Agenda packet — Rancho Cucamonga City Council, July 19, 2023 (part 4 of 4)

____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 9 Fiscal Year 2023/24 ATTACHMENT 13
Definitions of Budget Items
The following definitions describe the costs and expenses included in the District Budget:

Personnel Services: This item includes the costs attributed to the salaries of all full-time and part-time employees dedicated to maintenance of the District improvements. Additionally, this includes benefits available to City employees.

Operations and Maintenance: This item includes the costs of City staff to perform maintenance duties within the boundaries of the District.

Utilities: This item includes the costs to furnish electricity and telephone services, as required, for the operation and maintenance of the street lights, traffic signals, and appurtenant facilities throughout the District.

Assessment Administration: This item includes the cost to all particular departments and staff of the City, and consultants for providing the administration, coordination and management of District services, operations, and incidental expenses related to the District. This item also includes creation of an annual Engineer's Report, resolutions and placing the assessment amounts onto the County tax roll each year, along with responding to any public inquiries and future Proposition 218 balloting proceedings.

General Overhead: This item includes the costs of all central services departments of the City for providing the coordination of District services, inspections, annual bid management, responding to public concerns, public education, accounting, auditing and procedural matters associated with the District. This item also includes an allocation for general City staff time for administrative functions and systems that provide for a functional and operational District within the City's administrative structure.

Capital Outlay: This item includes new improvements to further enhance the level and quality of service provided within the boundaries of the District. This may include installation of safety lights and other large improvements.

Transfer Out - General City Street Lights Fund: This item includes the cost for the replacement and installation of District owned street lights. These costs are incurred in the General City Street Lights Fund and reimbursed by the District.

Other Revenues: This includes other revenues that are not levied through the annual assessments that support the District operations. These other revenues may include: interest earnings and Developer Energizing Fees.

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____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 10 Fiscal Year 2023/24 ATTACHMENT 13

METHOD OF ASSESSMENT
Overview
Pursuant to the 1972 Act and Article XIII D, all parcels that have a special benefit conferred upon them as a result of the maintenance and operation of improvements and services shall be identified, and the proportionate special benefit derived by each identified parcel shall be determined in relationship to the entire costs of the maintenance and operation of improvements. The 1972 Act, permits the establishment of assessment districts for the purpose of providing certain public improvements which include the public lighting facilities, including traffic signals.

Section 22573 of the 1972 Act requires that maintenance assessments must be levied according to benefit rather than according to assessed value. This Section states:

The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefit to be received by each such lot or parcel from the improvements.

The determination of whether or not a lot or parcel will benefit from the improvements shall be made pursuant to the Improvement Act of 1911 (Division 7 commencing with Section 5000) [of the Streets and Highways Code, State of California].

Section 22547 of the 1972 Act also permits the designation of zones of benefit within any individual assessment district if "by reasons or variations in the nature, location, and extent of the improvements, the various areas will receive different degrees of benefit from the improvement".

Article XIII D, Section 4(a) of the California Constitution limits the amount of any assessment to the proportional special benefit conferred on the property. Article XIII D also provides that publicly owned properties must be assessed unless there is clear and convincing evidence that those properties receive no special benefit from the assessment. Exempted from the assessment would be the areas of public streets, public avenues, public lanes, public roads, public drives, public courts, public alleys, public easements and rights-of-ways, public greenbelts and public parkways.

The net amount to be assessed may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels. Proposition 218, approved by the voters in November 1996, requires the City to separate general benefit from special benefit, where only special benefit is assessed.

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____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 11 Fiscal Year 2023/24 ATTACHMENT 13
Special Benefit
The maintenance and servicing of the improvements within the District (which are described in the Description of Improvements and Services Section of this report) are for the benefit of the properties within the District, and as such confer a special and direct benefit to parcels within the District by:
• improving the livability, safety, appearance, and desirability for properties within the boundaries of the District, and
• ensuring that improvements do not reach a state of deterioration or disrepair so as to be materially detrimental to properties within the District, and • providing for safe vehicular and pedestrian access for properties within the District, and • providing beautification and overall enhancement to properties within the District.

The above mentioned items affect the assessed property in a way that is particular and distinct from their effect on other parcels and that real property in general and the public at large do not share. They contribute to a specific enhancement of the properties within the District. Since these improvements were installed and are maintained specifically for the properties within the District; only properties within the District receive a special benefit and are assessed for said maintenance.

General Benefit
In addition to the special benefits received by parcels within the District, there are derivative general benefits that are conferred on parcels outside the boundaries of the District which include:
• the safety and visual enhancement of the area to persons or vehicles that may travel through the District
However, it has been determined that these benefits are derivative and do not provide a direct benefit to parcels outside of the district that are not being assessed.

Method of Assessment Spread
Each of the parcels within the District is deemed to receive special benefit from the improvements. Each parcel that has a special benefit conferred upon it as a result of the maintenance and operation of improvements are identified and the proportionate special benefit derived by each identified parcel is determined in relationship to the entire costs of the maintenance and operation of the improvements.

When the District was formed, Article XIII D and Proposition 218 had not yet been passed.

Upon the passage of Article XIII D and the subsequent passage of the Proposition Omnibus Implementation Act, new rules were put into place. Due to the changes in legal requirements, as

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____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 12 Fiscal Year 2023/24 ATTACHMENT 13
property annexed to the District after the passage of the Assessment Law, the description of the method of assessment became more refined; however, the assessment per parcel has remained the same since Fiscal Year 1996/97. Further, no parcel included in the District formation or annexations prior to when the language was refined, are now being levied differently than they were at the time the District was formed or the parcels were annexed.

To assess special benefit appropriately, it is necessary to relate the different type of parcel improvements to each other. The EBU method of apportionment uses the single-family home as the basic unit of assessment.

A single-family home equals one Equivalent Dwelling Unit (EBU). Every other land-use is converted to EBUs based on an assessment formula that equates to the property's specific development status, type of development (land-use), and size of the property, as compared to a single-family home. The following table provides the weighting factors applied to various land- use types, as assigned by County use code, to determine each parcel's EBU assignment.

Land-Use Equivalent Dwelling Units
Property Type (County Use Code) EBU Value Multiplier
Single Family Residential 1.00 Parcel
Multi-Family Residential 0.50 Unit
Non-Residential 2.00 Acre
The use of the latest County Assessor's Secured Roll shall be the basis for the Property Type determination and units/acreage assignments, unless better data is available to the City. In addition, if any parcel within the District is identified by the County Auditor/Controller to be an invalid parcel number for the current fiscal year, the Property Type and EBU assignment shall be based on the correct parcel number and/or new parcel number(s) County use code and subsequent property information. If a single parcel has changed to multiple parcels, the EBU assignment and assessment amount applied to each of the new parcels will be recalculated rather than spread the proportionate share of the original assessment.

The following table summarizes the Fiscal Year 2023/24 maximum allowable assessment rates for the District:

Property Type (County Use Code)
Maximum
Allowable
Assessment
Rate per EBU
Actual
Asessment Rate
per EBU
Total
Units/Acres Total EBUs
Single Family Residential $28.96 $28.96 2,652.00 2,652.00 Multi-Family Residential 28.96 28.96 5,250.00 2,625.00
Non-Residential 28.96 28.96 234.39 468.78

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____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 13 Fiscal Year 2023/24 ATTACHMENT 13
The total amount of maintenance and incidental costs for maintaining the street lights and traffic signals is assessed to the individual parcels of real property within the District in proportion to the special benefit received by such parcels of real property. The proposed individual assessments are shown on the assessment roll in this report.

ASSESSMENT DIAGRAM
An Assessment Diagram for the District is shown on the following page. The lines and dimensions of each lot or parcel within the District are those lines and dimensions shown on the maps of the Assessor of the County San Bernardino, at the time this report was prepared, and are incorporated by reference herein and made part of this Engineer's Report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 14 Fiscal Year 2023/24 ATTACHMENT 13

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____________________________________________________________________________ Street Lighting Maintenance District No. 4 – City of Rancho Cucamonga 15 Fiscal Year 2023/24 ATTACHMENT 13

ASSESSMENT ROLL AND ANNEXATIONS
Assessment Roll
The assessment roll is a listing of the assessment for Fiscal Year 2023/24 apportioned to each lot or parcel, as shown on the last equalized roll of the Assessor of the County of San Bernardino. The following table summarizes the Fiscal Year 2023/24 actual assessments for the District:

Property Type (County Use Code)
Actual
Assessment
Rate per EBU
Total
Units/Acres Total EBUs Total Assessment
Single Family Residential $28.96 2,652.00 2,652.00 $76,801.92 Multi-Family Residential 28.96 5,250.00 2,625.00 76,020.00 Non-Residential 28.96 234.39 468.78 13,575.87
Totals 8,136.39 5,745.78 $166,397.79
A copy of the full assessment roll is available for review in the City Clerk's office.

Annexations
There are no effective annexations for Fiscal Year 2023/24.

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ATTACHMENT 14
Annual Engineer’s Report
Fiscal Year 2023/24
City of Rancho Cucamonga
Street Lighting Maintenance District No. 5
(Caryn Planned Community)

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CITY OF RANCHO CUCAMONGA
STREET LIGHTING MAINTENANCE DISTRICT NO. 5
(CARYN PLANNED COMMUNITY)
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Phone: 909.477.2700
Fax: 909.477.2845

CITY COUNCIL
L. Dennis Michael, Mayor
Lynne B. Kennedy, Mayor Pro Tem
Ryan A. Hutchison, Council Member
Kristine D. Scott, Council Member
Ashley N. Stickler, Council Member

CITY STAFF
John R. Gillison, City Manager
Elisa Cox, Assistant City Manager
Jason C. Welday, Director of Engineering Services/City Engineer William Wittkopf, Public Works Director
Noah Daniels, Finance Director

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TABLE OF CONTENTS
ENGINEER’S LETTER 1
INTRODUCTION 3
Reason for Assessment 3
Process for Annual Assessment 3
PLANS AND SPECIFICATIONS 4
Description of the Boundaries of the District 4
Description of Improvements and Services 4
Map of Improvements 5
ESTIMATE OF COSTS 7
District Budget 7
Definitions of Budget Items 9
METHOD OF ASSESSMENT 10
Overview 10
Special Benefit 11
General Benefit 11
Method of Assessment Spread 11
ASSESSMENT DIAGRAM 13
ASSESSMENT ROLL AND ANNEXATIONS 15
Assessment Roll 15
Annexations 15

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 1 Fiscal Year 2023/24 ATTACHMENT 14
ENGINEER’S LETTER
WHEREAS, on June 7, 2023, the City Council of Rancho Cucamonga (the “City”), under the Landscaping and Lighting Act of 1972 (the “1972 Act”) adopted its Resolution No. 2023-058, a Resolution Initiating Proceedings for the Levy of Annual Assessments for Street Light Maintenance District No. 5 (Caryn Planned Community) (the “District”); and WHEREAS, the Resolution Initiating Proceedings directed the City Engineer to prepare and file an Annual Engineer’s Report for Fiscal Year 2023/24 pursuant to the requirements of the 1972 Act. The Annual Engineer’s Report presents the plans and specifications describing the general nature, location and extent of the improvements to be maintained, an estimate of the costs of the maintenance, operations and servicing of the improvements for the District for the referenced fiscal year, a diagram for the District, showing the area and properties proposed to be assessed, and an assessment of the estimated costs of the maintenance, operations and servicing of the improvements, assessing the net amount upon all assessable lots and/or parcels within the District in proportion to the special benefit received; and NOW THEREFORE, the following assessment is proposed to be authorized in order to pay for the acquisition of street lights, the installation of Light Emitting Diode (LED) street lighting, and estimated costs of maintenance, operation and servicing of the improvements to be paid by the assessable real property within the boundaries of the District in proportion to the special benefit received. The following table summarizes the proposed assessment.

Fiscal Year
2023/24 Budget
Expenditures
Operations and Maintenance 42,100
Transfer Out 9,560
Total Expenditures Budget 51,660
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 44,150 Anticipated Prior Year Delinquencies Collection 490
Subtotal - Taxes 44,640
Transfer In - General Fund 19,940
Total Revenues Budget 64,580
Contribution to/(Use of) Fund Balance 12,920$
Total District EBU Count 1,276.00
Actual Assessment per EBU 34.60$
Maximum Allowable Assessment per EBU 34.60$

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 2 Fiscal Year 2023/24 ATTACHMENT 14
In making the assessments contained herein pursuant to the 1972 Act:

1. I have identified all parcels which will have a special benefit conferred upon them from the improvement described in the Special Benefit Section of this Annual Engineer’s Report (the “Specially Benefited Parcels”). For particulars as to the identification of said parcels, reference is made to the Assessment Diagram, a copy of which is included in this Annual Engineer’s Report.

2. I have evaluated the costs and expenses of the improvements upon the Specially Benefitted Parcels. In making such evaluation:
a. The proportionate special benefit derived by each Specially Benefited Parcel from the improvements was determined in relationship to the entirety of the maintenance costs of the improvements;
b. No assessment has been imposed on any Specially Benefited Parcel which exceeds the reasonable cost of the proportional special benefit conferred on such parcel from the improvements; and
c. Any general benefits from the improvements have been separated from the special benefits and only special benefits have been assessed.

I, the undersigned, respectfully submit the enclosed Annual Engineer’s Report and, to the best of my knowledge, information and belief, I certify that the Annual Engineer’s Report, and Assessment Diagram included herein have been prepared and computed in accordance with the order of the City Council of the City of Rancho Cucamonga and the Assessment Law.

Jason C. Welday
Director of Engineering Services/City Engineer

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 3 Fiscal Year 2023/24 ATTACHMENT 14

INTRODUCTION
Reason for Assessment
Approval of the assessment covered by this Engineer’s Report will generate the revenue necessary to:

Provide for the maintenance and servicing of the improvements described in this Engineer’s Report. Maintenance may include but is not limited to, all of the following: the upkeep, repair, removal or replacement of all or any part of any improvement. Servicing means the furnishing of electricity, gas or other illuminating energy for the lighting or appurtenant facilities. This shall also include material, vehicle, equipment, capital improvements, the installation of LED street lighting, and administrative costs associated with the annual administration and operation of the District.

Process for Annual Assessment
The City cannot levy and collect annual assessments within the District without complying with the procedures specified in the 1972 Act. On an annual basis, an Engineer’s Report must be prepared which contains a full and detailed description of the improvements, the boundaries of the District and any zones therein, and the proposed assessments upon assessable lots and parcels of land within the District.

The City Council must also adopt a resolution of intention which:
• Declares the intention of the City Council to levy and collect assessments within the District for the fiscal year stated therein.
• Generally describes the existing and proposed improvements and any substantial changes proposed to be made in existing improvements.
• Refers to the District by its distinctive designation and indicate the general location of the District.
• Refers to the Engineer’s Report, on file with the City Clerk, for a full and detailed description of the improvements, the boundaries of the District and any zones therein, and the proposed assessments upon assessable lots and parcels of land within the District.
• Gives notice of the time and place for public hearing by the City Council on the levy of the proposed assessment.
• States whether the assessment is proposed to increase from the previous year.

If the assessments are to be levied in the same or lesser amounts than the maximum assessment amount approved, the City Clerk shall give notice by causing the resolution of intention to be published. Any interested person may, prior to the conclusion of the public hearing, file a written protest which shall state all grounds of objection. The protest shall contain a description sufficient to identify the property owned by the property owner filing the protest.

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 4 Fiscal Year 2023/24 ATTACHMENT 14
During the course or upon conclusion of the hearing, the City Council may order changes in any of the matters provided in the report, including the improvements, to the zones within the District, and the proposed diagram or the proposed assessment.

The City Council, upon conclusion of the public hearing must then adopt a resolution confirming the diagram and assessment, either as originally proposed or as changed by it. The adoption of the resolution shall constitute the levy of an assessment for the fiscal year referred to in the assessment.

If the assessment to be levied exceeds the maximum assessment amount previously approved, the City must comply with the procedures specified in Article XIII D and Proposition 218. The voters in the State of California in November 1996 added Article XIII D to the California Constitution imposing, among other requirements, the necessity for the City to conduct an assessment ballot procedure to enable the owners of each property on which assessments are proposed to be enacted or increased, the opportunity to express their support for, or opposition to, the proposed assessment or increase in such assessment.

PLANS AND SPECIFICATIONS
The District provides for the administration, maintenance, operations, and servicing of various improvements located within the public right-of-way and dedicated easements within the boundaries of the District.

Description of the Boundaries of the District
The District is located in the City of Rancho Cucamonga. The boundaries of the District are generally described as that area located north of the 210 Freeway, south of Banyan St, west of Rochester Ave and east of Milliken Ave, also known as the Caryn Planned Community. The boundaries also include Tract No. 13835 east of Rochester Ave and Tracts No. 13748, 13857 and 13858 west of Milliken Ave.

Reference is also made to the Assessment Diagram included in this Report.

Description of Improvements and Services
The improvements are the maintenance and servicing of street lights, traffic signals and appurtenant facilities throughout the District. The maintenance and servicing includes, but is not limited to, furnishing electric current for public lighting facilities including street lights and traffic signals, and associated appurtenant facilities. Services include personnel, materials, contracting services, utilities, and all necessary costs associated with the maintenance, replacement and repair required to keep the improvements in operational and satisfactory condition. In addition, it is the City's intention to continue to use cost effective materials, in order to lower expenses of the District. In Fiscal Year 2017/18, the acquisition by the City of the street lights and installation of LED street lighting specially benefiting the properties within the District has been added to the improvements.

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 5 Fiscal Year 2023/24 ATTACHMENT 14
Map of Improvements
The following page shows the map of street light and traffic signal improvements to be maintained using District funds.

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 6 Fiscal Year 2023/24 ATTACHMENT 14

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 7 Fiscal Year 2023/24 ATTACHMENT 14

ESTIMATE OF COSTS
The estimated costs of administration, maintenance, operations, and servicing the improvements as described in the Plans and Specifications are summarized below. Each year, as part of the District levy calculation process, the costs and expenses are reviewed and the annual costs are projected for the following fiscal year.

District Budget
Fiscal Year
2023/24 Budget
Expenditures
Operations and Maintenance:

Contract Services 1,770
Utilities:

Electric Utilities 32,560
Assessment Administration 4,570
Admin./General Overhead 3,200
Subtotal - Operations and Maintenance 42,100
Transfer Out - General Street Lights Fund 9,560
Total Expenditures Budget 51,660$
Fiscal Year
2023/24 Budget
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 44,150$ Anticipated Prior Year Delinquencies Collection 490
Subtotal - Taxes 44,640
Transfer In
Transfer In - General Fund 19,940
Total Revenues Budget 64,580
Contribution to/(Use of) Fund Balance 12,920$
Total Gross Estimated Assessments 44,149.60$
Total District EBU Count 1,276.00
Actual Assessment per EBU - Fiscal Year 2023/24 34.60$
Maximum Allowable Assessment per EBU - Fiscal Year 2023/24 34.60$

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 8 Fiscal Year 2023/24 ATTACHMENT 14
The maximum allowable assessment per Equivalent Benefit Unit (EBU) listed in the District budget above, is the amount which was approved in Fiscal Year 1996/97 and subsequent District annexations. Each year, prior to the assessments being placed on the tax roll, the City will review the budget and determine the amount needed to maintain the improvements for the upcoming fiscal year. The actual assessment per EBU will be based on the total amount of funds needed to maintain the improvements in a satisfactory and healthy condition. The actual assessment amount may be lower than the maximum allowable assessment; however, it may not exceed the maximum unless the increase is approved by the property owners in accordance with Proposition 218.

It is the intent of the City to maintain an Operating Reserve which shall not exceed the estimated costs of maintenance and servicing of the improvements prior to December 10 of the fiscal year, or when the City expects to receive its apportionment of special assessments and tax collections from the County, whichever is later. The reserve balance information for the District is as follows:

Operating Reserve
Estimated Reserve Fund Balance, June 30, 2023 (94,631)$ Contribution to/(Use of) Reserve - Fiscal Year 2023/24 12,920 Estimated Reserve Fund Balance, June 30, 2024 (81,711)$

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 9 Fiscal Year 2023/24 ATTACHMENT 14
Definitions of Budget Items
The following definitions describe the costs and expenses included in the District Budget:

Operations and Maintenance: This item includes the costs of City staff to perform maintenance duties within the boundaries of the District.

Debt Service: This item includes the repayment of interest and principal to the City Capital Reserve Fund for the acquisition of street lights and installation of LED street lighting within the District. In Fiscal Year 2023/24, the debt service has been suspended due to the structural operating deficit and will be routinely monitored.

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 10 Fiscal Year 2023/24 ATTACHMENT 14
Other Revenues: This includes other revenues that are not levied through the annual assessments that support the District operations. These other revenues may include: interest earnings and Developer Energizing Fees.

Section 22573 of the 1972 Act requires that maintenance assessments must be levied according to benefit rather than according to assessed value. This Section states:

The net amount to be assessed may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels. Proposition 218, approved by

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 11 Fiscal Year 2023/24 ATTACHMENT 14
the voters in November 1996, requires the City to separate general benefit from special benefit, where only special benefit is assessed.

Special Benefit
The maintenance and servicing of the improvements within the District (which are described in the Description of Improvements and Services Section of this report) are for the benefit of the properties within the District, and as such confer a special and direct benefit to parcels within the District by:
• improving the livability, safety, appearance, and desirability for properties within the boundaries of the District, and
• ensuring that improvements do not reach a state of deterioration or disrepair so as to be materially detrimental to properties within the District, and • providing for safe vehicular and pedestrian access for properties within the District, and • providing beautification and overall enhancement to properties within the District.

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derived by each identified parcel is determined in relationship to the entire costs of the maintenance and operation of the improvements.

When the District was formed, Article XIII D and Proposition 218 had not yet been passed.

Upon the passage of Article XIII D and the subsequent passage of the Proposition Omnibus Implementation Act, new rules were put into place. Due to the changes in legal requirements, as property annexed to the District after the passage of the Assessment Law, the description of the method of assessment became more refined, however, the assessment per parcel has remained the same since Fiscal Year 1996/97. Further, no parcel included in the District formation or annexations prior to when the language was refined, are now being levied differently than they were at the time the District was formed or the parcels were annexed.

A single-family home equals one EBU. The following table provides the weighting factors applied by land-use types, as assigned by County use code, to determine each parcel's EBU assignment.

Land-Use Equivalent Dwelling Units
Property Type (County Use Code) EBU Value Multiplier
Single Family Residential 1.00 Parcel
The use of the latest County Assessor's Secured Roll shall be the basis for the Property Type determination and units/acreage assignments, unless better data is available to the City. In addition, if any parcel within the District is identified by the County Auditor/Controller to be an invalid parcel number for the current fiscal year, the Property Type and EBU assignment shall be based on the correct parcel number and/or new parcel number(s) County use code and subsequent property information. If a single parcel has changed to multiple parcels, the EBU assignment and assessment amount applied to each of the new parcels will be recalculated rather than spread the proportionate share of the original assessment.

The following table summarizes the Fiscal Year 2023/24 maximum allowable assessment rates for the District:

Property Type (County Use Code)
Maximum
Allowable
Assessment
Rate per EBU
Actual
Asessment Rate
per EBU
Total
Units/Acres Total EBUs
Single Family Residential $34.60 $34.60 1,276.00 1,276.00

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____________________________________________________________________________ Street Lighting Maintenance District No. 5 – City of Rancho Cucamonga 13 Fiscal Year 2023/24 ATTACHMENT 14
The total amount of maintenance and incidental costs for maintaining the street lights and traffic signals is assessed to the individual parcels of real property within the District in proportion to the special benefit received by such parcels of real property. The proposed individual assessments are shown on the assessment roll in this report.

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Property Type (County Use Code)
Actual
Assessment
Rate per EBU
Total
Units/Acres Total EBUs Total Assessment
Single Family Residential $34.60 1,276.00 1,276.00 $44,149.60 Totals 1,276.00 1,276.00 $44,149.60
A copy of the full assessment roll is available for review in the City Clerk's office.

Annexations
There are no effective annexations for Fiscal Year 2023/24.

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ATTACHMENT 15
Annual Engineer’s Report
Fiscal Year 2023/24
City of Rancho Cucamonga
Street Lighting Maintenance District No. 6
(Commercial Industrial)

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CITY OF RANCHO CUCAMONGA
STREET LIGHTING MAINTENANCE DISTRICT NO. 6
(COMMERCIAL INDUSTRIAL)
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Phone: 909.477.2700
Fax: 909.477.2845

CITY COUNCIL
L. Dennis Michael, Mayor
Lynne B. Kennedy, Mayor Pro Tem
Ryan A. Hutchison, Council Member
Kristine D. Scott, Council Member
Ashley N. Stickler, Council Member

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 1 Fiscal Year 2023/24 ATTACHMENT 15
ENGINEER’S LETTER
WHEREAS, on June 7, 2023, the City Council of Rancho Cucamonga (the “City”), under the Landscaping and Lighting Act of 1972 (the “1972 Act”) adopted its Resolution No. 2023-058, a Resolution Initiating Proceedings for the Levy of Annual Assessments for Street Light Maintenance District No. 6 (Commercial Industrial) (the “District”); and WHEREAS, the Resolution Initiating Proceedings directed the City Engineer to prepare and file an Annual Engineer’s Report for Fiscal Year 2023/24 pursuant to the requirements of the 1972 Act. The Annual Engineer’s Report presents the plans and specifications describing the general nature, location and extent of the improvements to be maintained, an estimate of the costs of the maintenance, operations and servicing of the improvements for the District for the referenced fiscal year, a diagram for the District, showing the area and properties proposed to be assessed, and an assessment of the estimated costs of the maintenance, operations and servicing of the improvements, assessing the net amount upon all assessable lots and/or parcels within the District in proportion to the special benefit received; and NOW THEREFORE, the following assessment is proposed to be authorized in order to pay for the acquisition of street lights, the installation of Light Emitting Diode (LED) street lighting, and estimated costs of maintenance, operation and servicing of the improvements to be paid by the assessable real property within the boundaries of the District in proportion to the special benefit received. The following table summarizes the proposed assessment.

