Request for Approval
To: Zoe Heller
Deputy Director, Materials Management and Local Assistance Division
From: Michelle Martin
Branch Chief, Financial Resources Management Branch
Request Date: April 13, 2023
Decision Subject: Awards for the SB 1383 Local Assistance Grant Program, Third Round Funding (Greenhouse Gas Reduction Fund, Fiscal Year 2021–22)
Action By: April 20, 2023
Summary of Request
Staff requests approval of grant awards for the SB 1383 Local Assistance Grant Program (Program) for fiscal year (FY) 2021–22. Staff reviewed 20 eligible applications totaling $6,262,275 for third round funding.
Funding
The FY 2021–22 Budget Act allocated $60,000,000 to be used to provide grants to local jurisdictions to assist in the implementation of regulations adopted by the Department of Resources Recycling and Recovery pursuant to Chapter 395 of the Statutes of 2016; $3,000,000 (5 percent) has been allocated for administrative costs. Funds totaling $50,618,358 were awarded in previous cycles.
Table 1. Funding
Fund Source Amount
Available
Amount to
Fund Item
Amount
Remaining Line Item
Greenhouse Gas
Reduction Fund
(FY 2021–22)
$6,381,642 $6,033,858 $347,784 Local
Assistance/Grants
Background and Findings
Statutory Authority
Senate Bill (SB) 1383 Lara, Chapter 395, Statutes of 2016, set methane emissions reduction targets for California in a statewide effort to reduce emissions of short-lived climate pollutants.
SB 170 Budget Act of 2021 authorizes CalRecycle to award grants to local jurisdictions to assist in the implementation of programs to meet these statutory requirements.
Program Background
The SB 1383 Local Assistance Grant Program provides funding to assist local jurisdictions with meeting the requirements below:
• Provide organics collection services to all residents and businesses • Conduct education and outreach to the community
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• Secure access to recycling and edible food recovery capacity • Establish edible food recovery program
• Procure recyclable and recovered organic products
• Monitor compliance and conduct enforcement
Criteria and Process
The Eligibility Criteria and Evaluation Process was approved by the Deputy Director on December 28, 2021, and presented at the January 2022 CalRecycle Monthly Public Meeting.
The Notice of Funds Available were placed on the CalRecycle website on January 4, 2022, with an appropriate notice sent to stakeholders. Applications were due February 1, 2022.
CalRecycle received 476 applications requesting $54,947,783. Staff reviewed the applications in accordance with the approved evaluation criteria; 393 applications met the application requirements and adopted their enforceable ordinance, or similarly enforceable mechanism, by April 1, 2022, and were therefore eligible for first round funding. One application was deemed ineligible and therefore disqualified. First round funding grants were awarded in April 2022.
The remaining 82 applications were moved to second round funding and were given a secondary due date of June 14th, 2022. Staff reviewed the applications in accordance with the approved evaluation criteria; 62 applications met the application requirements and adopted their enforceable ordinance, or similarly enforceable mechanism, and were eligible for second round funding. Second round funding grants were awarded in September 2022.
Staff reviewed the remaining 20 applications in accordance with the approved evaluation criteria and identified 14 applicants who are eligible for third round funding. These 14 applicants adopted an enforceable ordinance, or similarly enforceable mechanism, that met CalRecycle’s criteria.
The types of projects recommended for funding include: bins, education and outreach materials, recordkeeping subscriptions, compost procurement, and personnel and administrative costs.
Recommendation
Staff recommends approval of 14 grant awards as listed below for $6,033,858.
Table 2. Recommended Awards
Applicant Award Amount
Alpine County $20,000
City of Compton $129,212
City of Los Angeles $5,144,473
City of Nevada City $20,000
City of Redlands $94,312
City of Rio Dell $20,000
City of Shasta Lake $20,000
City of Visalia $183,590
El Dorado County $212,198
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Applicant Award Amount
Kings County $44,192
Rancho Murieta Community Services District $20,000
Shasta County $85,881
Sunset Beach Sanitary District $20,000
Town of Paradise $20,000
Total Award $6,033,858
Deputy Director Actions
On the basis of the information and analysis in this Request for Approval and the findings set out herein, I hereby conditionally approve the grant awards for the SB 1383 Local Assistance Grant Program as listed in Table 2. Each proposed grantee’s award is subject to the following condition:
• The recommended grantee must pay all outstanding debts due to CalRecycle or bring current any outstanding payments owed to CalRecycle, within 60 days of the date of the award email.
• The recommended grantee must have a valid Resolution in place within 60 days of the date of the award email.
• The recommended grantee is responsible for submitting all outstanding documents required by CalRecycle during the application process, as well as those identified in the Application Guidelines and Instructions, prior to the release of funding.
___________________________ ____________________________ Zoe Heller Dated
Deputy Director
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City Council Meeting J. 18.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Approve the request for the temporary closure of Brockton Avenue for the University of Redlands Commencement on April 25 and 26, 2024, and determination that the event is categorically exempt from environmental review pursuant to Section 15311 of the State's guidelines implementing the California Environmental Quality Act (Facilities and Community Services Director Crocker)
MOTION(S):
If the City Council determines that the request is appropriate, the following motions are provided:
I move that the City Council determine that approval of the event is exempt from environmental review pursuant to Section 15311(c) of the State’s guidelines implementing the California Environmental Quality Act; and
1. I move to approve the temporary closure of Brockton Avenue from University Street to Grove Street on April 25 and April 26, 2024, for the University of Redlands commencement ceremony.
2. RECOMMENDATION:
Staff recommends that the City Council direct staff accordingly regarding the temporary street closure request of Brockton Avenue from University Street to Grove Street on April 24 and April 25, 2024, for the University of Redlands commencement ceremony.
DISCUSSION:
The Facilities and Community Services Department manages the administration and issuance of permits for temporary street closures in areas of the City. Upon issuing a street closure permit, the event may take place contingent on the event organizer paying the required fees.
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The University of Redlands is requesting to hold their commencement activities on Thursday, April 25, at the university campus from 12:00 p.m. to 10:00 p.m. and Friday, April 26, 2024, from 7:00 a.m. to 10:00 p.m. This request requires City Council's approval due to the necessity of a temporary street closure, aimed at managing traffic flow and ensuring the safety of both pedestrians and drivers along Brockton Avenue, between University Street and Grove Street. Should the City Council elect to approve the event, the following condition of approval will apply; the event will be held on Brockton Avenue between University Street and Grove Street.
ALTERNATIVES:
The City Council may elect to deny the temporary street closure.
STRATEGIC PLAN:
Priority A - Quality of Life, Strategic Objective: 1. Beautification, Arts and Culture.
SUBMITTED BY:
Tabitha Crocker, Facilities and Community Services Department Director RECOMMENDED BY:
Charles M. Duggan Jr., City Manager
REVIEWED BY:
Janice McConnell, Assistant City Manager
Christopher Boatman, Assistant City Manager
PREPARED BY:
Amber N. Davis, Administrative Assistant
Fiscal Impact
Fiscal Year: FY 2023/24
Revenue Generating: No
Appropriation Required Y/N: N
Amount: 0.00
Discussion:
Fees for closure will be billed to the University of Redlands; therefore there is no associated cost to the general fund.
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Attachments
Closure Map
Street Closure Permit for 04.25
Street Closure Permit for 04.26
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PERMIT TO CLOSE STREET FOR SOCIAL EVENT(S)
Date
3. Facilities & Community Services Department
Date
2. Municipal Utilities & Engineering Department
FOR OFFICE USE ONLY
This permit must be signed by the Chief of Police in order to be valid.
1. Chief of Police Date
Event:
Permission to close a street for an event is
subject to the following requirements:
1. Street Closure Diagram MUST be attached. (Failure to submit diagram will result in non-issuance of permit).
2. Event Flyer or Event Description MUST be attached. (Failure to submit flyer or event description will result in non-issuance of permit).
3. Applicant MUST provide insurance coverage per City's requirements (see reverse)
4. Written permission from all residents of the effected portion of the street MUST be attached.
5. No tables or other objects shall be placed on the street surface.
6. No alcohol shall be consumed on the street or City right-of-way outside of a permitted area.
7. Temporary No Parking Signs and barricades shall be supplied and posted by City Staff
8. Affected street(s) shall remain accessible for emergency vehicles and local traffic at all times.
9. This permit pertains only to the closing of the street(s). This permit does not relate to the type of activity, noise, or any other aspect of the event. All other applicable and appropriate ordinances and laws apply.
Permission is hereby granted to:
To close (street names)
Between (street names)
On (date) from (time) am pm to (time) am pm Address of Applicant:
Signature of Applicant: Phone No.
Condition(s):
Event Description:
Staff Notes:
Event times -
4. Risk Management Division Date
Street Closure time: From __________ am pm To _________ am pm Redlands Regular Meeting of 04-16-2024
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PERMIT TO CLOSE STREET FOR SOCIAL EVENT(S)
Date
3. Facilities & Community Services Department
Date
2. Municipal Utilities & Engineering Department
FOR OFFICE USE ONLY
This permit must be signed by the Chief of Police in order to be valid.
1. Chief of Police Date
Event:
Permission to close a street for an event is
subject to the following requirements:
1. Street Closure Diagram MUST be attached. (Failure to submit diagram will result in non-issuance of permit).
2. Event Flyer or Event Description MUST be attached. (Failure to submit flyer or event description will result in non-issuance of permit).
3. Applicant MUST provide insurance coverage per City's requirements (see reverse)
4. Written permission from all residents of the effected portion of the street MUST be attached.
5. No tables or other objects shall be placed on the street surface.
6. No alcohol shall be consumed on the street or City right-of-way outside of a permitted area.
7. Temporary No Parking Signs and barricades shall be supplied and posted by City Staff
8. Affected street(s) shall remain accessible for emergency vehicles and local traffic at all times.
9. This permit pertains only to the closing of the street(s). This permit does not relate to the type of activity, noise, or any other aspect of the event. All other applicable and appropriate ordinances and laws apply.
Permission is hereby granted to:
To close (street names)
Between (street names)
On (date) from (time) am pm to (time) am pm Address of Applicant:
Signature of Applicant: Phone No.
Condition(s):
Event Description:
Staff Notes:
Event times -
4. Risk Management Division Date
Street Closure time: From __________ am pm To _________ am pm Redlands Regular Meeting of 04-16-2024
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City Council Meeting K. 1.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Receive and file the Annual Report from the Measure T Citizens' Oversight Committee for FY 2023 (Management Services/Finance Director Garcia)
MOTION(S):
If the City Council determines that staff’s recommendation is appropriate, the following motion is provided:
I move to receive and file the annual report from the Measure T Citizens' Oversight Committee for FY 2023.
RECOMMENDATION:
Staff recommends that Council receive and file the annual report from the Measure T Citizens' Oversight Committee for FY 2023.
DISCUSSION:
For this evening's City Council meeting, Chairwoman Toni Momberger will be presenting the annual report of the Measure T Citizens' Oversight Committee for FY 2023.
ALTERNATIVES:
N/A
STRATEGIC PLAN:
N/A
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SUBMITTED BY:
Danielle Garcia, Management Services/Finance Director
REVIEWED BY:
Charles M. Duggan Jr., City Manager
Janice McConnell, Assistant City Manager
Fiscal Impact
Discussion:
There is no fiscal impact associated with the recommended motion.
Attachments
Measure T Oversight Committee - Annual Report 2023
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Measure T Citizens’ Oversight Committee
FY 2023 Annual Report
April 16, 2024
Summary & Background
The Measure T Citizens’ Oversight Committee provides stewardship of Measure T sales tax revenue. This Annual Measure T Report covers Fiscal Year (FY) 2023, beginning July 1, 2022 through June 30, 2023.
Measure T is a one‐cent sales tax, approved by the voters of the City of Redlands, that became effective April 1, 2021. The stated purpose of the tax was to provide fu nding for safety services, fire protection, paramedics, 911 emergency response, addressing homelessness, po lice patrols and crime prevention, maintaining library services, parks, sidewalks, and roads, keeping public areas well‐maintained and other general services. The measure included a provision for the formation of a Citizens’ Oversight Committee, further described in Chapter 2.72 in the Redlands Municipal Code.
The Oversight Committee was established to serve as an advisory body to the City Council and to periodically review the revenues and expenditures of Measure T monies. The seven‐member committee is comprised of five (5) citizen members from each Council dist rict and two (2) members representing the City’s employee bargaining units. The committee shall advise the Council regarding the use of Measure T revenue, according to the priorities set forth in each fiscal year adopted budget. This includes an annual written report to the Council that summarizes the committee’s proceedings and activities during the most recent review period.
For FY 2023, the City Council made the decision to prioritize the following expenditures in the Adopted Budget.
Continue funding additional public safety staffing, and staffing for other critical services Restoring vehicle purchases, IT support and equipment purchases for Fire & Police Addressing deferred maintenance for various buildings & facilities Restoring contract services for the maintenance of parks, streets, and City facilities Addition of Capital Projects ‐
o Upgrade and Enhance Community and Senior Center facilities o Upgrade and Replace various park facilities
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o Downtown and Gateway Improvements
o Specialized Police Department equipment
o Emergency Operations Center Remodel
o Alley & Street Improvement Projects
o Sidewalk/ADA Ramp Replacement Projects
Vactor truck purchase for Streets and Inspections
Building reserves for future public safety facilities Tree Trimming 25% of City Trees
Funding the annual contribution for Project Homekey Homlessness Solutions grant
During FY 2023, the City received a total of $20.4 million in M easure T sales tax. This was roughly $2.2 million higher than the original budget estimate. Sales tax is one of the City’s most economically sensitive revenue sources and also one of its largest. The City typically takes a conserv ative approach to budgeting revenue, so this overperformance is a good indicator of the strength of the loca l economy. Moving forward, future budgets are more likely to reflect a degree of caution as the City remains braced for economic uncertainty.
Committee Proceedings
The Committee met in October 2023 and welcomed four (4) new members: Edward Millican, representing District 3; Scott Welsh, representing District 5; Brooke Doolittle, repr esenting the group of Non‐Public Safety bargaining units; and Deputy Fire Chief Reggie Brown, representing the group of Public Safety bargaining units. After introducing the new members, the election of officers was condu cted and committee members were appointed t o t h e p o s i t i o n s o f C h a i r , V i c e c h a i r a n d S e c r e t a r y . T h e n s t a f f reviewed the duties and responsibilities of the committee members, according to the Redlands Municipal Code. Fo llowing this, recent Committee accomplishments were outlined, which included meeting a total o f eight (8) times, publishing two annual reports on financial statements, and reviewing the City’s first biennial budget for Measure T spending.
After this, the proposed budget for Measure T expenditures for fiscal year 2024 was presented to the Committee.
First, General Fund revenue assumptions were discussed. It was explained that the City expects to see a gradual flattening of the growth rate for sales tax revenue, that GDP growth in the national economy is expected to decline to nearly 0% by the middle of calendar year 2024, and that property tax was actually expected to continue showing modest growth – given the fact that it is a lagging economic indicator.
Moving onto the expenditure detail, enhanced public safety spen ding was discussed in terms of new leases for police and fire department vehicles, new police and fire depart ment radio communications equipment, and the signing of a financially significant agreement with a principal contractor for the design and construction of the new Safety Hall project. Next, an ov erview on service enhancements was provided and included upgrades and replacements for various park facilities and amenities, continu ed funding for the Project Homekey Homelessness Solutions program, and other enhancements for the Community and S e n i o r C e n t e r s . L a s t l y , c a p i t a l a n d maintenance spending was discussed and this included tree trimm ing for 25% of the City’s urban forest and the City’s sidewalk and ADA ramp replacement program.
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The Committee met again on March 20, 2024, to review the draft of this document, the annual report on Measure T expenditures for FY 2023. The Committee was provided an overview of the major areas for spending of Measure T funds, including ongoing costs of additional staffing for public safety and other areas, ongoing costs from service level enhancements, one‐time service level enhancements, capita l improvements, and addition to reserves. The Committee then discussed the original goals of Measure T, the staffing levels related to public safety needs and other questions with regard to the use of certain funds in some of the categories listed in the report.
The Committee met again on April 5, 2024 to discuss the content s of the annual report for FY 2023. Major areas of focus included the development of a framework through which to evaluate the spending of specific line items of Measure T. This framework is to include the ballot language, the budget plan and any associated major items of public recognition (i.e., referencing public outreach language during the initial efforts to pass Measure T). Another topic discussed was that the Committee requested to be informed when and if an expenditure that was not included in one of the categories in the original budget is added to the final list of expenditures under Measure T.
This speaks to the Street Construction item that was included, which referred to alley paving, sidewalk repair and ADA ramp replacement. Lastly, the Committee requested that more detail be provided in Figure 2 to help illustrate the specifics of certain line items. The Committee planned to meet again ahead of its presentation to City Council on April 16, 2024.
The Committee then met on April 9, 2024 to review and finalize the Annual Report document. With some revisions, it was approved unanimously. A discussion regarding a public st atement followed. The Committee discussed the particulars of the staff positions added with Measure T within the various departments, including Police & Fire.
The Committee read through the draft that was provided during t he meeting and suggested revisions. Staff also provided additional information in response to questions receiv ed from the Committee on the statement. The public statement was approved unanimously by the Committee with certain revisions.
Financial Summary Information
The total General Fund Revenue for fiscal year (FY) 2023 was ap proximately $118.9 million. Measure T sales tax revenue represents 17% of these funds, or $20.4 million. These revenues were collected between July 1, 2022 and June 30, 2023. See Figure 1.
Fiscal Year 2023 saw Measure T contribute significantly to ongoing efforts to ensure sufficient staffing in the areas of public safety, animal services, fire prevention, library services, and code enforcement, among others. The City has made progress towards long‐t erm goals of shortening the tre e‐trimming cycle for its roughly 43,000 trees, replacement of sidewalks, installation of ADA ramps, and the enhancement of parks maintenance services. These areas translate into better public infrastructure and better service to the community. The chart below also illustrates how significant sales tax revenues have become in the General Fund. It must be noted that sales tax is a revenue source that is more sensitive to economic disruption than others like property tax revenue.
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Figure 1.
Below are a few key takeaways related to the collection of Measure T:
Year‐over‐year, Measure T sales tax revenue is roughly $250,000 (1.2%) less than FY 2022 Taken together, both Basic Sales tax and Measure T sales tax comprise 41% of General Fund revenue, with Property Tax as the next largest category at 32%
Overall, Measure T revenues have been higher than original budg et estimates projected. That trend may reverse as we enter more economically uncertain times.
Figure 2 below describes the spending categories, the original amount budgeted for each, and actual spending before June 30, 2023. The origi nal budgeted amount as well as the actual amount for Measure T Sales Tax revenue is also included at the bottom of the figure. Since actual Measure T revenues exceeded budget, certain projects were incorporated into the Measure T spending plan as long as they were appropriate in nature given the original Measure T budget goals. The Committee notes that because Measure T revenue is a general sales tax comingled with other General Fund revenue and pooled for General Fund expenditures, it is not possible to trace all specific expenditures back to Measure T revenue.
Property Tax
32%
Basic Sales Tax
24%
Measure T
Sales Tax
17%
Other
Revenue
25%
Transfers In
2%
General Fund Revneue
By Source
FY 2023
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Figure 2.
Spending Categories from the FY 2023 Adopted Budget
Public Safety
Police Staffing (previously restored/enhanced) 2,628,265$ 3, 391,092$ 762,827 IT infrastructure and services for PD 123,915 534,000 410,085 Restoration of Fire personnel, including Community Risk Reducti on 1,144,424 1, 558,866 414,442 Enhanced custody transport services 100,000 277,542 177,542 Police vehicles 686,106 263,589 ( 422,517) Fire Light Duty Vehicles 160,000 29,234 ( 130,766) Replace Police Department Radios ‐ 684,650 684,650 Replace Fire Department Radios ‐ 805,692 805,692 PD Specialized Tools, Vehicle Outfitting, Equipment and Softwar e 428,009 426,001 (2, 008) Renovation of Emergency Operations Center 190,000 115,623 (74, 377) Fire Station Renovations (security, apparatus bay doors) ‐ 267,938 267,938 Increase in Paramedics cost ‐ 185,602 185,602 Fire Engine Equipment / Outfitting ‐ 63,714 63,714 Fire Station 262 Building Standards Remodel 1,500,000 160,022 (1, 339,978) subtotal 6,960,719 8, 763,565 1, 802,846 Public Infrastructure
Tree trimming for 25% of City trees, removal of dead trees, & n ew tree planting 1,000,000 1, 195,412 195,412 FCS rolling stock / equipment leases 384,105 270,854 ( 113,251) Previously Planned Alley Resurfacing, Sidewalk & ADA Ramp repla cement ‐ 1, 429,581 1,429,581 Vactor Truck purchase for Streets Division 650,000 657,806 7,806 Replace aged & outdated maintenance equipment 85,000 171,319 86,319 Restored and enhanced contractual service for general maintenan ce 750,000 716,309 (33, 691) Traffic Signal and Cabinet Maintenance & Replacement 175,000 162,627 (12, 373) Address Facility Deferred Maintenance 334,000 496,489 162,489 Library ‐ Cash Match for CA State Infrastructure Grant 200,613 ‐ ( 200,613) Sidewalk, ADA Ramp & Curb construction 500,000 515,978 15,978 Alley Improvement / Repaving Project 800,000 800,000 ‐ Addition to Reserve for Future Public Facilities 2,700,000 2, 700,000 ‐ subtotal 7,578,718 9,116,375 1,537,657
Quality of Life
Library/FCS/Recreation/IT staffing restored 932,388 1, 325,627 393,239 Animal Shelter Facility Improvements ‐ 187,490 187,490 Park Infrastructure Improvements 863,000 91,836 ( 771,164) Recreational & Senior Center Programs 136,600 95,964 (40, 636) Downtown & Gateway Improvements 340,000 151,032 ( 188,968) Upgrades/Enhancements to Community & Senior Centers 636,500 173,847 ( 462,653) Project Homekey grant match 810,101 510,497 ( 299,604) subtotal 3,718,589 2, 536,293 (1, 182,296) FY 2023 EXPENDITURES TOTAL 18,258,026 20, 416,233 2,158,207 FY 2023 REVENUES TOTAL 18,207,000 20,415,886 2,208,886 Actual Difference Revenues (Under)/Over Expenditures (51,026) (347) Adopted Budget
FY 2023
Actua l
FY 2023
Difference
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You will note there are several differences between the Adopted Budget and the Actual Amounts for FY 2023.
Some of this difference can be attributed to the length of time needed to procure vehicles caused by supply chain shortages. Also, some projects involve design and construction phases that tend to require a longer timeline than the 12‐month fiscal year. Lastly, revenues were significantly higher than original budget estimates and this provided more opportunities for spending on public safety and public infrastructure, in keeping with the budget goals adopted by City Council for Measure T spending.
Looking over Figure 2 provided on the preceding page (page 5), public safety needs received a total of approximately $8.8 million in Measure T funds. The Police Department received funding for restoring and enhancing roughly 28 positions within the department. This included 5 police officer positions that were restored after budgets were cut in the midst of the COVID‐19 pandemic an d an additional 2 officer positions that were added to enhance staffing levels. In addition to this, 14 new vehicles were received and 11 of these replacements are for existing patrol vehicles. Also, the outfitting and gea r needed to commission these new vehicles was also funded through Measure T. The Police Department also received funding for several software integrations between their existing computer‐aided dispatch system and citation and GIS software products. Other specialized equipment included the purchase of updated SWAT response equipment, GPS trackers to combat organized retail crime and special forensic processing technology tools.
Officers at report writing desks
For the Fire Department, the large upcoming project for which M easure T has been dedicated is the remodel of Fire Station 262 to address updates needed to maintain compliance with building standards for fire station facilities. Some work has been completed to date, but the vast majority of the spending is anticipated to occur in fiscal years 2024 and 2025. In addition to this project, there are other efforts underway to upgrade and replace the Fire Department’s light duty fleet with new vehicle leases. There have also been several projects involving fire station facility upkeep. Replacement of the apparatus bay doors was completed for Station 261. Security fencing and a gate were also added to Fire Station 261.
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Fire Station 261 Before Security Fence & Gate
Fire Station 261 After Security Fence & Gate
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Station 261 Brand New Bay Doors
In terms of public infrastructure, there are several areas in which Measure T has been invested: tree trimming, ADA ramp and sidewalk replacement, park playground improvements, increased replacement of traffic signals and cabinets, proactive servicing of streetlights, replacement of aged and outdated equipment, and public alley repaving.
7,100 trees were trimmed, including park and street trees. This is about six times more than the previous annual average trimming level. Also, 330 dead trees were remove d. The dead tree population is down to .012% of the total tree inventory. Lastly, a total of 150 new trees were planted. Approximately 9,579 square feet of damaged/raised sidewalk and 200 linear feet of curb and gutter were removed and replaced at approximately forty (40) different locations citywide. Playground mulch at all city play grounds was replaced with play ground mulch certified to international safety standards for public playground surfaces.
Five (5) miles of sidewalk blocks and 58 ADA ramps were removed and replaced throughout the City. Fourteen (14) streetlights/traffic signals were replaced, and 524 streetlights were serviced or repaired. A new stump grinder for trees, new deck mower and new Kubota tractor and attachments were purchased for the Parks Division. These purchases replace equipment that was as much as 43 years old (a 1981 stump grinder)
Roughly sixteen public alleys, including driveways and sidewalk s where needed, were resurfaced and new drainage facilities were installed. Upon completion of this project, only 1.5 miles of alleys will remain to be paved out of sixteen total miles of the City’s alleys.
The Street Division increased its remediation of illegal dumps, spending 411 hours this past fiscal year performing clean‐up of such sites.
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Tree Trimming Efforts – before & after (Ford Street at E. Highland Avenue)
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Alley Repaving Project – before and after on Steele Street
Lastly, Measure T enabled investment into enhancing and restoring certain ‘quality of life’ amenities and services for the community. Some examples of this include:
Animal Shelter improvements –
o New shade sails, remodeled cattery, hardscape and landscape improvements o Kennel repairs, freezer replacement, heating and cooling system repairs, and installation of a misting system outdoors for the summer months
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Coordinated and facilitated the Step Up In Redlands project, housing roughly 100 people that were experiencing homelessness (Project Homekey at the former Good N ite Inn). Achieved full occupancy less than 6 months after groundbreaking.
The Library was able to expand literacy programs by integrating remote learning with in‐person classes, continued computer and job training workshops and added sessions to popular Storytime offerings. Additional improvements to the Redlands Senior Center and Commun i t y C e n t e r i n c l u d e n e w f l o o r i n g , repainting, and lighting in the Community Center; refinished flooring in the gym area and racquetball courts, installation of a new electronic scoreboard in the gym and replaced lighting in the Senior Center. Recreational and downtown programs were also expanded with the introduction of free special events at the Centers like the Sweethearts Ball youth dance, movies in the park, photo booths, and painting classes; expansion of the Omni Trans bus voucher program and the continuation of the downtown attendant program to provide onsite monitoring and reporting of the conditions in the downtown Redlands business area.
Cattery Facility at the Redlands Animal Shelter – before & after
Groundbreaking at the Good Nite Inn – site of the City’s Project Homekey Redlands Regular Meeting of 04-16-2024
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Conclusions
The Measure T Citizens’ Oversight Committee has reviewed the re venues and expenditures of the Measure T sales tax and found that they were collected and appropriately spent in accordance with the City’s budget plan and the original intent of Measure T, and that the City’s FY 20 23 General Fund Adopted Budget both promoted and maintained the City’s core services, including public safety.
Measure T continues to be critical for funding essential city services and infrastructure projects. Additionally, the City is actively working to promote economic development within Redlands to expand and diversify the tax base to provide more long‐term revenue stability. The combination of dedicated local revenue from Measure T and a growing local economy provides the means to deliver the services and infrastructure that the residents of Redlands desire.
