Rancho Cucamonga City Council
March 2, 2022

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5 4.1.4 Performance of Covenants . Seller performing and complying in all material respects with a ll of the terms of this Agreement to be performed and complied with by Seller prior to or at the Closing.

4.1.5 Representations and Warranties . The representations and warranties of Seller set forth in Article 5 being true and accurate on the Closing Date, as if made on such date.

4.1.6 Non-Foreign Certification. Seller having executed and delivered to Buyer on or prior to the Closing Date a certification (the "Non-Foreign Certification"), substantially in the form of Exhibit C.

4.2 Seller's Conditions . Seller's obligat ions under this Agreement are expressly subject to the timely fulfillment of the conditions set forth in this Section 4.2 on or before the Closing Date, or such earlier date as is set forth below. Each condition may be waived in whole or part by Seller by written notice to Buyer.

4.2.1 Covenants. Buyer performing and complying in all material respects with all of the terms of this Agreement to be performed and complied with by Buyer prior to or at the Closing.

4.2.2 Representations and Warranties. The representations of Buyer set forth in Article 6 being true and accurate on the Closing Date, as if made on such date.

ARTICLE 5. SELLER'S REPRESENTATIONS AND WARRANTIES.

Seller hereby makes the following representations and warranties to Buyer with the understanding that each such representation and warranty is material and is being relied upon by Buyer:

5.1 Compliance. The Property, is in compliance with all applicable laws, ordinances, rules, regulations, judgments, orders, covenants, conditions, restrictions, whether federal, state , local, foreign or private. Seller has not received any request either formal or informal, oral or written, that Seller modify or terminate any use of the Property. The Property complies with all applicable subdivision laws and all local ordinances enac ted thereunder and no subdivision or parcel map not already obtained is required to transfer the Property to Buyer.

5.2 Documents. All of the Preliminary Documents which have been delivered or made available to Buyer pursuant to Article 3, and all other docum ents delivered to Buyer by or on behalf of Seller (a) are true, correct and complete copies of what they purport to be, (b) represent truly the factual matters stated therein, (c) are in full force and effect, (d) have not been modified, except as set fort h therein and (e) do not omit any information required to make the submission thereof accurate and complete in all material respects.

5.3 Taxes and Condemnation. There are no presently pending or contemplated special taxes or assessments which will affect the Property. There are no presently pending or contemplated proceedings to condemn or demolish the Property or any part of it.

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6 5.4 Contracts/Leases/Occupancy Rights . There are no agreements or other obligations to which Seller is party or by which it or the Pr operty is bound which may affect the current use of the Property, no r are there any current leases or occupancy agreements in force.

No party has a right to occupancy, tenancy, or a license to use or enter the Property.

5.5 Litigation. There are no actions, suits, proceedings, judgments, orders, decrees or governmental investigations pending or threatened against the Property or Seller which could affect the Property or the purchase, use or enjoyment thereof by Buyer.

5.6 Agreements with Governmental Authoritie s. There are no agreements with governmental authorities, agencies, utilities or quasi -governmental entities which affect the Property except those agreements which are identified in the Preliminary Title Report and those matters which are disclosed by th e Survey. Except the following: An easement to Southern California Gas Company for utility purposes over the property in question.

5.7 Hazardous Materials.

5.7.1 Definitions. For purposes of this Agreement:
(a) "Environmental Law(s) " means the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et. seq., the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq., the Clean Water Act, 33 U.S.C. Sections 1251 et seq., The Safe Drinking Water and Toxic Enforcement Act of 1986 (Cal. H&S Code Sections 25249.5-25249.13), the Carpenter -Preseley-Tanner Hazardous Substan ce Account Act (Cal. H&S Code Sections 25300 et seq.), and the California Water Code Sections 1300, et seq., as said laws have been supplemented or amended to date, the regulations promulgated pursuant to said laws and any other federal, state or local law , statute, rule, regulation or ordinance which regulates or proscribes the use, storage, disposal, presence, cleanup, transportation or Release or threatened Release into the environment of Hazardous Material. (b) "Hazardous Material " means any substance which is (i) designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, pollutant or contaminant under any Environmental Law, as currently in effect or as hereafter amended or enacted, (ii) a petroleum hydrocarbo n, including crude oil or any fraction thereof and all petroleum products, (iii) PCBs, (iv) lead, (v) asbestos, (vi) flammable explosives, (vii) infectious materials or (viii) radioactive materials. (c) "Release" means any spilling, leaking, pumping, pouring, emitting, discharging, injecting, escaping, leaching, dumping or disposing into the environment of any Hazardous Material (including the abandonment or discarding of barrels, containers, and other receptacles containing any Hazardous Material).

5.7.2 Representations:
(a) The Property and all existing uses and conditions of the Property are in compliance with all Environmental Laws, and Seller has not received any written notice of

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7 violation issued pursuant to any Environmental Law with respect to the Property or any use or condition thereof.
(b) Neither Seller nor any other present or former owner of the Property has used, handled, stored, transported, released or disposed of any Hazardous Material on, under or from the Property in violation of any Environmental Law. (c) There is no Release of any Hazardous Material existing on, beneath or from or in the surface or ground water associated with the Property. (d) All required permits, licenses and other authorizations required by or issued pursuant to any Environmental Law for the o wnership or operation of the Property by Seller have been obtained and are presently maintained in full force and effect. (e) There exists no writ, injunction, decree, order or judgment outstanding, nor any lawsuit, claim, proceeding, citation, directive, summ ons or investigation pending or threatened pursuant to any Environmental Law relating to (i) the ownership, occupancy or use of any portion of the Property by Seller or occupant or user of any portion of the Property or any former owner of any portion of the Property, (ii) any alleged violation of any Environmental Law by Seller or occupant or user of any portion of the Property or any former owner of any portion of the Property or (iii) the suspected presence, Release or threatened Release of any Hazardous Material on, under, in or from any portion of the Property. (f) There are no above -ground or underground tanks located on the Property used or formerly used for the purpose of storing any Hazardous Material. (g) No asbestos abatement or remediation work has been performed on the Property.
(h) There is no PCB-containing equipment or PCB-containing material located on or in the Property.

5.8 Title to the Property. Seller has good and marketable title to the Property , subject to the Conditions of Title. There are no outsta nding rights of first refusal or first look, options to purchase, rights of reverter, or claim of right relating to the transfer or sale of the Property or any interest therein. There are no unrecorded or undisclosed documents or other matters which affect title to the Property. No person holding a security interest in the Property or any part thereof has the right to consent or deny consent to the sale of the Property as contemplated herein, and Seller has the right to pay off such person and to remove a ll such liens as of the Closing Date. Seller has enjoyed the continuous and uninterrupted quiet possession, use and operation of the Property.

5.9 Seller's Authority. This Agreement and the other documents executed by Seller in connection herewith are legal, valid and binding obligations of Seller, enforceable in accordance with their respective terms. Neither the execution and delivery of this Agreement by Seller, nor performance of any of its obligations hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, any indenture, mortgage, deed of trust, agreement, undertaking, instrument or document to which Seller is a party or is bound, or

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8 any order or regulation of any court, regulatory body, administra tive agency or governmental body having jurisdiction over Seller.

5.10 Foreign Person . Seller is not a "foreign person" within the meaning of Section 1445(f) of the Internal Revenue Code.

5.11 Misstatements and Omissions . Neither the representations and warranties made by Seller in this Article 5 nor elsewhere in this Agreement contain any untrue statement or any omission of a material fact.

ARTICLE 6. BUYER'S REPRESENTATIONS AND WARRANTIES.

Buyer makes the following representation and warranties to Seller with the understanding that each such representation and warranty is material and is being relied upon by Seller:

6.1 Buyer's Authority . The execution, delivery and performance of this Agreement by Buyer have been duly and validly authorized by all necessary action and proceedi ngs, and no further action or authorization is necessary on the part of Buyer in order to consummate the transactions contemplated herein.

6.2 No Conflict. Neither the execution nor delivery of this Agreement by Buyer, nor performance of any of its obligation s hereunder, nor consummation of the transactions contemplated hereby, shall conflict with, result in a breach of, or constitute a default under, the terms and conditions of the organizational documents pursuant to which Buyer was organized, or any agreement to which Buyer is a party or is bound, or any order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over Buyer.

ARTICLE 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND INDEMNIFICATION.

7.1 Survival of Warra nties. Buyer and Seller agree that each representation and warranty in Articles 5 and 6, respectively, shall survive the Closing Date and shall not merge with the delivery to Buyer of the Grant Deed.

7.2 Notice of Changed Circumstances . If either party becom es aware of any fact or circumstances which would render false or misleading a representation or warranty made by such party, then it shall immediately give notice of such fact or circumstance to the other party, but such notice shall not relieve any party of any liabilities or obligations with respect to any representation or warranty.

7.3 Indemnification.

7.3.1 Seller's Indemnity . Seller at its sole cost and expense hereby agrees to indemnify, defend (with counsel acceptable to Buyer), protect and hold harmless Bu yer, from and against any and all claims, demands, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action and compliance requirements, enforcement and clean-up actions of any kind, and all costs and expenses incurred

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9 in connection therewith, including, without limitation, actual attorneys' fees and costs of defense and costs and expenses of all experts and consultants (collectively, the " Losses"), arising directly or indirectly, in whole or in part, out of any one or more of the following:
(a) the breach or alleged breach of any covenant of Seller contained in this Agreement or the inaccuracy or alleged inaccuracy of any representation or warranty of Seller contained in this Agreement;
(b) Seller's ownership of the Property prior to the Closing Date; or (c) the presence on, in or under the Property of any Hazardous Material on or before the Closing Date, any Release of any Hazardous Material, on, under or from the Property prior to the Closi ng Date or the use, generation, manufacturing, production, handling, storage, transport, discharge or disposal of any such Hazardous Materials on or before the Closing Date, from, under or about the Property, irrespective of whether any of such activities were or will be undertaken in accordance with Environmental Law or other applicable laws, regulations, codes and ordinances. The indemnity contained in this paragraph (c) shall further apply, without limitation, to: (i) all residual contamination and con tamination affecting any natural resources; (ii) all consequential damages; (iii) the costs of any required remediation or removal work on the Property, including, without limitation: (A) costs of remediation or removal incurred by the United States Government or the State or any other person; and (B) fines or penalties which arise from the provisions of any statute, state or federal; and (iv) liability for personal injury or property damage arising under any statutory or common -law tort theory, including damages assessed for the maintenance of a public or private nuisance, response costs or for the carrying on of an abnormally dangerous activity.

7.3.2 Survival. Seller's obligations pursuant to this Section 7.3 shall survive the Closing.

7.3.3 Buyers Indemnity . Buyer at its sole cost and expense hereby agrees to indemnify, defend (with counsel acceptable to Buyer), protect and hold harmless Seller, from and against any and all claims, demands, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action and compliance requirements, enforcement, and all costs and expenses incurred in connection therewith, including, without limitation, actual, out-of-pocket, attorneys' fees and costs of defense and costs and expenses of all experts and consultants (collectively, the " Losses"), arising directly or indirectly, in whole or in part, out of breach or alleged breach of any covenant of Buyer contained in this Agreement or the inaccuracy or alleged inacc uracy of any representation or warranty of Buyer contained in this Agreement.

ARTICLE 8. SELLER'S PRECLOSING COVENANTS.

Seller shall comply with the covenants contained in this Article 8 from the Effective Date through the Closing Date unless Buyer consents otherwise in writing. Buyer may grant or withhold any such consent requested by Seller in Buyer's sole discretion.

8.1 Contracts and Documents . Seller shall not enter into any material agreement of any type affecting the Property that would survive the Closing Date.

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10 8.2 Insurance. Seller shall maintain or cause to be maintained in full force and effect its present insurance policies for the Property.

8.3 Compliance with Obligations . Seller shall fully and timely comply with all obligations to be performed by it under this A greement, the Preliminary Documents, the Conditions of Title and all permits, licenses, approvals and laws, regulations and orders applicable to the Property.

8.4 No Transfers. Seller shall not sell, encumber or otherwise transfer any interest in all or any portion of the Property, or agree to do so.

8.5 Termination of Contracts . Seller at its sole cost and expense shall terminate any contracts described in Section 5.4 at or before the Closing Date.

8.6 Maintenance. At its sole cost and expense, Seller shall operate and maintain the Property such that on the Closing Date the Property shall be in at least as good a condition and repair as on the Effective Date, reasonable wear and tear excepted. Without limiting the generality of the foregoing, Seller shall, at a min imum, spend such amounts for repair and maintenance as are consistent with its prior practice. Seller shall promptly advise Buyer of any significant repair or improvement required to keep the Property in such condition. Seller shall not make any material alterations to the Property without Buyer's prior consent.

8.7 Best Efforts. Seller shall use its best efforts to cause the conditions set forth in Section 4.1 to be satisfied by the Closing Date, and Seller shall not take or permit any action that would result in any of the representations and warranties set forth in Article 5 becoming false or incorrect.

ARTICLE 9. CLOSING.

9.1 Time. Provided all conditions set forth in Article 4 have been either satisfied or waived, the parties shall close this transaction (the " Closing"), on the date which is thirty (30) days after the expiration of the Due Diligence Period (the " Closing Date "), as such date may be extended by the provisions of Article 10.

9.2 Escrow. This Article 9, together with such additional instructions as Orange Coast Title Company, located at 3536 Concours Street, Suite 120, Ontario, CA 91764; Attention:

Tina Duncan (909) 987-5433 as escrow officer ("Escrow Holder"), shall reasonably request and the parties shall agree to, shall constitute the escrow instructions to Escrow Holder. If there is any inconsistency between this Agreement and the Escrow Holder's additional escrow instructions, this Agreement shall control unless the intent to amend this Agreement is clearly stated in said additional instructions. Buyer a nd Seller shall cause Escrow Holder to execute and deliver a counterpart of this Agreement to each of them. If the Title Company does not serve as the Escrow Holder, the Title Company shall provide a letter to Buyer, in form and content acceptable to Buyer, pursuant to which the Title Company accepts responsibility and liability for the acts and omissions of Escrow Holder in discharging Escrow Holder's obligations hereunder, including, without limitation, any acts or omissions of Escrow Holder relating to the Title Company's commitment to issue the Title Policy, the receipt, recordation or delivery of any documents placed into escrow, and the receipt and disbursement of any funds placed into escrow.

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11 9.3 Seller's Deposit of Documents and Funds Into Escrow . Sell er shall deposit into escrow on or before Closing the following documents:

9.3.1 A duly executed and acknowledged grant deed, in the form acceptable to Buyer, conveying the Property to Buyer ("Grant Deed") in the form attached as Exhibit B;

9.3.2 All costs of Closing attributable to Seller, including, but not limited to, the ALTA Standard increment of the premium for the Title Policy, recording fees, transfer taxes and fees, one-half of the escrow fees, sales tax and any other costs of Closing customarily paid by sellers of real property, plus or minus prorations as provided in Section 9.8; provided that, subject to Section 9.6, Buyer and Seller shall bear their own attorneys' fees and costs in connection with the negotiation and preparation of this Agreement and the tr ansactions completed by this Agreement;

9.3.3 Seller's Non-foreign Certification; and

9.3.4 Such additional documents, including written escrow instructions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement.

9.4 Deliveries Outside of Escrow . Notwithstanding Section 9.3, Seller and Buyer may elect to deliver the documents described in Section 9.3 outside of escrow (other than documents which are to be recorded) by giving Escrow Holder a joint w ritten notice of such election, specifying the documents which will be so delivered outside of escrow. Upon receipt of such notice, Escrow Holder shall have no further obligation concerning such specified documents.

9.5 Buyer's Deposit of Documents and Funds. Buyer shall deposit into escrow:

9.5.1 The Purchase Price in accordance with the provisions of Article 2, plus or minus prorations as provided in Section 9.8, by cashier's or certified check or electronic transfer of federal funds to Escrow Holder, on or before the Closing Date;

9.5.2 All costs of Closing attributable to Buyer, including, but not limited to, the ALTA Extended Coverage increment of the premium for the Title Policy, recording fees, transfer taxes and fees, the escrow fees, and any other costs of Closin g customarily paid by buyers of real property, plus or minus prorations as provided in Section 9.8; provided that, subject to Section 9.6, Buyer and Seller shall bear their own attorneys' fees and costs in connection with the negotiation and preparation of this Agreement and the transactions completed by this Agreement; and

9.5.3 Such additional documents, including written escrow instructions consistent with this Agreement, as may be necessary or desirable for conveyance of the Property in accordance with this Agreement.

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12 9.6 Default, Termination and Remedies.

9.6.1 Buyer's Termination . This Agreement shall automatically terminate without further notice or action by Buyer upon the occurrence of any of the following events, provided that Buyer is not then in material breach of this Agreement: (a) any condition to Closing contained in Section 4.1 has not been satisfied or waived by Buyer by the Closing Date; or (b) Buyer having exercised its right to terminate this Agreement pursuant to Section 3.3 (disapproval of Due Dilige nce Investigation), Section 3.4 (disapproval of title) or Article 10 (damage or condemnation). In such event, the parties shall have no further obligation to each other except for those obligations that specifically survive the termination of this Agreeme nt. If this Agreement terminates as a result of Seller's material breach of this Agreement, Buyer shall have all remedies it may have hereunder or at law as a result of such occurrence, including the remedy of specific performance.

9.6.2 Seller's Termination. Provided that Seller is not then in material breach of this Agreement, this Agreement shall automatically terminate without further notice or action by Seller if any condition to Closing contained in Section 4.2 has not been satisfied or waived by Seller by the Closing Date.

9.6.3 Release from Escrow . Upon termination of this Agreement pursuant to Section 9.6.1 or 9.6.2, Escrow Holder shall promptly return to Buyer and Seller, respectively, all documents and monies deposited by them into escrow without prejudice to their rights and remedies hereunder.

