Section 2.6 Repayment Schedule.
(a) Annual Payments. Commencing on July 1st of the first year after the City's issuance of a Certificate of Completion for the Improvements and on July 1st of each year thereafter through the HOME Loan Term, Borrower shall make a Loan payment in an amount equal to the HOME Percentage of Lenders' Share of Residual Receipts for the previous calendar year (each, an “Annual Payment”). On or before each Annual Payment, the Borrower shall submit its Annual Financial Statement to the City for the preceding calendar year , and shall provide the City with any other documentation reasonably requested by the City to substantiate the Borrower 's determination of Residual Receipts . The City shall apply all Annual Payments first, to accrued interest, and second, to principal. The Borrower may retain fifty percent (50%) of Residual Receipts.
(b) Special Repayment f or Un -Leased HOME-Assisted Units. As required under 24 C.F.R. 92.252, if Borrower fails to lease any one of the HOME -Assisted Units within eighteen (18) months of the Completion of Construction, the Borrower shall repay to the City a proportionate share of the indebtedness of Borrower to the City under this Agreement and the Note attributable to each of the HOME -Assisted Units that has re mained un -leased for the entire eighteen (18) month period, which amount shall be immediately due and payable. (c) Payment in Full. Borrower shall pay all outstanding principal and accrued interest on the Loan, in full, on the earliest to occur of: (1) the City 's acceleration of the Note in accordance with Section 5.2 hereof; and (2) the expiration of the HOME Loan Term. (d) Prepayment. Borrower may prepay the Loan at any time without premium or penalty. However, the Regulatory Agreement will remain in effect for the entire HOME Reporting Term, and the Deed of Trust will remain in effect for the entire HOME Loan Term, regardless of any prepayment.
Section 2.7 Non-Recourse. Except as provided below, the Borrower shall not have any direct or indirect personal liability for payment of the principal of, or interest on, the Loan or the performance of the covenants of the Borrower under the Deed of Trust. The sole recourse of the City with respect to the principal of, or interest on, the Note and defaults by the Borrower in the performance of its covenants under the Deed of Trust shall be to the property described in the Deed of Trust; provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such se curity for the Note and of all the rights and 846
9 remedies of the City thereunder, or (b) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note and the performance of the Borrower's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the Borrower's obligation to indemnify the City under this Agreement, or liability for: (i) fraud or w illful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Borrower's interest of the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of s uch taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by the Borrower other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insur ance policies or awards r esulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Development.
Section 2.8 Subordination. The Deed of Trust shall be subordinated to each Senior Lien and to other liens approved by the Housing Director securing financing set forth in the Approved Financing Plan, if any, but only on condition that all of the following conditions are satisfied:
(a) All of the proceeds of the proposed Senior Lien, less any transaction costs, must be used to provide construction and/or permanent financing for the Development. (b) The subordination agreement(s) must be structured to minimize the risk that the Deed of Trust would be extinguished as a result of a foreclosure by the Senior Lender or other holder of the Senior Lien. To satisfy this requirement, the subordination agreement must provide the City with adequate rights to cure any defaults by the Borrower, including : (i) providing the City or its successor with copies of any notices of default at the same time and in the same manner as provided to the Borrower; and (ii) providing the City with a cure period to cure any default. (c) The subordination(s) described in this section may be effective only during the original term of the Senior Lien and any refinancing of the Senior Lien.
ARTICLE 3.
CONSTRUCTION OF THE IMPROVEMENTS
Section 3.1 Schedule of Performance.
Borrower shall perform the tasks described in the Schedule of Performance no later than the dates set forth in the Schedule of Performance, subject to Section 6.14, and as may be modified from time to time by the Housing Director.
Section 3.2 Permits and Approvals.
The Improvements shall be developed substantially in accordance the terms and conditions of the land use permits and approvals and building permits for the Development , including any variances granted . Borrower shall construct the Development in conformance with the plans and specifications approved by the City. Any changes in the work required to be performed under this 847
10 Agreement, including any additions, changes, or deletions to the plans and specifications, shall be approved by the Housing Director.
Section 3.3 Commencement of Construction.
Borrower shall cause the Commencement of Construction of the Development no later than the date set forth in the Schedule of Performance, which in no event shall be any later than twelve (12) months from the Effective Date. For the purposes of this Agreement, “ Commencement of Construction” means the date set for the start of construction of the Development in the notice to proceed issued by Borrower to Borrower's general contractor.
Section 3.4 Completion of Construction.
The Borrower shall diligently prosecute to completion the construction of Phas e 1 the Development (“Completion of Construction”) no later than the date set forth in the Schedule of Performance. Borrower shall record a Notice of Completion within ten (10) days of Completion of Construction and provide the City a copy of the recorded Notice of Completion. The City shall provide the Borrower the Certificate of Completion.
Section 3.5 Compliance with Applicable Laws.
(a) Compliance with Laws. To the extent applicable, Borrower shall cause all work performed in connection with the Development to be performed in compliance with all applicable laws, ordinances, rules and regulations of federal, state, county or munic ipal governments or agencies now in force or that may be enacted hereafter including without limitation and to the extent applicable, (1) the property standards set out in 24 C.F.R. 5.701 et seq. and 24 C.F.R. 92.251 or adopted by the City in conformance therewith; and (2) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work will proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and Borrower shall be responsible to the agency for the procurement and maintenance thereof, as may be required of Borrower and all entities engaged in work on the Development.
(b) Prevailing Wages.
(1) This Agreement has been prepared with the intention that the financial assistance provided by the City under this Agreement meets the exception set forth in Labor Code Section 1720(c)(5)(E) to the genera l requirement that state prevailing wages be paid in connection with construction work that is paid for in whole or in part out of public funds.
However, to the extent another funding source for the Development or a future court decision or a Department of Industrial Relations determination requires the payment of prevailing wages on the Development and related requirements under the Labor Code, then the Borrower shall pay prevailing wages on the Development and meet other related requirements under the La bor Code in the construction of the Development.
(2) Without limiting the generality of the indemnification set forth in Section 6.3 below, the Borrower shall indemnify, to the extent not prohibited by applicable law, 848
11 the City, its councilmembers, commissioners, officials, employees and agents, against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the Borrower, or its contractors or subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., and prevailing wage requirements of the federal Davis-Bacon Act (40 USC 3141-3148), to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the performance of the development activities or any other work undertaken or in connection with the Property. The requirements in this subsection survive the repayment of the Loan, and the reconveyance of the Deed of Trust. (c) Section 3 Training Opportunities . The prime contractor and all subcontractors shall be required to comply with the Section 3 Training Opportuni ties set forth in Section 4.7(b)(10)(C) of this Agreement.
(d) Accessibility Requirements . The Borrower shall construct the Development to comply with all applicable federal and state disabled persons accessibility requirements including but not limited to the Federal Fair Housing Act, Section 504 of the Rehabilitation Act of 1973, Title II and/or Title III of the Americans with Disabilities Act of 1990, Title 24 of the California Code of Regulations and the Uniform Federal Accessibility Standards (“UFAS”). In compliance with Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794, et seq.), a minimum of four (4) Units, representing five percent (5%) of the Units in the Development, shall be constructed to be readily accessible and usable by households with a mobility impaired member and a minimum of two (2) Units , representing two percen t (2%) of the Units in the Development) shall be constructed and to be readily accessible and usable by households with a hearing or visually impaired member. All Units in the Development shall also be built to comply with the Uniform Federal Accessibility Standards under 49 C.F.R. 31528.
Section 3.6 Equal Opportunity.
(a) During the construction of the Development there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, gender identity, marital status, familial status, disability , national origin or ancestry, or source of income, in the hiring, firing, promoting or demoting of any person engaged in the construction work. (b) In providing services supported in whole or in part with federal financial assistance, and in their outreach activities related to such services, program participants shall not discriminate against current or prospective program beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. A faith-based organization that is a recipient or subrecipient of HOME funds is eligible to use such funds as provided under the federal regulations without impairing its independence, autonomy, expression of religious beliefs, or religious character. Such organization will retain its independence from federal, state, and local government, and may continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs, pr ovided that it does not use direct program funds to support or engage in any explicitly religious activities, including activities that involve overt religious content, such as worship, religious instruction, or proselytization, or any manner prohibited by law. Among other things, faith- based organizations may use space in their facilities to provide program-funded services, without removing or altering 849
12 religious art, icons, scriptures, or other religious symbols. In addition, a HOME program -funded religious organization retains its authority over its internal governance, and it may retain religious terms in its organization's name, select its board members on a religious basis, and include religious references in its organization's mission statements and other governing documents. (c) Nothing in this Section prohibits the Borrower from requiring HOME- Assisted Units in the Development to be available to and occupied by income eligible households in accordance with the Regulatory Agreement.
Section 3.7 Minority and Women-Owned Contractors.
Borrower shall use its best efforts to afford minority -owned and women-owned business enterprises the maximum practicable opportunity to participate in the construction of the Development. Borrower shall, at a minimum, notify applicable min ority-owned and women- owned business firms located in Ventura County of bid opportunities for the construction of the Development. Documentation of such notifications must be maintained by Borrower and available to the City as requested.
Section 3.8 Construction Responsibilities.
(a) Borrower is responsible for the coordination and scheduling of the work to be performed so that commencement and completion of the construction of the Development will take place in accordance with this Agreement.
(b) Borrower is solely responsible for all aspects of Borrower 's conduct in connection with the Development, including (but not limited to) the quality and suitability of the plans and specifications, the supervision of construction work, and the qualifications, financial condition, and performance of all architects, engineers, contractors, subcontractors, suppliers, consultants, and property managers. Any review or inspection undertaken by the C ity with reference to the Development is solely for the purpose of determining whether Borrower is properly discharging its obligations to the City, and may not be relied upon by Borrower or by any third parties as a warranty or representation by the C ity as to the quality of the design or construction of the Development.
Section 3.9 Mechanics Liens, Stop Notices, and Notices of Completion. (a) If any claim of lien is filed against the Property or a stop notice affecting the Loan is served on the C ity or any other lender or other third party in connection with the Development, then Borrower shall, within twenty (20) days after such filing or service, either pay and fully discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to the City a surety bond in sufficient form and amount, or provide the C ity with other assurance satisfactory to the City that the claim of lien or stop notice will be paid or discharged. (b) If Borrower fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section or obtain a surety bond, then in addition to any other right or remedy, the City may (but is under no obligation to) discharge such lien, encumbrance, charge, or claim at Borrower's expense. Alternately, the City may require Borrower to immediately deposit with the City the amount necessary to satisfy such lien or claim and any costs, pending resolution 850
13 thereof. The C ity may use such deposit to satisfy any claim or lien that is adversely determined against Borrower.
(c) Borrower shall file a valid notice of cessation or Notice of Completion upon cessation of construction work on the Development for a continuous period of thirty (30) days or more, and take all other steps necessary to forestall the assertion of claims of lien against the Property. Borrower authorizes the C ity, but the City has no obligation, to record any notices of completion or cessation of labor, or any other notice that the City deems necessary or desirable to protect its interest in the Development.
Section 3.10 Inspections.
(a) The Borrower shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection of the Development by the C ity and by public authorities during reasonable business hours upon forty -eight (48) hours ' written notice for the purposes of determining compliance with this Agreement, provided, however, that nothing in this Agreement shall entitle the C ity to enter an occupied unit in the Development without notice to the tenant thereof, which the Borrower s hall deliver on behalf of the C ity, and permission from such tenant to the extent such permission is required by law. Such inspections do not relieve the Borrower, or its contractors, from any applicable requirement to obtain other C ity inspections in connection with the construction of the Improvements.
(b) After the completion of an inspection the C ity shall deliver a copy of the inspection report to the Borrower. If the C ity determines as a result of such inspection that there are any life- threatening heal th and safety related deficiencies, Borrower has the obligation to correct such deficiencies immediately, in accordance with 24 C.F.R. 92.251. If the City determines as a result of the inspection that there are any deficiencies for any of the inspectable items in the Development, the Borrower shall correct such deficiencies within fifteen (15) days from the delivery of the inspection report or if a period longer than fifteen (15) days is reasonably necessary to correct the deficiency, then Borrower must be gin to correct the deficiency within fifteen (15) days and correct the deficiency as soon as reasonably possible. In addition, the Borrower acknowledges that the C ity may re-inspect the Development to verify all deficiencies have been corrected or rely on third party documentation submitted by the Borrower for non- hazardous deficiencies in conformance with 24 C.F.R. 92.504(d).
Section 3.11 Approved Financing Plan.
As of the date of this Agreement, the City has approved the Approved Financing Plan, and which may amend from time to time as approved by the Housing Director.
Section 3.12 Development Fee. The maximum development fee to be paid to the Borrower (or any other organization or entity, including any entity Controlled by the Borrower) for development and construction management services shall be in the amount approved by the City as it may be revised from time to time. Except for the Development Fee, compensation paid under the construction contract for the Improvements , no compensation from any source shall be received by or be payable to the Borrower, any entity Controlled by the Borrower or any general partner of Borrower in connection with the provision of development and construction management services for the construction of the Improvements 851
14 Section 3.13 Marketing Plan.
(a) No later than six (6) months prior to the projected date of the Completion of Construction, Borrower shall submit to the C ity for approval its plan for marketing the Development to income -eligible households as required pursuant to the Regulatory Agreement, including information on affirmative marketing efforts and compliance with fair housing laws and 24 C.F.R. 92.351(a) (the “Marketing Plan”). To the extent permitted by law, the Marketing Plan shall: (1) at initial lease-up with respect to the HOME-Assisted Units, provide the City with a thirty (30) calendar day priority to refer rental applicants under its Affordable Housing Interest List; and (2) on an on- going basis and to the extent permitted by law, provide first priority to people who live or work in the City to rent the HOME -Assisted Units. Except as otherwise set forth above, HOME-Assisted Units shall be rented to eligible households on a first-come, first-served basis. (b) Upon receipt of the Marketi ng Plan, the C ity will promptly review the Marketing Plan and will approve or disapprove it within fifteen (15) business days after submission. If the Marketing Plan is not approved, Borrower shall submit a revised Marketing Plan within fifteen (15) business days. Borrower shall follow this procedure for resubmission of a revised Marketing Plan until the Marketing Plan is approved by the City. (c) If after five (5) months after the Completion of Construction any HOME - Assisted Unit remains unoccupied, the Borr ower shall submit a detailed report of the ongoing marketing efforts, and if deemed appropriate by the C ity, any necessary amendments or updates to the Marketing Plan aimed at ensuring any unoccupied HOME-Assisted Unit is promptly leased.
If any of the HOME-Assisted Units remain unoccupied eleven (11) months after the Completion of Construction, the Borrower shall submit a detailed report of the ongoing marketing efforts and submit to the C ity an update to the Marketing Plan. Failure to lease all of the HOME -Assisted Units to an eligible tenant within eighteen (18) months of Completion of Construction shall trigger the special repayment pursuant to Section 2.6(b).
ARTICLE 4.
LOAN REQUIREMENTS
Section 4.1 Per Unit Subsidy Requirement . The total amount of the Loan may not exceed the maximum per unit subsidy for HOME -Assisted Units amount established under 24 C.F.R. §92.250.
Section 4.2 Financial Accountings and Post-Completion Audits. (a) No later than ninety (90) days following Completion of Construction, Borrower shall provide to the C ity a financial accounting of all sources and uses of funds for the Development. No later than one hundred fifty (150) days following Completion of Construction, Borrower shall submit to the City a copy of the cost certification report prepared by the Borrower's accountant showing the sources and uses of all funds utilized for the Development Improvements (b) This requirement may be satisfied by providing the Final Cost Certification to the City. “Final Cost Certification” means the Final Cost Certification Sources and Uses of Funds prepared by Borrower for the Development that has been prepared using generally accepted accounting procedures in effect in the United States from time to time, consistently applied. 852
15 Section 4.3 Annual Operating Budget.
At the beginning of each year of the HOME Loan Term, Borrower shall provide to the City an annual budget for the operation of the Development.
Section 4.4 Information.
Borrower shall provide any information related to the Development reasonably requested by the C ity in connection with the Development, including (but not limited to) any information required by HUD in connection with Borrower's use of the Loan funds.
Section 4.5 Records.
(a) Borrower shall keep and maintain at the Development, or at the corporate offices of the Borrower 's general partner, or elsewhere with the C ity's written consent, full, complete and appropriate books, records and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail Borrower's calculation of Residual Receipts, and disbursements of Residual Receipts. Books, records and accounts relating to Borrower's compliance with the terms, provisions, covenants and conditions of this Agreement. All applic able financial documents are to be kept and maintained in accordance with generally accepted accounting principles consistently applied. All such books, records, and accounts shall at reasonable times be open to and available for inspection and copying by HUD, the C ity, its auditors or other authorized representatives at reasonable intervals during normal business hours and forty-eight (48) hours' prior written notice to Borrower. Borrower shall preserve such records for a period of not less than five (5) years after the creation of such records in compliance with all HUD records and accounting requirements. Copies of all tax returns and other reports that Borrower may be required to furnish to any governmental agency are to be open for inspection by the City at all reasonable times at the place that the books, records and accounts of Borrower are kept. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Loan is pending at the end of the record retention period stated herein, then Borrower shall retain the records until such action and all related issues are resolved. The records are to include all invoices, receipts, and other documents related to expenditures from the Loan funds. Borrower shall cause records to be accurate and current and in such a form as to allow the C ity to comply with the record keeping requirements contained in 24 C.F.R. 92.508. Such records are to include but are not limited to:
(1) Records providing a full description of the activities undertaken with the use of the Loan funds;
(2) Records demonstrating compliance with City and HUD property standards and lead -based paint requirements, including, as applicable, the Uniform Physical Conditions Standards established by HUD pursuant to 24 C.F.R. 5.703; (3) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing requirements; (4) Financial records as required by 24 C.F.R. 92.505, and Uniform Grant Guidance (2 C.F.R. Part 200);
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16 (5) Records demonstrating compliance with the Tenant Selection Plan requirements pursuant to 24 C.F.R. 92.253(d), and HOME affordability and income requirements; (6) Records demonstrating compliance with MBE/WBE requirements; (7) Records demonstrating compliance with 24 C.F. R. Part 75 which implements Section 3 of the Housing Development Act of 1968; (8) Records demonstrating compliance with applicable relocation requirements, which must be retained for at least five (5) years after the date by which persons displaced from the property have received final payments; (9) Records demonstrating compliance with applicable labor requirements including certified payrolls from Borrower 's general contractor evidencing that applicable prevailing wages have been paid.
(10) Records demonstrating compliance with 24 C.F.R. 8.20. (b) The City shall notify Borrower of any records it deems insufficient.
Borrower has thirty (30) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the C ity in such notice, or if a period longer than thirty (30) days is reasonably necessary to correct the deficiency, then Borrower must begin to correct the deficiency within thirty (30) days and correct the deficiency as soon as reasonably possible.
Section 4.6 City Audits.
Each year, Borrower shall provide the City with a copy of Borrower's annual audit, which shall include information on all of Borrower's activities (if any) and not just those pertaining to the Development. In addition, the City or any designated agent or employee of th e City at any time shall be entitled to audit all of Borrower's books, records, and accounts pertaining thereto and the Borrower and the Borrower's general partners shall submit all other financial information pertaining to the Development as is reasonably requested by the City or determined by the City as necessary for compliance with the requirements of 24 C.F.R. 504(d). Borrower shall also follow audit requirements of the Single Audit Act and Uniform Grant Guidance (UGG) 2 C.F.R. Part 200. Such audit shall be conducted during normal business hours at the principal place of business of Borrower and other places where records are kept. Immediately after the completion of an audit by the City, the City shall deliver a copy of the results of such audit to Borrower.
Section 4.7 HOME Requirements.
(a) Borrower shall comply with all applicable laws and regulations governing the use of the HOME Loan funds as set forth in 24 C.F.R. Part 92, including the requirements of the Regulatory Agreement during the HOME Reporting Term. In the event of any conflict between this Agreement and applicable laws and regulations governing the use of the Loan funds, the applicable laws and regulations govern. During the HOME Reporting Term, these requirements are federal requirements, implemented by the City.
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17 (b) The laws and regulations governing the use of the Loan funds include (but are not limited to) the following:
(1) Eligible Project Costs. Restrictions on funding only eligible project costs as defined under 24 C.F.R. 92.206 (subject to Section 2.3 above). (2) Environmental and Historic Preservation. 24 C.F.R. Part 50 and 24 C.F.R. Part 58, which prescribe procedures for compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321- 4361), and the additional laws and authorities listed at 24 C.F.R.
58.5. (3) Debarred, Suspended or Ineligible Contractors. The prohibition on the use of debarred, suspended, or ineligible contractors set forth in 24 C.F.R. Part 24. (4) Civil Rights, Housing and Community Development, and Age Discrimination Acts. The Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; Section 104(b) and Section 109 of Title I of the Housing and Community Development Act of 1974 as amended; Section 504 of the Rehabilitation Act of 1973 (29 USC 794, et seq.); the Age Discrimination Act of 1975 (42 USC 6101, et seq.); Executive Order 11063 as amended by Executive Order 12259 and implementing regulations at 24 C.F.R.
Part 107; Executive Order 11246 as amended by Executive Orders 11375, 12086, 11478, 12107; Executive Order 11625 as amended by Executive Order 12007; Executive Order 12432; Executive Order 12138 as amended by Executive Order 12608, Executive Order 13672 concerning gender identity.
(5) Lead-Based Paint . The requirement of the Lead -Based Paint Poisoning Prevention Act, as amended (42 U.S.C. 4821 et seq.), the Residential Lead-Based Paint Hazard Reduction Act (42 U.S.C. 4851 et seq.), and implementing regulations at 24 C.F.R. Part 35 and 24 C.F.R. 92.355.
(6) Relocation. The requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. 4601, et seq.), and implementing regulations at 49 C.F.R. Part 24; 24 C.F.R. 570.606; Section 104(d) of the Housing and Community Development Act of 1974 and implementing regulations at 24 C.F.R. 42 et seq.; 24 C.F.R. 92.353; and California Government Code Section 7260 et seq. and implem enting regulations at 25 California Code of Regulations Sections 6000 et seq. If and to the extent that development of the Development results in the permanent or temporary displacement of residential tenants, homeowners, or businesses, then Borrower shal l comply with all applicable local, state, and federal statutes and regulations with respect to relocation planning, advisory assistance, and payment of monetary benefits. If and to the extent applicable, Borrower shall prepare and submit a relocation plan to the C ity for approval. Borrower is solely responsible for payment of any relocation benefits to any displaced persons and any other obligations associated with complying with such relocation laws. Borrower shall indemnify, defend (with counsel reasonably chosen by the City), and hold harmless the C ity against all claims that arise out of relocation obligations to residential tenants, homeowners, or businesses permanently or temporarily displaced by the Development.