The Citizens’ Oversight Committee understands the passage of Me asure T represents a trusted investment by R e d l a n d s r e s i d e n t s . W e b e l i e v e M e a s u r e T f u n d s a r e b e i n g u s e d as intended for the betterment of the community. During the review period, City staff have worked to provide transparent and accurate information to the Committee. We want to thank City taxpayers for approving Me asure T and providing the community with a steady, direct source of local funding for vital public services and improvements.
The Citizens’ Oversight Committee looks forward to the continued improvements to public safety, infrastructure, and quality of life in the coming budget cycles made possible through funding from Measure T.
Sincerely,
T o n i M o m b e r g e r , C h a i r w o m a n , D i s t r i c t 4 Scott Welsh, Vicechair, District 5
Ruth Cook, Secretary, District 1
Edward Ico, District 2
Ed Millican, District 3
Brooke Doolittle, Non‐Public Safety Bargaining Unit
Reggie Brown, Public Safety Bargaining Unit
MEASURE T CITIZENS’ OVERSIGHT COMMITTEE
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City Council Meeting K. 2.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Council Member Priority Research Project: Affordability Programs (Assistant City Manager McConnell)
DISCUSSION:
Since October 2021, the City Council has held periodic workshops to discuss and prioritize requested research projects made by individual City Council Members. During the Council's last workshop held on January 31, 2024, the City Council directed staff to research the feasibility of continuing affordability programs like the Resident Grocery Gift Card program, which is currently funded by the City's allocation of State and Local Fiscal Recovery Funds of the American Rescue Plan Act. This research request was initiated by Council Member Guzman-Lowery who recommended the City find and source funding to continue providing affordability programs due to the success of the Grocery Gift Card Program and the positive impact it has had specifically on households that are on fixed incomes, such as seniors.
To provide a basis of the amount of funding that is required to continue a Resident Grocery Gift Card Program, staff is providing the following recap of costs of the current program and the number of households served.
Round 1 - Grocery Gift Card Program ($100 per month grocery gift card for eligible households for a 12-month period)
1,687 households served. Of those, 250 were considered fixed-income or senior households.
Total program cost of $2,024,400.
Round 2 - Grocery Gift Card Program ($100 per month grocery gift card for eligible households for a 12-month period)
1,400 households anticipated to be served. Of the 1,294 applications already received, 260 are considered fixed-income or senior households.
Total program cost of $1,680,000.
FUNDING RESEARCH
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FUNDING RESEARCH
As directed by the City Council, staff conducted research on available funding streams that could potentially assist in funding the continuance of a grocery gift card program. Unfortunately, staff was unsuccessful in finding grant opportunities that could fund a program of this magnitude.
While certain low-income food assistance programs are available, supported by federal or state grants, most are administered by other agencies. The CalFresh Supplemental Nutrition Assistance Program (SNAP), for example, is administered by San Bernardino County, as are several direct cash aid programs. The City participates in the SNAP program through our own Market Match program. Other programs, funded by the USDA, are administered by the Redlands Unified School District.
Most other available food assistance programs are administered through non-profits, some of which are already partners with the City and receive assistance directly through programs such as the state Encampment Resolution Fund (ERF).
Staff compiled the attached listing of assistance programs available to qualifying Redlands residents, including some of those mentioned. The details of each program and the administering agency are listed as well as services offered by various nonprofit organizations and religious institutions to the Redlands community. This list may not be exhaustive and staff will continue to seek grants and other funding opportunities to provide assistance to residents.
CURRENT SERVICES PROVIDED BY REDLANDS SENIOR CENTER
The Redlands Senior Center plays a vital role in supporting the well-being of our senior population by offering a range of services and activities. These include, but are not limited to:
Breakfast: Providing nutritious meals to seniors to start their day off right.
Presentations: Hosting informative sessions on various programs available to seniors, ensuring they are aware of resources and opportunities.
Trips: Organizing outings and excursions to engage seniors in social activities and exploration.
Cell Phone 101 Classes: Offering educational sessions to help seniors navigate modern technology and stay connected.
Omnitrans 31 Day Senior Access Bus Passes: Providing transportation assistance to seniors, facilitating mobility and access to essential services.
FSA Meal Services: Offering meal services through Family Services Association, ensuring seniors have access to affordable and nutritious food options.
Blood Pressure Checks: Conducting regular health screenings to monitor seniors' well-being and promote preventive care.
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Special Events: Hosting a variety of special events tailored to seniors' interests and preferences, fostering a sense of community and camaraderie.
Shared Community Events: Collaborating with other organizations and community groups to organize shared events, promoting inclusivity and community engagement.
These services and activities provided by the Redlands Senior Center contribute significantly to enhancing the quality of life for our senior residents, promoting socialization, health, and overall well-being.
UTILITY BILL ASSISTANCE PROGRAM
It is also worth noting the Utility Bill Assistance Program approved by the City Council in 2021. This program provides a $25 bi-monthly benefit to eligible households. The program is currently funded through December 2025 by the City's allocation of State and Local Fiscal Recovery Funds of the American Rescue Plan Act (ARPA); a total of $450,300 is allocated to the Utility Bill Assistance Program. Once ARPA funding is no longer available, a new funding source would need to be identified for the continuation of this program.
CONCLUSION
Although staff did not identify funding sources that are available at this time for the continuation of a Resident Grocery Gift Card program, staff will continue to monitor grant funding opportunities that become available. The City Council may also provide further direction to staff.
SUBMITTED BY:
Janice McConnell, Assistant City Manager
REVIEWED BY:
Charles M. Duggan, Jr., City Manager
Selina Sanchez, Grants Coordinator
Attachments
Affordability Programs
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The low-income assistance programs listed below are available to qualifying residents of California. They are funded by the state, federal government or both and typically administered through the county. County administration allows for larger geographic reach and centralized management, which reduces the need for multiple qualification processes and guidelines. As such, counties have the established workforce capacity, policies, and local community partnerships to support individuals in need of assistance programs.
Most low-income assistance programs require that applicants meet a minimum income threshold according to household size/composition, demonstrate proof of immigration status, and proof of residency in the state. For many of the programs listed, applicants may use the official State of California BenefitsCal portal to learn about service, apply for aid, manage their benefits, communicate with county representatives, and watch How-to Videos (https://benefitscal.com/?lang=en). The BenefitsCal portal is sponsored by CalSAWS, the Department of Social Services, and the Department of Heal Care Services; it was created to provide on unified experience for Californians receiving state benefits.
Aid
Category/
Type
Project Name Details Administered
By
Funded Through
Food CalFresh The CalFresh Program, federally known as the Supplemental Nutrition Assistance Program (SNAP), issues monthly
electronic benefits that can be used to buy most foods at many markets and food stores.
San
Bernardino
County
Cal Dept. of Social Services
Food California
Universal Meals
Program
In accordance with AB 130, all RUSD students are eligible to receive one healthy breakfast and one lunch at no cost each school day. Every student can participate in this meal program at no cost. Lunches are served every school day including minimum days. After-school meals will also be offered district wide at no cost.
Redlands
Unified
School
District
USDA
Food CEP The Community Eligibility Provision (CEP) is a non-pricing meal service option for schools and school districts in low-income areas. CEP allows the nation’s highest poverty schools and districts to serve breakfast and lunch at no cost to all enrolled students without collecting household applications. Instead, schools that adopt CEP are reimbursed using a formula based on the percentage of students categorically eligible for free meals based on their participation in other specific means- tested programs, such as the Supplemental Nutrition
Assistance Program (SNAP) and Temporary Assistance for
Needy Families (TANF). RUSD is a qualified provider, the letter of eligibility can also be used for families to qualify for other affordability programs within the state such as reduced utilities.
Redlands
Unified
School
District
USDA
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Food Sun Bucks Summer EBT or Sun Bucks provides grocery-buying benefits to low-income families with school-aged children when schools are closed for the summer. More than 30 million children across America could benefit from Summer EBT.
Redlands
Unified
School
District
USDA
Food Market Match
Program
Market Match is California’s healthy food incentive program that matches customers’ CalFresh nutrition assistance
benefits (SNAP) at farmers’ markets and other farm-direct sites. Market Match is distributed by over 60 community-based organizations and farmers’ market operators at over 250 sites across the state. Redlands Morning Market is a provider of this service.
Market
Match/
Redlands
Morning
Market
USDA
Utilities LifeLine California LifeLine provides discounted home phone and cell phone services to qualified households. Only one California LifeLine discounted phone is allowed per household (except for teletypewriter users and for Deaf and Disabled
Telecommunications Program participants). The California LifeLine discounts can only be for the individual’s primary residence. An individual can only have one primary residence.
California
Lifeline
California Public Utilities Commission
Utilities LIHEAP LIHEAP stands for the Low-Income Home Energy Assistance Program. LIHEAP is a federally funded program that helps low- income households pay for heating or cooling in their
homes. With additional federal funding available to help households struggling with higher energy costs and
making ends meet, many Californians in need may qualify.
LIHEAP can offer a one-time payment to help pay heating or cooling bills, in an emergency or energy crisis, such as a utility disconnection. In addition, the program can help with paying energy bills. LIHEAP can also provide in-
home weatherization services for Improved energy efficiency; and health and safety.
Community
Action
Partnership of
San
Bernardino
County
www.capsbc
.org
Cal Dept of Health Services
https://www.csd.ca.gov/energybills
Utilities CARE & FERA California Alternate Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) financial assistance programs help qualifying families of all sizes lower their monthly energy bills by 30-35% on their electric bill and 20% on their natural gas bill.
Sub Metered Tenants Rate discounts are available for
qualified tenants billed for energy usage through their landlords Edison, SoCal
Gas
CARE is funded through a rate surcharge
paid by all other utility customers.
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in apartment buildings, mobile-home parks, residential RV parks, or marinas.
Nonprofit Group Living Facility
The CARE program offers a monthly discount on energy bills for qualifying nonprofit group-living facilities. Learn if your tax- exempt group living facility qualifies.
The application is available on SCE’s provider website.
Utilities Arrearage
Management
Program
Arrearage Management Plan (AMP)
Customers enrolled in CARE or FERA with past-due bills at least 90 days old totaling $500 or more, and who has been a customer of SCE for at least six months and made an on-time payment within the last 24 months, maybe forgiven one-
twelfth (1/12) of their eligible past-due amounts in exchange for on-time payment of the current monthly bill.
Edison, SoCal
Gas
SoCal Edison
Health Medi-Cal Public health insurance program which provides needed health care services for low-income individuals including families with children, seniors, persons with disabilities, foster care, pregnant women, and low income people with specific
diseases such as tuberculosis, breast cancer, or
HIV/AIDS. Medi-Cal is financed equally by the state and federal government.
San
Bernardino
County
Cal Dept of Health Services
Cash Aid CalWORKS Helps with cash to pay for rent, housing, food, clothing, medical payments, and utilities for families with at least one child in the home.
San
Bernardino
County
Cal Dept. of Social Services
https://benefitscal.com/Help/program/cal
works/HCPDE?lang=en
Cash Aid GA/GR General Assistance/General Relief Cash assistance for adults in need without children in the household who are not able to support themselves by their own means, other public funds, or assistance programs
San
Bernardino
County
Cal Dept of Health Services
Cash Aid RCA Refugee Cash Assistance (RCA)
A cash aid program for immigrant groups that aren't eligible for other cash aid programs. This includes refugees. This also includes people who are seeking or have been granted asylum.
San
Bernardino
County
Cal Dept of Health Services
Cash Aid CAPI Cash Assistance Program for Immigrants. A cash aid program for the elderly, blind, and disabled people who are legally in the country. Recipients must not be able to get Supplemental San
Bernardino
County
Cal Dept. of Social Services
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Security Income/State Supplemental Payment (SSI/SSP) due to immigration status.
Various Community
Services Block
Grant
CSBG is a federally funded investment that aims to reduce poverty in the United States. CSBG is funded by the U.S.
Department of Health and Human Services, Administration for Children and Families, Office of Community Services. CSD is designated by the Governor as the state agency responsible for administering the CSBG program in California. There are currently 60 private nonprofit and local government
organizations across California (referred to as eligible entities) receiving CSBG funds. This network of eligible entities continues to administer programs that assist low-income individuals and families with attaining the skills, knowledge, and motivation necessary to achieve self-sufficiency.
Non-Profit
Agency-
Community
Action
Partnership of
San
Bernardino
County
U.S. Department of Health and Human
Services-Community Services Block Grant
Historically, non-profit organizations and religious institutions have provided aid at the local level either by partnering with counties to administer programs funded by the state or federal government or seeking funding opportunities directly.
The following comprises a list of those organizations and the services they provide to the Redlands community.
Services Organization Overview Partnered with City
Various Family Service
Association of
Redlands
Family Service Association in Redlands is, and has been, helping others in our community for the past 125 years. We are the "safety net" agency that families and individuals experiencing crisis and hardship can turn to for basic, yet vital, assistance. We help people better themselves by offering a hand up, not just a handout. Services provided include employment/education, surplus and emergency food, and clothing.
Yes, through the
ERF Grant
Varied Salvation Army The Salvation Army offers several social service programs including transitional housing, casework and counseling, senior centers, food pantries, help for domestic abuse, housing and utility assistance, rehabilitation, and job training.
Yes, through the
ERF Grant
Food Inland Empire
Filipino Seventh
Day Adventist
Church
The organization offers free food boxes weekly. No
Food Set Free Church
Redlands
The organization offers free sack lunches/food bags and dinner weekly. No Food Share Ministry The organization offers free dinner weekly at two locations. No Food Sandals Church
East Valley
The organization offers free food bags weekly. No
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Food The Holy Name
of Jesus Catholic
Parish
The organization offers free lunch weekly. No
Clothing Angels’ Closet
Charities
Angels’ Closet Charities collects and distributes new and gently used school clothes, formal attire, business attire, graduation caps and gowns, accessories, and toiletries.
No
Various Youth Hope
Foundation
Youth Hope provides aid and training to homeless, runaway, trafficked, and at-risk youth ages 14-24.
They serve hot, nutritious meals 4 times a week along with providing access to their food pantry. This program also provides youths with clothing throughout the year, as well as safe and affordable housing. They also offer continued education and job training. The organization provides youths with access to medical, dental, optometry, and counseling care assistance when required.
Yes, through the
ERF Grant
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City Council Meeting L. 1.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Public Hearing to consider Resolution No. 8571 and Ordinance No. 2962 pertaining to Development Impact Fees continued to a future date (Municipal Utilities and Engineering Director Harris) MOTION:
If City Council determines the staff recommendation is appropriate, the following motion is provided:
I move that the City Council continue the public hearing to consider Resolution No. 8571 and Ordinance No. 2962 pertaining to Development Impact Fees to a future date.
RECOMMENDATION:
Staff recommends continuing the public hearing considering Resolution No. 8571 and Ordinance No. 2962 pertaining to Development Impact Fees to a future date to allow time to update corresponding hearing documents.
DISCUSSION:
Staff recommends continuing the public hearing considering Resolution No. 8571 and Ordinance No. 2962 pertaining to Development Impact Fees to a future date to allow time to update corresponding hearing documents.
SUBMITTED BY:
John R. Harris, Municipal Utilities and Engineering Director REVIEWED BY:
Yvette M. Abich Garcia, City Attorney
Janice McConnell, Assistant City Manager
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PREPARED BY:
Veronica Medina, Associate Engineer
Fiscal Impact
Discussion:
There is no expense impact associated with this action.
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City Council Meeting M. 1.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of the Public Works Contract with AME Builders, Inc. for the repair and replacement of the City's Emergency Operations Center roof and rooftop HVAC units, for an amount not-to-exceed $425,706, and rejection of Best Contracting Services as the apparent lower bidder; and determination that these actions are categorically exempt from environmental review pursuant to Section 15301(d) of the State's guidelines implementing the California Environmental Quality Act (Fire Chief Sessler)
MOTION(S):
If the City Council determines that staff’s recommendation is appropriate, the following motion(s) are provided:
I move that the City Council determine that the Public Works Contract with AME Builders, Inc. is categorically exempt from environmental review pursuant to Section 15301(d) of the State's guidelines implementing the California Environmental Quality Act; and
1. I move that City Council reject the bid from Best Contracting Services as unresponsive; and
2. I move to approve a Public Works Contract with AME Builders, Inc. for the repair and replacement of the City's Emergency Operations Center roof and rooftop HVAC units for an amount not-to-exceed $425,706.
3. RECOMMENDATION:
Staff recommends that the City Council determine that approval of the Public Works Contract for the repair and replacement of the City's Emergency Operations Center roof and rooftop HVAC units is categorically exempt from environmental review pursuant to Section 15301(d) of the state's guidelines implementing the California Environmental Quality Act (CEQA).
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Staff further recommends that the City Council reject the bid from Best Contracting Services as unresponsive and approve a Public Works Contract with AME Builders, Inc. for an amount not-to-exceed $425,706, for the repair and replacement of the City's Emergency Operations Center roof and rooftop HVAC units.
DISCUSSION:
On April 18, 2023, the City Council approved the award of the FY22 Emergency Operations Center Grant Program for the City's Emergency Operations Center (EOC) Renovation Project. The grant program is intended to improve emergency management and preparedness capabilities by supporting flexible, sustainable, secure, strategically located, and fully interoperable EOCs with a focus on addressing identified deficiencies and needs.
Among the identified renovations, there is a pressing need to optimize the existing space for improved functionality and efficiency, upgrade workspaces, IT/computer systems, audiovisual systems, and undertake general facility enhancements. A key priority identified is the repair and replacement of the EOC's rooftop HVAC units and roofing due to the building's age, constructed in 1988, which necessitates urgent attention.
Following the City's procurement policy, the Facilities and Community Services Department solicited bids from qualified contractors to replace the existing HVAC rooftop units and all roofing at the City's EOC. On January 30, 2024, the City clerk received and opened project bids from the following three (3) contractors:
BIDDERS AMOUNT
Best Contracting Services (Unresponsive Bid) $131,507.50 AME Builders, Inc. $425,706
Allison Mechanical $589,000
After thorough review, staff evaluated each project bid and identified AME Builders, Inc. as the contractor submitting the lowest responsive and responsible bid. The bid submitted by Best Contracting Services was deemed unresponsive as the contractor did not bid on the complete project per the scope of work, specifically not including a bid for the repair and replacement of the HVAC units.
Accordingly, staff is seeking approval to award AME Builders, Inc. a Public Works contract to execute the project.
This project is categorically exempt from environmental review in accordance with Section 15301(d) of the State's guidelines implementing the California Environmental Quality Act since it is an improvement to an existing public facility.
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ALTERNATIVES:
City Council may deny the staff recommendation and provide alternative direction.
STRATEGIC PLAN:
Priority B - Public Health & Safety
SUBMITTED BY:
Rich Sessler, Fire Chief
RECOMMENDED BY:
Charles M. Duggan Jr., City Manager
REVIEWED BY:
Yvette M. Abich Garcia, City Attorney
Janice McConnell, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
PREPARED BY:
Bruni Reyes, Management Analyst
Fiscal Impact
Fiscal Year: 2023-2024
Revenue Generating: N
Appropriation Required Y/N: N
Discussion:
The total cost for the EOC roofing and rooftop HVAC units repair and replacement project is $425,706. This is a grant-funded project.
Attachments
Bid Report
AME Builders Contract
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PUBLIC WORK CONSTRUCTION CONTRACT
This Public Work Construction contract (“Contract”) is made and entered into this 16th day of April, 2024, by and between the City of Redlands, a municipal corporation, organized and existing under the laws of the S tate of California (hereinafter “City”), and AME Builders Inc. dba AME R oofing (hereinafter "Contractor"). City and Contractor are sometimes individually referred to herein as a “Party” and, together, as the “Parties.”
In consideration of the mutual promises contained herein, City and Contractor agree as follows:
1. SCOPE OF WORK: Contractor shall furnish all materials and will perform all of the work for the following: EOC HVAC Replacement & Roofing Replacement, complete all items as required by the Contract Documents (as herein defined) and Specifications for City’s EOC HVAC Replacement & Roofing Replacement Project, Project No. FCS01112024KG (the “Work”).
2. CONTRACT SUM: City shall pay Contractor the sum of Four Hundred Twenty-Five Thousand Seven Hundred Six Dollars ($425,706) as considera tion for its performance of the Work in accordance with the terms and conditions set forth in the Contract Documents. Pursuant to Public Contract Code Section 22300, Contractor has the option to deposit securities with an escrow agent as a substitute for retention of earnings required to be withheld by City pursuant to an escrow agreement as set forth in Public Contract Code section 22300.
3. TIME FOR COMPLETION: The Work shall be completed within thirty (30) working day(s) as defined in Section 1-2 of the Standard Specifications for Public Works Construction “Greenbook” from and after the date of City’s issuance of a Notice to Proceed to Contractor.
4. LIQUIDATED DAMAGES: Contractor’s failure to complete the Work within the time allowed will result i n damages being sustained by City. Such damages are, and wil l continue to be, impracticable and extremely difficult to determine. Accordingly, Contractor shall pay to City, or have withheld from monies due to Contractor, the sum of five hundred dollars/cents ($500) for each working day as defined in Section 1-2 of the Standard Specifications for Public Works Construction “Greenbook” in excess of the specified time for completion of the Work. Execution of this Contract shall constitute agreement by City and Contractor that five hundred dollars ($500) per day is the estimated damage to City caused by the failure of Contractor to complete the work within the allowed time. Such sum is liquidated damages and shall not be construed as a penalty, and may be deducted from payments due Contractor if such delay occurs.
5. CONTRACT DOCUMENTS: This Contract incorporates by reference the following: Notice Inviting Bids, Instructions to Bidders, Contractor’s Proposal, Bid Bond, Agreement, Performance Bond, Labor and Material Bond, Plans, General Conditions, Special Provisions and Specifications, and any addenda thereto (collectively, the “Contract Documents”).
6. ATTORNEYS' FEES: In the event any action is commenced to enforce or interpret the terms or conditions of this Contract, or the Contract Documents, the prevailing Party in such action, in addition to any costs and other relief, shall be entitled to recover its r easonable attorneys’ fees, including fees for use of in-house counsel by a Party.
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7. RESOLUTION OF CONSTRUCTION CLAIMS: Claims by Contractor in the amount of three hundred seventy five thousand dollars ($375,000) or less shall be made by Contractor and processed by the City pursuant to the provisions of Part 3, Chapter 1, Article 1.5 of the Public Contract Code (commencing with Section 201 04). All claims shall be in writing and include the documents necessary to substantiate the claim. Nothing in subdivision (a) of Public Contract Code Section 20104.2 shall extend the time limit or supersede the notice requirements provided in this case from filing claims by Contractor.
8. ELIGIBILITY OF CONTRACTOR/SUBCONTRACTOR: Contractor and all of its subcontractors shall abide by California Public Contract Code, Section 6109, and California Labor Code Sections 1777.1 and/or 1777.7, and certify that they are not debarred and are eligible to work on this project.
9. ASSIGNMENT OF AGREEMENT: No assignment by a Party of any rights or interests under this Contract shall be binding on another Party without the written consent of the Party sought to be bound.
10. SUCCESSORS AND ASSI GNS: City and Contractor each binds itself and their respective successors and assigns in respect to all covenants, agreements, and obligatio ns contained in the Contract Documents.
11. SEVERABILITY: Any provision or part of the Co ntract Documents held to be void or unenforceable under any law or regulation shall be deemed stricken, and all remaining provisions shall continue to be valid and binding upon City and Contractor.
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IN WITNESS WHEREOF, the Parties hereto have executed this Contract the day and year first written above.
CITY OF REDLANDS
(SEAL)
By:____________________________________
Eddie Tejeda, Mayor
ATTEST:
____________________________________
Jeanne Donaldson, City Clerk
(SEAL)
AME BUILDERS INC. DBA AME ROOFING___
Name of Contractor
By:_______________________________________
Signature of Authorized Agent
President _____ Title
__________________________________________
Signature of Authorized Agent (if necessary)
__________________________________________
Title
__________________________________________
Contractor's License No.
1057266
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WORKER'S COMPENSATION INSURANCE CERTIFICATION
Description of Contract: City of Redlands
Fire Department
EOC HVAC Replacement and Roofing Replacement
FCS01112024KG
Every employer, except the Sta te, shall secure the payment of compensation in one or more of the following ways:
a. By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this State. b. By securing from the Director of Industrial Relations, a certificate of consent to self - insure, either as an individual employer, or as one employer in a group of employers , which may be given upon furnishing proof satisf actory to the Director of Industr ial Relations of ability to self-insure and to pay any compensation that may become due to his or her employees.
CHECK ONE
_____I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liabili ty fo r Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work and activities required or permitted under this Agreement. (Labor Code §1861).
_____I affirm that at all times, in performing the work and activities required or permitted under this Agreement, I shall not employ any person in any manner such that I become subject to the workers’ compensation laws of California. How ever, at any time, if I employ any person such that I become subject to the workers’ compensation laws of California, immediately I shall provide the City with a certificate of consent to self-insure, or a certification of workers’ compensation insurance.
I certify under penalty of perjury under the laws of the State of California that the information and representations made in this certificate are true and correct.
Dated this day of , 2024.
AME Builders Inc. dba AME Roofing______
(Contractor)
_____________________________________
(Signature)
President ____________________________
(Official Title)
(SEAL)
(Labor Code Section 1861 provides that the above certificate must be signed and filed by the Contractor with the Owner prior to performing the work of the contract.)
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FAITHFUL PERFORMANCE BOND
Whereas, the City of Redlands (“City”), State of California, and AME Builders Inc. dba AME Roofing (hereinafter designated as "Principal") have entered into an agreement dated April 16, 2024 (“Agreement”) whereby Principal agrees to install and complete certain public improvements ( the “Work”), which said Agreement is identified as EOC HVAC Replacement and Roofing Replacement and is hereby referred to and made a part hereof; and
Whereas, said Principal is required under the terms of the Agreement to furnish a bond for the faithful performance of the Work, now, therefore, we, the Principal and , AME Builders Inc. dba AME Roofing, as Surety, are held and firmly bound unto the City in the penal sum of Four Hundred Twenty-Five Thousand Seven Hundred Six Dollars ($425,706) lawful money of the United States, for the payment of which sum we bind ourselves, and our heirs, successors, executors and administrators, jointly and severally, firmly by these presents.
The condition of th is obligation is such that if the above bounded Principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Agreement and any alteration thereof made as the rein provided, on his or its part, to be kept and perfor med at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall faithfully fulfill the one -year gu arantee of all material s and workmanship, and shall defend, indemnify and save harmless the Ci ty and its elected officials, officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.
As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by the City in successfully enforcing such obligations, all to be taxed as costs and included in the judgment rendered.
As a condition precedent to the satisfactory completion of the Work, the above obligation shall hold good for a period of one (1) year or longer if required by the Agreement after the acceptance of the work by the City, during which time if th e Principal shall fail to make full, complete, and satisfactory repair and replacements and totally protect the City from loss or damage made evident during this period from the date of completion of the Work, and resulting from or caused by defective materials or faulty workmanship, the above obligation in penal sum thereof shall remain in full force and effect. The obligations of Surety h ereunder shall c ontinue so long as any obligat ion of the Principal remains.
Whenever the Principal shall be, and is declared by the City to be, in default under the Agreement, the City having performed the City obligations thereunder, the Surety shall promptly remedy the default, or shall promptly, at the City’s option:
1. Complete the Work in accordance with its terms and conditions; or
2. Obtain a bid or bids for completing the Work in accorda nce with its terms and conditions, and upon determinatio n by Surety of t he lowest responsive and respo nsible bidder, arrange for a contract between such bidder and the City, and make available as work progresses sufficient funds to pay the cost of completion of the Work less the balance of the Agreement price, Redlands Regular Meeting of 04-16-2024
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but not exceeding, including other costs and damages for which Surety may be liable hereunder, the amount set forth above. The term “balance of the Agreement price,” as used in this paragraph, shall mean the total amount payable to the Principal by the City under the Agreement and any modifications thereto, less the amount previously properly paid by the City to the Principal.
Surety expressly agrees that the City may reject any contractor or subcontractor which may be proposed by Surety in fulfillment of its obligations in the event of default by the Principal.