Fiscal Year
2023/24 Budget
Expenditures
Operations and Maintenance 71,830$
Transfer Out 14,980
Total Expenditures Budget 86,810
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 132,360 Anticipated Prior Year Delinquencies Collection 1,610
Subtotal - Taxes 133,970
Other Revenues 1,170
Transfer In - CFD Street Lighting Services 6,610
Total Revenues Budget 141,750
Contribution to/(Use of) Fund Balance 54,940$
Total District EBU Count 2,574.91
Actual Assessment per EBU 51.40$
Maximum Allowable Assessment per EBU 51.40$

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 2 Fiscal Year 2023/24 ATTACHMENT 15
In making the assessments contained herein pursuant to the 1972 Act:

2. I have evaluated the costs and expenses of the improvements upon the Specially Benefited Parcels. In making such evaluation:
a. The proportionate special benefit derived by each Specially Benefited Parcel from the improvements was determined in relationship to the entirety of the maintenance costs of the improvements;
b. No assessment has been imposed on any Specially Benefited Parcel which exceeds the reasonable cost of the proportional special benefit conferred on such parcel from the improvements; and
c. Any general benefits from the improvements have been separated from the special benefits and only special benefits have been assessed.

I, the undersigned, respectfully submit the enclosed Annual Engineer’s Report and, to the best of my knowledge, information and belief, I certify that the Annual Engineer’s Report and Assessment Diagram included herein have been prepared and computed in accordance with the order of the City Council of the City of Rancho Cucamonga and the Assessment Law.

Jason C. Welday
Director of Engineering Services/City Engineer

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 3 Fiscal Year 2023/24 ATTACHMENT 15

INTRODUCTION
Reason for Assessment
Approval of the assessment covered by this Engineer’s Report will generate the revenue necessary to:

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 4 Fiscal Year 2023/24 ATTACHMENT 15
During the course or upon conclusion of the hearing, the City Council may order changes in any of the matters provided in the report, including the improvements, to the zones within the District, and the proposed diagram or the proposed assessment.

If the assessment to be levied exceeds the maximum assessment amount previously approved, the City must comply with the procedures specified in Article XIII D and Proposition 218. The voters in the State of California in November 1996 added Article XIII D to the California Constitution imposing, among other requirements, the necessity for the City to conduct an assessment ballot procedure to enable the owners of each property on which assessments are proposed to be enacted or increased, the opportunity to, express their support for, or opposition to the proposed assessment or increase in such assessment.

Description of the Boundaries of the District
The District is located in the City of Rancho Cucamonga, State of California. The boundaries of the District are generally described as the commercial and industrial area of the City which is generally bounded by Foothill Blvd on the north, 4th St on the south, East Ave on the east and Grove Ave on the west.

Reference is also made to the Assessment Diagram included in this Report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 5 Fiscal Year 2023/24 ATTACHMENT 15
Map of Improvements
The following page shows the map of street light and traffic signal improvements to be maintained using District funds.

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 6 Fiscal Year 2023/24 ATTACHMENT 15

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 7 Fiscal Year 2023/24 ATTACHMENT 15

District Budget
Fiscal Year
2023/24 Budget
Expenditures
Operations and Maintenance:

Operations and Maintenance:

Contract Services 2,780$
Utilities:

Electric Utilities 55,560
Assessment Administration 4,030
Admin./General Overhead 9,460
Subtotal - Operations and Maintenance 71,830
Transfer Out - General Street Lights Fund 14,980
Total Expenditures Budget 86,810$

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 8 Fiscal Year 2023/24 ATTACHMENT 15
Fiscal Year
2023/24 Budget
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 132,360$ Anticipated Prior Year Delinquencies Collection 1,610
Subtotal - Taxes 133,970
Other Revenues:

Interest Earnings 1,170
Transfer In:

Transfer In - CFD Street Lighting Services 6,610
Total Revenues Budget 141,750
Contribution to/(Use of) Fund Balance 54,940$
Total Gross Estimated Assessments 132,350.26$
Total District EBU Count 2,574.91
Actual Assessment per EBU - Fiscal Year 2023/24 51.40$
Maximum Allowable Assessment per EBU - Fiscal Year 2023/24 51.40$ The maximum allowable assessment per Equivalent Benefit Unit (EBU) listed in the District budget above, is the amount which was approved in Fiscal Year 1996/97 and subsequent District annexations. Each year, prior to the assessments being placed on the tax roll, the City will review the budget and determine the amount needed to maintain the improvements for the upcoming fiscal year. The actual assessment per EBU will be based on the total amount of funds needed to maintain the improvements in a satisfactory and healthy condition. The actual assessment amount may be lower than the maximum allowable assessment; however, it may not exceed the maximum unless the increase is approved by the property owners in accordance with Proposition 218.

Operating
Operating Reserve
Estimated Reserve Fund Balance, June 30, 2023 89,199$
Contribution to/(Use of) Reserve - Fiscal Year 2023/24 54,940 Estimated Reserve Fund Balance, June 30, 2024 144,139$

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 9 Fiscal Year 2023/24 ATTACHMENT 15
Definitions of Budget Items
The following definitions describe the costs and expenses included in the District Budget:

Operations and Maintenance: This item includes the costs of City staff to perform maintenance duties within the boundaries of the District.

Debt Service: This item includes the repayment of interest and principal to the City General Fund for the acquisition of street lights and installation of LED street lighting within the District.

In FY 2021/22, the outstanding balance of the interfund was fully repaid.

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 10 Fiscal Year 2023/24 ATTACHMENT 15

Section 22573 of the 1972 Act requires that maintenance assessments must be levied according to benefit rather than according to assessed value. This Section states:

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 11 Fiscal Year 2023/24 ATTACHMENT 15
Special Benefit
The maintenance and servicing of the improvements within the District (which are described in the Description of Improvements and Services Section of this report) are for the benefit of the properties within the District, and as such confer a special and direct benefit to parcels within the District by:
• improving the livability, safety, appearance, and desirability for properties within the boundaries of the District, and
• ensuring that improvements do not reach a state of deterioration or disrepair so as to be materially detrimental to properties within the District, and • providing for safe vehicular and pedestrian access for properties within the District, and • providing beautification and overall enhancement to properties within the District.

When the District was formed, Article XIII D and Proposition 218 had not yet been passed.

Upon the passage of Article XIII D and the subsequent passage of the Proposition Omnibus Implementation Act, new rules were put into place. Due to the changes in legal requirements, as

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 12 Fiscal Year 2023/24 ATTACHMENT 15
property annexed to the District after the passage of the Assessment Law, the description of the method of assessment became more refined, however, the assessment per parcel has remained the same since Fiscal Year 1996/97. Further, no parcel included in the District formation or annexations prior to when the language was refined, are now being levied differently than they were at the time the District was formed or the parcels were annexed.

A single-family home equals one EBU. Every other land-use is converted to EBUs based on an assessment formula that equates to the property's specific development status, type of development (land-use), and size of the property, as compared to a single-family home. The following table provides the weighting factors applied to various land-use types, as assigned by County use code, to determine each parcel's EBU assignment.

Land-Use Equivalent Dwelling Units
Property Type (County Use Code) EBU Value Multiplier
Non-Residential 1.00 Acre
The use of the latest County Assessor's Secured Roll shall be the basis for the Property Type determination and units/acreage assignments, unless better data is available to the City. In addition, if any parcel within the District is identified by the County Auditor/Controller to be an invalid parcel number for the current fiscal year, the Property Type and EBU assignment shall be based on the correct parcel number and/or new parcel number(s) County use code and subsequent property information. If a single parcel has changed to multiple parcels, the EBU assignment and assessment amount applied to each of the new parcels will be recalculated rather than spread the proportionate share of the original assessment.

The following table summarizes the Fiscal Year 2023/24 maximum allowable assessment rate for the District:

Property Type (County Use Code)
Actual
Assessment
Rate per EBU
Total
Units/Acres Total EBUs Total Assessment
Non-Residential $51.40 2,574.91 2,574.91 $132,350.26
Totals 2,574.91 2,574.91 $132,350.26
The total amount of maintenance and incidental costs for maintaining the streetlights and traffic signals is assessed to the individual parcels of real property within the District in proportion to the special benefit received by such parcels of real property. The proposed individual assessments are shown on the assessment roll in this report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 13 Fiscal Year 2023/24 ATTACHMENT 15

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 14 Fiscal Year 2023/24 ATTACHMENT 15

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____________________________________________________________________________ Street Lighting Maintenance District No. 6 – City of Rancho Cucamonga 15 Fiscal Year 2023/24 ATTACHMENT 15

Annexations
The following annexations are effective for Fiscal Year 2023/24.

Apn
Annexation
Date Project Name
Total Units/
Acres Total EBUs Property Type
0209-032-35 05/04/22 SUBTPM20164 2.32 2.32 Commercial/Industrial 0229-171-28 11/16/22 DRC2018-00946 1.55 1.55 Commercial/Industrial 0229-032-57 12/07/22 DRC2018-00594 0.79 0.79 Commercial/Industrial 0229-171-02 12/07/22 DRC2019-05590 4.76 4.76 Commercial/Industrial

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ATTACHMENT 16
Annual Engineer’s Report
Fiscal Year 2023/24
City of Rancho Cucamonga
Street Lighting Maintenance District No. 7
(North Etiwanda)

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CITY OF RANCHO CUCAMONGA
STREET LIGHTING MAINTENANCE DISTRICT NO. 7
(NORTH ETIWANDA)
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Phone: 909.477.2700
Fax: 909.477.2845

CITY COUNCIL
L. Dennis Michael, Mayor
Lynne B. Kennedy, Mayor Pro Tem
Ryan A. Hutchison, Council Member
Kristine D. Scott, Council Member
Ashley N. Stickler, Council Member

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 1 Fiscal Year 2023/24 ATTACHMENT 16
ENGINEER’S LETTER
WHEREAS, on June 7, 2023, the City Council of Rancho Cucamonga (the “City”), under the Landscaping and Lighting Act of 1972 (the “1972 Act”) adopted its Resolution No. 2023-058, a Resolution Initiating Proceedings for the Levy of Annual Assessments for Street Light Maintenance District No. 7 (North Etiwanda) (the “District”); and WHEREAS, the Resolution Initiating Proceedings directed the City Engineer to prepare and file an Annual Engineer’s Report for Fiscal Year 2023/24 pursuant to the requirements of the 1972 Act. The Annual Engineer’s Report presents the plans and specifications describing the general nature, location and extent of the improvements to be maintained, an estimate of the costs of the maintenance, operations and servicing of the improvements for the District for the referenced fiscal year, a diagram for the District, showing the area and properties proposed to be assessed, and an assessment of the estimated costs of the maintenance, operations and servicing of the improvements, assessing the net amount upon all assessable lots and/or parcels within the District in proportion to the special benefit received; and NOW THEREFORE, the following assessment is proposed to be authorized in order to pay for the acquisition of street lights, the installation of Light Emitting Diode (LED) street lighting, and estimated costs of maintenance, operation and servicing of the improvements to be paid by the assessable real property within the boundaries of the District in proportion to the special benefit received. The following table summarizes the proposed assessment.

Fiscal Year
2023/24 Budget
Expenditures
Operations and Maintenance 126,890
Transfer Out 30,310
Total Expenditures Budget 157,200
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 130,820 Anticipated Prior Year Delinquencies Collection 1,610
Subtotal - Taxes 132,430
Other Revenues 3,030
Transfers In 21,590
Total Revenues Budget 157,050
Contribution to/(Use of) Fund Balance (150)$
Total District EBU Count 3,926.00
Actual Assessment per EBU 33.32$
Maximum Allowable Assessment per EBU 33.32$

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 2 Fiscal Year 2023/24 ATTACHMENT 16
In making the assessments contained herein pursuant to the 1972 Act:

I, the undersigned, respectfully submit the enclosed Annual Engineer’s Report and, to the best of my knowledge, information and belief, I certify that the Annual Engineer’s Report and Assessment Diagram included herein have been prepared and computed in accordance with the order of the City Council of the City of Rancho Cucamonga and the Assessment Law.

Jason C. Welday
Director of Engineering Services/City Engineer

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 3 Fiscal Year 2023/24 ATTACHMENT 16

INTRODUCTION
Reason for Assessment
Approval of the assessment covered by this Engineer’s Report will generate the revenue necessary to:

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 4 Fiscal Year 2023/24 ATTACHMENT 16
During the course or upon conclusion of the hearing, the City Council may order changes in any of the matters provided in the report, including the improvements, to the zones within the District, and the proposed diagram or the proposed assessment.

Description of the Boundaries of the District
The District is located in the City of Rancho Cucamonga, State of California. The boundaries of the District are generally described as that area of the City known as North Etiwanda, which is generally bounded by Highland Ave on the south, Day Creek Channel on the west and City limits on the east and north.

Reference is also made to the Assessment Diagram included in this Report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 5 Fiscal Year 2023/24 ATTACHMENT 16
Map of Improvements
The following page shows the map of street light and traffic signal improvements to be maintained using District funds.

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 6 Fiscal Year 2023/24 ATTACHMENT 16

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 7 Fiscal Year 2023/24 ATTACHMENT 16

District Budget
Fiscal Year
2023/24 Budget
Expenditures
Operations and Maintenance:

Operations and Maintenance:

Contract Services 5,630
Utilities:

Electric Utilities 100,760
Assessment Administration 13,980
Admin./General Overhead 6,520
Subtotal - Operations and Maintenance 126,890
Transfer Out - General Street Lights Fund 30,310
Total Expenditures Budget 157,200$

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 8 Fiscal Year 2023/24 ATTACHMENT 16
Fiscal Year
2023/24 Budget
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 130,820$ Anticipated Prior Year Delinquencies Collection 1,610
Subtotal - Taxes 132,430
Other Revenues:

Interest Earnings 3,030
Transfer In:

Transfer In - General Fund 21,590
Total Revenues Budget 157,050
Contribution to/(Use of) Fund Balance (150)$
Total Gross Estimated Assessments 130,814.32$
Total District EBU Count 3,926.00
Actual Assessment per EBU - Fiscal Year 2023/24 33.32$
Maximum Allowable Assessment per EBU - Fiscal Year 2023/24 33.32$ The maximum allowable assessment per Equivalent Benefit Unit (EBU) listed in the District budget above, is the amount which was approved in Fiscal Year 1996/97 and subsequent District annexations. Each year, prior to the assessments being placed on the tax roll, the City will review the budget and determine the amount needed to maintain the improvements for the upcoming fiscal year. The actual assessment per EDU will be based on the total amount of funds needed to maintain the improvements in a satisfactory and healthy condition. The actual assessment amount may be lower than the maximum allowable assessment; however, it may not exceed the maximum unless the increase is approved by the property owners in accordance with Proposition 218.

Operating Reserve
Estimated Reserve Fund Balance, June 30, 2023 164,533$
Contribution to/(Use of) Reserve - Fiscal Year 2023/24 (150) Estimated Reserve Fund Balance, June 30, 2024 164,383$

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 9 Fiscal Year 2023/24 ATTACHMENT 16
Definitions of Budget Items
The following definitions describe the costs and expenses included in the District Budget:

Operations and Maintenance: This item includes the costs of City staff to perform maintenance duties within the boundaries of the District.

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 10 Fiscal Year 2023/24 ATTACHMENT 16
Other Revenues: This includes other revenues that are not levied through the annual assessments that support the District operations. These other revenues may include: interest earnings and Developer Energizing Fees.

Section 22573 of the 1972 Act requires that maintenance assessments must be levied according to benefit rather than according to assessed value. This Section states:

The net amount to be assessed may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels. Proposition 218, approved by

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 11 Fiscal Year 2023/24 ATTACHMENT 16
the voters in November 1996, requires the City to separate general benefit from special benefit, where only special benefit is assessed.

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 12 Fiscal Year 2023/24 ATTACHMENT 16
When the District was formed, Article XIII D and Proposition 218 had not yet been passed.

Upon the passage of Article XIII D and the subsequent passage of the Proposition Omnibus Implementation Act, new rules were put into place. Due to the changes in legal requirements, as property annexed to the District after the passage of the Assessment Law, the description of the method of assessment became more refined; however, the assessment per parcel has remained the same since Fiscal Year 1996/97. Further, no parcel included in the District formation or annexations prior to when the language was refined, are now being levied differently than they were at the time the District was formed or the parcels were annexed.

To assess special benefit appropriately, it is necessary to relate the different type of parcel improvements to each other. The Equivalent Dwelling Unit ("EDU") method of apportionment uses the single-family home as the basic unit of assessment.

A single-family home equals one Equivalent Dwelling Unit (EDU). Every other land-use is converted to EDUs based on an assessment formula that equates to the property's specific development status, type of development (land-use), and size of the property, as compared to a single-family home. The following table provides the weighting factors applied to various land- use types, as assigned by County use code, to determine each parcel's EDU assignment.

Land-Use Equivalent Dwelling Units
Property Type (County Use Code) EBU Value Multiplier
Single Family Residential 1.00 Parcel
Multi-Family Residential 0.50 Unit
Non-Residential 2.00 Acre
The use of the latest County Assessor's Secured Roll shall be the basis for the Property Type determination and units/acreage assignments, unless better data is available to the City. In addition, if any parcel within the District is identified by the County Auditor/Controller to be an invalid parcel number for the current fiscal year, the Property Type and EDU assignment shall be based on the correct parcel number and/or new parcel number(s) County use code and subsequent property information. If a single parcel has changed to multiple parcels, the EDU assignment and assessment amount applied to each of the new parcels will be recalculated rather than spread the proportionate share of the original assessment.

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 13 Fiscal Year 2023/24 ATTACHMENT 16
The following table summarizes the Fiscal Year 2023/24 maximum allowable assessment rates for the District:

Property Type (County Use Code)
Maximum
Allowable
Assessment Rate
per EBU
Actual
Asessment
Rate per EBU
Total
Units/Acres Total EBUs
Single Family Residential $33.32 $33.32 3,926.00 3,926.00 The total amount of maintenance and incidental costs for maintaining the street lights and traffic signals is assessed to the individual parcels of real property within the District in proportion to the special benefit received by such parcels of real property. The proposed individual assessments are shown on the assessment roll in this report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 14 Fiscal Year 2023/24 ATTACHMENT 16

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____________________________________________________________________________ Street Lighting Maintenance District No. 7 – City of Rancho Cucamonga 15 Fiscal Year 2023/24 ATTACHMENT 16

Property Type (County Use Code)
Actual
Assessment
Rate per EBU
Total
Units/Acres Total EBUs
Total
Assessment
Single Family Residential $33.32 3,926.00 3,926.00 $130,814.32 Totals 3,926.00 3,926.00 $130,814.32
A copy of the full assessment roll is available for review in the City Clerk's office.

Annexations
The following annexation is effective for Fiscal Year 2023/24:

Apn
Annexation
Date Project Name
Total Units/
Acres Total EBUs Property Type
0225-191-09 and -17 06/01/22 SUBTT20344 17.00 17.00 Single-Family Res

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ATTACHMENT 17
Annual Engineer’s Report
Fiscal Year 2023/24
City of Rancho Cucamonga
Street Lighting Maintenance District No. 8
(South Etiwanda)

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CITY OF RANCHO CUCAMONGA
STREET LIGHTING MAINTENANCE DISTRICT NO. 8
(SOUTH ETIWANDA)
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Phone: 909.477.2700
Fax: 909.477.2845

CITY COUNCIL
L. Dennis Michael, Mayor
Lynne B. Kennedy, Mayor Pro Tem
Ryan A. Hutchison, Council Member
Kristine D. Scott, Council Member
Ashley N. Stickler, Council Member

Page 583 of 715 ends

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 1 Fiscal Year 2023/24 ATTACHMENT 17
ENGINEER’S LETTER
WHEREAS, on June 7, 2023, the City Council of Rancho Cucamonga (the “City”), under the Landscaping and Lighting Act of 1972 (the “1972 Act”) adopted its Resolution No. 2023-058, a Resolution Initiating Proceedings for the Levy of Annual Assessments for Street Light Maintenance District No. 8 (South Etiwanda) (the “District”); and WHEREAS, the Resolution Initiating Proceedings directed the City Engineer to prepare and file an Annual Engineer’s Report for Fiscal Year 2023/24 pursuant to the requirements of the 1972 Act. The Annual Engineer’s Report presents the plans and specifications describing the general nature, location and extent of the improvements to be maintained, an estimate of the costs of the maintenance, operations and servicing of the improvements for the District for the referenced fiscal year, a diagram for the District, showing the area and properties proposed to be assessed, and an assessment of the estimated costs of the maintenance, operations and servicing of the improvements, assessing the net amount upon all assessable lots and/or parcels within the District in proportion to the special benefit received; and NOW THEREFORE, the following assessment is proposed to be authorized in order to pay for the acquisition of street lights, the installation of Light Emitting Diode (LED) street lighting, and estimated costs of maintenance, operation and servicing of the improvements to be paid by the assessable real property within the boundaries of the District in proportion to the special benefit received. The following table summarizes the proposed assessment.

Fiscal Year
2023/24 Budget
Expenditures
Personnel Services 50,690$
Operations and Maintenance 50,780
Transfer Out 10,680
Total Expenditures Budget 112,150
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 81,120 Anticipated Prior Year Delinquencies Collection 610
Subtotal - Taxes 81,730
Other Revenues 37,420
Total Revenues Budget 119,150
Contribution to/(Use of) Fund Balance 7,000$
Total District EBU Count 2,650.78
Actual Assessment per EBU 30.60$
Maximum Allowable Assessment per EBU 193.75$

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 2 Fiscal Year 2023/24 ATTACHMENT 17
In making the assessments contained herein pursuant to the 1972 Act:

I, the undersigned, respectfully submit the enclosed Annual Engineer’s Report and, to the best of my knowledge, information and belief, I certify that the Annual Engineer’s Report and Assessment Diagram included herein have been prepared and computed in accordance with the order of the City Council of the City of Rancho Cucamonga and the Assessment Law.

Jason C. Welday
Director of Engineering Services/City Engineer

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 3 Fiscal Year 2023/24 ATTACHMENT 17

INTRODUCTION
Reason for Assessment
Approval of the assessment covered by this Engineer’s Report will generate the revenue necessary to:

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 4 Fiscal Year 2023/24 ATTACHMENT 17
During the course or upon conclusion of the hearing, the City Council may order changes in any of the matters provided in the report, including the improvements, to the zones within the District, and the proposed diagram or the proposed assessment.

Description of the Boundaries of the District
The District is located in the City of Rancho Cucamonga, State of California. The boundaries of the District are generally described as that area of the City known as South Etiwanda, which is generally bounded by Etiwanda Ave on the west, Highland Ave on the north and Foothill Blvd on the south. The southern portion of the District is bounded by East Ave on the east and the northern portion of the District is bounded by the I-15 Freeway on the east.

Reference is also made to the Assessment Diagram included in this Report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 5 Fiscal Year 2023/24 ATTACHMENT 17
Map of Improvements
The following page shows the map of street light and traffic signal improvements to be maintained using District funds.

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 6 Fiscal Year 2023/24 ATTACHMENT 17

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 7 Fiscal Year 2023/24 ATTACHMENT 17

District Budget
Fiscal Year
2023/24 Budget
Expenditures
Personnel Services:

Regular Salaries 33,790$
Fringe Benefits 16,900
Subtotal - Personnel 50,690
Operations and Maintenance:

Operations and Maintenance:

Training 220
Membership Dues 80
O & M/General 410
Contract Services 1,980
Contract Equipment Maintenance/Repair 50
Subtotal - Operations and Maintenance 2,740
Utilities:

Electric Utilities 34,640
Assessment Administration 5,700
Admin./General Overhead 7,700
Subtotal - Operations and Maintenance 50,780
Transfer Out - General City Street Lights Fund 10,680
Total Expenditures Budget 112,150$

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 8 Fiscal Year 2023/24 ATTACHMENT 17
Fiscal Year
2023/24 Budget
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 81,120$ Anticipated Prior Year Delinquencies Collection 610
Subtotal - Taxes 81,730
Other Revenues:

Interest Earnings 37,420
Total Revenues Budget 119,150
Contribution to/(Use of) Fund Balance 7,000$
Total Gross Estimated Assessments 81,113.86$
Total District EBU Count 2,650.78
Actual Assessment per EBU - Fiscal Year 2023/24 30.60$
Maximum Allowable Assessment per EBU - Fiscal Year 2023/24 193.75$ The maximum allowable assessment per Equivalent Benefit Unit (EBU) listed in the District budget above, is the amount which was approved in Fiscal Year 1996/97 and subsequent District annexations. Each year, prior to the assessments being placed on the tax roll, the City will review the budget and determine the amount needed to maintain the improvements for the upcoming fiscal year. The actual assessment per EBU will be based on the total amount of funds needed to maintain the improvements in a satisfactory and healthy condition. The actual assessment amount may be lower than the maximum allowable assessment; however, it may not exceed the maximum unless the increase is approved by the property owners in accordance with Proposition 218.

Operating Reserve
Estimated Reserve Fund Balance, June 30, 2023 1,813,057$ Contribution to/(Use of) Reserve - Fiscal Year 2023/24 7,000 Estimated Reserve Fund Balance, June 30, 2024 1,820,057$

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 9 Fiscal Year 2023/24 ATTACHMENT 17
Definitions of Budget Items
The following definitions describe the costs and expenses included in the District Budget:

Operations and Maintenance: This item includes the costs of City staff to perform maintenance duties within the boundaries of the District.

Debt Service: This item includes the repayment of interest and principal to the City General Fund for the acquisition of street lights and installation of LED street lighting within the District.

In FY 2021/22, the outstanding balance of the interfund was fully repaid.

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 10 Fiscal Year 2023/24 ATTACHMENT 17

Section 22573 of the 1972 Act requires that maintenance assessments must be levied according to benefit rather than according to assessed value. This Section states:

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 11 Fiscal Year 2023/24 ATTACHMENT 17
Special Benefit
The maintenance and servicing of the improvements within the District (which are described in the Description of Improvements and Services Section of this report) are for the benefit of the properties within the District, and as such confer a special and direct benefit to parcels within the District by:
• improving the livability, safety, appearance, and desirability for properties within the boundaries of the District, and
• ensuring that improvements do not reach a state of deterioration or disrepair so as to be materially detrimental to properties within the District, and • providing for safe vehicular and pedestrian access for properties within the District, and • providing beautification and overall enhancement to properties within the District.