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18 (7) Discrimination against the Disabled . The requirements of the Fair Housing Act (42 U.S.C. 3601 et seq.) and implementing regulations at 24 C.F.R. Part 100; Section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794), the Uniform Federal Accessibility Standards (24 C.F.R. 8.20, et seq. 8.51) and federal regulations issued pursuant thereto, which prohibit discrimination against the disabled in any federally assisted program, the requirements of the Architectural Barriers Act of 1968 (42 U.S.C. 4151- 4157) and the applicable requirements of Title II and/or Title III of the Americans with Disabilities Act of 1990 (42 U.S.C. 12131 et seq.), and federal regulations issued pursuant thereto.
(8) Clean Air and Water Acts . The Clean Air Act, as amended, 42 U.S.C. 7401 et seq., the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., and the regulations of the Environmental Protection Agency with respect thereto, at 40 C.F.R. Part 1500, as amended from time to time.
(9) Uniform Administrative Requirements. The provisions of 2 C.F.R. 200 regarding Uniform Administrative Requirements, Cost Principles, And Audit Requirements for Federal Awards.
(10) Training Opportunities . The requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. 1701(u) and implementing Regulations at 24 C.F.R. 75 (“Section 3”).
(A) The work to be performed under this contract is subject to the requirements of Section 3 of the Housing and Urban Development Act of 1968, as amended, 12 U.S.C. Section 1701( u). The purpose of Section 3 is to ensure that employment and other economic opportunities generated by HUD assistance or HUD -assisted projects covered by Section 3, shall, to the greatest extent feasible, be directed to low - and very low-income persons, particularly persons who are recipients of HUD assistance for housing. (B) The parties to this contract agree to comply with HUD 's regulations in 24 C.F.R. 135 et seq., which implement Section 3. As evidenced by their execution of this contract, the parties to this contract certify that they are under no contractual or other impediment that would prevent them from complying with the Part 135 regulations. (C) Pursuant to Section 3, to the greatest extent feasible, and consistent with existing Federal, state, and local laws and regulations Borrower shall ensure:
(i) that employment and training opportunities arising in connection with the Development are provided to Section 3 workers within the metropolitan area (or nonmetropolitan county) in which the Development is located. Where feasible, priority f or opportunities and training described above should be given to: (i) Section 3 workers residing within the service area or the neighborhood of the project, and (ii) participants in YouthBuild programs; and
(ii) that contracts for work awarded in connection wit h the Development are provided to business concerns that provide economic opportunities to Section 3 workers residing within the metropolitan area (or nonmetropolitan county) in which the Development is located. Where feasible, priority for opportunities and training described above 856
19 should be given to: (i) Section 3 business concerns that provide economic opportunities to Section 3 workers residing within the service area or the neighborhood of the Development, and (ii) participants in YouthBuild programs.
(D) The contractor agrees to send to each labor organization or representative of workers with which the contractor has a collective bargaining agreement or other understanding, if any, a notice advising the labor organization or workers ' representative of the contractor's commitments under this Section 3 clause; and will post copies of the notice in conspicuous places at the work site where both employees and applicants for training and employment positions can see the notice. The notice shall describe the Section 3 preference; shall set forth minimum number and job titles subject to hire; availability of apprenticeship and training positions; the qualifications for each; the name and location of the person(s) taking applications for each of the positions; and the anticipated date the work shall begin. (E) The contractor agrees to include this Section 3 clause in every subcontract subject to compliance with regulations in 24 C.F.R. 135 et seq., and agrees to take appropriate action, as provided in an applicable provision of the subcontract or in this Section 3 clause, upon a finding that the subcontractor is in violation of the regulations in 24 C.F.R. 135 et seq.
The contractor will not subcontract with any subcontractor where the c ontractor has notice or knowledge that the subcontractor has been found in violation of the regulations in 24 C.F.R. 135 et seq.
(F) The contractor will certify that any vacant employment positions, including training positions, that are filled (i) after the contractor is selected but before the contract is executed, and (ii) with persons other than those to whom the regulations of 24 C.F.R. 135 et seq. require employment opportunities to be directed, were not filled to circumvent the contractor's obligations under 24 C.F.R. 135 et seq.
(G) Borrower will be considered to have complied with the Section 3 requirements, in the absence of evidence to the contrary, if it certifies that it has followed the prioritization of effort set forth in subsection ( C) above, and meets or exceeds the applicable Section 3 benchmark as described in 24 C.F.R. 75.23(b). (H) Borrower shall maintain records of its Section 3 activities and cause such records to be accurate and current and in a form that allows the C ity to comply with the reporting requirements of 24 C.F.R. 75.25.
(I) Borrower shall require all contractors and subcontractors performing work on the Development to comply with the Section 3 requirements. (J) Noncompliance with HUD's regulations in 24 C.F.R. 135 et seq. may result in sanctions, termination of this contract for default, and debarment or suspension from future HUD assisted contracts.
(11) Labor Standards . The labor requirements set forth in 24 C.F.R.
92.354; the prevailing wage requirements of the Davis -Bacon Act and implementing rules and regulations (40 U.S.C. 3141-3148); the Copeland “Anti-Kickback” Act (40 U.S.C. 276(c)) which requires that workers be paid at least once a week without any deductions or rebates except 857
20 permissible deductions; the Contract Work Hours and Safety St andards Act – CWHSSA (40 U.S.C. 3701-3708) which requires that workers receive “overtime” compensation at a rate of 1 - 1/2 times their regular hourly wage after they have worked forty (40) hours in one (1) week; and Title 29, Code of Federal Regulations, Subtitle A, Parts 1, 3 and 5 are the regulations and procedures issued by the Secretary of Labor for the administration and enforcement of the Davis- Bacon Act, as amended.
(12) Drug Free Workplace. The requirements of the Drug Free Workplace Act of 1988 (P.L. 100-690) and implementing regulations at 24 C.F.R. Part 24. (13) Anti-Lobbying; Disclosure Requirements . The disclosure requirements and prohibitions of 31 U.S.C. 1352 and implementing regulations at 24 C.F.R.
Part 87.
(14) Historic Preservation . The historic preser vation requirements set forth in the National Historic Preservation Act of 1966, as amended (16 U.S.C. Section 470) and the procedures set forth in 36 C.F.R. Part 800. If archeological, cultural, or historic period resources are discovered during construc tion, all construction work must come to a halt and Borrower shall immediately notify the C ity. Borrower shall not alter or move the discovered material(s) until all appropriate procedures for “post-review discoveries” set forth in Section 106 of the National Historic Preservation Act have taken place, which include, but are not limited to, consultation with the California State Historic Preservation Officer and evaluation of the discovered material(s) by a qualified professional archeologist. (15) Flood Disaster Protection. The requirements of the Flood Disaster Protection Act of 1973 (P.L. 93- 234) (the “ Flood Act”). No portion of the assistance provided under this Agreement is approved for acquisition or construction purposes as defined under Section 3(a) of the Flood Act, for use in an area identified by HUD as having special flood hazards which is not then in compliance with the requirements for participation in the national flood insurance program pursuant to Section 201(d) of the Flood Act. The use of any assistance provided under this Agreement for such acquisition or construction in such identified areas in communities then participating in the National Flood Insurance Program is subject to the mandatory purchase of flood insurance requirements of Section 102(a) of the Flood Act. If the Property is located in an area identified by HUD as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, 42 U.S.C. 4001 et seq., the property owner and its successors or assigns must obtain and maintain, during the ownership of the Property, such flood insurance as required with respect to financial assistance for acquisition or construction purposes under -Section 102(s) of the Flood Act. Such provisions are required notwithstanding the fact that the construction on the Proper ty is not itself funded with assistance provided under this Agreement.
(16) Religious Organizations. If the Borrower is a religious organization, as defined by the HOME requirements, the Borrower shall comply with all conditions prescribed by HUD for the use of HOME funds by religious organizations, including the First Amendment of the United States Constitution regarding church/state principles and the applicable constitutional prohibitions set forth in 24 C.F.R. 92.257.
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21 (17) HUD Regulations. Any other HUD regulations present or as may be amended, added, or waived in the future pertaining to the Loan funds. (18) Physical Needs Assessment . During the HOME Reporting Term , the Borrower shall conduct, or caused to be conducted, a physical needs assessment on the Development once every five (5) years from the date that the Construction of the Development is completed. The Borrower shall comply with all HUD requirements for conducting and documenting the physical needs assessment and shall provide the C ity with a copy of all documentation related to each physical needs assessment conducted, or caused to be conducted, by the Borrower.
(19) VAWA Requirements. The requirements of the Violence Against Women Act at 24 C.F.R. part 5, subpart L . The owner of HOME -assisted rental housing must provide the notice and certification form described in 24 CFR 5.2005(a) to the applicant for a HOME-assisted unit at the time the applicant is admitted to a HOME -assisted unit, or denied admission to a HOME-assisted unit based on the owner's tenant selection policies and criteria. The owner of HOME -assisted rental housing must also provide the notice and certification form described in 24 CFR 5.2005 with any notification of eviction from a HOME-assisted unit.
Section 4.8 Hazardous Materials.
(a) Borrower shall keep and maintain the Property in compliance with, and may not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. Borrower may not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limita tion, any substances defined as or included in the definition of “ hazardous substances,” “hazardous wastes, ” “hazardous materials, ” or “toxic substances” under any applicable federal or state laws or regulations (collectively referred to hereinafter as “Hazardous Materials”) except such of the foregoing as may be customarily used in construction of projects like the Development or kept and used in and about residential property of this type.
(b) Borrower shall immediately advise the C ity in writing if at any time it receives written notice of: (1) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against Borrower or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, (“Hazardous Materials Law ”); (2) all claims made or threatened by any third party against Borrower or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (1) and (2) above are hereinafter referred to as “ Hazardous Materials Claims ”); and (3) Borrower 's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law. (c) The City has the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to 859
22 have its reasonable attorneys' fees in connection therewith paid by Borrower, provided that no such payment of attorney's fees will be required if the Hazardous Materials Claims arise as a result of the activities of the City . Borrower shall indemnify and hold harmless the City and its board members, supervisors, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (1) all foreseeable consequential damages; (2) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans and (3) all reasonable costs and expenses incurred by the City in connection with clauses (1) and (2), including but not limited to reasonable attorneys ' fees and consu ltant's fees. This indemnification applies whether or not any government agency has issued a cleanup order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (A) losses attrib utable to diminution in the value of the Property; (B) loss or restriction of use of rentable space on the Property; (C) adverse effect on the marketing of any rental space on the Property; and (D) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the Property and surrounding properties).
(d) Without the C ity's prior written consent, which will not be unreasonably withheld, Borrower may not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property (other than in emergency situations or as required by governmental agencies havi ng jurisdiction), nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims.
Section 4.9 Maintenance and Damage.
The Borrower hereby agrees that, prior to completion of the Improvements, the portions of the Property undergoing construction shall be maintained in a neat and orderly condition to the extent practicable and in accordance with industry health and safety standards, and that, once the Improvements are completed, the Development shall be well maintained by the Borrowe r as to both external and internal appearance of the Improvements, the common areas, and the open spaces. The Borrower shall maintain the Development in good repair and working order, and in a neat, clean and orderly condition, including the walkways, driveways, alleyways and landscaping, and from time to time make all necessary and proper repairs, renewals, and replacements.
Section 4.10 Fees and Taxes.
The Borrower shall apply for and shall thereafter use good faith efforts to obtain an exemption from local property taxes pursuant to Section 214(g) of the California Revenue and Taxation Code. The Borrower shall pay all unabated real property taxes on the Development, personal property taxes, assessments and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property or the Borrower 's fee interest in the Property; provided, however, that the Borrower shall have the right to contest in good faith any such taxes, assessments, or charges. In the event the Borrower exercises its right to contest any tax, assessment, or charge against it, the Borrower, 860
23 on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.
Section 4.11 Operation of Development as Affordable Housing. (a) Promptly after C ompletion of C onstruction and for the HOME Reporting Term, Borrower shall operate the Development as an affordable housing development consistent with: (1) HUD's requirements for use of the HOME Funds; (2) the Regulatory Agreement; and (3) any other regulatory requirements imposed on Borrower including but not limited to regulatory agreements associated with the City HOME Loan.
(b) Before leasing any HOME -Assisted Unit in the Development, Bor rower shall submit its proposed form of lease agreement for the C ity's review and approval. The l ease must not contain any provision which is prohibited by 24 C.F.R. 92.253(b) and any modifications thereto. The initial term of the lease for any HOME-Assisted Unit in the Development will be for no less than one (1) year, except by mutual agreement between Borrower and the Tenant. Any Borrower termination of a lease agreement for any HOME-Assisted Unit in the Development or refusal to renew must be in conformance with 24 C.F.R. 92.253(c), and must be preceded by not less than sixty (60) days written notice to the Tenant by Borrower specifying the grounds for the action.
(c) Before leasing any HOME -Assisted Unit in the Development, Borrower shall provide the City, for its review and approval, with Borrower 's written tenant selection plan (the “Tenant Selection Plan ”), which plan shall be in compliance with the requirements of 24 C.F.R. 92.253(d), and the Marketing Plan.
(d) Borrower shall evaluate the income eligibility of each Tenant household in a HOME-Assisted Unit within sixty (60) days before the household 's expected occupancy of one of the HOME-Assisted Units. For all HOME-Assisted Units, Borrower shall certify or cause the property manager to certify each tenant household's income on an annual basis. (e) Borrower shall maintain all documents setting forth the household income of each household occupying a HOME-Assisted Unit, and the total amount for rent, utilities, and related services charged to each ho usehold occupying a HOME-Assisted Unit, as prescribed by the Regulatory Agreement and all other recorded regulatory restrictions.
Section 4.12 Nondiscrimination.
Borrower herein covenants by and for itself, its heirs, executors, administrators, successors and assigns, and all persons claiming under or through them, that there will be no discrimination against or segregation of a person or of a group of persons on account of race, color, religion, creed, age (except for lawful senior housing in accordance with state and federal law), familial status, disability, sex, sexual orientation, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property , nor may Borrower or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the Property . Borrower shall comply with Executive Orders 11246, 11375, 11625, 12138, 12431, 12250, 13672, Title VII of 861
24 the Civil Rights Act of 1964, the California Fair Housing and Employment Act and other applicable Federal, State and local laws and regulations and policies relating to equal employment and contracting opportunities, including laws and regulations hereafter enacted. The foregoing covenant will run with the land.
Section 4.13 Transfer.
(a) Definition. For purposes of this Agreement, “Transfer” means any sale, assignment, or transfer, whether voluntary or involuntary, of: (1) any rights and/or duties under this Agreement; and/or (2) any interest in the Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Development is transferred and Borrower retains title. The term “ Transfer” excludes the leasing of a Unit in the Development to an occupant in compliance with the Regulatory Agreement, and the leasing of any unrestricted units. The Housing Director is authorized to execute assignment and assumption agreements on behalf of the City to implement any approved Transfer. (b) Prohibition. Except as expressly permitted in this Agreement, the Borrower represents and agrees that the Borrower shall not make or create, or suffer to be made or created, any Transfer, either voluntarily or by operation of law without the prior written approval of the City.
(1) The limitations on Transfers set forth in this Section shall apply throughout the HOME Loan Term.
(2) Any Transfer made in contravention of this Section shall be void and shall be deemed to be a default under this Agreement whether or not the Borrower knew of or participated in such Transfer.
(c) Permitted Transfers . Notwithstanding the foregoing, the following permitted Transfers shall be permitted and are hereby approved by the C ity (each a “ Permitted Transfer”):
(1) Any Transfer permitted pursuant to the Approved Financing Plan. (2) Any Transfer directly resulting from the foreclosure of a lien of loan set forth in the Approved Financing Plan or the granting of a deed in lieu of foreclosure of a lien of a loan set forth in the Approved Financing Plan.
(3) Any Transfer of stock or equity in any party that does not change management or operational C ontrol of the Borrower, with no material change in beneficial ownership (with the exception of any conveyance to member(s) of the im mediate family(ies) of the transferor(s) or trusts for their benefit) and which constitutes a tax -free transaction under Federal income tax law and California real estate transfer tax. (4) The lease of residential units in the Development consistent with this Agreement and the Regulatory Agreement.
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25 (5)
Section 4.14 Insurance Requirements.
Borrower shall maintain the insurance coverage as specified in Exhibit C throughout the HOME Loan Term.
Section 4.15 Anti-Lobbying Certification.
(a) Borrower certifies, to the best of Borrower's knowledge or belief, that:
(1) No federal appropriated funds have been paid or will be paid, by or on behalf of it, 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, amendm ent, or modification of any federal contract, grant, loan, or cooperative agreement;
(2) 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, an officer or employee of Congress, or an employee of a member of Congress in connection with the awarding of any federal contract, grant, loan, or cooperative agreement, it will complete and submit Standard Form-LLL, Disclosure Form to Report Lobbying, in accordance with its instructions.
(b) This certification is a material representation of fact upon which reliance was placed when this Agreement was made or entered into. Submission of this certification is a prerequisite for making or entering into this Agreement imposed by Section 1352, Title 31, U. S.
Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than Ten Thousand Dollars ($10,000) and no more than One Hundred Thousand Dollars ($100,000) for such failure.
Section 4.16 Affordability and Project Monitoring.
(a) Throughout the HOME Reporting Term, the Borrower shall comply with all applicable record keeping and monitoring requirements set forth in (24 C.F.R. Section 92.508) of the HOME Regulations and shall annually complete and submit to the City income and rent certifications for the HOME-Assisted Units in a format reasonable acceptable to the City, which acceptable format shall include the report of such information delivered to TCAC (b) Representatives of the C ity (and HUD or its authorized representatives) shall be entitled to enter the Property upon at least forty-eight (48) hours' notice at reasonable times to monitor compliance with this Agreement, to inspect the records of the Development with respect to the HOME-Assisted Units, and to conduct an independent audit of such records. The Borrower agrees to cooperate with the City in making the Property available for such inspection. If for any reason the C ity is unable to obtain the Borrower 's consent to such an inspection, the Borrower understands and agrees that the C ity may obtain, at the Borrower 's expense, an administrative 863
26 inspection warrant or other appropriate legal order to obtain access to and search the Property. The Borrower agrees to maintain records in a business-like manner and to make such records available to the C ity upon forty -eight (48) hours ' notice at reasonab le times. Unless the C ity otherwise approves, such records shall be maintained for the most recent five years until five years after the expiration of the HOME Reporting Term.
(c) Throughout the HOME Loan Term, the Borrower grants the City inspection rights as set forth in Section 3.10 above, and t hroughout the HOME Reporting Term , Borrower shall make best efforts to allow the C ity to comply with all applicable physical monitoring requirements set forth in (24 C.F.R. Section 92.504(d) and 24 C.F.R. 92.251) of the HOME Regulations.
ARTICLE 5.
DEFAULT AND REMEDIES
Section 5.1 Events of Default.
(a) Subject to Section 6.14, each of the following constitutes an “ Event of Default” by Borrower under this Agreement:
(1) Failure to Construct . Failure of Borrower to obtain permits, commence, and prosecute to completion, construction of the Development within the times set forth in the Schedule of Performance, subject to extensions for reasons of force majeure under Section 6.14.
(2) Failure to Make Payment . Failure to repay the principal and any interest on the Loan within ten (10) days of when such payment is due pursuant to the Loan Documents.
(3) Failure to Comply with the Management Plan . Failure to comply with the Management Plan approved by the City and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the City to the Borrower, which notice provides reasonable detail of the default and the required cure for such default. (4) Failure to Comply with the Marketing Plan. Failure to comply with the Marketing Plan approved by the City and such failure having continued uncured for thirty (30) days after receipt of written notice thereof from the Ci ty to the Borrower, which notice provides reasonable detail of the default and the required cure for such default. (5) Breach of Covenants. Failure by Borrower to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and Borrower fails to cure such default within forty-five (45) days after receipt of written notice thereof from the City to Borrower, if Borrower is incapable of curing a default within such forty-five (45) day period, the C ity will give the Borrower one hundred twenty (120) days to cure such default provided Borrower has commenced to cure within such forty-five (45) day period and is diligently proceeding to cure such default through the end of such period; provided, however, that if a different period or notice requirement is specified under any other section of this Article 5, the specific provisions shall control.
864
27 (6) Default Under Other Loans. A default is declared under any other financing for the Development by the lender of such financing and such default remains uncured following any applicable notice and cure period.
(7) Insolvency. A court having jurisdiction makes or enters any decree or order: (1) adjudging Borrower to be bankrupt or insolvent; (2) approving as properly filed a petition seeking reorganization of Borrower, or seeking an y arrangement for Borrower under the bankruptcy law or any other applicable debtor 's relief law or statute of the United States or any state or other jurisdiction; (3) appointing a receiver, trustee, liquidator, or assignee of Borrower in bankruptcy or insolvency or for any of their properties; (4) directing the winding up or liquidation of Borrower if any such decree or order described in clauses (1) to (4), inclusive, is unstayed or undischarged for a period of ninety (90) calendar days; or (5) Borrower a dmits in writing its inability to pay its debts as they fall due or will have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (1) to (4), inclusive. (8) Assignment; Attachment. Borrower assigns its assets for the benefit of its creditors or suffers a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon is returned or released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution.
(9) Suspension; Termination. Borrower or its general partner shall have: (1) the operation of their business voluntarily or involuntarily sus pended by the State of California, (2) voluntarily stopped or terminated the operation of their business; (3) the Borrower shall have the operation of the partnership voluntarily or involuntarily dissolved, suspended or terminated by the State of California.
(10) Unauthorized Transfer . Any Transfer other than as permitted pursuant other than a permitted under this Agreement.
(11) Failure to Timely Lease . Failure of Borrower to lease all of the HOME-Assisted Units within eighteen (18) months of the Completion of Construction unless Borrower makes the repayment required under Section 2.6(b) above. (12) Applicability to General Partner s. The occurrence of any of the events set forth in subsection ( 7), subsection ( 8), or subsection ( 9) in relation to any of the Borrower's general partners.
Section 5.2 Remedies.