Surety shall not utilize the Principal in completing the Work nor shall Surety accept a bid from the Principal for completion of the Work if the City, when declaring the Principal in default, notifies Surety of the City’s objection to the Principal’s further participation in the completion of the Work.
No right of action shall accrue on the bond to or for the use of any person or corporation other than the City named herein or the successors or assigns of the City. Any suit under this bon d must be instituted within the applicable statute of limitations period.
The said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Agreement or to the work to be performed thereunder or the Specifications accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Agreement or to the work or to the specifications.
No final settlement between the City and the Pri ncipal shall abridge the right of any beneficiary hereunder whose claim may be unsatisfied.
The Principal and Surety agree that if the C ity is required to engage the services of any attorney in conn ection with the enforcement of this bond, each shall pay the City’ s reasonable attorneys’ fees incurred, with or without suit, in addition to the above sum.
In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on , 2024.
(SEAL) (SEAL)
(Contractor) (Surety)
BY:
(Signature) (Signature)
Address:___________________________________
__________________________________________
(Seal and Nota rial Acknowledgm ent of
Surety)
Telephone ( )___________________________
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LABOR AND MATERIAL BOND
Whereas, the City Council of the City of Redlands, State of California, and AME Builders Inc. dba AME Roofing (hereinafter designa ted as “Principal”) have enter ed into an agreement (the “Agreement”) whereby Principal agrees to install and complete certain designated public improvements (the “Work”), which said agreement, dated April 16, 2024, and identified as EOC HVAC Replacement and Roofing Replacement is hereby referred to and made a part hereof; and
Whereas, under the terms of the Agreement, Principal is required before commencing the performance of the Work, to file a good and sufficient Labor and Material bond with the City of Redlands to se cure the claims to which reference is made in Title 3 (commencing with Section 9550) of Part 6 of Divi sion 4 of the Civil Code of the State of California.
Now, therefore, said Principal and the undersigned as corporate surety, are held firmly bound unto the City and all contractors, subcontractors, laborers, material men and other persons employed in the performance of the Agreement and referred to in the aforesaid Code of Civil Procedure in the sum Four Hundred Twenty- Five Thousand Seven Hundred Six Dollars ($425,706) for materials furnished or labor thereon of any kind , or for amounts due under the Unemployment Insurance Act with respect t o such work or labor, that said surety will pay the same in an amount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this bond, will pay, in addi tion to the face amount thereof, costs and re asonable expenses and fees, including reasonable attorneys’ fee s, incurred by the City in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.
It is hereby expressly stipulated an d agreed that th is bond shall insure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 3 (commencing with Section 9550) of Part 6 of Division 4 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.
Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.
The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition.
In witness whereof, this instrument has been duly executed by the Principal and surety above named, on _______________________, 2024.
(SEAL) (SEAL)
(Contractor) (Surety)
BY:
(Signature) (Signature)
Address:_____________________________
(Seal and Notarial Acknowledgement of Surety) _________________________ Telephone: ( )___________________
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City Council Meeting M. 2.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of the First Amendment to the Professional Services Agreement with George Hills Company, Inc. increasing annual compensation for the remaining duration of the agreement bringing the total compensation to an amount not to exceed $270,052 providing third party liability claims administration on a time and expense basis, and adopt Resolution No. 8574, granting authority at the City’s request, to initiate small claims actions on behalf of the City and rescind Resolution No. 7830 (Human Resources/Risk Management Director Meteau)
MOTION(S):
If the City Council determines that staff’s recommendation is appropriate, the following motion is provided:
I move to approve the First Amendment to the agreement with George Hills Company, Inc. for the total compensation of the agreement not to exceed $270,052; and
1. Adopt Resolution No. 8574, and rescind Resolution No. 7830. 2.
RECOMMENDATION:
Staff recommends that Council approve the First Amendment to the Agreement to Perform Professional Services between George Hills Company, Inc. and the City of Redlands to provide third party liability claims administration on a time and expense basis for an amount not-to-exceed the amount of $270,052 for the services provided during the term of the agreement; approve Resolution No. 8574, granting authority at the City’s request, to initiate small claims actions on behalf of the City, rescinding Resolution No. 7830.
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DISCUSSION:
As provided in Resolution No. 8574, the City may delegate government claims responsibilities to its third-party claims administrator (TPA) to facilitate the day-to-day operations of claims management and ensure that the City complies with Government Code relating to Claims against a Public Entity. On July 5, 2022, City Council approved a 3-year agreement with George Hills for such services. Resolution No. 8574, also grants authority at the City’s request, to initiate small claims actions on behalf of the City
Under Exhibit “B” Fee Schedule (page 14) of the existing agreement, fees for claims administration services include a fixed fee of $69,000 per year for the first year and further states that the fixed fee is subject to re-evaluation in the event that the claim volume increases/decreases by 10%. In late 2023 George Hills completed an evaluation, and it was ascertained that the City's claims have increased above 10%, resulting in an actual cost to George Hills of $108,000.
Consequently, an amendment to the original agreement is being requested to move away from a fixed fee compensation for claim administration services.
Instead, the First Amendment will specify that claim administration services will be compensated on a time and expense basis, effective retroactively to July 1, 2023, and according to the amended fee schedule, include a not to exceed the annual cap of $95,000 for the remaining duration of the agreement and the total compensation not to exceed $$270,052. This change in how compensation is determined will adjust to the claim volume the City receives. The other terms of the agreement remain the same through June 2025.
ALTERNATIVES:
N/A
STRATEGIC PLAN:
N/A
SUBMITTED BY:
Robert Meteau, Human Resources/Risk Management Director RECOMMENDED BY:
Charles M. Duggan Jr., City Manager
REVIEWED BY:
Yvette M. Abich Garcia, City Attorney
Janice McConnell, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
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PREPARED BY:
Beatris Ordaz, HR Manager
Fiscal Impact
Fiscal Year: 23-24
Revenue Generating: No
Appropriation Required Y/N: No
Discussion:
According to the new terms of the City's amended agreement, the City agrees to pay for all services performed by Consultant on a Time and Expense basis, in the form of adjuster's fees not to exceed the annual cap of $95,000. The current hourly rates for Consultant’s personnel are:
Claims Supervisor: $127/hour*
Claims Adjuster: $102/hour*
Claims Processing: $84/hour*
Attachments
First Amendment
Resolution 8574
Resolution 7830 (Rescinded)
Agreement with George Hills
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FIRST AMENDMENT TO AGREEMENT TO PERFORM PROFESSIONAL SERVICES
This first amendment (“First Amendment”) to the agreement for third party liability claims administration services (“Agreement”), dated July 5, 2022, by and between the City of Redlands, a municipal corporation and a general law city (“City”), and George Hills Company, Inc. , a California corporation (“Consultant”), is made and entered into this 16th day of April, 2024.
RECITALS
WHEREAS, it is the desire of the City and Consultant to amend Article 5.1 of their existing Agreement to amend the Consultant’s Scope of Services and increase Consultant’s annual compensation, bringing the Consultant’ s total compensation to an amount not-to-exceed Two Hundred Seventy Thousand Dollars ($270,052), and
WHEREAS, it is the desire of the City and Consultant to amend Exhibit “A,” “Scope of Services” to include an amended “Scope of Services,” which is attached hereto by reference; and
WHEREAS, it is the desire of the City and Consultant to amend Exhibit “B,” “Fee Schedule” to include an amended “Fee Schedule,” which is attached hereto by reference.
NOW, THEREFORE, for good and valuable consideration in the receipt of which is hereby acknowledged City and Consultant agree as follows:
AGREEMENT
Section 1. The scope of work performed by Consultant pursuant to Exhibit “A” of the Agreement, entitled “Scope of Services,” is hereby amended and replaced by an amended Exhibit “A,” which is attached hereto and incorporated herein by this reference Attachment 1.
Section 2. Subsection 4.2 under Article 4 of the Agreement, entitled “Performance of Services,” is hereby amended to read as follows:
4.2 The term of this Agreement shall be for a period of three (3) years beginning July 5, 2022 and expiring on July 5, 2025.
Section 3. Subsection 5.1 under Article 5 of the Agreement, entitled “ Payments to Consultant,” is hereby amended to read as follows:
The total compensation for Consultant’s performance of the Services during the Term of this Agreement shall not exceed the amount of Two Hundred Seventy Thousand Dollars ($270,052.00). Commencing on the Effective Date of this Agreement, f ees and expenses to be paid to Consultant shall not exceed Eighty Thousand Fifty-Two Dollars ($80,052.00) for the first year of the Agreement and Ninety-Five Thousand Dollars ($95,000 .00) for each subsequent year of the Agreement. Effective July 1, 2023, City shall pay Consultant on a time and materials basis up to the not to not-to-exceed amount in accordance with the Redlands Regular Meeting of 04-16-2024
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rates specified in Exhibit “B,” titled “Fee Schedule,” which is attached hereto and incorporated herein by this reference.
Section 4. The scope of services set forth in Exhibit “ A” of the Agreement titled, “Scope of Services,” is hereby amended and replaced by an amended Exhibit “A,” which is attached hereto and incorporated herein by this reference as Attachment 1.
Section 5. The fee schedule set forth in Exhibit “B” of the Agreement titled, “Fee Schedule,” is hereby amended and replaced by an amended Exhibit “B,” which is attached hereto and incorporated herein by this reference as Attachment 2.
Section 6. All other provisions of the Agreement shall remain unchanged by this First Amendment and in effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment, to be effective as of April 16, 2024.
CITY OF REDLANDS GEORGE HILLS COMPANY, INC.
________________________________ By: ________________________________ Eddie Tejeda, Mayor John E. Chaquica, Chief Executive
Officer
ATTEST:
__________________________________
Jeanne Donaldson, City Clerk
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ATTACHMENT 1
EXHIBIT "A"
SCOPE OF SERVICES
SCOPE OF SERVICES AND CLIENT EXPRESSED AUTHORITY
AND LIMITATIONS UNDER THE CONTRACT
This Exhibit A is intended to provide the scope of services and specific service expectations in this Agreement, that would not otherwise require revision during the contract period, and which may differ from or elaborate upon our Client Service Profile. S ervices to be provided by George Hills Company (“GH”) on behalf of City of Redlands (“City”) may include all or some of the following,
I. SERVICES INCLUDED IN THE CONTRACT
A. General Administrative Services
Throughout each year GH performs numerous functions which support claims administration on behalf of the City, but do not include any claims handling, and are performed by non -claims personnel.
Additionally, in the first year of a new client there are several “on-boarding” services that are general and administrative in nature. Below is a list of such services which are included within the terms of this Contract:
1) Access to CMIS and training.
2) A monthly listing of open claims, showing expense categories, reserves, and total incurred. 3) Monthly claim summary reports.
4) Providing loss run data and required reports.
5) Providing annual reports to outside agencies.
6) Filing of regulatory reports (such as 1099, W-9, etc.). 7) Establish and maintain a trust fund to pay indemnity and expenses that may be due on claims. The amount to be maintained in the trust fund shall be determined by City. 8) If the trust fund is not set-up with the GH preferred bank—California Bank & Trust, there may be an additional set -up fee (other banks processes can be extraordinarily time consuming).
9) New bank account set up (signature cards, test checks, online access, set up bank in CXP). 10) Discussion and agreement on the Approval process.
11) Process checks weekly.
12) Submit positive pay if applicable/monitor positive pay (review daily emails from bank for exceptions).
13) Maintain a copy of all checks drawn by GH to pay claims and claims related expenses. 14) Submit monthly check registers of all transactions made for the period. 15) Monitor account balance, prepare replenishment requests as needed (customize request for each client’s need).
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16) Monthly bank reconciliation (prepared and sent to City). 17) Special reports that requested to go with billing invoices (by member, claim type, etc.). 18) Payment of invoices that are pass -throughs (i.e., invoices for medical record copies, ExamWorks, etc.).
19) Certificates of insurance as required by the Contract.
B. Investigative Services
1) Receipt and examination of all reports of accidents or incidents that are or may be the subject of claims.
2) Investigate accidents or incidents as warranted, to include on -site investigation, photographs, witness interviews, determination of losses and other such investigative services necessary to determine all City losses but not to include extraordinary investigative services outside the expertise of GH.
3) In the event City or other agency conducts any investigation, and upon Client’s request, GH shall review and analyze for liability and/or damage issues and for possible additional follow-up investigation.
4) Maintain service on a 24-hour, 7 days per week basis, to receive reports of any incident or accident which may be the subject of a liability claim and provide immediate investigative services to the extent necessary to provide a complete investigation. 5) Undertake items of investigation requiring special handling for CITY at the direction of the CITY’s Attorney or authorized representative.
C. Liability and Claim Handling Services
1) Promptly set up a claim file upon receipt of the claim and maintain a claim file on each potential or actual claim reported.
2) Assess and evaluate the nature and extent of each claim and establish claims reserves for indemnity and legal expense.
3) GH will follow any City policy regarding tort claim rejection instructions, including rejection and return of an untimely or insufficient claim. 4) Ensure timely tort claim handling, including contact and follow -up with claimants regarding claim issues and processing.
5) Any bodily injury claim that is being pursued shall be indexed. Notice only matters or precautionary bodily injury claims that are not pursued do not need to be indexed. 6) Determine the need for defense representation, recommend legal counsel, and support litigation activity.
7) Report claims to the excess insurer in compliance with excess carrier’s reporting requirements and coordinate with the excess insurer on a claim’s progress in accordance with the excess insurer’s reporting requirements.
8) Maintain records on any such claim and notify City when City is about to exhaust the Self- Insured Retention.
9) Obtain settlement contracts and releases upon settlement of claims or potential claims not in litigation.
10) Perform periodic reviews, as needed, of City files and claims as well as statutory requirements to ensure compliance including excess insurance related requirements.
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11) Perform the necessary data gathering for the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) and the Set Aside Contracts in compliance with Section 111 of the MMSEA including the required reporting. (See Attachment B) 12) To the extent there is privileged information or PHI shared between agencies, which is subject to protection under HIPAA, GH shall implement all necessary measures in compliance with the Act and will execute a Business Associates Agreement (BAA).
D. Litigation Support Services
1) Upon notification by the City that litigation has been filed on an open claim, GH shall follow the litigation referral process as outlined in the Client Expressed Scope of Work Instructions form.
2) Work cooperatively with City in choosing outside counsel from approved panel, if any, and assist defense counsel in on-going litigation defense efforts. 3) Obtain and maintain a Litigation Plan and Budget.
4) Review legal bills for compliance with Litigation Plan and Budget; Review, evaluate and adjust defense counsel invoices for legal services.
5) Cooperate with and assist defense counsel assigned to litigation of open claims and provide such investigative services as directed during pre-trial and trial stages. 6) Assist in responding to discovery or preparing discovery. 7) At the request of the City, attend mandatory settlement conferences on behalf of City. 8) At the request of the City, appear on behalf of City in small claims actions filed against City on open claims handled by GH.
9) At the request of the City, GH can file small claims actions on behalf of the City. 10) Review and evaluate case evaluations, correspondence and status reports forwarded to GH by counsel. Regularly discuss, review, and direct investigation, discovery, and case strategy with counsel.
11) Cooperate with counsel as a team with an open communication approach on each case to obtain the most economical and best result for the City.
E. Reports and Procedures
1) Within thirty (30) days of assignment, or sooner if practicable, required, or requested, GH will provide City with a report pursuant to specified claims handling instructions, showing name(s) of claimant(s), type of claim, date of loss, comments on liability, reserve recommendations, settlement recommendations, and other pertinent information.
Subsequent to the initial thirty (30) day report, GH will report as often as warranted by any important change in status but no longer than every ninety (90) days until the claim closes unless extended diary is appropriate.
2) All original reports, documents, and claim data of every kind or description, that are prepared in whole or in part by or for the GH in connection with this contract shall be City's property and constitute the GH’s work product for which compensation is paid. A copy of all reports, documents, and claim data of every kind or description that is in whole or in part by or for the City is the property of GH. Additional copies of original reports, documents, and data requested by City will be at City’s expense i n accordance with this contract.
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3) GH agrees that City have access and the right to audit and reproduce any of the GH’s relevant records to ensure that the City is receiving all services to which the City is entitled under this Contract or for any purpose relating to the Contract.
F. Data
1) Utilize GH’s claims management system—CXP (ClaimsXpress), or a substantially similar equivalent with comparable features and functionality. City will be provided “read-only” access to the claims system. “Read-write” access may be obtained at the City’s additional expense.
2) Record all claim information including all financial data. 3) Provide City and broker Read only on -line access to the claims data system (up to five users), if desired by City.
4) Provide monthly standard loss run and check register. 5) Provide annual claims data report upon request. Written authorization and/or a Business Associate Agreement may be required for confidential information protected by HIPAA. 6) Provide assistance to City in developing customized reports when requested (may require additional charge).
7) Arrange for electronic file conversion for any open and closed claims at the direction of City.
G. Claim Review Meetings
GH shall, on a mutually agreed periodic basis, meet with City to review and discuss the City’s claims inventory and claims results of specified periods and delivery of services by CLAIM ADMINISTRATOR.
H. Financial Accounting
1) Establish and maintain a trust fund for the purpose of paying indemnity and expenses that may be due on the claims. The amount to be maintained in the trust fund shall be determined by the City.
2) Maintain a copy of all checks drawn by the GH to pay claims and claims related expenses. 3) Submit monthly check registers of all transactions made for the period. 4) Complete or update Attachment B “Preferred Method of Check Processing” for check processing options.
5) Approval process shall be documented in GH Client Expressed Scope of Work Standards and Instruction Form.
6) GH will provide monthly bank reconciliation reports to City for audit purposes.
I. Third Party Subrogation Services
1) GH personnel are well versed in the identification, handling, and pursuit of subrogation claims arising out of CLAIMS which are the subject of this Contract. Included within this contract, GH will perform the following functions:
2) Identify potential opportunities to recover from persons, businesses, and entities other than the City.
3) Prepare and file a claim with each identified entity. 4) As applicable, tender defense to or seek recovery from any identified entity.
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5) With the assistance of counsel, prepare and file any necessary litigation required to effect the claim of recovery on behalf of the City
6) Manage litigation related to such claims made to other person, businesses or entities
J. First Party Subrogation Services
GH is a claim administration firm experienced in the handling of first party subrogation claims and is ready and capable of performing such services on behalf of City. GH does not handle subrogation claims with a value of less than $1000. For any claim in excess of $1,000, City may retain GH for Subrogation Services. Our services are unique to a first party loss of the City caused by the intentional or negligent act of a third party. Such losses generally are for the recovery of damages, and may include:
1) Labor costs, fully loaded and including benefit costs, for district or other personnel responding to or in any manner providing services;
2) Services or materials provided by outside vendors or contractors; 3) Internal or external vehicle or equipment use and/or rental; 4) Materials and/or goods utilized for the repair/replacement of damaged property; and/or 5) Additional fees that may be specific to the individual entity that are provided for within district ordinances or other governing documents.
II. CLIENT EXPRESSED AUTHORITY AND LIMITATIONS
The list immediately below contains numerous services provided in this Contract for which GH requests the City expressly establish authority and/or limitations, on the ability of GH to act on behalf of the City. The City will check the appropriate box establishing the authority of GH to act or the limitation as to that authority.
INVESTIGATION:
George Hills will conduct all investigations
City will conduct all investigations
City will direct GH on each claim as to who performs investigations In the event the Client or other agency conducts any investigation, GH shall review for completeness.
Retention of Vendors (appraisers, translators, copy services, Independent Adjuster, IME’s, Surveillance, etc.):
Must be preauthorized by City
Does not need preauthorization
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REJECTION OF CLAIMS:
City’s position regarding rejections (e.g., if entity so dictates, a claim will be rejected for insufficiency). Check all that apply.
Protocols for Rejections
GH needs authorization
GH does not need authorization
GH sends the Rejection
City sends the Rejection
GH sends out Denial Letter simultaneously with Rejection outlining the reason
LITIGATION:
Check all that apply.
GH will handle litigated claims
Full
As assigned
Check Issuance and Data Input
Data Input only
City will handle litigated claims in-house, with GH to capture data into SIMS City will send data to GH weekly
City will send data to GH monthly
Mandatory Settlement Conferences
GH always attends
At City request only
Small Claims Actions filed against City
GH always appears
At City request only
Legal Counsel
GH must have City authorization to refer to outside Legal Counsel GH does not need City authorization to refer to outside Legal Counsel GH must use City approved Legal Panel for Attorney selection City does not have an approved Legal Panel for Attorney selection All Litigation to be handled by City in-house Legal
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GH always sends Litigation Assignment packets to Legal Counsel City specific Litigation Guidelines: Yes No City specific Litigation Referral Form/Letter: Yes No City specific Litigation Budget Form: Yes No Pay fees for Experts, photocopies, medical records as: Expense Legal EXCESS REPORTING:
GH will report claims to the excess insurer in compliance with excess carrier’s reporting requirements and coordinate with the excess insurer on a claim’s progress in accordance with the excess insurer’s reporting requirements.
City will report claims to the excess insurer in compliance with excess carrier’s reporting requirements and coordinate with the excess insurer on a claim’s progress in accordance with the excess insurer’s reporting requirements.
AUTHORITY LEVELS:
Reserve within SIR:
$0.00 Other: $ (specify amount) Adjuster must seek approval from (client contact) to post indemnity reserves above authority level.
Medical Treatment:
Medical Authorizations should only be sent to the claimant once liability is determined to be adverse to the City.
Medical Authorizations should go out as soon as it is determined that a BI claim is being pursued.
CLAIMS EXCEEDING SIR:
GH stops tracking activity once the SIR has been reached.
GH will continue to track all activity at and/or above the SIR. The Excess JPA/Carrier will provide GH with activity documentation above the SIR.
GH will reserve to Full Value and track recoveries.
THIRD PARTY SUBROGATION SERVICES:
GH is authorized to initiate third party subrogation claims on behalf of City GH must obtain authorization to initiate third party subrogation claims on behalf of City.
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FIRST PARTY SUBROGATION SERVICES:
City elects to incorporate the first party subrogation services of GH into the contract City authorizes GH to initiate first party subrogation claims on behalf of City
City agrees to the additional compensation payable to GH for its first party subrogation services as follows:
GH shall be entitled to _______% of the gross recovery for each claim initiated by GH through its first party subrogation efforts.
City agrees to the terms and conditions stated in Attachment B, Subrogation Services.
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ATTACHMENT 2
EXHIBIT "B"
FEE SCHEDULE
The following compensation, fees and expenses, shall be paid in consideration for the services provided by Consultant as described in this Agreement to Perform Professional Services under Article 5 – Payments to Consultant, which has been agreed to, includ ing claims activity. This section shall remain in force and services provided during the term of this Contract, unless otherwise amended by the parties.
The amounts to be paid pursuant to this Agreement are detailed in two distinct areas of services:
First, under subsection 1) below, “Fees for Claims Administration Services”; and
Second, under subsection 2) below, “Reimbursable Costs and Expenses” which specifically relate to provision of claims handling services which is the subject of this Contract.
The fees and expenses/costs will be billed together monthly in our standard invoice format.
Additionally, if the City elects any optional services identified in this section, such as First Party Subrogation Services or any of the identified Optional Servi ces, such agreed upon additional amounts will also be billed together monthly where applicable.
1) Fees for Claims Administration Services
For the first year of the Agreement, Client agrees to pay a fixed fee of $69,000 in exchange for the claim administration and handling services described in this Agrement and the Exhibits hereto. The fixed fe e is a base fee and subject t o reevaluation in the event that the claim volume increases or decrease s by more than 10%. The City agrees that the base number of claims is 70.
Effective July 1, 2023 for the remaining duration of the term of the agreement, City agree s to pay for all services performed by Consultant on a Time and Expense basis. Consultant will charge time to each claim using 1/10th of an hour increments for each task performed on a claim. The time spent and further descriptions of each task shall be stated on each monthly invoice. The cumulative annual billing, however, shall not exceed the annual cap of $95,000, which cap is subject to annual adjustments . It is Consultant’s responsibility to monitor, review and advise City of any annual cap adjustments , whether by increase or decrease. In the event that Consultant reasonably estimates that the cap will be reached or exceeded in any year, notice will be provided to the City indicating that an adjustment may be necessary. If the cap is not adjusted, Consultant will perform services up to t he amount of the cap and must cease all work until the parties reach an agreement on the annual cap adjustment . To be effective, any annual cap adjustment must be included in a written amendment to this Redlands Regular Meeting of 04-16-2024
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Agreement pursuant to Section 8.6. The current hourly rates for Consultant’s personnel are:
Claims Supervisor: $127/hour*
Claims Adjuster: $102/hour*
Claims Processing: $84/hour*
*All hourly rates and fees in the Agreement are subject to the Annual Escalator language found in Section 2(i) of this Exhibit.
2) Reimbursable Costs and Expenses
a. Annual Administration Fee: City agrees to pay an annual administration fee of $10,000 which is billed annually at the beginning of the Agreement period and thereafter upon the anniversary of the Agreement.
b. Mileage – Adjuster: Mileage is paid at the IRS rate.
c. MMSEA: There is a $500 annual reporting fee which is paid directly to ExamWorks, for the performance of CMS reporting.
d. Adjuster Travel Expenses : Consultant will separately charge for any travel expenses in connection with attendance at mediations, settlement conferences, trials, etc. This will be subject to prior approval and that actual expenses with no mark -ups will be submitted with receipts on a monthly basis.
e. System Access Fee: Access to the claims management information system, “CMIS”, carries a cost of $1,500 annually. That cost is included in the annual administration fee and includes the setup and management of up to five (5) “read only” user accounts. “Read/write” access to the system can be obtained for an additional fee.
f. iMetrics Report Fee: There will be no charge for our iMetrics business intelligence reports with executive in-person debriefs.
g. Custom Reports: Additional charges for custom reporting shall be defined as, requiring a third-party programmer for three hours or more and is client specific.
h. Catastrophic Fees : Consultant recognizes that there are events that are unanticipated and catastrophic. When such events occur, it requires Redlands Regular Meeting of 04-16-2024
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additional hours for the handling of such claims. As such, to preserve the quality and efficiency of service for which we are known, Consultant proposes that should any one catastrophic event occur resulting in five or more claimants, or two or more claimants with their own defense counsel, City shall be billed at the current hourly rate for all services. Catastrophic Fees under this section only apply to City’s which have selected a “Fixed Fee” or “Time and Expense with a cap” payment options.
i. 3% Annual Escalator: All Consultant pricing options under this Contract are subject to an automatic annual increase of 3%. This annual increase shall take effect upon each anniversary of the Contract effectiveness date. .
j. General File : A general administrative file shall be established and maintained to track effort related to services necessary to fulfill our contractual obligations and not otherwise associated with a claim.
k. Paper Files : Consultant is prepared to take the lead to arrange for all services relating to conversion storage, copying, scanning, shipping, and disposal. Consultant will provide you a quote for any services related to storage, retrieval, copying, scanning, shipping, and disposal of paper files.
3) First Party Subrogation Services And Fees
Consultant is a claim administration firm experienced in the handling of first party subrogation claims and is ready and capable of performing such services on behalf of City. Consultant does not handle subrogation claims with a value of less than $1000. For any claim in excess of $1,000, and with prior written consent from City, Consultant shall initiate its Subrogation Services as described more fully in Exhibit A, Scope of Services and Client Expressed Authority and Limitations as well as Attachment A-1, Subrogation Agreement. Our services are unique to a first party loss of the City caused by the intentional or negligent act of a third party. City will pay a Subrogation Fee in the amount of 30% for each and every recovery obtained.
