April 2026 Annual Military Equipment Report for 2025/2026 5 Other Notes: None
3. Equipment Type: Unmanned, remotely piloted, powered aerial or ground vehicles - CA Gov’t Code §7070(c)(1)
Quantity Owned/Sought: 4 Lifespan: Approximately 5 years Equipment Capabilities: Vehicle is capable of being remotely navigated to provide scene information and intelligence in the form of video and still images transmitted to first responders.
Manufacturer Product Description: DJI Mavic 3 Thermal (M3T) UAS, DJI Avata UAS Purpose/Authorized Uses: Unmanned Aerial System (UAS) designed for public safety. The UAS is a battery powered, remote operated device with a flight time of approximately 36-45 minutes depending on weather and flight conditions. The UAS has proven to be useful to public safety agencies in crime scene analysis, search and rescue, pre-operation surveillance and other critical incidents where aerial views enhance the safety and efficiency of law enforcement personnel. The UAS would assist officers or incident commanders in situations that would include, but not limited to: major collision investigations, emergency life threatening situations, search for missing persons, natural disaster management, crime scene photography, and critical incidents for preservation of life and public safety missions.
Fiscal Impacts: DJI Mavic 3 Thermal (M3T): $6,000, quantity 2 (Total: ~$12,000), DJI Avata UAS $2610, quantity 2 (Total: ~$5220)
Legal/Procedural Rules Governing Use: The use of unmanned, remotely piloted, powered ground vehicles potentially involves privacy considerations. Absent a warrant or exigent circumstances, operators and observers shall adhere to all applicable privacy laws and shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy.
Training Required: FAA Part 107, POST UAS Operator, and Department-provided training.
Other Notes: Capabilities include 20MP Hasselblad camera with a large 4/3 CMOS sensor camera, 24mm equivalent lens, capable of 5.1K/50fps and 4K/120fps video. It includes a secondary 12MP telephoto camera, 56x tele zoom, 640x512 thermal sensor, one-way speaker, and spotlight.
4. Equipment Type: Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units – CA Govt Code §7070(c)(5)
Quantity Owned or Sought: 1 Lifespan: 20 years
Purpose/Authorized User: Trailer is purpose‐built to facilitate the operational control and direction of public safety units conducting DUI enforcement checkpoints, traffic safety operations, and responding to or at an incident. The Command and Control (C&C) trailer serves as a centralized location for command decision making, enhanced communication, and other situational awareness capabilities. Use may be authorized by the Watch Commander or the Tactical/Operations Commander, based on the circumstances of the given incident.
Fiscal Impact: Acquired by grant issued by the State of California Office of Traffic Safety under a Traffic Safety Grant. $40,415 for equipment. Annual maintenance cost is approximately $1000.
Legal and Procedural Rules Governing: It is the policy of the department to utilize C&C trailer only for law enforcement purposes and pursuant to State and Federal law.
Training Required: Department provided training.
April 2026 Annual Military Equipment Report for 2025/2026 6 Other Notes: The command-and-control trailer is standard tow-behind trailer with dual axels manufactured by Universal Trailer with a GVW of 3,100 pounds. The trailer measures approximately 16 feet long, 8.5 feet wide, and 9 feet tall. The trailer is equipped with a folddown rear door, lighting, and a generator.
5. Equipment Type: Semiautomatic Rifles and Ammunition - CA Gov’t Code §7070(c)(10) Quantity Owned or Sought: 28 Lifespan: 15 years
Purpose/Authorized User: Colt AR-15/M4 Carbine semiautomatic shoulder fired rifle with long spirally grooved barrel that fires .223 Rem/5.56 mm projectile bullet. The rifles are equipped with 10.5” barrel, Surefire muzzle brake, and Surefire SOCOM556-RC2 suppressors.
Ammunition is Speer Gold Dot caliber .223 62 grain.
A standard officer issue to be used as a precision weapon to address a threat with more precision and/or greater distances than a handgun, if present and feasible.
Fiscal Impact:
• Colt AR-15/M4 Rifle: $32,400, quantity: 28
• Surefire muzzle brake: $2,779, quantity: 28
• Surefire SOCOM556-RC2 Suppressors: $22,408, quantity: 28 • .223 62 gr ammunition: $2,715, quantity: 4,525
• Annual maintenance cost is approximately $1,500
Legal and Procedural Rules Governing: All applicable State, Federal and Local laws governing police use of force. Various Pinole Police Department Policies on Use of Force and Firearms.
Training Required: Department firearms training and qualifications as required by law and policy by POST certified instructors. CA POST certified 24-hour patrol rifle course.
Other Notes: These rifles are standard-issue service weapons for our officers and are therefore exempt from this Military Equipment Use Policy per CA Gov’t Code §7070(c)(10). They have been included in this document in an abundance of caution and in the interest of transparency.
6. Equipment Type: Less lethal launcher and Projectiles - CA Gov’t Code §7070(c)(12) Quantity Owned or Sought: 4 Lifespan: 20 years
Purpose/Authorized User: FN 303 MK2 Less Lethal Launcher utilizing compressed-air to fire less-lethal fin-stabilized projectiles. The FN303 MK2 features a magazine fed system that offers the ability to quickly switch between projectile types. Projectiles: .5% PAVA containing pepper powder designed for direct impact and area saturation, Clear Impact projectile intended for distraction, Washable Paint for training and marking, Indelible Paint projectile intended for marking with indelible colorant for later identification, and Inert Powder projectile for training.
To limit the escalation of conflict where employment of lethal force is prohibited or undesirable.
Provides officers with a less-lethal option in incidents of combative or self-destructive individuals, riot/crowd control and civil unrest incidents, circumstances where a tactical advantage can be obtained, potentially vicious animals, and training exercises or approved demonstrations.
April 2026 Annual Military Equipment Report for 2025/2026 7 Fiscal Impact:
• FN 303 MK2 & Slings: $5,080, quantity: 4
• PAVA Projectile: $768, quantity: 128
• Indelible Paint Projectile: $750, quantity: 150
• Washable Paint Projectile: $1,461, quantity: 300
• Inert Powder Projectile: $456, quantity: 450
• Magazine Assembly, Slings, and Maintenance Items: $486 • Cases: $1,587, quantity: 4
• Annual maintenance cost is approximately $250
Legal and Procedural Rules Governing: All applicable State, Federal and Local laws governing police use of force. Various Pinole Police Department Policies on Use of Force.
Training Required: Department provided training conducted by POST certified instructors.
Other Notes: None
7. Equipment Type: Less-Lethal Shotgun and Bean Bag Projectile - CA Gov’t Code §7070(c)(14)
Quantity Owned or Sought: 4 Lifespan: 25 years
Purpose/Authorized User: Remington 870 Less-Lethal 12-gauge Shotgun with orange and black marked stocks is used to deploy the less lethal 12-guage CTS Super-Sock Beanbag round.
The Combined Tactical Systems (CTS) Super-Sock Beanbag round is a less-lethal 2.4-inch 12- gauge shotgun round firing a ballistic fiber bag filled with 40 grams of lead shot.
To limit the escalation of conflict where employment of lethal force is prohibited or undesirable.
Provides officers with a less-lethal option in incidents of combative or self-destructive individuals, riot/crowd control and civil unrest incidents, circumstances where a tactical advantage can be obtained, potentially vicious animals, and training exercises or approved demonstrations.
Fiscal Impact:
• Remington 870 Less-Lethal 12-guage Shotgun: $2,200, quantity: 4 • CTS Model 2581 Super-Sock Beanbag Round: $1,090, quantity: 200 • Glass Breaker Ball: $480, quantity: 200
• Annual maintenance $0
Legal and Procedural Rules Governing: All applicable State, Federal and Local laws governing police use of force. Various Pinole Police Department Policies on Use of Force.
Training Required: Department provided training conducted by POST certified instructors.
Other Notes: None
April 2026 Annual Military Equipment Report for 2025/2026 8 Equipment Purchase and Training Use
2025/2026 Purchases and Maintenance
Military Equipment Quantity Cost Date of Purchase
COLT AR 15/M4 –
ammunition, .223 62 gr 4000 $1976 10/01/2025
COLT AR 15/M4 –
ammunition, .223 62 gr 5000 $2740 02/09/2026
ERV Maintenance
1 $1394 10/19/2025
2025/2026 Training/ Military Equipment Utilized
Training Military
Equipment
Frequency
Officer Training - Range
Colt AR-15/M4
Carbine w/
.223/556
ammunition
Quarterly Ranges
Officer Certification -
Range
Colt AR-15/M4
Carbine w/
.223/556
ammunition
As needed for certification. One course
in this period.
Patrol Rifle Armorers
Course
Colt AR-15/M4
Carbine w/
.223/556
ammunition
As needed.
FN 303 MK2Training -
Range
FN 303 MK2 Annually for patrol personnel and as
needed for new Officers
ERV Orientation and
Driver Training
ERV As needed for new Officers and
Community Service Officers
UAS Operator
Certification Training
UAS/Drone As needed for new UAS Operators.
April 2026 Annual Military Equipment Report for 2025/2026 9 UAS Operator Ongoing
Training
UAS/Drone Quarterly
Community Concerns and Complaints
In April of 2022, the Pinole Police Department published its Military Equipment Funding, Use and Acquisition policy on its website. Community concerns and complaints can be received via the Department’s website, in-person at the police department or in the field during police contacts, telephone, emails and social media. 2025/2026 Community Concerns, Complaints & PD Internal Investigations Related to Military Equipment Use
Community Concerns Community Complaints PD Internal Investigations 0 0 0
**No formal complaints or concerns were brought forward by the public.
April 2026 Annual Military Equipment Report for 2025/2026 10 Internal Inventory & Audit (PPD Military
Equipment)
Per Pinole Police Department policy 707.3 (c), the Department’s military equipment coordinator is required to complete an internal inventory of all military equipment within the possession of the Department at least once annually.
An inventory was completed on April 21, 2026, which identified all of the Department’s military equipment in preparation to fulfill the obligations set by Assembly Bill 481.
The Department purchased two DJI Avant indoor drones in the 2025/2026 budget cycle.
All current military equipment in the inventory was found to be in good shape and in working order.
2025/2026 Event or Incident Military Equipment Utilized Case# /
Incident#
Date Equipment
Used
Classification Reason
06/19/2025 Command Post Event Juneteenth/Pride Event
06/22/2025 Command Post Event Pinole Car Show
07/04/2025 Command Post Event 4th of July Celebration
10/07/2025 Command Post Event Halloween National Night
Out
10/31/2025 ERV Event Halloween Caravan
12/11/2025 Command Post Event Toy Drive@Target
12/19/2025 Command Post Event
Mutual Aid to Hercules PD
for DUI Checkpoint
12/27/2025 Command Post Event DUI Checkpoint
April 2026 Annual Military Equipment Report for 2025/2026 11 250701079 07/01/2025 UAV Outside Assist/Oakland PD
None 07/04/2025 UAV 4th of July Event
2507100180 07/10/2025 UAV Outside
Assist/Hercules/SUSCIR
2507250015 07/25/2025 UAV Outside Assist/San
Pablo/Burglary
25-907 07/28/2025 UAV Outside Assist/San
Pablo/Burglary
25-930 08/01/2025 UAV Outside Assist/HPD/Foot
bail on I-80
2508020177 08/02/2025 UAV Outside Assist/San
Pablo/Burglary
25-993 08/21/2025 UAV Commercial Burglary
25-1010 08/25/2025 UAV Outside
Assist/CCSO/Burglary
25-1031 08/31/2025 UAV Domestic Violence/Assault
w/a Deadly Weapon
25-1038 09/05/2025 UAV Outside Assist/Richmond
PD/Robbery
2509050074 09/05/2025 UAV
Outside
Assist/Richmond/Petty
Theft
2511080205 11/08/2025 UAV Outside Assist/San
Pablo/Residential Burglary
2512190241 12/19/2025 UAV Suspicious Circumstance
2603180200 03/18/2026 UAV Outside Assist/CCSO
2604060252 04/06/2026 UAV Outside Assist/San Pablo
April 2026 Annual Military Equipment Report for 2025/2026 12 Projected Military Equipment Acquisition
(2026/2027)
For 2026/2027 (May - April), the Pinole Police Department plans to purchase COLT AR15/M4 ammunition and FN 303 MK2 projectiles to replenish training and duty inventory.
Military Equipment Projected Purchase
Amount
Projected Purchase Price
.223 62 gr ammunition 7,000 rounds $4,000
FN 303 MK2 Projectiles 300 rounds $1,400
COLT AR15/M4 Lights 30 $5,500
Pinole PD CA Policy Manual
Law Enforcement Policy
Published with permission by Pinole PD CA
Copyright Lexipol, LLC 2026/05/28, All Rights Reserved. 707
Policy
Military Equipment
Effective Date Revised Date
05282026 05282026
707.1 PURPOSE AND SCOPE
The purpose of this policy is to provide guidelines for the approval, acquisition, and reporting requirements of military equipment (Government Code § 7070; Government Code § 7071; Government Code § 7072). This policy applies to all members of the Department
707.1.1 DEFINITIONS
Definitions related to this policy include (Government Code § 7070):
Governing body – The elected or appointed body that oversees the Department.
Military equipment – Includes but is not limited to the following:
• Unmanned, remotely piloted, powered aerial or ground vehicles. • Mine-resistant ambush-protected (MRAP) vehicles or armored personnel carriers. • High mobility multipurpose wheeled vehicles (HMMWV), two-and-one-half-ton trucks, five-ton trucks, or wheeled vehicles that have a breaching or entry apparatus attached. • Tracked armored vehicles that provide ballistic protection to their occupants. • Command and control vehicles that are either built or modified to facilitate the operational control and direction of public safety units.
• Weaponized aircraft, vessels, or vehicles of any kind. • Battering rams, slugs, and breaching apparatuses that are explosive in nature. This does not include a handheld, one-person ram.
• Firearms and ammunition of_.50 caliber or greater, excluding standard-issue shotguns and standard-issue shotgun ammunition.
• Specialized firearms and ammunition of less than_.50 caliber, including firearms and accessories identified as assault weapons in Penal Code § 30510 and Penal Code § 30515, with the exception of standard-issue firearms.
• Any firearm or firearm accessory that is designed to launch explosive projectiles. • Noise-flash diversionary devices and explosive breaching tools. • Munitions containing tear gas or OC, excluding standard, service-issued handheld pepper spray. • Area denial electroshock devices, microwave weapons, water cannons, long-range acoustic devices (LRADs), acoustic hailing devices, and sound cannons.
Military Equipment - 1
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Military Equipment
a.
b.
c.
d.
e.
1. 2.
f.
a.
b.
c.
d.
707.2 POLICY
It is the policy of the Pinole Police Department that members of this department comply with the provisions of Government Code § 7070 and 7071 with respect to the use and acquisition of military equipment. 707.3 MILITARY EQUIPMENT COORDINATOR
The Chief of Police should designate a member of this department to act as the military equipment coordinator. The responsibilities of the military equipment coordinator include but are not limited to:
Acting as liaison to the governing body for matters related to the requirements of this policy.
Identifying department equipment that qualifies as military equipment in the current possession of the Department, or the equipment the Department intends to acquire that requires approval by the governing body.
Conducting an inventory of all military equipment at least annually.
Collaborating with any allied agency that may use military equipment within the jurisdiction of Pinole Police Department (Government Code § 7071).
Preparing for, scheduling, and coordinating the annual community engagement meeting to include:
Publicizing the details of the meeting.
Preparing for public questions regarding the department's funding, acquisition, and use of equipment.
Preparing the annual military equipment report for submission to the Chief of Police and ensuring that the report is made available on the department website (Government Code § 7072). 707.4 MILITARY EQUIPMENT INVENTORY
The military equipment inventory constitutes a list of qualifying equipment for the Department. It can be found on the City of Pinole website under Police > Resources > Military Use Equipment. 707.5 APPROVAL
The Chief of Police or the authorized designee shall obtain approval from the governing body by way of an ordinance adopting the military equipment policy. As part of the approval process, the Chief of Police or the authorized designee shall ensure the proposed military equipment policy is submitted to the governing body and is available on the website at least 30 days prior to any public hearing concerning the military equipment at issue (Government Code § 7071). The military equipment policy must be approved by the governing body prior to engaging in any of the following (Government Code § 7071):
Requesting military equipment made available pursuant to 10 USC § 2576a.