(a) Upon the occurrence of an Event of Default and following the expiration of all applicable notice and cure periods the City: (1) is relieved of any obligation to make or continue the Loan; and (2) has the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following:
(1) Acceleration of Note. The C ity may cause all indebtedness of Borrower to the City under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. Borrower waives all right to presentment, 865
28 demand, protest or notice of protest or dishonor. The City may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the C ity as a creditor and secured party under the law including the Uniform Commercial Code, including foreclosure under the Deed of Trust. Borrower is liable to pay the C ity on demand all reasonable expenses, costs and fees (including, without limitation, reasonable attorney 's fees and expenses) paid or incurred by the City in connection with the collection of the Loan and the preservation, maintenance, protection, sale, or other disposition of the security given for the Loan. (2) Specific Performance. The City has the right to mandamus or other suit, action or proceeding at law or in equity to require Borrower to perform its obligations and covenants under the Loan Documents or to enjoin acts on things that may be unlawful or in violation of the provisions of the Loan Documents.
(3) Termination. The C ity has the right to terminate this Agreement and, at its sole option, to seek any remedies at law or equity available hereunder. (4) Right to Cure at Borrower's Expense. The City shall have the right to cure any monetary default by the Borrower under a loan in connection with the Development.
The Borrower agrees to reimburse the City for any funds advanced by the City to cure a monetary default by the Borrower upon demand therefor, together with interest thereon at the lesser of the rate of ten percent (10%) per annum or the maximum rate permitted by law (the “Default Rate”) from the date of expenditure until the date of reimbursement.
Section 5.3 Right of Contest.
Borrower may contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute an Event of Default hereunder. Any such contest is to be prosecuted diligently and in a manner unprejudicial to the City or the rights of the City hereunder.
Section 5.4 Remedies Cumulative.
No right, power, or remedy given to the C ity by the terms of this Agreement, or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy will be cumulative and in addition to every other right, power, or remedy given to the City by the terms of any such instrument, or by any statute or otherwise against Borrower and any other person. Neither the failure nor any delay on the part of the City to exercise any such rights and remedies will operate as a waiver thereof, nor does any single or partial exercise by the City of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.
ARTICLE 6.
GENERAL PROVISIONS
Section 6.1 Relationship of Parties.
Nothing contained in this Agreement is to be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and employee, principal and agent, limited or general partnership, or joint venture between the C ity and Borrower or its 866
29 agents, employees or contractors, and Borrower will a t all times be deemed an independent contractor and to be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. Borrower has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regard to the construction and operation of the Development, Borrower is solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and must include requirements in each contract that contractors are solely responsible for similar matters relating to their employees. Borrower is solely responsible for its own acts and those of its agents and employees.
Section 6.2 No Claims.
Nothing contained in this Agreement creates or justifies any claim against the City by any person that Borrower may have employed or wit h whom Borrower may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the lease of the Property , the construction or operation of the Development, and Borrower shall include similar requirements in any contracts entered into for the construction or operation of the Development.
Section 6.3 Indemnification.
The Borrower agrees to indemnify, defend (with counsel reasonably approved by City) and hold harmless the C ity and its authorized elected officials, officers, employees, agents and volunteers ( “Indemnities”) from any and all claims, actions, losses, damages, and/or liability arising out of this contract from any cause whatsoever, including the acts, errors or om issions of any person and for any costs or expenses incurred by the C ity on account of any claim except where such indemnification is prohibited by law. The Borrower's indemnification obligation does not apply to the City's gross negligence or willful misc onduct. This indemnification provision is not intended to and does not limit, negate, modify, nullify, or change the nonrecourse provisions of this Agreement or any other agreement, document, instrument, certificate or covenant executed by Borrower. The provisions of this Section will survive the expiration of the HOME Loan Term and the reconveyance of the Deed of Trust.
Section 6.4 Non-Liability of City Officials, Employees and Agents.
No council member, official, employee or agent of the City is personally liable to Borrower in the event of any default or breach by the C ity or for any amount that may become due to Borrower or its successor or on any obligation under the terms of this Agreement.
Section 6.5 No Third Party Beneficiaries.
There are no third party beneficiaries to this Agreement.
Section 6.6 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in Section 6.6(b) below who exercises or has exercised any functions or responsibilities 867
30 with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a financial interest or financial benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person 's tenure. Borrower shall exercise due diligence to ensure that the prohibition in this Section 6.6(a) is followed.
(b) The conflict of interest provisions of Section 6. 6(a) above applies to any person who is an employee, agent, consultant, officer of the City, or any immediate family member of such person, or any elected or appointed official of the C ity, or any person related within the third (3rd) degree of such person.
(c) In accordance with California Government Code Section 1090 and the Political Reform Act, California Government Code S ection 87100 et seq., no pe rson who is a director, officer, partner, trustee or employee or consultant of Borrower, or immediate family member of any of the preceding, may make or participate in a decision, made by the City or a City board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or Borrower. Interpretation of this Section is governed by the definitions and provisions used in the Political Re form Act, California Government Code Section 87100 et seq., its implementing regulations manual and codes, and California Government Code Section 1090. (d) Borrower shall comply with the conflict of interest provisions set forth in 24 C.F.R. 92.356.
Section 6.7 Notices, Demands and Communications.
All notices required or permitted by any provision of this Agreement must be in writing and sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receip t requested, or delivered personally, to the principal office of the Parties as follows:
City of Oxnard
Housing Department
435 South D Street
Oxnard, CA 93030
Attn: Housing Director
With copy to: City of Oxnard
Office of the City Attorney
305 West Third Street
Oxnard, CA 93030
Attn: City Attorney
BORROWER: Cypress Place at Garden City, L.P.
c/o Peoples’ Self-Help Housing Corporation
Attn: CEO and President
868
31 With copy to:
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected party may from time to time designate by mail as provided in this Section.
Receipt will be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable).
Section 6.8 Amendments.
No alteration or variation of the terms of this Agreement is valid unless made in writing by the Parties. The Housing Director is authorized to execute on behalf of the City amendments to the Loan Documents or amended and restated Loan Documents as long as any material change in the amount or terms of this Agreement is approved by the City Council.
Section 6.9 Action by City.
Except as may be otherwise specifically provided in this Agreement or another Loan Document, whenever any approval, notice, direction, finding, consent, request, waiver, or other action by the City is required or permitted under this Agreement or another Loan Document, such action may be given, made, or taken by the Housing Director , or by any person who shall have been designated in writing to the Borrower by the City, without further approval by the City Council. The City also authorizes the Housing Director or his or her designee to execute the other Loan Documents, estoppel certificates concerning the status of the Loan and the existence of Borrower defaults under the Loan Documents and subordination agreements substantially consistent with the terms of Section 2.8 above. Any such action shall be in writing. The Borrower acknowledges that nothing in this Agreement (including any approval by the Housing Director in accordance with this Agreement) shall limit, waive, or otherwise impair the authority and discretion of: (i) the City 's Community Development Department, in connection with the review and approval of the proposed construction plans for the Development (or any change to such plans), or any use, or proposed use, of the Property; (ii) the City's issuance of a building permit; or (iii) any other office or department of the City acting in its capacity as a governmental regulatory authority with jurisdiction over the development, use, or operation of the Development.
Section 6.10 Applicable Law and Venue.
This Agreement is governed by the laws of the State of California. Any action brought claiming a breach of this Agreement or interpreting this Agreement shall be brought in and venue shall be in Ventura County, California.
Section 6.11 Parties Bound.
This Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of the Parties hereto except that there shall be 869
32 no Transfer of any interest by any of the P arties hereto except pursuant to the terms of this Agreement. Any reference in this Agreement to a specifically named Party shall be deemed to apply to any successor, heir, administrator, executor or assign of such party who has acquired an interest in compliance with the terms of this Agreement, or under law.
Section 6.12 Attorneys' Fees.
If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing party will have the right to recover its reasonable attorneys ' fees and costs of suit from the other party.
Section 6.13 Severability.
If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions will continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
Section 6.14 Force Majeure.
In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of god; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; supply chain delays; governmental restrictions or priority; litigation (including suits filed by third parties concerning or arising out of this Agreement); weather or soils conditions which, in the opinion of the Borrower ' contractor, will necessitate delays; inability to secure necessary labor, materials or tools; acts of the other party; acts or failure to act of any public or governmental City or entity (other than the acts or failure to act of the City ); or any other causes (other than the Borrower's inability to obtain financing for the Improvements) beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any cause will be deemed granted if notice by the party claiming such extension is sent to the other within ten (10) business days from the date the party seeking the exten sion first discovered the cause and such extension of time is not rejected in writing by the other party within ten (10) business days of receipt of the notice. Times of performance under this Agreement may also be extended in writing by the City and the Borrower. In no event shall the cumulative delays during the HOME Loan Term of this Agreement exceed one hundred eighty (180) days, unless otherwise agreed to by the Parties in writing. As allowed under Section 6.9 of this Agreement, the Housing Director at the Housing Director 's reasonable discretion may extend the cumulative delay limit without need for additional City Council approval.
Section 6.15 Waivers.
Any waiver by the City of any obligation or condition in this Agreement must be in writing.
No waiver will be implied from any delay or failure by the City to take action on any breach or default of Borrower or to pursue any remedy allowed under this Agreement or applicable la w.
Any extension of time granted to Borrower to perform any obligation under this Agreement does not operate as a waiver or release from any of its obligations under this Agreement. Consent by 870
33 the City to any act or omission by Borrower may not be constr ued to be consent to any other or subsequent act or omission or to waive the requirement for the C ity's written consent to future waivers.
Section 6.16 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and are to be disregarded in interpreting any part of the Agreement's provisions.
Section 6.17 Entire Understanding of the Parties.
The Loan Documents constitute the entire agreement of the Parties with respect to the Loan.
Section 6.18 Multiple Originals; Counterpart.
This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
(Signatures appear on following page)
871
S-1
HOME Loan Agreement
Signature page
IN WITNESS WHEREOF, City and Borrower have caused this Agreement to be executed by their respective duly authorized officers.
LENDER:
THE CITY OF OXNARD
_____________________________
Emilio Ramirez, Housing Director
APPROVED AS TO FORM:
_____________________________
Stephen Fischer, City Attorney
APPROVED AS TO INSURANCE:
_____________________________
Michael More, Human Resources/Risk
Manager
BORROWER:
CYPRESS PLACE AT GARDEN CITY,
L.P., a California limited partnership
By: Cypress Place at Garden City LLC, a
California limited company
Its: Managing General Partner
By: Peoples’ Self-Help Housing Corporation,
a California nonprofit public benefit
corporation
Its: Sole Member/Manager
________________________________________
By: Kenneth Trigueiro
Its: Chief Executive Officer and President
872
EXHIBIT A
HOME Loan Agreement
Signature page
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
THE LAND REFE RRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF VENTURA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
APN:
873
EXHIBIT B
HOME Loan Agreement
Signature page
EXHIBIT B
SCHEDULE OF PERFORMANCE
874
EXHIBIT C-1
HOME Loan Agreement
Signature page
EXHIBIT C
INSURANCE REQUIREMENTS
875
EXHIBIT C-2
Exhibit INS-C
INSURANCE REQUIREMENTS FOR CONSTRUCTION PROJECTS
(WITH BUILDER’S RISK REQUIREMENT)
1. Contractor shall obtain and maintain during the performance of any services under this Contract the following insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of services hereunder by Contractor, its agents, representatives, employees or subcontractors.
a. Commercial General Liability Insurance, including Contractual Liability, in an amount not less than $2,000,000 combined singl e limit for bodily injury and property damage for each claimant for general liability with coverage equivalent to Insurance Services Office Commercial General Liability Coverage (Occurrence Form CG 0001). If a general aggregate limit is used, that limit shall apply separately to the project location or shall be twice the occurrence amount;
b. Business Automobile Liability Insurance in an amount not less than $1,000,000 combined single limit for bodily injury and property damage for each claimant for automobile liability with coverage equivalent to Insurance Services Office Automobile Liability Coverage (Occurrence Form CA0001) covering Code No. 1, “any auto;”
c. If architectural, engineering, or electrical work will be performed under the Contract, Professional Liability/Errors and Omi ssions Insurance appropriate to the work being done in an amount not less than $1,000,000, with neither Contractor nor listed subcontractors having less than $500,000 individually. The Professional Liability/Errors and Omissions Insurance must be project specific with at least a one-year extended reporting period, or longer upon request.
d. Course of Construction Insurance providing coverage for “all risks” of loss in an amount not less than the completed value of the project, with City named as Owner and Insured.
e. Workers’ Compensation Insurance in compliance with the laws of the State of Cali fornia, and Employer’s Liability Insurance in an amount not less than $1,000,000 per claimant.
Additionally, the workers’ compensation policy shall include a waiver of all rights of subrogation which the insurer may have against the City.
2. Contractor shall , prior to performance of any services, file with the Risk Manager certificates of insurance with original endorsements effecting coverage required by this Exhibit INS-E. The certificates and endorsements for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. The certificates and endorsements are to be on the attached forms or on othe r forms approved by the Risk Manager. All certificates and endorsements are to be received and approved by the Ris k Manager before work commences. City reserves the right to require complete certified copies of all required insurance policies at any time. The certificates of insurance and endorsements shall be sent via email (or fax if necessary) to the Risk Manager, addressed as follows (do not send hard copies):
City of Oxnard
Insurance Compliance
Reference No.
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
3. Contractor agrees that all insurance coverages shall be provided by a California admitted insurance carrier with an A.M. Best rating of A:VII or better and shall be endorsed to state that coverage may not be suspended, voided, canceled by either party, or reduced in coverage or limits without 30 days’ prior written notice to the Risk Manager. The Risk Manager shall not approve or accept any en dorsement if the endorsement contains “best effort” modifiers or if the insurer is relieved from the responsibility to give such notice.
4. Contractor agrees that the Commercial General Liability and Business Automobile Liability Insurance policies shall be endorsed to name City, its City Council, officers, employees and volunteers as additional insureds as respects: liability arising out of activities performed by or on behalf of Contractor; products and completed operations of Contractor; premises owned, occupied or used by Contractor; or automobiles owned, leased, hired or borrowed by Contractor. The coverage shall contain no special limitations on the scope of protection afforded to City, it s City Council, officers, employees and volunteers. The General Liability Special Endorsement Form and Automobile Liability Special Endorsement Form attached to this Exhibit INS -E or substitute forms containing the same information and acceptable to the Risk Manager shall be used to provide the endorsements (ISO form CG 2010 11/85 or if not available, CG 2010 with an edition date prior to 01/04 and CG 2037).
5. The coverages provided to City shall be primary and not contributing to or in excess of any existing City insurance or self-insurance coverages (this must be endorsed). Additionally, the workers’ compensation policy shall include a waiver of all rights of subrogation which the insurer may have against the City. Any failure to comply with reporting provisions of the policies shall not affect coverage provided to City, its City Council, officers, employees and volunteers. The insurance shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer’s liability.
6. Any deductibles or self-insured retentions must be declared to and approved by the Risk Manager. At the option of the Risk Manager, either the insurer shall reduce or eliminate such deductibles or self -insured retentions as respects City, its City Council, officers, employees and vo lunteers, or the Contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.
7. All insurance standards applicable to Contractor shall also be applicable to Contractor’s subcontractors . Contractor agrees to maintain appropriate agreements with subcontractors and to provide proper evidence of coverage upon receipt of a written request from the Risk Manager. 876
EXHIBIT C-3
INSTRUCTION FOR SUBMITTING INSURANCE CERTIFICATES AND ENDORSEMENT FORMS
Certificates of Insurance
The sample accord form on the following page is provided to facilitate your preparation and submission of certificates of ins urance.
You may use this or any industry form that shows coverage as broad as that shown on the attached sample. Please note the certificate holder address must be as shown on the attached sample accord form with the contract number and insurance exhibit identification information completed. Improperly addressed certificates ma y delay the contract start -up date because the City’s practice is to return unidentifiable insurance certificates to the insured for clarification as to the contract number. Cancellation provisions must be endorsed to the policy. Modifying the certificate does not change coverage or obligate the carrier to provide notice of cancellation.
Endorsement Forms
Original endorsements are required for general liability and automobile liability insurance policies and must be attached to the applicable certificate of insurance. City preference is that you use the endorsement forms which are attached. Substitute forms will be accepted, however, as long as they include provisions comparable to the sample accord form.
INS-F.doc
877
EXHIBIT C-4
SAMPLE
ACORD CERTIFICATE OF INSURANCE ISSUE DATE (MM/DD/YY)
PRODUCER
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
CODE SUB-CODE
COMPANIES AFFORDING INSURANCE COVERAGE
INSURED
COMPANY
LETTER A SPECIFY COMPANY NAMES IN THIS SPACE
COMPANY
LETTER B
COVERAGES
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY
REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.
CO
LTR
TYPE OF INSURANCE
POLICY NUMBER
POLICY EFFECTIVE
DATE (MM/DD/YY)
POLICY EXPIRATION
DATE (MM/DD/YY)
LIMITS
A
GENERAL LIABILITY
[x] COMMERCIAL GENERAL LIABILITY
[x] CLAIMS MADE [x] OCCUR.
[x] OWNER'S & CONTRACTOR'S PROT.
GENERAL AGGREGATE $2,000,000
PRODUCTS COMP/OP AGG. $2,000,000
PERSONAL & ADV. INJURY $2,000,000
EACH OCCURRENCE $2,000,000
FIRE DAMAGE (Any one fire) $
MED. EXPENSE (Any one person) $
A
AUTOMOBILE LIABILITY
[x] ANY AUTO
ALL OWNED AUTOS
SCHEDULED AUTOS
HIRED AUTOS
NON-OWNED AUTOS
GARAGE LIABILITY
COMBINED SINGLE $1,000,000
LIMIT
BODILY INJURY $
(Per person)
BODILY INJURY $
(Per accident)
PROPERTY DAMAGE $
A
EXCESS LIABILITY
UMBRELLA FORM
OTHER THAN UMBRELLA FORM
EACH OCCURRENCE $
AGGREGATE $
A
WORKERS' COMPENSATION
AND
EMPLOYERS' LIABILITY
STATUTORY LIMITS
EACH ACCIDENT
$1,000,000
DISEASE-POLICY LIMIT $1,000,000
DISEASE-EACH EMPLOYEE $1,000,000
A
OTHER
Errors and omissions insurance or malpractice insurance available for the insured's profession; if architectural, engineering or electrical work will be performed under the Contract, Course of Construction Insurance
Minimum coverage $1,000,000
Each consultant/ $500,000
& listed sub-consultant
Course of Construction
Completed Value of Project
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/RESTRICTIONS/SPECIAL ITEMS
CERTIFICATE HOLDER
CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
CANCELLATION
SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER
NAMED TO THE LEFT, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
AUTHORIZED REPRESENTATIVE
878
EXHIBIT C-5
GENERAL LIABILITY SPECIAL ENDORSEMENT
FOR THE CITY OF OXNARD (the “City”)
SUBMIT IN DUPLICATE
ENDORSEMENT NO.
ISSUE DATE (MM/DD/YY)
PRODUCER
POLICY INFORMATION:
Insurance Company:
Policy No.:
Policy Period: (from) (to)
LOSS ADJUSTMENT EXPENSE Included in Limits
In Addition to Limits
Telephone:
Deductible Self-Insured Retention (check which) of $ with an Aggregate of $ applies to
coverage. Per Occurrence Per Claim (which)
NAMED INSURED
APPLICABILITY This insurance pertains to the operations, products and/or tenancy of the named insured under all written agreements and permits in force with the City unless checked here in which case only the following specific agreements and permits with the City are covered:
CITY AGREEMENTS/PERMITS
TYPE OF INSURANCE
GENERAL LIABILITY
COMMERCIAL GENERAL LIABILITY
COMPREHENSIVE GENERAL LIABILITY
OWNERS & CONTRACTORS PROTECTIVE
Claims Made
Retroactive Date
Occurrence
OTHER PROVISIONS
COVERAGES
LIABILITY LIMITS IN THOUSANDS $
EACH
OCCURRENCE
AGGREGATE
GENERAL
PRODUCTS/COMPLETED OPERATIONS
PERSONAL & ADVERTISING INJURY
FIRE DAMAGE
Underwriter=s representative for claims pursuant to this insurance.
CLAIMS:
Name:
Address:
Telephone: ( )
In consideration of the premium charged and notwithstanding any inconsistent statement in the policy to which this endorsemen t is attached or any endorsement now or hereafter attached thereto, insurance company agrees as follows:
1. INSURED. The City, its officers, agents, employees and volunteers are included as insureds with regard to liability and defense of sui ts arising from the operations, products and activities performed by or on behalf of the named insured.
2. CONTRIBUTION NOT REQUIRED. As respects: (a) work performed by the named insured for or on behalf of the City; or (b) products sold by the named insured to the City; or (c) premises leased by the named insured from the City, the insurance afforded by this policy shall be primary insurance as respects the City, its officers, agents, employees or volunteers; or stand in an unbroken chain of coverage excess of the named insured’s scheduled underlying primary coverage. In either event, any other insurance maintained by the City, its officers, agents, employees or volunteers shall be in excess of this insurance and shall not contribute with it.
3. SEVERABILITY OF INTEREST. This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the company’s limits of liability. The inclusion of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included.
4. CANCELLATION NOTICE. With respect to the interests of t he City, this insurance shall not be canceled, or materially reduced in coverage or limits except after thirty (30) days prior written notice by receipted delivery has been given to the City.
5. PROVISIONS REGARDING THE INSURED’S DUTIES. Any failure to compl y with reporting provisions of the policy or breaches or violations of warranties shall not affect coverage provided to the City, its officers, agents, employees or volunteers.
6. SCOPE OF COVERAGE. This policy, if primary, affords coverage at least as broad as:
a. Insurance Services Office Commercial General Liability Coverage, “occurrence” form CG0001; or a. If excess, affords coverage which is at least as broad as the primary insurance form CG0001.
Except as stated above nothing herein shall be held to waive, alter or extend any of the limits, conditions, agreements or exclusions of the policy to which this endorsement is attached.
ENDORSEMENT HOLDER
CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
AUTHORIZED REPRESENTATIVE
Broker/Agent Underwriter
I (print/type name), warrant that I have authority to bind the above-mentioned insurance company and by my signature hereon do so bind this company to this endorsement.
