Paso Robles City Council
September 1, 2026

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2 D. The purpose of this Agreement is to provide for the levy of special taxes in the District (the “Special Taxes”) and the issuance and sale of Bonds of the District secured by the Special Taxes to finance the design, planning, engineering, financing, installation, and construction or acquisition of the Public Facilities and expenses incidental thereto.

E. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in Exhibit B attached hereto and by this reference herein incorporated.

AGREEMENTS
NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the parties agree as follows:

Section 1. Establishment of District. The City has initiated proceedings pursuant to the Act for the establishment of the District. Such proceedings include elections within each Improvement Area pursuant to Sections 53326, 53350 and 53353.5 of the Act on (i) the question of the issuance of the Bonds for each Improvement Area of the District to finance the design, planning, engineering, construction management, financing, installation and construction or acquisition of certain of the Public Facilities, (ii) the question of the annual levy of the Special Taxes within each Improvement Area on those portions of the Property subject to the Special Taxes to pay directly for certain of the Public Facilities and to pay the principal of and interest on Bonds of each Improvement Area and the annual administrative expenses of the City in levying and collecting such Special Taxes, paying the principal and interest on such Bonds and providing for the registration, exchange and transfer of such Bonds, including the fees of fiscal agents and paying agents, and any necessary replenishment of the reserve fund for such Bonds, and (iii) the question of the establishment of an appropriations limit for the District. All of the Public Facilities shall be authorized to be financed with the proceeds of Bonds and Special Taxes of any Improvement Area or the District.

From time to time prior to the issuance of the Bonds at the written request of Landowner, and subject to Landowner advancing funds as determined by the City as necessary to pay all costs related thereto in accordance with Section 4 below, the City shall use its reasonable best efforts to undertake proceedings which may be deemed necessary or appropriate to amend the Rate and Method applicable to the District or Improvement Area or to amend the boundaries of an Improvement Area or the District.

Section 2. Payment of City Fees as Deposit. Any payment or deposit of City Fees before Special Taxes are received or proceeds of the Bonds become available, including all City Fees paid prior to the execution of this Agreement, shall be held on deposit by the City in a separate account used exclusively for City Fees (the “Deposit Account”), and shall not be expended by the City, provided, however, earnings on the investment of funds in the Deposit Account shall be returned to the City. If any Bonds have not been issued for a period of twenty-four (24) months from the date such City Fees are paid, then the City may use any funds remaining in the Deposit Account for its lawful purposes and such funds shall be deemed by the City as the payment of the Fees for the applicable parcels of the Property for which payment was made.

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3 Immediately upon the City receiving sufficient proceeds of the Bonds in accordance with this Agreement, the City shall return to Landowner, or Landowner’s designee, the applicable funds held in the Deposit Account.

Section 3. Sale of Bonds.

Upon Landowner’s written request, the City shall use its reasonable best efforts, as hereinafter provided, to issue and sell Bonds, in one or more series, for each of the residential Improvement Areas in accordance with the provisions of this Agreement and the Financing District Policy. Each series of Bonds is expected to have a debt service amortization schedule matching the annual Special Taxes available for debt service pursuant to the applicable Rate and Method and for a term of not more than thirty-five (35) years, for the purpose of, collectively, raising an amount sufficient to pay for the design, planning, engineering, construction management, financing, installation and construction or acquisition of the Public Facilities. In connection with the issuance of the first series of Bonds for each Improvement Area, the City on behalf of itself and the District shall establish criteria for the issuance of Additional Bonds of such Improvement Area which meet the criteria of the Financing District Policy, if applicable. The timing of the issuance and sale of each series of Bonds, the aggregate principal amount thereof, and the terms and conditions upon which they shall be sold shall be as set forth in this Agreement and otherwise as determined by the City in its sole reasonable discretion after consultation with Landowner. Not by way of limitation of the foregoing, the timing of the issuance and sale of the first series of Bonds and any Additional Bonds shall be as soon as reasonably practicable, as determined by the City in its sole reasonable discretion following consultation with its financial advisor, underwriter and other consultants and counsel after written request from Landowner. Landowner shall use its reasonable best efforts to cooperate with City in connection with any Bond sale. Prior to the issuance of any Bonds for each Improvement Area, Landowner shall provide to the City a designation of all facilities of each merchant builder, if any, and the Landowner to be constructed or acquired with proceeds of Bonds.

Section 4. Advance of Certain Expenses. Pursuant to an agreement (the “Deposit Agreement”), by and between the City and Landowner, Landowner shall pay and advance all of the costs reasonably associated with the establishment of the District. After the establishment of the District, Landowner shall deposit funds with the City for the City’s reasonable out-of-pocket expenses associated with a sale of each series of Bonds, including, but not limited to, (i) the fees and expenses of any consultants and legal counsel to the City employed in connection with the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the issuance of the Bonds, (iii) the costs of publication of notices and other costs related to any proceeding undertaken in connection with the issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the issuance of the Bonds, including a reasonable allocation of City overhead expense, and (v) any and all other actual costs and expenses incurred by the City in connection with the issuance of the Bonds (“Reimbursable Expenses”). If the Bonds are issued by the District, the City shall reimburse Landowner from proceeds of the Bonds, without interest, for the portion of the Reimbursable Expenses deposits that have been expended or encumbered, said reimbursement to be made from

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4 the proceeds of the Bonds on the date of issuance of the Bonds or as soon as reasonably possible thereafter and only to the extent otherwise permitted under the Act, and refund any unexpended or encumbered deposited amounts. If the Special Taxes are levied and collected, the City may reimburse Landowner from the receipts of Special Taxes (net of amounts required to pay District administrative expenses), without interest, for the portion of the deposits paid by Landowner pursuant to the Deposit Agreement that have been expended or encumbered, said reimbursement from receipts of Special Taxes to be made on or before the end of each fiscal year; provided, however, that the City may retain such collected Special Taxes in the amounts that it deems reasonably necessary to facilitate the issuance of the Bonds.

The City shall keep records of all Reimbursable Expenses advanced by the City pursuant to this Section 4, which records shall be available for inspection by Landowner during regular business hours. The sole source of funds for reimbursement of any advance expenditure made by the City or Landowner shall be the uncommitted and unexpended payments made by Landowner to the City, proceeds of the Bonds, or Special Tax receipts as determined by the City.

Section 5. Tax Requirements. The timing of the sale of each series of Bonds, the nature of the investments in which the proceeds of the Bonds shall be invested, the duration of such investments, and the timing of the expenditure of such proceeds shall be as set forth in this Agreement and the applicable fiscal agent agreement (the “Fiscal Agent Agreement(s)”); provided, that in all such matters City shall comply with the requirements of and limitations prescribed by the provisions of Sections 103 and 141 through 150 of the Internal Revenue Code of 1986 (the “Code”), as amended, and the implementing regulations of the United States Department of the Treasury. The City shall not be required to take any such action which in the opinion of the City’s bond counsel could result in the Bonds being classified by the United States Department of the Treasury as “arbitrage bonds” or which could otherwise result in the interest on the Bonds being included in gross income for purposes of federal income taxation; provided, however, that the Landowner recognizes that a portion of the Public Facilities may need to be financed on a taxable basis. Should any change in or regulatory interpretation of any such requirement or limitation which may occur after the date of this Agreement require or necessitate, in the reasonable opinion of such bond counsel, any action on the part of the City in order to avoid such a classification or loss of tax exemption, the City shall notwithstanding any provision of this Agreement, forthwith take such action. In the event the City fails to comply with requirements set forth above in this Section 5, the City’s liability is limited to the Special Tax revenues generated by the applicable Improvement Area or the District.

Section 6. Priority and Allocation of Surplus Special Taxes and Bond Proceeds. (a) Special Taxes Following the Issuance of Bonds. Following the issuance of the first series of Bonds of an Improvement Area and continuing for a period of five (5) years thereafter, the City shall levy Special Taxes on all Assessor’s Parcels pursuant to the applicable Rate and Method or such lesser amount which complies with the applicable Fiscal Agent Agreement. Following the issuance of the first series of Bonds, the priority for allocation of the Special Taxes collected shall be as follows:
(1) first, to fund an amount up to the Priority Administrative Expense Requirement;

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5 (2) second, to pay principal and interest on outstanding Bonds and to replenish the reserve fund to the applicable reserve fund requirement; (3) third, to fund all actual Improvement Area or District administrative expenses in excess of the Priority Administrative Expense Requirement; and (4) fourth, all remaining amounts shall be deposited in the Special Fund and disbursed according to the following priority:
(i) to fund costs of the Offsite Facilities; and
(ii) to reimburse prior deposits paid by Landowner to City pursuant to the Deposit Agreement and Landowner’s third-party consultant costs incurred relating to the formation of the District; and
(iii) to the extent not funded with the proceeds of such series of Bonds, to pay or reimburse Landowner for any City Construction Facilities in the order requested by Landowner but subject to the terms of this Agreement, but in no event shall Special Taxes be allocated to pay or reimburse Landowner after five (5) years from the date the first series of Bonds are issued for each Improvement Area or the District; and (iv) all remaining amounts shall reduce Special Tax levies in subsequent fiscal years.
(b) Improvement Area Bond Proceeds. The proceeds of all Bonds of each Improvement Area and the District shall be allocated and disbursed according to the requirements of the applicable Fiscal Agent Agreement but otherwise according to the following priorities:
(1) first, to fund all costs of issuance of the Bonds including (i) a reserve fund for the Bonds which does not exceed the amount permitted under the Code or the Act, (ii) capitalized interest for at least the period required to collect sufficient Special Taxes through the annual levy, or such amount as the City shall determine pursuant to the Financing District Policy, and in consultation with the Landowner, (iii) the underwriter’s discount, (iv) the Reimbursable Expenses, and (v) bond counsel fees, disclosure counsel fees, financial advisor, appraisal and market absorption consultant fees, special tax consultant fees, fiscal agent or trustee fees and other typical and reasonable out-of-pocket expenses incurred by the City in connection with the issuance and sale of the Bonds;
(2) second, to fund costs of the Offsite Facilities; and (3) third, to reimburse, without interest, prior deposits paid by Landowner to City pursuant to the Deposit Agreement and this Agreement related to formation of the District and issuance of the Bonds; and
(4) fourth, to pay or reimburse the Landowner, or merchant builder as designated prior to such issuance, the costs of the City Acquisition Facilities in the order requested by Landowner but subject to the terms of this Agreement; and

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6 (5) fifth, to pay or reimburse the Landowner, or merchant builder as designated prior to such issuance, the costs of the City Construction Facilities paid previously that have not previously been reimbursed.
(c) Special Taxes Prior to the Issuance of Bonds. If Special Taxes are levied on Developed Property (as that term is defined in the appropriate Rate and Method) prior to the issuance of Bonds in any Improvement Area or the District, such Special Taxes shall be held by the City and used to pay the Priority Administrative Expense Requirement for such Improvement Area or District and fund the costs of the Offsite Facilities, with the remainder to reimburse prior deposits paid by Landowner to City pursuant to the Deposit Agreement and any third-party consultant costs of Landowner incurred in connection to the formation of the District and for the City Construction Facilities.

Section 7. Design and Construction of City Construction Facilities. The City shall cause those Public Facilities listed in Exhibit A hereto as City Construction Facilities (the “City Construction Facilities”) to be designed at such times as the City deems appropriate and the City shall cause plans and specifications for all such City Construction Facilities to be prepared. The City may retain other qualified professionals to design portions of the City Construction Facilities.

The City may be reimbursed for the City’s expenses incurred in designing and engineering the City Construction Facilities to the extent of funds deposited in the City’s improvement account.

The City may award the construction contract for the City Construction Facilities if proceeds on deposit in the City’s improvement account and other funds available to the City are sufficient to pay all costs associated with the construction of the completed City Construction Facilities. The City may be reimbursed pursuant to Section 1.150-2 of the Treasury Regulations from Bonds of the District or any Improvement Area or other available funds.

Section 8. Construction of City Acquisition Facilities and Offsite Facilities. (a) Plans. Landowner shall cause plans (the “Plans”) to be prepared for the City Acquisition Facilities and Offsite Facilities which are listed as such in Exhibit A hereto (together, the “Acquisition Facilities”). Landowner shall obtain the written approval of the Plans in accordance with applicable ordinances and regulations of the City. Copies of all Plans shall be provided by Landowner to the City Manager, or designee thereof, upon request therefore, and, in any event, as-built drawings and a written assignment of the Plans for any Acquisition Facility shall be provided to the City prior to its formal acceptance of the Acquisition Facility.

Notwithstanding anything herein to the contrary, Landowner shall not be required to prepare Plans or construct Acquisition Facilities any earlier, or in any manner other than as required by the Conditions of Approval.
(b) Duty of Landowner to Construct. All Acquisition Facilities to be acquired hereunder, shall be constructed by or at the direction of Landowner substantially in accordance with the approved Plans. Landowner shall perform all of its obligations hereunder and shall conduct all operations with respect to the construction of Acquisition Facilities in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified persons utilizing their best efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. Landowner shall employ at all times adequate staff or consultants with the requisite

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7 experience necessary to administer and coordinate all work related to the design, engineering, acquisition, construction and installation of the Acquisition Facilities to be acquired by the City from Landowner hereunder.

Landowner shall be obligated, as and when required by the Conditions of Approval, (i) to construct and convey to the City (or other applicable governmental agency) all Acquisition Facilities, and (ii) to use its own funds to pay all costs thereof in excess of the Purchase Prices of the Acquisition Facilities.

Landowner shall not be relieved of its obligation to construct each Acquisition Facility (as and when required by the Conditions of Approval) and convey each such Acquisition Facility to the City in accordance with the terms hereof, even if, (i) because of the limitations imposed by Section 8(f) hereof, the Purchase Price for such Acquisition Facility is less than the Actual Cost, or cost to Landowner, of such Acquisition Facility, or (ii) there are insufficient funds in the Improvement Fund to pay the Purchase Price thereof, and, in any event, this Agreement shall not affect any obligation of Landowner under the Conditions of Approval or any other agreement to which Landowner is a party or any other governmental approval to which Landowner or any land within the District is subject, with respect to the Acquisition Facilities required in connection with the development of the land within the District.
(c) Relationship to Public Works. This Agreement is for the acquisition by the City of the Acquisition Facilities, from moneys in the Improvement Fund and is not intended to be a public works contract. The City and Landowner agree that the Acquisition Facilities are of local, and not state-wide concern, and that the provisions of the California Public Contract Code shall not apply to the construction of the Acquisition Facilities except to the extent they may be applicable to Landowner as a public agency. Nothing in this Agreement shall subject Landowner to duplicative or additional requirements than it is otherwise subject to by applicable law as a public agency with respect to its bidding, contracting and construction of the Acquisition Facilities.

The City and Landowner agree that Landowner shall award all contracts for the construction of those Acquisition Facilities, and that this Agreement is necessary to assure the timely and satisfactory completion of the Acquisition Facilities and that, except to the extent otherwise specified above in this paragraph, compliance with the Public Contract Code with respect to the Acquisition Facilities would work an incongruity and would not produce an advantage to the City, or the District.

Notwithstanding the foregoing, Landowner, or its designee, shall award all contracts for construction of the Acquisition Facilities for which it subsequently submits Payment Request to the lowest responsible bidder, as determined by Landowner. Landowner, or its designee, shall solicit bids in accordance with City policies for the construction of each such Acquisition Facility and Landowner (unless otherwise approved in writing by the City), or its designee, shall open the bids actually received and read them aloud immediately following the submittal deadline. Upon written request of the City Manager or his designee, Landowner shall provide an analysis of bids for construction of such Acquisition Facilities. Landowner acknowledges and agrees that Acquisition Facilities for which Landowner submits Payment Requests shall be subject to the payment of prevailing wages by the applicable contractor(s) or subcontractor(s).

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8 The costs of materials shall be part of the contractors’ bids for constructing the Acquisition Facilities. Nothing in this Agreement shall (i) require Landowner to publicly or informally bid for materials, or (ii) prevent the supply or sale of materials by Landowner to the contractors constructing the Acquisition Facilities. If requested in writing by the City, Landowner shall demonstrate to the City that such materials were obtained at reasonable prices considering the terms of delivery and other factors and shall not charge the City a premium for supplying such materials (but shall be entitled to recover the costs of procuring such materials).

Landowner shall develop or cause to be developed and shall maintain or cause to be maintained a cost-loaded project schedule, using the critical path method, providing for all major project elements included in the construction of any Acquisition Facility to be acquired hereunder, so that the whole project is scheduled in the most efficient manner. Landowner shall provide the City Manager with complete copies of the schedule and each update to the schedule for the City Manager or his designee to review.

From time to time (expected to be at least monthly) at the request of the City Manager or his designee, Landowner shall meet and confer with City staff, consultants and contractors regarding matters arising hereunder with respect to the Acquisition Facilities and the progress in constructing and acquiring the same, and as to any other matter related to the Acquisition Facilities or this Agreement. Landownershall advise the City Manager or his designee in advance of any coordination and scheduling meetings to be held with contractors relating to the Acquisition Facilities, in the ordinary course of performance of an individual contract. The City Manager or his designee shall have the right to be present at such meetings, and to meet and confer with individual contractors if deemed advisable by the City Manager or his designee to resolve disputes and/or ensure the proper completion of the Acquisition Facilities.

City hereby agrees that, to its actual knowledge, compliance with the foregoing by Landowner will satisfy the requirements of Government Code Section 53313.5 for the completion of the Acquisition Facilities.
(d) Independent Contractor. In performing this Agreement, Landowner is an independent contractor and not the agent or employee of the City or the District. Neither the City nor the District shall be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of Landowner.
(e) Contractor’s License. None of the obligations of Landowner set forth in this Agreement shall be deemed to include any activities requiring a contractor’s license. (f) Performance and Payment Bonds. Landowner agrees to comply with all applicable performance and payment bonding requirements of the City with respect to the construction of the Acquisition Facilities. Performance and payment bonds shall not be required of Landowner to the extent moneys are available in the Improvement Fund to pay the Purchase Price, as defined in Section 9(c) below, of an Acquisition Facility provided that all contractors and/or subcontractors employed by Landowner in connection with the construction of the Acquisition Facility shall provide a labor and materials and performance bonds which name the City as an additional insured.

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9 (g) Contracts and Change Orders. Landowner, or its designee, shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as “change orders”) required for the construction of the Acquisition Facilities, and all such contracts and supplemental agreements shall be submitted to the City Manager or his designee.

Prior approval of supplemental agreements by the City Manager shall only be required for such change orders which in any way materially alter the quality or character of the subject Acquisition Facility, or which involve an amount equal to the greater of ten percent (10%) of the amount of the applicable bid for the Acquisition Facility. The City expects that such contracts and supplemental agreements needing prior approval by the City Manager will be reasonably approved or denied (any such denial to be in writing, stating the reasons for denial and the actions, if any, that can be taken to obtain later approval) promptly after receipt by the City Manager thereof. To the extent that a supplemental agreement, approved by the City Manager, or his designee, increases the Actual Cost of an Acquisition Facility, such increased cost may be payable as part of the Purchase Price of the related Acquisition Facility as provided in Section 9 hereof. (h) Time for Completion. Landowner reasonably expects, and agrees, to use its good faith efforts to complete all Acquisition Facilities that are expected to be financed with the proceeds of a particular series of Bonds within thirty-six (36) calendar months from the date of closing of such Bonds.

Section 9. Acquisition and Payment of Facilities.
(a) Inspection. Upon Substantial Completion of the construction of an Acquisition Facility or Discrete Component, Landowner shall notify the City Manager or his designee in writing that such Acquisition Facility or Discrete Component has been Substantially Completed. The cost and expense of the City's inspection of such Acquisition Facility or Discrete Component following such notice (including, but not limited to, the reasonable costs of the City's agents, employees and independent contractors engaged for such inspection) shall be paid by Landowner to the City. No payment hereunder shall be made by the City to Landowner for an Acquisition Facility or Discrete Component thereof until the Acquisition Facility or Discrete Component has been inspected and found to be completed or Substantially Completed in accordance with the approved Plans by the City. City hereby agrees to inspect the Acquisition Facilities and/or Discrete Component’s thereof promptly upon Landowner’s request. Unless otherwise provided in a Supplement, the City shall make or cause to be made regular on-going site inspections of the Acquisition Facilities to be acquired hereunder. Landowner agrees to pay all inspection, permit and other similar fees of the City applicable to construction of the Acquisition Facilities.
(b) Agreement to Sell and Purchase Acquisition Facilities. Landowner hereby agrees to sell the Acquisition Facilities to the City and the City hereby agrees to use amounts in the Improvement Fund to pay the Purchase Price, as defined below, thereof to Landowner, subject to the terms and conditions hereof. The City shall not be obligated to finance the purchase of any Acquisition Facility until the Acquisition Facility is completed and the acceptance date for such Acquisition Facility has occurred; provided that the City has agreed to make periodic payments to Landowner for costs and expenses in accordance with Section 6 of this Agreement and has agreed to make payments for Discrete Components prior to the acceptance date for the Acquisition

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10 Facility of which a Discrete Component is a part; provided further, that the City shall pay Landowner the Purchase Price for an Acquisition Facility, less the retention required under Section 9(g), upon Substantial Completion thereof and satisfaction of the Payment Request requirements of Section 9(d), notwithstanding that the Acceptance Date for such Acquisition Facility has not yet occurred. Landowner acknowledges that the Discrete Components have been identified for payment purposes only, and that the City shall not accept an Acquisition Facility of which a Discrete Component is a part until the entire Acquisition Facility has been completed. The City acknowledges that the Discrete Components do not have to be accepted by the City as a condition precedent to the payment of the Purchase Price therefor, but any such payment shall not be made until a Discrete Component has been completed in accordance with the Plans therefor. The City shall not be obligated to pay the Purchase Price for any Acquisition Facility except from the moneys in the Improvement Fund.
(c) Purchase Price. The Purchase Price for each Acquisition Facility and Discrete Component shall be equal to the Actual Cost of such Acquisition Facility and Discrete Component, but subject to the limitations of this Section 9. (d) Payment Requests.
(i) Landowner Payment Requests. In order to receive the Purchase Price for a completed or Substantially Completed Acquisition Facility or Discrete Component, inspection thereof under Section 9(a) shall have been made and Landowner shall deliver to the City Manager or his designee a Payment Request in the form of Exhibit C hereto for such Acquisition Facility or Discrete Component, together with all attachments and exhibits required by this Section 9(d) to be included therewith. If payment is requested for a completed Acquisition Facility, as opposed to a Discrete Component, and if the property on which the Acquisition Facility is located is not owned by the City at the time of the request, Landowner shall provide a copy of the recorded documents conveying to the City Acceptable Title to the real property on, in or over which such Acquisition Facility is located, as described in Section 10(a) hereof. Landowner shall also provide a copy of the recorded notice of completion of the Acquisition Facility, an assignment to the applicable District of any reimbursements that may be payable with respect to the Acquisition Facility, such as City or private utility reimbursements, and a non-exclusive assignment of the warranties and guaranties for such Acquisition Facility, as described in Section 10(f) hereof, in a form acceptable to the City. Any reimbursements received by the District with respect to an Acquisition Facility shall be deposited in the Improvement Fund.
(ii) Merchant Builder Payment Requests. Within each Improvement Area, it is expected by the City and the merchant builder that a portion of the Acquisition Facilities will be constructed by a merchant builder. Each merchant builder may submit a payment request in the manner set forth in Section 9(d)(i) above if, prior to the issuance of any series of Bonds of such Improvement Area, the Landowner has provided a written designation of the Acquisition Facilities which will be constructed by the merchant builder.
(e) Processing Payment Requests. Upon receipt of a Payment Request (and all accompanying documents), the City Manager or his designee shall promptly conduct a review in order to confirm that such request is complete, that such Acquisition Facility or Discrete Component identified therein was constructed in accordance with the Plans therefore, and to verify

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11 and approve the Actual Cost of such Acquisition Facility or Discrete Component specified in such Payment Request. The City Manager or his designee shall also conduct such review as is required in his/her discretion to confirm the matters certified in the Payment Request. Landowner agrees to cooperate with the City Manager or his designee in conducting each such review and to provide the City Manager or his designee with such additional information and documentation as is reasonably necessary for the City Manager or his designee to conclude each such review. Within thirty (30) business days of receipt of any Payment Request, the City Manager or his designee expects to review the request for completeness and notify Landowner whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the City Manager or his designee expects to provide a written approval or denial (specifying the reason for any denial) of the request within thirty (30) days of its submittal. If a Payment Request seeking reimbursement for more than one Acquisition Facility or Discrete Component is denied, the City Manager or his designee shall state whether the Payment Request is nevertheless approved and complete for any one or more Acquisition Facilities or Discrete Component and any such Acquisition Facilities or Discrete Component shall be processed for payment under Section 9(f) notwithstanding such partial denial. (f) Payment. Upon approval of the Payment Request by the City Manager or his designee, the City Manager or his designee shall sign the Payment Request and forward the same to the City Treasurer. Upon receipt of the reviewed and fully signed Payment Request, the City Treasurer shall, within the then current City financial accounting payment cycle but in any event within fifteen (15) business days of receipt of the approved Payment Request, cause the same to be paid by the Fiscal Agent under the applicable provisions of the applicable Fiscal Agent Agreement, to the extent of funds then on deposit in the Improvement Fund.

The Purchase Price paid hereunder for any Acquisition Facility or Discrete Component shall constitute payment in full for such Acquisition Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such Acquisition Facility or Discrete Component as specified in the Plans.
(g) Timing of Requisitions. The City and Landowner acknowledge that (i) to the extent Landowner has constructed and City has accepted (for payment purposes) certain Public Facilities (including Acquisition Facilities), Landowner may submit Payment Requests for such Public Facilities for reimbursement from amounts collected as Special Taxes and Bonds; (ii) Landowner may be submitting Payment Requests in advance of when sufficient, if any, funds are available for reimbursement; (iii) the Payment Requests submitted when there are insufficient proceeds available will be reviewed by the City as set forth in this Agreement and, if appropriate, approved for payment from funds when such funds are deposited in the Special Fund or Improvement Fund; and (iv) the payment for any Payment Requests approved in the preceding manner will be deferred until the date, if any, on which there are amounts in the Special Fund or Improvement Fund to make all or part of such payment, at which time the City will pay from the Special Fund or direct the Fiscal Agent to wire transfer (or pay in another mutually acceptable manner) from the Improvement Fund the funds available to the payee identified in such Payment Request.