4) Optional Services
a. Legal Services and Consultation (Optional and upon written request):
Consultant employs in-house General Counsel which have vast experience in claims and litigation handling for all claims which are, or could be, subject to this agreement. Consultant offers the services of its attorneys as an additional resource for Consultant clients, on a time and expense basis, as follows:
i. Litigation Management: $175.00 per hour
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adjusters and monitoring and handling of “watch list” claims (highest exposure, most complex litigation). These services are also available on a claim-by-claim basis in support of the Lead Adjuster assigned due to the complexity of the claims.
ii. Monitoring Counsel: $175.00 per hour
This case specific service includes evaluating coverage issues, monitoring claim and litigation strategy, analyzing liability and damage issues, participating in discussions regarding resolution by trial or settlement, and controlling costs.
iii. Outside General and Special Counsel: $175.00 per hour These services include confidential analysis and problem solving for managing risk and avoiding unnecessary litigation and provides immediate access to legal advice This includes identifying coverage issues, providing input and assistance on Public Records Act Requests, tort claim handling and strategy, conflicts of interest, oversight of outside litigation counsel and providing legal opinions on potential and active litigation.
iv. Trial/Mediation/Board Meetings Attendance: $175.00 per hour These services include attending Board Meetings, trial, mediation, and other court hearing attendance including appearing before Courts of Appeal. Analysis and consultation provided before, durin g and after these significant litigation events can reduce exposure and maximize opportunities for resolution.
v. Legal Training and Seminars: $175.00 per hour
These services include providing customized seminars and training upon request. Subject areas include memorandums of coverage, all aspects of risk management, claims handling and litigation, employment law and general liability claims. Courses are customized to address the client’s specific needs.
vi. Professional and Financial Services: $175.00 per hour As related to risk management and loss prevention in alignment with the scope of services.
NOTE: These services are traditionally Time and Expense, however an annual fee can be considered.
I. PAYMENT SCHEDULE
Consultant will submit its invoices to City, and payment of undisputed amounts shall be made by City, within a reasonable period of time, not to exceed thirty (30) days from the date of the invoice.
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II. ELECTRONIC FUNDS TRANSFER OR DIRECT DEPOSIT
Consultanthas determined that the most efficient and secure default form of payment for goods and/or services provided under Contract with City shall be Electronic Funds Transfer (EFT) or direct deposit, unless an alternative method of payment is deemed appropriate by both Consultantand City and agreed to in writing.
Consultant will submit a direct deposit authorization request via to City with banking and vendor information, and any other information that the City determines is reasonably necessary to process the payment and comply with all accounting, record keeping, and tax reporting requirements.
At any time during the duration of the Contract, Consultant may submit a written request for an exemption to this requirement. Such request must be based on specific legal, business or operational needs and Consultant will explain why the payment method designated by the City is not feasible and an alternative is necessary.
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1 I:\cmo\Resolutions\8574 Responsibilities of Third-Party Administrator George Hills and Rescinding Reso. No. 7830.docx-msv2 RESOLUTION NO. 8574
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS
DELEGATING GOVERNMENT CLAIMS RESPONSIBILITIES TO ITS THIRD-
PARTY CLAIMS ADMINISTRATOR, GEORGE HILLS COMPANY, SUBJECT TO THE PROVISIONS OF CHAPTER 3.09 OF THE REDLANDS MUNICIPAL CODE AND RESCINDING RESOLUTION NO. 7830
WHEREAS, the City of Redlands is a public entity and, pursuant to Government Code sections 990.4 et seq. and 6500 et seq., has a self-insured retention for liability claims and losses in the amount of five hundred thousand dollars ($500,000); and
WHEREAS, California Government Code sections 990.4 et seq. and 6500 et seq. allow a public entity to delegate the ministerial duties of sending notices to claimants, including, but not limited to, notices of rejection, insufficiency, and untimeliness of government claims; and
WHEREAS, Chapter 3.09 of the Redlands Municipal Code establishes regulations governing the City’s processing, acceptance, settlement, and rejection of government claims; and
WHEREAS, pursuant to Chapter 3.09 of the Redlands Municipal Code, it is the desire of the City Council and the City Manager to delegate to George Hills Company, the City’s third-party government claims administrator, in accordance with the company’s contract with the City and Chapter 3.09, the authority to coordinate with City staff and process government claims and send notices relating to the processing, acceptance, insufficiency, timeliness, and rejection of the same; and
WHEREAS, pursuant to Chapter 3.09 of the Redlands Municipal Code, it is the desire of the City Council and the City Manager to delegate to George Hills Company, the City’s third-party government claims administrator, in accordance with the company’s contract with the City and Chapter 3.09, at the City’s request the authority to initiate small claims actions on behalf of the City.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDLANDS AS FOLLOWS:
Section 1. The City Council hereby delegates to George Hills Company, the City’s third- party government claims administrator, the authority to coordinate with City staff and act on the City Council’s behalf, pursuant to Government Code section 810 et seq. and Chapter 3.09 of the Redlands Municipal Code, to process, accept, return as insufficient or untimely, and reject, any government claims against the City, and to provide any notices authorized under those Government Code sections and Chapter 3.09, on behalf of the City.
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2 I:\cmo\Resolutions\8574 Responsibilities of Third-Party Administrator George Hills and Rescinding Reso. No. 7830.docx-msv2 Section 2. The City Council hereby delegates to George Hills Company, the City’s third- party government claims administrator, at the request of the City’s Human Resources Director or their designee, the authority to initiate small claims actions on behalf of the City.
Section 3. Resolution No. 7830 is hereby rescinded.
Section 4. This Resolution shall become effective immediately upon its adoption.
ADOPTED, SIGNED AND APPROVED this 16th day of April, 2024
Eddie Tejeda, Mayor
ATTEST:
Jeanne Donaldson, City Clerk
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3 I:\cmo\Resolutions\8574 Responsibilities of Third-Party Administrator George Hills and Rescinding Reso. No. 7830.docx-msv2 I, Jeanne Donaldson, City Clerk of the City of Redlands, hereby certify that the foregoing resolution was duly adopted by the City Council at a regular meeting thereof held on the 16th day of April, 2024, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
Jeanne Donaldson, City Clerk
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RESOLUTION NO. 7830
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS
DELEGATING GOVERNMENT CLAIMS RESPONSIBILITIES TO ITS THIRD -
PARTY CLAIMS ADMINISTRATOR, GEORGE HILLS COMPANY, SUBJECT TO THE PROVISIONS OF CHAPTER 3. 09 OF THE REDLANDS MUNICIPAL CODE
WHEREAS, the City of Redlandsis apublic entity and, pursuantto GovernmentCode sections 990.4 et seq. and 6500 et seq., hasa self-insured retention for liability claims and losses in the amount of five hundred thousand dollars ($ 500, 000); and WHEREAS, California Govenunent Code sections 990.4 et seq. and 6500 et seq. allow a public entity to delegate the ministerial duties of sending notices to claimants, including, but not Iiinited to, notices of rejection, insufficiency, and untimeliness of goverm- hent claims; and
WHEREAS, Chapter 3. 09 of the Redlands Mulricipal Code establishes regulations governing the City' sprocessing, acceptance, settlement, andrejection of government claims; and
WHEREAS, pursuant to Chapter 3. 09 of the Redlands Municipal Code, it is the desire of the City Council and the City Manager to delegate to George Hills Company, the City' s third -party govermment claims administrator, in accordance with the company's contract with the City and Chapter 3.09, the authority to coordinate with City staff and process governinent claims and send notices relating to the processing, acceptance, insufficiency, timeliness, and rejection of the same;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF REDLANDS AS FOLLOWS:
Section 1. The City Council herebydelegatesto GeorgeHills Company, theCity'sthird - party government claims administrator, the authority to coordinate with City staff and act on the City Council' sbehalf, pursuant to GovenunentCodesectionS10et seq. andChapter3.09 ofthe Redlands Municipal Code, to process, accept, return as insufficient or untimely, and reject, any government claims against the City, andto provide any notices authorized under those GovenunentCodesections and Chapter 3.09, on behalf of the City.
Section 2. This Resolution shall become effective immediately upon its adoption. 1:1Resolutions\Res7800-789917830 - Resolution George Hills Company,doe Redlands Regular Meeting of 04-16-2024
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ADOPTED, SIGNED AND APPROVED this 17th day of April, 2018, by the following vote:
zlpwa 1qZWL_!! N
ul W. Foster, Mayor
ATTEST:
Je e Donaldson, City "Clerk
STATE OF CALIFORNIA)
COUNTY OF SAN BERNARDINO) SS.
CITY OF REDLANDS):
I, JeanneDonaldson, City Clerk of the City of Redlands, herebycertify that the foregoingresolution was duly adopted by the City Council at a regular meeting thereof held on the 17th day of April, 2018, by the following vote:
AYES: Councilmembers Harrison, Barich, Tejeda, Momberger; Mayor Foster NOES:
ABSTAIN:
ABSENT:
Jie Donaldson, City Clerk
City of Redlands
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City Council Meeting M. 3.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of the First Amendment to the Non-Professional Service Agreement with General Pump Company to revise the first Extended Term compensation to $750,000 and extend the term to two (2) years (Municipal Utilities and Engineering Director Harris) MOTION(S):
If City Council determines the staff recommendation is appropriate, the following motion is provided:
I move to approve the First Amendment to the Non-Professional Service Agreement with General Pump Company.
RECOMMENDATION:
Staff recommends City Council approval of a First Amendment to the Non-Professional Service Agreement with General Pump Company to revise the first Extended Term compensation to $750,000 and extend the term to two (2) years.
DISCUSSION:
The City's water production system includes forty-five (45) potable and non-potable groundwater wells, thirty-eight (38) booster pumps, and two (2) surface water treatment plants to serve more than 75,000 customers within and adjacent to Redlands. The groundwater wells and booster pumps are operated by high horsepower motors to deliver water at high flowrates and pressures throughout the Redlands water service area. Mechanical and electrical components require frequent routine maintenance to reduce the potential for malfunction and prevent equipment failure. Repairs associated with equipment failures typically exceed staff resources and repair capabilities. During emergencies, staffing may be even more limited, and support from a qualified groundwater well and booster pump contractor is often necessary.
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groundwater well and booster pump contractor is often necessary.
In August 2022, MUED staff issued a Request for Bids to qualified contractors to provide groundwater well and booster pump services on an as-needed basis.
Six (6) contractors submitted bid proposals and City Council approved a Non-Professional Service Agreement (Agreement) with General Pump Company on November 1, 2022. The original Agreement included an initial term of one (1) year, two (2) optional extension terms (each for an additional year), and annual compensation not-to-exceed $375,000. The Initial Term was completed successfully and the City and General Pump Company executed the first Agreement extension on August 31, 2023.
Throughout the project, General Pump Company has exceeded the City staff's performance expectations. MUED staff analyzed the remaining scope of services and associated costs to complete all project tasks and determined that reprioritizing tasks originally scheduled for completion during each of the Extended Terms will impact the schedule and costs associated with each Extended Term. Therefore, it is necessary to amend the original Agreement to combine the two (2) Extended Terms. The First Amendment to this Agreement revises the first Extended Term compensation to $750,000 and extends the term to two (2) years. Approval of the First Amendment does not increase the total anticipated project cost or ultimate completion date. No additional revisions to the original Agreement terms are proposed by this Amendment.
ALTERNATIVES:
City Council may deny the staff recommendation and provide alternate direction.
STRATEGIC PLAN:
N/A
SUBMITTED BY:
John R. Harris, Municipal Utilities and Engineering Director RECOMMENDED BY:
Charles M. Duggan Jr., City Manager
REVIEWED BY:
Yvette M. Abich Garcia, City Attorney
Janice McConnell, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
Dana Abramovitz-Daniel, Procurement Manager
PREPARED BY:
John R. Harris, Municipal Utilities and Engineering Director Redlands Regular Meeting of 04-16-2024
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Fiscal Impact
Revenue Generating: N
Appropriation Required Y/N: N
Budgeted Y/N: Y
Discussion:
Sufficient funding remains in the FY 23/24 MUED Water Services Budget for the First Amendment to the Non-Professional Service Agreement with General Pump Company.
Attachments
NPS Agreement - General Pump Company
General Pump Company First Amendment
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1 I:\cmo\Agreements\General Pump Company First Amendment FY23-0062.docx-ms
FIRST AMENDMENT TO NON-PROFESSIONAL SERVICE AGREEMENT
This first amendment (“First Amendment”) to the Non-Professional Service Agreement for groundwater well and booster pump services November 1, 2022 (the “Agreement”), by and between the City of Redlands, a municipal corporation and general law city (“City”), and General Pump Company, a California corporation (“Contractor”), is made and entered into this 16th day of April 2024.
RECITALS
WHEREAS, it is the desire of the City and Contractor to amend their existing Agreement, specifically to amend the compensation for Contractor’s performance of services during the first Extended Term to $750,000 and to amend the term during the first Extended Term to two (2) years.
NOW, THEREFORE, in consideration of the mutual promises contained herein City and Contractor agree as follows:
AGREEMENT
Section 1. The term for Contractor’s performance of services, as set forth in Section 4.2 of the Agreement, is hereby amended to extend the project completion time during the first Extended Term and shall read as follows:
4.2 “The term of this Agreement shall be for a period of one (1) year from the Effective Date of this Agreement (the “Initial Term”). The City shall have the option to extend the Initial Term of this Agreement by two (2) years (the “Extended Term”), on the same terms and conditions, by providing written notice to Contractor. The Initial Term and Extended Term are hereby collectively, referred to herein as the “Term” of this Agreement.”
Section 2. The compensation for Contractor’s performance of services, as set forth in Section 5.1 of the Agreement, is hereby amended to increase the Contractor’s maximum compensation during the first Extended Term and shall read as follows:
5.1 “The compensation for Contractor’s performance of the Services shall not exceed the amount of three hundred seventy -five thousand dollars ($375,000) for the Services provided during the Initial Term. Should this Agreement be renewed, the compensation for Contractor’s performance for the Services shall not exceed the amount of seven hundred fifty thousand dollars ($750,000) for the first Extended Term , bringing the total possible amount of compensation to a not -to-exceed amount of one million one hundred twenty- five thousand dollars ($1,125,000.00). For the Initial Term and Extended Term, City shall pay Contractor on a time and materials basis up to the not-to-exceed amount in accordance with the rates specified in Exhibit “C”, titled “Price and Fee Bid”, which is attached hereto and incorporated herein by reference.”
Section 2. All other provisions of the Contract shall remain unchanged by this First Amendment, and in effect.
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IN WITNESS WHEREOF, the parties have executed this First Amendment, to be effective as of the 16th day of April, 2024.
CITY OF REDLANDS GENERAL PUMP COMPANY
________________________________ By: ________________________________ Eddie Tejeda, Mayor Tom Nanchy, Sr. Project Manager
ATTEST:
__________________________________
Jeanne Donaldson, City Clerk
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City Council Meeting M. 4.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of an agreement with SCA of CA, LLC for city-wide street sweeping services in the amount not-to-exceed
$1,334,479.32 for an initial period of three years, and with two additional one-year renewal options at $444,826.44 for each extension for a possible agreement total amount not-to-exceed $2,224,132.20, and determination that the project is not subject to environmental review pursuant to Section 15301(c) of the State's guidelines implementing the California Environmental Quality Act (Facilities and Community Services Director Crocker)
MOTION(S):
If the City Council determines that staff’s recommendation is appropriate, the following motions are provided:
I move that the City Council determine that the project is categorically exempt from environmental review in accordance with Section 15301(c) of the State's guidelines implementing the California Environmental Quality Act; and
1. I move to approve an agreement with SCA of CA, LLC for city-wide street sweeping services in an amount not-to-exceed $1,334,479 for a period of three years, with two additional one-year renewal options for a possible agreement total amount not-to-exceed $2,224,132.20.
2. RECOMMENDATION:
Staff recommends that the City Council approve an agreement with SCA of CA, LLC for city-wide street sweeping services in an amount not-to-exceed $1,334,479 for a period of (3) three years, with (2) two additional one-year renewal options for a possible agreement total amount not-to-exceed $2,224,132.20.
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Staff further recommends the City Council determine that the project is categorically exempt from environmental review in accordance with Section 15301(c) of the State's guidelines implementing the California Environmental Quality Act.
DISCUSSION:
The Facilities and Community Services Department oversees the monthly street sweeping contract. The street sweeping contract includes residential routes which are swept twice a month, a monthly street sweeping program for City owned parking lots, airport, cemetery, landfill, and sweeping of the downtown area four times per week. This service enables the City to remain in compliance with the National Pollutant Discharge Elimination System (NPDES) requirements.
In accordance with the City's purchasing policy, City staff developed a Request for Bid (RFB) for street sweeping services. The RFB was competitively advertised, and the City Clerk conducted a public bid opening on November 22, 2023, opening 3 bids. Staff evaluated the bids for conformance with the purchasing ordinance, and verified the total price as shown in the table below.
SCA of CA, LLC was determined to be the lowest responsible and responsive bidder.
VENDOR BID AMOUNT
SCA of CA, LLC, Seven Hills, Ohio $444,826.44
CMAX Commercial, Ontario, CA $565,818.00
Athens Services, City of Industry, CA $979,541.00
Furthermore, approval of the agreement has been determined to be categorically exempt from environmental review in accordance with Section 15301(c) of the State CEQA guidelines. This section, existing facilities, consists of the operation, repair and maintenance, permitting, leasing, licensing or minor alteration of existing public or private structures, involving negligible or no expansion of existing or former use. The approval of this agreement will permit the services for city wide street sweeping.
ALTERNATIVES:
City Council may elect not to award the agreement with SCA of CA, LLC and provide alternative direction to staff.
STRATEGIC PLAN:
Not applicable.
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SUBMITTED BY:
Tabitha Crocker, Facilities and Community Services Department Director RECOMMENDED BY:
Charles M. Duggan Jr., City Manager
REVIEWED BY:
Yvette M. Abich Garcia, City Attorney
Janice McConnell, Assistant City Manager
Christopher Boatman, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
PREPARED BY:
Jocelynn Butters, Senior Administrative Assistant
Fiscal Impact
Fiscal Year: FY 23/24
Revenue Generating: N
Appropriation Required Y/N: N
Budgeted Y/N: Y
Account No.: 101304
Discussion:
Funding for this service is included in the Streets Division Operating Budget request for FY 2023-24. Street cleaning fees generate approximately $311,000 annually.
Attachments
Bid opening report
SCA of CA, LLC Agreement
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 1 AGREEMENT TO PERFORM NON-PROFESSIONAL SERVICES
FOR IMPROVEMENT TO PUBLIC BUILDINGS AND GROUNDS
This agreement for the provision of street sweeping services (“Agreement”) is made and entered in this 16th day of April, 2024 (“Effective Date”), by and between the City of Redlands, a municipal corporation (“City ”) and SCA of CA, LLC, a Delaware limited liability company (“Contractor”). City and Contractor are sometimes individually referred to herein as a “Party” and, together, as the “Parties.” In consideration of the mutual promises contained herein, City and Contractor agree as follows:
ARTICLE 1 – ENGAGEMENT OF CONTRACTOR
1.1 City hereby engages Contractor to perform street sweeping services for City (the “Services”). The Services that Contractor shall perform are more particularly described in Exhibit “A,” titled “Scope of Services,” which is attached hereto and incorporated herein by this reference.
1.2 The Services shall be performed by Contractor in a professional manner, and Contractor represents that it has the skill and the professional expertise necessary to provide the Services to City at a level of competency presently maintained by other practicing professional Contractors in the industry providing like and similar types of Services.
ARTICLE 2 – RESPONSIBILITIES OF CONTRACTOR
2.1 Contractor shall comply with all applicable federal, state, and local laws and regulations in the performance of the Services including, but not limited, to all applicable Labor Code and prevailing wage laws and non -discrimination laws, including the Americans with Disabilities Act. Pursuant to Labor Code section 1773.2, copies of the prevailing rates of per diem wages as determined by the Director of the California Department of Industrial Relations for each craft, classification or type of worker nee ded to undertake the Services are on file at City’s Municipal Utilities and Engineering Department, located at the Civic Center, 35 Cajon Street, Suite 15A (Mailing: P.O. Box 3005), Redlands, California 92373.
2.2 Contractor acknowledges that if it violates the Labor Code provisions relating to prevailing wages that City may enforce such provisions by withholding payments to Contractor or its subcontractors pursuant to Labor Code section 1771.6.
2.3 If Contractor executes an agreement with a subcontractor to perform any portion of the Services, Contractor shall comply with Labor Code sections 1775 and 1777.7, and shall provide the subcontractor with copies of the provisions of Labor Code sections 1771, 1775, 1776, 1777.5, 1813 and 1815. Contractor acknowledges that the statutory provisions establishing penalties for failure to comply with state wage and hour laws and to pay prevailing wages may be enforced by City pursuant to Labor Code sections 1775 and 1813.
2.4 Contractor and its subcontractors shall comply with the provisions of Labor Code section 1776 regarding payroll records maintenance, certifications, retention and inspection.
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 2 2.5 Contractor acknowledges that eight (8) hours constitutes a legal day’s work pursuant to Labor Code section 1810.
2.6 Contractor shall comply with the provisions of Labor Code section 1777.5 as to apprenticeships, and Labor Code sections 1771, 1775, 1776, 1777.5, 1813 and 1815.
2.7 Pursuant to Public Contract Code section 7103.5(b), Contractor offers and agrees to assign to City all rights, title and interest in and to all causes of action it may have under section 4 of the Clayton Act (15 U.S.C. section 15) or under the Cartwright A ct (Chapter 2 (commencing with section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, goods or materials pursuant to this Agreement.
ARTICLE 3 – RESPONSIBILITIES OF CITY
3.1 City shall make available to Contractor information in its possession that may reasonably assist Contractor in performing the Services.
3.2 City designates Tabitha Crocker, Facilities and Community Services Director , as City’s representative with respect to performance of the Services, and such person shall have the authority to transmit instructions, receive information, interpret, and define City’s policies and decisions with respect to performance of the Services.
ARTICLE 4 – PERFORMANCE OF SERVICES
4.1 The Services shall commence as of the Effective Date of this Agreement. Contractor shall perform and complete the Services in a prompt and diligent manner in accordance with the schedule set forth in Exhibit “A,” which is attached hereto and incorporated herein by this reference.
4.2 The term of this Agreement shall be for a period of three (3) years from the Effective Date of this Agreement (the “Initial Term”). The City shall have the option to extend the Initial Term of this Agreement by two (2) additional one-year terms (each, an “Extended Term”), on the same terms and conditions, by providing written notice to Contractor at least thirty (30) days prior to the expiration of the Initial Term or any Extended Term. The Initial Term and the Extended Terms are hereby collectively, referred to herein as the “Term” of this Agreement.
4.3 Contractor shall furnish a labor and material bond which renews annually in the form attached hereto as Exhibit “B,” and incorporated herein by this reference, in an amount equal to one hundred percent (100%) of the annual compensation to be paid to Contractor pursuant to this Agreement.
ARTICLE 5 – PAYMENTS TO CONTRACTOR
5.1 The compensation for Contractor’s performance of the Services shall not exceed the amount of One Million Three Hundred Thirty-Four Thousand Four Hundred Seventy Nine dollars and thirty two cents ($1,334,479.32) for the Services provided during the Initial Term. Should this Agreement be renewed, the compensation for Contractor’s performance Redlands Regular Meeting of 04-16-2024
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 3 for the Services shall not exceed the amount of Four Hundred Forty Four Thousand Eight Hundred Twenty Six dollars and Forty Four cents ($444,826.44) for the first Extended Term; and Four Hundred Forty Four Thousand Eight Hundred Twenty Six dollars and forty four cents ($444,826.44) for the second Extended Term, bringing the total possible amount of compensation to a not -to-exceed amount of Two Million Two Hundred Twenty Four Thousand One Hundred Thirty Two dollars and Twenty cents ($2,224,132.20). For the Initial Term and each Extended Term, City shall pay Contractor on a time and materials basis up to the not to not-to-exceed amount in accordance with the rates specified in Exhibit “C,” titled “Fee Schedule,” which is attached hereto and incorporated herein by reference.
5.2 Contractor shall submit monthly invoices to City describing the Services performed during the preceding month. Contractor’s invoices shall include a brief description of the Services performed, the dates the Services were performed, the number of hours spent and by whom.
City shall pay Contractor no later than thirty (30) days after receipt and approval by City of Contractor’s invoice.
5.3 Any n otice or other communication required, or which may be given, pursuant to this Agreement, shall be in writing. Any such notice shall be deemed delivered (i) on the date of delivery in person; (ii) five (5) days after deposit in first class registered mail, with return receipt requested; (iii) on the actual delivery date if deposited with an overnight courier; or (iv) on the date sent by facsimile or electronic mail transmission (including PDF) , if confirmed with a copy sent contemporaneously by fir st class, certified, registered or express mail; in each case properly posted and fully prepaid to the appropriate address set forth below, or such other address as a Party may provide notice in accordance with this section:
CITY CONTRACTOR
City Clerk Brad Becker, Regional Vice President
City of Redlands SCA of CA, LLC
35 Cajon Street 4141 Rockside Road, Suite #100
P.O. Box 3005 (mailing) Seven Hills, OH 44131
Redlands, CA 92373 [email protected]
[email protected] 216-777-2750
(909) 798-7531 216-777-2766
ARTICLE 6 – INSURANCE AND INDEMNIFICATION
6.1 The following insurance coverage required by this Agreement shall be maintained by Contractor for the duration of its performance of the Services. Contractor shall not perform any Services unless and until the required insurance listed below is obtained by Contractor.
Contractor shall provide City with certificates of insurance and endorsements evidencing such insurance prior to commencement of the Services. Insurance policies shall include a provision prohibiting cancellation or modification of the policy except upon thirty (30) days prior written notice to City.
Redlands Regular Meeting of 04-16-2024
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 4 A. Workers’ Compensation and Employer’s Liability insurance in the amount that meets statutory requirements with an insurance carrier acceptable to City, or certification to City that Contractor is self-insured or exempt from the workers’ compensation laws of the State of California. Contractor shall execute and provide City with Exhibit “ D,” titled “Workers’ Compensation Insurance Certification,” which is attached hereto and incorporated herein by this reference, prior to performance of the Services.
B. Comprehensive General Liability insurance with carriers acceptable to City in the minimum amount of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate, for public liability, property damage and personal injury is required. City shall be named as an additional insured and such insurance shall be primary and non-contributing to any insurance or self-insurance maintained by City.
C. Business Auto Liability coverage, with minimum limits of One Million Dollars ($1,000,000) per occurrence, combined single limit bodily injury liability and property damage liability. This coverage shall include all Contractor owned vehicles used in connection with Contractor’s provision of the Services, hired and non-owned vehicles, and employee non -ownership vehicles. City shall be named as an additional insured and such insurance shall be primary and non -contributing to any insurance or self - insurance maintained by City.
6.2 Contractor shall defend, indemnify, and hold harmless City and its elected and appointed officials, employees, and agents from and against any and all claims, losses and liability, including attorneys’ fees, arising from injury or death to persons or damage to property occasioned by any negligent act or omission by, or the willful misconduct of, Contractor, or its officers, employees and agents in performing the Services.
ARTICLE 7 – CONFLICTS OF INTEREST
7.1 Contractor covenants and represents that it does not have any investment or interest in any real property that may be the subject of this Agreement or any other source of income, interest in real property or investment that would be affected in any manner or degree by the performance of Contractor’s Services. Contractor further covenants and represents that in the performance of its duties hereunder, no person having any such interest shall perform any Services under this Agreement.
7.2 Contractor agrees it is not a designated employee within the meaning of the Political Reform Act because Contractor:
A. Does not make a governmental decision whether to:
(i) approve a rate, rule or regulation, or adopt or enforce a City law; (ii) issue, deny, suspend or revoke any City permit, license, application, certification, approval, order or similar authorization or entitlement; (iii) authorize City to enter into, modify or renew a contract; (iv) grant City approval to a contract that requires City approval and to which City is a party, or to the specifications for such a contract; (v) grant City approval to a plan, design, report, study or similar item; Redlands Regular Meeting of 04-16-2024
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 5 (vi) adopt, or grant City approval of, policies, standards or guidelines for City or for any subdivision thereof.
B. Does not serve in a staff capacity with City and in that capacity, participate in making a governmental decision or otherwise perform the same or substantially the same duties for City that would otherwise be performed by an individual holding a position specified in City’s Conflict of Interest Code under Government Code section 87302.