9.6.4 Remedies.
(a) Buyer's Remedies. If Seller breaches this Agreement, Buyer shall be entitled to pursue all remedies permitted herein and by law, including the remedy of specific performance. No termination of the escrow by Buyer following a breach by Seller shall be deemed to waive such breach or any remedy otherwise available to Buyer. (b) Seller's Remedies/Liquidated Damages . IF BEFORE THE

CLOSE OF ESCROW BUYER FAILS TO COMPLY WITH OR PERFORM BUYER'S

OBLIGATIONS UNDER THIS AGREEMENT AND (EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH 9.6) DOES NOT CURE SUCH FAILURE WITHIN TEN BUSINESS DAYS

AFTER SELLER GIVES BUYER WRITTEN NOTICE OF SUCH FAILURE, THEN SELLER MAY THEREAFTER: (I) TERMINATE THIS AGREEMENT; (II) RECEIVE AND RETAIN

THE DEPOSIT AS LIQUIDATED DAMAGES IF SUCH DEFAULT OCCURS PRIOR TO BUYER'S APPROVAL OF THE TITLE REVIEW; (III) RECEIVE AND RETAIN THE

DEPOSIT AS LIQUIDATED DAMAGES IF SUCH DEFAULT OCCURS AFTER BUYER'S APPROVAL PERIOD; AND (IV) EXERCISE THE OTHER RIGHTS AND REMEDIES RESERVED BY SELLER AS PROVIDED IN THIS PARAGRAPH. IN THE EVENT

SELLER TERMINATES THIS AGREEMENT BY REASON OF BUYER'S DEFAULT,

BUYER AND SELLER SHALL BE RELIEVED OF ANY FURTHER OBLIGATION TO EACH OTHER WITH RESPECT TO THIS AGREEMENT AND THE PROPER TY. IT IS EXPRESSLY UNDERSTOOD AND AGREED BY BUYER AND SELLER: THAT SELLER

WILL INCUR SUBSTANTIAL DAMAGES AS A RESULT OF ANY FAILURE BY BUYER

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13 TO COMPLY WITH OR PERFORM BUYER'S OBLIGATIONS UNDER THIS

AGREEMENT IN THE FORM OF, AMONG OTHER THINGS, ADDITIONA L INTEREST

COSTS, MARKETING COSTS, OPPORTUNITY COSTS AND OTHER RELATED EXPENDITURES; THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICAL TO

CALCULATE AND ASCERTAIN AS OF THE EFFECTIVE DATE OF THIS AGREEMENT

THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED IN SUCH EVE NT BY SELLER; AND THAT THE DEPOSIT IS A REASONABLE ESTIMATE OF THE EXTENT

TO WHICH SELLER MAY BE DAMAGED BY BUYER'S DEFAULT IN LIGHT OF THE

DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING SELLER'S ACTUAL DAMAGES AS A RESULT OF SUCH DEFAULT BY BUYER.
_________________ _________________

SELLER'S INITIALS BUYER'S INITIALS
(c) Waiver of Specific Performance. SELLER HEREBY WAIVES

THE RIGHT TO MAINTAIN AN ACTION FOR SPECIFIC PERFORMANCE OF BUYER'S

OBLIGATION TO PURCHASE THE PROPERTY AND SELLER AGREES THAT SELLER

CAN BE ADEQUATELY COMPENSATED IN MONEY DAMAGES IF BUYER FAILS TO PURCHASE THE PROPERT Y IN BREACH OF THIS AGREEMENT. SELLER

ACKNOWLEDGES THAT THE PROVISIONS OF THIS PARAGRAPH ARE A MATERIAL

PART OF THE CONSIDERATION BEING GIVEN TO BUYER FOR ENTERING INTO

THIS AGREEMENT AND THAT BUYER WOULD BE UNWILLING TO ENTER INTO THIS AGREEMENT IN THE ABSENCE OF THE PROVISIONS OF THIS PARAGRAPH. _________________ _________________

SELLER'S INITIALS BUYER'S INITIALS

9.7 Closing. When Escrow Holder has received all documents and funds identified in Sections 9.3 and 9.5, has received notification from Buyer and Seller that all conditions to Closing to be satisfied outside of escrow have been satisfied or waived and Title Company is irrevocably committed to issue the Title Policy, then, and only then, Escrow Holder shall:

9.7.1 Record the Grant Deed;

9.7.2 Cause the Title Company to issue the Title Policy to Buyer;

9.7.3 To the extent not otherwise delivered to Buyer outside of escrow, deliver to Buyer: (a) a conformed copy (showing all record ing information thereon) of the Grant Deed; and (b) the Non-foreign Certification;

9.7.4 Deliver the Purchase Price (as adjusted pursuant to Section 9.8) to Seller.

Escrow Holder shall prepare and sign closing statements showing all receipts and disbursements an d deliver copies to Buyer and Seller and, if applicable, shall file with the Internal Revenue Service (with copies to Buyer and Seller) the reporting statement required under Section 6045(e) of the Internal Revenue Code.

9.8 Closing Costs/Prorations.

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14 9.8.1 Closing Costs. The following are to be paid by Buyer or apportioned as of the Closing Date as follows:
(a) Buyer shall pay the premium for an ALTA standard coverage owner’s policy of title insurance, and Buyer shall pay the premium for any extended ALTA coverage or endorsements, if desired;
(b) Buyer shall pay one hundred percent (100%) the Escrow fees; (c) Buyer is a public entity and exempt from any city or county transfer taxes and recording fees;
(d) all other costs of escrow shall be paid equally by Buyer and Seller;

9.8.2 The provisions of this Section 9.8.1 shall survive the Closing

9.8.3 Prorations. Subject to the other provisions of this Section 9.8, all receipts and disbursements of the Property will be prorated as of 11:59 p.m. on the day immediately preceding the Closing Date. Not less than five (5) business days prior to the Closing, Seller shall submit to Buyer for its approval a tentative prorations schedule showing the categories and amounts of all prorations proposed. The parties shall agree on a final prorations schedule prior to the Closing and shall deliver the same to Escrow Holder. If following the Closing either party discovers an error in the prorations statement, it shall notify the other party and the parties shall promptly make any adjustment required.

9.8.4 Property Taxes. Where applicable, a ll real and personal property ad valorem taxes and special assessments, if any, whether payable in installments or not, including without limitation, all supplemental taxes attributable to the period prior to the Closing Date for the calendar year in which the Closing occurs, shall be prorated to the Closing Date, based on the latest available tax rate and assessed valuation. If the amount of any installment of real property taxes is not known as of the Closing Date, then a prora tion shall be made by the parties based on a reasonable estimate of the real property taxes applicable to the Property and the parties shall adjust the proration when the actual amount becomes known upon the written request of either party made to the other.

9.8.5 Utility Charges. Where applicable, all utility charges shall be prorated as of the Closing Date and Seller shall obtain a final billing therefor. All utility security deposits, if any, shall be retained by Seller.

9.9 Possession. Seller shall deliver exc lusive right of possession of the Property to Buyer on the Closing Date, subject only to the Conditions of Title.

ARTICLE 10. DAMAGE, DESTRUCTION AND CONDEMNATION.

This Agreement shall be governed by the Uniform Vendor and Purchaser Risk Act as set forth in Section 1662 of the California Civil Code as supplemented and modified by this Article 10. Seller shall promptly notify Buyer in writing of any material damage to the Property and of any taking or threatened taking of all or any portion of the Property. Within a

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15 reasonable period of time after receipt of such notice, Buyer shall determine whether a material part of the Property has been damaged or whether such taking or threatened taking has affected or will affect a material part of the Property. As used herein, (a) the destruction of a " material part" of the Property shall be deemed to mean an insured or uninsured casualty to the Property having an estimated cost of repair which in the reasonable judgment of Buyer equals or exceeds $50,000; and (b) a taking by em inent domain of a portion of the Property shall be deemed to affect a " material part " of the Property if in the reasonable judgment of Buyer the estimated value of the portion of the Property taken exceeds $ 50,000. Upon making its determination, Buyer shall notify Seller in writing of the results of such determination. Buyer may elect, by written notice delivered to Seller within 30 days after giving Seller notice of such determination, to terminate this Agreement in accordance with Section 9.6.1 if a mat erial part of the Property has been damaged or if such taking has affected or will affect a material part of the Property. If Buyer does not so terminate, (i) in the case of damage to a material part of the Property, Seller shall assign to Buyer at the Cl osing its right to recover under any insurance policies covering such damage and shall pay Buyer at the Closing the amount of the deductible, if any, and (ii) in the case of a threatened or actual taking of a material part of the Property, Seller shall ass ign to Buyer at the Closing Seller's entire right, title and interest in the proceeds thereof. If between the Effective Date and the Closing Date the Property suffers damage which is not material, Seller shall repair such damage at its expense prior to th e Closing, and the Closing Date shall be extended for a reasonable period of time not to exceed thirty (30) days to allow for completion of such repairs. The Closing Date shall be extended as necessary to permit Buyer to exercise its rights under this Article 10.

ARTICLE 11. GENERAL.

11.1 Notices. All notices, demands, approvals, and other communications provided for in this Agreement shall be in writing and shall be effective (a) when personally delivered to the recipient at the recipient's address set forth below; (b) five business days after deposit in a sealed envelope in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, addressed to the recipient as set forth below; or (c) one business day after deposit with a recognized overnight courier or delivery service, addressed to the recipient as set forth below, whichever is earlier. If the date on which any notice to be given hereunder falls on a Saturday, Sunday or legal holiday, then such date shall automatically be extend ed to the next business day immediately following such Saturday, Sunday or legal holiday.

The addresses for notice are:

SELLER: City of Rancho Cucamonga
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Phone: (909) 477-2740

BUYER: Cucamonga Valley Water District
Attn: Assistant General Manager
10440 Ashford Street
Rancho Cucamonga, CA 91730
Phone: (909) 987-2591

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16 With a copy to: Best Best & Krieger LLP.

Attn: Todd M. Gee
500 Capitol Mall, Suite 1700
Sacramento, CA 95818
Phone: (916) 551-2849
Either party may change its address by written notice to the other given in the manner set forth above.

11.2 Entire Agreement . This Agreement and the Schedules and Exhibits hereto contain the entire agreement and understanding between Buyer and Seller concerning t he subject matter of this Agreement and supersede all prior agreements, including any previous letter of intent or terms, understandings, conditions, representations and warranties, whether written or oral, made by Buyer or Seller concerning the Property o r the other matters which are the subject of this Agreement.

11.3 Amendments and Waivers . No addition to or modification of this Agreement shall be effective unless set forth in writing and signed by the party against whom the addition or modification is sough t to be enforced. The party benefited by any condition or obligation may waive the same, but such waiver shall not be enforceable by another party unless made in writing and signed by the waiving party.

11.4 Invalidity of Provision . If any provision of this A greement as applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole.

11.5 References. Unless otherwise indicated, (a) all Article, Section, Sche dule and Exhibit references are to the articles, sections, schedules and exhibits of this Agreement, and (b) all references to days are to calendar days. All the Schedules and Exhibits attached hereto are incorporated herein by this reference. Whenever u nder the terms of this Agreement the time for performance of a covenant or condition falls upon a Saturday, Sunday or California state holiday, such time for performance shall be extended to the next business day. The headings used in this Agreement are p rovided for convenience only and this Agreement shall be interpreted without reference to any headings. The masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so indicates or requires.

11.6 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and to be performed in California, without regard to any conflict of laws principles.

11.7 Confidentiality and Publicity . The parties shall at all times keep this transaction and any documents received from each other confidential, except to the extent necessary to (a) comply with applicable law and regulations, or (b) carry out the obligations set forth in this Agreement. Any such disclosure to third parties shall indicate that the information is

04342.00109\34308445.4

17 confidential and should be so treated by the third party. No press release or other public disclosure may be made by Seller or any of its agents concerning thi s transaction without the prior consent of Buyer.

11.8 Time. Time is of the essence in the performance of the parties' respective obligations under this Agreement.

11.9 Attorneys' Fees. In the event of any legal or equitable proceeding to enforce any of the terms or conditions of this Agreement, or any alleged disputes, breaches, defaults or misrepresentations in connection with any provision of this Agreement, the prevailing party in such proceeding shall be entitled to recover its reasonable costs and expenses, i ncluding, without limitation, reasonable attorneys' fees and costs of defense paid or incurred in good faith.

11.10 Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. How ever, Seller shall not have the right to assign all or any portion of its interest in this Agreement without Buyer's prior written consent. Buyer shall have the right to assign all or any portion of its interest in this Agreement, or substitute for itself a nominee, upon notice to Seller not later than three days prior to the Closing Date.

11.11 Further Assurances. Seller, at any time before or after Closing, shall, at its own expense, execute, acknowledge and deliver any further deeds, assignments, conveyances and other assurances, documents and instruments of transfer reasonably requested by Buyer and shall take any other action consistent with the terms of this Agreement that may reasonably be requested by Buyer for the purpose of transferring and confirming to Buyer, or reducing to Buyer's possession, any or all of the Property or otherwise carrying out the terms of this Agreement.

11.12 Cooperation With Exchange . Each party agrees to cooperate with the other if such party intends to accomplish a tax -deferred exch ange pursuant to Section 1031 of the Internal Revenue Code of 1986. Buyer and/or Seller may assign this Agreement to an exchange intermediary for the purpose of facilitating such an exchange by the assigning party. Buyer's duty to cooperate shall be limi ted to the transfer of money to Seller or Seller's designee in exchange for the Property, and in no event shall Buyer act as purchaser or acquirer of any exchange property. Seller's duty to cooperate shall be limited to the transfer of the Property to Buyer or Buyer's designee and in no event will Seller exchange the Purchase Property for any exchange property designated by Buyer. The requesting party shall indemnify and defend and hold the other party harmless from any claims, loss, damages or liability arising out of participation in an exchange.

11.13 No Third Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to confer any rights or remedies under or by reason of this Agreement on any person other than the parties to it and thei r respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge any obligation of any third person to any party hereto or give any third person any right of subrogation or action over against any party to t his Agreement.

04342.00109\34308445.4

18 11.14 Remedies Cumulative. The remedies set forth in this Agreement are cumulative and not exclusive to any other legal or equitable remedy available to a party.

11.15 Commissions, Indemnity, Disclosure . Each party represents to the other party that there is no broker representing such party in the current transaction, and that the representing party has incurred no liability for any brokerage commission or finder's fee arising from or relating to the transactions contemplated by this Agreement. Selle r shall be responsible for any broker commission associated with this purchase. Each party hereby indemnifies and agrees to protect, defend and hold harmless the other party from and against all liability, cost, damage or expense (including without limita tion attorneys' fees and costs incurred in connection therewith) on account of any brokerage commission or finder's fee which the indemnifying party has agreed to pay or which is claimed to be due as a result of the actions of the indemnifying party. This Section 11.15 is intended to be solely for the benefit of the parties hereto and is not intended to benefit, nor may it be relied upon by, any person or entity not a party to this Agreement.

11.16 Counterparts/Facsimile/.PDF Signatures . This Agreement may be e xecuted in counterparts and when so executed by the parties, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument that shall be binding upon the parties, notwithstanding that the parties may not be signatories to the same counterpart or counterparts. The parties may integrate their respective counterparts by attaching the signature pages of each separate counterpart to a single counterpart. In order to expedite the transaction contemplated herein, facsimile or .pdf signatures may be used in place of original signatures on this Agreement. Seller and Buyer intend to be bound by the signatures on the facsimile or .pdf document, are aware that the other party will rely on the facsimile or .pdf sign atures, and hereby waive any defenses to the enforcement of the terms of this Agreement based on the form of signature.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

BUYER:

CUCAMONGA VALLEY WATER
DISTRICT, a public corporation

By: __________________________________
Name: ________________________________
Its: ___________________________________
Date: _________________________________

SELLER:

CITY OF RANCHO CUCAMONGA, a
general law city

By: __________________________________
Name: ________________________________
Its: ___________________________________
Date: _________________________________

04342.00109\34308445.4

19 APPROVED AS TO FORM:

BEST BEST & KRIEGER LLP
By: _

04342.00109\34308445.4

20 Acceptance by Escrow Holder
Escrow Holder acknowledges receipt of the foregoing Agreement and accepts the instructions contained therein.

Dated: ______________, 2022 ORANGE COAST TITLE COMPANY By:

Name:

Title:

04342.00109\34308445.4

EXHIBIT A

LAND DESCRIPTION

EXHIBIT A

In the City of Rancho Cucamonga, County of San Bernardino, State of California; being a portion of Lot 12, Block 12 of Cucamonga Homestead Association per Plat recorded in Book 6

BEGINNING at a point on the north line of said Lot 12, distant 316 feet from the northeast corner of same; THENCE continuing along said north line a distance of 40.00 feet to the west line of Layton Street, 40 feet wide; THENCE along said west line S 0°26’ E a distance of 148.40 feet; THENCE leaving said west line N 89°36’30” E a distance of 40.00 feet to the east line of Layton Street; THENCE along said east line N 0°26’ W a distance of 148.21 feet, more or less, to the POINT OF BEGINNING.

Contains 5,932 square feet, more or less.

See Exhibit “B” attached hereto and made a part hereof.

END OF DESCRIPTION

Prepared by:

Dan Guerra & Associates
10271-B Trademark Street
Rancho Cucamonga, CA 91730
(909) 987-4306

August 24, 2020
Daniel E. Guerra, P.E. Date

EXHIBIT "B"P.I.Q.NLEGENDPOR. LOT 12, BLOCK 12, CUCAMONGA HOMESTEAD ASSOCIATIONIN CITY OF RANCHO CUCAMONGA, COUNTY OF SAN BERNARDINOSTATE OF CALIFORNIAPREPARED UNDER MYSUPERVISION:P.O.B.  
 

04342.00109\34308445.4

EXHIBIT B

FORM OF GRANT DEED

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO

Cucamonga Valley Water District
Attn: Assistant General Manager
10440 Ashford Street
Rancho Cucamonga, CA 91730

EXEMPT FROM RECORDING FEES PURSUANT
TO GOVERNMENT CODE SECTION 27383

SPACE ABOVE THIS LINE FOR RECORDER'S USE
APN: [_____________]
Grant Deed
The undersigned Grantor(s) declare(s): CUCAMONGA VALLEY WATER DISTRICT is exempt from property taxes
Documentary transfer tax is $0.00.

Computed on full value of property conveyed, or
Computed on full value less value of liens and encumbrances remaining at time of sale.

Unincorporated area City of Rancho Cucamonga and

FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,

CITY OF RANCHO CUCAMONGA

hereby GRANT(S) to
CUCAMONGA VALLEY WATER DISTRICT, a public corporation
the following described real property in the city of Rancho Cucamonga County of San Bernardino
State of California:

SEE ATTACHED EXHIBIT A
Dated: _______________, 2022

CITY OF RANCHO CUCAMONGA

__[Exhibit Only – Do Not Execute]______________

04342.00109\34308445.4

2 ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )

COUNTY OF ) On , 20___ before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature:

(seal)

04342.00109\34308445.4

3 CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code

This is to ce rtify that the interest in real property conveyed by the Grant Deed dated __________________, 2022, from CITY OR RANCHO CUCAMONGA , to CUCAMONGA VALLEY WATER DISTRICT, a public corporation , is hereby accepted by the undersigned officer on behalf of CUCAMONGA VALLEY WATER DISTRICT , pursuant to the authority conferred by Resolution No. _______, adopted by the Board of Directors for CUCAMONGA VALLEY WATER DISTRICT on ___________________, and the Grantee consents to recordation thereof by its duly authorized officer.

Dated: _________________, 2022 CUCAMONGA VALLEY WATER
DISTRICT, a public corporation

By __[Exhibit Only – Do Not Execute]______________

04342.00109\34308445.4

1 EXHIBIT C

TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 198 6, as amended (the "Code"), provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform CUCAMONGA VALLEY WATER DISTRICT, a public corporation (the "Transferee"), that withholding of tax un der Section 1445 of the Code will not be required upon the transfer of a U.S. real property interest to the Transferee by CITY OF RANCHO CUCAMONGA (the "Transferor"), the undersigned hereby certifies the following on behalf of the Transferor:

1. The Transf eror is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder);

2. The Transferor's U.S. employer identification number is _______________; and

3. The Transferor's office address is ______________________________________.

The Transferor understands that this Certificate may be disclosed to the Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalty of perjury I declare that I have examined this Certification and, to the best of my knowledge and belief, it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of the Transferor.

DATED: ________________, 2022.

CITY OF RANCHO CUCAMONGA

__[Exhibit Only – Do Not Execute]______________

DATE:March 2, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Jason C. Welday, Director of Engineering Services/City Engineer Baldwin Ngai, Associate Engineer
SUBJECT: Consideration to Accept as Complete, File a Notice of Completion, and Authorize Release of Retention, and Bonds for the Fiscal Year 19/20 Traffic Signal Project (Contract No. 2020-058). (CITY)
RECOMMENDATION:

Staff recommends that the City Council:

1. Accept the Fiscal Year 19/20 Traffic Signal Project, Contract No. 2020-058 (Project), as complete;

2. Approve the final contract amount of $1,095,371.28;

3. Authorize the release of the Faithful Performance Bond 35 days after recordation of Notice of Completion and accept a Maintenance Guarantee Bond;

4. Authorize the release of the Labor and Materials Bond in the amount of $1,138,293, six months after the recordation of said notice if no claims have been received;

5. Authorize the City Engineer to file a Notice of Completion and release of the project retention, 35 days after recordation of Notice of Completion; and

6. Authorize the City Engineer to approve the release of the Maintenance Bond one year following the filing of the Notice of Completion if the improvements remain free from defects in material and workmanship.

BACKGROUND:

On June 17, 2020, the City Council awarded a construction contract to Crosstown Electrical & Data, Inc., in the amount of $1,138,293 and a 10% contingency in the amount of $113,829 to address unforeseen construction related incidentals. A copy of the June 17,2020, City Council Staff Report is on file with the City Clerk. A vicinity map is included as Attachment 1.

The scope of work for the Project consisted of the installation of traffic signals and safety lighting, fiber optic interconnect and related equipment, video detection systems, traffic signal

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3 modifications, accessible curb ramps, sidewalk and curb and gutter repairs, pavement markers, signage and striping at the following four (4) locations within the City:
6th Street at Hellman Avenue – Traffic Signal Installation Haven Avenue from 4th Street to Civic Center Drive – Fiber Optic Network Installation Arrow Route at Red Oak Street – Flashing Yellow Arrow Left Turn Upgrade Arrow Route at White Oak Avenue – Flashing Yellow Arrow Left Turn Upgrade Church Street at Terra Vista Parkway (East) – Left Turn Upgrade ANALYSIS:

The subject project has been completed in accordance with the approved plans and specifications and to the satisfaction of the City Engineer.