Seeking funds for military equipment, including but not limited to applying for a grant, soliciting or accepting private, local, state, or federal funds, in-kind donations, or other donations or transfers.
Acquiring military equipment either permanently or temporarily, including by borrowing or leasing.
Collaborating with another law enforcement agency in the deployment or other use of military equipment within the jurisdiction of this department.
• Kinetic energy weapons and munitions.
• Any other equipment as determined by a governing body or a state agency to require additional oversight.
Military Equipment - 2
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Military Equipment
e.
f.
g.
Using any new or existing military equipment for a purpose, in a manner, or by a person not previously approved by the governing body.
Soliciting or responding to a proposal for, or entering into an agreement with, any other person or entity to seek funds for, apply to receive, acquire, use, or collaborate in the use of military equipment.
Acquiring military equipment through any means not provided above. 707.6 COORDINATION WITH OTHER JURISDICTIONS
On occasion, the department may be required to assist or be assisted by other law enforcement agencies in a formal Mutual Aid Request or support with day to day operational collaboration (i.e. pursuits, investigative unit assistance, joint law enforcement operations, etc.). The specific guidance and requirements for Mutual Aid is governed by PPD Policy 331 - Outside Agency Assistance.
In certain mutual aid or operational collaboration circumstances, it may be necessary for sworn department members to utilize military equipment in order to fulfill an assigned mission (i.e. active shooter, civil unrest, barricaded suspects in a vehicle, etc.). When sworn department members utilize military equipment in instances of mutual aid or law enforcement collaboration, the following shall apply:
a. Department members are required to adhere to the Department's Military Equipment Procedure and all policies and procedures outlined within the Pinole Police Department's Policy and Procedures Manual, regardless of operational jurisdiction.
b. Should the Pinole Police Department request mutual aid from another law enforcement agency within Contra Costa County and military equipment is required during the course of the response, the following shall apply:
1. The Pinole Police Department shall remain in charge of the overall incident command.
2. The Incident Commander or designee shall brief the supervisor from the assisting agency and inform them of the mission, enforcement posture, and any pertinent information related to the incident.
3. The assisting agency will be expected to adhere to their respective policies and procedures, particularly those governing the use of military equipment.
4. If the Incident Commander or their designee is informed of or witnesses the utilization of military equipment by an assisting agency inconsistent with the guidelines set forth in this procedure, the Incident Commander may elect to cancel the request for mutual aid or re-assign the assisting agency to a different support mission.
707.7 CITY COUNCIL APPROVAL
Pursuant to California Government Code section 7071, the City Council of Pinole approved this Policy pursuant to Ordinance #2024-04. Further substantive amendments to the Policy need to be reviewed and approved by the City Council.
Military Equipment - 3
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Law Enforcement Policy
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Copyright Lexipol, LLC 2026/05/13, All Rights Reserved. 608
Policy
Unmanned Aerial System (UAS) Operations
608.1 PURPOSE AND SCOPE
The purpose of this policy is to establish guidelines for the use of an unmanned aerial system (UAS) and for the storage, retrieval and dissemination of images and data captured by the UAS.
It is the policy of the department that trained and authorized personnel may use/deploy a UAS when such use is appropriate in the performance of their duties and authorized by the Chief of Police or designee. The deployment of a UAS will be in accordance with Federal, State, and municipal law and as the needs of the department dictate. 608.1.1 DEFINITIONS
Definitions related to this policy include:
Certificate of Authorization (COA) – A certificate granted to an individual or entity by the Federal Aviation Administration (FAA), which outlines specific conditions for flight for small UAS.
Federal Aviation Administration (FAA) – An entity of the federal government that regulates all aspects of civil aviation.
Part 107 – A certificate granted to an individual by the FAA, which outlines specific conditions of flight for small UAS aircrafts.
Pilot in Command (PIC) –Trained officer who is the sole person responsible for the operation of the UAS.
Unmanned aerial system (UAS) - An unmanned aircraft of any type that is capable of sustaining directed flight, whether preprogrammed or remotely controlled (commonly referred to as an unmanned aerial vehicle (UAV)), and all of the supporting or attached systems designed for gathering information through imaging, recording or any other means.
UAS Supervisor – Assigned by the Chief of Police to insure program requirements are met to include maintenance, training, and operations in adherence to policy and FAA regulations.
Visual Observer –Trained officer who may act as a spotter for PIC to assist in navigating the UAS and avoidance of hazards.
608.2 POLICY
Unmanned aerial systems may be utilized to enhance the department’s mission of protecting lives and property when other means and resources are not available or are less effective. Any use of a UAS will be in strict accordance with constitutional and privacy rights and Federal Aviation Administration (FAA) regulations.
Unmanned Aerial System (UAS) Operations - 1
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Unmanned Aerial System (UAS) Operations
1. 2.
3. 4.
5. 6.
a.
b.
c.
d.
7. 8.
608.3 USE OF UAS
Only authorized operators who have completed the required training shall be permitted to operate the UAS.
Use of vision enhancement technology (e.g., thermal and other imaging equipment not generally available to the public) is permissible in viewing areas only where there is no protectable privacy interest or when in compliance with a search warrant or court order. In all other instances, legal counsel should be consulted.
UAS operations should only be conducted consistent with FAA regulations. 608.4 FAA COMPLIANCE FOR DEPLOYMENT
Use of the UAS shall be allowed for criminal investigations or public safety purposes consistent with this policy, provided the requirements below are followed:
Prior to any use of a UAS, the department shall obtain a COA from the Federal Aviation Administration, unless the Police Chief authorizes personnel to use a UAS under the officer's own Part 107 certification.
Prior to the deployment of the UAS, the UAS PIC and the Visual Observer must be adequately trained in the use and operation and must be knowledgeable of the standards set forth in this policy.
Any operation of a UAS must fully comply with all FAA requirements guidelines. It is the PIC's responsibility to ensure compliance with FAA requirements and guidelines and this policy. If the PIC believes the requested deployment potentially violates any federal regulation, guideline or this policy, then the PIC must inform his or her immediate supervisor and the UAS Supervisor.
The PIC may not deploy the UAS for criminal investigative purposes without the knowledge of the on-duty watch commander or senior supervisor should the watch commander not be available.
Where a search warrant would normally be obtained for a criminal investigation, the PIC shall not deploy the UAS until such warrant is secured. This does not apply to non-investigative public safety deployments or for the purpose of training, testing, or evaluation.
Each deployment of an UAS shall be properly documented in a flight log by the PIC. Such documentation must include at a minimum:
The date, time, and purpose of each deployment.
Whether a search warrant was obtained by the agency.
Identity of the PIC and Visual Observer (if there is a Visual Observer.
Supervisor approving the deployment.
The PIC that deploys the UAS must have the capability to adequately track and record the flight pattern and location of the UAS.
If more than one UAS is deployed in an area or event, then each PIC shall coordinate and define the parameters of the area where each UAS will be operated. 608.5 AUTHORIZED USES FOR PUBLIC SAFETY DEPLOYMENT
Deployments include but are not limited:
Unmanned Aerial System (UAS) Operations - 2
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Unmanned Aerial System (UAS) Operations
1. 2.
3. 4.
5. 6.
7. Security Checks - The UAS may be deployed while conducting Security Checks of businesses or public lots in furtherance of the department's mission. Indiscriminate surveillance of private areas, absent a call for service requiring a public safety response or applicable warrant is prohibited.
Area Searches – The UAS may be deployed when conducting an area search for missing persons, property, etc.
Crime Scene / Area Documentation – The UAS may be deployed to assist in documenting crime scenes, accident scenes, or other areas where an aerial perspective is needed.
Search and Rescue – The UAS may be deployed during search and rescue operations to assist in locating lost or missing persons or other search and rescue operations.
Tactical Situations – The UAS may be deployed during certain tactical situations such as hostage / barricaded gunmen, active shooter, warrant services, or any other situation where an aerial or remote view is advantageous.
Fleeing Suspects – The UAS may be deployed to search for suspects that flee from police.
Training – All training flights will be conducted in accordance with the procedure and privacy requirements outlined in this policy.
608.6 PRIVACY
The use of the UAS potentially involves privacy considerations. Absent a warrant or exigent circumstances, operators and observers shall not intentionally record or transmit images of any location where a person would have a reasonable expectation of privacy (e.g., residence, yard, enclosure). Operators and observers shall take reasonable precautions to avoid inadvertently recording or transmitting images of areas where there is a reasonable expectation of privacy. Reasonable precautions can include, for example, deactivating or turning imaging devices away from such areas or persons during UAS operations.
608.7 PROGRAM COORDINATOR
The Chief of Police will appoint a program coordinator who will be responsible for the management of the UAS program. The program coordinator will ensure that policies and procedures conform to current laws, regulations, and best practices and will have the following additional responsibilities:
• Coordinating the FAA Certificate of Waiver or Authorization (COA) application process and ensuring that the COA is current, and/or coordinating compliance with FAA Part 107 Remote Pilot Certificate, as appropriate for department operations.
• Ensuring that all authorized operators and required observers have completed all required FAA and department-approved training in the operation, applicable laws, policies, and procedures regarding use of the UAS.
• Developing uniform protocol for submission and evaluation of requests to deploy a UAS, including urgent requests made during ongoing or emerging incidents. Deployment of a UAS may require written authorization of the Chief of Police or the authorized designee, depending on the type of mission. • Coordinating the completion of the FAA Emergency Operation Request Form in emergency situations, as applicable (e.g., natural disasters, search and rescue, emergency situations to safeguard human life).
Unmanned Aerial System (UAS) Operations - 3
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Law Enforcement Policy
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Unmanned Aerial System (UAS) Operations
608.8 PROHIBITED USE
The UAS video surveillance equipment shall not be used:
608.9 RETENTION OF UAS DATA
• Developing protocol for conducting criminal investigations involving a UAS, including documentation of time spent monitoring a subject.
• Implementing a system for public notification of UAS deployment. • Developing an operational protocol governing the deployment and operation of a UAS including but not limited to safety oversight, use of visual observers, establishment of lost link procedures, and secure communication with air traffic control facilities.
• Developing a protocol for fully documenting all missions. • Developing a UAS inspection, maintenance, and record-keeping protocol to ensure continuing airworthiness of a UAS, up to and including its overhaul or life limits. • Developing protocols to ensure that all data intended to be used as evidence are accessed, maintained, stored, and retrieved in a manner that ensures its integrity as evidence, including strict adherence to chain of custody requirements. Electronic trails, including encryption, authenticity certificates, and date and time stamping, shall be used as appropriate to preserve individual rights and to ensure the authenticity and maintenance of a secure evidentiary chain of custody.
• Developing protocols that ensure retention and purge periods are maintained in accordance with established records retention schedules.
• Facilitating law enforcement access to images and data captured by the UAS. • Recommending program enhancements, particularly regarding safety and information security. • Ensuring that established protocols are followed by monitoring and providing periodic reports on the program to the Chief of Police.
• Maintaining familiarity with FAA regulatory standards, state laws and regulations, and local ordinances regarding the operations of a UAS.
• To conduct random surveillance activities.
• To target a person based solely on actual or perceived characteristics, such as race, ethnicity, national origin, immigration status, religion, sex, sexual orientation, gender identity or expression, economic status, age, cultural group, or disability.
• To harass, intimidate, or discriminate against any individual or group. • To conduct personal business of any type.
• The UAS will not be weaponized or used to transport any weapons, explosives, or incendiary devices.
Unmanned Aerial System (UAS) Operations - 4
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Unmanned Aerial System (UAS) Operations
Data collected by the UAS shall be retained as provided in the established records retention procedure and schedule.
Unmanned Aerial System (UAS) Operations - 5
Attachments - 6
CITY COUNCIL
REPORT 10.B.
DATE: JUNE 16, 2026
TO: MAYOR AND COUNCIL MEMBERS
FROM: Markisha Guillory, Finance Director, 510-724-9823, [email protected] SUBJECT: FY 2025/26 UTILITY USERS' TAX REVIEW AND FY 2026/27 INCOME
EXEMPTION LIMITS
RECOMMENDATION
Staff recommends that the City Council:
1. Conduct a public hearing on the FY 2025/26 Annual Review of the Utility Users’ Tax (UUT); and
2. Adopt a Resolution modifying the Household Income eligibility thresholds for exemptions from the Utility Users’ Tax for FY 2026/27.
BACKGROUND
In November 1998, voters approved the City of Pinole’s Utility Users’ Tax (UUT) at a rate of 8% on electricity, gas, and telecommunication services. Voters approved ballot measures to extend the UUT in 2004, 2012, and 2018. The UUT does not have a sunset date. Renewal of the UUT was essential to secure the City’s fourth largest General Fund revenue source.
Revenue generated by the UUT amounts to approximately 9% of the City’s General Fund (excluding transfers in) and remains necessary to fund critical City services.
Section 3.26.150(A) of the Pinole Municipal Code authorizes the City Council to exempt the following classes of persons from paying UUT: (1) Persons who receive Aid to Families with Dependent Children (AFDC), (2) Persons who receive Veterans’ benefits and Veterans’ survivor pension benefits, (3) Persons on Supplemental Security Income or State Supplemental Payments (SSI/SSP); and (4) Persons who receive benefits from the Supplemental Nutrition Assistance Program (SNAP).
Additionally, Section B of the Code states: In addition, customers may also qualify for an exemption if their total household income does not exceed household incomes set by resolution of the City Council. Each year, the City Council adopts a resolution setting the household income thresholds. The City has used as the threshold the limits set annually by the California Alternative Rates for Energy (CARE) program, administered by Pacific Gas & Electricity (PG&E).
Pursuant to Section 3.26.170 of the Pinole Municipal Code, in June of every year, as part of the budget process, UUT is required to be reviewed through a report to the City Council. The report shall contain a summary of amounts of UUT realized, which is provided in the
subsequent section of this report.
REVIEW AND ANALYSIS
The UUT is an 8% tax on the consumption of electricity, gas, and telecommunications within the City. As a general tax, revenues are deposited into the City’s General Fund and may be used for any general municipal purpose.
Staff anticipates that the City will close FY 2025/26 with a projected $2,635,057 in actual UUT collected. Although the City continues to see a decline in the taxes collected on telecommunication services, gas and electricity collections continue to increase year-overyear. Table 1 shows the ten-year history of UUT collections.
Table 1 – Ten-Year History of UUT Collections
2016/17 2017/18 2018/19 2019/20 2020/21
Electricity & Gas $1,564,702 $1,452,015 $1,416,001 $1,484,969 $1,651,216 % Total UUT 76% 75% 78% 82% 85%
Telecommunications $501,921 $474,780 $396,843 $324,863 $288,510 % Total UUT 24% 25% 22% 18% 15%
Total UUT $2,066,623 $1,926,796 $1,812,844 $1,809,832 $1,939,726 % Change 10.1% -6.8% -5.9% -0.2% 7.2%
2021/22 2022/23 2023/24 2024/25
2025/26
(Estimated)
Electricity & Gas $1,797,374 $2,053,930 $2,207,681 $2,423,788 $2,425,429 % Total UUT 87% 89% 90% 91% 92%
Telecommunications $266,399 $258,900 $238,034 $233,367 $209,628 % Total UUT 13% 11% 10% 9% 8%
Total UUT $2,063,773 $2,312,830 $2,445,715 $2,657,156 $2,635,057 % Change 6.4% 12% 6% 9% -1%
Informational Update: Applying the UUT to Online Streaming Services Some cities have applied their Utility Users Tax, which traditionally applies to electric, gas, cable, and telephone services, to online streaming services such as Netflix, Hulu, and similar platforms. In a recent case the City of Santa Barbara imposed its UUT on Disney, which resulted in a legal challenge by Disney. Ultimately, the California Court of Appeal held that the City’s utility users tax applied to streaming services because its UUT taxes “video services” in a way that is broad enough to apply to streaming, or internet-based, services. After the decision was published on December 17, 2025 (and later modified on January 30, 2026), more cities have moved forward with applying the UUT to streaming platforms.