7.3 In the event City determines that Contractor must disclose its financial interests, Contractor shall complete and file a Fair Political Practices Commission Form 700, State ment of Economic Interests , with the City Clerk ’s office pursuant to the written instructions provided by the City Clerk.
ARTICLE 8 – GENERAL CONSIDERATIONS
8.1 In the event any action is commenced to enforce or interpret any of the terms or conditions of this Agreement the prevailing Party shall, in addition to any costs and other relief, be entitled to the recovery of its reasonable attorneys’ fees, including fees for the use of in- house counsel by a Party.
8.2 Contractor shall not assign any of the Services, except with the prior written approval of City and in strict compliance with the terms and conditions of this Agreement. Any assignment or attempted assignment without such prior written consent may, in the sole discretion of City, results in City’s immediate termination of this Agreement.
8.3 Contractor is for all purposes under this Agreement an independent contractor and shall perform the Services as an independent contractor. Neither City nor any of its agents shall have control over the conduct of Contractor or Contractor’s employees, except as herein set forth. Contractor shall supply all necessary tools and instrumentalities required to perform the Services. Assigned personnel employed by Contractor are for its account only, and in no event shall Contractor or personnel retained by it be d eemed to have been employed by City or engaged by City for the account of, or on behalf of City. Contractor shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent, nor shall Contractor have any authority, express or implied, to bind City to any obligation.
8.4 This Agreement may be terminated by City, in its sole discretion, by providing not less than five (5) days prior written notice to Contractor of City’s intent to terminate. If this Agreement is terminated by City, an adjustment to Contractor’s compensation shall be made, but (i) no amount shall be allowed for anticipated profit or unperformed Services, and (ii) any payment due Contractor at the time of termination may be adjusted to the extent of any additional costs to City occasioned by any default by Contractor. Upon receipt of a termination notice, Contractor shall immediately discontinue its provision of the Services and, within five (5) days of the date of the termination notice, deliver or otherwise make available to City, copies (in both hard copy and electronic form, where applicable) of project related d ata, design calculations, drawings, specifications, reports, estimates, summaries and such other information and materials as may have been accumulated by Redlands Regular Meeting of 04-16-2024
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I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 6 Contractor in performing the Services. Contractor shall be compensated on a pro-rata basis for Services completed up to the date of termination.
8.5 Contractor shall maintain books, ledgers, invoices, accounts and other records and documents evidencing costs and expenses related to the Services for a period of three (3) years, or for any longer period required by law, from the date of final payment to Contractor pursuant to this Agreement. Such books shall be available at reasonable times for examination by City at the office of Contractor.
8.6 This Agreement, including the Exhibits incorporated herein by reference, represents the entire agreement and understanding between the Parties as to the matters contained herein, and any prior negotiations, written proposals or verbal agreements relating to such matters are superseded by this Agreement. Except as otherwise provided for herein , an y amendment to this Agreement shall be in writing, approved by City and signed by City and Contractor.
8.7 This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflicts of laws provisions. The Parties agree that all actions or proceedings arising in connection with this Agreement shall be tried and litigated only in the state courts located in San Bernardino County, California, and the federal courts located in Riverside County, California.
8.8 If one or more of the sentences, clauses, paragraphs or sections contained in this Agreement is declared invalid, void or unenforceable by a court of competent jurisdiction, the same shall be deemed severable from the remainder of this Agreement and shall not affect, impair or invalidate the remaining sentences, clauses, paragraphs or sections contained herein, unless to do so would deprive a Party of a material benefit of its bargain under this Agreement.
IN WITNESS WHEREOF, duly authorized representatives of City and Contractor have signed in confirmation of this Agreement.
CITY OF REDLANDS SCA of CA, LLC
By: ___________________________ By: _________________________ Eddie Tejeda, Mayor Brad Becker, Regional Vice President
ATTEST:
___________________________
Jeanne Donaldson, City Clerk
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 7 EXHIBIT "A”
SCOPE OF SERVICES
1. Furnishing at its own expense all labor, equipment , and materials necessary for the satisfactory performance of the street sweeping.
2. Contractor is required to ensure that all locations are cleaned and/or swept free of all trash, dirt and debris. Locations that are inaccessible to a sweeping machine, must be cleaned out by hand or other means. For example, corners or tight cul -de-sacs should be sw ept out by hand broom or blower and collected for disposal. After sweeping, curbs and gutter shall be left in a clean condition (free from residue).
3. Locations that cannot be directly cleaned with a sweeping machine (i.e. parked car with debris behind it), the Contractor shall be required to use a blower to clean off the identified infrastructure and then collect and dispose of the debris, or other cleaning methods as approved by the authorized City representative.
4. Contractor is required to immediately notify and report to the authorized City representative the existence of large debris or illegal dumping that cannot be cleaned and disposed of by this contract.
5. Contractor shall make as many passes as are necessary to leave the streets in clean condition.
6. Contractor shall maintain a log that indicates dates, times, streets and miles swept. The log shall be available for the inspection by the Facilities & Community Services Director or his designee.
7. Holidays: Sweeping Services shall be provided on all holidays that the City provides refuse/recycle services.
8. Hours: Sweeping operations shall be conducted during hours that increase the benefit of the program. Residential shall be swept between 7 a.m. and 5 p.m. Commercial and Industrial areas shall be swept between the hours of 6:00 a.m. and 5:00 p.m. and downtown area shall be swept between the hours of 3:00 a.m. and 6:00 a.m.
9. Delays in Sweeping: Regular Sweeping shall not be required in the event of inclement weather.
10. Equipment: Sweeping shall be conducted by Tymco 600 or approved equal.
11. All sweepers utilized in this contract must be alternative fuel vehicles, fueled by compressed natural gas (CNG) or propane and that the City, as part of the contract, can sell CNG fuel to the firm. The City will require that the sweepers be equipped to work with both recyclable and domestic (potable) water, the use of recycled water shall be priority while performing daily operations. The selected Contractor will meet all Federal, State and local regulations, including, but not limited to SCAQMD Rule 1186. 1. Contractor shall have and maintain a minimum of three sweepers: Two (2) primary alternative fuel sweepers and one (1) back -up alternative sweeper for use in providing the services to the City.
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 8 12. In the event that a sweeper requires repair or replacement, a replacement sweeper will be provided so that the established inventory does not fall below the above stated requirements.
The selected vendor shall maintain the sweepers in good, clean, working condition. Any of the primary sweepers needing to be permanently replaced due to age and condition of the vehicles shall be replaced with a new vehicle.
13. Global Positioning System (GPS) Tracking: All primary street sweepers shall have installed a GPS that will enable the City to view via computer internet where the sweepers are at all times. The cost of the entire GPS system will be the responsibility of the selected vendor and the system must be capable of the following;
a. The system shall be internet based and the selected vendor shall provide to the City a minimum of two (2) accounts to have full access to the site.
b. The system shall be capable of gathering and reporting the following real time data; speed, direction, location on a map, address, distance traveled, brooms up or down water on or off.
c. The sweepers’ path of travel superimposed on a map.
d. Generating an email alert whenever sweeper speeds exceed 6 mph or sweeper non- movement for periods in excess of one hour.
e. Generating daily reports of sweeper activity including the previously required elements.
f. Maintaining the data for a period of 90 -days, after which data will be downloaded to the City for storage.
g. Two way voice or text messaging communication between the City and the individual sweepers must be available.
h. GPS system must be up and running within 30 days of signing the agreement.
14. Response to complaints: Contractor shall respond within 24 hours to requests or complaints called in from the Department. Contractor shall investigate any complaints that may concern or involve the performance of the Street Sweeping Services. Contractor shall report to the Facilities & Community Services Director or his designee, on the following working day, as to the action or procedure taken with reference to any complaints.
15. Disposal of Sweeping: Contractor shall utilize the County landfill to dispose of debris and trash or other designated disposal site that accepts debris and trash from a street sweeper; selected Contractor is responsible for disposal fees.
16. Water: Contractor shall obtain a portable water meter from the water department customer service division, and shall obtain and pay separately for all water necessary for street sweeping services. The City of Redlands will not provide water for this contract.
17. Speed Limit of Sweepers: Sweepers shall not operate above 5 miles per hour, especially around curbs and bends, or optimal maximum speed as specified by the manufacturer for optimum sweeping.
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I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 9 18. Record Keeping: Contractor shall provide the following records:
19. Maintain a daily log detailing mileage and cubic yards/tons of materials collected.
20. Submit to the City a monthly report which summarizes curb mileage for residential, commercial and industrial disposal.
21. Provide a report that specifies number and nature of complaints received when they were responded to and how they were resolved.
22. Provide a report that contains lists of trees, vegetation, inoperative motor vehicles, and any other obstructions which impede sweeping.
23. Contractor may, from time to time, be required to attend a quarterly meeting at which monthly reports, complaint logs and other documentation will be reviewed and discussed.
24. Contractor shall utilize alternative fuel street sweepers and comply with all Federal, State and Local regulations pertaining to sweeper equipment operation including, but not limited to, SCAQMD Rules 1186.1. The Contractor shall also provide all necessary operational information and data that may be required to complete the reporting requirements of any legally established regulatory agency.
25. Licenses: Contractor shall obtain a current City of Redlands business license before services are rendered.
26. Event of Default/Liquated Damages: Failure of the Contractor to complete the work in accordance with the agreement and specifications will result in damages being sustained by the City. Such damages are, and will continue to be, impractical and extremely difficult to determine. The following are events of default that shall be cause for liquidated damages:
A. Operation of sweeper without using sufficient water to control dust.
B. Operation of sweeper exceeding the stated speed limits for operation.
C. Missing scheduled sweeping days without providing prior notice to the Facilities & Community Services Director or his designee (excluding inclement weather).
27. When observed violating the foregoing on the first occurrence, the Contractor will be notified in writing by the City. Contractor shall respond within five (5) days with a written plan stating how compliance will be corrected. If the Contractor violates the same specifications a second time, within a 30-day period, the City shall have the right to withhold payment of $300.00 from the subsequent invoice following the month the violation occurred or went unresolved.
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 10 EXHIBIT "B"
LABOR AND MATERIAL BOND
Whereas, the City of Redlands, State of California, and SCA OF CA, LLC, (hereinafter designated as “Principal”) have entered into an agreement (the “Agreement”) whereby Principal agrees to provide street sweeping services (the “Work”), which said agreement, dated April 16 , 2024, and titled as “Agreement to Perform Non-Professional Services for Improvement to Public Builds and Grounds” is hereby referred to and made a part hereof; and
Whereas, under the terms of the Agreement, Principal is required before commencing the performance of the Work, to file a good and sufficient Labor and Material bond with the City of Redlands to secure the claims to which reference is made in Title 3 (commencing with Section 9550) of Part 6 of Division 4 of the Civil Code of the State of California.
Now, therefore, this bond is for the term beginning _____________________, 2024 and ending _____________________2025, but may be extended by continuation certificate executed by the Surety, at the option of the Surety. Neither non-renewal by the Surety, nor failure, nor inability of the Principal to file a replacement bond shall constitute a loss to the Obligee which is recoverable under this bond. Surety’s liability under this bond and all continuation certificates issued in connection therewith shall not be cumulative and shall in no event exceed the amount as set forth in this bond or in any additions, riders, or endorsements properly issued by the Surety as supplements thereto.
Principal and the undersigned as corporate surety, are held firmly bound unto the City and all contractors, subcontractors, laborers, material men and other persons employed in the performance of the Agreement and referred to in the aforesaid Code of Civil Procedure in the sum of Four Hundred Forty Four Thousand Eight Hundred Twenty Six dollars and Forty Four cents ($444,826.44) for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in an amount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by the City in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.
It is hereby expressly stipulated and agreed that this bond shall insure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 3 (commencing with Section 9550) of Part 6 of Division 4 of the Civil Code, so a s to give a right of action to them or their assigns in any suit brought upon this bond.
Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.
The surety hereby stipulates and agrees that no change, extension of time, alteration , or addition to the terms of the Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition.
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 11 In witness whereof, this instrument has been duly executed by the Principal and surety above named, on _______________, 2024.
(SEAL) (SEAL)
(Contractor) (Surety)
BY:
(Signature) (Signature)
Address:
_______________________________________
________________________________________
(Seal and Notarial Acknowledgment of
Surety)
Telephone( ) ___________________________
Redlands Regular Meeting of 04-16-2024
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 12 EXHIBIT “C”
FEE SCHEDULE
PRICE & FEE BID SHEET
BID A – SCHEDULED WORK
ITEM DESCRIPTION
UNIT OF
MEASURE
(MILES)
NUMBER OF
SWEEPS PER
YEAR
UNIT PRICE
PER SWEEP TOTAL PRICE
Downtown area
2082
156 $27.00 $56,214.00
1st & 3rd Monday 1,837 24 $24.50 $45,006.50
1st & 3rd Tuesday 1234 24 $24.50 $30,233.00
1st & 3rd Wednesday 1027 24 $24.50 $25,161.50,
1st & 3rd Thursday 1218 24 $24.50 $29,841.00
1st & 3rd Friday 1272 24 $24.50 $31,164.00
2nd & 4th Monday 1685 24 $24.50 $41,282.50,
2nd & 4th Tuesday 1390 24 $24.50 $34,055.00
2nd & 4th Wednesday 1262 24 $24.50 $30,919.00
2nd & 4th Thursday 1950 24 $24.50 $47,775.00
2nd & 4th Friday 1035 24 $24.50 $25,357.50
TOTAL BID A
$397,009.00
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I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 13 BID B – PARKS & OTHER REQUIRED AREAS
LOCATION
SERVICE
INTERVAL
SQ. FT
# OF
SWEEPS
PER YEAR
UNIT PRICE
PER SWEEP
TOTAL PRICE
Brookside Park 3RD FRIDAY 24,890 12 $74.67 $896.04
City Corp Yard 1ST & 3RD
WEDNESDAY 375,558 24 $300.45 $7,210.80
Civic Center Parking Lot
(above parking lot) 2ND THURSDAY 14,792 12 $39.94 $479.28 Community Park 3RD FRIDAY 30,707 12 $82.91 $994.92
Crafton Park 3RD FRIDAY 10,531 12 $40.02 $480.24
Down Town Parking
Structure
(above parking lot)
2ND THURSDAY 34,529 12 $103.59 $1,243.08
Ford Park 4TH THURSDAY 31,533 12 $78.83 $945.96
Hillside Memorial Park 2ND &4TH
WEDNESDAY 370,025 24 $296.02 $7,104.48
Joslyn Senior Center 4TH THURSDAY 20,538 12 $61.61 $739.32 Oakmont Park 2ND THURSDAY 8,080 12 $45.25 $543.00
Prospect Park 2ND THURSDAY 28,422 12 $68.21 $818.52
Redlands Airport
Parking 4TH THURSDAY 13,600 12 $39.44 $473.28
Airport interior 1st TUESDAY 1,315,862 12 $921.10 $11,053.20 Sports Park 1ST FRIDAY 219,500 12 $153.65 $1,843.80
Sylvan Park 3RD FRIDAY 24,243 12 $67.88 $814.56
The Door Fellowship
Church EVERY FRIDAY 23,109 48 $67.02 $3,216.96
TOTAL BID B $38,857.44
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 14 BID C – EXTRA WORK AS NEEDED
ITEM DESCRIPTION
UNIT
EST.
ANNUAL
QTY
UNIT PRICE
TOTAL PRICE
EXTRA WORK (ex: storm clean up,
construction clean up). Hour 40 $125.00 $5,000.00
TOTAL EXTRA WORK PRICE (C) $5,000.00
BID D – EXTRA WORK AS NEEDED
A.
ITEM NO.
B.
ITEM DESCRIPTION
C.
UNIT
D.
EST.
ANNUAL
QTY
E.
UNIT PRICE
F.
TOTAL PRICE
D1 Street Sweeper and Street
Sweeper Operator Rental Mile 120 $33.00 $3,960.00
TOTAL EXTRA WORK PRICE (D) $3,960.00
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NPS-2.2 (2/22)
I:\cmo\Agreements\SCA of CA, LLC Agreement FY23-0043.docx-msv4 15 EXHIBIT “D”
WORKERS’ COMPENSATION INSURANCE CERTIFICATION
Every employer, except the State, shall secure the payment of compensation in one or more of the following ways:
(a) By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this State. (b) By securing from the Director of Industrial Relations, a certificate of consent to self-insure, either as an individual employer, or as one employer in a group of employers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self -insure and to pay any compensation that may become due to his or her employees.
CHECK ONE
_____I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply wit h such provisions before commencing the performance of the work and activities required or permitted under this Agreement. (Labor Code §1861).
_____I affirm that at all times, in performing the work and activities required or permitted under this Agreement, I shall not employ any person in any manner such that I become subject to the workers’ compensation laws of California. However, at any time, if I employ any person such that I become subject to the workers’ compensation laws of California, immediately I shall provide the City with a certificate of consent to self -insure, or a certification of workers’ compensation insurance.
I certify under penalty of perjury under the laws of the State of California that the information and representations made in this certificate are true and correct.
SCA OF CA, LLC
By: Date: ___________________
Brad Becker, Regional Vice President
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City Council Meeting M. 5.
DATE: 04/16/2024
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of the termination of the Homekey Grant agreement between the City of Redlands, Shangri-La Industries, 1675 Industrial Park, LP, and Step Up on Second Street, Inc. funding the operating subsidy for the motel conversation project located at 1675 Industrial Park Avenue, authorize the City Manager to sign and submit a Notice of Termination, and for City to Directly Fund Step Up Redlands Facility With Grant Funding (Assistant City Manager Boatman)
MOTION(S):
If the City Council determines that staff’s recommendation is appropriate, the following motion is provided:
I move to terminate the Homekey Grant Agreement between the City of Redlands, Shangri-La Industries, 1675 Industrial Park, LP, and Step Up on Second Street, Inc., to authorize the City Manager to sign and submit a Notice of Termination, and to authorize the City Manager to use Grant Funding as appropriate for the Step Up Redlands Facility.
RECOMMENDATION:
Staff recommends that the City Council terminate the Homekey Grant Agreement between the City of Redlands, Shangri-La Industries, 1675 Industrial Park, LP, and Step Up on Second Street, Inc., authorize the City Manager to sign and submit a Notice of Termination, and to authorize the City Manager to use Grant Funding as appropriate for the Step Up Redlands Facility.
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DISCUSSION:
In order to address the housing needs of individuals and families who are homeless or at risk of homelessness in the City, the City jointly applied with Shangri-La, Industries, LLC (“Shangri-La Industries”) and Step Up on Second Street, Inc. (“Step Up”) for grant funding under the Homekey Program – Round 2 (“Homekey Program”) administered by the California Department of Housing and Community Development (“HCD”). On March 14, 2022, HCD awarded the City, along with its partners Shangri-La Industries and Step Up grant funding in the amount of $29,020,000. This grant award funded the acquisition of a motel located at 1675 Industrial Park Avenue, the rehabilitation of the facility, and ultimately the conversion of 98 motel rooms into permanent supportive housing (“Project”). The Project, more commonly referred to as "Step Up Redlands," also provides supportive services to the residents of the facility, most of whom were formerly homeless.
After receiving City Council approval, on May 24, 2022, the City, Shangri-La, and Step Up (together, the “HCD Grantees”) on the one hand, and HCD on the other hand entered into a grant agreement (“HCD Agreement”). The HCD Agreement required the City to, as a “matching contribution,” commit $3,573,485 in Project funding. It was anticipated that this operating subsidy, together with HCD’s award of grant money and other funding sources secured by Shangri-La, would fund the conversion and operations of Step Up Redlands for at least five years.
The City Council also approved a grant agreement between the City, Shangri-La Industries, 1675 Industrial Park, L.P. (“1675 Industrial”), and Step Up on July 19, 2022 (“Grant Agreement’). The purpose of this Grant Agreement was to establish the terms and conditions of the City’s disbursement of the operating subsidy, as well as Shangri-La Industries, Step Up, and 1675 Industrial’s obligations to the Project and the City. Pursuant to the Grant Agreement, and on the condition that Shangri-La Industries was not in default, the City agreed to disburse $3,573,485 to Shangri-La Industries, in seven annual payments of $510,497.
Pursuant to the HCD Agreement, grant funds were distributed by HCD directly to Shangri-La Industries in the summer of 2022. The Step Up Redlands facility was operational and occupied by February of 2023.
Subsequently, the City discovered that Shangri-La Industries had defaulted on its obligations under the Grant Agreement. On November 15, 2023, the City sent a Notice of Default letter to Shangri-La Industries, Step Up, and 1675 Industrial identifying at least seven different contractual defaults and demanding that these defaults be promptly cured. Among other things, it had become apparent that Shangri-La Industries had improperly incurred debt, failed to record the Project affordability covenant in first position on title, granted third Redlands Regular Meeting of 04-16-2024
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record the Project affordability covenant in first position on title, granted third party lenders security interests in the property without the consent of the City (or HCD), had failed to pay loans and tax assessments and did not inform the City of its various defaults, and was engaged in litigation without informing the City of such litigation. Shortly after, HCD filed a lawsuit against Shangri-La Industries for fraud, breach of the HCD Agreement, and breach of additional agreements involving other Homekey Program projects in California. As the City continues to investigate this matter, it has become further apparent that Shangri-La Industries or key individuals at Shangri-La Industries may have acted improperly, Shangri-La Industries appears to be in poor financial condition, and Shangri-La Industries may file bankruptcy.
Despite demanding cure, Shangri-La Industries has not responded to the City’s demand nor has it made sufficient attempts to cure its various defaults of the Grant Agreement. Since Shangri-La Industries failed to timely cure, the City is within its rights to terminate the Grant Agreement. Unless the grant is revoked and the Grant Agreement is terminated, the City will be forced to pay $510,497 to Shangri-La Industries this year. To ensure that the City-funded operating subsidy continues to be used to support the Project and also to guard against any misappropriation—Staff recommends that the City Council terminate the Grant Agreement.
The Grant Agreement is separate from the HCD Agreement. The City’s termination of the Grant Agreement does not alter or run afoul of the City’s obligations to the HCD under the HCD Agreement. The City will continue to disburse funds on an annual basis, according to the terms and conditions of the HCD Agreement, until the full balance of the operating subsidy is expended.
The City remains committed to the success of the Project and its commitments under the HCD Agreement. Termination of the Grant Agreement will guard against misappropriation and will allow the City to control how and to whom its operational subsidy is paid. The City will work directly with Step Up and Mitch Vanneman, the currently-appointed Receiver, to ensure that the City-funded operating subsidy funds the ongoing operations of Step Up Redlands. Under the Grant Agreement, the City has made two annual payments of $510,497.
Thus, the City has expended a total of $1,020,994 from the operating subsidy.
Notwithstanding these challenges, Step Up Redlands remains fully occupied and Step Up continues to provide support services to the residents of the facility.
Approximately 130 residents currently live at the facility, and the resident retention rate is approximately 98%. City Staff visit the site daily to monitor the facility and to ensure that residents receive adequate support. The City and HCD are actively working together to find a permanent solution that would allow for the continued operation of Step Up Redlands
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ALTERNATIVES:
The City Council may choose not to terminate the agreement.
STRATEGIC PLAN:
N/A
SUBMITTED BY:
Christopher Boatman, Assistant City Manager
RECOMMENDED BY:
Charles M. Duggan Jr., City Manager
REVIEWED BY:
Yvette M. Abich Garcia, City Attorney
Janice McConnell, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
Fiscal Impact
Discussion:
There is no fiscal impact related to the City Council terminating the agreement.
The current operating subsidy will be included in future budget requests and will continue to be expended on projected operations, consistent with the Project Homkey Agreement.
Attachments
A. Homekey Grant Agreement
B. Notice of Termination and Re-Affirmation of Funding
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CITY OF REDLANDS HOMEKEY GRANT AGREEMENT
This Homekey Grant Agreement ( the " Agreement") is dated as of July 19, 2022 (the Effective Date"), and is betweenthe City of Redlands, a political subdivision of the Stateof California ( the " City"), StepUp on Second Street, Inc., a California nonprofit public benefit corporation (" StepUp"), 1675IndustrialPark, LP, aDelawarelimitedpartnership ("Owner"), and Shangri-La Industries, LLC, aDelaware limited liability company, andpermittedsuccessorsand assigns (collectively " Grantee"). City, StepUp, Owner and Granteearecollectively referredto herein as the " Parties".
RECITALS
WHEREAS, the State of California implemented a statewide initiative known as " Project Homekey" with the intentionto securethousandsof motel/hotel roomsto provide non -congregate shelterfor extremelyvulnerableindividuals experiencinghomelessnessto help keepsusceptible, homelesspersonssafefrom theCOVID-19virus, flattenthecurve, andpreservehospital capacity; and
WHEREAS, the Stateof California Department of Housing andCommunity Development issueda Notice of Funding Availability (" NOFA") for the Homekey 2.0 2021 Program (NOFA); and
WHEREAS, City has determinedthat the developmentof an affordablepermanent motel/hotelhousingsite for ProjectHomekeycould be accomplishedmost effectivelyand economicallyif undertakenby anexperienceddeveloperunderan agreementwith City; and WHEREAS, Owner has identified, and is in escrow to acquire, the Good Nite Inn, located at 1675IndustrialParkAvenueasmoreparticularlydescribedin ExhibitA (the "Property"), as the most desirablemotelwithin theCity for theinterimto permanenthousing conversioncontemplated by ProjectHomekey; and
WHEREAS, the Parties have preparedthis Agreement to comply with the NOFA' s requirements to demonstrate how the development team is connected and how the development team will work together.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and for suchother goodandvaluableconsideration, the receiptof which is herebyacknowledged, the Parties agree as follows:
A. TheCity, StepUp, andtheGranteejointly appliedandwereawardedHomekey2.0 2021Fundsfrom HCD which shall be disbursed pursuant tothe termsof StandardAgreement, Award: 21-HK- 17166by and among HCD, the City and the Grantee, which shall govern the expenditureof theHomekeyFunds ( the " StandardAgreement").
B. The Department of Housing and Community Development ("HCD") issued a Notice of Funding Availability (" NOFA") for the Homekey Program, Round 2 on September9, 2021. The NOFA incorporatesby referencethe Multifamily Housing Program (MHP), as well as the MHP Final Guidelines (" MHP Guidelines"), dated June 19, 2019, both as amended and in E- 1
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effect from time to time. In addition, the NOFA statesthat Homekeygrantfundsarederived primarily from CoronavirusRelief Fund ("CRF") money receivedfrom the U.S. Departmentof theTreasury. TheCRFwasestablishedby thefederalCoronavirusAid, Relief, andEconomic Security (CARES) Act (PublicLaw No. 116- 136).
C. The GranteeandOwnerintendto convertthePropertyto provideninety-eight (98) permanent supportivehousingunitsandone (1) unrestrictedmanager's unitfor individualswho areexperiencinghomelessness, arechronicallyhomeless, or who areat risk of homelessness Target Population") on the Propertyin orderto provide increasedaffordablehousing (the Improvements"). The ImprovementsandthePropertyarereferredto asthe "Development." D. TheCitydesiresto makearevocablegrantto Granteein anamount notto exceed 3,573,485.00 of City funds ("City Funds") to fund a City Operating Subsidy (the "Grant").
E. Pursuantthetermsof the StandardAgreement, the City is required tocausea 55- yearuserestrictiontoberecordedagainstthePropertyin firstlienpriority (the "UseRestriction") to secureperformanceundertheStandardAgreement.
F. The Grant is being made to finance an operating subsidyreservefor the DevelopmenttoensuretheaffordabilityoftheunitsfortheHomekeyTermin order tohelpachieve financialfeasibility fortheDevelopment. TheDevelopmentwill increasethesupplyofaffordable rental housingin theCityofRedlands. Duetotheassistanceprovidedto Granteepursuant tothis Agreementandthe StandardAgreement, the City hasclassifiedninety-eight (98) units asCity - assistedunits (eachsuchunit a "City -AssistedUnit").
NOW, THEREFORE, the Parties agree as follows:
AGREEMENT
ARTICLE 1.
DEFINITIONS AND EXHIBITS
Section 1. 1 Definitions.