Signature
(original signature required)
Telephone: ( ) Date Signed
Rev. 2/21 INS-E.doc
879
EXHIBIT C-6
AUTOMOBILE LIABILITY SPECIAL ENDORSEMENT
FOR THE CITY OF OXNARD (the “City”)
SUBMIT IN DUPLICATE
ENDORSEMENT NO.
ISSUE DATE (MM/DD/YY)
PRODUCER
POLICY INFORMATION:
Insurance Company:
Policy No.:
Policy Period: (from) (to)
LOSS ADJUSTMENT EXPENSE Included in Limits
In Addition to Limits
Telephone:
Deductible Self-Insured Retention (check which) of $ with an Aggregate of $ applies to
coverage. Per Occurrence Per Claim (which)
NAMED INSURED
APPLICABILITY. This insurance pertains to the operations, products and/or tenancy of the named insured under all written agreements and permits in force with the City unless checked here in which case only the following specific agreements and permits with the City are covered:
CITY AGREEMENTS/PERMITS
TYPE OF INSURANCE
OTHER PROVISIONS
COMMERCIAL AUTO POLICY
BUSINESS AUTO POLICY
OTHER
LIMIT OF LIABILITY
CLAIMS: Underwriter’s representative for claims pursuant to this insurance.
Name:
Address:
Telephone: ( )
$ per accident, for bodily injury and property damage.
In consideration of the premium charged and notwithstanding any inconsistent statement in the policy to which this endorsement is attached or any endorsement now or hereafter attached thereto, insurance company agrees as follows:
7. INSURED. The City, its officers, agents, volunteers and employees are included as insureds with regard to liability and defense of suits arising from the operations, products and activities performed by or on behalf of the named insured.
8. CONTRIBUTION NOT REQUIRED. As respects: (a) work performed by the named insured for or on behalf of the Cit y; or (b) products sold by the named insured to the City; or (c) premises leased by the named insured from the City, the insurance afforded by this policy shall be primary i nsurance as respects the City, its officers, agents, employees or volunteers; or stand in an unbroken chain of coverage excess of the named insured’s scheduled underlying primary coverage. In either event, any other insurance maintained by the City, its officers, agents, employees or volunteers shall be in excess of this insurance and s hall not contribute with it.
9. SEVERABILITY OF INTEREST. This insurance applies separately to each insured against whom claim is made or suit is brought except with respect to the company’s limits of liability. The inclusion of any person or organization as an insured shall not affect any right which such person or organization would have as a claimant if not so included.
10. CANCELLATION NOTICE. With respect to the interests of the City, this insurance shall not be canceled, or materially reduced in coverage or limits except after thirty (30) days prior written notice by receipted delivery has been given to the City.
11. PROVISIONS REGARDING THE INSURED’S DUTIES. Any failure to comply with reporting provisions of the policy or breaches or violations of warranties shall not affect coverage provided to the City, its officers, agents, employees or volunteers.
12. SCOPE OF COVERAGE. This policy, if primary, affords coverage at least as broad as:
a. Insurance Services Office Automobile Liability Coverage, “occurrence” form CA0001, code ("any auto"); or b. If excess, affords coverage which is at least as broad as the primary insurance form referenced in the preceding section (1).
Except as stated above nothing herein shall be held to waive, alter or extend any of the limits, conditions, agreements or ex clusions of the policy to which this endorsement is attached.
ENDORSEMENT HOLDER
CITY OF OXNARD
Attn: Insurance Compliance
Reference No._______
P.O. Box 100085 – OX
Duluth, GA 30096
Via Email: [email protected]
Via Fax: 678-259-1007
AUTHORIZED REPRESENTATIVE
Broker/Agent Underwriter
I (print/type name), warrant that I have authority to bind the above- mentioned insurance company and by my signature hereon do so bind this company to this endorsement.
Signature
(original signature required)
Telephone: ( ) Date Signed
880
EXHIBIT C-5
881
EXHIBIT C-5
EXHIBIT D
DISBURSEMENT SCHEDULE
882
Note Page 1 5536 and 5482 Cypress Road
City of Oxnard
PROMISSORY NOTE
Oxnard, California
$1,600,000 ___________, 2023
FOR VALUE RECEIVED, Cypress Place at Garden C ity, L.P., a California Limited Partnership (“Borrower”), whose address is , California, hereby promises to pay to the order of the City of Oxnard, a municipal corporation (“Lender”), whose address is 435 South D Street, Oxn ard, California 93030, the principal amount equal to One Million Six Hundred Thousand Dollars ($ 1,600,000), or so much thereof as may be advanced by Lender to Borrow er, together with interest thereon, as set forth below.
1. PURPOSE. In order to assist Borrower in developing the first phase of one -hundred fifty (150) affordable rental housing units and two (2) managers’ units located at 5536 and 5482 Cypress Road, Oxnard, Ca lifornia (“Project”), Lender has agreed to loan the amount of One Million Six Hundred Thousand Dollars ($1,600,000) which are derived from funds received by the Lender from the Un ited States Department of Housing and Urban Development through th e HOME Investment Partner ships Program.
2. BORROWER’S OBLIGATION. This promissory note (“Note”) evidences Borrower’ s obligation to pay Lender the principal amount of One Million Six Hundred Thousand Dollars ($1,600,000) (“Loan”) for the HOME Funds loaned to Borrower by Lender for t he specific uses designated in a loan agreement between Borrower and Lender dated ___________________, 2023 (“Loan Agreement”).
3. INTEREST. Subject to Section 4, this Note shall bear simple interest at the rate of three percent (3%) per an num from the date of the first disbursement under the Loan Agreement and Note .
Interest is not compounding.
4. DEFAULT INTEREST. In the Event of Default by Borrower of any of its obligations under this Note or the Loan Documents , Borrower shall pay to Lender interest on the outstanding principal of this Note, at an annual rate equal to the lesser of (i) ten percent (10%) or (ii) the highest interest allowed by law, in addition to the interest rate provided in Section 3 above, from the date of the Event of Default until the date that the Event of Default is cured or the Loan is repaid in full. The default interest shall be paid monthly and is due to the County on the first day of each month.
5. AMOUNT AND TIME OF PAYMENT. The principal and interest of the Loan shall be due and payable on the earlier of: (a) fifty-five (55) years from the date of the recordation of a notice of completion issued for Phase 1 of the Project, or (b) the date the Property is sold or otherwise transferred, except, if Borrower is a limited partnership and the affordability covenants are maintained for the duration of the original City affordability period, for a transfer to the general partner(s) of the Borrower or, a Lender approved affiliate thereof, or (c) Borrower has failed to c ommence con struction as set f orth in Section 3.3 of the Loan Agreement, or (d) an event of default by Borrower, as defined in Section 5.1 of the Loan Agreement, which has not been cured as provided for in Section 5.2 of the Loan Agreement.
Annual loan payments on the Loan shall be made in ac cordance with Section 7 hereof . In the event of default by Borrower, as defined in Section 5.1 of the Loan Agreement, which has not been cured as provided for in Section 5.2 of the Loan Agreement, the principal and all current and accrued interest shall be due and payable in accordance with Section 9 of this Note. See also Section 5.2 Lender’s Remedies in 883
Note Page 2 5536 and 5482 Cypress Road
City of Oxnard
the Loan Agreement. In any event, t he principal and all current and accrued interest shall be due and payable no later than , 2078.
6. DEFINITIONS. Unless otherwise defined, a ll capitalized terms in this Note shall have the definition ascribed to such terms in the Loan Agreement.
7. PAYMENTS. All accrued interest and principal shall be due and payable in accordance wi th the terms set forth in Section 5. Commencing on July 1st of the first year after the City 's issuance of a Certificate of Completion for Phase 1 of the Project and on July 1st of each year thereafter through the HOME Loan Term, Borrower shall make a Loan payment in an amount equal to the HOME Percentage of Lenders' Share of Residual Receipts for the previous calendar year (each, an “ Annual Payment”). The Borrower shall provide the City with its Annual Financial Statement and any other documentation reasonably requested by t he City to substantiate the Borrower's determination of A nnual Payment. The City shall apply all Annual Payments first, to accrued interest, and second, to principal.
In the event that Lender determines that there is an u nderstatement in the amount and payment of Residual Receipts due to Lender, Borrower shall promptly pay to Lender such understatement, but in any event, no later than within twenty (20) days of notice of such understatement. In the event that Lender determines that there has been an overpayment in the amount and payment of Residual Receipts due to Lender, L ender shall pay to Borrower the amount of overpayment promptly, but in any event, within twenty (20) days of such determination. If contested, Borrower has the right to pay under protest and request an audit by an independent CPA.
8. PLACE AND MANNER OF PAYMENT. All amounts due and payable under this Note are payable at the office of Lender at the address set forth above, or at such other place as Lender may designate to Borrower in writing from time to time, in any coin or currency of the United States which on the respective Payment Dates thereof shall be legal tender for the payment of public and private debts.
9. DEFAULT AND ACCELERATION. This Note is secur ed by a Deed of Trust . All covenants, conditions and agreements contained in the Deed of Trust and the Loan Agreement are hereby made a part of this Note. Borrower agrees that the principal and all current and accrued interest , shall, at the option of Lend er, be immediately due and payable upon any event of d efault as defined in the Loan Agreement which has not been cured pursuant to that Loan Agreement, including without limitation the failure of Borrower to make any payment when due. Upon any event of default, Lender may exercise any other right or remedy permitted under this Note and the Loan Doc uments. Notwithstanding anything to the contrary contained in the Loan Documents, Lender hereby agrees that any cure of any event of default made or tendered by B orrower's limited partners shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if made or tendered by Borrower.
10. PREPAYMENT OF LOAN . No prepayment penalty will be charged to Borrower for payment of all or any portion of the Loan amounts prior to the end of the term described herein. However, prepayment of the Loan during the term of the Regulatory Agreement shall require Lender approval and shall not affect Borrower’s obligations under the Regulatory Agreement.
11. NO OFFSET. Borrower hereby waives any rights of offset it now has or may hereafter have against Len der, its successors and assigns, and agrees to make the payments called for herein in accordance with the terms of this Note.
12. WAIVERS. All presentments, notices of dishonor, and protests are waived by all makers, sureties, guarantors, and endorsers of this Note, if any.
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City of Oxnard
13. CONSENTS AND APPROVALS. Any consent or approval of Lender required under this Note shall not be unreasonably withheld or delayed.
14. NOTICES. Except as may be ot herwise specifically provided herein, any approval, notice, direction, c onsent request or other action by Lender shall be in writing and may be communicated to Borrower at the principal office of Borrower set forth below, or at such other place or places as Borrower shall designate in writing, from time to time, for the receipt of communications from Lender. Copies of all notices which are sent to Borrower under the terms of the Loan Documents shall also be sent to Borrower’s limited Partner at the address below.
BORROWER: Cypress Place at Garden City, L.P.
c/o Peoples’ Self-Help Housing Corporation
Attn: CEO and President
With copy to:
15. BINDING UPON SUCCESSORS. All provisions of this Note shall be binding upon and inure to the benefit of the successors-in-interest, transferees, and assigns of Borrower and Lender.
16. GOVERNING LAW. This Note shall be interpreted under and governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law.
17. SEVERABILITY. Every provision of this Note is intended to be severable. If any provision of this Note shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, leg ality, and enforceabil ity of the remaining provisions shall not in any way be affected or impaired.
18. TIME. Time is of the essence in this Note.
19. WAIVER. Any waiver by Lender of any obligation in these Loan Documents must be in writing. No waiver will be implied from any delay or failure by Lender to take action on any breach or default of Borrower or to pursue any remedy allowed under the Loan Documents or applicable law. Any extension of time granted to Borrowe r to perform any obligation under the Loan Do cuments shall not operate as a wa iver or release from any of the Borrower’s obligations under the L oan Documents.
Consent by Lender to any act or omission by Borrower shall not be construed to be consent to any other or subsequent act or omission or to waive the requirement for Lender’s written consent to future waivers.
20. AMENDMENTS AND MODIFICATI ONS. Any amendments or modifications to this Note must be in writing, and shall be made only if executed by both Borrower and Lender.
21. NONRECOURSE. Except as expressly provided in the second paragraph of this Section 21, the Borrower, and the Borrower' s partners, officers, directors, employees and agents shall not have any direct or indire ct personal liability for payment of the principal of, or interest on, this Note . The sole recourse of the Le nder with respect to the principal of, or interest on, the Note shall be to the property securing the indebtedness evidenced by the Note. However, nothing contained in the foregoing limitation 885
Note Page 4 5536 and 5482 Cypress Road
City of Oxnard
of liability shall (i) limit o r impair the enforcement against all such security for the Note of all the rights and remedies of t he Lender, or (ii) be deemed in any way to impair the right of the Lender to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto.
The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note, except as hereafter set forth; nothing contained herein is intended to relieve the Borrower of personal liability to the extent of actual damages for (i) Borrower's fraud or willful misrepresentation; (ii) the failure to pay taxes, asse ssments or o ther charges (which a re not contested by the Borrower in good faith) which may create l iens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market v alue of any personal property or fixtures removed or disposed of by the Borrower other than in accordance with the Deed of Trust; (iv) the material misapplication of any proceeds under any insurance policies or awards resul ting from condemna tion or the exe rcise of the power of eminent domain or by reason of damag e, loss or destruction to any portion of the Property; (v) the Borrower's indemnification obligations under the Loan Agreement; and (vi) payment to the Lender of any rental income or other income arising with respect to the Property received by the Borrowe r after the Lender has given notice to the Borrower of the occurrence of an Event of Default and after the expiration of all applic able notice and cure periods, subj ect to the rights of a ny lender p roviding a loan secured by the Property to which the Lender has subordinated the Deed of Trust.
22. LOAN AGREEMENT CONTROLS. In the event that any provisions of this Note and the Loan Agreement conflict, the terms of the Loan Agreement shall control.
(signature appears on following page)
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Note Page 5 5536 and 5482 Cypress Road
City of Oxnard
BORROWER:
CYPRESS PLACE AT GARDEN CITY, L.P.,
a California limited partnership
By: Cypress Place at Garden City LLC, a California limited liability company, its Managing General Partner
By: Peoples’ Self-Help Housing Corporation, a California nonprofit public benefit corporation, its Sole Member/Manager
By: _______________________________
Kenneth Trigueiro
Chief Executive Officer and President
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1 RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
CITY OF OXNARD
Housing Department
435 S D Street
Oxnard, CA 93030
Attention: Housing Director
No recording fee pursuant to California
Government Code Section 27383
APN: SPACE ABOVE THIS LINE FOR RECORDER’S USE
CITY HOME LOAN REGULATORY AGREEMENT AND
DECLARATION OF RESTRICTIVE COVENANTS
This City HOME Loan Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is made as of this day of , 2023, by and between the City of Oxnard, a municipal corporation (the “Lender”), and Cypress Place at Garden City, L.P., a California limited partnership (the “Owner”).
RECITALS
A. The Owner owns a parcel of real property located 5536 and 5482 Cypre ss Road, Oxnard, California 93033, as more particularly described in Exhibit A (the “Property”) upon which the Owner intends to construct one hundred fifty ( 150) units of affordable housing, including two (2) managers’ units in two phases: (1) the first phase will consist of development of ninety (90) units of affordable housing including one (1) manager’s unit (“Phase 1”), and (2) the second phase will consist of development of sixty (60) units of affordable housing including one (1) manager’s unit (the “Project”).”
B. The Lender has received HOME Investment Partnership s Program funds (“HOME Funds”) from the United States Department of Housing and Urban Development (“HUD”) pursuant to the Cranston- Gonzales National Affordable Housing Act of 1990 for the purpose of expanding the supply of decent, safe, sanitary and affordable housing for low -income persons and families.
C. Owner has received a loan from Lender in the amount of One Million Six Hundred Thousand Dollars ($1,600,000 ) in HOME Funds to provide financin g for construction of Phase 1 of the Project (the “City HOME Loan”).
D. As further consideration for this funding and to further the interests of the Lender, the Owner has agreed to enter into and record this Agreement. The purpose of this Agreement is to re gulate and restrict the occupancy, rents, operation, ownership, and management of the 888
2 Project. The covenants in this Agreement are intended to run with the land and be binding on the Owner and its successors and assigns in the Property.
NOW THEREFORE, IN CONSIDERATION of the mutual agreements, obligations, and representations, and in further consideration for the aforementioned funding, the Owner and the Lender hereby agree as follows:
1. DEFINITIONS
All initially capitalized terms in this Agreement sha ll have the definition ascribed to such terms in the City HOME Loan Agreement. Some of the following terms are defined in the City HOME Loan Agreement and repeated here for convenience of reference. Where such terms are not defined in the City HOME Loan Agreement, t he following terms have the meanings and content set forth in this section wherever used in this Agreement or attached exhibits.
1.1 “ANNUAL INCOME ” means the definition of Annual Income as more particularly defined at 24 CFR 5.609.
1.2 “AREA M EDIAN INCOME ” means the area median income for Ventura County Metropolitan Stati stical Area as determined from time to time by the United States Department of Housing and Urban Development (“HUD”) and published by HCD, adjusted for family size.
1.3 This section intentionally left blank.
1.4 “CITY HOME LOAN” means the loan of HOME F unds in the amount of One Million Six Hundred Thousand Dollars ($1,600,000) made by the Lender to the Owner to finance certain development costs of the Project pursuant to the City HOME Loan Agreement and the City HOME Loan Note.
1.5 “CITY HOME LOAN AGREEMENT” is the loan agreement executed by and between the Owner and the Lender, setting forth the terms and conditions governing the City HOME Loan.
1.6 “CITY HOME LOAN DEED OF TRUST” means that certain deed of trust, assignment of rents, and security agreement placed on the Property and the improvements to be constructed thereon as security for the City HOME Loan with the Owner as trustor and the Lender as beneficiary, as well as any amendments to, modifications of, and restatements of said deed of trust.
1.7 “CITY HOME LOAN DOCUMENTS” are collectively the City HOME Loan Agreement, the City HOME Loan Note evidencing the City HOME Loan , the City HOME Loan Deed of Trust securing the City HOME Loan Note, and this Agreement as they may be amended, modified, or restated from time to time, along with all exhibits and attachments to these documents.
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3 1.8 “CITY HOME LOAN NOTE” means the promissory note executed by the Owner in favor of the Lender in the amount of One Million Six Hundred Thousand Dollars ($1,600,000) evidencing the City HOME Loan, which is secured by the City HOME Loan Deed of Trust, as well as any amendments to, modifications of, or restatements of said promissory note.
1.9 “HOME-ASSISTED UNIT” means any of the fifteen (15) Units on the Property designated by the Owner as “floating” HOME units with restricted occupancy and rents pursuant to and subject to the requirements of this Agreement. A “floating” unit must have the HOME - assisted designation, must be occupied by HOME income -eligible tenants, and must be at least comparable in terms of size, features and number of bedrooms to the units originally designated at initial occupancy, although the specific unit(s) so designated may vary with availability. A unit shall not be considered a HOME -Assisted Unit until the Unit has been constructed and made available for occupancy. Nine (9) HOME-Assisted Units will be designated as “ High HOME Units” rented in accordance with the limits set forth in 24 C.F.R. § 92.252(a) , and six (6) HOME-Assisted Units will be designated as “Low HOME Units” rented in accordance with the limits set forth in 24 C.F.R. § 92.252(b).
1.10 “LOW-INCOME HOUSEHOLD” means a household, as defined in 24 CFR
92.2. 1.11 “LENDER” is the City of Oxnard , a municipal corporation, and its authorized representatives, officers, officials, directors, employees, and agents.
1.12 This section intentionally left blank.
1.13 “OWNER” means Cypress Place at Garden City , L.P., a California limited partnership.
1.14 “PROJECT” means the construction, operation and management of the Property and the improvements to be constructed thereon according to the terms of the City HOME Loan Agreement.
1.15 “PROPERTY” means the real property located at 5536 and 5482 Cypress Road, Oxnard, California as more particularly described in Exhibit A attached hereto and incorporated herein, including the improvements constructed thereon pursuant to the City HOME Loan Agreement.
1.16 “QUALIFYING HOUSEHOLD ” means a household that qualifies as a Low- Income Household or Very Low-Income Household, as defined herein. A Qualifying Household who meets the definition of Veteran must be given a preference to be first considered for a vacancy or may be moved to the top of a waiting list, if applicable. “ Veteran” is defined as the Head of Household or Spouse who has served in active duty in the United States Armed Forces for a minimum of six (6) continuous months, and if separated from military service, received other than dishonorable discharge. The veteran preference will also be given to a surviving 890
4 spouse or registered domestic partner of a deceased veteran, as defined herein. Verification of veteran status will be by the submittal of a copy of the veteran's DD-214.
1.17 “QUALIFYING RENT” means the total monthly charges for rent, which shall not exceed
a) a “Low HOME” Rent that does not exceed 30 percent (30%) of the adjusted income of a family whose annual income equals fifty percent (50%) of the median income for the area, as determined by HUD, with adjustments for number of bedrooms in the unit and smaller and larger families, or
b) a “High HOME ” Rent that does not exceed 30 percent (30%) of the adjusted income of a family whose annual income equals sixty percent (60%) of the median income for the area, as determined by HUD, with adjustments for number of bedrooms in the unit and smaller and larger families.
HOME rents are not required to be lower than the HOME rent limits for the project in eff ect on the date of this Agreement.
In accordance with 24 CFR 92.252( d), if the tenant pays for utilities and services (excluding telephone, television and Internet services ), then the Qualifying Rent shall be reduced by the maximum monthly allowance for utilities and services using the annual HUD Utility Schedule Model or other annual utility schedule as determined by the Lender.
1.18 This section intentionally left blank.
1.19 “TENANT” means a household occupying a Unit.
1.20 “TERM” means the period of time during which the HOME -Assisted Units must meet the affordability requirements imposed under the HOME Program, commencing upon project completion in conformance with 24 CFR 92.2 and 24 CFR 92.252(e) and terminating twenty (20) years from the date of the issuance of a certificate of occupancy issued for Phase 1 of the Project plus six months.
1.21 “UNIT” means a housing unit in the Project.
1.22 “VERY LOW-INCOME HOUSEHOLD” means a household, as defined in 24 CFR 92.2.
2. TERM AND COMPLIANCE
2.1 COMPLIANCE WITH CITY HOME LOAN DOCUMENTS. The Owner’ s actions with respect to the Property and the use of funds from the City HOME Loan shall at all times be in full conformity with all of the requirements of the City HOME Loan Documents, including but not limited to the insurance requirements contained therein.