Chapter 3.26 of the Pinole Municipal Code establishes the City’s UUT and imposes a tax on
“electric, gas, and telephone services only.” Many cities that are implementing a UUT on streaming services have specific language about telephone or cable in their ordinance applying to video or internet-based services, and/or have enacted ordinances to expand the meaning of “cable” in their ordinance to allow for collection of UUT from online streaming services. Unfortunately, Pinole’s ordinance does not currently include streaming services in its own UUT and only taxes electric, gas, and telephone. To impose a UUT on streaming services like Netflix, the language of the City’s Municipal Code and UUT would need to be amended via ordinance to include video services and more specifically, internet-based streaming services.
Because this would add a new category to the UUT ordinance and essentially authorizes a new tax beyond what voters initially approved, voter approval of a ballot measure under Proposition 218 would be required. Once the updated UUT is established, notice would need to be provided to the streaming companies ahead of when the City intends to begin collecting the tax to allow the companies to set up the collection method in their systems.
Utility Users Tax Exemption
Pursuant to Pinole Municipal Code Section 3.26.150(B), the City establishes by resolution the household income limits. The City uses those set by the California Alternative Rates for Energy (CARE) program for exemption from the UUT. PG&E administers the CARE program and confirms customers’ eligibility based on IRS income tax returns and certifies continued eligibility every two years.
This is consistent with the process other California cities use as a basis for exemption from the UUT levy. In some cases, agencies rely on PG&E to administer the exemption in which case they automatically do not charge the UUT to customers who are eligible for the CARE program. In other cases, customers apply for the exemption with the agency who verifies eligibility for the CARE program. The City of Pinole relies on PG&E to administer the exemption program for gas and electricity services. PG&E provides a listing of customers who have received an exemption from UUT on a monthly basis. Eligible customers who meet the same income guidelines as those for UUT exemption from gas and electricity services may receive exemption from UUT on telecommunication services by applying to the City.
Household Income Exemption Thresholds
Staff has obtained the current household income guidelines for the California Alternative Rates for Energy (CARE) program in the PG&E service area and recommends continuing to set the City’s household income exemption at the CARE amounts. The current thresholds effective June 1, 2026 through May 31, 2027 are displayed in Table 2 below.
Table 2 – Household Income Exemption Thresholds
Household
Size
Current CARE
Threshold
Previous CARE
Threshold
1-2 Persons $43,280 $42,300
3 Persons $54,640 $53,300
4 Persons $66,000 $64,300
5 Persons $77,360 $75,300
6 Persons $88,720 $86,300
7 Persons $100,080 $97,300
8 Persons $111,440 $108,300
9 Persons $122,800 $119,300
10 Persons $134,160 $130,300
Each additional person, add $11,360 $11,000
FISCAL IMPACT
There is no fiscal impact as a result of this report itself.
ATTACHMENTS
A. Resolution
B. PG&E CARE Program Guidelines
RESOLUTION 2026-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PINOLE
COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA SETTING HOUSEHOLD
INCOME LEVELS FOR UTILITY USERS TAX EXEMPTIONS FOR FISCAL YEAR (FY) 2026/27
WHEREAS, Section 3.26.170 of the Pinole Municipal Code provides for the establishment and modification of classes of exemptions of persons or service from utility users taxes; and
WHEREAS, the City Council held a Public Hearing, on June 16, 2026, to discuss and receive public comment on the tax and whether or not changes to household income levels for utility users tax exemptions should be made; and WHEREAS, the City Council desires to continue to allow exemptions for telephone users tax, electricity users tax and gas users tax based upon the Household Income Thresholds adopted by the State Public Utilities Commission’s California Alternative Rate for Energy (CARE) Program for the 2026/27 budget year.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL of the City of Pinole that, as provided in Section 3.26.150 of the Pinole Municipal Code, utility customers may qualify for exemption from the telephone users tax (P.M.C. Section
3.26.040), electricity users tax (P.M.C. Section 3.26.050) and gas users tax (P.M.C.
Section 3.26.060) if their total household income does not exceed the following thresholds:
AND BE IT FURTHER RESOLVED THAT the City Manager or his designee, and the City Attorney are hereby authorized and directed, to make all approvals and take all actions necessary or appropriate to carry out the intent of this Resolution. *********************************
Household
Size
Current CARE
Threshold
Previous CARE
Threshold
1-2 Persons $43,280 $42,300
3 Persons $54,640 $53,300
4 Persons $66,000 $64,300
5 Persons $77,360 $75,300
6 Persons $88,720 $86,300
7 Persons $100,080 $97,300
8 Persons $111,440 $108,300
9 Persons $122,800 $119,300
10 Persons $134,160 $130,300
Each additional person, add $11,360 $11,000
PASSED AND ADOPTED by the City Council of the City of Pinole this 16th day of June, 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
I hereby certify that the foregoing resolution was introduced, passed and adopted on this 16th day of June, 2026.
____________________________
Heather Bell-Spears, CMC
City Clerk
California Alternate Rates for Energy (CARE)
About CARE
The California Alternate Rates for Energy (CARE) program provides a monthly rate discount of about 38 percent on electricity and 20 percent on gas (compared to non-CARE bundled customers).
See if you qualify based on:
• Your income, or
• Your enrollment in one of the qualifying public assistance programs Note: CARE and FERA share one application. If you do not qualify for CARE, we will check to see if you qualify for FERA. Learn more about FERA. In addition, other financial assistance resources and support are available.
Eligibility
In this section:
• How your household can qualify for CARE
• How to qualify through other public assistance programs • Household income guidelines
• CARE income guidelines table
To qualify for CARE:
• The PG&E bill must be in your name.
o If you're a sub-metered tenant, you must have the landlord's energy bill in your name.
• You must live at the address to which the discount applies. • Another person (besides your spouse) can't claim you as a dependent on an income tax return.
• You must not share an energy meter with another home.
• You must account for all sources of qualifying household income. • This combined household income must meet the program income guidelines. • You must enroll in qualifying public assistance programs. • After you enroll, you may need to provide proof of qualifying household income. o You may also be required to participate in the Energy Savings Assistance program.
• Your monthly electric usage must not exceed six times the Tier 1 allowance. o Tier 1 is the lowest priced rate tier within PG&E's standard Tiered Base Plan. • You must renew your eligibility every two years.
o If you're on a fixed income, you must renew your eligibility every four years. • You must notify PG&E if your household no longer qualifies for the CARE discount.
To qualify through other public assistance programs:
You or someone in your household must take part in any of the following public assistance programs:
• Low Income Home Energy Assistance Program (LIHEAP)
• Women, Infants, and Children (WIC)
• CalFresh/SNAP (Food Stamps)
• CalWORKs (TANF) or Tribal TANF
• Head Start Income Eligible (Tribal Only)
• Supplemental Security Income (SSI)
• Medi-Cal for Families (Healthy Families A & B)
• National School Lunch Program (NSLP)
• Bureau of Indian Affairs General Assistance
• Medicaid/Medi-Cal (under age 65)
• Medicaid/Medi-Cal (age 65 and over)
Household income guidelines
Your eligibility is based on your household income. To calculate your household income:
1. Add all household members' incomes from all eligible sources for your total gross annual household income.
2. Compare your total combined gross annual household income against the income guidelines table.
Note: Your household must be at or below the amounts shown in the income guidelines table.
Household income includes all taxable and nontaxable revenues from all people living in the home. It includes, but is not limited to:
• Wages
• Salaries
• Interest and dividends
• Spousal and child support payments
• Public assistance payments
• Social Security and pensions
• Housing and military subsidies
• Rental income
• Self-employment income
• All employment-related, non-cash income
CARE income guidelines table
Number of persons in household Total gross annual household income* 1-2 $43,280 or less
3 $54,640 or less
4 $66,000 or less
5 $77,360 or less
6 $88,720 or less
7 $100,080 or less
8 $111,440 or less
9 $122,800 or less
10 $134,160 or less
Each additional person, add $11,360
*Income should be before taxes and based on current income sources. Valid through May 31, 2027.
CITY COUNCIL
REPORT 11.A.
DATE: JUNE 16, 2026
TO: MAYOR AND COUNCIL MEMBERS
FROM: Stacy Shell, Human Resources Director, 510-741-3864, [email protected] SUBJECT: APPROVE AND AUTHORIZE THE MAYOR TO EXECUTE THE
EMPLOYMENT AGREEMENT FOR NAOMI KELLY TO BECOME THE CITY
MANAGER
RECOMMENDATION
It is recommended that the City Council adopt a resolution approving and authorizing the Mayor to execute an employment agreement with Naomi Kelly to become the City Manager.
BACKGROUND
On November 17, 2025, former Pinole City Manager Kelcey Young announced that she would be leaving the City of Pinole at the end of November. Young’s final day of employment was November 28, 2025. Prior to her departure, Young named Police Chief Melissa Klawuhn as Acting City Manager effective November 29, 2025.
At an open meeting on December 2, 2025, the City Council convened in closed session to discuss the appointment of an Acting City Manager. Following deliberations in closed session, the City Council formally appointed Police Chief Melissa Klawuhn as Acting City Manager.
At a special meeting on December 9, 2025, and an open meeting on December 16, 2025, the City Council convened in closed session to discuss the appointment of an Interim City Manager. Following deliberations in closed session, the City Council directed staff to prepare an employment agreement and resolution appointing Garrett Evans as Interim City Manager, until the City Council appointed a new permanent City Manager through a nationwide executive recruitment search.
On January 30, 2026, the City obtained executive recruitment professional services from Bob Hall & Associates to conduct a nationwide search for the new City Manager which included staff and community engagement opportunities to obtain feedback to guide recruitment and selection strategies.
The consultant conducted an extensive and inclusive recruitment process to attract a highly qualified and diverse pool of candidates for the City Manager position. The process began with significant stakeholder engagement, including meetings with City Council, City staff, and community members to develop an ideal candidate profile reflecting the City's priorities and values.
To maximize outreach, the recruitment was advertised through multiple professional municipal management organizations and job boards, including ICMA, Cal Cities, PublicCEO, and Western City. In addition, the recruitment team actively leveraged professional networks and social media platforms, particularly LinkedIn, to identify and engage passive candidates who may not have otherwise applied.
Community input was a key component of the process and included public comment opportunities, a community survey, virtual and in-person community meetings, and direct outreach by the recruiter to local stakeholders. This comprehensive approach helped ensure that the recruitment reflected the expectations and interests of both the City Council and the broader Pinole community.
The recruitment process included a rigorous and multi-layered candidate evaluation and vetting procedure. Applications were reviewed against the established qualifications and ideal candidate profile, followed by preliminary interviews conducted by the recruitment team.
Finalists were then presented to the City Council, which independently selected the candidates it wished to interview.Throughout the interview process, all candidates were asked the same standardized questions to ensure fairness, consistency, and compliance with employment laws.
At a special meeting on May 2, 2026, the City Council convened in a closed session to interview finalists for the City Manager position. On May 5, 2026, top candidates were referred to City staff and community member interview panels for further assessment and feedback shared with the City Council with the City staff interview panel unanimously supporting the selection of Naomi Kelly. Later that day, at an open meeting, the City Council convened in closed session to evaluate the panels' feedback and conduct follow-up interviews with the top candidates. Following interview deliberations, the City Council voted unanimously to direct staff to facilitate a comprehensive pre-employment background.
Following the Council's selection of a preferred candidate, an extensive background investigation was conducted. This included criminal, civil, motor vehicle, and credit history reviews, as well as comprehensive reference checks with former supervisors, peers, and subordinates. In addition, the City conducted its own Department of Justice criminal records review and Live Scan fingerprinting. The City Council's final hiring decision was made only after considering all available information and completing these thorough due diligence measures. After clearance was obtained through the pre-employment background process, City Council directed staff to negotiate an employment agreement and prepare a resolution to appoint Naomi Kelly to the position of City Manager, with commencement of her duties on July 1, 2026. The attached employment agreement was negotiated between the parties.
In evaluating Ms. Kelly’s negotiated annual salary of $305,000, both internal equity and external market competitiveness were considered. From an internal equity perspective, the City Manager serves as the chief executive officer of the City and is responsible for the overall administration and supervision of all City departments and department directors. The highestcompensated direct subordinate to the City Manager is the Chief of Police, whose maximum annual salary is $279,881. The proposed City Manager salary results in an approximate 9 percent salary differential between the City Manager and the Chief of Police, reflecting the scope of responsibility and organizational oversight associated with the position.
From an external market perspective, a survey of comparable municipal agencies within Contra Costa County was conducted to assess the competitiveness of the proposed compensation. The analysis found that Ms. Kelly's negotiated annual salary is within approximately 3 percent of the median salary for City Managers among surveyed Contra Costa County jurisdictions, indicating that the proposed compensation is generally aligned with the regional market.
Contra
Costa
City/Town
Population Annual
Base
Salary
Antioch 118,240 $
293,720
Brentwood 60,000 $
287,243
Clayton 11,070 $
250,000
Concord 126,000 $
333,588
Danville 43,410 $
303,612
El Cerrito 25,962 $
261,384
Hercules 26,499 $
246,840
Lafayette 25,391 $
288,895
Martinez 38,290 $
275,578
Moraga 16,900 $
299,421
Oakley 47,158 $
311,772
Orinda 19,573 $
280,805
Pittsburg 75,435 $
299,796
Pleasant
Hill
34,335 $
293,165
Richmond 116,448 $
312,700
San Pablo 31,562 $
320,760
San
Ramon
84,605 $
350,387
Walnut
Creek
69.790 $
341,841
REVIEW AND ANALYSIS
Naomi Kelly comes to the City Manager appointment with more than 20 years of executive leadership experience, including nine years as San Francisco’s City Administrator, where she became both the first woman and the first African American to serve in that role. In that position, she managed 25 departments and launched or restructured nearly a dozen more. Ms.
Kelly has an extensive background overseeing municipal services and complex public initiatives in areas such as infrastructure, transportation, permitting, and community services.
She holds a B.A. in Psychology from New York University and a J.D. from the University of San Francisco, and she is a member of the California State Bar.
During her time in San Francisco, Ms. Kelly led several major efforts, including the city’s $35 billion, 10-year capital plan and a $2 billion public-housing transformation that improved living conditions for more than 10,000 low-income residents. She also developed a long-term Budget & Planning Team focused on aligning resources, service levels, and future mandates. Through her firm, NK Strategies, she has continued to support public-facing organizations with strategic planning, community engagement, operational improvements, and securing key project entitlements.
Across all of her work, Ms. Kelly has built a reputation for a practical, results-oriented problemsolving approach. She is particularly skilled at guiding teams through complex challenges, prioritizing projects, and making smart use of limited resources. Her experience shows how thoughtful planning, community input, and efficient operations can drive meaningful change.
Ms. Kelly is genuinely excited to join the Pinole community and looks forward to working alongside staff. She describes her leadership style as servant-leadership, balancing accountability with coaching, support, and professional development. She’s energized by the ability to make a direct impact in a smaller community where less bureaucracy and closer partnerships make it possible to see progress happen quickly and visibly. Ms. Kelly's professional resume is included in Attachment C.
Approval of the agreement and authorization for the Mayor to execute it is now required.
FISCAL IMPACT
This item has no fiscal impact to the General Fund as the position’s pay and benefits have already been incorporated into the FY 2026/27 Budget.
ATTACHMENTS
A. Resolution
B. Employment Agreement - Kelly
C. N-Kelly Resume
RESOLUTION NO. 2026-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PINOLE, COUNTY OF
CONTRA COSTA, STATE OF CALIFORNIA, APPROVING AND AUTHORIZING THE
MAYOR TO EXECUTE THE EMPLOYMENT AGREEMENT FOR NAOMI KELLY TO
BECOME THE CITY MANAGER
WHEREAS, previous City Manager Kelcey Young announced her separation on November 17, 2025, with an effective date of November 29, 2025; and WHEREAS, the City Council convened in a closed session on December 2, 2025, to discuss the appointment of an Acting City Manager; and WHEREAS, following the closed session deliberations, the Council formally appointed Police Chief Melissa Klawuhn as Acting City Manager, effective December 1, 2025, until the City Council appointed an Interim City Manager; and WHEREAS, at a special meeting on December 9, 2025, and an open meeting on December 16, 2025, the City Council convened in closed session to discuss the appointment of an Interim City Manager; and
WHEREAS, following the closed session deliberations, the City Council directed staff to prepare an employment agreement and resolution appointing Garrett Evans as Interim City Manager, until the City Council appoints a new permanent City Manager through a nationwide executive recruitment search; and
WHEREAS, the City conducted an executive recruitment search and at a special meeting on May 2, 2026, the City Council convened in a closed session to interview finalists for the City Manager position; and
WHEREAS, on May 5, 2026, the City Manager top candidates were referred to City staff and community member interview panels for further assessment and feedback; and
WHEREAS, at an open meeting on May 5, 2026, the Council convened in a closed session to interview the City Manager top candidates, and following deliberations, the City Council voted unanimously to direct staff to negotiate an employment agreement and prepare a resolution to appoint Naomi Kelly to the position of City Manager effective July 1, 2026.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PINOLE that the City Council does hereby approve and authorize the Mayor to execute the employment agreement for Naomi Kelly to become the City Manager effective July 1, 2026, attached here to as Exhibit A, and incorporated herein by this reference.
