Agenda — Roseville City Council, April 3, 2024 (part 4 of 8)

126746967
For Internal Use
Notification # 126746967
Contract # 50096347
E-PM #
G-PM # 35516844
E-Prior MLX/PM#
G-Prior MLX/PM# 296098
Customer # 4282172
V2
February 09, 2024
City of Roseville
2005 Hilltop Circle
ROSEVILLE, CA, 95747 Re: 7951 PAINTED DESERT DR, ROSEVILLE DearAndre Baranov
We are writing to let you know Pacific Gas and Electric Company (PG&E) will extend its facilities to provide the requested gas and electric service to the project address listed above. PG&E's costs have been developed based on the choices and information provided in your application and may change if you make changes. This letter, including PG&E's tariffs, which are incorporated by reference below, will serve as our contract. As required by the California Public Utilities Commission (CPUC), special facilities will be handled in a separate contract. Per Decision 22-09-026, Residential Customers submitting an application for new gas service on or after July 1, 2023, do not qualify for Allowances, Refunds or Discount Option. Applicants who submit a new application for gas Distribution Main Extension(s) on or after July 1, 2023, must pay PG&E its total estimated installed cost upon contract execution, in advance of PG&E commencing its work.

Upon completion of the work and determination of actual costs, PG&E will provide Applicant with a final invoice or refund to account for a true-up to actual costs. An Applicant's failure to pay a final invoice in a timely manner is a violation of PG&E's Gas Rules 15/16 and may result in discontinuance of service. NonResidential Customers submitting an application for new gas service on or after July 1, 2023, may qualify for Allowances, Refunds or Discount Option if approved by the CPUC. Please complete the following four steps to execute this contract. 1 Review the following work responsibilities and cost information.

Work To Be
Done By

GAS MAIN GAS SERVICE ELECTRIC DISTRIBUTION ELECTRIC SERVICE Trench Pipe Trench Pipe Trench Substr. Facilities Trench Substr. Facilities

PG&E X X
Customer

GAS ELECTRIC
Total non-refundable project costs $78,386.15 $0.00
Refundable extension costs $0.00 $0.00
Allowances (credit) - $0.00 - $0.00
Net refundable amount = $0.00 = $0.00
10 YEAR REFUNDABLE OPTION
Net refundable amount $0.00 $0.00
Credit for value of design and/or
facilities provided by applicant - $0.00 - $0.00
Total non-refundable project costs + $78,386.15 + $0.00 Total (if you select this option) = $78,386.15 = $0.00
NON-REFUNDABLE 50% DISCOUNT OPTION
Net refundable amount $0.00 $0.00
Discount: 50% of Net refundable amount - $0.00 - $0.00
Credit for value of design and/or
facilities provided by applicant - $0.00 - $0.00
Total non-refundable project costs + $78,386.15 + $0.00 Total (if you select this option) = $78,386.15 = $0.00
Potential refund per residential lot/unit $0.00 $0.00
Potential reimbursement per service completion
Pressurized or energized system $0.00 $0.00
Not pressurized or energized system $0.00 $0.00
Reimbursement for other work
performed $0.00 $0.00
All amounts include the Income Tax Component of Contribution (ITCC) PG&E is required to charge customers, where applicable.

DEFINITIONS AND EXPLANATION OF TERMS
(For more detail see rules 15 and 16):

Total non-refundable project costs include costs for
work such as electric trench and excavation, conduits,
inspections, streetlights, conversion from overhead to
underground and contract processing.

Refundable extension costs include costs for facilities such as electric conductor, transformers and poles; gas pipe, gas share of distribution trench and regulators;
and meters.

Allowances are a credit against refundable extension
costs. They are based upon the number of residential
units expected to be connected within the first six
months and the expected annual non-residential net
(distribution) revenue from your project.

Allowances granted under either option are subject to
deficiency billing if the number of residential units
connected or the annual non-residential net revenue
falls below the forecast used to calculate the
allowances.

Net refundable amount is the portion of overall costs
eligible for refund to you based upon additional
residential meters being set or upon increases in nonresidential annual net (distribution) revenue. A cost-ofownership charge is assessed against the Net refundable amount (except for individual residential
applicants) per Rule 15.

Potential refund per residential lot/unit is for those
lots/units for which you did not already receive an
allowance (i.e., units not expected to be connected in
the first six months). Any refunds may be decreased or
eliminated by cost-of-ownership charges assessed
under the provisions of Rule 15.

Potential reimbursement per service completion is
the amount to which a customer may be entitled for
performing certain service connection work PG&E
would otherwise perform when installing service
extensions and are not to be confused with refunds.

Reimbursement for other work performed is
the amount to which a customer may be entitled
for performing certain work (other than service
completions) that normally is PG&E's responsibility.

Gas and Electric
Extension Agreement*
* Automated document,
Preliminary Statement, Part A
"PG&E" refers to Pacific Gas and Electric Company, a subsidiary of PG&E Corporation. ©2015 Pacific Gas and Electric Company. All rights reserved.

Form 79-1169
Advice 4768-G/6973-E

Page 2 of 2 ends

126746967
2 Select one of the following payment options.
#opt1#
10-Year Refundable Option for Gas and Electric
#opt2#
Non-Refundable 50 Percent Discount Option for Gas
and Electric
#opt3#
10-Year Refundable Option for Gas and NonRefundable 50 Percent Discount Option for Electric #opt4#
Non-Refundable 50 Percent Discount Option for
Gas and 10-Year Refundable Option for Electric
Gas
$78,386.16
$78,386.16
$78,386.16
$78,386.16
+
+
+
+
Electric
$0.00
$0.00
$0.00
$0.00
-
-
-
-
Advance

SEE PMT CPN

SEE PMT CPN
=
=
=
=
Total Due
$78,386.16
$78,386.16
$78,386.16
$78,386.16
3 Review these important terms and conditions.

This Gas and Electric Extension Agreement is controlled by, and incorporates by reference, PG&E's tariffs, including Gas and Electric rules 2, 15, and 16; the Distribution and Service Extension Agreement-Provisions (Form 62-0982) and the General Terms & Conditions for Gas and Electric Extension & Service Construction by Applicant (Form 79-716), all as approved and authorized by the CPUC. This agreement at all times shall be subject to such modifications as the CPUC may direct from time to time in the exercise of its jurisdiction.

You can view PG&E's tariffs online at pge.com/tariffs or contact the PG&E representative listed below. Additional details underlying the amounts shown in this agreement, as well as the calculation of allowances, refunds or deficiency bills can also be provided by your local PG&E representative. 4 After completing steps 1, 2 and 3 and having checked one, but only one, of the four payment options above, please complete and return the following items to PG&E.

Sign and return this contract as indicated below.

Submit the Payment Coupon with Total Due based on your option selected.

Sign and return the enclosed Statement of Applicant's Contract Anticipated Costs (SACAC) [Form 79-1003] (explanation in box to the right).

Please provide your payment and required forms within 90 days from February 09, 2024. PG&E is not bound by the costs set forth above if payment and the signed forms are not received by PG&E within 90 days.

If you have any questions, please contact Veronica Bruno at 877-743-7782 or by email at [email protected].

ADDITIONAL INFORMATION
What is the SACAC form
Under PG&E's rules 15 and 16 you have a choice:you can
perform the work yourself, hire a qualified contractor to perform the work or hire PG&E to do the work. We are
required by the CPUC to provide you with PG&E's costs.

This form identifies our cost for the refundable service that is PG&E's responsibility to install. PG&E's costs were
developed based on your choices within the application and may change if you change that choice.

How do I fill out the SACAC?
If you want to do this work yourself or have a qualified contractor do this work, please enter your estimated costs in the section of the SACAC form entitled "Applicant Costs" or check the box in the section entitled "Applicant's Election Not To Provide Costs," sign and return to PG&E. PG&E will send you a revised agreement by return mail only if you choose to provide your estimated costs.

If you want PG&E to do this work, please check the section "Applicant's Election Not to Provide Costs," sign and return the SACAC form along with a check for the Total Due
based on the option you selected above.

You must return the completed SACAC form to PG&E
regardless of who you choose to do the work.

Please follow payment instructions
found on your Payment Coupon.

Pacific Gas and Electric Company
This contract has been reviewed and approved by:

Dave Bond
Service Planning Supervisor
Customer
Agreed and accepted by:

City of Roseville, A GOVERNMENT AGENCY
Authorized Signatory Dominick Casey
Title City Manager
Signature #sigMLX#
Date #sigDateMLX#
#titleMLX#
#Form 79-1169#
126746967

STATEMENT OF APPLICANT'S CONTRACT
ANTICIPATED COSTS.*
Project Name: City of Roseville Fire Station #8
Project Location: 7951 PAINTED DESERT DR, ROSEVILLE
Notification Number: 126746967
PM Number(s): (Gas) 35516844 (Electric)

APPLICANT COSTS

The following statement must only include the contracted anticipated installed costs of facilities installed by the Applicant that are refundable and that are PG&E's responsibility under its tariffs.

The costs provided by the Applicant must be taken from the Applicant's contract with its contractor. If the Applicant will be performing the work itself, the Applicant must also complete and sign this form.

The Applicant's statement of costs will be compared with PG&E's estimated installed costs of the same facilities, the lower of which will be used to determine the amount subject to allowances and refunds in accordance with the provisions of PG&E's Gas and Electric Rules 15 and 16.

If the Applicant chooses not to provide its costs, it must complete the last section of this form. Until the Applicant either provides the refundable cost from its contract with its contractor (or its own cost, if applicable), or returns this form indicating that it will not do so, PG&E will not proceed with any work on the Applicant's project.

Applicant's statement of costs include: overhead or underground service conductors, poles, service transformers, connection fittings, service pipe, valves, service connections, and other PG&E-owned service equipment, as detailed in Gas and Electric Rule 16.

Applicant's statement of costs DOES NOT include: inspection fees, nonresidential service costs, regulators, or PG&E-owned metering equipment.

Form 79-1003
Tariffs and Compliance
Advice 2458-G-C/2379-E
Decision 03-03-032
* Automated document, Preliminary Statement, Part A Effective: July 1, 2004

Page 1 of 2 ends

GAS ELECTRIC
Residential Service Facilities: Residential Service Facilities:

Applicant: $ #applicantCostGas# Applicant: $ #applicantCostElec# PG&E: $0.00 PG&E: $0.00
Number of gas service: 0 Stubs:0 Number of Electric service: 0 #Form 79-1003#
February 09, 2024
126746967

GAS ELECTRIC
Gas Distribution Facilities
and Non-Residential Service Services:

Electric Distribution Facilities
and Non-Residential Service Services:

Applicant: $ #gasDistFacilities# Applicant: $ #elecDistFacilities# PG&E: $40,487.65 PG&E: $0.00

GAS DISTRIBUTION TRENCH
Applicant: $ #gasDistTrench#
PG&E: $0.00
Applicant's statement of costs include: cables, switches, transformers, distribution main, valves, regulators, nonresidential service costs, and other distribution facilities required to complete the distribution line extension, as detailed in Gas and Electric Rule 15 as PG&E's responsibility.

Applicant's statement of costs DOES NOT include: inspection fees, tie-in of system by PG&E, distribution substructures, electric trench, conduits, feeder conduits, or protective structures, as detailed in Gas and Electric Rule 15.

I declare under penalty of perjury that the foregoing is true and correct.

APPLICANT'S ELECTION NOT TO PROVIDE COSTS: (if this option selected, box must be checked) I choose not to provide to the utility my refundable costs for this project as taken from my contract with my contractor, or as performed by myself, and acknowledge that PG&E will use its estimate of the refundable costs for this project in the contract between it and me.

Executed on #signDateSACAC# at
(Date) (City)
By:

Print Applicant Name: City of Roseville, A GOVERNMENT AGENCY #sigSACAC# Signed:

Title: Project Manager
#titleSACAC#
Form 79-1003
Tariffs and Compliance
Advice 2458-G-C/2379-E
Decision 03-03-032
* Automated document, Preliminary Statement, Part A Effective: July 1, 2004

Page 2 of 2 ends

#applicantSACAC#
Andre Baranov

Page 1 of 4 ends

February 09, 2024
Pacific Gas and Electric Company
Detailed Cost Sheet - Gas Distribution
and Service Extension Costs
References
Notification # 126746967
Contract # 50096347 V2
G16-PM # 35516844
G-Prior MLX/PM # 296098
Customer # 4282172
Cost Breakdown
Applicant Andre Baranov
Project Location/Name 7951 PAINTED DESERT DR, ROSEVILLE Total number of residential lots/units for this project: 0 Total number of non-residential lots/units for this project: 1 Total number of combined meters: 1
Cost of Services: (5)
Engineering & Administrative Costs $0.00
Including Applicant Design Value of $0.00
Service Tie-in Cost by PG&E (+) $0.00
Service Tie-in Cost by Applicant (+) $0.00
Gas Metering & Regulation (+) $0.00
Inspection Fees (+) $0.00 (4)
Service Cost - PG&E installed # Services 0 (+) $0.00
Service Cost - Applicant installed # Services 0 (+) $0.00 (5) Total Estimated Cost of Service Subject to Allowance (=) $0.00 Cost of Service Within Allowance:

Residential Service Allowance
(not to exceed Total Estimated Cost of Service Subject to Allowance) Water Heaters: $1,391.00 X 0 Units $0.00
Space Heaters: $987.00 X 0 Units (+) $0.00
Oven / Range: $84.00 X 0 Units (+) $0.00
Dryer Stub: $24.00 X 0 Units (+) $0.00
Total Residential Service Allowance (-) $0.00 (1)
Excess Service Cost (=) $0.00
Estimated Service Cost Within Allowance (Total less Excess) (=) $0.00 Average Cost per Lot or Unit Within Allowance
$0.00 / 0 = $0.00
Excess Service Allowance Applied to Distribution Line Extension Refundable Amount per Lot or Unit:
$0.00
Allowance
- $0.00
Ave. Cost / Unit
= $0.00 **

Page 2 of 4 ends

Allowances
Residential:
$1,391.00
Water Heaters:

X 0
Lots / Units
$0.00
$987.00
Space Heaters:

X 0
Lots / Units
$0.00
$84.00
Oven / Range:

X 0
Lots / Units
$0.00
$24.00
Dryer Stub:

X 0
Lots / Units
$0.00
SUB TOTAL Residential Allowance $0.00
plus ITCC 24% Residential Allowances (+) $0.00
TOTAL Residential Allowances (=) $0.00
Non-Residential: $0.00
Net Annual Revenue
/ 0.1572
Cost-of-Service-Factor
= $0.00
plus ITCC 24% Non-Residential Allowances (+) $0.00
SUB TOTAL Non-Residential Allowances (=) $0.00
less Residential Service Allowance:
( 0
Lots/Units
X $0.00
Ave. Cost / Unit
) + 24%
ITCC
= $0.00
Total Gas Distribution Main Extension Allowance (=) $0.00 Amount Subject to Refund
Engineering & Administrative Costs (includes Value of Applicant Design): $3,421.81 Including Applicant Design Value of $0.00
Tie-In of Distribution by PG&E (+) $2,773.71
Gas Metering (Non-Residential Projects) (+) $227.31
Other (+) $0.00
PG&E installed - Cost of Distribution Main and Non-Res Svcs. (+) $40,487.65 Applicant installed - Cost of Distribution Main and Non-Res Svcs. (+) $0.00 (5) PG&E installed - Cost of Distribution Main Trench. (+) $0.00 Applicant installed - Cost of Distribution Main Trench. (+) $0.00 (5) Inspection Fees (+) $0.00 (4)
Less Non-Residential Service Costs not Qualified for Refunds (-) $46,910.48 Less Distribution Extension Costs not Qualified for Refunds (-) $0.00 SUB TOTAL (=) $0.00
plus ITCC @ 24% (+) $0.00
Total Refundable Amount (=) $0.00
Less Total Allowances (not to exceed Total Refundable Amount) $0.00 Balance: Net Refundable Amount (=) $0.00
10 Year Refundable Advance Option
Balance: Net Refundable Amount $0.00
Less Credit for Value of Applicant Design Work (-) $0.00 Less Cost of Dist. Main Ext. and Non-Res Svcs. installed by Applicant (-) $0.00 (5) Less Distribution Main Trench by Applicant (-) $0.00 (5) Net 10 Year Refundable Advance Option Amount (=) $0.00 (2)

Page 3 of 4 ends

Non-Refundable Discount Option
Balance: Net Refundable Amount $0.00
$0.00
Balance
/ 0.50
Discount Rate
= (-) $0.00
Less Credit for Value of Applicant Design Work (-) $0.00 Less Cost of Dist. Main Ext. and Non-Res Svcs. installed by Applicant (-) $0.00 (5) Less Cost of Distribution Main Trench by Applicant (-) $0.00 (5) Net Non-Refundable Discount Option Amount (=) $0.00 (2) Non-Refundable Payments
Rule 16 Non-Refundable Payments
Excess Service Costs $0.00
Non-Residential Service Costs not Qualified for Refunds (+) $46,910.48 Service Costs Beyond Preferred Service Location (+) $0.00 Value of Rule 16 Land Rights Costs (+) $0.00
Value of Gas Service Trench in the Franchise Area
or on 3rd Party Property
(+) $2,110.90
Inspection Fees (+) $0.00
Rule 16 Trench Permits Obtained by PG&E (+) $723.60
Other Non-Refundable Charges (+) $0.00
Cost of Additional Rule 16 Applicant Design Plan Checks (+) $0.00 SUB TOTAL (=) $49,744.98
Plus ITCC @ 24% (+) $11,938.79
Other Non-Taxable Charges (+) $0.00
Residential Per Meter Charge = 0 unit(s) (+) $0.00
Non-Residential Per Meter Charge 1 unit(s) (+) $275.00
Inspection Fees (not subject to ITCC) (+) $0.00
Plus Gas Service Trench installed by PG&E on Private Property (+) $16,427.38 Less Excess Service Facilities Installed by Applicant (-) $0.00 Less Service Costs Beyond Preferred Location by Applicant (-) $0.00 Less Gas Service Trench in the Franchise Area or
on & 3rd Party Property installed by Applicant
(-) $0.00
Less Rule 16 Applicant Design Work Associated with Excess (-) $0.00 Total Rule 16 Non-Refundable Amount (=) $78,386.15
Rule 15 Non-Refundable Payments
Distribution Extension Costs not Qualified for Refunds $0.00 Inspection Fees (+) $0.00
Re-engineering / Composite Fees (+) $0.00
Cost of Additional Applicant Design Plan Checks (+) $0.00 Value of Distribution Main Substructures (+) $0.00
PG&E Land Rights Costs (+) $0.00
Rule 15 Trench Permits Obtained by PG&E (+) $0.00
Other Non-Refundable Charges (+) $0.00

Page 4 of 4 ends

SUB TOTAL (=) $0.00
Plus ITCC @ 24% (+) $0.00
Less Cost of Distribution Main Extension Installed by Applicant (-) $0.00 Less Cost of Distribution Main Trench by Applicant (-) $0.00 Less Distribution Main Substructures Installed by Applicant (-) $0.00 Less Credit for Value of Rule 15 Applicant Design Work (-) $0.00 Total Non-Refundable Gas Rule 15 Amount (=) $0.00
Relocation / Rearrangement of PG&E Facilities
Value of Relocation/Rearrangement Facilities $0.00
Value of Relocation/Rearrangement Conduits & Substructures (+) $0.00 Value of Relocation/Rearrangement Trench & Excavation (+) $0.00 Engineering & Administrative Costs (+) $0.00
Value of Relocation Applicant Design Work (+) $0.00
Re-engineering/Comp Prep/Add'l AD Plan Checks (+) $0.00 Tie-in/Meter for Relocation/Rearrangement by PG&E (+) $0.00 Relocation/Rearrangement Trench Permits Obtained by PG&E (+) $0.00 Relocation/Rearrangement Land Rights (+) $0.00
Relocation/Rearrangement Inspection Fees (+) $0.00
SUB TOTAL (=) $0.00
Plus ITCC @ 0% (+) $0.00
Plus Relocation/Rearrangement - Non Taxable (+) $0.00
D.0405055 Line Extension Costs - Residential $0.00
D.0405055 Line Extension Costs - Non-Residential $0.00
Less Relocation/Rearrangement Facilities Installed by Applicant (-) $0.00 Less Substructures Installed by Applicant (-) $0.00
Less Trench & Excavation Provided by Applicant (-) $0.00 Less Value of Relocation Applicant Design Work (-) $0.00 Less Relocation/Rearrangement Salvage (-) $0.00
Total Relocation / Rearrangement of PG&E Facilities Amount (=) $0.00 (1) Total Service Allowance not to exceed the Cost of Service (2) 10 Year Refundable and Discount Option credit amounts will be paid upon acceptance of facilities. Credit amounts are subject to future deficiency billing in accordance with the tariff. (3) 10 Year Refundable and Discount Option credit amounts do not offset Other Non-Refundable or Relocation Fees. See Reimbursement Summary for a total of Reimbursements and Credits to be paid upon acceptance of facilities. (4) Inspection Fees (Only Refundable if Applicant's Actual Cost is Used. Applicant's Actual Cost + Inspection Cannot Exceed PG&E's Estimate)
(5) The lower of PG&E's estimated costs or the Applicant's Contract Anticipated Costs (as documented on Form 79-1003 "Statement of Contract Anticipated Costs") will be used to establish the cost of Service and Distribution Line Extension subject to Allowance Note: This supplemental detailed cost sheet is for reference only and is not intended for use in place of the actual contract for the project listed.

COUNCIL COMMUNICATION
CC #: 3255
File #: 0210
Title: Tax Revenue Consulting Services - Professional Services Agreement Amendment Contact: Teri Quinlan 916-774-5316 [email protected] Meeting Date: 4/3/2024
Item #: 7.8.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution to approve the second amendment to the professional services agreement for Tax Revenue Consulting Services with Hinderliter, de Llamas & Associates dba HdL Companies, and authorize the City Manager to execute it.

BACKGROUND
On April 21, 2021, Council approved a professional services agreement with Hinderliter, de Llamas & Associates dba HdL Companies to provide transient occupancy tax administration services, short-term rental administration services, business tax administration services, and related consultant services to the City for a two-year term expiring April 20, 2023 with the option to renew the agreement for three additional years. Council approved the first amendment to the agreement on April 19, 2023. Staff seeks to renew the agreement for one year through this second amendment to the professional services agreement.

Title 4, Chapter 4.24, of the Roseville Municipal Code requires collection of the transient occupancy tax (TOT) for the privilege of occupancy in any hotel or short-term rental. Each transient is subject to and shall pay a tax in the amount of 10 percent of the rent charged by the operator. The Fiscal Year (FY) 2023-24 General Fund budget estimate for TOT revenue is $7,250,000.

Title 4, Chapter 4.25, of the Roseville Municipal Code makes it unlawful for any person to advertise, maintain, or operate a short-term rental of a dwelling in the City of Roseville without a permit. A property owner may apply for a short-term rental permit by filing an application and paying an application fee. Property owners must also collect and remit to the City the TOT according to the Municipal Code. The FY2023-24 General Fund budget estimate for short-term rental permit revenue is $4,300.

Title 6, Chapter 6.04, of the Roseville Municipal Code requires payment of an annual business license tax for doing business within the city limits of Roseville. The Municipal Code requires a business license be obtained when any business activity is conducted within the City, even if the business is located outside the city limits or if the business has a license from another city. Any business based in the City must have a license as well. This includes home-based businesses, building contractors, independent contractors, short-term rentals and non-profit businesses. The FY2023-24 General Fund budget estimate for business license tax revenue is $866,000.

Outsourcing the administration of these programs is cost effective for the General Fund and maintains a high level of customer service. Outsourcing these programs benefits residents and business by providing efficient online processing of applications 24 hours day, 7 days a week.

FISCAL IMPACT
The one-year renewal of the professional services agreement is for an annual not-to-exceed amount of $225,000, bringing the total not-to-exceed contract amount to $900,000. There are adequate funds available in the FY2023-24 Adopted Budget to fund this agreement. Staff will incorporate the future year cost of this agreement into the proposed FY2024-25 budget.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) only applies to projects which have the potential to cause a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA (CEQA Guidelines §15060(b)(3)).

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Respectfully Submitted,
Teri Quinlan, Accounting Manager
Dennis Kauffman, Assistant City Manager/Chief Financial Officer _____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 24-091
PSA Amendment
RESOLUTION NO. 24-091

APPROVING A SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT,

BY AND BETWEEN THE CITY OF ROSEVILLE AND HINDERLITER, DE LLAMAS &

ASSOCIATES DBA HDL COMPANIES, AND AUTHORIZING THE CITY MANAGER TO

EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS, a Second Amendment to Professional Services Agreement for tax revenue consulting services, by and between the City of Roseville and Hinderliter, de Llamas & Associates dba HdL Companies, has been reviewed by the City Council; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said Second Amendment is hereby approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2024, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
________________________
City Clerk

SECOND AMENDMENT TO

PROFESSIONAL SERVICES AGREEMENT
Project: Tax Revenue Consulting Services
THIS SECOND AMENDMENT TO AGREEMENT is made and entered into this ___ day of __________, 20__, by and between the City of Roseville, a municipal corporation (“CITY”), and Hinderliter, de Llamas & Associates dba HdL Companies, a California corporation (“CONSULTANT”); and
W I T N E S S E T H:

WHEREAS, CITY and CONSULTANT previously entered into a Professional Services Agreement dated April 21, 2021 and amended April 19, 2023, (“Agreement”) regarding tax revenue consulting services (“Project”); and
WHEREAS, CITY is exercising its option to extend the term of the Agreement for an additional one (1) year period; and
WHEREAS, CONSULTANT is willing and able to provide such additional services.

NOW, THEREFORE, the parties agree as follows:

1. Section 2 of the Agreement is amended by adding an additional paragraph to read as follows:

DocuSign Envelope ID: 0F10C8CC-9287-46E5-A3FB-24C604FECD49 2 [\\Rosenet\rosenetdfs\CITY ATTORNEY\CYCOM\WPDOCS\D002\P005\00085641.DOCX:03/21/2024 “CITY is exercising its option to extend the term of this Agreement for an additional one (1) year commencing April 21, 2024 and ending on April 20, 2025, unless terminated earlier pursuant to the provisions of Paragraph 17.”

2. Section 3 of the Agreement is amended by adding an additional paragraph to read as follows:
“CITY shall pay two hundred twenty-five thousand dollars ($225,000), in consideration of the additional services to the Second Amendment to Agreement. This brings the total not to exceed contract amount to nine hundred thousand dollars ($900,000).”

3. All other provisions of the Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the City of Roseville, a municipal corporation, has authorized the execution of this Second Amendment to Agreement in duplicate by its City Manager and attested to by its City Clerk under the authority of Resolution No. _________, adopted by the Council of the City of Roseville on the ___ day of ___________, 20__, and CONSULTANT has caused this Second Amendment to Agreement to be executed.

CITY OF ROSEVILLE, a HINDERLITER, DE LLAMAS &
municipal corporation ASSOCIATES DBA HDL COMPANIES, a
California corporation
BY: _______________________________ BY: _______________________________ DOMINICK CASEY its: _______________________________
City Manager
and
(SIGNATURES CONTINUED ON NEXT PAGE)
DocuSign Envelope ID: 0F10C8CC-9287-46E5-A3FB-24C604FECD49 President/CEO
3 [\\Rosenet\rosenetdfs\CITY ATTORNEY\CYCOM\WPDOCS\D002\P005\00085641.DOCX:03/21/2024 ATTEST:

BY: _______________________________
its: _______________________________
BY: _______________________________

CARMEN AVALOS
City Clerk
APPROVED AS TO FORM:

BY: _______________________________

MICHELLE SHEIDENBERGER
City Attorney
APPROVED AS TO SUBSTANCE:

BY: _______________________________

DENNIS KAUFFMAN
Chief Financial Officer/Assistant
City Manager
DocuSign Envelope ID: 0F10C8CC-9287-46E5-A3FB-24C604FECD49 CFO

COUNCIL COMMUNICATION
CC #: 3251
File #: 0200
Title: Tax Revenue Consulting Services - Professional Services Agreement Amendment Contact: Nancy Rothlisberger 916-774-5314 [email protected] Meeting Date: 4/3/2024
Item #: 7.9.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute a third amendment to the professional services agreement with MuniServices, LLC.

BACKGROUND
On April 7, 2021, the City Council authorized the City Manager to enter into a professional services agreement with MuniServices, LLC, to provide sales tax and transactions and use tax auditing, projection, recovery, and consultant services. The agreement terms included an initial two-year term and an annual not-to-exceed amount of $150,000 per year, or $300,000 over the total agreement term. MuniServices, LLC's compensation is based on a portion of quarterly revenues received by the City due to their audit and recovery services.

On June 15, 2022, the City Council authorized the City Manager to amend this agreement to increase the not-to-exceed amount to $250,000 per year because MuniServices identified a higher than anticipated amount of misallocated sales tax and transaction and use tax from their audit and recover services.

The initial two-year term of the agreement expired on April 7, 2023. The City Council authorized staff to exercise an agreement option to extend the agreement for an additional one-year period commencing on April 8, 2023, and ending on April 7, 2024.

Staff recommends exercising the agreement option to extend the agreement for an additional one-year period from April 8, 2024 through April 7, 2025.

FISCAL IMPACT
This agreement is structured to only compensate MuniServices, LLC based on the amount of additional revenues received by the City due to their audit and recovery services. The additional one-year extension will increase the total not-to-exceed amount from $750,000 to $1 million. The additional sales and use tax revenues that the City receives for the General Fund from these services more than offsets the cost.

Adequate appropriations are available in the FY2023-24 approved budget to fund this amendment. Staff will incorporate the cost of this agreement into the proposed FY2024-25 budget.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Respectfully Submitted,
Nancy Rothlisberger, Budget Manager
Dennis Kauffman, Assistant City Manager/Chief Financial Officer _____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 24-087
ThirdAmendment to PSA
RESOLUTION NO. 24-087

APPROVING A THIRD AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT,

BY AND BETWEEN THE CITY OF ROSEVILLE AND MUNISERVICES, LLC, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT

ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS, a Third Amendment to Professional Services Agreement for tax revenue consulting services, by and between the City of Roseville and MuniServices, LLC, has been reviewed by the City Council; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said Third Amendment is hereby approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2024, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
________________________
City Clerk
[\\Rosenet\rosenetdfs\CITY ATTORNEY\CYCOM\WPDOCS\D005\P005\00085042.DOCX:03/05/2024]

THIRD AMENDMENT TO

PROFESSIONAL SERVICES AGREEMENT
Tax Revenue Consulting Services
THIS THIRD AMENDMENT TO AGREEMENT is made and entered into this ___ day of __________, 20__, by and between the City of Roseville, a municipal corporation (“CITY”), and MuniServices, LLC, a Delaware limited liability company (“CONSULTANT”); and W I T N E S S E T H:

WHEREAS, CITY and CONSULTANT previously entered into a Professional Services Agreement dated April 7, 2021 and amended on June 15, 2022 and April 5, 2023 (“Agreement”) regarding tax revenue consulting services (“Project”); and WHEREAS, CITY is exercising its option to extend the term of the Agreement for an additional one (1) year period; and
WHEREAS, CONSULTANT is willing and able to provide such additional services.

NOW, THEREFORE, the parties agree as follows:

1. Section 2 of the Agreement is amended by adding an additional paragraph to read as follows:
“CITY is exercising its option to extend the term of this Agreement for an additional one (1) year commencing on April 08, 2024 and ending on April 07, 2025.”
[\\Rosenet\rosenetdfs\CITY ATTORNEY\CYCOM\WPDOCS\D005\P005\00085042.DOCX:03/05/2024]

2. Section 3 of the Agreement is amended by adding an additional paragraph to read as follows:
“CITY shall pay two hundred fifty thousand dollars ($250,000), in consideration of the additional services to the Third Amendment to Agreement. This brings the total not to exceed contract amount to one million dollars ($1,000,000).”

3. The Agreement is amended by adding an additional paragraph for compliance with AB334 to read as follows:
“23. Public Contracts: Conflicts of Interest. CONSULTANT’s duties and services under this Agreement shall not include preparing or assisting CITY with any portion of the CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. CONSULTANT’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. CONSULTANT shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by CONSULTANT pursuant to this Agreement.”