The net decrease in the total cost of $42,921.22 for the project is a result of eight (8) Contract Change Orders (CCO), including a final balancing statement (which conforms the final contract quantities to the actual quantities placed or constructed during the contract) and a credit for overtime inspection as summarized below. Significant changes in final quantities placed were related to reductions in fiber optic network conduit and cable, concrete removals, and increases in sidewalk placed.

CCO # Description Amount
CCO-01 Adjust signal pole on southwest corner of Foothill Boulevard and Cornwall Avenue to grade.
$11,285.00
CCO-02 Install new pedestrian push button post to comply with ADA requirements, adjustment of Pole E at 6 th Street and
Hellman Avenue to avoid a utility conflict.
$2,071.25
CCO-03 Removal of a portion of contracted fiber optic cable installation on Haven Avenue from 6th Street to Civic Center Drive. RCMU fiber optic infrastructure utilized instead. ($26,565.29)
CCO-04 Complete missing fiber optic network conduit paths at two (2) locations along Haven Avenue from 4 th Street to 6 th Street, including new conduit, fiber, and splicing.
$10,635.56
CCO-05 Upgrade battery backup systems at Arrow Route and White Oak Avenue and at Arrow Route and Red Oak Street to
improvement reliability of backup power.
$22,537.03
CCO-06 Relocate pedestrian push button post on the northwest corner of Hellman Avenue and 6th Street to comply with ADA requirements.
$1,421.23
CCO-BAL Balancing Statement ($63,175.50)
N/A Credit for overtime inspection. ($1,131.00)
Net Change in Contract Cost ($42,921.72)
At the end of the one-year maintenance period, if the improvements remain free from defects in materials and workmanship, the City Clerk will release the Maintenance Bond upon approval by the City Engineer.

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3 FISCAL IMPACT:

A total of $1,375,970 has been appropriated from the Transportation (Fund 124), Gas Tax R&T7360 (Fund 174) Funds and is identified under Capital Improvement Project Account No’s. and in the amounts listed below.

Account No. Funding Source Description Amount
11743035650/2048174-0 Gas Tax Fund
Fund 174
Church & Terra Vista
LT Upgrade
$35,000
11243035650/1957124-0 Transportation Fund
Fund 124
6th & Hellman TS
Installation
$1,188,210
11243035650/1996124-0 Transportation Fund
Fund 124
Arrow Route
LT Upgrades
$152,760
Total Project Funding $1,375,970
The final project construction cost after change orders and final accounting on support services is $1,210,836.28 as shown below.
e final project c
A total of $165,134.22 remains in the budget for this project and will be returned to the Transportation Fund (Fund 124) and Gas Tax Fund (174), fund balances to be used for future capital improvement projects.

COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

This item addresses the City Council's Core Values by ensuring the construction of high-quality public improvements that promote success as a world class community.

ATTACHMENTS:

Attachment 1 - Vicinity Map
Expenditure Amount
Final Construction Contract $1,095,371.28
Construction Inspection Services $99,220.50
Construction Survey $16,244.00
Total Project Cost $1,210,835.78

ATTACHMENT 1
FY 19/20 TRAFFIC SIGNAL PROJECT

VICINITY MAP

NOT TO SCALE

Project

DATE:March 2, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Sean McPherson, AICP
SUBJECT: Public Hearing for Consideration and Possible Action to Introduce, Waive Reading of and Adopt by a Four-fifths Vote, an Interim Urgency Ordinance Extending for an Additional 10 Months and 15 Days through January 20, 2023, an Existing Interim Ordinance Establishing Interim Objective Zoning and Subdivision Standards for Senate Bill 9 Projects in Single-Family Residential Zones in the City of Rancho Cucamonga and Making a Determination of Exemption Under the California Environmental Quality Act (CEQA). (INTERIM URGENCY ORDINANCE NO. 996) (CITY)
RECOMMENDATION:

Staff recommends that the City Council adopt Interim Urgency Ordinance No. 996, entitled “Interim Urgency Ordinance No. 996, Extending Interim Urgency Ordinance No. 994 for an Additional 10 Months and 15 Days (from an expiration date of March 5, 2022 to January 20, 2023), Establishing Interim Objective Zoning and Subdivision Standards for Senate Bill 9 Projects in Single-Family Residential Zones in the City of Rancho Cucamonga, Declaring the Urgency Thereof and Making A Determination of Exemption Under the California Environmental Quality Act (CEQA),“ by four-fifths vote, waive full reading, and read by title only.

BACKGROUND:

Government Code Section 65858 provides, “Without following the procedures otherwise required prior to the adoption of a zoning ordinance, the legislative body of a…city…to protect the public safety, health, and welfare, may adopt as an urgency measure an interim ordinance prohibiting any uses that may be in conflict with a contemplated General Plan, Specific Plan, or Zoning proposal that the legislative body, Planning Commission or the Planning Department is considering or studying or intends to study within a reasonable time. That urgency measure shall require a four-fifths vote of the legislative body for adoption. The interim ordinance shall be of no further force and effect 45 days from its date of adoption. After notice pursuant to Section 65090 and public hearing, the legislative body may extend the interim ordinance for 10 months and 15 days and subsequently extend the interim ordinance for one year. Any extension shall also require a four-fifths vote for adoption. Not more than two extensions may be adopted.” At the regular City Council meeting of December 1, 2021, the City Council directed staff to research and identify local regulations related to the implementation of Senate Bill (SB) 9, legislation which permits the ministerial approval of additional development, including additional units and/or lot splits, on parcels located within Single-Family Residential zones. SB 9 was signed by Governor Gavin Newsom on September 16, 2021 and became effective as of January 1, 2022.

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At their regular meeting on January 19, 2022, the City Council adopted Urgency Ordinance No. 980 which establishes interim local standards intended to protect and maintain the public health, safety and welfare of the City’s residents, pursuant to Government Code 65858.

ANALYSIS:

Since the approval of the interim urgency ordinance, staff has begun implementing the interim local standards in conversations with the public and members of the development community. As required pursuant to Section 65858(d) of the California Government Code, the City Council issued a report describing the measures taken to alleviate the condition which led to the adoption of the ordinance. This 10-day report, issued by City Council on February 16, 2022, noted that the following specific activities are currently being undertaken to alleviate the conditions which led to the adoption of Interim Urgency Ordinance 994:
City staff is currently implementing, as necessary, the subject interim standards in conversations with the public and members of the development community as SB 9- related projects are proposed. In so doing, staff is analyzing how the interim standards contained within the urgency ordinance may be augmented, revised or otherwise made to better protect and maintain the public health, safety and welfare of residents. City staff continues to work with professional consultants on updating the Development Code to achieve conformance with the recently adopted General Plan. As it relates to the integration of SB 9 standards into the broader Development Code update, staff and the consultant continue to determine any final refinements to the standards based on staff and public feedback and how to best integrate the final standards into the broader Development Code update.

The Interim Ordinance 994, if not extended, is set to expire on March 5, 2022. Considering the abovementioned ongoing efforts by staff to implement the interim standards, particularly with regard to properly integrating SB 9 standards into the broader Development Code update, staff recommends that the City Council extend the interim urgency ordinance by adopting Ordinance No. 996, attached to this report.

To ensure that staff continues to work toward preparing a permanent ordinance regarding SB 9 development, staff offers the following next steps:

1. Ongoing - Continue to work with property owners and various stakeholders to augment or revise the interim urgency ordinance to better protect the public health, safety and welfare;

2. March 9, 2022 - Provide an informational update to the Planning Commission;

3. Prior to the expiration of the interim urgency ordinance, hold duly noticed public hearings before the Planning Commission and City Council regarding the adoption of a permanent ordinance.

If the City is unable to complete the steps outlined above before January 20, 2023, the City may, but is not required to, extend the interim urgency ordinance for up to an additional year.

FISCAL IMPACT:

None.

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COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

Extending the interim urgency ordinance in an effort to maintain the public health, safety and welfare of the community achieves multiple City Council “Core Values,” including:
Providing and nurturing a high quality of life for all; Promoting and enhancing a safe and healthy community for all; Intentionally embracing and anticipating the future.

ATTACHMENTS:

Attachment 1 – City Council Staff Report (January 19, 2022) for Interim Urgency Ordinance No. 994 Attachment 2 – Ordinance No. 994
Attachment 3 – City Council 10-Day Staff Report (February 16, 2022) Attachment 4 – Ordinance No. 996

DATE:January 19, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Sean McPherson, AICP, Senior Planner
SUBJECT: Discussion, Consideration and Possible Action to Introduce, Waive Reading of and Adopt by a Four-fifths Vote, for a Period of 45 Days, an Urgency Ordinance to Establish Objective Zoning And Subdivision Standards for Senate Bill 9 Projects in Single-Family Residential Zones, Declaring The Urgency Thereof and Making a Determination of Exemption Under the California Environmental Quality Act (CEQA). (URGENCY ORDINANCE NO. 994) (CITY)
RECOMMENDATION:

Staff recommends that the City Council adopt Urgency Ordinance No. 994 entitled “An Urgency Zoning Ordinance of the City Council of the City of Rancho Cucamonga Enacted Pursuant to Government Code Section 65858 Establishing Interim Development Standards for SB 9 Development, Declaring the Urgency Thereof and Making A Determination of Exemption Under the California Environmental Quality Act (CEQA),” by four-fifths vote, waive full reading, and read by title only.

BACKGROUND:

Government Code Section 65858 provides, “Without following the procedures otherwise required prior to the adoption of a zoning ordinance, the legislative body of a…city…to protect the public safety, health, and welfare, may adopt as an urgency measure an interim ordinance prohibiting any uses that may be in conflict with a contemplated General Plan, Specific Plan, or Zoning proposal that the legislative body, Planning Commission or the Planning Department is considering or studying or intends to study within a reasonable time. That urgency measure shall require a four-fifths vote of the legislative body for adoption. The interim ordinance shall be of no further force and effect 45 days from its date of adoption. After notice pursuant to Section 65090 and public hearing, the legislative body may extend the interim ordinance for 10 months and 15 days and subsequently extend the interim ordinance for one year. Any extension shall also require a four-fifths vote for adoption. Not more than two extensions may be adopted.” In response to the housing shortage and affordability crisis, on September 16, 2021, Governor Gavin Newsom signed into law Senate Bill (SB) 9. SB 9, which took effect January 1, 2022, requiring the ministerial review of two types of development applications within single-family residential zones: two lot subdivisions (known as “Urban Lot Splits”), and residential development projects of up to 2 units per lot (“Two- Unit Projects”), subject to certain qualifying criteria. Because SB 9 requires that these applications be approved on a ministerial basis, the City cannot hold public hearings or consider subjective factors, such as aesthetics and neighborhood character,

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for qualifying applications which meet basic criteria. In short, this legislation makes it possible in some instances for there to be up to 4 units constructed on a single-family zoned lot where only one single family residence previously existed, inclusive of Accessory Dwelling Units (ADU) and Junior Accessory Dwelling Units (JADU).

Preliminary research by staff indicates that approximately 25,000 single-family zoned parcels within the City may be eligible for further development under SB 9. Considering the number of parcels which may be eligible for development under SB 9, and especially considering any impact this new development may have upon the City, staff is currently exploring potential regulations which may be implemented in order to ensure that SB 9 is implemented in an appropriate and legally defensible manner that carefully considers public health, safety and welfare in the City.

ANALYSIS:

Development under SB 9 could have the potential to cause specific adverse impacts, such as additional traffic which could exacerbate existing access and emergency response constraints within certain neighborhoods where access, circulation and parking may be deficient or limited (i.e., dead-end streets within Very High Fire Severity Zones, neighborhoods where roads do not meet minimum width standards, etc.). SB 9 could also impact the availability of services in existing single-family residential neighborhoods by facilitating the creation of lots and construction of units which are inconsistent with utilities in existing single-family residential neighborhoods. Finally, SB 9 could have the unintended effect of reducing affordability of units within single-family neighborhoods if such units are not reserved for low-income tenants or the developments are too large so as not to be affordable. It is critical that the City prevent any public health and safety impacts that may arise under this new requirement. Maintaining the quality, livability and safety of existing single-family residential neighborhoods throughout the City is a critically important community objective, as evidenced by goals set forth in the City’s General Plan. Consequently, implementing SB 9 regulations without considering local context could negatively affect the health, safety and welfare of the public within the City.

To address such concerns, on December 1, 2021, the City Council discussed certain policy and development code considerations which included:
Consider objective standards for zoning and subdivisions to ensure that SB 9 development does not adversely impact existing single-family residential neighborhoods; Consider studying areas of historic significance to determine if further protections are appropriate;
Consider implementing additional regulations related to SB 9 to maintain the public health, safety and welfare within Very High Fire Severity Zones; Consider the impact further SB 9 development may have on utility capacity within certain neighborhoods;
Consider how the development of SB 9 units may allow the City to achieve the important local and statewide goals of increasing the availability of affordable housing.

Following that City Council meeting, staff continues researching these various policy and development code considerations and intends to return to the Council within the first quarter of 2022 with comprehensive Development Code Amendments. As SB 9 is now effective (as of January 1, 2022), and in order to prevent any adverse impacts to public health, safety and welfare, staff recommends that the City Council adopt the subject urgency ordinance which is attached to this report and which establishes interim standards while staff continues to work on permanent development code amendments to address the policy considerations referenced above.

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SB 9 permits the City to enforce objective zoning, subdivision, and design standards on SB 9 project. In summary, the proposed interim regulations would do the following:
Limits the application of SB 9 to single-family residential zones, which are: Very Low Residential (VL), Low Residential (L), and Hillside Residential (HR). A maximum unit size of 800 square feet, which may be increased to 1,200 square feet if at least one of the units on the lot is reserved for rentals to very-low income households; Limits new units to one-story and 16 feet in height;
Requires the Fire Marshall, City Engineer, and Building Official to review SB 9 projects to determine whether a particular project could cause a specific, adverse impact to public health and safety for which there is no feasible mitigation; and Other objective design criteria intended to help prevent unintended impacts of SB 9 projects on existing single-family neighborhoods.

Pursuant to Government Code Section 65858, the initial term of the urgency ordinance is 45 days (expiring on March 5, 2022). In the event that staff determines that a permanent development code amendment may not be prepared by the expiration of the urgency ordinance, staff may bring a further ordinance to extend the term of the urgency ordinance for up to 10 months, 15 days prior to the initial expiration date. Ten days before the proposed extension, the City Council will consider a report identifying the steps taken by staff to address these issues during the urgency ordinance’s moratorium’s initial term.

This ordinance is exempt from the California Environmental Quality Act as an ordinance intended to implement SB 9.

FISCAL IMPACT:

None
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

Enacting an urgency ordinance in an effort to maintain the public health, safety and welfare or the community achieves multiple City Council “Core Values,” including:
Providing and nurturing a high quality of life for all; Promoting and enhancing a safe and healthy community for all; Intentionally embracing and anticipating the future.

ATTACHMENTS:

Attachment 1 – Draft Urgency Ordinance No. 994

Urgency Ordinance No. 994 - Page 1 of 10
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URGENCY ORDINANCE NO. 994

AN URGENCY ZONING ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, TO

ESTABLISH OBJECTIVE ZONING AND SUBDIVISION
STANDARDS FOR SENATE BILL 9 PROJECTS IN SINGLE-

FAMILY RESIDENTIAL ZONES, DECLARING THE URGENCY

THEREOF AND MAKING A DETERMINATION OF EXEMPTION

UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
(CEQA)

THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA DOES
HEREBY ORDAIN AS FOLLOWS:

SECTION 1.Legislative Findings.

On September 16, 2021, Governor Newsom approved Senate Bill (“SB”) 9 to amend the Planning and Zoning Law and the Subdivision Map Act effective January 1, 2022.

A.SB 9 amended Government Code Section 66452.6 and added Sections 65852.21 and 66411.7 of Chapter 162, and took effect on January 1, 2022.

B.SB 9 generally requires cities and counties to ministerially approve two-unit housing developments and parcel maps to create urban lot splits on lots within single- family residential zones.

C.SB 9 authorizes the City to enforce objective zoning, subdivision, and design standards.

D.SB 9 projects will have the potential to significantly impact the character of the City’s established residential neighborhoods.

E.SB 9 projects have the potential to impact the health, safety, and welfare of residents in the City, particularly those residing in single-family residential neighborhoods, vehicular and pedestrian safety, on-street parking demand, and housing affordability. In addition, the potential increase to residential density in areas of the City designed for single-family development may cause increased demand on utilities and access routes that were not designed for such density. As a result, the City Council finds that there is an immediate need to establish objective zoning and subdivision standards for SB 9 projects in order to protect the public health, safety, and welfare while it studies permanent land use regulations for such projects and to ensure SB 9 does not have a detrimental impact on single-family residential neighborhoods within the City.

F.The City intends to study and develop permanent land use regulations for the implementation of SB 9 projects in the city. Given that SB 9 took effect on January 1, ATTACHMENT 1

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2022, the City will not be able to complete the process of developing and adopting such permanent regulations prior to SB 9 taking effect. Thus, the City Council desires to adopt an interim urgency ordinance that will take effect immediately in order to ensure that SB 9 projects do not unreasonably impact the character of single-family residential neighborhoods or threaten public health, safety, or welfare while permanent regulations are studies and prepared.

G.It is well documented that California is experiencing a housing supply crisis, with housing demand far outstripping supply. The housing crisis has particularly exacerbated the need for affordable homes at prices below market rates. The City has a regional housing need between 2021 and 2029 to construct 3,245 extremely low/very low-income units, 1,920 low-income units, and 2,031 moderate income units (Housing Element 2021-2029, Table HE-47, Page 72). According to the City’s recently-adopted Housing Element, the City still needs to construct 3,209 extremely low/very low-income units and 1,864 low-income units during the sixth housing cycle.

H.To help address this affordability crisis, the City Council finds that limiting the size of units developed pursuant to SB 9 and requiring that some units be affordable are important interim regulations to protect public welfare and to prevent SB 9 developments from conflicting with forthcoming permanent land use regulations.

I.The purpose of this Ordinance is to establish objective zoning, subdivision, and design standards for housing developments undertaken pursuant to SB 9.

SECTION 2.Authority.

Pursuant to Government Code Section 65858, the City Council may adopt, as an urgency measure, an interim ordinance that prohibits any uses that may be in conflict with a contemplated zoning proposal that the City Council is considering, studying, or intends to study within a reasonable period of time.

SECTION 3.Urgency Declaration and Findings.

The City Council finds and determines that there is an immediate threat to the public health, safety, or welfare caused by SB 9 projects, which threat will significantly limit the City’s ability to preserve community character, affordability, and environmental and public health and safety. As described in Section 1 of this Interim Urgency Ordinance, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such development in the City could threaten the health, safety and welfare of the community through negative impacts that include, but are not limited to, emergency access during emergencies, appropriate sizing for utilities and streets, parking, and housing affordability.

The City Council finds and determines that there is an immediate threat to public health, safety, or welfare if the City does not have enforceable zoning, subdivision, and

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design standards for such projects. Therefore, it is necessary that this Interim Urgency Ordinance take effect immediately upon adoption.

SECTION 4.Prohibition on SB 9 Projects that Fail to Comply with this Interim Urgency Ordinance.

Based on the facts and findings set forth in Sections 1 through 3 of this Interim Urgency Ordinance, and notwithstanding any other ordinance or provision of the Rancho Cucamonga Municipal Code, residential development projects and urban lot splits proposed pursuant to Senate Bill 9, are prohibited unless the project complies with the requirements of Sections 5 and 6 of this Interim Urgency Ordinance.

SECTION 5. Development in Single-Family Residential Zones.

A. Purpose. This Section provides objective zoning and design standards for the development of residential units pursuant to SB 9. Development pursuant to this Section does not require discretionary review or a hearing and is processed ministerially through a plan check/zoning clearance.