PASSED AND ADOPTED this 16th day June 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
I hereby certify that the foregoing resolution was introduced, passed and adopted on this 16th day of June 2026 .
____________________________
Heather Bell-Spears, CMC
City Clerk
AGREEMENT FOR EMPLOYMENT OF
NAOMI KELLY
This Agreement is made and entered into by and between the City of Pinole (the “City"), a general law city, and Naomi Kelly ("KELLY" or "Employee"). This Agreement (the "Agreement") will become effective as specified herein.
1. Appointment of KELLY as City Manager
The City Council of the City of Pinole is authorized to negotiate the terms of an agreement with KELLY for her services through its duly appointed labor negotiator the City Attorney. The City Council and KELLY have engaged in such negotiations, and KELLY and the City now desire to agree in writing to the terms and conditions of KELLY's employment as City Manager.
2. Term of Agreement
This Agreement will become effective on the date this Agreement is approved by the City Council and executed by the Mayor, or in the Mayor's absence, the Mayor ProTem and KELLY. This Agreement and KELLY's employment shall remain in effect for three (3) years from the date of such execution unless terminated in accordance with paragraph 5 herein. If no successor Agreement is entered into to extend KELLY's employment beyond the three (3) year term, her employment with the City shall end with no payment of severance. The City shall notify KELLY at least three (3) months in advance of agreement expiration of intent to extend or not extend the Agreement.
3. AtWill Employment
KELLY is an "at will" employee who shall serve at the pleasure of the City Council. Accordingly, the City Council may terminate KELLY's employment at any time, with or without cause. This provision may not be altered except by a written instrument executed by KELLY and the City Council, which specifically references this Agreement and section.
4. Duties and Responsibilities
a. KELLY shall commence her duties as City Manager on July 1, 2026, and will continue for a term of three (3) years through June 30, 2029. b. KELLY shall serve as the City Manager for the City subject to the terms and conditions set forth herein. KELLY shall also perform the functions and duties specified under the laws of the State of California, the Municipal Code of the City; the Ordinances and Resolutions of the City, the job description for the City Manager position, and such other duties and functions as the City Council may from timetotime assign.
c. KELLY agrees to devote her productive time, ability and attention to the City's business. For the duration of this Agreement, KELLY shall not hold secondary employment, and shall be employed exclusively by the City, subject to any exceptions approved in writing by the Exhibit A
City Council. As an exempt employee, KELLY shall not receive overtime or extra compensation for work performed outside normal business hours.
5. Termination of Employment and Severance
a. KELLY may terminate this Agreement with or without cause, by giving the City Council sixty (60) days written notice in advance of termination. During the notice period, all the rights and obligations of the parties under this Agreement shall remain in full force and effect. b. The City Council may terminate this Agreement with or without cause, giving KELLY thirty (30) days written notice in advance of termination. c. In the event the City Council terminates KELLY's employment without cause, the City shall pay KELLY severance in a lump sum equal to six (6) months base salary, auto allowance, cell phone allowance, as well as the City's share of all health/benefit premium contributions, minus all applicable deductions. Any severance payment pursuant to this Agreement is contingent upon KELLY signing and delivering a general release of all claims against the City (including without limitation its former and current elected officials, employees, officers and agents) in a form acceptable to the City Attorney. Any severance amount paid pursuant to this Agreement shall be subject to the restrictions set forth in California Government Code § 53260. KELLY shall not receive any severance if she resigns, is terminated for cause, if the term of this Agreement lapses, or if a waiver and release agreement is not executed by the parties. If the City elects to terminate this Agreement and KELLY's employment without good cause as defined in this Agreement, a Notice of Termination Without Cause shall be provided in writing.
d. If KELLY is terminated for "cause," the City shall not owe any severance under this Agreement. This provision does not confer any property rights on KELLY, as she remains an atwill employee. The phrase "termination for cause" only pertains to KELLY's eligibility for severance as described in this Section. A "termination for cause" for purposes of severance may include, but shall not be limited to, the following:
i. Dishonesty;
ii. Embezzlement;
iii. Conviction of a felony or misdemeanor relating to KELLY's fitness to perform assigned duties;
iv. Any act involving moral turpitude;
v. Taking a position adverse to the interests of the City without the City's prior written consent;
vi. Violation of any fiduciary duty owed to the City;
vii. Failure to abide by the terms of this Agreement;
viii. Repeated failure, without good cause, to carry out lawful directives formally approved by the City Council acting as a body during a Brown Act compliant meeting after written notice and reasonable opportunity to cure; or ix. Failure to observe or perform any of her duties and obligations under this Agreement, if that failure continues for a period of thirty (30) days after KELLY receives written notice from City Council or its designee specifying the acts or omissions that constitute the failure.
If the City elects to terminate this Agreement and KELLY's employment for cause as defined in this Agreement, a Notice of Termination For Cause shall be provided in writing outlining the reason(s) for termination.
e. Pursuant to Government Code section 53243.2, any cash settlement related to the termination of this Agreement received by KELLY from the City shall be fully reimbursed to City if KELLY is convicted of a crime involving an abuse of her office or position as defined in California Government Code section 53243.4.
6. Compensation
a. Effective July 1, 2026, KELLY shall be paid an annual base salary of THREE HUNDRED AND FIVE THOUSAND DOLLARS ($305,000), less all applicable federal, state and local withholding.
b. KELLY shall receive cost of living salary increases equal to that provided to the Executive, Management, and Confidential Group bargaining unit during the term of this Agreement.
c. KELLY shall receive the benefits identified in Exhibit A to this Agreement.
7. Hours of Work
KELLY shall work a minimum of forty (40) hours per week on City and Successor Agency business. KELLY may work a 9/80 or other flexible work schedule, following consultation with the City Council.
8. Indemnification
The City shall provide for the defense of KELLY in any action or proceeding alleging an act or omission within the scope of KELLY's employment in accordance with California Government Code sections 825, 995 et seq., and other applicable law. Notwithstanding anything to the contrary in this Agreement, in accordance with California Government Code section 825, subdivision (a), the City reserves the right to not pay any judgment, compromise, or settlement subject to that section until it is established that the injury arose out of an act or omission occurring within the scope of KELLY's employment pursuant to this Agreement. Further, notwithstanding anything to the contrary in this Agreement, the City reserves the right to refuse to provide for the defense of KELLY for the reasons set forth in California Government Code section 995.2 or other applicable
provisions of law. Any City funds provided for the legal criminal defense of KELLY shall be fully reimbursed in accordance with California Government Code section 53243.1 if KELLY is convicted of a crime involving an abuse of her office or position as defined in California Government Code section 53243.4.
9. Notices
Notices pursuant to this Agreement shall be in writing given by deposit in the custody of the United States Postal Service, first class postage prepaid, addressed as follows:
a. The City:
Mayor of the City of Pinole
2131 Pear Street
Pinole, CA 94564
With a Copy to the City Attorney
2131 Pear Street
Pinole, CA 94564
b. Naomi Kelly:
To the address shown as current in the payroll system.
Alternatively, notices required pursuant to this Agreement may be personally served in the same manner as is applicable to civil judicial process. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice, postage prepaid, with the United States Postal Service.
10. Abuse of Office
Government Code sections 53243, 53243.1, 53243.2, and 53243.3 are incorporated by this reference as if fully set forth herein.
11. Performance Evaluations
The City Council shall review and evaluate the performance of KELLY upon completion of six (6) months and twelve (12) months of employment, and then at least once every twelve (12) months thereafter. At the time of each evaluation, performance goals shall be discussed that will be used to assist in the evaluation of KELLY's performance in the future. The City Council may, at its option, adjust KELLY's compensation as a result of the performance evaluation. The City agrees to evaluate KELLY's performance after the initial six (6) months of employment, at which time a merit increase shall also be considered.
12. Dues and Subscriptions
The City shall pay for the professional dues and subscriptions of KELLY necessary for her continuation and full participation in appropriate professional organizations.
13. Professional Development
At the time of the execution of this Agreement, the parties acknowledge that KELLY is, or will be, a member of various professional and service organizations. In addition, other organizations sponsor and offer short courses, institutes, seminars, and the like, which would be beneficial to KELLY'S professional development.
KELLY is permitted, encouraged, and in some instances, required by the City, to attend such meetings, activities, seminars, courses, institutes, and the like, as deemed appropriate by the City Council. KELLY's registration, travel, subsistence, and other related expenses shall be paid in advance directly to the vendor or reimbursed to KELLY consistent with applicable City policy.
14. Press Releases and Public Announcements
KELLY shall collaborate with the City regarding press announcements as to her appointment to the role of City Manager, including press releases and related communications.
15. Miscellaneous
a. The text herein shall constitute the entire agreement between the parties. This Agreement may not be modified, except by written agreement executed by both parties. b. If any provision, or any portion thereof, contained in this Agreement is held unconstitutional, invalid or unenforceable, the remainder of this Agreement, or portion thereof, shall be deemed severable, shall not be affected and shall remain in full force and effect. c. This Agreement shall be governed by the laws of the State of California. d. This Agreement may be executed in counterparts containing original signatures. ____________________________________ _____________________________________ Naomi Kelly Date
__________________________________ _____________________________________ Anthony Tave
Mayor
Date
ATTEST:
__________________________________
APPROVED AS TO FORM
______________________________________
Heather Bell, CMC
City Clerk
Eric Casher
City Attorney
EXHIBIT A
• Health, Vision, Dental, Life Insurance, STD/LTD Benefits KELLY shall receive health, vision, dental, life insurance and long/shortterm disability benefits under the same terms those benefits are provided to the City's unrepresented managers. • Retiree Medical
KELLY and her eligible dependents at the time of retirement shall be eligible to enroll on the City's retiree medical plan, in accordance with the provisions of the CalPERS Health Plans and the CalPERS Health Vesting Schedule.
The City shall make contributions toward KELLY's retiree health insurance premium in accordance with the CalPERS Health Vesting Schedule (Government Code 22893).
Upon KELLY's death, her eligible dependents shall continue to be eligible for enrollment on the City's plan and premium contribution, or reimbursement of their health insurance premium for alternate coverage, in accordance with the provisions of the CalPERS Health Plans and the CalPERS Health Vesting Schedule.
• Retirement Plan
The City currently participates in a retirement system through a contract with the California Public Employees Retirement System (CALPERS). For the Miscellaneous Employees, including KELLY, the CALPERS contract offers the following provisions:
▪ 2%@ 62 Retirement Plan (PEPRA)
▪ Military Buy Back
▪ Third Level Survivors Benefit
▪ Three Highest Years Compensation Formula
▪ Service for Unused Sick Leave
The City and KELLY shall make the Employer and Employee contributions to CalPERS benefits under the same terms provided to unrepresented managers. • Auto and Cell Phone Allowances
KELLY shall receive the amount of $600 monthly as a car allowance and $65 monthly as a cell phone allowance, less all applicable federal, state and local withholdings. • Deferred Compensation - 457 Plan
The City makes a 457 plan available for KELLY to contribute to through payroll deduction. The City shall provide up
to $100.00 in a dollar-for-dollar “matching” monthly contribution to the 457 Plan. • Vacation
KELLY shall accrue vacation leave at a rate of 144 hours per year, accrued incrementally each pay period. Upon separation from the City, KELLY shall be paid for all unused accrued vacation leave based upon her base salary on the date of separation.
KELLY may cash out accrued vacation in a manner consistent with unrepresented managers. • Administrative Leave
The City shall grant KELLY fortyeight (48) hours of administrative leave upon execution of this Agreement and ninetysix (96) hours of administrative leave at the beginning of each calendar year thereafter. KELLY may cash out administrative leave in a manner consistent with unrepresented managers.
• Sick Leave
KELLY shall accrue eight (8) hours per month, ninetysix (96) hours of sick leave per year, accrued incrementally each pay period.
• Sick Leave Incentive
KELLY’S sick leave use shall be reviewed by the City at the end of each calendar year. For any sick leave not used for six (6) consecutive months within the calendar year, KELLY shall receive an additional four (4) hours of accrued vacation time. For any sick leave not used for the entire calendar year (12 months), KELLY will receive an additional eight (8) hours of vacation time. • Other Leaves
KELLY shall receive all other leaves (Bereavement, Family and Medical, Jury Duty, Military, etc.) that are provided to unrepresented managers.
• Holidays
KELLY shall receive the same holidays and floating holidays as the City's unrepresented managers.
form
NAOMI M. KELLY, JD
P R O F E S S I O N I A L P R O F I L E
Senior Administrative Operations Executive with 20+ years of progressive leadership experience, including 9 years as a City Administrator directing/managing all aspects of day-to-day operations for municipal government (City & County); acting as the General Manager & Chief of Staff representing the Mayor & Board of Supervisors as Chief Administrator executing policy, legislative processes, public relation/PR strategy, and finance/budget management, ensuring effective operations management, workflow processes, and workforce productivity across all programs and projects.
E D U C A T I O N
California State Bar Member University of San Francisco | JD/Juris Doctor New York University | BS in Psychology
S K I L L S
• Transformation/Change Leader: Proposed/implemented strategic changes across business operations, driving growth of operations to scale; initiating/building/integrating multiple new departments (11), divisions, and programs to expand government services. • Relationship Management: Built/maintained relationships with elected/appointed officials, department heads, and interest groups to influence policy development/decisions, facilitating the legislative process and driving performance improvements across operations. • Strategic Advisor: Trusted advisor to Mayor & Board of Supervisors, providing expertise to assist with key policy decisions, supporting the legislative process and policymaking process by contributing to policy recommendations, regulatory compliance, & budget proposals. • High-Performing Teams: Built/developed/trained multidisciplinary teams, from recruiting quality talent to employee development; optimizing workforce by nurturing leadership in innovation, diversity & inclusion, and supporting/motivating of cohesive teams. • Project Management: Oversaw/managed multiple projects simultaneously, prioritizing requirements and ensuring process workflow via tracking of milestones and goals achieved with project deliverables (on time, on scope, and within budget defined). • Administrative: Served under 5 Mayors with diverse leadership styles, showing adaptability to work with various personalities; helping organizational leadership navigate through turbulent times and efficiently manage/resolve complex issues related to Civic organizations.
W O R K E X P E R I E N C E
NK Strategies LLC
Founder, Owner
San Francisco, CA
2021-Present
• Advises on strategic, risk and crisis management public affairs to brings about positive change in large institutions by focusing on ways to increase workplace and operational efficiencies, increased customer service, and employee engagement. The goal is to increase organizational productivity and performance, based on data informed strategies, organization design and change management through an equitable, racially diverse, and inclusive lens. Successfully delivered solutions and strategic plans for clients, including:
o Developing the Lucky Bayview Comprehensive Community Engagement Plan for Save Mart Supermarkets, leading to the successful grand opening of Lucky’s grocery store in the San Francisco Bayview Hunters Point neighborhood, recognized by the US Department of Agriculture as a food desert. The comprehensive community engagement plan focused on local hiring, local makers, local artists, and serving the local community, leading to staying power.
o Performing a Priority Initiatives Assessment and developing a Government Relations Strategy for the Museum of the African Diaspora’s (MoAD) Board of Directors. The NKS assessment and recommendations assisted with MoAD’s financial stability, government relations strategy, and enterprise growth. MoAD brings people of all ages, backgrounds, and ethnicities together in the heart of downtown San Francisco to discover the culture, history, and art of people of African descent. o Facilitating the strategic planning process for the San Francisco Bay Area Rapid Transit Administrative, HR, Labor Management, and Procurement Divisions to support safe, reliable, and clean-quality transit service for the Bay Area's riders. Established Leaves Council to address absenteeism. o Assisting construction and project management firms in reviewing contracts and writing RFP proposals and strategies. Provide policy analysis and review of government contracting laws, including strategic analysis and planning, issue management and monitoring, coalition building and grassroots support, and political environment analysis and advice. o Working with public relations firms to combat the profoundly negative national and local media coverage of the San Francisco Doom Loop.