4. All other provisions of the Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the City of Roseville, a municipal corporation, has authorized the execution of this Third Amendment to Agreement in duplicate by its City Manager and attested to by its City Clerk under the authority of Resolution No. _________, adopted by the [\\Rosenet\rosenetdfs\CITY ATTORNEY\CYCOM\WPDOCS\D005\P005\00085042.DOCX:03/05/2024] Council of the City of Roseville on the ___ day of ___________, 20__, and CONSULTANT has caused this Third Amendment to Agreement to be executed.

CITY OF ROSEVILLE, a MUNISERVICES, LLC, a Delaware
municipal corporation limited liability company
BY: _______________________________ BY: _______________________________ DOMINICK CASEY its: _______________________________
City Manager
and
ATTEST:

BY: _______________________________
its: _______________________________
BY: _______________________________

CARMEN AVALOS
City Clerk
APPROVED AS TO FORM:

BY: _______________________________

MICHELLE SHEIDENBERGER
City Attorney
APPROVED AS TO SUBSTANCE:

BY: _______________________________

DENNIS KAUFFMAN
Chief Financial Officer/Assistant
City Manager
CEO Chief Financial Officer

COUNCIL COMMUNICATION
CC #: 3224
File #: 0400-04-04-1
Title:

Community Facilities District No. 3 (Municipal Services) - Annexation No. 29 Shea Roseville Apartments - Resolution of Intention to Annex Territory Contact: Jeannine Thrash 916-774-5473 [email protected] Dennis Kauffman 916-774-5313 [email protected]
Meeting Date: 4/3/2024
Item #: 7.10.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a Resolution of Intention to Annex Territory to Community Facilities District and to Authorize the Levy of Special Taxes Therein, City of Roseville Community Facilities District No. 3 (Municipal Services), Annexation No. 29 (Shea Roseville Apartments). Staff also recommends that Council set Wednesday May 15, 2024 at 6:00 p.m. in the Roseville City Council Chambers at 311 Vernon Street, Roseville, California as the time and place to conduct a public hearing on the annexation.

BACKGROUND
The landowner is obligated per the Development Agreement by and between the City of Roseville and Roseville Holdings, LLC, to annex into the Municipal Services Community Facilities District No. 3 (CFD 3) prior to the issuance of the first residential building permit.

The property is being annexed into CFD 3 in order to offset the property's impact on the City's General Fund resources available to pay for municipal services citywide, including the project area.

FISCAL IMPACT
The CFD 3 will generate special taxes levied on the landowner's annual property tax bill.

Annexation into CFD 3 helps offset the property's impact on City General Fund resources available to pay for municipal services and therefore will not negatively impact the General Fund.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Adoption of the above-referenced resolution meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Respectfully Submitted,
Jeannine Thrash, Management Analyst
Dennis Kauffman, Assistant City Manager/Chief Financial Officer _____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 24-069
Proposed Boundary Map

CITY COUNCIL OF THE CITY OF ROSEVILLE
RESOLUTION NO. 24-069

A RESOLUTION OF INTENTION TO ANNEX TERRITORY

TO COMMUNITY FACILITIES DISTRICT

AND TO AUTHORIZE THE LEVY OF SPECIAL TAXES THEREIN

CITY OF ROSEVILLE
Community Facilities District No. 3
(Municipal Services)
Annexation No. 29 (Shea Roseville Apartments)
WHEREAS, the City Council (the “Council”) of the City of Roseville (the “City”) has conducted proceedings to establish Community Facilities District No. 3 (Municipal Services) (the “CFD”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the "Act"), Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing at Section 53311, of the California Government Code; and
WHEREAS, under the Act, this Council, as the legislative body for the CFD, is empowered with the authority to annex territory to the CFD, and now desires to undertake proceedings to annex territory to the CFD.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ROSEVILLE RESOLVES AS FOLLOWS:

1. Findings. This Council hereby finds and determines that public convenience and necessity require that territory be added to the CFD.

2. Territory Described. The name of the existing CFD is “City of Roseville Community Facilities District No. 3 (Municipal Services).” The territory originally included in the existing CFD is set forth in the map of the CFD heretofore recorded in the Placer County Recorder’s Office on August 18, 2004, in Book 3 at Page 41 of Maps of Assessment and Community Facilities Districts, to which map reference is hereby made, as such map has been supplemented in connection with subsequent annexations.

The territory now proposed to be annexed to the CFD is as shown on the Annexation Map for the captioned Annexation No. 29 (Shea Roseville Apartments) to the CFD, on file with the Clerk, the boundaries of which territory are hereby preliminarily approved and to which map reference is hereby made for further particulars. The City Clerk is hereby directed to cause to be recorded such Annexation Map, showing the territory to be annexed, in the office of the County Recorder of the County of Placer within 15 days of the date of adoption of this resolution.

3. The Services. The types of public services financed by the CFD and pursuant to the Act consist of those services (the “Services”) as described in Exhibit B to the Resolution of Formation with respect to the CFD adopted by the Council as Resolution No. 04-426 on September 15, 2004 (the “Resolution of Formation”) and included as Exhibit B hereto. It is presently intended that the Services will be provided, without preference or priority, to the existing territory in the CFD and the territory proposed to be annexed to the CFD.

4. Special Tax. Except to the extent that funds are otherwise available to the CFD to pay for the Services, a special tax sufficient to pay the costs thereof is intended to be levied annually within the CFD, and collected in the same manner as ordinary ad valorem property taxes.

The special tax proposed to pay for Services to be supplied within the territory proposed to be annexed will be equal to the special taxes levied to pay for the same Services in the CFD, except that a higher or lower tax may be levied within the territory proposed to be annexed or to be annexed in the future to the extent that the actual cost of providing the Services in that territory is higher or lower than the cost of providing those Services in the CFD.

The proposed rate and method of apportionment of the special tax among the parcels of real property within the CFD, as now in existence and following the annexation proposed herein, in sufficient detail to allow each landowner within the territory proposed to be annexed to the CFD to estimate the maximum amount such owner will have to pay, are described in the Resolution of Formation and included as Exhibit A hereto.

5. Hearing. Wednesday, May 15, 2024, at 6:00 p.m. or as soon as possible thereafter, at the City of Roseville Civic Center Council Chambers located at 311 Vernon Street, Roseville, California 95678, be, and the same are hereby appointed and fixed as the time and place when and where this Council, as legislative body for the CFD, will conduct a public hearing on the matters described in this Resolution.

6. Notice. The City Clerk is hereby directed to cause notice of said public hearing to be given by publication one time in a newspaper of general circulation in the area of the CFD, including the area to be annexed to the CFD. The publication of said notice shall be completed at least 7 days before the date herein set for said hearing. The City Clerk may also cause a copy of such notice and a copy of this Resolution to be mailed to each landowner within the territory proposed to be annexed, which notice and resolution shall be mailed at least 15 days before the date of said hearing. Such notice shall be substantially in the form specified in Section 53339.4 of the Act, with a summary form specifically authorized.

7. Effective Date. This Resolution shall take effect upon its adoption. * * * * * *
I hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Roseville, California, at a regularly scheduled meeting thereof, held on the day of 20 , by the following vote of the CityCouncil:

AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
ABSTAIN: COUNCILMEMBERS
Mayor
ATTEST:

City Clerk
Exhibit A

Page 1 ends

EXHIBIT A

CITY OF ROSEVILLE
COMMUNITY FACILITIES DISTRICT NO. 3
(MUNICIPAL SERVICES)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
A Special Tax applicable to each Assessor’s Parcel in Community Facilities District No. 3 (Municipal Services) [herein “CFD No. 3”] shall be levied and collected according to the tax liability determined by the City Council, acting in its capacity as the legislative body of CFD No. 3, through the application of the appropriate Special Tax rate, as described below. All of the property in CFD No. 3, unless exempted by law or by the provisions of Section E below, shall be taxed for the purposes, to the extent, and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acreage” or “Acre” means the land area making up an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable final subdivision map or other parcel map recorded at the County Recorder’s Office.
“Administrative Expenses” means the costs incurred by the City to determine, levy and collect the Special Tax, including salaries of City employees and fees of consultants and the costs of collecting installments of the Special Taxes upon the general tax rolls; preparation of required reports, and any other costs required to administer the CFD as determined by the Finance Director.
“Administrator” means the person or firm designated by the City to administer the Special Taxes according to this Rate and Method of Apportionment of Special Tax. “Affordable Housing Director” means, at any point in time, the person within the City who services as head of the department that is in charge of the City’s affordable housing program.
“Affordable Unit” means a Unit built on a Parcel for which an Affordable Purchase Development Agreement or similar agreement has been recorded on title of the property designating the Unit as affordable (as determined by the City) and resulting in a deed of trust on the Parcel in favor of the City. The City’s Affordable Housing Director shall determine which Units are designated as Affordable Units and maintain an Affordable Exhibit A

Page 2 ends

Unit Listing which shall contain all designated buildable parcels by tract and lot number.

The Affordable Unit Listing shall also be updated to reflect those Units no longer qualifying as Affordable Units, also known as Market Rate Units. The Affordable Unit Listing, which shall contain all qualifying Affordable Units as of April 30, shall be made available to the Administrator by July 1 of each year for purposes of determining the Maximum Special Tax for Parcels pursuant to Section C.
“Affordable Unit Assignment” means a reduction in the Maximum Special Tax for a Parcel due to the assignment of an Affordable Unit(s) to the Parcel. “Annual Tax Escalation Factor” means an annual increase in the Maximum Special Tax following the Base Year in an amount equal to the lesser of: (i) the combined percentage increase, if any, in the City of Roseville General Fund Operating Budget for police and fire services, or (ii) four percent (4%).
“Assessor’s Parcel” or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel number.
“Assessor’s Parcel Map” means an official map of the County Assessor designating parcels by Assessor’s Parcel number.
“Authorized Services” means the public services authorized to be funded by CFD No. 3 as set forth in the documents adopted by the City Council when the CFD was formed.
“Base Year” means Fiscal Year 2009-10.
“City” means the City of Roseville.
“City Council” means the City Council of the City of Roseville, acting as the legislative body of CFD No. 3.
“County” means the County of Placer.
“Developed Property” means, in any Fiscal Year, both of the following:
 For Condominium Conversion Parcels, all individual Units for which an escrow has closed prior to June 30 of the preceding Fiscal Year; and  All otherParcels of Taxable Property within the CFD for which a use permit or building permit for new construction of a residential or non-residential structure was issued prior to June 30 of the preceding Fiscal Year. “Finance Director” means the Finance Director for the City of Roseville or his or her designee or successor.

Exhibit A

Page 3 ends

“Fiscal Year” means the period starting on July 1 and ending on the following June 30.
“Land Use Designation” means the land use designated to be built on a particular Parcel based on reference to an adopted community plan or specific plan or, to the extent that such a plan has not been approved for a Parcel, to the City’s general plan.
“Market Rate Unit” means a Unit that is not an Affordable Unit. “Multi-Family Property” means, in any Fiscal Year, all Parcels in CFD No. 3 for which a building permit was issued or may be issued for construction of a residential structure with multiple units that share common walls, all of which are offered for rent to the general public.
“Maximum Special Tax” means the maximum Special Tax determined in accordance with Section C below that can be levied on Taxable Property in any Fiscal Year.
“Public Property” means any property within the boundaries of CFD No. 3 that is owned by the federal government, State of California, County, City, or other public agency.
“Single Family Attached Property” means, in any Fiscal Year, all Parcels in CFD No. 3 for which a building permit was issued for construction of a residential structure consisting of two or more Units that share common walls and are offered as for-sale Units, including such residential structures that meet the statutory definition of a condominium contained in Civil Code Section 1351.
“Single Family Detached Property” means, in any Fiscal Year, all Parcels in CFD No. 3 for which a building permit was issued for construction of a Unit that does not share a common wall with another Unit.
“Special Tax” means any tax levied to pay for Authorized Services. “Taxable Property” means all Assessor’s Parcels within the boundaries of CFD No. 3 which are not exempt from the Special Tax pursuant to law or Section E below. “Unit” means an individual single-family detached unit or an individual residential unit within a duplex, triplex, fourplex, townhome, condominium, or apartment structure. “Zoning Designation” means, for a particular Parcel, the designation of zoning for the Parcel based on the zoning map symbols set forth in the City’s zoning ordinance or, if the designation is inconsistent with the City’s zoning ordinance, as determined by the Administrator.

Exhibit A

Page 4 ends

B. CATEGORIZING PARCELS FOR ANNUAL TAX LEVY
Each Fiscal Year, the Administrator shall identify the current Assessor’s Parcel numbers for all Parcels of Developed Property within CFD No. 3. The Administrator shall then identify the Land Use Designation for each Parcel of Developed Property to determine the appropriate Maximum Special Tax pursuant to Section C below. If aLand Use Designation has not been assigned to a Parcel of Developed Property, the Administrator shall determine the Zoning Designation for the Parcel and reference Table 1 below to determine the Maximum Special Tax associated with that Zoning Designation.

If the Zoning Designation for the Parcel applies to more than one Land UseDesignation as reflected in Table 1, the Administrator shall determine the appropriate Maximum Special Tax rate for the Parcel by identifying the Maximum Special Tax shown in Table 1 for the land use category that is most similar to the land use that will be built on the Parcel.

For Single Family Attached Property or multi-family property, the number ofUnits shall be determined by referencing the condominium plan, apartment plan, site plan or other development plan for the property. For Condominium Parcels, the Administrator shall also determine the date of which escrow closed for any Units that were sold to individual buyers in the prior Fiscal Year.

For Parcels with a Land Use Designation of Residential, Mixed Use; Village Center – Medium Density Residential; Village Center – High Density Residential; or Commercial, Mixed Use, the Administrator shall determine whether (i) residential units that have been or will be built on the Parcel will be offered for sale to individual home buyers and (ii) a separate Assessor’s Parcel number will be assigned to the airspace parcel associated with each residential unit. Once separate Parcel numbers have been assigned to the residential airspace Parcels, the Administrator shall assign a Maximum Special Tax to the airspace Parcel for each residential unit. In addition, the Administrator shall tax the commercial land uses on the Parcel using the Maximum Special Tax for the appropriate commercial Land Use Designation in Table 1 below. The acreage to be used to calculate the Maximum Special Tax on the commercial uses shall be the full land area of the underlying Assessor’s Parcel on which the residential and commercial land uses are located.

Upon recordation of each Final Map creating Single Family Detached Property and/or Single Family Attached Property, the ECS Director is to determine the number of Affordable Units included within the Final Map. When building permits are issued for the Affordable Units designated on each Parcel, the Administrator shall reduce the Maximum Special Tax for each Affordable Unit to fifty percent (50%) of the Maximum Special Tax that applies to the Market Rate Units with the same Zoning Designation. After May 1 of each Fiscal Year, the Administrator shall obtain the Affordable Unit Listing from the Affordable Housing Director to confirm which Parcels qualify for an Affordable Unit Adjustment in the following Fiscal Year.

Exhibit A

Page 5 ends

C. MAXIMUM SPECIAL TAX
All Taxable Property within the CFD shall be subject to a Maximum Special Tax that will be levied each Fiscal Year to pay for Authorized Services. As discussedabove, the Administrator shall rely first on the Land Use Designation for a Parcel to determine the appropriate Maximum Special Tax in Table 1 below but, in the absence of an assigned Land Use Designation, the Administrator shall refer to the Zoning Designation and land use to be built on the Parcel. The following Maximum Special Tax rates apply to all Parcels of Developed Property within CFD No. 3:

Table 1
Maximum Special Taxes
Land Use Designation Zoning
Designation
Maximum Special Tax
(Fiscal Year
2009-10) *
Low Density Residential (LDR) R1 $342.00 per Unit
Medium Density Residential (MDR) RS R2 $200.00 per Unit High Density Residential (HDR) R3 $100.00 per Unit
Community Commercial CC $932.00 per Acre
General Commercial GC $932.00 per Acre
Highway Commercial HC $932.00 per Acre
Regional Commercial RC $932.00 per Acre
Central Business District CBD $932.00 per Acre
Business Professional BP, MP $801.00 per Acre
* Beginning July 1, 2010 and each July 1 thereafter, the Maximum Special Taxes shown above shall be adjusted by applying the Annual Tax Escalation Factor. The Maximum Special Tax for Affordable Units within a particular Zoning Designation shall be fifty percent (50%) of the amount shown above for that Zoning Designation, as adjusted by the Annual Tax Escalation Factor.

D. METHOD OF LEVY AND COLLECTION OF SPECIAL TAX
Each Fiscal Year, the Administrator shall levy the Maximum Special Tax on each Parcel of Developed Property in CFD No. 3. The Special Tax for CFD No. 3 shall be collected in the same manner and at the same time as ordinary ad valorem property taxes provided, however, that CFD No. 3 may (under the authority of Government Code Section 53340) in any particular case bill the taxes directly to the property owner off the County tax roll, and the Special Tax will be equally subject to foreclosure ifdelinquent.

E. LIMITATIONS
Notwithstanding any other provision of this Rate and Method of Apportionment of Special Tax, no Special Tax shall be levied on Public Property.

Exhibit A

Page 6 ends

F. INTERPRETATION OF SPECIAL TAX FORMULA
The City reserves the right to make minor administrative and technical changes to this document that does not materially affect the rate and method of apportioning the Special Taxes. In addition, the interpretation and application of any section of this document shall be left to the City’s discretion. Interpretations may be made by the City by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this Rate and Method of Apportionment of Special Tax.

Exhibit A

Page 7 ends

AMENDED MAXIMUM SPECIAL TAX RATES
COMMUNITY FACILITIES DISTRICT NO. 3
(MUNICIPAL SERVICES)
ANNEXATION NO. 29 (SHEA ROSEVILLE APARTMENTS)
Planned
Land Uses
(Base Year
FY 2023/24)
Maximum
Special
Tax Rates* Units/Acres
Anticipated
FY 2023/24
Maximum
Special Tax
if Built Out
Low Density Residential $528.35 per unit
Medium Density Residential $308.97 per unit
High Density Residential $154.49 per unit 4 $618
High Density -Affordable $77.24 per unit 352 27,190
Commercial $1,439.82 per acre
Business Professional $1,237.44 per acre
Total Maximum Special Tax $ 27,808
*The Maximum Special Tax following the Base Year (FY 2023-24) will increase in an amount equal to the lesser of; (i) the combined percentage increase, if any, in the City of Roseville General Fund Operating Budget for police and fire services, or (ii) four percent (4%).

If, in any Fiscal Year, the Land Use of a Property is not listed in Section C, the Maximum Special Tax for each such Parcel shall be determined by the Administrator based upon (i) the Special Tax per unit or acre for other District Properties having similar land use designations or (ii) a new Maximum Special Tax rate suitable for the Land Use, whichever is greater.

Exhibit B

Page 8 ends

EXHIBIT B

CITY OF ROSEVILLE
COMMUNITY FACILITIES DISTRICT NO. 3
(MUNICIPAL SERVICES)

LIST OF AUTHORIZED SERVICES
The Community Facilities District No. 3 (Municipal Services) (the “CFD”) shall include the City services authorized under Section 53313 of the Community Facilities Act of 1982, Chapter 2.5 of Division 2 of Title 5 of the California Government Code, commencing with Section 53311 (the “Act”), which include the following services, to the extent that such services are in addition to those provided in the territory of the CFD before the CFD was created (or, as to territory which may be annexed to the CFD, before such territory was annexed to the CFD.) In accordance with Section 53313 of the Act, the additional services may not supplant services already available within the territory when the district was created.
(a) Police protection services, including, but not limited to, criminal justice services. However, criminal justice services are limited to providing services for jails, detention facilities, and juvenile halls.
(b) Fire protection and suppression services, and ambulance and paramedic services.
(c) Recreation program services, library services, maintenance services for elementary and secondary school sites and structures, and the operation and maintenance of museums and cultural facilities, subject to the limitations contained in Section 53313 of the Act.
(d) Maintenance of parks, parkways, and open space.
(e) Flood and storm protection services, including, but not limited to, the operation and maintenance of storm drainage systems, and sandstorm protection systems.
(f) Services with respect to removal or remedial action for the cleanup of any hazardous substance released or threatened to be released into the environment, subject to the limitations contained in Section 53313 of the Act.

COUNCIL COMMUNICATION
CC #: 3228
File #: 0206-03
Title:

City of Roseville Goals and Policies Concerning the Use of Mello-Roos Community Facilities Act of 1982
Contact: Jeannine Thrash, 916-774-5473 [email protected] Dennis Kauffman 916-774-5313 [email protected]
Meeting Date: 4/3/2024
Item #: 7.11.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution approving the changes to the City of Roseville Goals and Policies Concerning the Use of Mello-Roos Community Facilities Act of 1982, effective April 3, 2024.

BACKGROUND
In 2019, the City Council approved the current version of the City of Roseville Goals and Policies Concerning the Use of Mello-Roos Community Facilities Act of 1982. Staff recently worked with the City's municipal advisor and bond counsel to recommend nonsubstantive edits to the document. The recommended update revises the language in the document to help clarify the meaning of the policy and align it with established City practices.

FISCAL IMPACT
The update to the Goals and Policies Concerning the Use of Mello-Roos Community Facilities Act of 1982 will not have any impact of the City's General Fund.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Adoption of financial policies meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal A - Remain fiscally responsible in a changing world Goal F - Invest in well-planned infrastructure and growth Respectfully Submitted,
Jeannine Thrash, Management Analyst
Dennis Kauffman, Assistant City Manager/Chief Financial Officer _____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 24-073
Amended Goals and Policies - Redline
Amended Goals and Policies
RESOLUTION NO. 24-073

ADOPTING THE AMENDED GOALS AND POLICIES CONCERNING THE USE OF MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982
WHEREAS, in 2019, the City Council adopted the current version of the City of Roseville Goals and Policies Concerning Use of Mello-Roos Community Facilities Act of 1982; and
WHEREAS, staff worked with the City’s municipal advisor and bond counsel to make nonsubstantive edits to help clarify the meaning of the policy and align it with established City practices; and
WHEREAS, the amended Goals and Policies Concerning Use of Mello-Roos Community Facilities Act of 1982 have been reviewed by the City Council.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said amended Goals and Policies Concerning Use of Mello-Roos Community Facilities Act of 1982 are hereby adopted.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 20__, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
________________________
City Clerk
Goals and Policies
Concerning Use of
MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982
Effective February 20, 2019 April 3, 2024

TABLE OF CONTENTS
Section Page
Introduction 1
1 Goals & Policies 1
2 Definitions 32
3 Eligible Public Facilities 43
4 Value-to-Lien Ratio 43
5 Market Absorption Study 54
6 Security 5
7 Special Tax Formula 65
8 Terms and Conditions of Bonds 7
9 District Costs, Deposits and Reimbursements 8
10 Agreements 98
11 Use of Consultants 910
12 Acquisition Provisions 910
13 Disclosure to Purchasers 910
14 Property Owner Support 110
15 Land Use Approvals 110
16 Application Process 110
17 Application of Goals and Policies 11
ATTACHMENT 1
Mello-Roos Community Facilities District Formation Process 132

INTRODUCTION
The purpose of these Goals and Policies is to establish for the City of Roseville (the “City”) a set of guidelines for the formation and administration of Community Facilities Districts (also referred to as “CFDs” or “Districts”). The underlying principles behind the proposed policies are public interest and benefit, fairness to current and future property owners and homeowners, avoidance of future failure of the project and/or property owner protest, protection of the City's financial position, and reimbursement to the City of its incurred expenses.

Community Facilities District laws are found in the Mello-Roos Community Facilities Act of 1982 in the California Government Code, beginning at Section 53311 (the “Mello-Roos Act”).

These Goals and Policies are adopted by the City in compliance with Section 53312.7 of the Mello-Roos Act.

The City has developed the following Goals and Policies on financing facilities and/or services through the formation of Community Facilities Districts, including financing public facilities through the issuance of debt to be repaid from proceeds of special taxes levied within the districts. It is the City's goal to support projects which address a public need and provide a public benefit. Proposed projects requesting Community Facility District debt financing will be evaluated to determine if such financing is financially viable and in the best interest of the City and current and future City and project residents.

The City may consider facilities or services District formation on its own initiative and also will consider developer or property owner initiated applications requesting the formation of Community Facilities Districts and the issuance of bonds to finance eligible public facilities necessary to serve newly developing commercial, industrial and residential projects in the following instances:
(1) When tax-exempt financing of project public facilities will result in a significant public benefit; and/or
(2) When the City has negotiated and executed a Development Agreement addressing project implementation; and/or
(3) When City-based needs and circumstances warrant financing Public Services or Public Facilities through a Special Tax to provide significant public benefit.

Generally, community serving public facilities will be eligible for this tax-exempt financing program. Facilities will be financed and Districts formed in accordance with the then current provisions of the Mello-Roos Act, or any other methodology legally available to the City to finance such improvements.

1. GOALS & POLICIES
2 Each time public facilities are to be built or accepted by the City, or a Community Facilities District is formed for the benefit of a development project, and if maintenance requirements will exceed normal City standards and/or if City services will need to be expanded to facilitate the project, the City will require the creation of a maintenance/services District or Home/Property Owners Association suitable to provide such needs. The City may also annex projects into existing maintenance/services Districts. The maintenance or services District may be established pursuant to the provisions of the Mello-Roos Act, or any other methodology legally available to the City to finance such maintenance. The purpose of the services/maintenance District is to fund the ongoing costs of parks and open space, public landscaping, police and fire protection services and library services and maintenance not funded by other sources; and/or to pay for any unfunded ongoing City maintenance or service costs associated with a development project in the City, all in accordance with the Mello-Roos Act and the formation documents for each particular District.

Existing neighborhoods may petition the City for the use of financing to fund local or neighborhood serving Public Services and/or Public Facilities in accordance with the MelloRoos Act.

The City shall make the determination as to whether a proposed District shall proceed under the provisions of the Mello-Roos Act, or any other methodology legally available to the City to finance improvements, services or maintenance. The City may confer with consultants and the Applicant to learn of any unique District requirements such as facilities or services serving the regional area or long-term development phasing prior to making any final determination.

All City and consultant costs incurred in the evaluation of new development, District applications, and the establishment of Districts will be paid by the Applicant(s)/petitioner(s) by advance deposit increments. The City shall not incur any non-reimbursable expense for processing Community Facilities Districts. Expenses not chargeable to the District shall be borne by the Applicant(s)/petitioner(s).

The City has established a Schedule of Maintenance Costs and Charges applicable to new development projects in the City, which provides a uniform set of City costs associated with the ongoing operations, maintenance, and administration of services provided within new development areas that can be financed by the levy of Special Taxes in maintenance/services Districts. The City will update this Schedule by Resolution from time to time to ensure new development projects continue to self-fund the prevailing costs incurred to provide annual and ongoing services in these new areas, as well as pay for the ongoing administration of Districts formed in such areas.

In addition to forming and administering its own Districts, the City may also permit the formation of Community Facilities Districts on land in the City and on its behalf by joint powers authorities of which the City is a member, such as through the California Municipal Finance Authority’s Bond Opportunities for Land Development (BOLD) program. 3 Unless the context otherwise requires, the terms employed in these Goals and Policies shall have the meanings specified below:
“Applicant” means a developer or other person requesting formation of a District. "City" means the City of Roseville.
“Community Facilities District” or "District" means a Community Facilities District formed under the Mello-Roos Act.
“Pay-As-You-Go Basis” means the use of annual and/or one-time special tax revenues to directly fund the acquisition, construction, or improvement of Public Facilities, or to fund other authorized costs of a District.
“Public Facilities” means improvements authorized to be constructed or acquired under the Mello-Roos Act including, but not limited to, costs for specified capital facilities imposed by public agencies as a condition to approval of the development encompassed by the District or as a condition to service the District, which may include, but is not limited to, infrastructure improvements such as major streets and arterials; highway improvements and freeways; freeway interchanges; right of way acquisitions; bridges, water, sewer and drainage improvements; landscape irrigation and drainage facilities; environmental mitigation and remediation; bicycle and pedestrian facilities; parks; wetlands; electrical conduits; transit improvements; and other improvements as which are defined as authorized improvements under the Community Facilities District(s) selected by the City or any ordinance adopted by the City. “Public Services” means services eligible for District financing provided for in the Mello-Roos Act, and for new development will particularly include those which benefit properties within a proposed development or area of the City subject to the special tax or the City at large and may include reserves for replacement of equipment facilitating maintenance and operation of the included City services, all as further specified in the Mello-Roos Act. “Special Tax” means tax(es) authorized to be levied by the City on behalf of a District on property within the boundary of the District.
"Value" or “Fair Market Value” means the amount of cash or its equivalent which a property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of a difficulty of the other, both having knowledge of all of the uses and purposes to which the property is adapted, and for which it is capable of being used and of the enforceable restrictions upon its uses and purposes.

2. DEFINITIONS
4 Public Facilities eligible for District financing are those improvements which benefit properties within a proposed development, and/or will mitigate impacts of that development upon areas of the City outside the proposed development and/or are otherwise determined by the City to be authorized improvements for a District, and which will be owned, operated and maintained by the City or another public agency as approved by the City.

The City has final determination as to any facility's eligibility for financing as well as the prioritization of facilities to be included within a financing District. Generally, “in-tract” (i.e., local streets) improvements will not be considered eligible.

If a school is financed, the school district’s goals and policies, if any, including its priority access policy will be coordinated with the formation of a District.

Public Services eligible for District financing are those types of services and maintenance activities which benefit properties within a proposed development or area of the City subject to the Special Tax as determined by the City, subject to the limitations and other requirements specified in the Mello-Roos Act.

The City may sell bonds for the District only if it determines that the value of the real property that would be subject to the special tax to pay debt service will be at least three (3) times the principal amount of the bonds to be sold and the principal amount of all other bonds outstanding that are secured by a special tax or bonded special assessment. Such determination will be based upon the full cash value as shown on the ad valorem assessment roll or upon an appraisal of the subject property made in a manner consistent with policies of the City. Requirements of a higher value to lien ratio may be imposed by the City and will be determined by City staff with recommendations from bond counsel, financial advisor, and the underwriter, with consideration of the facts pertaining to each particular project, including diversification of land ownership.

Each project will be considered on its own merits. Additionally, the aggregate value to lien ratio of parcels responsible for no more than five percent (5%) of the parcels expected to be subject to special taxes to pay debt service shall be below 3:1 or such higher ratio as determined by the City. The City may allow exceptions to its value to lien ratio requirements in accordance with the Mello Roos Act if it finds and determines that the proposed bonds do not present any unusual credit risk due to the availability of credit enhancements or for other reasons determined by the City.

The appraisal shall be coordinated by, under the direction of, and addressed to the City. All costs associated with the preparation of the appraisal report shall be paid by the Applicant through the advance deposit mechanism. The appraisal shall be conducted in accordance with criteria, standards and assumptions established by the City, based upon the recommendations for each specific project received from the underwriter and financial advisor designated by the City. In every case, the appraisal shall reflect recognized appraisal standards for land-secured bond

3. ELIGIBLE PUBLIC FACILITIES AND SERVICES

4. VALUE-TO-LIEN RATIO
5 financing. The City prefers that the appraisal be prepared in accordance with the recommendations of the California Debt and Investment Advisory Commission as contained in the Appraisal Standards for Land-Based Secured Financings, and deviations therefrom will only be considered upon recommendation from bond counsel, financial advisor, the underwriter and/or the appraiser, with consideration of the facts pertaining to each particular project. The appraised land value should include the value attributable to, and assuming, the Public Facilities to be financed by the bonds being issued for the District have been completed.

The City may require a market absorption study, and may retain a consultant to prepare a report to verify market absorption assumptions and projected sales prices of the properties subject to the special taxes in the District. The study, if required, shall include an estimate of the total number of units, land uses and rate of absorption, and will be used as a basis for verification that sufficient revenues can be generated, and to determine if the financing of the infrastructure and public facilities is appropriate given the projected level and pace of development. All City and consultant costs incurred for this study will be paid by the Applicant by advance deposit or out of special taxes or bond proceeds.

The study will also be provided to the appraiser for use in the appraisal process. The market absorption study should be completed prior to completion of the appraisal, and the appraisal shall take into consideration and reasonably reconcile to the conclusions of the market absorption study or include reasons for significant alternate conclusions.

For new development, the Applicant or property owner must demonstrate its financial plan and ability to pay all special taxes before full build-out has taken place to the satisfaction of the City.

Additional security such as credit enhancement may be required by the City in its sole discretion in certain instances.