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5 2.2 TERM OF AGREEMENT. This Agreement shall commence upon project completion in conformance with 24 CFR 92.2 and 24 CFR 92.252(e) and terminate twenty (20) years from the date of the issuance of a certificat e of occupancy for Phase 1 of the Project . The requirements of this Agreement shall apply throughout the Term without regard to the term of any loan or mortgage or any transfer of ownership of the Property.
2.3 COMPLIANCE WITH PROGRAM REQUIREMENTS. The Owner shall comply with all requirements imposed on projects assisted under the HOME P rogram in effect on the date the City HOME Loan is executed by all parties, and as may be amended from time to time.
3. PROJECT OCCUPANCY AND RENTS
3.1 OCCUPANCY OF PROJECT. A total of fifteen (15) Unit(s) in the Project shall be designated as HOME-Assisted. Each HOME-Assisted Unit must be occupied, or reserved for occupancy by Qualifying Household(s).
3.2 HOME-ASSISTED UNITS. The Owner shall limit for the full T erm of this Agreement the rental of fifteen (15) HOME -Assisted Unit (s) to Qualifying Households at Qualifying Rents that do not exceed the maximum rental charges for each HOME -Assisted Unit as set forth in Section 1 .17 and 3.4 herein. The HOME-Assisted Unit(s) shall be designated as “floating” so the HOME-Assisted Unit(s) may change over time as long as the total number and type of HOME-Assisted Units in the Project remains constant.
The HOME-Assisted Unit(s) shall meet the following standards:
A. Consist of five (5) on e-bedroom units, five (5) two- bedroom units and five (5) three-bedroom units, nine (9) of which will be designated as High HOME Units, and six (6) of which will be designated as Low HOME Units; B. Be similarly constructed and of comparable quality to all othe r Units in the Project and be dispersed throughout the Project; and
C. Provide Tenants of HOME-Assisted Units access and enjoyment of all common areas and facilities of the Project on the same basis as Tenants of other Units.
3.3 OTHER PROJECT UNITS . The Pr oject shall be maintained and operated to comply with all applicable federal, state, and local requirements for access for disabled persons, including but not limited to Section 504 of the Rehabilitation Act of 1973 (29 USC 794), as amended, and with imple menting regulations at 24 CFR, Part 8, and the Fair Housing Act (42 USC 3601- 3619), implemented at 24 CFR Part 100, Subpart D. Within thirty ( 30) days after Owner has completed the construction of the Project, Owner shall submit satisfactory documentation of compliance with these requirements, including, but not limited to, a certification from the Project architect documenting the unit numbers and type of accessibility features of no less than two (2) units accessible for mobility impairments and one (1) unit accessible for either hearing or visual impairments.
3.4 MAXIMUM RENTAL CHARGES.
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6 A. Maximum rental charges for the HOME-Assisted Units shall not exceed the Qualifying Rent as defined above in Section 1.17 and Section 3.2.
B. The Qualifying Rent for each HOME-Assisted Unit shall be set by the Lender at the time of initial occupancy of the Project . Annual increases in Qualifying Rents shall be calculated based on the change in Area Median Income published annually by HUD. At least sixty (60) calendar days prior to increasing Qualifying Rents on any HOME-Assisted Unit on the Project, Owner shall submit to the Lender for review and approval a written request for such increase. Tenants of Home -Assisted Units shall be given at least thirty (30) days written notice prior to any increase in Qualifying Rents , consistent with state law . Lender shall approve such request if the increased Qualifying R ents will comply with all applicable HOME Program requirements.
3.4.1 OCCUPANCY DEADLINES. Owner shall ensure that each HOME- Assisted Unit is occupied by an eligible tenant in accordance with the deadlines for occupancy set forth at 24 CFR 92. 252. Eligible tenants shall occupy each HOME-Assisted Unit within eighteen (18) months from the completion of construction of the Project , evidenced by the recording of a notice of completion and securing Certificate(s) of Occupancy . In the event that any HOME-Assisted Unit is not occupied by an eligible tenant five (5) months after the date of the issuance of a certificate of occupancy, Owner shall submit to Lender within ten (10) days a detailed record of its marketing efforts and comply with Lender’s requests for additional information pertaining to the marketing efforts. In the event any HOME-Assisted Unit is not occupied by el igible tenants within seventeen ( 17) months after the date of the issuance of a certificate of occupancy, then this shall constitute an Event of Default. On or before the last day of the seventeenth ( 17th) month after the date of the issuance of a certificate of occupancy, Lender shall give written notice to Owner in accordance with Section 6.2 herein. Owner shall have thirty (30) days from receipt of such notice to cure the breach, but in any event shall cure the breach before the end of the eighteenth (18th) month after the date of the issuance of a certificate of occupancy.
3.5 INCOME CERTIFICATION.
The Annual Income levels and other qualifications of applicants for HOME-Assisted Units shall be certified by Owner no earlier than six (6) months prior to the Qualifying Household's expected occupancy of a HOME-Assisted Unit and recertified annually thereafter by the Owner, in compliance with 24 CFR 92.203.
A.Initial Annual Income Verification. Before the Qualifying Household occupies a HOME-Assisted Unit, the Owner shall verify that the Annual Income calculated in an Annual Income certification is accurate by taking both of the following steps as a part of the verification process:
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7 (1) Third Party Verification: A ll third part ies (e.g., employer, Social Securi ty Administration, public assistance agency, etc.) are contacted in writing to obtain written verification of Annual Income; and
(2) Review of Documents: The Qualifying H ousehold provides documents verifying their Annual Income (e.g., pay stubs, tax returns, e tc.), which are to then be retained in the Project files.
B. Annual Income Recertification. At the time of lease renewal or pursuant to an annual schedule adopted by the Owner, and no later than the one -year anniversary of the initial Annual Income verification and annually thereafter, Owner shall recertify the Annual I ncome of each Tenant occupying a HOME -Assisted Unit using the method as described in Section 3.5.A , above.
3.6 INCREASES IN QUALIFYING HOUSEHOLD INCOMES. In the event that recertification of a previously -Qualifying Household's Annual Income indicates that the Annual Income exceeds the maximum designated for a Unit reserved for a Qualifying Household, the Owner may increase rents on such Unit only as permitted by HUD in accordance with regulations regarding “over -income tenants” at 24 CFR 92.252(i) . If the previously -Qualifying Household’s income exceeds eighty -percent (80%) of AMI, then the unit occupied by the previously-Qualifying Household no longer qualifies as a HOME -Assisted Unit and the next available unit of comparable size and amenities or larger must be designated as the replacement HOME-Assisted Unit.
4. LEASING THE PROJECT
4.1 TENANT LEASES. The Owner shall execute a written lease with T enants of HOME-Assisted Units for a term of at least one year, unless the Owner and the T enant mutually agree to a shorter period. A lease may not be for a period less than thirty (30) days. The Tenant lease and any changes thereto must be approved by Lender.
A. The Owner shall include in l eases for all HOME -Assisted Units provisions which provide that a Qualifying H ousehold is subject to annual certification of Annual I ncome and that the tenancy of the Qualifying H ousehold shall be terminated as soon as possible in accordance with state law should one or more of the Qualifying H ousehold's members misrepresent any material fact regarding the Qualifying H ousehold's qualification as a Low- or Very Low -Income Household, as the case may be. The Owner shall include in all leases for HOME-Assisted Units provisions which prohibit the Qualifying H ousehold from subleasing the HOME-Assisted Unit.
B. In addition to executing a lease for a HOME-Assisted Unit, the Owner shall require that each Qualifying Household leasing a HOME-Assisted Unit execute a declaration of intent to occupy which shall require the Qualifying H ousehold to occupy the HOME-Assisted Unit as the Qualifying Household's primary residence.
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8 C. The lease for each HOME-Assisted Unit shall not contain any of the prohibited provisions identified at 24 CFR §92.253(b) including the following:
1. Agreement to be sued . Agreement by the T enant to be sued, to admit guilt, or to a judgment in favor of the O wner in a lawsuit brought in connection with the lease;
2. Treatment of property . Agreement by the T enant that the O wner may take, hold or sell personal property of Qualifying H ousehold members without notice to the T enant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the T enant concerning disposition of personal property remaining in the HOME -Assisted Unit after the Tenant has moved out of the HOME -Assisted Unit. The Owner may dispose of this personal property in accordance with State law;
3. Excusing Owner from responsi bility. Agreement by the T enant not to hold the Owner or the Owner’s agents legally responsible for any action or failure to act, whether intentional or negligent;
4. Waiver of notice. Agreement of the Tenant that the Owner may institute a lawsuit without notice to the Tenant;
5. Waiver of legal proceedings . Agreement by the T enant that the O wner may evict the Tenant or Qualifying Household members without instituting a civil court proceeding in which the T enant has the opportunity to present a defense, or before a court decision on the rights of the parties;
6. Waiver of a jury trial . Agreement by the Tenant to waive any right to a trial by jury;
7. Waiver of right to appeal court decision. Agreement by the T enant to waive the T enant’s right to appe al, or to otherwise challenge in court, a court decision in connection with the lease; and
8. Tenant chargeable with cost of legal actions regardless of outcome .
Agreement by the Tenant to pay attorney’s fees or other legal costs even if the Tenant wins in a court proceeding by the O wner against the T enant. The Tenant, however, may be obligated to pay costs if the Tenant loses.
9. Mandatory support services . Agreement by the Tenant (other than a tenant in transitional housing) to accept supportive services that are offered.
D. Owner shall not terminate the tenancy or refuse to renew the lease of a Tenant of a HOME-Assisted Unit except for serious or repeated violation of the terms and conditions of the lease; for violation of applicable Federal, Stat e, or local l aw; or for other good cause. To terminate or refuse to renew the tenancy, the O wner shall serve written notice upon the T enant specifying the grounds for the action at lease thirty (30) days prior to termination of tenancy.
E. Owner shall comply with all requirements of the Violence Against Women Act (VAWA) set forth in 24 CFR part 5, subpart L . Owner shall provide the notice and certification form described in 24 CFR 5.2005(a)
to an applicant for a HOME -Assisted Unit at the time the applicant is admitted to a HOME -Assisted Unit or County-Assisted Unit, or denied admission to a HOME-Assisted Unit based on the O wner's tenant selection policies and criteria. Owner shall further provide the notice and certification form described in 24 CFR 5.2005 with any 895
9 notification of eviction from a HOME-Assisted Unit. If a family living in a HOME-Assisted Unit separates under 24 CFR 5.2009(a), the remaining tenant(s) may remain in the Unit. All leases for HOME-Assisted Unit s must include a VAWA lease term/addendum to incorporate all requirements that apply to the Owner or lease under 24 CFR part 5, subpart L, and 24 CFR
92.359, including the prohibited bases for eviction and restricti ons on construing lease terms under 24 CFR 5.2005(b) and (c). The VAWA lease term/addendum must also provide that the tenant may terminate the lease without penalty if it is determined that the tenant has met the conditions for an emergency transfer under
24 CFR 5.2005(e) . The lease term/addendum must
require the Owner to notify the participating jurisdiction before the owner bifurcates the lease or provides notification of eviction to the tenant. Owner shall comply with all other VAWA requirements applicable to the HOME program not specified herein.
F. Owner and Lender shall work together to comply with the requirements of the Coordinated Entry System under the Continuum of Care program, as set forth at 24 CFR Part 578, PIH Notice 2013-15 and other guidance from HUD on CoC and PHA collaboration.
4.2 TENANT SELECTION. Before leasing the Project, the Owner must provide Lender for its review and approval the Owner’s written tenant selection plan. Tenant selection must, at a minimum, meet the requirements for tenant selection set out in 24 C.F.R. 92.253(d) and any modifications thereto , and the requirements set forth in the City HOME Loan Agreement . A Veteran’s preference must be applied pursuant to amended Section 1.16 as described above.
Any changes to the tenant selection plan require prior written approval from Lender.
4.3 SECTION 8 CERTIFICATE HOLDERS. The Owner will accept as T enants, on the same basis as all other prospective T enants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor. The Owner shall not apply selection crit eria to Section 8 certificate or voucher holders that are more burdensome than criteria applied to all other prospective Tenants, nor shall the Owner apply or permit the application of management policies or lease provisions with respect to the Project which have the effect of precluding occupancy of Units by such prospective Tenants.
4.4 CONDOMINIUM CONVERSION. The Owner shall not convert Units to condominium or cooperative ownership or sell condominium or cooperative conversion rights in the Property during the Term of Agreement.
4.5 NONDISCRIMINATION. The Owner shall not discriminate or segregate in the use, enjoyment, occupancy, conveyance, lease, sublease, or rental of Units on the basis of race, color, ancestry, national origin, religion, sex,
gender, gender identity or expression, sexual preference, age, marital status, family status, source of income, military or veteran status, physical or mental disability, medical condition, genetic information, Acquired Immune Deficiency Syndrome (AIDS) or AID S-related conditions (ARC), or any basis prohibited by law . The Owner shall include a statement in all advertisements, notices and signs for the availability of Units for rent to the effect that the Owner is an Equal Housing Opportunity Provider.
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10 4.6 MARKETING PLAN. Prior to occupancy, Owner shall submit to the Lender for approval its plan for marketing the U nits in compliance with the requirements set forth in the City HOME Loan Agreement , including information on affirmative marketing efforts and compliance with fair housing laws and the Lender's affirmative fair marketing guidelines. Upon receipt of the marketing plan, the Lender shall promptly review the m arketing plan and shall approve or disapprove it within thirty (30) days after submission. If the marketing plan is not approved, Lender shall specify its reasons for disapproval. The Owner shall submit a revised marketing plan within thirty (30) days of Lender’s notice of disapproval. The Lender’s disapproval of the revised marketing plan shall const itute an Event of Default under Sections
8.1.D, 8.1.E, and/or 8.1.I of the City HOME Loan Agreement.
5. PROPERTY MANAGEMENT
5.1 MANAGEMENT RESPONSIBILITIES. The Owner is responsible for all management functions with respect to the Project , including wit hout limitation the selection of Tenants, certification and recertification of Qualifying H ousehold size and Annual I ncome, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The Lender shall have no responsibility over management of the Project . The Owner shall submit to the Lender for its approval its proposed Property manager. The Owner may only remove and/or replace the P roperty manager with the prior written consent of the Lender which consent shall not be unreasonably withheld.
5.2 APPROVAL OF MANAGEMENT POLICIES. The Owner shall submit its written management policies with respect to the Project to the Lender for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement, the requirements of the existing HOME P rogram, as may be amended from time to time, and the requirements of all lenders providing financing for the Project.
5.3 INSPECTION AND RECORDS. The Owner shall maintain records w hich clearly document the Owner’s performance of its obligations to operate the Property under the terms of this Agreement. The Owner shall submit all requested records to the Lender within t en ( 10) business days of the Lender’ s request. The Owner shall permit the Lender to enter and inspect the Property for compliance with Owner’s obligations under this Agreement at all reasonable times upon twenty-four (24) hours advance notice of such visit by the Lender to the Owner or the Owner’s Property manager and to T enants of any Units. Owner must include provisions in tenant leases that allow for Lender inspections of the units.
5.4 COMPLIANCE MONITORING. The Owner shall operate the P roperty in full compliance with this Agreement and the HOME Program regulations at 24 CFR Part 92 in effect on the date the City HOME Loan is executed by all parties, and as may be amended from time to time, and shall remain in compliance therewith throughout the T erm of this Agreement. The Owner shall permit the Lender to conduct annual compliance monitoring, including performing on-site records review and inspections of the Property, as required by regulation or reasonably requested by Lender.
897
11 5.5 ANNUAL REPORT. Following recordation of a notice of completion issued for the Project, the Owner shall annually submit to the Lender a report in a form approved by Lender for the preceding period of January 1st through December 31 st or portion thereof , containing the information requested by Lender so as to allow the Lender to determine the Owner's compliance with this Agreement. The report shall be submitted annually no later than March 1 st, and shall include, at a minimum: (i) an Annual Financial Statement as defined in S ection 1.2 of the City HOME Loan Agreement, (ii) a report on the occupancy of the P roject, (iii) a report on the physical condition of the Project, (iv) a report on the general management of the Project , (v) for each HOME-Assisted Unit, the r ent, Annual I ncome, and household size of the household in occupancy. The report shall also state the date the tenancy commenced for each HOME -Assisted Unit and such other information as the Lender may be request.
Within thirty (30) days after receipt of a written req uest, Owner shall submit any other information or completed forms requested by the Lender in order to comply with reporting requirements of the United States Department of Housing and Urban Development, or the State of California, or the Lender. The Lender shall have the right to examine and make copies of all books, records or other documents of Owner which pertain to the Project or any Unit to determine compliance with this Agreement.
5.6 FEES, TAXES, AND OTHER LEVIES. The Owner shall be responsible for payment of all fees, assessments, taxes, charges and levies imposed by any public authority or utility company with respect to the Property, and shall pay such charges prior to delinquency.
5.7 PROPERTY TAX EXEMPTION. The Owner shall not apply for a prope rty tax exemption for the Property under any provision of law other than California Revenue and Taxation Code Section 214(g) without the Lender’ s prior written consent. Lender acknowledges Owner will be applying for a property tax exemption for the propert y and hereby provides its consent.
5.8 MAINTENANCE OF EXISTING STRUCTURES. Owner shall maintain all buildings on the Property in good condition, in good repair, ordinary wear and tear excepted, and in a decent, safe, sanitary, habitable and tenantable co ndition. All Units in the Project must meet the standards set out in 24 CFR 92.251(f)(2) throughout the Term of this Agreement. In the event that Lender establishes property standards in accordance with 24 CFR 92.251(f)(1) and determines in its sole discre tion that these standards are applicable to the Project, Lender shall send written notice of this determination to Owner. Upon Owner’s receipt of such written notice, the property standards established by Lender pursuant to 24 CFR 92.251(f)(1) shall apply to all Units in the Project throughout the Term of this Agreement. Owner shall not cause or permit any violations of any laws, ordinances, regulations, covenants, conditions, restrictions, or equitable servitudes as they pertain to improvements, alteration s, maintenance or demolition on the Property. Lender shall have no responsibility over maintenance of the Property.
6. GENERAL PROVISIONS
6.1 SUBORDINATION. This Agreement shall be subordinate to each Senior Lien and to other liens approved by the Housi ng Director as set forth in Section 2.8 of the City HOME 898
12 Loan Agreement. The Housing Director is authorized to execute and form of subordination agreement provided by such Senior Lenders and approved as to form by the City Attorney.
6.2 DEFAULT AND REME DIES In the event of any breach of any agreement or obligation under this Agreement by the Owner, the Lender shall provide written notice to the Owner of such breach. The Owner shall have an opportunity to cure such breach within thirty (30) days from the Owner’ s receipt of such written notice or such longer period of time as the Lender determines is necessary to cure the breach if the Owner diligently undertakes to cure such breach. Lender shall accept a cure by the Owner’s limited partner on the same basi s as Lender accepts a cure by the Owner. If the Owner fails to perform a timely cure of the specified breach, the Lender may proceed with any or all of the fo llowing remedies upon the Owner’ s failure to cure:
A. Bring an action in equitable relief seeking the specific performance by the Owner of the terms and conditions of this Agreement, and/or enjoining, abating, or preventing any violation of said terms and conditions, and/or seeking declaratory relief;
B. Enter upon, take possession of, and manage the Property and the Project, either in person, by agent, or by a receiver appointed by a court, and collect any rents, income, deposits, or reserves and apply them to operate the Property;
C. After notice provided for herein, make such repairs or replacem ents to the Property and Project as are necessary and provide for payment thereof; or
D. Pursue any other remedy provided under the City HOME Loan Documents or allowed at law or in equity.
6.3 EVENT OF DEFAULT . In the event that the Project fails to me et the HOME affordability requirements included in this Agreement for the Term of the Agreement, subject to applicable notice and cure periods contained herein, this shall constitute an Event of Default under Sections 8.1.D, 8.1.E, and/or 8.1.I of the City HOME Loan Agreement.
6.4 NON-LIABILITY OF OFFICIALS, EMPLOYEES AND AGENTS. No official elected or appointed, officer, director, employee or agent of the Lender shall be personally liable to the Owner for any obligation created under the terms of this Agreement.
6.5 HOLD HARMLESS AND INDEMNITY. Owner shall at all times defend, indemnify and save City and its city council, departments, officers, employees, agents and volunteers, harmless against any and all claims, lawsuits, judgment, demands and liabil ity against City, its city council, departments, officers, employees, agents and volunteers, including those arising from injuries or death of persons and for damages to property, arising directly or indirectly out of the operations conducted or subsidized in whole or in part by City related to this Regulatory Agreement, save and except claims or litigation arising through the sole negligence or wrongdoing and/or sole willful misconduct of City or any other indemnitee. Owner is not obligated to indemnify City or others for claims based upon their use of information provided by Owner, provided the information itself is accurate. Owner shall at all times indemnify and hold 899
13 harmless City, its officers and employees, from all loss, litigation, liability, damag e, or expense, including, without limitation, potential tenant relocation costs arising under this Regulatory Agreement and/or any subcontract which Owner enters into relating to implementation of the Project.
Owner’s obligation to defend shall arise when a claim, demand or action is made or filed, whether or not such claim, demand or action results in a determination of liability or damages as to which Owner is obligated to indemnify and hold harmless.
6.6 GOVERNING LAW. This Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law.
6.7 AGREEMENT CONTROLS. In the event that any provision of this Agreement and that contained in any other Loan Document conflict, the terms of this Agreement shall control.
6.8 TIME. Time is of the essence in this Agreement.
6.9 CONSENTS AND APPROVALS. Any consent or approval of the Lender required under this Agreement shall not be unreas onably withheld. Any approval must be in writing and executed by an authorized representative of the Lender.
6.10 NOTICES, DEMANDS AND COMMUNICATIONS. Formal notices, demands and communications between the Owner and the Lender shall be sufficiently given and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally, to the principal offices of the Owner and the Lender as follows:
Lender:
Housing Department
435 South D Street
Oxnard, CA 93030
Attn: Housing Director
With copy to: City of Oxnard
Office of the City Attorney
305 West Third Street
Oxnard, CA 93030
Attn: City Attorney
900
14 Owner: Cypress Place at Garden City, L.P.
c/o Peoples’ Self-Help Housing Corporation
Attn: CEO and President
With copy to:
6.11 BINDING UPON SUCCESSORS. This Agreement shall be recorded and all provisions of this Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors -in-interest, transferees, and assigns of the Owner, and the Lender, and shall run with the land for the full T erm of this Agreement, regardless of any assignment, payment, prepayment, expiration, extinguishment of the City HOME Loan or City HOME Loan Note, any reconveyance of the City HOME Loan Deed of Trust, or any conveyance or transfer of the Property or portion thereof.