Engaged San Francisco sources to develop a monthly fact sheet with data-driven counterarguments to every point plot for the press and corporate quarterly calls.
o Performing strategic fundraising for the Connect Bay Area regional campaign, aligning public, private, and philanthropic stakeholders to secure resources for a multi-county sales tax initiative aimed at stabilizing and sustaining critical public transportation systems, demonstrating fiscal leadership and regional coalition-building.
City & County of San Francisco
City Administrator
San Francisco, CA
2012 - 2021
• Managed/supervised General Services for the large-scale local government institution, overseeing the efficacy of government services for 25 departments, divisions, & programs, i.e., Public Works Dept., Dept. of Technology, Office of Contract Administration/ Purchasing, Real Estate, County Clerk, Grants for the Arts, Convention Facilities, Animal Care & Control, Medical Examiner, & Treasure Island. • Capital Planning: In 2012, initiated the large-scale City’s $35B, 10-year capital plan as the Chair of the Capital Planning Committee, leading strategic planning to improve public infrastructure & facilities, ensuring accessibility, modernization, & safety in City planning. Collaborated with departments
form
and teams on capital planning, including securing bond approvals for public health and transportation, addressing climate change via planning/implementation of sea-level rise mitigation, which also boosted earthquake resiliency. o Integrity of the capital plan led to San Francisco voters approving nearly $4B in general obligation bonds for infrastructure projects, since 2012; more than the previous 50 years of G.O. bonds combined.
o National model has led to large infrastructure investment, while protecting taxpayers & maintaining the City/County’s bond ratings. • Executive Leadership: Oversaw the performance of ~2700 personnel and an annual budget of $700M for the City/County, creating/ overseeing Budget & Planning Team to improve financial management, policy analysis, and program evaluation; utilizing financial models and forecasting for City-wide work order programs and the elimination of structural deficits. • 2020: Launched/managed the City’s comprehensive COVID-19/Coronavirus logistical response for City and County of San Francisco as the City Administrator & Policy Advisor to the Mayor; the program has been recognized as one of the most effective in the U.S. o Led procurement of 75+M pieces of PPE, securing facilities (e.g., Moscone Center) to centralize City-wide emergency operations and response; including deployment of the Digital Services Team for coordination of COVID-19 testing & flu vaccinations, deployment of Community Education and Response Team to investigate health order violations and outreach efforts to businesses and residents, deployment of the Give 2SF donation program, and coordination/staffing of the Economic Recovery Task Force. • Strategic Initiatives: Launched/restructured 11 new departments, divisions, & programs; building/reorganizing from the ground up, creating/implementing SOPs, roadmaps, & business processes to ensure operational efficiency and organizational effectiveness; leading strategic innovation by focusing efforts on driving expansion of government services to achieve growth strategy. o For example: Contract Monitoring Division, Office of Short-Term Rentals, Digital Services, Office of Cannabis, Earthquake Safety Improvement Program, Office of Resilience and Recovery.
o Created successor agency, the Office of Community Investment & Infrastructure due to the dissolution of Redevelopment Agencies. • Program Management/Economic Development: Launched the Local Hire program roll-out in 2012, which added 145,000 jobs to the San Francisco region; resulting in unemployment rate dropping from 9.6% in 2012 to 3.7% by November 2019. • Visionary/Policy Management: Coordinated efforts to re-envision San Francisco’s public housing policy by conducting intensive stakeholder meetings to identify challenges and issues facing local public housing; making recommendations to improve Housing Authority management. Innovation led to initiation of a $2B project to transfer 3,500 public housing units across 29 sites to private, community-based non-profits, and invest $700M in much needed capital improvements; this program led to the improving of living conditions for more than 10,000 low-income residents. • Emerging Technology Projects for Advancement: Oversaw/managed the Chief Information Officer and Chief Information Security Officer; City projects focused on network cybersecurity & maintenance. As Chair of the Committee on Information & Technology (COIT), oversaw/managed the 5-year Integrated Communication Technology (ICT) plans, budget, & projects for all City departments. • Strategic Partnerships: Oversaw/managed private & public partnerships, e.g., celebration of the San Francisco City Hall Centennial, and the convening of the Bay Area Women’s Summit.
o Development: Oversaw Treasure Island Development Authority to manage the redevelopment of the former Naval base, producing open space, hotels, restaurants, retail, & entertainment venues, and a new San Francisco neighborhood of up to 8,000 homes to be offered at below-market rates. o Community Collaborations: Created the Yerba Buena Gardens Conservancy to program, operate, maintain, and improve San Francisco’s Yerba Buena Gardens; in conjunction with non-profit cultural organizations and commercial tenants. Appoint members of the Board of Directors, provided oversight as the landlord with auditing and technical advice.
City & County of San Francisco
City Purchaser
San Francisco, CA
2004-2012
o Oversaw and managed approximately $250 million in materials and supplies and approved approximately $500 million in professional service contracts supporting the operations of City departments providing public services. Developed and administered policies and procedures for procurements and contracts.
B O A R D A P P O I N T M E N T S
San Francisco Community Investment Fund 2012 -2021
• Awarded $190M in New Market tax credits, of which $165M was deployed/committed to help finance the construction of projects in San Francisco’s low-income neighborhoods including, the Boys and Girls Club San Francisco, American Conservatory Theatre’s Strand Theatre South of Market, the Manufacturing Foundry, Geneva Car Barn, Meals on Wheels, et al. • As Board Secretary, initiated policy to reinvest fees collected to fund tenant improvements for non-profits. Established a first of its kind program to serve as the financial institution on loan contracts with pre-qualified Small Local Business Enterprises, providing initial seed money for the Contractor Accelerated Payment Program (CAPP) of up to $1M.
University of San Francisco Board of Trustees
2016 - Present
• Chair of the University Life Committee that ensures comprehensive programs, policies, and practices are established to serve the developmental needs of a diverse student body and represent these needs to the Board; also, review Title IX investigations. • Member of the Investment Committee overseeing the $537 million endowment; approve asset class allocation, review the allocations, review and make recommendations to the consolidated investment portfolio and individual investment manager performance. • Member of the Committee on Trustees evaluating the performance of trustees, nominating, recruiting and cultivating a diverse pool of candidates for trusteeship; and recommending schedule of retreats and orientations. • Member of the Audit Committee that oversee the University's major business and financial risks to assure the Board of Trustees that the risks which could cause a significant financial loss and/or related damage to the University's reputation are being identified and managed appropriately. • Member of the Executive Committee that prepares the agenda for the full Board of Trustees and acts at the Bylaws Committee.
CITY COUNCIL
REPORT 11.B.
DATE: JUNE 16, 2026
TO: MAYOR AND COUNCIL MEMBERS
FROM: Markisha Guillory, Finance Director, 510-724-9823, [email protected] SUBJECT: REVISED PROPOSED FISCAL YEAR (FY) 2026/27 OPERATING AND
CAPITAL BUDGET
RECOMMENDATION
Staff recommends that the City Council review the updated Revised Proposed Budget, provide direction on any changes, and direct staff to prepare the Final Proposed Budget for adoption on June 23, 2026.
BACKGROUND
The City operates on an annual budget cycle. Through the budget, the City Council approves revenue estimates and authorizes City staff to expend the City’s limited financial resources.
City staff are responsible for preparing a proposed budget for City Council’s consideration, modification, and adoption.
On January 14, 2026, the Finance Subcommittee held a budget planning meeting during which the Subcommittee reviewed the FY 2026/27 budget development process and timeline.
On February 18, 2026, the Finance Subcommittee held its second budget planning meeting, during which it received a report on staff-identified anticipated opportunities and challenges for FY 2026/27, as well as a presentation on the preliminary General Fund long-term financial forecast. Following the discussion, the Subcommittee directed staff to plan a budget workshop that would include presentations from each City department.
On March 31, 2026, the City Council held a budget workshop where departments presented their operational plans and preliminary budgets for FY 2026/27. At that meeting, the Council directed staff to prepare three-, six-, and ten-percent budget reduction scenarios to address the projected budget deficits reflected in the long-term financial forecast.
On April 29, 2026, the Finance Subcommittee reviewed the preliminary General Fund baseline budget, long-term forecast, and Capital Improvement Plan (CIP) projects.
On May 5, 2026, the City Council received a comprehensive presentation of the Preliminary Proposed FY 2026/27 Operating and Capital Budget. The Council discussed various options for closing the budget gap and directed the Finance Subcommittee to continue the discussion and develop recommendations. The Council also directed staff to update the budget reduction scenarios to include additional detail related to service impacts.
On May 20, 2026, the Finance Subcommittee reviewed department proposed reductions and directed staff to prepare four to six percent reductions, aiming for the higher end. The Subcommittee also acknowledged that some departments may be unable to meet the full six percent reduction without affecting existing staff.
On June 2, 2026, the City Council received the Revised Proposed FY 2026/27 Operating and Capital Budget, which incorporated the budget reductions targeting six percent, along with several other items for consideration to help close the structural deficit. The City Council provided direction for a number of changes, which are outlined in the following section.
For the June 16, 2026 meeting, staff recommends that the City Council review the updated Revised Proposed Budget, provide direction on any changes, and direct staff to prepare the Final Proposed Budget for adoption on June 23, 2026.
REVIEW AND ANALYSIS
The FY 2026/27 Preliminary Proposed Budget presented in May reflected a structural deficit of $4,284,970, reflecting total ongoing revenues of $29,046,824 and ongoing expenditures of $33,331,794. This gap highlighted the need for corrective action to balance the budget not only for the upcoming year but for future years as well, given that the City is projected to fully deplete the Section 115 Trust by FY 2029/30 under the current model.
To address the structural deficit, staff developed the Preliminary Proposed Long-term Financial Forecast, incorporating the “Yellow Brick Road” model. The model outlines a pathway of potential measures to reduce projected deficits through the annual budget process. In addition, it treats the Section 115 Trust transfer as one-time revenue, highlighting the actual structural deficits.
As described above, the City Council and Finance Subcommittee directed staff to prepare budget reduction scenarios targeting overall six percent reductions to eliminate the structural deficit and produce a balanced budget that includes measures for long-term fiscal sustainability. Staff conducted internal meetings and completed a detailed review of every line item in each department’s budget, resulting in total reductions of $1,579,864. These reductions included travel and training, memberships, software, office expenses, printed communications, employee engagement and wellness programs, professional services, and City-sponsored events and community services. Staff also identified several items for consideration to close the remaining deficit, including the following:
• Fire Dept Annexation (Parcel Revenue Only) - $1,066,966 • Pinole Fire UAL from 115 Trust (Interest Earnings) - $619,051 • Removal of 3% Cost-of-Living Wage Increase - $490,000 • PCTV Reduction to Match Revenue - $480,000
With the reductions described above, the Revised Proposed Budget presented on June 2, 2026 reflected an estimated deficit of $49,089, with total revenues of $29,665,875 and expenditures of $29,714,964. The City Council directed staff to make several modifications, including restoring several items. In addition, staff identified other areas for reductions, including freezing several positions. The changes are as follows:
• Restoration of PCTV - ($480,000)
• Restoration of Senior Lunch Day - ($15,000)
• Removal of City Council Interns - $8,700
• Reallocate Public Works Positions to Projects - $235,924 • Freeze Vacant Community Services Officer - $123,577
• Freeze Vacant Police Records Specialist - $110,709
• Modify Attrition to Capture Benefits - $65,000
• Reduce City Manager Budget - $400
With the modified reductions described above, the Revised Proposed Budget is now balanced to a surplus of $221, with revenues and expenditures of approximately $29.7 million. With this structurally balanced budget and its constraints, there is no capacity to add new expenditures.
Any increase will require an equivalent reduction in another area. Table 1 below provides a breakdown of the proposed budget and the balancing measures. The Long-Term Financial Forecast (Yellow Brick Road) (Attachment A) has also been updated to reflect the changes.
Table 1 – Comparison of FY 2025/26 and FY 2026/27 General Fund Budget
Please note that an updated operating budget document is not attached to this staff report
because no changes have been made since the Preliminary Proposed Budget on May 5, 2026.
Once the City Council approves any final adjustments, staff will enter them into the City’s financial system and produce the Final Proposed Budget for adoption on June 23, 2026.
FISCAL IMPACT
There is no fiscal impact associated with this report. The budget itself outlines the City’s financial plan for FY 2026/27.
