counted as an Extremely Low Income Unit, Very Low Income Unit, 60% Low Income Unit or 70% Low Income Unit, as applicable, as long as said Unit continues to be rent-restricted and the next Unit of comparable or smaller size (in the same building) is occupied by a qualified low- income tenant..
Section 2.5 Lease Provisions. Owner shall include in leases for all Units provisions which authorize Owner to immediately terminate the tenancy of any household one or more of whose members has misrepresented any fact material to the household's qualification as a household with incomes at or below 70% area median income (AMI), 60% AMI, 50% of AMI or 30% of AMI. Each lease or rental agreement shall also provide that the household is subject to annual certification in accordance with Section 3.1 below, and that, if the household's income increases above the applicable limits for a Extremely Low Income Household, Very Low Income Household, 60% Low Income Household or 70% Low Income Household, as applicable, such household's Rent may be subject to increase.
Section 2.6 Condominium Conversion. The Owner shall not convert the Project or any Units to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Property during the Term of this Agreement.
ARTICLE 3.
INCOME CERTIFICATION AND REPORTING
Section 3.1 Income Certification. The Owner shall obtain, complete and maintain on file, immediately prior to initial occupancy and first year annual recertification, income certifications from each Tenant renting any of the Units (excluding the two managers' Units).
Subject to applicable laws, with respect to any Tenant that has been at the Project for more than 10 years, City may request a recertification. The Owner shall make a good faith effort to verify that the income provided by an applicant or occupying household in an income certification is accurate by taking one or more of the following steps as a part of the verification process: (1) obtain a pay stub for the most recent pay period; (2) obtain an income tax return for the most recent tax year; (3) conduct a credit agency or similar search; (4) obtain an income verification form from the applicant's current employer; (5) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies; or (6) if the applicant is unemployed and has no such tax return, obtain another form of independent verification. Self-certifications for all subsequent years are acceptable. Copies of tenant income certifications shall be available to City upon request.
Section 3.2 Annual Report to City. Each year by July 1 Owner shall submit an annual report to City, in a form approved by City. The annual report shall include for each Unit covered by this Agreement, the Rent and the income and household size of the household occupying the Unit and shall have the income certifications for each Tenant, prepared pursuant to Section 3.1 above available upon request. The report shall also state the date the tenancy commenced for each rental Unit, the number of bedrooms in such Unit, and such other information as City may be required by law to obtain.
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Section 3.3 Additional Information. Owner shall provide any additional information reasonably requested by City. City shall have the right to examine and make copies of all books, records or other documents of Owner which pertain to any Unit during normal business hours upon reasonable prior written notice to the Owner.
Section 3.4 Records.
(a) Owner shall keep and maintain at the principal place of business of the Owner set forth in Section 6.11 below, or elsewhere, full, complete and appropriate books, records and accounts relating to the Project. Owner shall cause all books, records and accounts relating to the Project to be kept and maintained in accordance with sound accounting principles consistently applied, and to be consistent with requirements of this Regulatory Agreement.
Subject to applicable law and reasonable prior written notice from the City, Owner shall cause all books, records, and accounts to be open to and available for inspection and copying by the City, its auditors or other authorized representatives at reasonable intervals during normal business hours upon reasonable prior written notice. Owner shall cause copies of all tax returns and other reports that Owner may be required to furnish to any government agency to be open for inspection by the City upon reasonable prior written notice during normal business hours at the place that the books, records and accounts of Owner are kept. Owner shall preserve such records for a period of not less than five (5) years after their creation. If any litigation, claim, negotiation, audit exception, monitoring, inspection or other action relating to the use of the Project is pending at the end of the record retention period stated herein, then Owner shall retain the records until such action and all related issues are resolved. Such records are to include but are not limited to:
(1) Records documenting compliance with the fair housing, equal opportunity, and affirmative fair marketing requirements; (2) Financial records; and
(3) Records demonstrating compliance with the marketing, tenant selection, affordability, and income requirements.
(b) The City shall notify Owner of any records it deems insufficient. Owner has thirty (30) calendar days after the receipt of such a notice to correct any deficiency in the records specified by the City in such notice, or if a period longer than thirty (30) days is reasonably necessary to correct the deficiency, then Owner must begin to correct the deficiency within thirty (30) days and correct the deficiency as soon as reasonably possible.
ARTICLE 4.
OPERATION OF THE DEVELOPMENT
Section 4.1 Residential Use. The Project shall be operated only for residential use and ancillary uses thereto including but not limited to [community facility space or other minor use].
No part of the Project shall be operated as transient housing.
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Section 4.2 Compliance with Loan Documents and Project Regulatory Agreements.
Owner shall comply with all the terms and provisions of the Loan Documents and any other regulatory requirement imposed on the Project, including but not limited to regulatory agreements associated with the Low Income Housing Tax Credits provided by the California Tax Credit Allocation Committee (the "Project Regulatory Documents"). Owner shall promptly notify the City in writing of the existence of any default by Owner under any Project Regulatory Documents and provide the City with copies of any such written notice of default.
Section 4.3 Property Tax Exemption. Owner shall not apply for a property tax exemption for the Property under any provision of law other than Revenue and Taxation Section 214(g) without City's prior written consent.
Section 4.4 Taxes and Assessments. Owner shall pay all real and personal property taxes, assessments, if any, and charges and all franchise, income, employment, old age benefit, withholding, sales, and other taxes assessed against it, or payable by it, at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, that Owner shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event Owner exercises its right to contest any tax, assessment, or charge against it, Owner, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges and interest.
Section 4.5 Nondiscrimination. All of the Units shall be available for occupancy on a continuous basis to members of the general public who are income eligible (except for the two managers’ units). There shall be no discrimination against or segregation of any person or group of persons, on account of race, religious creed, color, national origin, ancestry, physical disability, mental disability, medical condition, genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, or veteran or military status in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of any Unit nor shall 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, sublessees, subtenants, or vendees of any Unit or in connection with the employment of persons for the operation and management of the Project. All deeds, leases or contracts made or entered into by Owner as to the Units or the Project or portion thereof, shall contain covenants concerning discrimination as prescribed by the Loan Agreement.
Section 4.6 S
ection 8 Certificate Holders. The Owner shall accept as tenants, on the same basis as all other prospective tenants, persons who are recipients of federal certificates for rent subsidies pursuant to the existing housing program under Section 8 of the United States Housing Act, or its successor, or similar programs. The Owner shall not apply selection criteria to holders of Section 8 certificate or similar certificates or vouchers that is more burdensome than criteria applied to all other prospective tenants, nor shall the Owner apply or permit the application of management policies or lease provisions with respect to the Project which have the effect of precluding occupancy of units by such prospective tenants.
Section 4.7 Marketing Plan. No later than six (6) months prior to the date construction of the Project is projected to be complete, Owner shall submit to the City for approval its plan for ITEM 9.13.
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marketing the Project to income-eligible households as required by this Regulatory Agreement (the "Marketing Plan"), subject to the controlling requirements of the California Municipal Finance Authority. The Marketing Plan shall be in compliance with all applicable fair housing, equal opportunity and affirmative fair marketing laws and requirements.
Upon receipt of the Marketing Plan, the City shall promptly review the Marketing Plan and shall approve or disapprove it within fifteen (15) days after receipt. If the Marketing Plan is not approved, the City shall give Owner specific reasons for such disapproval and Owner shall submit a revised Marketing Plan within fifteen (15) days of notification of the City's disapproval.
Owner shall follow this procedure for resubmission of a revised Marketing Plan until the Marketing Plan is approved by the City. If the Owner does not submit a revised Marketing Plan that is approved by the City at least three (3) months prior to the date construction of the Project is projected to be complete, Owner will be in default of this Regulatory Agreement.
Section 4.8 Environmental Requirements. Owner shall comply with the environmental requirements set forth in Article X of the Loan Agreement and Article 6 of the Deed of Trust, which are incorporated herein.
ARTICLE 5.
PROPERTY MANAGEMENT AND MAINTENANCE
Section 5.1 Management Responsibilities. The Owner is responsible for all management functions with respect to the Project, including without limitation the selection of tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security, provided, however, that nothing herein shall prevent the Owner from delegating such responsibilities to the Management Agent. City shall have no responsibility over management of the Project. The Owner shall retain a professional property management company approved by City in its reasonable discretion to perform its management duties hereunder. A resident manager shall also be required.
Section 5.2 Management Agent. The Project shall at all times be managed by an experienced management agent with demonstrated ability to operate residential facilities like the Project in a manner that will provide decent, safe, and sanitary housing (as approved, the "Management Agent"). The parties hereby agree that the initial Management Agent shall be Cornerstone Residential CA.
Section 5.3 Performance Review. City reserves the right to conduct an annual (or more frequently, if deemed reasonably necessary by City) review of the management practices and financial status of the Project. The purpose of each periodic review will be to enable City to determine if the Project is being operated and managed in accordance with the requirements and standards of this Agreement. The Owner shall cooperate with City in such reviews.
Section 5.4 Replacement of Management Agent. Subject to the rights of the Senior Lenders, Investor Limited Partner, and the Authority (each as defined in the Loan Agreement), if, as a result of a periodic review, City determines in its reasonable judgement that the Project is ITEM 9.13.
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not being operated and managed in accordance with any of the material requirements and standards of this Agreement, City shall deliver notice to Owner of its intention to cause replacement of the Management Agent, including the reasons therefor. Within thirty (30) days of receipt by Owner of such written notice, City staff and Owner shall meet in good faith to consider methods for improving the financial and operating status of the Project. If after a reasonable period as determined by City (not to exceed sixty (60) days), City determines that the Owner is not operating and managing the Project in accordance with the material requirements and standards of this Agreement, City may require replacement of the Management Agent.
If, after the above procedure, City requires in writing the replacement of the Management Agent, Owner shall (subject to obtaining any necessary consents from the Investor Limited Partner, the Senior Lenders, the Agency and any other applicable government agency that has approval rights over the replacement of the Management Agent) promptly dismiss the then Management Agent, and shall appoint as the Management Agent a person or entity meeting the standards for a Management Agent set forth in Section 5.2 above.
Any contract for the operation or management of the Project entered into by Owner shall provide that the contract can be terminated as set forth above. Failure to remove the Management Agent in accordance with the provisions of this Section shall constitute default under this Agreement, and City may enforce this provision through legal proceedings as specified in Section 6.5.
Section 5.5 Management Policies. The Owner shall submit its written management plan with respect to the Project to City for its review, and shall amend such policies in any way necessary to ensure that such policies comply with the provisions of this Agreement subject to the senior rights of the Agency.
Section 5.6 Property Maintenance. The Owner agrees, for the entire Term of this Agreement, to maintain or cause to be maintained all interior and exterior improvements, including landscaping, on the Property in good condition and repair (and, as to landscaping, in a healthy condition), reasonable wear and tear excepted, and in accordance with all applicable laws, rules, ordinances, orders and regulations of all federal, state, county, municipal, and other governmental agencies and bodies having or claiming jurisdiction and all their respective departments, bureaus, and officials.
In the event that the Owner breaches any of the covenants contained in this section and such default continues for a period of thirty (30) days after written notice from City with respect to graffiti, debris, waste material, general maintenance, landscaping or minor repairs, then City, in addition to whatever other remedy it may have at law or in equity, shall have the right to enter upon the Property, subject to the rights of the tenants, and perform or cause to be performed all such acts and work necessary to cure the default. Pursuant to such right of entry, City shall be permitted (but is not required) to enter upon the Property, subject to the rights of the tenants, and perform all acts and work necessary to protect, maintain, and preserve the improvements and landscaped areas on the Property, and to attach a lien on the Property (if not timely reimbursed for such costs upon demand from the Owner), or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation by City and/or costs of such cure, which amount shall be promptly paid by the Owner to City upon ITEM 9.13.
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demand. Notwithstanding the foregoing, all rights of the City set forth in this paragraph are expressly subject and subordinate to the rights of the Senior Lenders and the Authority.
Section 5.7 Social Services. Owner shall provide a variety of social services at the Project. Such social services are subject to the prior written approval of the City, in its reasonable discretion. Owner shall use commercially reasonable efforts to create a comprehensive social service program that is targeted to the needs of the residents of the Project which may include, but is not limited to, the following services: after-school programs of an ongoing nature for school age children, financial planning skills, job coaching, and/or the availability of a bona fide services coordinator to the tenants. Owner shall ensure that all personnel providing or coordinating all social services shall be adequately trained and counseled, including with respect to the appropriate means and methods of communicating and interacting with residents. Any substantive change in the scope, amount, or type of social services to be provided at the Property shall be subject to prior reasonable approval of City and approval shall not be unreasonably withheld.
ARTICLE 6.
MISCELLANEOUS
Section 6.1 Transfers.
(a) For purposes of this Agreement, "Transfer" means any sale, assignment, or transfer, whether voluntary or involuntary, of: (i) any rights and/or duties under the Loan Documents; and/or (ii) any interest in the Project, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Project is transferred and Owner retains title. The term "Transfer" excludes the leasing of any single unit in the Project to an occupant in compliance with this Regulatory Agreement. (b) Except as otherwise permitted in this Section 6.1 and Sections 8.2 and 8.3 of the Loan Agreement, no Transfer is permitted without the prior written consent of the City, which the City may withhold in its sole reasonable discretion. The City Loan shall automatically accelerate and be due in full upon any Transfer made without the prior written consent of the City. Notwithstanding anything to the contrary in this Agreement, any transfer permitted under Sections 8.2 or 8.3 of Loan Agreement shall be permitted hereunder without the City’s approval. (c) The City hereby approves the admission of the Investor Limited Partner to Owner as limited partner. The City hereby approves future Transfers of the limited partner interest of Owner provided that: (i) such Transfers do not affect the timing and amount of the Investor Limited Partner capital contributions provided for in the Partnership Agreement (as such capital contributions may be adjusted pursuant to the terms of the Partnership Agreement); and (ii) in subsequent Transfers, the Investor Limited Partner or an Affiliate thereof, retains a membership or partnership interest and U.S. Bancorp Community Development Corporation, a Minnesota corporation serves as a managing member or general partner of the successor limited partner. In addition, once all capital contributions of the Investor Limited Partner are made pursuant to the Partnership Agreement, the Investor Limited Partner shall be permitted to transfer ITEM 9.13.
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its limited partnership interest in Owner to any entity upon notice to the City and approval within thirty (30) days of receipt, which approval shall not be unreasonably withheld. (d) The City hereby approves a Transfer of the Property from Owner to Lincoln Avenue Communities, or an Affiliate of Lincoln Avenue Communities, and an assumption of the City Loan by such transferee at or prior to the end of the Fifteen Year Compliance Period upon notice to the City and approval within thirty (30) days of receipt, which approval shall not be unreasonably withheld, provided that: (i) such Transfer is pursuant to an option or right of first refusal agreement referenced in the Partnership Agreement, (ii) the assignment and assumption agreement evidencing such Transfer requires the transferee to expressly assume the obligations of Owner under the Loan Documents, and (iii) the City is provided executed copies of all documents evidencing the Transfer.
(e) The City hereby approves the purchase of the Investor Limited Partner interest by Lincoln Avenue Communities, or an Affiliate of Lincoln Avenue Communities at or prior to the end of the Fifteen Year Compliance Period upon notice to the City and approval within thirty (30) days of receipt, which approval shall not be unreasonably withheld, provided that (i) such Transfer is pursuant to an option or right of first refusal agreement referenced in the Partnership Agreement, and (ii) the City is provided executed copies of all documents evidencing the Transfer.
(f) In the event a general partner of Owner is removed by the limited partner of Owner for cause following default under the Partnership Agreement, the City hereby approves the Transfer of the general partner interest to (i) (A) with respect to a removed managing general partner (but not a removed co-general partner), a 501(c)(3) tax exempt nonprofit corporation or other entity with a 501(c)(3) tax exempt nonprofit corporation member or partner, (B) with significant experience in the ownership and operation of affordable housing projects similar to the Project, and (C) with financial resources sufficient for the ownership of the Project, as selected by the Investor Limited Partner and approved by the City, and (ii) the Investor Limited Partner or an Affiliate thereof, but only for a period not to exceed ninety (90) days from the date of removal of the general partner, during which time such entity shall diligently seek a replacement general partner meeting the requirements of subsection (i)(A) above. (g) The City hereby approves the grant of the security interests in the Project for financing approved in the Financing Plan as such term is defined in the Loan Agreement, including, but not limited to those security interests in favor of the Senior Lenders (and any future Senior Lenders that hold a Refinanced Loan (as defined in the Note)) and the Agency.
Section 6.2 Term. The provisions of this Agreement shall apply to the Property for the entire Term even if the entire City Loan is paid in full prior to the end of the Term, . This Agreement shall bind any successor, heir or assign of Owner, whether a change in interest occurs voluntarily or involuntarily, by operation of law or otherwise, except as expressly released by City. City makes the City Loan on the condition, and in consideration of, this provision, and would not do so otherwise.
Section 6.3 Notice of Expiration of Term.
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(a) At least six (6) months prior to the expiration of the Term, Owner shall provide by first-class mail, postage prepaid, a notice to all Tenants containing (a) the anticipated date of the expiration of the Term, (b) any anticipated increase in Rent upon the expiration of the Term, (c) a statement that a copy of such notice will be sent to City, and (d) a statement that a public hearing may be held by City on the issue and that the Tenant will receive notice of the hearing at least fifteen (15) days in advance of any such hearing. The Owner shall also file a copy of the above-described notice with City.
(b) In addition to the notice required above, Owner shall comply with the requirements set forth in California Government Code Sections 65863.10 and 65863.11. Such notice requirements include: (i) a twelve (12) month notice to existing tenants, prospective tenants and Affected Public Agencies (as defined in California Government Code Section 65863.10(a)) prior to the expiration of the Term, (ii) a six (6) month notice requirement to existing tenants, prospective tenants and Affected Public Agencies prior to the expiration of the Term; (iii) a notice of an offer to purchase the Project to "qualified entities" (as defined in California Government Code Section 65863.11(d)), if the Project is to be sold within five (5) years of the end of the Term; (iv) a notice of right of first refusal within the one hundred eighty (180) day period that qualified entities may purchase the Project.
Section 6.4 Covenants to Run with the Land. City and Owner hereby declare their express intent that the covenants and restrictions set forth in this Agreement shall run with the land, and shall bind all successors in title to the Property, provided, however, that on the expiration of the Term of this Agreement said covenants and restrictions shall expire. Each and every contract, deed or other instrument hereafter executed covering or conveying the Property or any portion thereof shall be held conclusively to have been executed, delivered and accepted subject to such covenants and restrictions, regardless of whether such covenants or restrictions are set forth in such contract, deed or other instrument, unless City expressly releases such conveyed portion of the Property from the requirements of this Agreement.
Section 6.5 Enforcement by the City.
(a) If Owner fails to perform any obligation under this Agreement, and fails to cure the default within 30 days after City has notified the Owner in writing of the default or, if the default cannot be cured within 30 days, fails to commence to cure within 30 days and thereafter diligently pursue such cure, City shall have the right to enforce this Agreement by any or all of the following actions, or any other remedy provided by law:
(1) Calling the Loan. City may declare a default under the Note, accelerate the indebtedness evidenced by the Note, and proceed with foreclosure under the Deed of Trust.
(2) Action to Compel Performance or for Damage. City may bring an action at law or in equity to compel Owner's performance of its obligations under this Agreement, and/or for damages.
(3) Remedies Provided Under Loan Documents. City may exercise any other remedy available at law or provided under the Loan Documents.
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(b) The City shall provide notice of a default to the Senior Lenders and the Investor Limited Partner and any limited partner of Owner who has requested written notice from the City in the manner set forth in Section 13.3 of the Loan Agreement.
Section 6.6 Attorney's Fees and Costs. In any action brought to enforce this Agreement, the prevailing party shall be entitled to all costs and expenses of suit, including reasonable attorneys' fees. This section shall be interpreted in accordance with California Civil Code Section 1717 and judicial decisions interpreting that statute.
Section 6.7 Recording and Filing. City and Owner shall cause this Agreement, and all amendments and supplements to it, to be recorded against the Property in the Official Records of the County of Sacramento. This Agreement encumbers only the Owner’s leasehold interest in the Property and does not encumber the City’s fee title to the Property.
Section 6.8 Governing Law. This Agreement shall be governed by the laws of the State of California.
Section 6.9 Amendments. This Agreement may be amended only by a written instrument executed by all the parties hereto or their successors in title, and duly recorded in the real property records of the County of Sacramento, California.
Section 6.10 Notice. All notices given or certificates delivered under this Agreement shall be in writing and be deemed received on the delivery or refusal date shown on the delivery receipt, if: (i) personally delivered by a commercial service which furnishes signed receipts of delivery or (ii) mailed by certified mail, return receipt requested, postage prepaid, addressed as shown on the signature page. Any of the parties may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or communications shall be sent.
Section 6.11 Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining portions of this Agreement shall not in any way be affected or impaired thereby.
Section 6.12 Multiple Originals; Counterparts. This Regulatory Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
Section 6.13 Revival of Agreement after Foreclosure. In the event there is a foreclosure of the Property, this Regulatory Agreement will revive according to its original terms if, during the Term, the owner of record before the foreclosure, or deed in lieu of foreclosure, or any entity that includes the former owner or those with whom the former owner has or had family or business ties, obtains an ownership interest in the Project or a leasehold interest in the Property.
Section 6.14 Limitation of Liability. Section 13.19 of the Loan Agreement is hereby incorporated with the same force and effect as if set forth in its entirety herein.
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IN WITNESS WHEREOF, the City and Owner have executed this Agreement by duly authorized representatives, all on the date first written above.