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12 (h) Restrictions on Payments. Notwithstanding any other provisions of this Agreement, the following restrictions shall apply to any payments made to Landowner under Section 9(b) and Section 9(f) hereof:

A. Amounts of Payments. Subject to the following paragraphs of this Section 9(h), payments for each Acquisition Facility or Discrete Component will be made only in the amount of the Purchase Price for the respective Acquisition Facility or Discrete Component.

Nothing herein shall require the City in any event (i) to pay more than the Actual Cost of an Acquisition Facility or Discrete Component, or (ii) to make any payment beyond the available funds in the Special Fund and Improvement Fund. The parties hereto acknowledge and agree that all payments to Landowner for the Purchase Price of Acquisition Facilities or Discrete Component are intended to be reimbursements to Landowner for monies already expended or for immediate payment by Landowner (or directly by the City) to third parties in respect of such Acquisition Facilities or Discrete Component.

B. Joint or Third Party Payments. The City may make any payment jointly to Landowner and any mortgagee or trust deed beneficiary, contractor or supplier of materials, as their interests may appear, or solely to any such third party, if Landowner so requests the same in writing or as the City otherwise determines such joint or third party payment is necessary to obtain lien releases.

C. Withholding Payments. The City shall be entitled, but shall not be required, to withhold any payment hereunder for an Acquisition Facility or Discrete Component if Landowner or any Affiliate is delinquent in the payment of ad valorem real property taxes, special assessments or taxes, or Special Taxes levied in the District. In the event of any such delinquency, the City shall only make payments hereunder directly to contractors or other third parties employed in connection with the construction of the Acquisition Facilities or Final Discrete Component or to any assignee of Landowner’s interests in this Agreement (and not to Landowner or any Affiliate), until such time as Landowner provides the City Manager with evidence that all such delinquent taxes and assessments have been paid.

The City shall withhold final payment for any Acquisition Facility or Final Discrete Component constructed on land until Acceptable Title to such land is conveyed to the City, as described in Section 10 hereof.

The City shall be entitled to withhold payment for any Acquisition Facility or Discrete Component hereunder to be owned by the City until: (i) the City Manager or his designee determines that the Acquisition Facility or Discrete Component is ready for its intended use, (ii) the Acceptance Date for the Acquisition Facility has occurred or, with respect to a Discrete Component the requirements of Section 9, if applicable to such Acquisition Facility or Discrete Component, have been satisfied, and (iii) with respect to an Acquisition Facility, but not a Discrete Component, a Notice of Completion executed by Landowner, in a form acceptable to the City Manager or his designee, has been recorded for the Acquisition Facility and general lien releases conditioned solely upon payment from the proceeds of the Special Taxes or Bonds to be used to acquire such Acquisition Facility have been submitted to the City Manager for the Acquisition Facility. The City hereby agrees that Landowner shall have the right to post or cause the

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13 appropriate contractor or subcontractor to post a bond with the City to indemnify it for any losses sustained by the City because of any liens that may exist at the time of acceptance of such Acquisition Facility, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the City Manager or his designee. If the City Manager or his designee determines that an Acquisition Facility is not ready for intended use under (i) above, the City Manager or his designee shall so notify Landowner as soon as reasonably practicable in writing specifying the reason(s) therefor.

Nothing in this Agreement shall be deemed to prohibit Landowner from contesting in good faith the validity or amount of any mechanics or materialmans lien nor limit the remedies available to Landowner with respect thereto so long as such delay in performance shall not subject the Acquisition Facilities or Discrete Component to foreclosure, forfeiture or sale. In the event that any such lien is contested, Landowner shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the City Manager or his designee.

Nothing in this Section 9(h) shall prevent payments pursuant to Section 6 or the payment for Discrete Components as described in Section 9(b).

D. Retention. The City shall withhold in the Improvement Fund an amount equal to thirty percent (30%) of the Purchase Price of each Discrete Component to be paid hereunder until such time as one-half of the respective work has been completed and progress on the Acquisition Facility is satisfactory to the City Manager or his designee, at which time no further retention will be made (so that it is expected that, upon completion of any Acquisition Facility, a total of ten percent (10%) will have been retained). Any such retention will be released to Landowner upon final completion and acceptance of the related Acquisition Facility.

Payment of any retention shall also be contingent upon the availability of monies in the Improvement Fund therefore. No retention shall apply if Landowner proves to the City Manager or his designee’s satisfaction that Landowner’s contracts for the Acquisition Facilities or Discrete Component provide for the same retention as herein provided, so that the Purchase Price paid for the Acquisition Facility or Discrete Component is at all times net of the required retention.

E. Frequency. Unless otherwise agreed to by the City Manager, no more than one Payment Request shall be submitted by Landowner in any calendar month. (i) Defective or Non-conforming Work. If any of the work done or materials furnished for an Acquisition Facility are found by the City Manager or his designee to have a significant defect or to not be constructed in accordance with the applicable Plans: (i) and such finding is made prior to payment for the Purchase Price of such Acquisition Facility hereunder, the City may withhold payment therefore until such defect or nonconformance is corrected to the satisfaction of the City Manager or his designee, or (ii) and such finding is made after payment of the Purchase Price of such Acquisition Facility, the City and Landowner shall act in accordance with the City’s standard specification for City works construction, which are available in the City’s Public Works Department.

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14 (j) Modification of Public Facilities. The description of the Public Facilities in Exhibit A may be modified, or new Public Facilities may be added to Exhibit A, through a Supplement executed by the City Manager and Landowner provided the modifications or new Public Facilities are consistent with the facilities and costs authorized to be funded by the District pursuant to the formation proceedings and the Act.

Section 10. Ownership and Transfer of Facilities.
(a) Facilities to be Owned by the City – Conveyance of Land and Easements to City. Acceptable Title to all property on, in or over which each Acquisition Facility to be acquired by the City will be located, shall be deeded over to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Acquisition Facility located therein, thereon or thereover, and to permit Landowner to perform its obligations as set forth in this Agreement. Landowner agrees to assist the City in obtaining such documents as are required to obtain Acceptable Title. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for an Acquisition Facility (or the Final Discrete Component thereof) and shall be evidenced by an irrevocable offer of dedication or recordation of the acceptance thereof by the City Council. (b) Facilities to be Owned by the City – Title Evidence. Upon the request of the City, Landowner shall furnish to the City a preliminary title report for land with respect to Acquisition Facilities to be acquired by the City and not previously dedicated or otherwise conveyed to the City, for review and approval at least fifteen (15) calendar days prior to the transfer of Acceptable Title of an Acquisition Facility to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the judgment of the City, could materially affect the City’s use and enjoyment of any part of the property or easement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to such Acquisition Facility or pay the Purchase Price for such Acquisition Facility (or the Final Discrete Component thereof) until Landowner has cured such objections to title to the satisfaction of the City.
(c) Facilities Constructed on Private Lands. If any Acquisition Facility to be acquired is located on privately-owned land, the owner thereof shall retain title to the land and the completed Acquisition Facility until the Acquisition Facility is accepted by City and transferred to City pursuant to this Section 9. Pending the completion of such transfer, Landowner shall not be entitled to receive any payment for any such Acquisition Facility or the Final Discrete Component thereof. Landowner shall be entitled, however, to receive payments pursuant to Section 6 and payments for the Discrete Components (other than the Final Discrete Component) of the Acquisition Facility upon making an irrevocable offer of dedication of such land in form and substance acceptable to the City Manager. Notwithstanding the foregoing, upon written request of the City before payment for any Final Discrete Component of such Acquisition Facility, Landowner shall convey or cause to be conveyed Acceptable Title thereto in the manner described in Section 10(a) and Section 10(b) hereof.
(d) Facilities Constructed on City Land. If an Acquisition Facility to be acquired is on land owned by the City, the City hereby grants to Landowner a license to enter upon

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15 such land for purposes related to the construction (and maintenance pending acquisition) of the Acquisition Facility. The provisions for inspection and acceptance of such Acquisition Facility otherwise provided herein shall apply.
(e) [Reserved]
(f) Maintenance and Warranties. Landowner shall maintain each Acquisition Facility and Discrete Components thereof in good and safe condition until the Acceptance Date.

Prior to the Acceptance Date, Landowner shall be responsible for performing any required maintenance on any completed Acquisition Facility and Discrete Components thereof. On or before the Acceptance Date of the Acquisition Facility, Landowner shall assign to the City, as applicable, all of Landowner’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Acquisition Facility.

Landowner shall provide a warranty bond reasonably acceptable in form and substance to the City Manager to insure for one-year after the Acceptance Date that defects, which appear within said period, will be repaired, replaced, or corrected by Landowner, at its own cost and expense, to the satisfaction of the City Manager. Landowner shall not be responsible for normal wear and tear and/or defects caused by use of the Acquisition Facility by the City or public. Landowner shall commence to repair, replace or correct any defects to an Acquisition Facility, other than those caused by public use of the Acquisition Facility, within thirty (30) days after written notice thereof by the City to Landowner, and shall complete such repairs, replacement or correction as soon as practicable. After such one-year period, the warranty bond shall be released. From and after the Acceptance Date, the City shall be responsible for maintaining all Acquisition Facilities. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the Acquisition Facilities to be acquired by the City shall be delivered to the City Manager as part of the transfer of title.
(g) Discrete Components. Nothing in this Section 10 shall prevent payments pursuant to Section 6 or payment for Discrete Components as described in Section 9(b).

Section 11. Indemnification. Landowner, and each merchant builder, shall promptly defend, indemnify and hold harmless the City, its officers, employees and agents, and each and every one of them, and the District from any and all claims, actions, liability, damages, losses, expenses and costs arising out of Landowner’s or such merchant builder’s performance of, or failure to perform, its duties hereunder or by reason of, or arising out of, this Agreement; provided, however, nothing herein shall impose any liability on Landowner or merchant builder with respect to any Public Facility constructed by Landowner or merchant builder following the expiration of the one (1) year period after acceptancy of any such Public Facility.

Section 12. City Policies. Pursuant to the City’s policies, including the Financing District Policy, with regard to the issuance and sale of bonds of community facilities districts, the total annual amount of the Special Taxes to be levied on any parcel of property within an Improvement Area of the District and all other assessments and taxes which will be collected with respect to such property, must not exceed 1.90% of the estimated sales prices of the homes to be constructed within an Improvement Area, as determined by the City. The Rate and Method includes provisions to allow for a reduction in the Special Tax prior to the issuance of Bonds in order to not exceed a total effective rate of 1.90%. In addition, the Special Tax may also be reduced

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16 prior to the issuance of Bonds upon Landowner’s written request. Also, the ratio of the appraised market value of all parcels of property within a community facilities district to the total amount of the assessment and special tax obligation thereof after the issuance and sale of bonds for the District (the “Value-to-Lien Ratio”) may not be less than four-to-one (4:1). Pursuant to the City’s policies, the fair market value of the property within a community facilities district for purposes of determining such ratio will be determined based upon an appraisal made by an appraiser selected by the City. If the Value-to-Lien Ratio is less than four-to-one (4:1), then the City Manager may request, upon the recommendation of the underwriter and the City’s municipal advisor, additional security in the manner provided in Section 17 hereof.

Section 13. Representations, Covenants and Warranties of Landowner. Landowner represents and warrants for the benefit of the City as follows:

A. Organization. Landowner has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated.

B. Authority. Landowner has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered by Landowner.

C. Binding Obligation. This Agreement is a legal, valid and binding obligation of Landowner, enforceable against Landowner in accordance with its terms, subject to bankruptcy and other equitable principles.

D. Compliance with Laws. Landowner shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of Landowner in the District in violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the lands in the District or the Acquisition Facility.

E. Requests for Payment. Landowner represents and warrants that (i) it will not request payment from the City for the acquisition of any improvements other than the Acquisition Facility, and (ii) it will diligently follow all procedures set forth in this Agreement with respect to the Payment Request for the Acquisition Facility.

F. Additional Information. Landowner agrees to cooperate with all reasonable written requests for nonproprietary information by the original purchasers of the Bonds or the City related to the status of construction of improvements within the District, the anticipated completion dates for future improvements, and any other matter material to the investment quality of the Bonds.

G. Continuing Disclosure. Landowner agrees to comply with all of its obligations under any continuing disclosure agreement executed by it in connection with the offering and sale of any of the Bonds. Landowner shall cooperate with City in complying with the requirements of Rule 15c2-12 of the Securities and Exchange Commission in connection with the issuance and sale of the Bonds. Landowner shall provide information to the City regarding its operations and financial condition as such information has been disclosed in the Official

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17 Statement. The City, in consultation with the underwriter of the Bonds, may determine that some or all of such financial information will be included in the preliminary official statement and the final official statement for the Bonds. If Landowner owns property within the District responsible for more than 20% of the Special Taxes levied in such fiscal year, then Landowner acknowledges that it will be an “obligated person” for purposes of compliance with Rule 15c2-12(b)(5) of the Securities and Exchange Commission and that it will therefore be necessary that Landowner enter into a continuing disclosure undertaking, at the time of and in connection with the issuance and sale of the Bonds, that so long as it remains an obligated person it will semi-annually, at the time specified in such undertaking, provide information regarding its financial condition, including, at the City’s discretion, such regularly submitted periodic reports and financial statements prepared by Landowner’s certified public accountant which are available to the investing public (which may be consolidated with Landowner’s parent company) and the status of development and residential and land sale activity within the District to be included within the semi-annual reports which Landowner, or a dissemination agent designated in such undertaking, will file with the Nationally Recognized Municipal Securities Information Repositories which are identified by the Securities and Exchange Commission and any state information repository that may be designated for the State of California, as required by that rule. Copies of all such reports shall also be provided to the City and the underwriter of the Bonds. Landowner further acknowledges that it will be an obligated person pursuant to such rule as long as it owns property within the District that is responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds. If Landowner sells any portion of property within the District to an entity and such entity will own property within the District which will be responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds, Landowner shall notify such entity that it will be an obligated person for purposes of the rule and that such entity will be required to enter into a continuing disclosure undertaking as provided in this section.

Section 14. Independent Contractor. Landowner is an independent contractor and not the agent of the City or the District. This Agreement shall not and does not create a joint venture or partnership between the City and Landowner. The City shall have no responsibility or liability for the payment of any amount to any employee or subcontractor of Landowner.

Section 15. Special Taxes. The parties are entering into this Agreement and establishing the District for the purpose of creating a stream of Special Tax revenues that will be available to the District to pay directly the costs of acquisition, construction and/or equipping the Acquisition Facility and Public Facilities and to pay debt service on the Bonds, the proceeds of which will be used to pay the costs of acquisition, construction and/or equipping of the Acquisition Facility and Public Facilities. Landowner and City hereby acknowledge and agree (i) that any reduction or termination of the Special Taxes by exercise of the initiative power or other action would constitute a substantial impairment of the Special Tax revenue stream that Landowner and City intend to create for the purpose of providing an assured source of funding for construction, acquisition and/or equipping of the Acquisition Facility and Public Facilities, and (ii) that this Agreement is being entered into, and the Special Taxes are being imposed upon the Property pursuant to the applicable Rate and Method, in accordance with existing laws relating to the imposition of fees and charges as a condition of development of the Property and such Special Taxes are being incurred as an incident of the voluntary act of development of the Property. To the fullest extent permitted by law, Landowner, for itself and for each of its successors and assigns

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18 as owners or lessees of all or any portion of the Property included in the District hereby waives any right to exercise the initiative power that may be authorized in California Constitution Article XIIIC, Section 3, to reduce or appeal the Special Taxes.

Section 16. Disclosure of Special Taxes.
(a) From and after the date of this Agreement, Landowner shall provide, or shall require any merchant builder entering into a residential purchase contract (the “Residential Builder”) to provide, a “Notice of Special Tax” (as defined in Section 16(b) below) to each prospective purchaser of a home in the District prior to the execution by the home buyer of the sale contract for such home. Landowner shall, or shall require a Residential Builder to, deliver a fully executed copy of each notice to City. Landowner shall, or shall require a Residential Builder to, (i) maintain records of each Notice of Special Tax for a period of five (5) years, and (ii) shall provide copies of each notice to City promptly following the giving of such notice. Landowner shall, or shall require a Residential Builder to, include the Notice of Special Tax in all applications for Final Subdivision Reports required by the Department of Real Estate (“DRE”) which are filed after the effective date of this Agreement.

Landowner shall require of a Residential Builder acquiring lots within the Property, prior to the close of escrow on any residential lot, to (i) maintain records of each Notice of Special Tax for a period of five (5) years, (ii) provide copies of each notice to City promptly following the giving of such notice, and (iii) include the Notice of Special Tax in all of such Residential Builder’s applications for Final Subdivision Reports required by DRE. (b) With respect to any parcel, the term “Notice of Special Tax” means a notice in the form prescribed by California Government Code Section 53341.5 which is calculated to disclose to the purchaser thereof (i) that the property being purchased is subject to the Special Taxes and other special taxes of the District; (ii) the classification of such property; (iii) the maximum annual amount of the Special Taxes and other special taxes of the District and the number of years for which they are authorized to be levied; and (iv) the types of facilities and services to be paid or with the proceeds of the Special Taxes and other special taxes of the District. (c) City will file with the San Luis Obispo County Recorder’s office a notice of special tax lien that gives notice of the existence of the District and the levy of the Special Tax on property within the District for the benefit of subsequent property owners, pursuant to requirements of Section 3114.5 of the Streets and Highways Code. (d) Sample Property Tax Bill/Special Tax Information Sheet. Landowner and its successors and assigns shall prepare and have available in its sales office, copies of either a sample property tax bill in a form reasonably acceptable for the City or special tax information sheet in substantially the form attached hereto as Exhibit D (the “Special Tax Information Sheet”), which shows the assigned annual Special Taxes and other special taxes authorized to be levied within the District under the applicable Rate and Method. Landowner and its successors and assigns shall make available to prospective homebuyers to take with them, copies of such sample property tax bill or Special Tax Information Sheet at the time written information regarding the available home sites and corresponding base home prices is requested by and provided to such homebuyers.

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19 Section 17. Security for Payment of Special Taxes. Prior to the issuance of each series of Bonds of an Improvement Area, Landowner agrees to deliver to the City either a letter of credit (“Letter of Credit”), hereby defined as an irrevocable standby letter of credit that (i) is issued by a financial institution authorized to do business in the State of California, the long-term unsecured obligations of which, at the time of delivery of such letter of credit, are rated not less than “A” by Moody’s and not less than “A” by S&P; (ii) contains terms and provisions that shall in all respects be satisfactory to and approved in writing by the City; (iii) is delivered to and accepted by the Fiscal Agent pursuant to the applicable Fiscal Agent Agreement; (iv) is for a term of at least one year; and (v) is in an amount equal to the amount of Special Taxes that is expected to be levied in the next two fiscal years on all taxable property within the applicable Improvement Area or DISTRICT which is owned by the Landowner (the “Stated Amount”).

In the event that portions of the Property are sold to merchant builders, the Stated Amount of the Letter of Credit shall be reduced for the Assessor’s Parcels and/or Units owned by the merchant builder; provided, however, that the merchant builder shall be responsible to provide a substitute Letter of Credit in the amount of the reduction to the Letter of Credit provided by Landowner, and which Letter of Credit shall meet the requirements of this Section 17. Landowner shall continue to provide the Letter of Credit for all remaining taxable property in the Improvement Area owned by Landowner, provided, however, the City shall be required to reduce a particular Letter of Credit a maximum of twice each Calendar Year.

Landowner shall cause each Letter of Credit to be renewed annually by the issuing bank or a substitute bank which meets the standards set forth herein until such time as either 85% of the proposed Units in the Improvement Area subject to the Special Tax and owned by Landowner have been sold to the merchant builders or until Landowner no longer owns Assessor Parcels that are responsible for 10% or more of the Special Taxes expected to be levied in the Improvement Area in the subsequent fiscal year. Each Letter of Credit shall further provide that the failure of the issuing bank to renew the Letter of Credit until such condition is satisfied will enable the beneficiary to draw the full amount thereof. If the Fiscal Agent draws any amount under a Letter of Credit except upon the failure of the issuing bank to renew such Letter of Credit, then the City shall reimburse the amount drawn to the issuing bank with respect to a Letter of Credit, without interest, from the delinquent Special Tax installments with respect to which any such amount is drawn when and if such installments are paid or the proceeds of foreclosure of the applicable property as a result of such delinquency are received.

Notwithstanding the provisions of this Section 17, the City may waive or modify this requirement as pertains to the issuance of a particular series of Bonds at its sole discretion.

Section 18. Termination and Dissolution. Prior to the issuance of Bonds, Landowner may elect to terminate this Agreement and request that the City cancel the Special Taxes by providing written notice to the City. Within thirty (30) days of such written notice, City shall record a notice of cancellation of the Special Taxes with respect to each parcel. Landowner shall be responsible for reasonable City costs incurred relating to the cancellation of the Special Taxes and recordation of such notice; provided, however, that the City shall not terminate the Special Taxes for any lot for which a building permit has been issued, unless Landowner pays all City Fees or posts separate security therefore. Such termination of this Agreement and cancellation of

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20 Special Taxes shall have no effect on Landowner’s obligations to pay City Fees upon issuance of a building permit.

Section 19. Binding on Community Facilities Districts. The District shall automatically become a party to this Agreement, and all provisions hereof which apply to the City shall also apply to the District. The City Council of the City, acting as the legislative body of the District, shall perform all parts of this Agreement which require performance on the part of the District.

Section 20. Assignment. Upon the successful formation of the District, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and shall run with the land without any further action of the City or Landowner unless terminated in writing pursuant to Section 18. Further, upon the sale or transfer of any planning area or Improvement Area within the District, this Agreement may be separately assigned to the purchaser or merchant builder for such planning area or Improvement Area. Landowner may assign all or any of its rights pursuant to this Agreement to a purchaser of all or any portion of the Property.

Such a purchaser and assignee shall, as a condition to taking an assignment of such rights, enter into an assignment and assumption agreement with the Landowner, in a form reasonably acceptable to Landowner and the City, whereby such rights assigned are specified and such purchaser agrees, except as may be otherwise specifically provided therein, to assume the obligations of Landowner pursuant to this Agreement and to be bound thereby.

Section 21. Prompt Action. All consents, approvals and determinations required of either the City or Landowner pursuant to this Agreement shall be promptly given or made, and shall not be unreasonably withheld or conditioned.

Section 22. General. This Agreement and the Deposit Agreement contain the entire agreement between the parties with respect to the matters herein provided for. This Agreement may only be amended by a subsequent written agreement signed on behalf of both parties. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. This Agreement shall be construed and governed by the Constitution and laws of the State of California. Should either party to this Agreement commence a court action or proceeding against the other party with respect to this Agreement or the design and acquisition or construction of the Acquisition Facility, the party prevailing in such action or proceeding shall be entitled to receive from the losing party its attorney’s fees, expert witness fees, court costs and other costs incurred by it in prosecuting or defending such action or proceeding. The captions of the sections of this Agreement are provided for convenience only, and shall not have any bearing on the interpretation of any section hereof. This Agreement may be executed in several counterparts, each of which shall be an original of the same agreement. (Signature Page Follows)

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IN WITNESS WHEREOF, the parties have caused this agreement to be signed as of the date first above written.

Dated: [SIGNATURE BLOCKS OF
LANDOWNERS TO COME]
Dated: CITY OF EL PASO DE ROBLES
By:

Name:

City Manager
ATTEST:

By:

City Clerk
APPROVED AS TO FORM:

By:

Bond Counsel
-Signature PageFunding and Acquisition Agreement

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EXHIBIT A

DESCRIPTION OF PUBLIC FACILITIES
Special Taxes or Bond Proceeds of any Improvement Area may finance any of the Public Facilities listed below and the designation of a Phase is included solely for organizational purposes.

City Construction Facilities(1) Per Unit
Estimated
Total
Net City Traffic Fee $8,043 $1,286,935
Police 106 16,960
Fire 1,449 231,840
General Governmental 4,199 671,840
Library 1,354 216,640
Water Connection Fees (3/4" Meter) 19,066 3,050,560
Water Meter Installation Fee (3/4" Meter) 392 62,720
Wastewater Facility Fee 8,093 1,294,880
BSP Shared Infrastructure Fee (2) 23,830 3,812,800
Total Estimated DIF $66,532 $10,645,175
City Acquisition Facilities(3)
Estimated
Cost
Meadowlark Road Street Improvements $848,565
Airport Road Street Improvements 1,837,399
Ridge Road / Creston Road Street Improvements 719,706
Backbone Storm Drain Improvements 486,113
Planning Area Street Improvements 3,971,349
Planning Area Water Improvements 2,495,121
Planning Area Sewer Improvements 1,960,987
Planning Area Storm Drain Improvements 2,736,703
Total Estimated Costs $15,055,943

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Offsite Facilities
Estimated
Cost
Charolais / S. River intersection roundabout
S. River / Niblick SB right turn lane (aka Arco)
Creston Rd./Stoney Creek signal light
Creston Rd./Meadowlark signal light
Airport Road improvements (between Meadowlark and Creston Rd.) Beechwood Community Park improvements
Creston Road street frontage improvements
Meadowlark street frontage improvements
Beechwood street frontage improvements
Water booster station
Creston Road sewer lift station
Total Estimated Costs
Total Estimated District Costs
Footnotes:
(1) Represents the estimated impact fees net of any fee credits pursuant to the terms of the Development Agreement.
(2) Eligible amount of the Beechwood Specific Plan Shared Infrastructure Fee subject to amount paid for each planning area, as may be amended from time to time pursuant to the terms of the Development Agreement.
(3) The Public Facilities listed above are representative of the types of facilities eligible to be financed by the CFDs. Additional public facilities may be funded under this Agreement, including but not limited to all offsite infrastructure improvements and/or contributions to such improvements constructed by other property owners within the specific plan as required by the Development Agreement. Detailed scope and limits of specific projects will be determined as appropriate, consistent with the standards of City.

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EXHIBIT B

DEFINITIONS
The following terms shall have the meanings ascribed to them for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the applicable Fiscal Agent Agreement (as hereinafter defined).
“Acceptable Title” means title to land or interest therein, in form acceptable to the Public Works director, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, but subject to any exceptions determined by the Public Works Director as not interfering with the actual or intended use of the land or interest therein.

Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land with an “Acceptable Title” if: (i) such offer is necessary to satisfy a condition to a tentative or final parcel map, (ii) such offer is in a form acceptable to the Public Works Director, (iii) the Public Works Director has no reason to believe that such offer of dedication will not be accepted by the applicable public agency, and (iv) the Landowner commits in writing not to allow any liens to be imposed on such property prior to its acceptance.
“Acceptance Date” means the date the City Council takes final action to accept dedication of or transfer of title to the Acquisition Facility. “Additional Bonds” means any series of Bonds issued by or on behalf of the District after the first series of Bonds of that Improvement Area, in each case in compliance with and under supplements to the applicable Fiscal Agent Agreement, which Additional Bonds shall be secured on a parity lien or subordinate lien position with other Bonds previously issued. “Agreement” means this Agreement, together with any Supplement hereto. “Act” means the Mello-Roos Community Facilities Act of 1982, Sections 53311 et seq. of the California Government Code, as amended.
“Actual Cost” means the substantiated cost of the Acquisition Facility incurred by the Landowner or its designee, which costs may include: (i) the costs incurred for the construction of the Acquisition Facility, (ii) the costs incurred in preparing plans for the Acquisition Facility and the related costs of environmental evaluations of the Acquisition Facility, (iii) the fees paid to governmental agencies for obtaining permits, licenses or other governmental approvals for such Public Facility, (iv) a construction and project management fee of five percent (5%) of the costs described in clause (i) above incurred for the construction of the Acquisition Facility, (v) professional costs incurred by the Landowner, its designee, or the City associated with the Acquisition Facility, such as engineering, legal, accounting, inspection, construction staking, materials testing and similar professional services; and (vi) costs directly related to the construction and/or acquisition of the Acquisition Facility, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder).

Actual Cost shall not include any cost of carry or interest expense with respect to any construction loan obtained with respect to the Acquisition Facilities. Cost savings derived in connection with

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the completion of any Acquisition Facility may be applied to any cost over-runs incurred in connection with the completion of any other Acquisition Facility. “Assessor’s Parcel” shall have the meaning ascribed to it in the applicable Rate and Method.
“Bonds” means any series of bonds issued by or on behalf of the District. “City Fees” means the development impact fees imposed by the City that are credited to the City Construction Facilities; as shown on Exhibit A. “Conditions of Approval” means the mitigation measures and conditions of approval of or applicable to all land use entitlements approved by the City for the development of the Property, including, without limitation, tentative subdivision maps, the Development Agreement, and subdivision improvement agreements.
“Deposits” means payments made by Landowner to City for City costs relating to formation of the District and issuance of Bonds.
“Discrete Component” means a component or segment of an Acquisition Facility that the City Manager has agreed can be separately identified, inspected and completed, and be the subject of a Payment Request hereunder.
“District Representative” means the City Manager of the City, or his or her designee.
“Final Discrete Component” means the last Discrete Component of an Acquisition Facility to be financed after all other Discrete Components of that Acquisition Facility have been paid for from the proceeds of the Bonds.
“Financing District Policy” means the City of El Paso de Robles Debt Policy and Procedures, dated October 29, 2019.
“Fiscal Agent” means the financial institution or other entity that enters into a Fiscal Agent Agreement with the City with respect to the Bonds. “Fiscal Agent Agreement” means, collectively, any agreement or agreements by that or similar name to be executed by the City, for and on behalf of the District and the fiscal agent, which will provide for, among other matters, the issuance of the Bonds and the establishment of an Improvement Fund as originally executed by the City and the fiscal agent and as it may be amended from time to time.
“Improvement Fund” means the Improvement Fund established by the Fiscal Agent Agreement for any series of Bonds issued on behalf of the District. “Purchase Price” means the amount paid by the City for an Acquisition Facility determined in accordance with Section 8 of the Funding and Acquisition Agreement, being an amount equal to the Actual Cost of such Acquisition Facility, but subject to the limitations and

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reductions provided for in said Section 8.
“Priority Administrative Expense Requirement” means $[25,000] per year commencing in the first year of issuance of Bonds.
“Rate and Method” means the rate and method of apportionment of special taxes approved for each Improvement Area in accordance with the Act. “Special Fund” means a discrete, interest-bearing special fund of the City to be established and administered pursuant to this Agreement. “Special Tax or Special Taxes” means the special tax designated as “Special Tax” in the Rate and Method.
“Substantially Complete” or “Substantial Completion” with respect to an Acquisition Improvement means that such Acquisition Improvement is substantially complete in accordance with its Plans and Specifications and is available for use by the public for its intended purpose, notwithstanding any final “punch list” items still required to be completed, unless such items are required for the safe operation of such Acquisition Improvement, and shall be based upon approval of the District’s inspectors, which shall not be unreasonably withheld.

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C-1

EXHIBIT C

FORM OF PAYMENT REQUEST
City of Paso Robles Community Facilities District No. 2026-1 (Beechwood – Facilities) The undersigned, ______________________, a duly authorized representative of Landowner, hereby requests payment of the Purchase Price of the Acquisition Facilities described in Attachment A attached hereto. Capitalized undefined terms shall have the meanings ascribed thereto in that certain Funding and Acquisition Agreement, dated as of __________ 1, 2026 (the “Agreement”), by and between the City of El Paso de Robles (“City”) and the Landowner, in connection with the City of Paso Robles Community Facilities District No. 2026-1 (the “DISTRICT”). In connection with this Payment Request, the undersigned hereby represents and warrants to the District and the City as follows:

1. He (she) is a duly authorized representative of Landowner, qualified to execute this request for payment on behalf of Landowner and knowledgeable as to the matters set forth herein.

2. Each of the Acquisition Facilities described in Attachment A have been completed in accordance with the Agreement.

3. The true and correct Actual Cost of the Acquisition Facilities for which payment is requested is set forth in Attachment A.

4. Attached hereto are invoices, receipts, worksheets and other evidence of costs which are in sufficient detail to allow the City to verify the Actual Cost of the Acquisition Facilities for which payment is requested.

5. There has not been filed with or served upon Landowner notice of any lien, right to lien or attachment upon, or claim affecting the right to receive the payment requested herein which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law.

Copies of lien releases for all work for which payment is requested hereunder are attached hereto.

6. To the best of Landowner’s knowledge, Landowner is in compliance with the terms and provisions of the Agreement.

The Purchase Price for the Acquisition Facilities shall be payable from the appropriate account created pursuant to the Fiscal Agent Agreement or the Special Fund established pursuant to the Agreement.

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C-2
I hereby certify that the above representations and warranties are true and correct.

Dated: LANDOWNER
By:

Name:

Title:

By execution of this Payment Request, the City does hereby approve of the payment as described in this Payment Request and directs the Fiscal Agent to pay such amounts, first, from bond proceeds held in the designated account pursuant to the Fiscal Agent Agreement and, second from any surplus Special Taxes held by the City as applicable, to the payee listed above and/or the City shall pay all or a portion thereof from funds designated by the City for such purpose.

CITY OF EL PASO DE ROBLES for its
Community Facilities District No. 2026-1
(Beechwood – Facilities)
By:

Name:

City Manager

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D-1

EXHIBIT D

FORM OF

CITY OF EL PASO DE ROBLES SPECIAL TAX INFORMATION SHEET City of Paso Robles Community Facilities District No. 2026-1

1. WHAT IS COMMUNITY FACILITIES DISTRICT (DISTRICT) NO. 2026-1? District No. 2026-1 is a community facilities district which was formed pursuant to the “Mello-Roos Community Facilities Act of 1982” to finance certain public facilities.

2. WHO IS RESPONSIBLE TO PAY THE SPECIAL TAX AND HOW IS IT BILLED? The property owner is responsible for paying the special tax levied by DISTRICT No. 2026-1, which will appear as a separate line item on your property tax bill along with your regular property taxes.

3. HOW MUCH WILL MY SPECIAL TAX BE?
The special tax is based upon the size of the home. The assigned special taxes for DISTRICT No. 2026-1 (or the applicable Improvement Area therein) for Fiscal 20__-20__ are summarized below.
[INSERT SPECIAL TAX CHART]

4. HOW LONG WILL I HAVE TO PAY THE DISTRICT NO. 2026-1 SPECIAL TAX? The Special Tax will not be collected after fiscal year 20__-20__.

5. CAN THE SPECIAL TAXES BE PREPAID?
Homeowners have the option of prepaying the facilities Special Tax anytime. For prepayment information please contact the City of El Paso de Robles’s District No. 2026-1 administrator, DTA Finance, 5000 Birch Street, Suite 6000, Newport Beach, CA 92660.

6. WHERE CAN I GET MORE INFORMATION?
For more information in regards to District No. 2026-1, contact the City of El Paso de Robles’ District No. 2026-1 administrator, DTA Finance, DTA Finance, 5000 Birch Street, Suite 6000, Newport Beach, CA 92660.

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1 FUNDING AND ACQUISITION AGREEMENT
Relating to
IMPROVEMENT AREA NO. 2 OF
COMMUNITY FACILITIES DISTRICT NO. 2026-1 (BEECHWOOD – FACILITIES)

OF THE CITY OF EL PASO DE ROBLES
by and between

THE CITY OF EL PASO DE ROBLES
and
THOMAS H. ERSKINE, TRUSTEE OF THE THOMAS H. ERSKINE SEPARATE PROPERTY REVOCABLE TRUST, U/D/T DATED DECEMBER 20, 2002 _______________, 2026

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1 FUNDING AND ACQUISITION AGREEMENT
This FUNDING AND ACQUISITION AGREEMENT (the “Agreement”) is entered into as of the __ day of __________, 2026 by and between the CITY OF EL PASO DE ROBLES, a charter city and municipal organization organized and operating under the laws of the State of California (the “City”) and Thomas H. Erskine, Trustee of the Thomas H. Erskine Separate Property Revocable Trust, U/D/T Dated December 20, 2002 (the “Landowner”).

R E C I T A L S
A. Landowner owns that certain real property known as Paso Robles Assessor’s Parcel Numbers 009-863-041, 009-863-054 and 009-863-055 (the “Property”), all located in the jurisdictional boundaries of Improvement Area No. 2 of the District (as defined below).

B. The City is in the process of establishing a community facilities district with two improvement areas known as Improvement Area No. 1 and Improvement Area No. 2 (individually, an “Improvement Area” and, collectively, the “Improvement Areas”) to be known as “City of Paso Robles Community Facilities District No. 2026-1 (Beechwood – Facilities)” (the “District”), pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982, being Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Act”), over and including the Property. The District will be formed for the purpose of levying special taxes and selling bonds, in one or more series (the “Bonds”), in an amount sufficient to finance (i) the design, planning, engineering, installation and acquisition or construction of certain public facilities and improvements to be owned, operated or maintained by the City, including the “City Construction Facilities,” “Offsite Facilities,” and the “City Acquisition Facilities;” and (ii) to the extent authorized by law, to satisfy the obligation of the Property and the Landowner for the payment of certain fees to the City that are credited to the City Construction Facilities (the “City Fees” and, together with the City Construction Facilities, Offsite Facilities, and the City Acquisition Facilities, the “Public Facilities”). The Public Facilities are generally described in Exhibit A attached hereto, which are necessary to the development of the Property.

C. Section 53313.5 of the Act provides that a community facilities district may finance the purchase of facilities completed prior to the adoption of the resolution establishing the community facilities district, and may purchase facilities completed after the adoption of the resolution of formation establishing the community facilities district if the facilities have been constructed as if they had been constructed under the direction and supervision, or under the authority of, the local agency whose governing body is conducting proceedings for the establishment of the community facilities district.

D. The purpose of this Agreement is to provide for the levy of special taxes in the District (the “Special Taxes”) and the issuance and sale of Bonds of the District secured by the Special Taxes to finance the design, planning, engineering, financing, installation, and construction or acquisition of the Public Facilities and expenses incidental thereto.

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2 E. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in Exhibit B attached hereto and by this reference herein incorporated.

AGREEMENTS
NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the parties agree as follows:

Section 1. Establishment of District. The City has initiated proceedings pursuant to the Act for the establishment of the District. Such proceedings include elections within each Improvement Area pursuant to Sections 53326, 53350 and 53353.5 of the Act on (i) the question of the issuance of the Bonds for each Improvement Area of the District to finance the design, planning, engineering, construction management, financing, installation and construction or acquisition of certain of the Public Facilities, (ii) the question of the annual levy of the Special Taxes within each Improvement Area on those portions of the Property subject to the Special Taxes to pay directly for certain of the Public Facilities and to pay the principal of and interest on Bonds of each Improvement Area and the annual administrative expenses of the City in levying and collecting such Special Taxes, paying the principal and interest on such Bonds and providing for the registration, exchange and transfer of such Bonds, including the fees of fiscal agents and paying agents, and any necessary replenishment of the reserve fund for such Bonds, and (iii) the question of the establishment of an appropriations limit for the District. All of the Public Facilities shall be authorized to be financed with the proceeds of Bonds and Special Taxes of any Improvement Area or the District.

From time to time prior to the issuance of the Bonds at the written request of Landowner, and subject to Landowner advancing funds as determined by the City as necessary to pay all costs related thereto in accordance with Section 4 below, the City shall use its reasonable best efforts to undertake proceedings which may be deemed necessary or appropriate to amend the Rate and Method applicable to the District or Improvement Area or to amend the boundaries of an Improvement Area or the District.

Section 2. Payment of City Fees as Deposit. Any payment or deposit of City Fees before Special Taxes are received or proceeds of the Bonds become available, including all City Fees paid prior to the execution of this Agreement, shall be held on deposit by the City in a separate account used exclusively for City Fees (the “Deposit Account”), and shall not be expended by the City, provided, however, earnings on the investment of funds in the Deposit Account shall be returned to the City. If any Bonds have not been issued for a period of twenty-four (24) months from the date such City Fees are paid, then the City may use any funds remaining in the Deposit Account for its lawful purposes and such funds shall be deemed by the City as the payment of the Fees for the applicable parcels of the Property for which payment was made.

Immediately upon the City receiving sufficient proceeds of the Bonds in accordance with this Agreement, the City shall return to Landowner, or Landowner’s designee, the applicable funds held in the Deposit Account.

Section 3. Sale of Bonds.

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3 Upon Landowner’s written request, the City shall use its reasonable best efforts, as hereinafter provided, to issue and sell Bonds, in one or more series, for each of the residential Improvement Areas in accordance with the provisions of this Agreement and the Financing District Policy. Each series of Bonds is expected to have a debt service amortization schedule matching the annual Special Taxes available for debt service pursuant to the applicable Rate and Method and for a term of not more than thirty-five (35) years, for the purpose of, collectively, raising an amount sufficient to pay for the design, planning, engineering, construction management, financing, installation and construction or acquisition of the Public Facilities. In connection with the issuance of the first series of Bonds for each Improvement Area, the City on behalf of itself and the District shall establish criteria for the issuance of Additional Bonds of such Improvement Area which meet the criteria of the Financing District Policy, if applicable. The timing of the issuance and sale of each series of Bonds, the aggregate principal amount thereof, and the terms and conditions upon which they shall be sold shall be as set forth in this Agreement and otherwise as determined by the City in its sole reasonable discretion after consultation with Landowner. Not by way of limitation of the foregoing, the timing of the issuance and sale of the first series of Bonds and any Additional Bonds shall be as soon as reasonably practicable, as determined by the City in its sole reasonable discretion following consultation with its financial advisor, underwriter and other consultants and counsel after written request from Landowner. Landowner shall use its reasonable best efforts to cooperate with City in connection with any Bond sale. Prior to the issuance of any Bonds for each Improvement Area, Landowner shall provide to the City a designation of all facilities of each merchant builder, if any, and the Landowner to be constructed or acquired with proceeds of Bonds.

Section 4. Advance of Certain Expenses. Pursuant to an agreement (the “Deposit Agreement”), by and between the City and Landowner, Landowner shall pay and advance all of the costs reasonably associated with the establishment of the District. After the establishment of the District, Landowner shall deposit funds with the City for the City’s reasonable out-of-pocket expenses associated with a sale of each series of Bonds, including, but not limited to, (i) the fees and expenses of any consultants and legal counsel to the City employed in connection with the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the issuance of the Bonds, (iii) the costs of publication of notices and other costs related to any proceeding undertaken in connection with the issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the issuance of the Bonds, including a reasonable allocation of City overhead expense, and (v) any and all other actual costs and expenses incurred by the City in connection with the issuance of the Bonds (“Reimbursable Expenses”). If the Bonds are issued by the District, the City shall reimburse Landowner from proceeds of the Bonds, without interest, for the portion of the Reimbursable Expenses deposits that have been expended or encumbered, said reimbursement to be made from the proceeds of the Bonds on the date of issuance of the Bonds or as soon as reasonably possible thereafter and only to the extent otherwise permitted under the Act, and refund any unexpended or encumbered deposited amounts. If the Special Taxes are levied and collected, the City may reimburse Landowner from the receipts of Special Taxes (net of amounts required to pay District administrative expenses), without interest, for the portion of the deposits paid by Landowner pursuant to the Deposit Agreement that have been expended or encumbered, said reimbursement

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4 from receipts of Special Taxes to be made on or before the end of each fiscal year; provided, however, that the City may retain such collected Special Taxes in the amounts that it deems reasonably necessary to facilitate the issuance of the Bonds.

The City shall keep records of all Reimbursable Expenses advanced by the City pursuant to this Section 4, which records shall be available for inspection by Landowner during regular business hours. The sole source of funds for reimbursement of any advance expenditure made by the City or Landowner shall be the uncommitted and unexpended payments made by Landowner to the City, proceeds of the Bonds, or Special Tax receipts as determined by the City.

Section 5. Tax Requirements. The timing of the sale of each series of Bonds, the nature of the investments in which the proceeds of the Bonds shall be invested, the duration of such investments, and the timing of the expenditure of such proceeds shall be as set forth in this Agreement and the applicable fiscal agent agreement (the “Fiscal Agent Agreement(s)”); provided, that in all such matters City shall comply with the requirements of and limitations prescribed by the provisions of Sections 103 and 141 through 150 of the Internal Revenue Code of 1986 (the “Code”), as amended, and the implementing regulations of the United States Department of the Treasury. The City shall not be required to take any such action which in the opinion of the City’s bond counsel could result in the Bonds being classified by the United States Department of the Treasury as “arbitrage bonds” or which could otherwise result in the interest on the Bonds being included in gross income for purposes of federal income taxation; provided, however, that the Landowner recognizes that a portion of the Public Facilities may need to be financed on a taxable basis. Should any change in or regulatory interpretation of any such requirement or limitation which may occur after the date of this Agreement require or necessitate, in the reasonable opinion of such bond counsel, any action on the part of the City in order to avoid such a classification or loss of tax exemption, the City shall notwithstanding any provision of this Agreement, forthwith take such action. In the event the City fails to comply with requirements set forth above in this Section 5, the City’s liability is limited to the Special Tax revenues generated by the applicable Improvement Area or the District.

Section 6. Priority and Allocation of Surplus Special Taxes and Bond Proceeds. (a) Special Taxes Following the Issuance of Bonds. Following the issuance of the first series of Bonds of an Improvement Area and continuing for a period of five (5) years thereafter, the City shall levy Special Taxes on all Assessor’s Parcels pursuant to the applicable Rate and Method or such lesser amount which complies with the applicable Fiscal Agent Agreement. Following the issuance of the first series of Bonds, the priority for allocation of the Special Taxes collected shall be as follows:
(1) first, to fund an amount up to the Priority Administrative Expense Requirement;
(2) second, to pay principal and interest on outstanding Bonds and to replenish the reserve fund to the applicable reserve fund requirement; (3) third, to fund all actual Improvement Area or District administrative expenses in excess of the Priority Administrative Expense Requirement; and

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5 (4) fourth, all remaining amounts shall be deposited in the Special Fund and disbursed according to the following priority:
(i) to fund costs of the Offsite Facilities; and
(ii) to reimburse prior deposits paid by Landowner to City pursuant to the Deposit Agreement and Landowner’s third-party consultant costs incurred relating to the formation of the District; and
(iii) to the extent not funded with the proceeds of such series of Bonds, to pay or reimburse Landowner for any City Construction Facilities in the order requested by Landowner but subject to the terms of this Agreement, but in no event shall Special Taxes be allocated to pay or reimburse Landowner after five (5) years from the date the first series of Bonds are issued for each Improvement Area or the District; and (iv) all remaining amounts shall reduce Special Tax levies in subsequent fiscal years.
(b) Improvement Area Bond Proceeds. The proceeds of all Bonds of each Improvement Area and the District shall be allocated and disbursed according to the requirements of the applicable Fiscal Agent Agreement but otherwise according to the following priorities:
(1) first, to fund all costs of issuance of the Bonds including (i) a reserve fund for the Bonds which does not exceed the amount permitted under the Code or the Act, (ii) capitalized interest for at least the period required to collect sufficient Special Taxes through the annual levy, or such amount as the City shall determine pursuant to the Financing District Policy, and in consultation with the Landowner, (iii) the underwriter’s discount, (iv) the Reimbursable Expenses, and (v) bond counsel fees, disclosure counsel fees, financial advisor, appraisal and market absorption consultant fees, special tax consultant fees, fiscal agent or trustee fees and other typical and reasonable out-of-pocket expenses incurred by the City in connection with the issuance and sale of the Bonds;
(2) second, to fund costs of the Offsite Facilities; and (3) third, to reimburse, without interest, prior deposits paid by Landowner to City pursuant to the Deposit Agreement and this Agreement related to formation of the District and issuance of the Bonds; and
(4) fourth, to pay or reimburse the Landowner, or merchant builder as designated prior to such issuance, the costs of the City Acquisition Facilities in the order requested by Landowner but subject to the terms of this Agreement; and (5) fifth, to pay or reimburse the Landowner, or merchant builder as designated prior to such issuance, the costs of the City Construction Facilities paid previously that have not previously been reimbursed.

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6 (c) Special Taxes Prior to the Issuance of Bonds. If Special Taxes are levied on Developed Property (as that term is defined in the appropriate Rate and Method) prior to the issuance of Bonds in any Improvement Area or the District, such Special Taxes shall be held by the City and used to pay the Priority Administrative Expense Requirement for such Improvement Area or District and fund the costs of the Offsite Facilities, with the remainder to reimburse prior deposits paid by Landowner to City pursuant to the Deposit Agreement and any third-party consultant costs of Landowner incurred in connection to the formation of the District and for the City Construction Facilities.

Section 7. Design and Construction of City Construction Facilities. The City shall cause those Public Facilities listed in Exhibit A hereto as City Construction Facilities (the “City Construction Facilities”) to be designed at such times as the City deems appropriate and the City shall cause plans and specifications for all such City Construction Facilities to be prepared. The City may retain other qualified professionals to design portions of the City Construction Facilities.

The City may be reimbursed for the City’s expenses incurred in designing and engineering the City Construction Facilities to the extent of funds deposited in the City’s improvement account.

The City may award the construction contract for the City Construction Facilities if proceeds on deposit in the City’s improvement account and other funds available to the City are sufficient to pay all costs associated with the construction of the completed City Construction Facilities. The City may be reimbursed pursuant to Section 1.150-2 of the Treasury Regulations from Bonds of the District or any Improvement Area or other available funds.

Section 8. Construction of City Acquisition Facilities and Offsite Facilities. (a) Plans. Landowner shall cause plans (the “Plans”) to be prepared for the City Acquisition Facilities and Offsite Facilities which are listed as such in Exhibit A hereto (together, the “Acquisition Facilities”). Landowner shall obtain the written approval of the Plans in accordance with applicable ordinances and regulations of the City. Copies of all Plans shall be provided by Landowner to the City Manager, or designee thereof, upon request therefore, and, in any event, as-built drawings and a written assignment of the Plans for any Acquisition Facility shall be provided to the City prior to its formal acceptance of the Acquisition Facility.

Notwithstanding anything herein to the contrary, Landowner shall not be required to prepare Plans or construct Acquisition Facilities any earlier, or in any manner other than as required by the Conditions of Approval.
(b) Duty of Landowner to Construct. All Acquisition Facilities to be acquired hereunder, shall be constructed by or at the direction of Landowner substantially in accordance with the approved Plans. Landowner shall perform all of its obligations hereunder and shall conduct all operations with respect to the construction of Acquisition Facilities in a good, workmanlike and commercially reasonable manner, with the standard of diligence and care normally employed by duly qualified persons utilizing their best efforts in the performance of comparable work and in accordance with generally accepted practices appropriate to the activities undertaken. Landowner shall employ at all times adequate staff or consultants with the requisite experience necessary to administer and coordinate all work related to the design, engineering, acquisition, construction and installation of the Acquisition Facilities to be acquired by the City from Landowner hereunder.

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7 Landowner shall be obligated, as and when required by the Conditions of Approval, (i) to construct and convey to the City (or other applicable governmental agency) all Acquisition Facilities, and (ii) to use its own funds to pay all costs thereof in excess of the Purchase Prices of the Acquisition Facilities.

Landowner shall not be relieved of its obligation to construct each Acquisition Facility (as and when required by the Conditions of Approval) and convey each such Acquisition Facility to the City in accordance with the terms hereof, even if, (i) because of the limitations imposed by Section 8(f) hereof, the Purchase Price for such Acquisition Facility is less than the Actual Cost, or cost to Landowner, of such Acquisition Facility, or (ii) there are insufficient funds in the Improvement Fund to pay the Purchase Price thereof, and, in any event, this Agreement shall not affect any obligation of Landowner under the Conditions of Approval or any other agreement to which Landowner is a party or any other governmental approval to which Landowner or any land within the District is subject, with respect to the Acquisition Facilities required in connection with the development of the land within the District.
(c) Relationship to Public Works. This Agreement is for the acquisition by the City of the Acquisition Facilities, from moneys in the Improvement Fund and is not intended to be a public works contract. The City and Landowner agree that the Acquisition Facilities are of local, and not state-wide concern, and that the provisions of the California Public Contract Code shall not apply to the construction of the Acquisition Facilities except to the extent they may be applicable to Landowner as a public agency. Nothing in this Agreement shall subject Landowner to duplicative or additional requirements than it is otherwise subject to by applicable law as a public agency with respect to its bidding, contracting and construction of the Acquisition Facilities.

The City and Landowner agree that Landowner shall award all contracts for the construction of those Acquisition Facilities, and that this Agreement is necessary to assure the timely and satisfactory completion of the Acquisition Facilities and that, except to the extent otherwise specified above in this paragraph, compliance with the Public Contract Code with respect to the Acquisition Facilities would work an incongruity and would not produce an advantage to the City, or the District.