ATTACHMENTS
A. Long-Term Financial Forecast (Yellow Brick Road)
DRAFT
City of Pinole
Revised Proposed Long-Term Financial Forecast
(Yellow Brick Road)
2026B 2027F (1ST) 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F 2036F CAGR
REVENUES & SOURCES
311 - PROPERTY TAXES 6,698,790 6,899,754 6,771,860 7,022,419 7,282,248 7,551,692 7,831,104 8,120,855 8,421,327 8,732,916 9,056,034 9,391,107 3% 312 - SALES AND USE TAXES 12,364,189 12,563,278 12,711,780 13,016,863 13,381,335 13,742,631 14,113,682 14,494,751 14,886,110 15,288,035 15,700,812 16,124,733 3% 313 - UTILITY USERS TAX 2,345,000 2,532,600 2,737,490 2,819,615 2,904,203 2,991,329 3,081,069 3,173,501 3,268,706 3,366,767 3,467,770 3,571,804 4% 314 - FRANCHISE TAXES 850,000 901,000 832,000 856,960 882,669 909,149 936,423 964,516 993,452 1,023,255 1,053,953 1,085,571 2% 315 - OTHER TAXES 876,172 902,457 817,140 841,654 866,904 892,911 919,698 947,289 975,708 1,004,979 1,035,129 1,066,182 2% 321 - INTERGOVERNMENTAL TAXES 2,513,149 2,612,475 2,579,433 2,674,872 2,773,842 2,876,474 2,982,904 3,093,271 3,207,722 3,326,408 3,449,485 3,577,116 4% 323 - STATE GRANTS 73,022 73,022 143,340 73,022 73,022 73,022 73,022 73,022 73,022 73,022 73,022 73,022 0% 324 - OTHER GRANTS 72,025 25,209 - - - - - - - - - - -100% 332 - PERMITS 301,700 310,751 328,000 337,840 347,975 358,414 369,167 380,242 391,649 403,399 415,501 427,966 4% 341 - REVIEW FEES 25,500 36,922 - - - - - - - - - - -100% 342 - OTHER FEES 64,809 54,991 72,234 74,401 76,633 78,932 81,300 83,739 86,251 88,839 91,504 94,249 4% 343 - ABATEMENT FEES 42,000 20,223 39,500 40,685 41,906 43,163 44,458 45,791 47,165 48,580 50,037 51,539 2% 351 - FINES AND FORFEITURE 15,550 13,735 16,400 13,735 13,735 13,735 13,735 13,735 13,735 13,735 13,735 13,735 -1% 361 - PUBLIC SAFETY CHARGES 1,861,497 1,954,572 1,926,047 2,022,349 2,123,467 2,229,640 2,341,122 2,458,178 2,581,087 2,710,142 2,845,649 2,987,931 5% 370 - INTEREST AND INVESTMENT INCOME 100,000 61,845 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 55,000 -6% 381 - RENTAL INCOME 81,450 83,894 - - - - - - - - - - -100% 383 - REIMBURSEMENTS 11,500 11,615 10,500 10,500 10,500 10,500 10,500 10,500 10,500 10,500 10,500 10,500 -1% 384 - OTHER REVENUE 5,100 5,151 5,100 5,203 5,255 5,307 5,360 5,414 5,468 5,523 5,578 5,634 1% 392 - PROCEEDS FROM SALE OF PROPERTY 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 0% 399 - TRANSFERS IN
TOTAL REVENUES AND SOURCES 28,302,453 29,064,493 29,046,824 29,866,117 30,839,693 31,832,899 32,859,544 33,920,805 35,017,901 36,152,098 37,324,707 38,537,088 3%
EXPENDITURES & USES, BY ACCOUNT GROUP
401 - SALARIES AND WAGES 9,750,688 10,043,209 9,983,165 9,891,408 9,990,322 10,090,225 10,191,127 10,293,039 10,395,969 10,499,929 10,604,928 10,710,977 1% 402 - OVERTIME 535,649 551,718 635,295 641,648 648,064 654,545 661,090 667,701 674,378 681,122 687,933 694,812 3% 403 - OTHER PAY 539,942 556,140 556,126 561,687 567,304 572,977 578,707 584,494 590,339 596,242 602,205 608,227 1% 405 - SALARY SAVINGS (300,000) (300,000) (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) -7% 410 - EMPLOYEE BENEFITS (EXCL. PERS) 2,358,236 2,675,483 2,600,940 2,732,911 2,896,886 3,070,699 3,254,941 3,450,237 3,657,252 3,876,687 4,109,288 4,355,845 6% 410 - PERS ONLY 4,437,115 4,842,565 4,866,592 5,109,922 5,365,418 5,633,689 5,915,373 6,211,142 6,521,699 6,847,784 7,190,173 7,549,681 5% 411 - RETIREE BENEFITS 1,383,000 1,419,600 1,465,980 1,553,939 1,647,175 1,746,006 1,850,766 1,961,812 2,079,521 2,204,292 2,336,549 2,476,742 6% 421 - PROFESSIONAL AND TECHNICAL SERVICES 1,248,420 1,144,372 1,332,632 1,372,611 1,413,789 1,456,202 1,499,889 1,544,885 1,591,232 1,638,969 1,688,138 1,738,782 3% FIRE SERVICE CONTRACT 6,115,941 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 6,579,529 1% FIRE PROFESSIONAL SERVICES (CITY COSTS) 745,616 814,501 814,051 838,473 863,627 889,536 916,222 943,708 972,019 1,001,180 1,031,215 1,062,152 4% 422 - OFFICE EXPENSES 119,755 102,012 100,875 104,337 106,731 109,198 111,738 114,355 117,050 119,825 122,685 125,630 0% 423 - TRAVEL, TRAINING & MEETING COSTS 250,435 247,040 270,974 254,452 262,085 269,948 278,046 286,388 294,979 303,829 312,943 322,332 3% 424 - DUES, PUBLICATIONS AND ADVERTISING 46,869 44,869 49,884 44,869 44,869 44,869 44,869 44,869 44,869 44,869 44,869 44,869 0% 425 - ADMINISTRATIVE EXPENSES 388,435 402,788 400,267 418,070 434,034 450,716 468,155 486,392 505,469 525,432 546,331 568,215 4% 431 - UTILITIES 374,000 388,640 377,350 404,350 420,815 438,077 456,182 475,177 495,114 516,046 538,032 561,133 4% 432 - TAXES 4,156 4,156 4,156 4,156 4,156 4,156 4,156 4,156 4,156 4,156 4,156 4,156 0% 443 - OTHER MATERIALS AND SUPPLIES 148,700 153,161 188,700 194,361 200,192 206,198 212,384 218,755 225,318 232,077 239,040 246,211 5% 444 - CLOTHING AND UNIFORMS 36,298 37,387 34,500 35,535 36,601 37,699 38,830 39,995 41,195 42,431 43,704 45,015 2% 461 - INDIRECT COST ALLOCATIONS (1,452,408) (1,495,800) (1,457,096) (1,417,211) (1,431,383) (1,445,697) (1,460,154) (1,474,755) (1,489,503) (1,504,398) (1,519,442) (1,534,636) 1% 462 - INSURANCE 786,871 802,608 814,516 847,097 880,981 916,220 952,869 990,983 1,030,623 1,071,847 1,114,721 1,159,310 4% 471 - FURNITURE, FIXTURES & EQUIPMENT 33,540 32,474 33,540 33,448 34,452 35,485 36,550 37,646 38,776 39,939 41,137 42,371 2% 472 - IMPROVEMENTS 155,900 140,000 155,900 160,577 165,394 170,356 175,467 180,731 186,153 191,737 197,489 203,414 3% 481 - DEBT SERVICE 653,545 675,000 678,546 700,000 720,000 793,000 793,000 793,000 793,000 793,000 887,500 887,500 3% 491 - TRANSFERS OUT 3,176,407 3,254,194 2,995,373 3,085,234 3,177,791 3,273,125 3,371,319 3,472,458 3,576,632 3,683,931 3,794,449 3,908,282 2% TOTAL EXPENDITURES AND USES 31,537,110 33,115,647 33,331,794 34,001,401 34,878,831 35,846,757 36,781,053 37,756,696 38,775,766 39,840,455 41,047,572 42,210,551 3%
DRAFT
City of Pinole
Revised Proposed Long-Term Financial Forecast
(Yellow Brick Road)
2026B 2027F (1ST) 2027F 2028F 2029F 2030F 2031F 2032F 2033F 2034F 2035F 2036F CAGR STRUCTURAL SURPLUS/(DEFICIT) (3,234,657) (4,051,155) (4,284,970) (4,135,284) (4,039,138) (4,013,858) (3,921,509) (3,835,891) (3,757,865) (3,688,357) (3,722,865) (3,673,462) 6% DEPT EXPENDITURE CUTS FY 2026/27 1,399,964 1,399,964 1,399,964 1,399,964 1,399,964 1,399,964 1,399,964 1,399,964 1,399,964 1,399,964 PINOLE FIRE ANNEXATION FY 2026/27 1,066,966 1,066,966 1,066,966 1,066,966 1,066,966 1,066,966 1,066,966 1,066,966 1,066,966 1,066,966 3% COST OF LIVING WAGE INCREASES 490,000 490,000 490,000 490,000 490,000 490,000 490,000 490,000 490,000 490,000 REALLOCATE PUBLIC WORKS POSITIONS TO PROJECTS 235,924 235,924 235,924 235,924 235,924 235,924 235,924 235,924 235,924 235,924 FREEZE VACANT POLICE OFFICER 174,000
FREEZE COMMUNITY SERVICES OFFICER 123,577
FREEZE POLICE RECORDS SPECIALIST 110,709
MODIFY ATTRITION 65,000
NEW REVENUES/EXPENDITURE CUTS FY 2027/28 292,426
NEW REVENUES/EXPENDITURE CUTS FY 2028/29 163,780
NEW REVENUES/EXPENDITURE CUTS FY 2029/30 104,375
NEW REVENUES/EXPENDITURE CUTS FY 2030/31 -
TRANSFERS IN FROM SECTION 115 TRUST ($15M) 3,235,445 3,332,508 619,051 650,004 682,504 716,629 728,655 643,037 565,011 495,503 530,011 480,608 NET FAVORABLE/(UNFAVORABLE) 788 (718,647) 221 (0) (0) 0 (0) (0) (0) (0) (0) (0)
CITY COUNCIL
REPORT 12.A.
DATE: JUNE 16, 2026
TO: MAYOR AND COUNCIL MEMBERS
FROM: Eric Casher, City Attorney, N/A, [email protected] Lilly Whalen, Community Development Director, 510-724-9832, [email protected]
SUBJECT: APPROVE A PURCHASE AND SALE AGREEMENT BY AND BETWEEN THE
CITY OF PINOLE AND AMERICAN POSTAL INFRASTRUCTURE (APIF) FOR THE SALE OF PROPERTY LOCATED AT 2101 PEAR STREET (POST
OFFICE)
RECOMMENDATION
Staff recommends that the City Council Adopt a Resolution (Attachment A), to approve a Purchase and Sale Agreement to sell property located at 2101 Pear Street, which is currently leased to the USPS for a Post Office, to APFI – California, LLC and authorize the City Manager to execute the Purchase and Sale Agreement (Attachment B)
BACKGROUND
In 1960 the City leased a portion of the property located next to the current City Hall property to the United States Postal Service (“USPS”) for use as the Pinole Post Office. The original lease was extended several times, and the City and USPS entered into new leases in 2000 and 2014. The most recent lease was executed on November 6, 2014 and was extended in 2025 to August 31, 2030.
In fall of 2025 the City was approached by American Postal Infrastructure (APFI – California, LLC) with an offer to purchase the post office parcel and assume the existing USPS lease.
APFI – California, LLC is a real estate investment entity that acquires and manages properties with established, long-term commercial or governmental tenants. Their business operations focus on maintaining existing uses of properties they acquire. As part of their proposal, APFI indicated that the facility at 2101 Pear Street will continue to operate as the Pinole Post Office under the existing lease terms. The City negotiated a purchase price of $902,500 for the parcel.
The parcel leased to USPS includes the majority of the City Hall parking lot at 2131 Pear Street, which is a larger City-owned parcel. See Figure 1, below.
Figure 1: Location Map with Parcel Lines
REVIEW AND ANALYSIS
As required by Government Code Section 65402, the Planning Commission reviewed the proposed sale of the property to determine whether the disposition conforms to the City’s adopted General Plan. At its March 23, 2026 meeting, the Commission adopted Resolution 26-04 (Attachment C) finding the disposition consistent with the General Plan. The Commission’s determination noted that the land use designation of Old Town Sub-Area (OTSA) allows public/quasi-public/institutional uses, that the existing use as a Post Office is consistent with the PQI designation, and that the sale does not change the allowable land uses or development standards applicable to the site.
Because the City Hall parking lot is located on the same legal parcel as the Post Office, a lot line adjustment is required to separate the parking lot from the portion of the property proposed for sale. The lot line adjustment will remove the City Hall parking lot and a portion of Pear Street from the legal description of the Post Office parcel. The adjustment will be recorded at the time of closing to ensure that the parking lot remains part of the City Hall property, regardless of whether the sale proceeds.
At the time of closing, the City and APFI will enter into an assignment and assumption agreement, pursuant to which APFI will assume all the rights and obligations under the USPS lease. The continuation of the USPS lease ensures that postal services at 2101 Pear Street will remain in place, and the use of the facility as the Pinole Post Office will not change as a result of the sale.
Environmental Status
The proposed sale is not subject to the California Environmental Quality Act (CEQA) pursuant to the general rule in CEQA Guidelines Section 15061(b)(3). This exemption applies where it can be determined with certainty that the activity in question will not result in a significant effect on the environment. The proposed disposition is limited to the sale of an existing developed property and does not authorize any physical changes or development. Accordingly, there is no possibility that the sale will have a significant environmental effect, and the action is not subject to CEQA.
FISCAL IMPACT
The City currently receives $95,003 annually in lease income from the United States Postal Service for operation of the Pinole Post Office. This revenue is offset by ongoing maintenance responsibilities for the building, which was constructed in 1960 and remains a City-maintained facility under the current lease terms.
Based on service records from the last year, Public Works staff responded to approximately 12 maintenance calls, ranging from thermostat adjustments to plumbing repairs, at an estimated annual cost of $5,100. Contracted mechanical services totaled $10,820 over the same period for HVAC and water-heater repairs. The City also incurs a quarterly HVAC air-filter service contract of $2,600 annually, and last year completed a front lobby door replacement costing $3,500. When annualized, the complete interior and exterior repainting performed within the last five years adds approximately $13,600 per year to the maintenance lifecycle cost of the building.
Altogether, the estimated annual maintenance cost is approximately $35,620, resulting in a net annual lease revenue of approximately $59,383 to the City.
Although the building has been consistently maintained and the HVAC system is currently in good working order with no pending major repairs, the facility is now over 60 years old.
Deferred-maintenance considerations should be anticipated, including eventual roof replacement (last replaced in 1990), future HVAC lifecycle replacements, and general rehabilitation of aging building systems typical of structures from this era. These future capital needs are not currently budgeted.
If the City retains ownership of the property, it will continue receiving a reliable annual net revenue of approximately $59,383, while remaining responsible for routine maintenance and future capital improvements associated with an aging facility. Staff time dedicated to service calls—currently averaging about one per month—would also continue.
Alternatively, selling the property would provide a one-time revenue of $902,500, which may be directed toward priority capital improvements elsewhere in the City. The sale would
eliminate ongoing maintenance obligations and remove the City’s future exposure to major capital costs. However, the ongoing revenue stream would be discontinued, requiring the City to weigh the long-term value of stable lease income against the immediate benefit of a significant capital infusion and the reduction of long-term facility liability.
ATTACHMENTS
A. Resolution
B. Post Office PSA - Execution Copy with Exhibits
C. 26-04 Resolution Post Office GP Consistency
RESOLUTION NO. 2026-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PINOLE APPROVING
A PURCHASE AND SALE AGREEMENT BY AND BETWEEN THE CITY OF PINOLE AND APIF – CALIFORNIA, LLC FOR THE SALE OF PROPERTY LOCATED AT 2101 PEAR STREET AND AUTHORIZING THE CITY MANAGER
TO EXECUTE THE PURCHASE AND SALE AGREEMENT
WHEREAS, the City of Pinole (the “City”) is the owner of certain property located at 2101 Pear Street in the City, known as County Assessor’s Parcel Number 401-163-003-7, located on property commonly known as 2101 Pear St., Pinole, CA 94564 (the “Property”); and
WHEREAS, the Property was initially leased to the United States Postal Service (“USPS”) in 1960, and has continued to be used to the USPS through amendments or new leases, with the most recent lease executed on November 6, 2014 (as amended in 2025, the “USPS Lease”); and
WHEREAS, the City received an offer from APIF – California, LLC (the “Buyer”) to purchase the Property and assume all rights and obligations under the USPS Lease; and
WHEREAS, the City Hall parking lot is located on a portion of the Property, requiring the City to prepare a lot line adjustment to remove the City Hall parking lot and thus creating a new parcel (the “Post Office Property”).
WHEREAS, the City and the Buyer have negotiated a Purchase and Sale Agreement and Joint Escrow Instructions (the “Purchase Agreement”), substantially in the form on file with the City Clerk, setting forth the terms and conditions under which City will sell the Property to the Buyer; and WHEREAS, the City Council has duly considered all of the terms and conditions of the proposed Purchase Agreement and believes that the sale of the Property pursuant to the Purchase Agreement is in the best interests of the City of Pinole and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PINOLE DOES RESOLVE AS FOLLOWS:
SECTION 1. The City Council finds and determines that the recitals are true and correct and incorporated herein by this reference.
SECTION 2. The City Council hereby approves the sale of the Post Office Parcel pursuant to the Purchase and Sale Agreement substantially in the form on file with the City Clerk.
SECTION 3. The City Manager (or his or her designee) is hereby authorized to make revisions to the Purchase Agreement, in consultation with the City Attorney,
that do not materially or substantially increase the City obligations thereunder, to execute the Purchase Agreement, to record the lot line adjustment, to make all approvals and take all actions necessary or appropriate to carry out the Purchase Agreement, and to administer the City's obligations, responsibilities and duties to be performed under the Purchase Agreement, this Resolution and any related documents.
PASSED AND ADOPTED at a regular meeting of the Pinole City Council held on the 16th day of June, 2026, by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
I hereby certify that the foregoing resolution was introduced, passed, and adopted on the 16th day of June, 2026.
____________________________
Heather Bell-Spears, CMC
City Clerk
EXECUTION COPY
Purchase and Sale Agreement – Pinole, CA PO Site
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into as of the "Effective Date" (as defined below) between the City of Pinole, a California municipal corporation ("Seller"), and APIF – California, LLC, a Delaware limited liability company ("Purchaser"). Seller and Purchaser are collectively referred to herein as the “Parties.”