Address:
City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, California 95670
Attn: City Manager
And to: City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Attention: Stefan Heisler
Email: [email protected]
Phone: 916.851.8757
And to: City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Attention: Anthony Amara
Email: [email protected]
Phone: 916.556.1531
CITY:
CITY OF RANCHO CORDOVA, a California
municipal corporation
By:
Its:
Attest:
_______________________
City Clerk
Approved as to Form:
______________________
City Attorney
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Address:
Rancho Cordova Owner, LP
c/o Lincoln Avenue Communities
401 Wilshire Boulevard, 11
th Floor
Santa Monica, California 90401
Attention: Russell Condas
With copies to:
Lincoln Avenue Communities
680 5th Avenue, 17th Floor
New York, New York 10019
Attention: Hanna Jamar, Esq.
With copies to:
Cohen Liuzzo PLLC
88 Pine Street, Suite 1430
New York, New York 10005
Attention: Anthony Bargnesi, Esq. and Eleor
Cohen, Esq.
Email: [email protected]
and [email protected]
With copies to:
Cox Castle & Nicholson, LLP
50 California Street, Suite 3200
San Francisco, California 94111
Attention: Christian D. Dubois, Esq.
Facsimile: (415) 262-5143
Email: [email protected]
and:
U.S. Bancorp Community Development
Corporation
USB Project No: 36071
505 N 7th Street
Mail Code: SL-MO-T10M
St. Louis, MO 63101
OWNER:
RANCHO CORDOVA OWNER, LP,
a California limited partnership
By:
Rancho Cordova AGP LLC,
a Delaware limited liability company,
its administrative general partner
By:
_____________________________
Name: Russell Condas
Title: Vice President
By: PacH Rancho Cordova Holdings, LLC,
a California limited liability company,
its Managing General Partner
By: Pacific Housing, Inc.,
a California nonprofit public benefit
corporation, its manager
By:
__________________________
Mark A. Wiese, President
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Attn.: Asset Manager
Applegate & Thorne-Thomsen, P.C.
425 South Financial Place, Suite 1900
Chicago, IL 60605
Attention: Bennett P. Applegate
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared Russell Condas, 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.
______________________________________
Name: ______________________________
Notary Public
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.
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STATE OF CALIFORNIA )
)
COUNTY OF __________________ )
On ____________________, before me, ___________________________, Notary Public, personally appeared Mark A. Wiese, 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.
______________________________________
Name: ______________________________
Notary Public
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.
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A-1
EXHIBIT A
Property Description
6428183.3
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SCHEDULE OF PERFORMANCE
Task/Event Time for Performance
1. Developer and City open Escrow. Prior to Closing.
2. Closing Date. On or about June 3, 2026.
3. Developer commences construction of Project.
Notice of Commencement will be issued
within three (3) business days of
Closing.
4. Developer completes construction of Project. June 2028.
5. Developer commences leasing the Units. February 2028.
6. Developer completes leasing of all Units. December 2028.
It is expressly understood and agreed by the Parties that the foregoing schedule of performance is subject to all of the terms and conditions set forth in the text of the Agreement including, without limitation, extension due to Force Majeure. Times of performance under the Agreement may be extended by request of any Party memorialized by a mutual written agreement between the Parties, which agreement may be granted or denied in the non-requesting Party’s sole and absolute discretion (subject to events of Force Majeure set forth in this Agreement).
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SOURCES AND USES OF FUNDS
Financing Plan – Asteria Flats
Asteria Flats plans to finance the project with the following sources:
Senior Tax-Exempt Bond Loan:
California Municipal Finance Authority shall be the issuer for the tax-exempt bonds in the amount of $40,000,000, which consists of $32,000,000 in Qualified Private Activity Bonds from CMFA plus the $8,000,000 in recycled bonds. The bonds will be publicly offered to outside investors and held during the construction phase. Upon construction completion, the initial bondholders then tender their bonds to Capital One, N.A., who is also the Permanent Lender.
First Mortgage – Tax-Exempt (Permanent):
Freddie TEL permanent first mortgage serviced by Capital One, N.A in the amount of approximately $40,000,000.
First Mortgage – Taxable (Permanent):
Permanent first mortgage taxable tail in the amount of approximately $12,000,000 also serviced by Capital One, N.A.
Taxable Construction Mortgage:
Construction financing in the amount of approximately $90,276,974 during the construction period provided by U.S. Bancorp Impact Finance.
GP Capital Contribution:
General Partner capital contribution in the amount of approximately $4,570.
LIHTC Equity Investment:
The equity investor, U.S. Bancorp Community Development Corporation, will provide Low- Income Housing Tax Credit equity in multiple installments throughout construction and stabilization. Anticipated installments include:
• 1st Installment: $6,747,114
• 2nd Installment: $32,835,956
• 3rd Installment: $449,808
• 4th Installment: $4,847,884
• 5th Installment: $100,000
City of Rancho Cordova Subordinate Loan:
Subordinate public financing in the amount of approximately $5,000,000 issued by the City of Rancho Cordova.
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ATTACHMENT 3
Solar Credit Equity:
Solar tax credit equity will be provided by U.S. Bancorp Community Development Corporation, in the amount of approximately $2,432,362.
Short-Term Bond Reinvestment Proceeds:
Bond reinvestment proceeds in the amount of approximately $3,875,000, including $2,750,000 available during construction. The proceeds from sale of the bonds will be reinvested for a period of 36 months in Treasuries or SLGs. The bond reinvestment will cover the bond coupon, and generate positive earnings equal to the difference between the bond coupon and the reinvestment rate, which will be contributed to the deal.
Cashflow From Operations:
The project is anticipated to generate approximately $1,928,864 from operations during lease-up and stabilization.
Deferred Developer Fee:
The Developer shall defer payment of approximately $10,044,455 of the developer fee, to be repaid from project cash flow pursuant to partnership and loan agreement terms.
Please see the below Sources and Uses table for the complete project financial model.
Summary Sources
Construction Permanent
First Mortgage - Tax-Exempt – $ 40, 000,000
First Mortgage - Taxable – $ 12,000,000
GP Capital Contribution 4,570 4,570
LIHTC Equity - 1st Installment 6,854,303 6,854,303
Taxable Construction Mortgage 90,276,974 –
City Soft Funding 5,000,000 5,000,000
Solar Credit Equity – 2,432,362
LIHTC Equity - 2nd Installment – 33,357,607
LI
HTC Equity - 3rd Installment – 456,954
LIHTC Equity - 4th Installment – 4,926,489
LIHTC Equity - 5th Installment – 100,000
Short-Term Bond Reinvestment Proceeds 2,750,000 3,875,000 Cashflow From Operations 1,928,864 1,928,864
Deferred Developer Fee – 10,044,455
Total Sources $ 106,814,710 $ 120, 980,603
Summary Uses
Construction Permanent
Acquisition $ 6,065,000 $ 6, 065,000
Construction Hard Costs 79,819,564 79,819,564
Project Soft Costs 5,364,676 5,483,190
Tax Credit Fees 110,198 275,398
Bond Costs 670,188 670,188
Taxable Construction Loan Costs & Reserve 12,428,362 12,428,362 Land Acquisition 643,072 643,072
Permanent Loan Costs 1,028,500 1,028,500
Closing Costs 187,000 187,000
Escrows and Reserves 385,354 1,623,077
Developer Fee 112,798 12,757,253
Total Uses $ 106,814,710 $ 120,980,603
ITEM 9.13.
ATTACHMENT 3
Completion Guaranty
PERFORMANCE GUARANTY
This Performance Guaranty (“Guaranty”) is given as of __________, 20 26, by Rancho Cordova Owner LP, a California limited partnership (“Guarantor”), in favor of The City of Rancho Cordova, a California general law city (the “City”).
Preliminary Statement. The undersigned, Guarantor is the owner of the Project . As a material inducement to and in consideration of the City entering into that certain Loan Agreement (the “Loan Agreement”), dated as of the date hereof , between the City and Guarantor (“Borrower”) pursuant to which City loaned Borrower Five Million Dollars ($5,000,000) (“ Loan”) as evidenced by a promissory note executed by Borrower (“ Note”), whereby the “Project” will consist of two hundred thirty six (236) apartment units, together with all associated landscaping, parking and associated improvements, including a clubhouse, fitness center, leasing office, and swimming pool. Sixty (60) of the apartment units will be 1-bedroom units, sixty (60) of the apartment units will be two -bedroom units, fifty- eight (58) of the apartment units will be three -bedroom units, and fifty- eight (58) will be 4- bedroom units. All of the apartment units in the Project, except for two manager’s unit, will be restricted for occupancy by eligible households with incomes at or below 70% area median income (AMI), 60% AMI, 50% AMI and 30% AMI for a period of fifty -five (55) years from issuance of a final certificate of occupancy for the Project. Borrower and City will enter into a “Regulatory Agreement” which sets forth the affordable housing obligations and other requirements for operation of the Project.
NOW, THEREFORE, to induce the City to extend credit under the Loan Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:
Section 1. Guaranty.
(a) Guarantor irrevocably and unconditionally fully guarantees the due, prompt and complete payment and performance of all of the obligations relating to the development and construction of the Project, free and clear of any liens or claims of liens, in the manner and within the time necessary to comply with all of the terms, covenants and conditions of and of the applicable provisions of the Regulatory Agreement subject to Force Majeure. In furtherance, but not in limitation of the Guarantor’s obligations hereunder, if there are any construction cost overruns or if any lien is filed against the Project, the Guarantor hereby absolutely and unconditionally guarantees the prompt, absolute, and unconditional payment of such sums as are necessary to fully satisfy such obligations (or bond over such obligations to the City’s satisfaction) and satisfy all other amounts payable pursuant to the Regulatory Agreement and the Loan Documents. For the avoidance of doubt, this Guaranty does not guarantee the repayment of the Loan or the payment of any sums due under the Note or other Loan Documents, except to the extent such payment obligation arises directly from construction of the Project. (b) Guarantor hereby unconditionally guarantees the performance of Borrower in accordance with Section 5.9 of the Loan Agreement.
ITEM 9.13.
ATTACHMENT 3
Exhibit K 2
Performance Guaranty
(c) Subject to the Section 20(j) hereof, if Guarantor fails to promptly perform any of the above-described obligations under this Guaranty, the City may bring any action at law or in equity or both, or commence any appropriate proceeding, to compel Guarantor to perform its obligations under this Guaranty, and in such event, the City shall be entitled to collect from Guarantor compensation for all actual loss, cost, damage, and expense which the City may incur as a direct consequence of Guarantor’s failure to perform those obligations. The City may bring any such action or commence any such proceeding regardless of whether the Regulatory Agreement is in default or City has exhausted any and all security for the Loans. This Guaranty is not secured by the Deed of Trust.
All such obligations described above, and all replacements, renewals, consolidations, amendments and other modifications thereof, are collectively referred to herein as the “Obligations”. Guarantor further agrees to pay any and all expenses (including counsel fees and expenses, whether or not litigation is commenced, and during both the trial and any appellate phases of litigation) incurred by the City in enforcing any rights under this Guaranty.
Section 2. Guaranty Absolute . Guarantor guarantees that the Obligations will be paid and performed strictly in accordance with the terms of the Loan Documents and/or such other documents or agreements in connection to the Project as may be applicable thereto, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of the City with respect thereto. To the extent permitted by applicable law, the liability of Guarantor under this Guaranty shall be absolute and unconditional irrespective of , provided, however that no change to the Loan Documents shall increase the Obligations of the Guarantor hereunder without the express written consent of the Guarantor:
(a) any lack of validity or enforceability of the Regulatory Agreement , the Loan Agreement, the Notes or any of the other agreements between the parties; (b) any change in the time, manner or place of payment of, the interest rate payable under, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from the Loan Agreement, the Notes or any of the other agreements between the Parties;
(c) any exchange, release or non- perfection of any collateral, or any release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower or Guarantor (except for full payment and performance).
This Guaranty shall continue to be effective or be reinstated, as the case may be, if (i) at any time any payment of any of the Obligations is rescinded or must otherwise be returned by the City upon the insolvency, bankruptcy or reorganization of Borrower or otherwise, all as though such payment had not been made, or (ii) this Guaranty is released in consideration of a payment of money or transfer of property or grant of a security interest by Guarantor or any other Person and such payment, transfer or grant is rescinded or must otherwise be returned by ITEM 9.13.
ATTACHMENT 3
Exhibit K 3
Performance Guaranty
City upon the insolvency, bankruptcy or reorganization of such Person or otherwise, all as though such payment, transfer or grant had not been made.
Section 3. Waiver. Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty and any requirement that the City protect, secure, perfect or insure any security interest or lien or any property subject thereto or exhaust any right or take any action against Borrower or any other Person or any collateral.
Additionally, except as may be prohibited by applicable law, Guarantor waives:
(a) All statutes of limitations as a defense to any action or proceeding brought against Guarantor by the City pursuant to this Guaranty;
(b) Any right it may have to require the City to proceed against Borrower, proceed against or exhaust any security held from Borrower, or pursue any other remedy in the City ’s power to pursue, and any defense based on any homestead exemption or other exemption under applicable law, whether available to Borrower or Guarantor; (c) Any defense (excluding defense by the members, partners, shareholders, agents, or employees of the Guarantor) based on any limitation of liability or recourse in any other Loan Document or arising under law or any claim that Guarantor’s obligations exceed or are more burdensome than those of Borrower;
(d) Any defense based on (i) any legal disability of Borrower, (ii) any release, discharge, modification, or impairment of Borrower to the City from any cause, whether consented to by the City , respectively, or arising by operation of law or from any Bankruptcy or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor - creditor relationships, including any proceeding under the Bankruptcy Reform Act of 1978, as amended or recodified (the “ Bankruptcy Code ”), or under any other present or future state or federal law regarding Bankruptcy, reorganization or other relief to debtors (collectively, “ Debtor Relief Laws”) (any such proceeding referred to as an “Insolvency Proceeding” as further defined in Section 17 hereof), or (iii) any rejection or disaffirmance of the Loan, or any part of it, or any security held for it, in any such Insolvency Proceeding; (e) Any defense based on any action taken or omitted by the City in any Insolvency Proceeding involving Borrower, including any election to have the City’s claim allowed as being secured, partially secured or unsecured, any extension of credit by the City to Borrower in any Insolvency Proceeding, and the taking and holding by the City of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of intention to accelerate, notices of acceleration, notices of any suit or any other action against Borrower or any other person, notices of default, notices of dishonor, notices of acceptance of this Guaranty and of the existence, creation, or incurring of new or ITEM 9.13.
ATTACHMENT 3
Exhibit K 4
Performance Guaranty
additional indebtedness, and demands and notices of every kind except for any demand or notice by the City to Guarantor expressly provided for elsewhere in this Guaranty; (g) Any defense based on or arising out of any defense that Borrower may have to the payment or performance of the Obligations or any part of them (except for payment and performance in full);
(h) Any defense based on any lack of authority of the officers, directors, partners, members or agents acting or purporting to act on behalf of Borrower or any principal of Borrower or any defect in the formation of Borrower or any principal of Borrower; (i) Any and all rights Guarantor may have under any anti -deficiency statute or other similar protections, including, without limitation, to the fullest extent permitted by law, all rights and benefits under (A) Section 580a of the California Code of Civil Procedure purporting to limit the amount of any deficiency judgment which might be recoverable following the occurrence of a trustee’s sale under a deed of trust and any right to a fair value hearing or any fair value limitation or other limitation on liability or a deficiency based upon the fair value of any collateral after a nonjudicial foreclosure of the Deeds of Trust, (B) Section 580b of the California Code of Civil Procedure stating that no deficiency may be recovered on a real property purchase money obligation, (C) Section 580d of the California Code of Civil Procedure stating that no deficiency may be recovered on a note secured by a deed of trust on real property in case such real property is sold under the power of sale contained in such deed of trust, and (D) Section 726 of the California Code of Civil Procedure stating that there may be but one form of action on an indebtedness secured by real property, if such sections, or any of them, have any application hereto or any application to any Guarantor;
(j) Any and all rights and benefits under Section 2809 of the California Civil Code purporting to reduce a guarantor’s obligations in proportion to the principal obligation; (i) waive, to the fullest extent permitted by law;
(k) Any and all rights and benefits which might otherwise be available to the undersigned under California Civil Code Sections 2810, 2819, 2839 2845, 2849, 2850, 2899, and 3433;
(l) Any and all rights arising under Section 359.5 of the California Code of Civil Procedure; and
(m) Any failure by the City to inform Guarantor of any facts the City may now or hereafter know about Borrower, the Project, the Loans, or the transactions contemplated by the Regulatory Agreement or the Loan Agreement, it being understood and agreed that the Borrower has a duty so to inform and that Guarantor is fully responsible for being and remaining informed by Borrower of all circumstances bearing on the risk of nonperformance of Borrower’s obligations.
Without limiting the foregoing, Guarantor hereby waives all rights and defenses arising out of any election of remedies by the Regulatory Agreement, even though that election of remedies, such as nonjudicial foreclosure with respect to security for a guaranteed obligation, has destroyed Guarantor’s rights of subrogation and reimbursement against Borrower by operation of ITEM 9.13.
ATTACHMENT 3
Exhibit K 5
Performance Guaranty
Section 580d of the California Code of Civil Procedure or otherwise. In accordance with California Civil Code Section 2856(c), Guarantor hereby waives all rights and defenses that Guarantor may have because Borrower’s debt to the City is secured by real property. This means, among other things: (a) the City may collect from Guarantor without first foreclosing on any real or personal property collateral pledged by Borrower; and (b) if the City foreclose on any real property collateral pledged by Borrower: (1) The amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price. (2) the City may collect from Guarantor even if the City, by foreclosing on the real property collateral, has destroyed any right Guarantor may have to collect from Borrower. The foregoing is an unconditional and irrevocable waiver of any rights and defenses Guarantor may have because Borrower’s debt is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Section 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.
The City may terminate the Regulatory Agreement in accordance with the terms thereof and claim damages from the Borrower thereunder, including payment of past due and future rent under the Regulatory Agreement.
Section 4. Subrogation. Guarantor shall not exercise any rights which Guarantor may acquire by way of subrogation under this Guaranty, by any payment made hereunder or otherwise, until all of the Obligations shall have been paid in full and the City shall not be under any duty to extend credit to or for the benefit of Borrower. If any amount shall be paid to Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full, such amount(s) shall be held in trust for the sole benefit of the City , and shall forthwith be paid to the City to be applied to the Obligations, whether matured or unmatured, in accordance with the terms of the Regulatory Agreement and the Loan Agreement, respectively. If (i) Guarantor shall make payment to the City of all or any part of the Obligations and (ii) all the Obligations shall be paid in full and the City shall be under no duty to extend credit to or for the benefit of Borrower, then the City will, at Guarantor’s request, execute and deliver to Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation to Guarantor of an interest in the Obligations resulting from such payment by Guarantor.
Section 5. Amendments. No amendment or waiver of any provision of this Guaranty nor consent to any departure by Guarantor therefrom shall be effective unless the same shall be in writing and signed by the City, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
Section 6. Notices . All notices, demands, requests or other communications to be sent by one party to the other hereunder or required by law shall be in writing and shall be deemed to have been validly given or served by delivery of same in person to the addressee or by depositing same with Federal Express for next Business Day delivery or by depositing same in the United States mail, postage prepaid, registered or certified mail, return receipt requested, addressed as follows:
(a) If to Guarantor: RANCHO CORDOVA OWNER LP
c/o Lincoln Avenue Communities
ITEM 9.13.
ATTACHMENT 3
Exhibit K 6
Performance Guaranty
401 Wilshire Boulevard, 11th Floor
Santa Monica, California 90401
Attention: Russell Condas
With copies to:
Lincoln Avenue Communities
680 5th Avenue, 17th Floor
New York, New York 10019
Attention: Hanna Jamar, Esq.
With Copied to:
Cohen Liuzzo PLLC
88 Pine Street, Suite 1430
New York, New York 10005
Attention: Anthony Bargnesi, Esq. and Eleor Cohen, Esq.
Email: [email protected] and [email protected]
With copies to:
Cox Castle & Nicholson, LLP
50 California Street, Suite 3200
San Francisco, California 94111
Attention: Christian D. Dubois, Esq.
Facsimile: (415) 262-5143
Email: [email protected]
Limited Partner:
U.S. Bancorp Community Development Corporation
505 N 7th Street
Mail Code: SL-MO-T10M
St. Louis MO 63101
USB Project No: 36071
Attn.: Project Manager
Phone: 314-335-2600
Fax: 314-335-2601
And to:
Limited Partner’s Director of LIHTC Asset Management:
U.S. Bancorp Community Development Corporation
505 N 7th Street
Mail Code: SL-MO-T10M
ITEM 9.13.
ATTACHMENT 3
Exhibit K 7
Performance Guaranty
St. Louis MO 63101
USB Project No: 36071
Attn.: Director of LIHTC Asset Management
Phone: (314) 335-2600
Fax: (314) 335-2601
And to:
Limited Partner’s Director of LIHTC Project Management:
U.S. Bancorp Community Development Corporation
505 N 7th Street
Mail Code: SL-MO-T10M
St. Louis MO 63101
USB Project No: 36071
Attn.: Director of LIHTC Project Management
Phone: (314) 335-2600
Fax: (314) 335-2601
And to:
Applegate & Thorne-Thomsen, P.C.
425 South Financial Place, Suite 1900
Chicago, IL 60605
Attention: Bennett P. Applegate
(b) If to the City: City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Attention: City Manager
And to: City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Attention: Stefan Heisler
Email: [email protected]
Phone: 916.851.8757
And to: City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Attention: Anthony Amara
Email: [email protected]
Phone: 916.556.1531
ITEM 9.13.
ATTACHMENT 3
Exhibit K 8
Performance Guaranty
All notices, demands and requests shall be effective upon such personal delivery or upon being deposited with Federal Express or in the United States mail as required above. However, with respect to notices, demands or requests so deposited with Federal Express or in the United States mail, the time period in which a response to any such notice, demand or request must be given shall commence to run from the next Business Day following any such deposit with Federal Express or, in the case of a deposit in the United States mail as provided above, the date on the return receipt of the notice, demand or request reflecting the date of delivery or rejection of the same by the addressee thereof. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice, demand or request sent. By giving to the other party hereto at least ten (10) calendar days’ written notice thereof in accordance with the provisions hereof, the parties hereto shall have the right from time to time to change their respective addresses and each shall have the right to specify as its address any other address within the United States of America.