Notwithstanding the foregoing, Landowner, or its designee, shall award all contracts for construction of the Acquisition Facilities for which it subsequently submits Payment Request to the lowest responsible bidder, as determined by Landowner. Landowner, or its designee, shall solicit bids in accordance with City policies for the construction of each such Acquisition Facility and Landowner (unless otherwise approved in writing by the City), or its designee, shall open the bids actually received and read them aloud immediately following the submittal deadline. Upon written request of the City Manager or his designee, Landowner shall provide an analysis of bids for construction of such Acquisition Facilities. Landowner acknowledges and agrees that Acquisition Facilities for which Landowner submits Payment Requests shall be subject to the payment of prevailing wages by the applicable contractor(s) or subcontractor(s).

The costs of materials shall be part of the contractors’ bids for constructing the Acquisition Facilities. Nothing in this Agreement shall (i) require Landowner to publicly or informally bid for materials, or (ii) prevent the supply or sale of materials by Landowner to the

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8 contractors constructing the Acquisition Facilities. If requested in writing by the City, Landowner shall demonstrate to the City that such materials were obtained at reasonable prices considering the terms of delivery and other factors and shall not charge the City a premium for supplying such materials (but shall be entitled to recover the costs of procuring such materials).

Landowner shall develop or cause to be developed and shall maintain or cause to be maintained a cost-loaded project schedule, using the critical path method, providing for all major project elements included in the construction of any Acquisition Facility to be acquired hereunder, so that the whole project is scheduled in the most efficient manner. Landowner shall provide the City Manager with complete copies of the schedule and each update to the schedule for the City Manager or his designee to review.

From time to time (expected to be at least monthly) at the request of the City Manager or his designee, Landowner shall meet and confer with City staff, consultants and contractors regarding matters arising hereunder with respect to the Acquisition Facilities and the progress in constructing and acquiring the same, and as to any other matter related to the Acquisition Facilities or this Agreement. Landownershall advise the City Manager or his designee in advance of any coordination and scheduling meetings to be held with contractors relating to the Acquisition Facilities, in the ordinary course of performance of an individual contract. The City Manager or his designee shall have the right to be present at such meetings, and to meet and confer with individual contractors if deemed advisable by the City Manager or his designee to resolve disputes and/or ensure the proper completion of the Acquisition Facilities.

City hereby agrees that, to its actual knowledge, compliance with the foregoing by Landowner will satisfy the requirements of Government Code Section 53313.5 for the completion of the Acquisition Facilities.
(d) Independent Contractor. In performing this Agreement, Landowner is an independent contractor and not the agent or employee of the City or the District. Neither the City nor the District shall be responsible for making any payments to any contractor, subcontractor, agent, consultant, employee or supplier of Landowner.
(e) Contractor’s License. None of the obligations of Landowner set forth in this Agreement shall be deemed to include any activities requiring a contractor’s license. (f) Performance and Payment Bonds. Landowner agrees to comply with all applicable performance and payment bonding requirements of the City with respect to the construction of the Acquisition Facilities. Performance and payment bonds shall not be required of Landowner to the extent moneys are available in the Improvement Fund to pay the Purchase Price, as defined in Section 9(c) below, of an Acquisition Facility provided that all contractors and/or subcontractors employed by Landowner in connection with the construction of the Acquisition Facility shall provide a labor and materials and performance bonds which name the City as an additional insured.
(g) Contracts and Change Orders. Landowner, or its designee, shall be responsible for entering into all contracts and any supplemental agreements (commonly referred to as “change orders”) required for the construction of the Acquisition Facilities, and all such

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9 contracts and supplemental agreements shall be submitted to the City Manager or his designee.

Prior approval of supplemental agreements by the City Manager shall only be required for such change orders which in any way materially alter the quality or character of the subject Acquisition Facility, or which involve an amount equal to the greater of ten percent (10%) of the amount of the applicable bid for the Acquisition Facility. The City expects that such contracts and supplemental agreements needing prior approval by the City Manager will be reasonably approved or denied (any such denial to be in writing, stating the reasons for denial and the actions, if any, that can be taken to obtain later approval) promptly after receipt by the City Manager thereof. To the extent that a supplemental agreement, approved by the City Manager, or his designee, increases the Actual Cost of an Acquisition Facility, such increased cost may be payable as part of the Purchase Price of the related Acquisition Facility as provided in Section 9 hereof. (h) Time for Completion. Landowner reasonably expects, and agrees, to use its good faith efforts to complete all Acquisition Facilities that are expected to be financed with the proceeds of a particular series of Bonds within thirty-six (36) calendar months from the date of closing of such Bonds.

Section 9. Acquisition and Payment of Facilities.
(a) Inspection. Upon Substantial Completion of the construction of an Acquisition Facility or Discrete Component, Landowner shall notify the City Manager or his designee in writing that such Acquisition Facility or Discrete Component has been Substantially Completed. The cost and expense of the City's inspection of such Acquisition Facility or Discrete Component following such notice (including, but not limited to, the reasonable costs of the City's agents, employees and independent contractors engaged for such inspection) shall be paid by Landowner to the City. No payment hereunder shall be made by the City to Landowner for an Acquisition Facility or Discrete Component thereof until the Acquisition Facility or Discrete Component has been inspected and found to be completed or Substantially Completed in accordance with the approved Plans by the City. City hereby agrees to inspect the Acquisition Facilities and/or Discrete Component’s thereof promptly upon Landowner’s request. Unless otherwise provided in a Supplement, the City shall make or cause to be made regular on-going site inspections of the Acquisition Facilities to be acquired hereunder. Landowner agrees to pay all inspection, permit and other similar fees of the City applicable to construction of the Acquisition Facilities.
(b) Agreement to Sell and Purchase Acquisition Facilities. Landowner hereby agrees to sell the Acquisition Facilities to the City and the City hereby agrees to use amounts in the Improvement Fund to pay the Purchase Price, as defined below, thereof to Landowner, subject to the terms and conditions hereof. The City shall not be obligated to finance the purchase of any Acquisition Facility until the Acquisition Facility is completed and the acceptance date for such Acquisition Facility has occurred; provided that the City has agreed to make periodic payments to Landowner for costs and expenses in accordance with Section 6 of this Agreement and has agreed to make payments for Discrete Components prior to the acceptance date for the Acquisition Facility of which a Discrete Component is a part; provided further, that the City shall pay Landowner the Purchase Price for an Acquisition Facility, less the retention required under Section 9(g), upon Substantial Completion thereof and satisfaction of the Payment Request requirements

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10 of Section 9(d), notwithstanding that the Acceptance Date for such Acquisition Facility has not yet occurred. Landowner acknowledges that the Discrete Components have been identified for payment purposes only, and that the City shall not accept an Acquisition Facility of which a Discrete Component is a part until the entire Acquisition Facility has been completed. The City acknowledges that the Discrete Components do not have to be accepted by the City as a condition precedent to the payment of the Purchase Price therefor, but any such payment shall not be made until a Discrete Component has been completed in accordance with the Plans therefor. The City shall not be obligated to pay the Purchase Price for any Acquisition Facility except from the moneys in the Improvement Fund.
(c) Purchase Price. The Purchase Price for each Acquisition Facility and Discrete Component shall be equal to the Actual Cost of such Acquisition Facility and Discrete Component, but subject to the limitations of this Section 9. (d) Payment Requests.
(i) Landowner Payment Requests. In order to receive the Purchase Price for a completed or Substantially Completed Acquisition Facility or Discrete Component, inspection thereof under Section 9(a) shall have been made and Landowner shall deliver to the City Manager or his designee a Payment Request in the form of Exhibit C hereto for such Acquisition Facility or Discrete Component, together with all attachments and exhibits required by this Section 9(d) to be included therewith. If payment is requested for a completed Acquisition Facility, as opposed to a Discrete Component, and if the property on which the Acquisition Facility is located is not owned by the City at the time of the request, Landowner shall provide a copy of the recorded documents conveying to the City Acceptable Title to the real property on, in or over which such Acquisition Facility is located, as described in Section 10(a) hereof. Landowner shall also provide a copy of the recorded notice of completion of the Acquisition Facility, an assignment to the applicable District of any reimbursements that may be payable with respect to the Acquisition Facility, such as City or private utility reimbursements, and a non-exclusive assignment of the warranties and guaranties for such Acquisition Facility, as described in Section 10(f) hereof, in a form acceptable to the City. Any reimbursements received by the District with respect to an Acquisition Facility shall be deposited in the Improvement Fund.
(ii) Merchant Builder Payment Requests. Within each Improvement Area, it is expected by the City and the merchant builder that a portion of the Acquisition Facilities will be constructed by a merchant builder. Each merchant builder may submit a payment request in the manner set forth in Section 9(d)(i) above if, prior to the issuance of any series of Bonds of such Improvement Area, the Landowner has provided a written designation of the Acquisition Facilities which will be constructed by the merchant builder.
(e) Processing Payment Requests. Upon receipt of a Payment Request (and all accompanying documents), the City Manager or his designee shall promptly conduct a review in order to confirm that such request is complete, that such Acquisition Facility or Discrete Component identified therein was constructed in accordance with the Plans therefore, and to verify and approve the Actual Cost of such Acquisition Facility or Discrete Component specified in such Payment Request. The City Manager or his designee shall also conduct such review as is required in his/her discretion to confirm the matters certified in the Payment Request. Landowner agrees

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11 to cooperate with the City Manager or his designee in conducting each such review and to provide the City Manager or his designee with such additional information and documentation as is reasonably necessary for the City Manager or his designee to conclude each such review. Within thirty (30) business days of receipt of any Payment Request, the City Manager or his designee expects to review the request for completeness and notify Landowner whether such Payment Request is complete, and, if not, what additional documentation must be provided. If such Payment Request is complete, the City Manager or his designee expects to provide a written approval or denial (specifying the reason for any denial) of the request within thirty (30) days of its submittal. If a Payment Request seeking reimbursement for more than one Acquisition Facility or Discrete Component is denied, the City Manager or his designee shall state whether the Payment Request is nevertheless approved and complete for any one or more Acquisition Facilities or Discrete Component and any such Acquisition Facilities or Discrete Component shall be processed for payment under Section 9(f) notwithstanding such partial denial. (f) Payment. Upon approval of the Payment Request by the City Manager or his designee, the City Manager or his designee shall sign the Payment Request and forward the same to the City Treasurer. Upon receipt of the reviewed and fully signed Payment Request, the City Treasurer shall, within the then current City financial accounting payment cycle but in any event within fifteen (15) business days of receipt of the approved Payment Request, cause the same to be paid by the Fiscal Agent under the applicable provisions of the applicable Fiscal Agent Agreement, to the extent of funds then on deposit in the Improvement Fund.

The Purchase Price paid hereunder for any Acquisition Facility or Discrete Component shall constitute payment in full for such Acquisition Facility or Discrete Component, including, without limitation, payment for all labor, materials, equipment, tools and services used or incorporated in the work, supervision, administration, overhead, expenses and any and all other things required, furnished or incurred for completion of such Acquisition Facility or Discrete Component as specified in the Plans.
(g) Timing of Requisitions. The City and Landowner acknowledge that (i) to the extent Landowner has constructed and City has accepted (for payment purposes) certain Public Facilities (including Acquisition Facilities), Landowner may submit Payment Requests for such Public Facilities for reimbursement from amounts collected as Special Taxes and Bonds; (ii) Landowner may be submitting Payment Requests in advance of when sufficient, if any, funds are available for reimbursement; (iii) the Payment Requests submitted when there are insufficient proceeds available will be reviewed by the City as set forth in this Agreement and, if appropriate, approved for payment from funds when such funds are deposited in the Special Fund or Improvement Fund; and (iv) the payment for any Payment Requests approved in the preceding manner will be deferred until the date, if any, on which there are amounts in the Special Fund or Improvement Fund to make all or part of such payment, at which time the City will pay from the Special Fund or direct the Fiscal Agent to wire transfer (or pay in another mutually acceptable manner) from the Improvement Fund the funds available to the payee identified in such Payment Request.

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12 (h) Restrictions on Payments. Notwithstanding any other provisions of this Agreement, the following restrictions shall apply to any payments made to Landowner under Section 9(b) and Section 9(f) hereof:

A. Amounts of Payments. Subject to the following paragraphs of this Section 9(h), payments for each Acquisition Facility or Discrete Component will be made only in the amount of the Purchase Price for the respective Acquisition Facility or Discrete Component.

Nothing herein shall require the City in any event (i) to pay more than the Actual Cost of an Acquisition Facility or Discrete Component, or (ii) to make any payment beyond the available funds in the Special Fund and Improvement Fund. The parties hereto acknowledge and agree that all payments to Landowner for the Purchase Price of Acquisition Facilities or Discrete Component are intended to be reimbursements to Landowner for monies already expended or for immediate payment by Landowner (or directly by the City) to third parties in respect of such Acquisition Facilities or Discrete Component.

B. Joint or Third Party Payments. The City may make any payment jointly to Landowner and any mortgagee or trust deed beneficiary, contractor or supplier of materials, as their interests may appear, or solely to any such third party, if Landowner so requests the same in writing or as the City otherwise determines such joint or third party payment is necessary to obtain lien releases.

C. Withholding Payments. The City shall be entitled, but shall not be required, to withhold any payment hereunder for an Acquisition Facility or Discrete Component if Landowner or any Affiliate is delinquent in the payment of ad valorem real property taxes, special assessments or taxes, or Special Taxes levied in the District. In the event of any such delinquency, the City shall only make payments hereunder directly to contractors or other third parties employed in connection with the construction of the Acquisition Facilities or Final Discrete Component or to any assignee of Landowner’s interests in this Agreement (and not to Landowner or any Affiliate), until such time as Landowner provides the City Manager with evidence that all such delinquent taxes and assessments have been paid.

The City shall withhold final payment for any Acquisition Facility or Final Discrete Component constructed on land until Acceptable Title to such land is conveyed to the City, as described in Section 10 hereof.

The City shall be entitled to withhold payment for any Acquisition Facility or Discrete Component hereunder to be owned by the City until: (i) the City Manager or his designee determines that the Acquisition Facility or Discrete Component is ready for its intended use, (ii) the Acceptance Date for the Acquisition Facility has occurred or, with respect to a Discrete Component the requirements of Section 9, if applicable to such Acquisition Facility or Discrete Component, have been satisfied, and (iii) with respect to an Acquisition Facility, but not a Discrete Component, a Notice of Completion executed by Landowner, in a form acceptable to the City Manager or his designee, has been recorded for the Acquisition Facility and general lien releases conditioned solely upon payment from the proceeds of the Special Taxes or Bonds to be used to acquire such Acquisition Facility have been submitted to the City Manager for the Acquisition Facility. The City hereby agrees that Landowner shall have the right to post or cause the

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13 appropriate contractor or subcontractor to post a bond with the City to indemnify it for any losses sustained by the City because of any liens that may exist at the time of acceptance of such Acquisition Facility, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the City Manager or his designee. If the City Manager or his designee determines that an Acquisition Facility is not ready for intended use under (i) above, the City Manager or his designee shall so notify Landowner as soon as reasonably practicable in writing specifying the reason(s) therefor.

Nothing in this Agreement shall be deemed to prohibit Landowner from contesting in good faith the validity or amount of any mechanics or materialmans lien nor limit the remedies available to Landowner with respect thereto so long as such delay in performance shall not subject the Acquisition Facilities or Discrete Component to foreclosure, forfeiture or sale. In the event that any such lien is contested, Landowner shall only be required to post or cause the delivery of a bond in an amount equal to the amount in dispute with respect to any such contested lien, so long as such bond is drawn on an obligor and is otherwise in a form acceptable to the City Manager or his designee.

Nothing in this Section 9(h) shall prevent payments pursuant to Section 6 or the payment for Discrete Components as described in Section 9(b).

D. Retention. The City shall withhold in the Improvement Fund an amount equal to thirty percent (30%) of the Purchase Price of each Discrete Component to be paid hereunder until such time as one-half of the respective work has been completed and progress on the Acquisition Facility is satisfactory to the City Manager or his designee, at which time no further retention will be made (so that it is expected that, upon completion of any Acquisition Facility, a total of ten percent (10%) will have been retained). Any such retention will be released to Landowner upon final completion and acceptance of the related Acquisition Facility.

Payment of any retention shall also be contingent upon the availability of monies in the Improvement Fund therefore. No retention shall apply if Landowner proves to the City Manager or his designee’s satisfaction that Landowner’s contracts for the Acquisition Facilities or Discrete Component provide for the same retention as herein provided, so that the Purchase Price paid for the Acquisition Facility or Discrete Component is at all times net of the required retention.

E. Frequency. Unless otherwise agreed to by the City Manager, no more than one Payment Request shall be submitted by Landowner in any calendar month. (i) Defective or Non-conforming Work. If any of the work done or materials furnished for an Acquisition Facility are found by the City Manager or his designee to have a significant defect or to not be constructed in accordance with the applicable Plans: (i) and such finding is made prior to payment for the Purchase Price of such Acquisition Facility hereunder, the City may withhold payment therefore until such defect or nonconformance is corrected to the satisfaction of the City Manager or his designee, or (ii) and such finding is made after payment of the Purchase Price of such Acquisition Facility, the City and Landowner shall act in accordance with the City’s standard specification for City works construction, which are available in the City’s Public Works Department.

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14 (j) Modification of Public Facilities. The description of the Public Facilities in Exhibit A may be modified, or new Public Facilities may be added to Exhibit A, through a Supplement executed by the City Manager and Landowner provided the modifications or new Public Facilities are consistent with the facilities and costs authorized to be funded by the District pursuant to the formation proceedings and the Act.

Section 10. Ownership and Transfer of Facilities.
(a) Facilities to be Owned by the City – Conveyance of Land and Easements to City. Acceptable Title to all property on, in or over which each Acquisition Facility to be acquired by the City will be located, shall be deeded over to the City by way of grant deed, quitclaim, or dedication of such property, or easement thereon, if such conveyance of interest is approved by the City as being a sufficient interest therein to permit the City to properly own, operate and maintain such Acquisition Facility located therein, thereon or thereover, and to permit Landowner to perform its obligations as set forth in this Agreement. Landowner agrees to assist the City in obtaining such documents as are required to obtain Acceptable Title. Completion of the transfer of title to land shall be accomplished prior to the payment of the Purchase Price for an Acquisition Facility (or the Final Discrete Component thereof) and shall be evidenced by an irrevocable offer of dedication or recordation of the acceptance thereof by the City Council. (b) Facilities to be Owned by the City – Title Evidence. Upon the request of the City, Landowner shall furnish to the City a preliminary title report for land with respect to Acquisition Facilities to be acquired by the City and not previously dedicated or otherwise conveyed to the City, for review and approval at least fifteen (15) calendar days prior to the transfer of Acceptable Title of an Acquisition Facility to the City. The City shall approve the preliminary title report unless it reveals a matter which, in the judgment of the City, could materially affect the City’s use and enjoyment of any part of the property or easement covered by the preliminary title report. In the event the City does not approve the preliminary title report, the City shall not be obligated to accept title to such Acquisition Facility or pay the Purchase Price for such Acquisition Facility (or the Final Discrete Component thereof) until Landowner has cured such objections to title to the satisfaction of the City.
(c) Facilities Constructed on Private Lands. If any Acquisition Facility to be acquired is located on privately-owned land, the owner thereof shall retain title to the land and the completed Acquisition Facility until the Acquisition Facility is accepted by City and transferred to City pursuant to this Section 9. Pending the completion of such transfer, Landowner shall not be entitled to receive any payment for any such Acquisition Facility or the Final Discrete Component thereof. Landowner shall be entitled, however, to receive payments pursuant to Section 6 and payments for the Discrete Components (other than the Final Discrete Component) of the Acquisition Facility upon making an irrevocable offer of dedication of such land in form and substance acceptable to the City Manager. Notwithstanding the foregoing, upon written request of the City before payment for any Final Discrete Component of such Acquisition Facility, Landowner shall convey or cause to be conveyed Acceptable Title thereto in the manner described in Section 10(a) and Section 10(b) hereof.
(d) Facilities Constructed on City Land. If an Acquisition Facility to be acquired is on land owned by the City, the City hereby grants to Landowner a license to enter upon

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15 such land for purposes related to the construction (and maintenance pending acquisition) of the Acquisition Facility. The provisions for inspection and acceptance of such Acquisition Facility otherwise provided herein shall apply.
(e) [Reserved]
(f) Maintenance and Warranties. Landowner shall maintain each Acquisition Facility and Discrete Components thereof in good and safe condition until the Acceptance Date.

Prior to the Acceptance Date, Landowner shall be responsible for performing any required maintenance on any completed Acquisition Facility and Discrete Components thereof. On or before the Acceptance Date of the Acquisition Facility, Landowner shall assign to the City, as applicable, all of Landowner’s rights in any warranties, guarantees, maintenance obligations or other evidence of contingent obligations of third persons with respect to such Acquisition Facility.

Landowner shall provide a warranty bond reasonably acceptable in form and substance to the City Manager to insure for one-year after the Acceptance Date that defects, which appear within said period, will be repaired, replaced, or corrected by Landowner, at its own cost and expense, to the satisfaction of the City Manager. Landowner shall not be responsible for normal wear and tear and/or defects caused by use of the Acquisition Facility by the City or public. Landowner shall commence to repair, replace or correct any defects to an Acquisition Facility, other than those caused by public use of the Acquisition Facility, within thirty (30) days after written notice thereof by the City to Landowner, and shall complete such repairs, replacement or correction as soon as practicable. After such one-year period, the warranty bond shall be released. From and after the Acceptance Date, the City shall be responsible for maintaining all Acquisition Facilities. Any warranties, guarantees or other evidences of contingent obligations of third persons with respect to the Acquisition Facilities to be acquired by the City shall be delivered to the City Manager as part of the transfer of title.
(g) Discrete Components. Nothing in this Section 10 shall prevent payments pursuant to Section 6 or payment for Discrete Components as described in Section 9(b).

Section 11. Indemnification. Landowner, and each merchant builder, shall promptly defend, indemnify and hold harmless the City, its officers, employees and agents, and each and every one of them, and the District from any and all claims, actions, liability, damages, losses, expenses and costs arising out of Landowner’s or such merchant builder’s performance of, or failure to perform, its duties hereunder or by reason of, or arising out of, this Agreement; provided, however, nothing herein shall impose any liability on Landowner or merchant builder with respect to any Public Facility constructed by Landowner or merchant builder following the expiration of the one (1) year period after acceptancy of any such Public Facility.

Section 12. City Policies. Pursuant to the City’s policies, including the Financing District Policy, with regard to the issuance and sale of bonds of community facilities districts, the total annual amount of the Special Taxes to be levied on any parcel of property within an Improvement Area of the District and all other assessments and taxes which will be collected with respect to such property, must not exceed 1.90% of the estimated sales prices of the homes to be constructed within an Improvement Area, as determined by the City. The Rate and Method includes provisions to allow for a reduction in the Special Tax prior to the issuance of Bonds in order to not exceed a total effective rate of 1.90%. In addition, the Special Tax may also be reduced

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16 prior to the issuance of Bonds upon Landowner’s written request. Also, the ratio of the appraised market value of all parcels of property within a community facilities district to the total amount of the assessment and special tax obligation thereof after the issuance and sale of bonds for the District (the “Value-to-Lien Ratio”) may not be less than four-to-one (4:1). Pursuant to the City’s policies, the fair market value of the property within a community facilities district for purposes of determining such ratio will be determined based upon an appraisal made by an appraiser selected by the City. If the Value-to-Lien Ratio is less than four-to-one (4:1), then the City Manager may request, upon the recommendation of the underwriter and the City’s municipal advisor, additional security in the manner provided in Section 17 hereof.

Section 13. Representations, Covenants and Warranties of Landowner. Landowner represents and warrants for the benefit of the City as follows:

A. Organization. Landowner has the power and authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated.

B. Authority. Landowner has the power and authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered, and this Agreement has been duly and validly executed and delivered by Landowner.

C. Binding Obligation. This Agreement is a legal, valid and binding obligation of Landowner, enforceable against Landowner in accordance with its terms, subject to bankruptcy and other equitable principles.

D. Compliance with Laws. Landowner shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of Landowner in the District in violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the lands in the District or the Acquisition Facility.

E. Requests for Payment. Landowner represents and warrants that (i) it will not request payment from the City for the acquisition of any improvements other than the Acquisition Facility, and (ii) it will diligently follow all procedures set forth in this Agreement with respect to the Payment Request for the Acquisition Facility.

F. Additional Information. Landowner agrees to cooperate with all reasonable written requests for nonproprietary information by the original purchasers of the Bonds or the City related to the status of construction of improvements within the District, the anticipated completion dates for future improvements, and any other matter material to the investment quality of the Bonds.

G. Continuing Disclosure. Landowner agrees to comply with all of its obligations under any continuing disclosure agreement executed by it in connection with the offering and sale of any of the Bonds. Landowner shall cooperate with City in complying with the requirements of Rule 15c2-12 of the Securities and Exchange Commission in connection with the issuance and sale of the Bonds. Landowner shall provide information to the City regarding its operations and financial condition as such information has been disclosed in the Official

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17 Statement. The City, in consultation with the underwriter of the Bonds, may determine that some or all of such financial information will be included in the preliminary official statement and the final official statement for the Bonds. If Landowner owns property within the District responsible for more than 20% of the Special Taxes levied in such fiscal year, then Landowner acknowledges that it will be an “obligated person” for purposes of compliance with Rule 15c2-12(b)(5) of the Securities and Exchange Commission and that it will therefore be necessary that Landowner enter into a continuing disclosure undertaking, at the time of and in connection with the issuance and sale of the Bonds, that so long as it remains an obligated person it will semi-annually, at the time specified in such undertaking, provide information regarding its financial condition, including, at the City’s discretion, such regularly submitted periodic reports and financial statements prepared by Landowner’s certified public accountant which are available to the investing public (which may be consolidated with Landowner’s parent company) and the status of development and residential and land sale activity within the District to be included within the semi-annual reports which Landowner, or a dissemination agent designated in such undertaking, will file with the Nationally Recognized Municipal Securities Information Repositories which are identified by the Securities and Exchange Commission and any state information repository that may be designated for the State of California, as required by that rule. Copies of all such reports shall also be provided to the City and the underwriter of the Bonds. Landowner further acknowledges that it will be an obligated person pursuant to such rule as long as it owns property within the District that is responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds. If Landowner sells any portion of property within the District to an entity and such entity will own property within the District which will be responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds, Landowner shall notify such entity that it will be an obligated person for purposes of the rule and that such entity will be required to enter into a continuing disclosure undertaking as provided in this section.