The above mentioned items affect the assessed property in a way that is particular and distinct from their effect on other parcels and that real property in general and the public at large do not share. They contribute to a specific enhancement of the properties within the District. Since these improvements, including the community trails, were installed and are maintained specifically for the properties within the District; only properties within the District receive a special benefit and are assessed for said maintenance.

When the District was formed, Article XIII D and Proposition 218 had not yet been passed.

Upon the passage of Article XIII D and the subsequent passage of the Proposition Omnibus Implementation Act, new rules were put into place. Due to the changes in legal requirements, as

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 12 Fiscal Year 2023/24 ATTACHMENT 17
property annexed to the District after the passage of the Assessment Law, the description of the method of assessment became more refined; however, the assessment per parcel has remained the same since Fiscal Year 1996/97. Further, no parcel included in the District formation or annexations prior to when the language was refined, are now being levied differently than they were at the time the District was formed or the parcels were annexed.

Land-Use Equivalent Dwelling Units
Property Type (County Use Code) EBU Value Multiplier
Single Family Residential 1.00 Parcel
Multi-Family Residential 1.00 Unit
Non-Residential 2.00 Acre
The use of the latest County Assessor's Secured Roll shall be the basis for the Property Type determination and units/acreage assignments, unless better data is available to the City. In addition, if any parcel within the District is identified by the County Auditor/Controller to be an invalid parcel number for the current fiscal year, the Property Type and EBU assignment shall be based on the correct parcel number and/or new parcel number(s) County use code and subsequent property information. If a single parcel has changed to multiple parcels, the EBU assignment and assessment amount applied to each of the new parcels will be recalculated rather than spread the proportionate share of the original assessment.

The following table summarizes the Fiscal Year 2023/24 maximum allowable assessment rates for the District:

Property Type (County Use Code)
Maximum
Allowable
Assessment
Rate per EBU
Actual
Asessment Rate
per EBU
Total
Units/Acres Total EBUs
Single Family Residential $193.75 $30.60 1,206.00 1,206.00 Multi-Family Residential 193.75 30.60 1,381.00 1,381.00 Non-Residential 193.75 30.60 31.89 63.78

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 13 Fiscal Year 2023/24 ATTACHMENT 17
The total amount of maintenance and incidental costs for maintaining the street lights and traffic signals is assessed to the individual parcels of real property within the District in proportion to the special benefit received by such parcels of real property. The proposed individual assessments are shown on the assessment roll in this report.

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 14 Fiscal Year 2023/24 ATTACHMENT 17

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____________________________________________________________________________ Street Lighting Maintenance District No. 8 – City of Rancho Cucamonga 15 Fiscal Year 2023/24 ATTACHMENT 17

Property Type (County Use Code)
Actual
Assessment
Rate per EBU
Total
Units/Acres Total EBUs Total Assessment
Single Family Residential $30.60 1,206.00 1,206.00 $36,903.60 Multi-Family Residential 30.60 1,381.00 1,381.00 42,258.60 Non-Residential 30.60 31.89 63.78 1,951.66
Totals 2,618.89 2,650.78 $81,113.86
A copy of the full assessment roll is available for review in the City Clerk's office.

Annexations
The following annexations are effective for Fiscal Year 2023/24:

Apn
Annexation
Date Project Name
Total Units/
Acres Total EBUs Property Type
1100-201-08 01/19/22 DRC2014-01130 193.00 193.00 Multi-Family Res 1100-191-04 02/02/22 SUBTT20148 131.00 131.00 Multi-Family Res

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ATTACHMENT 18
Annual Engineer’s Report
Fiscal Year 2023/24
City of Rancho Cucamonga
Parks and Recreation Improvement
District No. PD-85
Jason C. Welday
Director of Engineering Services/City Engineer

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CITY OF RANCHO CUCAMONGA
PARKS AND RECREATION IMPROVEMENT DISTRICT NO. PD-85
10500 Civic Center Drive
Rancho Cucamonga, CA 91730
Phone: 909.477.2700
Fax: 909.477.2845

CITY COUNCIL
L. Dennis Michael, Mayor
Lynne B. Kennedy, Mayor Pro Tem
Ryan A. Hutchison, Council Member
Kristine D. Scott, Council Member
Ashley N. Stickler, Council Member

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TABLE OF CONTENTS
AUTHORITY FOR REPORT 1
FINDINGS 1
DISTRICT ANALYSIS 2
ESTIMATE OF WORK 3
District Budget 3
Definitions of Budget Items 5
METHOD OF SPREAD 6
Annexations 8
Boundary Map 8

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 1 Fiscal Year 2023/24 ATTACHMENT 18

AUTHORITY FOR REPORT
This report for the Fiscal Year 2023/24 is prepared pursuant to the order of the City Council of the City of Rancho Cucamonga (the “City”) and in compliance with the requirements of Article 4, Chapter 1, Landscape and Lighting Act of 1972 (the “1972 Act”), being Division 15, Section 22500 of the Streets and Highways code. Provisions for this annual assessment are included in Chapter 3 of the 1972 Act.

The purpose of this report is to set forth findings and the assessment analysis for the annual levy of assessments for the Park and Recreation Improvement District No. PD-85 (the “District”). This District, using direct benefit assessments, was originally created to provide funds to finance the cost of construction, maintenance, operation and debt payment of Heritage Community Park and Red Hill Community Park in the City of Rancho Cucamonga. Subsequently, the debt has been repaid with only the ongoing maintenance and operation with periodic capital improvement expenditures of the parks remaining.

FINDINGS
Section 22573 of the 1972 Act, requires assessments to be levied according to benefit rather than according to assessed value. The section states:

The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements.

The means of determining whether or not a parcel will benefit from the improvements is contained in the Improvement Act of 1911 (Division 7, commencing with Section 5000 of the Streets and Highways Code, State of California).

The 1972 Act also provides for the classification of various areas within an assessment district into benefit areas where, by reason of variations in the nature, location, and extent of the improvements, the various areas will receive differing degrees of all territory receiving substantially the same degree of benefit from the improvements and may consist of contiguous or noncontiguous areas.

As the assessments are levied on the bases of benefit, they are considered a user’s fee, not a tax; and, therefore, are not governed by Article XIII A. Properties owned by public agencies, such as a city, county, state, or the Federal government, are not assessable without the approval of the particular agency and, normally, are not assessed. Certain other parcels used for railroad mainline right-of-way, public utility transmission right-of-way, and common areas are also exempt from assessment.

The assessment for mobile home parks will be based upon underlying lot acreage.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 2 Fiscal Year 2023/24 ATTACHMENT 18

DISTRICT ANALYSIS
A. District Boundary
The District includes all of the City of Rancho Cucamonga with the general exception of land east of Deer Creek Channel and the Victoria, Caryn and Terra Vista Planned Communities.

All parcels of real property affected are more particularly described in maps prepared in accordance with Section 327 of the Revenue and Taxation Code, which are on file in the office of the San Bernardino County Assessor in the Hall of Records, 172 West Third Street, San Bernardino, California and which are hereby made a part hereof by reference.

B. District Name
City of Rancho Cucamonga Park and Recreation Improvement District No. PD-85.

C. Facilities
The existing works within the District boundary are generally described as follows:

1. The maintenance and operation of Heritage Community Park including, but not limited to, grading, planting, irrigation, onsite roads, sidewalks, parking lots, lighting, restrooms, equestrian facilities, playground equipment, picnic facilities, athletic facilities, and walking, jogging and equestrian trails and sanitary sewer connections.

2. The maintenance and operation of Red Hill Community Park including, but not limited to, grading, planting, irrigation, onsite roads, sidewalks, parking lots, lighting, waterscape, restrooms, senior citizens facilities, playground equipment, picnic facilities, major lighted athletic facilities, jogging trail, sanitary sewer connections and onsite drainage inlets.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 3 Fiscal Year 2023/24 ATTACHMENT 18

ESTIMATE OF WORK
The 1972 Act permits carrying forward surpluses or recovering deficits in subsequent fiscal years.

Costs for the district will be reviewed annually. Any surplus credited against the assessment or any deficits shall be included in the assessment for the following fiscal year.

District Budget
Fiscal Year
2023/24 Budget
Expenditures
Personnel Services:

Regular Salaries 169,250$
Overtime Salaries 4,600
Fringe Benefits 84,490
Subtotal - Personnel 258,340
Operations and Maintenance:

Operations and Maintenance:

O & M/General 72,270
O & M/Facilities 3,300
Emergency Equipment and Vehicle Rental 8,500
Equipment Operations and Maintenance 3,300
Subtotal - Operations and Maintenance 87,370
Contract Services:

Contract Services/General 432,830
Contract Services/Facilities 15,690
Tree Maintenance 24,380
Subtotal - Contract Services 472,900
Utilities:

Telephone Utilities 1,600
Water Utilities 204,200
Electric Utilities 184,270
Subtotal - Utilities 390,070
Assessment Administration 99,190
Admin./General Overhead 65,750
Other Expenses 2,960
Subtotal - Operations and Maintenance 1,118,240
Capital Expenditures:

Captial Outlay - Improvements Other Than Building 479,000 Captial Project 800,000
Subtotal - Capital Expenditures 1,279,000
Transfers Out:

Transfers Out - PD-85 Capital Reserve Fund 116,800
Total Expenditures Budget 2,772,380$

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 4 Fiscal Year 2023/24 ATTACHMENT 18
Fiscal Year
2023/24 Budget
Revenues
Taxes:

Estimated Assessments, Net of Estimated Delinquencies 1,163,810$ Anticipated Prior Year Delinquencies Collection 13,560
Subtotal - Taxes 1,177,370
Other Revenues:

Interest Earnings 43,340
Other Rental/Lease Income 124,010
Park Maintenance Fees 4,210
Sports Field User Group Rentals 110
Sports Lighting Fees 17,270
Other Revenue 100
Subtotal - Other Revenues: 189,040
Transfer In:

Transfer In - General Fund 32,700
Transfer In - PD-85 Operating Fund 196,100
Transfer In - CFD Empire Lakes 55,350
Subtotal - Transfer In: 284,150
Total Revenues Budget 1,650,560
Contribution to/(Use of) Fund Balance (1,121,820)$
Total Gross Estimated Assessments 1,163,802.00$
Total District EBU Count 37,542.00
Actual Assessment per EBU - Fiscal Year 2023/24 31.00$
Maximum Allowable Assessment per EBU - Fiscal Year 2023/24 31.00$ Each year, prior to the assessments being placed on the tax roll, the City will review the budget and determine the amount needed to maintain the improvements for the upcoming fiscal year.

The actual assessment will be based on the estimated costs of maintenance, available fund balance and maximum allowable assessment; however, it may not exceed the maximum unless the increase is approved by the property owners in accordance with Proposition 218.

It is the intent of the City to maintain an Operating Reserve which shall not exceed the estimated costs of maintenance and servicing of the improvements prior to December 10 of the fiscal year, or when the City expects to receive its apportionment of special assessments and tax collections from the County of San Bernardino, whichever is later. Beginning with Fiscal Year 2016/17, the City will maintain a Capital Reserve to be used for deferred maintenance and pending capital projects.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 5 Fiscal Year 2023/24 ATTACHMENT 18
The reserve balance information for the District is as follows:

Operating Capital Total
Reserve Reserve Reserve
Estimated Reserve Fund Balance, June 30, 2023 2,502,692$ 407,429$ 2,910,121$ Contribution to/(Use of) Reserve - Fiscal Year 2023/24 (1,026,480) (95,340) (1,121,820) Estimated Reserve Fund Balance, June 30, 2024 1,476,212$ 312,089$ 1,788,301$ Definitions of Budget Items
The following definitions describe the costs and expenses included in the District Budget:

Operations and Maintenance: This item includes the costs of City staff to perform maintenance duties within the boundaries of the District.

Contract Services: This item includes the contract costs of a landscape maintenance company responsible for the ongoing maintenance of the District improvements.

Utilities: This item includes the costs to furnish electricity, water, and telephone services, as required, for the operation and maintenance of the sprinklers and irrigation controllers in the District.

Assessment Administration: This item includes the cost of all particular departments and staff of the City, as well as consultants, for providing the administration, coordination and management of District services, operations, and incidental expenses related to the District. This item also includes creation of an annual Engineer's Report, resolutions and placing the assessment amounts onto the County tax roll each year, along with responding to any public inquiries and future Proposition 218 balloting proceedings.

Capital Outlay: This item includes new improvements to further enhance the level and quality of service provided within the boundaries of the District. This may include new monuments, irrigation systems, and other large improvements.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 6 Fiscal Year 2023/24 ATTACHMENT 18
Other Revenues: This includes other revenues that are not levied through the annual assessments that support the District operations. These other revenues may include: interest earnings, other rental/lease income (cell site tower leases), Park Maintenance Fees, Sports Field User Group Rentals, and parking permits (Metrolink Station paid parking).

METHOD OF SPREAD
The 1972 Act indicates that assessments may be apportioned by any formula or method which fairly distributes costs among all lots or parcels within the District in proportion to the estimated benefit received.

A. Definitions
The District is divided into three categories for the purpose of determining the assessments as follows:

CATEGORY A – includes parcels based on the number of existing residential units within certain ranges of parcel size.

CATEGORY B – includes all parcels not defined in Category A or Category C CATEGORY C – includes exempt parcels. Exempt parcels are those parcels listed by the County Assessor’s as exempt and/or which have an assessed value of less than $500.

B. Formula
The assessment formula is based on actual land use information contained in the current San Bernardino Assessor’s computer files and Assessor’s parcel maps.

Category A:

All parcels containing existing residential dwelling units and meeting the following conditions.

Parcel Size/Range Dwelling Units/Parcel
Less than 1.5 Acres and 1 or more dwelling units

1.51 to 3.5 Acres and 2 or more dwelling units

3.51 to 7.0 Acres and 4 or more dwelling units

7.01 to 14.0 Acres and 8 or more dwelling units

14.01 to 25 Acres and 15 or more dwelling units

25.01 Acres and larger 26 or more dwelling units
Category A is based on the number of existing residential units.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 7 Fiscal Year 2023/24 ATTACHMENT 18
Category B: All parcels not defined in Category A or Category C.

Category C: All exempt parcels as defined below:

1. All properties currently tax exempt;

2. All public ownership;

3. Railroad mainline right-of-ways;

4. Major utility transmission right-of-ways;

5. Mineral rights;

6. Parcels so small they currently cannot be built upon;

7. All normally assessable parcels within an assessed valuation of less than $500 and 1.5 acres or less; and,
C. Summary of Preliminary Assessment Amounts
Category A:

The preliminary estimated assessment rate, which will be levied during the Fiscal Year 2023/24, is $31.00 per residential dwelling unit for those parcels in Category A. Category A parcels containing more than one residential dwelling unit will be assessed for an amount equal to $31.00 times the number of residential dwelling units.

Category B:

The assessment, which may be levied for parcels within Category B during the Fiscal Year 2023/24, shall be according to the following schedule:

Definition Assessment Per Parcels
Single Family Residential $31.00
Multi-Family Residential $31.00
Less than 1.5 Acres $15.50

1.51 Acres to 3.50 Acres $46.50

3.51 Acres to 7.0 Acres $108.50

7.01 Acres to 14.0 Acres $217.00

14.01 Acres to 25.0 Acres $434.00

25.01 Acres and larger $775.00
Category C:

The assessment shall be $0.00 for Category C parcels.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 8 Fiscal Year 2023/24 ATTACHMENT 18
Annexations
There are no effective annexations for Fiscal Year 2023/24.

Boundary Map
An Assessment Diagram for the District is shown on the following page. The lines and dimensions of each lot or parcel within the District are those lines and dimensions shown on the maps of the County Assessor of the County of San Bernardino, at the time this report was prepared, and are incorporated by reference herein and made part of this Engineer’s Report.

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____________________________________________________________________________ Park and Recreation Improvement District No. PD-85 – City of Rancho Cucamonga 9 Fiscal Year 2023/24 ATTACHMENT 18

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Resolution No. 2023-XXX – Page 1 of 2
ATTACHMENT 19
RESOLUTION NO. 2023-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO

CUCAMONGA, CALIFORNIA, CONFIRMING THE DIAGRAMS AND
ASSESSMENTS; APPROVING THE ANNUAL ENGINEER’S
REPORTS; AND ORDERING THE LEVY AND COLLECTION OF THE

ANNUAL ASSESSMENTS WITHIN LANDSCAPE MAINTENANCE
DISTRICTS NOS. 1, 2, 3B, 4-R, 6-R, 7, 8, 9 AND 10 FOR FISCAL YEAR 2023/24
WHEREAS, the City Council of the City of Rancho Cucamonga did on the 7 th day of June 2023, adopt its Resolution of Intention No. 2023-055 (the "Resolution of Intention") pursuant to the Landscaping and Lighting Act of 1972, as amended (the "1972 Act"), declaring its intention to levy and collect assessments within Landscape Maintenance Districts Nos. 1, 2, 3B, 4-R, 6-R, 7, 8, 9, and 10 (each a "District" and collectively the "Districts") for Fiscal Year 2023/24 and giving notice of the time and place for a public hearing by the City Council on the levy of the proposed assessments within the Districts; and
WHEREAS, the City Council previously received and preliminarily approved a report of the Assessment Engineer (each an "Annual Engineer's Report" and collectively the "Annual Engineer's Reports") for each District as required pursuant to Article 4 of Chapter 1 of the 1972 Act, Article XIIID of the Constitution of the State of California (“Article XIIID”) and the Proposition 218 Omnibus Implementation Act (Government Code Section 53750 and following) (the “Implementation Act”) (the 1972 Act, Article XIIID and the Implementation Act are referred to collectively as the “Assessment Law”); and
WHEREAS, notice of such public hearing was duly and legally published in the time, form and manner as required by the Assessment Law, shown by the affidavit of Publication of said Resolution of Intention on file in the Office of the City Clerk; and
WHEREAS, said City Council having duly received and considered evidence, oral and documentary, concerning the jurisdiction facts in this proceeding and concerning the necessity for the contemplated work and the benefits to be derived therefrom, and said City Council having now acquired jurisdiction to order the proposed work.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, as follows:

SECTION 1. This City Council hereby finds and determines that:

A. Notice of the public hearing has been given and the proceedings for the consideration of the levy of the annual assessments within each District have been undertaken in accordance with the 1972 Act; and
B. The annual assessments for Fiscal Year 2023/24 proposed to be levied within each District as set forth in the applicable Annual Engineer's Report do not exceed the annual assessments as previously authorized to be levied within such District, and therefore, the proposed levy of assessments for Fiscal Year 2023/24 within such District are not deemed to be “increased” over the maximum authorized annual assessments.

SECTION 2. The final assessments and diagrams for the proceedings, as contained in the Annual Engineer’s Report for each of the Districts, is hereby approved and confirmed. The assessments for the Districts contained in the Annual Engineer’s Reports for Fiscal Year 2023/24 are hereby levied

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Resolution No. 2023-XXX – Page 2 of 2
ATTACHMENT 19
upon the respective lots or parcels in the Districts in the amounts as set forth in the applicable Annual Engineer’s Report.

SECTION 3. This City Council hereby orders that the work, as set forth and described in the Resolution of Intention, be done and made.

SECTION 4. The above-referenced diagram and assessment shall be filed in the Office of the City Clerk. Said diagram and assessment, and the certified copy thereof, shall be open for public inspection.

SECTION 5. The City Clerk is hereby ordered and directed to immediately file a certified copy of the diagram and assessment with the County Auditor. Such filing shall be made no later than the 3rd Monday in August 2023.

SECTION 6. After the filing of the diagram and assessment, the County Auditor shall enter on the County assessment roll opposite each lot or parcel of land the amount assessed thereupon, as shown in the assessment.

SECTION 7. The assessments shall be collected at the same time and in the same manner as County taxes are collected, and all laws providing for the collection and enforcement of County taxes shall apply to the collection and enforcement of the assessments.

SECTION 8. The assessments as above confirmed and levied for these proceedings will provide revenue and relate to the fiscal year commencing July 1, 2023 and ending June 30, 2024.

PASSED, APPROVED, AND ADOPTED this ________ day of ______________ 2023.

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Resolution No. 2023-XXX – Page 1 of 2
ATTACHMENT 20
RESOLUTION NO. 2023-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO

CUCAMONGA, CALIFORNIA, CONFIRMING THE DIAGRAMS AND
THE ASSESSMENTS; APPROVING THE ANNUAL ENGINEER’S
REPORTS; AND ORDERING THE LEVY AND COLLECTION OF THE

ANNUAL ASSESSMENTS WITHIN STREET LIGHTING
MAINTENANCE DISTRICTS NOS. 1, 2, 3, 4, 5, 6, 7 AND 8, FOR FISCAL YEAR 2023/24
WHEREAS, the City Council of the City of Rancho Cucamonga did on the 7 th day of June 2023, adopt its Resolution of Intention No. 2023-058 (the "Resolution of Intention") pursuant to the Landscaping and Lighting Act of 1972, as amended (the "1972 Act"), declaring its intention to levy and collect assessments within Street Lighting Maintenance Districts Nos. 1, 2, 3, 4, 5, 6, 7 and 8 (each a "District" and collectively the "Districts") for Fiscal Year 2023/24 and giving notice of the time and place for a public hearing by the City Council on the levy of the proposed assessments within the Districts; and WHEREAS, the City Council previously received and preliminarily approved a report of the Assessment Engineer (each an "Annual Engineer’s Report" and collectively the "Annual Engineer’s Reports") for each District as required pursuant to Article 4 of Chapter 1 of the 1972 Act, Article XIIID of the Constitution of the State of California (“Article XIIID”) and the Proposition 218 Omnibus Implementation Act (Government Code Section 53750 and following) (the “Implementation Act”) (the 1972 Act, Article XIIID and the Implementation Act are referred to collectively as the “Assessment Law”); and
WHEREAS, notice of such public hearing was duly and legally published in the time, form and manner as required by the Assessment Law, shown by the affidavit of Publication of said Resolution of Intention on file in the Office of the City Clerk; and
WHEREAS, said City Council having duly received and considered evidence, oral and documentary, concerning the jurisdiction facts in this proceeding and concerning the necessity for the contemplated work and the benefits to be derived therefrom and said City Council having now acquired jurisdiction to order the proposed work.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, as follows:

SECTION 1. This City Council hereby finds and determines that:

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Resolution No. 2023-XXX – Page 2 of 2
ATTACHMENT 20
Engineer’s Report.

SECTION 3. This City Council hereby orders that the work, as set forth and described in the Resolution of Intention, be done and made.

SECTION 8. The assessments as above confirmed and levied for these proceedings will provide revenue and relate to the fiscal year commencing July 1, 2023 and ending June 30, 2024.

PASSED, APPROVED, AND ADOPTED this ________ day of ____________ 2023.

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Resolution No. 2023-XXX – Page 1 of 2
ATTACHMENT 21
RESOLUTION NO. 2023-XXX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO

CUCAMONGA, CALIFORNIA, CONFIRMING THE DIAGRAM AND
ASSESSMENT; APPROVING THE ANNUAL ENGINEER’S REPORT;

AND ORDERING THE LEVY AND COLLECTION OF ASSESSMENTS
WITHIN PARK AND RECREATION IMPROVEMENT DISTRICT NO.

PD-85 FOR FISCAL YEAR 2023/24
WHEREAS, the City Council of the City of Rancho Cucamonga did on the 7 th day of June 2023, adopt its Resolution of Intention No. 2023-061 (the "Resolution of Intention") pursuant to the Landscaping and Lighting Act of 1972, as amended (the "1972 Act"), declaring its intention to levy and collect assessments within Park and Recreation Improvement District No. PD-85 (the “District”) for Fiscal Year 2023/24 and giving notice of the time and place for a public hearing by the City Council on the levy of the proposed assessments within the Districts; and
WHEREAS, the City Council previously received and preliminarily approved a report of the Assessment Engineer as required by the 1972 Act; and
WHEREAS, notice of such public hearing was duly and legally published in the time, form and manner as required by law, shown by the affidavit of Publication of said Resolution of Intention on file in the Office of the City Clerk; and
WHEREAS, said City Council having duly received and considered evidence, oral and documentary, concerning the jurisdiction facts in this proceeding and concerning the necessity for the contemplated work and the benefits to be derived therefrom, and said City Council having now acquired jurisdiction to order the proposed work.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA, HEREBY RESOLVES, as follows:

SECTION 1: This City Council hereby finds and determines that notice of the public hearing has been given and the proceedings for the consideration of the levy of the annual assessments within the District have been undertaken in accordance with the 1972 Act.

SECTION 2: The final assessments and diagram for the proceedings, as contained in the final Annual Engineer’s Report for the District, are hereby approved and confirmed. The assessments for the District contained in the Annual Engineer’s Report for Fiscal Year 2023/24 are hereby confirmed and levied upon the respective lots or parcels in the District in the amounts as set forth in applicable Annual Engineer’s Report.

SECTION 3: This City Council finds and determines that the public interest and convenience requires the levy and collection of assessments within the District for Fiscal Year 2023/24, and said City Council hereby orders that the work, as set forth and described in said Resolution of Intention be done and made.

SECTION 4: The above-referenced diagram and assessment shall be filed in the Office of the City Clerk. Said diagram and assessment, and the certified copy thereof, shall be open for public inspection.

SECTION 5: The City Clerk is hereby ordered and directed to immediately file a certified copy of the diagram and assessment with the County Auditor. Said filing is to be made no later than the 3rd Monday in August 2023.

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Resolution No. 2023-XXX – Page 2 of 2
ATTACHMENT 21
SECTION 6: After the filing of the diagram and assessment, the County Auditor shall enter on the County assessment roll opposite each lot or parcel of land the amount assessed thereupon, as shown in the assessment.

SECTION 7: The assessments shall be collected at the same time and in the same manner as County taxes are collected, and all laws providing for the collection and enforcement of County taxes shall apply to the collection and enforcement of the assessments.

SECTION 8: The assessments as above confirmed and levied for these proceedings will provide revenue and relate to the fiscal year commencing July 1, 2023 and ending June 30, 2024.

PASSED, APPROVED, AND ADOPTED this ________ day of _____________ 2023.