6.12 RELATIONSHIP OF PARTIES. The relationship of the Owner and the Lender during the term of this Agreement is solely that of lender and borrower and shall not be construed as a joint venture, equity venture, or partnership.
6.13 WAIVER. Any waiver by the Lender of any obligation in this Agreement must be in writing. No waiver will be implied from any delay or failure by the Lender to take action on any breach or default of the Owner or to pursue any remedy allowed under this Agreement, the City HOME Loan Documents, or applicable law. Any extension of time granted to the Owner to perform any obligation under this Agreement shall not operate as a waiver or release from any of Owner’s obligations under this Agreement. Consent by the Lender to any act or omission by the Owner shall not be construed to be consent to any other or subsequent act or omission or to waive the requirement for the Lender's written consent to future waivers.
6.14 AMENDMENTS AND MODIFICATIONS. Any amendment to or modification of this Agreement must be in writing, and shall be made only if executed by both the Owner and the Lender.
6.15 SEVERABILITY. Every provision of this Agreement is intended to be severable. If any provision of this Agreement shall be held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired.
Signatures appear on following page. No further text appears here. 901
15 IN WITNESS WHEREOF, Lender and Owner have caused this Agreement to be executed by their respective duly authorized officers.
LENDER:
THE CITY OF OXNARD
_____________________________
Emilio Ramirez, Housing Director
APPROVED AS TO FORM:
_____________________________
Stephen Fischer, City Attorney
APPROVED AS TO INSURANCE:
_____________________________
Michael More, Human Resources/Risk
Manager
OWNER:
CYPRESS PLACE AT GARDEN CITY,
L.P., a California limited partnership
By: Cypress Place at Garden City LLC, a
California limited company
Its: Managing General Partner
By: Peoples’ Self-Help Housing Corporation,
a California nonprofit public benefit
corporation
Its: Sole Member/Manager
________________________________________
By: Kenneth Trigueiro
Its: Chief Executive Officer and President
902
16 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF ____________ )
On _______________________, before me, ______________________, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_______________________________ (Place Notary Seal Above) Signature of Notary Public
903
17 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA )
) ss.
COUNTY OF ____________ )
On _______________________, before me, ______________________, Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_______________________________ (Place Notary Seal Above) Signature of Notary Public
904
EXHIBIT A
Exhibit A
Legal Description of the Property
905
LOAN AGREEMENTS FOR THE CYPRESS
PLACE AT GARDEN CITY AFFORDABLE
RENTAL HOUSING PROJECT
PEOPLE’S SELF-HELP HOUSING
Emilio Ramirez, Director
Housing Department
City Council
February 21, 2023
906
PEOPLE’S SELF-HELP HOUSING 2
Peoples’ Self-Help Housing (PSHH) is a non-profit housing organization that works to provide affordable rental and for sale housing to low-income households. For the past fifty-two years PSHH has been one of the leading nonprofit housing developers in San Luis Obispo, Santa Barbara, Monterey and Ventura counties. PSHH has created over 1,200
homeownership opportunities through their “sweat equity” program and has developed over 2,000 rental units.
907
CYPRESS PLACE AT GARDEN CITY 3
908
CYPRESS PLACE AT GARDEN CITY 4
909
BACKGROUND OF THE PROJECT
1. Design Development Review approval on February 3, 2021
2. Density Bonus Permit approval on February 18, 2021
3. An All-Affordable Housing Opportunity Program designated site
4. Units to be affordable for 55 years
5. PSHH received entitlements for 150 units comprised of 148 affordable rental and 2 manager units.
6. PSHH intends to develop the Cypress Place at Garden City in two phases.
7. Phase I will consist of 89 affordable rental units targeting low-income and farmworker families earning between 30% and 80% of the area median income and 1 manager unit
8. In Phase II, PSHH will develop 59 affordable rental units and 1 manager unit
5 910
PHASE 1 - DEVELOPMENT BUDGET 6
Source of Funds Amount
Permanent Loan $13,100,000
USDA Section 514 $5,000,000
Oxnard CDBG and HOME Loan $3,100,000
State HCD Joe Serna Program $8,180,344
State HCD Housing Accelerator Program $36,287,635
Build Incentive $465,188
PSHH Capital Contribution $1,000
TOTAL $66,134,167
911
PROPOSED HOME AND CDBG LOAN AGREEMENTS
The Loan Documents provide the following terms for the City Loans:
1. HOME Loan Amount of $1,600,000 and CDBG Loan
Amount of $1,500,00
2. 3% simple interest and 55 year term
3. Regulatory agreement terms of 20 years for the HOME
Loan and 5 years for the CDBG Loan
1. Per the entitlements units will remain affordable for 55 years
4. Residual receipts loan repayment
5. The development will have 15 HOME restricted units
7 912
RECOMMENDATION
That the City Council adopt a resolution authorizing the Housing Director to execute a $1,600,000 HOME Loan
Agreement and a $1,500,000 CDBG Loan Agreement, and
any and all related documents thereto, with Peoples’ Self-Help Housing for the construction of Phase I of Cypress Place at Garden City, a ninety (90) unit affordable rental housing project located at 5536 and 5482 Cypress Road.
8 913
End of Presentation
914
CITY COUNCIL OF THE CITY OF OXNARD
RESOLUTION NO. 2023- ______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF OXNARD APPROVING AND
AUTHORIZING THE HOUSING DIRECTOR TO ENTER INTO A HOME LOAN AGREEMENT IN THE PRINCIPAL AMOUNT OF $1,600,000 AND A CDBG LOAN AGREEMENT IN THE PRINCIPAL AMOUNT OF $1,500,000 WITH CYPRESS PLACE AT GARDEN CITY, L.P. FOR THE DEVELOPMENT OF THE CYPRESS PLACE AFFORDABLE
HOUSING PROJECT
WHEREAS, the City Council hereby finds and declares that it is necessary, essential and a public purpose for the City to enter into a variety of agreements with Cypress Place at Garden City, L.P., a California limited partnership (“Cypress Place”) to facilitate Cypress Place’s development of 150 units, including a manager’s unit, of affordable housing on certain real property located at 5536 and 5482 Cypress Road, Oxnard, California (“Project”); and
WHEREAS, in furtherance of the Project the City Council desires to approve a loan in the amount of $1,600,000 from Home Investment Partnerships Act funds received from the United States Department of Housing and Urban Development (“HUD”) pursuant to the Cranston-Gonzales National Housing Act of 1990 and authorize the Housing Director or designee to execute a (i) HOME Loan Agreement; (ii) Promissory Note; (iii) Deed of Trust with Assignment of Rents; and (iv) Regulatory Agreement (collectively “HOME Loan Documents”) by and between City and Cypress Place; and WHEREAS, in furtherance of the Project the City Council desires to approve a loan in the amount of $1,500,000 from Community Development Block Grant funds received from the HUD under Title I of the Housing and Community Development Act of 1974, as amended, and authorizes the Housing Director or designee to execute a (i) CDBG Loan Agreement; (ii) Promissory Note; (iii) Deed of Trust with Assignment of Rents; and (iv) Regulatory Agreement (collectively “CDBG Loan Documents”) by and between City and Cypress Place; and
WHEREAS, the HOME Loan Documents and the CDBG Loan Documents will provide the following terms: (a) 3% simple interest; (b) loan and regulatory agreement terms of fifty-five years after the date of the issuance of a certificate of occupancy for the Project; and (c) repayment of the loans will be on a residual receipts basis to be paid after all operating expenses, reserves, debt service with mandatory payments, investor management fee, deferred developer fee, and partnership management fee, with 50% of the residual receipts split pro-rata among all soft lenders based on the original principal amount of each soft lender loan.
NOW, THEREFORE, the City Council of the City of Oxnard resolves as follows:
1. The City Council hereby finds and declares that the above recitals are true and correct.
2. The City Council further approves and authorizes the Housing Director or designee to take all needed actions and execute all requisite documents on behalf of the City in consultation with the City Attorney relative to (i) HOME Loan Documents; (ii) CDBG Loan Documents; and (iii) any other agreements for the purpose of developing, maintaining and operating the Project.
3. The City Loan Agreement terms will be as follows: (a) 3% simple interest; (b) loan and regulatory agreement terms of fifty-five years after the date of the issuance of a certificate of occupancy for the Project; and (c) repayment of the City Loan will be on a residual receipts basis to be paid after all operating expenses, reserves, debt service with mandatory payments, investor management fee, deferred 915
2 developer fee, and partnership management fee, with 50% of the residual receipts split pro-rata among all soft lenders based on the original principal amount of each soft lender loan.
4. The Housing Director is authorized to execute any other form of document required by any lender, investor, regulator or other third party involved in the transaction, so long as the Housing Director, in coordination with the City Attorney, determines that the substance of such document does not materially conflict with the substance and intent of this Resolution.
5. This Resolution shall take effect from and after the date of its passage and adoption. (signatures appear on next page)
916
3 PASSED AND ADOPTED this day of February, 2023, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
John C. Zaragoza, Mayor
ATTEST:
Rose Chaparro, City Clerk
APPROVED AS TO FORM:
Stephen Fischer, City Attorney
917
CITY COUNCIL AGENDA REPORT
REPORTS
AGENDA ITEM NO. L.4
DATE: February 21, 2023
TO: City Council
FROM: Helen Miller, Chief Information Officer, (805)385-7446, [email protected]
SUBJECT: Oxnard 311 - Performance Update Report. (20 minutes)
RECOMMENDATION
That the City Council receive a City of Oxnard 311 constituent relationship management performance update for the period of performance year six (May 1, 2021, through April 30, 2022) and the first half of performance year seven (May 1, 2022, through October 31, 2022).
(Community Services, Public Safety, Housing & Development Committee approved 3-0.)
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/rLPX659PYAI
BACKGROUND
Oxnard 311 is the City’s Constituent Relationship Management (CRM) software, which allows residents within the City to report a variety of issues using the mobile phone application or website. The City's 311 software solution is used by local governments of all sizes and provides the ability to handle the continued upward trend of increasing service requests. Requests may be submitted in English, Spanish, or one of 15 other languages offered by the software vendor.
During the first six and a half years of availability, the Oxnard 311 mobile app has been downloaded 15,333 times and has been used to process approximately 123,550 service requests. The Oxnard 311 system allows residents to see live updates, track the status of their requests, and communicate directly to staff through in-app messaging. The Oxnard 311 system empowers resident guardianship and involvement in the community while increasing transparency and accountability of City staff.
DISCUSSION
The Oxnard 311 system completed its sixth full year of service at the end of April 2022. The following discussion focuses on performance trends and metrics from each full service year (May 2021 through April 2022) and the first half of service year 7 (May 2022 through October 2022).
1. Application Downloads
The Oxnard 311 system has grown each year in the number of Oxnard residents that are submitting service requests through the mobile application and website.
The majority of requests (75.8%) are submitted through the free mobile application. As such, application downloads are a reliable metric for system growth.
918
Year
1 Year 2 Year 3 Year 4* Year 5 Year 6 Year 7
(First Half)
Total
Downloads 2,139
1,995
(6.7%
decrease
compared
to year
one)
2,151
(7.8%
increase
compared
to year
two)
2,186
(1.6%
increase
compared
to year
three)
2,154
(1.5%
decrease
compared
to year
four)
3,007
(40%
increase
compared
to year
five)
1,701(13%
increase
compared to
year six if first
half trends
continue)
15,33
3 Please note that the year four report contained an error in the number of downloads for both Year 4 and the first half of year 5. Staff had discovered an error with the service the City uses for tracking download statistics. In December of 2019, the service no longer reported the number of Apple iOS downloads. Staff have since corrected this issue and the app download statistics have been updated in this report.
2. Requests Submitted
In the first six and a half service years, the Oxnard 311 system has also increased in the number of service requests submitted. This steady increase per service year in the number of requests submitted reflects a growing user base.
Year
1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 (First
Half)
Total
Requests
Submitted
7,900
15,435
(95%
increase
compared
to year
one)
17,704
(14%
increase
compared
to year
two)
18,784
(6%
increase
compared
to year
three)
22,747
(21%
increase
compared
to year
four)
26,750
(18%
increase
compared
to year
five)
14,230
(6% increase
compared to
year six if first
half trends
continue.
123,550
3. Performance Evaluation
There are 20 request types available to the public through the Oxnard 311 system. Staff from various departments in the City are involved in the Oxnard 311 system, which allows requests to be assigned to the correct person who has the appropriate skills/knowledge and is responsible for the required work to complete the request. The majority of requests,
69.2%, are for 3 of the 20 request types: illegal dumping, graffiti, and abandoned vehicles.
The following section covers performance statistics for each of the 20 request types. Each request type is presented in descending order by the total number of requests. Beyond number of requests, staff identified for each request type the percentage of requests completed on time, service level goal per year, and average completion time per year.
The Oxnard 311 system had slight database issues during the first three years that added a small margin of error to the performance statistics. City staff have resolved this issue and the performance stats from Service Years 4 and onward are accurate. In all cases, "days" refers to City working days and does not include weekends. The performance information is also summarized in the table at the end of this section of the report.
A. Illegal Dumping
Total number of requests in the first 6.5 years: 43,242 (35% of all requests)
Percentage of requests completed on time: 77.2%
919
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half
Goal 3 days 3 days 3 days 3 days 3 days 3 days 3 days
Number
of
Requests
2,371 5,470 6,433 6,556 8,616 10,059 3,737
Average 4.4 days
(delayed by
46.7% over
service goal)
8.6 days
(delayed by
186.7% over
service goal)
2.7 days
(exceeded
service goal
by 10%)
5.5 days
(delayed by
84.8% over
service goal)
3.5 days
(delayed by
17.4% over
service goal)
1.2 days
(exceeded
service
goal by
60%)
2.0 days
(exceeded
service goal
by 33.3%)
While Public Works exceeded its service level goal in Year 6 and the first half of Year 7, there are factors that introduce challenges to maintaining this level of service. Illegal dumping on private property and illegal dumping related to the homeless involve processes that must be coordinated with Code Enforcement and the Police Department, which requires more time. There is an increase in the number of homeless encampments Citywide but not necessarily a parallel increase in the amount of resources to tackle these 311 requests. Finally, the rental of special equipment is often required for the removal of illegal dumping and encampments, and such rentals take extra time.
Through the budgeting process for Fiscal Year 2021/2022, the Environmental Resources Division requested and received two additional Maintenance Worker Trainees assigned to the 311 Crew. Also, an existing Solid Waste Equipment Operator II position was reassigned to the 311 Crew. A commitment to provide excellent customer service to the residents of Oxnard, and increased efficiencies in coordination with Oxnard PD, Housing and Oxnard Code Enforcement have also contributed to the improvement in work order completion times over the last few years.
Despite the increase in requests, the service level goal has been met for Year 6. Furthermore, staff is on track to exceed the goal in Year 7.
B. Graffiti
Total number of requests in the first 6.5 years: 28,839 (23.3% of all requests)
Percentage of requests completed on time: 93.1%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 3 days 3 days 3 days 3 days 3 days 3 days 3 days
Number
of
Requests
1,840 2,971 3,994 4,832 5,555 6,340 3,307
Average 1.7 days
(exceeded
service goal
by 43.3%)
1.1 days
(exceeded
service goal
by 63.3%)
1.8 days
(exceeded
service goal
by 40%)
2.0 days
(exceeded
service goal
by 32.4%)
2.3 days
(exceeded
service goal
by 23.4%)
2.4 days
(exceeded
service goal
by 20%)
2.7 days
(exceeded
service goal
by 10%)
Public Works staff dedicated to removing graffiti on public property and Code Enforcement staff working with owners of private property with graffiti have both consistently met their service level goal.
While the City’s Graffiti Action Program (GAP) staffing levels have remained the same or been reduced, the demand for the assigned resources continues to increase year over year (a 244% increase from Year 1 requests to Year 6). The team is challenged to meet the assigned service goal. The average response time has trended up each year. However, the GAP 920
has exceeded its goal for all of Year 6 and the first half of year 7. It should be noted that if the demand for calls continues to see the same increasing trend, the GAP will no longer be able to meet its service goal unless additional resources are allocated or other tasks are deferred.
C. Abandoned Vehicles
Total number of requests in the first 6.5 years: 13,465 (10.9% of all requests)
Percentage of requests completed on time: 87.5%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 14 days 14 days 14 days 14 days 14 days 14 days 14 days Number
of
Requests
700 1,671 1,774 2,073 2,564 2,832 1,851
Average 12.2 days
(exceeded
service goal
by 12.9%)
9 days
(exceeded
service goal
by 35.7%)
9.3 days
(exceeded
service goal
by 33.6%)
9.9 days
(exceeded
service goal
by 29.4 %)
9.2 days
(exceeded
service goal
by 34.5%)
9.1 days
(exceeded
service goal
by 35%)
7.5 days
(exceeded
service goal
by 46.4%)
Staff from Traffic Enforcement and Code Enforcement are assigned abandoned vehicle requests on public and private property, respectively. Staff from both of these divisions have consistently met their service level goal.
D. Overgrown Landscape
Total number of requests in the first 6.5 years: 5,289 (4.3% of all requests)
Percentage of requests completed on time: 70.3%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 60 days 60 days 60 days 60 days 60 days 60 days 60 days Number
of
Requests
313 891 902 898 936 873 476
Average 73.7 days
(delayed by
22.8% over
service goal)
92.5 days
(delayed
by 54.2%
over service
goal)
75.1 days
(delayed
by 25.2%
over service
goal)
36.7 days
(exceeded
service goal
by 38.8%)
47.0 days
(exceeded
service goal
by 21.6%)
43.2 days
(exceeded
service goal
by 28%)
22.5 days
(exceeded
service goal
by 62.5%)
The Public Works Parks Division cited staffing levels in the past as the main reason for performance issues that were preventing them from completing requests within the service level goal time. Public Works has made improvements to how it uses the County's work release crews to address overgrown landscaping (including for 311 requests). The Parks Division has also developed a 311 crew with dedicated staff assigned to respond to non-irrigation related 311 requests.
They exceeded their service goal for Years 4, 5, and 6, and are continuing that trend in the first half of year 7.
With the addition of regular and ongoing contract services to assist our crews in both the parks and street landscapes, Parks staff anticipate the number of overgrown landscape requests to decrease over time as we get a handle on the deferred maintenance. However, the County has recently announced the drastic reduction or cancellation of the work 921
release program due to budget constraints. To mitigate this, Parks staff will use additional contract services at a significantly higher cost to get the same amount of work completed, assuming sufficient budget is available. The response times are expected to take longer but still remain within the 60 day goal.
E. General Questions
Total number of requests in the first 6.5 years: 4,718 (3.8% of all requests)
Percentage of requests completed on time: 58.7%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 15 days 15 days 15 days 15 days 15 days 15 days 15 days Number
of
Requests
413 668 709 742 881 818 514
Average 41.5 days
(delayed
by 176.7%
over service
goal)
45.9 days
(delayed
by 206%
over service
goal)
42.2 days
(delayed
by 181.3%
over service
goal)
30.7 days
(delayed by
104.7% over
service goal)
15.2 days
(delayed by
1.6% over
service goal)
20 days
(delayed by
33.3% over
service goal)
12.4 days
(exceeded
service goal
by 17.3%)
This category is a catch-all so residents can submit requests that otherwise do not fit into one of the existing categories.
Sample submissions include dogs off leash and dogs barking, trash or furniture in the alleyways, code compliance concerns regarding blocked street parking, loud noise, overgrown trees, broken gates and fences, maintenance in general and special district parks, and broken playground equipment in parks. There are some instances where a submission is made to general questions rather than the correct other category. Staff responsible for the General Questions category often receive a request and reassign it to the appropriate staff in another department, which delays the process. Staff continue to work on speeding up the reassigning process and made progress in service years five and six. New staff were added to the Oxnard 311 system in the second half of year 6 to assist with completing these requests and the service goal was exceeded in the first half of service year seven.
F. Potholes
Total number of requests in the first 6.5 years: 4,132 (3.3% of all requests)
Percentage of requests completed on time: 41.8%
Year 1 Year 2
(First
Half)
Year 2
(Second
Half)
Year 3 Year 4 Year 5 Year 6 Year 7
(First
Half)
Goal 150 days 15 days 30 days 30 days 35 days 35 days 35 days 35 days Number
of
Requests
592 382 260 717 759 493 687 234
Average 73.3 days
(exceeded
service
goal by
51.2%)
110.6 days
(delayed by
637% over
service
goal)
118.6 days
(delayed
by 295%
over
service
goal)
81.7 days
(delayed
by 172.2%
over
service
goal)
100.1 days
(delayed by
186.1%
over
service
goal)
135.9 days
(delayed by
288.2%
over service
goal)
49.3 days
(delayed by
40.9% over
service
goal)
19.5 days
(exceeded
service
goal by
44.3%)
922
Streets Division staff have altered the workflow to accurately identify pothole requests that should be part of resurfacing efforts instead of standard pothole repairs. Resurfacing is a more complex activity and takes significantly more work and time compared to filling in a pothole with asphalt. This adjustment will better track the amount of time it takes to address true potholes versus resurfacing improvements to the overall street, which would be repaired as part of Capital Improvement Plan projects. It is this misclassification that drives the results of Year 6 above the stated goal of 35 days.
Also, the improvement from Year 6 (49.3 days) to the first 6 months of Year 7 (19.5 days) is partially attributed to identifying and removing duplicate 311’s for the same location, which may not reflect a long-term attainment level. As such, a goal of 35 days is still a good target.
In September 2021, Public Works Streets Division hired seven maintenance workers and purchased two asphalt patch trucks for pothole repairs with Measure E funding. Since that date, Public Works has assigned staff to specifically address potholes on a daily basis. With these aforementioned actions, staff anticipates meeting the 35 day target for the completion of potholes. It should be noted that the two asphalt patch trucks are still on order with a delayed delivery date due to global supply chain issues. The anticipated delivery date of the two trucks is June 2023.
In addition, the City dedicated significant funding for street rehabilitation and alley resurfacing projects for Fiscal Year 2021-2022 and plans to continue that for Fiscal Year 2022-2023. This investment in street improvements has reduced the number of 311 pothole requests.
