764

2. BMW of Ontario – 1301 Auto Center Dr., Ontario, CA 91761

3. Citrus Motors Ford – 3267 E. Tenandhaven Paseo, Ontario, CA 91761

4. Crown Lexus – 1125 Kettering Dr., Ontario, CA 91761

5. Crown Toyota – 1201 Kettering Dr., Ontario, CA 91761

6. Empire Nissan – 1377 Kettering Dr., Ontario, CA 91761

7. Genesis of Ontario – 2100 Inland Empire Blvd., Ontario, CA 91764

8. Infiniti of Ontario – 2192 Inland Empire Blvd., Ontario, CA 91764

9. Jeep Chrysler Dodge RAM Fiat of Ontario – 1202 Auto Center Dr., Ontario, CA 91761

10.Mark Christopher Auto Center – 2131 E. Convention Center Way, Ontario, CA 91764

11.Mercedes-Benz of Ontario – 3787 E. Guasti Rd., Ontario, CA 91761

12.MINI of Ontario – 1251 Auto Center Dr., Ontario, CA 91761

13.Ontario Hyundai – 1307 Kettering Dr., Ontario, CA 91761

14.Ontario Volkswagen – 701 Kettering Dr., Ontario, CA 91761

15.Penske Honda of Ontario – 1401 Auto Center Dr., Ontario, CA 91761

16.Porsche Ontario – 2262 Inland Empire Blvd., Ontario, CA 91764

17.Subaru of Ontario – 1195 Auto Center Dr., Ontario, CA 91761

18.Volvo Cars Ontario – 1300 Auto Center Dr., Ontario, CA 91761 Qualifying Vehicles
 All purchases and leases of new cars or trucks are eligible.  All purchases of pre-owned cars or trucks are eligible.  Motorcycles, off-road vehicles or watercraft are not eligible purchases under this program.

Rebate Administration and Process
 Participating dealers document the purchase or lease of the new or pre-owned vehicle using the Resident VIP Rebate Form. Dealer must include:

1. Final sales invoice showing proof of purchase;

2. Proof of auto registration in Ontario;

3. Resident VIP Rebate Form;

4. Copy of one of the following: resident valid California Driver’s license; utility bill; property tax bill; proof of insurance; or bank statement.  Within thirty (30) days after the last day of the reportable month, dealers will submit a rebate summary report with required documentation to the City of Ontario for reimbursement and processing. The purchase summary form must be filled out and attached with rebate forms. Within thirty (30) days of the rebate submissions, provided that all required documentation is complete and submitted, City will issue reimbursement to dealers.
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 Any rebate provided by a dealership to a non-Ontario resident will not be reimbursed by the City.

Dealer Responsibilities
 Dealership franchises must have an Ontario business license, be in good standing with their manufacturer and the Inland Empire Automobile Dealers Association, and have no unresolved code violations or legal or administrative proceedings with the City.  Dealerships must document the purchase or lease of the new or pre-owned vehicle using the Resident VIP Rebate Form. Dealer must include: final sales invoice showing proof of purchase, proof of registration in Ontario, Resident VIP Rebate Form.  Dealerships shall identify the $500 (new vehicle purchase or lease) or $250 (pre-owned vehicle purchase) rebate to be applied towards the purchase price and shall be listed in the sales contract under a separate rebate on the “Other” line with a “Ontario Resident VIP Rebate” description.
 Dealerships must collect and submit all required documentation as proof of residency for qualified Ontario residents. (A copy of one of the following: valid California Driver’s license; utility bill; property tax bill; proof of insurance; or bank statement ).  On a monthly basis dealers will submit all rebate forms with required documentation to the City of Ontario for reimbursement and processing. Resident VIP Summary Form must be filled out and attached with rebate forms.

Program Term
The Ontario Resident Vehicle Incentive Program shall commence on April 1, 2027, and continue through March 31, 2037, for a term of ten (10) years, subject to annual appropriation of funds by the City Council and the terms of the applicable Participation Agreement.

Any extension, renewal, or material modification of the Program beyond March 31, 2037, shall be subject to City Council approval and compliance with all applicable legal requirements.

Program Administration
Within five (5) business days of receipt of documentation from dealerships, the City of Ontario will review the rebate applications and all supporting documentation. Dealers are required to self- certify that the summary covers all transactions handled during the reporting period.

Upon approval of documentation, the City of Ontario will be responsible for issuing checks to dealerships within thirty (30) days of the rebate submissions, provided that all required documentation is complete and submitted.

Program Funding
The Program budget shall be limited to $3,500,000 per year for vehicle rebates and up to $50,000 per year for City marketing and administration, subject to annual appropriation by the 335
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City Council. Over the 10-year Program term, the maximum cumulative expenditure shall not exceed $35,000,000 for vehicle rebates and $500,000 for marketing and administration, for a maximum total Program expenditure of $35,500,000.