If the City requires letters of credit or other credit enhancement, the credit enhancement shall be issued by an institution in a form and upon terms and conditions satisfactory to the City. All fees payable on the letter of credit or other security shall be the sole responsibility of the District Applicant or developer, not the City or District. Any security required to be provided by the Applicant shall be discharged by the City upon the opinion of a qualified appraiser retained by the City that the value-to-lien ratio has reached an acceptable level as determined by the City or upon meeting other credit criteria established by the City.

As an alternative to providing security, depending on circumstances:

A. A portion of the bond proceeds may be placed in escrow with a corporate agent in an amount sufficient to assure an acceptable value-to-lien ratio is reached on the

5. MARKET ABSORPTION STUDY

6. SECURITY
6 escrowed proceeds. The escrowed proceeds shall be released at such times and in such amounts as will assure an acceptable value-to-lien ratio with regard to the aggregate outstanding bonds and other covenants; or
B. The bonds may be issued in series with each series in an amount sufficient to assure an acceptable value-to-lien ratio with regard to the aggregate outstanding bonds and other covenants.

The special tax formula for each District shall adhere to the following requirements:

A. The maximum special tax shall include the annual costs incurred by the City to administer the District, including debt service, City and County administrative expenses, and delinquency coverage in an amount determined appropriate by City staff.

B. The special tax formula shall establish tax rates which correspond to the expected land use designation of each parcel.

C. The special tax formula shall be structured to ensure sufficient funds to pay for annual debt service and administrative expenses of the District.

D. A backup special tax or other mechanism to protect against changes in densities resulting in insufficient annual special tax revenues to pay annual debt service and administrative expenses shall be required.

E. The City may, at its sole discretion, provide for an annual escalation factor, not to exceed two percent (2%) of the Maximum Special Tax for Facilities Districts with residential parcels (bonded) in effect for the prior fiscal year. For Services Districts (non-bonded) or non-residential Districts, the City may provide for an annual escalation factor, not to exceed four percent (4%) of the Maximum Special Tax in effect for the prior fiscal year.

The maximum annual special tax submitted to the qualified electors of the CFD, when added together with all the annual payment requirements of overlapping debt and bonded assessments, and ad-valorem property taxes, shall not exceed one and three-fourths percent (1.75%) of the anticipated (as developed) Fair Market Value of the subject properties, based on projected home prices at time of bond saleprojected to be in effect as of the date bonds are expected to be issued, however City staff may allow for a limit of more than one and three-fourths percent (1.75%) at the Finance DirectorAssistant City Manager/Chief Financial Officer’s discretion.

The City shall retain a special tax consultant to prepare a report which:

A. Recommends a special tax formula for the proposed CFD.

7. SPECIAL TAX FORMULA
7 B. Evaluates the special tax proposed to determine its ability to adequately fund identified public facilities, City administrative costs, services (if applicable) and other related expenditures. Such analysis shall also address the resulting aggregate tax burden of all proposed special taxes plus existing special taxes, ad valorem taxes, and assessments on the properties within the CFD. The rates and method of apportionment of special taxes shall be designed to ensure sufficient revenues are produced in case of final development at lower densities than anticipated.

C. Consultants of the City for the District shall comply with the existing policies of the Fair Political Practices Commission and the California Government Code.

For bonded Districts the City may retain a Financial Advisor who will review the special tax formula and other financial documents to determine that the documents have been prepared in a manner that does not adversely impact the City’s financial position, District bonding capacity or credit rating. The Financial Advisor will confirm the findings of the Special Tax Consultant that the proposed Special Taxes are sufficient to fund all the future costs of the District. Costs incurred for these consultants will be paid by the Applicant(s) by advance deposit increments and may be reimbursed from bond proceeds or Special Tax collections.

All terms and conditions of the bonds shall be established by the City, and included in the Fiscal Agent Agreement. The City or a designated fiscal agent will control, manage and invest all District-issued bond proceeds designated for use on improvements. Each bond issue shall be structured to adequately protect bond owners and to not adversely impact the bonding capacity or credit rating of the City through the special taxes or assessments, credit enhancements, foreclosure covenant and reserve fund. Unless otherwise authorized by the City, the following shall serve as bond requirements:

A. If required, a reserve fund amount equal to the lesser of ten percent (10%) of the initial bond principal, or maximum annual debt service on the bonds, or one hundred twenty-five percent (125%) of average annual debt service, or as otherwise provided by Federal tax law. If agreed by the City and the Underwriter, a Surety may be purchased in lieu of a funded reserve.

B. The Special Taxes shall be levied for the first fiscal year following the sale of the bonds or at the end of capitalized interest period. Interest may be funded (capitalized) during a period not to exceed twenty-four (24) months, as determined by the Finance DirectorAssistant City Manager/Chief Financial Officer.

C. The repayment of principal shall begin on the earliest principal payment date for which sufficient special tax revenues can be made available after the end of the

8. TERMS AND CONDITIONS OF BONDS
8 capitalized interest period, or otherwise as determined by the Finance DirectorAssistant City Manager/Chief Financial Officer to be appropriate.

D. The City may consider an increasing annual debt servicemaximum Special Tax by two percent (2%) per year, per Section 53321 of the Mello-Roos Act, for the term of the bonds. Determination of this shall be made by the Finance DirectorAssistant City Manager/Chief Financial Officer.

E. The maximum Special Tax shall be established to ensure that the annual revenue produced by levy of the maximum special tax shall be equal to at least one hundred ten percent (110%) of the corresponding annual debt service.

F. Prior to the issuance of the bonds, the City may authorize its bond counsel to commence and process to final judgment an action establishing the validity of the proceedings, Special Tax and issuance of bonds, as determined appropriate by the City and such bond counsel.

G. In instances where multiple series of bonds are to be issued, the first series shall include Public Facilities of highest priority as determined by the City to be appropriate for initial development.

H. All statements and materials related to the sale of bonds shall emphasize and state that neither the good faith, nor the taxing power of the City, is pledged to security or repayment of the bonds. The sole source of revenues to secure bonds are Special Taxes.

All City and consultant costs incurred in the formation, evaluation and administration of District applications and the establishment of Districts will be paid by the Applicant by advance deposit increments. The City shall not incur any non-reimbursable expenses for processing and administering Districts. Expenses not chargeable to the District shall be directly borne by the Applicant.

Funds to reimburse costs and expenses incurred by the City shall be billed to the Applicant and the Applicant shall pay each invoice within sixty (60) calendar days of receipt of such notice. If the Applicant fails to make any payment of funds for the proceedings, the City may suspend all proceedings until receipt of such additional deposit.

For Districts financing facilities, except as otherwise provided herein, the Applicant shall be entitled to reimbursement for reasonable costs and expenses incident to the construction of the Public Facilities as provided under the Mello-Roos Act , provided that all such costs and expenses are determined by the City to be necessary and reasonable.

9. DISTRICT COSTS, DEPOSITS AND REIMBURSEMENTS
9 The Applicant or property owner shall not be entitled to reimbursement from bond proceeds for any of the expenses specified as follows:

A. In-house administrative and overhead expenses incurred by the Applicant not authorized by the City;
B. Interest expenses incurred by the Applicant on moneys advanced or expended during the proceedings and construction of Public Facilities; and C. Any other costs and expenses incurred by the Applicant which are not otherwise authorized for reimbursement under the Mello-Roos Act.

Neither the City nor the District shall be required to reimburse the Applicant or property owner from any funds other than the proceeds of bonds issued by the City for a District and pay-as-yougo Special Taxes. The use and terms of any pay-as-you-go reimbursement shall be at the discretion of the City’s Finance DirectorAssistant City Manager/Chief Financial Officer or such other person or persons as may be designated.

Agreements will be prepared incidental to District formation proceedings in a form satisfactory to the City and consistent with these policies. These agreements may include, but not be limited to:

A. Funding, Construction and Acquisition and Shortfall Agreement; B. Joint Community Facilities Agreements with any other public agency entitled to receive any portion of the bond proceeds or entitled to own and operate any of the public facilities financed by bond proceeds; and
C. Deposit and Reimbursement Agreement.

As a condition to the issuance and sale of bonds, all of the agreements specified shall be duly approved and executed by the parties thereto. Prior to execution of any agreements, such agreements shall be reviewed and approved by bond counsel and the City Attorney, who shall determine if each agreement shall also be approved by the City Council. Agreement approval by the City Attorney shall be indicated thereon when appropriate.

10. AGREEMENTS

11. USE OF CONSULTANTS
10 The City shall have the sole discretion as to selection of consultants and determination of fees and expenses of all consultants necessary for the formation of the District and the issuance of bonds, including the underwriter(s), bond counsel, financial advisor, appraiser, trustee, paying agent, market absorption study consultant, and the special tax consultant after reasonable consultation with the Applicant. Prior consent of the Applicant shall not be required in the determination by the City of the consulting and financing team.

The City shall also be responsible for determining the structure of the bonds to be issued, including the method of sale (negotiated or competitive), the need for bond ratings, investment of bond proceeds, and all other terms and conditions incidental to structuring and closing a bond issuance and distribution of proceeds, including pay-as-you-go funding, if any, in the form of reimbursement to developer from excess (after debt service and District administration) special tax collections, or otherwise as determined by the Finance DirectorAssistant City Manager/Chief Financial Officer or such other person or persons as may be designated.

The City, at its sole discretion, will determine the facilities to be acquired and the method of determining reasonable acquisition costs, which shall be set forth in the Funding, Construction and Acquisition and Shortfall Agreement. Applicable bidding and prevailing wage requirements are extensive and will be addressed during the preparation of the Funding, Construction and Acquisition Agreement.

The Applicant or property owner will be required to demonstrate to the satisfaction of the City that, to the best of their abilities, there will be full disclosure of the Special Taxes to prospective purchasers of property including interim purchasers and sales to merchant builders. In addition to all requirements of law, the City may require the Applicant to provide additional disclosure of such information as the City deems appropriate to the purchasers of property within the District, with respect to the existence of the District, maximum and/or backup special taxes to be levied within the District, facilities to be constructed, the foreclosure process and the terms and conditions of bonds issued on behalf of the District. Such disclosure shall include home buyer notifications requiring signature prior to home purchases, as well as methods to notify subsequent home purchasers.

Upon request, the Finance Department will provide a “Notice of Special Tax” to sellers of real property subject to the levy of special taxes as required by Government Code Section 53340.2.

12. ACQUISITION PROVISIONS

13. DISCLOSURE TO PURCHASERS
11 In the instance of multiple property owners, the Applicant shall be required to produce letters evidencing other property owners' support for the scope and establishment of the District as an attachment to the application. The Applicant must have concurrence of 2/3 vote of the property owners to be included in a Community Facilities District, unless the City accepts moving forward based on special circumstances.

Properties proposed for inclusion in a District must possess a land use determination such that proposed development land use and specific facility requirements can support the proposed special tax. The City will accept applications for Mello-Roos Act financing for residential properties primarily when they are included in an approved specific plan or City planning area.

Early communication with the City is encouraged to assist Applicants in evaluating the feasibility of available financing programs and to discuss program procedures.

1. PREAPPLICATION CONFERENCE: Applicant meets with City to discuss the proposed project and application procedures.

2. PROJECT REVIEW: Applicant and City staff meet to discuss initial application, including any issues raised and further information that might be required. If necessary, Applicant submits revised application.

3. PROJECT INITIATION: Applicant, staff and consultants meet to determine preliminary project schedule and begin work necessary to initiate District formation.

4. PROJECT IMPLEMENTATION: The resolution of intention is approved by Council action in order to move forward to the formation hearing. Once the District is formed, bonds can be issued (if forming a District for Public Facilities).

The City may find that a waiver of any of the above stated policies is reasonable given identified City benefits to be derived from such waiver. Such waivers may be granted with or without action of the City Council, as determined appropriate by the Finance DirectorAssistant City Manager/Chief Financial Officer. Approval by the City Council of formation of a District and/or issuance of bonds for a District constitutes a determination that a District conforms to the

14. PROPERTY OWNER SUPPORT

15. LAND USE APPROVALS

16. APPLICATION PROCESS

17. APPLICATION OF GOALS AND POLICIES
12 provisions of these Goals and Policies and, if applicable, that a waiver of any provision hereof is appropriate, and shall be conclusive evidence of such conformity.

These Goals and Policies may be reviewed and may be amended from time to time, as determined by the City to be appropriate in the light of changing conditions affecting the City and its real estate market and changes in practices among other communities in the region. 13 ATTACHMENT 1
GOVERNING LAW: California Government Code, beginning at Section 53311, Mello-Roos Community Facilities District Act of 1982, available online.

INFORMATIONAL SUMMARY OF MELLO-ROOS COMMUNITY FACILITIES

DISTRICT FORMATION PROCESS
A Community Facilities District (CFD) is a legally constituted governmental entity created for the purpose of financing public facilities and services. It is similar in effect to an Assessment District except that the resulting security for debt in an Assessment District is a fixed lien assessment, while under a CFD it is an annual special tax. A CFD may finance a broad range of facilities and/or services, including facilities and/or services which benefit an area in a general way, whereas assessment district financing is more limited in scope and requires a benefit analysis to match the fixed assessment amount to the benefit received. Recent legal cases have challenged benefit determinations. Given those flexibility features of a CFD, it has emerged as the preferred special district financing methodology for most municipalities.

The formation proceedings are subject to, and contingent upon satisfaction of all environmental, zoning and land use regulations. All documents of formation are to be prepared by the Applicant or designated party.

1. Initiation of Proceedings. Proceedings can be initiated by the City on its own initiative, or must be considered within ninety (90) days from the time a request is made by a petition signed by ten percent (10%) of the registered voters (or ten percent (10%) of the landowners by area if less than twelve (12) registered voters) within the proposed CFD.

The petition shall be accompanied by payment of a fee determined by the Finance Department to be sufficient to pay for costs incurred in conducting the proceedings.

2. Resolution of Intention. Adoption of a Resolution of Intention to establish a CFD begins the formation process, stating the name of the proposed CFD, the types of facilities and/or services to be financed and that, a special tax to pay for such facilities and/or services will be annually levied. The Resolution of Intention shall also fix a time and place for a public hearing between thirty (30) and sixty (60) days after the adoption of the Resolution of Intention, describe the method of levy and apportionment of the special tax and describe the proposed voting procedure. In addition, the resolution may specify conditions under which the obligation to pay the special tax may be prepaid and permanently satisfied. The City Council directs its responsible officers to study the proposed District and to file a report at or before the public hearing describing the proposed Public Facilities and Public Services and an estimate of costs. 14 3. Public Hearing. Protests against the establishment of the CFD, the extent of the CFD or the furnishing of specified types of Public Facilities and Public Services may be made orally or in writing by interested persons or taxpayers. If fifty percent (50%) or more of the registered voters, or six (6) registered voters, whichever is more, residing within the proposed CFD or the owners of one-half (1/2) or more of the area of land in the proposed CFD file written protests against the establishment of the CFD, the proceedings are abandoned. If the protests are directed toward certain types of facilities or services, or against a specified special tax, those specific items may be eliminated from the resolution forming the CFD. The hearing may be continued for up to thirty (30) days without special findings and up to six (6) months if the City Council makes specified findings.

4. Resolution of Formation. If the City Council decides to establish the CFD, it will adopt a Resolution of Formation containing similar information as contained in the Resolution of Intention.

5. Election. If the City Council determines to form the CFD, it submits the question of whether special taxes should be levied to an election of the voters (or land owners if less than twelve (12) registered voters) of the proposed CFD. Combined with the tax proposition, there may be a proposition on the question of incurring bonded indebtedness.

The tax, in order to be levied, must be approved by two-thirds (2/3) of the votes cast and thereafter levied by adoption of an ordinance of the City Council. The Mello-Roos Act provides that the election shall be at the next general election or at a special election to be held between ninety (90) and one hundred and eighty (180) days following the close of the protest hearing. The election time limits may be shortened by the unanimous consent of the qualified electors within the proposed District and the concurrence of the election official conducting the election.

6. Special Tax Bonds. A CFD may be created solely to provide the services permitted by statute. However, most CFD's have been created specifically for the purpose of levying special taxes to service bonded indebtedness incurred by the CFD in order to finance the construction of Public Facilities. The proceedings to authorize and incur bonded indebtedness usually parallel the proceedings for formation of the CFD and the authorization to levy the special tax, although the bond proceedings could be conducted separately and at a later date. The proceeding to authorize bonded indebtedness involves a Resolution of Intention, public hearing and election, all conducted in a manner very similar to proceedings to form the CFD and levy the tax. Government Code Sections 53341 and 53359 establish a limited period of time in which special taxes levied under the Mello-Roos Act may be challenged by a third party. For this reason, the City may choose to wait (60) days (a ‘validation period’) after the authorization to incur bonded indebtedness is approved before CFD bonds are sold. CFD bonds may be sold competitively or through negotiated sale and may bear fixed or variable interest rates. In some cases, specified facilities may be provided by a CFD for only a portion of the land within the CFD. In that event, the Mello-Roos Act provides for the formation of improvement areas for which separate elections are conducted and to which a specified special tax applies.
15 Goals and Policies
Concerning Use of
MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982
Effective April 3, 2024

TABLE OF CONTENTS
Section Page
Introduction 1
1 Goals & Policies 1
2 Definitions 3
3 Eligible Public Facilities 4
4 Value-to-Lien Ratio 4
5 Market Absorption Study 5
6 Security 5
7 Special Tax Formula 6
8 Terms and Conditions of Bonds 7
9 District Costs, Deposits and Reimbursements 8
10 Agreements 9
11 Use of Consultants 9
12 Acquisition Provisions 10
13 Disclosure to Purchasers 10
14 Property Owner Support 11
15 Land Use Approvals 11
16 Application Process 11
17 Application of Goals and Policies 11
ATTACHMENT 1
Mello-Roos Community Facilities District Formation Process 13

Community Facilities District laws are found in the Mello-Roos Community Facilities Act of 1982 in the California Government Code, beginning at Section 53311 (the “Mello-Roos Act”).

These Goals and Policies are adopted by the City in compliance with Section 53312.7 of the Mello-Roos Act.

Existing neighborhoods may petition the City for the use of financing to fund local or neighborhood serving Public Services and/or Public Facilities in accordance with the MelloRoos Act.

If a school is financed, the school district’s goals and policies, if any, including its priority access policy will be coordinated with the formation of a District.

Each project will be considered on its own merits. Additionally, the aggregate value to lien ratio of parcels responsible for no more than five percent (5%) of the special taxes to pay debt service shall be below 3:1 or such higher ratio as determined by the City. The City may allow exceptions to its value to lien ratio requirements in accordance with the Mello Roos Act if it finds and determines that the proposed bonds do not present any unusual credit risk due to the availability of credit enhancements or for other reasons determined by the City.

3. ELIGIBLE PUBLIC FACILITIES AND SERVICES

4. VALUE-TO-LIEN RATIO
5 recommendations of the California Debt and Investment Advisory Commission as contained in the Appraisal Standards for Land-Based Secured Financings, and deviations therefrom will only be considered upon recommendation from bond counsel, financial advisor, the underwriter and/or the appraiser, with consideration of the facts pertaining to each particular project. The appraised land value should include the value attributable to, and assuming, the Public Facilities to be financed by the bonds being issued for the District have been completed.

For new development, the Applicant or property owner must demonstrate its financial plan and ability to pay all special taxes before full build-out has taken place to the satisfaction of the City.

Additional security such as credit enhancement may be required by the City in its sole discretion in certain instances.

As an alternative to providing security, depending on circumstances:

A. A portion of the bond proceeds may be placed in escrow with a corporate agent in an amount sufficient to assure an acceptable value-to-lien ratio is reached on the escrowed proceeds. The escrowed proceeds shall be released at such times and in

5. MARKET ABSORPTION STUDY

6. SECURITY
6 such amounts as will assure an acceptable value-to-lien ratio with regard to the aggregate outstanding bonds and other covenants; or
B. The bonds may be issued in series with each series in an amount sufficient to assure an acceptable value-to-lien ratio with regard to the aggregate outstanding bonds and other covenants.

The special tax formula for each District shall adhere to the following requirements:

B. The special tax formula shall establish tax rates which correspond to the expected land use designation of each parcel.

C. The special tax formula shall be structured to ensure sufficient funds to pay for annual debt service and administrative expenses of the District.

The maximum annual special tax submitted to the qualified electors of the CFD, when added together with all the annual payment requirements of overlapping debt and bonded assessments, and ad-valorem property taxes, shall not exceed one and three-fourths percent (1.75%) of the anticipated (as developed) Fair Market Value of the subject properties, based on home prices projected to be in effect as of the date bonds are expected to be issued, however City staff may allow for a limit of more than one and three-fourths percent (1.75%) at the Assistant City Manager/Chief Financial Officer’s discretion.

The City shall retain a special tax consultant to prepare a report which:

A. Recommends a special tax formula for the proposed CFD.

C. Consultants of the City for the District shall comply with the existing policies of the Fair Political Practices Commission and the California Government Code.

C. The repayment of principal shall begin on the earliest principal payment date for which sufficient special tax revenues can be made available after the end of the

8. TERMS AND CONDITIONS OF BONDS
8 capitalized interest period, or otherwise as determined by the Assistant City Manager/Chief Financial Officer to be appropriate.

D. The City may consider an increasing annual maximum Special Tax by two percent (2%) per year, per Section 53321 of the Mello-Roos Act, for the term of the bonds. Determination of this shall be made by the Assistant City Manager/Chief Financial Officer.

9. DISTRICT COSTS, DEPOSITS AND REIMBURSEMENTS
9 The Applicant or property owner shall not be entitled to reimbursement from bond proceeds for any of the expenses specified as follows:

Neither the City nor the District shall be required to reimburse the Applicant or property owner from any funds other than the proceeds of bonds issued by the City for a District and pay-as-yougo Special Taxes. The use and terms of any pay-as-you-go reimbursement shall be at the discretion of the City’s Assistant City Manager/Chief Financial Officer or such other person or persons as may be designated.

Agreements will be prepared incidental to District formation proceedings in a form satisfactory to the City and consistent with these policies. These agreements may include, but not be limited to:

The City shall have the sole discretion as to selection of consultants and determination of fees and expenses of all consultants necessary for the formation of the District and the issuance of bonds, including the underwriter(s), bond counsel, financial advisor, appraiser, trustee, paying

10. AGREEMENTS

11. USE OF CONSULTANTS
10 agent, market absorption study consultant, and the special tax consultant after reasonable consultation with the Applicant. Prior consent of the Applicant shall not be required in the determination by the City of the consulting and financing team.

The City shall also be responsible for determining the structure of the bonds to be issued, including the method of sale (negotiated or competitive), the need for bond ratings, investment of bond proceeds, and all other terms and conditions incidental to structuring and closing a bond issuance and distribution of proceeds, including pay-as-you-go funding, if any, in the form of reimbursement to developer from excess (after debt service and District administration) special tax collections, or otherwise as determined by the Assistant City Manager/Chief Financial Officer or such other person or persons as may be designated.

Upon request, the Finance Department will provide a “Notice of Special Tax” to sellers of real property subject to the levy of special taxes as required by Government Code Section 53340.2.

12. ACQUISITION PROVISIONS

Early communication with the City is encouraged to assist Applicants in evaluating the feasibility of available financing programs and to discuss program procedures.

1. PREAPPLICATION CONFERENCE: Applicant meets with City to discuss the proposed project and application procedures.

3. PROJECT INITIATION: Applicant, staff and consultants meet to determine preliminary project schedule and begin work necessary to initiate District formation.

The City may find that a waiver of any of the above stated policies is reasonable given identified City benefits to be derived from such waiver. Such waivers may be granted with or without action of the City Council, as determined appropriate by the Assistant City Manager/Chief Financial Officer. Approval by the City Council of formation of a District and/or issuance of bonds for a District constitutes a determination that a District conforms to the provisions of these Goals and Policies and, if applicable, that a waiver of any provision hereof is appropriate, and shall be conclusive evidence of such conformity.

14. PROPERTY OWNER SUPPORT

15. LAND USE APPROVALS

16. APPLICATION PROCESS

17. APPLICATION OF GOALS AND POLICIES
12 These Goals and Policies may be reviewed and may be amended from time to time, as determined by the City to be appropriate in the light of changing conditions affecting the City and its real estate market and changes in practices among other communities in the region. 13 ATTACHMENT 1
GOVERNING LAW: California Government Code, beginning at Section 53311, Mello-Roos Community Facilities District Act of 1982, available online.

INFORMATIONAL SUMMARY OF MELLO-ROOS COMMUNITY FACILITIES

The petition shall be accompanied by payment of a fee determined by the Finance Department to be sufficient to pay for costs incurred in conducting the proceedings.

3. Public Hearing. Protests against the establishment of the CFD, the extent of the CFD or the furnishing of specified types of Public Facilities and Public Services may be made orally or in writing by interested persons or taxpayers. If fifty percent (50%) or more of the registered voters, or six (6) registered voters, whichever is more, residing within the 14 proposed CFD or the owners of one-half (1/2) or more of the area of land in the proposed CFD file written protests against the establishment of the CFD, the proceedings are abandoned. If the protests are directed toward certain types of facilities or services, or against a specified special tax, those specific items may be eliminated from the resolution forming the CFD. The hearing may be continued for up to thirty (30) days without special findings and up to six (6) months if the City Council makes specified findings.

4. Resolution of Formation. If the City Council decides to establish the CFD, it will adopt a Resolution of Formation containing similar information as contained in the Resolution of Intention.

COUNCIL COMMUNICATION
CC #: 3229
File #: 0206-10-01
Title:

Downtown Roseville Property and Business Improvement District - 2023 Annual Report and 2024 Budget
Contact: Gina McColl 916-774-5452 [email protected] Meeting Date: 4/3/2024
Item #: 7.12.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution approving the 2023 Downtown Roseville Property and Business Improvement District Annual Report and approve the 2024 Budget for the Downtown Roseville Partnership.

BACKGROUND
On July 16, 2014, the City Council approved the formation of the Downtown Roseville Property and Business Improvement District (DRPBID) for a term of five years commencing January 1, 2015, and terminating December 31, 2019. The overarching goal of the DRPBID was to facilitate improvements and activities that would provide a special benefit to assessed parcels. Based on the success of the DRPBID, on January 9, 2019, Council adopted a resolution renewing the DRPBID and Management Plan. With that approval, the amended documents established the assessment formula, required indemnification terms, insurance coverage limits, and levying of the annual assessments for an additional ten-year period (beginning January 1, 2020 and ending December 31, 2029).

The annual assessment provides funding for a budget that is managed by the established owner’s association, the Downtown Roseville Partnership (DRP). The DRP Board ensures that the budget is applied to activities and expenses defined in the Management Plan/Engineer’s Report accepted by Council as part of the district formation. In addition, the Management Plan includes the following requirement:

VI. GOVERNANCE
C. Annual Report
The Downtown Roseville Partnership shall present an annual report at the end of each year of operation to the City Council pursuant to Streets and Highways Code §36650….

The annual report is a prospective report for the upcoming year and must include:

Any proposed changes in the boundaries of the DRPID or in any benefit zones or classifications of property within the district;
The improvements and activities to be provided for that fiscal year; An estimate of the cost of providing the improvements or activities for that fiscal year;
The method and basis of levying the assessment in sufficient detail to allow each real property owner to estimate the amount of the assessment to be levied against his or her property for the fiscal year;
The amount of any surplus of deficit revenues to be carried over from a previous fiscal year; and
The amount of any contributions to be made from sources other than assessments levied pursuant to this Plan.

The 2023 DRPBID Annual Report is provided in Attachment 1 of this staff report. Additional supporting documents that further address the elements required in each annual report to Council are the 2023 financial statements and district map and assessment roll, which are included within Attachments 2 and 3.

Additionally, the 2024 budget, is included as Attachment 4 for reference, and has been approved by the DRP Board. No changes to the district boundaries or levying of assessments is proposed.

The assessment for the district totals approximately $215,000. Compared to last year’s budget, the DRP allocated additional expenditures in 2024, including expanded funding for the existing tree lighting program and Downtown Tuesday Nights, and funding for additional programs including support for the Homeless Outreach Navigator, a twice a year district clean-up by the Boy Scouts and a consultant to provide strategic planning services to the DRP Board, for a total budget of $239,400, utilizing the $215,000 from property assessments and $24,400 from reserves. At the end of 2023 there was $226,514.81 in reserves, total revenue of $236,964 and net income for the year of $9,957. The key elements of this year's budget are broken down into four service categories followed by the percentage of funds allocated to each sector:

Improvements - 23% ($54,500)
Marketing & Events - 27% ($65,300)
Clean & Safe - 26% ($62,400)
Administration - 24% ($57,200)
It should be noted that the above referenced allocations are not anticipated to significantly change; however, it may be necessary to redistribute funds between categories to provide flexibility in addressing impacts related to the changing economy. Expenditure of the funds within the DRP budget are at the discretion of the DRP Board as outlined in the DRP’s Management Plan.

FISCAL IMPACT
The City contributes to the PBID each year in the form of parcel assessments for City-owned property in Downtown Roseville. The 2023 City assessment was $64,796.84 and the total assessment collected for the district was $215,513. Receiving the annual report has no impact on the General Fund and a maximum of 2% of the property assessment will be retained by the City to cover the costs of administration of the management agreement.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. Adoption of this resolution meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal D - Enhance economic vitality
Respectfully Submitted,
Gina McColl, Economic Development Analyst
Melissa Anguiano, Economic Development Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 24-074
DRP Annual Report 2023
2023 Statement of Financial Position
DPBID Tax Rolls
2024 Budget
RESOLUTION NO. 24-074
APPROVING THE 2023 DOWNTOWN ROSEVILLE PROPERTY AND BUSINESS IMPROVEMENT DISTRICT ANNUAL REPORT AND 2024 BUDGET
WHEREAS, on July 16, 2014, the City Council approved the formation of the Downtown Roseville Property and Business Improvement District (“DRPBID”) to facilitate improvements and activities ; and
WHEREAS, the annual assessment provides funding for a budget that is managed by the established owner’s association, the Downtown Roseville Partnership (DRP); and WHEREAS, the DRP Board ensures that the budget is applied to activities and expenses defined in the Management Plan/Engineer’s Report accepted by Council as part of the district formation; and
WHEREAS, the DRP is required to submit an annual report and budget to the City; and WHEREAS, the 2023 Downtown Roseville Property and Business Improvement District Annual Report and 2024 Budget have been reviewed by the City Council.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that the 2023 Downtown Roseville Property and Business Improvement District Annual and the 2024 Budget are hereby approved.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 20__, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
________________________
City Clerk
2023 ANNUAL REPORT
As a local Downtown businessman, it remains my honor
to serve as president of Downtown Roseville Partnership, an organization that benefits our business community and provides a dynamic experience for residents. It is a privilege to work alongside our board members and our partner
organizations responsible for Roseville’s thriving environment.

Over the past year, our team concentrated heavily on
supporting more events, enhancing security and safety, and beautifying Downtown through building facade improvements and the addition of the new masonic mural, all to attract additional visitors to our District.

I hope you enjoy learning more about our accomplishments throughout this report.

As we continue our work, this year our focus lies in fostering relationships with more non-profit and civic organizations to collaborate on District events and capital improvements:
• Expand on holiday events and decorations
• Maintain landscape and streetscape enhancements
• Reduce vacancies
• Sponsor and support new murals and façade improvements • Promote development of vacant City-owned parcel along Oak Street adjacent to bridge
I couldn’t be prouder of our hardworking team and what we have collectively accomplished. I hope you will take part in all that we have on deck in 2024.

Warmly,
Dave Piches, AIA LEED AP
2023 President
Downtown Roseville Partnership Board of Directors
VISION
Downtown Roseville
Partnership is an actionoriented, collaborative
group of volunteers that
champions a vibrant and
authentic Downtown..

MISSION
We are proactive in
promoting, marketing
and providing services
that attract businesses
and visitors to the
District and manage the
District’s business affairs
in a transparent, fiscallyresponsible manner.

A MESSAGE FROM BOARD PRESIDENT DAVE PICHES
1 2023 BOARD OF DIRECTORS
Tom Carlson is the owner of Carlson Tax Consultants Inc. and a member of AICPA and Roseville Area Chamber of Commerce. As a board member with DRP, he is able to serve Downtown business and property owners and give back to the local business community.

Mike Esparza is president and CFO of All-Cal Insurance Agency.