The following termshavethe following meanings:
a) " Affiliate" meansanentitythatis controllingor controlledby Grantee. For the purposesofthisdefinition "Control" means (1) directorindirectmanagementorcontrolofthe managingmemberor membersin the caseof a limited liability company; (2) direct or indirect management orcontrolof ageneralpartner orgeneral partnersinthecaseofapartnership; and (3) director indirectcontrolof amajority of thedirectorsin thecaseof acorporation. b) " Agreement" meansthisHomekeyCity GrantAgreement, assuchmaybe amended from time to time.
c) " Shangri- La" means* Shangri- La Industries LLC, a Delaware limited partnership.
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d) " ApprovedFinancing" meansall ofthe loans, grantsandequityobtainedby Granteefor thepurposeof financingtheDevelopment, whichincludethefollowing, estimatedas of the Effective Date:
1) An equity contribution from the Granteeof not lessthanNine Hundred Four Thousand Eight Hundred Dollars ($ 904, 800)
2) A loanof approximatelyTenMillion Two HundredSeventyThousandSix HundredTwenty Dollars ($10, 270, 620) ( the " Construction Loan") 3) A grantof approximately Twenty FourMillion OneHundredForty -Two Thousand Dollars ($ 24,142,000) of Homekeyprogramfundingfrom HCD the " Homekey Acquisition Funds") or such other amount approvedby HCD; and
4) A grant of approximatelyFour Million Eight HundredSeventy -Eight Thousand Dollars ($ 4,878, 000) of Homekey program funding from HCD the "Homekey OperatingFunds") or suchotheramountapprovedby HCD; and
5) A conditional occupancy grantof approximatelyNine HundredEighty Thousand Dollars ($ 980,000) of Homekey programfundingfrom HCD (the Expedited Occupancy Conditional Bonus Operating Fund Award") contingent upon achieving full occupancy (with consideration for an average of 10% vacancy) within eight ( 8) months of the date of award pursuantto the termsof the NOFA and StandardAgreement
e) " ApprovedFinancingPlan" meanstheFinancingPlanapprovedbytheCity asof the dateof this Agreement, asthe samemay be amendedpursuant toSection3. 5. The Approved Financing Plan shall beupdatedat the Closeof Escrow without needfor amendmentof this Agreement.
0 " Certificate of Completion" means the final Certificate of Completion issuedby the City of Redlands, or comparableCity sign -off on the completionof conversionof the Development.
g) City" meanstheCity of Redlands, a political subdivisionof California. h) " Completion Date" meansthe datethat a temporaryor final Certificate of Completion, orequivalentdocumentis issuedby theCity to certify completionoftherehabilitation and conversion of the Development.
designee.
City -AssistedUnits" hasthe meaningsetforth in Recital F.
City" hasthemeaningsetforth inthefirst paragraphof thisAgreement.
City Executive Officer" means theCity's City Manager, or an authorized 1) " Development" hasthe meaningsetforth in ParagraphC of theRecitals.
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m) " Escrow" meansthe escrow accountestablishedby the Granteefor the closingof Developmentfinancingwith TicorTitle Companyof Californiain its LosAngeles office, located at 660 S. Figueroa Street, # 1888, Los Angeles, CA 90017 or another escrow companysatisfactoryto theCity.
n) " Event of Default" hasthe meaningsetforth in Section6.1. o) " Grant" hasthemeaningsetforth in ParagraphD of theRecitals. p) " Grant Documents" means this Agreement, and the Use Restriction. q) " Grantee" hasthemeaningsetforth in thefirst paragraphof thisAgreement. r) " HazardousMaterials" hasthe meaningsetforth in Section4.5(a). s) " HazardousMaterialsClaims" hasthemeaningsetforth in Section4.5(b). t) " HazardousMaterialsLaw" hasthemeaningsetforth in Section4.5(b). u) " Homekey Program" has the meaningset forth in ParagraphB of the Recitals.
v) " HomekeyFunds" means theHomekeyAcquisitionFundsprovidedby HCD under the Standard Agreement.
w) " HomekeyTerm" meanstheperiod beginningonthedateof thisAgreement andendingon thetenth (10th) anniversaryoftheCompletionDate. x) " Homekey Regulations" hasthe meaningsetforth in ParagraphB of the Recitals.
y) Improvements" hasthemeaningsetforth in ParagraphC of theRecitals. z) " Notice of Completion" means the Notice of Completion executedby Grantee in the form specified in California Civil Code Section 3093. aa) " Owner" means1675Industrial Park, LP, aDelawarelimited partnership. bb) " PermittedTransfer" hasthemeaningsetforth in Section4.11 (c). cc) " Property" hasthemeaningsetforthin ExhibitA of thisAgreement. dd) " Use Restriction" meansthe Regulatory Agreementand Declarationof RestrictiveCovenants betweenthe City andGranteeasdescribedin the StandardAgreement related totheGrantandtheHomekeyFunds, to berecordedagainsttheGrantee's feeinterestin the Property.
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ee) " Scheduleof Performance" meansthe schedulefor performanceof various tasksandobligationsunderthis Agreement thatis attachedasExhibit B, assuchmaybemodified pursuantto Section3.1."ServicesBudget" hasthe meaningsetforth in Section3.6. ff) " ServicesPlan" hasthe meaning set forth in Section 3.6. gg) " Program Participant" meansa person or household thatoccupiesa Unit in the Development meeting the Target Population.
hh) " Term" means the period of time that commenceson the date of this Agreement, and expires, unless sooner terminated in accordance with this Agreement, on the fourteenth (14th) anniversaryoftheCompletionDate.
ii) " Transfer" hasthemeaningsetforth in Section4.11.
jj) " Unit" means one ( 1) of the approximatelyninety-eight (98) affordable housingunitsto be constructedattheDevelopment, includingone (1) unrestrictedmanager'sunit.
Section 1.2 Exhibits.
The following exhibits areattachedto this Agreementandincorporatedinto this Agreementby this reference:
Exhibit A:
Exhibit B:
Legal Description of the Property
Schedule of Performance
ARTICLE 2.
GRANT PROVISIONS
Section 2. 1 Grant.
Subject tothe satisfactionof the conditionssetforth in this Article, the City shallprovide to GranteetheGrant, whichtheGranteemayusesolelyto fundthe operating subsidyfor the ninety-eight (98) City -AssistedUnits atthe Developmentfor the HomekeyTerm, consistentwith the terms of the Use Restriction and the Standard Agreement. Except as set forth in Section 2.4, Granteehasno obligation to repay theGrant.
Section 2. 2 Security.
a) Owner and Granteeshall also causeor permit the UseRestrictionto be recordedagainst thefee interestin theProperty, in first lien position. TheUseRestrictionshall not be subordinated.
Section 2. 3 Forgiveness of Revocable Grant.
a) Provided that no Default exists under this Agreement or the Use Restriction, withoutfurtheractionof theparties, theGrantshallbeforgivenby Five HundredThousandDollars E- 5
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500,000) for eachyearof theHomekey Termcommencingon thefirst anniversaryof the Effective Date.
Section 2. 4 Revocation of Grant Upon Default.
Notwithstandinganyprovisionhereintothecontrary, andinadditionto anyotherrightsand remediesavailabletotheCitysetforth inArticle6, uponaDefaultbyGrantee orOwner, theCity mayrevoketheoutstandingbalanceoftheGrant, and declare theoutstandingbalanceoftheGrant other thananyportionoftheGrantthathasbeenpreviouslyforgivenbytheCityassetforthin Section2.3 above) to be immediately due andpayable, subjectto the non -recourseprovisions set forth in Section 2. 5.
Section 2. 5 Non - Recourse.
NeitherGranteeor Owner, noranymemberof Grantee (thatis notaGuarantor) or anypartner of the Owner ( that is not a Guarantor), shall haveany direct or indirectpersonalliability for paymentoftheprincipalof, andintereston, theGrant.
Section 2.6 Conditions Precedent to Disbursement of Grant Funds. a) A special "CapitalizedOperatingSubsidyReserve" shall be createdand maintainedasasegregatedinterest -bearingaccountheldbytheGranteeorOwnerfortheHomekey Term of this Agreement, subject to subsections ( c) and ( d) below. The Capitalized Operating SubsidyReserveshallbecapitalizedintheamountoftheCityGrant. Anyinterestearnedonfunds intheCapitalizedOperatingSubsidyReserveshallbeaddedtoandbecomepartoftheCapitalized Operating SubsidyReserve.
b) The CapitalizedOperatingSubsidyReserveshall beusedto pay monthly operatingcostsforCity -AssistedUnitsoccupiedbyincomequalifyinghouseholdsfromtheTarget Population, duringtheTerm, andis expectedtobedrawndowncompletelywithin seven (7) years of the Term.
c) TheCity shalldisbursethe City Grant insevenannualinstallmentsof 510,497. Theinitialpaymentshallbemadeby orbeforeSeptember1, 2022, andsubsequent paymentsshallbemadeannuallybyorbefore theanniversaryoftheeffectivedatethereafter. The City shallhaveno obligationto make any disbursementsor to takeanyotheraction underthe GrantDocumentsunlessthe following conditionsprecedentare satisfiedprior to eachsuch disbursementof the Grant funds. There exists no Event of Default or any other financing agreementsor contracts betweenthe City and Grantee, Owner or their affiliates relating to the Development;
1) Granteehasdeliveredto theCity acopyof Grantee'sorganizational documents, including an Operating Agreement, and a corporate authorizing resolution authorizingGrantee's executionof thisAgreementandthetransactionscontemplatedby this Agreement;
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2) Ownerhasdeliveredto the City a copy of Owner's organizational documents, including a limited partnershipagreement, and a corporateauthorizingresolution authorizing Owner's executionof this Agreementand the transactionscontemplatedby this Agreement;
3) StepUp hasdeliveredto the City acopyof StepUp'sorganizational documents, and a corporate authorizing resolution authorizing Step Up's execution of this Agreementandthe transactions contemplatedby this Agreement; 4) Granteeor Owner have closed, or are closing, on the Construction Loan andhasprovided the GranteeEquity into escrow;
5) Grantee, StepUp andOwnerhavefurnishedthe City with evidence of the insurancecoveragemeeting the requirements of Section4.12below; 6) TheCity hasreceivedfrom Granteeandapproveda form of program participation agreement;
7)
Selection Plan;
The City and the Grantee andOwner have agreed on a Participant 8) The City has received, from Grantee, Step Up and Owner, and approveda copy of the ServicesPlan for the provision of serviceto residents; 9) Grantee or Owner have submitted a certification from the architect or a City approved Certified Access Specialist certifying that the Development will be rehabilitated in compliance with the accessibility requirements set forth in the Standard Agreementor hasprovided the City with other evidencethat the Development, asbuilt, complies with the accessibility requirementsset forth in the StandardAgreement; 10) The City has received from Grantee or Owner a copy of the Management Plan, and a management agreementand contact information for the property managerof theDevelopmentandthe nameandphonenumberof the on -sitepropertymanager, in compliance with the terms of the Use Restriction;
11) There exists no material adverse change in the financial condition of Granteefrom that shown bythefinancialstatementsandotherdata andinformationfurnishedby Granteeto the City prior to the dateof this Agreement;
d) The Capitalized Operating Subsidy Reserve is intended to assure the affordability of the City -AssistedUnits at the Developmentandshall not betransferableandmust remainwith theDevelopmentfor theTerm of this Agreement. During theTerm of this Agreement, the Grantee and Owner shall be required to either: ( 1) allow the Capitalized OperatingSubsidy Reserveto remain with the Developmentupon transfer; or (2) repayto the City any amounts remainingin theCapitalizedOperatingSubsidyReserveasof the dateof atransfer. e) Notwithstandinganyotherprovisionsof this Agreement, theCity shallhave no further obligation to disburse any portion of the Grant to Grantee or Owner under this E- 7
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Agreementfollowing: (i) terminationof thisAgreement; (ii) notificationbytheCitytotheGrantee of anEventof Default (excludinganyEventof Defaultof theCity) under termsof thisAgreement until such time as the Event of Default has been cured.
ARTICLE 3.
GRANTEE OBLIGATIONS
Section 3. 1 Schedule of Performance.
Subject tothisAgreement, the Granteeshallperformthe tasksdescribedin the Schedule of Performanceno later thanthedatessetforth in the Scheduleof Performance, which shall at all times be in substantial conformance with the terms and conditions of the StandardAgreement.
The Scheduleof Performancemay be modified inwriting by Grantee andthe City Executive OfficeronbehalfoftheCitywithouttheneedfor formalamendmentof thisAgreementorfurther approvalby the City Council .
Section 3. 2 Conversion and Rehabilitation.
a) Granteeshallbe solelyresponsibleto obtainall permitsandapprovalsfor the rehabilitation and operation of the Development. Grantee shall convert the Development to permanent housingandshallcausethecommencementandcompletionof conversionof the Developmentto permanenthousingnolater than thedatessetforthin the StandardAgreement. b) Grantee shall make Development available for occupancy as permanent housingin accordancewith thetermsof the UseRestriction. Grant fundsprovidedtotheGrantee mayonlybeusedtofundoperatingsubsidiesforUnitsthatareoccupiedby eligiblehouseholds.
Section 3. 3 Prevailing Wages; Accessibility.
a) PrevailingWages. Thefundingof anoperating subsidyisnotapublicwork underthemeaningsetforthinLaborCodeSection1720. Nonetheless, if and totheextentrequired by law, in therehabilitationof theDevelopment, GranteeandOwnershallandshallcauseall contractorsandsubcontractors topayprevailingwagesin performingany construction activities asmayberequiredunder federalDavis -BaconAct (40USC3141-3148) andthelaborcompliance provisionstobeprovidedbytheCity (if applicable), andpursuantto Labor Code Sections1720et sec . ( the "Prevailing Wage Requirements"), andthe implementingregulationsof the Department of Industrial Relations ( the " DIR"), to employapprenticesasrequiredby Labor CodeSections 1777. 5 et sec ., andtheimplementingregulationsof theDIR andcomplywith the otherapplicable provisionsof LaborCodeSections1720et seq., 1777.5 et seq., 1810- 1815, and implementing regulations of the DIR.
b) Grantee and Owners shall indemnify, hold harmless and defend (with counsel reasonablyacceptableto theCity) theCity andits City Council, officersandemployees againstanyclaimfordamages, compensation, fines, penaltiesor otheramountsarisingoutofthe failure or alleged failure of any person or entity ( including Grantee, its contractors and subcontractors) topayprevailingwagesasdetermined pursuantto LaborCodeSections1720et se . andprevailingwagerequirementsofthefederalDavis -BaconAct (40 USC3141-3148), to employapprenticespursuant toLaborCodeSections1777.5etseq., andimplementingregulations E- 8
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of the DIR or to comply with the other applicable provisions of Labor Code Sections1720 etsec ., 1777. 5 et sec ., andthe implementingregulationsof theDIR in connectionwith the performance of the developmentactivitiesor any otherwork undertakenor in connectionwith the Property.
The requirements in this subsection survive the termination of this Agreement. c) Accessibility Requirements. The Developmentwill beoperatedat all times in compliance with all applicable federal, state, and local disabledpersonsaccessibility requirementsincluding, but not limited to the applicableprovisions of the StandardAgreement.
Section 3. 4 Inspections.
a) The Grantee and Owner shall permit and facilitate, observation and inspectionof the Developmentby the City andby public authoritiesduringreasonable business hoursuponforty-eight (48) hours' writtennoticefor the purposesof determiningcompliancewith this Agreement, provided, however, that nothingin this Agreementshallentitle the City to enter anoccupiedunit in theDevelopmentwithout notice totheprogramparticipantthereof, which the Granteeand/or Owner shall deliver on behalf of the City, andpermissionfrom suchprogram participant to the extentsuchpermissionis requiredby law. Such inspections do not relieve the Grantee, or itscontractors, from anyapplicable requirementto obtainotherCity or City inspections in connection with the conversion of the Improvements.
b) After the completion of an inspectionthe City shall deliver a copy of the inspectionreportto the Grantee. If the City determinesasa resultof the inspectionthat thereare any deficiencies for any of the inspectable items in the Development, the Grantee shall correct suchdeficiencieswithin fifteen (15) daysfrom thedelivery of the inspection reportor if aperiod longerthan fifteen (15) daysis reasonablynecessaryto correctthe deficiency, then Granteemust begin to correct the deficiency within fifteen (15) days and correctthe deficiency as soon as reasonably possible.
Section 3. 5 Approved FinancingPlan.
As of the dateof this Agreement, the City hasapproved theApprovedFinancingPlan.
Granteeshallsubmitanyproposedor requiredamendmentsto theApprovedFinancingPlan, along with evidencethat the changesto the ApprovedFinancingPlanarereasonableandnecessary, to the City for approvalwithin fifteen (15) daysof the dateGranteereceivesinformationindicating that actual costs of the Developmentmaterially vary or will vary from the costsshown on the Approved Financing Plan, which approval shall not be unreasonablywithheld or delayed. The City will respondin writing within seven (7) daysafter receipt of a proposedamendmentto the Approved Financing Plan.
a) StepUp will beproviding on -site servicesto all programparticipantsin the Developmentwhich are required underthe Homekey Program (the " Social Services"). By the time specifiedin the Schedule, StepUp shallsubmitto theCity for approvalaproposedservices plan which shall includewritten guidelines orproceduresfor providing the SocialServices (the Services Plan"), and a proposedbudget for the provision of Social Services (the " Services Budget").
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b) The ServicesPlan shall include the types of Social Servicesprovided, staffinglevels, andoverallcoordinationof theSocialServices. c) Uponreceiptof theproposedServicesPlanandServicesBudget, theCity shallpromptlyreviewtheproposedServicesPlanandServicesBudgetandshallapproveor disapprovethem within fifteen ( 15) daysafter submission. If either the ServicesPlan or Services Budgetis not approved, StepUp shallsubmita revisedServicesPlanand/or ServicesBudget within fifteen (15) daysfollowing StepUp'sreceiptof theCity'swrittendisapproval. If theCity doesnot approvethe revised ServicesPlan and/or ServicesBudget becausethe StepUp fails to makespecificrevisionsrequestedbytheCity, StepUp, the Grantee andOwnershallbeindefault hereunder. If the City doesnot approveor disapproveupdatesto ResidentServicesPlanor Resident Services Budget within the timeframe specified herein, then the Resident Services Plan orResidentServicesBudget, asapplicable, from theprior yearshallremainin effect.
ARTICLE 4.
GRANT REQUIREMENTS
Section 4. 1 Annual Operating Budget.
At thebeginningof eachyearof theTerm, GranteeorOwnershallprovideto theCity an annual budget for the operation of the Development.
Section 4.2 Information.
Grantee, StepUp, andOwnershallprovideanyinformationrelatedto theDevelopment reasonablyrequestedbytheCityin connectionwiththeDevelopment, including (butnotlimited to) anyinformationrequired byHCDin connectionwith theStandardAgreement, andany informationrequiredbytheCity in connectionwith theGrantee'suseof theGrantfunds.
Section 4. 3 Records.
a) Grantee, StepUp, andOwnershallkeep andmaintainattheDevelopment, or at the corporateofficesof the Granteeor the Owner's generalpartner, or elsewherewith the City'swrittenconsent, full, completeandappropriate books, recordsandaccountsrelatingto the Development. Books, recordsand accountsrelating to Grantee's compliancewith the terms, provisions, covenantsandconditionsofthis Agreement. All applicablefinancialdocumentsare to bekeptandmaintainedin accordancewith generallyacceptedaccountingprinciplesconsistently applied. All suchbooks, records, and accountsshall at reasonabletimes be opento andavailable for inspectionand copying by the City, its auditorsor other authorizedrepresentativesat reasonableintervalsduring normalbusinesshoursandforty-eighthours' prior writtennoticeto GranteeandOwner. Grantee, StepUp andOwnershallpreservesuchrecordsfor aperiodof not lessthanfive (5) yearsaftertheexpirationof theStandardAgreement. Copiesof all taxreturns andother reports thatGranteeor Ownermayberequiredto furnishto anygovernmentalagency areto beopenfor inspectionbytheCityatallreasonabletimesattheplacethatthe books, records andaccountsof Grantee, StepUp or Ownerarekept. If anylitigation, claim, negotiation, audit exception, monitoring, inspectionorotheractionrelatingtotheuseoftheGrantispendingatthe endoftherecord retentionperiodstatedherein, thenGrantee, StepUpandOwnershall retainthe E- 10
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records until such action and all related issues are resolved. Such records are to include but are not limited to:
1) Records providing a full description of the activities undertaken under the Standard Agreement;
2) Records providing a full description of the activities undertaken with the use of the Grant funds;
3) Records documenting compliancewith the Participant Selection Plan and all applicable fair housing, equal opportunity, and affirmative fair marketing requirements;
4) Recordsdemonstratingcompliancewith UseRestriction;
5) Recordsdemonstratingcompliancewith all applicableaccessibility requirements;
6) Recordsdemonstratingcompliancewith any applicablerelocation requirements, which mustbe retainedfor at leastfive (5) yearsafterthe dateby which persons displacedfrom theproperty havereceivedfinal payments; and 7) Records demonstrating compliance with any applicable labor requirements (including certifiedpayrolls from Granteeor Owner'sgeneralcontractorevidencing thatapplicableprevailing wageshavebeenpaid if it hasbeendeemedaprevailing wageis required to bepaid.
b) The City shall notify Granteeor Owner of any recordsit deemsinsufficient.
Granteehasthirty (30) calendardaysafterthereceiptof suchanoticeto correctanydeficiencyin the records specified by the City in such notice, or if a period longer than thirty ( 30) days is reasonablynecessaryto correctthe deficiency, thenGranteemust beginto correctthedeficiency within thirty ( 30) daysand correctthe deficiency assoonasreasonablypossible.
Section 4. 4 City Grant Requirements.
a) Grantee, StepUp and Owner shall, at all times during the Term hereof, comply with all applicablelaws andregulationsgoverningthe useof the HomekeyFundsunder theStandardAgreement. Granteeshallalsocomplywith the lawsandregulationsgoverningthe useof the Grantfundsincluding (but not limited to) the following:
1) Civil Rights, Housing and Community Development, and Age Discrimination Acts. The Fair Housing Act ( 42 U.S.C. 3601 et seq.) and implementing regulations at 24 C. F.R. Part 100; Title VI of the Civil Rights Act of 1964 as amended; Title VIII of the Civil Rights Act of 1968 as amended; Section 104( b) and Section 109 of Title I of the Housing andCommunity DevelopmentAct of 1974asamended; Section504 of the Construction Act of 1973 (29 USC 794, et set.); the Age Discrimination Act of 1975 ( 42USC 6101, et sm.); ExecutiveOrder11063asamendedby ExecutiveOrder12259 andimplementingregulationsat 24 C.F.R. Part 107; Executive Order 11246as amendedby Executive Orders 11375, 12086, E- 11
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11478, 12107; ExecutiveOrder11625asamendedby ExecutiveOrder12007; ExecutiveOrder 12432; ExecutiveOrder12138asamendedby ExecutiveOrder12608, ExecutiveOrder13672 concerning Gender Identity.
2) Relocation. The parties agree andacknowledgethat the project contemplatedunderthis Agreementis notexpectedto resultin anydisplacement. Fromandafter theClosing, if andto theextenttherehabilitationof Developmentresultsin thepermanentor temporarydisplacementofresidentialtenants, program participants, homeowners, orbusinesses, thentheGranteeshallcomplywithall applicablelocal, state, andfederalstatutesandregulations, includingwithoutlimitationtheUniformRelocationAssistanceandRealPropertyAcquisition Policies Act of 1970 ( 42 U. S.C. 4601, et se .), and implementing regulationsat 49 C.F.R. Part 24; 24C.F.R. 570. 606; Section104(d) of theHousingandCommunityDevelopmentAct of 1974 and implementing regulations at 24 C.F.R. 42 et sec .; 24 C. F. R. 92. 353; and California GovernmentCodeSection7260et sec . andimplementingregulationsat 25 CaliforniaCodeof Regulations Sections 6000 et seq. ) with respectto relocationplanning, advisoryassistance, and paymentof monetary benefits. TheGranteeandOwnershallbesolelyresponsibleforpayment of anyrelocationbenefitsto anydisplacedpersonsandanyotherobligationsassociatedwith complying with such relocation laws. The Grantee and Owner shall defend ( with counsel reasonablyselectedbytheCity) theCity, itsgoverningboardmembers, officers, representatives, agents, assignsandemployeesagainst anyclaim for damages, compensation, fines, penalties, relocationpaymentsorotheramountsarisingoutofthefailureor allegedfailureof anypersonor entity ( includingthe Granteeor the City) to satisfyrelocationobligationsrelated tothe rehabilitationof theDevelopment. This obligationto indemnifyshall surviveterminationof this Agreement.
3) Homekey Regulations. Any other HCD regulations present or as maybeamended, added, orwaivedin thefuture pertainingtotheHomekeyFunds.
Section 4. 5 Hazardous Materials.
a) GranteeandOwnershall keepandmaintainthe Propertyin compliance with, andmaynotcauseorpermitthePropertytobeinviolationofanyfederal, stateorlocallaws, ordinancesor regulations relating toindustrialhygiene orto the environmental conditionson, underor about thePropertyincluding, butnotlimitedto, soilandgroundwater conditions. Grantee andOwnermay notuse, generate, manufacture, storeordisposeof on, under, orabout theProperty or transportto or fromthePropertyanyflammableexplosives, radioactivematerials, hazardous wastes, toxic substancesorrelatedmaterials, includingwithoutlimitation, anysubstancesdefined as or included in the definition of " hazardous substances," " hazardous wastes," " hazardous materials," or " toxic substances" under any applicable federal or state laws or regulations collectivelyreferred to hereinafteras "HazardousMaterials") exceptsuch of theforegoing asmay becustomarilyusedin rehabilitationof projectsliketheDevelopmentor keptand usedin and aboutresidentialpropertyof this type.
b) GranteeorOwner shallimmediatelyadvise theCity in writing if atanytime it receives written notice of: ( 1) anyandall enforcement, cleanup, removalorothergovernmental orregulatoryactionsinstituted, completedorthreatened againstGranteeorthePropertypursuant toanyapplicablefederal, stateor locallaws, ordinances, orregulationsrelatingtoanyHazardous E- 12
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Materials, (" Hazardous Materials Law"); ( 2) all claimsmadeor threatenedby any third party against Grantee, Owner or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any HazardousMaterials (the matters set forth in clauses ( 1) and ( 2) above are hereinafter referred to as " Hazardous Materials Claims"); and ( 3) Grantee'sor Owner's discoveryof anyoccurrenceor conditionon anyrealpropertyadjoiningor in thevicinity of thePropertythatcouldcausethePropertyor anypartthereofto beclassifiedas border -zoneproperty" (asdefinedin CaliforniaHealthandSafetyCodeSection25117.4) under the provision of California Health and Safety Code, Section 25220et seq., or any regulation adoptedin accordancetherewith, or tobeotherwisesubjectto anyrestrictionson theownership, occupancy, transferability or useof the Propertyunder anyHazardousMaterials Law. c) TheCity hastherighttojoin andparticipatein, asapartyif it soelects, any legalproceedingsor actionsinitiated in connectionwith any HazardousMaterialsClaimsandto haveitsreasonableattorneys' feesin connectiontherewithpaidby Granteeor Owner. Granteeand Owner shallindemnify andhold harmless theCity andits boardmembers, supervisors, directors, officers, employees, agents, successors andassignsfrom and against any loss, damage, cost, expenseor liability directly or indirectly arising out of or attributableto the use, generation, storage, release, threatenedrelease, discharge, disposal, or presenceof HazardousMaterials on, under, or about the Property including without limitation: ( 1) all foreseeable consequential damages; (2) thecostsof anyrequiredornecessaryrepair, cleanupor detoxificationof theProperty and thepreparationandimplementationof any closure, remedialor otherrequiredplans and (3) all reasonablecosts and expensesincurred by the City in connection with clauses (1) and (2), including but not limited to reasonableattorneys' fees andconsultant's fees. This indemnification applieswhether or not any governmentagencyhasissueda cleanup order. Losses, claims, costs, suits, liability, and expensescoveredby this indemnificationprovision include, but arenot limited to: ( A) lossesattributableto diminution in thevalue of theProperty; (B) lossor restrictionof use of rentable spaceon the Property; (C) adverseeffect on the marketing of any rental spaceon the Property; and (D) penaltiesandfinesleviedby, andremedial or enforcementactionsof anykind issuedby anyregulatoryagency (includingbut notlimited to the costsof anyrequired testing, remediation, repair, removal, cleanup or detoxification of the Property and surrounding properties). This obligation to indemnify will survivetermination of this Agreement. d) Without the City's prior written consent, which will not be unreasonably withheld, neitherGranteeor Owner maytakeanyremedialactionin responseto thepresenceof anyHazardousMaterialson, underorabouttheProperty (otherthanin emergencysituations oras requiredby governmentalagencieshavingjurisdiction), nor enterinto any settlementagreement, consentdecree, or other compromisein respectto anyHazardousMaterial Claims.