Section 14. Independent Contractor. Landowner is an independent contractor and not the agent of the City or the District. This Agreement shall not and does not create a joint venture or partnership between the City and Landowner. The City shall have no responsibility or liability for the payment of any amount to any employee or subcontractor of Landowner.

Section 15. Special Taxes. The parties are entering into this Agreement and establishing the District for the purpose of creating a stream of Special Tax revenues that will be available to the District to pay directly the costs of acquisition, construction and/or equipping the Acquisition Facility and Public Facilities and to pay debt service on the Bonds, the proceeds of which will be used to pay the costs of acquisition, construction and/or equipping of the Acquisition Facility and Public Facilities. Landowner and City hereby acknowledge and agree (i) that any reduction or termination of the Special Taxes by exercise of the initiative power or other action would constitute a substantial impairment of the Special Tax revenue stream that Landowner and City intend to create for the purpose of providing an assured source of funding for construction, acquisition and/or equipping of the Acquisition Facility and Public Facilities, and (ii) that this Agreement is being entered into, and the Special Taxes are being imposed upon the Property pursuant to the applicable Rate and Method, in accordance with existing laws relating to the imposition of fees and charges as a condition of development of the Property and such Special Taxes are being incurred as an incident of the voluntary act of development of the Property. To the fullest extent permitted by law, Landowner, for itself and for each of its successors and assigns

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18 as owners or lessees of all or any portion of the Property included in the District hereby waives any right to exercise the initiative power that may be authorized in California Constitution Article XIIIC, Section 3, to reduce or appeal the Special Taxes.

Section 16. Disclosure of Special Taxes.
(a) From and after the date of this Agreement, Landowner shall provide, or shall require any merchant builder entering into a residential purchase contract (the “Residential Builder”) to provide, a “Notice of Special Tax” (as defined in Section 16(b) below) to each prospective purchaser of a home in the District prior to the execution by the home buyer of the sale contract for such home. Landowner shall, or shall require a Residential Builder to, deliver a fully executed copy of each notice to City. Landowner shall, or shall require a Residential Builder to, (i) maintain records of each Notice of Special Tax for a period of five (5) years, and (ii) shall provide copies of each notice to City promptly following the giving of such notice. Landowner shall, or shall require a Residential Builder to, include the Notice of Special Tax in all applications for Final Subdivision Reports required by the Department of Real Estate (“DRE”) which are filed after the effective date of this Agreement.

Landowner shall require of a Residential Builder acquiring lots within the Property, prior to the close of escrow on any residential lot, to (i) maintain records of each Notice of Special Tax for a period of five (5) years, (ii) provide copies of each notice to City promptly following the giving of such notice, and (iii) include the Notice of Special Tax in all of such Residential Builder’s applications for Final Subdivision Reports required by DRE. (b) With respect to any parcel, the term “Notice of Special Tax” means a notice in the form prescribed by California Government Code Section 53341.5 which is calculated to disclose to the purchaser thereof (i) that the property being purchased is subject to the Special Taxes and other special taxes of the District; (ii) the classification of such property; (iii) the maximum annual amount of the Special Taxes and other special taxes of the District and the number of years for which they are authorized to be levied; and (iv) the types of facilities and services to be paid or with the proceeds of the Special Taxes and other special taxes of the District. (c) City will file with the San Luis Obispo County Recorder’s office a notice of special tax lien that gives notice of the existence of the District and the levy of the Special Tax on property within the District for the benefit of subsequent property owners, pursuant to requirements of Section 3114.5 of the Streets and Highways Code. (d) Sample Property Tax Bill/Special Tax Information Sheet. Landowner and its successors and assigns shall prepare and have available in its sales office, copies of either a sample property tax bill in a form reasonably acceptable for the City or special tax information sheet in substantially the form attached hereto as Exhibit D (the “Special Tax Information Sheet”), which shows the assigned annual Special Taxes and other special taxes authorized to be levied within the District under the applicable Rate and Method. Landowner and its successors and assigns shall make available to prospective homebuyers to take with them, copies of such sample property tax bill or Special Tax Information Sheet at the time written information regarding the available home sites and corresponding base home prices is requested by and provided to such homebuyers.

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19 Section 17. Security for Payment of Special Taxes. Prior to the issuance of each series of Bonds of an Improvement Area, Landowner agrees to deliver to the City either a letter of credit (“Letter of Credit”), hereby defined as an irrevocable standby letter of credit that (i) is issued by a financial institution authorized to do business in the State of California, the long-term unsecured obligations of which, at the time of delivery of such letter of credit, are rated not less than “A” by Moody’s and not less than “A” by S&P; (ii) contains terms and provisions that shall in all respects be satisfactory to and approved in writing by the City; (iii) is delivered to and accepted by the Fiscal Agent pursuant to the applicable Fiscal Agent Agreement; (iv) is for a term of at least one year; and (v) is in an amount equal to the amount of Special Taxes that is expected to be levied in the next two fiscal years on all taxable property within the applicable Improvement Area or DISTRICT which is owned by the Landowner (the “Stated Amount”).

In the event that portions of the Property are sold to merchant builders, the Stated Amount of the Letter of Credit shall be reduced for the Assessor’s Parcels and/or Units owned by the merchant builder; provided, however, that the merchant builder shall be responsible to provide a substitute Letter of Credit in the amount of the reduction to the Letter of Credit provided by Landowner, and which Letter of Credit shall meet the requirements of this Section 17. Landowner shall continue to provide the Letter of Credit for all remaining taxable property in the Improvement Area owned by Landowner, provided, however, the City shall be required to reduce a particular Letter of Credit a maximum of twice each Calendar Year.

Landowner shall cause each Letter of Credit to be renewed annually by the issuing bank or a substitute bank which meets the standards set forth herein until such time as either 85% of the proposed Units in the Improvement Area subject to the Special Tax and owned by Landowner have been sold to the merchant builders or until Landowner no longer owns Assessor Parcels that are responsible for 10% or more of the Special Taxes expected to be levied in the Improvement Area in the subsequent fiscal year. Each Letter of Credit shall further provide that the failure of the issuing bank to renew the Letter of Credit until such condition is satisfied will enable the beneficiary to draw the full amount thereof. If the Fiscal Agent draws any amount under a Letter of Credit except upon the failure of the issuing bank to renew such Letter of Credit, then the City shall reimburse the amount drawn to the issuing bank with respect to a Letter of Credit, without interest, from the delinquent Special Tax installments with respect to which any such amount is drawn when and if such installments are paid or the proceeds of foreclosure of the applicable property as a result of such delinquency are received.

Notwithstanding the provisions of this Section 17, the City may waive or modify this requirement as pertains to the issuance of a particular series of Bonds at its sole discretion.

Section 18. Termination and Dissolution. Prior to the issuance of Bonds, Landowner may elect to terminate this Agreement and request that the City cancel the Special Taxes by providing written notice to the City. Within thirty (30) days of such written notice, City shall record a notice of cancellation of the Special Taxes with respect to each parcel. Landowner shall be responsible for reasonable City costs incurred relating to the cancellation of the Special Taxes and recordation of such notice; provided, however, that the City shall not terminate the Special Taxes for any lot for which a building permit has been issued, unless Landowner pays all City Fees or posts separate security therefore. Such termination of this Agreement and cancellation of

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20 Special Taxes shall have no effect on Landowner’s obligations to pay City Fees upon issuance of a building permit.

Section 19. Binding on Community Facilities Districts. The District shall automatically become a party to this Agreement, and all provisions hereof which apply to the City shall also apply to the District. The City Council of the City, acting as the legislative body of the District, shall perform all parts of this Agreement which require performance on the part of the District.

Section 20. Assignment. Upon the successful formation of the District, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and shall run with the land without any further action of the City or Landowner unless terminated in writing pursuant to Section 18. Further, upon the sale or transfer of any planning area or Improvement Area within the District, this Agreement may be separately assigned to the purchaser or merchant builder for such planning area or Improvement Area. Landowner may assign all or any of its rights pursuant to this Agreement to a purchaser of all or any portion of the Property.

Such a purchaser and assignee shall, as a condition to taking an assignment of such rights, enter into an assignment and assumption agreement with the Landowner, in a form reasonably acceptable to Landowner and the City, whereby such rights assigned are specified and such purchaser agrees, except as may be otherwise specifically provided therein, to assume the obligations of Landowner pursuant to this Agreement and to be bound thereby.

Section 21. Prompt Action. All consents, approvals and determinations required of either the City or Landowner pursuant to this Agreement shall be promptly given or made, and shall not be unreasonably withheld or conditioned.

Section 22. General. This Agreement and the Deposit Agreement contain the entire agreement between the parties with respect to the matters herein provided for. This Agreement may only be amended by a subsequent written agreement signed on behalf of both parties. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. This Agreement shall be construed and governed by the Constitution and laws of the State of California. Should either party to this Agreement commence a court action or proceeding against the other party with respect to this Agreement or the design and acquisition or construction of the Acquisition Facility, the party prevailing in such action or proceeding shall be entitled to receive from the losing party its attorney’s fees, expert witness fees, court costs and other costs incurred by it in prosecuting or defending such action or proceeding. The captions of the sections of this Agreement are provided for convenience only, and shall not have any bearing on the interpretation of any section hereof. This Agreement may be executed in several counterparts, each of which shall be an original of the same agreement. (Signature Page Follows)

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IN WITNESS WHEREOF, the parties have caused this agreement to be signed as of the date first above written.

Dated: THOMAS H. ERSKINE, TRUSTEE OF
THE THOMAS H. ERSKINE SEPARATE

PROPERTY REVOCABLE TRUST,
U/D/T DATED DECEMBER 20, 2002
By:_______________________________
Thomas H. Erskine
Dated: CITY OF EL PASO DE ROBLES
By:

Name:

City Manager
ATTEST:

By:

City Clerk
APPROVED AS TO FORM:

By:

Bond Counsel
-Signature PageFunding and Acquisition Agreement

82472.04044\45367653.1
Attachment 7
B-1

EXHIBIT A

DESCRIPTION OF PUBLIC FACILITIES
Special Taxes or Bond Proceeds of any Improvement Area may finance any of the Public Facilities listed below and the designation of a Phase is included solely for organizational purposes.

City Construction Facilities(1) Per Unit
Estimated
Total
Net City Traffic Fee $8,043 $1,303,022
Police 106 17,172
Fire 1,449 234,738
General Governmental 4,199 680,238
Library 1,354 219,348
Water Connection Fees (3/4" Meter) 19,066 3,088,692
Water Meter Installation Fee (3/4" Meter) 392 63,504
Wastewater Facility Fee 8,093 1,311,066
BSP Shared Infrastructure Fee (2) 23,830 3,860,460
Total Estimated DIF $66,532 $10,778,240
City Acquisition Facilities(3)
Estimated
Cost
Meadowlark Road Street Improvements $848,565
Airport Road Street Improvements 1,837,399
Ridge Road / Creston Road Street Improvements 719,706
Backbone Storm Drain Improvements 486,113
Planning Area Street Improvements 3,971,349
Planning Area Water Improvements 2,495,121
Planning Area Sewer Improvements 1,960,987
Planning Area Storm Drain Improvements 2,736,703
Total Estimated Costs $15,055,943

82472.04044\45367653.1
Attachment 7
B-2
Offsite Facilities
Estimated
Cost
Charolais / S. River intersection roundabout
S. River / Niblick SB right turn lane (aka Arco)
Creston Rd./Stoney Creek signal light
Creston Rd./Meadowlark signal light
Airport Road improvements (between Meadowlark and Creston Rd.) Beechwood Community Park improvements
Creston Road street frontage improvements
Meadowlark street frontage improvements
Beechwood street frontage improvements
Water booster station
Creston Road sewer lift station
Total Estimated Costs
Total Estimated District Costs
Footnotes:
(1) Represents the estimated impact fees net of any fee credits pursuant to the terms of the Development Agreement.
(2) Eligible amount of the Beechwood Specific Plan Shared Infrastructure Fee subject to amount paid for each planning area, as may be amended from time to time pursuant to the terms of the Development Agreement.
(3) The Public Facilities listed above are representative of the types of facilities eligible to be financed by the CFDs. Additional public facilities may be funded under this Agreement, including but not limited to all offsite infrastructure improvements and/or contributions to such improvements constructed by other property owners within the specific plan as required by the Development Agreement. Detailed scope and limits of specific projects will be determined as appropriate, consistent with the standards of City.

82472.04044\45367653.1
Attachment 7
B-1

EXHIBIT B

DEFINITIONS
The following terms shall have the meanings ascribed to them for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the applicable Fiscal Agent Agreement (as hereinafter defined).
“Acceptable Title” means title to land or interest therein, in form acceptable to the Public Works director, free and clear of all liens, taxes, assessments, leases, easements and encumbrances, whether or not recorded, but subject to any exceptions determined by the Public Works Director as not interfering with the actual or intended use of the land or interest therein.

Notwithstanding the foregoing, an irrevocable offer of dedication may constitute land with an “Acceptable Title” if: (i) such offer is necessary to satisfy a condition to a tentative or final parcel map, (ii) such offer is in a form acceptable to the Public Works Director, (iii) the Public Works Director has no reason to believe that such offer of dedication will not be accepted by the applicable public agency, and (iv) the Landowner commits in writing not to allow any liens to be imposed on such property prior to its acceptance.
“Acceptance Date” means the date the City Council takes final action to accept dedication of or transfer of title to the Acquisition Facility. “Additional Bonds” means any series of Bonds issued by or on behalf of the District after the first series of Bonds of that Improvement Area, in each case in compliance with and under supplements to the applicable Fiscal Agent Agreement, which Additional Bonds shall be secured on a parity lien or subordinate lien position with other Bonds previously issued. “Agreement” means this Agreement, together with any Supplement hereto. “Act” means the Mello-Roos Community Facilities Act of 1982, Sections 53311 et seq. of the California Government Code, as amended.
“Actual Cost” means the substantiated cost of the Acquisition Facility incurred by the Landowner or its designee, which costs may include: (i) the costs incurred for the construction of the Acquisition Facility, (ii) the costs incurred in preparing plans for the Acquisition Facility and the related costs of environmental evaluations of the Acquisition Facility, (iii) the fees paid to governmental agencies for obtaining permits, licenses or other governmental approvals for such Public Facility, (iv) a construction and project management fee of five percent (5%) of the costs described in clause (i) above incurred for the construction of the Acquisition Facility, (v) professional costs incurred by the Landowner, its designee, or the City associated with the Acquisition Facility, such as engineering, legal, accounting, inspection, construction staking, materials testing and similar professional services; and (vi) costs directly related to the construction and/or acquisition of the Acquisition Facility, such as costs of payment, performance and/or maintenance bonds, and insurance costs (including costs of any title insurance required hereunder).

Actual Cost shall not include any cost of carry or interest expense with respect to any construction loan obtained with respect to the Acquisition Facilities. Cost savings derived in connection with

82472.04044\45367653.1
Attachment 7
B-2
the completion of any Acquisition Facility may be applied to any cost over-runs incurred in connection with the completion of any other Acquisition Facility. “Assessor’s Parcel” shall have the meaning ascribed to it in the applicable Rate and Method.
“Bonds” means any series of bonds issued by or on behalf of the District. “City Fees” means the development impact fees imposed by the City that are credited to the City Construction Facilities; as shown on Exhibit A. “Conditions of Approval” means the mitigation measures and conditions of approval of or applicable to all land use entitlements approved by the City for the development of the Property, including, without limitation, tentative subdivision maps, the Development Agreement, and subdivision improvement agreements.
“Deposits” means payments made by Landowner to City for City costs relating to formation of the District and issuance of Bonds.
“Discrete Component” means a component or segment of an Acquisition Facility that the City Manager has agreed can be separately identified, inspected and completed, and be the subject of a Payment Request hereunder.
“District Representative” means the City Manager of the City, or his or her designee.
“Final Discrete Component” means the last Discrete Component of an Acquisition Facility to be financed after all other Discrete Components of that Acquisition Facility have been paid for from the proceeds of the Bonds.
“Financing District Policy” means the City of El Paso de Robles Debt Policy and Procedures, dated October 29, 2019.
“Fiscal Agent” means the financial institution or other entity that enters into a Fiscal Agent Agreement with the City with respect to the Bonds. “Fiscal Agent Agreement” means, collectively, any agreement or agreements by that or similar name to be executed by the City, for and on behalf of the District and the fiscal agent, which will provide for, among other matters, the issuance of the Bonds and the establishment of an Improvement Fund as originally executed by the City and the fiscal agent and as it may be amended from time to time.
“Improvement Fund” means the Improvement Fund established by the Fiscal Agent Agreement for any series of Bonds issued on behalf of the District. “Purchase Price” means the amount paid by the City for an Acquisition Facility determined in accordance with Section 8 of the Funding and Acquisition Agreement, being an amount equal to the Actual Cost of such Acquisition Facility, but subject to the limitations and

82472.04044\45367653.1
Attachment 7
B-3
reductions provided for in said Section 8.
“Priority Administrative Expense Requirement” means $[25,000] per year commencing in the first year of issuance of Bonds.
“Rate and Method” means the rate and method of apportionment of special taxes approved for each Improvement Area in accordance with the Act. “Special Fund” means a discrete, interest-bearing special fund of the City to be established and administered pursuant to this Agreement. “Special Tax or Special Taxes” means the special tax designated as “Special Tax” in the Rate and Method.
“Substantially Complete” or “Substantial Completion” with respect to an Acquisition Improvement means that such Acquisition Improvement is substantially complete in accordance with its Plans and Specifications and is available for use by the public for its intended purpose, notwithstanding any final “punch list” items still required to be completed, unless such items are required for the safe operation of such Acquisition Improvement, and shall be based upon approval of the District’s inspectors, which shall not be unreasonably withheld.

82472.04044\45367653.1
Attachment 7
C-1

EXHIBIT C

FORM OF PAYMENT REQUEST
City of Paso Robles Community Facilities District No. 2026-1 (Beechwood – Facilities) The undersigned, ______________________, a duly authorized representative of Landowner, hereby requests payment of the Purchase Price of the Acquisition Facilities described in Attachment A attached hereto. Capitalized undefined terms shall have the meanings ascribed thereto in that certain Funding and Acquisition Agreement, dated as of __________ 1, 2026 (the “Agreement”), by and between the City of El Paso de Robles (“City”) and the Landowner, in connection with the City of Paso Robles Community Facilities District No. 2026-1 (the “DISTRICT”). In connection with this Payment Request, the undersigned hereby represents and warrants to the District and the City as follows:

1. He (she) is a duly authorized representative of Landowner, qualified to execute this request for payment on behalf of Landowner and knowledgeable as to the matters set forth herein.

2. Each of the Acquisition Facilities described in Attachment A have been completed in accordance with the Agreement.

3. The true and correct Actual Cost of the Acquisition Facilities for which payment is requested is set forth in Attachment A.

4. Attached hereto are invoices, receipts, worksheets and other evidence of costs which are in sufficient detail to allow the City to verify the Actual Cost of the Acquisition Facilities for which payment is requested.

5. There has not been filed with or served upon Landowner notice of any lien, right to lien or attachment upon, or claim affecting the right to receive the payment requested herein which has not been released or will not be released simultaneously with the payment of such obligation, other than materialmen’s or mechanics’ liens accruing by operation of law.

Copies of lien releases for all work for which payment is requested hereunder are attached hereto.

6. To the best of Landowner’s knowledge, Landowner is in compliance with the terms and provisions of the Agreement.

The Purchase Price for the Acquisition Facilities shall be payable from the appropriate account created pursuant to the Fiscal Agent Agreement or the Special Fund established pursuant to the Agreement.

82472.04044\45367653.1
Attachment 7
C-2
I hereby certify that the above representations and warranties are true and correct.

Dated: LANDOWNER
By:

Name:

Title:

By execution of this Payment Request, the City does hereby approve of the payment as described in this Payment Request and directs the Fiscal Agent to pay such amounts, first, from bond proceeds held in the designated account pursuant to the Fiscal Agent Agreement and, second from any surplus Special Taxes held by the City as applicable, to the payee listed above and/or the City shall pay all or a portion thereof from funds designated by the City for such purpose.

CITY OF EL PASO DE ROBLES for its
Community Facilities District No. 2026-1
(Beechwood – Facilities)
By:

Name:

City Manager

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D-1

EXHIBIT D

FORM OF

CITY OF EL PASO DE ROBLES SPECIAL TAX INFORMATION SHEET City of Paso Robles Community Facilities District No. 2026-1

1. WHAT IS COMMUNITY FACILITIES DISTRICT (DISTRICT) NO. 2026-1? District No. 2026-1 is a community facilities district which was formed pursuant to the “Mello-Roos Community Facilities Act of 1982” to finance certain public facilities.

2. WHO IS RESPONSIBLE TO PAY THE SPECIAL TAX AND HOW IS IT BILLED? The property owner is responsible for paying the special tax levied by DISTRICT No. 2026-1, which will appear as a separate line item on your property tax bill along with your regular property taxes.

3. HOW MUCH WILL MY SPECIAL TAX BE?
The special tax is based upon the size of the home. The assigned special taxes for DISTRICT No. 2026-1 (or the applicable Improvement Area therein) for Fiscal 20__-20__ are summarized below.
[INSERT SPECIAL TAX CHART]

4. HOW LONG WILL I HAVE TO PAY THE DISTRICT NO. 2026-1 SPECIAL TAX? The Special Tax will not be collected after fiscal year 20__-20__.

5. CAN THE SPECIAL TAXES BE PREPAID?
Homeowners have the option of prepaying the facilities Special Tax anytime. For prepayment information please contact the City of El Paso de Robles’s District No. 2026-1 administrator, DTA Finance, 5000 Birch Street, Suite 6000, Newport Beach, CA 92660.

6. WHERE CAN I GET MORE INFORMATION?
For more information in regards to District No. 2026-1, contact the City of El Paso de Robles’ District No. 2026-1 administrator, DTA Finance, DTA Finance, 5000 Birch Street, Suite 6000, Newport Beach, CA 92660.

Council Agenda Report
From: Ashlee Hernandez, Homeless Services Manager
Subject: Receipt of the El Camino Homeless Organization (ECHO) End-of-Year Report and Approval of ECHO Contribution Agreement for Fiscal Year 2026-27 and 2027-28 CEQA Determination: The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Date: September 1, 2026
Facts

1. Since 2022, the City has provided annual operating contributions to the El Camino Homeless Organization (ECHO) for emergency shelter and homeless services, subject to the service requirements set forth in the Third Amendment to the Supplemental Memorandum of Understanding (SMOU).

2. ECHO submitted its Fiscal Year 2025–26 End-of-Year Report which includes information regarding program activities, service outcomes, financial information, and performance measures.

3. On June 16, 2026, the City Council adopted the Fiscal Years 2026–27 and 2027–28 Operating and Capital Improvement Budgets, which include appropriations for the proposed Contribution Agreement.

4. The proposed Contribution Agreement provides for an annual City contribution to ECHO of $222,000 during Fiscal Years 2026–27 and 2027–28 for a total of $444,000.

Options

1. Take no action;

2. Receive and file ECHO’s 2025-26 End-of-Year report and direct staff to distribute the final FY 2025-26 payment in the amount of $111,000 and approve the Contribution Agreement for FY 2026-28;

3. Provide alternative direction to staff.

Analysis and Conclusions
Fiscal Year 2025-26 End-of-Year Report
Pursuant to the Third Amendment to the SMOU, ECHO has submitted all required biannual reporting for FY 2025-26. The submittal included the SMOU End-of-Year Report in the form of presentation slides, along with supporting documentation covering service participation, program participation, trash pickup data, quarterly stakeholder meeting minutes, and a profit and loss statement. The table below summarizes the status of ECHO’s obligations under the Third Amendment to the SMOU:

Obligations as Outlined in the SMOU FY 2025-2026 End-Year Status Provide fifty (50) temporary shelter beds for
participants in ECHO’s 90-Day Emergency Shelter
Program and one (1) nightly single-occupancy
emergency resource room available exclusively for
placement by the Paso Robles Police Department or
Fire & Emergency Services, subject to eligibility
criteria and operational constraints.

Seventy (70) 90-Day Program beds and one (1)
Emergency Resource Room provided.
(Attachment 1, pp. 3–5)
Utilize City-approved data collection tools to ensure
consistent reporting on enrollment, services,
referrals, housing placements, and other
performance measures.

Reporting received.
(Attachment 1, pp. 5–8, 11–12, 15-19)
Provide quarterly reports and communication to
surrounding stakeholders, including updates on
operations, data, community concerns, and
mitigation strategies; participate in quarterly
quality review and monitoring processes; and
maintain daily communication with clients
regarding community behavior expectations.

Ongoing coordination through the North
County Homelessness Network, monthly
meetings with the Homeless Services Division,
pilot programs addressing impacts along the
Black Oak Corridor, and integration into case
management and nightly guest engagement.
(Attachment 1, pp. 10, 19)
Update client consent forms to authorize datasharing with the City of Paso Robles Homeless Services Division; respond to City referrals within
five (5) business days.

No City referrals were made during the
reporting period.

Participate in City-organized meetings, forums, and
coordination efforts related to homelessness.

Participated in all events organized by the
Homeless Services Division.

Maintain agreement with HASLO for ownership and
operation of temporary housing.

Agreement in place and in good standing.

Provide occupancy preference, to the extent
allowed by law, to eligible households who live or
work in the City of Paso Robles.

ECHO reports eighty-five percent (85%) of
participants live and/or work in Paso Robles.

Seek and document relevant grant and funding
opportunities supporting ECHO Paso Robles
operations.

Documentation received.
(Attachment 1, pp. 2, 13-14)
ECHO shall maintain all required insurance
coverage pursuant to Section 27 of the SMOU,
including general liability, automobile, workers’
compensation, and professional liability insurance,
naming the City as an additional insured.

In compliance.

Defend, indemnify, and hold harmless the City of
Paso Robles pursuant to Section 23 of the Third
Amendment to the SMOU.

In compliance.

ECHO’s Financial Report
ECHO’s financial report provides a breakdown of expenditure and revenue streams for the Paso Robles Emergency Shelter. The budget outlines all expenses and income received from January 1, 2026, to June 30, 2026, under the City of Paso Robles award. During this period, ECHO fundraised $649,010.02 for the Paso Robles Shelter through grants, events, and community donations. Total expenses during this

timeframe amounted to $741,856.09, resulting in a deficit of $83,503.47 at the end of this timeframe. It is important to note that many of ECHO’s funding sources, including the City of Paso Robles’ contributions, are structured as reimbursement-based awards, meaning funds are received after expenses are incurred.