He owns properties located at 501, 503 and 505 Vernon Street and joined the DRP board to further the future plans and expected growth of the District.

Jamie Hazen is the owner of Jamie Hazen Consulting and serves as the Executive Director of Roseville Police Activities League (RPAL).

Jamie has been active in our community for decades and serves on the board for Downtown Roseville Merchants, the Performing Arts of Roseville and Placer Visitors Bureau.

David Herrick is SVP/controller for Consolidated
Communications, one of the larger employers in Downtown Roseville. He enjoys supporting the interests of residents and businesses.

David Piches founded Piches Architecture at 115 Taylor Street in Downtown Roseville. He has served on many boards, including Roseville Area Chamber of Commerce, Downtown Roseville
Merchants, Roseville Arts Center and Roseville Urban Forest Foundation. With DRP, Dave works to foster creative design solutions and encourage actions that will maintain existing improvements.

Lisa Peters is the CEO and president of Randy Peters Catering and Events Center, a certified woman-owned business. Lisa has been a staple in the business community for decades and brings unparalleled experience as a small business owner.

Mark Vespoli owns several Downtown Roseville properties, including 219, 400, 404 and 601 Vernon Street and 106 Judah Street. He brings to the board the perspective of a property owner and entrepreneur in Downtown Roseville.

Wayne Wiley is the economic development manager for City of Roseville, where he helps develop and implement economic development initiatives to ensure business enrichment within our community. Wayne has always had a passion for Downtown and enjoys working closely with the merchants, business owners and residents.

Ed Mojica is the owner of mas|mojica architecture studio, a local boutique architecture firm located in Downtown Roseville. The firm maintains a focus on retail, office, and hospitality projects in Roseville and the South Placer region. Raised in Roseville, he desires to facilitate authentic spaces and places such as our Downtown area. Inspired by the great projects of the DRP to date, he hopes to continue the excellent work of making these spaces a reality.

Frank Van Sant served in the US Navy for nearly 30 years, retiring as an officer with numerous awards, even moving six times in eight years. He relocated from New Mexico to the Sacramento area in 2014 after retiring from Raytheon as a defense contractor. A Mason since 2007, he is active in the fraternity’s Roseville chapter, diligently managing the organization’s building on Vernon Street and its tenants. As a busy volunteer, he also works on behalf of disabled veterans, emergency responders, and his local church.

Marytess Mayall serves as executive director for Blue Line Arts, a nonprofit at 405 Vernon Street. Born and raised in Roseville, MaryTess is passionate about building a vibrant arts and culture scene in the Downtown area. She also serves on the board of Downtown Roseville Merchants.
*Kat Maudru is DRP’s director of operations and is instrumental in promoting Downtown through community and public relations.

ABOUT DOWNTOWN ROSEVILLE PARTNERSHIP
Business and property owners from Downtown Roseville Partnership (DRP in 2014, collaborating with City of Roseville, its redevelopment organization (RCDC), and major businesses. DRP is funded from tax assessments paid by its property owners. 131
Commercial
Parcels
Downtown by
the numbers
79 Property
Owners
54 Residential
Parcels
206
Residents
2,119
Employees
193
Businesses
1 mile
Residents 15,219
Median Household Income $65,312
Housing Units 6,225
Average Residential Age 38
5 mile
Residents 311,135
Median Household Income $97,094
Housing Units 116, 692
Average Residential Age 38.3
Roseville.ca.us/ChooseRoseville
Public Investment in Downtown since 2009
13 2 11 5 3 1
Restaurants Coee
Shops
Public
Murals
231
Events
(87, 440 Attendees)
Live Music
Venues
Arts & Culture
Venues
Theater
5 transit
stops
Transit service
4 times per hour
1,584 Free
parking spaces

18.5 acres
of parks
2 Parks
Direct access to 6
mile-long trail
$164 Million

DOWNTOWN BY THE NUMBERS
2023 NOTABLES EVENTS & ACTIVITIES

DOWNTOWN IMPROVEMENT & SAFETY PROJECTS
DRP proudly organized and sponsored several attractive communitybuilding events:
•Downtown Tuesday Nights, seven popular events
attracting an average of 3,000 guests per event
•Downtown Roseville Merchants Family Fun Night
•Sylvia Besana Holiday Parade
•Roseville PAL BBQ Bacon & Brew Bash
•Central California Hemophilia Vampire Run
Our team also organized and managed
many improvement projects in the District:
•Façade grants at Growth Factory (316
Vernon Street) and 514-520 Vernon
Street, with a commitment to approve
improvements at Carlson Tax
Consultants (510 Oak Street)
Anticipated completion is June 2024
•Masonic building mural
•Enhanced holiday tree lights
•Eshuttle pilot program
•Bi-annual cleaning by local
Boy Scouts troops
•Increased security

NEW BUSINESSES & TENANTS

NEW LOCATIONS
New development projects are planned for the following locations:
• 129 Vernon Street • 200 Vernon Street

NEW DEVELOPMENT PROJECTS
Space Available to Lease
We are pleased to welcome these businesses to the District:
•Placer Robotics
•Studio Flora
•Daniello’s Speakeasy
•Roots Real Estate Group
•Primal Grounds Jiu Jitsu
•Wink’s Fitness & Wellness Studio
•Obsidian Hair Studio
Please visit these businesses at their new addresses:
•Bartlett Flowers & Gifts
•Mike’s Bikes
•Noel Flynn Gallery
•The Fig Tree
Creating a sense of place and community is a high priority for the Downtown Roseville Partnership. Some items on the horizon for 2024 include:
•Developing a strategic plan to guide our decision-making •Expanding security and clean and safe initiatives
•Exploring improvement and beautification opportunities including enhancing holiday décor and atmosphere
•Evaluating new events and activities and continuing
community favorites
•Continuing the façade grant program
•Addressing localized homeless issues by working with
elected officials, law enforcement and professional
homeless assistance organizations
2024 OUTLOOK
2023 FINANCIALS
27%
Maintenance/
Beautification
28%
27% Marketing
Security
18%
Advocacy/
Administrative
Revenue
Tax Assessments $ 206,244
Sponsorship revenue 5,720
Facade Grant Funding 25,000
$ 236,964
Expenditures by Category
Maintenance and Beautification 63,655
Marketing 65,530
Security 57,264
Advocacy/Administrative 42,673
Contingency -
$ 229,122
Other 2,115
Net Income $ 9,957
Downtown Roseville Partnership
P. O. Box 238
Roseville, CA 95678

GET IN TOUCH
Downtown Roseville Partnership
P. O. Box 238
Roseville, CA 95678
916.771.4475

CONNECT WITH US
godowntownroseville.com
Sign-up for our newsletter

MEETINGS
Regular meetings are held on the fourth Wednesday of
every month at 3:00 pm at Randy Peters Catering and
Event Center, 105 Vernon Street, Roseville. The public
is always invited to attend.

12.31.23 DRP Annual Reporting Package FINAL.xlsx
Downtown Roseville Partnership
For the year ended December 31, 2023
Statement of Activity - Summarized
Revenue
Tax Assessments $ 206,244
Sponsorship revenue 5,720
Façade Grant Funding 25,000
$ 236,964
Expenditures by Category
Maintenance and Beautification $ 63,655
Marketing 65,530
Security 57,264
Advocacy/Administrative 42,673
Contingency -
$ 229,122
Other $ 2,115
Net Income for the year $ 9,957
Downtown Roseville Partnership
Statement of Financial Position
As of December 31, 2023
ASSETS
Current Assets
Cash $ 228,085
Accounts Receivable -
Total Current Assets $ 228,085
Other Assets, net of amortization 5,266
TOTAL ASSETS $ 233,351

LIABILITIES AND EQUITY
Liabilities
Accounts Payable $ -
Total Liabilities $ -
Equity
Retained Earnings $ 223,394
Current Year Income 9,957
Total Equity $ 233,351
TOTAL LIABILITIES AND EQUITY $ 233,351
Downtown Roseville Partnership
Beginning and End of Year 2023 Reserves
Reserve Category
2023 BOY
Reserve
Original 2023
Assessements
2023 Grant
Proceeds 2023 Spend
2023 EOY
Reserve
Improvements $ 95,576.19 $ 38,153.51 $ 25,000.00 $ (63,655.40) $ 95,074.30 Marketing & Events 33,437.92 63,589.19 (68,030.45) 28,996.66 Clean & Safe 38,669.35 55,110.63 (64,453.72) 29,326.26
Administration 32,145.12 44,512.43 (43,006.54) 33,651.01 Contingency & Reserve 28,868.38 10,598.20 - 39,466.58
$ 228,696.96 $ 211,963.96 $ 25,000.00 $ (239,146.11) $ 226,514.81 APN Lot SqFt Assessment Frontage
13124017000 23,630 $4,477.17 150
13131021000 5,514 $738.19 0
13250013000 15,923 $2,131.96 0
13250014000 15,950 $2,135.71 0
13290005000 16,425 $2,025.24 0
13154019000 5,326
13152021000 37,461 $1,080.72 250
13071006000 5,754 $246.89 100
13072009000 3,489 $467.04 0
13072010000 14,813 $2,858.83 100
13092005510 3,484 $904.26 50
13093001000 14,911 $1,996.58 0
13093005000 3,049 $592.12 21
13122002000 3,552 $681.22 24
13122005000 7,405 $1,429.28 50
13122009000 13,503 $2,598.63 90
13123026000 10,856 $2,077.37 71
13152012000 7,405 $1,429.28 50
13153013000 20,908 $4,025.28 140
13153014000 8,832 $1,699.15 59
13153019000 11,212 $2,164.83 76
13250032000 32,234 $7,608.01 376
13072011000 7,396 $1,428.07 50
13092006000 3,484 $904.26 50
13092009000 4,356 $1,108.31 60
13093006000 11,029 $2,142.03 76
13093007000 26,136 $5,022.98 174
13101028000 8,712 $1,166.54 0
13121002000 14,939 $3,313.45 150
13121005000 4,791 $1,079.26 50
13121006000 4,961 $1,102.42 50
13122001000 7,405 $1,430.59 50
13122004000 7,586 $1,453.52 50
13163005000 9,031 $1,209.25 0
13072001000 5,227
13072003000 6,314
13072004000 6,969
13072005000 6,010
13073002000 4,520
13073015000 4,356
13073017000 7,929
13073019000 4,264
13073020000 4,356
13073021000 4,356
13131007000 5,008
13131008000 5,007
13152004000 7,491
13152005000 7,493
13152007000 7,504
13152008000 4,504
13152009000 6,012
13152020000 6,062 $811.57 0
13153001000 9,984
13153004000 5,994
13153005000 5,987
13153006000 5,989
13153007000 5,985 $801.39 0
13153022000 2,496
13154001000 6,018 $805.81 0
13154002000 6,018
13154003000 6,017
13154005000 5,907
13154006000 7,522
13154007000 7,522
13154008000 7,523
13154009000 7,522
13154011000 7,507
13154012000 7,509
13154013000 7,467
13154014000 6,013 $805.14 0
13154015000 6,015
13154016000 6,015
13154018000 6,708
13164002000 5,011
13164004000 5,010
13164005000 7,628
13164009000 4,997
13164011000 7,495
13164012000 7,495
13164013000 7,495
13164014000 6,878
13171002000 2,141
13171003000 4,462
13171004000 6,834
13171005000 3,009
13171006000 2,509
13172007000 7,526
13172008000 7,527
13172009000 7,452
13172010000 7,290
13091003000 22,982 $4,390.41 150
13093004000 2,178 $545.53 29
13122010000 9,078 $1,742.02 60
13123017000 16,117 $3,048.36 102
13123018000 18,107 $2,424.53
0 13123025000 17,424 $2,333.07
0 13123027000 4,505 $603.220
13124011000 14,954 $2,002.21
0 13131013000 4,810 $644.06
0 13131014000 4,116 $551.130
13131016000 5,508 $737.39
0 13131022000 5,034 $674.05
13152016000 6,534 $874.900
13153003000 7,490 $1,002.780
13153008000 6,098 $816.52
0 13153009000 7,490 $1,002.78
0 13153023000 18,730 $540.62 125
13154004000 6,018 $805.68
0 13154010000 7,503 $1,004.65
0 13161001000 9,661 $279.40 65
13164001000 7,486 $1,002.380
13164003000 4,791 $641.510
13164010000 2,499 $334.480
13164015000 6,534 $874.900
13164016000 10,991 $1,471.56
0 13164017000 5,501 $736.580
13171007000 4,514 $604.420
13171009000 4,791 $641.510
13092010000 4,598 $615.540
13071002000 7,588 $1,453.65 50
13101024000 18,295 $2,449.700
13152002000 8,276 $1,108.160
13070001000 2,323 $310.920
13070004000 15,172 $4,220.28 250
13071001000 7,581 $1,452.85 50
13071003000 7,583 $1,453.11 50
13072002000 5,101
13073016000 253 $33.740
13123021000 10,948 $2,102.73 73
13152019000 5,662 $758.140
13153021000 2,496 $334.210
13163003000 7,742 $1,036.65
0 13163004000 7,481 $1,001.570
13092007000 7,405 $1,429.28 50
13092008000 6,059 $1,163.69 40
13092011000 7,670 $1,026.880
13122003000 3,927 $753.32 26
13172020000 14,810 $1,983.060
13121004000 9,950 $2,208.86 100
13151004000 7,840 $1,925.28 100
13152018000 7,074 $947.07 0
13161002000 5,332 $1,684.88 111
13171011000 10,890 $1,458.17 0
13072008000 11,325 $2,391.92 100
13093008000 4,474
13093009000 14,480
13094001000 69,696 $9,332.29 0
13101022000 47,916
13122011000 7,576 $1,189.53 20
13122012000 4,356 $758.37 20
13124006000 7,429 $1,432.36 50
13124007000 7,431 $1,432.76 50
13124018000 12,909 $2,408.64 78
13124022000 14,219 $1,903.79 0
13124023000 23,858 $3,194.45 0
13152017000 7,776 $1,740.82 80
13163001000 2,391 $320.02 0
13171008000 7,524 $1,007.46 0
13290001000 21,344 $2,698.75 0
13290003000 12,632 $869.01 0
13290010000 305
13072012000 22,651 $4,346.22 150
13290002000 60,983 $4,388.57 0
13101031000 93,654 $12,540.27 0
13101026000 7,405 $991.53 0
13290004000 58,243 $4,173.93 0
13123024000 47,916
13093003000 17,177 $476.33 100
13124008000 7,490 $1,440.66 50
13290007000 7,405 $601.34 0
13290009000 3,920 $382.02 0
13091010000 29,108 $5,813.90 219
13101025000 9,198 $1,231.48 0
13101027000 3,763 $503.87 0
13101029000 1,754 $234.86 0
13072006000 8,680 $174.32 0
13072007000 6,781 $136.18 0
13073011000 11,325 $382.43 118
13164018000 29,835 $599.24 0
13121003000 4,973 $165.55 50
13162001000 126,324 $3,062.52 400
13071004000 15,163 $2,905.69 100
13071007000 1,899 $254.14 0
13071009000 9,474 $1,706.32 50
13071010000 5,800 $776.62 0
13092014000 22,684 $4,350.50 150
$215,513.40
$64,796.84
Downtown Roseville Partnership
2024 Budget by Category
Category Program
Improvements
Façade Program $ 25,000
Mural Program 10,000
Tree Lighting 12,000
Other 7,500
$ 54,500
Marketing and Events
Consulting services $ 25,300
Downtown Tuesday Night 30,000
Other sponsorships 10,000
$ 65,300
Clean & Safe
Security Services $ 24,000
Power washing 14,400
Homeless Outreach 15,000
Alley Cleanup 4,000
Other 5,000
$ 62,400
Administration
Accounting Services $ 3,200
Memberships 500
Annual Report 4,500
Consulting services 27,500
Strategic planning 12,000
Insurance 1,500
Legal Services 3,000
Support services 5,000
$ 57,200
Contingency & Reserve $ -
Total 2024 Budget $ 239,400
Funding from current year assessment $ 215,000
Funding from Reserves $ 24,400

COUNCIL COMMUNICATION
CC #: 3253
File #: 0709-03-02 & 0400-04-09
Title:

Prospera at Fiddyment Workforce Housing Project - Regulatory Agreement, Subordination Agreement, Loan Agreements, Promissory Notes, and Deeds of Trust Contact: Suzanne Acrell 916-774-5469 [email protected] Meeting Date: 4/3/2024
Item #: 7.13.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution approving a Regulatory Agreement, a Subordination Agreement, Loan Agreements, Promissory Notes, and Deeds of Trust in the amounts of $1 million from the Housing Trust Fund and $500,000 from the Housing Successor Low and Moderate Income Housing Asset Fund with Fiddyment Workforce Partners, L.P., and authorizing the City Manager to execute them and any other necessary documents to fund the Prospera at Fiddyment workforce project.

BACKGROUND
On April 21, 2021, City Council adopted a resolution to establish the Objective Design Standards (ODS) to streamline the construction of qualified affordable housing projects. The ODS were adopted in order to comply with State housing legislation. Qualified projects that comply with the ODS are subject to a non-discretionary ministerial permit process and can bypass the standard design review process as well as the public notification and hearing process and proceed directly to engineering and building permit review. A qualifying project is a housing development project where no less than 20% of the units are affordable to lower-income households.

The Fifth Amendment of the Development Agreement by and between the City of Roseville and Roseville Fiddyment Land Venture included an obligation for one hundred ninety-five (195) affordable units to be developed on WRSP Parcel F-6B. The developer successfully completed the ODS process in September 2021 for a project that included a density bonus request to increase the unit count to one hundred ninety-eight (198) total units. The parcel will be developed as two separate affordable housing projects: a 94 unit affordable tax credit project and a 104 unit workforce housing project.

The Regulatory Agreement for the workforce project, Prospera at Fiddyment, includes 8 units for extremely low-income (30% of AMI), 31 units for low-income (80% of AMI), and 20 units for moderate-income (100% of AMI) households. The remaining 45 units developed on F-6B will be restricted to incomes at 120% AMI and will not be regulated by this agreement. The developer requested to transfer 45 moderate-income units required in F-6B to parcel F-8A in order to help both projects with financing feasibility. The 45 units being moved to parcel F-8A will be restricted for low-income (80% AMI).

These units will serve a range of local housing needs, including members of the local workforce, families, young couples, single households, and seniors with low and very low incomes. Workers in these units could hold jobs ranging from employment in the service industry, local teachers, office assistants, custodians, store clerks, and others who are likely to have job opportunities in Roseville. The recommended agreement before Council will continue to support the City's General Plan in meeting the City of Roseville affordable housing goals.

On May 17, 2023, City Council approved a reservation in the amount of $1.5 million in housing funds for the Prospera at Fiddyment Workforce project. The City was awarded a State Housing & Community Development Local Housing Trust Fund (LHTF) grant totaling $6.7 million to fund affordable housing projects. The grant requires a dollar-for-dollar match of $6.7 million, bringing the total funding for projects to $13.4 million. Staff is requesting to loan $1 million of LHTF and $500,000 of the Housing Successor Low and Moderate Income Housing Asset Fund to support the creation of these affordable units.

In order to secure the Local Housing Trust Fund loan, the Housing Successor Low and Moderate Income Housing Asset Fund loan and affordability of the project, staff is requesting approval and execution of the attached loan documents and regulatory agreement.

The loan terms include guaranteed affordable rent for 55 years and a residual receipts loan accruing on the outstanding principal balance at a rate of three percent (3%) per annum. These regulatory and loan terms are consistent with previously developed City-assisted affordable housing projects. The City will also be subordinating these documents to the private lender on this project, as is standard with affordable housing development. Staff is also requesting authorization for the City Manager to execute any other necessary documents related to this action, such as subordination agreements and escrow instructions. The recommended agreement before Council will continue to support the City's General Plan in meeting the City of Roseville affordable housing goals.

FISCAL IMPACT
The Prospera at Fiddyment workforce housing project will be loaned $1 million from the Local Housing Trust Fund Award grant, and $500,000 from the Housing Successor Low and Moderate Income Housing Asset Fund. The necessary budget adjustments to recognize grant revenue and appropriate grant expenditures, along with matching funds from the City's Local Housing Trust Fund were adopted by City Council on September 21, 2022. No General Fund resources will be used for the loan of funds or implementation of the loan or regulatory agreements.

ENVIRONMENTAL REVIEW
Development of the Prospera at Fiddyment Workforce Housing Project was previously evaluated in West Roseville Specific Plan and Sphere of Influence Amendment EIR (certified January 9, 2004 and SCH# 2002082057), and identified in the associated West Roseville Specific Plan.

Construction of Prospera at Fiddyment Workforce Housing Project is found to be within the scope of the project covered by the West Roseville Specific Plan and Sphere of Influence Amendment Final EIR, and is therefore exempt from CEQA pursuant to Section 15182. As discussed in the Specific Plan EIR, the EIR provides environmental analyses of community infrastructure and facilities, including residential subdivisions. Because the project is consistent with the West Roseville Specific Plan and Sphere of Influence Amendment Final EIR and Specific Plan, no new effects would be expected to occur and all applicable mitigation measures from the West Roseville Specific Plan and Sphere of Influence Amendment EIR will be implemented during the design and construction of the Prospera at Fiddyment Workforce Housing Project. Because the proposed project meets the requirements identified in the State CEQA Guidelines Section 15183, no additional CEQA review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS
Goal C - Maintain a safe and healthy community
Respectfully Submitted,
Suzanne Acrell, Housing Analyst
Melissa Anguiano, Economic Development Director
_____________________________
Dominick Casey, City Manager
ATTACHMENTS:

Description
Resolution 24-089
Regulatory Agreement
SubordinationAgreement
LHTF LoanAgreement
LHTF Promissory Note
LHTF Deed of Trust
Low Mod LoanAgreement
Low Mod Promissory Note
Low Mod Deed of Trust
RESOLUTION NO. 24-089

APPROVING A REGULATORY AGREEMENT AND DECLARATION OF RESTRICTIVE

CONVENANTS, A SUBORDINATION AGREEMENT, HOUSING TRUST FUND LOAN

AGREEMENT, PROMISSORY NOTE, AND DEED OF TRUST, HOUSING SUCCESSOR

LOW AND MODERATE INCOME HOUSING ASSET FUND LOAN AGREEMENT,

PROMISSORY NOTE, AND DEED OF TRUST, BY AND BETWEEN THE CITY OF ROSEVILLE AND FIDDYMENT WORKFORCE PARTNERS, L.P., AND AUTHORIZING

THE CITY MANAGER TO EXECUTE THEM AND ANY OTHER RELATEDDOCUMENTS

ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS, on April 21, 2021, City Council adopted a resolution to establish the Objective Design Standards (“ODS”) to streamline the construction of qualified affordable housing projects; and
WHEREAS, the Fifth Amendment of the Development Agreement by and between the City of Roseville and Roseville Fiddyment Land Venture included an obligation for one hundred ninety-five (195) affordable units to be developed on West Roseville Specific Plan Parcel F-6B; and
WHEREAS, Fiddyment Workforce Partners, L.P. successfully completed the ODS process in September 2021 for a project that included a density bonus request to increase the unit count to 198 total units; and
WHEREAS, the parcel will be developed as two separate affordable housing projects: a 94 unit affordable tax credit project and a 104 unit workforce housing project; and WHEREAS, on May 17, 2023, City Council approved a reservation of Local Housing Trust Funds (LHTF) in the amount of $1 million for the Fiddyment Workforce Partners, L.P. affordable project, Prospera at Fiddyment Workforce Housing project; and WHEREAS, staff is requesting to loan $1 million of Local Housing Trust Fund (LHTF) and $500,000 of the Housing Successor Low and Moderate Income Housing Asset Fund to support the creation of these affordable units; and
WHEREAS, in order to secure both the LHTF and Housing Successor Low and Moderate Income Housing Asset Fund loan and affordability of the project, staff is requesting approval and execution of the loan documents and Regulatory Agreement, and Subordination Agreement; and WHEREAS, the recommended Regulatory Agreement will continue to support the City’s General Plan in meeting the City of Roseville affordable housing goals; and WHEREAS, the Subordination Agreement, Housing Trust Fund Loan Agreement, Promissory Note, and Deed of Trust have been reviewed by the City Council; and WHEREAS, the Housing Successor Low and Moderate Income Housing Asset Fund Loan Agreement, Promissory Note, and Deed of Trust have been reviewed by the City Council; and
WHEREAS, a Regulatory Agreement and Declaration of Restrictive Covenants necessary for the City to monitor the affordable housing community at Prospera at Fiddyment, by and between the City of Roseville and Fiddyment Workforce Partners, L.P., has been reviewed by the City Council; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said Subordination Agreement, Housing Trust Fund Loan Agreement, Promissory Note, Deed of Trust, said Housing Successor Low and Moderate Income Housing Asset Fund Loan Agreement, Promissory Note, and Deed of Trust and the Regulatory Agreement and Declaration of Restrictive Covenants are hereby approved and that the City Manager is authorized to execute them and any other related documents, including future subordination agreements, on behalf of the City of Roseville; and
BE IT FURTHER RESOLVED that the City Attorney is also hereby authorized to approve non-substantive changes to these documents; and BE IT FURTHER RESOLVED that the City Clerk is hereby directed to record the Regulatory Agreement and each of the Deeds of Trust, once fully executed, with the Placer County Recorder’s Office.

PASSED AND ADOPTED by the Council of the City of Roseville this day of , 2024, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR
ATTEST:

City Clerk
1 NO FEE DOCUMENT
PER GOV’T CODE § 27383

RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:

City of Roseville
CITY Clerk
311 Vernon Street
Roseville, CA 95678

REGULATORY AGREEMENT AND DECLARATION OF

RESTRICTIVE COVENANTS
(Project: Prospera at Fiddyment – 2801 N. Hayden Parkway, Roseville) This Regulatory Agreement and Declaration of Restrictive Covenants (“Regulatory Agreement”) is made this ____ day of ______________, 2024 (“Effective Date”), by and between the City of Roseville, a municipal corporation (“CITY”), and Fiddyment Workforce Partners, L.P., a Delaware limited partnership (“OWNER/DEVELOPER”).

RECITALS
A. OWNER/DEVELOPER is the owner of real property located at 2801 N.

Hayden Parkway, Roseville, California, (as more particularly described in Exhibit A (the “Property”)). OWNER/DEVELOPER proposes to develop a one hundred four (104) unit multi-family apartment project (the “Project”) on the Property, fifty-nine (59) of which shall be rented at rents that are affordable to Moderate (100% of Area Median Income (AMI)), Low (80% of AMI), and Extremely Low (30% AMI) income households (collectively, the “Regulated Units”). The Project is intended to serve as a community resource by providing decent, safe, and sanitary housing for households which would otherwise be unable to afford such housing. Development of the property is governed by the West Roseville Specific Plan.

B. The CITY has agreed to provide OWNER/DEVELOPER with financial assistance in the form of two loans to assist OWNER/DEVELOPER in the construction and permanent financing of the Project. One loan from the Local Housing Trust Fund is comprised of Five Hundred Thousand Dollars ($500,000) of Program Funds and Five Hundred Thousand Dollars ($500,000) of Matching Funds (the “LHTF Loan”). CITY attests that the underwriting standards being utilized for the LHTF Loan are those that have been submitted and approved by the California Department of Housing and Community Development. The second loan is from the Low and Moderate Income Housing Fund in the amount of Five Hundred Thousand Dollars ($500,000) (the “Low/Mod Loan”) (collectively the “Loans”).
2 C. The sources of funds for the Loans are the Local Housing Trust Fund and Low and Moderate Income Housing Fund. The Local Housing Trust Fund loan is comprised of Five Hundred Thousand Dollars ($500,000) of Program Funds and Five Hundred Thousand Dollars ($500,000) of Matching Funds.

D. OWNER/DEVELOPER is financing the Project through a combination of equity raised through Low Income Housing Tax Credits, equity raised through solar credits, construction and permanent loans from banks, and the Loans.

OWNER/DEVELOPER is simultaneously: (1) executing a Loan Agreement, a Promissory Note and a Deed of Trust evidencing and regulating certain aspects of the Loan; (2) recording the Deed of Trust to secure the Loan; and (3) as further consideration for the Loan, and to further the public interests of the CITY in seeing the Project maintained as affordable housing, OWNER/DEVELOPER is executing and recording this Regulatory Agreement. The Loan Agreements, the Promissory Notes, the Deeds of Trust, and this Regulatory Agreement are collectively referred to herein as the “Loan Documents.” E. This Regulatory Agreement is being executed and recorded pursuant to the requirements of California Health and Safety Code Section 33334.3 which further requires the recordation of the “Notice of Affordability Restrictions on Transfer of Property,” attached hereto as Exhibit B. The purpose of this Regulatory Agreement is to regulate and restrict the occupancy, rents, operation, ownership, and management of the Project for the benefit of Project occupants and the people of the City of Roseville. The covenants in this Regulatory Agreement are intended to run with the land and be binding on OWNER/DEVELOPER and OWNER/DEVELOPER’s successors in interest for the full term of this Regulatory Agreement. This Regulatory Agreement, in conjunction with any other regulatory agreements between the OWNER/DEVELOPER and other providers of financing, will ensure the Project's continuing affordability.

F. The Loans are being made to OWNER/DEVELOPER at an interest rate below the market rate in order to help achieve financial stability for the Project and to increase the supply of affordable rental housing in the CITY. In consideration for the Loans, OWNER/DEVELOPER has agreed to observe all the terms and conditions set forth below.

NOW, THEREFORE, OWNER/DEVELOPER and the CITY hereby agree as follows:

DEFINITIONS
The following terms have the meanings set forth herein wherever used in this Regulatory Agreement or attached exhibits.

1. “CITY” means the City of Roseville, a municipal corporation. 3 2. “AREA MEDIAN INCOME” (referred to herein as “AMI”) means the median income for the Metropolitan Statistical Area which includes the City of Roseville (“MSA”), with adjustments for household size, as determined from time to time by the U.S. Department of Housing and Urban Development (“HUD”) pursuant to Section 8(f)(3) of the United States Housing Act of 1937 as amended, affordability restrictions as published annually by the California Department of Housing and Community Development or such other method of median income calculation applicable to the City of Roseville that HUD may hereafter adopt in connection with said Act. If HUD should cease making such determination, the CITY may designate another method of calculation of area median income used by any federal or state agency and applicable to the City of Roseville. During the period a regulatory agreement governing the allocation and award of any federal tax credits is in effect, Area Median Income shall be determined in accordance with such regulatory agreement and 26 U.S.C., Section 42.

3. “DEED OF TRUST” means the Deed of Trust executed
contemporaneously with this Regulatory Agreement and recorded against the Property as security for the Loan and other obligations by OWNER/DEVELOPER, as trustor and the CITY as beneficiary, as well as any amendments to, modifications of, and restatements of said deed of trust.

4. “LOANS” means the loans of funds provided by the CITY to OWNER/DEVELOPER for the Project pursuant to the Loan Agreements.

5. “LOAN AGREEMENTS” means the Loan Agreements executed contemporaneously with this Regulatory Agreement by OWNER/DEVELOPER and the CITY, which governs the Loans, as well any amendments to, modifications of, or restatements of said Loan Agreements.

6. “LOAN DOCUMENTS” means, collectively, the Loan Agreements, the Promissory Notes, the Deeds of Trust and this Regulatory Agreement for the Project, as they may be amended, modified, or restated from time to time, along with all exhibits and attachments to these documents.

7. “NOTES” means the promissory notes executed contemporaneously with this Regulatory Agreement by OWNER/DEVELOPER in favor of the CITY evidencing the Loans, which are secured by the Deeds of Trust, as well as any amendments to, modifications of, or restatements of said promissory note. The Notes are on file with the City of Roseville.

8. “OWNER/DEVELOPER” means Fiddyment Workforce Partners, L.P., a Delaware limited partnership, together with its permitted successors and assigns.

9. “PROJECT” means the development, construction and operation of a one hundred four (104) unit residential, multi-family rental apartment project on the Property of which fifty-nine (59) units are to be rented at rents that are affordable to Moderate, Low, 4 and Extremely Low income households and any additional improvements, landscaping, roads, and parking spaces existing thereon, as the same may from time to time exist.

10. “PROPERTY” means the real property located at 2801 N. Hayden Parkway, Roseville, California, 95747 identified and described in Exhibit A, attached hereto and incorporated into this Regulatory Agreement by this reference, and any buildings or improvements now or hereafter situated on such real property.