Section 7. No Waiver; Remedies . No failure on the part of the City to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 8. [Reserved]
Section 9. Continuing Guaranty; Transfer of Obligations. This Guaranty is a continuing guaranty and shall (a) remain in full force and effect until the lien free completion of the Project and the issuance of a temporary or permanent certificate of occupancy for the entirety of the Project, provided that there has been payment in full of the Obligations and all other amounts payable under this Guaranty, (b) be binding upon Guarantor and its successors and assigns, and (c) inure to the benefit of and be enforceable by the City , its successors, assigns and transferees.
Without limiting the generality of the foregoing clause (c), the City may assign or otherwise transfer the Regulatory Agreement or any interest of the City therein to an entity controlled by the City or, with the consent of the Borrower, to a third party, and the City may assign or otherwise transfer any of the Loan Documents, or any interest of the City therein, to an entity controlled by the City or, with the consent of the Borrower, to a third party, and such other Person (upon receipt of consent from the Borrower to the extent required) shall thereupon become vested with all the rights in respect thereof granted to the City herein or otherwise.
Section 10. Governing Law. This Guaranty shall be governed by the internal laws of the State of California and shall be construed in accordance with and governed by the laws of said State, without regard to the choice of law rules of that State, except to the extent that any of such laws may now or hereafter be preempted by Federal law.
Section 11. Consent to Forum. As part of the consideration for new value this day received, Guarantor hereby consents to the jurisdiction of any state court located within the county of Sacramento, California or the United States District Court for the Eastern District of California, and any appellate court from any thereof , and waives personal service of any and all process upon Guarantor and consents that all such service of process be made by certified or registered mail directed to Guarantor as provided in Section 6 hereof and service so made shall ITEM 9.13.
ATTACHMENT 3
Exhibit K 9
Performance Guaranty
be deemed to be completed upon actual receipt thereof. Guarantor waives any objection to jurisdiction and venue of any action instituted against Guarantor as provided herein and agrees not to assert any defense based on lack of jurisdiction or venue. Guarantor further agrees not to assert against the City (except by way of a defense or counterclaim in a proceeding initiated by the City) any claim or other assertion of liability with respect to this Guaranty, the Obligations, the Regulatory Agreement, any of the Loan Documents, the City ’s conduct in respect of any of the foregoing or otherwise in any jurisdiction other than the foregoing jurisdictions. Nothing in this Section shall affect the right of the City to serve legal process in any other manner permitted by law or affect the right of the City to bring any action or proceeding against Guarantor in the courts of any other jurisdictions.
Section 12. Waiver of Jury Trial . TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, GUARANTOR WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH GUARANTOR AND CITY MAY BE PARTIES, ARISING
OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO, THIS GUARANTY OR THE OTHER LOAN DOCUMENTS. IT IS AGREED AND
UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR
PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS GUARANTY. THIS WAIVER IS KNOWINGLY, WILLINGLY
AND VOLUNTARILY MADE BY GUARANTOR, AND GUARANTOR HEREBY
REPRESENTS THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN
MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. GUARANTOR FURTHER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN SIGNING
THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL AND
THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
Section 13. Time is of the Essence. Time is of the essence in the performance of this Guaranty by Guarantor, and each and every term thereof.
Section 14. Revival and Reinstatement . If all or any portion of the Obligations are paid, the obligations of Guarantor hereunder shall continue and shall remain in full force and effect in the event that all or any part of such payment is avoided or recovered directly or indirectly from the City as a preference, fraudulent transfer or otherwise under the Bankruptcy Code or under any other Debtor Relief Laws or other similar laws, regardless of (a) any notice of revocation given by Guarantor prior to such avoidance or recovery, or (b) full payment and performance of all of Obligations. If the City is required to pay, return, or restore to Borrower or any other person any amounts previously paid on any of the Obligations because of any Insolvency Proceeding of Borrower, or any other reason, the obligations of Guarantor shall be reinstated and revived and the rights of the City shall continue with regard to such amounts, all as though they had never been paid.
ITEM 9.13.
ATTACHMENT 3
Exhibit K 10
Performance Guaranty
Section 15. Information Regarding Borrower and the Property. Before signing this Guaranty, Guarantor investigated the financial condition and business operations of Borrower, the present and former condition, uses and ownership of the Property, and such other matters as Guarantor deemed appropriate to assure itself of Borrower’s ability to discharge its obligations under the Loan Documents. Guarantor assumes full responsibility for that due diligence, as well as for keeping informed of all matters that may affect Borrower’s ability to pay and perform its obligations to the City. The City has no duty to disclose to Guarantor any information which the City may have or receive about Borrower’s financial condition or business operations, the condition or uses of the Property, or any other circumstances bearing on Borrower’s ability to perform.
Section 16. Subordination. Any rights of Guarantor (including but not limited to any rights as subrogee of the City or resulting from Guarantor’s performance under this Guaranty), whether now existing or later arising, to receive payment on account of any indebtedness (including interest) owed to it by Borrower, any owner or member of Borrower, or any subsequent owner of the Property, or to withdraw capital invested by it in Borrower, or to receive distributions from Borrower, shall during the term hereof be subordinate as to lien and time of payment and in all other respects to the full payment and/or performance in full of the Obligations owed to the City. Guarantor shall not be entitled to enforce or receive payment of any sums hereby subordinated until all the Obligations have been paid and performed in full and any such sums received in violation of this Guaranty shall be received by Guarantor in trust for the City.
Section 17. Bankruptcy of Borrower. In any bankruptcy, receivership, or other voluntary or involuntary proceeding, in or out of court, for the adjustment of debtor -creditor relationships (each, an “ Insolvency Proceeding ”) in which the filing of claims is required by law, Guarantor shall file all claims which Guarantor may have against Borrower relating to any indebtedness of Borrower to Guarantor and shall assign to the City all rights of Guarantor thereunder. If Guarantor does not file any such claim, the City, as attorney-in-fact for Guarantor, is hereby authorized to do so in the name of Guarantor or, in the its discretion, to assign the claim to a nominee and to cause proof of claim to be filed in the name of the City ’s nominee.
The foregoing power of attorney is with full power of substitution and coupled with an interest and cannot be revoked. The City or their respective nominees shall have the right, in its reasonable discretion, to accept or reject any plan proposed in such Insolvency Proceeding and to take any other action which a party filing a claim is entitled to take. In all such cases, whether in administration, bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to the City the amount payable on such claim and, to the full extent necessary for that purpose, Guarantor hereby assigns to the City all of Guarantor’s rights to any such payments or distributions; provided, however, that Guarantor’s O bligations hereunder shall not be satisfied except to the extent that the City receive cash by reason of any such payment or distribution. If the City receives anything hereunder other than cash, the same shall be held as collateral for amounts due or to become due under this Guaranty. In the event that acceleration of the time for payment of the Loans is stayed under a debtor relief law, Guarantor’s obligations hereunder shall nonetheless be payable immediately upon demand of the City.
Section 18. Term . Subject to Section 14, this Guaranty shall terminate upon (i) the completion of the Obligations, as evidenced by the executed and recorded Certificate of ITEM 9.13.
ATTACHMENT 3
Exhibit K 11
Performance Guaranty
Completion by the City, and (ii) acceptance by the City of such completion as evidenced by written acknowledgement of satisfactory completion by the City to be provided upon reasonable request from or on behalf of the Guarantor, which shall not be unreasonably withheld, conditioned, or delayed. Further, if the City fails to respond to the Guarantor’s request made in accordance with the preceding sentence within thirty (30) days from its receipt thereof, then this Guaranty shall be deemed to have automatically terminated at the end of such 30-day period.
Section 19. Severability. The parties hereto intend and believe that each provision in this Guaranty comports with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision or provisions, in this Guaranty is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Guaranty to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, that the remainder of this Guaranty shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of the City under the remainder of this Guaranty shall continue in full force and effect.
Section 20. Additional Guarantor Covenants. The Guarantor represents, warrants and covenants to and for the benefit of the City as follows:
(a) Guarantor’s correct legal name is as shown next to Guarantor’s signature below; (b) The address of Guarantor is correct and is shown next to Guarantor’s signature below;
(c) This Guaranty is valid, binding and enforceable against Guarantor in accordance with its terms and any instrument or agreement required hereunder or thereunder, when executed and delivered, shall be similarly valid, binding and enforceable; (d) The Guarantor shall immediately notify City in writing of any fact that may jeopardize Guarantor’s ability to discharge the Obligations. (e) Guarantor will receive a material benefit and advantage from the making of the Loan, and Guarantor has received at least “reasonable equivalent value” (as such phrase is used in §548 of the Bankruptcy Code, in §3439.04 of the California Uniform Fraudulent Transfer Act, and in comparable provisions of other applicable law) and more than sufficient consideration to support its obligations hereunder with respect to the Guaranteed Obligations; (f) The financial information provided by Guarantor to City, if any, is complete and accurate in all material respects as to the financial condition of Guarantor (and, if applicable, any partners, shareholders, members, or other principals of Guarantor) and since the date such financial information was provided to City, there has been no material change in the financial condition of Guarantor (and, if applicable, such other persons); ITEM 9.13.
ATTACHMENT 3
Exhibit K 12
Performance Guaranty
(g) All other information submitted to City by or on behalf of Guarantor in connection with this Guaranty is correct, complete, and not misleading in any material respect; (h) Guarantor has filed all tax returns (federal, state, and local) required to be filed and has paid all taxes, assessments, and governmental charges and levies thereon to be due, including interest and penalties; and
(i) Guarantor has not received any notice of violation of any and all existing and future laws, orders, ordinances, rules and regulations, and there are no claims, actions, proceedings or investigations pending or, to Guarantor’s knowledge, threatened against Guarantor with respect to any violations of applicable laws.
(j) Section 13.19 of the Loan Agreement is hereby incorporated by reference with the same force and effect as if set forth herein in its entirety.
The above referenced items are direct obligations of the Guarantor in favor of the City.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[SIGNATURES ON FOLLOWING PAGE]
ITEM 9.13.
ATTACHMENT 3
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and delivered by its duly authorized representative as of the date first written above.
GUARANTOR:
RANCHO CORDOVA OWNER LP,
a California limited partnership
By:
Rancho Cordova AGP LLC,
a Delaware limited liability company,
its administrative general partner
By: _____________________________
Name: Russell Condas
Title: Vice President
By: PacH Rancho Cordova Holdings, LLC,
a California limited liability company,
its Managing General Partner
By: Pacific Housing, Inc.,
a California nonprofit public benefit
corporation,
its manager
By: _____________________________
Mark A. Wiese, President
ITEM 9.13.
ATTACHMENT 3
MEMORANDUM
City Council Staff Report - Page 1 of 5
ITEM 12.1.
DATE: May 18, 2026
TO: Honorable Mayor and Council Members
FROM: Adam Lindgren, City Attorney
Stacy Leitner, City Clerk
SUBJECT: DISCUSSION OF BROWN ACT UPDATES UNDER SB 707 AND A
RESOLUTION AUTHORIZING THE HANDLING OF DISRUPTIONS OF
TELEPHONIC OR INTERNET SERVICE DURING COUNCIL
MEETINGS
RECOMMENDATION
Receive an informational report on new requirements of the Ralph M. Brown Act that impact the manner the City Council and other legislative bodies of the city conduct public meetings and adopt the Resolution approving the City of Rancho Cordova’s Telephonic or Internet Service Disruption Policy, in accordance with the Ralph M. Brown Act.
RESULT OF RECOMMENDED ACTION
Adoption of the Resolution, and the information in this report, will assist the Council and city staff to comply with newly enacted requirements of the Ralph M. Brown Act.
BACKGROUND
California Senate Bill 707 (“SB 707”), signed into law on October 3, 2025, revised the requirements of the Ralph M. Brown Act (California Government Code § 54950 et seq.) (“Brown Act”) to enhance public accessibility and expand the use of technology in local government meetings. Some of the changes apply to all legislative bodies covered by the Brown Act, while others apply only to “eligible legislative bodies,” which, for the City of Rancho Cordova, is the City Council.
The new requirements take effect in two phases:
Phase One: which became effective on January 1, 2026, includes the majority of the changes Act (e.g., expanded teleconferencing and reporting requirements) and impacts all legislative bodies covered by the Brown Act.
Phase Two: which takes effect on July 1, 2026, presents the most significant changes (e.g., mandatory teleconferencing and community outreach obligations) and applies only to the City Council, as an eligible legislative body.
City Council Staff Report - Page 2 of 5
DISCUSSION
Effective July 1, 2026, until January 1, 2030, the City Council, as an eligible legislative body, must comply with the following new public meeting requirements:
• Offer Remote Participation Options at All Open and Public Meetings: Provide remote options for the public to participate at City Council meetings and provide public comment via a 2–way telephonic service or a 2–way audiovisual platform, with equal opportunity and time to participate as in-person attendees. If an eligible legislative body elects to provide a 2-way audiovisual platform, the eligible legislative body shall publicly post and provide a call-in option, and activate any automatic captioning function during the meeting if an automatic captioning function is included with the 2-way audiovisual platform. Otherwise, the eligible legislative body shall provide a 2-way telephonic service for the public to participate in the meeting. Noticed agenda must now include remote participation instructions.
• Approve a Technology Disruption Policy: On or before July 1, 2026, adopt a disruption policy at a noticed public meeting, in open session (and not on the consent calendar) regarding disruption of telephonic or internet services occurring during meetings. As part of this policy, City Council must comply with certain requirements related to disruption, including for certain technological disruptions, recessing the open session for at least one hour and making a good faith attempt to restore the service. • Engage in Community Outreach: Encourage participation in public meetings, including from underrepresented and non-English-speaking communities. These activities must include, but are not limited to the following:
1. Electronically accept requests for meeting agendas and related documents.
2. Maintain a webpage dedicated to public meetings that includes a general explanation of the public meeting process; public comment procedures; agendas; and a calendar of meeting dates, times, and locations.
3. Provide a direct link on the City’s primary homepage explaining how to request materials and access the dedicated webpage.
4. Provide a space on a freely accessible posting board made available by the City where members of the public may post their own translation of City Council agendas.
5. Reasonably assist members of the public who wish to translate a public meeting into any language or wish to receive interpretation provided by another member of the public, so long as the interpretation is not disrupting to the meeting. The eligible legislative body shall publicize instructions on how to request assistance. This section does not require an eligible legislative body to provide interpretation of any public meeting. • Translate Meeting Information Into Applicable Languages Not Required at This Time: If applicable, eligible legislative bodies must now translate the agenda, remote joining instructions, and postings for each meeting of the City Council into all applicable languages (meaning languages, according to data from the most recent American Community Survey (“ACS”), that are spoken by 20% or more of the applicable population— provided that 20% or more of the population that speaks that language speaks English less than “very well.”) The city does not currently have any applicable languages, as defined.
City Council Staff Report - Page 3 of 5
Effective January 1, 2026, provisions of the Brown Act scheduled to expire (or sunset) were extended indefinitely. All legislative bodies covered by the Brown Act must comply with the following updated meeting requirements:
• Indefinite Social Media Exception: A member of a legislative body can communicate, outside of a meeting, on an internet-based social media platform to answer questions and provide information to – or solicit information from – the public. Members cannot use social media to discuss among themselves or respond directly to anything another member of the same legislative body posts regarding agency business. • Mandatory Brown Act Distribution: A local agency is now required to provide a copy of the chapter to any person elected or appointed to serve as a member of a legislative body.
• Reporting Requirements Regarding Compensation: Prior to taking final action, legislative bodies must now provide an oral summary report of a recommendation for a final action on compensation decisions for not just a local agency executive, but also a department head or other similar administrative officer of the local agency. • Expanded Public Comment and Access to Meetings: New exceptions to the general rule that a legislative body can bypass public comment for items already considered by a committee comprised exclusively of legislative body members have been added. Now, an opportunity to address previously considered items must be given if: 1) the committee’s primary subject matter jurisdiction focuses on elections, budgets, police oversight, privacy, removing from – or restricting access to – materials available in public libraries, or taxes/related spending proposals; or 2) the item was not previously considered by the committee at a meeting with a physical, in-person quorum. The updated requirements also allow for an elected legislative body to impose greater access requirements onto appointed legislative bodies without exceptions. • Reaffirmed Public Recording Rights: The public’s right to record open legislative body meetings is reaffirmed to now include any device used to record meetings. This right exists unless the legislative body makes a reasonable finding that the recording cannot continue without causing a persistent disruption to the proceedings. • Expanded Special Meetings Requirements Regarding Compensation: For special meetings, the requirement that the agenda be posted on the local agency's internet website, if the local agency has one, now applies to all legislative bodies, without exemptions. Prior law prohibited calling a special meeting to discuss specified compensation of local agency executives. New law expands the exception to include the legislative body itself.
• Reaffirmed Authority to Remove Disruptive Participants: The existing authority of a legislative body – or its presiding officer – to remove or limit participation of a disruptive person now explicitly includes teleconference meetings and members of the public participating in a meeting via a two-way telephonic service or a two-way audiovisual platform.
• Expanded Teleconferencing Options for Remote Participation: All legislative bodies covered by the Brown Act remain authorized to attend meetings remotely under existing provisions. In addition, new teleconferencing provisions have been added that can be used by a legislative body, in addition to or instead of the traditional provisions. These teleconferencing provisions are cumulative, and would authorize a legislative body to elect to use any teleconferencing provisions that are applicable to a meeting, regardless of whether any other teleconferencing provisions would also be applicable to that meeting. Each teleconferencing option has its own requirements. For any member who participates in an option, the minutes for the meeting must identify the specific provision
City Council Staff Report - Page 4 of 5
each member relied upon to participate remotely. Below are options available to appear remotely:
1. Gov. Code § 54953(b): Permits the use of teleconferencing for all purposes in connection with any meeting or proceeding of the legislative body.
2. Gov. Code § 54953(c): Permits a member with a disability to appear remotely as a reasonable accommodation.
3. Gov. Code § 54953.8.2: Permits a teleconference meeting during a state of emergency, provided that it complies with certain requirements.
4. Gov. Code § 54953.8.3: Permits a teleconference meeting and a member’s participation remotely if “just cause,” (e.g., a contagious illness or caretaker responsibilities) exists for remote participation and at least a quorum of the members of the legislative body participates in person from a singular physical location clearly identified on the agenda.
• Expanding Just Cause Definition For Remote Participation: The changes remove the requirement that the legislative body formally approve a member’s request to participate remotely due to a qualifying “just cause” circumstance. Now, where a quorum of members are in person from a single physical location, a member can notify the body at the earliest opportunity of their need to participate remotely for just cause. A member of a legislative body cannot participate in meetings solely by teleconference for just cause for more than two meetings per year, if the legislative body regularly meets once per month; or five meetings per year, if the legislative body regularly meets twice per month; or seven meetings per year, if the legislative body regularly meets three or more times per month. The “Just Cause” definition now reads as follows:
1. Childcare or caregiving of parent, grandparent, grandchild, sibling, spouse, or domestic partner.
2. A contagious illness.
3. A need related to a physical or mental condition.
4. Travel while on official business of the legislative body.
5. An immunocompromised child, parent, grandparent, grandchild, sibling, spouse, or domestic partner of the member that requires the member to participate remotely.
6. A physical or family medical emergency.
7. Military service obligations.
• Teleconferencing as a Reasonable Accommodation: Legislative body members may participate by teleconference as an accommodation for a disability. A member must participate through both audio and visual technology, except when a disability results in a need to participate off camera. The member must also disclose any other individuals 18 years of age or older present in the room at the remote location, and the general nature of the member's relationship with any of those individuals. Remote participation under this subdivision shall be treated as in-person attendance at the physical meeting location for all purposes, including any requirement that a quorum of the legislative body participate from any particular location.
IMPLEMENTATION STATUS
The City Clerk’s Department, with assistance from the City Attorney’s Office, is leading implementation efforts and has done the following:
City Council Staff Report - Page 5 of 5
• Determined the City Council qualifies as an eligible legislative body. This means that the City Council has additional Brown Act requirements that other legislative bodies of the City (e.g., the Planning Commission) do not have.
• Distributed Brown Act copies to all Council Members and appointed members of boards, commissions, and committees.
• Distributed a list of meeting locations to all Council Members and appointed members of boards, commissions, and committees.
• Updated onboarding procedures to include Brown Act distribution to new member orientation materials.
• Proposed for adoption a resolution to address any technology disruption aligned with SB 707.
• Initiated internal coordination with the City Manager’s Office, City Attorney, Communications, and Information Technology. For City Council meetings, staff plans to continue to utilize audiovisual or telephonic service for all public meetings beginning July 1, 2026.
• Establish and post instructions on how members of the public who wish to translate a public meeting into any language or wish to receive interpretation provided by another member of the public, can request reasonable assistance from the City. • Briefed Council on social media limitations and reminded members of permanent prohibition on responding to/reacting to other members' posts about agency business. • Reviewed ACS language data to determine that no applicable languages, as defined, currently exist within the city. This means that the new translation provisions do not apply to the city at this time.
Additional compliance actions currently taking place include:
• Designate freely accessible location for the public to post additional translations of meeting information.
• Establish ADA accommodation process for members requesting remote participation. • Update minutes templates to accommodate reporting requirements for remote participant names and statutory authority for each remote participation. • Website special meeting posting: Ensure procedures for 24-hour website posting of all special meeting notices.
• Train clerks, IT, Council, and commission members on new procedures and technology.
FISCAL IMPACT AND FUNDING SOURCE
The fiscal impact of the updates would be approximately $12,000 for upgrading the noticing board at City Hall, and an annual cost of approximately $46,785 annually for additional staff time and webinar license fees.