RECITALS:
WHEREAS, Seller owns certain real property known as Assessor Parcel Number 401-163-003-7, located on property commonly known as 2101 Pear St., Pinole, CA 94564 (the “City Property”), as more particularly described on Exhibit A attached hereto and incorporated herein by this reference; and WHEREAS, Seller has leased a portion of the City Property to the United States Postal Service (the “USPS Premises”) for use as a post office pursuant to that certain lease dated November 6, 2014 (the “USPS Lease”); and
WHEREAS, Purchaser desires to purchase the fee simple interest in the real property that comprises the USPS Premises, together with the building, improvements and fixtures located thereon (collectively, the “Property" and to take an assignment of the USPS Lease; and WHEREAS, in order to sell the USPS Premises, Seller will be recording a lot line adjustment to create the legal parcel that comprises the USPS Premises (the “Lot Line Adjustment”), as more particularly described in Exhibit B and depicted in Exhibit C, each of which are attached to this agreement and incorporated herein by this reference; and
WHEREAS, Seller will record the Lot Line Adjustment creating the new parcel in conjunction with Closing (defined below); and
WHEREAS, Seller desires to sell, and Purchaser agrees to purchase, the Property in accordance with the terms and conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged by the Parties, the Parties intending to be legally bound, hereby agree as follows:
1. INCORPORATION OF RECITALS; AGREEMENT TO SELL AND PURCHASE.
1.1 Incorporation of Recitals and Exhibits. The Recitals set forth above and the Exhibits attached to this Agreement are each incorporated into the body of this Agreement as if set forth in full.
1.2 Effective Date. The "Effective Date" shall be the later date of Purchaser or Sellers execution of this Agreement; provided, however, that this Agreement shall automatically be null and void and of no further force and effect if the last party to execute this Agreement does not do so within thirty (30) days following the date that such party has received the necessary approval needed from its governing board.
1.3 Purchase and Sale of Property. Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell the Property to Purchaser, and Purchaser hereby agrees to acquire the Property from Seller. The Property will be conveyed by Seller to Purchaser in an “as is” condition, with no warranty, express or implied, by Seller as to the physical condition including, but not limited to, the soil, its geology, or the presence of known or unknown faults or hazardous materials or hazardous waste (as defined by state and federal law); provided, however, that the foregoing shall not relieve Seller from disclosure of any such conditions of which Seller has actual knowledge.
Purchase and Sale Agreement – Pinole, CA PO Site
1.4 Assignment of USPS Lease. Seller agrees to assign the USPS Lease to Purchaser, and Purchaser agrees to enter into an assignment agreement to assume the of the USPS Lease, substantially in the form attached as Exhibit D attached hereto and incorporated by this reference (the “Assignment Agreement”).
2. PURCHASE PRICE AND PAYMENT.
2.1 Purchase Price. The purchase price for the Property to be paid by the Purchaser to the Seller (the "Purchase Price") is Nine Hundred and Two Thousand Five Hundred Dollars and no/100 ($902,500.00).
2.2 Payment of Purchase Price. The Purchase Price will be paid in immediately available funds to Seller from Purchaser at Closing.
2.3 Escrow Account. Seller will open an escrow account (the “Escrow”) to be maintained by Old Republic Title Company as Escrow No. 0147029278, located at 1000 Burnett Ave., Suite 400, Concord, CA 94523, Attn: Shannon McBee (the “Escrow Holder”). Escrow Holder shall perform all escrow and title services in connection with this Agreement.
2.4 Opening of Escrow. Within five (5) business days after the Effective Date, the Parties will deposit into Escrow the fully executed Agreement, or executed counterparts thereto. The date such fully executed Agreement is received by Escrow Holder will be deemed the “Opening of Escrow.”
2.5 Purchaser’s Deposit. Within five (5) Business Days of the Effective Date, Purchaser shall remit a deposit in the amount Thirty Thousand Dollars and no/100 ($30,000.00) (the "Deposit") to Escrow Holder, which shall be credited against the Purchase Price. Interest earned on the Deposit, if any, shall be deemed earned by Purchaser.
3. INSPECTIONS AND APPROVALS.
3.1 Inspections and Approvals. Purchaser shall have thirty-five (35) days (the "Study Period"), commencing on the Effective Date to conduct any and all inspections and studies relating to (i) the condition of the Property and (ii) the feasibility of Purchaser’s proposed use of the Property, including, but not limited to Phase I and Phase II environmental inspections (collectively, the "Inspections").
Purchaser shall be entitled to extend the Study Period one time for thirty (30) days by giving Seller written notice thereof at least two (2) days prior to the expiration of the Study Period. Seller shall permit Purchaser and Purchaser’s agents and representatives ("Consultants") access to the Property to conduct Inspections. All physical inspections must be coordinated with Seller’s representative.
Purchaser hereby agrees to indemnify and hold Seller harmless for any damage to the Property caused by Buyer’s inspections. Purchaser may, at any time prior to the expiration of the Study Period, terminate this Agreement for any reason or no reason whatsoever, by delivering written notice thereof to Seller. If Purchaser does not elect in writing to move forward with the transaction on or prior to the expiration of the Study Period for any reason, including, without limitation, as specified in Section 3.4.2 herein, then Purchaser shall be deemed to elect to terminate this Agreement in its entirety, which automatic termination Purchaser may waive in writing prior to expiration of such Study Period. If this Agreement is terminated prior to the end of the Study Period, the Deposit shall be promptly refunded to Purchaser, and neither party shall thereafter have any further rights, obligations, or liability hereunder.
3.2 Seller Documents. Within five (5) business days after the Effective Date, Seller shall provide to Purchaser copies of all reasonably available and known documents relating to the ownership and operation of the Property, including but not limited to agreements, plans, permits and reports (environmental, structural, mechanical, engineering and land surveys) that Seller has in its possession.
3.3 Environmental and Natural Hazards Disclosure. California Health & Safety Code section 25359.7 requires owners of non-residential real property who know, or have reasonable cause to believe, that any release of hazardous substances are located on or beneath the real property to provide written notice of same to the buyer of real property. Other applicable laws require Seller to provide certain disclosures regarding natural hazards affecting the Property. Seller agrees to make all necessary disclosures required by law.
Purchase and Sale Agreement – Pinole, CA PO Site
3.4 Title and Survey.
3.4.1 Purchaser may obtain a title insurance commitment ("Title Commitment") and a survey covering the Property ("Survey" and together with the Title Commitment, the "Title Documents"). Purchaser shall accept title to the Property subject only to the following, provided that such items permit the Property to continue in its current use: (i) standard exceptions contained in the Title Commitment, and (ii) any exceptions and matters approved in writing by Purchaser (collectively, the "Permitted Exceptions"). Seller shall discharge any (i) deeds of trust, (ii) mortgages, (iii) monetary liens, (iv) options to purchase, (v) rights of first refusal and/or first offer, and (vi) any monetary liens and/or fines and penalties which encumber the Property (collectively, "Mandatory Cure Items") Purchaser may, at its option, discharge same at Closing and receive a credit against the Purchase Price for the actual cost incurred if Seller fails to cure any Mandatory Cure Item.
3.4.2 On or before twenty (20) days after Purchaser’s receipt of the Title Commitment (the "Title Objection Deadline"), Purchaser shall give a written notice (the "Objection Notice") to Seller of any objectionable matter set forth in the Title Documents (the "Objections"). If Seller (i) does not agree to cure all of such Objections or (ii) fails to respond to the Objection Notice within seven (7) days after Seller’s receipt of same with written statement evidencing that Seller shall cure the same prior to Closing, Purchaser may (A) waive all applicable Objections and proceed with transaction contemplated herein, or (B) terminate this Agreement within ten (10) days of receipt of Seller’s response or omission thereof. If Purchaser terminates the Agreement pursuant to subdivision (B), the Deposit shall promptly be refunded to Purchaser, and neither party shall thereafter have any further rights, obligations, or liability hereunder.
4. SELLER’S OBLIGATIONS PRIOR TO CLOSING. Prior to Closing, Seller shall: (i) keep the Property insured under existing insurance policies and operate the Property in the ordinary course of business; (ii) not enter into (a) any new lease affecting any Property (each a "New Lease" and collectively, the "New Leases"), (b) renew, extend, modify, terminate or accept surrender of the USPS Lease, or (c) institute or prosecute available remedies for default under the USPS Lease without obtaining the written consent of Purchaser; (iii) not create or cause an encumbrance attaching to the Property; (iv) not enter into new service contracts or operating or maintenance agreements affecting the Property which will survive Closing; and (v) to the extent permitted by law, cooperate in good faith with Purchaser in filing any applications for development and/or operational approvals related to the Property.
5. REPRESENTATIONS AND WARRANTIES OF SELLER AND PURCHASER
5.1 Seller’s Representations. Seller represents and warrants that the statements below in this Section 5.1 are each true and correct as of the Closing Date (defined below) provided however, if to Seller’s actual knowledge any such statement becomes untrue prior to Closing, Seller will notify Purchaser in writing and Purchaser will have three (3) business days thereafter to determine if Purchaser wishes to proceed with Closing (the "Seller’s Representations"), which shall survive Closing for a period of twelve (12) months (the "Survival Period") with exception to items noted below:
5.1.1 Authority. Seller is a municipal corporation, lawfully formed, in existence and in good standing under the laws of the State of California. Seller has the full right, capacity, power and authority to enter into and carry out the terms of this Agreement. This Agreement has been duly executed by Seller, and upon delivery to and execution by Purchaser is a valid and binding agreement of Seller. This Agreement will not conflict with or constitute a default under any agreement to which Seller is a party or otherwise bound which would impair Seller’s ability to consummate the transactions contemplated herein;
Purchase and Sale Agreement – Pinole, CA PO Site
5.1.2 Encumbrances. Other than the USPS Lease, Seller has not alienated, encumbered, transferred, mortgaged, assigned, pledged, or otherwise conveyed its interest in the Property or any portion thereof, nor entered into any agreement to do so, and there are no liens, encumbrances, mortgages, covenants, conditions, reservations, restrictions, easements or other matters affecting the Property, except as disclosed by Seller. Seller will not, directly or indirectly, alienate, encumber, transfer, mortgage, assign, pledge, or otherwise convey its interest prior to the Close of Escrow, as long as this Agreement is in force;
5.1.3 Seller is not a "foreign person," as that term is used and defined in the Internal Revenue Code, Section 1445, as amended;
5.1.4 There are no actions, proceedings, litigation (including bankruptcy) pending or threatened against Seller with respect to the Property, and Seller has no knowledge of any uncured material violations of any federal, state, county or municipal law, ordinance, order, regulation, or requirement affecting Seller with respect to the Property.
5.1.5 To the best of Sellers knowledge no hazardous materials or other substances regulated by applicable federal, or state environmental laws are, or have been used, stored on, in or under the Real Property in violation of applicable federal or state environmental laws and Seller knows of no underground storage tanks ("UST") existing or ever existing on the Real Property.
5.1.6 To the best of Sellers knowledge the roof on the Property will be free from leaks, and the building systems, including, but not limited to plumbing, HVAC, and electrical systems will be in good condition and working order at Closing;
5.1.7 To the best of Sellers knowledge the rent roll for the Property is accurate in all material respects and Seller further represents, warrants and covenants: (i) USPS does not have an option to purchase the Property or any portion thereof; and (ii) there is no security deposit, except as may be disclosed in the rent roll;
5.1.8 The Property is not subject to any agreements that will survive Closing except for the USPS Lease, which is to be assumed by Purchaser at Closing.
5.2 Purchaser’s Representations. Purchaser represents and warrants to Seller the following as of the Effective Date and as of the Date of Closing, which shall survive the Closing for the Survival Period:
5.2.1 Purchaser is a Delaware Limited Liability company, duly organized, validly existing and in good standing under the laws of the State of Delaware.
5.2.2 At Closing, Purchaser shall have the power and authority to (i) execute this Agreement and to provide the Purchaser Closing Deliveries (as hereinafter defined), and (ii) consummate the transactions contemplated herein.
5.2.3 This Agreement will not conflict with or constitute a default under any agreement to which Purchaser is a party or otherwise bound which would impair Purchaser’s ability to consummate the transactions contemplated herein. This Agreement is a binding and enforceable agreement against the Purchaser.
5.2.4 Purchaser is not bankrupt or insolvent under any applicable federal or state standard, has not filed for protection or relief under any applicable bankruptcy or creditor protection statute, and has not been threatened by creditors with an involuntary application of any applicable bankruptcy or creditor protection statute.
Purchase and Sale Agreement – Pinole, CA PO Site
6. CLOSING.
6.1 Closing. The closing (the “Closing” or “Close of Escrow”) will occur no later than ninety (90) days from the expiration of the Study Period and any extended period (“Closing Date”) and the satisfaction of all of Seller’s Conditions to Closing and Purchasers Conditions to Closing, or such other date that the Parties agree in writing, but not later than one hundred eighty days from the Effective Date.
6.2 Purchaser’s Conditions to Closing. Purchaser’s obligation to close under this Agreement shall be subject to and conditioned upon the fulfillment of the following conditions precedent:
6.2.1 Delivery of all of the documents required to be delivered by Seller at Closing;
6.2.2 Seller’s Representations and Warranties shall be true and correct in all material respects as of Closing and Seller shall have complied with, fulfilled, and performed in all material respects each of its obligations under this Agreement;
6.2.3 The Escrow Holder shall be committed to issue an Owner’s Title Policy insuring good and marketable fee simple title to the Property to Purchaser for the Purchase Price, subject to the Permitted Exceptions and endorsements reasonably acceptable to Purchaser; and
6.2.4 The Closing shall not occur unless and until the Lot Line Adjustment has been fully approved, executed, and recorded, thereby creating a legal parcel that comprises the USPS Premises as contemplated herein. Evidence of such recording shall be provided to Purchaser and Escrow Agent prior to or concurrently with Closing.
6.2.5 Seller shall deliver a lease status report from the USPS to Purchaser not less than five (5) Business Days prior to Closing indicating no material deviations from the information contained in the Lease, no unperformed maintenance or other obligations required to be completed by Seller, and no defaults by USPS or defaults by or claims against the Seller ("Lease Status Report"). If unperformed maintenance or other obligations of the Seller are disclosed therein or otherwise arise out of Seller’s period of ownership or prior to Closing, Seller shall be obligated to perform or cause to be performed all such maintenance and satisfy such other obligations prior to Closing at its sole cost and expense (“Unperformed Lease Obligations”). Notwithstanding anything to the contrary contained in this Agreement, Seller’s obligation to perform the Unperformed Lease Obligations shall survive the Closing for a period of twenty-four (24) months.
6.2.6 In the event maintenance was performed by the USPS prior to Closing that was required to be performed by Seller, then the Seller shall be solely responsible for reimbursement for any and all open and outstanding invoices to the USP (“Performed Maintenance”). In the event Purchaser receives an invoice or notice of collection from the USPS requesting payment for work that the USPS had completed on behalf of the Seller prior to Closing the Seller shall immediately without delay reimburse the USPS directly for such preformed maintenance. This Section 6.2.6 shall survive Closing.
6.3 Seller’ Conditions to Closing. The Close of Escrow and Seller’s obligation to sell and convey the Property to Purchaser are subject to the satisfaction of the following conditions or Seller’s written waiver (in Seller’s sole discretion) of such conditions on or before the Closing Date:
6.3.1 Purchaser has performed all obligations to be performed by Purchaser pursuant to this Agreement before the Closing Date.
6.3.2 Purchaser’s representations and warranties set forth herein are true and correct in all material respects as of the Closing Date.
6.3.3 Seller has deposited into Escrow, and Escrow Holder has accepted, all documents required to effect the Lot Line Adjustment required to create the new parcel to be deeded to Purchaser.
6.3.4 Seller has completed all Surplus Land Act requirements needed to sell the Property.
Purchase and Sale Agreement – Pinole, CA PO Site
7. CLOSING PRORATIONS AND ADJUSTMENTS.
7.1 General. All normal and customarily proratable items, including, without limitation, rents, real estate taxes, and utilities charges arising under the USPS Lease shall be prorated on a per diem basis as of 12:01am on the Date of Closing, and allocated between the Seller and Purchaser on the basis of the actual number of days of the month which shall have elapsed as of the Closing Date, the actual number of days in the month, and a 365-day fiscal year associated with such proratable item. If accurate prorations and other adjustments cannot be made at Closing, the parties shall prorate based on the most recently available bill or invoice for such proratable item multiplied at a ratio of 1.1:1, subject to adjustment following Closing. In the event the prorations or adjustments provided for in this Agreement are later discovered to not have been correctly adjusted as of Closing, the parties shall correct and/or resolve any incorrect closing figures. This Section 7.1 shall survive Closing.