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DATE: July 19, 2023
TO: President and Members of the Board of Directors
FROM: John R. Gillison, City Manager
INITIATED BY: Mike McCliman, Fire Chief
Tamara L. Oatman, Finance Director
Darci Vogel, Fire Business Manager
Michelle Cowles, Management Analyst II
SUBJECT: Public Hearing for Consideration of a Resolution Adopting the Fire District's General Fund Final Budget for Fiscal Year 2023-24. (RESOLUTION NO. FD 2023-034) (FIRE)
RECOMMENDATION:

Staff recommends the Fire Board approve a Resolution adopting the General Fund Final Budget for FY 2023-24 in the amount of $51,263,990, which is a combination of $42,827,150 General Fund operational expenditures and $8,436,840 Fire Protection Capital Fund expenditures.

BACKGROUND:

The Health and Safety Code, commencing with Section 13890 et seq, requires that Fire Protection District:

1. Adopt a preliminary budget;

2. Publish a notice regarding a public hearing for final budget adoption; and

3. Adopt its final budget on or before October 1 st of each year.

ANALYSIS:

In compliance with the above requirements, the Fire Board of Directors has:

1. Conducted a public budget workshop on June 15, 2023, and adopted the preliminary budget on June 22, 2023;

2. Published on two (2) occasions in the Inland Valley Daily Bulletin notices regarding the public hearing for consideration of final budget adoption; and

3. Submitted a proposed resolution adopting the General Fund Final Budget during the Board meeting scheduled for July 19, 2023.

The preliminary budget has been available for public inspection in accordance with the Health and Safety Code.

FISCAL IMPACT:

The actions taken by the Fire Board will establish the Rancho Cucamonga Fire Protection District's final spending plan for Fiscal Year 2023-24.

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Page 2 ends

1 9
3 3
COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

This item brings together portions of the Council's vision and core values. Delivering vital fire and life safety services to residents, visitors, and businesses through an innovative combination of risk reduction and emergency response programs promotes and enhances a safe and healthy community for all.

ATTACHMENTS:

Attachment 1 - Resolution No. FD 2023-034, General Fund Final Budget FY 2023-24

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Resolution No. FD 23-xxx – Page 1 of 1
ATTACHMENT 1
RESOLUTION NO. FD 2023-XXX

A RESOLUTION OF THE BOARD OF DIRECTORS OF THE RANCHO

CUCAMONGA FIRE PROTECTION DISTRICT, COUNTY OF SAN

BERNARDINO, STATE OF CALIFORNIA, ADOPTING A FINAL
BUDGET FOR THE FISCAL YEAR JULY 1, 2023 THROUGH JUNE 30, 2024
WHEREAS, the Board of Directors of the Rancho Cucamonga Fire Protection District adopted its General Fund Preliminary Budget on June 22, 2023, and made said preliminary budget available for inspection by interested taxpayers; and
WHEREAS, the Board of Directors noticed a time and place for a public hearing regarding the preliminary budget; and
WHEREAS, the Board of Directors of the Rancho Cucamonga Fire Protection District conducted said hearing in accordance with requirements set forth in the Health and Safety Code of the State of California.

NOW, THEREFORE, the BOARD OF DIRECTORS OF THE RANCHO CUCAMONGA FIRE PROTECTION DISTRICT HEREBY RESOLVES to adopt the General Fund Final Budget for the District for Fiscal Year 2023/24 in the amount of $51,263,990, which is a combination of $42,827,150 General Fund operational expenditures and $8,436,840 Fire Protection Capital Fund expenditures. The General Fund's Final Budget is on file in the office of the Finance Director.

PASSED, APPROVED, and ADOPTED this 19th day of July 2023.

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DATE: July 19, 2023
TO: Mayor and Members of the City Council
FROM: John R. Gillison, City Manager
INITIATED BY: Matt Burris, AICP, LEED AP, Deputy City Manager – Community & Economic Development
Matt Marquez, Planning & Economic Development Director
SUBJECT: Presentation from Empire Economics Inc. on the City’s Annual Employment and Housing Trends Study and Analysis of the Current and Future State of Warehousing and Distribution. (CITY)
____________________________________________________________________________ RECOMMENDATION:

Staff recommends that the City Council receive a presentation from Dr. Joe Janczyk of Empire Economics Inc. on the City’s Annual Employment and Housing Trends Study and Analysis of the current and future state of Warehousing and Distribution.

BACKGROUND:

Over the years the City has worked with Empire Economics to develop an annual forecast of Rancho Cucamonga’s economic and housing growth and conditions. Additionally, supplemental analysis of items such as high-speed rail was prepared on an as needed basis. Factors impacting the City’s economy and housing market change regularly, and there is a need to understand the reasons behind these changes and the impacts they have on the community.

On February 15, 2023, the City Council approved a professional services agreement with Empire Economics for the main purpose of continuing to prepare these annual studies. The agreement approved by Council covers a three-year period. This year, Empire was tasked with not only producing an Employment and Housing Trends Study, but also an analysis of the Current and Future State of Warehousing and Distribution. The Empire team has completed their work and will now be presenting their findings to the City Council.

ANALYSIS:

As the City continues to grow and evolve, understanding changes to its economy and housing market remain key for future planning efforts. Listed below are the information categories covered in this year’s Employment and Housing Trends Study, along with key information or findings for each category:

1. Overview of the Federal Reserve Board’s (FRB) Inflation Policy: The study’s forecasting is based on the impacts of the FRB goal for inflation of 2%. Near term restrictive policies will/have result in significantly higher mortgage rates as well as higher unemployment rates. Additionally, stabilization policies once desired inflation rate is attained will result in lower financial interest rates. Therefore, although the short-term impacts of federal policies will adversely impact employment as well as the housing

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1 9
3 1
market, the eventual result will generally be lower interest rates that will allow for a return to normal growth conditions.

2. Expected Impacts on the Economy/Employment: The City’s economy has recovered from the impacts of the Covid 19 pandemic. Certain sectors performed better than others as the economy has evolved and reshaped itself. Among the relatively strong sectors, administrative and support is much higher than pre-Covid 19 conditions. Policies at the federal level will continue to impact the City’s economy over the next several years and cause even more restructuring. It is anticipated that the real estate and finance sectors will be impacted due higher mortgage and interest rates overall. Additionally, employment growth was roughly 4,100 in 2021 and 5,200 in 2022, which was a new peak level. It is anticipated that future employment growth between 2023 and 2027 will be roughly 1,200 to 2,200 per year.

3. Expected Impacts on the Housing Market: Near term policies at the Federal level have significantly increased mortgage rate and this recent surge has significantly increased mortgage payments. For example, with a 30-year fixed rate for a mortgage loan of $800,000:
• For a 2.9% mortgage rate, the mortgage interest on the loan would be about $400,000.
• For a mortgage rate of 6.9% (recent peak level), mortgage interest on the loan exceeds $1,000,000.

While homeowners have recently purchased or refinanced their mortgage loans at historically low rates, they have become reluctant to purchase another home with a much higher new mortgage rate. For example, 72% of homebuyers in in the county have a mortgage rate that is 4% or less. Many who are trying to purchase new homes will likely have a much higher mortgage rate than their existing homes and will also need to find a buyer for their current home who will be able to afford a higher mortgage rate. Eventually, when inflation lowers, mortgage rates will decline, and a more normal housing market should return.

4. Market Conditions for New Residential For-Sale and Apartment Units: The housing stock in Rancho Cucamonga has recently undergone a significant shift from primarily for- sale homes to multi-family apartment rentals. With regards to new for-sale homes, there were 17 projects with 1,105 homes in 2020 that were on the marketplace, and now these are all currently closed-out, occupied by homeowners. The sales rate in the City has almost doubled from 2021 from 308 to 578 homes. Furthermore, although there are several major projects in the planning process, these have not yet come onto the marketplace. These include several apartment-style projects which account for over 1,500 additional units. Again, these projects are in various stages of the development process and are in high demand. Rental rates in the City continue to increase. From 2015 until now, rents have increased from $1,709 to $2,711 which represents a level that has been consistently above those for San Bernardino County as a whole.

As discussed earlier in this report, in previous years the City has asked Empire Economics to conduct additional or supplemental analysis of other items impacting the local economy and/or housing market. This year, staff requested that they prepare an analysis of the Current and Future State of Warehousing and Distribution. Listed below are the information categories covered in this analysis, along with key findings for each category:

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3 1

1. Demand for Warehousing/Distribution Centers in the Inland Empire: Currently 40% of the nations imports from Asia are processed through the ports and then go into the Inland Empire and beyond. The combination of imports and transportation systems support the robust development of warehouse/distribution centers in the Inland Empire.

Within the Inland Empire, Rancho Cucamonga has a preferred location due to its proximity to the ports, closer proximity to existing highways and rail lines, and closer proximity to major population areas. Employment growth for these uses has been robust, even with advancement in automation. The need for workers in this field is expected to still outpace other segments until 2028.

The total square footage for new warehouse/distribution in the Inland Empire has increased from 423 million in 2008 to 630 million in 2022. The average building size is 840,000 with some of the larger buildings in the 4 million square foot range. Buildings on average are trending toward larger sizes, but despite fewer worker per square foot, the larger buildings coupled with increased demand require more workers overall. The demand for this type of space is expected to increase from 630 million square feet in 2022 to 806 million square feet in 2040.

2. Demand for Warehouse/Distribution Centers in Rancho Cucamonga: The share of Warehouse/Distribution employment increased from 4.3% in 2010 to a peak level of 6.4% in 2018. Since then, the share has decreased to about 5.0% during 2020-2022. The decline can be attributed to new automation being built into new buildings and implemented into older existing ones, as well as a stronger growth in various non- warehouse/distribution sectors such as healthcare.

The average salaries of the warehouse/distribution workers in the city of $54,826 are slightly below the average wages for the City as a whole of $56,261. Based upon the average salary level for warehouse/distribution workers, they would not likely be able to purchase a for-sale home in the city. While some workers may choose to rent an apartment in the city, most would likely choose to live in another Inland Empire city that would have lower housing costs.

The near-term warehouse/distribution projects that are currently under construction or in the planning process have an estimated 4,500,000 square feet. The term absorption utilized in Empire’s report (see attached) means that the space is fully constructed and is being utilized for operations by a firm. Empire estimates that absorption will commence in latter 2023, followed by significant levels of absorption in 2024 and 2025, with the balance in 2026. Empire estimated the amount of employment that the projects in the planning process will generate about 2,833 new jobs. The jobs created by the operation of firms in warehouse/distribution follows a similar pattern to their absorption. New job creation starts in 2023, with expected peak levels in 2024 and 2025, followed by the remaining in 2026.

3. Benefits/Cost Analysis of Warehouse/Distribution: The labor market will be fully recovered with over 300,000 new jobs being created in the Inland Empire, which exceeds the jobs lost due to the pandemic, including significant losses in the warehouse/distribution sector. Both the Inland Empire’s work force and wage numbers have grown over the last two years at a rate greater than the State of California. Warehouse space in the Inland Empire has a vacancy rate of 1.4% and is more expensive that similar space in Orange and San Diego counties. These are all positive factors for the warehouse and distribution market in the Inland Empire. Alternatively, there is a risk for a reduction in future growth

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3 1
due to automation. Per the Institute of Spatial Economics, 75% of jobs in the logistics industry could be at risk. Pollution associated with these uses continues to remain a concern, as do health risks to those who live in close proximity. Additionally, traffic and noise impacts are not anticipated to lessen.

4. Comparison of the Benefit/Costs for Potential Land Uses: Rancho Cucamonga’s industrial economic and employee base is well established in the southern portion of the City. This area has characteristics that provide for support for future warehouse/distribution development, including established industrial buildings, easy access to freeways, and large parcels that can accommodate large warehouse/distribution buildings. While there is potential for the development of other land use types, such as office or retail, their development potential is currently not as favorable as warehouse/industrial as measured by economic metrics. For example, vacant rates for warehouse/distribution are significantly lower (less than 2%) that the retail and office sectors (6.5% and 5.3%). Rental rates are also less for warehouse/distribution in comparison to other land use types. The warehouse/distribution sector will continue to remain stable, despite the risks associated with this development type (traffic, pollution, etc.), due the City and Inland Empire’s location, workforce, lower costs, and other factors outlined in Empire’s reports.

In conclusion, Federal policies will continue to drive mortgage rates and unemployment. More short-term rate hikes are expected. The market for existing homes expects to remain sluggish through 2024. Home sales will also remain low due to current homeowners having historically low mortgage rates. New residential development activity in the city remains primarily apartments. Lastly, warehouse/distribution remains a primary growth factor in the area, but with minimal economic benefits. In the City, the potential new warehouse/distribution development is significant (4 million square feet), but the economic benefits are minimal.

FISCAL IMPACT:

There is no fiscal impact associated with this presentation to the City Council. The cost for the 2023 annual forecast and supplemental analysis of warehouse and distribution centers was budgeted for in Fiscal Year 2022-2023. Funding came from General Fund- Non-Departmental General / Contract Services 1001001-5300. Funding for work in the following years will be requested as part of the annual budget process.

COUNCIL MISSION / VISION / GOAL(S) ADDRESSED:

This item addresses the City Council’s Core Values of “Intentionally embracing and anticipating the future”, and “Equitable prosperity for all” by ensuring that Rancho Cucamonga’s vibrant economy ensures prosperity and opportunities now and in the future.

ATTACHMENTS (1):

Attachment 1 – Employment and Housing Trends Study
Attachment 2 – Analysis of the Current and Future State of Warehousing and Distribution

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1 CITY OF RANCHO CUCAMONGA

RECENT/EXPECTED EMPLOYMENT/HOUSING TRENDS/PATTERNS
IMPACTS OF THE FEDERAL RESERVE GOAL OF 2% INFLATION

PREPARED
BY
EMPIRE ECONOMICS, INC.

JOSEPH T. JANCZYK, PH.D.

APRIL 17, 2023
(JUNE 2023 UPDATES TO FED POLICIES AND EMPLOYMENT)
ATTACHMENT 1

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TABLE OF CONTENTS
PREVIEW: KEY QUESTIONS FOR RANCHO CUCAMONGA

..............................................3
EMPIRICAL FOUNDATION: DATA COMPILED SPECIFICALLY FOR RANCHO CUCAMONGA.......4 I. OVERVIEW OF THE FEDERAL RESERVE BOARD (FRB) GOAL OF 2% INFLATION

........5
II. EXPECTED IMPACTS ON THE ECONOMY/EMPLOYMENT

..9
III. EXPECTED IMPACTS ON THE HOUSING MARKET

.
19 IV . MARKET CONDITIONS FOR NEW RESIDENTIAL FOR-SALE AND APARTMENT UNITS ......27

CREDENTIAL/QUALIFICATIONS OF EMPIRE ECONOMICS

.36
2

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PREVIEW: KEY QUESTIONS FOR RANCHO CUCAMONGA
FED POLICY AND COVID-19 IMPACTS:
HOW LONG WILL IT TAKE THE FEDERAL RESERVE BOARD TO ATTAIN ITS GOAL OF 2% INFLATION? HOW WILL THE FED POLICIES IMPACT INTEREST RATES AND UNEMPLOYMENT? HOW HAS THE COMPOSITION OF THE RANCHO CUCAMONGA ECONOMY CHANGE DUE TO COVID-19? WHAT ADDITIONAL SHIFTS CAN BE EXPECTED FROM THE FEDERAL RESERVE BOARD POLICIES? HOUSING PAYMENT, INVENTORY AND PRICE OUTLOOK:
HOW HA VE ANNUAL HOUSING PAYMENTS FOR NEW HOMEOWNERS CHANGED FROM WHEN MORTGAGE RATES WERE AT HISTORICALLY LOW LEVELS TO THE CURRENTLY HIGHER RATES?
HOW IS HOUSING INVENTORY IMPACTED BY EXISTING HOMEOWNERS NOT MOVING DUE TO HIGHER RATES? HOW MUCH MIGHT PRICES NEED TO DECLINE FOR THE MARKET TO RETURN TO NORMAL? LOCAL HOUSING TYPE SHIFT AND ABSORPTION:
THE HOUSING MARKET HAS SHIFTED FROM NEW FOR-SALE PROJECTS TO NEW MULTIFAMILY APARTMENT RENTALS. HOW LONG WILL IT TAKE THE FORTHCOMING NEW APARTMENT UNITS TO BE ABSORBED IN THE MARKETPLACE? 3

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EMPIRICAL FOUNDATION: SPECIFIC DATA FOR RANCHO CUCAMONGA *PRIMARY DATA COMPILED BY EMPIRE ECONOMICS SPECIFICALLY FOR THE CITY* A. EMPLOYMENT AND PAYROLL DATA SPECIFICALLY FOR THE CITY

EMPLOYMENT BY FIRMS IN CITY AND HOUSEHOLDS EMPLOYED IN THE CITY

FOR EACH ECONOMIC SECTOR, TOTAL EMPLOYMENT, SHARES AND RECENT CHANGES

FOR EACH ECONOMIC SECTOR, PAYROLL LEVELS AND RECENT CHANGES B. REAL PROPERTY FILES: SALES OF HOMES IN THE CITY
NUMBER OF EXISTING/NEW HOMES SOLD DURING JAN. 2000 THROUGH 2022: ~52,500

CHARACTERISTICS FOR EACH HOME SOLD
*PRODUCT TYPE * DATE OF SALE * PRODUCT TYPE * SALES PRICE * LIVING AREA

INVENTORY AND PENDING LISTING LEVELS
C. MARKET SURVEYS OF ACTIVE RESIDENTIAL FOR-SALES AND APARTMENT PROJECTS IN THE CITY MARKETING STATUS: HOMES CLOSED AND FUTURE SALES AS WELL AS RENTALS * SALES PRICES * INCENTIVES * LIVING AREAS * SPECIAL TAXES D. SITE VISITS FOR FORTHCOMING PROJECTS IN THE CITY

CURRENT DEVELOPMENT CONDITION OF THE PROPERTIES
STATUS OF DEVELOPMENT APPROV ALS CITY PLANNING DEPARTMENT 4

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I. OVERVIEW OF THE FEDERAL RESERVE BOARD (FRB) GOAL OF 2% INFLATION EMPIRE ECONOMICS (EMPIRE) ANNUAL ECONOMIC AND HOUSING MARKET STUDY FOR FORECASTING RANCHO CUCAMONGAS EMPLOYMENT AND HOUSING IS BASED UPON THE IMPACTS OF THE FEDERAL RESERVE BOARD (FRB/FED) GOAL OF 2% INFLATION.

TO IDENTIFY AND QUANTIFY THE IMPACTS OF THE FEDS POLICIES, EMPIRE COMPILED PRIMARY DATA SPECIFICALLY FOR RANCHO

CUCAMONGA (RC) WHICH INCLUDES EMPLOYMENT BY SECTOR AS WELL AS RECENT HOUSING SALES ALONG WITH THE CHARACTERISTICS OF THE MORTGAGES UTILIZED BY THESE HOUSEHOLDS.

EMPIRE FORMULATED A MACROECONOMIC MODEL SPECIFICALLY FOR RANCHO CUCAMONGA THAT IS UTILIZED TO FORECAST THE IMPACTS OF THE FEDS POLICY OF ATTAINING A 2% INFLATION RATE. * NEAR-TERM FED RESTRICTIVE POLICIES HA VE/WILL RESULT IN SIGNIFICANTLY HIGHER MORTGAGE RATES AS WELL AS A HIGHER UNEMPLOYMENT RATE.
* INTERMEDIATE-TERM FED STABILIZATION POLICIES ONCE THE 2% INFLATION RATE IS ATTAINED WILL RESULT IN LOWER FINANCIAL INTEREST RATES.

THEREFORE, ALTHOUGH THE SHORT RUN IMPACTS OF THE FED POLICY ADVERSELY IMPACT THE EMPLOYMENT AS WELL AS THE HOUSING MARKET, THE EVENTUAL RETURN TO AN INFLATION RATE OF 2% WILL RESULT IN GENERALLY LOWER INTEREST RATES THAT WILL ENABLE THE ECONOMY AND HOUSING MARKET TO RETURN TO NORMAL GROWTH CONDITIONS. 5

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6 CONSUMER PRICE INDEX (CPI)MEASURES THE CHANGE IN THE PRICE OF A FIXED BASKET OF GOODS AND SERVICES. THE FRB TARGET OF 2.0% INFLATION UTILIZES THE PERSONAL CONSUMPTION EXPENDITURE PRICE INDEX (PCE-PI) WHICH CAPTURES A CHANGING BASKET OF GOODS AND SERVICES, REFLECTING CONSUMER BEHA VIOR TO PRICE CHANGES.

RECENT TRENDS/PATTERNS FOR INFLATION RATES
2021-Q1
2021-Q2
2021-Q3
2021-Q4
2022-Jan.
2022-Feb.
2022-Mar.
2022-Apr.
2022-May
2022-June
2022-July
2022-Aug.
2022-Sept.
2022-Oct.
2022-Nov.
2022-Dec.
2023- Jan.
2023-Feb.
2023-Mar.
2023-Apr.
2023-May.

INFLATION INDEX - YEAR OVER YEAR

CHANGE BY QUARTER AND MONTHLY

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7 CURRENT FRB MONETARY POLICIES EXPECTED TO REDUCE
CORE INFLATION TO THE 2% GOAL BY 4TH QTR. 2025
SOURCE: FEDERAL OPEN MARKET COMMITTEE,
ECONOMIC PROJECTIONS, JUNE 14, 2023
TABLE 1 MEDIAN

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8 FEDERAL FUNDS RATE EXPECTED TO PEAK IN 2023-4TH QTR.

UNEMPLOYMENT RATE EXPECTED TO PEAK AT ABOUT 4.5% 2024-4TH 2025-4TH QTR SOURCE: FEDERAL OPEN MARKET COMMITTEE,
ECONOMIC PROJECTIONS, JUNE 14, 2023
TABLE 1 MEDIAN

BUT NOT A SMOOTH PATH
JEROME POWELL STATED THAT THERE WAS FA VORABLE PROGRESS IN JANUARY 2023 SHORTLY THEREAFTER: UNEXPECTED JOB SURGE (+517,000) & UNEMPLOYMENT 3.4%, A 53 YR. LOW BUT FOR MARCH 2023, JOB GROWTH WAS LOWER (+236,000) AND UNEMPLOYMENT ROSE SLIGHTLY TO 3.5%

0.3%

4.4%

5.6%

4.6%

3.4%

2.5%
0%
1%
2%
3%
4%
5%
6%

PROBABLE - FED RATE

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II. EXPECTED IMPACTS ON THE ECONOMY/EMPLOYMENT
THE CITYS ECONOMY HAS RECENTLY RECOVERED FROM THE IMPACTS OF COVID, AND THIS HAS RESULTED IN A RESTRUCTURING OF THE ECONOMIC SECTORS:

AMONG THE RELATIVELY STRONG SECTORS, ADMINISTRATIVE/SUPPORT IS MUCH HIGHER THAN PRE-COVID

AMONG THE RELATIVELY WEAK SECTORS, MANUFACTURING IS MUCH LOWER THAN PRE-COVID THE FEDS POLICIES WILL HA VE ANOTHER RESTRUCTURING IMPACT DURING THE NEXT SEVERAL YEARS, WITH THE SECTORS THAT ARE EXPECTED TO BE MOST IMPACTED, SUCH AS:

REAL ESTATE DUE TO SIGNIFICANTLY HIGHER MORTGAGE RATES

FINANCE DUE TO HIGHER INTEREST RATES OVERALL
ACCORDINGLY, BASED UPON THE COMPOSITION OF THE CITYS ECONOMIC BASE, EMPIRE IDENTIFIES THE DEGREE TO WHICH SPECIFIC SECTORS WILL BE IMPACTED ALONG THEIR IMPACTS ON THE AGGREGATE LEVELS OF EMPLOYMENT:

POTENTIAL CHANGES IN THE LEVELS OF EMPLOYMENT BY SECTORS

FORECASTS OF AGGREGATE EMPLOYMENT CHANGES, ANNUALLY
9

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10 RECENT EMPLOYMENT TRENDS BY V ARIOUS GEOGRAPHIC AREAS SINCE MARCH 2020, COVID-19 HAS DRAMATICALLY IMPACTED THE ECONOMY/EMPLOYMENT IN UNIQUE WAYS APRIL 2020: EMPLOYMENTDECLINED SIGNIFICANTLY, BY -18% FOR THE CITY SINCE MAY 2020, EMPLOYMENT STARTED TO RECOVER,SURPASSING ITS PRE-COVID LEVELS IN NOVEMBER 2021 AS OF MAY 2023, THE CITY IS ABOUT +3%ABOVE ITS PRE-COVID LEVELS THE CITYS RATE OF RECOVERY HAS BEEN GENERALLY BETWEEN RIV-SB (HIGHER END) AND CALIFORNIA (LOWER END) Jan.-Feb. 2020
20-Apr
20-Jun
20-Aug
20-Oct
20-Dec
21-Feb
21-Apr
21-Jun
21-Aug
21-Oct
Dec-21
Feb-22
Apr-22
Jun-22
Aug-22
Oct-22
Dec-22
Feb-23
Apr-23
% TOTAL NONFARM EMPLOYMENT VS.