ATTACHMENT(S)
1. Resolution
ITEM 12.1. ATTACHMENT 1
Resolution No. XX-2026 Page 1 of 4
CITY OF RANCHO CORDOVA
RESOLUTION NO. XX-2026
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA, STATE
OF CALIFORNIA, ESTABLISHING PROCEDURES FOR ADDRESSING DISRUPTIONS OF
TELEPHONIC OR INTERNET SERVICE OCCURRING DURING PUBLIC MEETINGS
WHEREAS, the Ralph M. Brown Act, California Government Code Section 54950 et seq. (“Brown Act”), requires all open and public meetings held by the City Council, as the eligible legislative body of the City of Rancho Cordova, include an opportunity for members of the public to attend via a remote telephonic or audiovisual platform service; and
WHEREAS, on or before July 1, 2026, the Brown Act requires the City Council to adopt a policy that addresses how the eligible legislative body will respond when there are disruptions in telephonic or internet service, that prevents members of the public from attending or observing a meeting remotely; and
WHEREAS, this policy addresses the procedures for recessing and reconvening a remote public meeting in the event of service disruption, and the efforts that the eligible legislative body must make to attempt to restore access and participation at the meeting; and
WHEREAS, the Brown Act also expands remote participation options for all legislative bodies covered by the Brown Act, pursuant to specified requirements; and
WHEREAS, this policy also aims to address the procedures for legislative bodies, other than the City Council, to follow when an open and public meeting which offers remote participation experiences service disruption that prevents members of the public from attending or observing a meeting remotely; and
WHEREAS, the policy herein is adopted to comply with the updated requirements of the Brown Act and to ensure the continuity of public participation during public meetings.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA as follows:
1. PURPOSE
This policy sets forth clear procedures and expectations for addressing disruptions of telephonic and internet service occurring during open and public meetings, as required by the Brown Act (Gov. Code § 54953.4). This policy affirms the city’s commitment to maintaining transparency, accessibility, and continuity of government during technology disruptions.
2. SCOPE
This policy applies to open and public meetings at which remote public participation is required or offered under the Ralph M. Brown Act, unless otherwise specified.
ITEM 12.1. ATTACHMENT 1
Resolution No. XX-2026 Page 2 of 4
3. DEFINITIONS
3.1 “Service disruption” is any failure, outage, or other interruption of the city’s telephonic or internet service that prevents the legislative body from broadcasting the meeting, or the public from attending, observing, providing public comment, or otherwise participating in a meeting through the city's remote access services.
3.2 “Remote access services” or “service” is the two-way telephonic service and/or two-way audiovisual online platform used to provide real-time remote public attendance, observation, and participation at meetings.
3.3 “Two-way telephonic service” is a telephone service that does not require internet access and allows the public to listen to and verbally participate in a meeting.
3.4 “Two-way audiovisual platform” is a platform that allows remote participants to see and hear the meeting and allows the legislative body to see and hear remote participants.
4. PROCEDURES
In the event of a service disruption during open and public meetings of the City Council (i.e., the “eligible legislative body”):
4.1 Response to service disruptions:
If any member of the eligible legislative body or city staff becomes aware of a disruption to the agency’s remote access services that prevents the public from attending or observing the meeting remotely:
4.1.1 The Presiding Officer of the eligible legislative body or staff should promptly announce the disruption to the public.
4.1.2 The Presiding Officer of the eligible legislative body or staff may then call a recess of the open session or convene in closed session, in accordance with the Brown Act.
4.1.3 Staff should begin efforts to identify and restore the disrupted service.
4.1.4 The open session shall remain in recess for at least one hour to make a good faith attempt to restore the service. The eligible legislative body may meet in closed session during this period. The eligible legislative body shall not reconvene the open session of the meeting until at least one hour following the disruption, or until telephonic or internet service is restored, whichever is earlier.
4.2 Efforts to restore service:
4.2.1 Staff shall make good faith efforts to restore remote access services, which may include:
• Troubleshooting teleconferencing platforms or software • Resetting or replacing audiovisual equipment
ITEM 12.1. ATTACHMENT 1
Resolution No. XX-2026 Page 3 of 4
• Attempting alternative connection methods
• Contacting appropriate support staff or service providers • Using back-up equipment or platforms, if available
4.2.2 The staff should document the restoration efforts undertaken.
4.3 Reconvening the open session:
4.3.1 Timing:
The open session may be reconvened after at least one hour of time has passed from the time of disruption, or until service is restored, whichever comes first.
4.3.2 If service has been restored:
If service is restored before or at the time the meeting reconvenes, the meeting will continue as normal.
4.3.3 If service is not/cannot be restored:
If service has not been restored after one hour, the City Council may either continue efforts to restore service or reconvene and:
1. Adjourn the meeting; or
2. Continue the meeting in open session by adopting, by roll call vote, the following, or a similar, finding:
“The City Council has made good faith efforts to restore telephonic or internet service in accordance with its adopted policy and Government Code Section 54953.4(b)(A)(i), and the public interest in continuing the meeting outweighs the public interest in remote public access because . . . . .”;
Upon adoption of the finding, the eligible legislative body may continue the open session even though remote access services have not been restored.
4.4 Documentation:
4.4.1 The City Clerk must enter a brief statement into the meeting minutes, which includes the following:
• The nature and time of the disruption
• Restoration efforts undertaken
• The time the meeting was reconvened (if applicable)
• Any finding adopted pursuant to section 4.3.3 (2)
ITEM 12.1. ATTACHMENT 1
Resolution No. XX-2026 Page 4 of 4
4.4.2 This documentation should be retained in accordance with the city’s record retention policies.
In the event of a service disruption during open and public meetings of legislative bodies, not including the City Council (i.e., “non-eligible legislative bodies”):
4.5. When a legislative body chooses to use remote teleconferencing option, any disruption in service that prevents the legislative body from broadcasting the meeting to members of the public using the call-in option or internet-based service option, or in the event of a disruption within the local agency’s control that prevents members of the public from offering public comments using the call-in option or internet-based service option, the legislative body shall take no further action on items appearing on the meeting agenda until public access to the meeting via the call-in option or internet-based service option is restored.
4.5.1. If service has been restored:
If service is restored, the meeting will continue as normal.
4.5.2. If service is not/cannot be restored:
No agenda actions may be taken until service is restored. If service has not been restored after one hour, the City Council must reconvene and adjourn the meeting.
4.5.3. Actions taken on agenda items during a disruption that prevents the legislative body from broadcasting the meeting may be challenged pursuant to California Government Code Section 54960.1.
4.6. Review and updates:
This policy may be amended by the City Council at a noticed public meeting during open session, not on the consent calendar.
PASSED AND ADOPTED by the City Council of the City of Rancho Cordova on the 18th day of May 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Garrett Gatewood, Mayor
Stacy Leitner, CMC
City Clerk
MEMORANDUM
City Council Staff Report - Page 1 of 1
ITEM 12.2.
DATE: May 18, 2026
TO: Honorable Mayor and Council Members
FROM: Adam Lindgren, City Attorney
Stacy Leitner, City Clerk
SUBJECT: RESOLUTIONS RELATED TO THE TIME AND LOCATION FOR
REGULAR CITY COUNCIL MEETINGS AND ESTABLISHING RULES
FOR THE MEETINGS
RECOMMENDATION
Adopt the Resolutions.
RESULT OF RECOMMENDED ACTION
Adoption of the Resolutions would set the standing time and location for Council meetings and would update the rules of meetings for the Council to align with recent updates made to the Ralph M. Brown Act.
BACKGROUND
Due to updates in City Council practices and state law regulating the conduct of meetings, the city is proposing the subject Resolutions. Adopting the Resolutions would replace the existing Resolutions relating to the time and location for regular meetings and the rules for the conduct of meetings.
FISCAL IMPACT AND FUNDING SOURCE
There is no fiscal impact.
ATTACHMENT(S)
1. Resolution for Time and Place of Council Meetings
2. Resolution for Rules of City Council Meetings
ITEM 12.2. ATTACHMENT 1 Resolution No. XX-2026 Page 1 of 1
CITY OF RANCHO CORDOVA
RESOLUTION NO. XX-2026
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA, STATE
OF CALIFORNIA, DESIGNATING THE PLACE AND TIME FOR REGULAR CITY COUNCIL
MEETINGS
WHEREAS, the City Council of the City of Rancho Cordova desires to encourage and maximize participation of the public in the proceedings and discussions of the City Council.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA as follows:
1. Resolution No. 113-2004 and Resolution No. 02-2003 are hereby rescinded.
2. The Regular Meeting days for the City Council of the City of Rancho Cordova shall remain the first and third Monday of the month, provided that if a regular meeting lands on an official holiday, the meeting will be held on the following day.
3. The Regular Meeting time of the City Council of the City of Rancho Cordova shall be 5:30 p.m. During a Regular Meeting of the City Council, no new item of business will be considered after 11:00 p.m.
4. The Regular Meeting place of the City Council of the City of Rancho Cordova is at Rancho Cordova City Hall, David B. Roberts Council Chambers, located at 2729 Prospect Park Drive, Rancho Cordova, California 95670. For meetings conducted virtually by teleconference, options for remote public participation via a 2–way telephonic service or a 2-way audiovisual platform (e.g., Zoom) is offered, in accordance with the Ralph M. Brown Act. Instructions for remote participation will be included in the noticed agenda.
PASSED AND ADOPTED by the City Council of the City of Rancho Cordova on the 18th day of May 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Garrett Gatewood, Mayor
Stacy Leitner, CMC
City Clerk
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 1 of 8
CITY OF RANCHO CORDOVA
RESOLUTION NO. XX-2026
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA, STATE
OF CALIFORNIA, ESTABLISHING RULES FOR MEETINGS OF THE CITY COUNCIL OF
THE CITY OF RANCHO CORDOVA
WHEREAS, Government Code Section 36813, authorizes a City Council to establish rules for the conduct of its meetings.
WHEREAS, the City Council adopted rules and procedures regarding meetings by Resolution No. 31-2003 that it wants to update.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA as follows:
1. The City Council rescinds Resolution No. 31-2003.
2. REGULAR MEETINGS
a. Time. Regular meetings of the City Council shall be held on the first and third Monday of each month at 5:30 p.m. Whenever the day fixed for any regular meeting of the Council falls on an official holiday, the meeting will be held at the same hour on the next day that is not a holiday.
b. Place. All regular meetings of the City Council shall be held at the Rancho Cordova City Hall, David B. Roberts Council Chambers, located at 2729 Prospect Park Drive, Rancho Cordova, California 95670. For meetings conducted virtually by teleconference, options for remote public participation via a 2-way telephonic service or a 2-way audiovisual platform (e.g., Zoom) is offered for each meeting. Instructions for remote participation will be included in each noticed agenda.
c. Public. All meetings of the City Council shall be open to the public; provided, however, the City Council may hold closed sessions as provided by State law.
3. SPECIAL MEETINGS
A special meeting may be ordered at any time by the City Manager, Mayor, or by a majority of the members of the legislative body, whenever in his/her/their opinion the public business may require it, or upon the written request of any three members of the Council.
Whenever a special meeting is called, written notice of the meeting shall be delivered personally or by any other means by the City Clerk to each member of the Council and to each local newspaper of general circulation, radio/television station requesting notice in writing, and posting a notice on the local agency’s internet website, if the local agency has one. The notice must be delivered at least twenty-four (24) hours before the time of the meeting, as specified in the notice. The notice shall specify the time and place of the special meeting and the business to be transacted or discussed. No other business shall be considered at such meetings by the
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 2 of 8
Council. The agenda for special meetings shall contain the information set forth in Section 4(a)- (d) below. At least twenty-four (24) hours before each special meeting, the City Clerk shall post a copy of the agenda, including the call and notice of the special meeting, at the same location identified in Section 4 below.
4. AGENDA
The City Manager, in consultation with the City Clerk and the City Attorney shall arrange an agenda. The City Clerk shall provide a copy of the agenda packet at least 72 hours prior to a regular Council meeting, and at least 24 hours prior to a Special Council meeting.
The agenda prepared by the City Clerk shall, at a minimum, include:
a. The date of the meeting;
b. The time of the meeting;
c. The location of the meeting;
d. For meetings conducted virtually by teleconference instruction for remote participation and public comment via a call-in option or an internet-based service option;
e. Procedures for receiving and resolving requests for accommodation; f. A brief general description of each item of business to be transacted or discussed at the meeting;
g. Specified period of time for members of the public to address the Council on items of interest to the public within the jurisdiction of the Council, including a provision that, absent direction of the Council, each person may speak for three (3) minutes, and include language that the Council can only briefly respond with questions, refer to staff, or place on a future agenda; h. A specified section under which Councilmembers and staff may present informational only reports.
At least seventy-two (72) hours before each regular meeting, the City Clerk shall post a copy of the agenda at City Hall (2729 Prospect Park Drive). Effective July 1, 2026 the city must also provide a physical location, within reasonable proximity to where the agenda is posted, that is open and accessible for the public to post translations of the agenda in languages other than English in accordance with recent updates to the Ralph M. Brown Act.
The City Clerk shall mark or denote "Consent Calendar" items on the agenda to identify those items on the agenda which can reasonably be expected to generate no discussion by members of the City Council, city staff or interested persons in the audience. The Council shall consider all of the items on the Consent Calendar portion of the agenda at one time by a vote after a motion has been made and seconded. If any member of the City Council, city staff or interested person in the audience requests to speak on an item on the Consent Calendar, the Council will first vote by one motion on the remaining Consent Calendar items, and following the
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 3 of 8
vote, any items on which there was a request to speak shall be taken up for comment and consideration, in the order listed on the agenda.
5. PRESIDING OFFICER
The Mayor presides at all City Council meetings and performs such other duties consistent with his/her office, as may be imposed by the Council. The Mayor is entitled to vote, but possesses no veto power. The Mayor is recognized as the official head of the City for all ceremonial purposes, by the courts for the purpose of serving civil process, and by the Governor for military purposes. In times of public emergency, the Mayor, with the consent of the Council, shall maintain order and enforce laws.
6. CALL TO ORDER
The Mayor, or in his/her absence, the Vice Mayor, shall take the chair precisely at the hour appointed for the meeting, and shall immediately call the Council to order. In the absence of the Mayor or Vice Mayor, the City Clerk shall call the Council to order, whereupon a temporary chair shall be elected by the members of the Council present. Upon the arrival of the Mayor or Vice Mayor, the temporary chair shall immediately relinquish the chair upon the conclusion of the business immediately before the Council.
Before proceeding with the business of the Council, the City Clerk shall enter into the minutes the names of the members present or absent.
7. QUORUM
A majority of the members of the Council shall constitute a quorum for the transaction of business. The Council may adjourn any regular, adjourned regular, special or adjourned special meeting to a time and place specified in the order of adjournment. If all members are absent from any regular or adjourned regular meeting, the City Clerk may declare the meeting adjourned to a stated time and place. If he/she does, he/she shall cause written notice of the adjournment to be given in the same manner provided for regular meetings. A copy of the order or notice of adjournment shall be posted in the same location identified in Section 4 and other places designated by the Council within seventy-two (72) hours after the time of adjournment.
Whenever a regular or adjourned regular meeting is adjourned as provided in this section, the resulting adjourned regular meeting is a regular meeting for all purposes. When an order of adjournment of any meeting fails to state the hour at which the adjournment meeting shall be held, it shall be held at the hour specified for regular meetings.
City Council members may participate remotely by teleconference as an accommodation for a disability. Remote participation for this reason shall be treated as in-person attendance at the physical meeting location for all purposes, including any requirement that a quorum of the legislative body participate from any particular location.
8. ORDER OF BUSINESS
Promptly at the hour set on the day of each regular meeting, the members of the Council, City Clerk (or Designee), City Attorney (or Designee), and City Manager (or Designee) shall take their regular stations in the Council Chambers, and the business of the Council shall be
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 4 of 8
taken up for consideration and disposition in the following order, unless it is determined by the Mayor that matters may be taken up out of order:
a. Call to Order – Roll Call
b. Meetings Recording and Playback Schedule
c. Pledge of Allegiance
d. Invocation
e. Presentations
f. Public Comment
g. Council Reports
h. City Manager’s Report
i. Consent Calendar
j. Consent Public Hearing
k. Public Hearings
l. Regular Calendar
m. Council Requests for Future Agenda Items
n. Adjournment
The order of business may change for a special meeting or for the addition of closed session items.
9. MATTERS TOO LATE FOR THE AGENDA
a. No action or discussion shall take place on any item not appearing on the agenda for a regular meeting as posted, unless:
i. The City Council determines by majority vote that an emergency situation exists, as defined in Government Code §54956.5;
ii. The City Council determines by vote of two-thirds vote of the members of the legislative body present at the meeting (or a unanimous vote if less than two-thirds of the members are present) that there is the need to take action immediately; and the need for action came to the attention of the “local agency” after the agenda was posted;
iii. The item was included in a posted agenda for a prior meeting held not more than five (5) calendar days prior to the meeting at which the item is acted upon.
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 5 of 8
b. When an item not on an agenda is raised by a member of the public, the City Council may briefly respond, may ask questions for clarification, provide a reference to Staff or other resources, or request Staff to report back at a subsequent meeting. Furthermore, a member of the City Council may take action to place a matter of business on a future agenda.
10. READING OF MINUTES
Unless the reading of the minutes of a Council meeting is requested by a member of the Council, the minutes may be approved without reading if the City Clerk has previously provided each member with a copy thereof.
11. RULES OF DEBATE
a. Presiding Officer may debate. The Mayor or such other member of the Council as may be presiding may move, second, and debate from the chair, subject only to the limitations of debate imposed upon all members. He/she shall not be deprived of any of the rights and privileges of a Councilmember by reason of his/her acting as the Presiding Officer.
b. Getting the floor. Every member desiring to speak shall address the Mayor, and upon recognition by the Mayor, shall confine himself/herself to the question under debate.
c. Interruptions. A member once recognized, shall not be interrupted when speaking unless it be to call him/her to order, or as herein otherwise provided. If a member, while speaking, be called to order, he/she shall cease speaking until the question of order be determined, and if in order, he/she shall be permitted to proceed.
d. Privilege of closing debate. The Councilmember moving the adoption of an ordinance or resolution shall have the privilege of closing the debate. e. Motion to reconsider. A motion to reconsider any action taken by the Council may be made at any time. The motion must be made by one of the prevailing side, but may be seconded by any member, and may be made at any time and have precedence over all other motions or while a member has the floor; it shall be debatable. Nothing herein shall be construed to prevent any member of the Council from making or remaking the same or other motion at a subsequent meeting of the Council.
f. Remarks of Councilmember. A Councilmember may request through the Mayor, the privilege of having an abstract of his/her statement on any subject under consideration by the Council entered in the minutes. If the Council consents thereto, the statement shall be entered in the minutes. g. Synopsis of debate. The City Clerk may be directed by the Mayor with the consent of the Council, to enter in the minutes a synopsis of the discussion of any question coming regularly before the Council.
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 6 of 8
h. Rules of Order. Except as otherwise provided in this Resolution, the current edition of "Roberts Rules of Order" shall govern the conduct of the meetings of the City Council.
12. ADDRESSING THE COUNCIL
Any person desiring to address the Council at a meeting shall first secure the permission of the Mayor to do so; provided, however, that under the following headings of business, any qualified and interested person shall have the right to address the Council upon obtaining recognition by the Mayor.
a. Written Communications. Interested persons or their authorized representative may address the Council by written communication on any matters concerning the city's business, or any matters over which the Council has control. b. Oral Communications. Interested persons in the audience or their authorized representatives may address the Council by oral communications on any matters over which the Council has control; provided, however, that preference shall be given to those persons who have notified the City Clerk in advance of their desire to speak in order that the same may appear on the agenda of the Council.
13. ADDRESSING THE COUNCIL AFTER A MOTION IS MADE
After a motion is made by the Council, no person shall address the Council without first securing the permission of the Mayor to do so.
14. MANNER OF ADDRESSING COUNCIL
Each person addressing the Council at an in-person meeting may stand at the podium and may give his/her name if they choose to. A Speaker Slip shall be completed in order to facilitate preparation of the minutes. For meetings conducted virtually by teleconference, the legislative body shall allow members of the public to access the meeting and provide an opportunity to address the legislative body via a 2-way telephonic or 2-way audiovisual platform. All remarks shall be addressed to the Council as a body and not to any member thereof. No person, other than the Council and the person having the floor, shall be permitted to enter into any discussion, either directly or through a member of the Council, without the permission of the Mayor. No question shall be asked of a Councilmember except through the Mayor.
15. VOTING
a. Members of the Council shall vote by a "voice vote" on all ordinances, resolutions and other matters, unless a roll call vote is required by law or is requested by a Councilmember. The Mayor shall announce the result of the vote. The City Clerk shall show on ordinances and resolutions the names of Councilmembers voting "Aye" and "No."
b. The vote on any matter being considered by the Council may be delayed by the Mayor until all members of the Council present for a meeting, and not excused as herein provided, are actually present at the Council dais.
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 7 of 8
c. A member of the Council who has a conflict of interest regarding any matter being considered by the Council shall declare the conflict and excuse himself/herself from participating in the Council's deliberations and decisions regarding that matter.
16. ORDER AND DECORUM
a. By Councilmembers. While the Council is in session, the members must preserve order and decorum. A member shall not, by conversation or otherwise, delay or interrupt the proceedings or the peace of the Council or disturb any member while speaking or refuse to obey the orders of the Council or Mayor, except as otherwise herein provided.
b. By Persons. The Mayor may remove, or cause the removal of, an individual for disruptive behavior. “Disruptive Behavior” means engaging in behavior during a meeting of the City Council that actually disrupts, disturbs, impedes, or renders infeasible the orderly conduct of the meeting and includes, but is not limited to one of the following: (A) A failure to comply with reasonable and lawful regulations adopted by City Council; or (B) Engaging in behavior that constitutes use of force or a true threat of force. Prior to removing an individual, the Presiding Officer, or their designee, shall warn the individual that their behavior is disrupting the meeting and that their failure to cease their behavior may result in their removal. These procedures apply to members of the public participating in open and public meetings both in-person and remotely.
c. Enforcement of Order and Decorum. A law enforcement officer shall be designated as Sergeant-at-Arms of the Council meetings when requested by the Mayor. He/she shall carry out all orders and instructions given at the Council meeting. Upon instruction of the Mayor, it shall be the duty of the Sergeant-at- Arms, as to any person who violates the order and decorum of the meeting, to remove and bar the person from the Council meeting. Willful disruptions of a public meeting is unlawful and a misdemeanor under the California Penal Code.
d. Smoking. Smoking is prohibited at all times in all city-owned facilities.
e. Code of Conduct Policy. The City Council shall adopt a code of conduct policy which, in the event of a conflict with this Resolution, shall control.