Section 4. 6 Maintenance and Damage.
a) During the Term, Grantee or Owner shall maintain the Development in goodrepairandin aneat, cleanandorderly condition, consistentwith qualityaffordablehousing developmentsowned or operatedby Shangri-La or Shangri-La affiliates and in compliancewith the City approved ManagementPlan. If there arises a condition in contravention of this requirement, andif Granteeor Ownerhavenot curedsuchconditionwithin thirty (30) daysafter receiving written notice from the City of such a condition, if Grantee or Owner are incapable of curingadefaultwithin suchthirty (30) dayperiod, theCity will givetheGranteeor Ownerninety E- 13
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90) daysto cure suchdefaultprovidedGranteeor Ownerhascommencedto curewithinsuch thirty (30) dayperiodandis diligentlyproceedingto cure suchdefaultthroughtheendof such period, thenin additionto anyotherrights availableto theCity, theCitymayperformall acts necessaryto curesuchcondition, andto establishor enforcealienor otherencumbrance against theProperty, subject totheprovisions providedin subsection (b) below. b) Subject tothe requirementsof SeniorLenders, and if economically feasible in theCity'sjudgmentafterconsultationwithGranteeandOwner, if anyimprovementnowor in thefutureonthePropertyis damagedor destroyed, thenGranteeor Ownershall, atits costand expense, diligentlyundertake torepairorrestoresuchimprovement. Suchworkorrepairisto be commencedno later than the later of one hundredtwenty (120) days, or such longerperiod approvedby the City in writing, afterthedamageor lossoccursor thirty (30) daysfollowing receiptof the insuranceproceeds, andis to be completedwithin one (1) yearthereafter. Any insuranceproceedscollectedforsuchdamageor destructionaretobeappliedto thecostof such repairsor restorationand, if suchinsuranceproceedsare insufficientfor suchpurpose, then GranteeorOwnershallmakeupthedeficiency. If GranteeorOwnerdonotpromptlymakesuch repairsthenanyinsuranceproceedscollectedfor suchdamageor destructionareto bepromptly deliveredbyGranteeor OwnertotheCityasaspecialrepaymentof theGrant, subjectto therights of the Senior Lenders, as applicable.
Section 4. 7 Fees and Taxes.
a) Granteeand Owner are solely responsiblefor payment of all fees, assessments, taxes, charges, andlevies imposedby anypublic authorityor utility companywith respecttothePropertyortheDevelopment, andshallpaysuch chargespriortodelinquency, except thosewhicharebeingcontestedin goodfaithby appropriate proceedingsandforwhichadequate reserveshavebeenprovidedin accordancewith generallyacceptedaccountingprinciples. b) City acknowledgesthatthe Granteeor Ownerintendto applyto the State Boardof Equalizationfor awelfareexemptionfrompropertytaxesunderCaliforniaRevenueand Taxation Code Section 214 for the Development.
Section 4. 8 Notice of Litigation.
Grantee, StepUp, andOwnershallpromptlynotifytheCity in writingof anylitigation relatedtotheDevelopment, andanylitigationrelatedtothe Grantee, StepUp, orOwnerforwhich the amountclaimed or at issueis in excessof Fifty ThousandDollars ($50, 000), and of any claims or disputesthat involve a material risk of suchlitigation. The conditions andobligations setforth in this Sectionshallapplyfor theentireTermof this Agreement.
Section 4. 9 Operation of Development as Affordable Housing. a) Granteeand Owner shall operate theDevelopment asanaffordable housing development consistent with: ( 1) HCD'srequirementsfor useof theHomekeyFundsandtheterms and conditions set forth in the Standard Agreement; ( 2) the Use Restriction; and (3) any other regulatoryrequirementsimposedon Granteeincludingbut notlimitedto regulatoryagreements associatedwith the City Grant.
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b) Before leasing any City -Assisted Unit in the Development, Grantee or Ownershallsubmitproposedform of programparticipationagreementfor the City's reviewand approval. Any program participation agreementfor any unit in the Developmentor refusal to renewmustbeprecededby not lessthansixty (60) dayswritten noticeto the ProgramParticipant by Granteespecifying the groundsfor the action.
c) Before letting any City -AssistedUnit in theDevelopment, Grantee, Owner, StepUp, and the City shall agreeupon a written programparticipantselectionplan for the Development ( the " Participant Selection Plan").
d) Granteeand Owner shall evaluate theincome eligibility of eachProgram Participant inUnitspursuantto theCity'sapprovedeligibility certificationprocedureswithin sixty 60) days beforethe household's expectedoccupancyof oneof the Units. For all City -Assisted Units, Granteeor Owner shallcertify or causethe propertymanagerto certify eachProgram Participant's continuedprogram eligibility anannualbasis. e) Granteeor Owner shall maintainall documentssettingforth the program eligibility, as applicable, household income of each householdoccupying a Unit, and the total amountfor contribution, utilities, and relatedserviceschargedto eachhouseholdoccupyingthe Development, asprescribedby theUseRestrictionandall otherrecordedregulatory restrictions.
Section 4. 10 Nondiscrimination.
a) Grantee, StepUp, andOwnerherein covenantby andfor themselves, their heirs, executors, administrators, successors and assigns, andall personsclaimingunderor through them, thattherewill benodiscriminationagainstorsegregationof apersonor of agroupof persons onaccountof race, color, religion, creed, age (exceptfor lawfulseniorhousingin accordancewith stateandfederallaw), familial status, disability, sex, sexualorientation, maritalstatus, ancestryor nationalorigin in the sale, lease, sublease, transfer, use, occupancy, tenure orenjoymentof the Property, nor may Granteeor any person claiming under or through Granteeestablishor permit any such practice or practices of discrimination or segregationwith referenceto the selection, location, number, use or occupancy of program participants, tenants, lessees, subtenants, sublesseesor vendeesin theProperty. Granteeshall complywith ExecutiveOrders11246, 11375, 11625, 12138, 12431, 12250, 13672, Title VII of the Civil Rights Act of 1964, the California Fair Housing andEmploymentAct andother applicableFederal, Stateand local laws andregulations and policies relatingto equalemploymentand contracting opportunities, including laws and regulationshereafterenacted. Notwithstandingtheabove, with respectto familial status, the above shouldnot beconstruedto applyto housingfor olderpersonsasdefinedin Section12955.9 of the Government Code and other applicable sections of the Civil Code as identified in Health and SafetyCodeSection33050(b). Theforegoing covenantwill run with the land.
Section 4. 11 Transfer.
a) Definition. For purposes of this Agreement, " Transfer" means any sale, assignment, ortransfer, whethervoluntary or involuntary, of: ( 1) any rights and/or duties under this Agreement; and/or (2) any interest inthe Development, including (but not limited to) a fee simpleinterest, ajoint tenancy interest, alife estate, apartnershipinterest, afeeinterest, asecurity E- 15
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interest, or aninterest evidencedby alandcontractbywhichpossessionof theDevelopmentis transferred and Grantee retains title. The term "Transfer" excludesthe leasing of a Unit in the Development to an occupantin compliance with the Use Restriction. The City Executive Officer is authorizedto executeassignmentandassumptionagreementson behalf of the City to implement any approvedTransfer.
b) Prohibition. Exceptasexpresslypermittedin this Agreement, the Grantee representsand agreesthat the Grantee shall not make or create, or suffer to be made or created, anyTransfer, eithervoluntarilyorby operationof lawwithoutthepriorwrittenapprovalof the City.
1) The limitations on Transfers set forth in this Section shall apply throughout the Term.
2) Any Transfermadein contraventionof this Sectionshallbevoid and shall be deemedto be a default under this Agreement whether or not the Granteeknew of or participated insuchTransfer.
c) Permitted Transfers. Notwithstanding the foregoing, the following are permittedTransfersshallbepermittedandareherebyapprovedbytheCity (eacha "Permitted Transfer"):
1) Any Transfer creating a Security Financing Interest either: ( A) permittedpursuant totheApprovedFinancingPlan; or (B) createdasaresultofaloan madeto developerthat replacesany existing SeniorLender.
2) Any Transferdirectlyresultingfrom the foreclosureof a Security FinancingInterestorthegrantingof adeedin lieuof foreclosureof aSecurity FinancingInterest or asotherwisepermittedunderthis Agreement.
3) Exceptassetforth in subsection (c) above, during the Term, Grantee will not refinance, re -syndicate, take out a line of credit or otherwise further encumber the propertyorrestructurethedebtconstitutingtheApprovedFinancingwithoutpriornotificationto the City.
Section 4. 12 Insurance Requirements.
a) Grantee, StepUp and Owner shall maintainthe following insurance coveragethroughoutthe Termof the Grantwrittenby insurersauthorizedto do businessin the Stateof California and with aminimum " Best" InsuranceGuide rating of "A- VII". If the Grantee, StepUp or Ownerusesexistingcoverageto complywiththeserequirementsandthatcoverage doesnot meet thespecifiedrequirements, the Grantee, StepUp, and Owner agreesto amend, supplement, or endorse theexisting coverageto do so. The type( s) of insurance required is E- 16
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determinedby the scopeof the contract servicesand the requirementssetforth in the Standard Agreement.
b) Without in anyway affecting the indemnity hereinprovided andin addition thereto, the Grantee, StepUp, and Owner shall secure andmaintain throughout the contract term the following types of insurancewith limits asshown:
1) Workers' Compensation/Employers Liability.
A) Workers' Compensation A program of Workers'
Compensationinsuranceor a state -approved, self-insuranceprogram in an amountand form to meetall applicablerequirementsof theLaborCodeoftheStateof California, including Employer's Liability with $ 1,000,000limits coveringall personsincludingvolunteersproviding serviceson behalfof theGranteeandall risks to suchpersonsunderthis Agreement. A Waiver of Subrogation or Right to Recoverendorsementin favor of the Stateof California, the Departmentof Housing and Community Development and the City will be attachedto the certificate — per the Standard Agreement and the NOFA.
B) If Grantee, StepUp, or Owner haveno employees, eachmay certify or warrant to the City, that it doesnot currently have anyemployees orindividuals who are defined as " employees" under the Labor Code and the requirement for Workers' Compensation coveragewill be waived by the City' s Director of Risk Management.
C) With respectto borrowers thatare non-profit corporations organized under California or federal law, volunteers for such entities are required to be covered by Workers' Compensationinsurance.
2) Commercial General Liability. General Liability Insurance covering all operationsperformedby or on behalf of Grantee, StepUp, and Ownerproviding coveragefor bodily injury andpropertydamagewith acombinedsinglelimit of notlessthanOne Million Dollars ($ 1,000,000), per occurrenceand Two Million Dollars ($ 2, 000, 000) aggregate for bodily injury andproperty damageliability. Thepolicy coveragemust include:
A) Premises operations and mobile equipment.
B) Products and completed operations.
C) Broad form property damage ( including completed
operations).
D) Explosion, collapse, and underground hazards.
E) Personalinjury.
F) Contractualliability.
G) Name the Stateof California, the Departmentof Housing andCommunity Developmentandthe City, aswell asthe respectiveappointees, officers, agents, E- 17
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andemployeesof each, asadditionalinsured, butonly with respectto work performedunderthe contract — perthe StandardAgreementandtheNOFA.
3) Commercial Automobile Liability.
A) Primary insurance coverage must be written on ISO
Business Auto coverageform for all owned, hired and non - ownedautomobiles or symbol I (any auto). The policy will alsonamethe Stateof California, the Departmentof Housingand CommunityDevelopment, andtheCity, aswellastherespectiveappointees, officers, agents, and employeesof each, asadditionalinsureds, but only with respectto work performedunderthe contract — per the StandardAgreementandtheNOFA.
B) Thepolicymusthaveacombined singlelimit of notlessthan One Million Dollars ($ 1,000, 000) for bodilyinjury andpropertydamage, peroccurrence.
C) If the Grantee, StepUp or Owneris transportingoneor more non -employeepassengersinperformanceof contractservices, theautomobileliabilitypolicymust have a combined single limit of Two Million Dollars ($ 2,000, 000) for bodily injury andproperty damageper occurrence.
D) If the Grantee, Step Up, or Owner own no autos, a non - ownedautoendorsementto the GeneralLiability policy describedaboveis acceptable. 4) Builder' s Risk/ Installation Floater
A) Builders Risk/ Installation Floater insurance to cover the labor, materials, and equipmentto be usedfor completion of the work performed under this contractagainstall risks of direct physicalloss, excluding earthquakeand flood, for an amountnot lessthat thefull amountof theproperty and/or materials beinginstalledand/orconstructed onorwithin thefacility. c) Insurance Review — Insurance requirements are subject to periodic review bytheCity. TheCity'sDirectorofRiskManagementordesigneeisauthorized, but notrequired, to reduce, waiveor suspendany insurancerequirementswheneverRiskManagementdetermines thatanyof therequiredinsuranceis notavailable, is unreasonablypriced, or is notneededto protecttheinterestsof theCity. Inaddition, if theDepartmentof RiskManagementdetermines thatheretofore unreasonablypricedorunavailabletypesof insurancecoverageorcoveragelimits becomereasonablypricedor available, theDirectorofRiskManagementordesigneeisauthorized, but not required, to change the above insurance requirements to require additional types of insurancecoverageorhighercoveragelimits, providedthatanysuchchange isreasonablein light ofpastclaimsagainsttheCity, inflation, oranyotheritemreasonablyrelatedtotheCity'srisk.
Section 4. 13 Anti -Lobbying Certification.
a) Grantee, StepUp, andOwner, certify, tothebestof Grantee'sStepUp'sand Owner' s respective knowledge or belief', that:
1) No federalappropriatedfundshavebeenpaidor will bepaid, by or onbehalfof it, toanypersonforinfluencingorattemptingtoinfluenceanofficeroremployeeof any agency, amemberof Congress, anofficeror employeeof Congress, or anemployeeof a E- 18
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memberof Congressin connectionwith theawardingof anyfederalcontract, themakingof any federalgrant, themakingof anyfederalloan, theenteringintoof anycooperativeagreement, and the extension, continuation, renewal, amendment, or modification of anyfederalcontract, grant, loan, or cooperative agreement;
2) If anyfunds otherthanfederal appropriatedfundshavebeenpaid or will bepaid to anypersonfor influencingor attemptingto influenceanofficer or employeeof any agency, a member of Congress, an officer or employee of Congress, or an employee of a memberof Congressin connectionwith the awardingof any federalcontract, grant, loan, or cooperative agreement, it will complete and submit Standard Form- LLL, Disclosure Form to Report Lobbying, in accordancewith its instructions.
b) This certification is a material representation of fact upon which reliance wasplaced when this Agreementwas made or enteredinto. Submission of this certification is a prerequisitefor making or enteringinto this Agreementimposedby Section1352, Title 31, U. S.
Code. Any personwhofails to file therequiredcertificationshallbesubject toacivil penaltyof not less than Ten Thousand Dollars ($ 10, 000) and no more than One Hundred Thousand Dollars 100, 000) for such failure.
Section 4. 14 CovenantsRegardingApproved Financing.
a) GranteeandOwnershallpromptlypaytheprincipalandinterestwhendue on any Approved Financing.
b) GranteeandOwnershallpromptly notify theCity in writing of the existence of anydefaultunderany documentsevidencingApproved Financing. c)
Section 4. 15 Affordability andProjectMonitoring.
a) Throughout the Term, the Grantee and Owner shall comply with all applicablerecordkeepingandmonitoring requirementssetforth in theHomekey Regulationsand shall annuallycompleteandsubmitto City a Certification of ContinuingProgramCompliance. b) Representativesof the City ( and HCD or its authorized representatives) shallbeentitledto entertheProperty uponat leastforty-eight (48) hours' noticeatreasonabletimes to monitor compliance with this Agreement to inspect the records of the Development with respect to theCity -AssistedUnits, andto conductan independentauditof suchrecords. The Granteeand Owneragreeto cooperatewith theCity in makingthePropertyavailablefor suchinspection. If for anyreasonthe City is unableto obtainthe Grantee's or Owner'sconsentto suchaninspection, the GranteeandOwnerunderstandandagreethat the City mayobtain, at theGranteeor Owner's expense, an administrative inspection warrant or other appropriate legal order to obtain access to and searchthe Property.
c) The Grantee and Owner agree to maintain records in a business - like manner andto makesuchrecordsavailableto the City uponforty-eight (48) hours' notice at reasonable E- 19
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times. UnlesstheCity otherwiseapproves, suchrecordsshallbemaintainedfor themostrecent five yearsuntil fiveyearsaftertheexpirationof theHomekeyTerm. d) Throughoutthe Term, the Granteeand Owner grant the City inspection rights as set forth in Section 3.4 above, and Grantee and Owner shall make best efforts to allow theCity to complywith all applicablephysicalmonitoringrequirements.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES OF BORROWER
Section 5. 1 Representations and Warranties of Grantee.
Granteeherebyrepresents andwarrantsto the City as follows and acknowledges, understands, and agreesthat the representationsand warranties set forth in this Article 5 are deemedto be continuing during the Term. The Granteeshall immediately advisethe City in writingif thereisanymaterialchangerelatingto anymatterssetforthorreferencedintheitems set forth below:
a) Organization. Granteeis duly organized, validly existing and in good standingunderthelawsof theStateof Californiaandhasthepowerandauthorityto ownits propertyandcarryonitsbusinessasnowbeingconducted. Copiesofthedocumentsevidencing theorganizationof the Granteedeliveredto theCity aretrue andcorrectcopiesof the originals. b) Authorityof Grantee. Granteehasfull powerandauthoritytoexecuteand deliver this Agreement andto make and accept theborrowings contemplatedhereunder, toexecute anddeliver the Grant Documentsandall otherdocuments orinstrumentsexecutedanddelivered, orto beexecutedanddelivered, pursuanttothisAgreement, andtoperformandobservetheterms andprovisionsof all of the above.
c) AuthorityofPersonsExecutingDocuments. ThisAgreementand theGrant Documents and all other documents orinstruments executedand delivered, or to be executedand delivered, pursuant tothisAgreementhavebeenexecutedanddeliveredbypersonswhoareduly authorizedto executeanddeliver the samefor andon behalf of Grantee, and all actionsrequired under Grantee's organizational documentsand applicable governing law for the authorization, execution, deliveryandperformanceof thisAgreementandtheGrantDocumentsandall other documentsor instrumentsexecutedanddelivered, or to beexecutedanddelivered, pursuantto this Agreement, havebeenduly taken.
d) ValidBindingAgreements. This AgreementandtheGrant Documentsand all other documentsor instrumentswhich have beenexecutedand deliveredpursuantto or in connectionwith this Agreementconstituteor, if not yet executedor delivered, will when so executedand deliveredconstitute, legal, valid and binding obligationsof Granteeenforceable against it in accordance with their respective terms.
e) No Breachof Law orAgreement. Neither theexecutionnor delivery of this Agreementandthe GrantDocumentsor of any other documents orinstrumentsexecutedand delivered, orto beexecutedordelivered, pursuantto thisAgreement, northeperformanceof any E-20
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provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breachof any statute, rule or regulation, or anyjudgment, decreeor orderof any court, board, commissionor agencywhatsoeverbinding on Grantee, or any provision of the organizational documentsof Grantee, or will conflict with or constitutea breachof or a default under any agreementto whichGranteeis aparty, or will resultin thecreationor impositionof anylien upon any assetsor property of Grantee, otherthan liensestablishedpursuanthereto. f) Compliance with Laws; Consents and Approvals. The conversion of the Developmentwill comply with all applicablelaws, ordinances, rules andregulationsof federal, stateandlocal governmentsand agenciesandwith all applicabledirections, rules andregulations of thefire marshal, healthofficer, building inspectorandotherofficers of anysuchgovernmentor agency.
g) PendingProceedings. Granteeis not in default underany law or regulation or under anyorderof anycourt, board, commissionor agencywhatsoever, andthereareno claims, actions, suits or proceedings pending or, to the knowledge of Grantee, threatened against or affecting Grantee or the Development, at law or in equity, before or by any court, board, commissionor agencywhatsoeverwhich might, if determinedadversely toGrantee, materially affect Grantee's ability to repay the Grant or impair the security to be given to the City pursuant hereto.
h) Title to Land. At the time of recordation of the Use Restriction, Grantee will havegood and marketablefee title to the Developmentand therewill exist thereonor with respecttheretono mortgage, lien, pledgeor otherencumbranceof anycharacterwhatsoeverother than liensfor currentrealpropertytaxes andliensancillaryto theApprovedFinancingandliens in favor of the City or approvedin writing by the City. i) Financial Statements. The financial statements of Grantee and other financialdataandinformationfurnishedby Granteeto theCity fairly andaccurately presentthe informationcontainedtherein. As of thedateof this Agreement, therehasnotbeenanymaterial adversechangein thefinancial conditionof Granteefromthatshownby suchfinancialstatements and other data and information.
j) Sufficient Funds. Granteeholds or reasonablyexpectsto receivefirm financial commitmentsfor sufficient funds to completethe acquisitionof the Propertyand the conversion of the Development in accordance with the Standard Agreement. k) Taxes. Grantee and its subsidiaries have filed all federal and other material tax returnsandreportsrequiredto be filed, andhavepaid all federalandothermaterialtaxes, assessments, feesand other governmental chargeslevied or imposedupon them or their income or thePropertyotherwisedue andpayable, exceptthosewhich arebeingcontestedin goodfaith by appropriateproceedingsandfor which adequatereserves havebeenprovided in accordancewith generallyacceptedaccountingprinciples. Thereis no proposedtax assessmentagainst Granteeor anyof its subsidiaries that could, if made, bereasonablyexpectedto haveamaterialadverseeffect upon the Property, liabilities ( actual or contingent), operations, condition ( financialor otherwise) or prospectsof Granteeandits subsidiaries, takenasa whole, which would be expectedto result in amaterial impairmentof theability of Granteeto performunderanyGrantDocumentto which E- 21
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it isaparty, oramaterialadverseeffectupon thelegality, validity, bindingeffectorenforceability against Granteeof any Grant Document.
Section 5.2 Representations and Warranties of Owner.
Ownerherebyrepresentsand warrantsto the City as follows and acknowledges, understands, and agrees that the representations and warranties set forth in this Article 5 are deemedtobecontinuing duringtheTerm. TheOwnershallimmediatelyadvisetheCityinwriting if thereisanymaterialchangerelatingtoanymatterssetforthorreferencedintheitemssetforth below:
a) Organization. Owner is duly organized, validly existing and in good standingunderthelawsof theStateof Delawareandhasthepowerandauthorityto ownits propertyandcarryonitsbusinessasnowbeingconducted. Copiesof thedocumentsevidencing theorganizationof theOwnerdeliveredto theCity aretrueandcorrectcopiesof theoriginals. b) Authority of Owner. Ownerhasfull powerandauthorityto executeand deliver this Agreement andto make andacceptthe borrowings contemplatedhereunder, to execute anddeliver the Grant Documentsand all other documentsor instrumentsexecutedand delivered, or tobeexecutedanddelivered, pursuanttothisAgreement, andto performandobserve theterms andprovisionsof all of the above.
c) Authorityof PersonsExecutingDocuments. ThisAgreementandtheGrant Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuanttothisAgreementhavebeenexecutedanddeliveredbypersonswhoareduly authorized to execute and deliver the samefor and on behalf of Owner, and all actions required underOwner's organizationaldocumentsand applicablegoverning law for the authorization, execution, deliveryandperformanceof thisAgreementandtheGrant Documentsandall other documentsor instrumentsexecutedanddelivered, or to beexecutedanddelivered, pursuant tothis Agreement, havebeenduly taken.
d) ValidBindingAgreements. ThisAgreementandtheGrantDocumentsand all other documentsor instruments which have been executedand delivered pursuantto or in connectionwith this Agreementconstituteor, if not yet executedor delivered, will when so executedand delivered constitute, legal, valid and binding obligations of Owner enforceable against it in accordance with their respective terms.
e) No Breachof Law or Agreement. Neither the executionnor delivery of this Agreementandthe Grant Documentsor of any otherdocumentsor instrumentsexecutedand delivered, orto beexecutedor delivered, pursuantto thisAgreement, northeperformanceof any provision, condition, covenantor othertermhereofor thereof, will conflictwithor resultin a breachof any statute, rule orregulation, or anyjudgment, decreeor orderof anycourt, board, commissionor agencywhatsoeverbindingon Owner, or anyprovisionof theorganizational documents of Owner, or will conflict with or constitute a breach of or a default under any agreementto whichOwneris aparty, orwill resultin thecreationor impositionof anylienupon anyassetsorpropertyofOwner, otherthanliensestablishedpursuanthereto.
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0 Compliance with Laws; Consents and Approvals. The conversion of the Development will comply with all applicable laws, ordinances, rules and regulations of federal, stateand local governmentsand agenciesand with all applicable directions, rules and regulations of the fire marshal, healthofficer, building inspectorandotherofficers of anysuchgovernmentor agency.
g) Pending Proceedings. Owner is not in default underany law or regulation or underanyorderof anycourt, board, commissionor agencywhatsoever, andthereareno claims, actions, suits or proceedings pending or, to the knowledge of Owner, threatened against or affectingOwnerortheDevelopment, atlaw or in equity, beforeorby anycourt, board, commission or agencywhatsoeverwhich might, if determinedadverselyto Owner, materially affect Owner's ability to repaythe Grant or impair the security to begiven to the City pursuanthereto. h) Title to Land. At the time of recordation of the Use Restriction, Owner will have goodandmarketablefee title to the Developmentandtherewill exist thereonor with respect thereto no mortgage, lien, pledge or other encumbranceof any characterwhatsoeverother than liens for current real property taxes and liens ancillary to the Approved Financingand liens in favor of the City or approvedin writing by the City.
i) Financial Statements. The financial statements of Owner and other financial dataandinformation furnishedby Ownerto the City fairly andaccuratelypresentthe information containedtherein. As of the dateof this Agreement, therehasnot beenany material adversechangein thefinancialconditionof Ownerfrom that shownby suchfinancialstatements and other data and information.
j) Sufficient Funds. Owner holds or reasonably expectsto receive firm financial commitmentsfor sufficient funds to completethe acquisitionof the Propertyandthe conversion of the Development in accordance with the Standard Agreement. k) Taxes. Owner and its subsidiaries have filed all federal and other material tax returns and reportsrequired to be filed, and havepaid all federal and other material taxes, assessments, feesandother governmentalchargeslevied or imposeduponthem or their incomeor the Propertyotherwisedueandpayable, exceptthosewhich arebeingcontestedin goodfaith by appropriateproceedingsandfor which adequatereserveshavebeenprovidedin accordancewith generallyacceptedaccountingprinciples. Thereis no proposedtax assessmentagainstOwneror anyof its subsidiariesthat could, if made, bereasonablyexpectedto haveamaterialadverseeffect upon the Property, liabilities ( actual or contingent), operations, condition (financial or otherwise) or prospectsof Owner and its subsidiaries, takenas a whole, which would be expectedto result in a materialimpairmentof the ability of Owner to performunderany GrantDocumentto which it is aparty, oramaterialadverseeffectuponthelegality, validity, bindingeffector enforceability againstOwnerof any GrantDocument.