Contribution Agreement
The proposed Contribution Agreement continues the City's financial contribution in support of emergency shelter and homeless services provided by ECHO. The agreement maintains the City's annual contribution of $222,000 for Fiscal Years 2026–27 and 2027–28, consistent with funding appropriated by the City Council through the adopted budget.

The Contribution Agreement replaces the existing SMOU with an agreement format consistent with the City's current funding agreements with other community partner organizations. The City will continue to provide funding and contract oversight, while ECHO retain exclusive responsibility for the day-to-day management and operation of its programs, personnel, facilities, and service delivery.

The new format also incorporates administrative and legal provisions consistent with the City's current contracting practices. Key updates include:
a) Agreement Structure: Replaces the existing SMOU and its three amendments with a Contribution Agreement.
b) Roles and Responsibilities: Confirms that the City provides funding and contract oversight, while ECHO maintains sole responsibility for the operation and administration of its shelter and homeless services.
c) Standard Contract Provisions: Incorporates current City contract language related to insurance, indemnification, records retention, compliance with applicable laws, notices, and other administrative provisions.
d) Annual Reporting: Requires ECHO to provide annual reporting regarding program activities, service outcomes, financial information, and performance measures.

The proposed agreement does not change the level of City funding or expand the scope of services previously authorized. Rather, it updates the contractual framework to better reflect the City's role as a funding partner while maintaining accountability through annual reporting and contract administration.

Fiscal Impact
Per Council direction on June 16, 2026, the FY 2026-27 and FY 2027-28 budget includes a contribution to the El Camino Homeless Organization (ECHO) of $222,000 per fiscal year, for a total of $444,000 for the next two fiscal years. There is no additional fiscal impact.

CEQA
The City finds that this action is not a project under the California Environmental Quality Act pursuant to State Guidelines Section State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378.

Recommendation (Option 2)
Receive and file ECHO’s 2025-26 End-of-Year report and direct staff to distribute the final FY 2025-26 payment in the amount of $111,000 and approve the Contribution Agreement for FYs 2026-2028.

Attachments

1. ECHO FY 25-26 End-of-Year Report and Financial Report

2. ECHO FY 26-28 Contribution Agreement

EL CAMINO HOMELESS ORGANIZATION
Paso Robles Campus Report
January 2026 – June 2026
Presented By:

Wendy Lewis, CEO
Empowering people in San Luis Obispo County to make
positive change by providing food, shelter, and supportive services.

Attachment 1
1

City of Paso Robles Funding
100% of the funding that
ECHO receives from the City
of Paso Robles goes directly
towards supporting staffing
of our Paso Robles Campus.

The funding is instrumental
in providing the services
that help those facing
homelessness transform
their lives and get back into
housing.
25%
75%
City of Paso
Robles Funds
Allocated for
Staffing
The Funding Provided by the City of Paso Robles
Covers 20% of the staffing costs associated directly
with the ECHO Paso Robles Campus
Attachment 1
2

Paso Robles HomeKey Project
The Paso HomeKey Project is 122 total units or rooms and has two service providers, ECHO and the Housing Authority of San Luis Obispo (HASLO) ECHO Operates 41 total units on the campus including 70 Emergency Shelter Beds:
• 70 beds are designated for ECHO's 90-Day Emergency Shelter Program • 1 Room ECHO's Residential Advocate(s). Currently this is a couple with lived experience who graduated from our program and now help run our programs and offers support to clients, staff and volunteers. • 1 Room has been transitioned into a Community Food Pantry • 1 Room has been designated as a program, training, and Emergency Resource Room utilized by Paso Robles PD.

ECHO's Atascadero and Paso Robles campuses
currently provide 130 emergency shelter beds for
individuals experiencing homelessness throughout
North County. With the opening of our new Family
Wing at the end of August, we'll increase our
capacity to 160 beds.

Attachment 13

Addition of the Emergency Resource
Room
In January of 2024 ECHO also expanded services and updated our MOU with the city of Paso Robles to include an Emergency Resource room to be utilized by Paso Robles Emergency Services including Fire and Police.

This service will help aid in providing immediate shelter to an individual or family in need of this service that is engaged with our community's emergency response teams.

So far in 2026 the Resource Room was activated 4 times.

ECHO is grateful for the opportunity to partner with our Emergency Services and benefit our community to the best of our ability.

Attachment 1
4

Shelter Program Data
Jan. 26 Feb. 26 March 26 1st Quarterly Totals
Total Shelter Stays 2086 1820 1888 5794
Unduplicated
Individuals Served 81 79 75 235
Resource Room
Activation 0 1 0 1
April 26 May 26 June 26
2nd Quarterly
Totals
January- JuneTotals
Total Shelter
Stays 1616 1659 1639 4914 10708
Unduplicated
Individuals
Served
85 62 65 211 446
Resource Room
Activation 1 1 0 2 4
Attachment 1
5

Quarter 1
Jan-March
Quarter 2
April-June
1st & 2nd Quarter
Totals
Dinners Served 9,542 9,936 19,478
Showers Provided 652 649 1,301
Food Bags Given 1,350 1,350 2,700
Referrals to Mental Health 16 18 34
Referrals to Drug/Alcohol 5 10 15
Referrals to Other
Resources 85 103 188
Laundry Service On-site 420 420 840
Additional ECHO Program and Referral Data
Attachment 1
6

Jan. 26 Feb. 26 March 26 Quarterly Totals
Housed through
Shelter &
Outreach
17 12 15 44
Remained Housed
through Homeless
Prevention
0 0 1 1
Found
Employment 3 5 2 10
Quarterly Documented Success
ECHO, Paso Robles
April 26 May 26 June 26 Quarterly Totals Jan - June 2026 Housed through
Shelter &
Outreach
18 20 10 48 92
Remained Housed
through Homeless
Prevention
8 7 13 29 29
Found
Employment 6 2 1 9 19
Attachment 1
7

Attachment 1
8

Additional Programs
and Services
Attachment 1
9

ECHO’s Good Neighbor program has been in full effect, with Residents of the 90-Day Program, working with staff weekly to clean up trash in the Black Oak Corridor including adoption of the street and surrounding area.

January - June: ECHO collected
a total of 63 bags
of litter.

ECHO has collected roughly 1,079 lbs of trash in 2026.

ECHO collected roughly 2,972 lbs of trash in 2025.

ECHO has attended numerous Paso Robles CIty Council meetings and HSOC meetings, monthly homeless provider collaboration meetings(5 cities homeless coalition & 40 prado), 1 Business Roundtable Meeting, 3 NCHN Meetings, attended several HSD check-ins on a monthly or bimonthly basis, Collaborated with Earth Shine for trash pick-ups, and participated in many other items regarding community engagement and collaboration.

Neighborhood Collaborations
Attachment 1
10

Additional Services
Programs and Services Provided
Program Highlights:

One of our most popular programs is our free haircut service, which fills up quickly each time it's offered. Another client favorite is when a dedicated volunteer who comes every other week to perform live music during dinner, bringing joy, connection, and a sense of community to our campuses.

From education and workforce development to resource
navigation and wellness opportunities, our programs are designed to equip individuals with the tools they need to thrive.

Weekly/ Bi Weekly Monthly/ As Needed
• Cal FRESH
assistanceDepartment of
Social Services
• Clean Slate
Program
• Onsite mental
health evaluationsTMHA
• Free Haircuts
• Parenting Classes
• Drug & Alcohol
Education
• Financial Literacy
• NA Meetings
• Project Bright Birthdays
• Access Support Network
• Department of
Social Services
• Arts and Crafts
• Story and
Game times
● Mini Farm
Animals
Attachment 111

Success Stories
Bridgette & her family
Bridgette is a mother of six, and from the
moment she arrived at ECHO, one thing
was clear—she was determined to build a
new life for herself and her children. She
was focused, hardworking, and full of
strength. Her children quickly became
friends with everyone on campus.

While at ECHO, she made their room feel
like home, filling it with warmth and little
touches that made it their own. Some of
their favorite memories came from the
simple moments—especially Project Bright
Birthdays. Her son loved every minute of it:
the games, crafts, bubbles, mini farm
animals, books from the library, and, of
course, the birthday cake.

When asked about her time at ECHO,
Bridgette's gratitude always comes back to
the people. "My case manager helped with
gas vouchers, and I could talk to her about
everything. Teresa was amazing for me.

She always did little things for Damien. All
the staff did."
Today, Bridgette has been 20 months sober! She
continues attending NA meetings, meeting with her
sponsor, asking for help when she needs it, and
doing the work every single day.

Because of that dedication, Bridgette and her
children are now in a home of their own.
"It's complete. We have couches, tables, a TV, our
own beds. It's comfortable, homey, kid-friendly...
everything."
Attachment 112

ADMIN
ECHO-Paso
Robles Fundraising HHAP-2 HHAP-3 HHAP-4 HHAP-5 HHIP-3 HP Funding Home Key PLHA Program SB 1090 Total Revenue
40000 Operating Income
4000 Grants 4010 GOVERNMENT
GRANTS
4016 General Fund 2,764.26 2,764.26
4025 PLHA Grant 38,092.02 38,092.02
4032 HHAP Grant 62,877.02 120,502.45 183,379.47
4035 SB 1090 35,085.31 35,085.31
Total for 4010
GOVERNMENT GRANTS $0.00 $0.00 $0.00 62,877.02 120,502.45 $0.00 $0.00 $0.00 $0.00 $0.00 38,092.02 2,764.26 35,085.31 $259,321.06 4050 Non Government Grants
4057 Other Grants 96,760.00 15,000.00 111,760.00
4057R Other GrantsRestricted 111,000.00 111,000.00 4057FW Other Grants-Restricted
Family Wing 0.00
Total for 4057R Other
Grants-Restricted $0.00 111,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $111,000.00 Total for 4050 Non
Government Grants $0.00 111,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 96,760.00 $0.00 $0.00 $0.00 15,000.00 $0.00 $222,760.00 Total for 4000 Grants $0.00 111,000.00 $0.00 62,877.02 120,502.45 $0.00 $0.00 96,760.00 $0.00 $0.00 38,092.02 17,764.26 35,085.31 $482,081.06 4100 FUND RAISING INCOME
4101 Long Walk Home 13,208.34 13,208.34
4103 Empty Bowl 46,307.11 46,307.11
4107 Turkey Trot 9,000.00 9,000.00
4157 Event
Participation/DonationsMISC FR EVENTS-VIN 13
WINEMAKERS - 180.00 250.00 430.00
Total for 4100 FUND RAISING
INCOME $0.00 $0.00 68,695.44 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 250.00 $0.00 $68,945.44 4200 CONTRIBUTIONS
4207 Direct Mail/Envelopes 1,447.50 31.35 1,478.85
4210 Ecumenical Donations 8,279.71 8,279.71
4220 Business Donations 4,553.00 4,553.00
4230 Individual Donations 79,998.23 79,998.23
4235 Stock Donations 3,372.50 3,372.50
4240 Civic/Non Profit
Organizations 301.24 301.24 Total for 4200
CONTRIBUTIONS $0.00 $0.00 1,447.50 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 96,536.03 $0.00 $97,983.53 Total for 40000 Operating Income $0.00 111,000.00 70,142.94 62,877.02 120,502.45 $0.00 $0.00 96,760.00 $0.00 $0.00 38,092.02 114,550.28 35,085.31 $649,010.02 4524 In-Kind Contributions 10,673.00 6,313.29 16,986.29 4900 OTHER INCOME
4905 Interest 24,856.07 24,856.07
4906 Dividends 3,633.40 3,633.40
Total for 4900 OTHER INCOME 28,489.47 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $28,489.47 Total for Revenue 28,489.47 111,000.00 70,142.94 62,877.02 120,502.45 $0.00 $0.00 96,760.00 $0.00 10,673.00 38,092.02 120,863.57 35,085.31 $694,485.78 Gross Profit 28,489.47 111,000.00 70,142.94 62,877.02 120,502.45 $0.00 $0.00 96,760.00 $0.00 10,673.00 38,092.02 120,863.57 35,085.31 $694,485.78 Expenditures 5000 ADMINISTRATIVE

EXPENSES
5010 Conferences & Training 184.50 157.50 47.91 903.96 1,293.86 5011 Admin
Meals/Appreciation/Outreach 192.79 500.00 37.83 2,667.04 1,833.54 5,231.19 5020 Dues, Fees, Memberships 8,038.28 108.96 49.50 8,196.74 5030 Insurance
5031 Employee Health -6,736.64 3,103.37 1,418.65 9,737.54 628.88 663.61 145.90 3,052.48 3,331.43 3,261.25 8,884.99 27,491.45 5035 D & O Insurance 1,702.05 2,836.75 4,538.80
5036 Liability/Prop/Umbrella
Insurance 3,793.47 3,853.95 5,991.08 11,741.66 811.86 26,192.01 Total for 5030 Insurance -1,241.12 3,103.37 $0.00 5,272.60 9,737.54 628.88 663.61 145.90 $0.00 9,043.56 3,331.43 17,839.66 9,696.85 $58,222.26 5050 Office Supplies & Services 2,729.12 -87.40 3,824.04 6,465.76 5070 Professional Charges 21,523.65 804.74 943.69 830.22 140.28 132.05 188.19 119.54 239.61 290.02 1,009.22 26,221.20 5075 Bank Charges 2,097.74 2,097.74
5080 Payroll
5085 Wages 87,974.31 13,988.64 90,245.18 15,248.64 14,352.12 20,455.41 12,993.35 26,043.40 15,760.30 109,701.07 406,762.41 5090 Payroll Tax Expense 7,901.15 1,418.41 7,653.59 1,290.26 1,412.16 2,098.26 980.42 2,138.07 1,472.23 10,086.39 36,450.93 5092 Accrued Vacation/Sick -31,537.48 -31,537.48
5095 Workers Comp Exp 12,169.24 12,169.24
5096 401K - Admin fees 1,408.57 1,408.57
5097 401K - ER MATCH 2,473.92 2,473.92
Total for 5080 Payroll -15,485.75 95,875.46 $0.00 15,407.04 97,898.77 16,538.90 15,764.28 22,553.67 $0.00 13,973.77 28,181.47 17,232.53 119,787.46 $427,727.59 Total for 5000 ADMINISTRATIVE
EXPENSES 18,039.20 99,783.57 657.50 21,623.33 108,504.36 17,308.05 16,559.93 22,887.76 $0.00 25,873.38 35,576.55 38,149.19 130,493.53 $535,456.33 5079 Investment Account Fees 84.93 84.93
5100 FUNDRAISING EXPENSES
5110 Event/Fundraising Exp -
Adv.Promo 7,444.67 7,444.67
5113 Empty Bowl 3,190.81 3,190.81
5160 Publicity/Promotion 2,280.70 2,280.70
Total for 5100 FUNDRAISING
EXPENSES $0.00 $0.00 12,916.18 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $12,916.18 5200 PROGRAM EXPENSES
5300 FOOD SERVICE
5310 Food 353.07 1,071.05 1,424.12
5310IK InKind Food 515.00 515.00
Total for 5310 Food $0.00 $0.00 0.00 $0.00 353.07 $0.00 $0.00 $0.00 $0.00 1,586.05 $0.00 0.00 $0.00 $1,939.12 Total for 5300 FOOD SERVICE $0.00 $0.00 0.00 $0.00 353.07 $0.00 $0.00 $0.00 $0.00 1,586.05 $0.00 0.00 $0.00 $1,939.12 El Camino Homeless Organization
Statement of Activity by Class
January-June, 2026
Attachment 113

5400 SHELTER SERVICES
5442 General Supplies &
Materials 1,541.82 13,605.44 2,942.93 81.54 18,171.72
Total for 5400 SHELTER
SERVICES $0.00 $0.00 $0.00 1,541.82 13,605.44 $0.00 $0.00 $0.00 $0.00 2,942.93 81.54 0.00 $0.00 $18,171.72 5500 CLIENT SERVICES
5560 Miscellaneous
Assistance
5572 Direct Aid 2,580.15 1,352.18 6,679.91 10,612.24 5572IK InKind Direct Aid 10,158.00 10,158.00 Total for 5572 Direct
Aid 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 2,580.15 1,352.18 16,837.91 $0.00 0.00 $0.00 $20,770.24 Total for 5560
Miscellaneous Assistance 0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 2,580.15 1,352.18 16,837.91 $0.00 0.00 $0.00 $20,770.24 5562 Children's/Client
Enrichment 234.21 234.21
5605 Housing Assistance
5610 Security Dep &
Rental Assist 43,350.53 29,663.23 73,013.76
Total for 5605 Housing
Assistance $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 43,350.53 $0.00 0.00 29,663.23 $0.00 0.00 $0.00 $73,013.76 5725 TRANSPORTATION
& Communication
5730 Local Bus Tickets 2,331.25 2,331.25
5740 Client Gas 337.50 2,875.00 3,212.50 5745 Staff Vehicle Expense 2,413.77 2,413.77
Total for 5725

TRANSPORTATION &
Communication $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 337.50 $0.00 5,288.77 2,331.25 0.00 $0.00 $7,957.52 Total for 5500 CLIENT
SERVICES 0.00 $0.00 0.00 $0.00 $0.00 $0.00 43,350.53 2,917.65 1,352.18 52,024.12 2,331.25 0.00 $0.00 $101,975.73 Total for 5200 PROGRAM
EXPENSES 0.00 $0.00 0.00 1,541.82 13,958.51 $0.00 43,350.53 2,917.65 1,352.18 56,553.10 2,412.79 0.00 $0.00 $122,086.57 7000 Physical Plant
7010 Building/Grounds
Maintenance & Repair 4,205.00 7,795.39 4,436.49 1,740.00 18,176.88 7030 Utilities
7031 Gas 4,518.84 558.28 703.86 5,780.98
7032 Electricity 13,176.51 1,535.54 2,244.41 16,956.46
7033 Water/Sewer 13,265.18 2,186.43 2,736.48 18,188.09
7034 Telephone & Internet
Service 520.39 3,418.02 2,293.63 6,232.04
7036 Waste Management 2,999.83 35.00 2,929.65 5,964.48
7037 Security System
Maintenance 22.17 22.17
Total for 7030 Utilities 520.39 $0.00 $0.00 37,378.38 $0.00 $0.00 $0.00 $0.00 $0.00 6,608.88 $0.00 0.00 8,636.57 $53,144.22 Total for 7000 Physical Plant 520.39 $0.00 $0.00 41,583.38 7,795.39 $0.00 $0.00 $0.00 $0.00 11,045.37 $0.00 0.00 10,376.57 $71,321.10 Suspense $0.00 $0.00
Total for Expenditures 18,644.51 99,783.57 13,573.68 64,748.52 130,258.26 17,308.05 59,910.46 25,805.41 1,352.18 93,471.85 37,989.34 38,149.19 140,870.10 $741,865.09 Net Operating Revenue 9,844.96 11,216.43 56,569.27 -1,871.50 -9,755.81 -17,308.05 -59,910.46 70,954.60 -1,352.18 -82,798.85 102.68 82,714.38 -105,784.79 -$47,379.31 Other Expenditures
8004 Family Wing Construction
8004-C Family Wing
Construction-Const 36,124.16 36,124.16
Total for 8004 Family Wing
Construction $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 36,124.16 $0.00 $0.00 $0.00 0.00 $0.00 $36,124.16 Total for Other Expenditures $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 36,124.16 $0.00 $0.00 $0.00 0.00 $0.00 $36,124.16 Net Other Revenue $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 -36,124.16 $0.00 $0.00 $0.00 0.00 $0.00 -$36,124.16 Net Revenue 9,844.96 11,216.43 56,569.27 -1,871.50 -9,755.81 -17,308.05 -59,910.46 34,830.44 -1,352.18 -82,798.85 102.68 82,714.38 -105,784.79 -$83,503.47 Budget Narrative
The budget above shows all expenses and income received for the ECHO, Paso Robles Emergency Shelter during Janaury - June 2026 for the City of Paso Robles grant award. During this timeframe, ECHO fundraised $649,010.02 for the Paso Robles Shelter though grants, events, and community donations. The total expenses for the ECHO, Paso Robles Shelter was $741,865.09. This leaves ECHO with a current deficit of $83,503.47 at the end of this timeframe. Many of ECHO's grants are similar to the City of Paso Robles Grant award in that the funds are awarded as a reimbrusement after expenses occur. Because of these grant processes, ECHO's budget will fluxuate between having a surplus or deficit of funds throughout the year.

Budget Key:

Blue Cells = Expenses and income for the City of Paso Robles Grant Award Green Cells = Total expeneses & income for ECHO, Paso Robles Emegrency Shelter Gray Cells = Other expenses & income for the ECHO, Paso Robles Emergency Shelter I hearby certifiy that I have examined this report and that the statements made and the figures shown herin and in any accompanying schedules are, to the best of my knowledge and belief, a true and complete financial statements, made in good faith for the period stated.
.
. __Mimi Rodriguez___ 08.04.2026 .
. . signature date
Attachment 114

Date Agency Service Provided
Number of
Attendees
Janaury 2026
2-Jan Reiki Healing Reiki healing through energy work 2 3-Jan Narcotics Anonymous Narcotics Anonymous Meeting 4 6-Jan SLO Bangers Needle exchange, education and HIV testing N/A 7-Jan Laundry Program Laundry Program for nightly clients 9 7-Jan Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 2
8-Jan Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 8
10-Jan Narcotics Anonymous Narcotics Anonymous Meeting 5 12-Jan Bingo Night Bingo and Prizes 10
13-Jan SLO Bangers Needle exchange, education and HIV testing N/A 13-Jan Chuck Sing Chuck singing at dinner N/A
14-Jan Laundry Program Laundry Program for nightly clients 11 14-Jan Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 4
16-Jan Mini farm animals Therapy animals are brought on site for interactive time with residents 3 17-Jan Narcotics Anonymous Narcotics Anonymous Meeting 5 20-Jan SLO Bangers Needle exchange, education and HIV testing N/A 21-Jan Laundry Program Laundry Program for nightly clients 9 21-Jan Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 4
23-Jan Job Resume/Finding Program Dee helps individuals build their resumes and apply for jobs 2 24-Jan Narcotics Anonymous Narcotics Anonymous Meeting 3 27-Jan SLO Bangers Needle exchange, education and HIV testing N/A 27-Jan Chuck Sing Chuck singing at dinner N/A
28-Jan Laundry Program Laundry Program for nightly clients 12 28-Jan Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 3
31-Jan Narcotics Anonymous Narcotics Anonymous Meeting 2 February 2026
2-Feb Parent Classes
Parent classes for parents to discover strong and healthy solutions for specific parenting challenges 2
2-Feb Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 12
3-Feb SLO Bangers Program Needle exchange, education and HIV testing N/A 4-Feb Laundry Program Laundry Program for nightly clients 8 4-Feb Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 4
6-Feb Reiki Healing Reiki healing through energy work 4 7-Feb Narcotics Anonymous Narcotics Anonymous Meeting 3 9-Feb Mini Heart Decorating Decorating mini heart pinatas 10-Feb SLO Bangers Program Needle exchange, education and HIV testing N/A 10-Feb Chuck Sing Chuck singing at dinner N/A
11-Feb Laundry Program Laundry Program for nightly clients 7 11-Feb Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 5
12-Feb Haircuts with nick
Nick from adventist health gave haircuts to residents and outreach clients 5
14-Feb Narcotics Anonymous Narcotics Anonymous Meeting 4 17-Feb SLO Bangers Program Needle exchange, education and HIV testing N/A 18-Feb Laundry Program Laundry Program for nightly clients 6 18-Feb Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 5
19-Feb Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 10
21-Feb Narcotics Anonymous Narcotics Anonymous Meeting 2 23-Feb Bingo Night Bingo and Prizes 8
24-Feb SLO Bangers Program Needle exchange, education and HIV testing N/A 24-Feb Chuck Sing Chuck singing at dinner N/A
25-Feb Laundry Program Laundry Program for nightly clients 5 Attachment 1
15

25-Feb Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 4
27-Feb Mini farm animals Therapy animals are brought on site for interactive time with residents 12 27-Feb Project bright birthdays
Fun birthday party in collaboration with the city for kids birthdays in that quarter 12
28-Feb Narcotics Anonymous Narcotics Anonymous Meeting 3 March 2026
3-Mar SLO Bangers Program Needle exchange, education and HIV testing N/A 4-Mar Laundry Program Laundry Program for nightly clients 6 4-Mar Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 8
4-Mar Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 12
6-Mar Reiki Healing Reiki healing through energy work 3 7-Mar Narcotics Anonymous Narcotics Anonymous Meeting 2 10-Mar SLO Bangers Program Needle exchange, education and HIV testing N/A 11-Mar Laundry Program Laundry Program for nightly clients 7 11-Mar Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 8
12-Mar Amanda free phones Helps clients get free phones 2 17-Mar St Patricks Pinata Decorating
Let's Create Con Amor provides all supplies for clients to create own personalized pinata 12
17-Mar SLO Bangers Program Needle exchange, education and HIV testing N/A 18-Mar Laundry Program Laundry Program for nightly clients 8 18-Mar Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 5
19-Mar Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 11
21-Mar Narcotics Anonymous Narcotics Anonymous Meeting 3 23-Mar Bingo Night Bingo and Prizes 10
24-Mar SLO Bangers Program Needle exchange, education and HIV testing N/A 24-Mar Chuck Sing Chuck singing at dinner N/A
25-Mar Laundry Program Laundry Program for nightly clients 8 25-Mar Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 7
26-Mar Amanda free phones Helps clients get free phones 3 31-Mar Camp ocean pines
Environmental Education and Camp Ocean Pines animal
ambassadors 6
31-Mar SLO Bangers Program Needle exchange, education and HIV testing N/A Apr-26
1-Apr Laundry Program Laundry Program for nightly clients 6 1-Apr Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 4
1-Apr Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 12
3-Apr Reiki Healing Reiki healing through energy work 2 3-Apr Easter Egg Hunt A fun easter egg hunt for all the children and family at the shelter 15 4-Apr Narcotics Anonymous Narcotics Anonymous Meeting 2 7-Apr SLO Bangers Program Needle exchange, education and HIV testing N/A 7-Apr Chuck Sing Chuck singing at dinner N/A
8-Apr Laundry Program Laundry Program for nightly clients 5 8-Apr Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 6
14-Apr Bingo Night Bingo and Prizes 12
14-Apr SLO Bangers Program Needle exchange, education and HIV testing N/A 15-Apr Laundry Program Laundry Program for nightly clients 7 15-Apr Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 5
16-Apr Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 14
18-Apr Narcotics Anonymous Narcotics Anonymous Meeting 3 21-Apr SLO Bangers Program Needle exchange, education and HIV testing N/A Attachment 1
16