B. Applicability. SB 9 projects shall only be developed in single-family residential zones. For purposes of this Section, the following zones are considered single- family residential zones: Very Low Residential (VL), Low Residential (L), and Hillside Residential (HR).

C. General Standards. All development pursuant to SB 9 shall comply with the following objective standards:

1.Eligibility requirements of Government Code Section 65852.21(a) shall be satisfied.

2.Except where superseded by SB 9 or this Section, development shall comply with the objective development standards of the zone in which the lot is located.

3.Access to any unit shall not be across an easement that restricts such access.

4.More than 25 percent of the exterior structural walls of an existing dwelling shall not be demolished unless the site has not been occupied by a tenant in the last three years.

5.The lot shall contain no more than one pedestrian path connected to the public right-of-way or private street.

6.The development shall contain no exterior stairways except those leading from grade to the first floor.

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7.Off-street parking shall be provided in accordance with the following standards:
a.A minimum of one off-street parking space shall be provided for each residential unit.
b.No off-street parking is required if either of the following apply:
i.The lot is located within one-half mile walking distance of either: a high-quality transit corridor as defined in Public Resources Code Section 21155(b) or a major transit stop as defined in Public Resources Code Section 21064.3.
ii.A car-share vehicle is located within one block of the lot.

D. Additional Standards for New Construction. In addition to the standards of Subsection C, the standards of this Subsection apply if one or both residential units are new construction:

1.Maximum unit size shall be 800 square feet, except when rented at a level affordable to Low-Income (50%-80% of AMI) households, per Subsection J.5 below, the maximum unit size may be up to 1,200 sqaure feet.

2.No residential unit shall exceed a building height of one story.

3.No residential unit shall exceed a building height of 16 feet.

4.Each residential unit shall have a minimum setback of four feet from side and rear property lines except as allowed by Government Code Section 65852.21.

5.If the residential units are built as separate buildings, the following standards shall apply.
a.The buildings shall be located one in front of the other in relation to the street.
b.The front building shall be at least as wide and as tall as the rear building.
c.The front building shall be positioned such that the rear building is not visible from the street when viewed from directly in front of the property.

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6.If the residential units are built as a single building, one residential unit shall have a door facing the street and one residential unit shall have a door facing a side or rear property line.

E. Additional Standards for Conversion of an Existing Dwelling. In addition to the standards of Subsection C, the standards of this Subsection apply if an existing dwelling will be fully or partially retained:

1.Maximum unit size shall be 800 square feet, except when rented at a level affordable to Low-Income (50%-80% of AMI) households, per Subsection J.5. below, the maximum unit size may be up to 1,200 square feet.

2.The existing setbacks shall be maintained when converting or substantially redeveloping an existing structure to a two-unit residential development, except that additions to the existing dwelling shall have a minimum setback of four feet from side and rear property lines.

3.Additions to the existing dwelling shall not increase the building height beyond the allowable maximum of the respective base zoning district.

4.If two residential units are located in the same building, one residential unit shall have a door facing the street and one residential unit shall have a door facing a side or rear property line.

F. Additional Standards for Urban Lot Split Projects. In addition to the standards of Subsections C, D, and E as applicable, the standards of this Subsection apply if the residential units will be located on lots created by an urban lot split.

1.Each lot created by the parcel map shall be used solely for residential uses.

2.No lot created by the parcel map shall have more than two residential units, inclusive of any accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU). No ADU or JADU shall be allowed on any parcel created by an urban lot split if the subdivider uses the authority provided under Government Code Section 65852.21.

3.If the boundary line between the lots created by the parcel map is perpendicular to the front lot line, the units shall be subject to the following standards:
a.The buildings nearest the street on each lot created by the parcel map shall have no more than one residential unit with a door facing the street.

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G. Exceptions. The Planning Director shall approve an exception to any of the standards specified in this Section upon determining that complying with the standard would physically preclude the construction of up to two residential units or would physically preclude either of the two residential units from being 800 square feet in floor area.

H. Review. The Building Official, City Engineer, and Fire Marshal shall review applications to determine whether a proposed development would cause a specific adverse effect to public health, safety, and welfare, as defined in Government Code Section 65589.5. If so, the Building Official shall make a written finding in support of his or her decision to deny the application.

I. Denial. The Building Official shall deny an application for an SB 9 project upon making both of the following findings in writing based upon a preponderance of evidence:

1.The proposed housing development project would have a specific, adverse impact upon the public health and safety or the physical environment as defined and determined in Government Code Section 65589.5(d)(2).

2.There is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

J. Income Restriction. If more than one unit is developed on a single lot, the second unit may be up to 1,200 square feet if one of the units is rented at a level affordable to Low-Income (50%-80% of AMI) households, provided that the property owner must execute and record against the subject property an affordability covenant provided by the Planning Director per Subsection K below.

K. Covenants Required. A property owner seeking to develop units on a single-family residential property, pursuant to the standards of SB 9 and the standards of this Section, shall execute and record the following covenants against the subject property with the San Bernardino County Assessor-Recorder-Clerk and provide a copy to the City:

1.Short-Term Rental of a residential unit for a period less than 31 days shall be prohibited;

2.Non-residential uses on the site shall be prohibited;

3.Any subsequent urban lot split of land that was previously subdivided with an urban lot split shall be prohibited;

4.The owner of the property for which an urban lot split is proposed shall sign an affidavit stating that the owner intends to occupy one of the housing

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units as their principal residence for at least three years from the date of the approval of the urban lot split; and

5.Residential units over 800 square feet, created pursuant to the standards of this Section, shall be rented at a level affordable to Low-Income (50%- 80% AMI) households for a period of at least 45 years.

SECTION 6.Urban Lot Splits in Single-Family Residential Zones.

A. Purpose. This Section provides objective subdivision standards for urban lot splits on single-family residential zone lots pursuant to SB 9.

B. Applicability

1.This Section applies to single-family residential zone lots. For the purposes of this Section, the following zones are considered single-family residential zones: Very Low Residential (VL), Low Residential (L), and Hillside Residential (HR).

2. An urban lot split is prohibited on a lot previously subdivided by an urban lot split pursuant to SB 9. In addition, an urban lot split is prohibited on a lot if the lot’s owner or any person acting in concert with the owner of such lot has previously subdivided an adjacent lot pursuant to SB 9.

3. An urban lot split shall not require discretionary review or a hearing and is approved ministerially by the City Engineer through a parcel map application. This Section is exempt from the application and hearing requirements described in Chapter 16.20 (Tentative Parcel Maps – Four or Less Parcels) and Section 16.22.090 (Approval by City Council).

C. Subdivision Standards. An urban lot split pursuant to this Section is subject to the following standards.

1. Eligibility requirements of Government Code Section 66411.7(a) shall be satisfied.

2. A minimum lot size of one acre per dwelling unit is required for any proposed lot which does not have access to a public sewer.

3. Each lot created by the parcel map shall have a minimum area of 1,200 square feet.

4. The newly created lots shall not be smaller than 45 percent of the area of the original lot.

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5. Each newly created lot must have access to a public street.

6. Lot lines shall be:
i.Straight lines, unless there is a conflict with existing improvements or the natural environment;
ii.Generally parallel to the street when facing the street or be at right angles perpendicular to the street on straight streets, or radial to the street on curved streets; and
iii.Within appropriate physical locations that do not bisect buildings and are contiguous with existing zoning boundaries.

D. Exceptions. The City Engineer shall approve an exception to any of the standards satisfied in this Section upon determining that complying with the standard would physically preclude the construction of up to two residential units or would physically preclude either of the two residential units from being 800 square feet in floor area.

E. Review. The Building Official, City Engineer, and Fire Marshal shall review applications to determine whether there is a specific adverse effect to public health, safety, and welfare.

F. Denial. The City Engineer shall deny an urban lot split upon making both of the following findings in writing based upon a preponderance of evidence.

1.The proposed housing development project would have a specific, adverse impact upon the public health and safety or the physical environment as defined and determined in Government Code Section 65589.5(d)(2).

2.There is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

G. Covenants Required. A property owner seeking to develop units on a single-family residential property, pursuant to the standards of SB 9 and the standards of this Section, shall execute and record the following covenants against the subject property with the San Bernardino County Assessor-Recorder-Clerk and provide a copy to the City:

1.Short-Term Rental of a residential unit for a period less than 31 days shall be prohibited;

2.Non-residential uses on the site shall be prohibited;

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3.Any subsequent urban lot split of land that was previously subdivided with an urban lot split shall be prohibited;

4.The owner of the property for which an urban lot split is proposed shall sign an affidavit stating that the owner intends to occupy one of the housing units as their principal residence for at least three years from the date of the approval of the urban lot split; and

5.Residential units over 800 square feet shall be rented at a level affordable to Low-Income (50%-80% AMI) households for a period of at least 45 years.

SECTION 7.CEQA.

Adoption of this Ordinance is not a project under the California Environmental Quality Act pursuant to Government Code Sections 65852.21(j) and 66411.7(n).

SECTION 8.Severability.

If any section, subsection, sentence, clause, phrase, or portion of this Interim Urgency Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Interim Urgency Ordinance. The City Council declares that it would have adopted this Interim Urgency Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

SECTION 9. Effective Date; Approval and Extension of Ordinance.

This Interim Urgency Ordinance, being adopted as an urgency measure for the immediate protection of the public safety, health, and general welfare, containing a declaration of the facts constituting the urgency, and passed by a minimum four-fifths (4/5) vote of the City Council, shall take effect immediately upon its adoption and shall continue in effect for a period of not longer than forty-five (45) days. After notice pursuant to Government Code Section 65090 and a public hearing, the City Council may extend the effectiveness of this Urgency Ordinance as provided in Government Code Section 65858.

SECTION 10. Publication.

The City Clerk shall certify to the passage and adoption of this Interim Urgency Ordinance and shall cause its publication in accordance with applicable law.

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PASSED, APPROVED, AND ADOPTED this __ day of _____, 2022, by the following vote to wit:

AYES: ( )
NOES: ( )
ABSENT: ( )
ABSTAIN: ( )

L. Dennis Michael, Mayor
ATTEST:

_________________________________
Janice C. Reynolds, City Clerk

APPROVED AS TO FORM:

_________________________________
Nicholas R. Ghirelli, City Attorney

DATE:February 16, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Sean McPherson, AICP, Senior Planner
SUBJECT: Report in Conformance with California Government Code Section 65858(D) on Measures Taken to Alleviate the Need for Interim Ordinance No. 994, Establishing Objective Zoning And Subdivision Standards for Senate Bill 9 Projects in Single-Family Residential Zones, Declaring The Urgency Thereof and Making a Determination of Exemption Under the California Environmental Quality Act. (CITY)
RECOMMENDATION:

Staff recommends that the City Council issue the attached report in conformance with California Government Code Section 65858 on the measures taken by the City to alleviate the need for Interim Ordinance No. 994.

BACKGROUND:

At the regular City Council meeting of December 1, 2021, the City Council directed staff to research and identify local regulations related to the implementation of Senate Bill (SB) 9, legislation which permits the ministerial approval of additional development, including additional units and/or lot splits, on parcels located within Single-Family Residential zones. SB 9 was signed by Governor Gavin Newsom on September 16, 2021, and became effective as of January 1, 2022.

At their regular meeting on January 19, 2022, the City Council adopted Urgency Ordinance No. 994 which establishes interim local standards intended to protect and maintain the public health, safety and welfare of the City’s residents, pursuant to Geovernment Code 65858. The temporary interim urgency ordinance, if not extended, is set to expire on March 5, 2022.

ANALYSIS:

Section 65858(d) of the California Government Code provides that, “Ten days prior to the expiration of that interim ordinance or any extension, the legislative body shall issue a written report describing the measures taken to alleviate the condition which led to the adoption of the ordinance.” The 10-day report does not modify nor extend the City’s existing moratorium related to service stations. Rather, issuance of the 10-day report satisfies a statutory step in the process to permit the City Council to consider that potential extension at its next regular meeting on March 2, 2022.

The following specific activities are currently being undertaken to alleviate the conditions which led to the adoption of Interim Ordinance 994.

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City staff is currently implementing, as necessary, the subject interim standards in conversations with the public and members of the development community as SB 9- related projects are proposed. In so doing, staff is analyzing how the interim standards contained within the urgency ordinance may be augmented, revised or otherwise made to better protect and maintain the public health, safety and welfare of residents. City staff continues to work with a professional consultant on updating the Development Code to achieve conformance with the recently adopted General Plan. As it relates to the integration of SB 9 standards into the broader Development Code update, staff and the consultant continue to determine any final refinements to the standards based on staff and public feedback and how to best integrate the final standards into the broader Development Code update.

The above reflect the actions taken since the adoption of Interim Ordinance No. 994. The City Council must issue a report that describes these actions in order to extend the interim urgency ordinance currently in effect. An opportunity for full public comment on the extension of Interim Ordinance No. 994 will be provided at the City Council's Public Hearing to be held on March 2, 2022 prior to the City Council’s consideration of an ordinance to extend Interim Ordinance No. 994.

ATTACHMENTS:

Attachment 1 – 10-Day Report
Attachment 2 – Ordinance No. 994

Urgency Ordinance No. 996 - Page 1 of 11
URGENCY ORDINANCE NO. 996

AN INTERIM URGENCY ORDINANCE OF THE CITY COUNCIL OF

THE CITY OF RANCHO CUCAMONGA, CALIFORNIA,
EXTENDING URGENCY ORDINANCE 994 FOR AN ADDITIONAL
TEN (10) MONTHS, FIFTEEN (15) DAYS (FROM AN EXPIRATION
DATE OF MARCH 5, 2022 TO JANUARY 20, 2023),

ESTABLISHING INTERIM OBJECTIVE ZONING AND
SUBDIVISION STANDARDS FOR SENATE BILL 9 PROJECTS IN

SINGLE-FAMILY RESIDENTIAL ZONES, DECLARING THE

URGENCY THEREOF, AND MAKING A DETERMINATION OF

EXEMPTION UNDER THE CALIFORNIA ENVIRONMENTAL

QUALITY ACT (CEQA)

THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1.Legislative Findings.

On September 16, 2021, Governor Newsom approved Senate Bill (“SB”) 9 to amend the Planning and Zoning Law and the Subdivision Map Act effective January 1, 2022.

A.SB 9 amended Government Code Section 66452.6 and added Sections 65852.21 and 66411.7 of Chapter 162, and took effect on January 1, 2022.

B.SB 9 generally requires cities and counties to ministerially approve two-unit housing developments and parcel maps to create urban lot splits on lots within single- family residential zones.

C.SB 9 authorizes the City to enforce objective zoning, subdivision, and design standards.

D.SB 9 projects will have the potential to significantly impact the character of the City’s established residential neighborhoods.

E.SB 9 projects have the potential to impact the health, safety, and welfare of residents in the City, particularly those residing in single-family residential neighborhoods, vehicular and pedestrian safety, on-street parking demand, and housing affordability. In addition, the potential increase to residential density in areas of the City designed for single-family development may cause increased demand on utilities and access routes that were not designed for such density. As a result, the City Council finds that there is an immediate need to establish objective zoning and subdivision standards for SB 9 projects in order to protect the public health, safety, and welfare while it studies permanent land use regulations for such projects and to ensure SB 9 does not have a detrimental impact on single-family residential neighborhoods within the City.

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F.The City continues to study and develop permanent land use regulations for the implementation of SB 9 projects in the city. Given that SB 9 took effect on January 1, 2022, the City will not be able to complete the process of developing and adopting such permanent regulations prior to SB 9 taking effect. Thus, the City Council desires to extend the interim urgency ordinance that will take effect immediately in order to ensure that SB 9 projects do not unreasonably impact single-family residential neighborhoods or threaten public health, safety, or welfare while permanent regulations and studies and prepared.

G.It is well documented that California is experiencing a housing supply crisis, with housing demand far outstripping supply. The housing crisis has particularly exacerbated the need for affordable homes at prices below market rates. The City has a regional housing need between 2021 and 2029 to construct 3,245 extremely low/very low-income units, 1,920 low-income units, and 2,031 moderate income units (Housing Element 2021-2029, Table HE-47, Page 72). According to the City’s recently-adopted Housing Element, the City still needs to construct 3,209 extremely low/very low-income units and 1,864 low-income units during the sixth housing cycle.

H.To help address this affordability crisis, the City Council finds that limiting the size of units developed pursuant to SB 9 and requiring that some units be affordable are important interim regulations to protect public welfare and to prevent SB 9 developments from conflicting with forthcoming permanent land use regulations.

I.On January 19, 2022, the City Council approved Urgency Ordinance 994, which temporarily established for 45 days interim objective zoning and subdivision standards for Senate Bill 9 projects in single-family residential zones. This initial urgency ordinance is scheduled to expire on March 5, 2022.

J.The City Council finds that allowing this extension will allow time to evaluate the applicability of the interim standards, as well as provide time for the integration of these standards, and revisions thereto, into the broader Development Code update to achieve compliance with the new General Plan.

K.Based on the foregoing, the City Council ultimately finds that if the City fails to extend the interim standards adopted pursuant to Urgency Ordinance 994, then new development pursuant to SB 9 may be allowed to develop within the City which may result in impacts to public health, safety and welfare.

L.A written report describing the measures taken to alleviate the conditions which led to the adoption of the aforementioned Urgency Ordinance was issued by the City Council on February 16, 2022, which was at least ten (10) days prior to the expiration of the Urgency Ordinance on March 5, 2022, in compliance with State law.

M.Pursuant to Government Code Sections 65858 and 65090, the City Council conducted a duly noticed public hearing on March 2, 2022, at which time the City Council

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considered this Urgency ordinance to extend the existing 45-day interim standards related to SB 9 zoning and subdivision development within single-family residential zones.

SECTION 2.Authority.

Pursuant to Government Code Section 65858, the City Council may adopt, as an urgency measure, an interim ordinance that prohibits any uses that may be in conflict with a contemplated zoning proposal that the City Council is considering, studying, or intends to study within a reasonable period of time. The City Council may also extend an interim ordinance for up to 10 months and 15 days, and subsequently for up to one year, pursuant to Government Code Section 65858(a).

SECTION 3.Urgency Declaration and Findings.

The City Council finds and determines that there is an immediate threat to the public health, safety, or welfare caused by SB 9 projects, which threat will significantly limit the City’s ability to preserve community character, affordability, and environmental and public health and safety. As described in Section 1 of this Interim Urgency Ordinance, the staff report accompanying this Interim Urgency Ordinance, and other evidence in the record, such development in the City could threaten the health, safety and welfare of the community through negative impacts that include, but are not limited to, emergency access during emergencies, appropriate sizing for utilities and streets, parking, and housing affordability.

The City Council finds and determines that there remains an immediate threat to public health, safety, or welfare if the City does not have enforceable zoning, subdivision, and design standards for such projects. Therefore, to preserve the public health, safety and welfare, the City Council finds that it is necessary that this Urgency Ordinance extend the current interim objective standards for zoning and subdivision standards for SB 9 projects within single-family residential zones.

SECTION 4. Moratorium Extended.

A.Based on the facts and findings set forth in Sections 1 through 3 of this Urgency Ordinance, and notwithstanding any other ordinance or provision of the Rancho Cucamonga Municipal Code, the City Council hereby extends through and including January 20, 2023, the existing interim objective standards for zoning and subdivision standards for SB 9 projects within single-family residential zones.

SECTION 5.Prohibition on SB 9 Projects that Fail to Comply with this Interim Urgency Ordinance.

Based on the facts and findings set forth in Sections 1 through 3 of this Interim Urgency Ordinance, and notwithstanding any other ordinance or provision of the Rancho Cucamonga Municipal Code, residential development projects and urban lot splits

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proposed pursuant to Senate Bill 9, are prohibited unless the project complies with the requirements of Sections 6 and 7 of this Interim Urgency Ordinance.

SECTION 6. Development in Single-Family Residential Zones.

A. Purpose. This Section provides objective zoning and design standards for the development of residential units pursuant to SB 9. Development pursuant to this Section does not require discretionary review or a hearing and is processed ministerially through a plan check/zoning clearance.

B. Applicability. SB 9 projects shall only be developed on in single-family residential zones. For purposes of this Section, the following zones are considered single- family residential zones: Very Low Residential (VL), Low Residential (L), and Hillside Residential (HR).