Section5. 3RepresentationsandWarrantiesof StepUp.
Step Up hereby representsand warrants to the City as follows and acknowledges, understands, and agrees that the representations and warranties set forth in this Article 5 are deemedto becontinuing duringtheTerm. StepUp shallimmediatelyadvisetheCity in writing if E- 23
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thereis anymaterialchangerelatingto anymatterssetforthorreferencedin theitemssetforth below:
a) Organization. StepUp is duly organized, validly existingandin good standingunderthelawsof theStateof Californiaandhasthepowerandauthorityto ownits propertyandcarryonitsbusinessasnowbeingconducted. Copiesof the documentsevidencing theorganizationof StepUp deliveredto theCity aretrueandcorrectcopiesof theoriginals. b) Authorityof StepUp. StepUphasfull powerandauthorityto execute and deliver this Agreement andto make andacceptthe borrowings contemplatedhereunder, to execute anddeliver the Grant Documentsand all other documentsor instrumentsexecutedanddelivered, orto beexecutedanddelivered, pursuanttothis Agreement, andtoperformandobservetheterms andprovisionsof all of theabove.
c) AuthorityofPersonsExecutingDocuments. This AgreementandtheGrant Documents and all other documents or instruments executedand delivered, or to be executedand delivered, pursuant tothisAgreementhavebeenexecutedanddeliveredbypersonswhoareduly authorizedto executeand deliverthe samefor andon behalfof StepUp, andall actionsrequired underStepUp's organizationaldocumentsandapplicablegoverninglaw for the authorization, execution, deliveryandperformanceof thisAgreementand theGrantDocumentsandall other documents orinstruments executedanddelivered, or to be executed anddelivered, pursuantto this Agreement, have beenduly taken.
d) Valid BindingAgreements. ThisAgreementandthe Grant Documentsand all other documentsor instruments which have beenexecutedand deliveredpursuantto or in connectionwith this Agreementconstituteor, if not yet executedor delivered, will whenso executedand deliveredconstitute, legal, valid and binding obligationsof StepUp enforceable against it in accordance with their respective terms.
e) No Breachof Law orAgreement. Neither theexecutionnor delivery of this Agreementandthe GrantDocumentsor of any otherdocumentsor instrumentsexecutedand delivered, orto beexecutedor delivered, pursuantto thisAgreement, northeperformanceof any provision, condition, covenantorother termhereofor thereof, will conflictwithorresultin a breachof any statute, ruleor regulation, or anyjudgment, decreeor orderof anycourt, board, commissionor agencywhatsoeverbindingon StepUp, or anyprovisionof theorganizational documentsof StepUp, or will conflict with or constitutea breachof or a defaultunderany agreementtowhichStepUp isaparty, orwill resultin thecreationor impositionof anylienupon anyassetsorpropertyof StepUp, otherthanliensestablishedpursuanthereto. f) Compliance with Laws; Consents and Approvals. The conversion of the Developmentwill complywithall applicablelaws, ordinances, rulesandregulationsof federal, stateandlocal governmentsand agenciesandwith all applicabledirections, rulesandregulations of thefire marshal, healthofficer, buildinginspectorandotherofficersof anysuchgovernmentor agency.
g) Pending Proceedings. Except as disclosedto the City in the estoppel certificate providebyStepUptotheCity, StepUpisnotin default underanylaworregulationor E- 24
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under any order of any court, board, commissionor agencywhatsoever, andthereareno claims, actions, suits or proceedingspending or, to the knowledge of Step Up, threatenedagainst or affecting Step Up or the Development, at law or in equity, before or by any court, board, commissionor agencywhatsoeverwhich might, if determinedadverselyto StepUp, materially affect StepUp's ability to performtheobligationsto theCity pursuanthereto.
ARTICLE 6.
DEFAULT AND REMEDIES
Section 6. 1 Events of Default.
a) Subject to Section 7.15, each of the following constitutes an "Event of Default" by Granteeunderthis Agreement:
1) Failure under Standard Agreement. Failure of Grantee or Owner to obtain permits, commence, andprosecuteto completion, conversionof the Developmentwithin the times set forth andin compliancewith the requirementsof the StandardAgreement. Any failure underthis sectionwill not beconsideredanEvent of Default if it is not formally identified assuchby HCD, andin anyevent, maybecuredby Granteeor Ownerwithin 120days. 2) Failure to Comply with the ManagementPlan. Failure to comply with the ManagementPlan approvedby the City and suchfailure having continueduncuredfor thirty ( 30) daysafter receipt of written notice thereoffrom the City to the Grantee, StepUp and Owner, which notice provides reasonabledetail of the default and the required cure for such default.
3) Failure to Comply with the Participant Selection Plan. Failure to comply with the Participant Selection Plan approved by the City and such failure having continueduncuredfor thirty ( 30) daysafter receiptof written noticethereof fromthe City to the Grantee, StepUp, and Owner, which notice providesreasonabledetail of the default and the required cure for such default.
4) Breach of Covenants. Failure by Grantee, StepUp, or Owner to duly perform, comply with, or observeany of the conditions, terms, or covenantsof any of the GrantDocuments, andGrantee, StepUp, or Ownerfail to curesuchdefaultwithin forty-five (45) days after receipt of written notice thereof from the City to Grantee Step Up, and Owner, if Grantee, StepUp, or Owner are incapableof curing a default within suchforty-five ( 45) day period, the City will givethe Grantee, StepUp, or Owneronehundredtwenty (120) daysto cure such default provided Grantee, StepUp, or Owner havecommenced tocurewithin suchforty- five (45) day period and is diligently proceedingto cure suchdefault through the end of such period; provided, however, that if a different period or noticerequirementis specified underany other section of this Article 6, the specific provisions shall control. 5) Insolvency. A court having jurisdiction makesor entersany decree or order: ( 1) adjudging Granteeor Owner to bebankrupt or insolvent; (2) approving asproperly filed a petition seeking reorganizationof Granteeor Owner, or seeking any arrangementfor Granteeor Ownerunderthe bankruptcy lawor any otherapplicabledebtor's relief law or statute of theUnited Statesor anystateor otherjurisdiction; (3) appointingareceiver, trustee, liquidator, E- 25
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or assigneeof Granteeor Ownerin bankruptcyor insolvencyor for anyof their properties; (4) directingthewindinguporliquidationof GranteeorOwnerif anysuchdecreeororder described in clauses ( 1) to ( 4), inclusive, is unstayedor undischargedfor a period of ninety (90) calendar days; or (5) Granteeor Owneradmitin writing its inabilityto payits debtsastheyfall dueorwill havevoluntarilysubmittedtoorfiledapetitionseeking anydecreeororderofthenaturedescribed in clauses ( 1) to ( 4), inclusive.
6) Assignment; Attachment. Grantee or Owner assigns their assets for the benefit of its creditors or suffers a sequestration or attachment of or execution on any substantialpartof itsproperty, unlessthepropertysoassigned, sequestered, attachedor executed uponis returnedor releasedwithin ninety (90) calendardaysafter sucheventor, if sooner, prior to salepursuantto suchsequestration, attachment, or execution. 7) Suspension; Termination. Grantee, or Owner or its generalpartner, shall have: ( 1) theoperationof their businessvoluntarily or involuntarily suspendedby the State of California, (2) voluntarily stoppedorterminatedtheoperationof their business; (3) theGrantee or Ownershallhavethe operationof the partnershipvoluntarily or involuntarilydissolved, suspendedor terminatedby the Stateof California or Delaware. 8)
pursuantto Section4.12.
9) Failureto Timely Occupancy. Failure of Granteeor Ownerto make the City -AssistedUnits availablefor occupancywithin the time specifiedin the Standard Agreement. Any failureunderthissectionwill notbeconsideredanEventof Defaultif it is not formallyidentifiedassuchbyHCD, andin anyevent, maybecuredby GranteeorOwnerwithin 120 days.
Unauthorized Transfer. Any Transfer other than as permitted Section 6.2 Remedies.
a) Upon the occurrenceof an Event of Default and following the expiration of all applicablenoticeand cureperiodswill, eitheratthe option of the City or automaticallywhere so specified, givesthe City the right to proceedwith any and all remediesset forth in this Agreement andthe Grant Documents, including but not limited to the following:
A) Revocationof Grant. The City may demandthat anyportion of theGrantnotforgivenpursuant to Section2.3above, togetherwith anyaccruedinterest thereon, to becomeimmediatelydueandpayable.
B) Specific Performance. The City has the right to mandamus or othersuit, actionorproceedingat law or in equityto requireGrantee, StepUp, andOwnerto performtheir obligationsandcovenantsunderthe GrantDocumentsor to enjoinactson things that maybeunlawfulor in violationof theprovisionsof theGrantDocuments.
C) Termination. The City has the right to terminate this Agreementand, atits soleoption, to seekany remediesat law or equity availablehereunder.
Section 6.3 Right of Contest.
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GranteeandOwnermay contest in goodfaith any claim, demand, levy, or assessmentthe assertion of which would constitute an Event of Default hereunder. Any suchcontest is to be prosecuteddiligently and, asto a defaultrelatedto a third party or third partyevent, in a manner unprejudicial to the City or the rights of the City hereunder.
Section 6. 4 Remedies Cumulative.
No right, power, or remedy given to the City by the termsof this Agreementor the Grant Documents is intendedto be exclusive of any other right, power, or remedy; andeachand every suchright, power, or remedywill be cumulativeand in addition to every otherright, power, or remedygiven totheCity by thetermsof anysuchinstrument, orby anystatuteor otherwiseagainst Grantee, StepUp or Ownerandany otherperson. Neitherthefailure nor any delayonthepart of the City to exerciseany suchrights andremedieswill operateas awaiver thereof, nor doesany single or partial exerciseby the City of any suchright or remedy precludeany other or further exerciseof suchright or remedy, orany otherright or remedy.
ARTICLE 7.
GENERAL PROVISIONS
Section 7. 1 Relationship of Parties.
Nothing containedin this Agreementis to be interpretedor understoodby any of the Parties, or by anythird persons, ascreatingtherelationshipof employerandemployee, principal andagent, limited or generalpartnership, orjoint venture betweenthe City andGrantee, StepUp or Owner or their agents, employees or contractors, and Grantee, Step Up and Owner will at all times be deemedan independentcontractor andto be wholly responsiblefor the manner in which it or its agents, or both, performthe servicesrequiredof it by thetermsof thisAgreement. Grantee, StepUp, and Owner haveandretain the right to exercisefull control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regard to the rehabilitation and operation of the Development, Grantee and Owner aresolely responsiblefor all matters relating to payment of its employees, including compliance with Social Security, withholding, andall otherlaws andregulationsgoverningsuchmatters, and must include requirements in each contract that contractorsare solely responsiblefor similar mattersrelatingto their employees. Grantee, StepUp andOwner aresolelyresponsiblefor their own acts and those of their agents and employees.
Section 7. 2 No Claims.
Nothing containedin this Agreementcreatesor justifies any claim against theCity by any personthatGrantee, StepUp or Ownermayhaveemployedor with whom Grantee, StepUp, or Owner may havecontractedrelative to the purchaseof materials, suppliesor equipment, or the furnishingor theperformanceof anywork or serviceswith respectto thetenancyof theProperty, therehabilitationor operationof the Development, andGrantee, StepUp andOwnershall include similar requirements in any contracts entered into for the rehabilitation or operation of the Development.
Section 7. 3 Indemnification.
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The Grantee, StepUp and Owner, each agreesto indemnify, defend (with counsel reasonablyapprovedby City) andholdharmlesstheCity andits authorizedofficers, employees, agents and volunteers (" Indemnities") from anyandall claims, actions, losses, damages, and/or liability arisingout of this contractfrom any causewhatsoever, includingthe acts, errorsor omissionsofany personandfor anycostsorexpensesincurredbytheCity onaccountof anyclaim exceptwheresuchindemnificationisprohibitedby law. Thisindemnificationprovisionshall apply regardlessof the existenceor degreeof fault of Indemnities, exceptasprovided in the following sentence. The indemnification obligations apply to the City' s " active" as well as " passive" negligencebut doesnot applyto theCity's "grossnegligence" or "willful misconduct" within the meaning of Civil Code Section 2782. Theprovisionsof this Sectionshallnot be limited by the existence of insurance and will survive the expiration of the Term.
Section 7. 4 Non -Liability of City Officials, EmployeesandAgents.
No boardmember, official, employeeor agentof the City is personallyliable to Grantee, StepUp, or Ownerin theeventof anydefaultor breachby theCity or for anyamountthat may become due to Grantee, Step Up, or Owner or their successoror on any obligation under the terms of this Agreement.
Section 7. 5 No Third Party Beneficiaries.
There areno third party beneficiaries tothis Agreement.
Section 7. 6 Conflict of Interest.
a) Except for approvedeligible administrative or personnelcosts, no person describedin Section7. 6(b) below who exercisesor hasexercisedany functions or responsibilities with respecttotheactivitiesfundedpursuantto thisAgreementorwhois in apositiontoparticipate in adecision -makingprocessorgaininsideinformationwith regard tosuchactivities, mayobtain a financial interest or financial benefit from the activity, or have an interest in any contract, subcontractor agreementwith respectthereto, or theproceedsthereunder, eitherfor themselvesor thosewith whomtheyhavefamilyor businessties, during, or at anytimeafter, suchperson's tenure. Grantee, StepUp, andOwnershallexerciseduediligenceto ensurethattheprohibitionin this Section is followed.
b) The conflict of interest provisions of Section 7. 6(a) above apply to any personwhoisanemployee, agent, consultant, officeroftheCity, or anyimmediatefamilymember of suchperson, or anyelectedor appointedofficial of theCity, or anypersonrelatedwithinthe third (3rd) degreeof suchperson.
c) In accordance with California Government Code Section 1090 and the Political Reform Act, California Government Code Section 87100 et seq., no person who is a director, officer, partner, trusteeor employeeor consultantof Grantee, or immediatefamily memberof anyofthepreceding, maymakeorparticipatein a decision, madeby theCity oraCity board, commission orcommittee, if it is reasonably foreseeablethat the decisionwill havea materialeffecton any sourceof income, investmentor interestin realpropertyof thatpersonor Grantee. Interpretationof this Sectionis governedby thedefinitionsandprovisionsusedin the E- 28
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Political Reform Act, California Government Code Section 87100 et seq., its implementing regulations manual and codes, and California Government Code Section 1090.
Section 7. 7 Notices, Demands and Communications.
All noticesrequiredor permitted by any provision of this Agreementmust be in writing andsentby registeredor certified mail, postageprepaid, returnreceiptrequested, or deliveredby expressdelivery service, returnreceiptrequested, or deliveredpersonally, to theprincipal office of the Parties as follows:
City:
City of Redlands
35 Cajon Street, Suite 200
Redlands, CA 92373
Attn: Mayor Paul T. Barich
with a copy to:
City of Redlands
35 Cajon Street, Suite 200
Redlands, CA 92373
Attn: City Attorney
Grantee:
Owner:
Shangri- La Industries, LLC
c/ o Shangri- La Industries
660 S Figueroa St, Suite 1888
Los Angeles, CA 90017- 3433
Attn: Andy Meyers/Cody Holmes
1675 Industrial Park, LP
c/ o Shangri- La Industries
660 S Figueroa St, Suite 1888
Los Angeles, CA 90017- 3433
Attn: Andy Meyers/Cody Holmes
with a copy to:
Cornelius & Cohanghadosh, APC
23801 Calabasas Rd., Suite 100
Calabasas, CA 91302
Attn: Alex Cornelius
StepUp:
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StepUp on SecondStreet, Inc.
1328 Second Street
Santa Monica, CA 90401- 1122
Attn: Tod Lipka, President and Chief Executive Officer
Suchwritten notices, demandsandcommunicationsmay besentin the samemanner tosuchother addressesastheaffectedparty mayfrom timeto time designateby mail asprovidedin this Section.
Receipt will be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusalof delivery (or attempteddelivery if undeliverable).
Section 7. 8 Amendments.
No alterationor variation of thetermsof this Agreementis valid unlessmadein writing by the Parties. The City ExecutiveOfficer is authorizedto executeon behalf of theCity amendments to the Grant Documents or amended and restated Grant Documents.
Section 7. 9 City Approval.
The City hasauthorizedthe City ExecutiveOfficer or designeeto execute theancillary Grant documentsanddeliver suchapprovalsor consentsasarerequired bythis Agreement, andto executeestoppelcertificatesconcerningthe statusof the Grantandthe existenceof defaults under the Grant Documents, including subordinationagreementssubstantially consistentwith the terms of Section 2. 7 above.
Section 7. 10 Applicable Law and Venue.
This Agreementis governed bythe laws of the Stateof California.
Section 7. 11 Parties Bound.
Except as otherwise limited herein, this Agreement binds and inures to the benefit of the partiesandtheir heirs, executors, administrators, legal representatives, successors, and assigns.
This Agreement is intended to run with the land and to bind Grantee and its successors and assigns in thePropertyandtheDevelopmentfor the entireTerm, andthebenefit hereofis to inureto the benefit of the City andits successorsandassigns.
Section 7. 12 Attorneys' Fees.
If any lawsuit is commencedto enforceany of the termsof this Agreement, theprevailing party will havethe right to recoverits reasonableattorneys' fees andcostsof suit from the other party.
Section 7. 13 Severability.
If anyterm of this Agreementis held by a court of competentjurisdiction to be invalid, void or unenforceable, the remainderof the provisions will continue in full force andeffect unless E- 30
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the rights and obligations of the Parties have been materially altered or abridged by such invalidation, voiding or unenforceability.
Section 7. 14 Force Majeure.
In addition to specificprovisions of this Agreement, performanceby anyparty hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of god; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; governmental restrictions or priority; litigation ( including suits filed by third parties concerning or arising out of this Agreement); weather or soils conditions which, in the opinion of the Grantee' s or Owner' s contractor, will necessitatedelays; inability to securenecessarylabor, materialsor tools; actsof the otherparty; actsor failureto actof anypublic or governmentalCity or entity (otherthantheactsor failureto act of the City); or anyothercauses (otherthanthe Grantee's inability to obtainfinancing for the Improvements) beyond the control or without the fault of the party claiming anextensionof time to perform. An extensionof time for any causewill be deemedgrantedif noticeby the party claimingsuchextensionis sentto the otherwithin ten (10) businessdaysfrom the datetheparty seeking theextensionfirst discoveredthecauseand suchextensionoftimeisnotrejectedin writing by the otherparty within ten (10) businessdaysof receiptof the notice. Times of performance underthis Agreementmay alsobe extendedin writing by the City and the Grantee. In no event shall the cumulative delaysduring the Term of this Agreementexceedthree hundredand sixty 360) days, unlessotherwiseagreedto by thePartiesin writing. As allowed underSection7.20 of this Agreement, the City Executive Officer at the City Executive Officer's reasonablediscretion may extend thecumulativedelaylimit without needfor additionalBoardof Supervisorapproval.
Section 7. 15 Waivers.
Any waiverbytheCity of anyobligationorconditionin this Agreementmustbein writing.
No waiver will be implied from any delayor failure by the City to take actionon anybreachor defaultof Granteeor to pursueanyremedyallowedunderthis Agreementor applicablelaw. Any extensionof time grantedto Granteeto performany obligationunderthis Agreementdoesnot operateas awaiver or releasefrom any of its obligations under this Agreement. Consentby the City to any act or omission by Granteemay not be construedto be consentto any other or subsequentact or omission or to waive the requirement for the City' s written consent to future waivers.
Section 7. 16 Title of Parts and Sections.
Any titles of the sectionsor subsectionsof thisAgreementareinsertedfor convenienceof referenceonly andareto bedisregardedin interpretinganypartof theAgreement'sprovisions.
Grant.
Section 7. 17 Entire Understandingof the Parties.
The Grant Documents constitute the entire agreement of the Parties with respect to the Section 7. 18 Multiple Originals; Counterpart.
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ThisAgreement maybeexecutedin multipleoriginals, eachof whichis deemedto bean original, andmay be signed in counterparts.
Section 7. 19 Action by the City. Except as may be otherwise specifically providedin this Agreementor anyotherof theGrant Documents, wheneveranyapproval, notice, direction, finding, consent, request, waiver, or other actionby the City is requiredor permittedunder thisAgreementor anyotherof the Grant Documents, suchactionshallbe given, made, taken, refused, denied or withheld by the City Executive Officer, at the City ExecutiveOfficer's reasonablediscretion (unlesssomeother standardis expresslystated), or by any personwho shall havebeendesignatedin writing to the Borrowersby the City ExecutiveOfficer, without further approvalby the City Council. Any suchaction shall be in writing.
Date.
WHEREAS, this Agreementhasbeen enteredinto by the undersignedasof theEffective Signatures On Next Page]
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GRANTEE:
Shangri-La Industries, LLC, aDelawarelimited liability company By:
Name: Andrew Meyers Abdul-Wahab
Its: Authorized Signatory
Date: July 18, 2022
OWNER:
1675IndustrialPark, LP, a Delawarelimited partnership
By:
Name: Andrew Meyers Abdul-Wahab
Its: Authorized Signatory
Date: July 18, 2022
STEP UP:
STEP UP ON SECOND STREET, INC., a California nonprofit
public benefit corporation
Date:
By:
Name:
Its:
Tod Lipka
CEO
July 18, 2022
Signature Page Continues]
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CITY:
CITY OF
Californa
By:
Name:
Title:
Date:
Paul T. Barich
Mayor
7/ 20/ 22
ATTEST:
nne Donaldson
City Clerk
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apoliticalsubdivisionof theStateof
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EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
The land is situatedin the Stateof California, City of Redlands, andis describedasfollows:
APN: 0292063380000
H L WILLIAMS TR PTN LOT 2 BLK 1 LYING SLY OF LI DESC AS COM AT PT ON W LI SD LOT S 0 DEG 25 MIN 34 SECONDS E 198. 80 FT FROM NW COR THEREOF TH N 89 DEG 34 MIN 16 SECONDS E 469. 83 FT TH ALG A TANGENT CURVE CONCAVE SWLY WITH RADIUS OF 370 FT THRU ANGLE OF 30 DEG 55 MIN 23 SECONDS 199. 69 FT TO E LI SD LOT EXE 475 FT THEREOF MEAS AT R/ A TO AND PARALLEL WITH E LI SD LOT AND EX ST 7- 17- 87
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EXHIBIT B
SCHEDULE OF PERFORMANCE
This Schedule of Performance sets forth the schedule for various activities under the Agreement to which this exhibit is attached. The description of items in this Scheduleof Performance is meant to be descriptiveonly, andshall notbe deemedto modify in any way the provisionsof the Agreementto which such items relate. Times for performanceare subjectto ForceMajeure, as furtherprovidedin Section7.15of theAgreement, andthenoticeand curerightsasfurther providedin Sectionof theAgreement.
As providedin theAgreement, thisScheduleof Performancemayonlybemodifiedin awriting executedby all Parties, in accordancewith Section7. 9of theAgreement.
Milestone Date
Execute Standard Agreement May 24, 2022
Execute Grant Documents On or before July 30, 2022
Submit Evidence of Insurance Prior to Acquisition Closing Closeon Acquisition Financing, ConstructionFinancingandAcquire Property
On or before June 29, 2022
Submit and obtain approval of Management Plan and Social Services Plan
On or before November 15, 2022
Submitnondiscriminationpolicy in accordancewith Exhibit D of the Standard Agreement
On or before November 15, 2022
Draft Regulatory Agreementfor use restriction On or before November 15, 2022 Final HCD-approvedRegulatory Agreement or otheruserestriction recorded againstthe project real property
On or before March 14, 2023
Submitplansandapplication(s) for plancheckandbuildingpermitto City of Redlands
On or before March 25, 2022
City Grant Issuance
In seven installments on or before
July 15annually afterinitial plans
and application submittal
Obtain Building Permits
Within thirty (30) calendardaysof
building plan and application
submittal
Begin rehabilitation and Unit conversion Within thirty (30) businessdays from obtaining Building Permits
Complete rehabilitation and unit conversion On or before March 14, 2023 Provideto theCity, projectinformationfor HomekeyProgramand Expenditure Report as outlined in Section 601 of the NOFA Annually f r five ( 5) years on
January15 for the prior calendar
year (January1to December31)
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April 17, 2024
BY CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Shangri-La Industries, LLC
660 South Figueroa Street
Suite 1888
Los Angeles, CA 90017-3433
1675 Industrial Park, LP
c/o Shangri-La Industries
Attn: Andy Meyers Abdul-Wahab/Cody
Holmes
660 South Figueroa Street
Suite 1888
Los Angeles, CA 90017-3433
Step Up on Second Street, Inc.
Attn: Tod Lipka, President and Chief
Executive Officer
1328 Second Street
Santa Monica, CA 90401-1122
Cornelius & Cohanghadosh, APC
Attn: Alex Cornelius
23801 Calabasas Road
Suite 100
Calabasas, CA 91302
Re: Notice of Termination and Re-Affirmation of Funding Commitment re Homekey Grant Agreement dated July 19, 2022
Dear Shangri-La Industries, LLC; 1675 Industrial, L.P.; and Step Up on Second Street, Inc.:
This Notice of Termination and Re -Affirmation of Funding Commitment (“Notice”) provides express notice that the City of Redlands (“City”) hereby exercises its right to terminate the Homekey Grant Agreement dated July 19, 2022 (“Agreement”) by and between t he City on the one hand, and Shangri-La Industries LLC (“Shangri-La Industries”), Step Up on Second Street, Inc. (“Step Up”), and 1675 Industrial, L.P. (“1675 Industrial”) (together, the “Counter -Parties”) on the other hand.
This Notice also provides express notice to the Counter -Parties and other interested stake holders that the City remains committed to the success of the Homekey project in the City as well as its obligations under the separate grant agreement with the Cali fornia Department of Housing and Community Development (“HCD”). These commitments include, specifically, the provision of a City-funded operating subsidy. The City will work directly with Step Up and other parties to ensure that the operating subsidy fun ds on-site operations and services provided at the Homekey project in the City.
The Agreement concerns the City and Counter -Parties’ endeavor to acquire an existing motel, rehabilitate the motel, and convert the motel to a permanent housing solution for individuals and families who are homeless or at risk of homelessness (“Project”).
In or around November of 2023, the City discovered that Counter -Parties were in default of their obligations under the Agreement. In accordance with Sections 6.1 and 7.7 of the Agreement, the City sent a Notice of Default letter to the Counter-Parties on November 15, 2023. The Notice of Redlands Regular Meeting of 04-16-2024
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Default letter identified numerous defaults by the Counter -Parties, described such defaults, and demanded cure of these defaults. The defaults listed in the letter included, but were not limited to, the following: (i) failure to record the affordability covenant in first position (§ 2.2), (ii) failure to pay due and owing taxes and assessments (§ 6.1), (iii) failure to apply for the property tax welfare exemption (§ 4.7), (iv) failure to promptly inform the City of pending litigation involving the Project (§ 4.8), (v) failure to make loan payments when due and failure to notify the City of existing loan defaults (§ 4.14), (vi) failure to inform the City of material changes to Shangri-La Industries’ financial condition (§ 5.1), and (vii) failure to obtain Ci ty and HCD consent before encumbering the property (§ 4.11).
The Counter-Parties did not cure these defaults, and have made no efforts to discuss steps that could be undertaken in order to progress toward a complete cure. “[A]t the option of the City,” it “has the right to terminate th[e] Agreement” and “seek any remedies at law or equity” that may be available to it. (Agreement, § 6.2(a) and (C).) The City, pursuant to City Council action on April 16, 2024, now exercises its right to terminate the Agreement . The City preserves all additional rights and remedies it may pursue under the Agreement. The City, through counsel, is willing and available to discuss the contents of this letter further with you.
Sincerely,
Charles M. Duggan, Jr.
City Manager
c: State of California, Department of Housing & Community Development Yvette M. Abich Garcia, City Attorney
Dustin Nirschl, Esq., Best, Best & Krieger
Christopher Boatman, Assistant City Manager
Redlands Regular Meeting of 04-16-2024
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