Program Evaluation
Staff will periodically evaluate the effectiveness of the Program, including changes in eligible new and pre-owned vehicle purchases and leases by Ontario residents, rebate participation, local sales-tax revenue, and dealership employment. Staff will also consider external factors, including economic conditions, San Bernardino County vehicle sales, changes in manufacturer market share, and the opening or closure of dealerships inside or outside the City.

In accordance with Government Code section 53083, the City will prepare a follow-up economic development subsidy report and hold a public hearing within the Program term, five (5) years after approval of the subsidy, and no later. Because the Program has a term of ten (10) years or more, the City will also provide the required information and hold a public hearing at the conclusion of the 10-year Program term.
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Economic Development Subsidy Report
Pursuant to Government Code Section 53083
For a City of Ontario Resident Vehicle Incentive Program Pursuant to Government Code Section 53083, 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 through the City’s website regarding a proposed economic development subsidy provided by the City pursuant to a Participation Agreement between the City of Ontario and 18 franchised dealers (Agreement), in connection with the Resident Vehicle Incentive Program (VIP). Notice was published on the City’s website for a public hearing to be held on October 06, 2026.

The purpose of this report is to provide the information required pursuant to Government Code Section 53083 in regard to the Ontario Resident VIP. 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 or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.

The City proposes to enter into a Participation Agreement with the eighteen franchised automobile dealerships listed below. For purposes of this report, the participating dealerships are identified as business-entity beneficiaries because they are parties to the Participation Agreement and may receive an indirect economic benefit from increased or retained vehicle sales resulting from the Resident VIP.

The direct financial incentive will be provided to eligible City of Ontario residents that purchase or lease a qualifying vehicle from a participating dealership. The Participation Agreement will establish the responsibilities of the City and each participating dealership, including purchaser eligibility verification, required documentation, program administration, and payment procedures. The participating dealership entities are:

Audi Ontario
2272 Inland Empire Blvd.

Ontario, CA 91764
Genesis of Ontario
2100 Inland Empire Blvd.

Ontario, CA 91764
Ontario Hyundai
1307 Kettering Dr.

Ontario, CA 91761
BMW of Ontario
1301 Auto Center Dr.

Ontario, CA 91761
Infiniti of Ontario
2192 Inland Empire Blvd.

Ontario, CA 91764
Ontario Volkswagen
701 Kettering Dr.

Ontario, CA 91761
Citrus Motors Ford
3267 E. Tenandhaven Paseo
Ontario, CA 91761
Jeep Chrysler Dodge RAM Fiat of Ontario
1202 Auto Center Dr.

Ontario, CA 91761
Penske Honda of Ontario
1401 Auto Center Dr.

Ontario, CA 91761
Crown Lexus
1125 Kettering Dr.

Ontario, CA 91761
Mark Christopher Auto Center
2131 E. Convention Center Way
Ontario, CA 91764
Porsche Ontario
2262 Inland Empire Blvd.

Ontario, CA 91764
Crown Toyota
1201 Kettering Dr.

Ontario, CA 91761
Mercedes-Benz of Ontario
3787 E. Guasti Rd.

Ontario, CA 91761
Subaru of Ontario
1195 Auto Center Dr.

Ontario, CA 91761
Empire Nissan
1377 Kettering Dr.

Ontario, CA 91761
MINI of Ontario
1251 Auto Center Dr.

Ontario, CA 91761
Volvo Cars Ontario
1300 Auto Center Dr.

Ontario, CA 91761
City of Ontario - Resident Vehicle Incentive Program (§ 53083 Subsidy Report) Page 1 337
Economic Development Subsidy Report
Pursuant to Government Code Section 53083
For a City of Ontario Resident Vehicle Incentive Program (2) The start and end dates and schedule, if applicable, for the economic development subsidy.

Upon City Council approval, the proposed Participation Agreement is expected to commence on April 1, 2027, and end on March 31, 2037, for a 10-year term, with a formal review at the 5-year mark.

The Resident VIP is contingent upon voter approval of Measure H on the November 03, 2026 ballot, and of Measure H and previously approved Measure Q remaining in place. The Resident VIP will remain subject to annual appropriation of legally available City revenues. Because the term of the proposed Resident VIP is ten years, the City will post this report on the City's website for the full term, issue an interim report to the Council within five years of approval, and the City Council will hold a public hearing at the conclusion of the subsidy, consistent with Government Code Section 53083. (3) 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 to Ontario residents is $500 per new vehicle purchased or leased and $250 per pre-owned vehicle purchased from a participating dealership, for an estimated subsidy of approximately $3,500,000 per year over the 10-year proposed term, for an estimated cumulative total of approximately $35,000,000. In addition, up to $50,000 per year is budgeted for City marketing and administration of the Resident VIP, for a total estimated public expenditure of up to $3,550,000 per year — totalling up to an estimated $35,500,000 over the term.