17. SPECIAL COMMITTEES/TASK FORCES
All special committees/task forces shall be appointed by the Mayor, subject to approval of the City Council.
18. COUNCILMEMBER VACANCIES
When a vacancy occurs on the City Council, in the office of Councilmember or Mayor, and the Council determines to consider filling the vacancy by appointment, the Council will make the appointment in accordance with the provisions of the Government Code. This rule shall not preclude the Council from calling a special election to fill the vacancy or from adopting an ordinance to fill the vacancy pursuant to Government Code §36512 at a meeting at which one of the remaining Councilmembers (including the Mayor) is absent.
ITEM 12.2. ATTACHMENT 2
Resolution No. XX-2026 Page 8 of 8
19. PROTESTS
Any Councilmember shall have the right to have the reasons for his/her dissent from, or protest against, any action of the Council entered in the minutes.
20. ADJOURNMENT
A motion to adjourn shall always be in order and decided without debate.
21. RULES AVAILABLE FOR PUBLIC REVIEW
A copy of this Resolution shall be available at all meetings of the Council for review by the public.
22. RESCIND PREVIOUS RESOLUTION
This Resolution replaces Resolution No. 31-2003.
PASSED AND ADOPTED by the City Council of the City of Rancho Cordova on the 18 th day of May 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Garrett Gatewood, Mayor
Stacy Leitner, CMC
City Clerk
MEMORANDUM
City Council Staff Report - Page 1 of 3
ITEM 12.3.
DATE: May 18, 2026
TO: Honorable Mayor and Council Members
FROM: Amanda Norton, Economic Development Director
SUBJECT: A RESOLUTION OF INTENTION TO MODIFY THE RANCHO CORDOVA
TOURISM BUSINESS IMPROVEMENT DISTRICT
RECOMMENDATION
Adopt the Resolution.
RESULT OF RECOMMENDED ACTION
Adoption of the Resolution would result in a public meeting on June 15, 2026, and a public hearing on July 6, 2026, on the modification of the Rancho Cordova Tourism Business Improvement District (RCTBID) and the levy of assessments on certain lodging businesses.
BACKGROUND
The Rancho Cordova Tourism Business Improvement District (RCTBID) is a benefit assessment district proposed to continue a revenue source to help fund marketing and sales promotions and destination development programs for assessed Rancho Cordova lodging businesses. This approach has been used successfully in other destination areas throughout the state to improve tourism and drive additional room nights to assessed businesses.
The Property and Business Improvement District Law of 1994, Streets and Highways Code §36600 et seq., allows for the Owners’ Association to request that the city modify the Management District Plan (Plan). As the RCTBID Owners’ Association, Rancho Cordova Travel and Tourism Corporation (RCTTC) provided a written request to the City Council to modify the RCTBID Plan. This written request was submitted on February 17, 2026. The proposed modification of the RCTBID Plan will include modifying the boundaries of the RCTBID to establish two benefit zones and increasing the assessment rate within DOVA Zone from four and one-half of one percent (4.5%) to six percent (6%). The modified RCTBID will continue to include all lodging businesses with two (2) rooms or more located within the boundaries of the City of Rancho Cordova.
TOURISM BUSINESS IMPROVEMENT DISTRICTS
Tourism Business Improvement Districts (TBIDs) utilize the efficiencies of private sector operation in the market-based promotion of tourism. These special assessment districts allow assessed business owners to organize their efforts to increase tourism. Business owners within the TBID fund the TBID, and those funds are used to provide services that are desired by and
City Council Staff Report - Page 2 of 3
benefit the assessed businesses within the TBID.
TBID benefits:
• Funds cannot be diverted for other government programs; • They are customized to fit the needs of each destination; • They allow for a wide range of services; including: destination marketing, tourism promotion, and sales lead generation;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable funding source for tourism promotion.
In California, TBIDs are primarily formed pursuant to the Property and Business Improvement District Law of 1994 (94 Law). This law allows for the creation of special benefit assessment districts to raise funds within a specific geographic area. The key difference between TBIDs and other special benefit assessment districts is that funds raised are returned to the private non- profit corporation governing the TBID.
RCTBID MODIFICATION PROCESS
May 18, 2026 Adopt Resolution of Intention to Modify
Upon the submission of a written request from the Owners’ Association of the RCTBID, the City Council (Council) may initiate proceedings to modify the RCTBID by the adoption of a resolution expressing its intention to modify the RCTBID.
No later than
May 22, 2026
NOTICE
The 94 Law requires the City to mail written notice to the owners of all businesses proposed to be assessed within the RCTBID. Mailing the notice begins a mandatory forty-five (45) day period in which assessed business owners may protest RCTBID modification.
June 15, 2026 PUBLIC MEETING
Allow public testimony on the modification of the RCTBID and levy of assessments. No Council action required.
July 6, 2026 FINAL PUBLIC HEARING
If written protests are received from the owners of businesses in the modified RCTBID which will pay fifty percent (50%) or more of the assessments proposed to be levied, and protests are not withdrawn so as to reduce the protests to less than fifty percent (50%), no further proceedings to levy the proposed assessment against such businesses shall be taken for a period of one (1) year from the date of the finding of a majority protest by the Council.
If the Council, following the public hearing, decides to establish the modified RCTBID, the Council shall adopt a resolution of modification.
FISCAL IMPACT AND FUNDING SOURCE
None immediately. The city will continue to receive a fee of two percent (2%) of the amount collected to cover its costs of administration. Because the RCTBID programs are intended to increase visitation to the city, there may be an increase in transient occupancy tax and sales tax collections.
City Council Staff Report - Page 3 of 3
ATTACHMENT(S)
1. Resolution
2. Exhibit A to the Resolution - Boundary Map
3. RCTBID Management District Plan
ITEM 12.3. ATTACHMENT 1 Resolution No. XX-2026 Page 1 of 2
CITY OF RANCHO CORDOVA
RESOLUTION NO. XX-2026
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA, STATE
OF CALIFORNIA, DECLARING ITS INTENTION TO MODIFY THE RANCHO CORDOVA
TOURISM BUSINESS IMPROVEMENT DISTRICT, FIXING THE TIME AND PLACE OF A
PUBLIC HEARING THEREON, AND GIVING NOTICE THEREOF
WHEREAS, the City of Rancho Cordova (City) created the Rancho Cordova Tourism Business Improvement District (RCTBID) on December 6, 2010, by Resolution No. 136-2010; and
WHEREAS, on April 19, 2021, the City Council subsequently adopted Resolution No. 44- 2021 adopting the Management District Plan (Plan) and renewing the RCTBID for an additional ten (10) year term; and
WHEREAS, the Property and Business Improvement District Law of 1994 (Streets and Highways Code §36600 et seq.) authorizes cities to modify the Plan at the request of the Owners’ Association; and
WHEREAS, the RCTBID Owners’ Association, Rancho Cordova Travel and Tourism Corporation (RCTTC), has requested modification of the Plan.
NOW, THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA as follows:
1. The recitals set forth herein are true and correct.
2. The City Council declares its intention to modify the RCTBID Plan.
3. The proposed modifications of the RCTBID Plan will include implementing updates to modernize the Plan, modifying the boundaries of the RCTBID to establish two benefit zones and increasing the assessment rate within DOVA Zone from four and one-half of one percent (4.5%) to six percent (6%), as described below.
a. The boundaries of the RCTBID shall be modified to establish two benefit zones, as shown on the map attached hereto and incorporated herein by reference.
b. The current annual assessment rate levied on all lodging businesses with two (2) rooms or more within the RCTBID is four and one-half of one percent (4.5%) of gross room rental revenue. The modified annual assessment rate for lodging businesses with two (2) rooms or more located within DOVA Zone shall be increased from four and one-half of one percent (4.5%) to six percent (6%) of gross room rental revenue, as shown in the table below:
Zone Assessment Rate
DOVA Zone 6.0%
Zone 1 4.5%
ITEM 12.3. ATTACHMENT 1 Resolution No. XX-2026 Page 2 of 2
4. The time and place for a public meeting for comments on the modification of the RCTBID Plan are set for June 15, 2026, at 5:30 PM, or as soon as possible thereafter as the matter may be heard, at Council Chambers located at 2729 Prospect Park Drive, Rancho Cordova, CA 95670.
5. The time and place for a public hearing on modification of the RCTBID Plan is set for July 6, 2026, at 5:30 PM or as soon thereafter as the matter may be heard at Council Chambers located at 2729 Prospect Park Drive, Rancho Cordova, CA 95670.
6. At the public meeting and hearing, the testimony of all interested persons for or against the modification of the RCTBID may be received. If at the conclusion of the public hearing, there are of record written protests by the owners of the lodging businesses within the modified RCTBID that will pay fifty percent (50%) or more of the estimated total assessment of the entire RCTBID, no further proceedings to modify the RCTBID shall occur for a period of one (1) year.
7. This Resolution shall take effect immediately upon its adoption by the City Council.
PASSED AND ADOPTED by the City Council of the City of Rancho Cordova on the 18th Day of May 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Garrett Gatewood, Mayor
Stacy Leitner, CMC
City Clerk
Rancho Cordova TBID
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ITEM 12.3.
ATTACHMENT 2
Exhibit A to the Resolution
Photo Credit: City of Rancho Cordova
RANCHO CORDOVA TOURISM BUSINESS
IMPROVEMENT DISTRICT
MANAGEMENT DISTRICT PLAN
May 12, 2026 Prepared pursuant to the Property and Business Improvement District Law of 1994, Streets and Highways Code section 36600 et seq.
2021-2031
ITEM 12.3.
ATTACHMENT 3
Contents
I. OVERVIEW ..................................................................................................................... 3 II. BACKGROUND ............................................................................................................... 5 III. RANCHO CORDOVA TRAVEL & TOURISM CORPORATION ACCOMPLISHMENTS ...... 6 IV. BOUNDARY .................................................................................................................. 10 V. BUDGET AND SERVICES .............................................................................................. 12 A. Annual Service Plan ........................................................................................................... 12 B. California Constitutional Compliance ................................................................................... 18 C. Assessment ...................................................................................................................... 19 D. Penalties and Interest ......................................................................................................... 20 E. Time and Manner for Collecting Assessments ....................................................................... 21 VI. GOVERNANCE ............................................................................................................. 21 A. Owners’ Association .......................................................................................................... 21 B. Brown Act and California Public Records Act Compliance ...................................................... 22 C. Annual Report .................................................................................................................. 23 APPENDIX 1 – LAW ................................................................................................................. 24 APPENDIX 2 – ASSESSED LODGING BUSINESSES*................................................................ 40 Prepared
by Civitas
www.civitasadvisors.com
ITEM 12.3.
ATTACHMENT 3
RCTBID Management District Plan
May 12, 2026
3 I. OVERVIEW
Developed by Rancho Cordova Travel & Tourism Corporation (RCTTC) and Rancho Cordova hoteliers, the Rancho Cordova Tourism Business Improvement District (RCTBID) is an assessment district proposed to provide specific benefits to payors by funding marketing, sales promotion efforts, and destination development for assessed businesses. This approach has been used successfully in other destination areas throughout the country to provide the benefit of additional room night sales directly to payors.
This Management District Plan, as modified in 2026, reflects updates to the structure, assessment methodology, and programmatic elements of the RCTBID, including the establishment of benefit zones to reflect differing levels and types of benefit expected to be received by assessed lodging businesses.
Dova Zone is intended to accommodate concentrated visitor-serving, hospitality, entertainment, event, and related destination development anticipated to generate overnight visitation and room -night demand.
Location: The RCTBID includes all Lodging Businesses with two (2) rooms or more located within the boundaries of the City of Rancho Cordova, as shown on the map in Section IV. The RCTBID includes two benefit zones; assessments, services, and expenditures shall be administered in a manner consistent with the benefits anticipated to be conferred within each benefit zone.
Services: RCTBID is designed to provide specific benefits directly to payors by increasing awareness and demand for room night sales. Marketing and sales promotions and destination development programs will increase demand for overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing demand for room night sales. For Dova Zone, such destination development programs may include visitor-serving capital improvements, public realm improvements, event and entertainment infrastructure, transportation and mobility improvements, programming, marketing, and related facilities, uses, and activities intended to support overnight visitation and lodging demand.
Budget: The total RCTBID annual assessment budget for the initial year of its ten (10) year operation is anticipated to be approximately $2,464,000. This amount may fluctuate as room sales do, as businesses open and close, and if the assessment rate is increased pursuant to this Plan. At the time of this modification, this budget reflects assessments generated from existing Lodging Businesses and does not include revenues attributable to Dova Zone, for which assessments will commence upon the operation of Lodging Businesses within Dova Zone.
Cost: The annual assessment rate is a percentage of gross room rental revenue, varied by benefit zone. The initial annual assessment rate for each benefit zone is shown in the table below.
Zone Assessment Rate
Dova Zone 6.0%
Zone 1 4.5%
ITEM 12.3.
ATTACHMENT 3
RCTBID Management District Plan
May 12, 2026
4 At the City of Rancho Cordova City Council’s discretion, assessments collected may be used to repay a capital infrastructure bond if the City Council chooses to issue bonds. Until and unless bonds are issued, any funds collected by the RCTBID will be used towards the services outlined in this Plan. The assessment levied pursuant to this Plan will also not be collected on stays pursuant to contracts executed prior to July 1, 2021. Stays pursuant to contracts executed between September 1, 2013 and June 30, 2021 shall instead be subject to assessment at the rate of $1.50 per paid occupied room per night. During the ten (10) year term, the assessment rate may be increased annually by the RCTBID Owners’ Association by a maximum of one percent (1%) of gross room rental revenue per year, as described in Section IV. The total assessment rate may not exceed ten percent (10%) in any zone.
Collection: The City of Rancho Cordova (City) will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each assessed Lodging business located in the boundaries of the RCTBID. The City shall take all reasonable efforts to collect the assessments from each Lodging Business.
Duration: RCTBID will have a ten (10) year life, beginning July 1, 2021 through June 30, 2031.
Once per year, beginning on the anniversary of RCTBID renewal, there is a thirty (30) day period in which owners paying fifty percent (50%) or more of the assessment may protest and initiate a City Council hearing on RCTBID termination. This provision shall be read together with the governance provisions applicable to Dova Zone pursuant to Section VI.
Management: Rancho Cordova Travel and Tourism Corporation (RCTTC) will continue to serve as the RCTBID Owners’ Association. The Owners’ Association is charged with managing funds and implementing programs in accordance with this Plan and must provide annual reports to the City Council. This provision shall be read together with the governance provisions applicable to Dova Zone pursuant to Section VI.
ITEM 12.3.
ATTACHMENT 3
RCTBID Management District Plan
May 12, 2026
5 II. BACKGROUND
TBIDs are an evolution of the traditional Business Improvement District. The first TBID was formed in West Hollywood, California in 1989. Since then, over 100 California destinations have followed suit.
In recent years, other states have begun adopting the California model – Montana, South Dakota, Washington, Colorado, Texas and Louisiana have adopted TBID laws. Several other states are in the process of adopting their own legislation. The cities of Wichita, Kansas and Newark, New Jersey used an existing business improvement district law to form a TBID. And, some cities, like Portland, Oregon and Memphis, Tennessee have utilized their home rule powers to create TBIDs without a state law.
California’s TBIDs collectively
raise over $300 million annually
for local destination marketing.
With competitors raising their
budgets, and increasing rivalry
for visitor dollars, it is important
that Rancho Cordova Lodging
Businesses continue to invest in
stable, lodging-specific marketing
programs.
TBIDs utilize the efficiencies of
private sector operation in the
market-based promotion of
tourism districts. TBIDs allow
lodging business owners to
organize their efforts to increase
demand for room night sales.
Lodging business owners within the TBID pay an assessment and those funds are used to provide services that increase demand for room night sales.
In California, most TBIDs are formed pursuant to the Property and Business Improvement District Law of 1994. This law allows for the creation of a benefit assessment district to raise funds within a specific geographic area. The key difference between TBIDs and other benefit assessment districts is that funds raised are returned to the private non-profit corporation governing the district.
There are many benefits to TBIDs:
• Funds must be spent on services and improvements that provide a specific benefit only to those who pay;
• Funds cannot be diverted to general government programs; • They are customized to fit the needs of payors in each destination; • They allow for a wide range of services;
• They are designed, created and governed by those who will pay the assessment; and • They provide a stable, long-term funding source for tourism promotion.
ITEM 12.3.
ATTACHMENT 3
6 RCTBID Management District Plan
May 12, 2026
III. RANCHO CORDOVA TRAVEL & TOURISM CORPORATION
ACCOMPLISHMENTS
Established in 2010, but formally organized in 2011, the Rancho Cordova Tourism Business Improvement District (RCTBID) set out to increase the number of district visitors, improve the brand of the destination and increase market share for the hotels in Rancho Cordova. Through robust marketing, business development, brand positioning and consistent relationship management, the Visit Rancho Cordova brand, managed by Rancho Cordova Travel & Tourism Corporation (RCTTC) has accomplished these goals and continues to serve as an asset to the Rancho Cordova community.
Since the formation of RCTBID in 2011 through year - end 2019, Occupancy rate increased 49.2%, Average Daily Rate (ADR) increased by 44.1%, and RevPAR increased by 77.6%. Over this same timeframe, nationally the Occupancy rate increased 15.1%. At the time of the 2026 modification of this Plan, occupancy has trended close to national averages with a slight decrease to 61.1%, while ADR has continued to climb, resulting in flat RevPAR for hotels. (Source: Statista).
Mission:
To drive sustainable tourism in Rancho Cordova that increases economic impact, supports local hotels and businesses, and enhances the quality of life for residents and visitors alike.
Vision:
To put Rancho Cordova on the map as a must-visit hidden gem destination.
Values:
Ambassadors of Community, Collaboration -Fueled, Inclusive at the Core, Always Trustworthy, Possibility-Minded, Unapologetically Joyful.
Brand Promise:
Stunning landscapes, cultural richness, and quirky experiences make Rancho Cordova one-of-a-kind.
Visitor Promise:
In Rancho Cordova, every traveler belongs and there is something for everyone.
Marketing Impact:
• Website impact of 1.4 million sessions, 1.9 million views, and engagement rate of 32.7% since January 1, 2019; influencing, from July-December 2025, over $1,318,321.25 in visitor spending. • Social media impact of 37,000+ followers across all channels, including a reach of 888,000 on Meta platforms since January 2023 and 1.7 million views on Instagram collaboration posts from 2024-2025.
• Paid commercial CTV advertisement impact surpassing 174,229 total plays since November 2025. • Ongoing direct booking campaigns with Expedia, resulting in over 2,048,466 impressions, 1,845 hotel nights, and $247,514 in bookings from 2024-2025.
• Leisure media and PR impact resulting in a printed distribution of more than 1.5 million and more than a digital distribution of 1.8 million from 2024-2025. • Promotional impact of over 30,000 items distributed to assessed hotels, residents, travelers, and Sacramento International Airport from 2024-2025.
• UGC (User Generated Content) online photo galleries garnered 196,700 views since January 1, 2025.
• Virtual tour impact of 2,794,838 Google views and 876,887 clicks via Threshold 360 since January 1, 2023.
ITEM 12.3.
ATTACHMENT 3
7 RCTBID Management District Plan
May 12, 2026
Sales & Business Development Impact:
• Since 2022, we have hosted 40 meeting and event planners from 11 states across the U.S. and Mexico for Meeting Planner Familiarization Trips
• Since 2022, we have hosted 5 partner Destination Analysis immersions • Since 2022, we have conducted over 700 tradeshow appointments • In 2025 generated 195 leads consisting of 76,785 room nights and $51,083,905.38 in potential economic impact and support 14,064 jobs
RCTTC staff volunteered on the following boards and committees:
• California Capital Airshow
• Rancho Cordova Area Chamber of Commerce
• California Travel Association
• Meeting Professionals International Sacramento Sierra Nevada Chapter • Associations West ELEVATE Steak Committee
• Associations West Capital Regional Counsel
• Gold Country Visitors Association
• Destinations International
• Cordova Recreation & Parks Foundation
• U.S. Travel
• Visit California CEO Committee
• Associations West Membership Advisory Group
• Associations West ELEVATE Sizzle Committee
• OneWest Disaster Recovery Committee
• OneWest Event Committee
• Leadership Rancho Cordova
• STAR Communities
• RCPD Citizen’s Academy
• Sacramento Metro Fire
Industry Recognition and Organization Awards and Certificates:
• Marc Sapoznik Class X Leadership Rancho Cordova graduate 2015 • Marc Sapoznik awarded CHIA (Certification in Hotel Industry Analytics) 2023 • Dawn Hall inducted into Chamber of Commerce Hall of Fame 2023 • Maggie Thyken Huss Class XVII Leadership Rancho Cordova graduate 2024 • Kristen Achziger Class XVIII Leadership Rancho Cordova graduate 2025 • Dawn Hall Class XVIII Leadership Rancho Cordova honorary graduate 2025 • Aubrey Hall awarded PDM (Professional in Destination Management) Certification 2023 • Kristen Achziger awarded PDM (Professional in Destination Management) Certification 2023 • Maggie Thyken Huss awarded PDM (Professional in Destination Management) Certification 2025 • HSMAI International Marketing Campaign Award – Silver 2020 • Smart Women in Meetings Rising Star Award 2022 – Maggie Thyken Huss • CalTravel Association 30 and Under Emerging Leader Award 2023 – Aubrey Hall • Community Partner Award 2024 – Sacramento Telangana Association • Associations West Emerging Professional Rising Star Industry Professional of the Year 2026 – Maggie Thyken Huss
ITEM 12.3.