21-Apr Chuck Sing Chuck singing at dinner N/A
22-Apr Laundry Program Laundry Program for nightly clients 7 22-Apr Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 4
23-Apr Camp ocean pines
Environmental Education and Camp Ocean Pines animal
ambassadors 8
25-Apr Kahoot and Cones Clients play kahoot game to learn shelter rules and get ice cream 5 28-Apr SLO Bangers Program Needle exchange, education and HIV testing N/A 29-Apr Laundry Program Laundry Program for nightly clients 6 29-Apr Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 7
May-26
1-May Mini farm animals Therapy animals are brought on site for interactive time with residents 14 1-May Project bright birthdays
Fun birthday party in collaboration with the city for kids birthdays in that quarter 14
2-May Narcotics Anonymous Narcotics Anonymous Meeting 1 5-May Bingo Night Bingo and Prizes 6
5-May Chuck Sing Chuck singing at dinner N/A
6-May Laundry Program Laundry Program for nightly clients 8 6-May Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 5
6-May Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 12
6-May Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
7-May Therapy Dogs With Dale Dale brings therapy dog for clients to interact with 15 8-May Reiki Healing Reiki healing through energy work 2 9-May Mothers Day Cookie Decorating A fun way to bring mothers together and decorate yummy cookies 6 13-May Laundry Program Laundry Program for nightly clients 7 13-May Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 8
13-May Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
16-May Narcotics Anonymous Narcotics Anonymous Meeting 2 19-May Pancakes and PJs 90 day client meeting 6
19-May Chuck Sing Chuck singing at dinner N/A
20-May Laundry Program Laundry Program for nightly clients 8 20-May Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 7
20-May Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
21-May Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 12
25-May Haircuts with nick
Nick from adventist health gave haircuts to residents and outreach clients 6
26-May Camp ocean pines
Environmental Education and Camp Ocean Pines animal
ambassadors 8
26-May SLO Bangers Program Needle exchange, education and HIV testing N/A 27-May Laundry Program Laundry Program for nightly clients 7 27-May Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 6
27-May Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
June 2026
2-Jun SLO Bangers Program Needle exchange, education and HIV testing N/A 2-Jun Chuck Sing Chuck singing at dinner N/A
3-Jun Laundry Program Laundry Program for nightly clients 8 3-Jun Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 9
3-Jun Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 11
3-Jun Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
Attachment 1
17

9-Jun SLO Bangers Program Needle exchange, education and HIV testing N/A 10-Jun Laundry Program Laundry Program for nightly clients 6 10-Jun Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 8
10-Jun Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
12-Jun Reiki Healing Reiki healing through energy work 2 16-Jun SLO Bangers Program Needle exchange, education and HIV testing N/A 16-Jun Chuck Sing Chuck singing at dinner N/A
17-Jun Laundry Program Laundry Program for nightly clients 6 17-Jun Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 9
17-Jun Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
18-Jun Social Services
They help with simple tasks like checking your case status, updating contact information, helping with CalFresh SAR 7’s, or starting an application. 12
19-Jun Father's Day Wooden Craft Night
Participants built their own fully functioning cars using screws, batteries, and step-by-step instructions. 4
23-Jun SLO Bangers Program Needle exchange, education and HIV testing N/A 24-Jun Laundry Program Laundry Program for nightly clients 6 24-Jun Access Support Network
HIV and Hep C testing, Wound care, Low Barrier MOUD, Hep C Treatment, Narcan Distribution, Suboxone 7
24-Jun Mobile Probation Services
Parks at the front of echo to meet clients that need to check in with their P.O. N/A
30-Jun SLO Bangers Program Needle exchange, education and HIV testing N/A 30-Jun Chuck Sing Chuck singing at dinner N/A
Attachment 1
18

Date Time Received Time Returned Handled By What Call Was Regarding Attachment 1
19

AGREEMENT BETWEEN THE CITY OF EL PASO DE ROBLES AND EL CAMINO

HOMELESS ORGANIZATION, FOR THE PROVISION OF EMERGENCY SHELTER

AND HOMELESS SUPPORTIVE SERVICES
______________________________________________________________________ THIS AGREEMENT (“Agreement”) is made and entered into this 1st day of July 2026 (“Effective Date”) by and between the City of El Paso de Robles (hereafter referred to as “CITY”) and El Camino Homeless Organization, a California nonprofit public benefit corporation (hereafter referred to as “ECHO”).

WHEREAS, CITY has developed its strategic plan to address homelessness, which includes specific recommendations and actions to diversify and strengthen the Paso Robles housing access, programs and services, and education; and WHEREAS, ECHO is a key stakeholder in the CITY's homelessness and housing landscape and will assist the CITY in carrying out objectives and action items contained within the strategic plan; and
WHEREAS, ECHO has special knowledge and experience for the operation of emergency shelter and supportive services for individuals and families experiencing homelessness in the CITY; and
WHEREAS, the CITY desires to have ECHO provide these services in order to address homelessness in the CITY and support the operation of the ECHO Paso Robles facility located at 1134 Black Oak Drive, Paso Robles, CA 93446; and
WHEREAS, ECHO is willing to provide the services hereinafter set forth on behalf of the CITY in the manner and for the purpose hereinafter provided; and CITY and ECHO hereby enter into this Agreement to set forth the terms and conditions relating to certain emergency shelter and services to be provided by ECHO.

1. ECHO RESPONSIBILITIES. ECHO shall provide and perform the following services and activities during the term of this Agreement subject to the conditions set forth in Exhibit A, attached and incorporated by reference hereto:

A. Provide fifty (50) temporary shelter beds dedicated to participants of ECHO’s 90- Day Emergency Shelter Program, together with case management services and life-skills classes;
B. Provide one (1) nightly crisis room available exclusively for placement by the Paso Robles Police Department or Paso Robles Fire and Emergency Services; C. Utilize data collection templates and tools mutually agreed upon with the CITY to ensure consistent quarterly reporting and performance tracking through the County’s Homeless Management Information System (“HMIS”); D. Achieve and maintain performance metrics mutually agreed upon by CITY and ECHO;
E. Provide a quarterly newsletter to surrounding stakeholders reporting on shelter operations, statistical data, and community concerns;
Attachment 21

F. Make available to stakeholders a twenty-four (24)-hour telephone line for reporting urgent issues;
G. Participate in a quarterly quality review and monitoring process evaluating the quality and impact of services delivered, and ensure daily communication with clients regarding expectations for appropriate community behavior; H. Provide the CITY with an updated Good Neighbor Policy as approved by ECHO's Board of Directors;
I. Update client consent forms to include language referencing the CITY's Homeless Services Division as an authorized data-sharing and coordination partner, in compliance with applicable privacy laws;
J. Receive and respond to all referrals from the CITY within five (5) business days of receipt;
K. Participate in the CITY’s strategic plan process by attending meetings, conferences, and other events where attendance is deemed essential to implementing the CITY's homelessness and housing strategy; L. Subject to applicable law and funding source requirements, give a preference in the occupancy of temporary shelter units to eligible households who live or work in the CITY;
M. Provide to the CITY an annual report, including ECHO’s financials and implementation of the services described in this Section; and N. Comply with all applicable federal, state, and local laws, regulations, licensing requirements, U.S. Department of Housing and Urban Development (“HUD”) requirements, HMIS standards, privacy laws, labor laws, and funding source requirements.

2. COMPENSATION. In consideration of the services performed by ECHO pursuant to this Agreement, and so long as ECHO is not in default under any of the provisions of this Agreement, CITY shall:

A. Disburse two hundred twenty-two thousand dollars ($222,000) to cover services for the 2026-27 fiscal year, payable upon CITY’s receipt of ECHO’s annual report described in Section 1 above.

B. Disburse two hundred twenty-two thousand dollars ($222,000) to cover services for the 2027-28 fiscal year, payable upon CITY’s receipt of ECHO’s annual report described in Section 1 above.

C. Payment shall be made upon receipt and acceptance of the annual report by the CITY and verification that ECHO is in substantial compliance with this Agreement. The CITY may withhold payment until deficiencies are corrected.

D. In the event that the City Council is compelled to reduce General Fund budget expenditures at any time during the term of this Agreement, the amount of the payments under this Agreement may need to be reduced, as determined by CITY. CITY shall notify ECHO of any such reduction as early as is reasonably feasible and understands that any reduction in CITY’s payment may result in a proportionate reduction in ECHO services provided under this Agreement.

Attachment 22

E. During the term of this Agreement, ECHO shall make efforts to secure other sources of funding for its services, in order to reduce reliance on CITY funds.

F. This Agreement shall not prevent the CITY from appropriating additional sums for specific projects that the CITY may desire to have performed by ECHO.

3. ECHO’S ANNUAL BUDGET. ECHO shall, by April 1 of each year, submit to the CITY for review by the City Council, a budget and plan for the emergency shelter and supportive services to be provided by ECHO during the next following fiscal year covered by this Agreement. The budget should first be approved by ECHO’s Board of Directors.

4. ECHO’S FINANCIAL RECORDKEEPING, REPORTING, AND AUDITS. Upon fifteen (15) days’ notice to ECHO, the CITY shall have the right to audit the books, records, and accounts of ECHO during normal business hours. In addition to the annual reports ECHO is to furnish to the CITY pursuant to Section 1 above, ECHO shall provide annual operations and financial reports as described in Exhibit A. CITY may inspect facilities, records, and program operations upon reasonable notice. ECHO shall retain all financial records, supporting documentation, program records, HMIS reporting documentation, invoices, payroll records, and grant records for a minimum of five (5) years following expiration of this Agreement.

5. USE OF FUNDS; PROHIBITION AGAINST POLITICAL ACTIVITY. Funds disbursed under this Agreement shall be used exclusively for the provision of emergency shelter and supportive services described. ECHO shall not use any monies received under this Agreement for endorsement, opposition, or participation in any political or lobbying activity, including but not limited to, involvement in the support or opposition to any candidate for public office or proposed ballot measure.

6. INDEMNIFICATION, HOLD HARMLESS. To the fullest extent permitted by law, ECHO shall indemnify, defend, and hold the CITY, its officials, officers, directors, agents, volunteers, and employees free and harmless from any and all liability, claims, demands, causes of action, damages, losses, and expenses, including attorneys’ fees, arising out of the performance by ECHO of the services provided for hereunder, caused in whole or in part by any alleged act, error, omission, or willful misconduct of ECHO, its officers, employees, subcontractors, consultants, or agents in carrying out the terms of this Agreement. ECHO remains fully responsible for the performance of all subcontractors.

ECHO’s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by ECHO or the CITY. The obligations contained in this Section shall survive the expiration or earlier termination of this Agreement. ECHO's duty to defend shall arise immediately upon tender of any claim covered by this Section.

7. INSURANCE. ECHO shall not commence any additional work for the CITY until it has provided evidence satisfactory to the CITY that it has secured all insurance required under this Section. In addition, ECHO shall not allow any subcontractor to commence work on any subcontract until it has secured all insurance required under this Section.

8. Commercial General Liability
a) ECHO shall take out and maintain, during the performance of all work under this Agreement, in amounts not less than specified herein, Commercial General Liability Insurance, in a form and with insurance companies acceptable to the CITY.

Attachment 23

b) Coverage for Commercial General Liability Insurance shall be at least as broad as the following:

1. Insurance Services Office Commercial General Liability coverage (Occurrence Form CG 00 01) or exact equivalent.
c) Commercial General Liability Insurance must include coverage for the following:

1. Bodily Injury and Property Damage

2. Personal Injury/Advertising Injury

3. Premises/Operations Liability

4. Products/Completed Operations Liability

5. Aggregate Limits that Apply per Project

6. Explosion, Collapse and Underground (“UCX”) exclusion deleted

7. Contractual Liability with respect to this Agreement

8. Broad Form Property Damage

9. Independent Consultants Coverage
d) The policy shall contain no endorsements or provisions limiting coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one insured against another; (3) products/completed operations liability; or (4) contain any other exclusion contrary to the Agreement.
e) The policy shall give CITY, its officials, officers, employees, agents and CITY designated volunteers additional insured status using ISO endorsement forms CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.
f) The Commercial General Liability program may utilize either deductibles or provide coverage excess of a self-insured retention, subject to written approval by the CITY, and provided that such deductibles shall not apply to the CITY as an additional insured.

B. Automobile Liability
a) At all times during the performance of the work under this Agreement, ECHO shall maintain Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, in a form and with insurance companies acceptable to the CITY.
b) Coverage for Automobile Liability Insurance shall be at least as broad as Insurance Services Office Form Number CA 00 01 covering automobile liability (Coverage Symbol 1, any auto).
c) The policy shall give CITY, its officials, officers, employees, agents and CITY designated volunteers additional insured status.

Attachment 24

d) Subject to written approval by the CITY, the Automobile Liability program may utilize deductibles, provided that such deductibles shall not apply to the CITY as an additional insured, but not a self-insured retention.

C. Workers’ Compensation/Employer’s Liability
a) ECHO certifies that it is aware of the provisions of Section 3700 of the California Labor Code which requires every employer to be insured against liability for Workers’ Compensation or to undertake selfinsurance in accordance with the provisions of that Code, and it will comply with such provisions before commencing work under this Agreement.
b) To the extent ECHO has employees at any time during the term of this Agreement, at all times during the performance of the work under this Agreement, ECHO shall maintain full compensation insurance for all persons employed directly by it to carry out the work contemplated under this Agreement, all in accordance with the “Workers’ Compensation and Insurance Act,” Division IV of the Labor Code of the State of California and any acts amendatory thereof, and Employer’s Liability Coverage in amounts indicated herein. ECHO shall require all subconsultants to obtain and maintain, for the period required by this Agreement, Workers’ Compensation coverage of the same type and limits as specified in this Section.

D. Professional Liability (Errors and Omissions)
a) At all times during the performance of the work under this Agreement, ECHO shall maintain Professional Liability or Errors and Omissions Insurance appropriate to its profession, in a form and with insurance companies acceptable to the CITY and in an amount indicated herein.

This insurance shall be endorsed to include contractual liability applicable to this Agreement and shall be written on a policy form coverage specifically designed to protect against acts, errors or omissions of ECHO. “Covered Professional Services” as designated in the policy must specifically include work performed under this Agreement. The policy must “pay on behalf of” the insured and must include a provision establishing the insurer's duty to defend.

E. Minimum Policy Limits Required
a) The following insurance limits are required for the Agreement:

Combined Single Limit
Commercial General Liability $1,000,000 per occurrence/ $2,000,000 aggregate for bodily
injury, personal injury, and
property damage
Attachment 25

Automobile Liability $1,000,000 per occurrence for
bodily injury and property damage
Employer’s Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and
aggregate (errors and omissions)
b) Defense costs shall be payable in addition to the limits. c) Requirements of specific coverage or limits contained in this Section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as Additional Insured pursuant to this Agreement.

F. Evidence Required
a) Prior to execution of the Agreement, ECHO shall file with the CITY evidence of insurance from an insurer or insurers certifying to the coverage of all insurance required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer’s equivalent) signed by the insurer’s representative and Certificate of Insurance (Acord Form 25-S or equivalent), together with required endorsements. All evidence of insurance shall be signed by a properly authorized officer, agent, or qualified representative of the insurer and shall certify the names of the insured, any additional insureds, where appropriate, the type and amount of the insurance, the location and operations to which the insurance applies, and the expiration date of such insurance.

G. Policy Provisions Required
a) ECHO shall provide the CITY at least thirty (30) days prior written notice of cancellation of any policy required by this Agreement, except that ECHO shall provide at least ten (10) days prior written notice of cancellation of any such policy due to non-payment of premium. If any of the required coverage is cancelled or expires during the term of this Agreement, ECHO shall deliver renewal certificate(s) including the Commercial General Liability additional insured endorsement to the CITY at least ten (10) days prior to the effective date of cancellation or expiration.
b) The Commercial General Liability policy and Automobile Liability policy shall each contain a provision stating that ECHO’s policy is primary insurance and that any insurance, self-insurance or other coverage maintained by the CITY or any named insureds shall not be called upon to contribute to any loss.
c) The retroactive date (if any) of each policy is to be no later than the Effective Date of this Agreement. ECHO shall maintain such coverage continuously for a period of at least three years after the completion of the work under this Agreement. ECHO shall purchase a one (1) year extended reporting period A) if the retroactive date is advanced past the Attachment 26

Effective Date of this Agreement; B) if the policy is cancelled or not renewed; or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent to the Effective Date of this Agreement.
d) All required insurance coverages, except for the Professional Liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the CITY, its officials, officers, employees, agents, and volunteers or shall specifically allow ECHO or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a loss. ECHO hereby waives its own right of recovery against CITY, and shall require similar written express waivers and insurance clauses from each of its subconsultants.
e) The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability. Further the limits set forth herein shall not be construed to relieve the Consultant from liability in excess of such coverage, nor shall it limit ECHO’s indemnification obligations to the CITY and shall not preclude the CITY from taking such other actions available to the CITY under other provisions of the Agreement or law.

H. Qualifying Insurers
a) All policies required shall be issued by acceptable insurance companies, as determined by the CITY, which satisfy the following minimum requirements:

1. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A: VII and admitted to transact in the business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

I. Additional Insurance Provisions
a) The foregoing requirements as to the types and limits of insurance coverage to be maintained by ECHO, and any approval of said insurance by the CITY, is not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by ECHO pursuant to this Agreement, including but not limited to, the provisions concerning indemnification.
b) If at any time during the life of the Agreement, any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced, CITY has the right but not the duty to obtain the insurance it deems necessary and any premium paid by CITY will be promptly reimbursed by ECHO or CITY will withhold amounts sufficient to pay premium from ECHO payments.

In the alternative, CITY may cancel this Agreement.
c) The CITY may require ECHO to provide complete copies of all insurance policies in effect for the duration of the agreement.

Attachment 27

d) Neither the CITY nor any of its officials, officers, employees, agents, or volunteers shall be personally responsible for any liability arising under or by virtue of this Agreement.

J. Subconsultant Insurance Requirements. ECHO shall not allow any subcontractors or subconsultants to commence work on any subcontract until they have provided evidence satisfactory to the CITY that they have secured all insurance required under this section. Policies of commercial general liability insurance provided by such subcontractors or subconsultants shall be endorsed to name the CITY as an additional insured using ISO form CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by ECHO, CITY may approve different scopes or minimum limits of insurance for particular subcontractors or subconsultants.

9. INDEPENDENT CONTRACTOR; NOT AGENT. Notwithstanding any other representation, oral or written, between the parties, including any and all agents or representatives thereof, ECHO is at all times during the term of this Agreement acting as a free and independent contractor, and shall not be an employee or an agent of the CITY.

Except as the CITY may authorize in writing, ECHO shall have no authority, express or implied, to act on behalf of the CITY in any capacity whatsoever as an agent, and shall have no authority, express or implied, pursuant to this Agreement, to bind the CITY to any obligations whatsoever.

10. CONFLICT OF INTEREST. ECHO shall not enter into any contract or agreement that will create a conflict of interest with its duties to the CITY under this Agreement.

No member, official or employee of the CITY shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to this Agreement which affects his or her personal interests or the interests of any corporation, partnership, or association in which he or she is directly or indirectly interested. ECHO warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

11. LICENSES, PERMITS. ECHO represents and warrants to the CITY that it has and shall maintain at all times during the term of this Agreement, at its sole cost and expense, all business licenses, permits, qualifications, and approvals of whatsoever nature which are legally required for ECHO to provide the services hereunder.

12. ASSIGNMENT PROHIBITED. No Party to this Agreement may assign any right or obligation pursuant to this Agreement without the prior written consent of the other Party.

Any attempted or purported assignment without such consent shall be void and of no effect.

13. NON-DISCRIMINATION. ECHO agrees to comply with all fair employment practice laws of the state and federal government. ECHO covenants and agrees for itself, its successors, its assigns and every successor in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, sexual orientation, medical condition, disability, marital status, ancestry, or national origin in the provision of any services to be provided by ECHO hereunder, nor shall ECHO or any person claiming under or through ECHO establish or permit any such practice or practices of discrimination or segregation in the provision of any services to be provided by ECHO hereunder.

Attachment 28

14. REVERSION OF FUNDS AND PROPERTY. During the term of this Agreement, should ECHO’s Board of Directors be dissolved, disbanded, or otherwise cease to function in a manner described in this Agreement, all assets of ECHO shall be disbursed in accordance with applicable provisions of ECHO’s Bylaws. All funds attributable to the CITY, and equipment purchased out of funds provided by the CITY, shall revert to ownership of the CITY. For the purpose of this provision, ECHO shall maintain a written record of, and include as part of each annual report, a listing of capital equipment that has been purchased with funds provided by CITY.

15. TERM. The term of this Agreement shall commence on July 1, 2026 and expire June 30, 2028, unless terminated earlier in accordance with Section 15 below.

16. DEFAULT. The failure of either party to abide by any of the terms of this Agreement shall constitute a default under this Agreement. If either party fails to cure any such default within fifteen (15) days of receiving notice from the other party of such default, then this Agreement may be terminated by giving thirty (30) days’ written notice of such termination. At the time of termination, it will be determined whether the applicable annual payment has been made pursuant to Section 2. If payment has not been made, CITY will pay ECHO the equivalent of pro-rated payment for the portion of the period during which services were rendered prior to termination. If payment has been made, ECHO shall return to CITY the equivalent of pro-rated payment for the portion of the period during which services were not rendered prior to termination.

17. NOTICES. All notices required or permitted under this Agreement shall be in writing and may be delivered personally, sent by electronic mail (e-mail), or deposited in the United States Mail, first-class postage prepaid, addressed to the parties at the addresses or email addresses set forth below, or to such other address or e-mail address as either party may designate by written notice. Notices delivered personally shall be effective upon delivery. Notices sent by e-mail shall be deemed received on the date transmitted, provided the sender does not receive notice of failed delivery. Notices sent by U.S. Mail shall be deemed received three (3) business days after mailing.

18. FULL AGREEMENT AND AMENDMENT. This document, together with its exhibits, represents the entire understanding between the parties and supersedes all prior negotiations, representations, or agreements, either written or oral, including the Prior Agreements described in the recitals above. This Agreement may only be amended by a writing signed by both parties.

19. SEVERABILITY. Should any provision of this Agreement be deemed to be legally void or unenforceable, all remaining provisions shall survive and be enforceable. This Agreement shall in all respects be governed by the laws of the State of California, and venue for any action shall lie in the County of San Luis Obispo, State of California.

20. ATTORNEYS’ FEES. In the event suit is brought for the enforcement or interpretation of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees.

IN WITNESS WHEREOF, this Agreement is hereby executed as of the day and year first hereinabove written.

THE CITY OF EL PASO DE ROBLES
1000 Spring Street

EL CAMINO HOMELESS ORGANIZATION
6370 Atascadero Avenue
Attachment 29

Paso Robles, CA 93446
By __________________
Chris Huot, City Manager
Date ________________
Atascadero, CA 93422
By ___________________
Wendy Lewis, President and CEO
Date _________________
ATTEST:

By: __________________
Melissa Martin, City Clerk
Approved as to Form:

By ___________________
City Attorney
Attachment 210

EXHIBIT A

SCOPE OF SERVICES
ECHO shall provide the following services in connection with the operation of the ECHO Paso Robles emergency shelter facility located at 1134 Black Oak Drive, Paso Robles, CA 93446.

ECHO shall perform all services in accordance with the terms of this Agreement, applicable federal, state, and local laws, funding requirements, and industry best practices for emergency shelter and homeless services:

Service Scope of Services Deliverable Reporting Requirement Emergency
Shelter
Operations
Maintain and operate
fifty (50) emergency
shelter beds dedicated
to participants of
ECHO's 90-Day
Emergency Shelter
Program. Provide
intake, assessments,
individualized case
management, housing
navigation, life-skills
education, and referrals
to healthcare,
behavioral health,
substance use
t t t l t

Maintain continuous
operation of fifty (50)
emergency shelter beds
throughout the term of the
Agreement, except during
emergencies or
circumstances beyond
ECHO's reasonable
control. Maintain
documentation
demonstrating services
provided.

Quarterly report includes bed
occupancy, bed utilization,
average length of stay,
unduplicated participants
served, and permanent
housing outcomes.

Crisis Room Maintain one (1) nightly
single-occupancy crisis
room available
exclusively for
placement by the Paso
Robles Police
Department or Paso
Robles Fire and
Emergency Services.

Accept eligible referrals
received before midnight,
subject to ECHO's
behavioral and safety
requirements. Document
all referrals, admissions,
denials, and reasons for
denial.

Quarterly report
summarizing crisis room
utilization, referrals received,
admissions, denials, and
occupancy.

HMIS Data
Collection &
Performance
Reporting
Maintain active
participation in the
Homeless Management
Information System
(“HMIS”) and utilize
CITY-approved
reporting templates and
data collection tools.

Maintain complete,
accurate, and timely HMIS
data entry. Submit
quarterly performance
reports no later than
October 20, January 20,
April 20, and July 20.

Reports shall include shelter
occupancy, unduplicated
participants served,
demographics, referrals
received, referral response
times, case management
participation, housing plans
completed, permanent
housing placements, meals
served, laundry and shower
services provided,
behavioral health referrals,
and other performance
measures reasonably
requested by the CITY.

Attachment 211

Community
Communication
Prepare and distribute
a quarterly community
newsletter to
surrounding residents,
businesses,
neighborhood
organizations, partner
agencies, and other
interested stakeholders.

Newsletter shall
summarize shelter
operations, housing
outcomes, community
concerns, Good Neighbor
activities, and include
current contact information
for designated ECHO staff.

Newsletter shall be posted
on ECHO's website and
submitted to the CITY no
later than the twentieth
(20th) day following the end
of each calendar quarter.

Good Neighbor
Policy
Maintain a current
Good Neighbor Policy
Provide the Good
Neighbor policy and notify
the CITY in writing within
thirty (30) days of any
revisions.

Submission with written
notice of revisions.

Community
Response Line
Maintain a twenty-four
(24) hour telephone
number for reporting
urgent issues related to
shelter operations.

Respond to urgent calls
within sixty (60) minutes
whenever reasonably
possible. Maintain a
complaint log documenting
the issue, response, and
resolution.

Complaint activity
summarized in annual
reports.

