CITY COUNCIL
REGULAR MEETING AGENDA
Tuesday, May 21, 2024
7:00 PM
City Council Chamber
200 Old Bernal Avenue
Pleasanton, CA 94566
The meeting will be held in-person, broadcast live on Channel 29 and at https://www.trivalleytv.org and streamed at https://www.youtube.com/user/TheCityofPleasanton.
Public participation: It is requested that members of the public wishing to address the City Council submit a speaker card. When public comment is opened on an agenda item, individuals may speak once per agenda item.
To submit written public comment regarding an open session item on this meeting agenda visit https://forms.cityofpleasantonca.gov/f/writtenpubliccomment. Comments will be accepted by the City Clerk’s Office until 12:00 p.m. on the day of the Council meeting.
In Person at Council Chamber:
• Submit a physical speaker card to the City Clerk at the meeting. When your name is called, please provide comment at the podium.
CALL TO ORDER
• Pledge of Allegiance
• Remarks by Councilmember Testa
• Roll Call
Resolution No. 2024-028
Ordinance No. 2281
REPORT ON CLOSED SESSION
AGENDA AMENDMENTS
CONSENT CALENDAR
Items listed on the consent calendar are considered routine in nature and may be enacted by one motion. If discussion is required, that particular item will be removed from the consent calendar and will be considered separately.
City Manager
1. Approve meeting minutes of April 16, 2024
2. Approve first amendment to the professional services agreement with HF&H consultants, LLC for solid waste system technical assistance services to increase the amount of the agreement by $100,000 for a total amount not to exceed
City Council Agenda Page 2 of 4 May 21, 2024
$200,000
3. Approve flying of the commemorative Progress Pride Flag pursuant to the City's Flag Policy
4. Adopt a resolution to approve rates for solid waste, recyclable materials, and organic materials collection for fiscal year 2024/25 as required by the franchise agreement between the City and Pleasanton Garbage Service, Inc.
Community Development
5. Actions of the Zoning Administrator and Planning Commission
6. Adopt a resolution approving the Ridge View Commons Senior Rental Housing Complex's Amended and Restated Loan Agreement, Ground Lease and Regulatory Agreement, and authorize the City Manager to execute all documents, including subordination agreements, and take all steps necessary to refinancing and renovation of Ridge View Commons
7. Continued from May 7, 2024 - Approve and authorize the City Manager to execute the second amendment to the Maintenance Services Agreement with St. Francis Electric for routine signal maintenance, signal upgrades, and emergency repairs, extending the contract term to June 30, 2025, increasing the rates for maintenance of intersections, beacons, and in-pavement lights, and amending the compensation to a not-to-exceed annual amount of $500,000
Finance
8. Accept the Monthly Disbursements and Investment Report for March 2024 Library and Recreation
9. Approve the submittal of an application to the California State Library for grant funds in the amount of $42,948 for fiscal year 2024/25
Public Works
10. Adopt a Resolution of Summary Vacation for a Public Service Easement at 870 St.
John Court
11. Approve as-needed Maintenance and Trade Services Agreements for Facilities, Utilities, Streets, Parks, Fleet, and Environmental Services Divisions for General Maintenance Infrastructure Repairs
12. Adopt resolutions approving the Engineer’s reports for Landscape Maintenance Districts 1984-1 (Ponderosa-Del Prado), 1993-1 (Windsor), 1993-2 (Bonde Ranch), 1994-1 (Oak Tree Farm), and 1995-1 (Moller Ranch), declaring the City’s intention to assess the properties for the cost to operate and maintain the Districts; and
City Council Agenda Page 3 of 4 May 21, 2024
setting June 18, 2024, at 7:00 P.M. as the date and time for the public hearing
MEETING OPEN TO THE PUBLIC
13. Presentation of a proclamation recognizing May as Older Americans Month
14. Presentation of a proclamation recognizing May as Lupus Awareness Month
15. Public Comment regarding items not listed on the agenda – Speakers are limited to 3 minutes.
PUBLIC HEARINGS AND OTHER MATTERS
If necessary to ensure completion of the following items, the Mayor may alter time limits.
16. Appeal of Planning Commission’s denial of application P23-0599 for Design Review and a Vesting Tentative Map for a housing development that includes the demolition of two existing commercial buildings and construction of 146 multi-family residential units with 38 accessory dwelling units with associated site improvements located at 5976 & 5994 West Las Positas Boulevard
17. Adopt a resolution accepting the fiscal year 2024/25 mid-term update for operating and capital budget
18. Receive a report and presentation on the use of Section 115 Pension Trust Funds and provide feedback to staff
MATTERS INITIATED BY COUNCIL
COUNCIL REPORTS
Brief reports on conferences, seminars, and meetings attended by the Council
ADJOURNMENT
Notice
Under Government Code §54957.5, any writings/documents regarding an open session item on this agenda and items received by the City Clerk’s Office by 12:00 p.m. on the day of the meeting provided to a majority of the City Council after distribution of the agenda packet will be available for public inspection on the City’s website https://www.cityofpleasantonca.gov/ and also at the Pleasanton Library located at 400 Old Bernal Ave., Pleasanton, CA 94566.
There is a 90-day limit for the filing of a challenge in the Superior Court to certain City administrative decisions and orders, which require a hearing by law, the receipt of evidence, and the exercise of discretion. The 90-day limit begins on the date the decision is final (Code of Civil Procedure § 1094.6). Further, if you challenge an action
City Council Agenda Page 4 of 4 May 21, 2024
taken by the City Council in court, you may be limited, by California law, including but not limited to Government Code §65009, to raising only those issues you or someone else raised in the public hearing, or in written correspondence delivered to the City Council prior to or at the public hearing. The City Council may be requested to reconsider a decision if the request is made prior to the next City Council meeting, regardless of whether it is a regular or special meeting.
Accessible Public Meetings
The City of Pleasanton can provide special assistance for persons with disabilities to participate in public meetings. To make a request for a disability-related modification or accommodation (e.g., an assistive listening device), please contact the City Clerk’s Office at 123 Main Street, Pleasanton, CA 94566 or (925) 931-5027 at the earliest possible time. If you need sign language assistance, please provide at least two working days’ notice prior to the meeting date.
City Council Minutes
Item #1
CALL TO ORDER
CITY OF PLEASANTON
CITY COUNCIL
MINUTES
Tuesday, April 16, 2024
7:00 PM
Mayor Brown called the Regular Meeting of the City Council to order at the hour of 7:00 p.m. from the Council Chamber located at 200 Old Bernal Avenue.
Councilmember Balch provided opening remarks.
ROLL CALL
Present: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Absent:
None
REPORT ON CLOSED SESSION
There was no report out as the closed session meeting was canceled.
AGENDA AMENDMENTS
None.
CONSENT CALENDAR
Mayor Brown opened public comment. There being no speakers, Mayor Brown closed the public comment.
MOTION: It was mis by Arkin/Testa to approve the consent calendar as recommended. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Noes: None
Absent: None
City Attorney
1. Introduce an omnibus ordinance to amend the Municipal Code in Chapters 1.22
City Council Minutes
Item #1
Voluntary campaign contribution and expenditure limitation, 1.24 Administrative citations, 5.20 Business license exemptions, 6.56 Alarms, 13.08 Parks and Recreation Facilities, and Title 18 Zoning and waive first reading. Adopt resolutions to amend the Purchasing Procedures and Manual; and update the Master Fee Schedule for Small Wireless Facility application fees and Police Department false alarm fines Recommendation: Introduce the omnibus Ordinance No. 2277 and waive first reading, and adopt two Resolutions Nos. 2024-013 and 2024-014.
City Manager
2. Adopt a resolution opposing California ballot initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act and authorize joining the CalCities Coalition
Recommendation: Adopt Resolution No. 2024-015 opposing California ballot initiative No. 21-0042A1, the Taxpayer Protection and Government Accountability Act and authorize joining the CalCities Coalition.
3. Adopt a resolution amending the local Conflict of Interest Code and updating the list of designated positions required to file Statements of Economic Interests Recommendation: Adopt Resolution No. 2024-016 amending the local Conflict of Interest Code and updating the list of designated positions required to file Statements of Economic Interests.
4. Enact revisions to commission structure: introduce an ordinance modifying the duties, membership and meeting frequency of the Civic Arts, Human Services, Library, and Parks and Recreation Commissions by amending Pleasanton Municipal Code title 2, chapters 2.39, 2.28, 2.34 and 2.32 Recommendation: Enact revisions to commission and committee structure: introduce Ordinance No.2278 modifying the duties, membership and meeting frequency of the Civic Arts, Human Services, Library, and Parks and Recreation Commissions by amending PMC chapters 2.39, 2.28, 2.34 and 2.32.
Community Development
5. Actions of the Zoning Administrator and Planning Commission Recommendation: Approve actions of the Zoning Administrator and Planning Commission.
6. Approve plans and specifications and award construction contract to Columbia Electric, Inc. in the amount of $1,155,127 for the Valley Avenue at Northway Road
City Council Minutes
Item #1
Intersection Improvements Project (Bi-Annual Traffic Signal Installation, CIP No. 23532) with an approximately 13 percent contingency of $147,394, for a total cost of $1,302,521, and budget amendments in the Gas Tax and Traffic Impact Fee Funds Recommendation:
1. Approve plans and specifications and award construction contract to Columbia Electric, Inc. in the amount of $1,155,127 for the Valley Avenue at Northway Road Intersection Improvements Project (Bi-Annual Traffic Signal Installation, CIP No. 23532) with an approximately 13 percent contingency of $147,394 for the total cost up to $1,302,521.
2. Approve amendments to the FY 2023/24 budget as follows:
• Transfer $196,686 from the Annual Expedited Speed Lump Program (CIP No. 23534) to the Bi-Annual Traffic Signal Installation Project (CIP No. 23532) in the Gas Tax Fund.
• Transfer $194,512 from the Annual Intersection Improvements and Various Locations Project (CIP No. 23541) to the Bi-Annual Traffic Signal Installation Project (CIP No. 23532) in the Gas Tax Fund.
• Transfer $200,689 from the Annual Neighborhood Traffic Calming Devices Project (CIP No. 23555) to the Bi-Annual Traffic Signal Installation Project (CIP No. 23532) in the Gas Tax Fund. • Transfer $116,156 from the Annual Intersection Improvements and Various Locations Project (CIP No. 23541) to the Bi-Annual Traffic Signal Installation Project (CIP No. 23532) in the Traffic Impact Fee Fund.
Finance
7. Approve a professional services agreement with The Pun Group, LLP for professional auditing services for a three-year contract with an option to extend the contract for two years for a total of five years for a total not to exceed amount of $523,555 with up to 20 percent contingency Recommendation:
• Approve a professional services agreement with The Pun Group for professional auditing services for a three-year contract with an option to extend the contract for two years for a total of five years for a total not to exceed amount of $523,555.
• Authorize the City Manager or designee to execute the attached professional services agreement for a three-year contract and approve future contract amendments.
• Authorize the City Manager or designee to approve up to 20 percent in contingency per fiscal year to cover testing of additional major programs
City Council Minutes
Item #1
associated with the single audit and the implementation of new Governmental Accounting Standards Board (GASB) pronouncements.
8. Adopt a resolution approving an interfund loan from the Equipment Replacement Fund to the Recycled Water Fund in the amount of $965,160 for a term of not more than five years to redeem the outstanding 2017 Water Revenue Bonds; and approve amendments to the Fiscal Year 2023/24 Budget
Recommendation: Adopt Resolution No. 2024-017 approving an interfund loan from the Equipment Replacement Fund to the Recycled Water Fund in the amount of $965,160 for a term of not more than five years to redeem the outstanding 2017 Water Revenue Bonds; and approve amendments to the Fiscal Year 2023/24 Budget.
9. Accept the monthly disbursements and investment report for February 2024 Recommendation: Accept claim disbursements in the amount of $18,923,050 and the investment report for the month of February 2024.
Fire
10. Public Hearing: Receive any protests and adopt a resolution to approve the 2024 Weed Abatement Program and authorize the abatement of weeds, rubbish, dirt, or refuse upon or in front of certain described properties within the city of Pleasanton Recommendation: Receive any protests and adopt Resolution No. 2024-018 to approve the 2024 Weed Abatement Program and authorize the abatement of weeds, rubbish, dirt, or refuse upon or in front of certain described properties within the city of Pleasanton.
Police
11. Receive annual military equipment use report for 2023; introduce and waive first reading of an ordinance amending Ordinance No. 2246 to amend the Pleasanton Police Department's military equipment use policy to add equipment to the policy's military equipment inventory; and adopt a resolution accepting the annual military equipment use report for 2023 determining that the police department's use of military equipment in 2023 complied with the standards of approval and renewing the military equipment use policy
Recommendation: Receive annual military equipment use report for 2023; introduce and waive first reading of Ordinance No. 2279 amending Ordinance No. 2246 to amend the Pleasanton Police Department's military equipment use policy to add equipment to the policy's military equipment inventory; and adopt Resolution No. 2024- 019 accepting the annual military equipment use report for 2023
City Council Minutes
Item #1
determining that the police department's use of military equipment in 2023 complied with the standards of approval, and renewing the military equipment use policy.
Public Works
12. Accept public improvements performed by ELLA for the Ken Mercer Cricket Field Project, CIP No. 22795 and a budget amendment to the Park Capital Improvement Program Fund.
Recommendation: Accept public improvements performed by ELLA for the Ken Mercer Cricket Field Project, CIP No. 22795 and a budget amendment to the Park Capital Improvement Program Fund..
1. Accept the project as complete and authorize the City Clerk to file a Notice of Completion.
2. Authorize release of the retention in the amount of $22,381.14 to ELLA 30 days after the recordation of the Notice of Completion if no claims are filed.
3. Amend the Ken Mercer Cricket Field Project budget from $72,951 to $0 in the Park CIP - General Fund (Fund 221).
13. Award a design professional services agreement to ENGEO Incorporated in the amount of $782,407 with an approximately 5 percent contingency of $39,593, for a total cost up to $822,000 for various city sites damaged in the 2023 storm event, and approve budget amendments in the Storm Drain Replacement Fund Recommendation:
1. Approve design professional services agreement with ENGEO Incorporated in the amount of $782,407, with an approximately 5 percent contingency of $39,593, for a total cost up to $822,000.
2. Authorize the City Manager to execute the attached design professional services agreement.
3. Authorize the Director of Public Works, or authorized staff, to approve and execute project amendments for the various storm CIPs to not exceed project funding with an aggregate design contingency of $39,593 (approximately 5 percent of design contract).
4. Approve amendments to the FY 2023/24 budget in the Storm Drain Replacement Fund as follows:
• Transfer $159,000 from the Design and Construct Storm Drain, CIP No. 22484, to East Vineyard Detention Pond Outfall Repairs, CIP No. 24676. • Transfer $168,000 from the Design and Construct Storm Drain, CIP No. 22484, to Oak Tree Farm Outfall Repairs and Channel Stabilization, CIP No. 24677.
City Council Minutes
Item #1
• Transfer $308,000 from the Design and Construct Storm Drain, CIP No. 22484, to Augustin Bernal Trail Creek Crossing Culverts and Retaining Wall, CIP No. 24678.
14. Approve plans and specifications, and award a construction contract to O'Grady Paving, Inc., in the amount of $6,861,681, with an approximately 15 percent contingency of $1,029,252, for the total cost up to $7,890,933, for the Annual Street Resurfacing & Preventative Maintenance Project, CIP No. 24503 and approve budget amendments in the Gas Tax Fund, Measure BB - Bike & Pedestrian Fund, Measure BB Streets Fund, Measure F Fund, the General Fund, and the Streets Capital Improvement Fund
Recommendation:
1. Approve plans and specifications, and award the construction contract to O'Grady Paving, Inc, of Mountain View, CA, for the low bid amount of $6,861,681, with an approximately 15 percent contingency of $1,029,252, for the total cost up to $7,890,933.
2. Authorize the City Manager to enter into the project contract.
3. Authorize the Director of Public Works, or authorized staff, to approve and execute contract change orders for a contingency amount of up to $1,029,252 (approximately 15 percent of the contract) for unforeseen yet necessary related work.
4. Approve amendments to the FY 2023/24 budget as follows:
• Transfer $986,606 in the Gas Tax Fund (Fund 160), from the Annual Street Resurfacing & Reconstruction Project, CIP No. 23503, to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503. • Transfer $168,487 in the Measure BB - Bike & Pedestrian Fund (Fund 165), from the Annual Street Resurfacing & Reconstruction Project, CIP No. 23503, to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503.
• Transfer $1,529,638 in the Measure BB Streets Fund (Fund 170), from the Annual Street Resurfacing & Reconstruction Project, CIP No. 23503, to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503. • Transfer $349,822 in the Measure F Fund (Fund 166), from the Annual Street Resurfacing & Reconstruction Project, CIP No. 23503, to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503. • Transfer $324,865 in the Streets CIP Fund (Fund 211), from the Annual Street Resurfacing & Reconstruction Project, CIP No. 23503, to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503. • Transfer $327,011 in the Gas Tax Fund (Fund 160) from the Annual Slurry Seal of Various Streets Project, CIP No. 24504, to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503.
City Council Minutes
Item #1
• Transfer $83,527 from the Police Department's budget (00122100- 440104) in the General Fund to the Annual Street Resurfacing & Reconstruction Project, CIP No. 24503 in the Streets CIP Fund (Fund 211).
15. Award a professional services agreement to Kayuga Solution in the not-to-exceed amount of $688,270 for the Asset Management Plan Project, CIP No. 24460, and authorize an amendment to the agreement with GHD, Inc., in the not-to-exceed amount of $61,730 for the integration of MaintStar with the Asset Management Program
Recommendation: Award a professional services agreement to Kayuga Solution in the not-to-exceed amount of $688,270 for the Asset Management Plan Project, CIP No. 24460, and authorize an amendment to the agreement with GHD, Inc., in the not-toexceed amount of $61,730 for the integration of MaintStar with the Asset Management Program.
1. Approve a professional services agreement with Kayuga Solution in the not- toexceed amount of $688,270.
2. Authorize a third amendment to the agreement with GHD, Inc., for the not- toexceed amount of $61,730 and to extend the term of the agreement to December 31, 2025, for the integration of MaintStar with the Asset Management Program.
3. Authorize the City Manager or designee to enter into the project agreements.
16. Adopt a resolution of summary vacation for public service and emergency vehicle access easements and acceptance of replacement emergency access easement and pedestrian access easement at 4452 Rosewood Drive Recommendation: Adopt Resolution No. 2024-020 summary vacation for public service and emergency vehicle access easements and acceptance of replacement emergency access easement and pedestrian access easement at 4452 Rosewood Drive.
1. Summarily vacate the public service easement having found that the easement will be superseded by relocation or determined to be excess by the easement holder, and there are no other public facilities located within the easement (§8333(c)).
2. Summarily vacate the emergency vehicle access easement having found that said easement area is an excess right-of-way of a street or highway not required for street or highway purposes (§8334(a)).
3. Vacate the street, highway, or public service easement by adopting a Resolution of Summary Vacation (§8335(a)(1)). The Resolution of Summary Vacation states the following (§8335(b)):
City Council Minutes
Item #1
a. That the vacation is made under this chapter.
b. That the vacation area is precisely described.
c. That the facts under which this summary vacation is made are as stated in this report.
d. That from and after the date this Resolution of Summary Vacation is recorded with the Alameda County Recorder's Office, the street, highway, or public service easement vacated no longer constitutes a street, highway, or public service easement.
e. That notice of the Resolution of Summary Vacation has been provided to all entities having any right, title, or interest in the public service easement.
MEETING OPEN TO THE PUBLIC
17. Presentation of a proclamation recognizing April as Arts, Culture and Creativity Month
Councilmember Balch presented the proclamation to recipients Kelly Cousins, Rachel, George Garbarino.
18. Presentation of a proclamation recognizing April 21-27 as National Crime Victims' Rights Week
Councilmember Balch presented the proclamation to recipient Kelly Collins from the Alameda County District Attorney's Office.
19. Presentation of a proclamation recognizing April as Fair Housing Month Councilmember Balch presented the proclamation to recipient Barbara Clemons with the Bay East Association of Realtors.
20. Presentation of a proclamation recognizing April as Sexual Assault Awareness Month
Councilmember Balch presented the proclamation to recipient Tri Valley Haven.
21. Public Comment regarding items not listed on the agenda.
Mayor Brown opened public comment. The following individuals provided comment:
David Fiala, Jon Krueger, Herb Moniz, Paul Sullivan, Alok Damireddy, Marti Sutton, Leah Beniston, Eugene Choi, Anup.
Mayor Brown closed the public comment.
City Council Minutes
Item #1
PUBLIC HEARINGS AND OTHER MATTERS
22. Adopt a resolution certifying an exception to the 180-day waiting period to appoint retired annuitant, Gina Anderson, to serve as Interim Police Chief pursuant to Government Code sections 7522.56 and 21224
Recommendation: Adopt Resolution No. 2024-021 waiving the 180-day waiting period to appoint retired annuitant Gina Anderson to serve as Interim Police Chief during the recruitment and selection process for the permanent appointment of the City's next Police Chief. This limited-duration assignment is recommended to be effective May 3, 2024, pursuant to Government Code Sections 7522.56 and 21224, at an hourly rate of $144.58, consistent with the salary schedule for the police chief.
Presentation by Xaviera Scoggins, Director of Human Resources and Labor Relations.
Mayor Brown opened public comment. There being no speakers, Mayor Brown closed the public comment.
MOTION: It was m/s by Balch/Arkin to approve the item as recommended. Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Noes: None
Absent: None
23. Public Hearing - City Council review of Planning Commission approval of a proposed project at 3200 Hopyard Road for Design Review (P23-0177) and Vesting Tentative Tract Map 8672 for either: (Option 1) 57 attached condominium units in nine, three-story buildings (48 townhome-style units and nine apartment units); or (Option 2) 55 attached condominium units in eight, three-story buildings and two, two-story duet buildings (47 townhome-style units and eight apartment units); and City Council approval of an Affordable Housing Agreement for either Option 1 or Option 2
Recommendation:
1. Approve the Design Review (DR) application, filed as P23-0177, based on the required findings, and subject to the draft conditions of approval in Exhibit A.
2. Approve the Vesting Tentative Tract Map (VTM) 8672, based on the required findings, and subject to the draft conditions of approval in Exhibit A.
3. Find the CEQA Guidelines Section 15183 Consistency Checklist for the project is adequate to serve as the environmental documentation for the project and satisfies all the requirements of CEQA.
4. Approve the general provisions of the Affordable Housing Agreement Alternative 2 for the 55-unit project with eight one-bedroom units for sale to low-income (80% AMI) households and housing providers by the applicant accepting $375,000 per-unit sales price and the City using approximately $800,000 in Affordable Housing Fees to provide deeper affordability to the low-income (80% AMI) level. The City Council is also asked to delegate authority to the City
City Council Minutes
Item #1
Manager to approve up to an additional 25% contingency or $200,000 of Affordable Housing Fees, if needed should additional costs arise or subsidy is required.
Presentation by Diego Mora, Associate Planner, Steve Hernandez, Housing Manager, and Ellen Clark, Community Development Director.
The Mayor recessed the meeting at 9:22 p.m. and reconvened at 9:32 p.m.
Mayor Brown opened public comment. The following individuals provided comment: Ed Broome, Richard Martinelli, Marcia Conroy, Shannon Hancock, Kenneth Hamm, John Conroy, Dan Lacy, Dave Marell, Marta Seda, David Pastor, Larry Kriegbaum, Lynn Kriegbaum, Kristen Springer, Phil Sayre, Dennis Goode, Vincent Jiang, AJ Jahadakbar, Elizabeth Rajs, Ralph Rajs, Evelin Bailey, Parisa Bayati, Connie Cox.
At 10:35 p.m. by majority consensus, the City Council decided to continue with the meeting.
Project applicant, Bruce Meyer, answered questions from the City Council.
Mayor Brown closed the public comment.
MOTION: It was m/s by Testa/Arkin for the City not to contribute any lower income housing funds toward the eight affordable housing units.
SUBSTITUTE MOTION: It was m/s by Nibert/Balch for the City to approve the affordable housing agreement for alternative option 2 (55-unit project) and allocate a maximum total of $250,000 from the lower income housing fund for eight affordable housing units at 100% AMI at the sale price $375,000.
At 12:22 a.m. the Council agreed by majority consensus to continue item 24 on the agenda to the next meeting in May.
At 12:27 a.m. the Mayor called a recess. The meeting reconvened at 12:36 a.m.
AMENDED SUBSTITUTE MOTION: It was m/s by Nibert/Balch for the City to approve the affordable housing agreement for the 55-unit project and allocate a maximum total of $250,000 from the lower income housing fund for eight affordable housing units at 100% AMI at the sale price $375,000. The funds will be available for a maximum of five years from building permit issuance and any unspent funds will return to the lower income housing fund.
Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Nibert, Mayor Brown
Noes: Councilmember Testa
Absent: None
City Council Minutes
Item #1
MOTION: It was m/s by Balch/Arkin to approve the design in staff recommendation 1 for alternative option 2 (55-unit project).
Mayor Brown requested an amendment to include a requirement for cars to be parked in garages as part of the conditions.
AMENDED MOTION: lt was m/s by Balch/Arkin to approve staff recommendation 1 approving the Design Review (DR) application, filed as P23-0177, based on the required findings, and subject to the draft conditions of approval for alternative option 2 (55-unit project), with additional requirement for cars parking in garages as part of the conditions.
Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Nibert, Mayor Brown
Noes: Councilmember Testa
Absent: None
MOTION: It was m/s by Balch/Nibert to approve staff recommendations 2 and 3 approving the Vesting Tentative Tract Map (VTM) 8672, based on the required findings, and subject to the draft conditions of approval for alternative option 2 (55-unit project) and finding the CEQA Guidelines Section 15183 Consistency Checklist for the project is adequate to serve as the environmental documentation for the project and satisfies all the requirements of CEQA.
Motion passed by the following vote:
Ayes: Councilmembers Arkin, Balch, Nibert, Testa, Mayor Brown Noes: None
Absent: None
24. Bi-annual update to the City Council regarding Police department operations, services and activities
Item continued to next City Council meeting.
MATTERS INITIATED BY COUNCIL
By majority consensus, the City Council agreed to request that the City, via Parks and Recreation, participate in the committee commemorating the 250th anniversary of the United States.
Councilmember Arkin requested an update to objective design standards. City Manager Beaudin provided an overview of pending applications and relevant objective design standards that are applicable based on timing of submittals. By majority consensus, the Council agreed to receive a schedule of future updates to the objective design
City Council Minutes
Item #1
standards.
Councilmember Arkin requested a policy on use of lower income housing funds. By majority consensus, the Council agreed to receive a list of current uses of lower income housing funds.
Councilmember Arkin requested an update regarding impact Fees. Community Development Director Clark stated a City Council workshop is planned in May.
Councilmember Testa requested a policy or ordinance that all housing applications heard by the Planning Commission automatically be heard by the City Council for the final hearing. The request failed for lack of majority consensus.
COUNCIL REPORTS
The City Council reported on local and regional board meetings attended.
ADJOURNMENT
Mayor Brown adjourned the meeting at 1:12 a.m.