G. Litter
Total number of requests in the first 6.5 years: 2,980 (2.4% of all requests)
Percentage of requests completed on time: 59.7%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First
Half)
Goal 3 days 3 days 3 days 10 days 10 days 10 days 10 days Number
of
Requests
373 451 347 385 498 531 396
Average 14.6 days
(delayed
by 386.7%
over service
goal)
24.7 days
(delayed
by 723.3%
over service
goal)
20.3 days
(delayed
by 576.7%
over service
goal)
12.2 days
(delayed by
21.7% over
service goal)
17.1 days
(delayed by
71% over
service goal)
9.2 days
(exceeded
service
goal by
8%)
8.5 days
(exceeded
service
goal by
15%)
Parks conducted an inventory of trash cans throughout the parks that are currently missing lids and has been working on adding lids that are locked to the top of each. Replacing and securing the lids has helped keep the trash from being blown out by the wind or pulled out by humans and birds.
In late September, contract services started in our parks, which included, among other tasks, servicing of all trash cans four days a week and weekly pickup of loose litter throughout the park boundaries. We anticipate that this will drastically reduce the number of litter related 311 requests over time.
During Year 6, prior staffing adjustments and contracting of services resulted in a measurable improvement, allowing staff to exceed the service goal while addressing more total requests than Year 5. The first half of Year 7 has also exceeded the service goal.
H. Water Waste and Leaks
Total number of requests in the first 6.5 years: 2,930 (2.4% of all requests) 923
Percentage of requests completed on time: 54.7%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First
Half)
Goal 4 days 4 days 4 days 4 days 4 days 4 days 4 days
Number
of
Requests
133 310 321 326 454 546 844
Average 25.7 days
(delayed by
542.5% over
service goal)
42.9 days
(delayed
by 972.5%
over service
goal)
47.1 days
(delayed
by 1,077.5%
over service
goal)
12.5 days
(delayed by
211.3% over
service goal)
8.9 days
(delayed by
123.1% over
service goal)
17.6 days
(delayed by
340% over
service goal)
3.4 days
(exceeded
service
goal by
15%)
During the third year performance report, City staff identified workflow issues within the system that were preventing requests from being assigned to the correct person. Staff responded by developing complex assignment logic within the 311 system to automatically assign requests to appropriate personnel based on the location of the issue and the type of equipment causing the water waste or leak. Response times have reduced dramatically from 47.1 days in the third year to
12.5, 8.9, and 17.6 days in the following three years. Staff continued to make progress in Years 4, 5 and 6 yet still did not meet the 4-day response goal. However, in the first half of Year 7 staff not only met but exceeded the service goal target by 15%, despite a significant increase in requests.
With the implementation of contractors to assist with regular and ongoing landscaping and maintenance in street landscapes and parks, Parks Division staff have been able to pivot from being strictly reactive to water leaks to being more proactive. The City Council has also appropriated funding specifically for the purpose of purchasing much needed irrigation supplies for our City staff as well as funding to utilize on-call contractors to assist with the repairs. In FY 2021- 22, staff was able to do a rough assessment of the street landscapes and parks irrigation. At that time, staff only had the capacity to address the highest priority issues such as leaks and misaligned sprinkler heads that would waste water.
The Water Division assisted with coordinating irrigation audits at 22 parks between April and June of 2022. Once completed, staff used the findings to prioritize repairs based on the estimated water waste per park. To date, staff has completed repairs at 9 of the 22 parks that were assessed. The estimated annual water savings for these repairs equal 7,555,548 gallons at an estimated cost savings of $45,154 per year.
Parks staff and contractors use a work order system to assign and complete irrigation repairs. Repair requests are directly routed to the system from 311 and are also manually assigned by staff to proactively deal with irrigation issues not identified by 311 users. In calendar year 2022, Parks staff and contractors have completed a total of 952 irrigation repair assignments, 184 of which were 311 requests and 768 were proactive repairs identified by our team (see map below).
Repair assignments vary in size from an individual sprinkler replacement to the replacement and repair of half of a park’s irrigation system. Going forward, staff is working on improving the data collection to provide more comprehensive information.
If funding continues to be provided for both irrigation supplies and contractors that assist with ongoing landscape maintenance and on-call irrigation services, City staff will be able to slowly address the years of deferred maintenance of our City’s irrigation systems, eventually updating and upgrading our aging irrigation infrastructure over time. As this occurs, staff projects the number of water waste 311 requests to decrease. During that time, staff will have the ability to be more proactive and address issues more quickly.
924
925
I. Trash and Recycling Service
Total number of requests in the first 6.5 years: 2,740 (2.2% of all requests)
Percentage of requests completed on time: 69.2%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year
7 (First
Half)
Goal 2 days 2 days 2 days 3 days 3 days 3 days 3 days
Number
of
Requests
126 320 313 313 513 649 510
Average 4.3 days
(delayed by
115% over
service goal)
4.5 days
(delayed
by 125% over
service goal)
7.5 days
(delayed
by 275%
over service
goal)
2.4 days
(exceeded
service goal
by 18.8%)
1.7 days
(exceeded
service goal
by 44.5%)
4.0 days
(delayed by
33.3% over
service goal)
3.0 days
(Met
service
goal)
There was a significant increase in this type of request from Year 1 to Year 6. These requests are exclusively related to Environmental Resources collection operations for missed pickups or repairs on residential trash carts and commercial bins.
Staff exceeded its performance goal in service Year 5, faced delays in Year 6, and met the performance goals for the first half of service Year 7.
J. Sidewalk Repair
Total number of requests in the first 6.5 years: 2,414 (2% of all requests)
Percentage of requests completed on time: 55.5%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 60 days 60 days 60 days 60 days 60 days 60 days 60 days Number
of
Requests
241 687 410 427 252 259 153
Average 116 days
(delayed
by 93.3%
over service
goal)
121.9 days
(delayed
by 103.2%
over service
goal)
58.7 days
(exceeded
service goal
by 2.2%)
65.3 days
(delayed by
8.8% over
service
goal)
43.1 days
(exceeded
service goal
by 28.17%)
34 days
(exceeded
service goal
by 43.3%)
14.8 days
(exceeded
service goal
by 75.3%)
Public Works Streets Division staff has steadily improved its response to this type of request since the first two service years and has exceeded the service level goal since Year 5. Currently, the City has a contract with a third-party vendor for grinding concrete that has helped in resolving many sidewalk repair service requests.
926
K. Animal Safety
Total number of requests in the first 6.5 years: 2,221 (1.8% of all requests)
Percentage of requests completed on time: 76.6%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 2 days 2 days 2 days 7 days 7 days 7 days 7 days
Number
of
Requests
103 217 308 213 216 785 380
Average 7.3 days
(delayed
by 265%
over service
goal)
8.3 days
(delayed by
315% over
service goal)
5.8 days
(delayed by
190% over
service goal)
6.8 days
(exceeded
service goal
by 3.4%)
2.8 days
(exceeded
service goal
by 60.5%)
2.2 days
(exceeded
service goal
by 68.6%)
1.9 days
(exceeded
service goal
by 72.9%)
Staff requested, and was granted, an extension of its service goal from two to seven days to more appropriately reflect the workflow related to animal safety requests. The Police Department has been facing staffing challenges for this, and has been operating with one Animal Safety Officer since April of 2022. Staff has exceeded its performance goal in years four, five, six, and the first half of year seven.
L. Homeless Encampment
Total number of requests in the first 6.5 years: 2,131 (1.7% of all requests)
Percentage of requests completed on time: 98.6%
Year
1 Year
2 Year
3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal NA NA NA 21 days 21 days 21 days 21 days
Number
of
Requests
NA NA NA 7 561 827 701
Average NA NA NA 7.6 days
(exceeded service
goal by 63.9%)
6.6 days
(exceeded service
goal by 68.4%)
4.6 days
(exceeded service
goal by 78.1%)
3.4 days
(exceeded service
goal by 83.8%)
The Homeless Encampment request type was created and made available to the public April 23, 2020, which was close to the end of service year four. This request type is marked as “sensitive” and limits access to the request to the person who submitted it and the staff who are assigned to it. Staff from the Police Department, Environmental Resources, Code Compliance, and Housing are all involved in the workflow and work as a team to coordinate safe outreach and cleanup efforts. Staff has consistently exceeded its performance goal.
M. Streetlight Out
Total number of requests in the first 6.5 years: 1,611 (1.3% of all requests)
Percentage of requests completed on time: 71.3%
927
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 15 days 15 days 15 days 15 days 15 days 15 days 15 days Number
of
Requests
128 234 213 255 317 355 106
Average 123.6 days
(delayed by
724% over
service goal)
55.9 days
(delayed by
272.7% over
service goal)
28.5 days
(delayed
by 90%
over service
goal)
19.1 (delayed
by 27.6%
over
service
goal)
7.0 days
(exceeded
service goal
by 53.2%)
16.8 days
(delayed by
12% over
service goal)
10.9 days
(exceeded
service goal
by 27.3%)
City staff continues to assist with Southern California Edison (SCE) street light outages City-wide. Approximately 96% of the street lights within the City limits are owned and maintained by SCE. Once an outage is received, it is reported to SCE and the 311 request is closed. City street-owned lighting outages are reported to the appropriate division for repairs.
Depending on the complexity of the repair and parts needed, a delay may occur due to contractor scheduling or material availability. The goal was not obtained in Year 6 due to other planned and unplanned work for staff that include safety related transportation improvements and traffic signal repairs with higher priority than illumination outages. The first half of Year 7 is on track to meet the goal.
N. Traffic - General Issues
Total number of requests in the first 6.5 years: 1,458 (1.2% of all requests)
Percentage of requests completed on time: 73.4%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 15 days 15 days 15 days 18 days 18 days 18 days 18 days Number
of
Requests
11 53 174 185 285 456 286
Average 384.7 days
(delayed
by 2464.7%
over service
goal)
40.5 days
(delayed
by 170.0%
over service
goal)
18.2 days
(delayed
by 21.3%
over service
goal)
19.1 days
(delayed by
6% over
service
goal)
27.1 (delayed by
50.7% over
service
goal)
26.7 days
(delayed by
48.3% over
service goal)
8.8 days
(exceeded
service goal
by 51.1%)
Requests that are traffic enforcement related (and responded to by the Oxnard Police Department) consistently perform well in the Oxnard 311 system and exceed their performance goals. Public Works Engineering Division staff has cited recent staffing levels and high turnover as the main reason its staff could not complete requests within the service level goal time. Requests within this category often take a significant amount of time to complete due to the complexity of the solutions, such as when staff must perform an analysis or mandated procedure. Staff requested, and were granted, a service level goal extension from 15 days to 18 days starting in service year four.
The Transportation and Mobility Division continued to experience extreme staff shortages for much of 2021. Since April 2021, only the City Traffic Engineer has been available to respond to Oxnard 311 requests. Three engineer positions in the division remained vacant for much of the year with two only being filled in late October 2021. Staff has employed 928
consultant assistance to help with the backlog of 311 requests, but COVID impacts to conducting field review have delayed processing of requests. Staff triaged requests for prioritization with a focus on safety. Additionally, with public schools reoccupying in August of 2021 after a year of COVID stay at home orders, staff experienced a significant increase in 311 and other requests for traffic control review.
Two positions were successfully recruited and filled in late 2021 and staff have begun to review and close out 311 requests. Additionally, a new modified approach to 311 requests was implemented in FY 2021/22 with 311 requests that require substantial field investigation or follow-up study being moved into the Traffic Request process to monitor requests. This should assist in closing out standard 311 requests to meet the objectives and still track and process major complex requests as they are submitted.
Based upon the first six months of Year 7, adjustments to the process have resulted in seeing a measurable improvement in this area. If the current trend remains consistent for the rest of Year 7, this area will see success in meeting the performance goal while addressing more total requests than last year.
O. Street Signs
Total number of requests in the first 6.5 years: 1,341 (1.1% of all requests)
Percentage of requests completed on time: 76.8%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 60 days 60 days 60 days 60 days 60 days 60 days 60 days Number
of
Requests
86 221 185 200 247 250 154
Average 70.5 days
(delayed by
17.5% over
service goal)
60.9 days
(delayed
by 1.5% over
service goal)
32.3 days
(exceeded
service goal
by 46.2%)
46.6 days
(exceeded
service goal
by 22.3%)
24.8 days
(exceeded
service goal
by 58.7%)
35.7 days
(exceeded
service goal
by 40.5%)
7.4 days
(exceeded
service goal
by 87.7%)
The City has contracted with a sign vendor that supplies and makes signs, which has improved the response time for the repair and replacement of signs. Staff has been exceeding its performance goal consistently since Year 3.
P. Assessment District
Total number of requests in the first 6.5 years: 1,224 (1% of all requests)
Percentage of requests completed on time: 63.3%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 21 days 21 days 21 days 21 days 21 days 21 days 21 days Number
of
Requests
190 229 211 211 124 189 66
Average 18.9 days
(exceeded
service goal
10%)
31.6 days
(delayed
50.5% over
service goal)
58.6 days
(delayed
179% over
service goal)
17.9 days
(exceeded
service goal
14.8%)
15.4 days
(exceeded
service goal
26.8%)
31.7 days
(delayed 51%
over service
goal)
42.6 days
(delayed
102.9% over
service goal)
929
The goals for both years 4 and 5 were met, but the goals for year 6 and into year 7 have been delayed for multiple reasons.
First, a majority of the requests are for tree trimming services and sidewalk grinding, both of which require funding to address. Second, the majority of the 311 requests received are related to the landscape maintenance districts (LMDs).
This district type has varying levels of funding for each district to address these requests. For example, LMD-31 has 55 active requests for services, but is currently at a D-level of service (monthly mowing) because of its capped assessment with limited available fund balance. Therefore, this LMD cannot support its current maintenance and operation needs that includes grid pruning of all trees. As some LMDs become increasingly less able to fund themselves at their current assessment levels, more deferred maintenance is accumulated and costs increase. More information on the LMDs' budgets can be reviewed here: https://www.oxnard.org/city-department/finance/special-assessment-districts/lmds/ .
In an effort to get back below the 21 day goal, Special Districts staff are developing plans to address tree trimming and sidewalk grinding. The City now has new shared agreements in place to address and resolve the Special District tree trimming and sidewalk grinding requests during the term of the agreements. However, this will require funding from the FY 2023-24 assessment process and appropriations from the available fund balance within each District, if such funding is available.
Services will continue to be unavailable in some LMDs due to their assessment limitations and their limited available fund balance as a result of their capped assessments related to the passage of Proposition 218. As such, any requests beyond the scheduled routine landscape maintenance services are not able to be performed in a timely manner, or at all, due to these LMDs being underfunded.
Q. Traffic - Signal Issues
Total number of requests in the first 6.5 years: 843 (0.7% of all requests)
Percentage of requests completed on time: 44.7%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First
Half)
Goal 3 days 3 days 3 days 15 days 15 days 15 days 15 days Number
of
Requests
176 135 136 132 101 103 58
Average 300.5 days
(delayed by
9916.7% over
service goal)
73.9 days
(delayed
by 2363.3%
over service
goal)
21.1 days
(delayed by
603.3% over
service goal)
23.8 days
(delayed by
58.7% over
service goal)
26.8 days
(delayed by
78.7% over
service goal)
22 days
(delayed by
46.7% over
service
goal)
13.9 days
(exceeded
service
goal by
7.3%)
The City of Oxnard maintains over 170 signalized intersections. (A few traffic lights were installed and made operational in the last year as a part of new developments.) Public Works staff have cited the aging infrastructure, current staffing levels, and occasional multi-jurisdictional coordination as the main reasons for delay in responding to some of these requests. All safety related issues, including malfunctioning lights, are immediately responded to. However, if the complaint is a signal knockdown, the completion of the request could take weeks or even months to resolve.
Additionally, due to the age of some of the infrastructure, parts needed for repairs can have a substantial lead time or may not be available at all. As an example, a replacement signal pole can have a lead time of six to twelve months (or more) depending upon the type. Replacing aging equipment, though expensive, will also reduce the need for frequent repairs as well as maintenance costs. As such, staff requested, and were granted, a performance goal extension from 3 days to 15 days in Year 4 for requests that are not considered urgent. 930
The filling of vacant positions has helped decrease the time to respond to requests from Year 5 to Year 6. The data for the first 6-months of Year 7 is trending below the goal of 15 days. A new third party maintenance contract has been obtained with a traffic signal provider to perform preventive maintenance and emergency work on the traffic signal system. This, along with adjustments to the internal work order process, is anticipated to reduce the time it takes to respond to Oxnard 311 requests.
R. Technical Support & Questions
Total number of requests in the first 6.5 years: 414 (0.3% of all requests)
Percentage of requests completed on time: 91.1%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 6 days 6 days 6 days 6 days 6 days 6 days 6 days
Number
of
Requests
20 13 9 10 17 11 5
Average 61.2 days
(delayed by
920.0% over
service goal)
6.7 days
(delayed
by 11.7%
over service
goal)
1.2 days
(exceeded
service goal
by 80.0%)
8.8 days
(delayed by
46.7% over
service goal)
4.4 days
(exceeded
service level
by 27.5%)
5.0 days
(exceeded
service level
by 16.7%)
4.6 days
(exceeded
service level
by 23.3%)
Poor performance during service year one was attributed to one request that took multiple months to complete. For the majority of requests, staff has consistently met the service level goal. However, Oxnard 311 app software-related issues often take more time to resolve than the service level goal allows. For example, when a user submitted a request regarding issues with uploading pictures, Accela had to release a software update patch that took close to a month to develop and release. With these types of issues, City staff cannot process the request any faster.
Staff are completing requests within the service level goal for service year six and the first half of service year seven.
S. Street Markings
Total number of requests in the first 6.5 years: 383 (0.3% of all requests)
Percentage of requests completed on time: 71%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 60 days 60 days 60 days 60 days 60 days 60 days 60 days Number
of
Requests
27 61 61 72 54 70 40
Average 68.3 days
(delayed
by 13.8%
over service
goal)
78.9 days
(delayed by
31.5% over
service goal)
83.2 days
(delayed
by 38.7%
over service
goal)
31.2 days
(exceeded
service goal
by 47.9%)
34.3 days
(exceeded
service goal
by 42.8%)
37.4 days
(exceeded
service goal
by 37.7%)
8.5 days
(exceeded
service goal
by 85.8%)
The Streets Division continues to improve its response time for service requests as well as making efforts to maintain pavement markings with in-house staffing and contracted work. 931
T. Curb and Gutter Repair
Total number of requests in the first 6.5 years: 315 (0.3% of all requests)
Percentage of requests completed on time: 48.3%
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
(First Half)
Goal 60 days 60 days 60 days 60 days 60 days 60 days 60 days Number
of
Requests
14 51 52 52 42 62 39
Average 205.7 days
(delayed
by 242.8%
over service
goal)
150.8 days
(delayed by
151.3% over
service goal)
58.1 days
(exceeded
service goal
by 3.2%)
80.1 days
(delayed by
33.5% over
service goal)
37.9 days
(exceeded
service goal
by 36.8%)
37.8 days
(exceeded
service goal
by 37%)
20.2 days
(exceeded
service goal
by 66.3%)
Public Works Streets Division staff improved its response time during Year 6 and has been exceeding its service level goal for the first six months of Year 7.
Summary Table
A summary of the request types, their service level goals, and the performance for each service year can be found in the table immediately below. Each column of the table represents a different service year. Each row represents a different request type. In each cell of the table, the "goal" represents the service level goal in that year for that request type, and each "average" states the average completion time of staff in that year for that request type. For example, in Year 2 for abandoned vehicles, the table lists "Goal: 14 , Average: 9." This means that in Service Year 2, the service level goal for abandoned vehicles was 14 working days, but staff was responsive to those requests on an average of 9 working days.
Category Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 (First Half)
Goal Avg Goal Avg Goal Avg Goal Avg Goal Avg Goal Avg Goal Avg Illegal
Dumping
3 4.4 3 8.6 3 2.7 3 5.5 3 3.5 3 1.2 3 2.0
Graffiti 3 1.7 3 1.1 3 1.8 3 2 3 2.3 3 2.4 3 2.7
Abandoned
Vehicle
14 12.2 14 9 14 9.3 14 9.9 14 9.2 14 9.1 14 7.5
Overgrown
Landscape
60 73.7 60 92.5 60 75.1 60 36.7 60 47 60 43.2 60 22.5
Pothole 150 73.3 15/30* 113.4 30 81.7 35 100.1 35 135.9 35 49.3 35 19.5 General
Questions
15 41.5 15 45.9 15 42.2 15 30.7 15 15.2 15 20 15 12.4
Sidewalk
Repair
60 116 60 121.9 60 58.7 60 65.3 60 43.1 60 34 60 14.8
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Category Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 (First Half)
Goal Avg Goal Avg Goal Avg Goal Avg Goal Avg Goal Avg Goal Avg Litter 3 14.6 3 24.7 3 20.3 10 12.2 10 17.1 10 9.2 10 8.5 Water Waste
and Leaks
4 25.7 4 42.9 4 47.1 4 12.5 4 8.9 4 17.6 4 3.4
Trash and
Recycling
Service
2 4.3 2 4.5 2 7.5 3 2.4 3 1.7 3 4.0 3 3.0
Assessment
District
21 18.9 21 31.6 21 58.6 21 17.9 21 15.4 21 31.7 21 42.6 Animal
Safety
2 7.3 2 8.3 2 5.8 7 6.8 7 2.8 7 2.2 7 1.9
Streetlight
Out
15 123.6 15 55.9 15 28.5 15 19.1 15 7.0 15 16.8 15 10.9 Street Signs 60 70.5 60 60.9 60 32.3 60 46.6 60 24.8 60 35.7 60 7.4 Traffic -
Signal Issues
3 300.5 3 73.9 3 21.1 15 23.8 15 26.8 15 22.0 15 13.9
Tech
Support and
Questions
6 61.2 6 6.7 6 1.2 6 8.8 6 4.4 6 5.0 6 4.6
Homeless
Encampment
NA NA NA NA NA NA 21 7.6 21 6.6 21 4.6 21 3.4
Traffic -
General
Issues
15 384.7 15 40.5 15 18.2 18 19.1 18 27.1 18 26.7 18 8.8 Street
Markings
60 68.3 60 78.9 60 83.2 60 31.2 60 34.3 60 37.4 60 8.5
Curb and
Gutter
Repair
60 205.7 60 150.8 60 58.1 60 80.1 60 37.9 60 37.8 60 20.2
*The service level goal for pothole requests was changed in the middle of year 2. The first half of year 2 had a service level goal of 15 days. The second half of year 2 had a service level goal of 30 days.