PRE-COVID LEVELS (JAN.-FEB. 2020)

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UNEMPLOYMENT RATES: HISTORICALLY AND RECENTLY

UNEMPLOYMENT RATES BY GEOGRAPHIES
(MAY 2023)
RANCHO CUCAMONGA HAD AN UNEMPLOYMENT RATE (3.1%)
BELOW THAT OF BOTH SAN BERNARDINO COUNTY (4.3%)
AND THE UNITED STATES (3.7%)
THE CITYS RELATIVELY LOW UNEMPLOYMENT RATE

REDUCES THE SUPPLY OF ITS A V AILABLE WORKERS
11 RANCHO CUCAMONGA MONTHLY UNEMPLOYMENT RATES
(JANUARY 2010 MAY 2023)
CITYS RATE DECLINED FROM 10% IN 2010 TO 2,6% IN DEC. 2019 COVID-19 CAUSED THE RATE TO RISE TO 12.9% IN MAY 2020 AS THE ECONOMY RECOVERED, THE RATE WAS 2.6% IN MAY 2022 MOST RECENTLY, THE RATE WAS 3.1% IN MAY 2023
2010-Jan
2010-Jul
2011-Jan
2011-Jul
2012-Jan
2012-Jul
2013-Jan
2013-Jul
2014-Jan
2014-Jul
2015-Jan
2015-Jul
2016-Jan
2016-Jul
2017-Jan
2017-Jul
2018-Jan
2018-Jul
2019-Jan
2019-Jul
2020-Jan
2020-Jul
2021-Jan
2021-Jul
2022-Jan
2022-July
2023-Jan

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12 COMPOSITION OF RANCHO CUCAMONGA EMPLOYMENT BY SECTOR 25.5% OF JOBS ARE IN TWO LARGEST SECTORS: ADMINISTRATIVE SUPPORT SERVICES AND RESTAURANT/HOTELS ANOTHER 31.9% OF JOBS: GOVERNMENT, RETAIL TRADE, AND MANUFACTURING

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13 RANCHO CUCAMONGA EMPLOYMENT BY SECTORS: COVID RESTRUCTURING IMPACTS (2022 VS. 2019 PRE-COVID)
SECTORS WITH BIGGEST JOB ADDITIONS 2022 VS. 2019: ADMINISTRATIVE SUPPORT ~ +1,200 AND WHOLESALE TRADE ~ +800 SECTORS WITH BIGGEST JOB LOSES 2022 VS. 2019: MANUFACTURING ~ -1,400 AND RETAIL TRADE ~ -500

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14 RANCHO CUCAMONGA EMPLOYMENT BY SECTORS 2022 SALARIES OVERALL A VERAGE SALARY FOR 2022: $56,261
HIGHEST PAYING SECTORS: FINANCE AND INSURANCE, CONSTRUCTION, MANUFACTURING, WHOLESALE TRADE LOWEST PAYING SECTORS: RESTAURANT/HOTELS, EDUCATIONAL SERVICES, RETAIL, ADMINISTRATIVE SUPPORT

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RANCHO CUCAMONGA VS. CALIFORNIA: EMPLOYMENT RECOVERY BY SECTORS OVERALL, RANCHO CUCAMONGA AGGREGATE TOTAL NONFARM EMPLOYMENT IS ABOVE PRE-COVID-19 PEAK 15 DEC. 2022
RANCHO

CUCAMONGA

SECTORS
AHEAD

OF CALIFORNIA
INFORMATION
ADMINISTRATIVE
PROFESSIONAL
EDUCATION
REAL ESTATE
ACCOMMODATION

AND FOOD SERVICE
HEALTHCARE
WHOLESALE TRADE
GOVERNMENT
DEC. 2022
RANCHO

CUCAMONGA

SECTORS
BEHIND

CALIFORNIA
TRANSPORTATION AND

WAREHOUSING
RETAIL TRADE
FINANCE / INSURANCE
OTHER SERVICES
CONSTRUCTION
ARTS, ENTERTAINMENT,

RECREATION
MANUFACTURING
MANAGEMENT

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RANCHO CUCAMONGA - RECENT AND FORECASTED AGGREGATE LEVELS OF EMPLOYMENT (2000-2022 RECENT & 2023-2027 FORECAST)
TOTAL EMPLOYMENT BY FIRMS LOCATED IN RANCHO CUCAMONGA DECLINED BY SOME -6,400 FROM 2019 TO 2020 EMPLOYMENT INCREASED BY ~4,100 IN 2021 AND IN 2022 BY ~5,200, EXCEEDING ITS PRE-COVID LEVEL DURING 2023-2027, EMPLOYMENT AMONG THE V ARIOUS SECTORS IS EXPECTED TO CONTINUE TO RISE ADDITIONALLY , ANOTHER ~2,800 JOBS ARE EXPECTED TO BE CREATED FROM NEW WAREHOUSE BUILDINGS EMPLOYMENT SURPASSED ITS PRIOR 2018 PEAK LEVEL IN OCTOBER 2022

FUTURE EMPLOYMENT GROWTH WILL BE GENERATED BY MOST SECTORS, INCLUDING WAREHOUSE/DISTRIBUTION 16 36,830
41,124
45,503
52,496
56,545
60,591
65,139
64,358
62,974
59,054
58,210
61,188
63,884
66,188
71,253
73,262
75,159
75,383
75,611
74,445
68,040
72,122
77,360
78,943
81,168
83,389
84,992
86,192
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022-Est.
2023-F
2024-F
2025-F
2026-F
2027-F

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17 FORECAST OF ANNUAL RANCHO CUCAMONGA EMPLOYMENT ANNUAL CHANGES BASED UPON A CONSIDERATION OF RECENT/EXPECTEDECONOMICEMPLOYMENT TRENDS FOR FIRMS IN THE CITY EMPLOYMENT GROWTH WAS ~4,100 IN 2021 AND ~ 5,200 IN 2022, ATTAINING A NEW PEAK LEVEL FUTURE GROWTH IN 2023-2027 IS EXPECTED TO AMOUNT TO ~1,200-2,200 PER YEAR, INCLUDING ~400-1,000 PER YEAR

OF ADDITIONAL WAREHOUSE/DISTRIBUTION JOBS

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18 LOCATION OF EMPLOYMENT VS. AFFORDABILITY OF HOUSING
RANCHO CUCAMONGAS HOUSEHOLDS WITH JOBS (BLUE LINE) EXCEED THE NUMBER OF JOBS BY FIRMS IN THE CITY (GREEN LINE) ABOUT 17,000 (NET) CITY RESIDENTS COMMUTE TO JOBS OUTSIDE THE CITY, TYPICALLY AT HIGHER SALARIES

THAT ENABLE THEM TO AFFORD HOUSING IN THE CITY
FOR WAREHOUSE/DISTRIBUTION WORKERS WITH SALARIES OF ABOUT $55,000/YR.

MANY WILL NEED TO SEEK MORE AFFORDABLE HOUSING OUTSIDE OF THE CITY. 2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022-Est.
2023-F
2024-F
2025-F
2026-F
2027-F

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III. EXPECTED IMPACTS ON THE HOUSING MARKET
NEAR-TERM: RESTRICTIVE FED POLICIES HA VE SIGNIFICANTLY INCREASED MORTGAGE RATES.

RECENT SURGES IN MORTGAGE RATES HA VE SUBSTANTIALLY INCREASED MORTGAGE PAYMENTS FOR PURCHASERS OF EXISTING AND NEW HOMES.

FOR EXAMPLE, WITH A 30 YEAR FIXED RATE FOR A MORTGAGE LOAN OF $800,000:

FOR A 2.9% MORTGAGE RATE, THE MORTGAGE INTEREST ON THE LOAN WOULD BE ABOUT $400,000.

FOR A MORTGAGE RATE OF 6.9% (RECENT PEAK LEVEL), MORTGAGE INTEREST ON THE LOAN EXCEEDS $1,000,000.

THE MAJORITY OF US HOMEOWNERS HA VE RECENTLY PURCHASED/REFINANCED THEIR MORTGAGE LOANS AT HISTORICALLY LOW RATES, SO THEY MAY BE RELUCTANT TO PURCHASE ANOTHER HOME WITH A MUCH HIGHER NEW MORTGAGE RATE. 72% OF HOMEOWNERS HA VE A MORTGAGE RATE THATS 4.0% OR LESS 55% OF HOMEOWNERS HA VE A RATE THAT IS 3.5% OR LESS
34% HA VE A RATE THATS 3.0% OR LESS
MOVE UP PURCHASERS FOR HOMES WILL LIKELY HA VE A MUCH HIGHER MORTGAGE RATE THAN THEIR EXISTING HOMES.

FURTHERMORE, THEY WILL ALSO NEED TO FIND A BUYER FOR THEIR CURRENT HOME WHO WILL BE ABLE TO AFFORD A HIGHER MORTGAGE RATE.

EVENTUALLY WHEN INFLATION RETURNS TO 2%, MORTGAGE RATES DECLINE, NORMAL HOUSING MARKET RETURNS.

FINANCIAL MARKETS WILL REACT POSITIVELY TO THE FED BEING ON A SUSTAINED PATH TO SUCCESSFULLY ACCOMPLISH THE 2% INFLATION TARGET.

SUCH LOWER INFLATION RATES, IN TURN, SHOULD RESULT IN LOWER MORTGAGE RATES.

THE HOUSING MARKET RETURNS TO A NORMAL LEVEL OF SALES AND APPRECIATION. 19

Page 643 of 715 ends

20 ANNUAL PRICE CHANGE FOR RANCHO CUCAMONGA (2000 2022) FROM 2000 TO 2022, PRICES HA VE GONE THROUGH FOUR MAJOR PERIODS:
2000-2006: STRONG GROWTH DRIVEN BY CREATIVE FINANCE, PRICES RISING ABOUT 20% PER YEAR 2006-2010: HOUSING BUBBLE CORRECTION WITH PRICES FALLING -10% PER YEAR 2010-2020: STEADY PRICE RISE OF ~5% PER YEAR
2020-2022: COVID-19 IMPACT WITH PRICES RISING BY SOME 18%/YR DUE TO HISTORICALLY LOW MORTGAGE RATES

TOTAL PRICE INCREASE BY TIME PERIOD BY TYPE
$234,814
$261,078
$298,204
$364,662
$467,093
$566,348
$620,278
$614,926
$451,042
$383,044
$379,900
$389,151
$398,402
$449,754
$489,667
$513,452
$534,307
$568,142
$606,769
$606,040
$653,712
$767,633
$876,332
$131,493
$140,081
$163,679
$202,156
$256,041
$342,651
$362,206
$347,120
$269,627
$218,865
$220,711
$238,177
$255,642
$281,869
$298,684
$301,124
$319,521
$341,264
$366,727
$363,284
$371,745
$443,082
$511,176

Page 644 of 715 ends

21 SALES OF EXISTING/NEW HOMES IN RANCHO CUCAMONGA
SINGLE-FAMILY DETACHED AND ATTACHED, 2000-2022
SALES OF EXISTING/NEW SINGLE FAMILY DETACHED HOMES DECLINED FROM 1,509 IN 2021 TO 1,068 IN 2022, LOWEST SINCE AT LEAST 2000
WHILE THE SALES OF ATTACHED HOMES DECLINED FROM 391 IN 2021 TO 315 IN 2022, THE LOWEST SINCE 2013 THESE DECLINES CAN BE ATTRIBUTED TO HIGHER MORTGAGE RATES o EXISTING HOMEOWNERS WANT TO KEEP THEIR HISTORICALLY LOW MORTGAGE RATES o PURCHASERS OF HOMES FACE HIGHER NEW MORTGAGE RATES
2,346
2,552
3,015
3,104
2,859 2,863
2,015
1,338
1,494 1,569 1,577
1,192 1,228
1,470
1,361
1,582 1,519 1,478
1,338 1,320
1,427
1,509
1,068
390
438
480
577
837
983
629
474
410
535
435
294
269
348
348
340
330
394
321
319
355
391
315

Page 645 of 715 ends

TRENDS/PATTERNS FOR U.S. MORTGAGE RATES SINCE 2018
MORTGAGE RATES ARE A SECONDARY DRIVER OF HOUSING DEMAND; EMPLOYMENT GROWTH IS TYPICALLY THE PRIMARY DRIVER MORTGAGE RATES HAD A PRIOR PEAK OF 4.9% IN NOVEMBER 2018 RATES THEN DECLINED TO THEIR LOWEST LEVEL OF 2.8% IN JANUARY 2021, DUE TO FED POLICIES TO STIMULATE THE ECONOMY RATES REMAINED AT HISTORICALLY LOW LEVELS, BELOW 3.2%, THROUGH DECEMBER 2021 BUT THEN DUE TO HIGHER INFLATION, MORTGAGE RATES ROSE TO 6.9% IN OCTOBER 2022 AND REMAINED ABOVE 6.0% IN 2023 22 January 2018
March 2018
May 2018
July 2018
September 2018
November 2018
January 2019
March 2019
May 2019
July 2019
September 2019
November 2019
January 2020
March 2020
May 2020
July 2020
September 2020
November 2020
January 2021
March 2021
May 2021
July 2021
September 2021
November 2021
January 2022
March 2022
May 2022
July 2022
September 2022
November 2022
January 2023
March 2023
May 2023
30-YEAR FIXED MORTGAGE RATES

Page 646 of 715 ends

RANCHO CUCAMONGA ANNUAL HOUSING PAYMENTS BY MONTH (JAN. 2018 DEC. 2024 FORECAST)

ANNUAL HOUSING PAYMENTS REPRESENT THE SUM OF MORTGAGE PRINCIPAL, MORTGAGE INTEREST AND PROPERTY TAXES FROM JANUARY 2019 TO DECEMBER 2020HOUSING PAYMENTS WERE ABOUT~$33,000/YR; LOWER RATES OFFSET HIGHER PRICES DURING 2021HOUSING PAYMENTS ROSE TO~$40,000/YR.: MORTGAGE RATES WERE RELATIVELY STABLE BUT PRICES ROSE SUBSTANTIALLY THEN IN LATTER 2022, PAYMENTS ROSE TO~$51,000/YR.: PRICES CONTINUED TO INCREASE AND RA TES ROSE SIGNIFICALLY TO ABOUT ~6.5% 23 E. DECEMBER 2024:

IF CURRENT

HOUSING PRICES
DECLINED BY -8%

AND MORTGAGE

RATES DECLINED
TO 4.5% BY
DECEMBER 2024,

THE PAYMENT

WOULD FALL TO
$38K
A. 2019-2020: LOWER

RATES OFFSET HOUSING

APPRECIATION
B. 2021: RISING PRICES

AND STABLE RATES

DROVE PAYMENTS
HIGHER.

C. EARLY 2022: HIGHER

PRICES AND

MORTGAGE RATES

DROVE PAYMENTS

EVEN HIGHER

ANNUAL HOUSING

PAYMENT LEVELS
D. MID-LATER 2022:

FALLING PRICES OFFSET

BY RISING MORTGAGE

RATES AS PAYMENTS

GO EVEN HIGHER
1/1/2018
5/1/2018
9/1/2018
1/1/2019
5/1/2019
9/1/2019
1/1/2020
5/1/2020
9/1/2020
1/1/2021
5/1/2021
9/1/2021
1/1/2022
5/1/2022
9/1/2022
1/1/2023
5/1/2023
9/1/2023
1/1/2024
5/1/2024
9/1/2024
ANNUAL HOUSING PAYMENT AMOUNTS (IN JAN. 2023 $)

..A

.|
.B
.|..C
|..D..|

..
.
......E

Page 647 of 715 ends

24 RANCHO CUCAMONGA SHARE OF ANNUAL HOUSING PAYMENTS BY MONTH (JAN. 2018 DEC. 2024 F) ANNUAL HOUSING PAYMENTS = MORTGAGE PRINCIPAL + MORTGAGE INTEREST + PROPERTY TAXES FOR THE FIRST YEAR A. JAN. 2018:MORTGAGE INTEREST PAYMENT SHARE MADE UP ABOUT34% OF THE TOTAL ANNUAL HOUSING PAYMENT B. JAN. 2018 TO DEC. 2020:MORTGAGE INTEREST PAYMENT SHARE DECLINED TO25%: RATES FELL AND PRINCIPAL SHARE ROSE WITH PRICES C. DEC. 2020 TO NOV . 2022:MORTGAGE INTEREST RATE SHARE ROSE TO ALMOST50% AS MORTGAGE RATES ROSE. PURCHASERS OF HOMES AT CURRENT RATES HA VE TWICE AS MUCH MORTGAGE INTEREST THAN AT HISTORICALLY LOW RATES 1/1/2018
5/1/2018
9/1/2018
1/1/2019
5/1/2019
9/1/2019
1/1/2020
5/1/2020
9/1/2020
1/1/2021
5/1/2021
9/1/2021
1/1/2022
5/1/2022
9/1/2022
1/1/2023
5/1/2023
9/1/2023
1/1/2024
5/1/2024
9/1/2024

ANNUAL HOUSING PAYMENT SHARES
(ADJUSTED FOR INFLATION)

A B C

Page 648 of 715 ends

RANCHO CUCAMONGA HOUSING SUPPLY, DEMAND,
AND PRICE APPRECIATION (JAN. 2018 DEC. 2022)
A. IN 2018 TO EARLY 2020, THE CITY HOUSING INVENTORY(SUPPLY/RED) WAS HIGHER THAN PENDING SALES(DEMAND/GREEN),NORMAL B. HOWEVER, BEGINNING IN2ND QUARTER OF 2020, HOUSING DEMAND AND SUPPLY STARTED TO CONVERGE AND MET IN 2021 C. ONCE SUPPLY AND DEMAND CURVES STARTED TO CONVERGE, THIS WAS FOLLOWED BY A SIGNIFICANT INCREASE INPRICE APPRECIATION D. DURING 2022,INVENTORY EXCEEDED PENDING SALES, CLOSER TO NORMAL PA TTERNS, BUTINVENTORY STILL LOW DUE TO HIGH RATES 25 2018-03-01
2018-06-01
2018-09-01
2018-12-01
2019-03-01
2019-06-01
2019-09-01
2019-12-01
2020-03-01
2020-06-01
2020-09-01
2020-12-01
2021-03-01
2021-06-01
2021-09-01
2021-12-01
2022-03-01
2022-06-01
2022-09-01
2022-12-01

RANCHO CUCAMONGA HOUSING PRICE
CHANGE SINCE JAN. 2018

RANCHO CUCAMONGA

PENDING LISTINGS AND INVENTORY

..
.A

..
.|

.B
....|
.....C
..
|
...D
..

Page 649 of 715 ends

RANCHO CUCAMONGA HOUSING INVENTORY (SUPPLY) AND PENDING LISTINGS (DEMAND) (2018 2022) A. FOR 2018-2020, THE LEVEL OF FOR-SALE HOMES/INVENTORY WAS HIGHER THAN DEMAND/SALES, NORMAL CONDITIONS B. BUT IN 2021, DUE TO COVID-19, INVENTORY DECLINED SIGNIFICANTLY, UNIQUE CONDITION C. FOR 2022 THERE WERE DECLINES IN DEMAND (AFFORDABILITY) AND SUPPLY (SLOW SALES) DUE TO HIGHER MORTGAGE RATES. 26 A B C

RANCHO CUCAMONGA PENDING LISTINGS AND INVENTORY
(2018-2020, 2021 ANNUAL AVERAGE; 2022 AND 2023 BY MONTH) DEMAND 2022; MONTHLY
SUPPLY 2022; MONTHLY
DEMAND 2023
SUPPLY 2023; MONTHLY

RANCHO CUCAMONGA PENDING LISTINGS AND INVENTORY
(2018-2020, 2021 ANNUAL AVERAGE; 2022 AND 2023 BY MONTH) SUPPLY 2021 AVG.

DEMAND 2021; MONTHLY

RANCHO CUCAMONGA PENDING LISTINGS AND INVENTORY
(2018-2020, 2021 ANNUAL AVERAGE; 2022 AND 2023 BY MONTH)

Page 650 of 715 ends

27 IV. MARKET CONDITIONS THE NEW RESIDENTIAL FOR-SALE AND APARTMENTS UNITS THE COMPOSITION OF THE RANCHO CUCAMONGA HOUSING MARKET FOR NEW HOMES AND APARTMENT UNITS HAS

RECENTLY UNDERGONE A SIGNIFICANT SHIFT FROM PRIMARILY FOR-SALE HOMES TO MULTIFAMILY APARTMENT RENTALS.
WITH REGARDS TO NEW FOR-SALE HOMES,THERE WERE 17 PROJECTS WITH 1,105 HOMES IN 2020 THAT WERE ON THE MARKETPLACE, AND NOW THESE ARE ALL CURRENTLY CLOSED-OUT, OCCUPIED BY HOMEOWNERS. FURTHERMORE, ALTHOUGH THERE ARE SEVERAL MAJOR PROJECTS IN THE PLANNING PROCESS, THESE HA VE NOT YET COME ONTO THE MARKETPLACE NOR ARE ANY OF THEM EXPECTED TO HA VE MARKET ENTRIES DURING 2023. WITH REGARDS TO MULTIFAMILY APARTMENTS,THE PLANNED COMMUNITY OF THE RESORT HAD A MAJOR APARTMENT PROJECT COME ONTO THE MARKET IN 2022 WHICH IS EXPECTED TO HA VE 867 UNITS. ADDITIONALLY , THERE ARE ANOTHER SIX APARTMENT PROJECTS THA T ARE EXPECTED TO HA VE 1,803 ADDITIONAL UNITS.

THREE OF THESE PROJECTS HA VE ALREADY PULLED BUILDING PERMITS FOR 614 UNITS, AND THE OTHER THREE ARE EXPECTED TO COMPLETE THEIR PLANNING APPROV ALS AND MAY COMMENCE DEVELOPMENT BY THE END OF 2023. THIS SECTION FOCUSES UPON THE RANCHO CUCAMONGA MARKET CONDITIONS FOR MULTIFAMILY APARTMENT HOUSING SECTOR, AND DISCUSSES THE ABSORPTION OF THE CURRENTLY ACTIVE AND FORTHCOMING PROJECTS.

Page 651 of 715 ends

28 RANCHO CUCAMONGA FOR-SALE HOMES: PRICE PATTERNS AND SALES TRENDS THE RECENT 2021 SALES RATE ALMOST DOUBLED FROM 2020, FROM 308 TO 578 HOMES THE V ALUE RATIO ROSE SUBSTANTIALLY , FROM $300/SQ.FT. IN 2020 TO $428/SQ.FT. IN 2021 THE SINGLE REMAINING PROJECT IN 2022 CLOSED OUT ITS 17 HOMES

Page 652 of 715 ends

OVERVIEW OF APARTMENT RENTAL RATES

SAN BERNARDINO COUNTY AND RANCHO CUCAMONGA
29 FOR SAN BERNARDINO COUNTY (SBC) RENTS INCREASED FROM AROUND $1,419 IN EARLY 2015 TO $2,458 RECENTLY . WHILE FOR RANCHO CUCAMONGA RENTS INCREASED FROM $1,709 IN EARLY 2015 TO $2,711 RECENTLY SO RANCHO CUCAMONGA RENT LEVELS HA VE CONSISTENTLY BEEN ABOVE THOSE FOR SAN BERNARDINO COUNTY AS A WHOLE. 3/1/15 9/1/15 3/1/16 9/1/16 3/1/17 9/1/17 3/1/18 9/1/18 3/1/19 9/1/19 3/1/20 9/1/20 3/1/21 9/1/21 3/1/22 9/1/22

APARTMENT RENT TRENDS

RANCHO CUCAMONGA & SAN BERNARDINO COUNTY

Page 653 of 715 ends

OVERVIEW OF APARTMENT RENTAL APPRECIATION RATES

SAN BERNARDINO COUNTY AND RANCHO CUCAMONGA
30 THE APARTMENT MARKET FOR SAN BERNARDINO COUNTY (SBC) EXPERIENCED AN APPRECIATION RATE OF ABOUT 5% ANNUALLY FROM 2017 TO SUMMER 2020.
BUT FOR RANCHO CUCAMONGA (RC), ALTHOUGH RENTS APPRECIATED AT 5% IN 2017, THE RATE DECLINED TO 0% IN SUMMER 2020. IN SUMMER 2021 SBC AND RC BOTH EXPERIENCED PEAK APPRECIATION RATES OF ABOUT ~20%. HOWEVER, SINCE SEPTEMBER 2021, FOR BOTH SBC AND RC, APPRECIATION RECENTLY DECLINED TO LESS THAN 5%. -5%
0%
5%
10%
15%
20%
25%

APARTMENT RENT PATTERNS - CHANGES ANNUALLY

RANCHO CUCAMONGA & SAN BERNARDINO COUNTY
Rancho Cucamonga San Bernardino County

Page 654 of 715 ends

31 HOMECOMING IS LOCATED IN A PLANNED COMMUNITY (THE RESORT) WHICH HAS A COPIOUS AMENITY PACKAGE. RENTS RANGE FROM $2,499 FOR 776 SQ.FT. TO $4,898 FOR 2,349 SQ.FT. THE OTHER FORTHCOMING APARTMENT PROJECTS ARE NOT IN PLANNED COMMUNITIES SO THEIR RENTS MAY BE LOWER.

RENTS FOR A CURRENTLY ACTIVE PROJECT: HOMECOMING AT THE RESORT

Page 655 of 715 ends

32 RANCHO CUCAMONGA NEW APARTMENT PROJECTS

APPROXIMATE LOCATIONS
A
B CE
F D
G

Page 656 of 715 ends

RANCHO CUCAMONGA NEW APARTMENT PROJECTS

CURRENTLY ACTIVE, UNDER CONSTRUCTION AND NEAR TERM
33 THERE ARE A TOTAL OF SEVEN ACTIVE, UNDER CONSTRUCTION AND NEAR-TERM APARTMENT PROJECTS THAT ENTITLEMENTS FOR 2,670 UNITS, OF THESE, 1,349 HA VE HAD PERMITS ISSUED. 867
193
131
660
260
311
248
735
175
96 343
0 0 0
0 100
200
300
400
500
600
700
800
900
1000

RANCHO CUCAMONGA NEW APARTMENT PROJECTS

CURRENT PROJECT STATUS

TOTAL UNITS BUILDING PERMITS

Page 657 of 715 ends

34 CHARACTERISTICS OF THE NEW APARTMENT PROJECTS

CURRENTLY ACTIVE, UNDER CONSTRUCTION, NEAR TERM & FUTURE (SOURCE: CITY OF RANCHO CUCAMONGA)

Page 658 of 715 ends

35 MARKET DEMAND IS ESTIMATED BASED UPON THE CITYS OVERALL EMPLOYMENT GROWTH WITH SPECIAL CONSIDERATION FOR NEWLY DEVELOPING WAREHOUSE/DISTRIBUTION FACILITIES WITH ~2,800 NEW JOBS. ABSORPTION AMONG THE PROJECTS IS PRIORITIZED ACCORDING TO THEIR CURRENT DEVELOPMENT APPROV AL STATUS. THE PACE OF NEW DEVELOPMENT IS EXPECTED TO OCCUR IN A SYNCHRONIZED MANNER TO MAINTAIN STABLE RENTS. SHOULD EXCESS UNITS ENTER THE MARKETPLACE, RENTS WOULD NEED TO BE LOWERED TO MAINTAIN ABSORPTION.