Jocelyn Kwong, City Clerk
Item #2
CITY COUNCIL AGENDA REPORT
May 21, 2024
City Manager
TITLE: APPROVE FIRST AMENDMENT TO THE PROFESSIONAL SERVICES
AGREEMENT WITH HF&H CONSULTANTS, LLC FOR SOLID WASTE SYSTEM
TECHNICAL ASSISTANCE SERVICES TO INCREASE THE AMOUNT OF THE AGREEMENT BY $100,000 FOR A TOTAL AMOUNT NOT TO EXCEED $200,000
SUMMARY
In 2022, the City Council awarded a professional services agreement to HF&H Consultants, LLC to provide technical assistance in managing a variety of solid waste related projects.
Under the current agreement, staff and the consultant have worked on planning and implementation of SB 1383, as well as other ongoing projects related to management of the franchise agreement between the City and Pleasanton Garbage Service. Additional funds are needed to provide for ongoing consulting services to continue necessary work on solid waste and recycling related projects.
RECOMMENDATION
Approve first amendment to the professional services agreement with HF&H consultants, LLC for solid waste system technical assistance services to increase the amount of the agreement by $100,000 for a total amount not to exceed $200,000.
BACKGROUND
The Professional Services Agreement with HF&H Consultants, LLC (HF&H) was entered into on June 1, 2022, for solid waste system technical assistance not to exceed $100,000 over a period of five years. During the first two fiscal years of the contract, HF&H has provided consultation on, among other things, analysis and adjustment of garbage rates under the franchise agreement, and new requirements of State Law SB 1383 which seeks to reduce emission of short-lived climate pollutants. Staff is proposing a First Amendment to the Agreement that will increase the contract by $100,000 for a total amount not to exceed amount of $200,000 to continue to provide technical assistance for the solid waste, recyclables, and organic materials program.
DISCUSSION
HF&H assists City staff with a variety of ongoing tasks to manage the franchise agreement with Pleasanton Garbage Service as well as other related waste and recycling projects. Over the past year, staff has worked with HF&H on the implementation of SB 1383 and the garbage franchise agreement rate period seven cost basis rate adjustments. The consultation has required significant time and resources and will continue through the next several years.
Additional funds are needed for the remaining contract term, including fiscal years 2025-2026 and 2026-2027, to provide ongoing technical assistance with monitoring, analyzing, benchmarking and negotiations for the solid waste and recycling program.
The First Amendment seeks to increase the Agreement amount by $100,000 to a not to
exceed amount of $200,000 for the remainder of the contract term through fiscal year 2026- 2027.
EQUITY AND SUSTAINABILITY
As a full-service municipality, the City provides a wide range of services and programs to meet the needs of all members of the community. The waste and recycling program takes into account both equity and sustainability considerations to ensure fair access to services and promote environmentally responsible waste management practices. The consulting assistance for waste disposal is vital to ensuring that the services the City provides are available in a healthy and safe manner to all members of the Pleasanton community.
OUTREACH
No outreach was conducted, as this item is a routine matter of City business.
STRATEGIC PLAN ALIGNMENT
This action advances the ONE Pleasanton strategic plan goal of Investing In Our Environment to continue to implement priority items from the Climate Action Plan 2.0 (CAP) to lead by example in environmental sustainability.
FISCAL IMPACT
The proposed First Amendment to the Professional Services Agreement with HF&H Consultants, LLC adds an additional $100,000 for a total not to exceed amount of $200,000.
Funding for this Agreement will come from PGS Reserve fund Account 17130231-430101, for which the funds are already budgeted.
Prepared by: Submitted by: Approved by:
ZeeLaura Page,
Management Analyst
Alexa Jeffress, Deputy City Manager Gerry Beaudin, City Manager
Attachments:
1. HF&H First Amendment to Agreement
First Amendment Page 1
ATTACHMENT 1
FIRST AMENDMENT TO AGREEMENT
This First Amendment to Agreement ("First Amendment") is entered into this 21 day of May 2024 by the City of Pleasanton ("City") and HF&H Consultants, LLC ("Contractor”) Whereas, on June 1, 2022 the City and HF&H Consultants, LLC entered into Professional Services Agreement for Solid Waste System Technical Assistance services ("Agreement"); and
Whereas, the agreement is through June 30, 2027, and the services for solid waste technical assistance is ongoing; and
Whereas, the parties desire to amend to the Agreement to increase the compensation; Now, therefore, in exchange for valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. Section 4 of the Agreement, " Compensation.” is amended to read:
City shall pay Consultant for services rendered pursuant to this Agreement as described more particularly in Exhibit A. The payments shall be made on a monthly basis upon receipt and approval of Consultant’s invoice. Total compensation and reimbursement for costs shall not exceed $200,000 an increase of $100,000.
2. This amendment may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with U.S. federal E-Sign Act of 2000 (15 U.S. Code §7001 et seq.), California Uniform Electronic Transactions Act (Cal. Civil Code §1633.1 et seq.), or other applicable law) or other transmission method, and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
3. All other terms and conditions of the Agreement shall remain in full force and effect.
In witness whereof, authorized representatives of the parties have executed this First Amendment to the Agreement as of the date first above written.
CITY OF PLEASANTON CONTRACTOR or CONSULTANT
_____________________________ By: __________________________ Gerry Beaudin, City Manager Signature
__________________________
Print name
Title: __________________________
First Amendment Page 2
[If Contractor or Consultant is a corporation,
signatures must comply with California
Corporations Code §313]
ATTEST:
_____________________________
Jocelyn Kwong, City Clerk
APPROVED AS TO FORM:
By: __________________________
_____________________________ Signature
Daniel G. Sodergren, City Attorney
__________________________
Print name
Title: __________________________
Rev. 3/23
Item #3
CITY COUNCIL AGENDA REPORT
May 21, 2024
City Manager
TITLE: APPROVE FLYING OF THE COMMEMORATIVE PROGRESS PRIDE FLAG
PURSUANT TO THE CITY'S FLAG POLICY
SUMMARY
The City Council may request display of the commemorative Pride Flag in accordance with the outdoor commemorative flag display policy established in August 2022 and authorize the commemorative Pride flag to be displayed for the month of June 2024.
RECOMMENDATION
Staff recommends that a member of the City Council request display of the Progress Pride Flag and authorize display of the commemorative Pride Flag for the month of June 2024.
BACKGROUND
The City’s outdoor commemorative flag display policy was established on August 16, 2022 by Resolution No. 22-1322. The policy provides guidance and standards for the outdoor display of flags at all City facilities and parks, including commemorative flags other than the United States, California and City flags.
DISCUSSION
The City’s flagpoles are not intended to serve as a forum for free expression by the public. The City shall display commemorative flags only if authorized by the City Council as an expression of the City’s official sentiments. The City Council shall only consider a request to display a commemorative flag if the request is made by a member of the Pleasanton City Council.
Under the policy, a two-step process is required to raise a commemorative flag:
1. A member or the City Council must request display of a commemorative flag; and
2. The City Council must authorize display of a commemorative flag by minute order or resolution during a duly noticed meeting of the City Council.
Traditionally, the City has raised the Pride Flag during the month of June to commemorate Pride Month. The Pride Flag has been flown at the 123 Main Street flagpole by the City for the last five years throughout the month of June. As the first step of the process, in May 2023 Mayor Brown made a request to the City Manager to display the Pride flag during the month of June.
EQUITY AND SUSTAINABILITY
The recommended action advances the City’s equity goals in the City’s Diversity, Equity, Inclusion and Belonging (DEIB) Action Plan Strategic priority 4 - Align external-facing work with Pleasanton’s DEI mission, core values, and strategic plan, Initiative A. Ensure alignment of our
external work with the Pleasanton strategic plan, budgeting priorities and new initiatives.
OUTREACH
No outreach was conducted, as this item is a routine matter of City business.
STRATEGIC PLAN ALIGNMENT
Approval of this action advances the ONE Pleasanton Strategic Plan goal of Optimizing our Organization, Strategy 1 – Implementing the City’s diversity, equity, and inclusion (DEI) action plan within the City’s organization, to include ongoing training and development.
FISCAL IMPACT
There is no fiscal impact associated with displaying the Pride flag.
Prepared by: Submitted by: Approved by:
Sharon Petrehn,
Management Analyst
Pamela Ott, Assistant City Manager Gerry Beaudin, City
Manager
Attachments:
1. Resolution 22-1322
RESOLUTION NO. 22- 1322
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON
ESTABLISHING THE CITY OF PLEASANTON OUTDOOR COMMEMORATIVE FLAG
DISPLAY POLICY
WHEREAS, the City of Pleasanton displays the United States Flag, the California State Flag, the City of Pleasanton Flag at the Civic Center and other City facilities; and WHEREAS, the City of Pleasanton does not have a policy regarding the display of such flags or display of commemorative flags; and
WHEREAS, staff recommend establishing a policy that provides guidance and standards for the outdoor display of flags at all City facilities and parks, including commemorative flags other than the Unites States, California and City flags.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:
SECTION 1. The City Council declared that the City of Pleasanton' s flagpoles are not intended to serve as a forum for free expression of the public, but rather for the display of Federal, State, and City Flags, and any commemorative flag as may be authorized by the City Council as an expression of the Council' s official sentiment.
SECTION 2. The purpose of this policy is to provide guidance for the outdoor display of flags at all City facilities, including parks.
SECTION 3. The Outdoor Commemorative Flag Display Policy is attached hereto as Exbibit A.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on August 16, 2022.
I, Jocelyn Kwong, City Clerk of the City of Pleasanton, California, certify that the foregoing resolution was adopted by the City Council at a regular meeting held on August 16, 2022 by the following vote:
Ayes: Councilmembers Arkin, Balch, Narum, Testa, Mayor Brown Noes: None
Absent: None
Abstain: None
Ju,-
J c lyn Kwo g, City lerk
APPROVED AS TO FORM:
Daniel G. Sodergren, 17ity Attorney
ATTACHMENT 1
Resolution No. 22- 1322
EXHIBIT A
THE CITY OF PLEASANTON OUTDOOR COMMEMORATIVE FLAG DISPLAY POLICY Policy:
Procedure
A two-step process is required to raise a commemorative flag at any outdoor city facility:
1. A member or the City Council must request display of a commemorative flag, and
2. The City Council must authorize display of a commemorative flag by minute order or resolution during a duly noticed meeting of the City Council.
Commemorative Flags
The City's flagpoles are not intended to serve as a forum for free expression by the public. The City shall display commemorative flags only if authorized by the City Council as an expression of the City's official sentiments. Any such authorization shall be given at a duly noticed meeting of the City Council.
The City Council shall only consider a request to display a commemorative flag if the request is made by a member of the Pleasanton City Council.
Commemorative flags shall be displayed for a period of time that is reasonable or customary for the subject that is to be commemorated, but no longer than thirty-one ( 31) continuous days.
Commemorative flags shall be displayed exclusively on the Pleasanton Civic Center flagpole( s) in the last position of honor, unless otherwise directed by Council and to the extend such display does not conflict with federal or state law, or this policy.
Item #4
CITY COUNCIL AGENDA REPORT
May 21, 2024
City Manager
TITLE: ADOPT A RESOLUTION TO APPROVE RATES FOR SOLID WASTE,
RECYCLABLE MATERIALS, AND ORGANIC MATERIALS COLLECTION FOR FISCAL YEAR 2024/25 AS REQUIRED BY THE FRANCHISE AGREEMENT BETWEEN THE CITY AND PLEASANTON GARBAGE SERVICE, INC.
SUMMARY
Pursuant to the existing Franchise Agreement between the City and Pleasanton Garbage Service, Inc. (PGS), garbage collection rates shall be adjusted annually with City Council approval, commencing on July 1 of each year of the term of the agreement (see Section 8. 2 C). The rate setting process identified in the Franchise Agreement for rate period seven is a rate application using a cost-based rate adjustment methodology.
On December 22, 2023, PGS submitted a rate application request for rate period seven, which covers Fiscal Year 2024/2025. After review and discussion with PGS and the City's waste and recycling consultant, HF&H Consultants, Inc., staff recommends a 3.90 percent rate increase adjustment effective July 1, 2024.
RECOMMENDATION
Adopt a resolution to approve rates for solid waste, recyclable materials, and organic materials collection for fiscal year 2024/25 as required by the franchise agreement between the City and Pleasanton Garbage Service, Inc..
BACKGROUND
The current garbage service Franchise Agreement outlines the process for annual rate adjustments, which includes an index-based rate adjustment and a cost-based rate adjustment (Table 1). July 1, 2024, begins the Seventh Rate Period, which is a cost-based rate adjustment period. As stipulated in the Agreement, all rates are set by the City Council. In past practice, rate adjustments were presented to the City Council among the meeting's Consent Calendar items because the adjustment approach is provided within the Agreement and is constrained by specified methodology.
Table 1 - Anual Rate Adjustment Increase Basis
Rate Period Fiscal Year Type of Rate
increase
Seven 2024-2025 Cost-based
Eight 2025-2026 Index-based
Nine 2026-2027 Index-based
Ten 2027-2028 Index-based
Eleven 2028-2029 Index-based
Per the Franchise Agreement, Exhibit I, the cost-based adjustment mechanism involves review
of Pleasanton Garbage Service’s actual cost of operations and operational statistics (staffing levels, routes, route hours, customers, and service levels, etc.) to forecast the Total Calculated Costs for the coming rate period. The intent of performing the cost-based adjustment is to examine the actual impact of changes in costs, the number of customers and the service level of customers. The Rate Adjustment Factor is the lesser of 6 percent or the difference (measured as a percentage) between the forecasted Total Calculated Costs for the coming rate period and the Gross Rate Revenues of the most-recently completed 12-month period (adjusted to reflect the most recent rate adjustment). The Rate Adjustment Factor is applied to the then-current rates, with any additional costs factored in, to determine the rates for the coming rate period.
DISCUSSION
The Seventh Rate Period stipulates the use of a cost-based rate adjustment methodology.
PGS submitted its application for a rate adjustment on December 22, 2023. PGS’s application included a total Calculated Cost of $36,536,914 to provide current franchised services for Rate Period Seven. Based on HF&H’s review of the application, and the recommended adjustments to the application, a total revenue requirement of $36,951,004 was determined. HF&H’s adjustments to PGS’s application are described in more detail in Attachment 1. After inclusion of City costs allowed for in the Franchise Agreement and outlined in more detail below, these total adjustments result in a 3.90 percent overall rate increase, roughly equivalent to the current Consumer Price Index (CPI), to provide the services currently required in the Agreement and meet State requirements.
New costs in Rate Period Seven include the introduction of City staff costs needed to facilitate compliance with SB 1383, which requires cities and waste facilities to implement, measure, and report organic waste activity to reduce greenhouse gas emissions by diverting organic waste from landfills, as well as the start of incorporating a Vehicle Impact Mitigation Fee into the rate structure to offset street maintenance costs. These new annual costs total $500,000 and $1,329,400 respectively. Approval of this recommended rate increase will bolster the City’s ability to maintain its road system and provide consistent funding for staff to ensure the long-term sustainability of the City’s waste and recycling program.
Adding three to five full-time staff to support the City’s waste and recycling program was outlined in the SB 1383 Action Plan adopted by the City Council on July 20, 2021. Currently, the City has 2.30 Full-Time Equivalent (FTE) staff allocated to waste and recycling. This includes a portion of the Assistant to the City Manager position, a full-time Management Analyst and a Recycling Coordinator. With the City's waste and recycling program expanding to comply with new SB 1383 requirements, some of the revenue generated by the proposed cost-based adjustment to garbage rates will be allocated to support a new Waste and Recycling Manager position that will oversee the City’s waste and recycling team and the Franchise Agreement, as well as other waste and recycling related programs and projects.
Once all position-related details have been finalized, staff will include a recommendation to add this position, which will be 100 percent funded with non-General Fund dollars, as part of future budget updates.
The current Franchise Agreement Section 7.2 also allows for establishment of a Vehicle Impact Mitigation Fee which is currently set at $0 per year. On June 7, 2022, the City Council authorized the Vehicle Impact Mitigation Fee Study as part of the allowable expenses from Fund 171 PGS Reserve Fund. Pursuant to City Council direction, HF&H conducted an analysis
(Attachment 2) to determine the impact of solid waste, recycling, and organics collection vehicles on street maintenance costs within the City’s maintained road system. The study found that the share of the annual street maintenance costs attributable to PGS from refuse vehicle impacts was $2,909,800. Therefore, the City could collect up to $2,909,800 through the garbage rates to cover the cost of street maintenance. While the analysis performed was conservative, HF&H and City staff do not recommend that the entire amount be included in Rate Period Seven, in part to mitigate the fee burden on the rate payers. Instead, staff recommends the inclusion of $1,329,400 in Vehicle Impact Mitigation Fee, which begins to incorporate a significant portion of the Vehicle Impact cost while also maintaining a lower increase for rate payers. By incorporating the fee in this year’s cost-based rate application, the City has the opportunity to include these new costs in a rate period not burdened by other rate adjustment requirements. In future index-based rate adjustment years, the inclusion of this cost (as well as staffing costs) would be in addition to the annual CPI/index-based adjustments in non-cost-based rate adjustment periods, potentially leading to larger rate increases.
EQUITY AND SUSTAINABILITY
As a full-service municipality, the City provides a wide range of services and programs to meet the needs of all members of the community. Waste and recycling rates take into account both equity and sustainability considerations to ensure fair access to services and promote environmentally responsible waste management practices. The cost of waste disposal is vital to ensuring that the services the City provides are available in a healthy and safe manner to all members of the Pleasanton community.
OUTREACH
On March 18, 2024, a publicly noticed City Council Waste and Recycling subcommittee meeting was held.
STRATEGIC PLAN ALIGNMENT
This action advances the ONE Pleasanton strategic plan goal of Investing In Our Environment to continue to implement priority items from the Climate Action Plan 2.0 (CAP) to lead by example in environmental sustainability.
FISCAL IMPACT
Staff recommends the City Council adopt a resolution (Attachment 3) approving the City to receive from PGS an estimated $1,329,400 in Vehicle Impact Mitigation Fee to be allocated to PGS Reserve Fund (Fund 171), and $500,000 in staff costs to be allocated to PGS Reserve fund (Fund 171) in Fiscal Year 2024/2025 depending on the rate set by the City Council.
Prepared by: Submitted by: Approved by:
ZeeLaura Page,
Management Analyst
Alexa Jeffress, Deputy City Manager Gerry Beaudin, City Manager
Attachments:
1. Pleasanton RY 7 CBRA
2. Pleasanton 2024 RVIF Report
3. Resolution - Rate Period 7
!
"
# !
$%
!
& '()**+% ,,,-./.012345678374-129
:&
((($
:;<!!
=&
!>
(?
>
:$%%
@ABCDEFG HDIJDKLMNODPQPRFLRSPTBPUD@DTIJEDHPFDNDTJLV@DIDRWLRFTPEFLTXQWLYZDRQPFJLR [ZZOJEPFJLR = :;<!!
' \]^\
__
`\]^\a
&
&
!
! >
`
a!
b
!>
c
d
b
`>ca
>
b`>*a
&
:&&
`:&&
a
d
= d
((((?e
&
&
!
f
!
' ge
ggeh#
gge\]^\:
g
d
&
d
b
!>c
:&&
&
&
&
d
!
`:
a
e ijklmmnopnqrostummsqrnviuqk
njowxywz{|}~ko}own
yy{|{ww||wyxw >c
:&&
!?%?%
$e
&
b
!
b
!
>*`
d
aeh
:&&
b
b
!?%
?e
&&
&
d
:
e
?eb
&
b
b
:
e\]^\
>c
:&&
d
ggge d
e
Attachment 1
!"#$%&'()*+,-(.-"/%011$23"/245
6786 9
7
77
:
-"/%(%;24<-(. =2>>%;%53% ?@?-"/%(%;24<. (%;A52/B4,/"5<@%%0<CD,/E%5/, FG7H I
7
FG KL J
K
M M K
NM FGOF N
PN
L
7
Q
R
97
S
PQ
R
T
7
S
QR
I
T
7
S
Q R N IHO
S
MLQ M
UV
7O
S
Q9F
RLMQPR
(;414,%<-(. =2>>%;%53% ?@W?-(. 055D"$B4,/4>X1%;"/245, Y9 Z
7
7 KQ
JM
NN K NL
PRK
N
L
SI
7 O
L
JLQ
N
LR J
N
FGOF
L
NM
ML
P
J T7G
I
7 N
LNQ
L
R
LM
N
O
7O
7
JL
M
JL
M !4/"$055D"$B4,/4>X1%;"/245,& ab [\]^_\]`[ a& `^.\[c[da`\.^c\.]_ ^_eX1%;"/25f-"/24(;4>2/& ab \gc&\&`& a& [[\h_]da\.`h\.hg (",,!i;4DfiB4,/, FG7H I
7 K
JM
M
K
J
P K
MN
P
7 PN
JNMQM
PR
P
N
JP 97
I
7
LJ
PMQNP
J NR
LN
P
T
7
I
7 PL
P
QM
L
R
MP
N
I
T
7
I
7Q6jVR N
J QN
LR
LJ Tk7QIHOR
I
7L
PM QN
PR
JN UV
7O
I
7L
L
JLMQM
P R
N
MJ SI
7 I6lL
M
PQPL
LNR
M
L
m7
7j
LN
MN
LN
MN Y
7 NJN
L QL
LRNLM
L !4/"$(",,n!i;4DfiB4,/,& ab .\]`]\hh` a& g_`\[_&da[\`h.\ghh !4/"$B"$3D$"/%<B4,/,#%>4;%B2/o@%%,] ab `\`[h\^`c a] &\h[^\[]_dah\_^`\]c] B2/o@%%,p("oE%5/, S G
S K
MP
M K
N K
N
PL I7 77
QYSR
N
PJN
PJ FGm 777S
N
N
I7U7I
7 L
L
!4/"$B2/o@%%,p("oE%5/,& a& \c.g\.^c a] \gg]\.&^ a\&[c\`&& !4/"$X/i%;0<CD,/E%5/,b a _b ]_[\g]_d a]_[\g]_d !4/"$B"$3D$"/%<B4,/,] ah [\`][\^&h a] &h\_g^ a[\^`&\__h qr1%3/%<*%;s23%-%s%5D%b*3i%<D$%*nhd] a_ `\`[c\[c` a]`\`[c\[c` =2>>%;%53%qr3%,,b*i4;/"f%db ab ^.h\cg^d a&\]gg\].^d 03;4,,/i%t4";<-"/%0<CD,/E%5/@"3/4;cu.he]u^_e Attachment 1
!
""#$%&'()*+,- %# (./.012 3 4
5
678
5
56
597
56
7:675356
5;6
597
56<<
<
=>
5
5
5
5
55
5
?
5<
5
56
5
56
<<
5;@5 5
565
755
5
5
56
59 5 5
5
5
5 =>
7
5
4; 655
56
597
8
5 5
5 565
5 5
<56A5
5
5
=>
5
56
;6
565B
5
556 5
6
5
5
7
5
56
< <
6
5
55
=>
7
5; """#CDEC%,%FGH"H %#HIJK.JLMJ0N O
6556
5
5
B785<5
56
58
5 55
56
575
=>56A5;P6
56
756
5
56
597
8
5 5
=>
5
55 5
5
9 595
5
5
5
5
5
5
5
56
5
<7 =>
=>
556A5
5
5
; 6
5
<
5756QRSQ
5565
56 5
T5785<
<
7
: 5
;6
55
7
T5QRSQ8
5 5
<75 =>56A5
<
; P65B
5
56A5
B
5<
56 =>5
5
5
565 =>
5
;356
5
56A5 =>656
555
5
5
556
8
5 5
5565565
; QRSQ
5
56
<
7
756A5QRSQ
5
56
575
56A5 =>;6
56
5<5
U V P
<
5655
5
5
5656 56
756
5; V P
<
565
56 5
5
5;P
6B 56556
6
556
5
6
B
65
; Attachment 1
! "#
$%
&&&'
&
() (*
&
&'
+
&'
&, -
&'&'
&. ! "
#
&'&+
/
#
#0#
&
&&
0
#
&
&
0
#
+ &
#
&
. ! "
& (
&
&
1&
2
+&
&+ #
. ! "#
&'&&'
& &&
3) 3*
&
&&
&&' &'
&'
&. ! " &
&'&',& $%&
#
&'
1
& &
&&'&
+ '
. 4567879:97;<= >
#
+
&&
&
&' &
&'$
&&%&
&'+1&#
''
&'
&'
&& &
&?
'.
&
'.%'
#
&
+ $%
&&&
. >
+
&'
#
$%
1&
&
&
&
.&
&
&
1&
+
#&
&
2& &
&
&'
+
&. @5ABC7BD;EAFGHIIJ7K:97;< ',&LMNL&
#
$%
&
+ &&
&'%& O.P..&'
&. $%
+ &&&'&Q +
P.LMNL
&'
&
/ R9BISTUBV7E7K:97;<;E9WBX:9WB8:97K:JHKKYV:KZ LMNL
#
$%
&&&
&
&' &
+
&&'
&
&&'
1&
#
.'
/
![
&&'&
&
&
1&
&\'+&L&'
& ![
&&' &' &
$%
&1
& &&
![
&&'
&&
&&'
'&
'
&
LMNL&'& $%
&
&' &
&
&'
&
.] 1
& &
2
. Attachment 1
!
"#$%&'($#$)*+,$-.))$,#-/0#-/*%/,$,#0
1
23425678754
5
545 9:
5
545
;<2
=
5
>4=
5
5
57?
54
5
55
554
@
2
57AB
5 5
7 "#$%C'DEF.0#"%$G+H+G-/0#-/*%/,$,# IJKLMNOPQRSLTRUVNWTW :58778734256 55
54554
B52
=
5
5
54
5
4 252X;? 554
2
=
5
5
54
5 5 55
2
54
5Y454Y 6=Z[
;? 554
5
5
2
54
5Y454Y 6=Z7Z
\
\
54
2
9:
5 2
=
5
7]
\
9:54
5 545554Y 6=Z2
54
55
54
54
554
5 54
5 @7]^_]
`8
a7@ 5
554
552
57 bJcdRSVNWTW :587787234256
55
545
B5
5
54
5
4154
2
5 X;? 52
54
5454^6[
;? 5 54
5
5254
54
57Z
\
\
54
2
9:
5
1
25
\
B5
5 52\
7]
\
9:54
5 545 554^62
54
5
5
5 54
54
54
554
5 54
5 @7]^_]
`
8 7
5
5 54
5554
57 VJeRfghSRije 34256
55
545
B5\4k>
54
5
415;>4k>5
5
5\4
5454=
55
?;!l
5545
>4 5
6?;55 2
Y5\4
\
54
5?7Z
\
\
54
2
9:
5 >4k>
55
2\
7]
\
9:54
5 5455545
>45
62
54
5
5
5 54
54
5 4
554
5 54
5 @7]^_]
55455 2
\4
7]^_]
`
@ !785
554
55\4k>
57 iJmTfROVNWTW :58778734256
55
545
B554
5
54
5
4154
254
5 X;? 52
54
5454Y 6=n[
;?54
5 Attachment 1
!
" "#"$
"$
"%&
'
'
"$
#
()
" *"$
"+
#"
'
," *
"
"#'
%-
'
()"$
" "$" ""$. /01#
"$
"
"
" "$
"$
"$
""$
" "$
" 2%-34-
5
*
!
6% "
""$
"""$
"% 789:;<=>9<?;<=:@>:AB )"6%%6%C$#"/
""
"$"
"
"
$#"5!