11. “QUALIFYING HOUSEHOLD” means a household in which household income does not exceed the percentage of Area Median Income prescribed for the applicable housing unit by the terms of this Regulatory Agreement.

12. “QUALIFYING RENT” means the maximum monthly rent allowed under Exhibit C “adjusted for family size appropriate to the unit” (as such term is defined by California Health and Safety Code Sections 50052.5 and 50053 including a reasonable allowance for tenant-paid utilities (also known as Utility Allowance).

13. “REGULATED UNITS” means fifty-nine (59) rental dwelling units of the one hundred four (104) rental dwelling units on the Property constructed for the Project that shall be rented at rents that are affordable Moderate, Low, and Extremely Low income households and having the following composition: twenty-four (24) one (1) bedroom units, twenty (26) two (2) bedroom units, and nine (9) three (3) bedroom units.

14. “HCD” means California Department of Housing Community Development.

15. “LHTF” means the Local Housing Trust Fund Program administered from the California Department of Housing Community Development.

OWNER/DEVELOPER’S OBLIGATIONS

16. COMPLIANCE WITH LOAN DOCUMENTS. OWNER/DEVELOPER’s
actions with respect to the Property and the use of Loans funds shall at all times be in full conformity with the requirements of the Loan Documents.

17. TERM OF AGREEMENT. This Regulatory Agreement shall commence upon the Effective Date and shall remain in full force and effect for fifty-five (55) years after the date OWNER/DEVELOPER obtains a Certificate of Occupancy from the CITY for the Project or, in the event the Project has multiple buildings or structures, a Certificate of Occupancy for the last habitable building or structure for the Project. The obligations in this Regulatory Agreement shall remain effective and fully binding on OWNER/DEVELOPER for this full term regardless of any expiration of the term of any loan, any payment, or prepayment of any loan, any assignment of a note, any reconveyance of a deed of trust, or any sale, assignment, transfer, or conveyance of the Property (other than transfers by foreclosure, deed in lieu of foreclosure, exercise of the power of sale or other similar transfer.
5 18. LEGAL INTEREST IN PROJECT. OWNER/DEVELOPER represents that it has legal interest in the Property and that all other persons holding legal or equitable interests in the Property have signed an “Acknowledgement and Consent Certificate”, in a form approved by the City Attorney of the CITY, acknowledging and consenting to the terms of this Regulatory Agreement. All persons holding any legal or equitable interest in the Property shall be bound by this Regulatory Agreement.

PROJECT OCCUPANCY AND RENTS

19. OCCUPANCY OF PROJECT. OWNER/DEVELOPER shall limit, for the full term of this Regulatory Agreement identified in paragraph 15, above, the rental of Regulated Units to Qualifying Households according to the schedule contained in Exhibit C herein, which is hereby incorporated by reference into this Regulatory Agreement. The income levels and other qualifications of applicants shall be certified prior to initial occupancy in conformance with the Final Management Plan identified in paragraph 25, below, and the City of Roseville’s rules governing income certification, as these rules may be amended from time to time by California law or as required in order to comply with California law, provided, however, during the period a regulatory agreement governing the allocation and award of any federal tax credits is in effect, income levels and other qualifications of applicants shall be determined in accordance with such regulatory agreement and 26 U.S.C., Section 42. Specifically, OWNER/DEVELOPER covenants and agrees that for the full term of this Regulatory Agreement it shall reserve for occupancy: (i) two (2) one-bedroom, three (3) two-bedroom, and three (3) three-bedroom Regulated Units for households whose income does not exceed thirty percent (30%) of AMI (the “LHTF Units”); (ii) six (6) two-bedroom, and six (6) three-bedroom Regulated Units for households whose income does not exceed eighty percent (80%) of AMI; and (iii) twenty-two (22) one-bedroom and seventeen (17) two-bedroom Regulated Units for households whose income does not exceed one hundred percent (100%) of AMI. As of the date hereof, the Project is intended to have the benefit of a contract with respect to project based rental assistance under Section 8 of the United States Housing Act of 1937, as amended with respect to eight (8) of the units in the Project (the “Section 8 Units” which are intended to be rented to households whose income does not exceed thirty percent (30%) of AMI (the “Section 8 Contract”). If during the term of this Regulatory Agreement, the Section 8 Contract is not renewed or is terminated, then the Project must continue to reserve a total of eight (8) Regulated Units for households whose income does not exceed thirty percent (30%) of AMI.

At least 30% of program funds and matching funds must be allocated towards ELI Households (30% AMI or less); no more than 20% of program funds and matching funds may be allocated towards Moderate Income Households (Between 80% and 120% AMI), the remainder of program funds and matching funds may be allocated toward Lower Income Households (Between 30% to 80% AMI).

The Project shall be owned, managed and operated as a single, multi-family residential rental project, which may be comprised of several buildings and structures, 6 each consisting of more than one residential dwelling unit, together with facilities functionally related and subordinate thereto, in accordance with the applicable provisions of the Internal Revenue Code and applicable California law, as the same may be amended from time to time. All of the residential dwelling units in the Project will be similarly constructed and shall contain separate and complete facilities for living, sleeping, eating, cooking and sanitation for a single person or family, including sleeping area, bathing and sanitation facilities and cooking facilities equipped with a cooking range, refrigerator and sink. None of the residential dwelling units shall be utilized, at any time, on a transient basis. Neither the Project, nor any portion thereof, shall ever be used as a hotel, motel, hostel, vacation rental, dormitory, fraternity house, sorority house, rooming house, hospital, nursing home, sanitarium, rest home or trailer park, or court.

OWNER/DEVELOPER shall further ensure that reasonable support services for the residents of this Project are provided, such as, but not limited to, life skills training, social and recreational programs, educational, health and nutritional programs, and computer training.

20. PROJECT RENTS. Rents for Regulated Units shall be limited to Qualifying Rents as set forth in Exhibit C as the same may be revised from time to time in accordance with this Regulatory Agreement and applicable federal or state laws and regulations, provided in no case shall Qualifying Rents in any year be decreased more than five percent (5%) from the Qualifying Rents for the immediately preceding year.

Except as provided in any current and applicable Housing Assistance Payment Contract, rent shall be no greater than considered “affordable rent” for the applicable household pursuant to Sections 50052.5 and 50053 of the California Health and Safety Code, as amended, or any successor statute thereto, provided, however, “affordable rent” for regulated Units restricted for households whose income does not exceed eighty percent (80%) of AMI, the Qualifying Rent shall not exceed the product of thirty percent (30%) of eighty percent (80%) of AMI, as permitted under Health and Safety Code section 50053, for the express purpose of allowing the OWNER/DEVELOPER to meet its debt underwriting and financing assumptions, and therefore to keep the Project affordable to lower-income households, it being agreed that (i) OWNER/DEVELOPER would not undertake to develop the Project with Regulated Units without a welfare exemption from California ad valorem property taxes pursuant to California Revenue and Taxation Code Section 214(g) with respect to the 30% AMI and 80% AMI Regulated Units, and (ii) all of the Regulated Units restricted for households whose income does not exceed thirty percent (30%) AMI and 80% of AMI are “units serving lower income households” for purposes of the welfare exemption from California ad valorem property taxes pursuant to California Revenue and Taxation Code Section 214(g). Nothing in this Regulatory Agreement shall prevent OWNER/DEVELOPER from charging lower rents.

21. SECURITY DEPOSITS. Any security deposits collected by OWNER/DEVELOPER or OWNER/DEVELOPER’s agent shall be kept separate and apart from all other funds in a trust account with a depository insured by the Federal Deposit Insurance Corporation or other comparable federal deposit insurance program and shall be held and disbursed in accordance with California law. The balance in the 7 trust account shall at all times equal or exceed the aggregate of all outstanding obligations, plus accrued interest thereon.

22. RENTAL INCREASES FOR EXISTING TENANTS ON THE PROPERTY.

Irrespective of when income limits are published under applicable tax credit law, rents for Regulated Units may be adjusted no more frequently than: (a) after the initial twelve (12) months following the date of initial occupancy or (b) every twelve (12) months following the last permissible date of recorded rental adjustment. Additionally, in no event shall the amount of annual rent increase exceed the amount of annual rent increase allowed by Tax Credit Law. Rents for Regulated Units may be adjusted annually to coincide with the increases in the Annual Adjustment Factors (“AAFs”) as published by the United States Department of Housing and Urban Development (“HUD”) for the West Region and the California Department of Housing and Community Development (“HCD”).

In the event that HUD terminates publication of the AAFs, rents shall be adjusted as allowed by Tax Credit Law and the CA Tax Credit Allocation Committee, provided, however, in the event a regulatory agreement governing the allocation and award of any federal tax credits no longer is in effect rents shall be adjusted annually to coincide with the HCD State Income Limits, using the limits established for Placer County, adjusted for household size, unit type and affordability. If OWNER/DEVELOPER does not agree with the adjustment factors provided herein, OWNER/DEVELOPER may, within fifteen (15) calendar days of notification by the CITY’s Economic Development Director or successor (“the EDD”) of that year’s adjustment, present to the EDD information on which it wishes to base its annual rent adjustment. The EDD will review this information and decide on which adjustment factor OWNER/DEVELOPER shall base its annual rent increase. The decision of the EDD shall be final.

23. CONDOMINIUM CONVERSION PROHIBITED. OWNER/DEVELOPER
shall not convert Project units, including Regulated Units and/or any unregulated units, to condominium or cooperative ownership or sell condominium or cooperative conversion rights to the Project units, during the term of this Regulatory Agreement.

24. NONDISCRIMINATION.

A. OWNER/DEVELOPER herein covenants by and for itself, its subcontractors, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, nor denial of the benefits of this Regulatory Agreement to, any person or group of persons, on the basis of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, sex, gender or self-identified gender, gender expression, sexual orientation, marital status, age, mental disability, physical disability or medical condition (including cancer, HIV and AIDS), genetic information, military or veteran status, familial status, source of income, or political affiliation or belief, nor any unlawful discrimination against any employee or applicant for employment because of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, sex, gender or selfidentified gender, gender expression, sexual orientation, marital status, age (over 40), 8 mental disability, physical disability or medical condition (including cancer, HIV and AIDS), use of family care leave, genetic information, military or veteran status, familial status, source of income, or political affiliation or belief. OWNER/DEVELOPER shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination or harassment. In addition to the foregoing general obligations, OWNER/DEVELOPER shall comply with the provisions of the Fair Employment and Housing Act (Government Code Section 12900, et seq.), the regulations promulgated thereunder (Title 2, California Code of Regulations, Section 10000, et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (Sections 11135-11139.5) and any state or local regulations adopted to implement any of the foregoing, as such statutes and regulations may be amended from time to time. To the extent this Regulatory Agreement subcontracts to OWNER/DEVELOPER services or works required of the CITY by the State of California pursuant to agreement between the CITY and the State, the applicable regulations of the Fair Employment and Housing Commission implementing Government Code Section 12990 (a) through (f), set forth in Subchapter 5 of Division 4.1 of Title 2 of the California Code of Regulations are expressly incorporated into this Regulatory Agreement by reference and made a part hereof as if set forth in full, and OWNER/DEVELOPER and any of its subcontractors shall give written notice of their obligations thereunder to labor organizations with which they have collective bargaining or other agreements.

B. The provisions of paragraph (A) shall further apply to the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Project, and OWNER/DEVELOPER and any person claiming under or through the OWNER/DEVELOPER, shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Project.

C. OWNER/DEVELOPER shall include the provisions contained in this section in all contracts and subcontracts related to the Project.

D. The requirements in this section shall survive the repayment of the Loans, and the reconveyance of the Deeds of Trust.

25. MANAGEMENT RESPONSIBILITIES. OWNER/DEVELOPER is
specifically responsible, subject to its obligations herein, for all management functions with respect to the Property, including, without limitation, the selection of tenants, certification and recertification of household size and income, evictions, collection of rents and deposits, maintenance, landscaping, routine and extraordinary repairs, replacement of capital items, and security. The CITY shall have no responsibility over management of the Property. A resident manager or an alternative designated contact shall be required to reside on-site.

26. INTENTIONALLY OMITTED.

27. DRAFT AND FINAL MANAGEMENT PLANS.
9 A. DRAFT MANAGEMENT PLAN. OWNER/DEVELOPER shall
prepare and submit to the CITY a Draft Management Plan for the CITY’s review and approval. The Draft Management Plan shall be submitted to the CITY at least one hundred eighty (180) calendar days prior to the anticipated date for completion of construction of the Project. The Draft Management Plan shall contain, but is not limited to, specific statement as to (1) the identity, experience and duties of all employees of the Management Agency who intend to manage the Project; (2) marketing policies and strategies; (3) tenancy occupancy rules and regulations; (4) rental procedures and tenant income limitation; (5) eviction procedures; (6) operating policies and guidelines; (7) reserve account policies; (8) maintenance and capital improvement policies; (9) shall provide as an exhibit thereto a sample form of lease agreement; and (10) any provisions required by the Loan Agreements. Upon transfer of OWNER/ DEVELOPER’s interest in the Project, the party to whom the Project is transferred shall, as a condition of such transfer, provide the CITY with a copy of such party’s Management Plan for the Project, which plan shall provide statements as called for herein.

B. CITY REVIEW OF DRAFT MANAGEMENT PLAN. Upon submittal of the Draft Management Plan by OWNER/DEVELOPER to the CITY, the CITY shall review the Draft Management Plan and provide written comments to OWNER/DEVELOPER within ninety (90) calendar days or as soon thereafter as is practicable.

C. FINAL MANAGEMENT PLAN. Prior to issuance of any Certificate of Occupancy for the Project, OWNER/DEVELOPER shall submit a Final Management Plan to the CITY for its review and final approval no later than thirty (30) calendar days prior to the anticipated date for completion of construction of the Project.

Notwithstanding the foregoing, the CITY shall have the right to review and approve any proposed amendments to OWNER/DEVELOPER’s contract with its management firm, or any new management contracts, during the term of this Regulatory Agreement; provided, however, that the CITY’s approval shall not be required for a renewal of the initial management contract.

28. MANAGEMENT AGENCY. The Project shall at all times be managed by an experienced Management Agency reasonably acceptable to the CITY, with demonstrated ability to operate residential facilities like the Project in a manner that will provide decent, safe and sanitary housing. The City shall have the right to require a change in the Management Agency or the on-site manager for reasonable cause at any time during the term of this Regulatory Agreement, subject to the prior written consent of the senior lenders and the tax credit investor. During the monitoring as described in paragraph 34, the CITY will assess the Management Agency’s ability to operate the Project in a decent, safe and sanitary manner. Calls for police and fire services at a significantly greater number or with a significantly greater frequency of serious calls and frequent fair housing complaints by tenants or applicants may be among criteria 10 considered by the CITY in determining whether any management change shall be required.

OWNER/DEVELOPER shall submit for the CITY’s approval the identity of any proposed Management Agency. OWNER/DEVELOPER shall also submit such additional information about the background, experience, and financial condition of any proposed Management Agency as is reasonably necessary for the CITY to determine whether the proposed Management Agency meets the standards for a qualified Management Agency set forth above.

If the proposed Management Agency meets the standards for a qualified Management Agency set forth above, the CITY shall approve the proposed Management Agency by notifying OWNER/DEVELOPER in writing. Unless the proposed Management Agency is disapproved by the CITY within thirty (30) calendar days of said submission of identity and qualifications of proposed Management Agency, which disapproval shall state reasonable specificity the basis for disapproval, it shall be deemed approved. The CITY hereby approves of the use of FPI Management, Inc., a California Corporation, engaged in the provision of multi-family residential and commercial property management services, as the designated initial Management Agency for the Project.

29. DISMISSAL OF MANAGEMENT AGENCY. Within fifteen (15) calendar days from OWNER/DEVELOPER’s receipt of any recommendation by CITY staff to dismiss the Management Agency, OWNER/DEVELOPER shall either dismiss the Management Agency or request a meeting with CITY staff representatives to discuss further. If an agreement cannot be reached with CITY staff representatives, OWNER/DEVELOPER may request a public meeting to discuss the CITY recommendation. If, after conducting a requested public meeting, the CITY Council supports said recommendation of CITY staff, OWNER/DEVELOPER shall promptly dismiss the Management Agency and shall appoint as the new Management Agency a person or entity which meets the standards for Management Agency and is approved by the CITY as set forth in paragraph 28.

30. MAINTENANCE AND SECURITY. OWNER/DEVELOPER shall at its own cost and expense maintain the Property in good condition, in good repair, and in decent, safe, sanitary, habitable, and tenantable living condition for the benefit of Project occupants. OWNER/DEVELOPER shall not commit or permit any waste on or to the Property, and shall prevent and/or rectify any physical deterioration of the Property.

OWNER/DEVELOPER shall provide adequate security equipment for the safety of Project occupants and to minimize the need for public safety calls.

OWNER/DEVELOPER shall maintain the Property in conformance with all applicable state, federal, and local laws, ordinances, codes, and regulations and the Management Plan; but OWNER/DEVELOPER’s maintenance obligations shall not be limited only to the standards contained in these laws or the Management Plan.

In the event the OWNER/DEVELOPER fails to maintain the Property in accordance with the foregoing standards, and after at least seven (7) calendar days’ prior 11 written notice to OWNER/DEVELOPER and the Senior Lenders, the CITY or its agent may, but shall be under no obligation to, enter upon the Property, make such repairs or replacements as are deemed necessary in the CITY’s reasonable discretion (with the prior written consent of the Senior Lenders), and provide for payment thereof. Any amount advanced by the CITY to make such repairs, together with interest thereon from the date of such advance at the same rate of interest as specified in the Note for the Project (unless payment of such an interest rate would be contrary to applicable law, in which case interest shall accrue at the highest rate then allowed by applicable law), shall become an additional obligation of OWNER/DEVELOPER to the CITY, and shall be secured by the Deed of Trust.

31. UNIT VACANCIES. OWNER/DEVELOPER shall use its best efforts to fill vacancies in Regulated Units as quickly as possible.

32. INSPECTIONS AND RECORDS. OWNER/DEVELOPER shall maintain complete, accurate and current records which clearly document OWNER/DEVELOPER’s performance of its obligations to operate the Property and the Project under the terms of this Regulatory Agreement. OWNER/DEVELOPER shall submit any records reasonably requested by the CITY in connection with the Project to the CITY within ten (10) business days of the CITY’s request. OWNER/DEVELOPER shall also permit the CITY or its duly authorized representatives to enter and inspect the Property and the Project for compliance with obligations under this Regulatory Agreement upon seventy-two (72) hours advance notice of such visit by the CITY to OWNER/DEVELOPER or OWNER/DEVELOPER’s Management Agency and to tenants of any inspected Project units, subject to the provisions of the leases regarding inspection and entry rights, which provisions must otherwise be consistent with state law.

All tenant lists, applications and waiting lists relating to the Regulated Units shall at all times be kept separate and identifiable from any other business of the OWNER/DEVELOPER and shall be maintained as required by the CITY, in a reasonable condition for proper audit and subject to examination during business hours by representatives of the CITY. OWNER/DEVELOPER shall retain copies of all materials obtained or produced with respect to occupancy of the Regulated Units for a period of at least five (5) years.

The CITY shall also have the right to perform on-site inspections of the Project, including the Regulated Units, as is reasonably required to ensure compliance with the Loan Documents, but in any case at least once per year. OWNER/DEVELOPER agrees to cooperate in such inspection(s). If the CITY desires to inspect the interior of the Regulated Units, the CITY shall give OWNER/DEVELOPER sufficient notice to allow OWNER/DEVELOPER to give seventy-two (72) hours’ notice to tenants.

33. ANNUAL REPORTS. OWNER/DEVELOPER shall provide any information reasonably requested by the CITY in connection with the Project. In particular, OWNER/DEVELOPER shall provide the CITY with annual reports required by the Regulatory Agreement, including but not limited to reports regarding the Project’s rent 12 and occupancy levels, as well as the annual operating budget. Without limitation, OWNER/DEVELOPER shall provide the CITY no later than the ninetieth (90th) day after the close of each calendar year following the date of this Regulatory Agreement, hardcopies and PDF copies of the following documents:

A. Insurance certificates detailing all coverage required under the Loan Agreements and the Deeds of Trust.

B. Evidence of payment of property taxes or property tax exemption for the Project, as applicable.

C. Audited financial statements for the Project and
OWNER/DEVELOPER.

D. An occupancy report including: (i) the verified income of each tenant or household; (ii) the number and demographic information of tenants in each household; (iii) the current rents charged each tenant or household and whether these rents include utilities; (iv) the date tenancy commenced for each Unit; and (v) any additional information required by California Health and Safety Code Section 33418.

E. Certifications of eligibility for all tenants of Regulated Units at the time of initial occupancy and upon the yearly anniversary of their continuing tenancies. Such certification shall include verified income statements on a form provided by the CITY.

OWNER/DEVELOPER shall retain in the tenant’s file all verifications of tenant’s income (tax returns, W-2 forms, paycheck stubs, etc.).

Within fifteen (15) calendar days after receipt of a written request, OWNER/DEVELOPER shall provide any other information or completed forms requested by the CITY to ensure compliance with the Loan Documents or this Regulatory Agreement.

If similar reports on some or all of the Regulated Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the purpose of this section by the CITY, with respect to the portion of the requirements of this section covered by such reports, provided that copies are provided on an annual basis to the CITY with an owner certification addressed to the CITY certifying that the OWNER/DEVELOPER has complied with this Regulatory Agreement.

34. MONITORING/NON-COMPLIANCE/CURE. OWNER/DEVELOPER’s
compliance with the provisions of this Regulatory Agreement shall be reviewed at least annually, and at such other times as the CITY may require, upon thirty (30) calendar days prior written notice from the CITY. During any such review, OWNER/DEVELOPER shall bear the burden of proof to demonstrate good faith compliance with the terms of this Regulatory Agreement. If, as a result of such review, the CITY finds and determines that OWNER/DEVELOPER has not complied in good faith with the terms and conditions of this Regulatory Agreement, the CITY shall give written notice to OWNER/DEVELOPER 13 of its findings and of the exact nature of OWNER/DEVELOPER’s non-compliance.

OWNER/DEVELOPER shall be given a period of sixty (60) calendar days after delivery of any such notice in which to cure, to the reasonable satisfaction of the CITY, any noncompliance; provided that, if the non-compliance cannot be cured within sixty (60) calendar days, OWNER/DEVELOPER shall not be in breach so long as OWNER/DEVELOPER is diligently undertaking to cure such non-compliance. In the event the CITY fails to give OWNER/DEVELOPER notice of any non-compliance at or before the annual review, OWNER/DEVELOPER shall not be held responsible for any failure to comply with the terms and conditions of this Regulatory Agreement during the year covered by the annual review.

35. CITY REMEDIES FOR BREACH. If OWNER/DEVELOPER is unable or otherwise fails to cure any non-compliance within sixty (60) calendar days (or longer as provided herein) after the CITY delivers notice of non-compliance pursuant to paragraph 34, the CITY may, in addition to any other remedy provided by law or equity, modify or terminate this Regulatory Agreement, revoke the Project approval, or take any other action available to it under this Regulatory Agreement.

In particular, and without limitation by reason of enumeration, OWNER/DEVELOPER acknowledges and agrees that failure to cure any noncompliance under this Regulatory Agreement, whether by OWNER/DEVELOPER or any successor, shall, at the option of the CITY, constitute a breach and default under this Regulatory Agreement as to all other property within the Project. In addition, and without limitation by reason of enumeration, OWNER/DEVELOPER acknowledges and agrees that the CITY shall have the right to withhold issuance of all building permits within the Project until such breach is cured.

Any partners of OWNER/DEVELOPER shall have the right to cure any default.

The CITY agrees that any cure of a default by any partners of OWNER/DEVELOPER shall be deemed to be a cure by OWNER/DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by OWNER/DEVELOPER.

In the event of any breach/default or violation of any agreement, obligation, or warranty under this Regulatory Agreement, the CITY shall give written notice to OWNER/DEVELOPER, with copies to the Senior Lenders, specifying: (a) the nature of the breach or violation; (b) the action required to cure the breach or violation; and (c) a date, which shall not be less than thirty (30) calendar days from the date of the notice, by which such action to cure must be taken. If OWNER/DEVELOPER fails to cure the breach or violation within the timeframe specified in the notice, the CITY additionally has the right, at its sole election, to:

A. Declare a default under the Note, accelerate the indebtedness evidenced by the Note, and with respect to the Loans, proceed with foreclosure under the Deeds of Trust; 14 B. Bring an action for equitable relief seeking the specific performance by OWNER/DEVELOPER of the terms and conditions of this Regulatory Agreement, and/or enjoining, abating, or preventing any violation of said terms and conditions, and/or seeking declaratory relief;
C. Enter upon, take possession of, and manage the Property and the Project, either in person, by agent, or by a receiver appointed by a court, and collect any rents, income, deposits, or reserves and apply them to operate the Property and the Project, and continue in possession until such time as the CITY in its sole judgment determines that OWNER/DEVELOPER is in a position to operate the Property and the Project in compliance with this Regulatory Agreement;
D. After notice provided for herein, make such repairs or replacements to the Property as are necessary and provide for payment thereof;
E. Declare an event of default under the Loan Documents and pursue the remedies described therein; and/or
F. Pursue any other remedy allowed at law or in equity.

The CITY’s rights hereunder shall be in addition to, and not in lieu of, every other right or remedy provided for herein or now or hereafter existing at law or in equity by statute or otherwise, including, but not limited to injunctive relief, specific performance and damages. The exercise or beginning of exercise by the CITY of any one or more rights or remedies, provided herein or now or hereafter existing at law or in equity by statute or otherwise, shall not preclude the simultaneous or later exercise by the CITY of any or all other rights or remedies provided for in this Regulatory Agreement or now or hereafter existing at law or in equity or by statute or otherwise. All such rights and remedies shall be considered cumulative and nonexclusive.

36. FEES, TAXES, AND OTHER LEVIES. OWNER/DEVELOPER shall be responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property and the Project, and shall pay such charges prior to delinquency in order to prevent any penalty from accruing or any lien or charge from attaching to the Property or the Project. However, OWNER/DEVELOPER shall not be required to pay any such charge so long as (a) the legality thereof is being contested in good faith and by appropriate proceedings; and (b) OWNER/DEVELOPER maintains reserves adequate to pay any contested liabilities. In the event OWNER/DEVELOPER exercises its right to contest any tax, assessment, or charge against it, OWNER/DEVELOPER, on final determination of the proceeding or contest, shall immediately payor discharge any decision or judgment rendered against it, together with all costs, charges and interest.
15 37. INSURANCE COVERAGE. OWNER/DEVELOPER shall cause to have in full force and effect during the term of this Regulatory Agreement continuous insurance coverage as required by the Deed of Trust.

38. PROPERTY DAMAGE OR DESTRUCTION. Subject to the requirements of Senior Lenders, and if economically feasible in the CITY's reasonable judgment after consultation with the DEVELOPER, if any improvement now or in the future on the Property is damaged or destroyed, then the DEVELOPER shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications for the Development. Such work or repair shall be commenced no later than the later of one hundred twenty (120) calendar days, or such longer period approved by the CITY in writing, after the damage or loss occurs or thirty (30) calendar days following receipt of the insurance proceeds, and shall be complete within one year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then the DEVELOPER shall make up the deficiency. If the DEVELOPER does not make repairs, then any insurance proceeds collected for such damage or destruction shall be promptly delivered to the CITY as a special repayment of the Loans, subject to the rights of the Senior Lenders, if any.

GENERAL PROVISIONS

39. SUBORDINATION. Except as expressly set forth herein, this Regulatory Agreement shall not be subordinated in priority to any other interest in the Property that was not recorded on or prior to the date of recordation of this Regulatory Agreement.

40. TRANSFER AND ENCUMBRANCE OF PROPERTY. During the term of this Regulatory Agreement, OWNER/DEVELOPER shall not, except as permitted below, make or permit any sale, agreement to sell, assignment, conveyance, lease (other than the rental of Project units to eligible residential tenant occupants), or transfer of the Property or any part thereof, including the sale of any general or limited partnership interests, the removal of any general partner, or any substantial change in operational or management control over the Property (collectively referred to as “Transfers”), without the prior written consent of the CITY and HCD. The limitations on OWNER/DEVELOPER’s right of assignment or other transfer contained in this paragraph 40 shall not apply to:
(i) any foreclosure, deed in lieu of foreclosure, or other remedial action lawfully taken by any Senior Lender holding a security interest in the Property with priority over the CITY’s interests;
(ii) the transfer of limited partner interests in OWNER/DEVELOPER; (iii) the removal or buy-out of a general partner or a limited partner pursuant to the terms and conditions of OWNER/DEVELOPER’s organizational document or any purchase option agreement or put option agreement contemplated thereby; 16 (iv) transfers to a tax-exempt entity under the direct control of or under common control with OWNER/DEVELOPER or a general partner of
OWNER/DEVELOPER(provided that the City shall not unreasonably withhold its consent to a transfer of general partner interest to a tax-exempt entity that is not under the direct control with OWNER/DEVELOPER or a general partner of OWNER/DEVELOPER if such transfer will maintain the property tax exemption for the Property); (v) intentionally deleted;
(vi) the granting of easements to any appropriate governmental agency or utility or permits to facilitate the development of the Project; (vii) the transfer (A) of an interest in and/or of an existing partner to another existing partner, or (B) of an interest in an existing general partner to an affiliate of any general partner;
(viii) transfers of an interest to a new partner which is an affiliate of an existing partner, including transfers of an additional general partner interest to an affiliate of a limited partner; or
(ix) transfer of the Project or partnership interests in OWNER/DEVELOPER to a general partner of OWNER/DEVELOPER; or
(x) any mortgage, deed of trust, or other form of conveyance for any subordinate Approved Financing (i.e. subordinate to the Deed of Trust), or refinancing thereof, Permitted Encumbrances, or the recording of a regulatory agreement in connection with the tax credit requirements applicable to the Development, or refinancing thereof.

The CITY shall give its consent to a Transfer provided that it determines all of the following conditions are met: (a) OWNER/DEVELOPER is not in default under this Regulatory Agreement and the Loan Documents, or the Transfer will cure existing defaults of this Regulatory Agreement or the Loan Documents; (b) the transferee agrees to assume all obligations of OWNER/DEVELOPER imposed by this Regulatory Agreement and the Loan Documents; (c) the transferee demonstrates to the CITY’s satisfaction that it is capable of owning and/or operating the Property and the Project in full compliance with this Regulatory Agreement and the Loan Documents; (d) the terms of the Transfer shall not jeopardize the CITY’s security interest in the Property and is otherwise in full compliance with all legal standards, including eligibility requirements and other conditions imposed by funding sources for the Project and any Loans; and (e) the Transfer has been approved by the CITY’s governing body, if such approval is required.

During the term of this Regulatory Agreement, OWNER/DEVELOPER shall not, except as may be contemplated herein or by the Loan Agreement, engage in any 17 financing or other transaction creating any mortgage or other encumbrance or lien upon the Property and/or the Project (except for any financing provided by the CITY), without the prior written consent of the CITY and HCD. The CITY may give its consent to such financing if and only to the extent necessary to maintain or improve the affordability or condition of the Property and/or the Project.

41. NONLIABILITY OF OFFICIALS, EMPLOYEES, AND AGENTS. No member, official, officer, director, employee, agent, or independent contractor of the CITY shall be personally liable to OWNER/DEVELOPER or third party beneficiaries for any obligation created under the terms of this Regulatory Agreement.

42. INDEMNITY AND WAIVER. Notwithstanding the insurance coverage required herein and to the fullest extent allowed by law, OWNER/DEVELOPER shall defend, indemnify and save and hold the CITY, its members, officials, officers, directors, employees, agents, and independent contractors (collectively “Indemnitees”), harmless against any losses, damages, liabilities, claims, demands, judgments, actions, court costs, and legal or other expenses (including attorneys’ fees) which Indemnitees may incur as a result of (1) OWNER/DEVELOPER’s failure to perform any obligations as and when required by this Regulatory Agreement; (2) any failure of OWNER/DEVELOPER’s representations or warranties to be true and complete in any material respect; or (3) any act or omission by OWNER/DEVELOPER or any contractor, subcontractor, management agent, or supplier with respect to the Project or the Property, except to the extent that such losses are caused solely by the negligence or willful misconduct of Indemnitees.