ESTIMATED ABSORPTION SCHEDULES FOR NEW APARTMENT PROJECTS

NUMBER OF APARTMENT RENTAL'S - ANNUALLY

Page 659 of 715 ends

36 Resume: Joseph T. Janczyk, Ph.D.

President of Empire Economics
Education: University of California, Riverside, Ph.D. in Economics, Completed in 1976 Specializations in Urban Economics, Mathematical Modeling and Econometric Analysis State University of New York at Buffalo, Bachelors, Completed in 1970 Dual Majors: Economics and Psychology
Prior Employment: California State University, Tenured Economics Professor: 1976-1985 Courses Taught: Microeconomics, Macroeconomics, Urban Economics, Regional, Computer Modeling, Econometrics, among others
Empire Economics: Chairman and President: 1986-Present Perform Independent Real Estate Consulting Services Primarily for Land Secured Financings Work for Public Entities including Counties, Cities, School Districts and Water Districts Long-term Relationships with Many Clients, 25+ years
Well Established Relationships with Numerous Professionals in the Municipal Finance Industry Performed 500+ Studies on behalf of Public Entities for $15B+ in municipal financing oLand Secured Financings for Planned Communities, Business Parks and Retail Centers for 400+ CFDs/ADs for $7.5B bonds
Price Point Study Establish Special Taxes that conform to public entities policies Market Absorption Studies - Provide timelines for phasing infrastructure Homeowner Equity Studies and Forecasts of Assessed Values Economic Forecasting Studies: Forecast Employment and Housing Demand Socioeconomic Studies Orange County Transportation Corridors: 2 studies $2.75B bonds oDesignated as Municipal Bond Issue of the Year for 1999 oRating Agency and Bond Insurer Presentations Trips to New York City Mortgage Revenue Bond Issues: Lower Mortgage Rates 50+ studies for $1.7B bonds Other Municipal Bond Issues: 35+ studies $2B+ bonds; Certificates of Participation, others Forthcoming Bond Issues: 25+ studies for $400M+ future bond sales Industry Contributions Regular Speaker/Panelist at Following Events:

State Treasurer, Mr. John Chiang: Council of Economic Advisors: January 2015 December 2018 oBi-annual meetings and published articles in the Treasurers Newsletter, Intersections UCLA Municipal Bond Financing Seminars (10+ times, as Featured Speaker) Bond Buyer Conference
League of Cities
Municipal Bond Industry Association
Best Practices for Continuing Disclosure
Appraisal Standards for Land Secured Financing by CDIAC Meetings with Municipal Bond Funds
Dedicated to Public Sector: Certifications Provided in each Study:

Empire has not performed any consulting services for the CFD/AD property owners nor the developers/builders, during the past thirty years.

Empire will not perform any consulting services for the CFD/AD property owners nor the developers/builders, during the next five years.

Page 660 of 715 ends

1 CITY OF RANCHO CUCAMONGA

THE CURRENT AND FUTURE STATE OF WAREHOUSE/DISTRIBUTION

ECONOMIC, ENVIRONMENTAL AND OPPORTUNITY COST IMPACTS

PREPARED
BY
EMPIRE ECONOMICS, INC.

JOSEPH T. JANCZYK, PH.D.

APRIL 17, 2023
(JUNE 2023 UPDATES TO RECENT V ACANCY RATES AND LEASE RATES) ATTACHMENT 2

Page 661 of 715 ends

THE INLAND EMPIRE (IE) HAS A STRATEGIC GEOGRAPHIC LOCATION WITHIN SOUTHERN CALIFORNIA THAT HAS RECENTLY ATTRACTED NUMEROUS WAREHOUSE/DISTRIBUTION (W/D) FACILITIES OVER THE LAST 30 YEARS, GAINING EVEN MORE TRACTION IN RECENT YEARS.

FURTHERMORE, WITHIN THE IE, RANCHO CUCAMONGA (RC) HAS A STRATEGIC LOCATION AS COMPARED TO EASTERLY CITIES, SINCE RC IS IN CLOSER PROXIMITY TO BOTH THE ENTRY PORTS AS WELL AS THE LA-OC POPULATION CENTERS RESULTING IN HIGHER RENTS..

MARKET CONDITIONS FOR W/D SPACE CONTINUES TO BE ROBUST COMAPRED TO HISTORIC LEVELS, WITH RENT AT AN ALL TIME HIGH AND CURRENT VACANCY CLOSE TO AT AN ALL TIME LOW. ADDITIONALLY, STRONG FUTURE DEMAND FOR W/D IS EXPECTED TO CONTINUE DURING THE FORESEEABLE FUTURE.

PLEASE NOTE THAT FOR THE W/D FACILITIES IN THE FIRST QUARTER OF 2023, RELATIVE TO 2022, VACANCIES HAVE INCREASED, AND MARKET RENTS HAVE SLIGHTLY DECREASED DUE TO SUPPLY/DEMAND GETTING CLOSER TO EQUILIBRIUM, BUT WE ARE STILL AT HISTORIC LOWS.

FURTHERMORE, AS SOME CITIES IN THE IE IMPOSE MORATORIUMS/REGULATIONS ON NEW W/D DEVELOPMENTS, THIS DEMAND WILL LIKELY SHIFT TO OTHER NEARBY CITIES SUCH AS RC.

HOWEVER, W/D FACILITIES DO NOT HAVE A SIGNIFICANT BENEFICIAL ECONOMIC IMPACT SINCE THEY EMPLOY RELATIVELY FEW WORKERS PER ACRE DUE TO THEIR AUTOMATION, HAVE MODERATE PAY LEVELS AND MOST EMPLOYEES SEEK LOWER PRICED HOUSING ELSEWHERE.

FURTHER ADVANCES IN AUTOMATION WILL ACCENTUATE THESE TRENDS, PRIMARILY FOR NEW W/D DEVELOPMENTS.

WITH REGARDS TO POTENTIAL ADVERSE IMPACTS ON THE CITYS RESIDENTS, W/D FACILITIES/OPERATIONS HAVE TRUCKS THAT RESULT IN MORE TRAFFIC CONGESTION AND ALSO GENERATE NOISE/AIR POLLUTION THAT INCREASES HEALTH RISKS.

POTENTIAL OTHER LAND USES THAT MAY BE DEVELOPED ALONG THE PERIMETER AROUND THE CITYS CORE EMPLOYMENT CENTER INCLUDE OFFICE, RETAIL AND MULTIFAMILY.

HOWEVER, THEIR POTENTIAL IS LIMITED DUE TO THEIR CURRENTLY LESS FAVORABLE MARKET CONDITIONS RELATIVE TO W/D, AS WELL AS SUCH LAND USES UTILIZING SMALLER AND INFILL PARCELS.

THEREFORE, CONSIDERING THE STRONG MARKET CONDITIONS FOR W/D FACILITIES IN THE IE ALONG WITH THE CITY HAVING SOME LARGER

PARCELS FOR FUTURE W/D FACILITIES, THE CITY MAY DESIRE TO CONSIDER MITIGATING THE ADVERSE IMPACTS OF FUTURE W/D FACILITIES ON THE CITYS RESIDENTS BY NEGOTIATING WITH DEVELOPERS TO REDUCE THE TYPICAL AMOUNT OF TRAFFIC CONGESTION AND AIR POLLUTION. 2 EXECUTIVE SUMMARY: SYNOPSIS AND CONCLUSIONS

Page 662 of 715 ends

OVERVIEW OF THE MARKET ANALYSIS OF WAREHOUSE/DISTRIBUTION IN RANCHO CUCAMONGA 3 SECTION I

DEMAND FOR WAREHOUSE/DISTRIBUTION CENTERS

IN THE INLAND EMPIRE

SECTION II

DEMAND FOR WAREHOUSE/DISTRIBUTION CENTERS

IN RANCHO CUCAMONGA

SECTION III

BENEFIT/COST ANALYSIS OF

WAREHOUSE/DISTRIBUTION

WITH THE

DIRECT ECONOMIC COMPONENTS
AND

OTHER NON-ECONOMIC FACTORS

SECTION IV

COMPARISON OF THE BENEFIT/COSTS

FOR POTENTIAL LAND-USES

WITH THE

DIRECT ECONOMIC COMPONENTS
AND

OTHER NON-ECONOMIC FACTORS

Page 663 of 715 ends

FULL STUDY

TABLE OF CONTENTS
4 APPENDIX

PAGE(S)

MAIN REPORT

PAGE(S)KEY RESEARCH WITH SOURCESCONTENT
N/A2N/AEXECUTIVE SUMMARY
30-313N/AOVERVIEW OF THE MARKET ANALYSIS OF

WAREHOUSE/DISTRIBUTION IN RANCHO

CUCAMONGA
N/A4N/ATABLE OF CONTENTS
32-355-12***VOIT MARKET DATA***,PUBLICLY AVAILABLE BUILDING PERMIT AND APN DATA, ***SB SUN 10/13/2022***, PUBLICLY AVAILABLE EMPLOYMENT DATA FROM BLS,***UCR 12.20.2022***, ***PRESS ENTERPRISES 10.20.2021***, ***PRESS ENTERPRISES 9.20.2021***, ***BLOOMBERG 6.14.2020***, ***INDUSTRIAL WAREHOUSING IN THE SCAG REGION APRIL 2018*** I. DEMAND FOR WAREHOUSE/DISTRIBUTION

CENTERS

IN THE INLAND EMPIRE
36-3913-20SAME DATA SOURCES AS ABOVE, ***CITY OF RC ECONOMIC OUTLOOK DECEMBER 2020, ***THE CITY OF RC PLANNING DEPARTMENT*** II. DEMAND FOR WAREHOUSE/DISTRIBUTION

CENTERS

RANCHO CUCAMONGA
40-4521-23***BLOOMBERG 8.15.2022***, PUBLICLY AVAILABLE EMPLOYMENT DATA FROM BLS, ***SOUTH COAST AIR QUALITY DISTRICT***, ***LA TIMES

2.5.2023***, REDLANDS DAILY FACTS 2.22.2023***,***CITY OF RC GENERAL PLAN***, ***LOS ANGELES TIMES 12.28.2022***, DELOITTE REAL ESTATE OUTLOOK 2021, APN DATA FROM THE CITY OF RC, VOIT WEBSITE, CBRE

WEBSITE, CUSHMAN AND WAKEFIELD WEBSITE
III. BENEFIT/COST ANALYSIS OF WAREHOUSE/

DISTRIBUTION

WITH THE

DIRECT ECONOMIC COMPONENTS
AND

OTHER NON-ECONOMIC FACTORS
4624-28IV. COMPARISON OF THE BENEFIT/COSTS

FOR POTENTIAL LAND-USES

WITH THE

DIRECT ECONOMIC COMPONENTS
AND
OTHER NON-ECONOMIC FACTORS 4

Page 664 of 715 ends

SECTION I

DEMAND FOR WAREHOUSE/DISTRIBUTION CENTERS

IN THE INLAND EMPIRE
5

Page 665 of 715 ends

HISTORICAL DEVELOPMENT OF THE WAREHOUSE/DISTRIBUTION MARKET IN THE INLAND EMPIRE 6 THE LOGISTICS INDUSTRY IS CENTERED AROUND GOODS COMING INTO THE PORTS OF LOS ANGELES (LA) AND LONG BEACH BEFORE BEING DISTRIBUTED TO W/D FACILITIES IN SOUTHERN CALIFORNIA OR BEING SHIPPED ON RAIL TO OTHER AREAS. THE MOVEMENT OF THESE GOODS EASTERLY INTO THE INLAND EMPIRE AND ACROSS THE COUNTRY IS FACILITATED BY:

SUBSTANTIAL INVESTMENTS IN RAILROAD LINES
THE DEVELOPMENT OF AND SIGNIFICANT ENHANCEMENTS TO FREEWAYS: 10, 60 & 15 CURRENTLY , 40% OF THE NATIONS IMPORTS FROM ASIA ARE PROCESSED THROUGH THE PORTS AND THEN GO INTO THE INLAND EMPIRE AND BEYOND.
THE COMBINATION OF IMPORTS AND TRANSPORTATION SYSTEM SUPPORT THE ROBUST DEVELOPMENT OF WAREHOUSE/DISTRIBUTION CENTERS IN THE INLAND EMPIRE AREA:
1) COPIOUS SUPPLY OF VACANT PROPERTY, WITH LARGE PARCELS

INCLUDING PARCELS DUE TO THE CLOSURES OF KAISER STEEL AND NORTON AFB 2) RELATIVELY LOWER LABOR COSTS IN THE INLAND EMPIRE VS. LA AND OC WITHIN THE INLAND EMPIRE, RANCHO CUCAMONGA HAS A PREFERRED LOCATION, COMPARED TO CITIES LOCATED EASTERLY:
CLOSER PROXIMITY TO THE PORTS
CLOSER POXIMITY TO EXISTING HIGHWAYS AND RAIL LINES
CLOSER PROXIMITY TO MAJOR POPULATION AREAS, SUCH AS LA.

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GEOGRAPHICAL DEVELOPMENT PATTERNS FOR WAREHOUSE/DISTRIBUTION MARKET IN THE INLAND EMPIRE

RANCHO CUCAMONGA HAS A STRATEGIC LOCATION VS CITIES LOCATED EASTERLY IN SB-R COUNTIES

CLOSER PROXIMITY TO THE PORTS/RAIL/HIGHWAYS AND ALSO CLOSER PROXIMITY TO THE LA POPULATION CORE 7

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EMPLOYMENT TRENDS FOR WAREHOUSE/DISTRIBUTION (W/D) WORKERS IN THE INLAND EMPIRE DESPITE CHANGES IN WAREHOUSE TECHNOLOGY FROM 1990 TO 2020 THERE ARE TWICE AS MANY WORKERS IN EACH COMPARABLE SPACE DUE TO COMPLEXITY CHANGES.
COVID-19 ACCELERATED THE TREND FOR ADDITIONAL WAREHOUSE SPACE BY 2 YEARS DUE TO INCREASED DEMAND FROM E-COMMERCE.
DESPITE AUTOMATION, THE NEED FOR WAREHOUSE WORKERS IS EXPECTED TO OUTPACE ALL OTHER SEGMENTS UNTIL 2028 DUE TO HIGH DEMAND FOR WAREHOUSE SPACE. 8 SHARE OF TOTAL EMPLOYMENT

NUMBER OF EMPLOYEES

EMPLOYMENT GROWTH

FOR W/D HAS

BEEN ROBUST
FROM 18,000 IN 2010
TO 132,000 IN EARLY 2023

THE SHARE OF W/D

TO TOTAL EMPLOYMENT

HAS INCREASED FROM

1.6% IN 2010 TO 8.0%
IN EARLY 2023

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RECENT DEVELOPMENT TRENDS FOR WAREHOUSE/DISTRIBUTION CENTERS IN THE INLAND EMPIRE 9 THE TOTAL SQUARE FOOTAGE FOR

WAREHOUSE/DISTRIBUTION IN THE INLAND

EMPIRE HAS INCREASED
FROM 423M IN 2008
TO 630M IN 2022.

WHILE THE NUMBER OF BUILDINGS HAS
INCREASED BY 245 FROM 2008 TO 2022.

THE AVERAGE SQUARE FEET OF A

WAREHOUSE/DISTRIBUTION SPACE IS
ABOUT 840,000 SQ.FT.

SOME OF THE BIGGER BUILDINGS ARE IN
THE 4M SQUARE FOOTAGE RANGE, SUCH AS

THE NEW AMAZON DISTRIBUTION CENTER
IN ONTARIO.

BUILDINGS ON AVERAGE ARE TRENDING
TOWARDS LARGER SIZES.

DESPITE FEWER WORKERS PER SQUARE

FOOT, THE LARGER BUILDINGS COUPLED

WITH INCREASED DEMAND REQUIRE
MORE WORKERS OVERALL.
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

BUILDING COUNT

TOTAL SQAURE FEET (M)

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VACANCY RATES FOR WAREHOUSE/DISTRIBUTION MARKET IN THE INLAND EMPIRE THE INDUSTRIAL MARKET OF WHICH THE WAREHOUSE/DISTRIBUTION IS PART OF HAS BEEN ROBUST IN SOUTHERN CALIFORNIA. VACANCY RATE FOR INDUSTRIAL SPACE IN THE INLAND EMPIRE SLIGHTLY INCREASED IN THE FIRST QUARTER OF 2023 TO 2.2% VS. 1.4% IN 2022, BY COMPARISON, THE VACANCY RATE DURING 2008-2009 WAS 10%-12%. WHILE NEW DELIEVERIES ARE STILL BEING RECEIVED, HIGH INTEREST RATES AND UNCERTAIN DEMAND FOR FURTHER LEVELS OF ECOMMERCE GROWTH RELATIVE TO 2020-2022 IN THE INLAND EMPIRE IS DECREASING FUTURE DEMAND SOMEWHAT. 10

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IMPACT OF NEW TECHNOLOGY ON TRANSPORTATION JOBS

1. AUTONOMOUS, OR SELF DRIVING TRUCKS POSE THE BIGGEST RISK TO TRANSPORTATION WORKERS.

2. REGULATORY HURDLES FOR AUTONOMOUS TRUCKS ARE HIGH
AND CURRENTLY REQUIRE A SAFETY DRIVER.

3. AUTONOMOUS TRUCKS COULD EITHER INCREASE TRAFFIC IF
TRUCKS (24/7) OR DECREASE TRAFFIC PENDING REGULATIONS.

4. POTENTIAL TO MANDATE GREEN TECHNOLOGY .
FUTURE TECHNOLOGY IS LIKELY TO IMPACT THE NEED FOR SOME WAREHOUSE/TRANSPORTATION WORKERS BUT NOT NECESSARILY THE NEED FOR SPACE, AS GOODS HAVE TO BE STORED/LOADED/UNLOADED IN A PHYSICAL LOCATION. IT IS A SIGNIFICANT CAPITAL INVESTMENT TO DEPLOY NEW AUTOMATION TECHNOLOGY IN EXISTING SPACES AS THEY WERE NOT DESIGNED TO ACCOMMODATE RECENT TECHNOLOGICAL ADVANCES.
ADDITIONALLY, AUTONOMOUS TRUCK TECHNOLOGY WILL LIKELY HAVE A SIGNIFICANT IMPACT ON TRANSPORTATION JOBS, INCLUDING THE POTENTIAL REDUCTION OF TRUCK WORKERS IF APPROVED AS FULLY AUTONOMOUS. AUTONOMOUS TRUCKS COULD IMPROVE GREENHOUSE EMISSIONS IF BATTERY POWERED, BUT ALSO ENABLE TRUCKS TO RUN 24/7. 11 POTENTIAL IMPACT OF TECHNOLOGICAL CHANGE ON WAREHOUSE/DISTRIBUTION INDUSTRY

IMPACT OF NEW TECHNOLOGY ON WAREHOUSE JOBS

1. NEW TECHNOLOGIES ARE LIKELY TO LEAD TO WORK
INTENSIFICATION.

2. NEW TECHNOLOGIES HA VE THE POTENTIAL TO DE-SKILL SOME JOBS.

3. NEW TECHNOLOGIES ARE POISED TO TRANSFORM HOW
WORKERS ARE MANAGED.

4. IN THE SHORT TO MEDIUM TERM, NEW TECHNOLOGIES LIKELY WILL NOT CAUSE WIDESPREAD JOB LOSS.

5. TECHNOLOGY IS LIKELY TO HA VE UNEVEN IMPACTS ACROSS
DEMOGRAPHICS AND OCCUPATIONS.

TECHNOLOGICAL GAINS "INCLUDING BUT NOT LIMITED TO THOSE THAT MAY DE-SKILL AND INTENSIFY WORKAPPEARS TO BE LED BY

THE WIDESPREAD DESIRE TO COMPETE WITH AMAZON AND OTHER
MAJOR ONLINE RETAILERS
SOURCE: PRIOR REPORT ON IMPACT OF AUTOMATION

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FORECAST OF FUTURE DEMAND FOR ADDITIONAL WAREHOUSE/DISTRIBUTION FOR THE INLAND EMPIRE 12 EMPIRE FORMULATED A MOST PROBABLE FORECAST FOR FUTURE WAREHOUSE/DISTRIBUTION DEVELOPMENT IN THE INLAND EMPIRE:
1) EXPECTED DEMAND FOR FUTURE WAREHOUSE/DISTRIBUTION DEVELOPMENT IN THE IE, AS MEASURED BY BUILDING SQ.FT. OF FLOOR SPACE SOURCE: SCAG STUDY, ADJUSTED FOR RECENT GROWTH DUE TO COVID (+10%) AND OTHER EXPECTED CONDITIONS.

2.) ADJUSTED FOR FURTHER AUTOMATION/OTHER TECHNOLOGY THAT MAY REDUCE THE AMOUNT OF FUTURE WAREHOUSE SPACE REQUIRED.

SUCH ENHANCEMENTS ARE LIKELY TO PRIMARILY INCREASE THE VERTICALITY OF THE BUILDINGS.

THE DEMAND FOR WAREHOUSE/DISTRIBUTION SPACE (SQ.FT.) IS FORECASTED TO INCREASE FROM 630M IN 2022 TO 806M IN 2040, BY ABOUT 28%.

TOTAL CURRENT AND FORECASTED SQAURE FEET (M)

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SECTION II

DEMAND FOR WAREHOUSE/DISTRIBUTION CENTERS

IN RANCHO CUCAMONGA
13

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EMPLOYMENT TRENDS FOR WAREHOUSE/DISTRIBUTION WORKERS IN RANCHO CUCAMONGA THE RECENT DECLINE IN THE LEVELS OF W/D EMPLOYMENT CAN BE ATTRIBUTED PRIMARILY TO NEW W/D CENTERS WITH MORE AUTOMATION BEING BUILT AND TECHNOLOGY BEING IMPLEMENTED IN OLDER EXISTING CENTERS. THE RECENT DECLINE IN THE W/D MARKET SHARE OF EMPLOYMENT CAN ALSO BE ATTRIBUTED TO THE RELATIVELY STRONGER GROWTH OF VARIOUS NON-W/D SECTORS SUCH AS HEALTHCARE. FINALLY , IT IS WORTHWHILE TO NOTE THAT THERE ARE SEVERAL NEW W/D CENTERS THAT WILL BE ENTERING THE MARKETPLACE IN THE NEAR TERM THAT WILL SUBSTANTIALLY INCREASE THE LEVEL OF W/D EMPLOYMENT. 14 EMPLOYMENT

INCREASED FROM
2,850 IN 2010
TO 4,500 IN 2014

EMPLOYMENT

REMAINED ABOVE
4,000 THROUGH 2018

THEN EMPLOYMENT
DECREASED TO 2,700
IN 2020

SINCE THEN,

EMPLOYMENT ROSE
TO 3,300 IN 2022

THE SHARE OF W/D

TO TOTAL EMPLOYMENT
ROSE FROM 4.3% IN 2010
TO A PEAK LEVEL OF 6.4%
IN 2018

THE SHARE THEN
DECLINED TO ABOUT 5.0%
DURING 2020-2022
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010

SHARE OF TOTAL EMPLOYMENT

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RANCHO CUCAMONGA: TYPICAL SALARY LEVELS BY ECONOMIC SECTORS .
THE AVERAGE SALARIES OF THE W/D WORKERS IN THE
CITY OF $54,826 ARE SLIGHTLY BELOW THE AVERAGE
WAGES FOR THE CITY AS A WHOLE OF $56,261.
BASED UPON THE AVERAGE SALARY LEVEL FOR W/D

WORKERS, THEY WOULD NOT LIKELY BE ABLE TO
PURCHASE A FOR-SALE HOME IN THE CITY.
WHILE SOME OF THE W/D WORKERS MAY CHOOSE TO

RENT AN APARTMENT IN THE CITY, MOST WOULD LIKELY

CHOOSE TO LIVE IN ANOTHER IE CITY THAT WOULD
HAVE LOWER HOUSING COSTS.
15

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CURRENT STATE OF WAREHOUSE/DISTRIBUTION MARKET IN RANCHO CUCAMONGA

THE CHARACTERISTICS OF THE RANCHO CUCAMONGA (RC) INDUSTRIAL MARKET ARE NOW DISCUSSED, AND COMPARED TO THOSE OF THE INLAND EMPIRE (IE) AS A WHOLE.

WHILE W/D REPRESENTS THE MAJOR COMPONENT OF THE INDUSTRIAL PROPERTY DESCRIPTION, IT ALSO INCLUDES SOME MANUFACTURING AND RESEARCH DEVELOPMENT AS WELL.

HOWEVER, SINCE THE SAME INDUSTRIAL STATISTIC IS UTILIZED FOR BOTH THE IE AND RC GEOGRAPHIC AREAS, THEN COMPARISONS BETWEEN THEM ARE MEANINGFUL.

THE TOTAL NUMBER OF BUILDINGS AMOUNTS TO 749 FOR RC AND 8,700 FOR THE IE.; RC HAS A SHARE OF 8.6% THE AMOUNT OF SPACE AMOUNTS TO 41,000,000 FOR RC AND 630,000,000 FOR IE; RC HAS A SHARE OF 6.5% THE AMOUNT OF SPACE UNDER CONSTRUCTION AMOUNTS TO 2,830,654 FOR RC AND 33,036,000 FOR I.E: RC HAS A SHARE OF 8.6% * SO RC HAS A SIGNIFICANTLY HIGHER SHARE OF NEW DEVELOPMENT THE RECENT GROSS ABSORPTION AMOUNTS TO 1,920,000 FOR RC AND 30,550,000 FOR I.E: RC HAS A SHARE OF 6.3% THE VACANCY RATE AMOUNTS TO 1.64% FOR RC AND 1.41% FOR IE THE TOTAL AMOUNT OF SQUARE FOOTAGE AVAILABLE AMOUNTS TO 1,346,000 FOR RC AND 19,900,000 FOR IE., RC HAS A SHARE OF 5.7% THE ASKING LEASE RATE AMOUNTS TO $1.50/SQ.FT. FOR RC AND $1.59/SQ.FT. FOR IE

THE LOWER RENTS FOR THE RC BUILDINGS MAY REFLECT THEIR AGE - NOT EASILY ABLE TO ACCOMMODATE NEW TECHNOLOGY 16

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FORECAST OF NEAR-TERM AND FUTURE DEVELOPMENT

FOR WAREHOUSE/DISTRIBUTION PROJECTS
17 THE RANCHO CUCAMONGA PLANNING DEPARTMENT PROVIDED

INFORMATION ON THE WAREHOUSE/DISTRIBUTION PROJECTS THAT

ARE CURRENTLY UNDER CONSTRUCTION AND ALSO AT VARIOUS
STAGES IN THE PLANNING PROCESS.