! *
2!%
2
'$
."
"
% ()
"
"
""5!
! *
2!%
%D ,
" "
% E8FA>@GHAI>AJK?<;@>:ABI )"6%%6%C$#"/ ""
"$""$
)"
LC#'
$#"$
"
"
"$
"
%-34-
5*2
*%*M
""
"
"
% N8O;AJ:> &"$" ()
"""
#
"#
P
"
" Q
"!
P
"R""
#
"
"
S$
'
""$",
" "
##'
5
6%
" ()
"% T8O@IIUFV;AWXVHAI>IYZ<V:=G<[@:B><B@B=<\]<?@:;HAI>I )"6%.%!C$#"/ ""
"$"
,"'$ "
"
"$
"
$+"Q^$"
.
"
."'$
"$"$0
" "
RQ!_
""$"
^$"
/RQ"" #
."'$
'
"$
"R%&
'
'
"$
#
()
" *'$ "
""
#'
% -
'
()"$
" "$"""$"
^$"
/#
"$
"
"
" "$
"$
"$
""$
" "$
" 2^$"
.
"
^$%-34-
""$"" #
'$
%-34-
5!
2%26"
""$
""'$ "
"%
Attachment 1
!
"#$%&'()*%+,-.()*(&/&'01%*23((.'45*(+(67//8&+3%.&/9+%3&:( ;<=>?@A<=>B;<=>?CD<E FGHIJIKLMGN
GG
G
GO
P
G
G
GLGLQ
GG
RP!S
GJLGLJ NQTRPGG
U
G
JG
GL
G
G G!Q GL
RIVWXV
Y
GL G
GL
G
G G!Q GL
P
HGU M
HR
G ZF
G GLI[
G G
GGL GLGLJ NQT G
GGLG
G
G
G
GG
M\
IH!
GIVWXV
\
]I
G
GGL
G
I ^A_`_ab>cd<D_A??b>c FGHIJI
KLMGN
GG
GL
[G
GG
M G
LMG M
GLPeGM
G
GLGLQ
GG
RP!S
GJLGLJ NQTRPGG
MG
JG
GL
GQ
G G!Q GL
RIf
Y
GLG
GL
G
G G!Q GL
G ZF
G GLI[
G G
GGL GLGL J NQTG
GGL
M G
G
G
GG
M \
I
]
GIVWXV
\H]
g!HI
G
GGL
G
I h<c=>b_i=EA<b=a?d<D_A??b>c FGHIJIjKLMGN
M
GL
[G
GG
G
LMG M
GLPeGk
G
G
GLGLQ
GG
RP!S
GJLGLJ NQTRPGG
k
G
JG
GL
GQ
G G!Q GL
RIf
Y
GLG
GL
G
G G!Q GL
G ZF
G GLI[
G G
GGL GL GLJ NQTG
GGL
G
G
GG
M\!Ij
GIVWXV
\
j
!I
G
GGL
G
I
J
G
G
LMGGL
G
If
Y
GLG
GL
G
G G!Q GL
G ZF
G GLI[
G G
GGL GLGLJ NQTG
GGL
G
G
GG
M\!I
!
GIVWXV
\H
jI
]G
GGL
G
I lD>?E<m_EbD>=>BnAoDabEbD>d<D_A??b>c FGHIJIgKLMGN
M
GL
[G
GG
G
G GPJXUR G
LMGM
GLPeGJXUUM
G
GLGLQ
G G
RP!S
GJLGLJ NQTRPGG
JXUUM
JG
GL
GQ
G G!Q GL
RIf
Y
GLG
GL
G
G G !Q GL
G ZF
G GLI[
G G
GGL GL Attachment 1
!
"#$ %&'"
""#$()
"
"
""
*+!,!
",-.(-
+/
,
"
""#
"
, 0123456789:37;1762 <"/,$,/=#*"%
""
"#
>"
""
"
#*"*
"#?
"#)
$
"
"@
##
&)
&?
"
&?
"
A
"#"#&
""
"#)
$
"
"# "
"*"#""
<B
")
"#
"&
" " !& "#
,B
?
"#"
"#
"
" "!& "#
" C<
" "#, #
&"
>
"
?
!,D
"#$"
"
E
"#
>
"
"# "#
"
, C<
"#""
"#
"
F?
*
"#
"
""#
"
"
"
,#
&"
G
"#
#
@+
,
A,#
E
H
"
"#
"
&"
*B
" "
@BA
"$ %"
@+
,
!,
HIJ +
,
KA,#?
"
F@+
,
L+
,
KAMJ+
, I,-.(-
?
"#
"
*
"# C<
"#, -
?
C<"#"
*
N
"
", C<#"
*<
?
N
"B
" "O"
"
+K,/
"
"
" K,
"
-.(-
+K
!,
&"
"+
, I,-.(-
?
"#""
"#
&"
"" "#" "**
, PQRSTUVWXYXVZ[ =#*"%
""
"#"
>"
"$\C
#*"
*"#
*
"
F@A " *
"#
"#"#.%$\C]
@A"#
"
" "*"#
"#
",B
?
?
"#
*
C<
" H
"*?
,-
?
C<"#
" "#"""#.%$\C*
"#
"
"
" "#
"#
"#
""#
" "#
" K,-.(-
+ H
!H/,
"
""#
"""#
"$\C, ^Q_`YTaTXYbcdT`XT <"/,$,K=#*"%
""
"
"
#*"+H/
K/,
K, C<
"
""
"
+H/
K/,
,\>
" "
, eQeTfXTVWXYX <"/,$, =#*"%
""
K
"
#*"
*F@A ""#
O
"
"&
" ""
*
"#
"$#$ %&'] Attachment 1
!" ##$
#
#%
#$
#&$& '()* +, #$
# #$###$& '()%
#$
#
#
# #$
#$
#$
##$
# #$
# -*./0.
12
23*4#
##$
###$
#&5+* 6789:;<=>>69=:?@:9:A@9:;B>CDEF@BCD?D G#&
&
#
#
-
$ #$ ##
$$&#
#
##
4
###$#
#$
#H
IJ#
/
#&
/
G%#
#$&##$&#
#
K#L#%
-
34
##$
J$%#L* ./0.
I
#
# #
#
*5M
# #
* N7B=?OP@@DQR@=STEFD@S@:?D UVWXYZ[\]U]]^,#_*J* J$%#. ##
$
$$
$`_*2
a+
# I
,##I
$%#
^_*2
!#&#&
#
%
&#/
#$
#$
&#/
,#
_*J*#$
$_*J*4"#$
M
# #
##,#_*/"* +,
##$ - #
#$ #$*./0.
b
#$#$&###
#$
M#
$
#
`
-
1
_*
##
$
1
_
32*
* cdXeWf[XWe[dXgdX[edV[Xhij[kUl[mno +,
`
#
# # #
#$ #
* +,##$
##$# # #
#
*./0.
1_
34*
* p]Z[Yl]qfmWYeg[e[hWe[dXU]]^,#_*J*J$%#.
##
r$' ###/
$` #$##r$' ###/
##$&##$
#(
# # ( #$
#%
#$
#&$#$& '()
#$
#%#$&#* ./0.
b
#$#$&###
#$
M#I$ # #
`
-
1
_
*
* c[esteWuu[Xhcd\e\^./0.
b
#$#$&###
#$
# #
# ##$&##
#
#I#
$#
###$ ##$ +, #
##$&#
#
# *$ #
`
-
#
12
*
* vwxyz{|w}x~wx
w ,#_*/J$%#.
##
#$#
# ##
# %
# b#$
M
# #
##$
##
#$
#
`
I
I
#$
#*
Attachment 1
!"#$%&'#"#()*+#,(-.#/"#01(-223#/#*$"2 4
56
6
6647
6
6
4
6
56
6
6
897
:
4
4;;
64
64
;6:68 <=;
6
6
6
:
:
>
?8@AB@
:
64
;
<=
646
56
6
;7
6
:;
6 C
:64
6
6
D8E 5
6 6
8 !"#$F&G0.H2"#0I-"JKL-2" 4
6;
M
<=
N
666
6O?D
C?D
8 C6
:
6
4
:
P@AB@
5
668Q
5
6 6
6646
;64
6 4:6
64666
6O?D
C
?8CCR
O
S8
<=
6T
6
?8
U:
6
66
6464
67
66 64
;64
68
Attachment 1
!"#$%&'()*(+,-./0%,1"0%+22$34"0356
7897 :
8
88
;
1"0%<%=35,1<> ?3@@%=%64% ()(1"0%<%=35,> <%=A630B5/0"6,)%%+,-./0C%60/ DE8F G
8
DE IJ H
I
K K I
LK DEMD L
NL
J
8
O
P
:8
Q
NO
P
R
8
Q
OP
G
R
8
Q
O P L GFM
Q
KJO K
ST
8M
Q
O:D
PJKONP
<=525/%,1<> ?3@@%=%64% ()*(1<> +66."$B5/05@U2%="0356/ V: W
8
8 IO
HK
LL I LJ
NPI
L
J
QG
8 M
J
HJO
L
JP H
L
DEMD
J
LK
KJ
N
H R8E
G
8 L
JLO
J
P
JK
L
M
8M
8
HJ
K
HJ
K !50"$+66."$B5/05@U2%="0356/X _` YZ[\]Z[^Y _X ^\>ZY&Ya_^Z>\&Z>[] \]bU2%="036c1"035<=5@30X _` Zd&XZX^X _X YYZe][a_Z>^eZ>ed <"//!f=5.cfB5/0/ DE8F G
8 I
HK
K
I
H
N I
KL
N
8 NL
HLKOK
NP
N
L
HN :8
G
8
JH
NKOLN
H LP
JL
N
R
8
G
8 NJ
N
OK
J
P
KN
L
G
R
8
G
8O7gTP L
H OL
JP
JH Rh8OGFMP
G
8J
NK OL
NP
HL ST
8M
G
8J
J
HJKOK
N P
L
KH QG
8 G7iJ
K
NONJ
JLP
K
J
j8
8g
JL
KL
JL
KL V
8 LHL
J OJ
JPLJK
J !50"$<"//k!f=5.cfB5/0/X _` >Z[^[Zee^ _X d]^ZY]Xa_YZ^e>Zdee !50"$B"$4.$"0%,B5/0/#%@5=%B30l)%%/[ _` ^Z^YeZ\^& _[ XZeY\ZY[]a_eZ]\^Z[&[ B30l)%%/m<"lC%60/ Q E
Q I
KN
K I
L I
L
NJ G8 88
OVQP
L
NHL
NH DEj 888Q
L
L
G8S8G
8 J
J
!50"$B30l)%%/m<"lC%60/X _X Z&>dZ>\& _[ Zdd[Z>X\ _ZXY&Z^XX !50"$U0f%=+,-./0C%60/` _ ]` []YZd[]a _[]YZd[]a !50"$B"$4.$"0%,B5/0/[ _e YZ^[YZ\Xe _[ XeZ]d\ _YZ\^XZ]]e no2%40%,p%=q34%1%q%6.%`p4f%,.$%pkea[ _] ^Z^Y&ZY&^ _[^Z^Y&ZY&^ ?3@@%=%64%no4%//`pf5=0"c%a` _` \>eZ&d\a _XZ[ddZ[>\a +4=5//0f%r5"=,1"0%+,-./0C%60)"405=&s>eb[s\]b Attachment 1
!! ! ! !
"
#$
$$ %&
$
$
$'
$()$
$$
$
$'
$'
*
( &''*+
$
$$,*-$
$$./011233
'$4''2
$$
( ( 5
$
-67-89:&;<:&
<<8
=8(-$ ,*-$
$ &
>$
Attachment 1
Managing Tomorrow’s Resources Today
590 Ygnacio Valley Road, Suite 105 Northern California
Walnut Creek, California 94596 Southern California
Telephone: 925/977-6950 www.hfh-consultants.com
May 8, 2024
ZeeLaura Page
Management Analyst
City of Pleasanton
123 Main Street
Pleasanton, CA 94566
Sent via e-mail
Subject: Refuse Vehicle Street Maintenance Cost Analysis – FINAL REPORT Dear ZeeLaura Page:
The City of Pleasanton engaged HF&H Consultants, LLC (HF&H) to perform an analysis to determine the impact of solid waste, recycling, and organics collection vehicles (Refuse Vehicles) on street maintenance costs (i.e., maintenance, rehabilitation, and reconstruction costs) within the City’s maintained road system.
This analysis and assumptions have been made to reflect the current collection methodology, vehicles, and changes in the City’s street maintenance funding levels. Should there be any future material changes to that information, or within five years regardless of such changes, the City should review the calculated impacts and any associated fees that might be established.
Objectives
The objectives of the engagement were to:
1. Calculate the City’s average annual expenditures for pavement-related street maintenance net of gas tax apportionments based on Fiscal Years Ending (FYE) 2018-2022 (Average Annual Expenditures).
2. Allocate the Average Annual Expenditures based on the percentage impact of Refuse Vehicles and other vehicles on the City’s streets.
Findings
As shown in the following tables and based on the approach described below:
1. We calculate Average Annual Expenditures of $11,139,500 based on actual spending as demonstrated in the City’s Streets and Roads Report to the State of California Controller’s Office for Fiscal Years Ending (FYE) 2018 through 2022.
2. Refuse Vehicles account for approximately 26.1% of the total impact across the City’s road network.
3. Based on 26.1% attribution to Refuse Vehicles, the share of the Average Annual Expenditures attributable to Refuse Vehicles is $2,909,800 as shown in Table 1 below.
Attachment 2
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
Table 1: Summary Financial Impacts
(Includes all street classifications)
Note: Numbers may not sum exactly due to rounding.
Tables 2 through 4 below illustrate the impact of vehicle types by road classification, which combine to the system-wide values presented above in Table 1. It is worth noting that the vast majority of the impacts of Refuse Vehicles occur on the residential street type. Residential streets are designed to the lowest standard of all streets in the City. Their primary function is to provide access to individual residential properties for motorized vehicles, bicycles, and pedestrians. The residential streets are not designed to accommodate the frequency and loading of a Refuse Vehicle. A collector street is a low-to-moderate capacity road that moves traffic from residential streets to arterials. These types of streets are designed to a higher standard than residential streets to accommodate larger vehicles and more volume. Arterial streets provide direct, relatively high-speed service for longer trips and large traffic volumes and are designed to the highest standard.
It should be noted that reasonable ranges exist for various key assumptions used in our analysis, and that the analysis is extremely sensitive to changes in certain key assumptions. HF&H provides discussion of key assumptions and sensitivities later in this report. In several cases, this report relied on representations made by City staff and Pleasanton Garbage Service (which we assumed to be informed and dependable). @ Current Funding
$ 922,800 8.3%
$ 832,300 7.5%
$ 1,036,900 9.3%
$ 45,000 0.4%
$ 38,700 0.3%
$ 34,200 0.3%
$ 2,909,800 26.1%
$ 8,229,700 73.9%
TOTAL $ 11,139,500 100.0%
ALL OTHER VEHICLES SUBTOTAL
Percent of Total
Impacts
Residential Solid Waste Vehicles
Residential Recycling Vehicles
Residential Organics Vehicles
Commercial Recycling Vehicles
Street Maintenance Cost
Impact Vehicle Type
Commercial Organics Vehicles
PGS VEHICLE SUBTOTAL
Commercial Solid Waste Vehicles
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
Table 2: Residential Street Impact Analysis
Table 3: Collector Street Impact Analysis
Table 4: Arterial Street Impact Analysis
per lane @ Current Funding
1,327 $ 877,100 18.5%
1,197 $ 791,100 16.7%
1,492 $ 985,600 20.8%
4,016 2,653,800 $ 56.1%
3,145 2,077,900 $ 43.9%
TOTAL 7,161 4,731,700 $ 100.0%
ALL OTHER VEHICLES SUBTOTAL
Percent of Total
Impacts Vehicle Type
Total ESAL Loadings Street Maintenance
Cost Impact
Residential Solid Waste Vehicles
PGS VEHICLE SUBTOTAL
Residential Recycling Vehicles
Residential Organics Waste Vehicles
per lane @ Current Funding
1,327 $ 42,300 1.1%
1,197 $ 38,100 1.0%
1,492 $ 47,500 1.2%
1,308 $ 41,700 1.1%
1,124 $ 35,800 0.9%
995 $ 31,700 0.8%
7,444 $ 237,000 6.2%
113,577 3,616,200 $ 93.8%
121,021 3,853,200 $ 100.0%
Percent of Total
Impacts
Street Maintenance
Cost Impact Total ESAL Loadings
Residential Solid Waste Vehicles
Residential Recycling Vehicles
Vehicle Type
Commercial Solid Waste Vehicles
PGS VEHICLE SUBTOTAL
Commercial Recycling Vehicles
Commercial Organics Vehicles
Residential Organics Waste Vehicles
ALL OTHER VEHICLES SUBTOTAL
TOTAL
per lane @ Current Funding
1,327 $ 3,400 0.1%
1,197 $ 3,100 0.1%
1,492 $ 3,800 0.1%
1,308 $ 3,300 0.1%
1,124 $ 2,900 0.1%
995 $ 2,500 0.1%
7,444 $ 19,000 0.7%
992,556 2,535,600 $ 99.3%
1,000,000 2,554,700 $ 100.0%
ALL OTHER VEHICLES SUBTOTAL
Percent of Total
Impacts Vehicle Type
Total ESAL Loadings Street Maintenance
Cost Impact
Residential Solid Waste Vehicles
Residential Recycling Vehicles
TOTAL
Commercial Organics Vehicles
PGS VEHICLE SUBTOTAL
Commercial Recycling Vehicles
Commercial Solid Waste Vehicles
Residential Organics Waste Vehicles
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
Overview
Road maintenance is based on deterioration. While roads will deteriorate if simply left unused, most deterioration is associated with use. The damage caused by vehicles increases much more than proportionately with size and weight. Hence, maintenance costs are greater for trips made by heavy vehicles. A single, large truck can cause as much damage as thousands of automobiles, and a truck’s configuration can affect the amount of damage as well. If the load is spread over more axles, allowing for less weight on each wheel, then damage is reduced.1 Refuse Vehicles are generally some of the heaviest vehicles regularly operating on City streets. Accordingly, these vehicles contribute significantly to the cost of maintaining those streets.
Generally speaking, the City’s streets are in good shape (with and Average PCI of 67); however, assuring adequate future funding for an effective pavement management program is one of the most financially prudent steps the City can take. Rapid deterioration of pavement typically occurs after roadways drop to a PCI score of 60 or lower;2 therefore, assuring adequate funding for an effective pavement management program for the City’s streets is critical. Delays in preventative maintenance increase the quantity and severity of pavement defects, and result in higher costs during pavement life. Consequently, using only a routine and reactive approach will considerably increase the life cycle costs of the pavement. 3 Background
Pleasanton Garbage Service provides collection services for solid waste, recycling, and organics exclusively for residential and commercial customers in the City.
Residential solid waste, recycling, and organics are collected in an automated, side-loading, vehicles that collects materials from all customers on each side of each street in a single pass.
Commercial collection service is provided in varying frequencies to customers by front-loading vehicles. To be conservative in our estimates, we have assumed these vehicles service the average commercial customer account 1 time per week.
Approach
Our analysis is based on the City’s projected Average Annual Expenditures and allocates the Average Annual Expenditures attributed to the impacts of Refuse Vehicles on the City’s streets. The basis for allocating the Average Annual Expenditures is made by calculating the Equivalent Single Axle Load (ESAL) of each type of vehicle traveling on the City’s streets, as described below.
The weight and loading of Refuse Vehicles impose a particular, specific, and quantifiable impact on streets.
The analysis is based on the fact that the City’s streets are designed to handle a certain amount of vehicle 1 Rufolo, Cost-Based Road Taxation, Cascade Policy Institute, Policy Perspective #5, November 1995. 2 Metropolitan Transportation Commission, “Current Issues in Pavement Maintenance and Management.” July 2002. 3 A Pavement Preventative Maintenance Program; Larry Galehouse, P.E., L.S.; Michigan Department of Transportation.
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
traffic (loading) over their design life. That loading is a function of both the number and weight of vehicles.
The lifetime “vehicle loading” that a street can accommodate can be expressed as the total number of ESALs. Each vehicle type (e.g., Refuse Vehicles, other trucks, and automobiles) can be converted into an associated ESAL, based on the vehicle’s weight and its distribution among the vehicle’s axles. By projecting the type and number of vehicles that will travel on a street over its design life, the total number of ESALs can be calculated, and the street designed to handle that projected loading. Similarly, the relative impact of each type of vehicle on that street can be calculated based on the percentage of the total ESALs attributed to each vehicle type.
Methodology
The methodology used to project the impact of Refuse Vehicles can be summarized as follows:
Determine Design Standard
HF&H used data provided by the City to estimate a design Traffic Index (TI). This resulted in an estimated residential street TI of 5 or 7,161 ESALs. Collector streets were estimated to have a TI of 7 or 121,021 ESALs.
Arterial streets were estimated to have a TI of 9 or 1,000,000 ESALs.
Determine the Impact of Each Vehicle Type
HF&H collected from Pleasanton Garbage Service and through independent investigation, vehicle weights and profiles for the various vehicles being studied in this analysis. Each vehicle type was modeled based on weight, vehicle specifications, axle profile, and average payload. This modeling produced an average ESAL for each pass of each vehicle type, which was then used to assess the direct impact of each vehicle trip by each vehicle type.
Project Maintenance Costs Associated with Each Vehicle Type We obtained the City’s annual Streets and Roads Report data for the period FYE 2018 through FYE 2022.
These annual costs were escalated by the Engineering News Record Construction Cost Index for San Francisco to bring the costs into current 2024 dollars. This data was used to calculate the percentage of funding that was dedicated to pavement versus non-pavement related activities. This calculation was used as the basis for the Average Annual Expenditures. The Average Annual Expenditures were allocated among residential, collector, and arterial streets in proportion to the percentage of lane miles for each of those street classifications. The residential, collector, and arterial street portions of the Average Annual Expenditures were allocated among the various vehicle types in proportion to the calculated impact of each vehicle type, as determined above.
Key Assumptions/Inputs
The analysis relied in part on the following key assumptions, provided by the City and Pleasanton Garbage Service and supplemented with data from other sources as noted:
• Residential streets account for approximately 42.5% of the total residential, collector, and arterial lane miles in the City.
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
• Collector streets account for approximately 34.6% of the total residential, collector, and arterial lane miles in the City.
• Arterial streets account for approximately 22.9% of the total residential, collector, and arterial lane miles in the City.
• Residential solid waste, recycling, and yard waste services are provided weekly. • Residential solid waste payloads are 9,510 pounds per load on average. • Residential organic payloads are 10,580 pounds per load on average. • Residential recycling payloads are 6,000 pounds per load on average. • Commercial solid waste payloads are 14,330 pounds per load on average. • Commercial recycling payloads are 7,197 pounds per load on average. • Commercial organic payloads are 2,890 pounds per load on average. • Residential streets have an estimated design TI of 5. • Collector streets have an estimated design TI of 7.
• Arterial streets have an estimated design TI of 9.
• Refuse Vehicles servicing residential containers typically travel on each residential street segment twice to provide service (i.e., they service one side of the street on a single pass). 4 • Commercial Vehicles service the average account for each material once per week. • Refuse Vehicle tare weight and payload weight data was provided by Pleasanton Garbage Service and was based on actual data for vehicles from their fleet. • Refuse Vehicle axle weight distribution profiles were based on data provided by vehicle manufacturers for the same or similar vehicle types.
• Axle weight data for other trucks and automobiles was based on data compiled from a variety of sources including vehicle manufacturers and industry publications. • The City’s Average Annual Expenditures are approximately $11,139,500.
Using the assumptions noted above, the portion of the City’s Average Annual Expenditures associated with Refuse Vehicles was calculated following the previously described methodology.
Sensitivity Analysis
As noted in the Limitations section below, our analysis is based on a number of key assumptions, and changes to those assumptions may have a material impact on the resulting findings. The following 4 The analysis does not account for any additional passes due to vehicle routing (e.g., “dead-heading” over a previously serviced street).
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
information provides an overview of the relative impact of changes in certain key assumptions on the projected impacts associated with Refuse Vehicles.
Average Annual Non-Discretionary Funding
Our analysis is based on Average Annual Expenditures of approximately $11,139,500. Changes to that amount would have a proportionate effect on the amount allocated to Refuse Vehicles, provided that the allocation of the Average Annual Expenditures to each functional classification of streets remains the same (e.g., a change in the Average Annual Expenditures amount of 10% would result in a 10% change in the amount of costs allocated to Refuse Vehicles).
Refuse Vehicle Trips
Changing the number of trips assumed for Refuse Vehicles has a direct effect on the projected impacts (e.g., the calculated impact for a Refuse Vehicle making two passes down each street segment is twice that of a Refuse Vehicle making only one pass). While the current number of trips associated with Refuse Vehicles is well established, changes to the collection methods (e.g., switching from two-pass fully automated side loader solid waste collection to one-pass semi-automated side- or rear-loader collection) would impact the number of Refuse Vehicle trips and the associated impact.
Total Vehicle Trips and Percentage of Vehicle Types
Changing the number of total vehicle trips (without changing the number of Refuse Vehicle trips), affects the projected impacts in roughly inverse proportion (e.g., doubling the number of total vehicle trips reduces the calculated impact of Refuse Vehicles by about half, while halving the number of total vehicle trips roughly doubles the calculated impact).
Changing the percentage of total vehicles assumed to be trucks has a material impact on the analysis. The impact of trucks is substantial; therefore, as the percentage of trucks increases, their relative impact increases, while the relative impact of Refuse Vehicles decreases. There is a similar relationship with automobiles; however, that impact is not as significant due to the lesser relative impact of automobiles.
Equivalent Single Axle Loadings (ESAL)
Changing the assumed ESAL for Refuse Vehicles has a roughly proportionate effect on the calculated impact.
If we double the associated ESAL, the impact roughly doubles. Similarly, if we reduce the assumed ESAL by half, the impact is reduced by about half. While we have attempted to estimate the ESALs for Refuse Vehicles as accurately as possible, those calculations are highly sensitive to assumed vehicle weights (both loaded and unloaded) and the distribution of that weight among the vehicles’ axles.
The assumptions regarding the ESALs of each vehicle type affect the calculated impacts associated with each other vehicle type. Changes in the assumed ESALs of other trucks and automobiles have an inverse effect on the calculated impact of Refuse Vehicles (i.e., as the assumed ESAL of other trucks and/or automobiles increases, the calculated impact of Refuse Vehicles decreases and vice versa).
Managing Tomorrow’s Resources Today
ZeeLaura Page
May 8, 2024
Limitations
Our analysis does not account for the potential impact of any non-vehicle-related factors (e.g., repair and maintenance of underground utilities). To the extent any such factors affect street maintenance and rehabilitation costs, the impact attributed to the different vehicle types would be affected.
Our analysis is based on the various assumptions noted, including the total number of vehicle trips and average ESALs associated with the various vehicle types. Changes to these assumptions may have a material impact on the analysis.
Annual street maintenance costs can vary widely, both in total and specific to pavement- and nonpavement-related expenses as well as the amount spent on residential versus collector and arterial streets.
Our analysis is based on the City’s street maintenance cost and funding data for FYE 2018 through 2022 and the noted assumptions regarding those factors. Changes to those assumptions may have a material impact on the associated calculations.