C. General Standards. All development pursuant to SB 9 shall comply with the following objective standards:

1.Eligibility requirements of Government Code Section 65852.21(a) shall be satisfied.

2.Except where superseded by SB 9 this Section, development shall comply with the objective development standards of the zone in which the lot is located.

3.Access to any unit shall not be across an easement that restricts such access.

4.More than 25 percent of the exterior structural walls of an existing dwelling shall not be demolished unless the site has not been occupied by a tenant in the last three years.

5.The lot shall contain no more than one pedestrian path connected to the public right-of-way or private street.

6.The development shall contain no exterior stairways except those leading from grade to the first floor.

7.Off-street parking shall be provided in accordance with the following standards:
a.A minimum of one off-street parking space shall be provided for each residential unit.
b.No off-street parking is required if either of the following apply:

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i.The lot is located within one-half mile walking distance of either: a high-quality transit corridor as defined in Public Resources Code Section 21155(b) or a major transit stop as defined in Public Resources Code Section 21064.3.
ii.A car-share vehicle is located within one block of the lot.

D. Additional Standards for New Construction. In addition to the standards of Subsection C, the standards of this Subsection apply if one or both residential units are new construction:

1.Maximum unit size shall be 800 square feet, except when rented at a level affordable to Low-Income (50%-80% of AMI) households, per Subsection J below.

2.No residential unit shall exceed a building height of one story.

3.No residential unit shall exceed a building height of 16 feet.

4.Each residential unit shall have a minimum setback of four feet from side and rear property lines except as allowed by Government Code Section 65852.21.

5.If the residential units are built as separate buildings, the following standards shall apply.
a.The buildings shall be located one in front of the other in relation to the street.
b.The front building shall be at least as wide and as tall as the rear building.
c.The front building shall be positioned such that the rear building is not visible from the street when viewed from directly in front of the property.

6.If the residential units are built as a single building, one residential unit shall have a door facing the street and one residential unit shall have a door facing a side or rear property line.

E. Additional Standards for Conversion of an Existing Dwelling. In addition to the standards of Subsection C, the standards of this Subsection apply if an existing dwelling will be fully or partially retained:

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1.Maximum unit size shall be 800 square feet, except when rented at a level affordable to Low-Income (50%-80% of AMI) households, per Subsection J below.

2.The existing setbacks shall be maintained when converting or substantially redeveloping an existing structure to a two-unit residential development, except that additions to the existing dwelling shall have a minimum setback of four feet from side and rear property lines.

3.Additions to the existing dwelling shall not increase the building height beyond the allowable maximum of the respective base zoning district.

4.If two residential units are located in the same building, one residential unit shall have a door facing the street and one residential unit shall have a door facing a side or rear property line.

F. Additional Standards for Urban Lot Split Projects. In addition to the standards of Subsections C, D, and E, as applicable, the standards of this Subsection apply if the residential units will be located on lots created by an urban lot split.

1.Each lot created by the parcel map shall be used solely for residential uses.

2.No lot created by the parcel map shall have more than two residential units, inclusive of any accessory dwelling unit (ADU) or junior accessory dwelling unit (JADU). No ADU or JADU shall be allowed on any parcel created by an urban lot split if the subdivider uses the authority provided under Government Code Section 65852.21.

3.If the boundary line between the lots created by the parcel map is perpendicular to the front lot line, the units shall be subject to the following standards:
a.The buildings nearest the street on each lot created by the parcel map shall have no more than one residential unit with a door facing the street.

G. Exceptions. The Planning Director shall approve an exception to any of the standards specified in this Section upon determining that complying with the standard would physically preclude the construction of up to two residential units or would physically preclude either of the two residential units from being 800 square feet in floor area.

H. Review. The Building Official, City Engineer, and Fire Marshal shall review applications to determine whether a proposed development would cause a specific adverse effect to public health, safety, and welfare, as defined in Government Code

Urgency Ordinance No. 996 - Page 7 of 11
Section 65589.5. If so, the Building Official shall make a written finding in support of his or her decision to deny the application.

I. Denial. The Building Official shall deny an application for an SB 9 project upon making both of the following findings in writing based upon a preponderance of evidence:

1.The proposed housing development project would have a specific, adverse impact upon the public health and safety or the physical environment as defined and determined in Government Code Section 65589.5(d)(2).

2.There is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

J. Income Restriction. If more than one unit is developed on a single lot, the second unit may be up to 1,200 square feet if one of the units is rented at a level affordable to Low-Income (50%-80% of AMI) households, provided that the property owner must execute and record against the subject property an affordability covenant provided by the Planning Director per Subsection K below.

K. Covenants Required. A property owner seeking to develop units on a single-family residential property, pursuant to the standards of SB 9 and the standards of this Section, shall execute and record the following covenants against the subject property with the San Bernardino County Assessor-Recorder-Clerk and provide a copy to the City:

1.Short-Term Rental of a residential unit for a period less than 31 days shall be prohibited;

2.Non-residential uses on the site shall be prohibited;

3.Any subsequent urban lot split of land that was previously subdivided with an urban lot split shall be prohibited;

4.The owner of the property for which an urban lot split is proposed shall sign an affidavit stating that the owner intends to occupy one of the housing units as their principal residence for at least three years from the date of the approval of the urban lot split; and

5.Residential units over 800 square feet shall be rented at a level affordable to Low-Income (50%-80% AMI) households for a period of at least 45 years.

SECTION 7.Urban Lot Splits in Single-Family Residential Zones.

Urgency Ordinance No. 996 - Page 8 of 11
A. Purpose. This Section provides objective subdivision standards for urban lot splits on single-family residential zoned lots pursuant to SB 9.

B. Applicability

1.This Section applies to single-family residential zoned lots. For purposes of this Section, the following zones are considered single-family residential zones: Very Low Residential (VL), Low Residential (L), and Hillside Residential (HR).

2. An urban lot split is prohibited on a lot previously subdivided by an urban lot split pursuant to SB 9. In addition, an urban lot split is prohibited on a lot if the lot’s owner or any person acting in concert with the owner of such lot has previously subdivided an adjacent lot pursuant to SB 9.

3. An urban lot split shall not require discretionary review or a hearing and is approved ministerially by the City Engineer through a parcel map application. This Section is exempt from the application and hearing requirements described in Chapter 16.20 (Tentative Parcel Maps – Four or Less Parcels) and Section 16.22.090 (Approval by City Council).

A. Subdivision Standards. An urban lot split pursuant to this Section is subject to the following standards.

1. Eligibility requirements of Government Code Section 66411.7(a) shall be satisfied.

2. A minimum lot size of one acre per dwelling unit is required for any proposed lot which does not have access to a public sewer.

3. Each lot created by the parcel map shall have a minimum area of 1,200 square feet.

4. The newly created lots shall not be smaller than 45 percent of the area of the original lot.

5. Each newly created lot must have access to a public street.

6. Lot lines shall be:
i.Straight lines, unless there is a conflict with existing improvements or the natural environment;
ii.Generally parallel to the street when facing the street or be at right angles perpendicular to the street on straight streets, or radial to the street on curved streets; and

Urgency Ordinance No. 996 - Page 9 of 11
iii.Within appropriate physical locations that do not bisect buildings and are contiguous with existing zoning boundaries.

A. Exceptions. The City Engineer shall approve an exception to any of the standards satisfied in this Section upon determining that complying with the standard would physically preclude the construction of up to two residential units or would physically preclude either of the two residential units from being 800 square feet in floor area.

B. Review. The Building Official, City Engineer, and Fire Marshal shall review applications to determine whether there is a specific adverse effect to public health, safety, and welfare.

C. Denial. The City Engineer shall deny an urban lot split upon making both of the following findings in writing based upon a preponderance of evidence.

1.The proposed housing development project would have a specific, adverse impact upon the public health and safety or the physical environment as defined and determined in Government Code Section 65589.5(d)(2).

2.There is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact.

D. Covenants Required. A property owner seeking to develop units on a single-family residential property, pursuant to the standards of SB 9 and the standards of this Section, shall execute and record the following covenants against the subject property with the San Bernardino County Assessor-Recorder-Clerk and provide a copy to the City:

1.Short-Term Rental of a residential unit for a period less than 31 days shall be prohibited;

2.Non-residential uses on the site shall be prohibited;

3.Any subsequent urban lot split of land that was previously subdivided with an urban lot split shall be prohibited;

4.The owner of the property for which an urban lot split is proposed shall sign an affidavit stating that the owner intends to occupy one of the housing units as their principal residence for at least three years from the date of the approval of the urban lot split; and

Urgency Ordinance No. 996 - Page 10 of 11

5.Residential units over 800 square feet shall be rented at a level affordable to Low-Income (50%-80% AMI) households for a period of at least 45 years.

SECTION 8.CEQA.

Adoption of this Ordinance is not a project under the California Environmental Quality Act pursuant to Government Code Sections 65852.21(j) and 66411.7(n).

SECTION 9.Severability.

If any section, subsection, sentence, clause, phrase, or portion of this Interim Urgency Ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Interim Urgency Ordinance. The City Council declares that it would have adopted this Interim Urgency Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

SECTION 10. Effective Date; Approval and Extension of Ordinance.

This Interim Urgency Ordinance, being adopted as an urgency measure for the immediate protection of the public safety, health, and general welfare, containing a declaration of the facts constituting the urgency, and passed by a minimum four-fifths (4/5) vote of the City Council, shall take effect immediately upon its adoption and shall continue in effect for a period of not longer than forty-five (45) days. After notice pursuant to Government Code Section 65090 and a public hearing, the City Council may extend the effectiveness of this Urgency Ordinance as provided in Government Code Section 65858.

SECTION 11. Term.

This Interim Urgency Ordinance shall take effect concurrent with the expiration of Urgency Ordinance 994 at midnight on March 5, 2022, and shall remain in effect for a period of ten (10) months, fifteen (15) days, through and including January 20, 2023, in accordance with California Government Code Section 65858.

SECTION 12. Publication.

The City Clerk shall certify to the passage and adoption of this Interim Urgency Ordinance and shall cause its publication in accordance with applicable law.

PASSED, APPROVED, AND ADOPTED this 2 nd day of March, 2022, by the following vote to wit:

Urgency Ordinance No. 996 - Page 11 of 11

AYES: ( )
NOES: ( )
ABSENT: ( )
ABSTAIN: ( )

L. Dennis Michael, Mayor
ATTEST:

_________________________________
Janice C. Reynolds, City Clerk

APPROVED AS TO FORM:

_________________________________
Nicholas R. Ghirelli, City Attorney

DATE:March 2, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Lori Sassoon, Deputy City Manager/Administrative Services Linda A. Troyan, MMC, Director of City Clerk Services
Patricia Bravo-Valdez, MMC, Deputy Director of City Clerk Services SUBJECT: 8:00 PM Time Certain: Public Hearing #5 – Conduct Public Hearing to Receive Public Input on District Boundaries and First Reading of Ordinance No. 997, to be Read by Title Only and Waive Further Reading, Adjusting the Boundaries of the Four City Council Districts and Adopting a New Official Council District Map Based on the Results of the 2020 Decennial Census. (ORDINANCE NO. 997) (CITY)
RECOMMENDATION:

Staff recommends that the City Council receive a report from staff, conduct a public hearing to receive public input, and introduce first reading of Ordinance No. 997, to be read by title only and waive further reading, adjusting the boundaries of the four City Council Districts and adopting a new official Council District Map for the City of Rancho Cucamonga based on the results of the 2020 decennial census.

BACKGROUND:

On November 8, 2016, the voters of Rancho Cucamonga approved Ordinance No. 887, providing for the election of four members of the City Council by four districts, with a Mayor elected at large, and establishing the boundaries and election order of each district. At that time, the Council districts were drawn using the 2010 Census data as was required by law.

Following each U.S. Census, which occurs every ten years, cities with by-district election systems must use the new census data to review and, if needed, redraw district lines to reflect how local populations have changed. This process, called redistricting, ensures all districts have nearly equal population.

By law, the City must hold at least four (4) public hearings that enable community members to provide input on the drawing of district maps. At least one hearing must occur before the city or county draws draft maps. At least two public hearings must occur after the drawing of draft maps.

The Government Code requires that a final map be adopted and submitted to the County no later than April 18, 2022.

The City scheduled five (5) hearing dates for the Council Redistricting process and conducted extensive community outreach efforts. Four public hearings took place on September 15, 2021, November 3, 2021, January 19, 2022, February 2, 2022, with the last hearing taking place on March 2, 2022 at 8:00 PM. Recordings and informational materials for those hearings are available at www.drawrc.org.

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5 3
The districts must be redrawn using the 2020 census data and in compliance with the Fair Maps Act, which was adopted by the California Legislature as AB 849 and took effect January 1, 2020.

Under the Act, the Council shall draw and adopt boundaries using the following criteria in the listed order of priority in accordance with Elections Code 21601(c):

1. Comply with the federal requirements of equal population and the Voting Rights Act

2. Geographically contiguous

3. Undivided neighborhoods and “communities of interest” (socio-economic geographic areas that should be kept together)

4. Easily identifiable boundaries

5. Compact (do not bypass one group of people to get to a more distant group of people)

6. Shall not favor or discriminate against a political party Once the prioritized criteria are met, other traditional districting principles can be considered, such as:

1. Minimize the number of voters delayed from voting in 2022 to 2024

2. Respect voters’ choices / continuity in office

3. Future population growth
As of the date of this report, only one map was submitted by the public and provided to the City Council with the February 2, 2022 City Council meeting Staff Report, including the City’s demographer’s review of the map, with the associated data.

Additionally, and in accordance with the Mutual Release and Settlement Agreement and Amendment entered with the Southwest Voter Registration Project (“SVREP”) and Louisa Ollague (Collectively “Plaintiff”), the City submitted a draft map to the Plaintiff on October 29, 2021 for their review and consideration. Subsequently, ongoing discussions and reviews took place. Map 105 was developed, and the parties have indicated their agreement to submit this map to the City Council in accordance with the settlement agreement. This draft map meets the required federal and state criteria and would make minimal changes to the existing City Council District boundaries.

At the last City Council Meeting on February 2, 2022, the City Council gave direction to move forward with Map 105 as its preferred map and directed staff to prepare the final map and ordinance for first reading at its March 2, 2022 City Council meeting.

ANALYSIS:

The purpose of Public Hearing #5 is to receive public input, review any map drafts received from the public to date and conduct first reading of Ordinance No. 997, adjusting the boundaries of the four City Council Districts and adopting a new official Council District Map based on the results of the 2020 decennial census.

1 1
5 3
Some of the major components and highlights of the proposed map include:
Having a balanced population between districts;
Having compact geographical shapes for Fair Map Act purposes and requirements; Avoids separating communities of interest; maintains the more modern/post incorporation of planned communities of Terra Vista and Victoria more fully intact in District 3;
Pushes District 2 boundary north of Foothill all the way to Base Line between Hellman and Hermosa for optimum density, and creating an area of highest Latino Citizen Voting Age Population (CVAP) at 44%;
District 4 boundary is revised for better population balance between Districts; Map 105 is in compliance with the various legal requirements as noted above, and is now proposed for adoption. Election sequencing has not changed and will be in accordance with Rancho Cucamonga Municipal Code Section 2.11, which in summary provides that elections for the Council seats in Districts 2 and 3 will be held every four years beginning in November 2018, along with the election of Mayor. The elections for Districts 1 and 4 will be held every four years beginning in November 2020. The district numbers in proposed map align with the current district numbers of districts that generally align with the same territory.

The attached ordinance is presented for the City Council’s consideration in adopting the preferred map, Map 105, as the City Council District Map.

No additional public comments nor maps have been received since the last hearing date. The public is encouraged to participate in the hearing.

FISCAL IMPACT:

None.

COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

Conducting this public hearing is in keeping with the City Council’s mission to ensure and advance the quality of life for the community through inclusive decision making.

ATTACHMENTS:

Attachment 1 – Ordinance No. 997

ORDINANCE NO. 997

AN ORDINANCE OF THE CITY OF RANCHO CUCAMONGA ,

CALIFORNIA, ADJUSTING THE BOUNDARIES OF THE FOUR

CITY COUNCIL DISTRICTS AND ADOPTING A NEW OFFICIAL

COUNCIL DISTRICT MAP FOR THE CITY OF RANCHO
CUCAMONGA BASED ON THE RESULTS OF THE 2020

DECENNIAL CENSUS

A. Recitals.

1. On November 8, 2016 the City Council adopted Ordinance No. 887 pursuant to Government Code Sections 34871 and 34872 to add Chapter 2.11 to the Rancho Cucamonga Municipal Code to provide for the by-district election of members of the City Council and at-large election of the Mayor, adopt the official Council District Map for the City of Rancho Cucamonga, establish the boundaries and identification number of each electoral district , and establish a sequencing of elections for each Council District.

2. Pursuant to Elections Code Section 21601 and Section 2.11.050 of the Rancho Cucamonga Municipal Code, the City Council is required to adjust the boundaries of any or all of the Council Districts following each decennial federal census. Using the census as a basis, the City Council must adjust the boundaries so that the Council Districts are as nearly equal in population as prac ticable and in compliance with all applicable provisions of law, including the United States and Federal Constitutions and the Federal Voting Rights Act of 1965 (52 U.S.C.

Section 10301 et seq.).

3. In accordance with Elections Code Section 21607 and 21607.1, the City Council held public hearings on the drawing of district boundaries on September 15, 2021, November 3, 2021, January 19, 2022, February 2, 2022, and March 2, 2022. At each of the foregoing hearings, the public was invited to provide input on the composition of the new Council District boundaries.

4. After closing the public hearing held on March 2, 2022, the City Council selected the map depicted in Exhibit “A” of this Ordinance and incorporated herein by this reference as the official Council District Map for the City of Rancho Cucamonga and introduced this Ordinance for first reading. Demographic data supporting the map based on the 2020 Census is attached hereto as Exhibit “B” of this Ordinance and incorporated herein by this reference.

B. Ordinance.

The City Council of the City of Rancho Cucamonga does ordain as follows:

SECTION 1. The map attached hereto as Exhibit “A” to this Ordinance is hereby approved and adopted as the Official Council District Map for the City of Rancho Cucamonga and shall be used in the 2022 general municipal election and all such elections for City Council thereafter, until further amended.

SECTION 2. Section 2.11.020 of Chapter 2.11 of the Municipal Code is hereby amended to read as follows:
“2.11.020 City Council Districts Established. The boundaries for the four (4) City Council districts and the identification number of each district shall be as described on

the Official Council District Map for the City of Rancho Cucamonga, attached as Exhibit “A” to Ordinance No. 997 and incorporated herein by this reference. A copy of the Council District Map is on file in the Office of the City Clerk.” SECTION 3. Severability. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force and effect. The City Council of the City of Rancho Cucamonga hereby declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable.

SECTION 4. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published in the manner prescribed by law.

PASSED, APPROVED, AND ADOPTED this day of , 2022.