ATTACHMENT 3
8 RCTBID Management District Plan
May 12, 2026
Event Sponsorships
• Barrel District Events
• CA Capital Film Office
• California Capital Airshow
• Cordova Community Council Events
• Leadership Rancho Cordova
• Hangtown Motocross Classic
• Intercollegiate Rowing Association Championships
• Paddle Splash Water Festival
• Rancho Cordova In Action Day of Service
• Rio Strada Racing
• Sac State Athletics
• California Mermaid Convention
• Sac State Aquatic Center
• Soil Born Farms
• Community Food Hub
• American River Parkway Foundation
• Sacramento State Athletics
• Golden West Track & Field
• The Picklr
• Sacramento Children’s Museum
• Sacramento Pride Festival
• The MACC
• Police Activities League Christmas Toy Drive
Memberships & Partnerships
• Rancho Cordova Chamber
• Cordova Community Council
• California Black Chamber
• Hispanic Chamber
• Sacramento Rainbow Chamber
• Visit Sacramento
• Sacramento LGBT Center
• Sac Metro Chamber
• Visit California
• STR (Smith Travel Research)
• US Travel Association
• Cal Travel Association
• Sports Events & Tourism Association (Sports ETA)
• Gold Country Visitors Association
• CalSAE
• American River Parkway Foundation
• Destinations International
• HelmsBriscoe
• HPN Global
ITEM 12.3.
ATTACHMENT 3
9 RCTBID Management District Plan
May 12, 2026
• MPI SSN & NCC Chapters
• Civitas
• One West Tourism Alliance
• California Hotel & Lodging Association
• PCMA
• SITE
• ASAE
• SGMP
• California DMO Alliance
• California Sports Alliance
• Sac State Athletics
• CA Capital Film Office
• Sac State Aquatic Center
• The Picklr
• The MACC
• Visit California Meetings
• Visit California LA28
• American River Parkway Foundation
• Regional collaborations for sports shows with Visit Sacramento, Explore Elk Grove, Visit Stockton and Visit Bakersfield
Tradeshows and Conferences:
• Associations West Seasonal Spectacular
• Associations West ELEVATE Annual Conference
• Northstar Small & Boutique Meetings
• TEAMS Annual Conference + Expo
• All Things Meetings Tradeshow and Reception
• Northstar Destination California
• HPN Annual Partner Conference
• ASAE Annual Meeting
• IPW
• Northstar IPEC
• SITE SoCal Holiday Event
• HelmsBriscoe Annual Business Conference
• CA Cup Golf Invitational
• Destinations International Convention Sales & Services Summit • Connect Spring Marketplace
• MPI Northern California Chapter ACE
• PCMA Convening Leaders
• Smart Meetings National Extraordinary Experience
• Connect Marketplace (main convention)
• Destinations International Annual Convention
• Visit California Outlook Forum
• Cal Travel Sumit
• MPI World Education Congress
• IMEX
• Smart Meetings Smart Woman Summit
• CVENT Connect
ITEM 12.3.
ATTACHMENT 3
10 RCTBID Management District Plan
May 12, 2026
IV. BOUNDARY
The RCTBID will include all Lodging Businesses existing and in the future that have two (2) rooms or more, available for public occupancy within the boundaries of the City of Rancho Cordova. The RCTBID is divided into two (2) benefit zones based on the benefits conferred on Lodging Businesses within each zone. Lodging Businesses in Dova Zone are assessed at a higher rate due to their location within Dova Zone and the greater benefit they are expected to receive from RCTBID funded services.
Dova Zone is intended to include concentrated visitor -serving and destination -generating development, including future lodging, hospitality, entertainment, event, meeting, sports, mobility, and related improvements, all of which are expected to materially enhance overnight visitation and lodging demand. Any future Lodging Businesses located within Dova Zone, whether or not affiliated with any existing Dova Zone development, shall be subject to the Dova Zone assessment structure and governance provisions set forth in this Plan.
“Lodging Business” means: any structure, or any portion of any structure, which is occupied or intended or designed for occupancy by transients for dwelling, lodging or sleeping purposes, and includes any hotel, inn, tourist home or house, motel, studio hotel, bachelor hotel, lodging house, rooming house, apartment house, dormitory, public or private club, mobile home or house trailer at a fixed location, or other similar structure or portion thereof.
The boundary, as shown in the map below, currently includes seventeen (17) Lodging Businesses. A complete listing of Lodging Businesses within the RCTBID can be found in Appendix 2.
ITEM 12.3.
ATTACHMENT 3
11 RCTBID Management District Plan
May 12, 2026
ITEM 12.3.
ATTACHMENT 3
12 RCTBID Management District Plan
May 12, 2026
V. BUDGET AND SERVICES
A. Annual Service Plan
Assessment funds will be spent to provide specific benefits conferred or privileges granted directly to assessed Lodging Businesses , that are not provided to those not charged, and which do not exceed the reasonable cost to the City of conferring the benefits or granting the privileges. The privileges and services provided with the RCTBID funds are sales and marketing promotions and d estination development programs available only to assessed Lodging Businesses. Funds attributable to each benefit zone shall be administered in a manner consistent with the specific benefits to be conferred on assessed Lodging Businesses within that benefit zone.
A service plan assessment budget has been developed to deliver services that benefit the assessed Lodging Businesses. A detailed annual assessment budget will be developed and approved by RCTTC.
The table below illustrates the initial annual assessment budget allocations. The total initial assessment budget is $2,464,000. Assessments for Dova Zone are not reflected in the initial assessment budget because there are currently no operating businesses within the Zone.
ITEM 12.3.
ATTACHMENT 3
13 RCTBID Management District Plan
May 12, 2026
Although actual revenues will fluctuate due to market conditions, the proportional allocations of the budget shall remain the same. However, the City and the RCTTC board shall have the authority to adjust budget allocations between the categories by no more than fifteen percent (15%) of the total budget per year; provided, however, that any exercise of such authority by RCTTC with respect to Dova Zone funds shall be subject to the Dova Zone governance provisions of this Plan. Dova Zone funds shall not be commingled with Zone 1 funds. A description of the proposed improvements and activities for the initial year of operation is below. The same activities are proposed for subsequent years. In the event of a legal challenge against the RCTBID, any and all asses sment funds may be used for the costs of defending the RCTBID.
Each budget category includes all costs related to providing that service. For example, the sales and marketing budget includes the cost of staff time dedicated to overseeing and implementing the sales and marketing program. Staff time dedicated purely to administrative tasks is allocated to the administrative portion of the budget. The costs of an individual staff member may be allocated to multiple budget categories. The staffing levels necessary to provide the services below will be determined by the RCTTC on an as- needed basis.
Sales and Marketing
A sales and marketing program will promote assessed Lodging Businesses as tourist, meeting, and event destinations. The sales and marketing program will have a central theme of promoting Rancho Cordova as a desirable place for overnight visits. The program will have the goal of increasing demand for overnight visitation and room night sales at as sessed Lodging Businesses, and may include the following activities:
• Internet marketing efforts to increase awareness and optimize internet presence to drive demand for overnight visitation and room sales to assessed Lodging Businesses; • Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive demand for overnight visitation and room sales to assessed Lodging Businesses;
• Attendance of trade shows to promote assessed Lodging Businesses; • Sales blitzes for assessed Lodging Businesses;
• Familiarization tours of assessed Lodging Businesses; • Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed Lodging Businesses;
• Attendance of professional industry conferences and affiliation events to promote assessed Lodging Businesses;
• Lead generation activities designed to attract tourists and group events to assessed Lodging Businesses;
• Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed Lodging Businesses;
• Development and maintenance of a website designed to promote assessed Lodging Businesses;
• Coordination of press pitching, curated media trips, and influencer opportunities to drive visitation to assessed Lodging Businesses;
• Development of social media, video, and photography content to promote assessed Lodging Businesses; and
• Strategic development and maintenance of e-newsletters for leisure, meeting, and advocacy audiences to drive visitation to assessed Lodging Businesses.
ITEM 12.3.
ATTACHMENT 3
14 RCTBID Management District Plan
May 12, 2026
Destination Development
Destination Development (“DD”) shall be administered separately for Dova Zone and Zone 1 in a manner consistent with the benefit zone structure and governance provisions set forth in this Plan.
DD funded from Zone 1 or other non -Dova Zone revenues will be eighteen percent (18%) of the applicable annual budget, unless otherwise adjusted in accordance with this Plan. As the total number of rooms sold and room prices increase over time, the amount of available funds for projects is anticipated to increase. With respect to DD projects funded from Zone 1 or other non -Dova Zone revenues, RCTTC, working collaboratively with the City Manager, shall develop specific DD funding criteria. The City and RCTTC may provide input regarding such projects, and any public work s project contract shall be awarded in accordance with Public Contract Code and Municipal Code requirements.
Notwithstanding the foregoing, DD projects, improvements, activities, programs, and related expenditures funded in whole or in part from Dova Zone revenues shall be governed in accordance with the Dova Zone governance provisions of this Plan. With respect to Dova Zone funds, the Dova Zone Special Committee shall establish project criteria, priorities, and approvals for Dova Zone improvements, activities, programs, and related expenditures funded from Dova Zone 1 revenues.
RCTTC shall have a role limited to administration, implementation, and compliance with this Plan and applicable law, and shall not have discretion to approve, deny, reallocate, or reprioritize Dova Zone projects, activities, programs, or expenditures except as directed by the Dova Zone Special Committee or as required for compliance with applicable law. These DD projects may include:
• Comprehensive and integrated wayfinding signage system including signage to parking decks and lots;
• Transportation programs connecting hotels with downtown and other attractions, to increase room night sales at assessed Lodging Businesses; • Art and cultural projects, to attract overnight visitors; • Gateway enhancements, to attract overnight visitors;
• Enhancements to environmental experiences which attract overnight visitors, and shall expose visitors to the value of the vital ecosystems;
• Improvements to existing parks and sports facilities utilized by overnight visitors; • Safe and fun entertainment complex for young teens and adults utilized by overnight visitors;
• Live music venue which attracts overnight visitors;
• Infrastructure improvements that enhance Destination competitive position to attract desirable special events year around and attract overnight visitors; • Public gathering and festival spaces;
• Convention, meeting, and conference facilities;
• Youth and amateur sports facilities and complexes;
• Mobility, circulation, and transportation improvements, including innovative transportation systems intended to improve access to visitor-serving destinations; • Structured parking, utilities, security, lighting, wayfinding, public realm, and related visitor- serving infrastructure; and
• Other facilities and improvements designed to support tourism, events, entertainment, and overnight visitation.
ITEM 12.3.
ATTACHMENT 3
15 RCTBID Management District Plan
May 12, 2026
Dova Zone Use of Funds
Dova Zone funds shall be used for any improvements, activities, and programs permitted under this Plan and applicable law, including, without limitation, capital improvements, destination development, and other visitor -serving uses, in each case designed t o drive overnight visitation to assessed Lodging Businesses. Funds raised within the Dova Zone are authorized for disbursement and/or allocation if approved by the Dova Zone Special Committee. Dova Zone expenditures may fund, but are not limited to, the fo llowing: financing, bonding, or other funding mechanisms associated with the development, construction, or operation of arena or stadium facilities, meeting and conference spaces, youth sports facilities, and ancillary visitation infrastructure situated wi thin the Dova Zone and benefitting assessed Lodging Businesses. Dova Zone funds shall be separately accounted for. Permitted Dova Zone uses may include, without limitation, visitor -serving capital improvements, destination development improvements, and related infrastructure designed to drive overnight visitation to assessed Lodging Businesses within Dova Zone, including event venues, public plazas and festival areas, convention and meeting facilities, youth and amateur sports facilities, transportation and mobility improvements, parking, utilities, lighting, security, signage, wayfinding, public realm improvements, programming, marketing, operations, and related visitor -serving facilities, improvements, and activities. Dova Zone funds may be used for constr uction, programming, marketing, operations, financing, and other permitted uses within Dova Zone, including associated debt repayment. An amount equal to five percent (5%) of the revenue derived from the Dova Zone assessment in any year shall be allocated to RCTTC to pay for renewal and benefits received from the RCTTC programming including, but not limited to, sales activities related to the proposed arena.
Administration and Operations
The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting fees. Shared staffing, contracting, administrative services, programs, and other resources may be used for Dova Zone, Zone 1, or both benefit zones, provided that all costs are separately accounted for and charged or allocated on a reasonable basis consistent with the benefits conferred on each be nefit zone, including direct charges for costs attributable solely to Dova Zone and incremental shared costs reasonably allocable to Dova Zone based on the direct benefits conferred on Dova Zone.
City Administration Fee
The City of Rancho Cordova shall be paid a fee equal to two percent (2%) of the amount of assessment collected, to cover its costs of collection and administration.
Contingency/Reserve
The budget includes a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the RCTTC Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the RCTTC Board. Contingency/reserve funds may be spent on District programs or adm inistrative and renewal costs in such proportions as determined by the RCTTC Board. The reserve fund from both zones shall be used for the costs of renewing the RCTBID. Any contingency or reserve funds attributable to Dova Zone shall be separately accounted for.
ITEM 12.3.
ATTACHMENT 3
16 RCTBID Management District Plan
May 12, 2026
Annual Budget
The total ten (10) year improvement and service plan budget is projected at approximately $2,464,000 annually, and for a total amount of $64,760,489 through 2031 if the maximum assessment rate increases are adopted. This budget is expected to fluctuate as room sales change and if the assessment rate is increased. The initial annual assessment rate is a percentage of gross room rental revenue, varied by benefit zone.
The initial annual assessment rate for Dova Zone is six percent (6%) of gross room rental revenue and for Zone 1 is four and one half of one percent (4.5%) of gross room rental revenue. At the time of the 2026 modification of this Plan, the projected budget does not reflect any adjustment attributable to Dova Zone, as there are currently no operational Lodging Businesses subject to the Dova Zone 1 6% assessment. The absence of currently operating Dova Zone Lodging Businesses shall not limit the future administration, segregation, budgeting, governance, or use of Dova Zone funds once assessments are generated within Dova Zone. Separate Dova Zone budget reporting shall commence upon the first collection of Dova Zone assessments.
The Owners’ Association may increase the assessment rate by a maximum of one percent (1%) per year to a maximum rate of ten percent (10%) for any zone. If the maximum annual assessment increases are adopted by the Owners’ Association upon approval from City Council, the annual budget will increase as illustrated in the table below. The assessment rate might not increase starting in 2022, the increases may be implemented in later years at the discretion of the Owners’ Association. The table below demonstrates the maximum with the assumption that the rates will be increased in annually from 2022 through 2027 as it is a required disclosure, it is not the anticipated course of action. Alternate courses of action may be taken in regards to implem enting the assessment rate increase other than what is demonstrated in the chart below, within the parameters of this Management District Plan. For example, increases may be implemented in years 2028-2031, with the stipulation that each annual increase is no more than one percent (1%) and that the total assessment rate may not exceed ten percent (10%) for any zone.
Tables A and B below reflect the historical budget from 2021 through 2025. Beginning in 2026 as a result of the modification of this Plan, the budget structure has been updated to consolidate Destination Recovery and Crisis Response funding into the Sales and Marketing category, and this revised structure is reflected in Tables C and D on the following pages. Additionally, a three percent (3%) annual increase in the total budget is shown, to account for estimated increased room night sales as a result of RC TBID efforts. This three percent (3%) annual increase is a conservative estimate based on the effects of similarly sized TBID budgets.
ITEM 12.3.
ATTACHMENT 3
17 RCTBID Management District Plan
May 12, 2026
Table A
Estimated Annual Budget If Maximum Assessment Rates Are Adopted 2021-2026
Year Sales &
Marketing Administration Destination
Development
Destination
Recovery
Contingency/
Reserve City Fee Total
2021-22 $1,158,080 $492,800 $443,520 $197,120 $123,200 $49,280 $2,464,000 2022-23 $1,457,868 $620,369 $558,332 $248,148 $155,092 $62,037 $3,101,846 2023-24 $1,774,595 $755,147 $679,632 $302,059 $188,787 $75,515 $3,775,734 2024-25 $2,109,136 $897,505 $807,754 $359,002 $224,376 $89,750 $4,487,524 2025-26 $2,461,993 $1,047,657 $942,891 $419,063 $261,914 $104,766 $5,238,283 Total $8,961,672 $3,813,478 $3,432,129 $1,525,392 $953,369 $381,348 $19,067,387 The table below demonstrates the annual improvement and service plan budget with the assumption that the rates will not be increased during years 2021 -2026 of the district’s ten (10) year term.
Additionally, a three percent (3%) annual increase in the total budget is shown to account for estimated increased room night sales as a result of RCTBID efforts.
Table B
Estimated Annual Budget If Maximum Assessment Rates Are Not Adopted 2021-2026
Year Sales &
Marketing Administration Destination
Development
Destination
Recovery
Contingency
/Reserve
City
Fee Total
2021-22 $1,158,080 $492,800 $443,520 $197,120 $123,200 $49,280 $2,464,000 2022-23 $1,192,822 $507,584 $456,826 $203,034 $126,896 $50,758 $2,537,920 2023-24 $1,228,607 $522,812 $470,530 $209,125 $130,703 $52,281 $2,614,058 2024-25 $1,265,465 $538,496 $484,646 $215,398 $134,624 $53,850 $2,692,479 2025-26 $1,303,429 $554,651 $499,186 $221,860 $138,663 $55,465 $2,773,254 Total $6,148,403 $2,616,343 $2,354,708 $1,046,537 $654,086 $261,634 $13,081,711
The following tables reflect the consolidation of the Destination Recovery and Crisis Response category as a result of the 2026 modification of this Plan.
Table C
Estimated Annual Budget If Maximum Assessment Rates Are Adopted 2026-2031
Year Sales &
Marketing Administration Destination
Development
Contingency/
Reserve City Fee Total
2026-27 $3,316,760 $1,206,095 $1,085,485 $301,524 $120,609 $6,030,473 2027-28 $5,214,242 $1,896,088 $1,706,479 $474,022 $189,609 $9,480,441 2028-29 $5,370,669 $1,952,971 $1,757,674 $488,243 $195,297 $9,764,854 2029-30 $5,531,790 $2,011,560 $1,810,404 $502,890 $201,156 $10,057,800 2030-31 $5,697,744 $2,071,907 $1,864,716 $517,977 $207,191 $10,359,534 Total $25,131,205 $12,952,098 $11,656,888 $3,238,024 $1,295,210 $45,693,102 The table below demonstrates the annual improvement and service plan budget with the assumption that the rates will not be increased during years 2026 -2031 of the district’s ten (10) year term.
Additionally, a three percent (3%) annual increase in the total budget is shown to account for estimated increased room night sales as a result of RCTBID efforts.
ITEM 12.3.
ATTACHMENT 3
18 RCTBID Management District Plan
May 12, 2026
Table D
Estimated Annual Budget If Maximum Assessment Rates Are Not Adopted 2026-2031
Year Sales &
Marketing Administration Destination
Development
Contingency/
Reserve City Fee Total
2026-27 $1,571,048 $571,290 $514,161 $142,823 $57,129 $2,856,451 2027-28 $1,618,180 $588,429 $529,586 $147,107 $58,843 $2,942,145 2028-29 $1,666,725 $606,082 $545,474 $151,520 $60,608 $3,030,409 2029-30 $1,716,727 $624,264 $561,838 $156,066 $62,426 $3,121,321 2030-31 $1,768,229 $642,992 $578,693 $160,748 $64,299 $3,214,961 Total $8,340,909 $5,649,400 $5,084,460 $1,412,350 $564,940 $15,165,287
B. California Constitutional Compliance
The RCTBID assessment is not a property -based assessment subject to the requirements of Proposition 218. Courts have found Proposition 218 limited the term ‘assessments’ to levies on real property.1 Rather, the RCTBID assessment is a business -based assessment, and is subject to Proposition 26. Pursuant to Proposition 26 all levies are a tax unless they fit one of seven exceptions.
Two of these exceptions apply to the RCTBID, a “specific benefit” and a “specific government service.” Both require that the costs of benefits or services do not exceed the reasonable costs to the City of conferring the benefits or providing the services . The assessment imposed by this Plan is a business-based assessment used to provide specific benefits directly to assessed Lodging Businesses.
1. Specific Benefit
Proposition 26 requires that assessment funds be expended on, “a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conf erring the benefit or granting the privilege.”2 The services in this Plan are designed to provide targeted benefits directly to assessed Lodging Businesses, and are intended only to provide benefits and services directly to those Lodging Businesses paying the assessment. These services are tailored not to serve the general public, businesses in general, or parcels of land, but rather to ser ve the specific businesses within the RCTBID. The activities described in this Plan are specifically targeted to increase demand for room night sales for assessed Lodging Businesses within the boundaries of the RCTBID, and are narrowly tailored. RCTBID funds will be used to provide specific benefits directly to the assessees that increase room night demand. Assessment funds shall not be used to feature non-assessed Lodging Businesses in RCTBID programs, or to directly generate sales for non - assessed businesses. The activi ties paid for from assessment revenues are business services constituting and providing specific benefits to the assessed Lodging Businesses.
The assessment imposed by this RCTBID is used to provide specific benefits directly to the payors that are not provided to those not charged. Those specific benefits include increased demand for room night sales for assessed Lodging Businesses. Those specific benefits, including increased demand for room night sales for assessed Lodging Businesses, will be provided only to Lodging Businesses paying the district assessment, with marketing and sales programs promoting Lodging Businesses paying the RCTBID ass essment. The marketing and sales programs will be designed to
1 Jarvis v. the City of San Diego 72 Cal App. 4th 230
2 Cal. Const. art XIII C § 1(e)(1)
ITEM 12.3.