* * * * *
We appreciate the opportunity to be of service to the City. If you have any questions regarding this submittal, please do not hesitate to call me directly at (925) 977-6964.
Sincerely,
HF&H CONSULTANTS, LLC
Dave Hilton
Senior Project Manager
cc: Rob Hilton, President, HF&H Consultants
RESOLUTION NO. 24-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON TO
ADOPT RATES FOR SOLID WASTE, RECYCLABLE MATERIALS, AND
ORGANIC MATERIALS COLLECTION SERVICES
WHEREAS, on March 20, 2018 the City Council voted to approve and entered into a franchise agreement between the City of Pleasanton and Pleasanton Garbage Service Inc. for Solid Waste, Recyclable Materials, and Organic Materials collection services; and
WHEREAS, on June 7, 2022 the City Council voted to approve an amended franchise agreement between the City of Pleasanton Garbage Service, Inc. to comply with California state law SB 1383 requirements; and
WHEREAS, in accordance with Section 9.20.090 of the City of Pleasanton Municipal Code, rates for franchise services shall be set by a resolution approved by the City Council of the City of Pleasanton; and
WHEREAS, Pleasanton Garbage Service, Inc. shall conduct all billing related to collection, transportation, recycling and disposal of said Solid Waste, Recyclable Materials, and Organic Materials in strict accordance with rates listed in this Resolutions; and
WHEREAS, setting the Vehicle Impact Mitigation Fee established in the Franchise Agreement Section 7.2, in the amount of $1,329,400, to include in the costbased Rate Adjustment, effective date July 1, 2024.
WHEREAS, including City of Pleasanton Staff costs in the amount of $500,000 was agreed upon to the cost-based Rate Adjustment, effective date July 1, 2024; and WHEREAS, in accordance with the Cost-Based Rate Adjustment methodology the rate increase for rate period seven is 3.9 percent.
NOW, THEREFORE BE IT RESOLVED THAT THE CITY COUNCIL OF THE
CITY OF PLEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:
SECTION 1: The fee schedule set forth in Resolution 23-1407 is hereby rescinded.
SECTION 2: The rates for the collection, transport, and disposal of Solid Waste, Recyclable Materials, and Organic Materials from the City of Pleasanton for Attachment 3
Commercial/Multi-Family Services, Residential Services and for Transfer Stations Services, are revised as of July 1, 2024 as outlined in Exhibit A.
SECTION 3: Rates will go into effect on July 1, 2024.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on May 21, 2024.
I, Jocelyn Kwong, City Clerk of the City of Pleasanton, California, certify that the foregoing resolution was adopted by the City Council at a regular meeting held on the 21 of May 2024, by the following vote:
Ayes:
Noes:
Absent:
Abstain:
__________________________
Jocelyn Kwong, City Clerk
APPROVED AS TO FORM:
______________________________
Daniel G. Sodergren, City Attorney
PLEASANTON GARBAGE SERVICE, INC.
Rate
SINGLE-FAMILY RESIDENTIAL RATES 7/1/2024
Cart Service $ 32.78
35-Gallon Service
For the regularly-scheduled once each week pick up of the following * 35-gallon cart for refuse
* 96-gallon cart for recycable materials
* 64 or 96-gallon cart for green waste including food scraps * Each additional fefuse cart per week $ 32.78
Cart Service $ 57.19
96-Gallon Service
For the regularly-scheduled once each week pick up of the following * 96-gallon cart for refuse
* 96-gallon cart for recycable materials
* 64 or 96-gallon cart for green waste including food scraps * Each additional fefuse cart per week $ 57.19
Back Yard Service
For the regularly-scheduled once each week pick up of waste cart from the back or side yard of a single family residential property of a customer unable to bring the cart to the curb. Carts must be within 50 feel of any gate or fence. 35-Gallon Service $ 39.84
* Each additional refuse cart per week $ 39.84
96-Gallon Service $ 68.62
* Each additional fefuse cart per week $ 68.62
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 1 Exhibit A
PLEASANTON GARBAGE SERVICE, INC.
Rate
SINGLE-FAMILY RESIDENTIAL RATES 7/1/2024
Container Service $ 177.11
For the one-time drop-off and pick-up of a 4 cubic yard container provided by Pleasanton Garbage Service, Inc.
Additional Services
* Extra 30-gallon bag (per bag) $ 9.46
* Go Back Service for customer who forgot to put out carts $ 14.20 * Same day 'go back' for a second pick-up $ 13.42
* Other than same day 'go back' service $ 28.09
* Cart Exchange back and forth changes $ 15.81
* Redelivery of Cart after deliquent account is cleared $ 48.72 * Damaged or Stolen Cart - One replacement cart in a 12 month period for Second replacement cart $ 76.06
Senior Citizens Rate
Primary occupant must be 62 years of age or older. For the regularly-scheduled once each week pick up of the following:
35-Gallon Service $ 32.78
* 35-gallon cart for refuse
* 96-gallon cart for recycable materials
* 64 or 96-gallon cart for green waste including food scraps * Each additional refuse cart per week $ 32.78
96-Gallon Service $ 48.60
* 96-gallon cart for refuse
* 96-gallon cart for recyclable materials
* 64 or 96-gallon cart for green waste including food scraps * Each additional refuse cart per week $ 48.60
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 2
PLEASANTON GARBAGE SERVICE, INC.
Rate
SINGLE-FAMILY RESIDENTIAL RATES 7/1/2024
Senior Citizen Rate (continued)
Backyard Service
For the regularly-scheduled once each week pick up of waste cart from the back or side yard of a single family residential property of a customer unable to bring the cart to the curb. Carts must be within 50 feel of any gate or fence. 35-Gallon Service $ 39.84
* Each additional refuse cart per week $ 39.84
96-Gallon Service $ 60.05
* Each additional refuse cart per week $ 60.05
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 3
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
Solid Waste Cart Service
35-gallon 1/week $ 32.78
35-gallon 2/week $ 66.83
35-gallon 3/week $ 103.86
35-gallon 4/week $ 136.29
35-gallon 5/week $ 168.41
96-gallon 1/week $ 57.19
96-gallon 2/week $ 116.64
96-gallon 3/week $ 181.25
96-gallon 4/week $ 237.59
96-gallon 5/week $ 293.63
Each additional solid waste cart per week 35-gallon 1/week $ 32.78 96-gallon 1/week $ 57.18
Rate
7/1/2024
Go back service for customer who forgot to put out carts All Each Cart $ 14.20 Cart Exchange / back and forth changes All Each Cart $ 15.81 Redelivery of Cart after deliquent account is cleared All Each Cart $ 48.72 Second replacement cart in a 12 month period All Each Cart $ 76.06 Mixed Recycle or Organics dumped as trash All Each Cart $ 23.80 Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart.
Additional Services for Solid Waste, Mixed
Recycling and Organic Carts
Damaged or Stolen Cart - One replacement cart in a 12 month period is provided free of charge
Cart
Size Frequency
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - All Cart Service
Cart
Size Frequency
4
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
Bin Service (Loose)
1 1 $ 146.74
1 2 $ 299.34
1 3 $ 465.82
1 4 $ 609.74
1 5 $ 753.66
2 1 $ 293.45
2 2 $ 598.66
2 3 $ 931.41
2 4 $ 1,219.21
2 5 $ 1,507.04
3 1 $ 440.20
3 2 $ 917.01
3 3 $ 1,371.80
3 4 $ 1,803.51
3 5 $ 2,235.27
4 1 $ 586.94
4 2 $ 1,222.71
4 3 $ 1,813.08
4 4 $ 2,388.71
4 5 $ 2,964.37
7 1 $ 1,048.88
7 2 $ 2,184.36
7 3 $ 3,177.57
7 4 $ 4,184.96
7 5 $ 5,192.35
COMMERCIAL/MULTI-FAMILY
RESIDENTIAL RATES - SOLID WASTE
Cubic
Yards Frequency
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 5
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
Bin Service (Loose) - continued
Extra Pickup 1 Each $ 33.21
2 Each $ 66.44
3 Each $ 99.63
4 Each $ 132.85
7 Each $ 232.49
On Call 1 Each $ 33.21
2 Each $ 66.44
3 Each $ 99.63
4 Each $ 132.85
7 Each $ 232.49
Money on Delivery Bin Take Away 3-Day Rental 4 Each $ 177.11 Money on Delivery Bin Take Away 3-Day Rental Extra Bin
Pick-Up 4 Each $ 132.85
Rate
7/1/2024
Bin - Compactor
1 1/2 1 $ 431.74
1 1/2 2 $ 863.49
1 1/2 3 $ 1,295.25
1 1/2 4 $ 1,726.54
1 1/2 5 $ 2,158.78
2 1 $ 575.67
2 2 $ 1,151.33
2 3 $ 1,726.99
2 4 $ 2,257.38
2 5 $ 2,878.32
3 1 $ 863.50
3 2 $ 1,727.00
3 3 $ 2,590.51
3 4 $ 3,454.00
3 5 $ 4,317.50
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart.
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE
Cubic
Yards Frequency
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE
Cubic
Yards Frequency
6
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
Bin Compactor - continued
4 1 $ 1,151.34
4 2 $ 2,302.66
4 3 $ 3,454.01
4 4 $ 4,605.35
4 5 $ 5,756.67
5 1 $ 1,710.04
5 2 $ 2,878.34
5 3 $ 4,046.64
5 4 $ 5,214.94
5 5 $ 6,383.25
6 1 $ 2,052.03
6 2 $ 3,454.00
6 3 $ 4,855.94
6 4 $ 6,257.91
6 5 $ 7,659.88
Rate
7/1/2024
Bin Compactor
Extra Pickup 1 1/2 Each $ 118.39
2 Each $ 132.85
3 Each $ 199.28
4 Each $ 265.70
5 Each $ 332.14
6 Each $ 398.58
Overweight Charges (per ton) NA Each $ 79.16
Same Day Service ALL Each $ 335.84
Steam Clean Compactor Container/Box ALL Each $ 376.18
Hard to Handle Trash (per ton) NA $ 74.97
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart.
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE
Cubic
Yards Frequency
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE
Cubic
Yards Frequency
7
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
Rolll Off Box (Loose) - On Call
Monthly Rental Fee All Sizes $ 403.58
15 $ 591.93
20 $ 789.23
30 $ 1,183.87
40 $ 1,578.50
Cash on Delivery 3-Day Rental - Daily Rental Fee All Sizes $ 18.82 Cash on Delivery for 3-Day Rental 15 $ 591.93
20 $ 789.23
25 $ 986.56
30 $ 1,183.87
40 $ 1,578.50
Overweight Charges (per ton) All Sizes $ 79.16
Rate
7/1/2024
Roll Off Box (Compactor) - On Call
8 $ 631.39
10 $ 789.23
15 $ 1,183.87
16 $ 1,262.80
20 $ 1,578.50
24 $ 1,894.20
25 $ 1,973.11
30 $ 2,367.73
36 $ 2,841.28
40 $ 3,156.98
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE Cubic Yards
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - SOLID WASTE Cubic Yards
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 8
PLEASANTON GARBAGE SERVICE, INC.
Rate
Frequency 7/1/2024
Additional Services for Solid Waste
Go Back Service All Each $ 152.97
Steam Clean Bin All Each $ 182.04
Pallet Pick Up N/A Each $ 13.74
Hard to Handle Trash (per ton) N/A N/A $ 74.97
Lock & Key for Customer to purchase from PGS All Each $ 13.20 Rate
Frequency 7/1/2024
Mixed Recycling Cart Service
First and Second Cart 64-gallon 1/week Free
64-gallon 2/week $ 42.88
64-gallon 3/week $ 87.49
64-gallon 4/week $ 136.12
64-gallon 5/week $ 178.19
Third and all additional 64-gallon carts 64-gallon 1/week $ 42.88 64-gallon 2/week $ 87.49
64-gallon 3/week $ 136.12
64-gallon 4/week $ 178.19
Back Yard Cart Service per Cart 64-gallon 1/week $ 61.02 64-gallon 5/week $ 220.23
First Cart 96-gallon 1/week Free
96-gallon 2/week $ 42.88
96-gallon 3/week $ 87.49
96-gallon 4/week $ 136.12
96-gallon 5/week $ 178.19
Second and all additional 96-gallon carts 96-gallon 1/week $ 42.88 96-gallon 2/week $ 87.49
96-gallon 3/week $ 136.12
96-gallon 4/week $ 178.19
96-gallon 5/week $ 220.23
Back Yard Service 96-gallon 1/week $ 61.02
COMMERCIAL/MULTI-FAMILY
RESIDENTIAL RATES - SOLID WASTE Cubic Yards
COMMERCIAL/MULTI-FAMILY
RESIDENTIAL RATES - RECYCLING Cart Size
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 9
PLEASANTON GARBAGE SERVICE, INC.
Rate
Frequency 7/1/2024
Bins - Cardboard Only
1 1 $ 117.07
1 2 $ 232.40
1 3 $ 357.86
1 4 $ 468.30
1 5 $ 578.79
2 1 $ 234.09
2 2 $ 464.77
2 3 $ 715.46
2 4 $ 936.56
2 5 $ 1,157.42
3 1 $ 346.70
3 2 $ 706.38
3 3 $ 1,047.90
3 4 $ 1,371.67
3 5 $ 1,716.68
4 1 $ 459.29
4 2 $ 938.23
4 3 $ 1,381.23
4 4 $ 1,812.93
4 5 $ 2,244.62
7 1 $ 916.83
7 2 $ 1,677.25
7 3 $ 2,421.85
7 4 $ 3,177.30
7 5 $ 3,932.80
Rate
Frequency 7/1/2024
Extra Pickup (same rates for Carboard only) 1 Each $ 24.91 2 Each $ 49.80
3 Each $ 74.71
4 Each $ 99.62
7 Each $ 174.35
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - RECYCLING Cubic Yards
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - RECYCLING Cubic Yards
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 10
PLEASANTON GARBAGE SERVICE, INC.
Rate
Frequency 7/1/2024
Bins - Mixed Recycling Only
1 1 $ 117.07
1 2 $ 232.40
1 3 $ 357.86
1 4 $ 468.30
1 5 $ 578.79
2 1 $ 234.09
2 2 $ 464.77
2 3 $ 715.46
2 4 $ 936.35
2 5 $ 1,157.42
3 1 $ 346.70
3 2 $ 706.38
3 3 $ 1,053.53
3 4 $ 1,371.67
3 5 $ 1,716.68
4 1 $ 459.29
4 2 $ 938.23
4 3 $ 1,381.23
4 4 $ 1,812.93
4 5 $ 2,244.62
Compactor - Mixed Recycling Only
1 1/2 1 $ 333.85
1 1/2 2 $ 667.71
1 1/2 3 $ 1,001.57
1 1/2 4 $ 1,335.07
1 1/2 5 $ 1,669.31
2 1 $ 459.21
2 2 $ 893.83
2 3 $ 1,326.59
2 4 $ 1,733.66
2 5 $ 2,210.58
3 1 $ 680.08
3 2 $ 1,330.32
3 3 $ 1,989.50
3 4 $ 2,626.95
3 5 $ 3,315.85
4 1 $ 900.93
4 2 $ 1,766.93
4 3 $ 2,631.31
4 4 $ 3,495.25
4 5 $ 4,358.95
5 1 $ 1,322.31
5 2 $ 2,225.72
5 3 $ 3,129.12
COMMERCIAL/MULTI-FAMILY
RESIDENTIAL RATES - RECYCLING Cubic Yards
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 11
PLEASANTON GARBAGE SERVICE, INC.
Rate
Frequency 7/1/2024
Compactor- Mixed Recycling Only
6 1 $ 1,586.77
6 2 $ 2,670.85
6 3 $ 3,754.94
6 4 $ 4,839.03
6 5 $ 5,923.12
Rate
Frequency 7/1/2024
Organics Cart Service
96-gallon 1/week $ 42.88
96-gallon 2/week $ 87.49
96-gallon 3/week $ 136.12
96-gallon 4/week $ 178.19
96-gallon 5/week $ 220.23
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - MIXED RECYCLING
Cubic
Yards
COMMERCIAL/MULTI-FAMILY RESIDENTIAL
RATES - ORGANICS Cart Size
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 11A
PLEASANTON GARBAGE SERVICE, INC.
Rate
Frequency 7/1/2024
Bins (Loose)
1 1 $ 117.07
1 2 $ 232.40
1 3 $ 357.86
1 4 $ 468.30
1 5 $ 578.79
2 1 $ 234.09
2 2 $ 464.77
2 3 $ 715.46
2 4 $ 936.35
2 5 $ 1,157.42
3 1 $ 346.70
3 2 $ 706.38
3 3 $ 1,056.69
3 4 $ 1,385.10
3 5 $ 1,716.68
4 1 $ 459.29
4 2 $ 938.23
4 3 $ 1,381.23
4 4 $ 1,812.93
4 5 $ 2,244.62
Rate
Frequency 7/1/2024
Roll Off (Loose) - On Call
15 Each $ 443.96
20 Each $ 591.93
30 Each $ 887.90
40 Each $ 1,183.87
COMMERCIAL/MULTI-FAMILY
RESIDENTIAL RATES - ORGANICS Cubic Yards
COMMERCIAL/MULTI-FAMILY
RESIDENTIAL RATES - ORGANICS Cubic Yards
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 12
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
Air Conditioner $ 252.01
Flocked Holiday Tree $ 41.10
Bathtub (non-metal or metal) $ 117.70
Chair-Recliner $ 103.27
Couch 6 foot or 9 foot $ 117.70
Dishwasher $ 117.70
Washer $ 117.70
Dryer $ 117.70
Freezer $ 252.01
Refrigerator $ 252.01
Stove $ 117.70
Grill $ 148.73
Toilet $ 103.27
Hide a bed $ 117.70
Mattress Full, King Queen, Twin $ 148.73
Microwave $ 103.27
Misc. Furniture Item $ 103.27
Misc Large Item $ 148.73
Ping Pong Table $ 148.73
CPU $ 89.85
Printer $ 89.85
Television Bigger than 25 Inches $ 206.54
Television Less than 25 inches console or computer monitor $ 148.73 Water Heater 30, 40, 50 or 80 gallon and above $ 117.70 Tire no rim $ 40.44
Tire with rim - Car and Pick-Up Truck $ 51.62
Tire with rim - Large Truck $ 92.96
LARGE ITEM ON CALL LIST FOR RESIDENTIAL & COMMERCIAL
CUSTOMERS
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 13
PLEASANTON GARBAGE SERVICE, INC.
Rate
7/1/2024
For the disposal of all type of dry garbage, trash, refuse and debris which meets the disposal requirements of the transfer station Pleasanton Residents
Minimum Dump Rate $ 9.27
Per Yard Dump Rate $ 14.30
Per Ton Rate $ 79.16
Commercial Customers and Non-Residents
Cubic Yard Construction/Demolition $ 44.26
Cubic Yard Hard to Handle (over 6 feet in length or 3 feet in diameter) $ 67.15 Cubic Yard Extremely Hard to Handle $ 88.90
Cubic Yard Certified Loads N/A
Cubic Yard Household Garbage $ 35.10
Minimum Cash Sale $ 35.10
Minimum Charge Sale $ 35.10
Weight Master Certificate $ 38.15
Per Tonnage Fee $ 175.53
TRANSFER STATION
Approved Garbage Rates effective July 1, 2024. Amended October 17, 2023 to include new commercial rates for mixed recycling compactors and mixed recycling 64-gallon cart. 14
Item #5
CITY COUNCIL AGENDA REPORT
May 21, 2024
Community Development
TITLE: ACTIONS OF THE ZONING ADMINISTRATOR AND PLANNING
COMMISSION
P24-0276, Neil Ginty
Application for Administrative Design Review approval to construct an approximately 328-square-foot single-story and 328-square-foot second-story addition to the rear of the existing two-story residence located at 4447 Sandalwood Drive.
Project Information:
Existing floor area: 2,018 square feet
Total floor area with addition: 2,584 square feet
Lot size: 6,476 square feet
Existing floor area ratio: 31.16 percent
Total floor area ratio with addition: 39.90 percent
Approved. (9 days)
P24-0282, Tyler Carr/Dryco
Application for Design Review approval to construct a new perimeter fence located at 4747 Willow Road.
Approved. (1 day)
P24-0260, David Ford
Application for Sign Design Review approval to install one new internally illuminated wall sign and reface one monument sign located at 5100 Franklin Drive reading “Natera.”
Approved. (7 days)
P24-0261, David Ford
Application for Sign Design Review approval to replace two illuminated wall-mounted signs and two monument signs for Marriot located at 11950 Dublin Canyon Road.
Approved. (2 days)
PUD-81-25-12M, Christen Soares/Field Paoli Architects
Application for site-specific Planned Unit Development (PUD) Minor Modification approval to PUD-81-25, adding brewpubs (on-site alcohol consumption) to the list of conditionally permitted uses for 3595 Utah Street.
Approved. (13 days)
Planning Commission, April 24, 2024
Commissioners Present: Anurag Jain, Vivek Mohan, Ken Morgan Stephanie Wedge, and Chair Matt Gaidos
Commissioners Absent: Brandon Pace
P24-0127, Chevron Stations Inc., 1875 Valley Avenue – Application to amend PCUP61, an existing Conditional Use Permit, which currently allows for the sale of beer and wine, to also allow for the sale of distilled spirits for off-site consumption (Type 21 ABC License) at an existing gas station located at 1875 Valley Avenue.
Recommendation: Adopt Resolution No. PC-2024-08 approving the application.
Actions Taken: Adopt Resolution No. PC-2024-08, as recommended.
Vote: 4-0.
Planning Commission, May 8, 2024
Commissioners Present: Anurag Jain, Vivek Mohan, Ken Morgan, Brandon Pace Stephanie Wedge, and Chair Matt Gaidos
Commissioners Absent: None
Stoneridge Mall DA Extension - Application to amend and extend the Stoneridge Shopping Center Development Agreement (DA), governing a previously approved approximately 362,790-square-foot shopping center expansion, for one year, with a City Manager option to extend the DA for one additional year subject to the completion of performance standards set forth in this sixth amendment.
Recommendation: Adopt Resolution No. PC-2024-09 approving the extension.
Actions Taken: Adopt Resolution No. PC-2024-09, as recommended.
Vote: 4-1. Mohan abstained.
Prepared by: Submitted by: Approved by:
Melinda Denis
Zoning Administrator
Ellen Clark
Director of Community
Development
Gerry Beaudin
City Manager
Item #6
CITY COUNCIL AGENDA REPORT
May 21, 2024
Community Development
TITLE: ADOPT A RESOLUTION APPROVING THE RIDGE VIEW COMMONS SENIOR
RENTAL HOUSING COMPLEX'S AMENDED AND RESTATED LOAN
AGREEMENT, GROUND LEASE AND REGULATORY AGREEMENT, AND
AUTHORIZE THE CITY MANAGER TO EXECUTE ALL DOCUMENTS,
INCLUDING SUBORDINATION AGREEMENTS, AND TAKE ALL STEPS
NECESSARY TO REFINANCING AND RENOVATION OF RIDGE VIEW
COMMONS
SUMMARY
Ridge View Commons (Ridge View) is a 200-unit Low Income Housing Tax Credit (LIHTC) rental housing development for seniors 62 years and older. Ridge View was constructed in 1989 on land at 5200 Case Avenue which is owned by the City and leased to Eden Housing, a non-profit public benefit corporation. Eden Housing pursued an update of its finances for the lease and operation of Ridge View, known as a resyndication, in 2019, 2020, and again in 2023 when it submitted an application to secure an allocation of low-income housing tax credits and tax-exempt bond financing. The Ridge View project successfully secured authority for approximately $40 million in tax-exempt bond financing and $32 million in equity to be provided by a low-income housing tax credit investor, for the purpose of rehabilitating and renovating the development. The official award was announced on December 6, 2023, and the award requires Eden Housing to close its financing and start renovation by approximately June 1, 2024. All the relevant City-related financing documents must be executed and delivered to escrow prior to the June 1, 2024, deadline.
RECOMMENDATION
Adopt a Resolution to:
1. Approve an Amended and Restated Ground Lease, an omnibus Assignment and Amendment to Loan Documents, an Amended and Restated Promissory Note, a Leasehold Deed of Trust, and a Regulatory Agreement, and authorize the City Manager, or designee, to execute each such document substantially in the forms attached to the Resolution, with such modifications as may be approved by the City Manager in consultation with the City Attorney;
2. Allow subordination of the City's Leasehold Deed of Trust to deeds of trust and regulatory agreements to be executed for the benefit of the project construction lender and required in connection with the bond financing for the project; and
3. Authorize the City Manager, or designee, to execute such additional documents and to take all steps necessary to implement the transactions described in this Agenda Report and the Resolution.
BACKGROUND
Constructed in 1989, Ridge View Commons – an Eden Housing development – is a 200-unit affordable age-restricted (62 and older) rental housing complex located at 5200 Case Avenue in Pleasanton. The City owns the land and leases it to Eden Housing; during the term of the lease, Eden Housing owns the buildings and improvements on the site. Ridge View's construction was financed through a combination of City loans and Low Income Housing Tax Credit (LIHTC) financing. There are two existing City loans: a $4,000,000 loan, which was a Housing Development Grant (“HDG”) Loan using federal funds granted to the City by the U.S.
Department of Housing and Urban Development (HUD), and a $2,457,000 loan that used the City Lower Income Housing Funds (LIHF).
Eden Housing has secured authority for approximately $40 million in tax-exempt bond financing and $32 million in equity to be provided by a low-income housing tax credit investor, which will allow Eden Housing to renovate the property while maintaining its long-term affordability. This new financing, known as resyndication, requires update, amendment and restatement of a series of documents and agreements, to which the City is a party. Among other aspects, these agreements address the existing obligation to repay the City loans, which will be assumed by the partnership that will execute a new ground lease with the City and acquire and rehabilitate the project.
DISCUSSION
Eden Housing has secured a commitment of 4% tax credit and tax-exempt bond financing, and a construction and permanent conventional loan in the amount of approximately $39,668,600 from Silicon Valley Bank (SVB), a division of First Citizens Bank & Trust Company. The SVB loan will be recorded in senior position to the City's loans. In accordance with the tax credit resyndication schedule, and as required by the project lender, Eden Housing intends to close all financing for the project June 1, 2024, or shortly thereafter, and immediately commence with the project renovation.
Staff, in consultation with outside legal counsel, has negotiated updated agreements that will specifically address the requirements and expectations for the City’s financing and lease of the property, and in several instances will improve the terms of the existing agreements. The form agreements are attached to the Resolution, which are collectively provided as Attachment 1.
Major provisions of the documents pertaining to the terms of the Ground Lease and Regulatory Agreement are summarized herein:
Amended and Restated Ground Lease
The existing Ground Lease has a 50-year term that expires in 2038 and requires an annual ground rent of $1.00 for the 10-acre land parcel. Key terms of the Ground Lease have been renegotiated as follows:
• The amended and restated Ground Lease will have a new and extended term of 75 years, commencing on the closing date (i.e., expiring in 2099). This will allow for a term that is substantially longer than the standard 55-year tax credit affordability restriction.
The extended Ground Lease is required for Eden Housing to close its tax credit resyndication deal.
• Maximum rents are set at 60% AMI for the first 55 years, and at 80% AMI thereafter.
The current affordability restrictions will transition, upon vacancy, to the new tax credit restrictions. This is explained in more detail under the Regulatory Agreement section below.