Quality
Assurance
Participate in quarterly
quality review and
monitoring meetings
with the CITY to
evaluate program
performance, contract
compliance, community
concerns, and
operational
improvements.

Cooperate with reasonable
requests for
documentation,
monitoring, site visits, and
corrective action planning
when deficiencies are
identified.

Quarterly quality review
meetings and supporting
documentation upon
request.

Client Consent
& Data Privacy
Maintain client consent
forms authorizing
coordination with the
CITY's Homeless
Services Division in
compliance with
applicable privacy laws
and HMIS
requirements.

Maintain administrative,
physical, and technical
safeguards protecting
confidential client
information. Notify the
CITY of any reportable
data breach or
unauthorized disclosure
affecting services provided
under this Agreement.

Annual certification of
compliance and immediate
notification of reportable
incidents.

CITY Referrals Receive and respond to
referrals submitted by
the CITY.

Respond within five (5)
business days indicating
acceptance, waitlist
placement, denial, or
inability to serve, including
the reason when
applicable.

Referral activity summarized
in annual reports.

Attachment 212

Coordination Participate in meetings,
planning efforts,
emergency response
coordination,
Continuum of Care
activities, and other
collaborative efforts
related to
homelessness upon
reasonable request by
the CITY.

Attend meetings and
actively participate in
coordinated planning and
implementation activities.

Participation documented in
quarterly reports.

Local
Preference
Subject to applicable
law and funding source
requirements, provide
preference in shelter
placement to eligible
households who live or
work within the CITY.

Apply local preference
consistently to the
maximum extent permitted
by law.

Annual summary of local
preference implementation
upon request.

Annual Report Submit an Annual
Report to the CITY in
connection with each
annual payment under
the Agreement.

Annual Report shall
include financial
statements, shelter
utilization, performance
outcomes, permanent
housing placements,
community engagement
activities, grant activity,
accomplishments,
challenges, and goals for
the upcoming fiscal year.

Submission of the Annual
Report does not, by itself,
obligate the CITY to issue
payment, which remains
subject to compliance with
the Agreement.

Annual Report submitted
prior to each annual
payment request.

Grant
Development
Seek and pursue public
and private grant
opportunities
supporting operation of
the Paso Robles
Emergency Shelter and
reducing reliance on
CITY funding.

Document grant
applications submitted,
funding awarded, pending
applications, and
additional funding secured
during the reporting period.

Annual grant summary
included in the Annual
Report.

Attachment 213

Council Agenda Report
From: Warren Frace, Community Development Director
Subject: Olsen – South Chandler Specific Plan Development Agreement – Operating Memo #3 – Off-Site Street Improvement Timing Relief for PA-19 (Shea Homes) The Olsen–South Chandler Specific Plan and Development Agreement were analyzed as part of the Olsen–South Chandler Specific Plan Final Environmental Impact Report SCH#2019011065. The requested Operating Memo timing triggers have been analyzed by Central Coast Transportation Consulting and determined to be consistent with Mitigation Monitoring and Reporting Program. Therefore, the Operating Memo is consistent with the EIR. As such, no additional CEQA review is required.

Date: September 1, 2026
Facts

1. On February 20, 2020, the City Council approved the Olsen–South Chandler Specific Plan (OSCSP) and associated Environmental Impact Report (EIR), allowing up to 1,293 single-family and multifamily residential units. The EIR requires project impacts, including off-site traffic impacts, to be mitigated to a level of less than significant.

2. Increasing the supply of single-family and multi-family housing is a City Council adopted goal for Fiscal Years 2024–2026.

3. The OSCSP Development Agreement establishes timing requirements for required public improvements associated with residential development.

4. Since 2023, the City Council has approved several Operating Memos modifying the timing of required improvements, while maintaining the obligation to complete them:
a. February 2023: Established alternative timing triggers for off-site traffic and park improvements.
b. August 2024: Provided additional time for off-site public improvements. c. September 2025: Addressed all-electric subdivision tract improvements. d. October 2025: Provided additional time for off-site traffic improvements.

5. Olsen 212, the OSCSP master developer, is responsible for the Meadowlark Road and PA-21 park improvements. Both projects are approximately 80 percent complete and are anticipated to be completed in the fourth quarter of 2026.

6. Shea Homes is constructing homes in Planning Area 19 (PA-19), with the first homes anticipated for completion in September 2026. The Development Agreement currently requires Meadowlark Road and the PA-21 park improvements to be completed before the first PA-19 home receives final occupancy.

7. On August 11, 2026, Shea Homes requested Operating Memo No. 3 to modify the timing triggers, allowing PA-19 homes to receive final occupancy as follows:
a. Meadowlark Road: PA-19 Unit 50 occupancy instead of Unit 1. b. PA-21 park improvements: PA-19 Unit 65 occupancy instead of Unit 1.

8. The required improvements remain obligated under the Development Agreement and are secured by a Public Improvement Plans performance bond.

Community Outreach
The OSCSP included a robust public outreach process including a weeklong public charrette, a 45-day public EIR circulation and public hearing at both Planning Commission and City Council.

Options

1. Take no action;

2. Authorize the City Manager to execute Olsen–South Chandler Specific Plan Development Agreement Operating Memo No. 3;

3. Provide alternative direction.

Analysis and Conclusions
Olsen 212 is the master developer for the Olsen – South Chandler Specific Plan and responsible for the improvement of Meadowlark Road and the PA-21 park improvements. Both of these improvements are well underway, but will not be completed until the 4th quarter of 2026.

Shea Homes is a merchant home builder with homes under construction inOlsen – South Chandler Specific Plan Planning Area #19 (PA-19). The Development Agreement requires Meadowlark Road and PA-21 to be completed prior to the 1st final occupancy of a home in PA-19. Currently, Shea Homes is scheduled to have the first homes completed by the middle of September 2026. In order to keep the project moving and allow buyers to move in, Shea Homes has submitted a request for a Development Agreement Operating Memo to change the timing triggers for Meadowlark Road and the PA-21 park improvements (Attachment 1).

Specific plan improvement Development Agreement timing Requested Operating Memo timing Meadowlark Road
(west of Sherwood Road)
PA-19 – unit 1 occupancy PA-19 – unit 50 occupancy
PA-21 park improvement PA-19 – unit 1 occupancy PA-19 – unit 65 occupancy Meadowlark Road is currently graded with curb, gutter and bikeway installed. There are some minor design addendums that need to be processed before the road and be paved and landscaped. The PA-21 park landscape improvements will be installed with the Meadowlark Road landscaping improvements.

Meadowlark improvements on August 12, 2026
Conclusion
Shea Homes request appears reasonable based on the construction delays beyond their control. The offsite improvements are 80% complete and guaranteed by a Public Improvement Plans performance bond.

If the Operating Memo is not approved, completed houses, with buyers under contract, will sit vacant for months.

The City Manager is seeking City Council concurrence prior to authorizing this Operating Memo.

Fiscal Impact
There are no new fiscal impacts approving the Operating Memo No. 3.

CEQA Determination
The Olsen–South Chandler Specific Plan and Development Agreement were analyzed as part of the Olsen– South Chandler Specific Plan Final Environmental Impact Report SCH#2019011065. The requested Operating Memo timing triggers have been analyzed by Central Coast Transportation Consulting and determined to be consistent with Mitigation Monitoring and Reporting Program. Therefore, the Operating Memo is consistent with the EIR. As such, no additional CEQA review is required.

Recommendation (Option 2)
Authorize the City Manager to execute Olsen–South Chandler Specific Plan Development Agreement Operating Memo No. 3.

Attachments

1. 8/11/26 Shea Homes Operating Memo Request Letter

2. Olsen – South Chandler Specific Plan Phasing Map

3. Resolution 26-XXX – OSCSP Operating Memo 3
a. Exhibit A –Operating Memo 3

August 11, 2026
To: Warren Frace
Community Development Director
City of El Paso de Robles
1000 Spring Street
Paso Robles, CA 93446
Re: Necessary Modifications to Occupancy Triggers Contained in the Development Agreement and Amended and Restated Operating Memorandum No. 1 Affecting PA 19 Dear Mr. Frace:

This letter summarizes the necessary modifications to the occupancy triggers contained in the Development Agreement between the City of El Paso de Robles and Olsen 212, LLC dated February 14, 2020 and recorded on May 4, 2020, and the Amended and Restated Operating Memorandum No. 1 between the City of El Paso de Robles and Olsen 212, LLC executed on December 3, 2024, as they relate to occupancies within PA 19.

Necessary Modifications
The following modifications are necessary to avoid unintended impacts to PA 19 homeowners and to provide a reasonable path forward while Olsen 212, LLC obligations are completed:
• Modify the occupancy trigger associated with the Phase 2 Northwest Improvements from the 1st occupancy within PA 19 to the 50th occupancy within PA 19. • Modify the occupancy trigger associated with the PA 21 West Improvements from the 50th occupancy within PA 19 to the 65th occupancy within PA 19.

Basis for Necessary Modifications
The necessary modifications are intended to address circumstances affecting infrastructure obligations identified in the Development Agreement and Amended and Restated Operating Memorandum No. 1 that are currently beyond Shea Homes’ control and to avoid unintended impacts to homeowners with scheduled closings in PA 19.

The Phase 2 Northwest Improvements and PA 21 West Improvements that currently trigger occupancies within PA 19 are obligations of Olsen 212, LLC, as the developer, and are not improvements that Shea Homes controls, designs, permits, or constructs.

Attachment 1

Construction of the Phase 2 Northwest Improvements encountered a drainage issue that required additional evaluation and redesign. Based on ongoing discussions with the City and Olsen 212, the Phase 2 Northwest Improvements are currently undergoing redesign. Prior to identification of the drainage issue, the improvements were anticipated to be completed on October 22, 2026. However, because the redesign effort remains ongoing, a revised completion schedule has not yet been established.

Similarly, the PA 21 West Improvements remain in City plan check, and the timing of their completion remains dependent upon completion of the City’s review and approval process.

Because both improvement obligations are tied to activities being undertaken by the master developer and remain subject to ongoing design, review, and approval processes outside of Shea Homes’ control, the current occupancy triggers have the potential to impact PA 19 homeowners despite the homes themselves being complete and otherwise ready for occupancy.

Homeowner Impact and Occupancy Period
PA 19 currently has 24 homes under contract that are scheduled to close between September 8, 2026 and December 2026. In addition, based on Shea Homes’ current absorption pace, PA 19 is projected to generate approximately 25 additional home sales through July 2027. These existing homeowner commitments and anticipated sales establish the occupancy period that would be accommodated by the necessary modifications.

The necessary modifications provide a practical timeframe for Olsen 212 to complete redesign, approval, and construction of the Phase 2 Northwest Improvements and to obtain approvals and complete construction of the PA 21 West Improvements, while allowing homeowners to proceed with their anticipated closings.

Given the current status of the Phase 2 Northwest Improvements redesign and ongoing review of PA 21 West, modifying the occupancy trigger for the Phase 2 Northwest Improvements from the 1st occupancy within PA 19 to the 50th occupancy within PA 19 and modifying the occupancy trigger for the PA 21 West Improvements from the 50th occupancy within PA 19 to the 65th occupancy within PA 19 provides a reasonable occupancy period corresponding to existing homeowner commitments and projected sales. The necessary modifications are intended to bridge the period required to complete the redesign, approval, and construction processes associated with these Olsen 212 obligations while avoiding impacts to homeowners.

Clarification Regarding Basins 7A and 7B
Separate from the necessary modifications discussed above, Shea Homes would appreciate confirmation regarding the City’s expectations for occupancies associated with drainage areas tributary to Basins 7A and 7B.

Attachment 1

The City and Olsen 212 continue to evaluate the final basin design based on infiltration and drainage testing completed during the first and second quarters of 2026. Until the final design criteria are established, construction of portions of these facilities may not be feasible.

Should occupancies within the affected drainage areas be scheduled prior to finalization of the basin design, Shea Homes seeks alignment on a path forward that would allow those occupancies to proceed provided interim BMPs, drainage controls, and erosion-control measures remain in place and functioning as intended.

Once the final design criteria are established, Shea Homes and/or Olsen 212 would proceed with implementation of the required basin improvements as expeditiously as practicable, subject to permitting requirements, weather conditions, and other factors affecting construction activities.

Shea Homes appreciates the City’s partnership and cooperation in addressing these issues. The necessary modifications do not eliminate, waive, or reduce the obligation of Olsen 212, LLC to complete the required Phase 2 Northwest Improvements and PA 21 West Improvements under the Development Agreement and Amended and Restated Operating Memorandum No. 1. Rather, they recognize that the timing of those improvements is currently dependent upon redesign efforts, agency review, and approval processes that are outside of Shea Homes’ control.

The occupancy thresholds of the 50th occupancy for the Phase 2 Northwest Improvements and the 65th occupancy for the PA 21 West Improvements represent a measured and reasonable solution that balances the City’s interest in ensuring completion of the required infrastructure with the need to protect homeowners who have already entered into purchase agreements and are scheduled to begin closing on September 8, 2026. The modifications also provide an occupancy period that corresponds to Shea Homes’ existing sales commitments and projected absorption through July 2027, while preserving the intent and purpose of the Development Agreement and Amended and Restated Operating Memorandum No. 1.

Importantly, the homeowners affected by these occupancy triggers have no ability to influence the redesign, approval, or construction schedules associated with the Olsen 212 improvements. The necessary modifications provide a reasonable and equitable approach that allows Olsen 212 adequate time to complete its obligations while avoiding unnecessary impacts to current and future homeowners.

Shea Homes believes these modifications represent the most practical path forward, maintaining accountability for completion of the required improvements, preserving the intent of the governing agreements, and supporting the continued orderly buildout and occupancy of PA 19.

Attachment 1

Thank you for your assistance in bringing this item forward for City Council acceptance on September 1, 2026. We appreciate the City’s continued partnership in supporting the successful delivery of PA 19 homes while the remaining Olsen 212 obligations are finalized and completed.

Sincerely,
Tayler Simpson, MRED
Area Project Manager
Shea Homes – Trilogy
805-704-6113
[email protected]
Attachment:

1. Shea Homes Nevina PA 19 Closing Schedule

2. Shea Homes PA 19 Closing Map
Attachment 1

Attachment 1

Attachment 1

Attachment 1

PHASING',
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r,::s:7:7 ··-·-·-•-•t
Phase 1
Phase 2
Phase 3
•Phasing changes subject to approval
of the City Engineer.

PARKS & REC PHASING
PA-6
PA-7
Unit 1 Occupancy
50th Unit Occupancy
9 Royal Oak Park
PA-14 West
PA-14 East
Oak Knoll Park
PA-21 West
PA-22
Phase 1B - 50th Unit Occupancy
Phase 1B - soth Unit Occupancy
Phase 2 · 50th SFD Unit Occupancy
50th Unit Occupancy in PA-19
PA-21 East
50th Unit Occupancy in PA-19
50th Unit Occupancy in PA-19
Phase 3 · 50th Unit Occupancy
DOC #2020021501 Page 78 of 102

EXI-IIBIT E

PHASING PLAN
- Phase l Infrastructure
C1::1 Water and Sewer (;:xtension
Airport Road Infrastructure
Scott Rd. Sewer Improvements
Phase 1B Infrastructure
Unit l Occupancy
Unit l Occupancy
PA-5 1st Occupancy
Phase 1B 1st Occupancy
Phase 18 1st Occupancy
11111
<><>
''''
Phase 2 Infrastructure Northeast PA-13 1st Occupancy
Phase 2 Infrastructure Northwest PA-19or201stOccupancy
Phase 2 Infrastructure Southeast PA-17 1st Occupancy
Phase 3 Infrastructure PA-23 1st Occupancy
75 Attachment 2

Attachment 3
RESOLUTION 26-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES

AUTHORIZING EXECUTION OF
THE OLSEN–SOUTH CHANDLER SPECIFIC PLAN –OLSEN 212 DEVELOPMENT AGREEMENT OPERATING MEMO NO. 3– Extending Timing Triggers for Meadowlark Road and PA-21 Park Improvements Olsen – South Chandler Specific Plan
Shea Homes PA-19 Operating Memo
WHEREAS, the Olsen–South Chandler Specific Plan (OSCSP), Development Agreement and Environmental Impact Report (EIR) were approved by City Council on February 20, 2020; and WHEREAS, increasing the supply of both single-family residential (SFR) and multi-family residential (MFR) housing production is one of the City Council Adopted Goals for Fiscal Years 2024-2026; and WHEREAS, the City Manager is authorized to approve Operating Memo’s to approve interpretation and minor adjustments to the Development Agreement; and WHEREAS, on February 21, 2023, the City Council authorized the City Manager to execute Development Agreement Operating Memo No. 1. which provided an alternative timing trigger for both off-site traffic improvements and public park improvements; it did not alleviate the improvements from being installed, only changing the timing on when they must be installed; and WHEREAS, on August 6, 2024, the City Council authorized the City Manager to execute Development Agreement Operating Memo No. 1 – Amendment 1 to allow additional time to complete off-site public improvements; and
WHEREAS, on September 16, 2025 the City Council authorized the City Manager to execute Development Agreement Operating Memo No. 2 – to install all electric subdivision tract improvements in the Olsen – South Chandler Specific Plan.

WHEREAS, on October 21, 2025 the City Council authorized the City Manager to execute the Further Amended and Restated Development Agreement Operating Memo No. 1 to allow additional time to complete Off-site traffic improvements
WHEREAS, on August 11, 2026, Shea Homes, submitted a request for an Operating Memo to allow homes to be finaled in PA-19 while the Meadowlark Street and PA-21 Park improvements are completed.

WHEREAS, the City Manager is seeking City Council concurrence to approve Operating Memo 3 and allow homes to be finaled in PA-19 while the Meadowlark Street and PA-21 Park improvements are completed.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF EL PASO DE ROBLES DOES HEREBY RESOLVE AS FOLLOWS:

Section 1. All of the above recitals are true and correct and incorporated herein by reference.

Section 2. The Olsen–South Chandler Specific Plan and Development Agreement were analyzed as part of the Olsen–South Chandler Specific Plan Final Environmental Impact Report (SCH#2019011065), which was approved by the City Council on February 20, 2020. The requested Operating Memo timing triggers have been analyzed by Central Coast Page 480 of 487 City Council Agenda September 1, 2026 Attachment 3
Transportation Consulting and determined to be consistent with the EIR and Mitigation Monitoring and Reporting Program. As such, no additional CEQA review is required.

Section 3. The City Manager is authorized to execute Operating Memo No. 3 as shown in Exhibit A, attached hereto and incorporated herein by reference.

APPROVED this 1
st day of September 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

John R. Hamon, Jr., Mayor
ATTEST:

Melissa Martin, City Clerk
Exhibit A –Operating Memo 3

Exhibit A
Olsen – South Chandler Specific Plan Development Agreement Operating Memorandum Number Three Page 1 of 6
between The City of El Paso de Robles, Olsen Ranch 212, LLC and Shea Homes OPERATING MEMORANDUM NUMBER 3

BETWEEN

THE CITY OF EL PASO DE ROBLES,
OLSEN RANCH 212, LLC AND SHEA HOMES

COMPRISING INSUBSTANTIAL MODIFICATIONS

TO DEVELOPMENT AGREEMENT
OLSEN – SOUTH CHANDLER SPECIFIC PLAN
DEVELOPMENT AGREEMENT - OPERATING MEMO 3
The Development Agreement by and among the City of El Paso de Robles (the "City") and Olsen Ranch 212, LLC ("the Developer"), dated as of February 14, 2020 and recorded on May 4, 2020 in the Official Records of San Luis Obispo County as Document No. 2020021501 (the "Development Agreement"), provides in Section 1.7 of the Development Agreement that refinements and further development of the Project may demonstrate that minor changes are appropriate with respect to the details of the Project development and the performance of the parties under this Agreement.

Specifically, Section 1.7 (a) describes Insubtantial Modification and provides that “. . . any minor modification to the Development Agreement which does not modify (i) the Term of the Development Agreement; (ii) permitted uses of the Property, (iii) maximum density or intensity of use, except as allowed pursuant to Section 2.1.3 of the Development Agreement (Final Lotting) (iv) provisions for the reservation, dedication, acquisition, or abandonment of land or public rights of way, (v) conditions, terms, restrictions or requirements for subsequent discretionary actions, (vi) monetary contributions by Developer, or (vii) any other financial commitments by Developer, including the provisions related to Developer's obligations to finance installation, operations, and maintenance of Project infrastructure and formation and operations of one or more community facilities districts, (any and all of which are hereinafter an "Insubtantial Modification"), and that can be processed under CEQA as exempt from CEQA, or with the preparation of an Addendum to the EIR, shall not require a public hearing prior to the parties executing a modification to the Development Agreement. . .”
The Development Agreement further provides that if and when City and Developer agree that such Insubstantial Modifications are necessary or appropriate, they may implement such clarifications through operating memoranda approved by the City and Developer as insubstantial modifications to the Development Agreement.

With this Operating Memorandum No. 3, City, Olsen Ranch 212, LLC and Shea Homes (developers) wish to adjust the timing triggers for occupancy of homes in Planning Area #19 (PA19).

Capitalized terms used in this Operating Memorandum shall carry the same definitions as those set forth in the Development Agreement.

Exhibit A
Olsen – South Chandler Specific Plan Development Agreement Operating Memorandum Number Three Page 2 of 6
between The City of El Paso de Robles, Olsen Ranch 212, LLC and Shea Homes A. Purpose
The purpose of this Operating Memorandum is to identify a basic framework between the City and Developersto facilitate the construction of certain improvements as contemplated under the terms of the Development Agreement. This Operating Memorandum will reduce certain uncertainties associated with the orderly development of the Project and provide for the effective and efficient development of public facilities, infrastructure, and services as required by the Development Agreement. Except as expressly modified herein, the terms and conditions of the Development Agreement remain in full force and effect.

B. Recitals:
a. Operating Memo 1
On February 21, 2023, the City Council authorized the City Manager to execute the Development Agreement Operating Memo No. 1 which provided an alternative timing trigger for both off-site traffic improvements and public park improvements; it did not alleviate the improvements from being installed, only changing the timing on when they must be installed.
b. Operating Memo 1 – Amendment 1
On August 6, 2024 the City Council authorized the City Manager to execute an Amended and Restated Development Agreement Operating Memo No. 1 to allow additional time to complete off-site public improvements.
c. Operating Memo 1 – Amendment 2
On October 21, 2025 the City Council authorized the City Manager to execute the Further Amended and Restated Development Agreement Operating Memo No. 1 to allow additional time to complete Off-site traffic improvements. d. Operating Memo 2
On September 16, 2025 the City Council authorized the City Manager to execute Development Agreement Operating Memo No. 2 – to install all electric subdivision tract improvements in the Olsen – South Chandler Specific Plan C. INSUBSTANTIAL MODIFICATIONS:
1 Off-Site Traffic Improvements Completion Deadline Modifications. The Development Agreement requires that Developer shall construct certain off-site roadway improvements as specified in the Development Agreement, Specific Plan, and Mitigation Monitoring and Reporting Program. The Parties agree to modify certain deadlines specified in the Development Agreement and Specific Plan as follows:

Exhibit A
Olsen – South Chandler Specific Plan Development Agreement Operating Memorandum Number Three Page 3 of 6
between The City of El Paso de Robles, Olsen Ranch 212, LLC and Shea Homes Traffic Improvement Summary Description Original Timing Deadline for Completion of
Construction of Improvements
Modified Timing
Deadline for Completion of
Construction of Improvements
Meadowlark Road
(west of Sherwood Road)
Install collect street
improvements with bikeway
and landscaping
Prior to the issuance of 1st
Certificate of Occupancy in PA19
Prior to the issuance of 50th
Certificate of Occupancy in PA-19
The City concludes that these traffic improvement completion deadline modifications will not result in any new or substantially more severe significant environmental impacts. 2 Park Improvements Completion Deadline Modifications. The Development Agreement requires that Developer shall construct certain parks improvements as specified in the Development Agreement and Specific Plan. The Parties agree to modify certain deadlines specified in the Development Agreement and Specific Plan as follows:

Park Improvement Summary Description Original Timing
Deadline for Completion of
Construction of
Improvements
Modified Timing
Deadline for Completion of
Construction of Improvements
PA-21 Park Park and landscaping
improvements to the PA-21
area
Prior to the issuance of 50th
Certificate of Occupancy in
PA-19
Prior to the issuance of 65th
Certificate of Occupancy in PA19

3. Default. Developer agrees that any failure to complete any requirement of this Operating Memorandum as and when required shall constitute a default under the Development Agreement, entitling the City to exercise any and all remedies under the Development Agreement, subject to its notice requirements. The Developer further agrees that any failure to complete any requirement of this Operating Memorandum as and when required shall entitle the City to, at its option, cease issuing any building permits or other subsequent ministerial entitlements, after complying with the notice requirements of Section 6.1 and the emergency working group requirements of Section 6.4.

Exhibit A
Olsen – South Chandler Specific Plan Development Agreement Operating Memorandum Number Three Page 4 of 6
between The City of El Paso de Robles, Olsen Ranch 212, LLC and Shea Homes IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the last written date below.

FOR CITY:
__________________________________
Chris Huot, City Manager
Date: ______________________________
ATTEST:
________________________________
Melissa Martin, City Clerk
APPROVED AS TO FORM:
_____________________________
Elizabeth Hull, City Attorney
(signatures continued on following page)

Exhibit A
Olsen – South Chandler Specific Plan Development Agreement Operating Memorandum Number Three Page 5 of 6
between The City of El Paso de Robles, Olsen Ranch 212, LLC and Shea Homes FOR DEVELOPER OLSEN RANCH 212:

OLSEN RANCH 212, LLC,
a California limited liability company
By:________________________________
Danny Brose, Its Manager
APPROVED AS TO FORM:

Procopio, Cory, Hargreaves & Savitch LLP
By:__________________________________
James D. Vaughn
Attorneys for Developer Olsen Ranch 212, LLC
(signatures continued on following page)

Exhibit A
Olsen – South Chandler Specific Plan Development Agreement Operating Memorandum Number Three Page 6 of 6
between The City of El Paso de Robles, Olsen Ranch 212, LLC and Shea Homes FOR DEVELOPER SHEA HOMES:

SH AA Vinedo, LLC,
a Delaware limited liability company
By: Shea Homes Limited Partnership,
a California limited partnership,
Its Sole Member
By:________________________________
Preston Holdner
Assistant Secretary
By:________________________________
Tayler Simpson
Authorized Agent