The duty of the OWNER/DEVELOPER to indemnify includes the duty to defend Indemnitees in any court action, administrative action, or other proceeding brought by any third party arising from the Project or the Property. OWNER/DEVELOPER’s duty to defend and indemnify Indemnitees shall survive the term of this Regulatory Agreement, the reconveyance of the Deed of Trust, and any release of part or all of the Property from the burdens of this Regulatory Agreement. The parties intend that this provision shall be broadly construed.

OWNER/DEVELOPER hereby waives any claims, suits, or actions against the CITY on account of or arising from the Costa-Hawkins Rental Housing Act, California Civil Code Sections 1954.50 et seq. (“CHRHA”). Furthermore, the parties hereby acknowledge and agree that, without limitation, the Loans and any Project entitlements, permits, or approvals have conferred upon the OWNER/DEVELOPER and/or the Project either a direct financial contribution or other form of assistance pursuant to Section 1954.52(b) of the CHRHA.

43. GOVERNING LAW AND VENUE. This Regulatory Agreement shall be interpreted under and be governed by the laws of the State of California, except for those provisions relating to choice of law and those provisions preempted by federal law. Any action arising out of this Regulatory Agreement shall be brought in Placer County, California, regardless of where else venue may lie.
18 44. CONFLICTS. In the event of any conflict among the Loan Documents, the most restrictive requirements shall apply. In addition, the Project may be subject to the terms of other governmental subsidy programs. This Regulatory Agreement and the agreements entered into by OWNER/DEVELOPER pursuant to these subsidy programs independently regulate the Regulated Units in the Project. If any provision of another regulatory agreement is found in conflict or in contradiction with the terms of this Regulatory Agreement in relation to the Regulated Units, the most restrictive requirement, providing the greatest affordability to the most tenants for the longest term, shall apply to those Regulated Units, except as otherwise specified.

45. ATTORNEYS’ FEES AND COSTS. In the event that a legal or administrative action is brought to interpret or enforce the terms of this Regulatory Agreement, the prevailing party in such action shall be entitled to recover its reasonable litigation expenses, including but not limited to, court costs, expert witness fees, discovery expenses, and attorneys’ fees.

46. TIME. Time is of the essence in this Regulatory Agreement.

47. CONSENTS AND APPROVALS. Except as otherwise expressly provided in this Regulatory Agreement, any consent or approval required under the Regulatory Agreement shall not be unreasonably withheld or delayed.

48. NOTICES, DEMANDS, AND COMMUNICATIONS. Formal notices, demands, and communications between OWNER/DEVELOPER and the CITY shall be given by registered or certified mail, return receipt requested, postage prepaid or delivered personally, to OWNER/DEVELOPER and the CITY as follows, or at such other address as a party may designate by written notice to the other party:

CITY OF ROSEVILLE
Economic Development Director
City of Roseville
311 Vernon Street
Roseville, CA 95678

OWNER/DEVELOPER
Fiddyment Workforce Partners,
L.P.
1350 Columbia Street, Suite 802
San Diego, CA 92101
Attn: Greg Gossard
with a copy to:

Crestone Development, LLC1601
19th Street, Suite 1150
Denver, CO 80202
Attn: Phil Anderson
19 49. BINDING UPON SUCCESSORS. All provisions of this Regulatory Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors, successors in interest, transferees, and assigns of OWNER/DEVELOPER and the CITY, and shall run with the land for the full term of this Regulatory Agreement, regardless of any assignment, payment, prepayment, expiration, extinguishment of the Loans or Notes, any reconveyance of the Deeds of Trust, or any conveyance or transfer of the Property. Any successor in interest to OWNER/DEVELOPER and any purchaser or transferee of the Property shall be subject to all of the duties and obligations imposed on OWNER/DEVELOPER under this Regulatory Agreement for the full term of this Regulatory Agreement. The term “OWNER/DEVELOPER” as used in this Regulatory Agreement shall include all such assigns, successors-in-interest, and transferees.

50. RELATIONSHIP OF PARTIES. The relationship of OWNER/DEVELOPER and the CITY for this Project during the term of this Regulatory Agreement shall not be construed as a joint venture, equity venture, or partnership. The CITY neither undertakes nor assumes any responsibility or duty to OWNER/DEVELOPER or to any third party with respect to the operation of the Property or the actions of OWNER/DEVELOPER. Except as the CITY may specify in writing, OWNER/DEVELOPER shall have no authority to act as an agent of the CITY or to bind the CITY to any obligation.

51. WAIVER. Any waiver by the CITY of any obligation in this Regulatory Agreement must be in writing. No waiver shall be implied from any delay or failure by the CITY to take action on any breach or default of OWNER/DEVELOPER or to pursue any remedy allowed under this Regulatory Agreement or applicable law. Any extension of time granted to OWNER/DEVELOPER to perform any obligation under this Regulatory Agreement shall not operate as a waiver or release from any of its obligations under this Regulatory Agreement. Consent by the CITY to any act or omission by OWNER/DEVELOPER shall not be construed as the consent to any other or subsequent act or omission or to waive the requirement for the CITY’s written consent to future waivers.

52. OTHER AGREEMENTS. OWNER/DEVELOPER represents that it has not entered into any agreements that would restrict or compromise its ability to comply with the terms of this Regulatory Agreement. OWNER/DEVELOPER shall not enter into any agreements that are inconsistent with the terms of this Regulatory Agreement without an express written waiver by the CITY.

53. AMENDMENTS AND MODIFICATIONS. Any amendments or
modifications to this Regulatory Agreement must be in writing, and shall be effective only if executed by both OWNER/DEVELOPER and the CITY, following receipt of all required approvals, and only with the consent of the Senior Lenders.

54. SEVERABILITY. Every provision of this Regulatory Agreement is intended to be severable. If any provision of this Regulatory Agreement is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired. 20 SPECIAL PROVISIONS

55. ADMINISTRATIVE FEE. In the event of OWNER/DEVELOPER’s breach or violation of any agreement, obligation or warranty under the Regulatory Agreement that is uncured within the cure periods provided herein, or in the event the Property is transferred in violation of paragraph 38 of this Regulatory Agreement, OWNER/DEVELOPER shall pay annually, not later than April 15 of each year, a $10,000 fee (“Administrative Fee”). The CITY shall provide the OWNER/DEVELOPER with notice and the right to cure, as set forth in above paragraph 32, any event which the CITY believes give rise to an obligation to pay the Administrative Fee. Such fee shall remain in effect during any period of breach or violation. The payment of such Administrative Fee shall be in addition to, and not to the exclusion of, the CITY’s other remedies contemplated in paragraph 33 of this Regulatory Agreement; provided however that this provision shall be subject to the nonrecourse provisions set forth in the Note.

56. REFINANCING/RESYNDICATION REVIEW FEE. In the event that the Property and/or the Project is a tax credit project and is refinanced or resyndicated during the term of this Regulatory Agreement, OWNER/DEVELOPER shall provide the CITY a prepayment in amount to be determined by the CITY, upon request by OWNER/DEVELOPER, for CITY’s staff actual costs in reviewing any refinancing or resyndication documentation submitted to the CITY for the CITY’s review and approval.

Such prepayment shall be submitted by OWNER/DEVELOPER prior to the CITY commencing any review. It is estimated that the prepayment will be five thousand dollars ($5,000.00). OWNER/DEVELOPER shall not be entitled to receive a refund of any such fee in the event that OWNER/DEVELOPER fails to complete such refinancing or resyndication.

57. TENANT MONITORING FEE. Commencing one (1) year after the date of the final Certificate of Occupancy for the Project and annually thereafter, OWNER/DEVELOPER shall pay to the CITY, not later than March 31 of each year, a tenant monitoring fee equal to FORTY DOLLARS ($40) for each occupied, rent restricted, apartment unit within the Project. A penalty of ten percent (10%) per month shall be assessed against any fee not paid when due.

58. PARTICIPATION IN HOUSING CHOICE VOUCHER PROGRAM.

OWNER/DEVELOPER agrees to accept tenants who qualify under the Housing Choice Voucher (“HCV”) program administered by the Roseville Housing Authority (the “Authority”) or its successor.

59. CHECKLIST FOR REGULATED UNITS. OWNER/DEVELOPER agrees that each prospective tenant, prior to rental of a Regulated Unit, shall be required to complete forms required by Exhibit D, or OWNER/DEVELOPER's equivalent as approved in writing by the CITY.
21 60. CURE BY PARTNERS OF DEVELOPER/OWNER. Notwithstanding anything to the contrary in this Agreement, CITY agrees that any cure of a default hereunder by any partners of the OWNER/DEVELOPER shall be deemed to be a cure by the OWNER/DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by the OWNER/DEVELOPER. The Limited Partner of OWNER/DEVELOPER shall be provided a duplicate copy of any notice of default at the address above and may change its address on file with the CITY by providing notice of same to CITY.
[Signatures Next Page]

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY
The land described herein is situated in the State of California, County of Placer, City of Roseville, described as follows:

Parcel One:

Lot 2, as shown on that certain Parcel Map of “Prospera at Fiddyment Ranch F6B, being a resubdivision of West Roseville Specific Plan Parcel F-6b Subdivision No.

PL21-0188”, which map was filed for record on December 16, 2022, in Book 36 of Parcel Maps, page 87, Placer County Records.

Parcel Two:

A non-exclusive easement for ingress and egress as described in that certain Agreement of Cross Use Easement by and between Fiddyment Affordable Partners, L.P., and Fiddyment Workforce Partners, L.P., dated as of December 29, 2022.

APN: 492-500-002-000 (portion)

EXHIBIT B

NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY

RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:

City of Roseville
CITY Clerk
311 Vernon Street
Roseville, CA 95678

NOTICE OF AFFORDABILITY RESTRICTIONS

ON TRANSFER OF PROPERTY
PLEASE TAKE NOTICE that the real property that is the subject of this Notice of Affordability Restrictions on Transfer of Property (hereinafter “Notice”), which property is identified and described in Exhibit A, attached hereto and incorporated herein by reference (hereinafter “Property”), is subject to the following affordability covenants and restrictions that run with the land and are binding on Fiddyment Workforce Partners, L.P., a Delaware limited partnership, and/or its permitted successors and assigns:
(a) The Property shall be developed, constructed, owned, operated and managed as a residential, multi-family rental housing apartment project to be rented at rents that are affordable to Moderate, Low and Extremely Low income households. Occupancy of fifty-nine (59) of the one hundred four (104) total units shall be reserved, for the full term set forth in subdivision (b) below, as follows:
(i) Two (2) one-bedroom, three (3) two-bedroom, and three (3) threebedroom regulated units for households whose income does not exceed thirty percent (30%) of Area Median Income (as defined in the Regulatory Agreement between the City of Roseville, a municipal corporation and Fiddyment Workforce Partners, L.P., a Delaware limited partnership, executed on _________________, 2024 and recorded concurrently with this Notice (hereinafter “Regulatory Agreement”);
(ii) Six (6) two-bedroom and six (6) three-bedroom regulated units for households whose income does not exceed eighty percent (80%) of Area Median Income; and
(iii) Twenty-two (22) one-bedroom and seventeen (17) two-bedroom regulated units for households whose income does not exceed one hundred percent (100%) of Area Median Income.

Rents shall be established according to the schedule contained in the Regulatory Agreement.
(b) The covenants and restrictions referenced above commence upon the execution of the Regulatory Agreement and shall remain in full force and effect for a minimum of fifty-five (55) years after the date Fiddyment Workforce Partners, L.P., a Delaware limited partnership and/or its permitted successors and assigns, obtains a Certificate of Occupancy from the City of Roseville. The obligations referenced in this Notice and set forth in greater detail in the Regulatory Agreement shall remain effective and fully binding for this full term regardless of any expiration of the term of any loan, any payment, or prepayment of any loan, any assignment of a note, any reconveyance of a deed of trust, or any sale, assignment, transfer, or conveyance of the Property (other than certain transfers by foreclosure, deed in lieu of foreclosure, exercise of the power of sale or other similar transfer.
(c) The street address for the Property is 2801 N. Hayden Parkway, Roseville, California, 95747, as further identified and described in Exhibit A. (d) The assessor’s parcel number for the property is: APN: 492-500-002-000 (portion) as further identified and described in Exhibit A.

Any questions about the contents of this Notice may be directed to the Office of the City Attorney for the City of Roseville, 311 Vernon Street, Roseville, California 95678; Telephone (916) 774-5325.

CITY OF ROSEVILLE,
a municipal corporation
Dated: _____________ By: ___________________________
Michelle Sheidenberger
City Attorney
City of Roseville

EXHIBIT C

UNIT CONFIGURATION AND INITIAL RENT RESTRICTIONS
Maximum Household Income 30% AMI – Project Based Vouchers Bedroom
size
Number
of Units
Gross
Rent
Less
approved
CUAC*
Allowable
Contract
Rent
1 2 $1,800 $52 $1,748
2 3 $2,290 $60 $2,230
3 3 $2,828 $66 $2,762
Maximum Household Income 80% AMI
Bedroom
size
Number
of Units
Gross
Rent
Less
approved
CUAC*
Allowable
Contract
Rent
2 6 $1,930 $60 $1,870
3 6 $2,144 $66 $2,078
Maximum Household Income 100% AMI
Bedroom
size
Number
of Units
Gross
Rent
Less
approved
CUAC*
Allowable
Contract
Rent
1 22 $2,145 $52 $2,093
2 17 $2,412 $60 $2,352
* California Utility Allowance Calculator (CUAC) is California’s energy consumption model for calculating utility allowance estimates.

EXHIBIT D

CHECKLIST FOR AFFORDABLE RENTAL UNITS
The following documentation must be present in the Tenant’s file (in a form approved by the Housing Manager) for an “affordable renter.”
____ Certification of Affordable Rental Unit Eligibility ____ Calculation of Tenant Eligibility Form
____ Record of Rental Increases
____ Written, third party verification of all income sources, including:
____ Employment
____ Self-employment (tax return and profit & loss statement for current year)
____ Unemployment
____ AFDC (Welfare) Benefits
____ Child Support
____ Alimony
____ Social Security Benefits
____ Supplemental Security Income (SSK)
____ VA or Military Benefits
____ Pensions and/or Annuities
____ Retirement Funds
____ Savings Accounts (Interest Income)
____ Checking Accounts
____ Government Grants
____ Trust Funds
____ Stocks & Bonds (Cash Value)
____ Life Insurance (Cash Value)
Name ____________________________________ Complex ____________________________ Title _____________________________________ Date _______________________________

CERTIFICATION OF AFFORDABLE RENTAL UNIT ELIGIBILITY
Re: ____________________________________ Apt. # __________ Apartment Complex
I/we have read and answered truthfully, fully frankly and personally each of the following questions for all persons who are to occupy the unit being applied for in the above apartment project. Listed below are the names of all persons who intend to reside in the unit:
1) Name of Members of the
Household
2) Relationship
to head of
Household 3) Age
4) Social
Security No.
5) Place of
Employment
___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ ___________________ ____________ _____ __________ ______________ CERTIFICATION OF AFFORDABLE RENTAL UNIT ELIGIBILITY (CONT.)

INCOME COMPUTATION
6) The total anticipated income calculated in accordance with this paragraph 6, of all persons (except children under the age of 18 years) listed above for the 12-month period beginning the date that I/we plan to move into a unit is $________________ .

Included in the total anticipated income listed above are:
a. All wages and salaries, overtime pay, commissions, fees and other compensation for personal services, before payroll deductions.

Excluded from such anticipated income are:
a. Casual, sporadic or irregular gifts;
b. Amounts which are specifically for or in reimbursement of medical expenses; c. Lump sum additions to family assets, such as inheritances, insurance payments (including payments under health and accident insurance and worker’s compensation), capital gains and settlements for personal or property losses;
d. Amounts of educational scholarships paid directly to the student or the educational institution and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books, and equipment. Any amounts of such scholarships or payments to veterans not used for the above purposes are to be included in income;
e. Hazardous duty pay to a family member in the Armed Forces who is away from home and exposed to hostile fire;
f. Relocation payments under Title II of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970;
g. Foster child care payments;
h. The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1977.
7) This certificate is made with the knowledge that it will be relied upon by the Owner to determine maximum income for eligibility to occupy the unit; and I/we declare that all information set forth herein is true, correct and complete and based upon information I/we deem reliable and that the statement of total anticipated income contained in paragraph 6 is reasonable and based upon such investigation as the undersigned deemed necessary.
8) I/We will assist the Owner in obtaining any information or documents required to verify the statement made herein, including either an income verification from my/our present employer(s) or copies of federal tax returns for the immediately preceding calendar year.
9) I/We acknowledge that I/we have been advised that the making of any misrepresentation or misstatement in this declaration will constitute a material breach of my/our agreement with the Owner to lease the unit and will entitle the Owner to prevent or terminate my/our occupancy of the unit by institution of an action for eviction or other appropriate proceedings.

I/We declare under penalty of perjury that the foregoing is true and correct.

Executed this _____ day of ___________________ in the City of ____________________ California.
_____________________________________
Applicant
_____________________________________
Applicant
_____________________________________
Applicant
_____________________________________
Applicant
_____________________________________
Applicant
[All persons listed in number 2 above, except children under the age of 18 must sign this form]

CALCULATION OF TENANT ELIGIBILITY FORM
(FORM COMPLETION BY APARTMENT OWNER OR AGENT)
NAME: ____________________________________ UNIT # ____________

SOURCE MONTHLY ANNUAL
Social Security $
______________
$
______________ Social Security $
______________
$
______________ Civil Service $
______________
$
______________ Pension _________________________ $
______________
$
______________ Interest _________________________ $
______________
$
______________ Wages __________________________ $
______________
$
______________ Tips __________________________ $
______________
$
______________ Wages __________________________ $
______________
$
______________ Tips __________________________ $
______________
$
______________ Child Support $
______________
$
______________ Welfare $
______________
$
______________ Stocks/Bonds $
______________
$
______________ Other ___________________________ $
______________
$
______________ Other ___________________________ $
______________
$
______________ TOTAL INCOME $
______________
$
______________ Monthly base rent $
______________ Move-in date
______________
BY
___________________________________ TITLE _____________________________ DATE _____________________________

AFFORDABLE TENANT

RECORD OF RENTAL INCREASES
(FORM COMPLETION BY APARTMENT OWNER OR AGENT)
NAME ______________________________ APT. NO. _________
MOVE-IN DATE _____________________ INITIAL BASE RENT $___________ ANNUAL INCOME $_________________

DATE OF

INCREASE

CURRENT
RENT
ANNUAL

ADJUSTMENT

FACTORS NEW RENT
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________
_____________ $___________ X 1._______ = $___________

HOUSING TRUST FUND LOAN AGREEMENT
Between

CITY OF ROSEVILLE
and
FIDDYMENT WORKFORCE PARTNERS, L.P.
2801 N. HAYDEN PARKWAY, ROSEVILLE
1 HOUSING TRUST FUND LOAN AGREEMENT
(2801 N. HAYDEN PARKWAY, Roseville)
This Housing Trust Fund Loan Agreement (the "Agreement") is entered into as of __________, 2024 (the "Effective Date"), by and between the City of Roseville, a municipal corporation (the "CITY" or “Beneficiary”), and Fiddyment Workforce Partners, L.P., a Delaware limited partnership (the “DEVELOPER” or “Owner” or “Borrower” or “Trustor”), with reference to the following facts:

RECITALS
A. The DEVELOPER intends to construct one hundred and four (104) residential rental units, along with approximately 4,000 square feet of amenity space (the “Development”), of which fifty-nine (59) residential rental units (the "Affordable Units") shall be affordable to moderate, low, and extremely low income households pursuant to the Regulatory Agreement, on property located at 2801 N. Hayden Parkway in the City of Roseville, Placer County, and as more particularly described in Exhibit A attached hereto (collectively, the "Property"). The Property is owned in fee title by the DEVELOPER.

B. In order to make the units in the Development affordable, the DEVELOPER wishes to borrow from the CITY and the CITY wishes to extend to the DEVELOPER a loan of One Million Dollars ($1,000,000) (the "Loan") to be used for construction and permanent financing of the Development. The Loan will be evidenced by a promissory note (the "Note") executed by the DEVELOPER in favor of the CITY and secured by a deed of trust recorded against the Property (the “Deed of Trust”).

C. The source of the Loan funds is the Roseville Housing Trust Fund (“Housing Trust Fund”), of which Five Hundred Thousand Dollars ($500,000) consists of Program Funds from the Local Housing Trust Fund program administered by the California Department of Housing and Community Development (HCD) and Five Hundred Thousand Dollars ($500,000) consists of Matching Funds.

D. The Loan is being made to the DEVELOPER at an interest rate below the market rate in order to help achieve financial stability for the Development and to increase the supply of affordable rental housing in the CITY. In consideration for the Loan, the DEVELOPER has agreed to provide the Affordable Units for a fifty-five (55) year period from issuance of Certificate of Occupany. The CITY and the DEVELOPER will record a regulatory agreement (the "Regulatory Agreement") against the Property to ensure the affordability of the Affordable Units. Separate regulatory agreements between the DEVELOPER and the entities providing the Approved Financing may also be executed to ensure the affordability of the Affordable Units.

NOW, THEREFORE, the Parties agree as follows:

AGREEMENT
2 The foregoing recitals are hereby incorporated by reference and made part of this Agreement.

ARTICLE 1.

DEFINITIONS AND EXHIBITS
Section 1.1 Definitions.

The following capitalized terms have the meanings set forth in this Section 1.1 wherever used in this Agreement, unless otherwise provided:
(a) “Affordable Units” is defined in paragraph A of the Recitals. (b) "Agreement" is this Housing Trust Fund Loan Agreement. (c) “Annual Operating Expenses” is defined in Section 2.8(c) below. (d) "Approved Financing" shall mean all of the following loans and equity (item (i) referred to as the "Approved Construction Financing" and items (ii)-(v) referred to as the "Approved Permanent Financing") obtained by the DEVELOPER for the Development in addition to the Loan:
(i) Construction and Permanent Loan made by Zions
Bancorporation, National Association, as trustee, which is a Senior Loan
(ii) City of Roseville Local Housing Trust Fund Loan
(iii) Limited Partner capital contributions
(iv) Energy Rebate, and Deferred Developer Fee
(e) "Approved Project Budget" is the pro forma acquisition and construction budget for the Development, including sources and uses of funds, as approved by the CITY, and attached as Exhibit B.
(f) "City" is defined in the first paragraph of this Agreement. (g) “Construction Component” defined in Section 2.1(a) below. (h) "County" means the County of Placer, a political subdivision of the State of California.
(i) "DEVELOPER" is defined in the first paragraph of this Agreement. (j) "Deed of Trust" is the deed of trust of even date herewith, among the DEVELOPER, as trustor, Placer Title Company, as trustee, and the CITY, as beneficiary, 3 that will encumber the Development to secure repayment of the Loan and performance of all covenants of the Loan Documents.
(k) "Default" is defined in Section 6.1 below.
(l) "Default Rate" is defined in Section 2.2(b).
(m) "Development" is defined in paragraph B of the Recitals. (n) “DIR” is defined in Section 3.3(c) below.
(o) "Effective Date" is defined in the first paragraph of this Agreement. (p) “Final Disbursement” is defined in Section 2.1(a) below. (q) “Gross Revenue” is defined in Section 2.8(c) below. (r) "Hazardous Materials" is defined in Section 3.09(a) below. (s) "Hazardous Materials Claim" is defined in Section 3.09(b) below. (t) "Hazardous Materials Law" is defined in Section 3.09(b) below. (u) "HCD" is defined in Section 7.3 below.
(v) "Loan" is defined in paragraph C of the Recitals.
(w) "Loan Documents" are this Agreement, the Note, the Regulatory Agreement, and the Deed of Trust.
(x) Intentionally omitted.
(y) "Note" is the promissory note of even date herewith between the DEVELOPER and the CITY evidencing the DEVELOPER's obligation to repay the Loan. (z) "Parties" are the CITY and the DEVELOPER.
(aa) "Property" is defined in paragraph B of the Recitals. (bb) "Regulatory Agreement" is defined in paragraph D of the Recitals. (cc) “Residual Receipts” are defined in Section 2.7(c) below. (dd) “Senior Lender” is a lender of a Senior Loan.
(ee) "Senior Loan" is defined in Section 2.5 below.
(ff) "Term" is defined in Section 2.8(a) below.
4 (gg) "Transfer" is defined in Section 3.14(a) below.
(hh) "Unit" means one of the one hundred and four (104) rental housing units to be constructed on the Property.

Section 1.2 Exhibits.

The following exhibits are attached to this Agreement and incorporated into this Agreement by this reference:

Exhibit A: Legal Description of the Property
Exhibit B: Approved Project Budget
ARTICLE 2.

LOAN PROVISIONS
Section 2.1 Loan and Applications for Additional Financing. (a) The CITY shall loan to the DEVELOPER the Loan in the principal amount of One Million Dollars ($1,000,000) for the purposes set forth in Section 2.3 of this Agreement. The obligation to repay the Loan shall be evidenced by the Note.

Section 2.2 Interest.
(a) Interest. Subject to subsection (b) below, simple interest shall accrue on the outstanding principal balance of the Loan at a rate of three percent (3%) per annum.
(b) Default Interest. Upon the occurrence and continuance of a Default, interest on the Loan shall begin to accrue, as of the date of Default and continuing until such time as the Loan is repaid in full or the Default is cured, at the default rate of the lesser of eight percent (8%) per annum, compounded annually (the "Default Rate") and the highest rate permitted by law.

Section 2.3 Use of Loan Funds. The DEVELOPER shall use the Loan funds to fund construction of the Development and subsequent permanent financing of the Development in a manner consistent with the Approved Financing and Approved Project Budget. The DEVELOPER shall not use the Loan for any other purposes without the prior written consent of the CITY and HCD.

Section 2.4 Security. The DEVELOPER shall secure its obligation to repay the Loan, as evidenced by the Note, by executing the Deed of Trust, and recording it as a lien against the Property senior in lien priority to all other deeds of trust recorded against the Property except as provided in Section 2.5 below. The DEVELOPER shall also cause or permit the Regulatory Agreement to be recorded against the Property in a position 5 superior to all other deeds of trust recorded against the Property, except as provided in Section 2.5 below.

Section 2.5 Subordination.

The Loan Documents shall be subordinated to the Construction Loan and Permanent Loan (in each case, a “Senior Loan”) and to the loan documents evidencing and securing the Senior Loan. The CITY may subordinate to any other loans or affordability covenants as approved by the CITY and HCD in their reasonable discretion.

Section 2.6 Conditions Precedent to Disbursement of Loan Funds. (a) Maximum Disbursement. The maximum amount of funds to be disbursed pursuant to this Section 2.6 shall not exceed the amount of the Loan. (b) Conditions Precedent to Disbursement of the Loan. The CITY shall not be obligated to make any disbursements of the Loan or take any other action under the Loan Documents unless all of the following conditions precedent are satisfied prior to each such disbursement of Loan funds:
(i) There exists no uncured Default nor any act, failure, omission or condition that would constitute an event of Default under this Agreement; (ii) The DEVELOPER has delivered to the CITY a copy of a corporate resolution authorizing the DEVELOPER's execution of the Loan Documents; (iii) Intentionally deleted
(iv) The DEVELOPER has delivered to the CITY a certificate of good standing dated within thirty (30) calendar days of the Effective Date; (v) The DEVELOPER has furnished the CITY with evidence of the insurance coverage meeting the requirements of Section 3.15 below; (vi) The DEVELOPER has caused to be executed and delivered to the CITY all Loan Documents and any other instruments and policies required under the Loan Documents;
(vii) The Deed of Trust and the Regulatory Agreement will be recorded against the Property in the County’s Office of the Recorder concurrently with the close of escrow;
(viii) A title insurer reasonably acceptable to the CITY is unconditionally and irrevocably committed to issuing an ALTA Lender's Policy of title insurance insuring the priority of the Deed of Trust in the amount of the Loan, subject only to such exceptions and exclusions listed on Schedule B to such Lender’s Policy or as may be reasonably acceptable to the CITY (collectively, the “Permitted Encumbrances”, and containing such endorsements as the CITY may reasonably require. The 6 DEVELOPER shall provide whatever documentation (including an indemnification agreement), deposits or surety is reasonably required by the title company in order for the CITY's Deed of Trust to be senior in lien priority to any other liens, except approved Senior Loans and other liens approved in writing by CITY; (ix) The DEVELOPER is in possession of all City zoning and land use approvals required to construct the Development and has provided the CITY with evidence of such approvals;
(x) Intentionally deleted.
(xi) The DEVELOPER has provided to CITY and CITY has
approved the Approved Project Budget as set forth in Section 1.1(e) above. (c) Intentionally deleted.
(d) Intentionally deleted.

Section 2.7 Repayment Schedule.

The Loan shall be repaid as follows:
(a) The Loan and this Agreement shall have a term that commences on the Effective Date and expires on the earlier to occur of: (i) fifty-five (55) years from the date of issuance of the certificate of occupancy or equivalent certification provided by the CITY; or (ii) December 31, 2078 (the "Term").
(b) No later than April 30th of each calendar year commencing the calendar year after the year the Approved Permanent Financing has closed, the DEVELOPER shall make repayments of the Loan for that prior calendar year equal to the lesser of 1) on fifty percent (50%) of the available amount of Residual Receipts (as defined below in subsection (c)(iii)) or 2) the annual interest due. These payments shall be credited first against accrued interest and then against outstanding principal of the Loan, and shall be accompanied by the DEVELOPER's report of Residual Receipts (including an independent auditor's report regarding the auditor's review of Gross Revenue and Annual Operating Expenses). The DEVELOPER shall provide the CITY with any documentation reasonably requested by the CITY to substantiate the DEVELOPER's determination of Residual Receipts. If the repayments are not received by the CITY within fifteen (15) calendar days after the installment is due, DEVELOPER shall pay to the CITY a late charge of five percent (5%) of such installment. Such late charge shall be immediately due and payable without demand by the CITY. (c) The following definitions shall apply for purposes of Section 2.8(b):
(i) "Annual Operating Expenses", with respect to a particular calendar year during the Term, means the following costs reasonably and actually incurred for operation and maintenance of the Development to the extent that they are consistent with an annual independent audit performed by a certified public accountant 7 using generally accepted accounting principles: property taxes and assessments imposed on the Development; debt service currently due on a non-optional basis (excluding debt service due from residual receipts or surplus cash of the Development) on loans that are part of the Approved Financing; property management fees and reimbursements, excluding incentive management fees, not to exceed fees and reimbursements which are standard in the industry, and pursuant to a management contract approved by the CITY; premiums for property damage and liability insurance; utility services not paid for directly by tenants, including water, sewer, and trash collection; maintenance and repair; any annual license or certificate of occupancy fees required for operation of the Development; security services; advertising and marketing; cash deposited into reserves for capital replacements of the Development in the amount required by Senior Lenders or DEVELOPER’s investor limited partner; cash deposited into an operating reserve for the Development in an amount required by Senior Lenders or DEVELOPER’s investor limited partner; extraordinary operating costs specifically approved by the CITY; payments of deductibles in connection with casualty insurance claims not normally paid from reserves, the amount of uninsured losses actually replaced, repaired or restored, and not normally paid from reserves; general partner asset management fees not-to-exceed Twenty Five Thousand Dollars ($25,000) in the first year and subject to annual increases at three percent (3%); limited partner asset management fees not-to-exceed Eight Thousand Five Hundred Dollars ($8,500) in the first year and subject to annual increases at three percent (3%); the cost of social services; any tax credit adjuster payments; repayment of any completion or operating loans made to the Developer; deferred developer fees; and other ordinary and reasonable operating expenses approved by the CITY and not listed above. Annual Operating Expenses shall not include the following: depreciation, amortization, depletion or other non-cash expenses or any amount expended from a reserve account. (ii) "Gross Revenue," with respect to a particular calendar year during the Term, means all revenue, income, receipts, and other consideration actually received by DEVELOPER from operation and leasing of the Development. "Gross Revenue" shall include, but not be limited to: all rents, fees and charges paid by tenants, Section 8 payments or other rental subsidy payments received for the dwelling units, deposits forfeited by tenants, all cancellation fees, price index adjustments and any other rental adjustments to leases or rental agreements resulting in actual income; proceeds from vending and laundry room machines; the proceeds of business interruption or similar insurance; subject to the rights of Senior Lenders, the proceeds of casualty insurance to the extent not utilized to repair or rebuild the Development (or applied toward the cost of recovering such proceeds) and not payable to the Senior Lenders; and condemnation awards for a taking of part or all of the Development for a temporary period. "Gross Revenue" shall also include the fair market value of any goods or services provided in consideration for the leasing or other use of any portion of the Development. "Gross Revenue" shall not include any rental income received from the Development’s commercial space, tenants' security deposits, loan proceeds, capital contributions or similar advances.
8 (iii) "Residual Receipts", with respect to a particular calendar year during the Term, means the amount by which Gross Revenue (as defined above) exceeds Annual Operating Expenses (as defined above).
(d) In connection with the annual payments required by Section 2.8(b), within one hundred twenty (120) calendar days of the end of the calendar year, the DEVELOPER shall furnish to the CITY an audited statement duly certified by an independent firm of certified public accountants, setting forth in reasonable detail the computation and amount of Residual Receipts during the preceding calendar year. (e) The DEVELOPER shall keep and maintain on the Property, or at its principal place of business, or elsewhere with the CITY's written consent, which consent shall not be unreasonably withheld, full, complete and appropriate books, records and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the DEVELOPER's calculation of Residual Receipts. Books, records and accounts relating to the DEVELOPER's compliance with the terms, provisions, covenants and conditions of this Agreement shall be kept and maintained in accordance with generally accepted accounting principles consistently applied, and shall be consistent with requirements of this Agreement which provide for the calculation of Residual Receipts on a cash basis.