• Establishes a residual receipts ground lease payment, payable from annual project surplus cash to be allocated between the Ground Lease and the City loans. In the aggregate, a capitalized ground rent payment to the City, in the amount of $5 million, will be payable over the life of the Ground Lease, subject to availability of surplus cash.
Promissory Note and Leasehold Deed of Trust
• The two existing City loans in the amount of $4 million and $2.475 million will be consolidated, amended, and restated to reflect the current outstanding principal balances and accrued interest. The projected assumption of the two City loans at $10,908,538.06 ($4 million in principal plus $6,908,538.06 current/projected interest) and $5,715,845.30 ($2.475 million in principal plus $3,240,845.30 in current/projected interest) will be recast into a single promissory note that will accrue interest at the Applicable Federal Rate. Repayment of the amended and restated note will be secured by a Leasehold Deed of Trust. The Promissory Note will be payable from project residual receipts (i.e., net cash flow after all approved project expenses and payments to reserves). During the first 15 years, 33% of annual project residual receipts will be allocated toward payment of the City loan and Ground Lease rent; thereafter, the City share will increase to 50% of residual receipts.
• The entire outstanding balance of principal and interest will be due and payable to the City 55 years from the date that project rehabilitation is completed. • Future transfers of the project are subject to City review and approval. • Projections show an annual net cash flow of approximately $30,000 to the City that could be applied toward either the City loan or the ground lease rent. In addition, it is estimated the City would receive approximately $300,000, subject to a completed auditor's cost certification at the end of construction, which would be applied to repaying the City loan. The start of the renovation date is established as approximately June 1, 2024, with a completion date of approximately September 30, 2025.
Regulatory Agreement
The Regulatory Agreement establishes the required project affordability, occupancy, use and property management requirements, including the following key terms:
• Sets affordable unit levels that will, upon vacancy, transition from the existing 25%, 33%, 50%, and 60% AMI levels to correspond to the new tax credit restrictions -- 30%, 50%, 60%, and 80% AMI income and rent levels. Note that the 80% AMI level is required in order to generate tax credits on units where existing tenants are currently over-income. Per these terms, no existing tenant will have rents raised other than by the annual allowable increase (see below). Any adjustments to new AMI income levels will be made only when units are vacated and re-tenanted.
Current Affordability TCAC Targeting
AMI Unit
Size
Number AMI Unit
Size
Number
25% 1 9 30% 1 18
33% 1 36 50% 1 55
50% 1 27 60% 1 102
60% 1 108 80% 1 5
25% 2 1 30% 2 2
33% 2 4 50% 2 5
50% 2 3 60% 2 8
60% 2 12 80% 2 3
Total 200 Total 198
Two 2-bedroom
employee units
Two unrestricted 2-
bedroom employee units
• Restricts annual rent increases for existing residents to the lesser of either (1) the percentage increase allowed by California Tax Credit Allocation Committee (CTCAC) regulations, and (2) the percentage increase allowed by applicable State law. As noted, upon vacancy rents may increase to the TCAC maximum allowable rents for designated AMI categories.
• Sets the term of the Regulatory Agreement for a period of 55 years commencing upon completion of construction to mirror the 55-year tax credit regulatory agreement. • Allows deeply targeted rents to "float up" to 60% AMI following a foreclosure, which facilitates a higher appraised value and supports a higher loan amount. • Establishes the City’s preference criteria in leasing the property subject to applicable fair housing and financing requirements.
• Establishes property management and maintenance expectations for the property and allows the City the right, subject to investor and lender approval, to request replacement of the management agent in the event of default of those management responsibilities.
• Describes ongoing monitoring, tenant recertification and reporting requirements for the project.
• Requires payment of $10,000 per year to the City as a monitoring fee, increasing by an annual escalation of 3%.
After Eden Housing closes its low-income housing tax credit resyndication deal, it can begin to substantially rehabilitate the exterior of Ridge View Commons as well as the interior of the 200 units at the property. Constructed in 1989, the 35-year old property would significantly benefit from a substantial renovation. Planned exterior improvements include window replacements, rebuilding patio decks, new fencing, new site lighting, and new landscape and irrigation.
Interior work to be undertaken includes new electrical and plumbing systems and individual units provided with new ranges and hoods, exhaust fans in the bathrooms, new faucets in the kitchens and bathrooms, new toilets, as well as accessibility improvements for some units.
Additionally, the resyndication would result in financial benefits to the City as the City would receive annual payments towards the repayment of the City loan as well as a monitoring fee that would allow City staff to ensure the property is adhering to its affordability restrictions.
EQUITY AND SUSTAINABILITY
The action directly implements the Housing Element that serves as the City’s strategy for addressing its housing needs for all residents at all income levels. Housing Element Policy 3.3 is to preserve the affordability of restricted units affordable to extremely low-, very low- and low-income households for the longest term feasible, including requiring units to be deedrestricted in perpetuity whenever allowable.
OUTREACH
No outreach was conducted, as this item is a routine matter of City business.
STRATEGIC PLAN ALIGNMENT
Approval of this action advances the ONE Pleasanton strategic goal of Building a Community Where Everyone Belongs, Strategy 6 to implement the Housing Element, by preserving and rehabilitating an existing affordable rental housing community for seniors.
FISCAL IMPACT
It is anticipated that the City will receive approximately $300,000 from the project's net operation incomes at the end of construction and completion of the cost certification, which is projected approximately on September 30, 2025. The City is then projected to receive approximately $30,000 annually from the project’s cash flow. The City will also receive a $10,000 annual monitoring fee with an annual escalation increase of 3%. All payments received would be applied toward repayment of the City loan.
Prepared by: Submitted by: Approved by:
Steve Hernandez, Housing
Division Program Manager
Ellen Clark, Director of Community
Development
Gerry Beaudin, City
Manager
Attachments:
1. Resolution Ridge View Commons
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLEASANTON TO APPROVE THE RIDGE VIEW COMMONS SENIOR RENTAL HOUSING COMPLEX’S AMENDED AND RESTATED GROUND LEASE; AND AUTHORIZE THE CITY
MANAGER TO EXECUTE ALL NECESSARY DOCUMENTS INCLUDING
SUBORDINATION AGREEMENTS FOR EDEN HOUSING’S TAX CREDIT FINANCING
FOR THE RENOVATION OF RIDGE VIEW COMMONS
WHEREAS, Ridge View Commons at 5200 Case Avenue is a 200-unit senior rental housing complex. The City owns the underlying land and has a Ground Lease with Eden Housing, which owns the apartment buildings and manages the rental of very-low and low-income affordable units as well as market-rate units at the complex; and WHEREAS, when Ridge View Commons was originally developed in 1989, the City acquired the land, waived development fees, and provided loans in the amount of: $4,000,000 in 1988 from a Department of Housing and Urban Development (HUD) grant through the Housing Development Grant (HODAG) program; and $2,250,000 loan in 1999 increased by $225,000 in 2009 from the City’s Affordable Housing Funds. As Ridge View Commons provides many significantly affordable units, the complex has not been able to pay off these loans, and outstanding interest has continued to accrue; and
WHEREAS, Eden Housing has been selected by the State of California to receive an allocation of tax exempt bond financing and low-income housing tax credits to fund capital improvements for the renovation of Ridge View Commons, as well as upgrade to about 20 units to meet current accessibility requirements. Eden Housing has asked to convey the complex to a new limited partnership controlled by an affiliate of Eden, amend these existing City loans, have a new regulatory agreement to clarify affordability requirements, modify the ground lease to extend the term as required by the tax credit financing, and subordinate the deed of trust securing repayment of the City loans to the construction/permanent lender; and WHEREAS, the tax credit financing will ensure the renovation of Ridge View Commons so that it can continue to serve as a vital senior housing complex with affordable units that keeps existing residents safely in the Pleasanton community, thereby implementing the Livibility and Community Development strategies of the ONE Pleasanton strategic plan.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PLEASANTON DOES RESOLVE, DECLARE, DETERMINE AND ORDER THE FOLLOWING:
SECTION 1. Finds that the agreements facilitate the funding for the rehabilitation, maintenance and repair of the existing residential improvements at Ridge View Commons and those are a Class 1 Categorical Exemption under the California Environmental Quality Act (CEQA) per Regulation §15301 Existing Facilities.
SECTION 2. Approves: (A) Amended and Restated Documents (Promissory Note, Deed of Trust, Regulatory Agreement) attached as Exhibit A; (B) Amended and Restated Ground Lease attached as Exhibit B; agrees to subordinance the City deed of trust to the construction/permanent lender, and authorizes the City Manager to execute any required Subordination Agreement(s) in a form approved by the City Attorney; and authorizes the City Manager and City Attorney to make minor modifications to the agreements; and authorizes the City Manager to execute the ATTACHMENT 1
Resolution No.
agreements and any other documents related to the re-syndication and financing for rehabilitation of Ridge View Commons.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Pleasanton at a regular meeting held on May 21, 2024.
I, Jocelyn Kwong, City Clerk of the City of Pleasanton, California, certify that the foregoing resolution was adopted by the City Council at a regular meeting held on the 21st day of May, 2024, by the following vote:
Ayes:
Noes:
Absent:
Abstain:
_____________________________
Jocelyn Kwong, City Clerk
APPROVED AS TO FORM:
_______________________________
Daniel G. Sodergren, City Attorney
Resolution No.
EXHIBIT A
Amended and Restated Documents
(Promissory Note, Deed of Trust, Regulatory Agreement)
4854-3151-6602 v3 1
AMENDED AND RESTATED SECURED PROMISSORY NOTE
(Ridge View Commons)
[$16,632,775] ____________, 2024
[$6,475,000 plus accrued interest] Pleasanton, California FOR VALUE RECEIVED, Ridge View Commons II Associates, L.P., a California limited partnership (“Borrower”), promises to pay to the City of Pleasanton, a municipal corporation (the “City”), in lawful money of the United States of America, the principal sum of [______________________ ($______)] together with interest on the outstanding principal balance in accordance with the terms and conditions described herein.
This Note amends, restates, and supersedes in their entirety: (i) that certain Promissory Note Secured by Deed of Trust in the original principal amount of Four Million Dollars ($4,000,000) dated as of June 27, 1988, executed by Eden Housing, Inc., a California nonprofit corporation (“Eden”) and subsequently amended by an Amendment to Promissory Note Secured by Deed of Trust executed by Eden and dated December 28, 1988 (as so amended, the “Prior HDG Note”); and (ii) that certain Promissory Note dated September 1, 1999, executed by Ridge View Commons Associates, a California limited partnership (“Ridge View I”) in the original principal amount of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000), and subsequently amended to increase the principal amount to Two Million, Four Hundred SeventyFive Thousand Dollars ($2,475,000) pursuant to that certain First Amendment to Promissory Note dated January 27, 2010, and executed by Ridge View I and City (as so amended, the “Prior Additional Note”). Eden’s obligation to pay the Prior HDG Note was assumed by Ridge View I pursuant to that certain Assumption and Assignment Agreement dated October 31, 1989, executed by and among Eden, Ridge View I, and City, and recorded in the Official Records of Alameda County (“Official Records”) on November 14, 1989 as Instrument No. 89-308003.
The Prior HDG Note and the Prior Additional Note, each as previously amended and assigned are collectively referred to herein as the “Prior Notes.” As evidenced by this Note, Borrower has assumed the obligation to pay the Prior Notes.
The original principal amount of this Note is equal to the aggregate sum of the outstanding principal balances of the Prior Notes, together with interest accrued thereon as of [May 1, 2024].
This Note is secured by an Amended and Restated Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) dated as of the date hereof, executed by Borrower as trustor for the benefit of City, and recorded in the Official Records substantially concurrently with the delivery of this Note. City shall be entitled to the benefits of the security provided by the Deed of Trust and shall have the right to enforce the covenants and agreements contained herein, in the Deed of Trust, the Ground Lease (defined below), and that certain Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants dated as of the date hereof, executed by and between City and Borrower, and recorded in the Official Records substantially concurrently with the delivery of this Note (the “Regulatory Agreement”). The rent restrictions and other requirements set forth in the Regulatory
4854-3151-6602 v3 2
Agreement and in that certain Amended and Restated Ground Lease dated as of the date hereof and executed by and between City and Borrower (“Ground Lease”) shall remain effective for the full term of such documents, and shall survive the repayment of this Note. Capitalized terms used without definition herein shall have the meanings ascribed to such terms in the Ground Lease. The Ground Lease, this Note, the Deed of Trust, and the Regulatory Agreement are collectively referred to herein as the “City Documents.”
1. PAYMENTS.
1.1 INTEREST RATE. Interest shall accrue on the principal balance of this Note outstanding from time to time at the rate of [Four and 55/100 percent (4.55%) compounded annually] (the Applicable Federal Rate). Interest shall be calculated on the basis of a year of 365 days, and charged for the actual number of days elapsed.
1.2 INITIAL PAYMENT; ANNUAL PAYMENT DATES; MATURITY DATE. On the date that Borrower’s Project construction loan converts to a permanent loan, Borrower shall pay to City the sum of ______________ Dollars ($_______) which shall be applied to the outstanding balance payable under this Note. Thereafter, annual payments toward principal and interest accrued on this Note shall be payable on a residual receipts basis as described below.
Such annual payments shall be credited first to any unpaid late charges and other costs and fees then due, then to accrued interest, and then to principal. Notwithstanding the foregoing, in City’s sole discretion, City may elect to apply Surplus Cash payments received from Borrower toward payments due under the Ground Lease in lieu of applying such payments toward the sums due under this Note. In no event shall any amount due under this Note become subject to any rights, offset, deduction or counterclaim on the part of Borrower. The entire outstanding principal balance of this Note, together with interest accrued thereon and all other sums accrued hereunder shall be payable in full on the date (the “Maturity Date”) which is the earlier of (i) the fifty-fifth (55th) anniversary of the date upon which the City Building Inspector signs off on the final inspection of the Project following completion of rehabilitation and issues a certificate of occupancy or equivalent for the Project, and (ii) the fifty-seventh (57th) anniversary of the date of this Note; provided however, the Maturity Date shall not be earlier than the date of expiration or termination of the Regulatory Agreement that the California Tax Credit Allocation Committee (CTCAC) will cause to be recorded against Borrower’s leasehold interest in the Property at about the time that the Project is placed in service in connection with the allocation of federal LowIncome Housing Tax Credits for the Project.
1.3 ANNUAL PAYMENTS FROM SURPLUS CASH. During the 15-year period commencing upon the Project placed-in-service date, by no later than June 30 of each year, Borrower shall pay to City thirty-three and 33/100 percent (33.33%) of all Surplus Cash generated by the Project during the previous calendar year to reduce the indebtedness owed under this Note. Commencing upon the earlier of (a) the commencement of the sixteenth (16th) year following the Project placed-in-service date, and (b) the date that any deferred developer fee has been fully paid, annual payments due under this Note shall increase to equal fifty percent (50%) of Surplus Cash generated by the Project during the previous calendar year. Each payment of Surplus Cash due pursuant to this Section shall be due and payable to the City by not later than June 30 for the previous calendar year.
4854-3151-6602 v3 3
Borrower acknowledges that in City’s sole discretion, by written notice to Borrower, City may elect to apply Borrower’s payments of Surplus Cash toward the balance payable under the Ground Lease in lieu of applying such payments toward the balance payable under this Note.
By not later than April 30 of each year, Borrower shall provide to City Borrower’s calculation of Surplus Cash for the previous calendar year, accompanied by such supporting documentation as City may reasonably request, including without limitation, an independent audit prepared for the Project by a certified public accountant in accordance with generally accepted accounting principles. The annual report shall include, without limitation, a Project income and expense statement and an accounting of deposits to and withdrawals from the Project replacement, operating, and other reserves. City shall have the right to inspect and audit Borrower’s books and records concerning the calculation of Surplus Cash, and to object within sixty (60) days from receipt of the report. Failure to timely object shall be deemed acceptance of the report. If City does object, City shall specify the reasons for disapproval. Borrower shall have thirty (30) days to reconcile any disapproved item. If Borrower and City cannot agree on the amount of Surplus Cash, an independent auditor mutually selected by Borrower and City shall resolve any disputed items. The cost of the auditor shall be shared equally by Borrower and City.
By not later than November 1 of each year, Borrower shall provide to City a proposed budget for the following calendar year which shall include estimated Project revenue, expenses and debt service, and an estimate of Surplus Cash. City will review the proposed budget and, if acceptable, approve it, which approval shall not be unreasonably withheld, provided, however, if the proposed budget has not been rejected by City within forty-five (45) days of receipt, City shall be deemed to have accepted the budget. If the budget is not acceptable, City shall specify the reasons for disapproval. Once approved, any changes to the budget that exceed ten percent (10%) of the total budget shall require City's prior written consent, which consent shall not be unreasonably withheld. Upon City’s request, the budget shall include a long-term capital needs and replacement reserve plan supported by a physical needs assessment prepared by a third-party at Borrower’s expense.
1.3.1 “Surplus Cash” shall mean for each calendar year during the term hereof, the amount by which Gross Revenue (defined below) exceeds Annual Operating Expenses (defined below) for the Project. Surplus Cash shall also include net cash proceeds realized from any refinancing of the Project as described in Section 1.6 below, and net cash proceeds from any sale of the Project, less fees and closing costs reasonably incurred by Borrower in connection with such sale or refinancing, and any use of proceeds approved by City in the exercise of City’s sole discretion.
1.3.2 “Gross Revenue” shall mean for each calendar year during the term hereof, all revenue, income, receipts and other consideration actually received by Borrower from the operation and leasing of the Project. Gross Revenue shall include, but not be limited to: all rents, fees and charges paid by tenants; Section 8 payments and other rental subsidy payments received for the dwelling units; deposits forfeited by tenants; all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; the proceeds of casualty insurance not required to be paid to the holders of Approved Senior
4854-3151-6602 v3 4
Loans (provided however, expenditure of such proceeds for repair or restoration of the Project shall be included within Annual Operating Expenses in the year of the expenditure, and with City’s written consent, proceeds of casualty insurance may be excluded from Gross Revenue until the year such proceeds will be expended for repair or restoration of the Project provided that Borrower provides adequate assurance that such proceeds will be expended for such purposes); condemnation awards for a taking of part or all of the Property or the Project for a temporary period; and the fair market value of any goods or services provided to Borrower in consideration for the leasing or other use of any part of the Project. Gross Revenue shall include any release of funds from replacement, operating, and other reserve accounts other than for the purposes for which such reserves were established. Gross Revenue shall not include tenant security deposits, loan or grant proceeds, capital contributions, or similar advances.
1.3.3 “Annual Operating Expenses” shall mean for each calendar year during term hereof, the following costs reasonably and actually incurred for the operation and maintenance of the Project to the extent that they are consistent with an annual independent audit performed by a certified public accountant using generally accepted accounting principles:
property taxes and assessments; debt service currently due and payable on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Project) on loans which have been approved in writing by the City and which are secured by deeds of trust senior in priority to the Deed of Trust (“Approved Senior Loans”); reasonable property management fees and reimbursements in an amount not to exceed Sixty Dollars ($60) per unit per month, increasing by two percent (2%) annually, but in no event greater than six percent (6%) of the Project’s effective gross income for the applicable year, and paid pursuant to a property management agreement approved by City (or with respect to units subject to a Section 8 Housing Assistance Payments contract, if any, such greater amount as permitted by HUD); premiums for property damage and liability insurance; utility service costs not paid for directly or indirectly by tenants; maintenance and repair costs; fees for licenses and permits required for the operation of the Project; organizational costs (e.g., annual franchise tax payments) and costs associated with accounting, tax preparation and legal fees of Borrower incurred in the ordinary course of business; expenses for security services; advertising and marketing costs; payment of deductibles in connection with casualty insurance claims not paid from reserves; tenant services; the amount of uninsured losses actually replaced, repaired or restored and not paid from reserves; cash deposits into reserves for capital replacements in an amount no more than Five Hundred FortyFive Dollars $545 per unit per year or such greater amount as reasonably required by the holder of an Approved Senior Loan or as required by a physical needs assessment prepared by a thirdparty selected or approved by City and prepared at Borrower’s expense; any required annual loan and monitoring fees payable to the City or other public agency lenders; cash deposits into operating reserves in an amount reasonably approved by the City or required by the holder of an Approved Senior Loan or the Investor Limited Partner, but only if the accumulated operating reserve does not exceed four (4) months’ projected Project operating expenses and debt service; and other ordinary and reasonable operating expenses in accordance with the approved annual budget. Commencing on the Project placed in service date, Annual Operating Expenses shall also include a partnership management fee payable to Borrower’s general partner in the maximum annual amount of Twenty-Five Thousand Dollars ($25,000), and during the first fifteen (15) years following the date upon which the Project is placed in service, an asset management fee payable to the Investor Limited Partner in the maximum annual amount of Seven Thousand Five Hundred Dollars ($7,500), each payable in accordance with Borrower’s
4854-3151-6602 v3 5
partnership agreement; provided however, for the purpose of calculating Annual Operating Expenses, the partnership management fee and the asset management fee may increase annually by a maximum of three percent (3%), and provided further, that subject to the proviso below, such fees may be included as Annual Operating Expenses only to the extent actually paid in any calendar year. Notwithstanding the immediately preceding sentence, during the fifteen (15) year period commencing upon the Project placed-in-service date, unpaid partnership management fees and asset management fees may accrue for up to a maximum of three (3) years; any otherwise accrued but unpaid portion of the partnership management fee or asset management fee that is not paid on a current basis in any particular year shall be payable only from Borrower’s share of Surplus Cash. The asset management fee payable to the Investor Limited Partner shall be included in Annual Operating Expenses only during the fifteen (15) year period commencing upon the Project placed-in-service date. Following such 15-year period, for the purpose of calculating Surplus Cash, only the partnership management fee shall be includable in Annual Operating Expenses.
1.3.4 EXCLUSIONS FROM ANNUAL OPERATING EXPENSES. For the purpose of calculating Surplus Cash, except to the extent expressly permitted pursuant to Section
1.3.3 above, Annual Operating Expenses shall exclude the following: incentive management fees, developer fees and interest on any deferred developer fees; contributions to Project reserves (except as permitted pursuant to Section 1.3.3); debt service payments on any loan which is not an Approved Senior Loan, including without limitation, unsecured loans, sponsor loans, and loans secured by deeds of trust that are subordinate to the Deed of Trust; depreciation, amortization, depletion and other non-cash expenses; expenses paid for with disbursements from any reserve account; capital expenditures unless approved in advance by City; distributions to partners; any amount paid to any general partner of Borrower or any entity controlling or under common control with the entities that control any general partner of Borrower. Notwithstanding the foregoing limitation regarding payments to Borrower and related parties, the following fees shall be included in Annual Operating Expenses, subject to applicable limitations set forth in Section 1.3.3 above, even if paid to Borrower, an affiliate of Borrower, or a partner of Borrower:
fees paid to a property management agent, resident services agent, or social services agent pursuant to a property management agreement or services agreement approved by City; partnership management fees, asset management fees, and subject to Section 1.3.5, repayment of cash advances by Borrower or its partners to cover Project operating expense deficits or emergency cash needs of the Project. Payments to Borrower, its partners or affiliates in excess of the applicable limitations set forth in Section 1.3.3 or for purposes that are excluded from Annual Operating Expenses pursuant to the terms of this Note, shall not be counted toward Annual Operating Expenses for the purpose of calculating Surplus Cash but may be paid from Borrower’s share of Surplus Cash.
1.3.5 ADJUSTMENT TO OPERATING EXPENSES. Notwithstanding anything to the contrary set forth herein, for the purpose of calculating Surplus Cash, Annual Operating Expenses shall include: (a) the repayment of operating deficit loans provided by Borrower’s limited partner(s) provided however, interest payable on such loans may be included in Annual Operating Expenses only in an amount equivalent to the lesser of (i) interest accrued at the actual interest rate charged for the loan, and (ii) interest accrued at the then-current Applicable Federal Rate, and (b) the amount of any tax credit adjuster that is required to be paid solely from Project cash flow.
4854-3151-6602 v3 6
1.4 COST SAVINGS. Within ten (10) business days after the Investor Limited Partner pays its capital contribution following the issuance of the IRS Form 8609 for the Project, Borrower shall pay to the City as a reduction of the outstanding principal balance of this Note, a one-time payment in the amount of Fifty Percent (50%) of Excess Proceeds. “Excess Proceeds” shall mean the sum of all sources of funding received by Borrower to finance the leasing of the Property and the acquisition and rehabilitation of the Project, including without limitation, construction and permanent loans, equity contributions, and grants and loans from private or public agency sources, less the sum of actual uses as shown on the final cost certificate for the Project. For the purpose of calculating Excess Proceeds, Project sources of funding shall take into consideration any reduction or increase in equity contributions by the Investor Limited Partner, including any additional contribution due to an upward credit adjustor. In the event that any “upward credit adjuster” is paid to Borrower that has not been included in the calculation of Excess Proceeds pursuant to this Section, one-half of any such amount shall be paid to City as a reduction of the outstanding principal balance of this Note within thirty (30) days after Borrower’s receipt of such funds. If other public agency lenders require payment of Excess Proceeds, then Excess Proceeds shall be allocated among the City and such lenders pro rata in proportion to each lender’s financial contribution to the Project.
1.5 DUE ON SALE. The entire unpaid principal balance and all interest and other sums accrued hereunder shall be due and payable upon the Transfer absent City consent, of all or any part of the Project or the Property or any interest therein other than a Transfer permitted without City consent pursuant to the Ground Lease. Without limiting the generality of the foregoing, this Note shall not be assumable without City’s prior written consent, which consent may be granted or denied in City’s sole discretion.
1.6 RESYNDICATION/REFINANCING. Borrower shall pay to City as a reduction of the outstanding balance of this Note, the amount equal to fifty percent (50%) of the Net Proceeds of Project refinancing or resyndication in accordance with this Section. For purposes of this Section “Net Proceeds” means all proceeds of refinancing or resyndication less: (a) the amount used to repay the refinanced debt, (b) reasonable out-of-pocket expenses Borrower is required to pay to third parties in connection with the refinancing or resyndication, including fees and closing costs reasonably incurred by Borrower, (c) the reasonable costs paid by Borrower to rehabilitate, construct and install capital improvements to the Project as approved by City in writing (including without limitation reasonable architects’ and engineers’ fees incurred in connection with such capital improvements), (d) any reasonable increase in Project reserves that Borrower is required to fund as a condition to such refinancing or resyndication, provided that Borrower actually funds such reserves and such reserves are held for Borrower’s benefit by a third-party financial institution, (e) if applicable, the reasonable amount required to be paid to purchase the Investor Limited Partner’s interest in the Partnership provided that the Investor Limited Partner that is being replaced is not affiliated with Eden, and provided further that such amount does not exceed the fair market value of such interest as reasonably and customarily determined for such interests in partnerships that own and operate affordable housing developments financed with low-income housing tax credits and located in the greater San Francisco Bay Area, and (f) other uses of proceeds approved by City in the exercise of City’s sole discretion. All Net Proceeds shall be used to pay down the outstanding balance of this Note
4854-3151-6602 v3 7
and such other purposes as City may approve in writing in the exercise of City’s discretion. If other public agency lenders require payment of Net Proceeds, then Net Proceeds shall be allocated among the City and such lenders pro rata in proportion to each lender’s financial contribution to the Project.