7.2 USPS Rents. At Closing the Seller shall establish a rent collection escrow ("Rent Collection Escrow") equal to two (2) months of rents under the Leases. If Seller receives any rental payments from USPS after Closing otherwise belonging to Purchaser, Seller shall immediately notify Purchaser of its receipt of same, and Purchaser shall be immediately entitled to payment of the same amount from the Rent Collection Escrow. Once Purchaser receives rents directly from USPS, the balance in the Rent Collection Escrow shall be disbursed to Seller immediately following disbursement to Purchaser of any outstanding amounts due to Purchaser pursuant to this Section 7.2.
7.3 Fixed Rents. Fixed Rents and Additional Rents under the USPS Lease is to be collected at Closing in respect of the month in which the Closing occurs (the “Current Month”), on a per diem basis based upon the number of days in the Current Month prorated as of 12:01 am the day of Closing in the Current Month which shall be allocated to Purchaser. Due to such allocation the Seller shall be entitled to the full regularly scheduled Fixed Rent payment of the Current Month as received by the USPS.
8. CLOSING COSTS.
8.1 Seller and Purchaser shall each pay for (i) one-half of the Escrow fees other charges; and (ii) California Real Estate Transfer Taxes.
8.2 Seller shall pay for: (i) all fees and other charges to cure title in accordance with Purchaser’s Title Objections;
8.3 Purchaser shall pay for: (i) any and all costs and expenses in connection with obtaining financing for the purchase of the Property, if any; (ii) the costs associated with the issuance of the Owner’s Title Insurance Policy for the Property; (iii) fees imposed upon the recordation of the Deed; and (iv) the Survey costs.
8.4 Each party shall be responsible for their own legal fees incurred in connection with this Agreement.
Any and all other closing costs not specifically addressed in this Section shall be paid in accordance with the customs and practices for Contra Costa County, California.
9. CLOSING DELIVERIES.
9.1 Seller Closing Deliveries. Not less than Two (2) days prior to the Closing Date Seller shall deposit into Escrow for delivery to Purchaser at Closing (the "Seller Closing Deliveries"): (i) the documents required for the Lot Line Adjustment, including an executed grant deed for the Property; (ii) an executed Assignment Agreement; (iii) an affidavit or qualifying statement which satisfies the requirements of paragraph 1445 of the Internal Revenue Code of 1986, as amended, any regulations thereunder (the “Non-Foreign Affidavit”); (iv) a California Franchise Tax Board form 590 to satisfy the requirements of California Revenue and Taxation Code Section 18805(b) and 26131, (v) a copy of the resolution adopted by the City Council of the City of Pinole authorizing the sale of the Property and the execution of the documents; and (vi) such other documents as Escrow Holder requires in order to Close on the Property.
Purchase and Sale Agreement – Pinole, CA PO Site
9.2 Purchaser Closing Deliveries. Not less than One (1) day prior to the Closing Date Purchaser shall deposit into Escrow for delivery to Seller at Closing (collectively, the "Purchaser Closing Deliveries"):
(i) an executed Assignment Agreement; (ii) immediately available funds in the amount, which together with the Deposit plus interest thereon, if any, is equal to: (a) the Purchase Price as adjusted by any prorations between the Parties; (b) all escrow fees and recording fees and closing costs required by Escrow Holder; and (c) the cost of the Title Policy and (iii) any other documents reasonably required by Escrow Holder.
9.3 Closing. Upon Closing, Escrow Holder shall: (i) record the Lot Line Adjustment documents and the grant deed in the order set forth in closing instructions to be provided by Seller; (ii) disburse to Seller the Purchase Price; (iii) deliver to Purchaser the Non-Foreign Affidavit, the California Certificate and the original recorded grant deed; (iv) deliver to Purchaser and Seller signed counterparts of the Assignment Agreement; (v) pay any expenses payable through escrow; (vi) distribute to itself the payment of escrow fees and expenses required hereunder; and deliver the title policy to the Purchaser. .
10. DAMAGE, DESTRUCTION AND CONDEMNATION.
10.1 Casualty. Seller assumes all risk of loss or damage to the Property by any cause until Closing. If at any time prior to Closing all or any portion of the Property is destroyed or damaged by any cause (the "Casualty"), Seller shall promptly give written notice thereof to Purchaser (the "Casualty Notice") and Purchaser may terminate this Agreement by delivering written notice to Seller or Purchaser may proceed to Closing and all insurance proceeds payable to Seller shall be assigned to Purchaser at Closing together with a credit to Purchaser in the amount of any deductible to be paid under the applicable insurance policy.
10.2 Condemnation. In the event, at any time on or prior to the Date of Closing, any action or proceeding is filed, under which the Property, or any portion thereof, may be taken pursuant to any law, ordinance or regulation or by condemnation or the right of eminent domain, the Purchaser shall have the right to either (a) terminate this Agreement and receive a refund of the Deposit, or (b) proceed to Closing without any reduction or adjustment in the Purchase Price, except that all condemnation proceeds, if any, shall be assigned to Purchaser at Closing.
11. DEFAULT AND REMEDIES.
11.1 Purchaser Default. Purchaser and Seller acknowledge that the actual damages that would be suffered by Seller hereunder caused by a Purchaser default would be impossible or very difficult to accurately estimate. Accordingly, if Purchaser defaults in Closing hereunder, Seller may, as it sole and final remedy, terminate this Agreement and retain the Deposit hereunder. The Deposit is liquidated damages and is a reasonable estimate of the anticipated or actual harm that might arise from a Purchaser default. The Deposit is the Purchaser's sole liability and entire obligation and Seller's exclusive remedy for any Purchaser default.
11.2 Seller Default. If Seller defaults hereunder or breaches any of Seller’s Representations, Purchaser may either (i) seek specific performance of the Seller’s obligations under this Agreement, or (ii) terminate this Agreement and receive a return of the Deposit and any other sums placed into the Escrow by Purchaser, and except for the rights and obligations expressly provided to survive termination of this Agreement, neither Party shall have any further obligations or liabilities under this Agreement..
11.3 Survival. The provisions of this Section 11 shall (i) survive any termination of this Agreement, and (ii) shall survive Closing and the delivery of the Seller Closing Deliveries and shall not merge into the grant deed for the Property.
12. NOTICES. Any notice required or permitted to be given hereunder must be in writing and shall be deemed to be given when (i) hand delivered, or (ii) one (1) business day after pickup by United Parcel Service (Overnight) or Federal Express (Next Business Day Delivery), or another similar overnight express service, or (iii) three (3) business days after the date of mailing by U.S. certified mail, postage prepaid, return receipt requested, and in all cases addressed to the parties at their respective addresses set forth below:
Purchase and Sale Agreement – Pinole, CA PO Site
If to Seller:
City of Pinole
2131 Pear St.,
Pinole, CA 94564
Attn: City Manager
Phone: (510) 724-9830
Email:
If to Purchaser:
American Postal Infrastructure SPV I, LLC
c/o American Infrastructure Funds
950 Tower Lane, Suite 800
Foster City, California 94404
Attn: William Hallisey
Phone: 650-854-6000
Email: [email protected]
or in each case to such other address as either party may from time to time designate by giving notice in writing pursuant to this Section 12 to the other party.
13. MISCELLANEOUS.
13.1 Entire Agreement. This Agreement, together with the Schedules and Exhibits attached hereto, is the entire agreement between the Parties with respect to the subject matter hereof, and no alteration, modification or interpretation hereof shall be binding unless in writing and signed by both Parties. This Agreement shall be binding upon and inure to the benefit of Purchaser and Seller and their respective successors and permitted assigns. Each party hereby acknowledges that all Parties hereto participated equally in the drafting of this Agreement and that, accordingly, no court interpreting this Agreement shall construe it more stringently against one party than the other. This Agreement may be executed in multiple counterparts and executed / delivered electronically, each of which shall be effective as and shall constitute an original document binding upon the party or Parties signing the same.
13.2 Severability. If any provision of this Agreement shall be held invalid and unenforceable, the remainder of this Agreement shall be enforced to the fullest extent permitted by law.
13.3 Applicable Law. This Agreement shall be construed and enforced in accordance with the laws of the State of California.
13.4 No Public Disclosure. Except to the extent as may be required by law or as required by the Escrow Holder or to the officers, directors, partners and employees of the Parties hereto in the ordinary course of business, all information relating to the transaction contemplated herein shall remain confidential subject to the prior written consent of Purchaser and Seller.
13.5 WAIVER OF JURY TRIAL. SELLER AND PURCHASER WAIVE ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, COUNTERCLAIM, OR PROCEEDING BASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS AGREEMENT.
13.6 Attorneys’ Fees. In the event either party hereto commences litigation against the other to enforce its rights hereunder, the prevailing party in such litigation shall be entitled to recover from the other party its reasonable attorneys’ fees and expenses incidental to such litigation including the cost of any appeals. The provisions of this Section 13.6 shall survive Closing and any termination of this Agreement.
13.7 Assignability. This Agreement may be assigned by Purchaser without obtaining the written approval of Seller so long as (i) such assignee is controlled by Purchaser (the "Assignee") and (ii) Purchaser provides written notice to Seller. Upon Assignee’s execution of a document assuming Purchaser’s rights and obligations under this Agreement, Purchaser shall be fully released from any and all of its rights and obligations under this Agreement.
13.8 Brokerage/Broker’s Commission. Purchaser and Seller each represent that no real estate broker has been retained by either party in the procurement of the Property or negotiation of this Agreement. The Parties shall indemnify and hold each other harmless from and against any and all claims, loss, liability, cost, and expenses (including reasonable attorneys’ fees) resulting from any claims that may be made against the Parties by any broker or person claiming a commission, fee, or other compensation from the
Purchase and Sale Agreement – Pinole, CA PO Site
Parties by reason of this transaction. This Section 13.8 shall survive the Closing or earlier termination of this Agreement.
13.9 Section 1031 Exchange. Seller and/or Purchaser may consummate the purchase of the Property as part of a so-called like kind exchange (the “Exchange”) pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), provided that: (i) the Closing shall not be delayed or affected by reason of the Exchange nor shall the consummation or accomplishment of the Exchange be a condition precedent or condition subsequent to the exchanging party’s obligations under this Agreement; (ii) the exchanging party shall effect the Exchange through an assignment of its rights under this Agreement to a qualified intermediary; and (iii) the non-exchanging party shall not be required to take an assignment of the purchase agreement for the replacement property or be required to acquire or hold title to any real property for purposes of consummating the Exchange. The nonexchanging party shall not by this agreement or acquiescence to the Exchange (1) have its rights under this Agreement affected or diminished in any manner or (2) be responsible for compliance with or be deemed to have warranted to the exchanging party that the Exchange in fact complies with Section 1031 of the Code.
13.10 Interpretation. This Agreement has been negotiated at arm’s length and each Party has been represented by independent legal counsel in this transaction and this Agreement has been reviewed and revised by counsel to each of the Parties. Accordingly, each Party hereby waives any benefit under any rule of law (including Section 1654 of the California Civil Code) or legal decision that would require interpretation of any ambiguities in this Agreement against the Party drafting it.
13.11 Counterparts and Electronic Signatures. This Agreement may be executed simultaneously or in any number of counterparts, each of which shall be deemed an original, equally admissible in evidence, but all of which together shall constitute one and the same Agreement, notwithstanding that the signatures of each Party or their respective representatives do not appear on the same page of this Agreement.
The Parties hereby acknowledge and agree that electronic signatures that comply with the eSign Act (15 U.S.C. Ch. 96) (such as DocuSign signatures), or signatures transmitted by electronic mail in socalled "PDF" format shall be legal and binding and shall have the same full force and effect as if an original of this Agreement had been delivered. The Parties hereto (a) intend to be bound by the signatures on any document sent by electronic means including by electronic mail, (b) are aware that the other Party will rely on such signatures, and (c) hereby waive any defenses to the enforcement of the terms of this Agreement based on the foregoing forms of signature.
13.12 Representation on Authority of Parties. Each person signing this Agreement represents and warrants that he or she is duly authorized and has legal capacity to execute and deliver this Agreement. Each Party represents and warrants to the other that the execution and delivery of the Agreement and the performance of such Party’s obligations hereunder have been duly authorized and that the Agreement is a valid and legal agreement binding on such Party and enforceable in accordance with its terms.
SIGNATURES ON FOLLOWING PAGE
Purchase and Sale Agreement – Pinole, CA PO Site
[SIGNATURE PAGE TO PURCHASE AND SALE AGREEMENT]
IN WITNESS WHEREOF, Purchaser and Seller have executed this Agreement on the dates set forth below, effective as of the Effective Date defined above.
SELLER:
City of Pinole, a California municipal corporation
By:___________________________________
Garrett Evans
Interim City Manager
Date
ATTEST
___________________________________
Heather Bell
City Clerk
Reviewed as to Form:
___________________________________
Eric Casher
City Attorney
PURCHASER:
APIF – California, LLC, a Delaware limited liability
company
By: AMERICAN POSTAL INFRASTRUCTURE
SPV I, LLC, its Managing Member
BY:________________________________
William Hallisey
Vice President
Date
Purchase and Sale Agreement – Pinole, CA PO Site
EXHIBIT A
Legal Description of City Property
Real Property: 2101 Pear St., Pinole, CA 94564
APN: 401-163-003-7
Legal Description:
Parcel One:
That parcel of land designated as “School Property” on the “Map of the Town of Pinole, Contra Costa Co., California”, which map was filed in the Office of the County Recorder of the County of Contra Costa, State of California, on September 24, 1887, in Volume “B” of Maps, at Page 41.
EXHIBIT B
Legal Description of Property
EXHIBIT C
Depiction of Property
2 EXHIBIT D
Form of Assignment Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
(Lease Agreement for 2101 Pear Street)
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is entered into as of June ___, 2026 (the “Effective Date”), by and between the City of Pinole, a California municipal corporation (the “City”) and APIF – California, LLC, a Delaware limited liability company (“APIF”).
RECITALS
A. On June ____, 2026, APIF entered into that certain purchase and sale agreement (the “PSA”) with the City for the purchase of property located at 2101 Pear Street in Pinole, CA, known as a portion of Assessor’s Parcel Number 40-63-003-7 (the “Property”), as more particularly described in Exhibit A attached hereto and incorporated herein by this reference.
B. The Property is leased to the United States Postal Service (the “USPS”) pursuant to that certain lease between the City and the USPS dated November 6, 2014 (as amended, the “Lease”).
C. Pursuant to the PSA, among other things, the City will purchase the Property and assume the Lease.
D. Section 6.2 of the Lease permits assignment of the Lease under certain conditions and assignment of the Lease to the APIF meets the required conditions.
E. The City desires to assign to APIF all of its rights, interests, obligations and liabilities under the Lease (the “Rights and Obligations”), and for APIF to assume the Rights and Obligations thereunder concurrently with execution of this Agreement, and APIF desires to so acquire the Rights and Obligations from the City and agrees to assume the Rights and Obligations, all as more fully set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and APIF hereby agree as follows:
1. Assignment by the City. From and after the Effective Date hereof, the City hereby assigns, transfers and grants to APIF, and its successors and assigns, all of the City’s Rights and Obligations under the Lease.
2. Acceptance and Assumption. From and after the Effective Date hereof, APIF, for itself and its successors and assigns, hereby expressly assumes all of the City’s Rights and Obligations under the Lease.
3. No Modification of Responsibilities. Nothing in this Agreement shall increase, decrease, or otherwise modify any of the rights or obligations of the “Developer” or the “City” under the Lease.
4. Effective Date. The assignments set forth in this Agreement are effective as of the Effective Date of this Agreement.
5. Governing Law. This Agreement and the legal relations of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of California, without regard to its principles of conflicts of law.
3 6. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
7. Further Assurances. City and APIF agree to take all such further actions and execute such further documents as may be necessary or desirable to carry out the purposes of the Agreement. [Signatures follow on separate page]
IN WITNESS WHEREOF, the Parties have executed this Assignment Agreement as of the date first written above.
CITY
City of Pinole, a California municipal corporation
By:___________________________________
Garrett Evans
Interim City Manager
ATTEST
___________________________________
Heather Bell
City Clerk
Reviewed as to Form:
___________________________________
Eric Casher
City Attorney
APIF
APIF – California, LLC, a Delaware limited liability
company
By: AMERICAN POSTAL INFRASTRUCTURE
SPV I, LLC, its Managing Member
BY:________________________________
William Hallisey
Vice President