All such books, records, and accounts shall be open to and available for inspection by the CITY, its auditors or other CITY authorized representatives at reasonable intervals during normal business hours. Copies of all tax returns and other reports that the DEVELOPER may be required to furnish any governmental agency shall at all reasonable times be open for inspection by the CITY at the place that the books, records and accounts of the DEVELOPER are kept. The DEVELOPER shall preserve records on which any statement of Residual Receipts is based for a period of not less than five (5) years after such statement is rendered.
(f) All principal and accrued interest on the Loan shall be due in full on the earlier to occur of (i) the date of any Default, or (ii) the expiration of the Term. (g) The CITY and the DEVELOPER shall have the right, but not the obligation, to extend the period for repayment of the Loan if desirable to serve the purposes of this Agreement.
(h) The DEVELOPER shall have the right to prepay the Loan at any time without penalty. However, the Regulatory Agreement shall remain in effect for the entire Term.

Section 2.8 Non-Recourse.

Except as provided below, the DEVELOPER shall not have any direct or indirect personal liability for payment of the principal of, and interest on, the Loan or the performance of the covenants of the DEVELOPER under the Deed of Trust. Following recordation of the Deed of Trust, the sole recourse of the CITY with respect to the principal of, and interest on, the Note and defaults by the DEVELOPER in the performance of its covenants under the Deed of Trust shall be to the property described in the Deed of Trust; 9 provided, however, that nothing contained in the foregoing limitation of liability shall (a) limit or impair the enforcement against all such security for the Note of all the rights and remedies of the CITY thereunder, or (b) be deemed in any way to impair the right of the CITY to assert the unpaid principal amount of the Note as demand for money within the meaning and intendment of Section 431.70 of the California Code of Civil Procedure or any successor provision thereto. The foregoing limitation of liability is intended to apply only to the obligation for the repayment of the principal of, and payment of interest on the Note and the performance of the DEVELOPER's obligations under the Deed of Trust, except as hereafter set forth; nothing contained herein is intended to relieve the DEVELOPER of its obligation to indemnify the CITY under Section 7.5 of this Agreement, for liability for (i) fraud or willful misrepresentation; (ii) the failure to pay taxes, assessments or other charges which may create liens on the Property that are payable or applicable prior to any foreclosure under the Deed of Trust (to the full extent of such taxes, assessments or other charges); (iii) the fair market value of any personal property or fixtures removed or disposed of by the DEVELOPER other than in accordance with the Deed of Trust; and (iv) the misappropriation of any proceeds under any insurance policies or awards resulting from condemnation or the exercise of the power of eminent domain or by reason of damage, loss or destruction to any portion of the Property.

ARTICLE 3.

LOAN REQUIREMENTS
Section 3.1 Construction Reporting.

During construction of the Development, DEVELOPER shall provide to the CITY, on a monthly basis, copies of construction inspection reports and draw reports provided to construction lenders, at the same time as those reports are provided to construction lenders and regardless of whether the CITY is at the time being requested to make construction disbursements.

Section 3.2 Completion of Construction.

DEVELOPER shall diligently prosecute construction of the Development to completion, and shall cause the completion of the Development no later than required by the California Tax Credit Allocation Committee placed-in-service deadline associated with the Approved Financing, or such later date as the CITY may approve.

Section 3.3 Construction Pursuant to Plans and Laws; Prevailing Wages. (a) DEVELOPER shall construct the Development in conformance with the Approved Financing and Approved Project Budget and consistent with the plans and specifications utilized to obtain City permits. DEVELOPER shall notify the CITY in a timely manner of any changes in the work required to be performed under this Agreement, including any additions, changes, or deletions to the plans and specifications approved by the City. HCD reserves the right to inspect any site upon which the work is being performed; and the DEVELOPER shall cause to be inserted in any subcontract for 10 performance of the work a provision permitting HCD or its agents the right to inspect the work-site at any reasonable time.
(b) DEVELOPER shall cause all construction work to be performed in compliance with (i) all applicable laws, ordinances, rules and regulations of federal, state, county or municipal governments or agencies now in force or that may be enacted hereafter, including without limitation and to the extent applicable, state prevailing wages pursuant to Labor Code Section 1770 et seq., and the regulations pursuant thereto, as further set forth in subsection (c) below; and (ii) all directions, rules and regulations of any fire marshal, health officer, building inspector, or other officer of every governmental agency now having or hereafter acquiring jurisdiction. The work shall proceed only after procurement of each permit, license, or other authorization that may be required by any governmental agency having jurisdiction, and DEVELOPER shall be responsible to the CITY for the procurement and maintenance thereof, as may be required of DEVELOPER and all entities engaged in work on the construction.
(c) This Agreement has been prepared with the intention that CITY assistance under this Agreement meets the exception set forth in Labor Code Section 1720(c)(5)(E) to the general requirement that state prevailing wages be paid in connection with construction work that is paid for in whole or in part out of public funds; provided, however, that nothing in this Agreement constitutes a representation or warranty by any party regarding the applicability of the provisions of Labor Code Section 1720 et seq., and the hiring of apprentices pursuant to Labor Code Sections 1777.5 et seq., to the Approved Financing. If applicable to the Approved Financing or Approved Project Budget, the DEVELOPER shall pay and shall cause the contractor and subcontractors to pay prevailing wages in connection with the construction of the Development, as those wages are determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices as required by Labor Code Sections 1777.5 et seq., and the implementing regulations of the Department of Industrial Relations ("DIR"). The DEVELOPER shall indemnify, hold harmless and defend (with counsel reasonably acceptable to the CITY) the CITY against any claim for damages, compensation, fines, penalties or other amounts arising out of the failure or alleged failure of any person or entity (including the DEVELOPER, its contractor and subcontractors) to pay prevailing wages as determined pursuant to Labor Code Sections 1720 et seq., to employ apprentices pursuant to Labor Code Sections 1777.5 et seq., and implementing regulations of the DIR or to comply with the other applicable provisions of Labor Code Sections 1720 et seq., 1777.5 et seq., and the implementing regulations of the DIR in connection with the any other work undertaken or in connection with the Property. The requirements in this Subsection shall survive the repayment of the Loan, and the reconveyance of the Deed of Trust.
(d) As required by HCD as a condition of the Local Housing Trust Fund Program, during the construction period, if the DEVELOPER elects to place a sign or signs identifying the Development that is visible to the public, the DEVELOPER shall include the following language on the sign, “Funding provided by the Roseville Local Housing Trust Fund and the California Department of Housing and Community Development.” If the DEVELOPER does not elect to place a sign on the Property identifying the Development, HCD may place one or more signs on the Property stating that it is providing financing for the Development.
11 Section 3.4 Mechanics Liens, Stop Payment Notices, and Notices of Completion.
(a) If any claim of lien is filed against the Property or a stop payment notice affecting the Loan is served on the CITY or any other lender or other third party in connection with the Development, then DEVELOPER shall, within thirty (30) calendar days after such filing or service, either pay and fully discharge the lien or stop payment notice, effect the release of such lien or stop payment notice by delivering to the CITY a surety bond in sufficient form and amount, or provide the CITY with other assurance satisfactory to the CITY that the claim of lien or stop payment notice will be paid or discharged.
(b) If DEVELOPER fails to discharge any lien, encumbrance, charge, or claim in the manner required in this Section, then in addition to any other right or remedy, the CITY may (but shall be under no obligation to) discharge such lien, encumbrance, charge, or claim at DEVELOPER'S expense. Alternately, the CITY may require DEVELOPER to immediately deposit with the CITY the amount necessary to satisfy such lien or claim and any costs, pending resolution thereof. The CITY may use such deposit to satisfy any claim or lien that is adversely determined against DEVELOPER. (c) DEVELOPER shall file a valid notice of cessation or notice of completion upon cessation of construction on the Development and take all other reasonable steps to forestall the assertion of claims of lien against the Property.

DEVELOPER authorizes the CITY, but without any obligation, to record any notices of completion or cessation of labor, or any other notice that the CITY deems necessary or desirable to protect its interest in the Property.

Section 3.5 Inspections.

DEVELOPER shall permit and facilitate, and shall require its contractors to permit and facilitate, observation and inspection of the construction by the CITY and by public authorities during reasonable business hours for the purposes of determining compliance with this Agreement.

Section 3.6 Equal Opportunity.

During construction of the Development there shall be no discrimination on the basis of race, color, creed, religion, age, sex, sexual orientation, marital status, national origin, ancestry, or disability in the hiring, firing, promoting, or demoting of any person engaged in the construction work.
12 Section 3.7 Information and Annual Reporting.
(a) The DEVELOPER shall provide any information reasonably requested by the CITY in connection with the Development in connection with the DEVELOPER's use of the Loan funds. In particular, the DEVELOPER shall provide the CITY with annual reports required by the Regulatory Agreement, including but not limited to reports regarding the Development's rent and occupancy levels, as well as the annual operating budget. Without limitation, the DEVELOPER shall provide the CITY no later than the ninetieth (90th) day after the close of each calendar year following the Effective Date, hard copies and PDF copies of the following documents:
(i) insurance certificates detailing all coverage required under Section 3.15 below;
(ii) evidence of payment of property taxes or property tax exemption for the Development, as applicable;
(iii) audited financial statements for the Development and DEVELOPER; and
(iv) an occupancy report including: (i) the verified income of each tenant or household, (ii) the number and demographic information of tenants in each household; (iii) the current rents charged each tenant or household and whether these rents include utilities, and (iv) the date tenancy commenced for each Affordable Unit; (b) Substitution of Monitoring and Compliance Reports Prepared for Other Financing Programs. If similar reports on some or all of the Affordable Units are required for regulatory compliance with other financing programs, those reports may be deemed satisfactory for the purpose of this Section by the CITY, with respect to the portion of the requirements of this Section covered by such reports, provided that copies are provided on an annual basis to the CITY with an owner certification addressed to the CITY certifying that the DEVELOPER is not in default under this Agreement.

Section 3.8 Records. The DEVELOPER shall keep and maintain at the Development, or elsewhere with the CITY’s written consent, which consent shall not be unreasonably withheld, full, complete and appropriate books, record and accounts relating to the Development, including all such books, records and accounts necessary or prudent to evidence and substantiate in full detail the DEVELOPER's compliance with the terms and provisions of this Agreement. All such books, records, and accounts shall be open to and available for audit, inspection and copying by the CITY, their auditors or other authorized representatives at reasonable intervals during normal business hours.

The DEVELOPER shall preserve such records for a period of not less than five (5) years after the creation of such records. Such records shall include all invoices, receipts, and other documents related to expenditures from the Loan funds. Records must be kept accurate and current.
13 Section 3.9 Hazardous Materials.
(a) The DEVELOPER shall keep and maintain the Property in compliance with, and shall not cause or permit the Property to be in violation of any federal, state or local laws, ordinances or regulations relating to industrial hygiene or to the environmental conditions on, under or about the Property including, but not limited to, soil and ground water conditions. The DEVELOPER shall not use, generate, manufacture, store or dispose of on, under, or about the Property or transport to or from the Property any flammable explosives, radioactive materials, hazardous wastes, toxic substances or related materials, including without limitation, any substances defined 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 (collectively referred to hereinafter as "Hazardous Materials") except such of the foregoing as may be customarily used in construction of projects like the Development or kept and used in and about residential property of this type. (b) The DEVELOPER shall immediately advise the CITY in writing if at any time it receives written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against the DEVELOPER or the Property pursuant to any applicable federal, state or local laws, ordinances, or regulations relating to any Hazardous Materials, ("Hazardous Materials Law"); (ii) all claims made or threatened by any third party against the DEVELOPER or the Property relating to damage, contribution, cost recovery compensation, loss or injury resulting from any Hazardous Materials (the matters set forth in clauses (i) and (ii) above are hereinafter referred to as "Hazardous Materials Claims"); and (iii) the DEVELOPER's discovery of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be classified as "border-zone property" (as defined in the California Health and Safety Code) under the provision of California Health and Safety Code, Sections 25220 et seq., or any regulation adopted in accordance therewith, or to be otherwise subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Hazardous Materials Law.
(c) The CITY shall have the right to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials Claims and to have its reasonable attorneys' fees in connection therewith paid by the DEVELOPER. The DEVELOPER shall defend, indemnify and hold harmless the CITY and its councilmembers, directors, officers, employees, agents, successors and assigns from and against any loss, damage, cost, expense or liability directly or indirectly arising out of or attributable to the use, generation, storage, release, threatened release, discharge, disposal, or presence of Hazardous Materials on, under, or about the Property including without limitation: (a) all foreseeable consequential damages; (b) the costs of any required or necessary repair, cleanup or detoxification of the Property and the preparation and implementation of any closure, remedial or other required plans; and (c) all reasonable costs and expenses incurred by the CITY in connection with clauses (a) and (b), including but not limited to reasonable attorneys' fees and consultant's fees. This indemnification applies whether or not any government agency has issued a cleanup 14 order. Losses, claims, costs, suits, liability, and expenses covered by this indemnification provision include, but are not limited to: (1) losses attributable to diminution in the value of the Property; (2) loss or restriction of use of rentable space on the Property; (3) adverse effect on the marketing of any rental space on the Property; and (4) penalties and fines levied by, and remedial or enforcement actions of any kind issued by any regulatory agency (including but not limited to the costs of any required testing, remediation, repair, removal, cleanup or detoxification of the Property and surrounding properties). This obligation to defend and indemnify shall survive termination of this Agreement. (d) Without the CITY's prior written consent, which shall not be unreasonably withheld, the DEVELOPER shall not take any remedial action in response to the presence of any Hazardous Materials on, under or about the Property, nor enter into any settlement agreement, consent decree, or other compromise in respect to any Hazardous Material Claims, which remedial action, settlement, consent decree or compromise might, in the CITY's reasonable judgment, impair the value of the CITY's security hereunder; provided, however, that the CITY's prior consent shall not be necessary in the event that the presence of Hazardous Materials on, under, or about the Property either poses an immediate threat to the health, safety or welfare of any individual or is of such a nature that an immediate remedial response is necessary and it is not reasonably possible to obtain the CITY's consent before taking such action, provided that in such event the DEVELOPER shall notify the CITY as soon as practicable of any action so taken. The CITY agrees not to withhold its consent, where such consent is required hereunder, if (i) a particular remedial action is ordered by a court of competent jurisdiction, (ii) the DEVELOPER will or may be subjected to civil or criminal sanctions or penalties if it fails to take a required action; (iii) the DEVELOPER establishes to the reasonable satisfaction of the CITY that there is no reasonable alternative to such remedial action which would result in less impairment of the CITY's security hereunder; or (iv) the action has been agreed to by the CITY.
(e) The DEVELOPER hereby acknowledges and agrees that (i) this Section is intended as the CITY's written request for information (and the DEVELOPER's response) concerning the environmental condition of the Property as required by California Code of Civil Procedure Section 726.5, and (ii) each representation and warranty in this Agreement (together with any indemnity obligation applicable to a breach of any such representation and warranty) with respect to the environmental condition of the Property is intended by the Parties to be an "environmental provision" for purposes of California Code of Civil Procedure Section 736.
(f) In the event that any portion of the Property is determined to be "environmentally impaired" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(3)) or to be an "affected parcel" (as that term is defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise limiting or in any way affecting the CITY's or the trustee's rights and remedies under the Deed of Trust, the CITY may elect to exercise its rights under California Code of Civil Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected portion of the Property and (2) exercise (i) the rights and remedies of an unsecured creditor, including reduction of its claim against the DEVELOPER to judgment, and (ii) any other rights and remedies permitted by law. For purposes of determining the CITY's right to proceed as 15 an unsecured creditor under California Code of Civil Procedure Section 726.5(a), the DEVELOPER shall be deemed to have willfully permitted or acquiesced in a release or threatened release of Hazardous Materials, within the meaning of California Code of Civil Procedure Section 726.5(d)(1), if the release or threatened release of Hazardous Materials was knowingly or negligently caused or contributed to by any lessee, occupant, or user of any portion of the Property and the DEVELOPER knew or should have known of the activity by such lessee, occupant, or user which caused or contributed to the release or threatened release. All costs and expenses, including (but not limited to) reasonable attorneys' fees, incurred by the CITY in connection with any action commenced under this paragraph, including any action required by California Code of Civil Procedure Section 726.5(b) to determine the degree to which the Property is environmentally impaired, plus interest thereon at the lesser of ten percent (10%) and the maximum rate permitted by law, until paid, shall be added to the indebtedness secured by the Deed of Trust and shall be due and payable to the CITY upon its demand made at any time following the conclusion of such action.

Section 3.10 Maintenance and Damage.
(a) During the course of both construction and operation of the Development, the DEVELOPER shall maintain the Development and the Property in good repair, reasonable wear and tear excepted, and in a neat, clean and orderly condition. If there arises a condition in contravention of this requirement, and if the DEVELOPER has not cured such condition within thirty (30) calendar days after receiving a CITY notice of such a condition, or within ninety (90) calendar days after receiving a CITY notice of such a condition in the case of a condition that cannot be reasonably remedies in thirty (30) calendar days, then in addition to any other rights available to the CITY, the CITY shall have the right to perform all acts necessary to cure such condition, and to establish or enforce a lien or other encumbrance against the Property. (b) Subject to the requirements of Senior Lenders, and if economically feasible in the CITY's reasonable judgment after consultation with the DEVELOPER, if any improvement now or in the future on the Property is damaged or destroyed, then the DEVELOPER shall, at its cost and expense, diligently undertake to repair or restore such improvement consistent with the plans and specifications for the Development. Such work or repair shall be commenced no later than the later of one hundred twenty (120) calendar days, or such longer period approved by the CITY in writing, after the damage or loss occurs or thirty (30) calendar days following receipt of the insurance proceeds, and shall be complete within one year thereafter. Any insurance proceeds collected for such damage or destruction shall be applied to the cost of such repairs or restoration and, if such insurance proceeds shall be insufficient for such purpose, then the DEVELOPER shall make up the deficiency. If the DEVELOPER does not make repairs, then any insurance proceeds collected for such damage or destruction shall be promptly delivered to the CITY as a special repayment of the Loan, subject to the rights of the Senior Lenders, if any.

Section 3.11 Fees and Taxes. The DEVELOPER shall be solely responsible for payment of all fees, assessments, taxes, charges, and levies imposed by any public authority or utility company with respect to the Property or the Development to the extent 16 owned by the DEVELOPER, and shall pay such charges prior to delinquency. However, the DEVELOPER shall not be required to pay and discharge any such charge so long as (a) the legality thereof is being contested diligently and in good faith and by appropriate proceedings, and (b) if requested by the CITY, the DEVELOPER deposits with the CITY any funds or other forms of assurance that the CITY in good faith from time to time determines appropriate to protect the CITY from the consequences of the contest being unsuccessful.

Section 3.12 Notice of Litigation.

The DEVELOPER shall promptly notify the CITY in writing of any litigation which has the potential to materially affect the DEVELOPER or the Property or the Development and of any claims or disputes that involve a material risk of such litigation.

Section 3.13 Nondiscrimination.
(a) DEVELOPER herein covenants by and for itself, its subcontractors, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, nor denial of the benefits of this Agreement to, any person or group of persons, on the basis of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, gender or selfidentified gender, sexual orientation, marital status, age, mental disability, physical disability or medical condition (including cancer, HIV and AIDS) or political affiliation or belief, nor any unlawful discrimination against any employee or applicant for employment because of race, color, ancestry, national origin or ethnic group identification, religion or religious creed, gender or self-identified gender, sexual orientation, marital status, age (over 40), mental disability, physical disability or medical condition (including cancer, HIV and AIDS), use of family care leave, or political affiliation or belief. DEVELOPER shall ensure that the evaluation and treatment of employees and applicants for employment are free of such discrimination or harassment. In addition to the foregoing general obligations, DEVELOPER shall comply with the provisions of the Fair Employment and Housing Act (Government Code section 12900, et seq.), the regulations promulgated thereunder (Title 2, California Code of Regulations, section 7285.0, et seq.), the provisions of Article 9.5, Chapter 1, Part 1, Division 3, Title 2 of the Government Code (sections 11135-11139.5) and any state or local regulations adopted to implement any of the foregoing, as such statutes and regulations may be amended from time to time. To the extent this Agreement subcontracts to DEVELOPER services or works required of CITY by the State of California pursuant to agreement between CITY and the State, the applicable regulations of the Fair Employment and Housing Commission implementing Government Code section 12990 (a) through (f), set forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations are expressly incorporated into this Agreement by reference and made a part hereof as if set forth in full, and DEVELOPER and any of its subcontractors shall give written notice of their obligations thereunder to labor organizations with which they have collective bargaining or other agreements. (b) The provisions of paragraph (a) shall further apply to the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Development, and DEVELOPER and any person claiming under or through the DEVELOPER, shall not 17 establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the Development.
(c) Notwithstanding paragraph (a), with respect to familial status, paragraph (a) shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code. With respect to familial status, nothing in paragraph (a) shall be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to paragraph (a).
(d) The DEVELOPER shall include the provisions contained in this Section in all contracts and subcontracts related to the Development. (e) The requirements in this Section shall survive the repayment of the Loan, and the reconveyance of the Deed of Trust.

Section 3.14 Transfer.
(a) For purposes of this Agreement, "Transfer" is any sale, assignment, or transfer, whether voluntary or involuntary, of (i) any of DEVELOPER’S rights and/or duties under this Agreement, and/or (ii) any ownership interest in the Development, including (but not limited to) a fee simple interest, a joint tenancy interest, a life estate, a partnership interest, a leasehold interest, a security interest, or an interest evidenced by a land contract by which possession of the Development is transferred and the DEVELOPER retains title. "Transfer" shall exclude the leasing of any single unit in the Development to an occupant, the granting of security interest in connection with the Approved Financing, and the transfer of an easement interest in the Property for utility purposes. The limitations on DEVELOPER’s right of Transfer contained in this Section

3.14 also shall not apply to:
(i) any foreclosure, deed in lieu of foreclosure, or other remedial action lawfully taken by any Senior Lender holding a security interest in the Property with priority over the CITY’s interests;
(ii) the transfer of limited partner interests in DEVELOPER, (iii) the removal or buy-out of a general partner or a limited partner pursuant to the terms and conditions of DEVELOPER’s organizational document or any purchase option agreement or put option agreement contemplated thereby;
(iv) transfers to a tax-exempt entity under the direct control of or under common control with DEVELOPER or a general partner of DEVELOPER (provided that the City shall not unreasonably withhold its consent to a transfer of general partner interest to a tax-exempt entity that is not under 18 the direct control with DEVELOPER or a general partner of DEVELOPER if such transfer will maintain the property tax exemption for the Property); (v) any mortgage, deed of trust, or other form of conveyance for restructuring or refinancing of any amount of senior indebtedness for the Project, provided that the amount of indebtedness incurred in the restructuring or refinancing is not in excess of eighty-five percent (85%) of the then applicable value of the Project;
(vi) the granting of easements to any appropriate governmental agency or utility or permits to facilitate the development of the Project; (vii) the transfer (A) of an interest in and/or of an existing partner to another existing partner, or (B) of an interest in an existing general partner to an affiliate of any general partner;
(viii) transfers of an interest to a new partner which is an affiliate of an existing partner, including transfers of an additional general partner interest to an affiliate of a limited partner; or
(ix) transfer of the Project or partnership interests in DEVELOPER to a general partner of DEVELOPER at the end of the fifteen year Tax Credit initial compliance period;
(x) intentionally deleted.

The City Manager or his/her designee is authorized to execute assignment and assumption agreements on behalf of the CITY to implement any approved Transfer. (b) CITY is entering into this Agreement based on the experience, skill, and ability to perform of DEVELOPER. The DEVELOPER recognizes that its qualifications and identity are of particular concern to the CITY, in view of: (i) the importance of affordable housing to the general welfare of the community; (ii) the reliance by the CITY upon the unique qualifications and ability of the DEVELOPER to ensure the quality of the affordability, use, operation, and maintenance of the Development; (iii) the requirement that the Development be used for affordable housing; and (iv) DEVELOPER's representation that the Development is not to be acquired or used for speculation, but only for operation by the DEVELOPER in accordance with the Regulatory Agreement.
(c) No Transfer not specifically authorized in this Section 3.14 shall be permitted without the prior written consent of the CITY and HCD, which the CITY and HCD may withhold in their reasonable discretion. The Loan shall automatically accelerate and be due in full upon any Transfer made without the prior written consent of the CITY and HCD.
(d) Intentionally deleted.
19 Section 3.15 Insurance Requirements.
(a) The DEVELOPER shall maintain the following insurance coverage throughout the Term of the Loan:
(i) Workers’ Compensation insurance to the extent required by law, including Employer's Liability coverage, with limits not less than One Million Dollars ($1,000,000) each accident.
(ii) Comprehensive General Liability insurance with limits not less than Two Million Dollars ($2,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for Contractual Liability, Personal Injury, Broadform Property Damage, Products and Completed Operations (occurrence form CG-0001).
(iii) Comprehensive Automobile Liability insurance with limits not less than One Million Dollars ($1,000,000) each occurrence combined single limit for Bodily Injury and Property Damage, including coverages for owned, non-owned and hired vehicles, as applicable.
(iv) Property insurance covering the Development, in form appropriate for the nature of such property, covering all risks of loss, excluding earthquake, for one hundred percent (100%) of the replacement value, with deductible, if any, acceptable to the CITY, naming the CITY as a Loss Payee, as its interests may appear. Flood insurance shall be obtained if required by applicable federal regulations.

The DEVELOPER shall cause any general contractor, agent, or subcontractor working on the Development under direct contract with the DEVELOPER or subcontract to maintain insurance of the types and in at least the minimum amounts described in subsections (a)(i), (a)(ii), and (a)(iii) above, except that the limit of liability for comprehensive general liability insurance for subcontractors shall be One Million Dollars ($1,000,000), and shall require that such insurance shall meet all of the general requirements of subsections (b), (c), and (d) below, including, without limitation, the requirement of subsection (c). Liability and Comprehensive Automobile Liability insurance to be maintained by such contractors and agents pursuant to this subsection shall name as additional insureds the CITY, its officers, officials, agents, employees and volunteers.
(b) The required insurance shall be provided under an occurrence form, and the DEVELOPER shall maintain the coverage described in subsection (a) continuously throughout the Term. Should any of the required insurance be provided under a form of coverage that includes an annual aggregate limit or provides that claims investigation or legal defense costs shall be included in such annual aggregate limit, such annual aggregate limit shall be three times the occurrence limits specified above.

Insurance is to be placed with insurers with a current A.M. Best’s rating of not less than A:VII.
20 (c) Certificates. All insurance coverages referenced in subparagraph (a) above, shall be evidenced by one or more certificates of coverage or, with the consent of the CITY, demonstrated by other evidence of coverage acceptable to the CITY, which shall be filed by DEVELOPER and approved by the CITY prior to disbursement of the Loan. Such certificates shall be kept current during the term of this Agreement; shall provide that CITY shall be given no less than thirty (30) calendar days prior written notice of any non-renewal, cancellation, other termination, or material change, except that only ten (10) calendar days prior written notice shall be required where the cause of nonrenewal or cancellation is non-payment of premium; and shall provide that the inclusion of more than one insured shall not operate to impair the rights of one insured against another insured, the coverage afforded applying as though separate policies had been issued to each insured, but the inclusion of more than one insured shall not operate to increase the limits of the company's liability. For the commercial general liability insurance coverage referenced in subparagraph (a)(ii) of this Section, and, where the vehicles are covered by a commercial policy rather than a personal policy, for the comprehensive automobile liability insurance coverage referenced in subparagraph (a)(iii) of this Section, DEVELOPER shall also file with the CITY evidence of coverage an endorsement from the insurance provider naming CITY, its officers, employees, agents and volunteers as additional insureds and waiving subrogation, and the certificate or other evidence of coverage shall provide that if the same policy applies to activities of DEVELOPER not covered by this Agreement then the limits in the applicable certificate relating to the additional insured coverage of CITY shall pertain only to liability for activities of DEVELOPER under this Agreement, and that the insurance provided is primary coverage to CITY with respect to any insurance or self-insurance programs maintained by CITY. The additional insured endorsements for the general liability coverage shall use Insurance Services Office (ISO) Form No. CG 20 09 11 85 or CG 20 10 11 85, or equivalent, including (if used together) CG 2010 10 01 and CG 2037 10 01; but shall not use the following forms: CG 20 10 10 93 or 03 94. Upon request by the CITY, DEVELOPER shall provide or arrange for the insurer to provide within thirty (30) calendar days of the request, certified copies of the actual insurance policies or relevant portions thereof.
(d) Deductibles/Retentions. Any deductibles or self-insured retentions shall be declared to, and be subject to approval by, the CITY, which approval shall not be denied unless the CITY determines that the deductibles or self-insured retentions are unreasonably large in relation to the Loan and the Development and the risks of liability associated with the activities required of DEVELOPER by this Agreement. At the option of and upon request by the CITY if the City determines that such deductibles or retentions are unreasonably high, either the insurer shall reduce or eliminate such deductibles or self-insurance retentions as respects CITY, its officers, employees, agents and volunteers or DEVELOPER shall procure a bond guaranteeing payment of losses and related investigations, claims administration and defense expenses.

ARTICLE 4.

AFFORDABLE HOUSING REQUIREMENTS
21 Section 4.1 Affordability Restrictions.

In consideration for the Loan to be provided to the DEVELOPER on below-market terms, the DEVELOPER hereby agrees that fifty-nine (59) Units shall be affordable to moderate, low, and extremely low income tenants for fifty-five (55) years as further specified in the Regulatory Agreement between the DEVELOPER and CITY and other regulatory agreements between the DEVELOPER and providers of the Approved Financing. The DEVELOPER shall record against the Property, prior to the disbursement of any Loan funds, the Regulatory Agreement.

ARTICLE 5.

REPRESENTATIONS AND WARRANTIES OF THE DEVELOPER
Section 5.1 Representations and Warranties.