THERE ARE 13 PROJECTS THAT HAVE AN ESTIMATED/EXPECTED
TOTAL OF 4,540,512 SQ.FT. OF SPACE.

OF THESE, THERE ARE 7 PROJECTS THAT HAVE
AROUND 75,000 FT.² OR MORE OF SPACE .

THESE PROJECTS REPRESENT 96.6% OF THE TOTAL
SQUARE FOOTAGE.
CONSTRUCTION TIMES ESTIMATED BY EMPIRE ECONOMICS (EE)

TAKE INTO CONSIDERATION EXPECTED MARKET DEMAND
ACTUAL CONSTRUCTION AND MARKETENTRY WILL BE
DETERMINED BY THE DEVELOPERS/PROPERTY OWNERS .
THE DISTRIBUTION OF THESE PROJECTS BY VARIOUS STAGES OF DEVELOPMENT/PLANNING APPROVALS ARE AS FOLLOWS:

UNDER CONSTRUCTION 2023-2024 2,410,461 SQ.FT.

PLAN CHECK EE ESTIMATED CONSTRUCTION:
2024-2025 : 840,634 SQ.FT.

ENTITLEMENT REVIEW EE ESTIMATED CONSTRUCTION:
2025-2026 1,289,417 SQ.FT.

TOTAL SQUARE FEET

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APPROXIMATE LOCATIONS OF NEAR-TERM AND FUTURE DEVELOPMENT FOR WAREHOUSE/DISTRIBUTION PROJECTS OVER ~75K SF
18 1.

2.3.45. 6.

7.8. PROJECTS UNDER CONSTRUCTION ESTIMATED 2023-2024 (YELLOW ON MAP)

1. 12434 4TH STREET: WAREHOUSE/DISTRIBUTION COMPLEX COMPRISED OF TWO BUILDINGS WITH 2,200,000 SQUARE FEET

2. EAST SIDE OF PECAN SOUTH OF ARROW: 104,269 SQUARE FEET OF

INDUSTRIAL/WAREHOUSE BUILDING
PROJECTS UNDER PLAN REVIEW ESTIMATED 2024 2025 (WHITE ON MAP)

3. N/O NAPA ST E/O ETIWANDA: TWO WAREHOUSE/DISTRIBUTION BUILDINGS TOTALING 651,000 SQUARE FEET; PROJECT INVOLVES GPA, ZMA, PREZONE,

ANNEXATION

4. NWC OF JERSEY BLVD. AND MILLIKEN AVE. : 143,014 SQUARE-FOOT

INDUSTRIAL/WAREHOUSE
PROJECTS ENTITLEMENTS UNDER REVIEW ESTIMATED 2025-2026 (RED ON MAP)

5. SWC 9TH STREET AND VINEYARD AVENUE: WAREHOUSE/DISTRIBUTION COMPLEX COMPRISED OF 3 BUILDINGS ON VACANT LAND FOR 1,037,467 SQUARE FEET.

6. NEC HERMOSA AND 4TH: TWO WAREHOUSE/DISTRIBUTION BUILDINGS TOTALING 91,369 SQUARE-FEET WITHIN THE NEO-INDUSTRIAL (NI) DISTRICT

7. 13045 WHITTRAM: NEW SPEC INDUSTRIAL ~86,000 SQUARE FEET OF INDUSTRIAL/WAREHOUSE WITH 3,000 FEET OF OFFICE

8. 9910 6TH STREET: TWO INDUSTRIAL/WAREHOUSE BUILDINGS TOTALING 74,387 SF

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NEAR-TERM FORECAST FOR ADDITIONAL WAREHOUSE/DISTRIBUTION FOR RANCHO CUCAMONGA 19 THE NEAR-TERM W/D PROJECTS THAT ARE CURRENTLY UNDER CONSTRUCTION OR IN THE PLANNING PROCESS HAVE AN ESTIMATED 4,500,000 SQ.FT.

THE TERM ABSORPTION UTILIZED HEREIN MEANS THAT THE SPACE IS FULLY CONSTRUCTED AND IS BEING UTILIZED FOR OPERATIONS BY A FIRM.

EMPIRE ESTIMATES THAT ABSORPTION WILL COMMENCE IN LATTER 2023, FOLLOWED BY SIGNIFICANT LEVELS OF ABSORPTION IN 2024 AND 2025, WITH THE BALANCE IN 2026.

EMPIRE ESTIMATED THE AMOUNT OF EMPLOYMENT THAT THE PROJECTS IN THE PLANNING PROCESS WILL GENERATE ABOUT 2,833 NEW JOBS.

THE JOBS CREATED BY THE OPERATION OF FIRMS IN W/D FOLLOWS A SIMILAR PATTERN TO THEIR ABSORPTION.

NEW JOB CREATION STARTS IN 2023, WITH AN EXPECTED PEAK LEVELS IN 2024 AND 2025, FOLLOWED BY THE REMAINING IN 2026.

BUILDING SQ.FT . ABSORBED

NEW EMPLOYMETN

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RANCHO CUCAMONGA; FORECAST OF FUTURE DEMAND FOR ADDITIONAL WAREHOUSE/DISTRIBUTION 20 EMPIRE FORMULATED A MOST PROBABLE FORECAST FOR FUTURE WAREHOUSE/DISTRIBUTION DEVELOPMENT FOR RANCHO CUCAMONGA (RC):

1. EXPECTED DEMAND FOR FUTURE WAREHOUSE/DISTRIBUTION DEVELOPMENT IN THE IE, AS MEASURED BY BUILDING SQ.FT. OF FLOOR SPACE SOURCE: SCAG STUDY, ADJUSTED FOR RECENT GROWTH DUE TO COVID (+10%) AND OTHER EXPECTED CONDITIONS.

2. THE CAPTURE RATE OF THIS DEMAND BY RC, BASED UPON RECENT MARKET SHARES AS WELL AS NEAR-TERM W/D DEVELOPMENT.

3. ADJUSTED FOR HOW FURTHER AUTOMATION /OTHER TECHNOLOGY THAT MAY REDUCE THE AMOUNT OF FUTURE WAREHOUSE SPACE REQUIRED.

SUCH ENHANCEMENTS ARE LIKELY TO PRIMARILY INCREASE THE VERTICALITY OF THE BUILDINGS.

THE DEMAND FOR WAREHOUSE/DISTRIBUTION SPACE (SQ.FT.) IS FORECASTED TO INCREASE FROM 33M IN 2022 TO 41M IN 2040, BY ABOUT 24%

TOTAL CURRENT AND FORECASTED SQAURE FEET (M)

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SECTION III

BENEFIT/COST ANALYSIS OF

WAREHOUSE/DISTRIBUTION

WITH THE

DIRECT ECONOMIC COMPONENTS
AND

OTHER NON-ECONOMIC FACTORS
21

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COST/BENEFIT ANALYSIS OF POTENTIAL FUTURE DEVELOPMENT OF WAREHOUSE/DISTRIBUTION ECONOMIC COMPONENTS:
EMPIRE CONSIDERED SEVERAL APPROACHES FOR VALUING LAND USE, AND SELECTED THE MARKET VALUE PER SQ.FT. OF BUILDING SPACE. THIS WAS APPLIED TO DIFFERENT LAND USES BASED ON THEIR RESPECTIVE CURRENT LEVELS OF RENTS AND VACANCY RATES. 22 CURRENT

PROPERTY VALUE

NOI (NET OPERATING

INCOME)
=

CAP RATE (RATE OF RETURN ON A

REAL PROPERTY)
=

MONTHLY LEASE
RATE PSF 12 (1- VACANCY)X X (1- EXPENSES)X
OTHER NON-ECONOMIC COMPONENTS:
THE ECONOMIC COMPONENT DISCUSSED ABOVE DOES NOT ACCOUNT FOR OTHER VARIABLES THAT MAY BE OF INTEREST TO THE CITY:

AVERAGE WAGE BY ECONOMIC SECTORS

WAGE GROWTH POTENTIAL FOR THE SECTOR
WHERE WORKERS IN EACH SECTOR TYPICALLY RESIDE: - WITHIN CITY OR ELSEWHERE, DEPENDS UPON AFFORDABILITY OF HOUSING

HOW MUCH DOES EACH LAND USE POTENTIALLY BENEFIT THE CITY - MARKET VALUES & PROPERTY TAXES

SALES TAX ELIGIBLE- DOES THE LAND USE GENERATE SALES TAX IMPACT OF REMOTE WORK: CURRENTLY AND FUTURE EXPECTATIONS

NEGATIVE IMPACTS OF AUTOMATION ON WORKERS
POSITIVE EXTERNALITIES BENEFITS OF THIS SPACE UTILIZATION FOR A PARTICULAR LAND USE

NEGATIVE EXTERNALITIES, TRAFFIC CONGESTION, NOISE AND HEALTH IMPAIRMENTS

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PROS AND CONS OF THE WAREHOUSE/DISTRIBUTION MARKET IN THE INLAND EMPIRE 23 PROS
LABOR MARKET IS FULLY RECOVERED WITH 316,000 JOBS BEING

CREATED WHICH EXCEEDS THE JOBS LOST DUE TO THE
PANDEMIC, INCLUDING SIGNIFICANT LOSSES IN THE W/D SECTOR. FROM FEB20 TO OCT22 THE INLAND EMPIRES WORK FORCE ROSE BY +3.6% VS. CALIFORNIA DECLINED BY -1.3%
FROM Q1 2021 TO Q1 2022 WAGE GROWTH IN THE INLAND EMPIRE HAS BEEN +4.6% VS. +1.0% FOR CALIFORNIA.
WAGE GROWTH IN SAN BERNARDINO COUNTY WAS +5.2%
WAGE GROWTH IN RIVERSIDE COUNTY WAS +3.9%
INLAND EMPIRE WAREHOUSE SPACE HAS THE LOWEST VACANCY
LEVELS OF 1.4%
ASKING RENTS IN RECENT YEARS ROSE SIGNIFICANTLY
W/D SPACE IN THE INLAND EMPIRE IS MORE EXPENSIVE THAN

SIMILAR SPACE IN ORANGE COUNTY AND SAN DIEGO COUNTY
CONS
FUTURE W/D EMPLOYMENT GROWTH RISK - DUE TO AUTOMATION PER THE INSTITUTE OF SPATIAL ECONOMICS, 75% OF JOBS IN

THE LOGISTICS INDUSTRY ARE AT RISK
UCLA ANDERSON EXPECTS LIMITED EMPLOYMENT GROWTH IN

WAREHOUSES/TRANSPORTATION GOING FORWARD
POLLUTION - IS A CONCERN FOR THE INLAND EMPIRE
RESIDENTS IN CLOSE PROXIMITY TO W/D HAVE HIGHER HEALTH RISKS TRAFFIC IT IS ESTIMATED THAT CITY OF RANCHO CUCAMONGA HAS 32,000 TRUCKS A DAY.
NOISE THERE IS SIGNIFICANT NOISE

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SECTION IV

COMPARISON OF THE BENEFITS/COSTS

FOR POTENTIAL LAND-USES

WITH THE

DIRECT ECONOMIC COMPONENTS
AND

OTHER NON-ECONOMIC FACTORS
24

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RANCHO CUCAMONGAS PRIMARY EMPLOYMENT INDUSTRIAL AND
WAREHOUSE/DISTRIBUTIONS ECONOMIC BASE IS WELL ESTABLISHED IN THE SOUTHERN PART OF THE CITY .

FURTHERMORE, THIS AREA HAS CHARACTERISTICS THAT PROVIDE SUPPORT FOR FUTURE W/D DEVELOPMENT:
* ESTABLISHED INDUSTRIAL AND W/D BUILDINGS
* EASY ACCESS TO THE I-10 AND 1-15
* LARGE PARCELS THAT CAN ACCOMMODATE W/D CENTERS

UNDEVELOPED AS WELL

UNDERDEVELOPED PARCELS THAT MAY BE REUTILIZED
(OLDER BUILDINGS W/O NEWER TECHNOLOGY)

HISTORICALLY, INDUSTRIAL SPACE WAS LOCATED NEXT TO OTHER INDUSTRIAL SPACE.

BUT COMMERCIAL SPACE SUCH AS RETAIL AND OFFICE AS WELL AS

MEDIUM DENSITY RESIDENTIAL HAS AND WILL CONTINUE TO SERVE AS A BUFFER ALONG ITS PERIMETER.
25 RANCHO CUCAMONGA GEOGRAPHICAL DEVELOPMENT PATTERNS FOR VARIOUS LAND USES

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METHODOLOGY UNDERLYING THE COST/BENEFIT ANALYSIS FOR

WAREHOUSE/DISTRIBUTION AS COMPARED TO ALTERNATIVE LAND USES EMPIRE HAS COMPILED BOTH QUANTIFIABLE DATA POINTS AND QUALITATIVE INFORMATION/DATA TO COMPARE AND CONTRAST THE ECONOMIC BENEFITS AND NON-ECONOMIC IMPACTS (EXTERNALITIES) OF VARIOUS LAND USES: RETAIL, OFFICE AND MULTIFAMILY./APARTMENTS.
IN PERFORMING THIS ANALYSIS EMPIRE WAS REQUIRED TO COMPILE/RECONCILE DATA FROM VARIOUS SOURCES INCLUDING ACTUAL

SALES VALUES OF DIFFERENT LAND USE PARCELS WITHIN THE IE AND THE CITY OF RC, AND THEN FORMULATE AN ECONOMIC MODEL UTILIZING VARIOUS ASSUMPTIONS.
EMPIRE STRONGLY RECOMMENDS THAT THE CONCLUSIONS SET-FORTH IN THE FOLLOWING TABLE BE UTILIZED AS GENERALIZED GUIDELINES FOR CONSIDERING POLICIES; AND CAUTIONS THAT EACH PROPOSED PROJECT BE EVALUATED TO TAKE INTO CONSIDERATION ITS SPECIFIC CHARACTERISTICS.

PLEASE REFER TO THE FOLLOWING TABLE AND GRAPHS FOR ADDITIONAL INFORMATION. 26

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COST/BENEFIT ANALYSIS OF WAREHOUSE/DISTRIBUTION AND OTHER POTENTIAL LAND-USES 27

Page 687 of 715 ends

ALTHOUGH THERE MAY BE POTENTIAL FOR THE DEVELOPMENT ALTERNATIVE LAND USES, SUCH AS OFFICE, RETAIL AND MULTIFAMILY ,

THEIR DEVELOPMENT POTENTIAL, AS MEASURED BY ECONOMIC METRICS, ARE CURRENTLY NOT AS FAVORABLE 28 OVERVIEW OF CURRENT MARKET CONDITIONS FOR WAREHOUSE/DISTRIBUTION AND ALTERNATIVE POTENTIAL LAND USES: RETAIL, OFFICE AND MULTIFAMILY/APARTMENTS RENTS PER SQ.FT. - MONTHLY

EMPLOYEE SALARIES - ANNUALLY

EMPLOYEES/RESIDENTS PER ACRE

VACANCY RATE

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THE CURRENT AND FUTURE STATE OF

WAREHOUSE/DISTRIBUTION

ECONOMIC, ENVIRONMENTAL AND OPPORTUNITY

COST IMPACTS

APPENDIX
29 EMPIRE ECONOMICS LEVERAGED A VARIETY OF MARKET DATA SOURCES (VOIT, CBRE,

KIDDER MATHEWS, ETC), UNIVERSITY/GOVERNMENT PUBLICATIONS (UCR/SCAG/EPA),

CONSULTANT RESEARCH REPORTS (DELOITTE) AND VARIOUS PRESS ARTICLES (LA TIMES/REDANDS DAILY, ETC.) WITH REPORTING ON CRITICAL ITEMS TO NAME A FEW.

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THE SCOPE OF RESEARCH FOR THIS TOPIC COULD BE EXTREMELY BROAD, SO EMPIRE NARROWED IT DOWN TO THE FOLLOWING PARAMETERS:

A FOCUS ON W/D WORKERS AND SPACE BASED ON APN DATA FROM THE CITY .

ONLY LOOKING AT THE HISTORY OF W/D SPACE, TYPICALLY KNOWN AS INDUSTRIAL SPACE

EMPIRE ACKNOWLEDGES THERE ARE MANY OTHER CITIES WITH LARGE AMOUNTS OF W/D SPACE

REMAIN OBJECTIVE IN REPORTING POSITIVE AND NEGATIVE EXTERNALITIES ASSOCIATED WITH THE W/D SPACE THE CONCEPT OF OPPORTUNITY COST FOR POTENTIAL LAND UTILIZATION FROM A QUANTITATIVE AND QUALITATIVE PERSPECTIVE IS IMPORTANT FOR THE CITY TO UNDERSTAND WHAT ELSE CAN BE ON THE LAND WITH POTENTIAL COSTS/BENEFITS.

TRANSPORTATION/INDUSTRIAL SPACE CURRENT USE
RETAIL A VARIETY OF CENTER TYPES
OFFICE EMPIRE WAS ABLE TO UTILIZE SOME RESEARCH PERFORMED FOR A PRIOR STUDY MULTIFAMILY EMPIRE FOCUSED ON MULTIFAMILY AS MORE LIKELY TO BE INFILL VS. SINGLE FAMILY RESIDENTIAL EMPIRE USED THE RESEARCH TO NARROW DOWN TRENDS AND POTENTIAL OPTIONS TO SHAPE ECONOMIC DEVELOPMENT IN THE CITY.

EMPIRE FOCUSED ON POTENTIAL ZONING AND ECONOMIC INCENTIVES.

THE OTHER TREND FROM THE RESEARCH WAS CITIES INSTITUTING MORATORIUMS OR BANS ON NEW INDUSTRIAL SPACE.

HOWEVER, THESE BANS ARE VERY COMPLEX IN THEIR NATURE AND DO APPLY UNIFORMLY TO ALL PROJECTS AND ARE REALLY A

NEGOTIATING TACTIC/STRATEGY TO SHAPE FUTURE DEVELOPMENT APPENDIX: SCOPE OF RESEARCH
30

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APPENDIX SCOPE OF RESEARCH: KEY SOURCE LIST
31 https://www.sbsun.com/2022/10/13/warehouses-pose-a-dilemma-for-the-inland-empire/amp/ https://www.kcet.org/the-empire-of-logistics-goods-movement-in-southern-california https://www.pressenterprise.com/2021/10/20/what-is-the-future-of-warehouses-in-the-inland-empire/ https://www.bloomberg.com/news/articles/2021-06-14/california-launches-new-war-on-warehouse-pollution https://www.bloomberg.com/news/articles/2022-08-15/los-angeles-warehousing-mecca-halts-expansion-just-as-needs-soar https://news.ucr.edu/articles/2022/12/21/pandemic-left-behind-inland-empire-economy-flourished-2022 https://news.ucr.edu/articles/2022/09/22/inland-empire-business-activity-growth-contrasts-national-decline https://www.lung.org/research/sota/key-findings/most-polluted-places http://www.laalmanac.com/environment/ev01a.php
https://www.epa.gov/air-trends/air-quality-cities-and-counties https://www.pressenterprise.com/2021/09/29/inland-empire-is-warehouse-central-but-how-did-it-happen/ https://www.latimes.com/california/story/2023-02-05/warehouses-big-rigs-fill-inland-empire-streets https://scag.ca.gov/sites/main/files/file-attachments/task4_understandingfacilityoperations.pdf https://www.cityofrc.us/sites/default/files/2021-01/PlanRC_ExistingConditionsReport_LandUse_December2020_0.pdf https://www.latimes.com/california/story/2023-02-05/warehouses-big-rigs-fill-inland-empire-streets https://www.redlandsdailyfacts.com/2023/02/22/ban-on-new-warehouses-considered-by-redlands-city-council/ https://www.redlandsdailyfacts.com/2023/02/22/ban-on-new-warehouses-considered-by-redlands-city-council/ https://www2.deloitte.com/us/en/insights/industry/financial-services/commercial-real-estate-outlook-2021.html

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APPENDIX PART I.) HISTORICAL DEVELOPMENT OF THE WAREHOUSE/DISTRIBUTION MARKET IN THE INLAND EMPIRE 32

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APPENDIX PART I.) LARGEST EMPLOYERS IN SAN BERNARDINO COUNTY 33 Source
https://news.ucr .edu/articles/2022/12/21/pandemic-left-behind-inland-empire-economy-flourished-2022

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APPENDIX PART I.) IMPACT OF COVID-19 ON WAREHOUSING FROM DATADEX 34 1. THE NEED TO KEEP MORE INVENTORY ON HAND EXPANDED THE USE OF SAFETY STOCK.

2. PANDEMIC-FORCED LOCKDOWNS SPURRING THE ACCELERATION OF ONLINE SHOPPING, E-COMMERCE AND LAST MILE DELIVERY AND

DRAMATICALLY IMPACTED WAREHOUSE OPERATIONS
NO, IT IS NOT YOUR IMAGINATION. THE USE OF ONLINE SHOPPING HAS DRAMATICALLY INCREASED. IN FACT, FORBES ESTIMATES THAT COVID ACCELERATED THE GROWTH OF E-COMMERCE APPROXIMATELY 4 TO 6 YEARS. BECAUSE MANY WAREHOUSES WERE ONLY HANDLING

GOODS BY THE PALLET, IT HAS BEEN A SIGNIFICANT CHANGE AND ADDED COST TO ADOPT THE NEEDED PROCESSES AND TECHNOLOGY TO BE ABLE TO SERVICE PICK AND PACK OPERATIONS NEEDED FOR D2C E-COMMERCE ORDER FULFILLMENT.

3. INVENTORY VISIBILITY TAKES CENTER STAGE

4. LABOR SHORTAGES AND SOCIAL DISTANCING REQUIREMENTS BOLSTERED ADOPTION OF TECHNOLOGY SOLUTIONS

5. ESCALATION IN NEED FOR MORE COLD STORAGE WAREHOUSES

CONCLUSION
GLOBAL SUPPLY CHAINS CERTAINLY TOOK A HIT DURING THE COVID-9 PANDEMIC. THE IMPACT OF THE CORONAVIRUS WAS WIDESPREAD, AFFECTING ISSUES FROM HUMAN CAPITAL TO DELIVERY CHARGES. BECAUSE THE WORLD IS STILL EARLY IN THE DIGITAL TRANSFORMATION OF SUPPLY CHAINS AND DISTRIBUTION NETWORKS. THE LOGISTICS AND SUPPLY CHAIN CHALLENGES WERE HIGHLY DISRUPTIVE, ESPECIALLY AS SOME DISTRIBUTION CENTERS AND WAREHOUSES HAVE BEEN SLOW TO ADOPT TECHNOLOGIES AND STILL LARGELY OPERATE MANUALLY.

THE IMPACT ON WAREHOUSES IS STILL BEING FELT TODAY AND IS HAVING A TRANSFORMATIVE EFFECT ON THE SUPPLY CHAIN INDUSTRY.

WHETHER IT STARTED WITH THE DISRUPTION IN THE SUPPLY CHAINS OF PROTECTIVE EQUIPMENT OR WAS RELATED TO THE E-COMMERCE

BOOM, JOB LOSS, CHANGES IN FREIGHT TRANSPORTATION, CHANGING PUBLIC HEALTH ADVISORIES FOR BUSINESSES OR SOME OTHER REASON, MUCH OF THE CHANGE IS HERE TO STAY.

CONSUMERS MUST BE ABLE TO COUNT ON SUPPLY CHAINS, NOT ONLY FOR ESSENTIAL ITEMS LIKE FOODS, MEDICINE, PERSONAL PROTECTIVE EQUIPMENT, AND HAND SANITIZER, BUT FOR EVERYDAY GOODS THAT BRING THEM COMFORT, SATISFACTION AND EVEN JOY .

LOOKING AT THIS FROM THE PERSPECTIVE OF A GLASS HALF FULL, PERHAPS THE IMPACT OF THE CORONAVIRUS WAS POSITIVE IN THAT IT

DEMONSTRATED THAT COMPLEX PROBLEMS COULD ARISE AND BE SOLVED, AT TIMES BY CLOSE COLLABORATION AND PROBLEM SOLVING AS WELL AS BY THE ADOPTION OF NEW STRATEGIES AND INNOVATIVE EMERGING TECHNOLOGIES. FROM ARTIFICIAL INTELLIGENCE TO MOBILE

ROBOTS, MATERIAL HANDLING EQUIPMENT, AND SOPHISTICATED MANAGEMENT SYSTEMS, SUPPLY CHAINS, WAREHOUSES AND DISTRIBUTION

CENTERS CAN BE MADE MORE RESILIENT, DEFENSIBLE AGAINST CYBERSECURITY ATTACKS, AND EFFICIENT WITH EMERGING TECHNOLOGIES. FOR INSTANCE, MATERIAL HANDLING EQUIPMENT AND MOBILE ROBOTS CAN COMPENSATE FOR DIMINISHING HUMAN CAPITAL WHEN WORKERS MUST BE SIDELINED DUE TO ILLNESS, POTENTIALLY SAVING LIVES. .

Source
https://www.datexcorp.com/impact-of-covid-19-on-warehousing-and-the-supply-chain/

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APPENDIX PART I.) IMPACT OF COVID-19 ON WAREHOUSING FROM DATADEX 35 1. CONTINUED SOCIAL DISTANCING

2. KEEPING MORE INVENTORY ON HAND

3. INCREASED USE OF WAREHOUSE AUTOMATION

4. RESHORING/NEARSHORING MANUFACTURING

5. SCALABLE PROCESSES & PICKING STRATEGIES

6. MORE WORK-IN-PROCESS (WIP) INVENTORY

7. INCREASED WAREHOUSE CAPACITY

8. SMALLER DECENTRALIZED WAREHOUSE LOCATIONS

9. GREATER RELIANCE ON 3PL DISTRIBUTION NETWORKS

10. SHORTER WAREHOUSE/3PL CONTRACTS

11. ACCELERATED GROWTH OF E-COMMERCE
WHILE THE COVID PANDEMIC DIDNT START THE E-COMMERCE BOOM, IT IS CERTAINLY RESPONSIBLE FOR THE RECENT SURGE IN DEMAND.