1.7 PREPAYMENT. Borrower may, without premium or penalty, at any time and from time to time, prepay all or any portion of the outstanding principal balance due under this Note, provided that each such prepayment is accompanied by accrued interest on the amount of principal prepaid calculated to the date of such prepayment. Prepayments shall be applied first to any unpaid late charges and other costs and fees then due, then to accrued but unpaid interest, and then to principal. The Regulatory Agreement shall remain in full force for the entire term thereof regardless of any prepayment of this Note.
1.8 MANNER OF PAYMENT. All payments of principal and interest on this Note shall be made to City at P.O. Box 520, 123 Main Street, Pleasanton, CA 94566 or such other place as City shall designate to Borrower in writing, or by wire transfer of immediately available funds to an account designated by City in writing.
2. DEFAULTS AND REMEDIES.
2.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following events shall constitute an event of default hereunder (“Event of Default”):
(A) Borrower fails to pay when due the principal and interest payable hereunder and such failure continues for ten (10) days after the due date for such payment. (B) Pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Borrower or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Borrower or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Borrower or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due. (C) A court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Borrower or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Borrower, or any general partner thereof, or substantially all of such entity’s assets, (iii) orders the liquidation of Borrower or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project, and in each case the order or decree is not released, vacated, dismissed or fully bonded within sixty (60) days after its issuance.
(D) Borrower shall have voluntarily suspended its business or Borrower shall have been dissolved or terminated.
4854-3151-6602 v3 8
(E) The occurrence of a Transfer in violation of the Ground Lease or the Regulatory Agreement.
(F) The holder of any debt instrument secured by a mortgage or deed of trust on the Project or Borrower’s leasehold interest in the Property declares a default and such default remains uncured beyond any applicable cure period such that the holder of such instrument has the right to accelerate payment thereunder.
(G) Borrower fails to maintain insurance on the Property and the Project as required pursuant to the City Documents and Borrower fails to cure such default within five (5) days. (H) Subject to Borrower’s right to contest the following charges pursuant to the City Documents, if Borrower fails to pay taxes or assessments due on the Property or the Project or fails to pay any other charge that may result in a lien on the Property or the Project, and Borrower fails to cure such default within twenty (20) days of the date of delinquency, but in all events prior to the date upon which the holder of any such tax or other lien has the right to foreclose thereon.
(I) If any Borrower representation or warranty contained in any City Document, or any certificate furnished in connection therewith, proves to have been false or misleading in any adverse respect when made and continues to be adverse to the City. (J) An Event of Default shall have been declared under the Ground Lease or any other City Document, and remains uncured beyond the expiration of the applicable cure period. (K) Reserved.
2.2 REMEDIES. Upon the occurrence of an Event of Default hereunder, City may, at its option (i) by written notice to Borrower, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all sums due hereunder, immediately due and payable regardless of any prior forbearance, (ii) exercise any and all rights and remedies available to it under applicable law, and (iii) exercise any and all rights and remedies available to City under this Note and the other City Documents, including without limitation, the right to pursue foreclosure under the Deed of Trust. Borrower shall pay all reasonable costs and expenses incurred by or on behalf of City including, without limitation, reasonable attorneys' fees, incurred in connection with City's enforcement of this Note and the exercise of any or all of its rights and remedies hereunder and all such sums shall be a part of the indebtedness secured by the Deed of Trust. The rights and remedies of City under this Note shall be cumulative and not alternative.
2.3 DEFAULT RATE. Upon the occurrence of an Event of Default, interest shall automatically be increased without notice to the rate of the lesser of ten percent (10%) per annum or the maximum rate permitted by law (the “Default Rate”); provided however, if any payment due hereunder is not paid when due, the Default Rate shall apply commencing upon the due date for such payment. When Borrower is no longer in default, the Default Rate shall no longer apply, and the interest rate shall once again be the rate specified in Section 1.1 of this Note.
Notwithstanding the foregoing provisions, if the interest rate charged exceeds the maximum
4854-3151-6602 v3 9
legal rate of interest, the rate shall be the maximum rate permitted by law. The imposition or acceptance of the Default Rate shall in no event constitute a waiver of a default under this Note or prevent City from exercising any of its other rights or remedies.
2.4 LIMITED PARTNERS RIGHT TO CURE. Borrower’s limited partner(s) shall have the right to cure any default of Borrower hereunder upon the same terms and conditions afforded to Borrower. Any cure tendered by a limited partner of Borrower shall be deemed to be a cure by Borrower and shall be accepted or rejected on the same basis as if tendered by Borrower.
3. MISCELLANEOUS.
3.1 WAIVERS; AMENDMENTS; BORROWER’S WAIVERS. No waiver by City of any right or remedy under this Note shall be effective unless in a writing signed by City.
Neither the failure nor any delay in exercising any right, power or privilege under this Note will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege by City will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. No waiver that may be given by City will be applicable except in the specific instance for which it is given. No notice to or demand on Borrower will be deemed to be a waiver of any obligation of Borrower or of the right of City to take further action without notice or demand as provided in this Note. There shall be no amendment to or modification of this Note except by written instrument executed by Borrower and City.
To the maximum extent permitted by applicable law Borrower hereby waives presentment, demand, protest, notices of dishonor and of protest and all defenses and pleas on the grounds of any extension or extensions of the time of payment or of any due date under this Note, in whole or in part, whether before or after maturity and with or without notice.
3.2 NOTICES. Any notice required or permitted to be given hereunder shall be given in accordance with the Ground Lease.
3.3 SEVERABILITY. If any provision in this Note is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Note will remain in full force and effect. Any provision of this Note held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.
3.4 GOVERNING LAW; VENUE. This Note shall be governed by the laws of the State of California without regard to principles of conflicts of laws. Any legal action filed in connection with this Note shall be filed in the Superior Court of Alameda County, California, or in the Federal District Court for the Northern District of California.
3.5 BINDING ON SUCCESSORS. This Note shall bind Borrower and its successors and assigns and shall accrue to the benefit of City and its successors and assigns.
3.6 SECTION HEADINGS, CONSTRUCTION. The headings of Sections in this Note are provided for convenience only and will not affect its construction or interpretation.
4854-3151-6602 v3 10
3.7 RELATIONSHIP OF THE PARTIES. The relationship of Borrower and City under this Note is solely that of borrower and lender, and the indebtedness evidenced by this Note (the “Loan”) and secured by the Deed of Trust will in no manner make City the partner or joint venturer of Borrower.
3.8 TIME IS OF THE ESSENCE. Time is of the essence with respect to every provision of this Note.
3.9 NONRECOURSE. Except as expressly provided in this Section 3.9, neither Borrower nor its partners shall have personal liability for payment of the principal of, or interest on, this Note, and the sole recourse of City with respect to the payment of the principal of, and interest on, this Note shall be to the Project, the Property and any other collateral held by City as security for this Note; provided however, nothing contained in the foregoing limitation of liability shall:
(A) impair the enforcement against all such security for the Loan of all the rights and remedies of the City under the Deed of Trust and any financing statements City files in connection with the Loan as each of the foregoing may be amended, modified, or restated from time to time; (B) impair the right of City to bring a foreclosure action, action for specific performance or other appropriate action or proceeding to enable City to enforce and realize upon the Deed of Trust, the interest in the Project and the Property created thereby and any other collateral given to City in connection with the indebtedness evidenced hereby and to name the Borrower as party defendant in any such action;
(C) be deemed in any way to impair the right of the City to assert the unpaid principal amount of the Loan as a demand for money within the meaning of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto; (D) constitute a waiver of any right which City may have under any bankruptcy law to file a claim for the full amount of the indebtedness owed to City hereunder or to require that the Project and the Property shall continue to secure all of the indebtedness owed to City hereunder in accordance with this Note and the Deed of Trust; or
(E) limit or restrict the ability of City to seek or obtain a judgment against Borrower to enforce against Borrower and its general partners to:
(1) recover under any provision of any City Document that obligates Borrower to indemnify City, or
(2) recover from Borrower and its general partners compensatory damages as well as other costs and expenses incurred by City (including without limitation reasonable attorneys’ fees and expenses) arising as a result of the occurrence of any of the following:
(a) any fraud or intentional misrepresentation on the part of the Borrower, any general partner thereof, or any officer, director or authorized representative of Borrower or any general partner thereof in connection with the request for or
4854-3151-6602 v3 11
creation of the Loan, or in any City Document, or in connection with any request for any action or consent by City in connection with the Loan; (b) any failure to maintain insurance on the Property and the Project as required pursuant to the City Documents;
(c) failure to pay taxes, assessments or other charges which may become liens on the Property or the Project (subject to any right to contest as set forth in the Ground Lease);
(d) the presence of Hazardous Materials on the Property or other violation of the Borrower’s obligations under the Ground Lease or the Deed of Trust pertaining to environmental matters;
(e) the occurrence of any act or omission of Borrower that results in waste to or of the Project or the Property and which has a material adverse effect on the value of the Project or the Property;
(f) [reserved]
(g) the removal or disposal of any personal property or fixtures or the retention of rents, insurance proceeds, or condemnation awards in violation of the Deed of Trust;
(h) the material misapplication of the proceeds of any insurance policy or award resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Project or the Property; and
(i) the failure of Borrower to pay all amounts payable under this Note in full if Borrower Transfers the Property in violation of the Ground Lease or the Regulatory Agreement.
SIGNATURE ON FOLLOWING PAGE.
4854-3151-6602 v3 12
IN WITNESS WHEREOF, Borrower has executed this Amended and Restated Secured Promissory Note as of the date first written above.
BORROWER:
Ridge View Commons II Associates, L.P., a California limited partnership By: Ridge View Commons LLC,
a California limited liability company,
its general partner
By: Eden Investments, Inc.,
a California nonprofit public benefit corporation,
its sole member/manager
By: ____________________________
Andrea Osgood, Chief of Real Estate Development and
Executive Vice President
1 4860-6036-3710v2
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383, 27388.1
(SPACE ABOVE THIS LINE RESERVED FOR RECORDER’S USE)
APN: 947-0008-010
LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS LEASEHOLD DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (“Deed of Trust”) dated as of ___________, 2024, is executed by Ridge View Commons II Associates, L.P., a California limited partnership (“Trustor”) to WFG National Title Insurance Company as trustee (“Trustee”), for the benefit of the City of Pleasanton, a municipal corporation (“Beneficiary”).
RECITALS
A. The City owns fee title to the land described in Exhibit A attached hereto and incorporated herein by this reference (the “Land”). The Land is located in the City of Pleasanton, Alameda County, California. Pursuant to that certain Ground Lease dated as of the date hereof, and executed by and between City and Trustor (“Ground Lease”), Trustor holds a leasehold interest in the Land. Trustor intends to rehabilitate, own and operate an affordable multifamily residential development on the Land (the “Project”). Pursuant to the Ground Lease, during the term of the Ground Lease, Trustor is the owner of all Improvements presently located or to be constructed on the Land. A memorandum of the Ground Lease has been recorded in the Official Records of Alameda County (“Official Records”).
B. City provided certain loans to Trustor’s predecessor in interest in connection with the development of the Project (collectively, the “Loan”). With Beneficiary’s consent, Trustor has assumed the obligation to repay the Loan. In connection therewith, Trustor has executed and delivered to City an Amended and Restated Secured Promissory Note (the “Note”) payable to City in the original principal amount of [$16,632,775].
C. Trustor and Beneficiary have also executed an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (the “Regulatory Agreement”) dated as of the date hereof, and which will be recorded in the Official Records of Alameda County (“Official Records”) substantially concurrently herewith. Among other provisions, the Regulatory Agreement requires the residential units in the Project to be rented to Eligible Households at Affordable Rents (as defined in the Regulatory Agreement).
2 4860-6036-3710v2
D. As a condition precedent to allowing Trustor to assume the obligation to repay the Loan, Beneficiary has required that Trustor enter into this Deed of Trust and grant to Trustee for the benefit of Beneficiary, a lien and security interest in the Project and Trustor’s leasehold interest in the Land and interests in the Property (defined below) to secure repayment of the Note and performance of Trustor’s obligations under the City Documents (defined below).
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows.
1. Grant in Trust. In consideration of the foregoing and for the purpose of securing payment and performance of the Secured Obligations defined and described in Section 2, Trustor hereby irrevocably and unconditionally grants, conveys, transfers and assigns to Trustee, in trust for the benefit of Beneficiary, with power of sale and right of entry and possession, all estate, right, title and interest which Trustor now has or may later acquire in and to the Land, and all of the following, whether presently owned or hereafter acquired:
a. All buildings, structures, and improvements, now or hereafter located or constructed on the Land (“Improvements”);
b. All appurtenances, easements, rights of way, pipes, transmission lines or wires and other rights used in connection with the Land or the Improvements or as a means of access thereto, whether now or hereafter owned or constructed or placed upon or in the Land or Improvements and all existing and future privileges, rights, franchises and tenements of the Land, including all minerals, oils, gas and other commercially valuable substances which may be in, under or produced from any part of the Land, and all water rights, rights of way, gores or strips of land, and any land lying in the streets, ways, and alleys, open or proposed, in front of or adjoining the Land and Improvements (collectively, “Appurtenances”); c. All machinery, equipment, fixtures, goods and other personal property of the Trustor, whether moveable or not, now owned or hereafter acquired by the Trustor and now or hereafter located at or used in connection with the Land, the Improvements or Appurtenances, and all improvements, restorations, replacements, repairs, additions or substitutions thereto (collectively, “Equipment”);
d. All existing and future leases, subleases, licenses, and other agreements relating to the use or occupancy of all or any portion of the Land or Improvements (collectively, “Leases”), all amendments, extensions, renewals or modifications thereof, and all rent, royalties, or other payments which may now or hereafter accrue or otherwise become payable thereunder to or for the benefit of Trustor, including but not limited to security deposits (collectively, “Rents”); e. All insurance proceeds and any other proceeds from the Land, Improvements, Appurtenances, Equipment, Leases, and Rents, including without limitation, all deposits made with or other security deposits given to utility companies, all claims or demands relating to insurance awards which the Trustor now has or may hereafter acquire, including all advance payments of insurance premiums made by Trustor, and all condemnation awards or payments now or later made in connection with any condemnation or eminent domain proceeding (“Proceeds”);
3 4860-6036-3710v2
f. All revenues, income, rents, royalties, payments and profits produced by the Land, Improvements, Appurtenances and Equipment, whether now owned or hereafter acquired by Trustor (“Gross Revenues”);
g. All architectural, structural and mechanical plans, specifications, design documents and studies produced in connection with development of the Land and construction of the Improvements (collectively, “Plans”); and
h. All interests and rights in any private or governmental grants, subsidies, loans or other financing provided in connection with development of the Land and construction of the Improvements (collectively, “Financing”).
All of the above-referenced interests of Trustor in the Land, Improvements, Appurtenances, Equipment, Leases, Rents, Proceeds, Gross Revenues, Plans and Financing as hereby conveyed to Trustee or made subject to the security interest herein described are collectively referred to herein as the “Property.”
2. Obligations Secured. This Deed of Trust is given for the purpose of securing payment and performance of the following (collectively, the “Secured Obligations”): (i) all present and future indebtedness evidenced by the Note and any amendment thereof, including principal, interest and all other amounts payable under the terms of the Note; (ii) all present and future obligations of Trustor to Beneficiary under the Loan Documents (defined below); (iii) all additional present and future obligations of Trustor to Beneficiary under any other agreement or instrument acknowledged by Trustor (whether existing now or in the future) which states that it is or such obligations are, secured by this Deed of Trust; (iv) all obligations of Trustor to Beneficiary under all modifications, supplements, amendments, renewals, or extensions of any of the foregoing, whether evidenced by new or additional documents; and (v) reimbursement of all amounts advanced by or on behalf of Beneficiary to protect Beneficiary’s interests under this Deed of Trust or any other City Document. The Ground Lease, the Note, the Regulatory Agreement, and this Deed of Trust as any of the foregoing instruments may be modified, supplemented, amended, renewed, or extended, are herein collectively referred to as the “City Documents.”
3. Assignment of Rents, Issues, and Profits. Trustor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary the Rents, royalties, issues, profits, revenue, income and proceeds of the Property. This is an absolute assignment and not an assignment for security only. Beneficiary hereby confers upon Trustor a license to collect and retain such Rents, royalties, issues, profits, revenue, income and proceeds as they become due and payable prior to any Event of Default hereunder. Upon the occurrence of any such Event of Default, Beneficiary may terminate such license without notice to or demand upon Trustor and without regard to the adequacy of any security for the indebtedness hereby secured, and may either in person, by agent, or by a receiver to be appointed by a court, enter upon and take possession of the Property or any part thereof, and sue for or otherwise collect such rents, issues, and profits, including those past due and unpaid, and apply the same, less costs and expenses of operation and collection, including reasonable attorneys’ fees, to any indebtedness secured hereby, and in such order as Beneficiary may determine. Beneficiary’s right to the rents, royalties, issues, profits, revenue, income and proceeds of the Property does not depend upon whether or not Beneficiary
4 4860-6036-3710v2
takes possession of the Property. The entering upon and taking possession of the Property, the collection of such rents, issues, and profits, and the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and/or is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary, Trustee and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity, including the right to exercise the power of sale granted hereunder. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Land or the Improvements, Beneficiary shall not be deemed to be a “mortgagee in possession,” shall not be responsible for performing any obligation of Trustor under any Lease, shall not be liable in any manner for the Property, or the use, occupancy, enjoyment or operation of any part of it, and shall not be responsible for any waste committed by Trustor, lessees or any third parties, or for dangerous or defective condition of the Property or any negligence in the management, repair or control of the Property. Absent Beneficiary’s written consent, Trustor shall not accept prepayment of Rents for any rental period exceeding one month.
4. Security Agreement. Trustor intends this Deed of Trust to create a lien on Trustor’s interest in the Property, and an absolute assignment of the Rents and Leases, all in favor of Beneficiary. To the extent that any of the Property is, or is determined under applicable law, to be personal property or fixtures, Trustor as debtor hereby grants to Beneficiary as secured party a security interest in all such Property to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the California Uniform Commercial Code, as amended or recodified from time to time (the “UCC”), covering all such Property. To the extent such Property is not real property encumbered by the lien granted above, and is not absolutely assigned by the assignment set forth above, Trustor intends that such Property shall constitute “proceeds, products, offspring, rents, or profits” (as defined in and for the purposes of Section 552(b) of the United States Bankruptcy Code, as such section may be modified or supplemented) of the Land and Improvements.
5. Financing Statements. Pursuant to the UCC, Trustor, as debtor, hereby authorizes Beneficiary, as secured party, to file such financing statements and amendments thereof and such continuation statements with respect thereto as Beneficiary may deem appropriate to perfect and preserve Beneficiary's security interest in the Property and Rents, without requiring any signature or further authorization by Trustor. If requested by Beneficiary, Trustor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall not be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it.
Everything used in connection with the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust is, and at all times and for all purposes and in all proceedings both legal or equitable shall be regarded as part of the estate encumbered by this Deed of Trust irrespective of whether (i) any such item is physically attached to the Improvements, (ii) serial numbers are used for the better identification of certain equipment items capable of being thus identified in a recital contained herein or in any list filed with
5 4860-6036-3710v2
Beneficiary, or (iii) any such item is referred to or reflected in any such financing statement so filed at any time. Similarly, the mention in any such financing statement of (1) rights in or to the proceeds of any fire and/or hazard insurance policy, or (2) any award in eminent domain proceedings for a taking or for lessening of value, or (3) Trustor's interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the property conveyed hereby, whether pursuant to lease or otherwise, shall not be construed as in any way altering any of the rights of Beneficiary as determined by this instrument or impugning the priority of Beneficiary’s lien granted hereby or by any other recorded document. Such mention in any financing statement is declared to be solely for the protection of Beneficiary in the event any court or judge shall at any time hold, with respect to the matters set forth in the foregoing clauses (1), (2), and (3), that notice of Beneficiary's priority of interest is required in order to be effective against a particular class of persons, including but not limited to the federal government and any subdivisions or entity of the federal government.
6. Fixture Filing. This Deed of Trust is intended to be and constitutes a fixture filing pursuant to the provisions of the UCC with respect to all of the Property constituting fixtures, is being recorded as a fixture financing statement and filing under the UCC, and covers property, goods and equipment which are or are to become fixtures related to the Land and the Improvements. Trustor covenants and agrees that this Deed of Trust is to be filed in the real estate records of Santa Clara County and shall also operate from the date of such filing as a fixture filing in accordance with Section 9502 and other applicable provisions of the UCC. This Deed of Trust shall also be effective as a financing statement covering minerals or the like (including oil and gas) and accounts subject to the UCC, as amended. Trustor shall be deemed to be the “debtor” and Beneficiary shall be deemed to be the “secured party” for all purposes under the UCC.
7. Trustor’s Representations, Warranties and Covenants; Rights and Duties of the Parties.
7.1 Representations and Warranties. Trustor represents and warrants that: (i) Trustor lawfully possesses and holds a leasehold interest in the Land, (ii) Trustor will hold a fee interest in the Improvements that Trustor will cause to be constructed on the Land pursuant to the Ground Lease; (iii) Trustor has good and marketable title to or a leasehold interest in all of the Property; (iv) other than as limited by the City Documents, Trustor has the full and unlimited power, right and authority to encumber Trustor’s interests in the Property with this Deed of Trust and assign the Rents as contemplated herein; (v) this Deed of Trust creates a valid lien on Trustor’s entire interest in the Property subject only to encumbrances of record and senior liens permitted pursuant to the City Documents or otherwise approved in writing by Beneficiary (“Permitted Encumbrances”); (vi) except with respect to Permitted Encumbrances, Trustor will hold a leasehold interest in the Land and a fee interest in the Improvements free and clear of all deeds of trust, mortgages, security agreements, reservations of title or conditional sales contracts, (vii) there is no financing statement affecting the Property or any part thereof on file in any public office other than as disclosed in writing to Beneficiary; and (vii) the correct address of Trustor’s chief executive office is specified in Section 11.2.
7.2 Condition of Property. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof: (i) Trustor has not received any notice from any governmental authority of any threatened or pending zoning, building, fire, or health and safety
6 4860-6036-3710v2
code violation, or violation of other governmental regulations concerning the Property that has not previously been corrected, and except as disclosed to Beneficiary in writing, no condition on the Land violates any health, safety, fire, environmental, building, or other federal, state or local law, ordinance or regulation; (ii) except as disclosed to Beneficiary in writing, no contracts, licenses, leases or commitments regarding the maintenance or use of the Property or allowing any third party rights to use the Property are in force; (iii) there are no threatened or pending actions, suits, or administrative proceedings against or affecting the Property or any portion thereof or the interest of Trustor in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or similar proceedings affecting the Property or any portion thereof; (v) Trustor has not received any notice from any insurer of defects of the Property which have not been corrected; (vi) there are no natural or artificial conditions upon the Land or any part thereof that could result in a material and adverse change in the condition of the Land; (vii) all information that Trustor has delivered to Beneficiary, either directly or through Trustor's agents, is accurate and complete; and (viii) Trustor or Trustor’s agents have disclosed to Beneficiary all material facts concerning the Property.
7.3 Authority. Trustor represents and warrants that this Deed of Trust and all other documents delivered or to be delivered by Trustor in connection herewith: (a) have been duly authorized, executed, and delivered by Trustor; (b) are binding obligations of Trustor; and (c) do not violate the provisions of any agreement to which Trustor is a party or which affects the Property. Trustor further represents and warrants that there are no pending, or to Trustor’s knowledge, threatened actions or proceedings before any court or administrative agency which may adversely affect Trustor’s ownership of, or interest in, the Property or part thereof.
7.4 Payment and Performance of Secured Obligations. Trustor shall promptly pay when due the principal and all interest due on the indebtedness evidenced by the Note, and shall promptly pay and perform all other obligations of Trustor arising in connection with the Secured Obligations, the City Documents, in accordance with the respective terms thereof.
7.5 Preservation and Maintenance of Property; Compliance with Laws. Trustor covenants that it shall keep the Land and Improvements in good repair and condition, reasonable wear and tear excepted, and from time to time shall make necessary repairs, renewals and replacements thereto so that the Property shall be preserved and maintained. Trustor covenants that it shall comply with all federal, state and local laws, regulations, ordinances and rules applicable to the Property and the Project, including without limitation all applicable requirements of state and local building codes and regulations, all applicable prevailing wage laws, and all applicable statutes and regulations relating to accessibility for the disabled. Trustor shall not remove, demolish or materially alter any Improvement without Beneficiary’s consent, shall complete or restore promptly and in good and workmanlike manner any building, fixture or other improvement which may be constructed, damaged, or destroyed thereon, and shall pay when due all claims for labor performed and materials furnished therefor, subject to Trustor’s rights under Section 7.8 below. Trustor shall use the Land and the Improvements solely for purposes authorized by the City Documents, shall not commit or allow waste of the Property, and shall not commit or allow any act upon or use of the Property which would violate any applicable law or order of any governmental authority, nor shall Trustor bring on or keep any article on the Property or cause or allow any condition to exist thereon which could invalidate or
7 4860-6036-3710v2
which would be prohibited by any insurance coverage required to be maintained on the Property pursuant to the City Documents.
7.6 Restrictions on Conveyance and Encumbrance; Acceleration. It shall be an Event of Default hereunder if the Property or the Improvements, or any part thereof, or interest therein is sold, assigned, conveyed, transferred, hypothecated, leased, licensed, or encumbered in violation of the City Documents or if any other Transfer (as defined in the Loan Agreement) occurs in violation of the City Documents. If any such Transfer shall occur in violation of such requirements, without limiting the provisions of Section 8 hereof, all obligations secured by this Deed of Trust, irrespective of the maturity dates of such obligations, shall at the option of Beneficiary, and without demand, immediately become due and payable, subject to any applicable cure period.
7.7 Inspections; Books and Records. Beneficiary and its agents and representatives shall have the right at any reasonable time upon reasonable notice to enter upon the Land and inspect the Property to ensure compliance with the City Documents. Trustor shall maintain complete and accurate books of account and other records (including copies of supporting bills and invoices) adequate to document the operation of the Property, together with copies of all written contracts, Leases and other instruments which affect the Property. The books, records, contracts, Leases and other instruments shall be subject to examination and inspection by Beneficiary at any reasonable time following at least two (2) business days’ prior notice.
7.8 Charges, Liens, Taxes and Assessments. Trustor shall pay before delinquency all taxes, levies, assessments and other charges affecting the Property that are (or if not paid may become) a lien on all or part of the Property. Trustor may, at Trustor’s expense, contest the validity or application of any tax, levy, assessment or charge affecting the Property by appropriate legal proceedings promptly initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is reasonably satisfied that neither the Property nor any part thereof or interest therein will be in danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have posted a bond or furnished other security as may reasonably be required from time to time by Beneficiary; and provided further that Trustor shall timely make any payment necessary to prevent a lien foreclosure, sale, forfeiture or loss of the Property.
7.9 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust.