ATTACHMENT 3
19 RCTBID Management District Plan
May 12, 2026
increase room night sales at each assessed Lodging Business. Because they are necessary to provide the marketing and sales promotions and destination development programs that provide specific benefits to assessed Lodging Businesses, the administration and contingency services are also necessary to provide those specific benefits, including increased demand for room night sales, to assessed Lodging Businesses
Although the RCTBID, in providing specific benefits to payors, may produce incidental benefits to non-paying businesses, the incidental benefit does not preclude the services from being considered a specific benefit. The legislature has found that, “A specific benefit is not excluded from classification as a ‘specific benefit’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific benefit to the payor.”3
2. Specific Government Service
The assessment may also be utilized to provide, “a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the serv ice or product.” 4 The legislature has
recognized that marketing and promotions services like those to be provided by the RCTBID are government services within the meaning of Proposition 26 .5 Further, the legislature has determined
that “a specific government service is not excluded from classification as a ‘specific government service’ merely because an indirect benefit to a nonpayor occurs incidentally and without cost to the payor as a consequence of providing the specific government service to the payor.”6
3. Reasonable Cost
RCTBID services will be implemented carefully to ensure they do not exceed the reasonable cost of such services. The full amount assessed will be used to provide the services described herein. Funds will be managed by the RCTTC, and reports submitted on an annual basis to the City. Only assessed Lodging Businesses will be featured in marketing materials, receive sales leads generated from RCTBID-funded activities, be featured in advertising campaigns, and benefit from other RCTBID- funded services. Non- assessed Lodging Businesses will not receive these, nor any other, RCTBID- funded services and benefits.
The RCTBID-funded programs are all targeted directly at and feature only assessed businesses. It is, however, possible that there will be a spillover benefit to non -assessed businesses. If non-assessed Lodging Businesses receive incremental room nights, that portion of the promotion or program generating those room nights shall be paid with non- RCTBID funds. RCTBID funds shall only be spent to benefit the assessed businesses, and shall not be spent on that portion of any program which directly generates incidental room nights for non-assessed businesses.
C. Assessment
The annual assessment rate is a percentage of gross room rental revenue, varied by benefit zone. The initial annual assessment rate for each zone is shown in the table below.
Zone Assessment Rate
Dova Zone 6.0%
Zone 1 4.5%
3 Government Code § 53758(a)
4 Cal. Const. art XIII C § 1(e)(2)
5 Government Code § 53758(b)
6 Government Code § 53758(b)
ITEM 12.3.
ATTACHMENT 3
20 RCTBID Management District Plan
May 12, 2026
At the City Council’s discretion, assessments collected may be used to repay a capital infrastructure bond if Council chooses to issue bonds. Until and unless bonds are issued, any funds collected by the RCTBID will be used towards the services outlined in this Plan. Based on the benefit received, assessments will not be collected on: charges incurred by a person in the performance of official duties as an officer or employee of a local, state or federal government entity, or by government-sponsored corporate charge card. The assessment levied pursuant to this Plan will also not be collected on stays pursuant to contracts executed prior to July 1, 2021. Stays pursuant to contracts executed between September 1, 2013 and June 30, 2021 shall instead be subject to assessment at the rate of $1.50 per paid occupied room per night. During the ten (10) year term, the assessment rate may be increased annually by the Owners’ Association by a maximum of one percent (1%) of gross room rental. The total assessment rate may not exceed ten percent (10%) for any zone. Assessments collected from Lodging Businesses within Dova Zone shall constitute Dova Zone funds and shall be separately accounted for in accordance with this Plan. This requirement shall apply to all Lodging Businesses located within Dova Zone, whether or not affiliated with any existing Dova Zone development.
The term “gross room rental revenue” as used herein means: the consideration charged, whether or not received, for the occupancy of space in a Lodging Business valued in money, whether to be received in money, goods, labor or otherwise, including all receipts, cash, credits and property and services of any kind or nature, without a ny deduction therefrom whatsoever. Gross room rental revenue shall not include any federal, state or local taxes collected, including but not limited to transient occupancy taxes.
The assessment is levied upon and a direct obligation of the assessed Lodging Business. However, the assessed Lodging Business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. If the RCTBID assessment is identified separately it shall be disclosed as the “RCTBID Assessment.” As an alternative, the disclosure may include the amount of the RCTBID assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon, and is the sole obligation of the assessed Lodging Business even if it is passed on to transients. The assessment shall not be considered revenue for any purpose, including calculation of transient occupancy taxes.
Bonds may be issued.
D. Penalties and Interest
The RCTBID shall reimburse the City of Rancho Cordova for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent RCTBID assessment are sought to be recovered in the same collection action by the City, the RCTBID shall bear its pro rata share of such collection costs. Assessed Lodging Businesses which are delinquent in paying the assessment shall be responsible for paying:
1. Original Delinquency. When an assessment becomes delinquent, any owner who fails to remit any assessment imposed by this Plan within the time required shall pay a penalty of 10 percent (10%) of the amount of the assessment in addition to the amount of the assessment.
2. Continued Delinquency. Any owner who fails to remit any delinquent remittance on or before a period of thirty (30) days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent (10%) of the ITEM 12.3.
ATTACHMENT 3
21 RCTBID Management District Plan
May 12, 2026
amount of the assessment in addition to the amount of the assessment and the ten percent (10%) penalty first imposed.
3. Fraud. If the City determines that the nonpayment of any remittance due under this chapter is due to fraud, a penalty of twenty -five percent (25%) of the amount of the assessment shall be added thereto in addition to the penalties stated in subsections (1) and (2) of this section.
4. Interest. In addition to the penalties imposed, any owner who fails to remit any assessment imposed by this Plan shall pay interest at the rate of one and one -half percent (1.50%) per month or fraction thereof, compounded, on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid.
5. Penalties Merged with Assessment. Every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment herein required to be paid.
E. Time and Manner for Collecting Assessments
The RCTBID assessment will be implemented beginning July 1, 2021 and will continue for ten (10) years through June 30, 2031. The City will be responsible for collecting the assessment on a monthly basis (including any delinquencies, penalties and interest) from each Lodging Business. The City shall take all reasonable efforts to collect the assessments from each Lodging Business. The City shall forward the assessments collected to the Owners’ Association. The City’s monthly remittance and reporting shall separately identify collections, penalties, interest, delinquencies, and other amounts attributable to each benefit zone, including Dova Zone. Funds attributable to Dova Zone shall be deposited into the separate Dova Zone account or sub fund maintained pursuant to this Plan.
Concurrent with the remittal of assessment funds to the Owners Association, the City shall also provide monthly reports stating details surrounding businesses that are default on expected payments, as well as the term of their delinquency and any other relevant information for the Owners Association to reasonably determine which assessed L odging Businesses are in compliance with the RCTBID assessment.
VI. GOVERNANCE
A. Owners’ Association
The City Council, through adoption of this Management District Plan, has the right, pursuant to Streets and Highways Code §36651, to identify the body that shall implement the proposed program, which shall be the Owners’ Association of the RCTBID as defined in Streets and Highways Code §36612. The City Council has determined that Rancho Cordova Travel and Tourism Corporation (RCTTC) will serve as the Owners’ Association for the RCTBID.
1. Dova Zone Special Committee . Notwithstanding RCTTC’s role as the Owners’ Association, and unless and until the Dova Zone Lodging Businesses elect an alternative governance structure pursuant to the Future Governance Flexibility provisions below, all Dova Zone funds shall be administered pursuant to this subsection. The Dova Zone Special Committee shall have primary authority over Dova Zone fund governance as provided herein. The D ova Zone Special Committee is required to pay its proportionate fair share of any litigation costs regarding the district and any city collection costs for collecting and enforcing the assessment, identified as no more than 2% in the budget. A Dova Zone Special Committee shall be established consisting of not fewer than three (3) members, all of whom shall be appointed by the assessed Lodging Business within. If the Dova Zone Special Committee consists of three (3) members, at least one (1) member shall also be a current member of the RCTTC Board. If the Dova Zone Special ITEM 12.3.
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Committee consists of five (5) members, at least two (2) members shall also be current members of the RCTTC Board. In all cases, appointment authority shall remain solely with the Dova Zone assessed Lodging Businesses. Any such member or members who are also current members of the RCTTC Board shall nevertheless serve on the Dova Zone Special Committee solely by appointment of the Dova Zone assessed Lodging Businesses. The Dova Zone Special Committee may be established and convened earlier with the consent of the City and the Owners’ Association and shall be established and convened no later than upon when construction breaks ground of a Lodging Business within Dova Zone. Subject to the general provisions in this plan requiring all district funds be available for legal defense of the district, and renewal. The Dova Zone Special Committee shall have primary authority over the budgeting, prioritization, approval, allocation, commitment, and expenditure of Dova Zone funds, including approval of Dova Zone projects, activities, programs, project criteria, annual budgets, reallocations within Dova Zone, reserves, and the use of Dova Zone funds to support financing or debt for permitted Dova Zone uses.
RCTTC shall administer and implement the determinations of the Dova Zone Special Committee and shall not reallocate, encumber, expend, or otherwise commit Dova Zone funds except as directed by the Dova Zone Special Committee, subject only to compliance with applicable law, public contracting requirements, financing requirements, bond covenants, and related ministerial or compliance obligations. No action of the RCTTC Board shall be required to approve, r atify, or validate any determination of the Dova Zone Special Committee with respect to Dova Zone funds. No action of the Dova Zone Special Committee is intended to and does not supersede the City’s legislative and land use authority under state law and its municipal code. This includes, but is not limited to, the requirement for Dova Zone projects to receive all required and applicable City approval and entitlements.
2. RCTTC Board . RCTTC shall include at least one member of its Board of Directors who is appointed by the owners of Lodging Businesses located within Dova Zone, effective upon no later than upon when construction breaks ground of a Lodging Business within Dova Zone. Any such member or members who are also current members of the RCTTC Board shall nevertheless serve on the Dova Zone Special Committee by appointment of the Dova Zone Owners.
3. Future Governance Flexibility. In light of the anticipated phased development of lodging within Dova Zone, including the possibility that Dova Zone Lodging Businesses may not commence operations immediately, the Dova Zone Special Committee shall serve as the governance structure for Dova Zone. Upon the commencement of operations of any Lodging Business within Dova Zone, the appointment structure of the Dova Zone Special Committee may be revised by amendment to this Plan; provided, however, that Dova Zone funds shall remain subject to Dova Zone governance.
B. Brown Act and California Public Records Act Compliance An Owners’ Association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. The Owners’ Association is, however, subject to government regulations relating to transparency, namely the Ralph M. Brown Act and the California Public Records Act. These regulations are designed to promote public accountability. The Owners’ Association acts as a legislative body under the Ralph M. Brown Act (Government Code §54950 et seq.). Thus, meetings of the RCTTC board and certain committees must be held in compliance with the public notice and other requirements of the Brown Act. The Owners’ Association is also subject to the record keeping and disclosure require ments of the California Public Records Act. Accordingly, the Owners’ Association shall publicly report any action taken and the vote or abstention on that action of each member present for the action.
ITEM 12.3.
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To the extent applicable, the Dova Zone Special Committee shall be treated as a committee of the Owners’ Association for purposes of transparency, recordkeeping, and public meeting requirements relating to matters within the subject matter of the district.
C. Annual Report
The RCTTC shall present an annual report at the end of each fiscal year of operation to the City Council and shall file the annual report with the City of Rancho Cordova City Clerk, pursuant to Streets and Highways Code §36650 (see Appendix 1). The annual report shall include:
• Any proposed changes in the boundaries of the improvement district or in any benefit zones or classification of businesses within the district.
• The improvements and activities to be provided for that fiscal year. • An estimate of the cost of providing the improvements and the activities for that fiscal year. • The method and basis of levying the assessment in sufficient detail to allow each business owner to estimate the amount of the assessment to be levied against his or her business for that fiscal year.
• The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
• The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
• Separate reporting for Dova Zone revenues, expenditures, reserves, carryovers, and commitments.
• A description of Dova Zone projects, activities, and financing approved or proposed for the applicable fiscal year.
• Any proposed changes to the governance, budgeting, or administration of Dova Zone, including any election by the Dova Zone assessed Lodging Businesses to pursue a separate Dova Zone owners’ association or successor governance structure.
ITEM 12.3.
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APPENDIX 1 – LAW
CURRENT THROUGH CH. 790 OF THE LEGISLATION FROM THE 2025-2026 REGULAR SESSION, EFFECTIVE AS OF OCTOBER 13, 2025
STREETS AND HIGHWAYS CODE
DIVISION 18. PARKING
PART 7. PROPERTY AND BUSINESS IMPROVEMENT DISTRICT LAW
OF 1994
CHAPTER 1. General Provisions
ARTICLE 1. Declarations
36600. Citation of part
This part shall be known and may be cited as the “Property and Business Improvement District Law of 1994.”
36601. Legislative findings and declarations; Legislative guidance
The Legislature finds and declares all of the following:
(a) Businesses located and operating within business districts in some of this state’s communities are economically disadvantaged, are underutilized, and are unable to attract customers due to inadequate facilities, services, and activities in the business districts.
(b) It is in the public interest to promote the economic revitalization and physical maintenance of business districts in order to create jobs, attract new businesses, and prevent the erosion of the business districts.
(c) It is of particular local benefit to allow business districts to fund business related improvements, maintenance, and activities through the levy of assessments upon the businesses or real property that receive benefits from those improvements. (d) Assessments levied for the purpose of conferring special benefit upon the real property or a specific benefit upon the businesses in a business district are not taxes for the general benefit of a city, even if property, businesses, or persons not assessed receive incidental or collateral effects that benefit them. (e) Property and business improvement districts formed throughout this state have conferred special benefits upon properties and businesses within their districts and have made those properties and businesses more useful by providing the following benefits:
(1) Crime reduction. A study by the Rand Corporation has confirmed a 12-percent reduction in the incidence of robbery and an 8-percent reduction in the total incidence of violent crimes within the 30 districts studied.
(2) Job creation.
(3) Business attraction.
(4) Business retention.
(5) Economic growth.
(6) New investments.
(f) With the dissolution of redevelopment agencies throughout the state, property and ITEM 12.3.
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business improvement districts have become even more important tools with which communities can combat blight, promote economic opportunities, and create a clean and safe environment.
(g) Since the enactment of this act, the people of California have adopted Proposition 218, which added Article XIII D to the Constitution in order to place certain requirements and restrictions on the formation of, and activities, expenditures, and assessments by property-based districts. Article XIII D of the Constitution provides that property-based districts may only levy assessments for special benefits. (h) The act amending this section is intended to provide the Legislature’s guidance with regard to this act, its interaction with the provisions of Article XIII D of the Constitution, and the determination of special benefits in property-based districts. (1) The lack of legislative guidance has resulted in uncertainty and inconsistent application of this act, which discourages the use of assessments to fund needed improvements, maintenance, and activities in property-based districts, contributing to blight and other underutilization of property.
(2) Activities undertaken for the purpose of conferring special benefits upon property to be assessed inherently produce incidental or collateral effects that benefit property or persons not assessed. Therefore, for special benefits to exist as a separate and distinct category from general benefits, the incidental or collateral effects of those special benefits are inherently part of those special benefits. The mere fact that special benefits produce incidental or collateral effects that benefit property or persons not assessed does not convert any portion of those special benefits or their incidental or collateral effects into general benefits.
(3) It is of the utmost importance that property-based districts created under this act have clarity regarding restrictions on assessments they may levy and the proper determination of special benefits. Legislative clarity with regard to this act will provide districts with clear instructions and courts with legislative intent regarding restrictions on property-based assessments, and the manner in which special benefits should be determined.
36602. Purpose of part
The purpose of this part is to supplement previously enacted provisions of law that authorize cities to levy assessments within property and business improvement districts, to ensure that those assessments conform to all constitutional requirements and are determined and assessed in accordance with the guidance set forth in this act. This part does not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes.
36603. Preemption of authority or charter city to adopt ordinances levying assessments
Nothing in this part is intended to preempt the authority of a charter city to adopt ordinances providing for a different method of levying assessments for similar or additional purposes from those set forth in this part. A property and business improvement district created pursuant to this part is expressly exempt from the provisions of the Special Assessment Investigation, Limitation and Majority Protest Act ITEM 12.3.
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of 1931 (Division 4 (commencing with Section 2800)).
36603.5. Part prevails over conflicting provisions
Any provision of this part that conflicts with any other provision of law shall prevail over the other provision of law, as to districts created under this part.
36604. Severability
This part is intended to be construed liberally and, if any provision is held invalid, the remaining provisions shall remain in full force and effect. Assessments levied under this part are not special taxes.
ARTICLE 2. Definitions
36606. “Activities”
“Activities” means, but is not limited to, all of the following that benefit businesses or real property in the district:
(a) Promotion of public events.
(b) Furnishing of music in any public place.
(c) Promotion of tourism within the district.
(d) Marketing and economic development, including retail retention and recruitment. (e) Providing security, sanitation, graffiti removal, street and sidewalk cleaning, and other municipal services supplemental to those normally provided by the municipality. (f) Other services provided for the purpose of conferring special benefit upon assessed real property or specific benefits upon assessed businesses located in the district.
36606.5. “Assessment”
“Assessment” means a levy for the purpose of acquiring, constructing, installing, or maintaining improvements and providing activities that will provide certain benefits to properties or businesses located within a property and business improvement district.
36607. “Business”
“Business” means all types of businesses and includes financial institutions and professions.
36608. “City”
“City” means a city, county, city and county, or an agency or entity created pursuant to Article 1 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code, the public member agencies of which includes only cities, counties, or a city and county, or the State of California.
36609. “City council”
ITEM 12.3.
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“City council” means the city council of a city or the board of supervisors of a county, or the agency, commission, or board created pursuant to a joint powers agreement and which is a city within the meaning of this part.
36609.4. “Clerk”
“Clerk” means the clerk of the legislative body.
36609.5. “General benefit”
“General benefit” means, for purposes of a property-based district, any benefit that is not a “special benefit” as defined in Section 36615.5.
36610. “Improvement”
“Improvement” means the acquisition, construction, installation, or maintenance of any tangible property with an estimated useful life of five years or more including, but not limited to, the following:
(a) Parking facilities.
(b) Benches, booths, kiosks, display cases, pedestrian shelters and signs. (c) Trash receptacles and public restrooms.
(d) Lighting and heating facilities.
(e) Decorations.
(f) Parks.
(g) Fountains.
(h) Planting areas.
(i) Closing, opening, widening, or narrowing of existing streets. (j) Facilities or equipment, or both, to enhance security of persons and property within the district.
(k) Ramps, sidewalks, plazas, and pedestrian malls.
(l) Rehabilitation or removal of existing structures.
36611. “Management district plan”; “Plan”
“Management district plan” or “plan” means a proposal as defined in Section 36622.
36612. “Owners’ association”
“Owners’ association” means a private nonprofit entity that is under contract with a city to administer or implement improvements, maintenance, and activities specified in the management district plan. An owners’ association may be an existing nonprofit entity or a newly formed nonprofit entity. An owners’ association is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose. Notwithstanding this section, an owners’ association shall comply with the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950) of Part 1 of Division 2 of Title 5 of the Government Code), at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act (Division 10 ITEM 12.3.
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(commencing with Section 7920.000) of Title 1 of the Government Code), for all records relating to activities of the district.
36614. “Property”
“Property” means real property situated within a district.
36614.5. “Property and business improvement district”; “District”
“Property and business improvement district,” or “district,” means a property and business improvement district established pursuant to this part.
36614.6. “Property-based assessment”
“Property-based assessment” means any assessment made pursuant to this part upon real property.
36614.7. “Property-based district”
“Property-based district” means any district in which a city levies a property-based assessment.
36615. “Property owner”; “Business owner”; “Owner”
“Property owner” means any person shown as the owner of land on the last equalized assessment roll or otherwise known to be the owner of land by the city council. “Business owner” means any person recognized by the city as the owner of the business. “Owner” means either a business owner or a property owner. The city council has no obligation to obtain other information as to the ownership of land or businesses, and its determination of ownership shall be final and conclusive for the purposes of this part. Wherever this part requires the signature of the property owner, the signature of the authorized agent of the property owner shall be sufficient. Wherever this part requires the signature of the business owner, the signature of the authorized agent of the business owner shall be sufficient.
36615.5. “Special benefit”
(a) “Special benefit” means, for purposes of a property-based district, a particular and distinct benefit over and above general benefits conferred on real property located in a district or to the public at large. Special benefit includes incidental or collateral effects that arise from the improvements, maintenance, or activities of property-based districts even if those incidental or collateral effects benefit property or persons not assessed.
Special benefit excludes general enhancement of property value.
(b) “Special benefit” also includes, for purposes of a property-based district, a particular and distinct benefit provided directly to each assessed parcel within the district. Merely because parcels throughout an assessment district share the same special benefits does not make the benefits general.
ITEM 12.3.
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36616. “Tenant”
“Tenant” means an occupant pursuant to a lease of commercial space or a dwelling unit, other than an owner.
ARTICLE 3. Prior Law
36617. Alternate method of financing certain improvements and activities; Effect on other provisions
This part provides an alternative method of financing certain improvements and activities. The provisions of this part shall not affect or limit any other provisions of law authorizing or providing for the furnishing of improvements or activities or the raising of revenue for these purposes. Every improvement area established pursuant to the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500) of this division) is valid and effective and is unaffected by this part.
CHAPTER 2. Establishment
36620. Establishment of property and business improvement district
A property and business improvement district may be established as provided in this chapter.
36620.5. Requirement of consent of city council
A county may not form a district within the territorial jurisdiction of a city without the consent of the city council of that city. A city may not form a district within the unincorporated territory of a county without the consent of the board of supervisors of that county. A city may not form a district within the territorial jurisdiction of another city without the consent of the city council of the other city.