_____________________________________
L. Dennis Michael, Mayor
ATTEST:
_____________________________
City Clerk

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO ) ss

CITY OF RANCHO CUCAMONGA )
I, JANICE REYNOLDS, City Clerk of the City of Rancho Cucamonga, do hereby certify that the foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Rancho Cucamonga held on the _____ day of _______________, 2022, and was passed at a regular meeting of the City Council of the City of Rancho Cucamonga held on the ______ day of ______________, 2022, by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAINED: COUNCILMEMBERS:

EXHIBIT A

Map 105
District 1
Total Pop 44,393
Deviation from ideal 691
% Deviation 1.58%
% Hisp 34.5%
% NH White 47%
% NH Black 5%
% Asian-American 10%
Total 32,485
% Hisp 29%
% NH White 58%
% NH Black 4%
% Asian/Pac.Isl. 7%
Total 31,168
% Latino est. 28%
% Spanish-Surnamed 26%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 65%
% NH Black 4%
Total 26,562
% Latino est. 27%
% Spanish-Surnamed 25%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 66%
% NH Black 4%
Total 19,091
% Latino est. 23%
% Spanish-Surnamed 21%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 70%
% NH Black est. 4%
ACS Pop. Est. Total 43,768
age0-19 24%
age20-60 52%
age60plus 25%
immigrants 15%
naturalized 71%
english 76%
spanish 16%
asian-lang 5%
other lang 4%
Language Fluency Speaks Eng. "Less than Very Well" 8%
hs-grad 47%
bachelor 20%
graduatedegree 14%
Child in Household child-under18 32%
Pct of Pop. Age 16+ employed 64%
income 0-25k 12%
income 25-50k 12%
income 50-75k 15%
income 75-200k 50%
income 200k-plus 12%
single family 84%
multi-family 16%
rented 25%
owned 75%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

Latino voter registration and turnout data are Spanish-surname counts adjusted using Census Population Department undercount estimates. NH White and NH Black registration and turnout counts estimated by NDC. Citizen Voting Age Pop., Age, Immigration, and other demographics from the 2015-2019 American Community Survey and Special Tabulation 5-year data.
2 43,607
-95
-0.22%
48%
25%
13%
11%
30,926
44%
31%
15%
8%
21,769
43%
39%
4%
2%
38%
16%
17,001
41%
37%
4%
2%
39%
16%
10,005
38%
35%
3%
2%
43%
16%
44,675
26%
60%
14%
21%
59%
59%
29%
7%
5%
15%
52%
17%
7%
35%
63%
17%
23%
17%
39%
4%
50%
50%
59%
41%
3 42,439
-1,263
-2.89%
34%
31%
12%
21%
29,010
36%
33%
16%
13%
23,793
32%
29%
7%
3%
43%
18%
19,668
31%
28%
7%
3%
43%
18%
12,316
29%
27%
5%
2%
47%
18%
43,209
28%
58%
14%
23%
65%
67%
16%
11%
6%
13%
39%
26%
18%
39%
69%
9%
11%
14%
56%
10%
63%
37%
48%
52%
4 44,370
668

1.53%
33%
35%
8%
21%
30,693
31%
42%
9%
16%
28,301
30%
27%
8%
2%
51%
10%
23,854
29%
27%
8%
2%
52%
10%
15,676
27%
25%
6%
2%
56%
10%
45,019
28%
54%
18%
21%
66%
67%
17%
9%
7%
9%
46%
24%
16%
45%
67%
7%
11%
12%
52%
19%
90%
10%
20%
80%
Total
174,809
1,954

4.47%
37%
34%
10%
16%
123,115
35%
41%
11%
11%
105,031
32%
30%
6%
2%
51%
11%
87,085
31%
29%
5%
2%
52%
11%
57,088
28%
26%
4%
2%
56%
11%
176,670
26%
56%
18%
20%
65%
67%
19%
8%
6%
11%
46%
21%
14%
38%
66%
11%
14%
14%
49%
11%
71%
29%
38%
62%
01/26/2022 21:37 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats

EXHIBIT B

ITEM G2. ADDITIONAL MATERIAL RECEIVED – MARCH 2, 2022, CITY COUNCIL MEETING From: Zachary Walthers <[email protected]>
Date: February 28, 2022 at 4:15:41 PM PST
To: "Michael, Dennis" <[email protected]>
Subject: District 1
CAUTION: This email is from outside our Corporate network. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear Mayor Michael,
My name is Zachary Walthers and I reside at 6547 Kinlock Ave, Rancho Cucamonga 91737 and respectfully ask that you and your council reconsider changing our neighborhood district 4 back to 1. We are a neighborhood with a l community of interest having long ties best aligned with District 1. I wish to remain District 1.

Respectfully, Zachary Walthers
Sent from my iPhone

ITEM G2. ADDITIONAL MATERIAL RECEIVED – MARCH 2, 2022, CITY COUNCIL MEETING From: Paul Arigan <[email protected]>
Date: February 28, 2022 at 1:03:24 PM PST
To: "Michael, Dennis" <[email protected]>
Subject: New councilmatic zone

CAUTION: This email is from outside our Corporate network. Do not click links or open attachments unless you recognize the sender and know the content is safe.

February 28, 2020

Mayor L. Dennis Michael
Rancho Cucamonga, California
[email protected]

Your Honor, Mayor Michael:

My name is Paul Reed Arigan. I have resided at 6599 Halsted Avenue, Rancho Cucamonga for the past 38 years.

I urge you and your council to rescind plans to reassign my neighborhood to District 4. My neighborhood has always identified itself as part of Alta Loma, even before the creation of the City of Rancho Cucamonga in 1978. It is a stretch to consider my neighborhood as part of District 4, that is, Etiwanda, whose traditional boundary lies to the east of Milliken Avenue.

The council’s proposed motion smacks of backroom politics which has no place in our city’s government. I consider the proposal an attempt to save someone’s political career. In truth, it is a terrible miscalculation.

Respectfully yours,

Paul Reed Arigan, Docteur-ès-Lettres

ITEM G2. ADDITIONAL MATERIAL RECEIVED – MARCH 2, 2022, CITY COUNCIL MEETING From: William Mitchell <[email protected]>
Date: February 27, 2022 at 4:52:10 PM PST
To: "Michael, Dennis" <[email protected]>
Subject: Redistricting

CAUTION: This email is from outside our Corporate network. Do not click links or open attachments unless you recognize the sender and know the content is safe.

Dear Mayor Michael,
My name is William Mitchell. I reside at 10233 Heather Street Alta Loma, I respectfully ask that you and your council reconsider changing our neighborhood from District 4 back to District 1.We are a neighborhood with a community of interest having long ties best aligned with District 1.

I wish to remain in District 1.

Respectfully, William Mitchell.

DATE:March 2, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Tamara L. Oatman, Finance Director
SUBJECT: Consideration to Receive and File Midyear Financial Update for the Six- Month Period Ended December 31, 2021. (CITY)
RECOMMENDATION:

Staff recommends that the City Council receive and file the attached Midyear Financial Update for the six-month period ended December 31, 2021.

BACKGROUND:

On a quarterly basis, the Finance Director provides the City Council with a brief update on the budgetary performance of the City’s operating funds which include the City General Fund (Fund 001), the Library Fund (Fund 290), and the Fire District Operating Funds (Funds 281, 282, and 283). At the midyear point, staff conducts an analysis of the City’s operating budget which includes detailed inquiries of the various City departments. During these inquiries, budgetary needs may be identified that require more timely attention than the Amended Budget process may provide. As a result, additional appropriations may be requested of the City Council in conjunction with the Midyear Financial Update.

ANALYSIS:

Operating Budget. The Midyear Financial Update provides budget and year-to-date actuals (including encumbrances) of both revenues and expenditures for the City’s operating funds.

Overall, the City’s operating budget for expenditures is performing well as of midyear and is generally consistent with the prior year. There are some additional appropriations needed for unanticipated cost increases for the General Fund and the Fire District as discussed further below.

Generally, revenues are on track or slightly ahead of projections, as a whole, and expenditures are on track with or slightly below historical norms. Both sales tax and TOT revenues are recovering from the COVID-19 pandemic and are anticipated to exceed budget.

General Fund. As of midyear, it is anticipated that projected increases and decreases in the various General Fund revenues will net to an overall increase of $6,898,820. This includes projected growth in sales tax (19%), property tax (11.5%), and TOT (>30%). This growth was offset by reduced revenues for Community Services, which are net of one-time grant reimbursement revenues of $649,500, as the Department continues to regularly assess its programming for the year to maneuver through the challenges created by the COVID-19 Pandemic.

On the expenditures side, Community Services expenditures will be about $3.3 million less than anticipated. The Department is planning to redirect its projected net savings for the year, along

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with some other General Fund resources, towards repair, replacement, and enhancement of the various facilities and parks utilized by the Department for its programming.

Staff recently became aware of rate increases by Southern California Gas Company which took effect January 1, 2022. These rate increases included a 6% increase in rates to transport natural gas and a second 21% rate increase which reflects a new procurement price for natural gas.

These two rate increases combined with the higher commodity price for natural gas have resulted in a significant increase in the gas bills for the various City facilities. An additional appropriation in the amount of $68,070 will be requested for the General Fund - City Facilities Division which accounts for utility costs for most City facilities.

Fuel prices have also continued to soar over the past year, increasing 35% for the average consumer. The wholesale price that the City pays has increased 44% over this past year; however, decreased consumption has slightly tempered the impact of this price increase.

Although some allowance for price increases was incorporated into the FY 2021/22 Adopted Budget, based on current pricing and YTD usage, an increase in the gasoline budgets for two of the General Fund divisions will be requested in the total amount of $118,120.

Although the expenditure budget includes carryover purchase orders totaling approximately $661,290, net projected savings in the various departmental budgets have resulted in a projected decrease of $2,133,620 in the General Fund’s total expenditure budget.

Library Fund. Library expenditures are anticipated to be $200,270 less than budgeted. Savings are anticipated as a result of the reduction in the part-time salaries budget which was reduced commensurate with the Department’s suspension of in-person programming due to the impacts of the COVID-19 pandemic. The Department will also experience some salary savings due to vacancies in full-time positions. Revenues are anticipated to be $153,600 greater than budgeted overall due to projected growth in property taxes. Overall, the Library’s operations are anticipated to end the fiscal year with net funds available in the amount of $792,170 which is a $353,870 increase over the surplus reflected in the FY 2021/22 Adopted Budget.

Fire District. The Fire District’s expenditures are on track as of midyear, with a few items to note.

Due to several retirements of long-term staff that occurred in December 2021, accumulated leave payouts occurred in January 2022 requiring increased appropriation requests for two divisions in the Fire Fund – Administration ($312,810) and Fire Suppression ($877,840). These leave payouts will be funded by the District’s employee leave payouts reserve. Two other additional appropriations are being requested to fund additional medical supplies and materials for the District’s ambulance, Alternate Transport Vehicle 174 (AT-174), and to fund additional personal protective gear due to the ongoing COVID-19 Pandemic. The amounts of the additional appropriations are $23,810 and $30,000, respectively.

The allocation of post-RDA property tax revenues between the District’s General Fund and Capital Fund will be adjusted as needed to ensure the Fire District General Fund is balanced at the end of the fiscal year. As of midyear, it is anticipated that slightly less will be needed for the General Fund than was budgeted due to anticipated revenue growth for the District along with anticipated salary savings. Overall, the Fire District will end with a balanced budget by the usage of the Fire Fund’s employee leave payouts reserve in the amount of $1,216,140 and CFD 85-1’s operating reserve in the amount of $640,010.

FISCAL IMPACT:

As a result of the analysis conducted with the various departments for the attached report, certain additional appropriations were identified that require more immediate attention rather than waiting

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for the adoption of the Amended Budget in May. Staff respectfully requests that the City Council authorize the following additional appropriations:

Account Number Account Description Reason for Revision
Increase/
(Decrease)
1001205-5401 General Fund-City Facilities-Gas Utilities So Cal Gas rate increase effective 1/1/22 and commodity price increases 68,070$ 1700401-5401 Sports Complex Fund-Gas Utilities So Cal Gas rate increase effective 1/1/22 and commodity price increases 5,950$ 1001701-5255/ 7255-6184 General Fund-Police-Gasoline Increased gasoline prices 96,220$ 1001317-5255 General Fund-Vehicle & Equip Maint-Gasoline Increased gasoline prices 21,900$ 1001302-5300 General Fund-Building and Safety-Contract Services Contract inspection services to backfill temporary staffing vacancies 100,000$ 1023302-5102 SB1186 Cert Access Spec Prog-Training CASP training for staff 500$ 1023302-5200 SB1186 Cert Access Spec Prog-O&M CASP certifications and exams for staff 2,000$ 1712001-5604 Equip/Vehicle Replacement Fund-Capital Outlay, Vehicles Replacement of expired CNG tanks on two dump trucks 50,000$ 1712001-5604 Equip/Vehicle Replacement Fund-Capital Outlay, Vehicles Replacement of on-call truck (currently out of service) 75,000$ 3281501-5000 Fire Fund-Administration-Regular Salaries To account for leave balance payments for staff 312,810$ 3281504-5200 Fire Fund-Emergency Med Srvcs-O&M Increased usage of medical supplies and materials 23,810$ 3281504-5285 Fire Fund-Emergency Med Srvcs-Safety Gear & Equip Increased usage of personal protective gear 30,000$ 3281508-5000 Fire Fund-Fire Suppression-Regular Salaries To account for leave balance payments for staff 877,840$ Total increase in expenditure accounts 1,664,100$
FY 2021/22 Midyear Additional Appropriation Requests
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

Providing the City Council with regular financial updates on the City's operating budget supports the Council's efforts to create an equitable, sustainable, and vibrant city, rich in opportunity for all to thrive, by providing meaningful, timely information upon which they can base their current and future decisions that impact the City's finances.

ATTACHMENTS:

Attachment 1 – Midyear Financial Update – Six-Month Period Ended December 31, 2021

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

OVERVIEW
T
his report summarizes the City’s overall financial position for the current fiscal year through December 31, 2021.

The focus of this report is the City’s operating budget which is comprised of the City General Fund, the Library Fund, and the Fire District Operating Funds. The revenue and expenditure budgets and actuals include necessary adjustments for encumbrances, carryover purchase orders, and any supplemental appropriations made by the City Council as of December 31, 2021.

GENERAL FUND
G
eneral Fund Financial Condition. With 50% of the year complete, General Fund expenditures are at 42 % of projections (consistent with the prior year) and revenues are at 32% (compared to 30% in the prior year). Revenues are typically less during the first half of the fiscal year as a number of the more significant items, including franchise fees and fourth quarter sales tax, are not received until the second half of the fiscal year. Both expenditures and revenues are explained in more detail below.

T
he expenditures budget and YTD actual figures above include carryover purchase orders from the prior fiscal year.

Excluding the carryover purchase orders, the City adopted a balanced budget for Fiscal Year 2021 /22.

D
epartmental Expenditures. The YTD actual figure
above incorporates all General Fund divisions, including non-departmental divisions such as General Overhead.

For purposes of departmental analysis, these non -
departmental divisions are excluded from the chart on
the right.

Depar
tmental operating expenditures (including
outstanding purchase orders/encumbrances) are
generally consistent with the prior year as a percent of the budget, and on target as of midyear. Any significant differences between the current and prior year are noted below.

F
actors contributing to a slightly higher percentage
expended/encumbered in some departmental budgets
include the following: 1) some contracts cover the entire fiscal year and must be fully encumbered with a
purchase order at the beginning of the fiscal year and 2) certain overhead cost allocations are fully allocated at the beginning of the fiscal year.

D
epartments with the more significant variances in the percentage spent – current year (CY) vs. prior year (PY) – include:
• R
ecords Management (42% CY; 15% PY): In the prior year, Records Management budgeted a line it em f
or the 2020 General Election which was not expended as of midyear resulting in the unusually low percentage spent. There is no similar item budgeted in the current year resulting in the higher percentage spent as of the end of the first quarter.

General Fund Budget* Y T D Actual* Percent
Revenues 95,869,910$ 30,673,773$ 32%
Expenditures 96,366,127$ 40,156,077$ 42%
ATTACHMENT 1

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

• Planning (52% CY; 65% PY): Year to date expenditures are comparable to the prior year as of the end of the fourth quarter. While the carryover purchase orders are slightly higher in the current year, the decrease in the percentage spent as of midyear is primarily due to the increas ed budget for reimbursable contract services in the current year due to anticipated increases in development activity. These contract services, which include California Environmental Quality Act (CEQA) consulting services as well as design professional services, are reimbursed by developers through Planning Special Services Fees. • Engineering (50% CY; 64% PY): The Engineering Department requested an additional appropriation in the amount of $280,000 as part of the First Quarter Financial Update to increas e contract plan check services due to recent staff vacancies. As of midyear, the funds had not yet been encumbered or spent resulting in a lesser percentage spent compared to the prior year for the department as a whole. Another factor contributing to the lower percentage spent include the annual NPDES permits which were fully paid as of midyear in the prior year but were not yet paid as of midyear in the current year.

Community Services. Although the Community Services Department has a relatively consistent percentage spent as of midyear compared to the prior year (33% CY; 29% PY) , the Department continues to regularly assess its programming for the year to maneuver through the challenges created by the COVID -19 Pandemic. Based on its most recent assessment, it is anticipated that revenues will be about $3 million less than anticipate d and expenditures will be about $3.3 million less than anticipated. The revenue reduction is net of the Shuttered Venues Grant reimbursement of $649,500. The Department is planning to redirect these net savings, along with some other General Fund resources, towards repair, replacement, and enhancement of the various facilities and parks utilized by the Department for its programming. The estimated total cost for these items is $651,450.

Utility/Fuel Cost Increases. Rate increases by Southern California Edison were noted in the First Quarter Financial Update. Recently, staff became aware of additional rate increases by Southern California Gas Company which took effect January 1, 2022. These rate increases included a 6% increase in rates to transport natural gas and a second 21% rate increase which reflects a new procurement price for natural gas. These two rate increases combined with the higher commodity price for natural gas have resulted in a significant increase in the gas bills for the various City facilities. An additional appropriation in the amount of $68,070 will be requested for the General Fund - City Facilities Division which accounts for utility costs for most City facilities.

Fuel prices have continued to soar over the past year. Based on information from AAA, California average gas prices for regular unleaded gas have increased from $3.465 per gallon to $4.684 per gallon over this past year , a 35% increase. The wholesale price that the City pays has increased 44% over this past year; however, decreased consumption has slightly tempered the impact of this price increase. Although some allowance for price increases was incorporated into the FY 2021/22 Adopted Budget, based on current pricing and YTD usage, an increase in the gasoline budgets for two of the General Fund divisions will be requested in the total amount of $118,120.

Overall, although the expenditure budget includes carryover purchase orders totaling approximately $ 661,290, net projected savings in the various departmental budgets have resulted in a projected decrease of $2,133,620 in the General Fund’s total expenditure budget.

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

Top Seven Revenues . The City’s top seven revenues account for about 87% of total General Fund revenues (compared to 86% in the prior year). Following is a summary of these revenues as of midyear:

Sales Tax. Revenues as of the six months ended December 31, 20 21 are at 40% of budget (consistent with the prior year). The percentage is lower than 50% as of midyear due to the timing of our receipts from the State and the County. As of midyear, we have received four months’ allocation of sales tax revenues from the State (consistent with the prior year) and four months’ allocation of Prop 172 revenues (compared to five months in the prior year).

Based on discussions with the City’s sales tax consultant regarding 3Q2021 receipts, Rancho Cucamonga’s receipts from July through September were 19.0% above the third sales period in 2020. Excluding reporting aberrations, including a large payment error by a sporting goods retailer, actual sales were up 26.4%. Several popular new restaurant openings helped lift tax proceeds from casual dining eateries by 95%, exceeding the 68% statewide trend. General consumer goods retailers posted a 20% increase in revenue as the economy reopened after the epidemic. Electronics and family apparel retailers also benefited from back -to-school spending after a year of remote learning and as shoppers allocate more of their paychecks to tangible goods, rather than services.

Payments from local service stations surged 71%, exceeding the 53% statewide trend, as the price of gasoline spiked above $4.50 per gallon and as consumers drove more than they did last year during the lockdown. The sale of business and industrial material was also robust. Comparing 3Q2021 to 3Q2019 (pre- pandemic), most of the City’s business types have fully recovered from the impacts of the pandemic, which is great news!

Statewide, overall growth is expected to continue through the end of the 2021 calendar year. Likely headwinds into 2022 include: pent up demand for travel and experiences shifting spending away from taxable goods; higher prices for fuel, merchandise and services displacing more of consumer’s disposable income; expected interest rate hikes resulting in more costly financing for automobiles, homes, and consumer loans ; loss of auto sales; geopolitical instability leading to higher inflation; and misallocations from the County pool.

Taking all of the above factors into consideration along with estimated growth for new sales tax generators and anticipated adjustments by the State, our consultant has indicated that sales tax revenue is anti cipated to exceed the Adopted Budget by a modest percentage. With all the variables noted above the actual amount is difficult to predict with accuracy.