7.10 Hazard, Liability and Workers’ Compensation Insurance. At all times during the term hereof, at Trustor’s expense, Trustor shall keep the Improvements and personal property now existing or hereafter located on the Property insured against loss by fire, vandalism and malicious mischief by a policy of standard fire and extended all-risk insurance. The policy shall be written on a full replacement value basis and shall name Beneficiary as loss payee as its interest may appear. The full replacement value of the improvements to be insured shall be determined by the company issuing the policy at the time the policy is initially obtained. Not more frequently than once every two (2) years, either the Trustor or the Beneficiary shall have the right to notify the other party that it elects to have the replacement value redetermined by the insurance company. Subject to the rights of any senior lienholder, and the terms of the Ground
8 4860-6036-3710v2
Lease, the proceeds collected under any insurance policy may be applied by Beneficiary to any indebtedness secured hereby and in such order as Beneficiary may determine, or at the option of Beneficiary, the entire amount so collected or any part thereof may be released to Trustor for repair or replacement of the Improvements; provided however, if Trustor is not in default under the City Documents, the proceeds shall be released to Trustor to repair or rebuild the Project provided that sufficient additional sources of financing to complete such repair or rebuilding are available to complete such work and provided further, that all senior lienholders also permit such proceeds to be used for such purposes. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice.
7.10.1 Trustor shall at all times during the term hereof, maintain insurance coverage in the amounts and in accordance with the requirements specified in the City Documents, and shall otherwise comply with all requirements pertaining to insurance specified in the City Documents.
7.10.2 Trustor shall file with Beneficiary prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary may require, including without limitation, copies of the required insurance policies) evidencing each of the insurance policies and endorsements thereto as required by the City Documents, and such certificates (or policies) shall provide that at least thirty (30) days’ prior written notice shall be provided to Beneficiary prior to the expiration, cancellation or change in coverage under each such policy.
7.10.3 If any insurance policy required by the City Documents is canceled or the coverage provided thereunder is reduced, Trustor shall, within five (5) days after receipt of written notice of such cancellation or reduction in coverage, but in no event later than the effective date of cancellation or reduction, file with Beneficiary a certificate showing that the required insurance has been reinstated or provided through another insurance company or companies. Upon failure to so file such certificate, Beneficiary may, without further notice and at its option, procure such insurance coverage at Trustor’s expense, and Trustor shall promptly reimburse Beneficiary for such expense upon receipt of billing from Beneficiary.
7.10.4 The insurance policies required hereunder shall be issued by insurance companies authorized to do business in the State of California with a financial rating of at least A VII status as rated in the most recent edition of Best's Key Rating Guide. Each policy of insurance shall contain an endorsement requiring the insurer to provide at least thirty (30) days written notice to Beneficiary prior to change in coverage, cancellation or expiration thereof.
7.11 Hazardous Materials. Trustor represents and warrants that except as disclosed to Beneficiary in writing, as of the date hereof to the best knowledge of Trustor: (i) the Land is free and has always been free of Hazardous Materials (as defined below) and is not and has never been in violation of any Environmental Law (as defined below); (ii) there are no buried or partially buried storage tanks located on the Land; (iii) Trustor has received no notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Land are or have ever been in violation of any Environmental Law or informing Trustor that the Land is subject to investigation or inquiry regarding Hazardous Materials on the Land or the potential violation of any Environmental Law; (iv) there is no monitoring program required by the Environmental Protection Agency or any
9 4860-6036-3710v2
other governmental agency concerning the Land; (v) no toxic or hazardous chemicals, waste, or substances of any kind have ever been spilled, disposed of, or stored on, under or at the Land, whether by accident, burying, drainage, or storage in containers, tanks, holding areas, or any other means; (vi) the Land has never been used as a dump or landfill; and (vii) Trustor has disclosed to Beneficiary all information, records, and studies in Trustor’s possession or reasonably available to Trustor relating to the Land concerning Hazardous Materials.
Trustor shall not cause or permit any Hazardous Material (as defined below) to be brought upon, kept, stored or used in, on, under, or about the Land by Trustor, its agents, employees, contractors or invitees except for incidental supplies ordinarily used in connection with the construction, rehabilitation, maintenance, repair, and operation of multifamily residential developments and used, stored, and disposed of in compliance with all applicable laws, and shall not cause any release of Hazardous Materials into, onto, under or through the Land. If any Hazardous Material is discharged, released, dumped, or spilled in, on, under, or about the Land and results in any contamination of the Land or adjacent property, or otherwise results in the release or discharge of Hazardous Materials in, on, under or from the Land, Trustor shall promptly take all actions at its sole expense as are necessary to comply with all Environmental Laws (as defined below).
To the greatest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold Beneficiary and its elected and appointed officials, officers, agents and employees (collectively, “Indemnitees”) harmless from and against any and all loss, claim, liability, damage, demand, judgment, order, penalty, fine, injunctive or other relief, cost, expense (including reasonable fees and expenses of attorneys, expert witnesses, and other professionals advising or assisting Beneficiary), action, or cause of action (all of the foregoing, hereafter individually “Claim” and collectively “Claims”) arising in connection with the breach of Trustor’s covenants and obligations set forth in this Section 7.11 or otherwise arising in connection with the presence or release of Hazardous Materials in, on, under, or from the Property, except to the extent caused by the gross negligence or willful misconduct of the Indemnitees. The foregoing indemnity includes, without limitation, all costs of investigation, assessment, containment, removal, remediation of any kind, and disposal of Hazardous Materials, all costs of determining whether the Land is in compliance with Environmental Laws, all costs associated with bringing the Land into compliance with all applicable Environmental Laws, and all costs associated with claims for damages or injury to persons, property, or natural resources.
Without limiting the generality of the foregoing, Trustor shall, at Trustor’s own cost and expense, do all of the following:
a. pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; b. reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Deed of Trust; and c. reimburse Indemnitees for any and all expenses, including without limitation outof-pocket expenses and fees of attorneys and expert witnesses, paid or incurred in connection
10 4860-6036-3710v2
with the enforcement by Indemnitees of their rights under this Deed of Trust, or in monitoring and participating in any legal or administrative proceeding.
Trustor’s obligation to indemnify the Indemnitees shall not be limited or impaired by any of the following, or by any failure of Trustor to receive notice of or consideration for any of the following: (i) any amendment or modification of any City Document; (ii) any extensions of time for performance required by any City Document; (iii) any provision in any of the City Documents limiting Beneficiary's recourse to property securing the Secured Obligations, or limiting the personal liability of Trustor, or any other party for payment of all or any part of the Secured Obligations; (iv) the accuracy or inaccuracy of any representation and warranty made by Trustor under this Deed of Trust or by Trustor or any other party under any City Document, (v) the release of Trustor or any other person, by Beneficiary or by operation of law, from performance of any obligation under any City Document; (vi) the release or substitution in whole or in part of any security for the Secured Obligations; and (vii) Beneficiary’s failure to properly perfect any lien or security interest given as security for the Secured Obligations.
The provisions of this Section 7.11 shall be in addition to any and all other obligations and liabilities that Trustor may have under applicable law, and each Indemnitee shall be entitled to indemnification under this Section without regard to whether Beneficiary or that Indemnitee has exercised any rights against the Property or any other security, pursued any rights against any guarantor or other party, or pursued any other rights available under the City Documents or applicable law. The obligations of Trustor to indemnify the Indemnitees under this Section shall survive any repayment or discharge of the Secured Obligations, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the lien of this Deed of Trust.
Without limiting any of the remedies provided in this Deed of Trust, Trustor acknowledges and agrees that each of the provisions in this Section 7.11 is an environmental provision (as defined in Section 736(f)(2) of the California Code of Civil Procedure) made by Trustor relating to real property security (the “Environmental Provisions”), and that Trustor's failure to comply with any of the Environmental Provisions will be a breach of contract that will entitle Beneficiary to pursue the remedies provided by Section 736 of the California Code of Civil Procedure (“Section 736”) for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary's action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d, or 726(b) of the California Code of Civil Procedure. “Hazardous Materials” means any substance, material or waste which is or becomes regulated by any federal, state or local governmental authority, and includes without limitation (i) petroleum or oil or gas or any direct or indirect product or by-product thereof; (ii) asbestos and any material containing asbestos; (iii) any substance, material or waste regulated by or listed (directly or by reference) as a “hazardous substance”, “hazardous material”, “hazardous waste”, “toxic waste”, “toxic pollutant”, “toxic substance”, “solid waste” or “pollutant or contaminant” in or pursuant to, or similarly identified as hazardous to human health or the environment in or pursuant to, the Toxic Substances Control Act [15 U.S.C. Section 2601, et seq.]; the
11 4860-6036-3710v2
Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. Section 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C.
Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder; (iv) any substance, material or waste which is defined as such or regulated by any “Superfund” or “Superlien” law, or any Environmental Law; or (v) any other substance, material, chemical, waste or pollutant identified as hazardous or toxic and regulated under any other federal, state or local environmental law, including without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas and synthetic fuel products and by-products. “Environmental Law” means all federal, state or local statutes, ordinances, rules, regulations, orders, decrees, judgments or common law doctrines, and provisions and conditions of permits, licenses and other operating authorizations regulating, or relating to, or imposing liability or standards of conduct concerning (i) pollution or protection of the environment, including natural resources; (ii) exposure of persons, including employees and agents, to any Hazardous Material (as defined above) or other products, raw materials, chemicals or other substances; (iii) protection of the public health or welfare from the effects of by-products, wastes, emissions, discharges or releases of chemical substances from industrial or commercial activities; (iv) the manufacture, use or introduction into commerce of chemical substances, including without limitation, their manufacture, formulation, labeling, distribution, transportation, handling, storage and disposal; or (iv) the use, release or disposal of toxic or hazardous substances or Hazardous Materials or the remediation of air, surface waters, groundwaters or soil, as now or may at any later time be in effect, including but not limited to the Toxic Substances Control Act [15 U.S.C. 2601, et seq.]; the Comprehensive Environmental Response, Compensation and Liability Act [42 U.S.C. Section 9601, et seq.], the Hazardous Materials Transportation Authorization Act [49 U.S.C. Section 5101, et seq.], the Resource Conservation and Recovery Act [42 U.S.C. 6901, et seq.], the Federal Water Pollution Control Act [33 U.S.C. Section 1251], the Clean Air Act [42 U.S.C. Section 7401, et seq.], the California Underground Storage of Hazardous Substances Act [California Health and Safety Code Section 25280, et seq.], the California Hazardous Substances Account Act [California Health and Safety Code Section 25300, et seq.], the California Hazardous Waste Act [California Health and Safety Code Section 25100, et seq.], the California Safe Drinking Water and Toxic Enforcement Act [California Health and Safety Code Section 25249.5, et seq.], and the Porter-Cologne Water Quality Control Act [California Water Code Section 13000, et seq.], as they now exist or are hereafter amended, together with any regulations promulgated thereunder.
7.12 Notice of Claims; Defense of Security; Reimbursement of Costs. a. Notice of Claims. Trustor shall provide written notice to Beneficiary of any uninsured or partially uninsured loss affecting the Property through fire, theft, liability, or
12 4860-6036-3710v2
property damage in excess of an aggregate of Fifty Thousand Dollars ($50,000) within three (3) business days of the occurrence of such loss. Trustor shall ensure that Beneficiary shall receive timely notice of, and shall have a right to cure, any default under any other financing document or other lien affecting the Property and shall use best efforts to ensure that provisions mandating such notice and allowing such right to cure shall be included in all such documents. Within three (3) business days of Trustor’s receipt thereof, Trustor shall provide Beneficiary with a copy of any notice of default Trustor receives in connection with any financing document secured by the Property or any part thereof.
b. Defense of Security. At Trustor’s sole expense, Trustor shall protect, preserve and defend the Property and Trustor’s interest in, and right of possession of, the Property, the security of this Deed of Trust and the rights and powers of Beneficiary and Trustee created under it, against all adverse claims.
c. Compensation; Reimbursement of Costs. Trustor agrees to pay all reasonable fees, costs and expenses charged by Beneficiary or Trustee for any service that Beneficiary or Trustee may render in connection with this Deed of Trust, including without limitation, fees and expenses related to provision of a statement of obligations or related to a reconveyance. Trustor further agrees to pay or reimburse Beneficiary for all costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including without limitation any rights or remedies afforded to Beneficiary or Trustee or both of them under Sections 7.18 and 8.2, whether or not any lawsuit is filed, or in defending any action or proceeding arising under or relating to this Deed of Trust, including reasonable attorneys’ fees and other legal costs, costs of any disposition of the Property under the power of sale granted hereunder or any judicial foreclosure, and any cost of evidence of title. d. Notice of Changes. Trustor shall give Beneficiary prior written notice of any change in the address of Trustor and the location of any Property, including books and records pertaining to the Property.
7.13 Indemnification. To the greatest extent permitted by law, Trustor shall indemnify, defend (with counsel reasonably acceptable to Beneficiary), and hold harmless the Trustee and the Indemnitees (as defined in Section 7.11) from and against all Claims arising directly or indirectly in any manner in connection with or as a result of (a) any breach of Trustor’s covenants under any City Document, (b) any representation by Trustor in any City Document which proves to be false or misleading in any material respect when made, (c) injury or death to persons or damage to property or other loss occurring on the Land or in any improvement located thereon, whether caused by the negligence or any other act or omission of Trustor or any other person or by negligent, faulty, inadequate or defective design, building, construction or maintenance or any other condition or otherwise, (d) any Claim, demand or cause of action, or any action or other proceeding, whether meritorious or not, brought or asserted against any Indemnitee which relates to or arises out of the Property, the Project, or any City Document or any transaction contemplated thereby, or any failure of Trustor to comply with all applicable state, federal and local laws and regulations applicable to the Property, except to the extent arising from the gross negligence or willful misconduct of the Indemnitees. The obligations of Trustor under this Section shall survive the repayment of the Loan and shall be secured by this Deed of Trust. Notwithstanding any contrary provision contained herein, the obligations of
13 4860-6036-3710v2
Trustor under this Section shall survive any foreclosure proceeding, any foreclosure sale, any delivery of a deed in lieu of foreclosure, and any release or reconveyance of this Deed of Trust.
7.14. Limitation of Liability. Beneficiary shall not be directly or indirectly liable to Trustor or any other person as a consequence of any of the following: (i) Beneficiary's exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary in this Deed of Trust; (ii) Beneficiary's failure or refusal to perform or discharge any obligation or liability of Trustor under any agreement related to the Property or under this Deed of Trust; (iii) any waste committed by Trustor, the lessees of the Property or any third parties, or any dangerous or defective condition of the Property; or (iv) any loss sustained by Trustor or any third party resulting from any act or omission of Beneficiary in managing the Property after an Event of Default, except to the extent the loss is caused by the willful misconduct or gross negligence of Beneficiary. Trustor hereby expressly waives and releases all liability of the types described in this Section 7.14 and agrees that Trustor shall assert no claim related to any of the foregoing against Beneficiary.
7.15 Insurance and Condemnation Proceeds. Subject to the rights of any senior lienholders and the provisions of the Ground Lease, any award of damages in connection with any condemnation for public use of, or injury to the Property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply such moneys to any indebtedness secured hereby in such order as Beneficiary may determine, or at the option of Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant to such notice. Notwithstanding the foregoing, provided that all senior lenders have consented to the use of condemnation and insurance proceeds for the repair or restoration of the Property, Beneficiary will not withhold consent to the use of such proceeds for such purpose provided that adequate funds are available to Trustor to complete such repair or restoration, and the security for Beneficiary’s lien will not be impaired.
7.16 Release, Extension, Modification. At any time and from time to time, without liability therefor and without notice, upon written request of Beneficiary and presentation of this Deed of Trust and the Note for endorsement, Trustee may release or reconvey all or any part of the Property, consent to the making of any map or plat of the Land or part thereof, join in granting any easement or creating any restriction affecting the Property, or join in any extension agreement or other agreement affecting the lien or charge hereof. At any time and from time to time, without liability therefor and without notice, Beneficiary may (i) release any person liable for payment of any Secured Obligation, (ii) extend the time for payment or otherwise alter the terms of payment of any Secured Obligation; (iii) accept additional real or personal property of any kind as security for any Secured Obligation, or (iv) substitute or release any property securing the Secured Obligations.
7.17 Reconveyance. Upon written request of Beneficiary stating that all of the Secured Obligations have been paid in full, and upon surrender of this Deed of Trust, and the Note, Trustee shall reconvey, without warranty, the Property or so much of it as is then held under this Deed of Trust. The recitals in any reconveyance executed under this Deed of Trust of any matters or facts shall be conclusive proof of the truthfulness thereof. Trustor shall pay all fees of Trustee and all recordation fees related to such reconveyance.
14 4860-6036-3710v2
7.18 Cure; Protection of Security. Either Beneficiary or Trustee may cure any breach or default of Trustor if Trustor fails to do so within the applicable cure period, and if it chooses to do so in connection with any such cure, Beneficiary or Trustee may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include:
appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary’s or Trustee’s sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be conclusive as among Beneficiary, Trustee and Trustor; obtaining insurance and/or paying any premiums or charges for insurance required to be carried hereunder; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary or Trustee. Beneficiary and Trustee may take any of the actions permitted under this Section
7.18 either with or without giving notice, except for notices required under applicable law. Any amounts disbursed by Beneficiary pursuant to this paragraph shall become additional indebtedness secured by this Deed of Trust.
7.19 Limited Partners Right to Cure. Trustor’s limited partners shall have the right to cure any default of Trustor hereunder upon the same terms and conditions afforded to Trustor.
Beneficiary shall provide any notice of default hereunder to the limited partners at the address set forth in Section 11.2 below concurrently with the provision of such notice to Trustor.
8. Default and Remedies.
8.1 Events of Default. Trustor acknowledges and agrees that an Event of Default shall occur under this Deed of Trust upon the occurrence of any one or more of the following events.
a. An event of default arises under any City Document and remains uncured beyond the expiration of the applicable cure period set forth in such document; b. Trustor fails to perform any monetary obligation which arises under this Deed of Trust or any other City Document, and does not cure that failure within ten (10) days following written notice from Beneficiary or Trustee;
c. Trustor’s interest in the Property or any part thereof is voluntarily or involuntarily sold, transferred, leased, encumbered, or otherwise conveyed in violation of the City Documents;
d. Trustor fails to maintain the insurance coverage required hereunder or under the other City Documents and fails to cure such default within five (5) days, or Trustor otherwise fails to comply with the requirements of Section 7.10 hereof and Trustor fails to cure such default within the applicable time specified in Section 7.10; e. Subject to Trustor’s right to contest such charges as provided herein, Trustor fails to pay taxes or assessments due on the Land or the Improvements or fails to pay when due any other charge that may result in a lien on the Land or the Improvements, and
15 4860-6036-3710v2
Trustor fails to cure such default within twenty (20) days of the date of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to pursue foreclosure thereof.
f. Any representation or warranty made by or on behalf of Trustor contained in, or made in connection with, the execution and delivery of this Deed of Trust or any other City Document, or in any certificate or statement furnished pursuant to any City Document, proves to have been false or misleading in any adverse respect when made and continues to be adverse to the City;
g. If, pursuant to or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Trustor or any general partner thereof (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Trustor or any general partner thereof in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due; h. If a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for relief against Trustor or any general partner thereof in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for Trustor or any general partner thereof or substantially all of such entity’s assets, (iii) orders the liquidation of Trustor or any general partner thereof, or (iv) issues or levies a judgment, writ, warrant of attachment or similar process against the Property or the Project or any part thereof, and in each case the order or decree is not released, vacated, dismissed or fully bonded within sixty (60) days after its issuance;
i. The holder of any other debt instrument secured by a mortgage or deed of trust on the Property or part thereof declares an event of default thereunder and exercises a right to declare all amounts due under that debt instrument immediately due and payable, subject to the expiration of any applicable cure period set forth in such holder’s documents; j. A default on the part of Trustor arises under the Ground Lease and remains uncured beyond the expiration of all applicable cure periods; or k. Trustor fails to perform any obligation arising under this Deed of Trust other than one enumerated in this Section 8.1, and does not cure that failure either within ten (10) days after written notice from Beneficiary or Trustee in the event of a monetary default, or within thirty (30) days after such written notice in the event of a nonmonetary default, provided that in the case of a nonmonetary default that in Beneficiary’s reasonable judgment cannot reasonably be cured within thirty (30) days, an Event of Default shall not arise hereunder if Trustor commences to cure such default within thirty (30) days and thereafter prosecutes such cure to completion with due diligence and in good faith and in no event later than ninety (90) days following receipt of notice of default.
8.2 Remedies. Subject to the applicable notice and cure provisions set forth herein, at any time after an Event of Default, Beneficiary and Trustee shall be entitled to invoke any and all
16 4860-6036-3710v2
of the rights and remedies described below, and may exercise any one or more or all, of the remedies set forth in any City Document, and any other remedy existing at law or in equity or by statute. All of Beneficiary’s rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies. Beneficiary shall be entitled to collect all expenses incurred in pursuing the remedies provided hereunder, including without limitation reasonable attorneys’ fees and costs.
a. Acceleration. Beneficiary may declare any or all of the Secured Obligations, including without limitation all sums payable under the Note and this Deed of Trust, to be due and payable immediately.
b. Receiver. Beneficiary may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property. c. Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust. Such other things may include: taking and possessing copies of all of Trustor’s or the then owner's books and records concerning the Property; entering into, enforcing, modifying, or canceling Leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Trustor; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Trustor shall assemble all of the Property that has been removed from the Land and make all of it available to Beneficiary at the site of the Land. Trustor hereby irrevocably constitutes and appoints Beneficiary as Trustor's attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Trustor's name on any instruments.
d. UCC Remedies. Beneficiary may exercise any or all of the remedies granted to a secured party under the UCC.
e. Judicial Action. Beneficiary may bring an action in any court of competent jurisdiction to foreclose this Deed of Trust in the manner provided by law for foreclosure of mortgages on real property and/or to obtain specific enforcement of any of the covenants or agreements of this Deed of Trust.
f. Power of Sale. Under the power of sale hereby granted, Beneficiary shall have the discretionary right to cause some or all of the Property, including any Property which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.
8.3 Power of Sale. If Beneficiary elects to invoke the power of sale hereby granted, Beneficiary shall execute or cause the Trustee to execute a written notice of such default and of its election to cause the Property to be sold to satisfy the obligations hereof, and shall cause such
17 4860-6036-3710v2
notice to be recorded in the office of the Recorder of each County wherein the Property or some part thereof is situated as required by law and this Deed of Trust.
Prior to publication of the notice of sale, Beneficiary shall deliver to Trustee this Deed of Trust and the Note or other evidence of indebtedness which is secured hereby, together with a written request for the Trustee to proceed with a sale of the Property, pursuant to the provisions of law and this Deed of Trust.
Notice of sale having been given as then required by law, and not less than the time then required by law having elapsed after recordation of such notice of default, Trustee, without demand on Trustor, shall sell the Property at the time and place fixed by it in the notice of sale, either as a whole or in separate parcels and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may, and at Beneficiary’s request shall, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement at the time and place fixed by the preceding postponement. Trustee shall deliver to the purchaser its deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee, or Beneficiary, may purchase at such sale.
After deducting all costs, fees, and expenses of Trustee and of the trust hereby created, including reasonable attorneys’ fees in connection with sale, Trustee shall apply the proceeds of sale to payment of all sums advanced or expended by Beneficiary or Trustee under the terms hereof and all outstanding sums then secured hereby, and the remainder, if any, to the person or persons legally entitled thereto.
Without limiting the generality of the foregoing, Trustor acknowledges and agrees that regardless of whether or not a default has occurred hereunder, if an Event of Default has occurred under the City Documents, and if in connection with such Event of Default Beneficiary exercises its right to foreclose on the Property, then: (i) Beneficiary shall be entitled to declare all amounts due under the Note immediately due and payable, and (ii) the proceeds of any sale of the Property in connection with such foreclosure shall be used to pay all Secured Obligations, including without limitation, the outstanding principal balance and all other amounts due under the Note.
At any foreclosure sale, any person, including Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any part of it to the extent permitted by then applicable law.
Instead of paying cash for such property, Beneficiary may settle for the purchase price by crediting the sales price of the property against the following obligations:
a. First, the portion of the Secured Obligations attributable to the expenses of sale, costs of any action and any other sums for which Trustor is obligated to pay or reimburse Beneficiary or Trustee under Section 7.12(c); and
18 4860-6036-3710v2
b. Second, the remaining balance of all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose.
8.4 Trustor’s Right to Reinstate. Notwithstanding Beneficiary’s acceleration of the sums secured by this Deed of Trust, Trustor shall have the right to have any proceedings begun by Beneficiary to enforce this Deed of Trust discontinued at any time prior to five days before sale of the Property pursuant to the power of sale contained in this Deed of Trust or at any time prior to entry of a judgment enforcing this Deed of Trust if: (a) Trustor pays Beneficiary all sums which would be then due under the City Documents if the Secured Obligations had no acceleration provision; (b) Trustor cures all breaches of any other covenants or agreements of Trustor contained in this Deed of Trust; (c) Trustor pays all reasonable expenses incurred by Beneficiary and Trustee in enforcing the covenants and agreements of Trustor contained in this Deed of Trust, and in enforcing Beneficiary’s and Trustee’s remedies as provided herein, including, but not limited to, reasonable attorney’s fees; and (d) Trustor takes such action as Beneficiary may reasonably require to assure that the lien of this Deed of Trust, Beneficiary’s interest in the Property and Trustor’s obligation to pay the sums secured by this Deed of Trust shall continue unimpaired. Upon such payment and cure by Trustor, this Deed of Trust and the obligations secured hereby shall remain in full force and effect as if no acceleration had occurred.
9. Trustor’s Waivers. To the fullest extent permitted by law, Trustor waives: (a) all statutes of limitations as a defense to any action or proceeding brought against Trustor by Beneficiary; (b) the benefit of all laws now existing or which may hereafter be enacted providing for any appraisement, valuation, stay, extension, redemption or moratorium; (c) all rights of marshalling in the event of foreclosure; and (d) all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, notices of acceptance of this Deed of Trust and of the existence, creation, or incurring of new or additional indebtedness, and demands and notices of every kind.
10. Leasehold Mortgagee Provisions.
10.1 The provisions of this Section 10 shall apply for so long as any portion of the Property consists of Trustor's interest as tenant under the Ground Lease defined and described in Recital A. As used in this Section 10, the term “Ground Lease” means the Ground Lease and any extension, renewal or replacement thereof. The lien of this Deed of Trust shall encumber all of Trustor's rights and interests under and in connection with the Ground Lease, including without limitation renewal and extension rights and purchase options (if any), all of which rights shall be collectively referred to herein as the “Leasehold.”
10.2 Intentionally omitted.
10.3 Unless Beneficiary otherwise consents in writing, so long as any Secured Obligation remains outstanding, neither the fee title to, nor any other estate or interest in, the property subject to the Ground Lease shall merge with any leasehold, notwithstanding the union of such estates in the landlord or the tenant or in a third party. Any acquisition of the landlord's interest in the Ground Lease by Trustor or any affiliate of Trustor shall be accomplished in such
19 4860-6036-3710v2
a manner as to avoid a merger of the interests of landlord and tenant unless Beneficiary consents to such merger in writing.
10.4 If Trustor acquires fee title to any portion of the real property subject to the Ground Lease, this Deed of Trust shall automatically be a lien on such fee title.
10.5 Except as permitted by the City Documents, Trustor shall not subordinate the Ground Lease or Leasehold to any deed of trust or other encumbrance of, or lien on, any interest in the real property subject to such Leasehold without the prior written consent of Beneficiary.
Any such subordination without such consent shall, at Beneficiary's option, be void.