4. Summary
A. Projected Future Use of Oxnard 311
Oxnard staff have communicated with other cities around the country that use the same CRM platform (Accela’s PublicStuff) to estimate what future Oxnard 311 use could look like. Most cities reported a large increase in submitted requests between years one and two as more users discovered the system, which Oxnard experienced. The following years display steady request increases between 7 to 30%, with an average over 9 years of 19%. Oxnard 311 growth appears to be close to following the same trend, as seen by the 18% overall increase in requests submitted between years five and six.
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While impossible to predict the exact volume of request increases for Oxnard 311, the City should be prepared for continuous growth. The related increase in workload will need to be met with a variety of solutions, including more efficient workflows, additional staff, and potentially increasing service level goals to account for additional work.
B. Analysis
As of October 31, 2022, the last day of the 18 month performance update period, the City successfully met or exceeded the service level goal for 19 out of 20 of the service request types.
In year 6, staff met the service level goals in 12 of the 20 (60%) categories: abandoned vehicles, animal safety, curb and gutter repair, graffiti, homeless encampment, illegal dumping, litter, overgrown landscape, sidewalk repair, street markings, street signs, and tech support and questions.
In the first half of year 7, staff met the service level goal in another seven categories (35%): general questions, potholes, street lights out, traffic general issues, traffic signal issues, trash and recycling service, and water waste and leaks.
Assuming a continuation of the same resources, staff will strive to continue on this successful path with these categories.
There is 1 of the 20 categories that did not meet its service level goal: Assessment Districts. This represents 1% of all 311 requests. Based upon the first six months of Year 7, these requests are being completed on an average of 40.9 days (a 94% delay of the 21 day service goal). Most of these requests are for tree trimming services and sidewalk repairs, which require significant funding. Although the City has new shared agreements to resolve the Special District tree trimming and sidewalk grinding requests, this will require funding from the FY 23-24 assessment process and the subsequent necessary appropriations from each District. The majority of the requests are from landscape maintenance districts (LMDs), which is a district type with highly varying levels of funding from district to district. Services will continue to be unavailable in some LMDs due to their limited available fund balance as a result of their capped assessments.
STRATEGIC PRIORITIES
This agenda item supports the Quality of Life strategy. The purpose of the Quality of Life strategy is to restore and increase quality services and programs that enrich Oxnard's diverse community, promotes safe neighborhoods, encourages community engagement, and supports our residents in their efforts to improve their quality of life.
This agenda item supports the Organizational Effectiveness strategy. The purpose of the Organizational Effectiveness strategy is to reinforce, stabilize, improve, and strengthen the organizational foundation of the City in order to build a modern, high-functioning City government that effectively and efficiently supports the operating departments in providing high-quality services and programs for our residents and businesses.
FINANCIAL IMPACT
There is no financial impact.
COMMITTEE OUTCOME
The Community Services, Public Safety, Housing & Development Committee approved 3-0 on January 24, 2022 to approve the staff recommendation and to forward the item for Council approval.
Prepared by: Helen Johnson, Interim GIS Manager
ATTACHMENTS
1. Presentation
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Oxnard 311 - Performance Update Report
February 21, 2023
Helen Miller, Chief Information Officer
Helen Johnson, Interim GIS Manager
City Council
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DOWNLOADS
That the City Council receive a City of Oxnard 311
constituent relationship management performance update
for the period of performance year six (May 1, 2021
through April 30, 2022) and the first half of performance year seven (May 1, 2022 through October 31, 2022).
(Community Services, Public Safety, Housing &
Development Committee approved 3-0.)
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123,550Launched
15,333
REQUESTS SUBMITTED DOWNLOADS
2016
17 languages supported
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4 19 OF 20 CATEGORIES OF
311 SERVICES
EXCEED/MEET
GOAL
OVERALL SERVICE CATEGORY PERFORMANCE 5/1/21 - 10/31/22
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5 APP DOWNLOADS
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6 REQUESTS SUBMITTED
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7 Illegal Dumping - 43,242
Graffiti - 28,839
Abandoned
Vehicles
13,465
7REQUESTS SUBMITTED
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8 43,242 Total Illegal Dumping Requests in first 6 ½ years before
after
ILLEGAL DUMPING REQUESTS PER YEAR
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9 Goal = 3 Days Avg = 4 Days
Goal
before
after
ILLEGAL DUMPING REQUESTS PERFORMANCE PER YEAR
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10 ILLEGAL DUMPING REQUESTS PERFORMANCE PER YEAR
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11 28,839 Total Graffiti Requests in first 6 ½ years
GRAFFITI REQUESTS PER YEAR
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12 Goal = 3 Days Avg = 2.0 Days
Goal 2.7
GRAFFITI REQUESTS PERFORMANCE PER YEAR
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13 GRAFFITI REQUESTS PERFORMANCE PER YEAR
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14 13,465 Abandoned Vehicle Requests in first 6 ½ years
ABANDONED VEHICLE REQUESTS PER YEAR
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15 Goal = 14 Days Avg = 9.4 Days
Goal
ABANDONED VEHICLE REQUESTS PERFORMANCE PER YEAR
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16 ABANDONED VEHICLE REQUESTS PERFORMANCE PER YEAR
950
17 Assessment Districts
● Most requests are for tree trimming services and
sidewalk repairs, both of which require funding
● The majority of requests are from Landscape
Maintenance Districts (LMDs), which is a district type
with highly varying levels of funding from district to
district
● Special Districts staff are utilizing new shared
agreements to address and resolve their tree
trimming and sidewalk grinding requests
● Services will continue to be unavailable in some LMDs due to their limited available fund balance as a result of their capped assessments - see website:
https://www.oxnard.org/city-department/finance/spe
cial-assessment-districts/lmds/ for more information
ONE FOCUS AREA: ASSESSMENT DISTRICTS (1% OF REQUESTS)
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DOWNLOADS
That the City Council receive a City of Oxnard 311
constituent relationship management performance update
for the period of performance year six (May 1, 2021
through April 30, 2022) and the first half of performance year seven (May 1, 2022 through October 31, 2022).
(Community Services, Public Safety, Housing &
Development Committee approved 3-0.)
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QUESTIONS
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CITY COUNCIL AGENDA REPORT
REPORTS
AGENDA ITEM NO. L.5
DATE: February 21, 2023
TO: City Council
FROM: Denise Olson, Interim Chief Financial Officer, (805) 200-5400, [email protected]
SUBJECT: Discussion of the State Auditor’s 2021 Fiscal Health Ranking of California Cities. (10 minutes)
RECOMMENDATION
That the City Council receive the State Auditor's 2021 Fiscal Health Ranking of California Cities.
(This item was presented to the Finance and Governance Committee on January 10, 2023.)
Please click the following link to view the required Measure M pre-recorded presentation video: https://youtu.be/gbDJR6hhG44
BACKGROUND
California State Auditor Local Government Financial Risk Scores
The state auditor’s office released its annual list of California’s most financially at-risk cities. The report calculates financial risk scores for 482 cities based on a number of factors including reserves, debt burden, liquidity, revenue trends, pension funds and obligations, and post-employment benefit funds and obligations.
The rankings are not a reflection of where the cities’ finances currently stand, but rather a snapshot of financial health based on an analysis of the prior fiscal year’s audited financial statements – which, in the case of this year’s report, is Fiscal Year 2020-21 (FY21).
Oxnard was ranked #8 most at risk based on the City’s June 30, 2021 Annual Comprehensive Financial Report (ACFR).
DISCUSSION
Ranking Oxnard as 8th most financially at risk city makes a compelling headline but does not reflect a number of very important factors. The scores are calculated for all cities on an annual basis using a number of backward-looking factors using City’s publicly available financial reports. Cities with scores less than 42, are considered to be at high risk of financial distress, and a score of around 72 is where an agency is considered a low risk. Of the 482 cities in California as at June 30, 2021; 5 are high risk, 156 Moderate risk, and 321 at low risk.
This staff report, organized by rating category, explains why the State Auditor has calculated a significant drop in ranking for the City of Oxnard and also describes the methodology used by the State Auditor in their effort to rank nearly five hundred cities of all shapes, sizes, and demographics.
The table below presents the California State Auditor’s scoring range and the scores of the City of Oxnard for 2017 through 2021, by financial indicator, as available online at: https://www.auditor.ca.gov/local_high_risk/dashboard-csa
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General Fund Reserves – 30% of the total score
General Fund Reserves reported at the end of FY2021 reflect a $36.5 million reduction in available fund balance due to a court order that the General Fund (including Streets Fund), reimburse Utility Funds (Water, Wastewater, and Environmental Waste) for Infrastructure Use Fees (IUF) collected over many years. This is the largest single factor to the significant reduction in the State’s risk score from 51.78 (49th) in FY2020 to 44.34 (8th) in FY2021.
The City was ordered to transfer this money back over a three-year period, with $5m of the $36.5m was reimbursed in FY21 before the start of the three year period and the remaining transfers of $12.0 million, $10.0 million, and $9.5 million due to occur in FY 22, FY 23, and FY 24 respectively. The total reimbursement order of $36.5m became effective in June 2021. Government Accounting Standards required the City to recognize the full $31.5 million remaining to be paid - as a reduction of available fund balance - in its ACFR as at June 30, 2021.
While this is rightly included in the state auditor report, it has a somewhat misleading negative impact on the financial risk score provided because the amount will be paid over three years compared to the immediate reduction to the general fund reserves resulting from the required accounting entry.
*Adjusting for this one-time impact would see Oxnard's score for General Fund reserves increase to approximately 14.38 from the actual FY21 score of 3.93, a significant increase that would see Oxnard move down the risk table approximately 100 places in the General Fund reserves category. Throughout this report - for reference purposes only - the FY21 score has been re-calculated to exude the one-time IUF reimbursement impact.
The estimated change in the General Fund reserves score, excluding the one-time IUF impact, would result in the overall City risk score of #69 (compared to the actual score of #8). This highlights the significance of this important indicator.
Carrying sufficient reserves within the General Fund to ensure that vital services are maintained during economic challenges is an important responsibility of the City. Given the makeup of City taxes being more stable than many other agencies, and the new Measure E 1.5% sales tax, there is cause for optimism that the City’s reserves will be sufficient in the coming years.
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Debt Burden – 15% of the total score
The debt burden score is a factor of general fund revenues and long-term debt. The City issues debt in order to build and maintain critical infrastructure. Spreading the cost of capital improvements and maintenance over the life of an asset through debt payments is a way to achieve generational equity by attempting to match the costs to taxpayers over the time period the asset will be in use. This score will improve when the City reports its FY22 ACFR including a full year of Measure E tax receipts.
Liquidity – 10% of the total score
Liquidity score is a factor of cash and investments compared to liabilities. The IUF liability impacts this score similarly to the General Fund reserves score. Adjusting for the one-time IUF impact the City would gain approximately 4.5 points, reducing the risk score from high risk to low risk. Furthermore, the City has sufficient and growing revenues to cover its debt service. This fact resulted in the improvement to the City’s credit rating on October 26, 2022 from “A” to “AA-“, with rating improvements for lease revenue bonds from “A-“ to “A”, and Gas Tax bonds from “A+” to “AA-“, the fifth upgrade in the last 12 months.
Revenue Trends – 5% of the total score
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Revenue trends have been positive for the City representing strong growth in the local area for property and sales tax (the two largest sources of revenue for the General Fund.) the report does not take any regard to Measure E, 1.5% Sales tax increase, approved by the voters in November 2020, with receipts commencing in April 1 2022 (final quarter of FY21). This new revenue source along with continued growth in other major categories is not factored into the FY21 score, and should materially impact the assessment.
The City’s fundamentals are strong; Oxnard does not overly rely upon tax revenue from discretionary-spending driven sources such as Transient Occupancy Tax (TOT or hotel tax), and Oxnard benefits from a robust real estate market resulting in good property values and corresponding property tax revenues.
Pension Obligations and Other Post Employment Benefits – 40% of the total score This category is an amalgamation of several different factors.
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Long established, full-service cities tend to have larger, more mature pension funds and share the same challenge of unfunded liabilities built over years due to investment returns not keeping pace with actuarial assumptions. Oxnard employees and retirees are members of CalPERS California Public Employees Retirement System). The City was 70% funded as at June 30, 2021, in line with most large CalPERS agencies.
Like those cities, Oxnard is actively exploring a range of options to mitigate the unfunded liability. The City is pre-paying its annual required unfunded liability basis and held several workshops over the past few years to discuss potential strategies.
Summary
The State Auditor ranking of cities based on financial indicators can be a helpful tool as long as it is used in context of its methodology and an appropriate amount of analysis of the many factors affecting current and future financial health of cities.
It can be a challenging task to create a useful and objective comparison of the 482 California cities. Distilling all the various nuances and differences in services provided, and economic differences by location to present an objective and useful comparison. The State Auditor's annual risk categorization and ranking is a useful data point - however - it should not be used as a stand-alone evaluation metric. Users of the ranking must consider other factors such as future projections and consider decisions made that are not included in historic financial results.
Oxnard staff continue to closely monitor all the city's financial indicators and make recommendations to Council when adjustments to budget or financial strategy may be needed. The City is not immune to external economic downturns and the considerable pressure on budgets caused by pension liabilities. The outlook is steadily improving and stabilizing for the City of Oxnard, as evidenced by the continuation of ratings upgrades received from Standards and Poors, including as recently as October 2022. This rating process is trusted by investors all around the world and is the result of careful analysis of audited reports, interviews with City leadership, and discussion of financial strategy and forecasts.
STRATEGIC PRIORITIES
This agenda item is a routine operational item or does not relate to the five strategic priorities adopted by City Council on March 16, 2021.
FINANCIAL IMPACT
There is no financial impact.
COMMITTEE OUTCOME
The Finance and Governance Committee approved 2-0 on January 10, 2023, that the City Council receive and file this report.
Prepared by: Mark Sewell, Assistant Chief Financial Officer
ATTACHMENTS
1. City Council Presentation - State Auditor’s 2021 Fiscal Health Ranking of California Cities
958
STATE AUDITOR’S 2021 FISCAL HEALTH
RANKING OF CALIFORNIA CITIES
City Council – February 21, 2023
1 Prepared by: Mark Sewell, Assistant Chief Financial Officer 959
OVERVIEW
• State of California Audit Office publishes an annual risk assessment on all 482 California Cities.
• Risk Assessment attempts to quantify and rank fiscal health based on a number of publicly available financial indicators.
• Cities considered High Risk may be subject to State Audits and corrective action plans to the Joint Legislative Audit Committee.
• City of Oxnard was again categorized as at Moderate Risk of Financial Distress in its most recent report (FY21)
• City of Oxnard rank when compared to other California cities increased to #8 in FY 21 (from #49 in FY 20)
This Presentation attempts to explain the methodology of the score, and reassure Council and the public, that while the City has seen its rank increase, the financial fundamentals for the City are strong and improving. 2 960
STATE AUDITOR METHODOLOGY
• Factors that could indicate Financial Distress:
• Financial Reserves
• Does the city have sufficient reserves to cover unexpected costs or shortfalls in revenue?
• Debt Burden
• How is t he cit y’s level of debt compar ed t o it s income • Cash Position / Liquidity
• Is t he cit y able t o pay it s bills in t he coming fiscal year ? • Revenue Trends
• I s the city’ s revenue going down over time?
• Retirement Obligations
• Does the city have the ability to pay f or retirement benef its it promised its employees?
• The product of an advisory panel made up of members from Public Policy Institute of Califor nia, CalPERS, S&P Global Rating Ser ves, Califor nia Society of Municipal Finance O fficer s, League of Califor nia Cities and Univer sity of Washington.
• State Auditor focuses on the General Fund, as this is often the largest fund, and is responsible for public safety, public works, recreation and parks. 3 961
CITY OF OXNARD: SCORE BY FINANCIAL FACTOR
• City of Oxnard ranked #8 most at risk of Financial Distress. • Ranking based on a number of backward looking factors including:
• General Fund Reserves, Debt, L iquidity and Pension Obligations.
• Oxnard ranking changed from #49 to #8 in FY 21.
• City considered at M oderate Risk F Y 17 – FY 21.
4 Financial Indicators
General
Fund
Reserves
Debt
Burden Liquidity
Revenue
Trends
Pension
Obligation
Pension
Funding
Pension
Costs
Future
Pension
Costs
OPEB
Obligations
OPEB
Funding Total City Rank
Total Available Points / 100 30.00 15.00 10.00 5.00 10.00 5.00 5.00 5.00 10.00 5.00 100.00
Classification
Boundaries
High Risk 6.50 8.33 4.99 2.50 4.00 3.50 2.22 2.22 4.00 3.50 41.76 Moderate Risk 16.00 13.33 7.49 3.75 8.00 4.00 3.33 3.33 8.00 4.00 71.23 Low Risk 30.00 15.00 10.00 5.00 10.00 5.00 5.00 5.00 10.00 5.00 100.00
City of
Oxnard Score
FY17 score 13.42 6.41 10.00 3.00 5.68 3.60 2.50 1.67 10.00 0.00 56.28 101 FY18 score 6.75 6.58 10.00 2.75 5.60 3.70 2.78 1.67 10.00 0.00 49.83 41 FY19 score 6.55 7.75 10.00 3.13 6.40 3.70 2.50 1.67 10.00 0.00 51.70 42 FY20 score 8.81 7.75 8.55 3.00 6.08 3.70 2.22 1.67 10.00 0.00 51.78 49 FY21 score 3.93 8.58 3.55 3.25 6.56 4.30 2.50 1.67 10.00 0.00 44.34 8
56.28 49.83 51.70 51.78 44.34
59.26 FY17
score
FY18
score
FY19
score
FY20
score
FY21
score
FY21
score*
Risk Score
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UNDERSTANDING THE CHANGE IN RANK
• City of O xnar d r anked # 8 Most Financially at Risk • FY20: 51.78 #49
• FY21: 44.34 #8
• I mportant to note that Ci ty i s not considered at High Risk .
• FY 21 Financial Factors Impacted by One time Adjustment:
• General F und Reserves
• Liquidit y
• City recognized Court Ordered I nf rastructure Use F ee (I UF ) liability to the General Fund ($36.5m) in FY21.
– As required by Governmental Accounting Standards
– Common Practice to remov e one -time events when comparing fiscal years – Impact of unwinding many years of IUF all reported in one fiscal year (FY 2021)
• New, Ongoing Revenue, Measure E (1.5% tax), Not Fully Factored into Analysis.
• Commenced in final quarter of FY21.
• Full benefit not yet seen in financial results used to calculate score. • W ill enable Cit y t o impr ove Gener al Fund Reser ves, Liquidit y and ot her fact or s. 5 963
GENERAL FUND RESERVES
• General F und Reserves at end of F Y 21, reported below policy levels due to the required accounting adjustment recognizing full $36.5 million IUF judgement.
• $5.0 million paid in FY21
• $12.0 million paid in FY 22
• $10.0 million to be paid in FY 23
• $9.5 million to be paid in FY 24
• City was required to recognize the full $36.5 million in FY21, the Court order spread the reimbursement over four years
• City is able to utilize future revenues in order to make these payments. • Measure E, 1.5% voter approved tax measure commenced receipts in April 2021
• Unrestricted revenue source used to fund general government. • Helping the City to provide essential services, deliver capital projects and rebuild available general fund reserves.
• Adjusting for the IUF shows an underlying score of 14.38.
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DEBT BURDEN
• Ability for the City to service its debts. (excluding Pensions) • Calculated as L ong Term Debt / Revenues
• City debt burden has been improving as revenues have increased over the years and debt payments made.
• The City issues debt in order to build and maintain critical infrastructure. • Spreading the cost of capital improvements and maintenance over the life of an asset through debt payments is a way to achieve generational equity. • M atching the costs to taxpay ers ov er the time
period the asset will be in use.
• This score will improve when the City reports its
FY 22 ACFR including a full year of Measure E tax.
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LIQUIDITY
• Ability for the City to pay its bills in the short term. • Calculated as General Fund Cash/General Fund L iabilities • City paid $5.0 million in FY21 (reduced Cash)
• City recognized liability of further $31.5 million ( increased liabilities) • Therefore, Liquidity ratio was impacted significantly by the IUF ruling
• Court Order spread the reimbursement over four years, and this is not factored into the state auditor calculation, meaning future revenues and not just existing cash can be used to make the payments.
*Adjusting for the IUF improves from High Risk to Low Risk. 8 966
REVENUE TRENDS
• Extent to which the City’s revenues are increasing or shrinking over time. • Calculated as average annual change over last three years. • The Score of 3.25 / 5.00 puts the City close to Low Risk (3.75) • This does not factor in a full year of Measure E revenues.
• City of Oxnard has strong fundamental revenues from Sales and Property taxes. • Does not rely heavily on more consumer discretionary sources of revenue such as Transient Occupancy Tax.
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RETIREMENT OBLIGATIONS
• Net Pension Liability, Required annual payments to CalPERS, Value of Pension Assets and Liabilities and Governmental Revenues are all factors in determining the risk of financial distress as determined by the State Auditors. • City of O xnard is similar to many long established, full service cities with large, mature pension plans administered by CalPERS.
• The City’s funded status of 70% in FY21 is in line with many other agencies, reflecting the challenge of investment returns falling below actuarial assumptions.
• The City is actively exploring range of options to mitigate pension risk. 10 968
SUMMARY
• It is a challenging task to compare nearly 500 cities and account for all the local nuances within each city.
• The State Auditor Risk of Financial Distr ess can be a good tool as long as it is used as one of many tools to evaluate the financial performance and position of a municipality.
• Ranking Oxnard at Moderate Risk of Financial Distress does not seem unreasonable. • However, financial factors used to generate the final score are heavily impacted by the IUF adjustment, and weigh this heavily in the overall rank. • M oreover, the analysis does not fully allow for material new revenues, M easure E .
City Ratings Upgrade
• Standard and Poors (S& P) have access to the same data as the State Auditors, and augment this with additional information provided by staff during presentations to better understand financial and operating strategy for the City. • S&P upgr aded the City’s cr edit r ating (a widely accepted indicator of financial r isk) as recently as October 2022 on the basis of historic and projected financial information.
The City does face some significant financial challenges, but is well positioned with the recent passing of Measure E, continued tight cost control and strategic debt management, to continue to pr ovide essential ser vices, and wor k towar d deliver y of Councils str ategic pr ior ities in the coming year s.
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THANK YOU
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