Top Seven Revenues Budget
YTD
Actual
%
Received
Sales Tax 31,967,150 12,769,624 40%
Vehicle license fees* 22,048,730 - 0% Franchise fees 7,572,760 1,321,750 17%
Property tax 10,270,140 6,324,960 62%
Development fees 4,982,500 2,780,638 56%
Business licenses 2,698,710 1,781,962 66%
Trans. occupancy taxes 3,420,000 1,896,100 55% *Includes Property tax in-lieu of VLF

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

Vehicle License Fees (VLF) , including property tax in- lieu of VLF . As of midyear, we have not received a disbursement of VLF from the State which is consistent with the prior year. The VLF relates to excess amounts collected by the State for the prior fiscal year, and it has typically been received during the third quarter of our fiscal year. We will receive property tax in-lieu of VLF from the County of San Bernardino in January and May. Overall, this revenue source is anticipated to exceed budget by $359,770 or 1.6% based on information provided by the County.

Franchise Fees. We will not receive the largest components of franchise fee revenues – payments from Southern California Edison and Southern California Gas Company – until April 2022. Franchise fees from waste management and cable are remitted approximately 30 days after the end of each quarter . These revenues are anticipated to exceed budget by $310,730 or 4.1%.

Property Tax. The first major apportionment of taxes occurred in December. Included in the property tax budget is post-RDA property tax revenue of $ 2,590,090. This portion of the City’s property taxes is normally received in January and June as part of the County of San Bernardino’s distribution of the Redevelopment Property Tax Trust Fund (RPTTF); however, the January payment was received a few days early at the end of December. This same situation occurred in the prior fiscal year resulting in the collection percentages being consistent. It is anticipated that overall property tax revenues will exceed budget by $1,177,820 or 11.5%.

Development Fees. Development revenues for plan check fees , planning fees, and engineering fees are coming in as anticipated with collection percentages of 42.21%, 43.72%, and 53.02%, respectively. Building permit fee revenue is coming in at a faster pace than expected during the first quarter with a collection percentage of 75.32%.

At this time, the Building and Safety Department anticipates ending the year in line with budget for the fiscal year as this initial surge moderates later in 2022.

Business Licenses. Overall business license revenues are ahead of the 50% midyear target , with a collection percentage of 66%, which is higher than the prior year ’s collection of 54%. Based on activity through December 31, 2021 and considering that t he peak of the renewals is not received until January , revenues are anticipated to exceed budget by $209,290 or 7.8%.

Transient Occupancy Taxes (TOT). Based on information provided by the Greater Ontario Convention and Visitors Bureau (GOCVB), for the second quarter, average occupancy is currently at 74.43% compared to 55.70% for the prior year and 75.53% for Fiscal Year 2019/20. Similarly, for the second quarter, average daily rates are currently at $153.42 compared to $117.24 for the prior year and $134.03 for Fiscal Year 2019/20.

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

Year-to-date receipts are tracking about 65% more than the prior year due to the impacts of the COVID-19 pandemic which significantly reduced prior year receipts. As was noted in the First Quarter Financial Update, one of the City’s major hotels temporarily closed in late March 2020 and started accepting guests again in August 2020. Current year receipts include operations for all the City’s hotels. Revenue from short term rentals (STRs) continues to grow due to the City’s partnership with Harmari. Annualizing YTD revenues indicates that the revenue estimate for FY 2021/22 will be exceeded by more than 3 0% as the City continues to outperform the GOCVB projections from earlier this year. This revenue estimate includes two months’ TOT remittances for a new hotel opening anticipated for late March/early April.

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

Another entitled hotel, Tapestry by Hilton, has been able to secure construction financing. It is anticipated that the City may receive up to a half year’s TOT revenue during Fiscal Year 2022/23 depending on the timing of construction.

Other General Fund Revenue Changes. Based on the State Mandate Reimbursement Claims for FY 2020/21 that were filed by the City’s consultant, the City anticipates receiving approximately $350,000 for the various claims this fiscal year. The largest claim is for the Racial and Identify Prof iling Act (RIPA) in the amount of $250,000.

Overall, revenues for State Mandate reimbursements are anticipated to exceed budget by $290,000.

Revenues for non-abated reimbursements are estimated to exceed budget by approximately $83,410. This line item includes the payroll tax credits the City received from the American Rescue Plan Act (ARPA) for COVID-related sick leave usage through September 30, 2021 in the amount of $114,000, which were not budgeted. The City was able to take credits against our Medi care payments to reimburse us for the cost we incurred. Since we needed to fully expense our Medicare liability, this revenue account was used to account for the credit that reduced the actual amount of payroll taxes remitted to the Federal government. O ther reimbursements are coming in less than anticipated which offset the tax credits slightly.

As of midyear, it is anticipated that projected increases and decreases in the various General Fund revenues will net to an overall increase of as much as $6,898,820. This includes projected growth in sales tax revenue, property tax, and TOT. This growth was offset by reduced revenues for Community Services noted above, which are net of one-time grant reimbursement revenues of $649,500.

LIBRARY FUND

Library Fund Financial Condition. As of midyear, Library revenues are at 52% of projections (compared to 46% in the prior year) and expenditures are at 57% (compared to 50% in the prior year). The higher than usual revenue collection percentage is due to the timing of the County’s payment of the statutory passthrough from RPTTF. As noted previously, the first ins tallment is usually received in January ; however, it was received in December in the both the current year and the prior year.

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

Property tax makes up approximately 86% of the Library Fund’s revenues (compared to 82% in the prior year). As noted in the First Quarter Financial Update, t his increase is due to two factors. First, property tax revenues are projected to increase due to increased assessed values and home sales. Second, revenues from other sources were budgeted at a reduced level for FY 2021/22 due to in- person services being limited by the COVID -19 pandemic. These revenues include passport processing fees and passport photo fees as well as donations from the Friends of the Library.

As noted above, the first major apportionment of taxes occurred in December. The Library’s property tax revenues, however, also include a statutory pass -through from the former Redevelopment Agency. This pass -through represents approximately 37.5% of the Library’s property tax revenues and is normally received in January and June as part of the County’s distribution of the Redevelopment Property Tax Trust Fund (RPTTF). However, as noted above, the January payment was received in late December , similar to the prior year . Also included in the property tax budget is post -RDA property tax revenue of $140,340. These revenues are also distributed from the RPTTF.

Library expenditures are anticipated to be $200,270 less than budgeted. Savings are anticipated as a result of the reduction in the part-time salaries budget which was reduced commensurate with the Department’s suspension of in-person programming due to the impacts of the COVID-19 pandemic. The Department will also experience some salary savings due to vacancies in full -time positions. Revenues are anticipated to be $153,600 greater than budgeted overall due to projected growth in property taxes. Overall, the Library’s operations are anticipated to end the fiscal year with net funds available in the amount of $792,170, which is a $353,870 increase over the surplus reflected in the FY 2021/22 Adopted Budget.

FIRE DISTRICT

Fire District Financial Condition. With 50% of the year complete, Fire District operating revenues are at 5 4% of projections (compared to 56% in the prior year) and expenditures are at 50% (compared to 52% in the prior year).

Property tax comprises approximately 88% of the Fire District’s operating revenues (consistent with the prior year) which includes the General Fund, Community Facilities District (CFD) 85-1, and Community Facilities District 88-1.

The first major apportionment of taxes occurred in December. Included in the property tax budget is post -RDA property tax revenues of $13,129,690 . This amount represents a statutory pass -through from the former Redevelopment Agency. The full amount of the pass-through is allocated on a percentage basis between the Fire District’s operating funds and its capital fund based upon the operating budget needs of the Fire District each fiscal year. As noted above, RPTTF revenues is normally received in January and June. However, the January remittance was received a few days early in December.

The Fire District’s expenditures are on track as of midyear , with a few items to note. Due to several retirements of long-term staff that occurred in December 20 21, accumulated leave payouts occurred in January 2022 requiring increased appropriation requests for two divisions in the Fire Fund – Administration ($312,810) and Fire Suppression ($877,840). These leave payouts will be funded by the District’s employee leave payouts reserve.

Library Fund Budget* Y T D Actual* Percent
Revenues 5,981,960$ 3,135,314$ 52%
Expenditures 5,646,273$ 3,231,104$ 57%
*Includes carryover purchase orders.

Fire District Budget* Y T D Actual* Percent
Revenues 47,067,530$ 25,462,834$ 54%
Expenditures 48,006,601$ 24,203,204$ 50%
*Includes carryover purchase orders.

City of Rancho Cucamonga
Midyear Financial Update
Six Month Period Ended December 31, 2021

Two other additional appropriations are being requested to fund additional medical supplies and materials for the District’s ambulance, Alternate Transport Vehicle 174 (AT-174), and to fund additional personal protective gear due to the ongoing COVID -19 Pandemic. The amounts of the additional appropriations are $23,810 and $30,000, respectively.

The allocation of post -RDA property tax revenues between the District’s General Fund and Capital Fund will be adjusted as needed to ensure the Fire District General Fund is balanced at the end of the fiscal year. As of midyear, it is anticipated that slightly less will be needed for the General Fund than was budgeted due to anticipated revenue growth for the District along with anticipated salary savings. Overall, the Fire District will end with a balanced budget by the usage of the Fire Fund’s employee leave payouts reserve in the amount of $1,216,140 and CFD 85 -1’s operating reserve in the amount of $640,010.

SUMMARY

Overall, the City’s operating budget for expenditures is performing well as of midyear and is consistent with the prior year. There are some additional appropriations needed for unanticipated cost increases for the General Fund and the Fire District as discussed above. Generally, revenues are on track or slightly ahead of projections, as a whole, and expenditures are on track with or slightly below historical norms. Both sales tax and TOT revenues are recovering from the COVID-19 pandemic and barring any further interruptions are anticipated to exceed budget.

DATE:March 2, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Elisa C. Cox, Deputy City Manager
Michael Parmer, Assistant to the City Manager
SUBJECT: Consideration of a Resolution Supporting the League of California Cities in its Opposition to Ballot Measure - "The Taxpayer Protection and Government Accountability Act" (Initiative AG# 21-0042A1). (RESOLUTION NO. 2022-033) (CITY)
RECOMMENDATION:

Staff recommends City Council approve Resolution No. 2022-033, supporting the League of California Cities in its opposition to ballot measure - "The Taxpayer Protection and Government Accountability Act" (Initiative AG# 21-0042A1).

BACKGROUND:

On January 4, 2022, the California Business Roundtable filed the Taxpayer Protection and Government Accountability Act (AG# 21-00422A1). The measure is currently being circulated by proponents to qualify it for the November 2022 ballot. The Taxpayer Protection and Government Accountability Act limits voters’ authority, adopts new and stricter rules for raising taxes and fees, and makes it more difficult to hold violators of state and local laws accountable. A previous effort to drastically limit local revenue authority failed to obtain enough signatures to be included on the November 2018 ballot.

The League of California Cities (Cal Cities) and a broad coalition of local governments, labor and public safety leaders, infrastructure advocates, and businesses, strongly oppose this initiative.

ANALYSIS:

Under current law, local revenue authority is limited by both statute and a number of voter- approved constitutional provisions, including those added by Proposition 13 (1978), Proposition 218 (1996), and Proposition 26 (2010). However, the proposed Taxpayer Protection and Government Accountability Act will make it even more difficult for counties, cities, schools, special districts, and the state to raise revenue by any means, placing new and increased restrictions on revenue measures and significantly narrowing exceptions. The fundamental provision of the proposed initiative is to designate every levy, charge, or exaction of any kind imposed by the state or local agency as either a tax or an “exempt charge.” Every revenue measure not defined as an exempt charge would be subject to voter approval requirements, some of which the initiative newly imposes or increases.

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Specifically, the measure seeks to:

Limit Voter Authority and Accountability
Prohibits local voters from providing direction on how local tax dollars should be spent by prohibiting local advisory measures.
Invalidates 2017 Upland decision that allows majority of local voters to pass special taxes.

Future taxes proposed by the Initiative are subject to the same rules as taxes placed on a ballot by a city council. Furthermore, the Initiative would be retroactive in that all tax measures passed between January 2022 and November 2022 would be invalidated unless reenacted within 12 months.

Restrict Local Fee Authority to Provide Local Services
Sets new standard for franchise fees and charges paid for the use of local and state government property. The standard may significantly restrict the amount oil companies, utilities, gas companies, railroads, garbage companies, cable companies, and other corporations pay for the use of local public property.
Except for licensing and other regulatory fees, fees and charges may not exceed the “actual cost” of providing the product or service for which the fee is charged. “Actual cost” is the “minimum amount necessary,” moving from a preponderance of evidence to clear and convincing evidence, and prohibiting a court from considering how a local agency describes or characterizes a revenue measure in making its determination rather the using it as a factor in that determination.

Restrict Authority of State and Local Governments to Issue Fines and Penalties for Violations of Law
Requires voter approval of fines, penalties, and levies for corporations and property owners that violate state and local laws unless a new, undefined adjudicatory process is used to impose the fines and penalties.

Restrict Local Tax Authority to Provide Local Services
Expanding existing taxes (e.g., UUT, use tax, TOT) to new territory (e.g., annexation) or expanding the base (e.g., new utility service) requires voter approval. City charters may not be amended to include a tax or fee. New taxes can be imposed only for a specific time period. Taxes adopted after January 1, 2022, that do not comply with the new rules, are void unless reenacted.
All state taxes require majority voter approval.
Prohibits any surcharge on property tax rate and allocation of property tax to state.

Other Changes
No fee or charge or exaction regulating vehicle miles traveled can be imposed as a condition of property development or occupancy.

FISCAL IMPACT:

The State’s Legislative Analyst’s Office (“LAO”) notes that, “by expanding the definition of taxes and restricting administrative changes to fees, the measure would…lower annual state and local revenues, potentially substantially lower, depending on future actions of the Legislature, local governing bodies, voters, and the courts.” Adoption of this measure could have significant fiscal impact in Rancho Cucamonga and require steep reductions in service levels, result in indeterminable legal and administrative burdens and costs from new and more empowered legal

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challenges and cost tracking requirements, result in the delay and deterrence of municipal annexations and associated impacts on housing and commercial development, and have significant service and infrastructure impacts.

COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

Opposition to the Taxpayer Protection and Government Accountability Act initiative is aligned with the Council’s vision to “build on our success as a world class community, to create an equitable, sustainable, and vibrant city, rich in opportunity for all to thrive” as the measure, if adopted, would have a significant impact on service and infrastructure, including in fire and emergency response, law enforcement, public health, drinking water, sewer sanitation, parks, libraries, public schools, affordable housing, homelessness prevention and mental health services.

ATTACHMENTS:

Attachment 1 – Resolution No. 2022-033
Attachment 2 – Text of the ballot measure

Resolution No. 2022-033 – Page 1 of 1
ATTACHMENT 1
2 1
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RESOLUTION NO. 2022-033

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO

CUCAMONGA, CALIFORNIA, SUPPORTING THE LEAGUE OF
CALIFORNIA CITIES IN ITS OPPOSITION TO BALLOT MEASURE – “THE TAXPAYER PROTECTION AND GOVERNMENT
ACCOUNTABILITY ACT” (INITIATIVE AG# 21-0042A1)
WHEREAS, an association representing California’s wealthiest corporations is behind a deceptive proposition aimed for the November 2022 statewide ballot; and

WHEREAS, the measure creates new constitutional loopholes that allow corporations to pay far less than their fair share for the impacts they have on our communities, including local infrastructure, our environment, water quality, air quality, and natural resources; and WHEREAS, the measure includes undemocratic provisions that would make it more difficult for local voters to pass measures needed to fund local services and infrastructure, and would limit voter input by prohibiting local advisory measures where voters provide direction on how they want their local tax dollars spent; and
WHEREAS, the measure makes it much more difficult for state and local regulators to issue fines and levies on corporations that violate laws intended to protect our environment, public health and safety, and our neighborhoods; and
WHEREAS, the measure puts billions of dollars currently dedicated to state and local services at risk, and could force cuts to public schools, fire and emergency response, law enforcement, public health, parks, libraries, affordable housing, services to support homeless residents, mental health services, and more; and
WHEREAS, the measure would also reduce funding for critical infrastructure like streets and roads, public transportation, drinking water, new schools, sanitation, and utilities.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, that the City of Rancho Cucamonga opposes Initiative AG# 21-0042A1).

NOW, THEREFORE, BE IT FURTHER RESOLVED, that the City of Rancho Cucamonga will join the NO on Initiative 21-0042A1 coalition, a growing coalition of public safety, labor, local government, infrastructure advocates, and other organizations throughout the state.

PASSED, APPROVED, AND ADOPTED this day of 2022.

BELL, McANDREWS & HILTACHK, LLP
Anabel Renteria
Initiative Coordinator
ATTORNEYS AND COUNSEL-ORS AT I.AW
455 C APIT O L MALL , S UITE 600
SACRAMENT O, CALIFOE=INIA 95014
(916) 44;a-7757
FA X [916) 44-;a-7 7 59
www.bmhlaw. com
January 4, 2022
2 1 - 0 0 4 2

RECEIVED
JAN O 4 2022
Office of the Attorney General
State of California

INITIATIVE COORDINATOR

ATTORNEY GENERAL'S OFFICE
PO Box 994255
Sacramento, CA 94244-25550
Re: Initiative 21-0042 - Amendment Number One
Dear Initiative Coordinator:

Pursuant to subdivision (b) of Section 9002 of the Elections Code, enclosed please find Amendment #1 to Initiative No. 21-0042 "The Taxpayer Protection and Government Accountability Act." The amendments are reasonably germane to the theme, purpose or subject of the initiative measure as originally proposed .

I am the proponent of the measure and request that the Attorney General prepare a circulating title and summary of the measure as provided by law, using the amended language.

Thank you for your time and attention processing my request.

Sincerely,
~~
Thomas W. Hiltachk
ATTACHMENT 2

2 1 - 0 0 4 2 Arndt. # /
The Taxpayer Protection and Government Accountability Act [Deleted codified text is denoted in strikeout. Added codified text is denoted by italics and underline.] Section 1. Title
This Act shall be known, and may be cited as, the Taxpayer Protection and Government Accountability Act.

Section 2. Findings and Declarations
(a) Californians are overtaxed. We pay the nation's highest state income tax, sales tax, and gasoline tax. According to the U.S. Census Bureau, California's combined state and local tax burden is the highest in the nation. Despite this, and despite two consecutive years of obscene revenue surpluses, state politicians in 2021 alone introduced legislation to raise more than $234 billion in new and higher taxes and fees.
(b) Taxes are only part of the reason for California's rising cost-of-living crisis. Californians pay billions more in hidden "fees" passed through to consumers in the price they pay for products, services, food, fuel, utilities and housing. Since 2010, government revenue from state and local "fees" has more than doubled.
(c) California's high cost of living not only contributes to the state's skyrocketing rates of poverty and homelessness, they are the pushing working families and job-providing businesses out of the state. The most recent Census showed that California's population dropped for the first time in history, costing us a seat in Congress. In the past four years, nearly 300 major corporations relocated to other states, not counting thousands more small businesses that were forced to move, sell or close. (d) California voters have tried repeatedly, at great expense, to assert control over whether and how taxes and fees are raised. We have enacted a series of measures to make taxes more predictable, to limit what passes as a "fee," to require voter approval, and to guarantee transparency and accountability. These measures include Proposition 13 (1978), Proposition 62 (1986), Proposition 218 (1996), and Proposition 26 (2010).
(e) Contrary to the voters' intent, these measures that were designed to control taxes, spending and accountability , have been weakened and hamstrung by the Legislature, government lawyers, and the courts, making it necessary to pass yet another initiative to close loopholes and reverse hostile court decisions.