COVID CATAPULTED E-COMMERCE AHEAD 2 YEARS IN ONLY 10 MONTHS; REALIZING PROJECTED 2022 RESULTS IN 2020 FOR A TOTAL OF $4.28 TRILLION IN GLOBAL E-COMMERCE SALES IN 2020. WAREHOUSE AND DISTRIBUTION CENTERS ARENT NEW TO E-COMMERCE, BUT THE RAPID INCREASE IN DEMAND HAS MOST STRUGGLING TO KEEP UP.

12. EMBRACING OMNI-CHANNEL DISTRIBUTION

13. MICRO-DISTRIBUTION FROM STORE

AS CUSTOMERS DEMAND FASTER SHIPMENTS, RETAIL BUSINESSES WILL LOOK TO LEVERAGE EXISTING BRICK AND MORTAR LOCATIONS AS MINI-DISTRIBUTION CENTERS. THEY WILL AIM TO BUILD A LARGER DISTRIBUTION NETWORK WITHOUT A LARGE INVESTMENT. EQUIPPING EXISTING RETAIL STORE LOCATIONS WITH DISTRIBUTION CAPABILITIES CAN BE MORE COST EFFECTIVE THAN PARTNERING.

14. NEW IMPORTANCE ON INVENTORY VISIBILITY

15. INCREASE IN COLD STORAGE

IN SUMMARY
AS WE SETTLE INTO OUR POST-COVID LIVES THE ONLY THING THAT IS CERTAIN IS THAT NOTHING IS CERTAIN. COMPANIES ARE CREATING BACK UP PLANS FOR THEIR BACK UP PLANS. WITH AN UNPREDICTABLE FUTURE, WAREHOUSE AND DISTRIBUTION CENTERS WILL LOOK TO BE AS ADAPTABLE AND FLEXIBLE AS POSSIBLE. THEIR MAIN FOCUS WILL BE ON HOW TO BEST UTILIZE SPACE AND EFFICIENTLY MANAGE THEIR BIGGEST EXPENSE - LABOR.

Source
https://us.blog.kardex-remstar.com/15-ways-covid-changing-warehousing

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36 APPENDIX PART II.) RECENT SALES COMPS FOR RC METHODOLOGY EMPIRE ANALYZED RECENT SALES FOR LARGER INDUSTRIAL, OFFICE, RETAIL AND

MULTIFAMILY PROPERTIES WITHIN THE INLAND EMPIRE AND A SUBSET OF CITIES

WITHIN RC, FONTANA, ONTARIO AND RIALTO TO COME UP WITH A PSF VALUE PLEASE NOTE THAT EMPIRE FOCUSED ON THE SALES DATA FOR INDUSTRIAL FROM 2019-2022 AND FOR THE OTHER ASSET CLASSES 2021-2022 THE PRICE OF INDUSTRIAL PSF HAS RISEN SINCE 2019

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APPENDIX PART II.) WAREHOUSE/DISTRIBUTION WHOLESALE MANUFACTURING SPACE PER WORKER IN THE RC 37 THE CITY OF RC HAS SEEN A LARGE AMOUNT OF GROWTH IN ITS WAREHOUSE/DISTRIBUTION SPACE BUT NOT AN EQUAL INCREASE IN EMPLOYMENT. BASED ON APN DATA, EMPIRE ESTIMATES THAT THERE WAS 26.4M SQUARE FEET OF WAREHOUSE DISTRIBUTION SPACE IN 2010 AND CLOSE TO

33.8M SQUARE FEET IN 2022 OR A PERCENT GROWTH OF SOME 28% THE AMOUNT OF WORKERS INCREASED FROM 11,170 WORKERS TO 15,092 WORKERS WITH THERE BEING A QUICKY RECOVERY FROM OVID FOR A % GROWTH OF SOME 35%
PLEASE NOTE THAT THE AMOUNT OF WORKERS PER SPACE WAS DECREASING FROM 2014 TO 2019 THEN INCREASED DUE TO COVID-19 AND IS

SLIGHTLY DECREASING, REFLECTING VARIOUS TECHNOLOGY NEEDS AND SPACE DESIGNS

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APPENDIX PART II.) LOCATION OF VACANT INDUSTRIAL SPACE FOR THE RANCHO CUCAMONGA MARKET

THE OVERALL VACANCY RATE FOR THE INDUSTRIAL OR

WAREHOUSE/TRANSPORTATION MARKET PER VARIOUS SOURCES IS
BETWEEN 1.1% (CBRE) TO 1.61% (VOIT).
PLEASE NOTE THAT THE VACANCY RATE FOR THE INLAND EMPIRE HAS COME DONE FROM 2008 AFTER THE GREAT RECESSION FROM
LEVELS OF CLOSE TO 12% TO HISTORIC LOWS TODAY.
CURRENTLY , DUE TO RANCHO CUCAMONGAS PRIME LOCATION OFF THE 1-15 AND BY THE 1-10, SPACE IS AT A PREMIUM WITH LITTLE VACANCY..
I-15 IS A MAJOR WEST TO EAST CORRIDOR THAT GOES NORTH THROUGH THE WESTERN HALF OF THE US.
THE I-10 IS A MAJOR WEST TO EAST CORRIDOR AS WELL.
.
38 -------------------------

THE VACANCIES ARE LOCATED INTERSPERSED IN THE

SOUTHERN PART OF THE CITY AND ARE GENERALLY
SMALLER SQUARE FOOTAGE SPACES.

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APPENDIX PART II) CITY OF RANCHO CUCAMONGA CURRENT PLAN 39

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APPENDIX PART III.) POTENTIAL IMPACTS OF TECHNOLOGICAL CHANGE (AUTOMATION/GREEN TECHNOLOGY) ON THE

WAREHOUSE/DISTRIBUTION MARKETS
40 Source:
https://www.inboundlogistics.com/articles/warehouse-automation-growing-but-for-how-long/

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APPENDIX PART III.) AMAZONS RECENT WAREHOUSE: 4M SQUARE FEET FOR 1,500 WORKERS 41 ONTARIO, CALIF. - AMAZON IS OPENING ONE OF ITS LARGEST WAREHOUSES IN THE INLAND EMPIRE.

THE FACILITY, LOCATED AT THE MERRILL COMMERCE CENTER IN ONTARIO, WILL BE COMPLETED IN 2024, AND THE TOTAL SQUARE FOOTAGE IS OVER 4 MILLION SQ. FT., MAKING IT ONE OF THEIR LARGEST BUILDINGS.

IT WILL EMPLOY OVER 1,500 PEOPLE.

AMAZON OFFICIALS SAY THE COMPANY HAS INVESTED MORE THAN $19.3 BILLION IN THE INLAND EMPIRE AND $81 BILLION IN CALIFORNIA SINCE 2010.

ACCORDING TO A RECENT COMPANY REPORT, AMAZON CREATED OVER 40,000 JOBS IN THE INLAND EMPIRE AND AMAZONS INVESTMENTS IN THE REGION LED TO THE CONTRIBUTION OF MORE THAN $15.4 BILLION TO THE ECONOMY OVER THE LAST DECADE.

PAUL GRANILLO, PRESIDENT AND CEO OF INLAND ECONOMIC PARTNERSHIP, SAYS AMAZONS INVESTMENT IN THE INLAND EMPIRE HELPED THE REGION BECOME A NATIONAL LEADER IN THE GOODS MOVEMENT INDUSTRY. "THE MORE THAN 40,000 JOBS CREATED BY AMAZON, ALLOWED THE INLAND EMPIRE TO WEATHER THE ECONOMIC DOWNTURN BETTER THAN OUR NEIGHBORING COUNTIES. MORE IMPORTANTLY, IT PROVIDES OUR RESIDENTS WITH LOCAL EMPLOYMENT OPPORTUNITIES NEGATING THE NEED FOR MULTI-HOUR DAILY COMMUTES. THESE EFFORTS, PROVIDE ECONOMIC OPPORTUNITY NOW BUT ALSO POSITION OUR REGION FOR THE FUTURE," GRANILLO SAID IN A STATEMENT.

AMAZON IS ALSO OPENING A FULFILMENT CENTER IN VICTORVILLE AND ONTARIO. EACH LOCATION WILL EMPLOY OVER 1,000 PEOPLE.

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APPENDIX III.) POTENTIAL EMISSION RAMIFICATIONS
42 Source
https://scag.ca.gov/sites/main/files/file-attachments/task5_developingpolicyevaluation.pdf?1604268239

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APPENDIX PART III.) FORECAST OF FUTURE DEMAND FOR ADDITIONAL WAREHOUSE/DISTRIBUTION 43

Page 703 of 715 ends

44 APPENDIX PART III.) FUTURE IMPACT OF AUTOMATION IN RANCHO CUCAMONGA

THERE IS A WIDE V ARATION OF AUTOMATION TECHNOLOGIES THAT CAN BE ADOPTED BY EMPLOYERS IN CONJUNCTION WITH MODIFICATION TO THE BUILDING SIZE/LAYOUT (INCREASED CEILINGS/CROSS DOCK, ETC.), TO AUTOMATE ONE OF MANY TASKS THAT TAKE PLACE IN A WAREHOUSE.

HOWEVER, NOT ALL EMPLOYERS WILL HA VE THE CAPITAL OR ABILITY DUE TO THE SIZE/WEIGHT OF ITEMS TO ADOPT THIS TECHNOLOGY TO THEIR CURRENT WAREHOUSES, AS ONLY CERTAIN TECHNOLOGIES CAN BE EASILY DEPLOYED POST BUILDING CONSTRUCTION.

RESEARCH SHOWS THA T AUTOMATION HAS NOT ALWAYS REDUCED THE AMOUNT OF WAREHOUSE JOBS, IT HAS OFTEN LEAD TO THE INTENSIFICATION OF JOBS, DESKILLING EXISTING JOBS, CHANGING HOW EMPLOYEES ARE MANAGERD AND MAY NOT LEAD TO EXISITING JOB LOSS.

AUTOMATION WILL MANIFEST ITSELF IN LESS FUTURE EMPLOYEES BEING HIRED POTENTIALLY FOR FUTURE BUILDINGS UNDER CONSTRUCTION, DEPENDING ON HOW MUCH A SPECIFIC COMPANY INVESTS IN TECHNOLOGY .

IMPACT OF NEW TECNOLOGY ON WAREHOUSE JOBS

1. NEW TECHNOLOGIES ARE LIKELY TO LEAD TO WORK
INTENSIFICATION.

2. NEW TECHNOLOGIES HA VE THE POTENTIAL TO DE-SKILL SOME JOBS.

3. NEW TECHNOLOGIES ARE POISED TO TRANSFORM HOW
WORKERS ARE MANAGED.

4. IN THE SHORT TO MEDIUM TERM, NEW TECHNOLOGIES LIKELY WILL NOT CAUSE WIDESPREAD JOB LOSS.

5. TECHNOLOGY IS LIKELY TO HA VE UNEVEN IMPACTS ACROSS
DEMOGRAPHICS AND OCCUPATIONS.

TECHNOLOGICAL GAINS INCLUDING BUT NOT LIMITED TO THOSE THAT MAY DE-SKILL AND INTENSIFY WORKAPPEARS TO BE LED

BY THE WIDESPREAD DESIRE TO COMPETE WITH AMAZON AND

OTHER MAJOR ONLINE RETAILERS

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APPENDIX PART III). AIR POLLUTION RISK
45 Source
https://www.lung.org/research/sota/key-findings/most-polluted-places http://www.laalmanac.com/environment/ev01a.php
https://www.epa.gov/air-trends/air-quality-cities-and-counties

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APPENDIX PART IV.) CITYS VISION
46

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DATE: July 19, 2023
TO: Mayor and Members of the City Council
FROM: John R. Gillison, City Manager
INITIATED BY: Matt Marquez, Director of Planning and Economic Development SUBJECT: Quarterly Development Update – Second Quarter 2023 (CITY) RECOMMENDATION:

Staff recommends that the City Council receive a presentation from staff on development-related activities for the second quarter of 2023 (April through June).

BACKGROUND:

Over the last several months, the City Council has received reports detailing the progress in implementing the City’s General Plan and Housing Element. Those reports are submitted to State agencies for annual review and serve as report cards for the community to verify that progress continues to be made toward meeting the goals outlined in each plan. While those reports include development-related information (permits issued, new housing units constructed, etc.), they are only developed and presented to the City Council once a year. Staff believes more frequent updates are necessary to better inform the community and at the conclusion of the first quarter of 2023, provided a Quarterly Development Update (QDU) to the City Council. Now, with the second quarter of 2023 complete, it is again time for staff to present an update to the City Council.

ANALYSIS:

The QDU to be presented to the City Council will include summaries of both Building & Safety and Planning & Economic Development related activities. This includes, but may not be limited to, detailing entitlement approvals by use type, providing updates on key development projects, and reporting on building permit and plan check activity. For example, 1,487 new plan checks have been submitted to the City for review, and 1,543 building permits have been issued during the second quarter of 2023. Additionally, hundreds of people have visited the public counter and staff has fielded thousands of phone calls, all while construction on various projects continues throughout the City.

Staff's formal presentation to the City Council will provide additional details on development- related activities, and staff will continue to report this information to Council quarterly.

FISCAL IMPACT:

There is no fiscal impact associated with this item.

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Page 2 ends

1 9
3 4
COUNCIL MISSION / VISION / VALUE(S) ADDRESSED:

This item addresses the Council’s following core values:

1. Providing and nurturing a high quality of life for all

2. Relentless pursuit of improvement

3. Building and preserving a family-oriented atmosphere ATTACHMENTS:

None

Page 708 of 715 ends

DATE: July 19, 2023
TO: Mayor and Members of the City Council
FROM: John R. Gillison, City Manager
INITIATED BY: Wess Garcia, Acting Library Director
SUBJECT: Consideration of the City Council Library Subcommittee's Recommendation to Appoint Members to the Library Board of Trustees. (CITY)
RECOMMENDATION:

Staff recommends the City Council approve the City Council Library Subcommittee’s recommendation to appoint Christine DeVries and Laurel Rice to a three-year term ending on June 30, 2026 and appoint William Diepenbrock to fill an un-scheduled vacancy for an unexpired term ending on June 30, 2024 on the Library Board of Trustees.

BACKGROUND:

As mandated by the California Education Code Sections 18910-18927, municipal public libraries shall have a Board of Trustees appointed by the municipality’s governing body. As outlined in the By-laws of the Rancho Cucamonga Public Library Board of Trustees, the Board is mandated to provide oversight to the Library. Terms of office for the Trustees shall be for three years and all Members serve in a volunteer capacity.

Two vacancies will be created on the Board on June 30, 2023, when the terms for Board Members Christine DeVries and Janet Temkin conclude. A third vacancy via a resignation by Board member Kristen Murrieta-Morales was submitted and effective as of June 22, 2023.

New appointees Christine DeVries and Laurel Rice will each be appointed to complete three- year terms concluding June 30, 2026. The appointment of William Diepenbrock due to the resignation of Kristen Murrieta-Morales will be to fill an unexpired term ending on June 30, 2024.

ANALYSIS:

The City Council Library Subcommittee, at their meeting on May 17, 2023, interviewed six applicants for the Library Board of Trustees vacancies. The Subcommittee recommends the appointment of Christine DeVries, Laurel Rice, and William Diepenbrock. These three candidates have demonstrated their passion for public library services in Rancho Cucamonga.

FISCAL IMPACT:

None.

COUNCIL MISSION / VISION / VALUE(S) ADDRESSED:

Providing superior Library Services to the residents of Rancho Cucamonga supports City Council’s Core Values of providing and nurturing a high quality of life and equitable prosperity for all.

ATTACHMENTS:

None.

Page 709 of 715 ends

DATE: July 19, 2023
TO: Mayor and Members of the City Council
FROM: John R. Gillison, City Manager
INITIATED BY: Michael Parmer, Assistant to the City Manager SUBJECT: Designation of Voting Delegates and Alternates for the League of California Cities (Cal Cities) Annual Business Meeting. (CITY) RECOMMENDATION:

Staff recommends the City Council designate a voting Delegate and Alternates for the Annual Business Meeting of the 2023 League of California Cities (Cal Cities) Annual Conference.

BACKGROUND:

Cal Cities 2023 Annual Conference is scheduled for September 20-22, 2023, in Sacramento. An essential part of the Annual Conference is the Annual Business Meeting during the General Assembly on Friday, September 22. At this meeting, the Cal Cities membership considers and takes action on various resolutions that establish Cal Cities policy on municipal issues of statewide importance.

In order to vote at the Annual Business Meeting, the City Council must designate one (1) voting delegate and appoint up to two (2) alternate voting delegates, one of whom may vote in the event the designated voting delegate is unable to serve in that capacity. According to the League bylaws, the voting delegate and the two alternate delegates must be designated by an official vote of the City Council.

ANALYSIS:

The designate voting delegate and alternates must be registered to attend the conference. Only one (1) voting card will be provided for use by either the voting delegate or the alternates. The task of voting at the Annual Business Meeting cannot be transferred to any other city official beyond the designated voting delegate and alternates. The voting delegate and alternates can be Council Members or City Staff scheduled to participate in the conference.

FISCAL IMPACT:

None.

COUNCIL MISSION / VISION / VALUE(S) ADDRESSED:

Actively participating in the policy-making process during the General Assembly supports the City Council’s Core Values of intentionally embracing and anticipating the future and continuous improvement.

ATTACHMENTS:

Attachment 1 - Voting Delegate Letter and form.

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1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org DATE: Wednesday, June 21, 2023
TO: Mayors, Council Members, City Clerks, and City Managers RE: DESIGNATION OF VOTING DELEGATES AND ALTERNATES
Leag
ue of California Cities Annual Conference and Expo, Sept. 20-22, 2023, Sacramento SAFE Credit Union Convention Center
Every
year, the League of California Cities convenes a member-driven General Assembly at the Cal Cities Annual Conference and Expo. The General Assembly is an important opportunity where city officials can directly participate in the development of Cal Cities policy.

Takin
g place on Sept. 22, the General Assembly is comprised of voting delegates appointed by each member city; every city has one voting delegate. Your appointed voting delegate plays an important role during the General Assembly by representing your city and voting on resolutions.

To cast
a vote during the General Assembly, your city must designate a voting delegate and up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity. Voting delegates may either be an elected or appointed official.

Pleas
e complete the attached voting delegate form and email it to Cal Cities office no later than Monday, August 28.

New th
is year, we will host a pre-conference information session for voting delegates to explain their role. Submitting your voting delegate form by the deadline will allow us time to establish voting delegate/alternate records prior to the conference and provide pre- conference communications with voting delegates.

Please view Cal Cities’ event and meeting policy in advance of the conference.

Action
by Council Required. Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the city council. When completing the attached Voting Delegate form, please attach either a copy of the council resolution that reflects the council action taken or have your city clerk or mayor sign the form affirming that the names provided are those selected by the city council.

Please
note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone.

Council Action Advised by August 28, 2023
ATTACHMENT 1

Page 711 of 715 ends

Conference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. Conference registration is open on the Cal Cities website.

For a city to cast a vote, one voter must be present at the General Assembly and in possession of the voting delegate card and voting tool. Voting delegates and alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the voting delegate desk. This will enable them to receive the special sticker on their name badges that will admit the voting delegate into the voting area during the General Assembly.

Transferring Voting Card to Non-Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the General Assembly, they may not transfer the voting card to another city official.

Seating Protocol during General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.

The voting delegate desk, located in the conference registration area of the SAFE Credit Union Convention Center in Sacramento, will be open at the following times:

Wednesday, Sept. 20, 8:00 a.m.- 6:00 p.m. and Thursday, Sept. 21, 7:30 a.m.- 4:00 p.m. On Friday, Sept. 22, the voting delegate desk will be open at the General Assembly, starting at 7:30 a.m., but will be closed during roll calls and voting.

The voting procedures that will be used at the conference are attached to this memo.

Please share these procedures and this memo with your council and especially with the individuals that your council designates as your city’s voting delegate and alternates.

Once again, thank you for completing the voting delegate and alternate form and returning it to Cal Cities office by Monday, Aug. 28. If you have questions, please contact Zach Seals at [email protected].

Attachments:
• General Assembly Voting Guidelines
• Voting Delegate/Alternate Form
• Information Sheet: Cal Cities Resolutions and the General Assembly

Page 712 of 715 ends

1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org

General Assembly Voting Guidelines

1. One City One Vote. Each member city has a right to cast one vote on matters pertaining to Cal Cities policy.

2. Designating a City Voting Representative. Prior to the Cal Cities Annual Conference and Expo, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the voting delegate form provided to the Cal Cities Credentials Committee.

3. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the voting delegate desk in the conference registration area. Voting delegates and alternates must sign in at the voting delegate desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the General Assembly.

4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city’s voting card by providing a signature to the credentials committee at the voting delegate desk, may sign petitions to initiate a resolution.

5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and voting tool; and be registered with the credentials committee. The voting card may be transferred freely between the voting delegate and alternates but may not be transferred to another city official who is neither a voting delegate nor alternate.

6. Voting Area at General Assembly. At the General Assembly, individuals with a voting card will sit in a designated area. Admission to the voting area will be limited to the individual in possession of the voting card and with a special sticker on their name badge identifying them as a voting delegate.

7. Resolving Disputes. In case of dispute, the credentials committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the General Assembly.

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CITY: ________________________________________
2023 ANNUAL CONFERENCE

VOTING DELEGATE/ALTERNATE FORM
Please complete this form and return it to Cal Cities office by Monday, August 28, 2023.

Forms not sent by this deadline may be submitted to the Voting Delegate Desk located in the Annual Conference Registration Area. Your city council may designate one voting delegate and up to two alternates.

To vote at the General Assembly, voting delegates and alternates must be designated by your city council. Please attach the council resolution as proof of designation. As an alternative, the Mayor or City Clerk may sign this form, affirming that the designation reflects the action taken by the council.

Please note: Voting delegates and alternates will be seated in a separate area at the General Assembly. Admission to this designated area will be limited to individuals (voting delegates and alternates) who are identified with a special sticker on their conference badge. This sticker can be obtained only at the voting delegate desk.

1. VOTING DELEGATE
Name:

Title:

2. VOTING DELEGATE - ALTERNATE
Name:

Title:

Email: _______________________________
Email: ______________________________

3. VOTING DELEGATE - ALTERNATE
Name:

Title:

Email: _____________________________

ATTACH COUNCIL RESOLUTION DESIGNATING VOTING DELEGATE AND ALTERNATES OR ATTEST: I affirm that the information provided reflects action by the city council to designate the voting delegate and alternate(s).

Nam
e: ____________________________________ Email: _________________________________ Mayor or City Clerk: ________________________ Date: __________ Phone: ________________ (circle one) (signature)
Please complete and email this form to [email protected] by Monday, August 28, 2023.

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Sixty days before the
Annual Conference and
Expo, Cal Cities members
may submit policy
proposals on issues of
importance to cities. The
resolution must have the concurrence
of at least five additional member cities
or individual members.

How it works: Cal Cities
Resolutions and the General Assembly
General Assembly
General Resolutions
Policy Committees
Developing League of California Cities policy is a dynamic process that engages a wide range of members to ensure that we are representing California cities with one voice. These policies directly guide Cal Cities advocacy to promote local decision-making, and lobby against statewide policy that erodes local control.

The resolutions process and General Assembly is one way that city officials can directly participate in the development of Cal Cities policy. If a resolution is approved at the General Assembly, it becomes official Cal Cities policy. Here’s how Resolutions and the General Assembly works.

The petitioned resolution
is an alternate method
to introduce policy
proposals during the
annual conference. The
petition must be signed by
voting delegates from 10% of member
cities, and submitted to the Cal Cities
President at least 24 hours before the
beginning of the General Assembly.

Petitioned Resolutions
The Cal Cities President
assigns general resolutions
to policy committees where
members review, debate,
and recommend positions for
each policy proposal. Recommendations are
forwarded to the Resolutions Committee.

Who’s who
The Resolutions
Committee includes
representatives from
each Cal Cities diversity
caucus, regional
division, municipal
department, policy
committee, as well as
individuals appointed by
the Cal Cities president.

Voting delegates
are appointed by each
member city; every city
has one voting delegate.

The General Assembly
is a meeting of the
collective body of
all voting delegates —
one from every
member city.

Seven Policy
Committees meet
throughout the year to
review and recommend
positions to take on
bills and regulatory
proposals. Policy
committees include
members from each Cal
Cities diversity caucus,
regional division,
municipal department,
as well as individuals
appointed by the Cal
Cities president.

During the General Assembly, voting delegates
debate and consider general and petitioned
resolutions forwarded by the Resolutions Committee.

Potential Cal Cities bylaws amendments are also
considered at this meeting.

Cal Cities policy
development is a
member-informed
process, grounded
in the voices and
experiences of city
officials throughout
the state.

For more information visit www.calcities.org/general-assembly Prior to the Annual Conference and Expo
Resolutions Committee
The Resolutions Committee
considers all resolutions.

General Resolutions approved
1 by either a policy committee
or the Resolutions Committee
are next considered by the General
Assembly. General resolutions not approved,
or referred for further study by both a policy
committee and the Resolutions Committee
do not go the General Assembly. All
Petitioned Resolutions are considered by the
General Assembly, unless disqualified.
2 • Voting delegates will receive increased communications to prepare them for their role during the General Assembly.
• The General Assembly will take place earlier to allow more time for debate and discussion.
• Improvements to the General Assembly process will make it easier for voting delegates to discuss and debate resolutions.

What’s new in 2023?
During the Annual Conference and Expo
1 The Resolution Committee can amend a general resolution prior to sending it to the General Assembly. 2 Petitioned Resolutions may be disqualified by the Resolutions Committee according to Cal Cities Bylaws Article VI. Sec. 5(f).

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Rancho Cucamonga City CouncilJuly 19, 2023

Rancho Cucamonga City Council
July 19, 2023