10.6 Trustor shall notify Beneficiary promptly in writing of the institution of any legal proceeding involving obligations under the Ground Lease, and Beneficiary may intervene in any such legal proceeding and be made a party. Trustor shall promptly provide Beneficiary with a copy of any decision rendered in connection with any such proceeding.
10.7 To the extent permitted by law, the price payable by Trustor or any other party in the exercise of the right of redemption, if any, from any sale under, or decree of foreclosure of, this Deed of Trust shall include all rents and other amounts paid and other sums advanced by Beneficiary on behalf of Trustor as the tenant under the Ground Lease.
10.8 Trustor shall promptly notify the landlord in writing, in accordance with Section 25359.7 of the California Health and Safety Code and any successor and/or similar statutes (and shall simultaneously notify Beneficiary in writing), in the event that Trustor knows or has cause to believe that any Hazardous Materials have come to be located on or beneath the property leased under the Ground Lease.
10.9 The generality of the provisions of this Deed of Trust shall not be limited by any provision of Section 10 and the subsections thereof that sets forth particular obligations of Trustor as the tenant under the Ground Lease.
11. Miscellaneous Provisions.
11.1 Additional Provisions. The City Documents grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Trustor which apply to this Deed of Trust and the Property.
11.2 Notices. Trustor requests that a copy of notice of default and notice of sale be mailed to Trustor at the address set forth below. That address is also the mailing address of Trustor as debtor under the UCC. Beneficiary’s address set forth below is the address for Beneficiary as secured party under the UCC. Except for any notice required under applicable law to be given in another manner, all notices to be sent pursuant to this Deed of Trust shall be made in writing, and sent to the parties at their respective addresses specified below or to such other address as a party may designate by written notice delivered to the other parties in accordance with this Section. All such notices shall be sent by: (a) personal delivery, in which case notice shall be deemed delivered upon receipt; (b) certified or registered mail, return receipt requested, in which case notice shall be deemed delivered two (2) business days after deposit,
20 4860-6036-3710v2
postage prepaid in the United States mail; or (c) nationally recognized overnight courier, in which case notice shall be deemed delivered one (1) day after deposit with such courier.
TRUSTOR: Ridge View Commons II Associates, L.P.
c/o Eden Housing, Inc.
22645 Grand Street
Hayward, CA 94541
Attention: President
with a copy to: Gubb & Barshay LLP
235 Montgomery Street, Suite 1110
San Francisco, CA 94104
Attention: Nicole Kline
with a copy to:
BENEFICIARY: City of Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager
with a copy to: Burke, Williams & Sorensen, LLP
1999 Harrison Street, Suite 1650
Oakland, CA 94612-3501
Attention: Susan E. Bloch, Esq.
11.3 Binding on Successors. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of the Trustor, Beneficiary and Trustee; provided however this Section 11.3 does not waive the provisions of Section 7.6.
11.4 Substitution of Trustee. Beneficiary may from time to time or at any time substitute a trustee or trustees to execute the trust hereby created, and when any such substitution has been filed for record in the office of the Recorder of Santa Clara County, it shall be conclusive evidence of the appointment of such trustee or trustees, and such new trustee or trustees shall succeed to all of the powers and duties of the Trustee named herein.
11.5 Attorneys’ Fees and Costs. In any action or proceeding to foreclose this Deed of Trust or to enforce any right of Beneficiary or of Trustee, Trustor shall pay to Beneficiary and Trustee all costs of such action or proceeding, including reasonable attorneys’ fees.
11.6 Governing Law; Severability; Interpretation. This Deed of Trust shall be governed by the laws of the State of California without regard to principles of conflicts of laws.
Trustor agrees that any controversy arising under or in relation to this Deed of Trust shall be litigated exclusively in state or federal courts with jurisdiction in Santa Clara County, California.
21 4860-6036-3710v2
Trustor irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation, and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. If any provision of this Deed of Trust is held unenforceable or void, that provision shall be deemed severable from the remaining provisions, and shall in no way affect the validity of this Deed of Trust. The captions used in this Deed of Trust are for convenience only and are not intended to affect the interpretation or construction of the provisions herein contained. In this Deed of Trust, whenever the context so requires, the singular number includes the plural.
11.7 Waiver, Modification and Amendment. Any waiver by Beneficiary of any obligation of Trustor hereunder must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary or Trustee to take action on account of any default of Trustor. Consent by Beneficiary or Trustee to any act or omission by Trustor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary’s or Trustee’s consent to be obtained in any future or other instance. No amendment to or modification of this Deed of Trust shall be effective unless and until such amendment or modification is in writing, executed by Trustor and Beneficiary. Without limiting the generality of the foregoing, Beneficiary’s acceptance of payment of any sum secured hereby after its due date shall not constitute a waiver by Beneficiary of its right either to require prompt payment when due of all other sums so secured or to declare default for failure so to pay.
11.8 Action by Beneficiary. Except as may be otherwise specifically provided herein, whenever any approval, notice, direction, or consent by the Beneficiary is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by Beneficiary’s City Manager or by any person who shall have been designated by Beneficiary’s City Manager, without further approval by the governing board of Beneficiary.
11.9 Joint and Several Liability. If Trustor consists of more than one person or entity, each shall be jointly and severally liable for the faithful performance of all of Trustor’s obligations under this Deed of Trust.
11.10 Time is of the Essence. Time is of the essence for each provision of this Deed of Trust.
11.11 Counterparts. This Deed of Trust may be executed in multiple counterparts, each of which shall be an original and all of which together shall constitute one agreement.
11.12 Partial Subordination to Extended Use Agreement. Trustor and the California Tax Credit Allocation Committee may enter into a Regulatory Agreement (the “CTCAC Regulatory Agreement”) which constitutes the extended low-income housing commitment described in Section 42(h)(6)(B) of the Internal Revenue Code of 1986, as amended (the “Code”). In the event of a foreclosure of Beneficiary’s interest under this Deed of Trust or delivery by the Trustor of a deed in lieu thereof (collectively, a “Foreclosure”), the following rule shall apply pursuant to Section 42(h)(6)(e)(ii) of the Code:
22 4860-6036-3710v2
With respect to dwelling units that had been regulated by the CTCAC Regulatory Agreement, for a period of three (3) years following a Foreclosure: none of the tenants occupying such units at the time of the Foreclosure may be evicted or have their tenancy terminated other than for good cause, nor may any rent be increased except as otherwise permitted under Section 42 of the Code.
SIGNATURES ON FOLLOWING PAGE
23 4860-6036-3710v2
IN WITNESS WHEREOF, Trustor has executed this Leasehold Deed of Trust as of the date first written above.
TRUSTOR:
Ridge View Commons II Associates, L.P., a California limited partnership By: Ridge View Commons LLC,
a California limited liability company,
its general partner
By: Eden Investments, Inc.,
a California nonprofit public benefit corporation,
its sole member/manager
By: ____________________________
Andrea Osgood, Chief of Real Estate Development and
Executive Vice President
SIGNATURES MUST BE NOTARIZED.
24 4860-6036-3710v2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF _____________________
On ______________ before me, _______________________ (here insert name and title of the officer), personally appeared _________________________ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _______________________________ (Seal)
25 4860-6036-3710v2
Exhibit A
LAND
The land referred to is situated in the City of Pleasanton, County of Alameda, State of California, and is described as follows:
PARCEL ONE:
ALL BUILDINGS AND OTHER IMPROVEMENTS WHICH BUILDINGS AND IMPROVEMENTS ARE AND SHALL REMAIN AS REAL PROPERTY, SITUATED ON THE FOLLOWING DESCRIBED:
PARCEL 2 AS SHOWN ON PARCEL MAP NO. 5231, FILED APRIL 22, 1988, IN BOOK 176 OF MAPS AT PAGES 40 AND 41, ALAMEDA COUNTY RECORDS.
PARCEL TWO:
PARCEL 2 AS SHOWN ON PARCEL MAP NO. 5231, FILED APRIL 22, 1988, IN BOOK 176 OF MAPS AT PAGES 40 AND 41, ALAMEDA COUNTY RECORDS.
EXCEPTING FROM PARCEL TWO ALL BUILDINGS AND OTHER IMPROVEMENTS SITUATED ON ABOVE SAID LAND, WHICH ARE AND SHALL REMAIN AS REAL PROPERTY.
APN: 947-0008-010
4879-3324-5885v2
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Pleasanton
P.O. Box 520
123 Main Street
Pleasanton, CA 94566
Attention: City Manager
EXEMPT FROM RECORDING FEES PER
GOVERNMENT CODE §§6103, 27383, 27388.1
Space above this line for Recorder’s use.
AFFORDABLE HOUSING REGULATORY AGREEMENT
AND
DECLARATION OF RESTRICTIVE COVENANTS
by and between
THE CITY OF PLEASANTON
and
RIDGE VIEW COMMONS II ASSOCIATES, L.P.
(Ridge View Commons)
____________, 2024
4879-3324-5885v3
2 This Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants (this “Agreement”) is entered into effective as of __________, 2024 (“Effective Date”) by and between the City of Pleasanton, a municipal corporation (“City”) and Ridge View Commons II Associates, L.P., a California limited partnership (“Owner”). The City and the Owner are collectively referred to herein as the “Parties.”
R E C I T A L S
A. City owns the real property located in the City of Pleasanton, Alameda County, California, located at 5200 Case Avenue, known as Alameda County Assessor Parcel No. 947- 0008-010, and more particularly described in Exhibit A attached hereto (the “Property”).
B. City and Owner have entered into a ground lease dated as of the date hereof (the “Ground Lease”), pursuant to which Owner will lease the Property from City for a term of seventy-five (75) years, and rehabilitate, own and operate an affordable senior housing development thereon consisting of 200 apartments and related improvements (the “Project”) in accordance with the Ground Lease. A Memorandum of the Ground Lease will be recorded in the Official Records of Alameda County substantially concurrently herewith.
C. This Agreement requires the Restricted Units within the Project to be available to Eligible Households at Affordable Rents in accordance with this Agreement for a period of not less than fifty-five (55) years. The Ground Lease imposes affordability requirements that will continue to apply following the expiration of the Initial Affordability Restriction Period.
D. City provided certain loans to Owner’s predecessor in interest in connection with the development of the Project (collectively, the “Loan”). City has agreed to allow Owner to assume the obligation to repay the Loan. In connection therewith, Owner shall execute and deliver to City an Amended and Restated Secured Promissory Note (the “Note”) which shall be secured by an Amended and Restated Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing that shall be executed by Owner for the benefit of City (the “Deed of Trust”) and recorded against the Project and Owner’s leasehold interest in the Property substantially concurrently herewith.
E. The purpose of this Agreement is to satisfy the affordability requirements of the City’s affordable housing program and to regulate and restrict the occupancy and rents of the Project’s Restricted Units for the benefit of the Project occupants. The Parties intend the covenants set forth in this Agreement to run with the land and to be binding upon Owner and Owner’s successors and assigns for the full term of this Agreement.
NOW THEREFORE, in consideration of the foregoing, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows.
1. Definitions. The following terms have the meanings set forth in this Section wherever used in this Agreement or the attached exhibits.
4879-3324-5885v3
3 “Actual Household Size" means the actual number of persons in the applicable household.
“Adjusted for Family Size Appropriate for the Unit” shall be determined consistent with Section 42(g)(2) of the Internal Revenue Code of 1986 as amended, and applicable federal and CTCAC regulations.
"Affordable Rent" means a monthly rent less a utility allowance and other fees and charges required to be paid by tenants of the Project on a non-optional basis in the amount not greater than the maximum rents specified in CTCAC Regulations for households of the applicable Area Median Income categories as set forth in Sections 3.2(c) and 3.2(d) of this Agreement.
“Affordable Housing Monitoring Fee” is defined in Section 4.3. “Annual Report” is defined in Section 4.4.
“Applicable Rules and Regulations” means the State of California and federal rules and regulations applicable to the Project, including without limitation, Sections 42 and 142 of the Internal Revenue Code of 1986, as amended, Treasury Regulations 26 CFR §1.42 et seq., and the CTCAC Regulations.
“Area Median Income” or “AMI” means the median income for Alameda County, California, adjusted for Actual Household Size, as determined by HUD pursuant to Section 8 of the United States Housing Act of 1937 and as published from time to time by the State of California Department of Housing and Community Development (“HCD”) in Section 6932 of Title 25 of the California Code of Regulations or successor provision published pursuant to California Health and Safety Code Section 50093(c).
“City’s Authorized Representative” means the City Manager of the City of Pleasanton.
“City Documents” means collectively, the Loan Agreement, the Note, the Deed of Trust, the Ground Lease, and this Agreement.
“Claims” means collectively, liabilities, losses, costs, expenses (including without limitation attorneys’ fees and costs of litigation), claims, demands, actions, suits, judicial or administrative proceedings, penalties, deficiencies, fines, orders, and damages. “CTCAC” means the California Tax Credit Allocation Committee. “CTCAC Regulations” means collectively, the CTCAC regulations published at Title 24 California Code of Regulations Section 10300 et seq., as may hereafter be amended, and CTCAC memoranda published annually setting forth maximum household income limits and maximum rents for projects financed with low-income housing tax credits.
4879-3324-5885v3
4 “Deed of Trust” is defined in Recital D.
“Eligible Household” means a household for which household Gross Income upon initial occupancy does not exceed the maximum income level for a Restricted Unit as specified in Sections 3.2(c) and 3.2(d) and that includes at least one member who is age 62 or older or other qualifying resident as defined in California Civil Code Section 51.3. “Financial Feasibility” is defined in Section 3.3.
“Gross Income” means the applicable household’s total Gross Income as determined in accordance with Section 42(g)(2) of the Internal Revenue Code of 1986, as amended, and applicable federal and CTCAC Regulations.
“Ground Lease” is defined in Recital B.
“HUD” means the U.S. Department of Housing and Urban Development. “Indemnitees” means collectively, the City and its elected and appointed officers, officials, employees, agents, contractors, consultants, and representatives. “Initial Affordability Restriction Period” is defined in Section 2. “Loan” is defined in Recital D.
“Marketing Plan” is defined in Section 6.5.
“Note” is defined in Recital D.
“Permitted Annual Rent Increase” is defined in Section 3.2(b). “Project” is defined in Recital B.
“Property” is defined in Recital A.
“Property Management Plan” is defined in Section 6.5.
"Restricted Units" means the 198 dwelling units in the Project that are reserved for occupancy at an Affordable Rent by Eligible Households of specified household income levels as set forth in Section 3.2.
“Term” is defined in Section 2.
2. Term of Agreement; Initial Affordability Restriction Period.
2.1 Term. The term of this Agreement (the “Term”) shall be coterminous with the Ground Lease, i.e., this Agreement shall remain in effect for the period commencing on the Effective Date and terminating on the seventy-fifth (75th) anniversary of the Effective Date, subject to the following:
4879-3324-5885v3
5 (a) The rent restrictions and household Gross Income restrictions set forth in Section
3.2(c) shall remain in effect for the period (the “Initial Affordability Restriction Period”) commencing on the Effective Date and terminating on the fifty-fifth (55th) anniversary of the date upon which the Project construction loan converts to permanent financing. If such date cannot be ascertained, the Interim Affordability Restriction Period shall terminate on the fifty-seventh (57th) anniversary of the Effective Date of this Agreement.
(b) Upon the expiration of the Initial Affordability Restriction Period, the rent restrictions and household Gross Income restrictions set forth in Section 3.2(d) shall apply for the remainder of the Term, and all other provisions of this Agreement, including without limitation, the provisions restricting annual rent increases, shall remain in effect throughout the Term.
2.2 Effectiveness Succeeds Conveyance of Property and Repayment of Loan. This Agreement shall remain effective and fully binding for the full Term regardless of (i) any sale, assignment, transfer, or conveyance of the Project or Owner’s leasehold interest in the Property, or any part thereof or interest therein, (ii) any payment, prepayment or extinguishment of the Loan or the Note, or (iii) any reconveyance of the Deed of Trust.
2.3 Reconveyance. Upon the termination of this Agreement, the Parties agree to execute and record appropriate instruments to release and discharge this Agreement; provided, however, the execution and recordation of such instruments shall not be necessary or a prerequisite to the termination of this Agreement upon the expiration of the term.
3. Use and Affordability Restrictions. Owner hereby covenants and agrees, for itself and its successors and assigns, that the Property shall be used solely for the operation of a multifamily senior housing development in accordance with the requirements set forth in this Agreement.
Owner represents and warrants that it has not entered into any agreement that would restrict or compromise its ability to comply with the occupancy and affordability restrictions set forth in this Agreement, and Owner covenants that it shall not enter into any agreement that is inconsistent with such restrictions without the express written consent of City.
3.1 Senior Housing. Owner has elected to operate the Project as a senior housing development and as such to require all dwelling units in the Project except for the managers’ units to be occupied or held available for occupancy by households that include “elderly” or “senior” residents in accordance with applicable law. To the extent applicable, the Project will be operated at all times in accordance with (a) the Unruh Act, including without limitation California Civil Code Sections 51.2, 51.3, and 51.4; (b) the federal Fair Housing Act, 42 U.S.C.
Section 3607(b) and 24 CFR 100.304; (c) the California Fair Employment and Housing Act, Government Code Section 12900 et seq., and (d) all other applicable laws and regulations.
Owner shall develop and implement appropriate age verification procedures to ensure compliance with this Section 3.1, and shall provide City with a copy of such verification procedures. Owner will indemnify, defend, and hold the Indemnitees harmless from all Claims arising out of Owner’s failure to comply with applicable legal requirements related to housing for seniors. The indemnity provisions of this paragraph shall survive the expiration or other termination of this Agreement.
4879-3324-5885v3
6 3.2 Affordability Restrictions. Owner shall comply with all of the following requirements:
(a) Monthly Rent for Existing Residents. Rent payable by residents residing in the Project as of the Effective Date shall be limited to the rent required by the resident’s lease or rental agreement in effect immediately prior to the Effective Date, subject to Permitted Annual Rent Increases.
(b) Permitted Annual Rent Increases. Rent payable by residents of the Project may be increased no more often than once during each 12-month period of a tenant’s occupancy of a Restricted Unit, and rent increases shall be limited to not more than the lowest of the following (the “Permitted Annual Rent Increase”): (i) the percentage increase allowed by CTCAC Regulations, (ii) the percentage increase allowed by applicable State law, and (iii) the percentage by which maximum allowable rents for the applicable Area Median Income categories as published in the CTCAC Regulations has increased over the applicable maximum allowable rents published by CTCAC for the immediately preceding year. (c) Monthly Rent Upon Vacancy – Initial Affordability Restriction Period. During the Initial Affordability Restriction Period, rent for Restricted Units that are vacated shall be set at not greater than Affordable Rent for the applicable Area Median Income category as set forth in this Section. Thereafter, annual rent increases shall be limited as set forth in the preceding paragraph (b).
Subject to paragraph (a) above, and as described in the table below, throughout the Initial Affordability Restriction Period: not less than twenty (20) residential units in the Project shall be occupied, or if vacant available for occupancy, at Affordable Rents to households whose household Gross Income is no greater than thirty percent (30%) of Area Median Income adjusted for Actual Household Size, not less than an additional sixty (60) residential units in the Project shall be shall be occupied, or if vacant available for occupancy, at Affordable Rents to households whose household Gross Income is no greater than fifty percent (50%) of Area Median Income adjusted for Actual Household Size, and not less than an additional one hundred eighteen (118) residential units in the Project shall be occupied, or if vacant available for occupancy, at Affordable Rents to households whose household Gross Income is no greater than sixty percent (60%) of Area Median Income adjusted for Actual Household Size. Two (2) residential units shall be manager/staff units that will not be subject to rent or occupancy restrictions. Notwithstanding the foregoing, the Parties acknowledge that as of the Effective Date, eight (8) Project residents have household Gross Income exceeding sixty percent (60%) AMI. Until the expiration of the Initial Affordability Restriction Period, upon vacancy, the units occupied by such residents shall be occupied or available for occupancy at Affordable Rent by households whose household Gross Income does not exceed sixty percent (60%) of Area Median Income adjusted for Actual Household Size.
4879-3324-5885v3
7 Maximum
Household Income
Unit Size
30%
AMI
50%
AMI
60%
AMI
Subtotal
Mgr
Unit
Total
1-Bedroom 18 55 107 180 0 180
2-Bedroom 2 5 11 18 2 20
Total 20 60 118 198 2 200
In the event that recertification of tenant incomes indicates that the number of residential units actually occupied by Eligible Households falls below the number reserved for each income group as specified in this Section, Owner shall rectify the condition by renting the next available dwelling unit(s) in the Project to Eligible Household(s) until the required income mix is achieved.
(d) Income Limits and Maximum Rents Following Expiration of Initial Affordability Restriction Period. Upon expiration of the Initial Affordability Restriction Period, subject to Section 3.5 below: (i) upon vacancy, the Restricted Units shall be occupied, or if vacant available for occupancy, by households with household Gross Income not greater than eighty percent (80%) of Area Median Income adjusted for Actual Household Size, and (ii) maximum rents shall be limited to not greater than Affordable Rent for households whose household Gross Income does not exceed eighty percent (80%) of Area Median Income Adjusted for Household Size Appropriate for the Unit as published by CTCAC; provided however, rent payable by residents residing in a Restricted Unit as of the date that the Initial Affordability Restriction Period expires shall be limited to the rent required by the resident’s lease or rental agreement in effect immediately prior to such expiration date, subject to Permitted Annual Rent Increases.
3.3 Rent Float-Up Provisions. Subject to compliance with Section 3.2(b) and the provisions of this Section, if necessary to preserve Project feasibility, in the event of (i) a loss of project-based vouchers or other operating subsidy for the Project, or (ii) a foreclosure or threatened foreclosure of a senior mortgage secured by the Project, rents on any units restricted at thirty percent (30%) or fifty percent (50%) of Area Median Income may be permitted to increase to the rent allowable for units restricted at sixty percent (60%) of Area Median Income (or such lesser amount as may be necessary to ensure Project Financial Feasibility (defined below)), but only to the extent, for the number of units, and for the period of time necessary to achieve Financial Feasibility.
Owner shall immediately notify City in writing of any impending or threatened foreclosure and any impending or threatened termination or reduction of any project-based rental assistance or operating subsidy for the Project, and Owner shall make every effort to find alternative subsidies or financing structures that would enable the rents, income-targeting, and occupancy restrictions set forth in Section 3.2(c) to be maintained. As used in this Agreement, “Financial Feasibility” means that the Project’s annual net operating income (i.e., gross annual income received minus operating expenses and deposits into operating and replacement reserves
4879-3324-5885v3
8 in the amounts required by lenders that have provided Project financing that is payable on a nonresidual receipts basis) divided by annual debt service payable on non-residual receipts loans equals at least 1.10.
The increased rents and income-targeting permitted pursuant to this Section may remain in effect only for so long as required to maintain Financial Feasibility. Owner will use best efforts to obtain alternate sources of financing or adjustments in the terms of Project financing provided by lenders other than City in efforts to avoid the necessity for rent increases and enable the Project to comply with the rent and occupancy restrictions set forth in Section 3.2(c). Any rent increases permitted pursuant to this Section will be subject to the applicable regulations of other agencies that have provided financing for the Project and applicable law. If rents for any Restricted Units are increased pursuant to this Section, Owner shall include in each Annual Report submitted pursuant to Section 4.4 below, documentation that the increase in rents is required for Financial Feasibility, and documentation regarding Owner’s efforts to secure additional sources of rent or operating subsidy for the Project.
3.4 Project Based Vouchers and Other Subsidies. If any residential units in the Project are subsidized with Section 8 project-based vouchers through a Housing Assistance Payment Contract with HUD or the Housing Authority of the County of Alameda, or with another source of rent or operating subsidy, the rules and regulations applicable to such programs shall prevail with respect to the setting of rents, implementation of occupancy requirements, and determination of household Gross Income for the units assisted by such programs.
3.5 Compliance with Most Restrictive Requirements. Notwithstanding anything to the contrary set forth in this Agreement, if the CTCAC Regulatory Agreement or restrictions imposed by Project lenders, Project investors, or regulatory agencies restrict a greater number of units than restricted by this Agreement or require stricter household income eligibility or affordability requirements than those imposed by this Agreement, the requirements of the CTCAC Regulatory Agreement and such other lenders, investors or regulatory agencies shall prevail during the time that that they are effective.
3.6 Increased Resident Income. No tenant qualifying for a Restricted Unit shall be denied continued occupancy of a unit in the Project because, after admission, such tenant's household Gross Income increases to exceed the qualifying limit for such Restricted Unit. A household which at initial occupancy qualifies in a particular income category shall be treated as continuing to be of such income category so long as the household’s Gross Income does not exceed one hundred forty percent (140%) of the applicable income limit. In the event the household Gross Income of a household that qualified at the applicable income limit at initial occupancy exceeds the applicable income limit for a Restricted Unit, that unit will continue to be considered as satisfying the applicable income limit if the rent for the unit remains at not greater than the applicable restricted amount. In the event a tenant’s household income exceeds the limits specified in this Section, Owner shall apply the rules applicable to the Project pursuant to Section 42 of the Internal Revenue Code of 1986, as amended, the federal regulations applicable thereto, and the CTCAC Regulations. In the event of inconsistency between the provisions of this Section and the Applicable Rules and Regulations, the Applicable Rules and Regulations shall prevail.
4879-3324-5885v3
9 3.7 Manager’s Units. Two (2) dwelling units in the Project may be used as resident manager’s units, and shall be exempt from the occupancy and rent restrictions set forth in this Agreement.
3.8 No Condominium Conversion. Owner shall not convert the Project to condominium or cooperative ownership or sell condominium or cooperative rights to the Project or any part thereof during the Term.
3.9 Non-Discrimination; Compliance with Fair Housing Laws.
3.9.1 Preference for City of Pleasanton Residents and Employees. In order to ensure that there is an adequate supply of affordable housing within the City of Pleasanton for residents and employees of businesses within the City, to the extent permitted by law and consistent with the program regulations for funding sources used for the Project, Owner shall give a preference in the rental of the Restricted Units to Eligible Households that include a member who lives or works in the City of Pleasanton. Notwithstanding the foregoing, in the event of a conflict between this provision and Applicable Rules and Regulations, the provisions of such Applicable Rules and Regulations shall control. Owner shall comply with City’s affirmative marketing policies and procedures as they may be amended from time to time to ensure that City residents and people who work in Pleasanton are provided reasonable notice and opportunity to rent units in the Project.
3.9.2 Fair Housing; Section 8 Vouchers. Owner shall comply with State and federal fair housing laws in the marketing and rental of the Restricted Units. Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of rent subsidies, including without limitation Section 8 vouchers.
3.9.3 Non-Discrimination. Owner shall not restrict the rental, sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, the Project, or any portion thereof, on the basis of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial status, source of income, disability, veteran or military status or genetic information of any person. Owner covenants for itself and all persons claiming under or through it, and this Agreement is made and accepted upon and subject to the condition that there shall be no discrimination against or segregation of any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, the Project, or part thereof, nor shall Owner or any person claiming under or through Owner establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in, of, or for the Property, the Project, or part thereof.
Owner shall include such provision in all deeds, leases, contracts and other instruments executed by or on behalf of Owner, and shall enforce the same diligently and in good faith.
3.10 Relocation. Persons residing in the Project as of the Effective Date shall not be displaced before suitable replacement housing is available. Owner shall ensure that all occupants