Section 3. Statement of Purpose
(a) In enacting this measure, the voters reassert their right to a voice and a vote on new and higher taxes by requiring any new or higher tax to be put before voters for approval. Voters also intend that all fees and other charges are passed or rejected by the voters themselves or a governing body elected by voters and not unelected and unaccountable bureaucrats.
(b) Furthermore, the purpose and intent of the voters in enacting this measure is to increase transparency and accountability over higher taxes and charges by requiring any tax measure placed on the ballot- 1

either at the state or local level-to clearly state the type and rate of any tax, how long it will be in effect , and the use of the revenue generated by the tax.
(c) Furthermore, the purpose and intent of the voters in enacting this measure is to clarify that any new or increased form of state government revenue, by any name or manner of extraction paid directly or indirectly by Californians, shall be authorized only by a vote of the Legislature and signature of the Governor to ensure that the purposes for such charges are broadly supported and transparently debated. (d) Furthermore, the purpose and intent of the voters in enacting this measure is also to ensure that taxpayers have the right and ability to effectively balance new or increased taxes and other charges with the rapidly increasing costs Californians are already paying for housing, food, childcare, gasoline, energy , healthcare, education, and other basic costs of living, and to further protect the existing constitutional limit on property taxes and ensure that the revenue from such taxes remains local, without changing or superseding existing constitutional provisions contained in Section 1{c) of Article XIII A. (e) In enacting this measure, the voters also additionally intend to reverse loopholes in the legislative two­ thirds vote and voter approval requirements for government revenue increases created by the courts includin g, but not limited to, Cannabis Coalition v. City of Upland, Chamber of Commerce v. Air Resources Board, Schmeer v. Los Angeles County, Johnson v. County of Mendocino, Citizens Assn. of Sunset Beach v.

Orange County Local Agency Formation Commission, and Wilde v. City of Dunsmuir.

Section 4. Section 3 of Article XIII A of the California Constitution is amended to read:

Sec. 3(a} Every levy, charge. or exaction of any kind imposed by state law is either a tax or an exempt charge.
illlJ1l ~ Any change in state statute Jaw which results in any taxpayer paying a new or higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature , and submitted to the electorate and approved by a maiority vote, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property, may be imposed. Each Act shall include:
(A) A specific duration of time that the tax will be imposed and an estimate of the annual amount expected to be derived from the tax.
(BJ A specific and legally binding and enforceable limitation on how the revenue from the tax can be spent.

If the revenue from the tax can be spent for unrestricted general revenue purposes. then a statement that the tax revenue can be spent for "unrestricted general revenue purposes" shall be included in a separate, stand-alone section. Any proposed change to the use of the revenue from the tax shall be adopted by a separate act that is passed by not less than two-thirds of all members elected to each of the two houses of the Legislature and submitted to the electorate and approved by a maiority vote. (2) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall. for each measure providing for the imposition of a tax, including a measure proposed by an elector pursuant to Article II, include:
{A) The type and amount or rate of the tax;
(BJ The duration of the tax: and
2

(CJ The use of the revenue derived from the tax.
(c} Any change in state law which results in any taxpayer paying a new or higher exempt charge must be imposed by an act passed by each of the two houses of the Legislature. Each act shall specify the type of exempt charge as provided in subdivision (e ), and the amount or rate of the exempt charge to be imposed.

Ml._fbt As used in this section and in Section 9 of Article II, "tax" means every aA1f levy, charge, or exaction of any kind imposed by the State state law that is not an exempt charge. e1<eept the follo•Ning:
(e) As used in this section. "exempt charge" means only the following:
(1) a el:iarge imposes fer a s1=1eeifie eenefit eonferreEl or pri'+'ilege granteEl aireetly to tl:ie 13ayor tl:iat is not 1=1ro>viaeEl to tl:iose not et:iargeEI, anEI whiel:i aoes not e1<ceeEl tl:ie reasonal3Ie costs to tl:ie State of eonferring the benefit or granting the pri¥ilege to the 1=1a¥OF.
ill {-2+ A reasonable charge irnposeEl for 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 rnasonable actual costs to the State of providing the service or product to the payor. f.11 ~ A charge in,poseEl for the reasonable regulatory costs to the State incident to issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof. (3) A levy, charge. or exaction collected from local units of government. health care providers or health care service plans that is primarily used by the State of California for the purposes of increasing reimbursement rates or payments under the Medi-Cal program, and the revenues of which are primarily used to finance the non-federal portion of Medi-Cal medical assistance expenditures. (4) A reasonable charge iR'l13oseEl for entrance to or use of state property, or the purchase. rental, or lease of state property, except charges governed by Section 15 of Article XI. (5} A fine, or penalty, or other monetary el:large including any applicable interest for nonpayment thereot imposed by the judicial branch of government or the State, as a result of a state administrative enforcement agency pursuant to adiudicatorv due process, to punish a violation of law. (6} A levy, charge, assessment, or exaction collected for the promotion of California tourism pursuant to Chapter 1 (commencing with Section 13995) of Part 4.7 of Division 3 of Title 2 of the Government Code. flL~Any tax or exempt charge adopted after January 1, 2022 ~, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted B'l the begislatuFe anel signea into law ey tl:ie <iio¥ernoF in compliance with the requirements of this section. [gl[.JlJG:} The State bears the burden of proving by a preponEleranee oftl:le clear and convincing evidence that a levy, charge, or other exaction is an exempt charge and not a tax. The State bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. ,tR-a-t tl:ie amouRt is RO n,ore tl:ian neeessary to cover the reasonable costs of the go•.•emn,ental actii,•i:t>,• ane 3

that the manner in •Nhiel.:i these cests are allecated ts a pa·1er bear a fair er reasenable relatienshi13 ts the 13a·1or's b1:1relens on, or benefits reeei11eel from, the go•.ieFRmental actit.iit'( (2) The retention ofrevenue by, or the payment to. a non-governmental entity ofa levv. charge, or exaction of any kind imposed by state law, shall not be a factor in determining whether the levy. charge, or exaction is a tax or exempt charge.
(3) The characterization of a levy, charge, or exaction of any kind as being voluntary, or paid in exchange for a benefit, privilege, allowance, authorization, or asset, shall not be a factor in determining whether the levy, charge, or exaction is a tax or an exempt charge. /4} The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge. (h) As used in this section:
(1) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor, and {ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including, but not limited to taxes, other exempt charges, grants, and state or federal funds received to provide such service or product.
(2) "Extend" includes, but is not limited to, doing any of the following with respect to a tax or exempt charge: lengthening its duration. delaying or eliminating its expiration, expanding its application to a new territory or class ofpayor, or expanding the base to which its rate is applied. (3) "Impose" means adopt, enact, reenact, create, establish, collect, increase or extend. (4) "State law" includes, but is not limited to. any state statute, state regulation, state executive order. state resolution, state ruling, state opinion Jetter, or other legal authority or interpretation adopted, enacted. enforced, issued, or implemented by the legislative or executive branches of state government. "State law" does not include actions taken by the Regents of the University of California, Trustees of the California State University, or the Board of Governors of the California Community Colleges.

Section 5. Section 1 of Article XIII C of the California Constitution is amended, to read:

Sec. 1. Definitions. As used in this article:
{a) "Actual cost" of providing a service or product means: (i) the minimum amount necessary to reimburse the government for the cost of providing the service or product to the payor. and {ii) where the amount charged is not used by the government for any purpose other than reimbursing that cost. In computing "actual cost" the maximum amount that may be imposed is the actual cost less all other sources of revenue including, but not limited to taxes. other exempt charges, grants, and state or federal funds received to provide such service or product.
(b) "Extend" includes, but is not limited to. doing any of the following with respect to a tax. exempt charge, or Article XIII D assessment. fee, or charge: lengthening its duration, delaying or eliminating its expiration. expanding its application to a new territory or class of payor, or expanding the base to which its rate is applied.
4

.lfl..W
11 General tax" means any tax imposed for general governmental purposes. (d} "Impose" means adopt, enact, reenact, create, establish, collect, increase, or extend. {clJb} "Local government" means any county, city, city and county, including a charter city or county, any special district, or any other local or regional governmental entity, or an elector pursuant to Article fl or the initiative power provided by a charter or statute . (f) "Local law" includes. but is not limited to, any ordinance, resolution, regulation. ruling, opinion letter, or other legal authority or interpretation adopted, enacted, enforced, issued, or implemented by a local government.
{gl_{t} "Special district" means an agency of the State, formed pursuant to general law or a special act, for the local performance of governmental or proprietary functions with limited geographic boundaries including, but not limited to, school districts and redevelopment agencies. f11L{d} "Special tax" means any tax imposed for specific purposes, including a tax imposed for specific purposes, which is placed into a general fund.
111 i@} As used in this article, and in Section 9 of Article II, "tax" means every aRV-levy, charge, or exaction of any kind, imposed by a local go,;ernmeRt law that is not an exempt charge., exeept tl=le fellowiRg:
(i) As used in this section, "exempt charge" means only the following:
(1) A cl=large imposeel fer a speeifie beAefit eoAferreel or pri,;ilege graAteel eliFeetl')' to tl=le pa1,ior tl=lat is Rot pre1,•ieleel to these Rot ehargea, aA£l which £lees Rot exeeeel tl=le reaseAable costs to tl=le loeal gm,·ernFAeAt of conferriAg the beAefit or graAting tl:1e pri¥ilege.
ill R} A reasonable charge imposes for a specific local government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasoAable actual costs to the local government of providing the service or product. fl1 WA charge im13ose£l for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof.

W {4t A reasonable charge imposeel for entrance to or use of local government property, or the purchase, rental, or lease of local government property.

Ml. fSt A fine, or penalty, or other FAOA@tar,· eharge including any applicable interest for nonpayment thereat imposed by the judicial branch of government or a local government administrative enforcement agency pursuant to adiudicatorv due process, as a res1,1lt of to punish a violation of law. ill -f6t A charge imposed as a condition of property development. No levv, charge, or exaction regulating or related to vehicle miles traveled may be imposed as a condition of property development or occupancy. f.i1 f7t An AssessFAeRts a Rel property relate el fees assessment. fee. or charge imJ;1oseel iA aeeoraanee witl=l the pro¥isio A5 of subject to Article XI 11 D, or an assessment imposed upon a business in a tourism marketing district, a parking and business improvement area, or a property and business improvement district. 5

(7) A charge imposed for a specific health care service provided directly to the payor and that is not provided to those not charged. and which does not exceed the reasonable costs to the local government of providing the health care service. As used in this paragraph, a "health care service" means a service licensed or exempt from licensure by the state pursuant to Chapters 1. 1.3, or 2 of Division 2 of the Health and Safety Code.

The local government bears the b1:1rden of proving by a preponderance of the e .. ·ielence that a lew, charge, or other exaction is not a ta1<, that the amo1:1nt is no more than necessaPJ' to cover the reasonable costs of the go•,ernfflental acti•.«ity anel that tJ:ie manner in which those costs are allocateel to a pa•ror bear a fair or reasonable relationship to the pa•ror's blslrdens on, or bene:fits receiveel from, the go1a1ernmental acfa•ity.

Section 6. Section 2 of Article XIII C of the California Constitution is amended to read :

Sec. 2. Local Government Tax Limitation. Notwithstanding any other provision of this Constitution:
(a) Every levy. charge. or exaction of any kind imposed by local law is either a tax or an exempt charge. All taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes. (b) No local Jaw go,.·ernment whether proposed by the governing body or by an elector, may impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote. A general tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. The election required by this subdivision shall be consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body. (c) An•r general tax imposed, el<tended, or increaseel, •.-.iitho1:1t •.·oter approval, lay any local go,.·ernment on or after Janlslary 1, 1995, ana prior ta the effecti,.·e date of this article, shall contin1:1e to be imposed only if appro,.·ea b1• a majority vote of the voters voting in an election OR the issye of the in:iposition, whicl::i election sl::iall be l::ield witl::iin t•Ne 1•ears ef the effectii.ie date of this article and in com13liance with slslbdi\·isien (b}. {El) No local law government. whether proposed by the governing body or by an elector. may impose, eMteRd, er increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote. A special tax shall not be deemed to have been increased if it is imposed at a rate not higher than the maximum rate so approved. {d) The title and summary and ballot label or question required for a measure pursuant to the Elections Code shall. for each measure providing for the imposition of a tax, include:
(1) The type and amount or rate of the tax;
(2) the duration of the tax; and
(3) The use of the revenue derived from the tax. If the proposed tax is a general tax. the phrase "for general government use" shall be required, and no advisory measure may appear on the same ballot that would indicate that the revenue from the general tax will. could. or should be used for a specific purpose. (e) Only the governing body of a local government. other than an elector pursuant to Article II or the initiative power provided by a charter or statute. shall have the authority to impose any exempt charge.

The governing body shall impose an exempt charge by an ordinance specifying the type of exempt charge 6

as provided in Section l(i) and the amount or rate of the exempt charge to be imposed. and passed by the governing body. This subdivision shall not apply to charges specified in paragraph (7) of subdivision (i) of Section 1.
ff) No amendment to a Charter which provides for the imposition, extension, or increase of a tax or exempt charge shall be submitted to or approved by the electors. nor shall any such amendment to a Charter hereafter submitted to or approved by the electors become effective for any purpose. (q) Any tax or exempt charge adopted after January 1, 2022, but prior to the effective date of this act, that was not adopted in compliance with the requirements of this section is void 12 months after the effective date of this act unless the tax or exempt charge is reenacted in compliance with the requirements of this section.
{h)(1) The focal government bears the burden of proving by clear and convincing evidence that a levy, charge or exaction is an exempt charge and not a tax. The local government bears the burden of proving by clear and convincing evidence that the amount of the exempt charge is reasonable and that the amount charged does not exceed the actual cost of providing the service or product to the payor. (2} The retention of revenue by, or the payment to, a non-governmental entity of a levy. charge, or exaction of any kind imposed by a local law, shall not be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge.
(3) The characterization of a levy. charge. or exaction of any kind imposed by a local law as being paid in exchange for a benefit. privilege, allowance, authorization, or asset, shall not be factors in determining whether the levy, charge, or exaction is a tax or an exempt charge. (4) The use of revenue derived from the levy, charge or exaction shall be a factor in determining whether the levy, charge, or exaction is a tax or exempt charge.

Section 7. Section 3 of Article XIII D of the California Constitution is amended, to read:

Sec. 3. Property Taxes, Assessments, Fees and Charges Limited (a) No tax, assessment, fee, 6f charge, or surcharge, including a surcharge based on the value ofpropertv, shall be assessed 13y a Ry ageRC'f upon any parcel of property or upon any person as an incident of property ownership except:
(1) The ad valorem property tax impeseEI p1::1rsYaRt te described in Section 1(a) of Article XIII and Section 1/a) of Article XIII A, and described and enacted pursuant to the voter approval requirement in Section 1/b) Q[Article XII I A.
(2) Any special non-ad valorem tax receiving a two-thirds vote of qualified electors pursuant to Section 4 of Article XIII A, or after receiving a two-thirds vote of those authorized to vote in a community facilities district by the Legislature pursuant to statute as it existed on December 31, 2021. (3) Assessments as provided by this article.
(4) Fees or charges for property related services as provided by this article. 7

(b) For purposes of this article, fees for the provision of electrical or gas service shall not be deemed charges or fees imposed as an incident of property ownership.

Section 8. Sections 1 and 14 of Article XIII are amended to read:

Sec. 1 Unless otherwise provided by this Constitution or the laws of the United States:
(a) All property is taxable and shall be assessed at the same percentage of fair market value. When a value standard other than fair market value is prescribed by this Constitution or by statute authorized by this Constitution, the same percentage shall be applied to determine the assessed value. The value to which the percentage is applied, whether it be the fair market value or not, shall be known for property tax purposes as the full value.
(b) All property so assessed shall be taxed in proportion to its full value. (c) All proceeds from the taxation of property shall be apportioned according to law to the districts within the counties.

Sec. 14. All property taxed by state or local government shall be assessed in the county, city, and district in which it is situated. Notwithstanding any other provision of/aw, such state or local property taxes shall be apportioned according to law to the districts within the counties.

Section 9. General Provisions
A. This Act shall be liberally construed in order to effectuate its purposes.

B. (1) In the event that this initiative measure and another initiative measure or measures relating to state or local requirements for the imposition, adoption, creation, or establishment of taxes, charges, and other revenue measures shall appear on the same statewide election ballot, the other initiative measure or measures shall be deemed to be in conflict with this measure. In the event that this initiative measure receives a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions ofthe other initiative measure or measures shall be null and void. (2) In furtherance of this provision, the voters hereby declare that this measure conflicts with the provisions of the "Housing Affordabili ty and Tax Cut Act of 2022" and "The Tax Cut and Housing Affordability Act," both of which would impose a new state property tax (called a "surcharge") on certain real property, and where the revenue derived from the tax is provided to the State, rather than retained in the county in which the property is situated and for the use of the county and cities and districts within the county, in direct violation of the provisions of this initiative. (3) If this initiative measure is approved by the voters, but superseded in whole or in part by any other conflicting initiative measure approved by the voters at the same election, and such conflicting initiative is later held invalid, this measure shall be self-executing and given full force and effect.

C. The provisions of this Act are severable. If any portion, section, subdivision, paragraph, clause, sentence, phrase, word, or application of this Act is for any reason held to be invalid by a decision of any court of competent jurisdiction, that decision shall not affect the validity of the remaining portions of this Act. The People of the State of California hereby declare that they would have adopted this Act and each and every portion, section, subdivision, paragraph, clause, sentence, phrase, word, and application not 8

declared invalid or unconstitutional without regard to whether any portion of this Act or application thereof would be subsequently declared invalid.

D. If this Act is approved by the voters of the State of California and thereafter subjected to a legal challenge alleging a violation of state or federal law, and both the Governor and Attorney General refuse to defend this Act, then the following actions shall be taken:
(1) Notwithstanding anything to the contrary contained in Chapter 6 of Part 2 of Division 3 ofTitle 2 of the Government Code or any other law, the Attorney General shall appoint independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (2) Before appointing or thereafter substituting independent counsel, the Attorney General shall exercise due diligence in determining the qualifications of independent counsel and shall obtain written affirmation from independent counsel that independent counsel will faithfully and vigorously defend this Act. The written affirmation shall be made publicly available upon request. (3) A continuous appropriation is hereby made from the General Fund to the Controller, without regard to fiscal years, in an amount necessary to cover the costs of retaining independent counsel to faithfully and vigorously defend this Act on behalf of the State of California. (4) Nothing in this section shall prohibit the proponents of this Act, or a bona fide taxpayers association, from intervening to defend this Act.
9

DATE:March 2, 2022
TO:Mayor and Members of the City Council
FROM:John R. Gillison, City Manager
INITIATED BY: Elisa Cox, Deputy City Manager
Hope Velarde, Management Analyst I
SUBJECT: Selection of a Delegate for the Southern California Association of Government's (SCAG) General Assembly. (CITY)
RECOMMENDATION:

Staff recommends that the City Council appoint a member to serve as Rancho Cucamonga’s delegate at the upcoming SCAG General Assembly. The Council may also wish to select an alternate delegate if desired, although it is not required.

BACKGROUND:

The Southern California Association of Governments (SCAG) is the nation's largest metropolitan planning organization, representing six counties and 191 cities in an area covering more than 38,000 square miles. SCAG undertakes a variety of planning and policy initiatives to encourage a more sustainable Southern California now and in the future. As the designated Metropolitan Planning Organization, SCAG is mandated by federal and state law to research and draw up plans for transportation, growth management, hazardous materials management, and air quality.

SCAG is governed by the General Assembly which brings together the official representatives of SCAG's membership and helps set the agency's course for the coming year. The General Assembly serves as a forum where policy matters can be identified and addressed. Amendments to SCAG's Bylaws may also be considered at the General Assembly. In addition, members of the General Assembly also vote on SCAG's General Fund budget and SCAG's new President, Vice President and Second Vice President are announced for the upcoming year at this annual event.

ANALYSIS:

This year's Regional Conference and General Assembly will be held in-person on May 5, 2022 in Palm Desert, CA. If a Member City wishes to select a Delegate to participate in the General Assembly, City Council action is required to appoint the Delegate. An Alternate may also be selected, however, it is not required. Each General Assembly Delegate (or Alternate) will be invited to the SCAG's Regional Conference and General Assembly event. If a City has a Council Member that serves as a Regional Council Member on the SCAG Board, that person is automatically the City's delegate, however, if an Alternate is also desired, they will need to be appointed by the City Council. Mayor L. Dennis Michael currently serves as a SCAG Regional Council Member and thus served as the City’s delegate at last year’s SCAG General Assembly.

Delegates and Alternates are required to submit FPPC Form 700 Statement of Economic Interests to the SCAG office upon appointment.

1 1
5 2
FISCAL IMPACT:

None.

COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

Participating in the SCAG General Assembly complements the City Council’s Core Values by intentionally embracing and anticipating the future.

ATTACHMENTS:

None.