36621. Initiation of proceedings; Petition of property or business owners in proposed district
(a) Upon the submission of a written petition, signed by the property or business owners in the proposed district who will pay more than 50 percent of the assessments proposed to be levied, the city council may initiate proceedings to form a district by the adoption of a resolution expressing its intention to form a district. The amount of assessment attributable to property or a business owned by the same property or business owner that is in excess of 40 percent of the amount of all assessments proposed to be levied, shall not be included in determining whether the petition is signed by property or business owners who will pay more than 50 percent of the total amount of assessments proposed to be levied.
(b) The petition of property or business owners required under subdivision (a) shall include a summary of the management district plan. That summary shall include all of the following:
ITEM 12.3.
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(1) A map showing the boundaries of the district.
(2) Information specifying where the complete management district plan can be obtained.
(3) Information specifying that the complete management district plan shall be furnished upon request.
(c) The resolution of intention described in subdivision (a) shall contain all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property or businesses within the district, a statement as to whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements do not need to be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities, and the location and extent of the proposed district. (2) A time and place for a public hearing on the establishment of the property and business improvement district and the levy of assessments, which shall be consistent with the requirements of Section 36623.
36622. Contents of management district plan
The management district plan shall include, but is not limited to, all of the following:
(a) If the assessment will be levied on property, a map of the district in sufficient detail to locate each parcel of property and, if businesses are to be assessed, each business within the district. If the assessment will be levied on businesses, a map that identifies the district boundaries in sufficient detail to allow a business owner to reasonably determine whether a business is located within the district boundaries. If the assessment will be levied on property and businesses, a map of the district in sufficient detail to locate each parcel of property and to allow a business owner to reasonably determine whether a business is located within the district boundaries. (b) The name of the proposed district.
(c) A description of the boundaries of the district, including the boundaries of benefit zones, proposed for establishment or extension in a manner sufficient to identify the affected property and businesses included, which may be made by reference to any plan or map that is on file with the clerk. The boundaries of a proposed property assessment district shall not overlap with the boundaries of another existing property assessment district created pursuant to this part. This part does not prohibit the boundaries of a district created pursuant to this part to overlap with other assessment districts established pursuant to other provisions of law, including, but not limited to, the Parking and Business Improvement Area Law of 1989 (Part 6 (commencing with Section 36500)). This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with another business assessment district created pursuant to this part. This part does not prohibit the boundaries of a business assessment district created pursuant to this part to overlap with a property assessment district created pursuant to this part.
(d) The improvements, maintenance, and activities proposed for each year of operation of the district and the estimated cost thereof. If the improvements, maintenance, and activities proposed for each year of operation are the same, a description of the first ITEM 12.3.
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year’s proposed improvements, maintenance, and activities and a statement that the same improvements, maintenance, and activities are proposed for subsequent years shall satisfy the requirements of this subdivision.
(e) The total annual amount proposed to be expended for improvements, maintenance, or activities, and debt service in each year of operation of the district. If the assessment is levied on businesses, this amount may be estimated based upon the assessment rate.
If the total annual amount proposed to be expended in each year of operation of the district is not significantly different, the amount proposed to be expended in the initial year and a statement that a similar amount applies to subsequent years shall satisfy the requirements of this subdivision.
(f) The proposed source or sources of financing, including the proposed method and basis of levying the assessment in sufficient detail to allow each property or business owner to calculate the amount of the assessment to be levied against their property or business. The plan also shall state whether bonds will be issued to finance improvements.
(g) The time and manner of collecting the assessments.
(h) The specific number of years in which assessments will be levied. In a new district, the maximum number of years shall be five. Upon renewal, a district shall have a term not to exceed 10 years. Notwithstanding these limitations, a district created pursuant to this part to finance capital improvements with bonds may levy assessments until the maximum maturity of the bonds. The management district plan may set forth specific increases in assessments for each year of operation of the district. (i) The proposed time for implementation and completion of the management district plan.
(j) Any proposed rules and regulations to be applicable to the district. (k)
(1) A list of the properties or businesses to be assessed, including the assessor’s parcel numbers for properties to be assessed, and a statement of the method or methods by which the expenses of a district will be imposed upon benefited real property or businesses, in proportion to the benefit received by the property or business, to defray the cost thereof.
(2) In a property-based district, the proportionate special benefit derived by each identified parcel shall be determined exclusively in relationship to the entirety of the capital cost of a public improvement, the maintenance and operation expenses of a public improvement, or the cost of the activities. An assessment shall not be imposed on any parcel that exceeds the reasonable cost of the proportional special benefit conferred on that parcel. Only special benefits are assessable, and a property-based district shall separate the general benefits, if any, from the special benefits conferred on a parcel. Parcels within a property-based district that are owned or used by any city, public agency, the State of California, or the United States shall not be exempt from assessment unless the governmental entity can demonstrate by clear and convincing evidence that those publicly owned parcels in fact receive no special benefit. The value of any incidental, secondary, or collateral effects that arise from the improvements, maintenance, or activities of a property-based district and that benefit property or persons not assessed shall not be deducted from the entirety of the cost of any special benefit or affect the proportionate special benefit derived by each identified parcel. (3) In a property-based district, properties throughout the district may share the same special benefits. In a district with boundaries that define which parcels are to receive ITEM 12.3.
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improvements, maintenance, or activities over and above those services provided by the city, the improvements, maintenance, or activities themselves may constitute a special benefit. The city may impose assessments that are less than the proportional special benefit conferred, but shall not impose assessments that exceed the reasonable costs of the proportional special benefit conferred. Because one or more parcels pay less than the special benefit conferred does not necessarily mean that other parcels are assessed more than the reasonable cost of their special benefit. (l) In a property-based district, a detailed engineer’s report prepared by a registered professional engineer certified by the State of California supporting all assessments contemplated by the management district plan.
(m) Any other item or matter required to be incorporated therein by the city council.
36623. Procedure to levy assessment
(a) If a city council proposes to levy a new or increased property assessment, the notice and protest and hearing procedure shall comply with Section 53753 of the Government Code.
(b) If a city council proposes to levy a new or increased business assessment, the notice and protest and hearing procedure shall comply with Section 54954.6 of the Government Code, except that notice shall be mailed to the owners of the businesses proposed to be assessed. A protest may be made orally or in writing by any interested person. Every written protest shall be filed with the clerk at or before the time fixed for the public hearing. The city council may waive any irregularity in the form or content of any written protest. A written protest may be withdrawn in writing at any time before the conclusion of the public hearing. Each written protest shall contain a description of the business in which the person subscribing the protest is interested sufficient to identify the business and, if a person subscribing is not shown on the official records of the city as the owner of the business, the protest shall contain or be accompanied by written evidence that the person subscribing is the owner of the business or the authorized representative. A written protest that does not comply with this section shall not be counted in determining a majority protest. If written protests are received from the owners or authorized representatives of businesses in the proposed district that will pay 50 percent or more of the assessments proposed to be levied and protests are not withdrawn so as to reduce the protests to less than 50 percent, no further proceedings to levy the proposed assessment against such businesses, as contained in the resolution of intention, shall be taken for a period of one year from the date of the finding of a majority protest by the city council.
(c) If a city council proposes to conduct a single proceeding to levy both a new or increased property assessment and a new or increased business assessment, the notice and protest and hearing procedure for the property assessment shall comply with subdivision (a), and the notice and protest and hearing procedure for the business assessment shall comply with subdivision (b). If a majority protest is received from either the property or business owners, that respective portion of the assessment shall not be levied. The remaining portion of the assessment may be levied unless the improvement or other special benefit was proposed to be funded by assessing both property and business owners.
36624. Changes to proposed assessments
ITEM 12.3.
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At the conclusion of the public hearing to establish the district, the city council may adopt, revise, change, reduce, or modify the proposed assessment or the type or types of improvements, maintenance, and activities to be funded with the revenues from the assessments. Proposed assessments may only be revised by reducing any or all of them.
At the public hearing, the city council may only make changes in, to, or from the boundaries of the proposed property and business improvement district that will exclude territory that will not benefit from the proposed improvements, maintenance, and activities. Any modifications, revisions, reductions, or changes to the proposed assessment district shall be reflected in the notice and map recorded pursuant to Section 36627.
36625. Resolution of formation
(a) If the city council, following the public hearing, decides to establish a proposed property and business improvement district, the city council shall adopt a resolution of formation that shall include, but is not limited to, all of the following:
(1) A brief description of the proposed improvements, maintenance, and activities, the amount of the proposed assessment, a statement as to whether the assessment will be levied on property, businesses, or both within the district, a statement on whether bonds will be issued, and a description of the exterior boundaries of the proposed district, which may be made by reference to any plan or map that is on file with the clerk. The descriptions and statements need not be detailed and shall be sufficient if they enable an owner to generally identify the nature and extent of the improvements, maintenance, and activities and the location and extent of the proposed district. (2) The number, date of adoption, and title of the resolution of intention. (3) The time and place where the public hearing was held concerning the establishment of the district.
(4) A determination regarding any protests received. The city shall not establish the district or levy assessments if a majority protest was received. (5) A statement that the properties, businesses, or properties and businesses in the district established by the resolution shall be subject to any amendments to this part. (6) A statement that the improvements, maintenance, and activities to be conferred on businesses and properties in the district will be funded by the levy of the assessments.
The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district. Notwithstanding the foregoing, improvements and activities that must be provided outside the district boundaries to create a special or specific benefit to the assessed parcels or businesses may be provided, but shall be limited to marketing or signage pointing to the district. (7) A finding that the property or businesses within the area of the property and business improvement district will be benefited by the improvements, maintenance, and activities funded by the proposed assessments, and, for a property-based district, that property within the district will receive a special benefit. (8) In a property-based district, the total amount of all special benefits to be conferred on the properties within the property-based district.
(b) The adoption of the resolution of formation and, if required, recordation of the ITEM 12.3.
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notice and map pursuant to Section 36627 shall constitute the levy of an assessment in each of the fiscal years referred to in the management district plan.
36627. Notice and assessment diagram
Following adoption of the resolution establishing district assessments on properties pursuant to Section 36625, the clerk shall record a notice and an assessment diagram pursuant to Section 3114. No other provision of Division 4.5 (commencing with Section 3100) applies to an assessment district created pursuant to this part.
36628. Establishment of separate benefit zones within district; Categories of businesses
The city council may establish one or more separate benefit zones within the district based upon the degree of benefit derived from the improvements or activities to be provided within the benefit zone and may impose a different assessment within each benefit zone. If the assessment is to be levied on businesses, the city council may also define categories of businesses based upon the degree of benefit that each will derive from the improvements or activities to be provided within the district and may impose a different assessment or rate of assessment on each category of business, or on each category of business within each zone.
36628.5. Assessments on businesses or property owners
The city council may levy assessments on businesses or on property owners, or a combination of the two, pursuant to this part. The city council shall structure the assessments in whatever manner it determines corresponds with the distribution of benefits from the proposed improvements, maintenance, and activities, provided that any property-based assessment conforms with the requirements set forth in paragraph (2) of subdivision (k) of Section 36622.
36629. Provisions and procedures applicable to benefit zones and business categories
All provisions of this part applicable to the establishment, modification, or disestablishment of a property and business improvement district apply to the establishment, modification, or disestablishment of benefit zones or categories of business. The city council shall, to establish, modify, or disestablish a benefit zone or category of business, follow the procedure to establish, modify, or disestablish a property and business improvement district.
36630. Expiration of district; Creation of new district
If a property and business improvement district expires due to the time limit set pursuant to subdivision (h) of Section 36622, a new management district plan may be created and the district may be renewed pursuant to this part.
ITEM 12.3.
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CHAPTER 3. Assessments
36631. Time and manner of collection of assessments; Delinquent payments
The collection of the assessments levied pursuant to this part shall be made at the time and in the manner set forth by the city council in the resolution levying the assessment.
Assessments levied on real property may be collected at the same time and in the same manner as for the ad valorem property tax, and may provide for the same lien priority and penalties for delinquent payment. All delinquent payments for assessments levied pursuant to this part may be charged interest and penalties.
36632. Assessments to be based on estimated benefit; Classification of real property and businesses; Exclusion of residential and agricultural property
(a) The assessments levied on real property pursuant to this part shall be levied on the basis of the estimated benefit to the real property within the property and business improvement district. The city council may classify properties for purposes of determining the benefit to property of the improvements and activities provided pursuant to this part.
(b) Assessments levied on businesses pursuant to this part shall be levied on the basis of the estimated benefit to the businesses within the property and business improvement district. The city council may classify businesses for purposes of determining the benefit to the businesses of the improvements and activities provided pursuant to this part. (c) Properties zoned solely for residential use, or that are zoned for agricultural use, are conclusively presumed not to benefit from the improvements and service funded through these assessments, and shall not be subject to any assessment pursuant to this part.
36633. Time for contesting validity of assessment
The validity of an assessment levied under this part shall not be contested in an action or proceeding unless the action or proceeding is commenced within 30 days after the resolution levying the assessment is adopted pursuant to Section 36625. An appeal from a final judgment in an action or proceeding shall be perfected within 30 days after the entry of judgment.
36634. Service contracts authorized to establish levels of city services
The city council may execute baseline service contracts that would establish levels of city services that would continue after a property and business improvement district has been formed.
36635. Request to modify management district plan
The owners’ association may, at any time, request that the city council modify the management district plan. Any modification of the management district plan shall be made pursuant to this chapter.
ITEM 12.3.
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36636. Modification of plan by resolution after public hearing; Adoption of resolution of intention
(a) Upon the written request of the owners’ association, the city council may modify the management district plan after conducting one public hearing on the proposed modifications. The city council may modify the improvements and activities to be funded with the revenue derived from the levy of the assessments by adopting a resolution determining to make the modifications after holding a public hearing on the proposed modifications. If the modification includes the levy of a new or increased assessment, the city council shall comply with Section 36623. Notice of all other public hearings pursuant to this section shall comply with both of the following:
(1) The resolution of intention shall be published in a newspaper of general circulation in the city once at least seven days before the public hearing. (2) A complete copy of the resolution of intention shall be mailed by first class mail, at least 10 days before the public hearing, to each business owner or property owner affected by the proposed modification.
(b) The city council shall adopt a resolution of intention which states the proposed modification prior to the public hearing required by this section. The public hearing shall be held not more than 90 days after the adoption of the resolution of intention.
36637. Reflection of modification in notices recorded and maps
Any subsequent modification of the resolution shall be reflected in subsequent notices and maps recorded pursuant to Division 4.5 (commencing with Section 3100), in a manner consistent with the provisions of Section 36627.
36638. Assessment as government imposed fee on Civ C § 1770 transaction
(a) A business assessment pursuant to this part is a fee imposed by a government on the transaction for purposes of paragraph (29) of subdivision (a) of Section 1770 of the Civil Code.
(b) This section shall become operative on July 1, 2024.
CHAPTER 3.5. Financing
36640. Bonds authorized; Procedure; Restriction on reduction or termination of assessments
(a) The city council may, by resolution, determine and declare that bonds shall be issued to finance the estimated cost of some or all of the proposed improvements described in the resolution of formation adopted pursuant to Section 36625, if the resolution of formation adopted pursuant to that section provides for the issuance of bonds, under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500)) or in conjunction with Marks-Roos Local Bond Pooling Act of 1985 (Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code). Either act, as the case may be, shall govern the proceedings relating to the issuance of bonds, although proceedings under the Bond Act of 1915 may be modified by the city council as necessary to accommodate assessments levied ITEM 12.3.
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upon business pursuant to this part.
(b) The resolution adopted pursuant to subdivision (a) shall generally describe the proposed improvements specified in the resolution of formation adopted pursuant to Section 36625, set forth the estimated cost of those improvements, specify the number of annual installments and the fiscal years during which they are to be collected. The amount of debt service to retire the bonds shall not exceed the amount of revenue estimated to be raised from assessments over 30 years.
(c) Notwithstanding any other provision of this part, assessments levied to pay the principal and interest on any bond issued pursuant to this section shall not be reduced or terminated if doing so would interfere with the timely retirement of the debt.
CHAPTER 4. Governance
36650. Report by owners’ association; Approval or modification by city council
(a) The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. The owners’ association’s first report shall be due after the first year of operation of the district. The report may propose changes, including, but not limited to, the boundaries of the property and business improvement district or any benefit zones within the district, the basis and method of levying the assessments, and any changes in the classification of property, including any categories of business, if a classification is used. (b) The report shall be filed with the clerk and shall refer to the property and business improvement district by name, specify the fiscal year to which the report applies, and, with respect to that fiscal year, shall contain all of the following information:
(1) Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district.
(2) The improvements, maintenance, and activities to be provided for that fiscal year. (3) An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year.
(4) The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year. (5) The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year.
(6) The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.
(c) The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified. Any modification shall be made pursuant to Sections 36635 and 36636.
The city council shall not approve a change in the basis and method of levying assessments that would impair an authorized or executed contract to be paid from the revenues derived from the levy of assessments, including any commitment to pay principal and interest on any bonds issued on behalf of the district.
36651. Designation of owners’ association to provide improvements, ITEM 12.3.
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maintenance, and activities
The management district plan may, but is not required to, state that an owners’ association will provide the improvements, maintenance, and activities described in the management district plan. If the management district plan designates an owners’ association, the city shall contract with the designated nonprofit corporation to provide services.
CHAPTER 5. Renewal
36660. Renewal of district; Transfer or refund of remaining revenues; District term limit
(a) Any district previously established whose term has expired, or will expire, may be renewed by following the procedures for establishment as provided in this chapter. (b) Upon renewal, any remaining revenues derived from the levy of assessments, or any revenues derived from the sale of assets acquired with the revenues, shall be transferred to the renewed district. If the renewed district includes additional parcels or businesses not included in the prior district, the remaining revenues shall be spent to benefit only the parcels or businesses in the prior district. If the renewed district does not include parcels or businesses included in the prior district, the remaining revenues attributable to these parcels shall be refunded to the owners of these parcels or businesses. (c) Upon renewal, a district shall have a term not to exceed 10 years, or, if the district is authorized to issue bonds, until the maximum maturity of those bonds. There is no requirement that the boundaries, assessments, improvements, or activities of a renewed district be the same as the original or prior district.
CHAPTER 6. Disestablishment
36670. Circumstances permitting disestablishment of district; Procedure
(a) Any district established or extended pursuant to the provisions of this part, where there is no indebtedness, outstanding and unpaid, incurred to accomplish any of the purposes of the district, may be disestablished by resolution by the city council in either of the following circumstances:
(1) If the city council finds there has been misappropriation of funds, malfeasance, or a violation of law in connection with the management of the district, it shall notice a hearing on disestablishment.
(2) During the operation of the district, there shall be a 30-day period each year in which assessees may request disestablishment of the district. The first such period shall begin one year after the date of establishment of the district and shall continue for 30 days. The next such 30-day period shall begin two years after the date of the establishment of the district. Each successive year of operation of the district shall have such a 30-day period. Upon the written petition of the owners or authorized representatives of real property or the owners or authorized representatives of businesses in the district who pay 50 percent or more of the assessments levied, the city council shall pass a resolution of intention to disestablish the district. The city council shall notice a hearing on disestablishment.
ITEM 12.3.
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(b) The city council shall adopt a resolution of intention to disestablish the district prior to the public hearing required by this section. The resolution shall state the reason for the disestablishment, shall state the time and place of the public hearing, and shall contain a proposal to dispose of any assets acquired with the revenues of the assessments levied within the property and business improvement district. The notice of the hearing on disestablishment required by this section shall be given by mail to the property owner of each parcel or to the owner of each business subject to assessment in the district, as appropriate. The city shall conduct the public hearing not less than 30 days after mailing the notice to the property or business owners. The public hearing shall be held not more than 60 days after the adoption of the resolution of intention.
36671. Refund of remaining revenues upon disestablishment or expiration without renewal of district; Calculation of refund; Use of outstanding revenue collected after disestablishment of district
(a) Upon the disestablishment or expiration without renewal of a district, any remaining revenues, after all outstanding debts are paid, derived from the levy of assessments, or derived from the sale of assets acquired with the revenues, or from bond reserve or construction funds, shall be refunded to the owners of the property or businesses then located and operating within the district in which assessments were levied by applying the same method and basis that was used to calculate the assessments levied in the fiscal year in which the district is disestablished or expires. All outstanding assessment revenue collected after disestablishment shall be spent on improvements and activities specified in the management district plan.
(b) If the disestablishment occurs before an assessment is levied for the fiscal year, the method and basis that was used to calculate the assessments levied in the immediate prior fiscal year shall be used to calculate the amount of any refund.
ITEM 12.3.
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APPENDIX 2 – ASSESSED LODGING BUSINESSES*
*List as of February 26, 2026
Business
Name
Address
Best Western Plus Rancho Cordova Inn 10713 White Rock Rd Rancho Cordova Rancho Cordova Inn near Lake Natoma 12249 Folsom Blvd Rancho Cordova Courtyard Sacramento Rancho Cordova 10683 White Rock Rd Rancho Cordova Days Inn & Suites Rancho Cordova 3240 Mather Field Rd Rancho Cordova Townplace Suites by Marriott 11212 Point East Dr Rancho Cordova Extended Stay America 10721 White Rock Rd Rancho Cordova Fairfield Inn & Suites Rancho Cordova 10745 Gold Center Dr Rancho Cordova Hampton Inn Sacramento Rancho Cordova 10755 Gold Center Dr Rancho Cordova Holiday Inn Sacramento Rancho Cordova 11269 Point East Dr Rancho Cordova Studio 6 11299 Point East Dr Rancho Cordova
Homewood Suites by Hilton Rancho
Cordova Sacramento
10700 White Rock Rd
Rancho Cordova
Hyatt Place Sacramento Rancho Cordova 10744 Gold Center Dr Rancho Cordova La Quinta Inn & Suites -Rancho Cordova 11131 Folsom Blvd Rancho Cordova Motel 6 Rancho Cordova 10694 Olson Dr Rancho Cordova
California Inn Rancho Cordova 10800 Olson Dr Rancho Cordova Residence Inn Sacramento Rancho Cordova 2779 Prospect Park Dr Rancho Cordova Sacramento Marriott Rancho Cordova 11211 Point East Dr Rancho Cordova ITEM 12.3.
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