The Resident VIP would be funded by a portion of the revenue generated by the proposed sales tax Measure H and existing Measure Q. Qualifying leases are limited to new cars and trucks. Pre-owned vehicle leases, motorcycles, off-road vehicles, and watercraft are not eligible. These figures are maximum (appropriation) ceilings; the estimated actual rebate cost, based on current purchase volumes, is provided in item 5 below. The program is anticipated to be funded through annual appropriations from legally available City sales tax and use tax revenues. All program expenditures will remain subject to City Council for budget approval and the terms of the Participation Agreement. (4) A statement of the public purposes for the economic development subsidy.

With the proposed sales tax measure set for the November 3, 2026, ballot, local dealerships have expressed concern that a citywide sales tax increase could lead to a decrease in the potential number of cars sold or leased to residents. The Resident VIP has been developed to address the potential leakage of local automotive purchases to outside jurisdictions. This represents a shifting in local revenues, as well as the loss of funds needed for vital City services, to outside jurisdictions, resulting in a negative impact on the City's local economy. To spur residents to continue to purchase from Ontario dealerships, the Resident VIP incentive has been proposed. (5) Projected tax revenue to the local agency as a result of the economic development subsidy.

With targeted marketing and program awareness efforts, staff anticipate that the proposed incentive program will increase the number of eligible City of Ontario residents purchasing vehicles and, importantly, improve the City's approximately ability to retain a portion of those transactions within Ontario rather than losing sales activity to competing dealerships in surrounding jurisdictions. Staff estimates that the Resident VIP will retain 5,141 new-vehicle purchases and 1,894 pre-owned vehicle purchases annually at participating dealerships located within the City of Ontario. These estimates represent purchases that are assumed to occur outside the City in the absence of the program.

City of Ontario - Resident Vehicle Incentive Program (§ 53083 Subsidy Report) Page 2 338
Economic Development Subsidy Report
Pursuant to Government Code Section 53083
For a City of Ontario Resident Vehicle Incentive Program Based on reported taxable sales and transaction volumes, the estimated average taxable revenue attributable to each transaction is $36,774 for a new vehicle and $17,614 for a pre-owned vehicle. These figures should not be interpreted as average vehicle prices. Dealership representatives estimate average prices of approximately $54,000 for new vehicles and $35,000 for pre-owned vehicles.

However, the taxable-revenue averages are lower because they reflect a combination of vehicle purchases and leases, for which the full retail value of the vehicle may not be recognized as taxable revenue during the same reporting period.

Using these blended taxable-revenue averages, the projected annual taxable sales retained within the City are calculated as follows:
• 5,141 new vehicles × $36,774 = $189,055,134
• 1,894 pre-owned vehicles × $17,614 = $33,360,916
• Total estimated taxable sales = $222,416,050
Applying the City’s existing and proposed local sales tax allocation (1%-Measure Q and proposed

0.5%-Measure H), the program is projected to generate/protect approximately $3,336,241 in annual tax revenue to the City:
• $222,416,050 × 1.5% = $3,336,241
Assuming consistent annual participation throughout the proposed 10-year program term, the cumulative projected tax revenue would be approximately $35 million, without adjustment for inflation, changes in vehicle prices, or changes in purchasing activity.

The proposed half-cent local transactions and use tax is generally associated with the purchaser’s place of registration or use. Because an Ontario resident may generate this revenue for the City regardless of whether the vehicle is purchased from a dealership located inside or outside Ontario, revenue from the proposed tax measure is not included in the amount projected to result directly from the Resident VIP.

Actual revenue will depend on program participation, the number of purchases that are retained within Ontario because of the incentive, vehicle transaction values, purchaser eligibility, and applicable tax- allocation rules. (6) Estimated number of jobs created by the economic development subsidy, broken down by full- time, part-time, and temporary positions.

The proposed Resident VIP will assist in retaining the existing jobs at the eighteen Ontario auto dealerships. The Resident VIP is not expected to create a significant number of new net positions; as an offset to a sales tax increase rather than a demand stimulus, its primary effect is to sustain existing employment, and new part-time or temporary positions are anticipated to grow with corresponding sales growth. Based on employment information provided, dealerships currently employ approximately 1,548 full-time and 54 part-time positions (approximately 1,602 total), with no temporary positions reported.

City of Ontario - Resident Vehicle Incentive Program (§ 53083 Subsidy Report) Page 3 339