The DEVELOPER hereby represents and warrants to the CITY as follows:
(a) Organization. The DEVELOPER is a duly organized Delaware limited partnership, validly existing and in good standing under the laws of the States of California and Delaware and has the power and authority to own its property and carry on its business as now being conducted.
(b) Authority of the DEVELOPER. The DEVELOPER has full power and authority to execute and deliver this Agreement and to make and accept the borrowings contemplated hereunder, to execute and deliver the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
(c) Authority of Persons Executing Documents. This Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of the DEVELOPER, and all actions required under the DEVELOPER's organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and the Loan Documents and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, have been duly taken.
(d) Valid Binding Agreements. This Agreement and the Loan Documents and all other documents or instruments which have been executed and delivered pursuant to or in connection with this Agreement constitute or, if not yet executed or delivered, will when so executed and delivered constitute, legal, valid and binding obligations of the DEVELOPER enforceable against it in accordance with their respective terms.
22 (e) No Breach of Law or Agreement. Neither the execution nor delivery of this Agreement and the Loan Documents or of any other documents or instruments executed and delivered, or to be executed or delivered, pursuant to this Agreement, nor the performance of any provision, condition, covenant or other term hereof or thereof, will conflict with or result in a breach of any statute, rule or regulation, or any judgment, decree or order of any court, board, commission or agency whatsoever binding on the DEVELOPER, or any provision of the organizational documents of the DEVELOPER, or will conflict with or constitute a breach of or a default under any agreement to which the DEVELOPER is a party, or will result in the creation or imposition of any lien upon any assets or property of the DEVELOPER, other than liens established pursuant hereto. (f) Compliance With Laws; Consents and Approvals. The construction and operation of the Development will comply with all applicable laws, ordinances, rules and regulations of federal, state and local governments and agencies and with all applicable directions, rules and regulations of officers of any government or agency. (g) Pending Proceedings. The DEVELOPER is not in default under any law or regulation or under any order of any court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of the DEVELOPER, threatened against or affecting the DEVELOPER or the Development, at law or in equity, before or by any court, board, commission or agency whatsoever which might, if determined adversely to the DEVELOPER, materially affect the DEVELOPER's ability to repay the Loan or impair the security to be given to the CITY pursuant hereto.
(h) Title to Land. At the time of recordation of the Deed of Trust, the DEVELOPER will have acquired the Property in fee, and there will exist thereon or with respect thereto no mortgage, lien, pledge or other encumbrance of any character whatsoever other than liens for current real property taxes and liens in favor of the CITY or for the Approved Financing, except for Permitted Encumbrances and liens approved in writing by the CITY.
(i) Financial Statements. The financial statements of the DEVELOPER and other financial data and information furnished by the DEVELOPER to the CITY fairly and accurately present the information contained therein. As of the date of this Agreement, there has not been any adverse, material change in the financial condition of the DEVELOPER from that shown by such financial statements and other data and information.
(j) Taxes. The DEVELOPER has filed all federal and other material tax returns and reports required to be filed, and has paid all federal and other material taxes, assessments, fees and other governmental charges levied or imposed upon the DEVELOPER or the DEVELOPER's income or the Property otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with generally accepted accounting principles. There is no proposed tax assessment against the DEVELOPER that could, if made, be reasonably expected to have a material adverse effect upon the 23 Property, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of the DEVELOPER, taken as a whole, which would be expected to result in a material impairment of the ability of the DEVELOPER to perform under any Loan Document to which it is a party, or a material adverse effect upon the legality, validity, binding effect or enforceability against the DEVELOPER of any Loan Document.

ARTICLE 6.

DEFAULT AND REMEDIES
Section 6.1 Events of Default.

Each of the following shall constitute a "Default" by the DEVELOPER under this Agreement:
(a) Failure to Make Payment. Failure to repay the principal and any interest on the Loan within ten (10) calendar days after receipt of written notice from the CITY that such payment is due pursuant to the Loan Documents. (b) Breach of Covenants. Failure by the DEVELOPER to duly perform, comply with, or observe any of the conditions, terms, or covenants of any of the Loan Documents, and such failure having continued uncured for thirty (30) calendar days after receipt of written notice thereof from the CITY to the DEVELOPER or, if the breach cannot be cured within thirty (30) calendar days, the DEVELOPER shall not be in breach so long as the DEVELOPER is diligently undertaking to cure such breach; provided, however, that if a different period or notice requirement is specified under any other Section of this Article 6, the specific provisions shall control.
(c) Default Under Other Loans. A default is declared under any other financing for the Development by the lender of such financing (other than the Senior Loan financing), subject to applicable notice and cure periods. (d) Insolvency. A court having jurisdiction shall have made or entered any decree or order (i) adjudging the DEVELOPER to be bankrupt or insolvent, (ii) approving as properly filed a petition seeking reorganization of the DEVELOPER or seeking any arrangement for the DEVELOPER under the bankruptcy law or any other applicable debtor's relief law or statute of the United States or any state or other jurisdiction, (iii) appointing a receiver, trustee, liquidator, or assignee of the DEVELOPER in bankruptcy or insolvency or for any of their properties, or (iv) directing the winding up or liquidation of the DEVELOPER, if any such decree or order described in clauses (i) to (iv), inclusive, shall have continued unstayed or undischarged for a period of ninety (90) calendar days; or the DEVELOPER shall have admitted in writing its inability to pay its debts as they fall due or shall have voluntarily submitted to or filed a petition seeking any decree or order of the nature described in clauses (i) to (iv), inclusive. The occurrence of any of the events of Default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note. 24 (e) Assignment; Attachment. The DEVELOPER shall have assigned its assets for the benefit of its creditors or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequestered, attached or executed upon shall have been returned or released within ninety (90) calendar days after such event or, if sooner, prior to sale pursuant to such sequestration, attachment, or execution. The occurrence of any of the events of default in this paragraph shall act to accelerate automatically, without the need for any action by the CITY, the indebtedness evidenced by the Note.
(f) Suspension; Termination. The DEVELOPER shall have voluntarily suspended its business or, shall have been dissolved or terminated. (g) Liens on Property and the Development. There shall be filed any claim of lien (other than Permitted Encumbrances or liens in connection with the Approved Financing, and liens approved in writing by the CITY) against the Development or any part thereof, or any interest or right made appurtenant thereto, or the service of any notice to withhold proceeds of the Loan and the continued maintenance of said claim of lien or notice to withhold for a period of twenty (20) calendar days, without discharge or satisfaction thereof or provision therefor (including, without limitation, the posting of bonds) satisfactory to the CITY.
(h) Condemnation. The condemnation, seizure, or appropriation of all or the substantial part of the Property and the Development other than by the CITY. (i) Unauthorized Transfer. Any Transfer other than as permitted by Section 3.14.
(j) Representation or Warranty Incorrect. Any DEVELOPER representation or warranty contained in this Agreement, or in any application, financial statement, certificate, or report submitted to the CITY in connection with any of the Loan Documents, proving to have been incorrect in any material respect when made or when later due to be performed.

Section 6.2 Remedies.

Notwithstanding anything to the contrary in any of the Loan Documents, any partners of the DEVELOPER shall have the right but not the obligation to cure any Default, The Limited Partner of DEVELOPER shall be given a duplicate notice of any Default at the address set forth in Section 7.9 of this Agreement. The CITY agrees that any cure of a Default by any partners of the DEVELOPER shall be deemed to be a cure by the DEVELOPER, and shall be accepted or rejected on the same basis as if made or tendered by the DEVELOPER. The occurrence of any Default hereunder following the expiration of all applicable notice and cure periods will, either at the option of the CITY or automatically where so specified, relieve the CITY of any obligation to make or continue the Loan and shall give the CITY the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, including but not limited to the following:
25 (a) Acceleration of Note. The CITY shall have the right to cause all indebtedness of the DEVELOPER to the CITY under this Agreement and the Note, together with any accrued interest thereon, to become immediately due and payable. The DEVELOPER waives all right to presentment, demand, protest or notice of protest or dishonor. The CITY may proceed to enforce payment of the indebtedness and to exercise any or all rights afforded to the CITY as a creditor and secured party under the law, including the Uniform Commercial Code, and including foreclosure under the Deed of Trust.
(b) Specific Performance. The CITY shall have the right to mandamus or other suit, action or proceeding at law or in equity to require the DEVELOPER to perform its obligations and covenants under the Loan Documents or to enjoin acts on things which may be unlawful or in violation of the provisions of the Loan Documents. (c) Right to Cure at the DEVELOPER's Expense. The CITY shall have the right (but not the obligation) to cure any monetary default by the DEVELOPER under a loan other than the Loan. The DEVELOPER agrees to reimburse the CITY for any funds advanced by the CITY to cure a monetary default by the DEVELOPER upon demand therefor, together with interest thereon at the lesser of the maximum rate permitted by law and the Default Rate from the date of expenditure until the date of reimbursement.

Section 6.3 Right of Contest.

The DEVELOPER shall have the right to contest in good faith any claim, demand, levy, or assessment the assertion of which would constitute a Default hereunder. Any such contest shall be prosecuted diligently and 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 terms of this Agreement or the Loan Documents is intended to be exclusive of any other right, power, or remedy; and each and every such right, power, or remedy shall be cumulative and in addition to every other right, power, or remedy given to the CITY by the terms of any such instrument, or by any statute or otherwise against the DEVELOPER and any other person. Neither the failure nor any delay on the part of the CITY to exercise any such rights and remedies shall operate as a waiver thereof, nor shall any single or partial exercise by the CITY of any such right or remedy preclude any other or further exercise of such right or remedy, or any other right or remedy.

ARTICLE 7.

GENERAL PROVISIONS
Section 7.1 Relationship of Parties.

Nothing contained in this Agreement shall be interpreted or understood by any of the Parties, or by any third persons, as creating the relationship of employer and 26 employee, principal and agent, limited or general partnership, or joint venture between the CITY and the DEVELOPER or its agents, employees or contractors, and the DEVELOPER shall at all times be deemed an independent contractor and shall be wholly responsible for the manner in which it or its agents, or both, perform the services required of it by the terms of this Agreement. The DEVELOPER has and retains the right to exercise full control of employment, direction, compensation, and discharge of all persons assisting in the performance of services under the Agreement. In regards to the acquisition, construction, and operation of the Development, the DEVELOPER shall be solely responsible for all matters relating to payment of its employees, including compliance with Social Security, withholding, and all other laws and regulations governing such matters, and shall include requirements in each contract that contractors shall be solely responsible for similar matters relating to their employees. The DEVELOPER shall be solely responsible for its own acts and those of its agents and employees.

Section 7.2 No Claims.

Nothing contained in this Agreement shall create or justify any claim against the CITY by any person that the DEVELOPER may have employed or with whom the DEVELOPER may have contracted relative to the purchase of materials, supplies or equipment, or the furnishing or the performance of any work or services with respect to the purchase of the Property, the construction or operation of the Development, and the DEVELOPER shall include similar requirements in any contracts entered into for the construction or operation of the Development.

Section 7.3 Amendments.

No alteration or variation of the terms of this Agreement shall be valid unless made in writing by the Parties. The City Manager is authorized to execute on behalf of the CITY amendments to the Loan Documents or amended and restated Loan Documents so long as the City Council first approves any material change in the amount or terms of this Agreement or in the amounts or terms of financing provided by other parties for the Development, requiring conforming amendments to the Loan Documents. In the event of amendments to the Loan Documents, the DEVELOPER shall submit copies of all trust fund loan guidelines and underwriting standards and procedures for review and approval by the California Department of Housing and Community Development (“HCD”).

Section 7.4 Loan Documents.

In the event of any conflict among the Loan Documents, the most restrictive requirements shall apply.

Section 7.5 Indemnification.
(a) To the full extent permitted by law, the DEVELOPER shall indemnify, defend at its own expense, and hold the CITY and its elected officials, officers, employees and agents in their official capacity (collectively "Indemnitees") harmless against any and all claims, suits, actions, losses and liability of every kind, nature and description made against it and expenses (including reasonable attorneys' fees) which arise out of or in 27 connection with this Agreement, including but not limited to the purchase of the Property, development, construction, marketing and operation of the Development, except to the extent such claim arises from the grossly negligent or willful misconduct of the CITY or Indemnitees. Each Party shall notify the other Party immediately in writing of any claim or damage related to activities performed under this Agreement. The Parties shall cooperate with each other in the investigation and disposition of any claim arising out of the activities under this Agreement, providing that nothing shall require either party to disclose any documents, records or communications that are protected under the attorney-client privilege or attorney work product privilege. (b) The provisions of this Section shall survive the expiration of the Term, the reconveyance of the Deed of Trust, and any release of part or all of the Property from the burdens of this Agreement. The defense and indemnity obligations of this Agreement are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Agreement.

Section 7.6 Non-Liability of CITY Officials, Employees and Agents.

No official, employee or agent of the CITY shall be personally liable to the DEVELOPER in the event of any default or breach by the CITY or for any amount which may become due to the DEVELOPER or its successor or on any obligation under the terms of this Agreement.

Section 7.7 No Third Party Beneficiaries.

There shall be no third party beneficiaries to this Agreement.

Section 7.8 Conflict of Interest.
(a) Except for approved eligible administrative or personnel costs, no person described in subsection (b) below who exercises or has exercised any functions or responsibilities with respect to the activities funded pursuant to this Agreement or who is in a position to participate in a decision-making process or gain inside information with regard to such activities, may obtain a personal or financial interest or benefit from the activity, or have an interest in any contract, subcontract or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with whom they have family or business ties, during, or at any time after, such person's tenure. The DEVELOPER shall exercise due diligence to ensure that the prohibition in this Section is followed.
(b) The conflict of interest provisions of subsection (a) above apply to any person who is an employee, agent, consultant, officer, or any immediate family member of such person, or any elected or appointed official of the CITY, or any person related within the third (3rd) degree of such person.
(c) In accordance with Government Code Section 1090 and the Political Reform Act, Government Code Section 87100 et seq., no person who is a director, officer, partner, trustee or employee or consultant of the DEVELOPER, or immediate family 28 member of any of the preceding, shall make or participate in a decision, made by the CITY or a CITY council, board, commission or committee, if it is reasonably foreseeable that the decision will have a material effect on any source of income, investment or interest in real property of that person or the DEVELOPER. Interpretation of this Section shall be governed by the definitions and provisions used in the Political Reform Act, Government Code Section 87100 et seq., its implementing regulations manual and codes, and Government Code Section 1090.

Section 7.9 Notices, Demands and Communications.

Formal notices, demands, and communications between the Parties shall be sufficiently given if and shall not be deemed given unless dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered by express delivery service, return receipt requested, or delivered personally, to the principal office of the Parties as follows:

DEVELOPER: Fiddyment Workforce Partners, L.P.
1350 Columbia Street, Suite 802
San Diego, CA 92101
Attn: Greg Gossard
with a copy to:

Crestone Development, LLC1601 19th Street, Suite 1150
Denver, CO 80202
Attn: Phil Anderson
CITY: City of Roseville
311 Vernon Street
Roseville, California 95678
Attn: City Manager
Such written notices, demands and communications may be sent in the same manner to such other addresses as the affected Party may from time to time designate by mail as provided in this Section. Receipt shall be deemed to have occurred on the date shown on a written receipt as the date of delivery or refusal of delivery (or attempted delivery if undeliverable). Any notice sent to DEVELOPER will also be sent to DEVELOPER'S limited partner.

Section 7.10 Applicable Law and Venue.

This Agreement shall be governed by and construed in accordance with California law. Venue shall be Placer County.

Section 7.11 Parties Bound.

Except as otherwise limited herein, the provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their heirs, executors, 29 administrators, legal representatives, successors, and assigns. This Agreement is intended to run with the land and shall bind the DEVELOPER and its successors and assigns in the Property and the Development for the entire Term, and the benefit hereof shall inure to the benefit of the CITY and its successors and assigns.

Section 7.12 Attorneys' Fees.

If any lawsuit is commenced to enforce any of the terms of this Agreement, the prevailing Party will have the right to recover its reasonable attorneys' fees and costs of suit from the other Party.

Section 7.13 Severability.

If any term of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall continue in full force and effect unless 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 specific provisions of this Agreement, performance by either Party shall not be deemed to be in Default where delays or defaults are due to war, terrorism, insurrection, strikes, lock-outs, riots, floods, earthquakes, fires, quarantine restrictions, freight embargoes, or court order. An extension of time for any cause will be deemed granted if notice by the Party claiming such extension is sent to the other within ten (10) calendar days from the commencement of the cause and such extension of time is not rejected in writing by the other Party within ten (10) calendar days of receipt of the notice.

In no event shall the CITY be required to agree to cumulative delays in excess of one hundred eighty (180) calendar days.

Section 7.15 CITY Approval.

The CITY has authorized the City Manager to execute the Loan Documents and deliver such approvals or consents as are required by this Agreement, and to execute estoppel certificates concerning the status of the Loan and the existence of the DEVELOPER defaults under the Loan Documents. Any consents or approvals required under this Agreement shall not be unreasonably withheld or made, except where it is specifically provided that a sole discretion standard applies.

Section 7.16 Waivers.

Any waiver by the CITY of any obligation or condition in this Agreement must be in writing. No waiver will be implied from any delay or failure by the CITY to take action on any breach or default of the DEVELOPER or to pursue any remedy allowed under this Agreement or applicable law. Any extension of time granted to the DEVELOPER to perform any obligation under this Agreement shall not operate as a waiver or release from any of its obligations under this Agreement. Consent by the CITY to any act or omission by the DEVELOPER shall not be construed to be a consent to any other or subsequent 30 act or omission or to waive the requirement for the CITY's written consent to future waivers.

Section 7.17 Title of Parts and Sections.

Any titles of the sections or subsections of this Agreement are inserted for convenience of reference only and shall be disregarded in interpreting any part of the Agreement's provisions.

Section 7.18 Entire Understanding of the Parties.

This Agreement constitutes the entire understanding and agreement of the Parties with respect to the Loan. If there is any conflict between this Agreement and any other Loan Documents, the most restrictive provisions shall control.

Section 7.19 Multiple Originals; Counterparts.

This Agreement may be executed in multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
[Signatures on following page.]
[Remainder of page intentionally blank.]

A-1

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
The land described herein is situated in the State of California, County of Placer, City of Roseville, described as follows:

Parcel One:

Lot 2, as shown on that certain Parcel Map of “Prospera at Fiddyment Ranch F-6B, being a resubdivision of West Roseville Specific Plan Parcel F-6b, Subdivision No. PL21-0188”, which map was filed for record on December 16, 2022, in Book 36 of Parcel Maps, page 87, Placer County Records.

Parcel Two:

APN: 492-500-002-000 (portion)

EXHIBIT B

APPROVED PROJECT BUDGET

COUNCIL COMMUNICATION
CC #: 3248
File #: 0709-04
Title: HOME Investment Partnerships Program - Funding Application Contact: Suzanne Acrell 916-774-5469 [email protected] Meeting Date: 4/3/2024
Item #: 7.14.

RECOMMENDATION TO COUNCIL
Staff recommends that the City Council adopt a resolution authorizing the City Manager or his designee to execute the necessary application, standard agreement and relevant documents necessary to apply for and receive HOME Investment Partnerships Program (HOME) funding from the State of California Department of Housing and Community Development (HCD).

BACKGROUND
The HOME Investment Partnerships Program (HOME) is federally funded and was established in 1990 by the National Affordable Housing Act of 1990 to provide decent affordable housing to lower-income households, expand the capacity of nonprofit housing providers, and strengthen the ability of state and local governments to provide housing, and leverage private sector participation.

For non-entitlement cities, the HOME program is administered by HCD. As a non-entitlement community, the City of Roseville must apply to HCD for HOME funding.

On January 19, 2024, HCD released a Notice of Funding Availability (NOFA) for approximately $120 million in funds. To continue supporting the development of affordable housing in Roseville, the Housing Division requests to apply for HOME funding. Eligible activities include rehabilitation and new construction of rental housing for low income households as well as programs that serve low-income households including first-time homebuyer, owner-occupied rehabilitation, and tenantbased rental assistance.

Based on HCD’s formula, the City is eligible to apply for a maximum of $12,150,000 including up to $125,000 for project administration, and up to $75,000 for project related soft costs. The City of Roseville is eligible to apply as a State Recipient since the City does not receive HOME funds directly from HUD. Should the City receive an award, the Housing Division will loan the funds to Mercy Housing for the development of Pleasant Grove Apartments Phase II and will monitor the project for compliance with HOME rules and regulations for the 20-year period of affordability.

On March 20, 2024, Council approved loaning $7.55 million in Local Housing Trust Fund and Prohousing Incentive Program funding for the first phase of Mercy Housing’s Pleasant Grove Apartments. Project development and financing for this project will occur in phases in order to receive an award of tax credits from the California Tax Credit Allocation Committee (CTCAC) for the first phase. Developers are limited to one HOME application each and must otherwise partner with a State Recipient (e.g., the City of Roseville) to submit a HOME application for their respective projects.

Staff requests Council authorization to complete and submit an application for HOME funds (see attached Draft HOME application). Application materials must be submitted to HCD no later than April 9, 2024 with awards expected to be announced in September/October 2024. If HOME funds are awarded, funds will be granted from HCD to the City and then loaned from the City to Mercy Housing for the development of the Pleasant Grove Phase II project. Loan terms will guarantee affordable rent for 55 years. If the City is successful, staff will bring forward the necessary loan and regulatory agreement documents required for project development for Council review and consideration.

Pleasant Grove Phase II will include 49 affordable housing units. Overall, including both phases, the project will have 98 total units, 96 affordable units and two units designated for onsite managers. The project will include one, two, and three-bedroom units and will serve low-income households including some units designated for extremely low-income households. These units will serve a range of local housing needs, including members of the local workforce, families, young couples, single households, and seniors with low and very low incomes. Workers in these units could hold jobs ranging from employment in the service industry, local teachers, office assistants, custodians, store clerks, and others who are likely to have job opportunities in Roseville. The recommended funding application before Council will continue to support the City's General Plan in meeting the City of Roseville affordable housing goals.

FISCAL IMPACT
HOME project funding is provided as a grant to the City. This grant would be used to create and retain affordable housing serving the low-income community and supporting the development of affordable housing. The recommended action does not impact the City's General Fund.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. The funding application meets the above criteria and is not subject to CEQA. No additional environmental review is required.

Description
Resolution 24-086
2022-2023 HOME Universal Application Draft
Draft Experience Worksheet
Draft Authorized Signatories Designation Form
Draft Verification of Impact Fees-PG Phase II
Draft Verification of Water and Sewer- PG Phase II
Draft Verification of Zoning-PG Phase II
Draft Applicant Certification and Commitment of Responsibility Draft Certification and Legal Status
RESOLUTION NO. 24-086
AUTHORIZING THE SUBMISSION OF THE 2022-2023 HOME INVESTMENT

PARTNERSHIPS PROGRAM APPLICATION TO THE CALIFORNIA STATE

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, AND

AUTHORIZING THE CITY MANAGER TO EXECUTE IT AND ANY RELATED

DOCUMENTS NECESSARY TO PARTICIPATE AND COMPLY WITH THE PROGRAM

ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS:

A. The California Department of Housing and Community Development (the “Department”) is authorized to allocate HOME Investment Partnerships Program (“HOME”) funds made available from the U.S. Department of Housing and Urban Development (“HUD”). HOME funds are to be used for the purposes set forth in Title II of the Cranston-Gonzalez National Affordable Housing Act of 1990, in federal implementing regulations set forth in Title 24 of the Code of Federal Regulations, part 92, and in Title 25 of the California Code of Regulations commencing with section 8200.

B. On January 19, 2024, the Department issued a Notice of Funding Availability announcing the availability of funds under the HOME program (the “NOFA”).

C. In response to the 2022-2023 HOME NOFA, the City of Roseville, a municipal corporation (the “Applicant”), wishes to apply to the Department for, and receive an allocation of HOME funds.

THEREFORE, IT IS RESOLVED THAT:

1. In response to the 2022-2023 HOME NOFA,
the Applicant shall submit an application to the Department to participate in the HOME program and for an allocation of funds not to exceed twelve million, one hundred fifty thousand dollars ($12,150,000) for the following activities and/or programs:
 Development of the Pleasant Grove Apartments
Phase II rental new construction project located at 1721 Pleasant Grove Boulevard, Roseville, CA. The development will consist of 49 units targeting households earning between 30% to 60% of Area Median Income.  City of Roseville general administration and
project related soft costs.

2. If the application for funding is approved, then the Applicant hereby agrees to use the HOME funds for eligible activities in the manner presented in its application as approved by the Department in accordance with the statutes and regulations cited above. The Applicant may also execute a standard agreement, any amendments thereto, and any and all other documents or instruments necessary or required by the Department or HUD for participation in the HOME program (collectively, the required documents).

3. The applicant authorizes Dominick Casey, City
Manager, or his designee, to execute, in the name of the applicant, the required documents.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2024, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
________________________
City Clerk
Rev.

HOME Program
2022-2023 Notice of Funding Availability
Universal Application
State of California
Phone: (916) 263-2771
Governor Gavin Newsom
Melinda Grant, Undersecretary
Business, Consumer Services and Housing Agency
Gustavo Velasquez, Director
Department of Housing and Community Development
2020 West El Camino Avenue, Suite 200
Sacramento, CA 95833
12/1/21
Email: [email protected]
NOFA: January 19, 2024
HOME 2021 Page 1 of 19 HOME Coverpage
$0
$0$0$0$0
$10,091
$0$0$0$0$0
Support.

Housing
Units
Restricted
Monthly Rent
$603$723$836
$1,005$1,206$1,393$1,206
$0$0$0
$10,091
1Monthly Utility
Allowance
$61$75$87$61$75$87$61$75$87
Unit Mix 12/1/21
Project Name Pleasant Grove Phase II County the Project is located Other HCD Program(s) Name(s):

National Housing Trust FundHave you applied, do you plan to apply, or has the Project or Area been awarded other HCD program funds? Placer
If the Project is also known under another name(s) or was formerly known under another name(s), provide the name(s).

Yes
Funding Amount Funding Status NOFA Date Award Date/Expected Award Date $6,331,304 Application submitted 10/25/23 May, 2024
1 850
Mid-Rise (3-5 stories)
608
0 0
Subsidy Program Name
Subsidy
Units
Monthly Rent
Subsidy
Amount
Subsidy
Units
Subsidy Program Name
$1,447$1,672
$0$0$0
$1,672
2 60% AMI 0 7
0 0 $00 0
3 60% AMI
0 0
2 none 1 0 1
Project Units
# of
Bedrms
2 50% AMI 5 5
4 45 0 5
4 50% AMI
% of Area Median
Income
Total
Restricted
Units
0 0 4
5 50 0
0 05 0 5
7 7 7 77 7 7 0 77 7 7
0 000 000
Yes
0 File uploaded?
0 0
File: Utility Allowance 1Provide document showing current utility allowance chart, with relevant components circled. 49 48 48 1 48 1 0 $0
0 0
0 Maximum Loan Amount
5 5
4 1 30% AMI
0 0
1 0
0 0
2 43
0 0
4 Total
Units
HOME
Assisted Units
4 Manager
Units
4 000
4 30% AMI30% AMI
1 60% AMI3 50% AMI 5 5
Total
Restricted
Units
4 Total
Unrestricted
Units
0 40
1 0
Special
Needs
Units
Mid-Rise (3-5 stories)
$1,447
$836
$1,005$1,206$1,393$1,206
850
Mid-Rise (3-5 stories)Mid-Rise (3-5 stories)
Building Type
Mid-Rise (3-5 stories)Mid-Rise (3-5 stories)Mid-Rise (3-5 stories)Mid-Rise (3-5 stories) Square
Feet
608850
1,095
608850 Mid-Rise (3-5 stories)
1,095 Mid-Rise (3-5 stories)1,095
Unrestricted
Monthly Rent
112122111
Proposed
Monthly Rent
$603$723
# of Baths
Monthly Rent
Subsidy
Amount
1 Bedroom
Assisted
Units
0 Bedroom
Assisted
Units
0 Bedroom
Loan Amount
0 $0 15
1 Bedroom
Loan Amount
2 Bedroom
Assisted
Units
$2,636,280 16 $3,419,488
3 Bedroom
Assisted
Units
3 Bedroom
Loan Amount
4 Bedroom
Assisted
Units
17 $4,700,194 0
4 Bedroom
Loan Amount
5 Bedroom
Assisted
Units
5 Bedroom
Loan Amount
$0 0 $0
Max Loan
$10,755,962
2 Bedroom
Loan Amount
$0 Annual Unrestricted Rent
Annual Net Restricted RentAnnual Net Proposed Rent
$638,160$638,160
HOME 2021 Page 2 of 19 Max Funds and Unit Mix
12/1/21
Amount
1 Yes State-HCD No $10,755,962 $10,755,962 $5,0002 Yes Private No 2 $13,292,238 $0 $13,292,238 8.57% Interest Only 23 $20,090 3 Yes Other No N/A $507,340 $0 $507,340 0.00% N/A N/A $147,5724 $0 $1,540,000 5 $06 $07 $08 $09 $0
10 $011 $012 $013 $014 $015 $016 $017 $018 $019 $020 $1,712,662 $1,712,66221 Yes Equity Investor $1,912,953 $0 $1,912,953 $26,468,493 100.00% $28,181,155 $0 $28,181,155 $1,712,662 Type Rate Type Due in (yrs)
1 Yes State-HCD No $10,755,962 $10,755,9622 Yes Other No N/A $507,340 $0 $507,340 None3 $04 $05 $06 $07 $08 $09 $0 10 $012 $012 $013 $014 Yes Private No 2 $1,667,000 $0 $1,667,000 Fixed for Term 7.70% Amortized with Call 18 $155,711 $0 15 $0
16 Yes Equity Investor $15,250,853 $15,250,853 9%
$2 $28,181,155 $0 $28,181,155 $155,711 $0
$28,181,155 100.00%
File: File uploaded? Yes
Sources of Funds
Perm EFC #1, #2, etc Commitment letter or other evidence documenting permanent financing commitments (see Guidelines for explanation of funding commitments) Construction Period Sources of Funds
Totals
Permanent Sources of Funds
<% Funds committed
Applicant comments: Include a description of ballon payments and unusual or extraordinary circumstances that have resulted in higher than expected project costs and provide a justification as to why these costs are reasonable.

Project Tax Credit Type:

Funding Committed by Application Due Date?Funding Committed by Application Due Date? Syndication ConsultingTCAC Application/Res/Monitoring Fee

HCD HOME
Commercial
Amount Local Support
Developer Fee
Total Amount
Interest Rate Repayment Terms
<Total funds committed
Totals
Private mortgage financingDeferred costs
Gross Tax Credit Equity
<% Funds committed
Donated Land
Source Type
Required
Residential
Debt Service
Required
Commercial
Debt Service
Commercial
Amount
Source Name
(listed in order of lien priority)
Lien
No. Total Amount Interest Rate Source Name (listed in order of lien priority) Donated Land
Required
Payment
Loan Term
(months)
Conventional Construction Loan
Capitalized Operating Reserve
Residential
Amount
*Details of Deferred Costs
Source Type
HCD HOME Loan
Description
Gross Tax Credit Equity
Lien
No.

Residential
Amount Local Support
<Total funds committed
Deferred costs (detail at right)
HOME 2021 Page 3 of 19 Dev Sources
12/1/21
LAND COST/ACQUISITIONLesser of Land Cost or Value $507,340 $507,340 $0 Demolition $0 $0Legal $0 $0Land Lease Rent Prepayment $0 $0 Total Land Cost or Value $0 $507,340 $0 $0 $0 $0 $0 $0 $0 $0 $0 $507,340 $0 $0 $0 Existing Improvements Cost or Value $0 $0Off-Site Improvements $0 $0 Total Acquisition Cost $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Land Cost / Acquisition Cost $0 $507,340 $0 $0 $0 $0 $0 $0 $0 $0 $0 $507,340 $0 $0 $0 Predevelopment Interest/Holding Cost $0 $0
Assumed, Accrued Interest on Existing Debt
(Rehab/Acq) $0 $0Excess Purchase Price Over Appraisal $0 $0REHABILITATIONSite Work $0Structures $0General Requirements $0Contractor Overhead $0Contractor Profit $0Prevailing Wages $0General Liability Insurance $0Urban Greening $0Environmental Remediation $0Other Rehabilitation: (Specify) $0Other Rehabilitation: (Specify) $0 Total Rehabilitation Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Relocation Expenses $0 $0 NEW CONSTRUCTIONSite Work $542,323 $542,323 $542,323 $0Structures $10,755,962 $1,667,000 $2,746,748 $15,169,710 $15,169,710 $0 General Requirements $1,446,556 $1,446,556 $1,446,556 $0Contractor Overhead $367,640 $367,640 $367,640 $0Contractor Profit $367,641 $367,641 $367,641 $0Prevailing Wages $0 $0General Liability Insurance $151,787 $151,787 $151,787 $0Urban Greening $0 $0Environmental Remediation $0 $0Other New Construction: Payment & Performance Bond $0 $0Other New Construction: (Specify) $0 $0 Total New Construction Costs $10,755,962 $0 $0 $0 $0 $0 $0 $0 $1,667,000 $0 $5,622,695 $18,045,657 $18,045,657 $0 $0 $0 $0 ARCHITECTURAL FEESDesign $329,258 $329,258 $329,258 $0Supervision $0 $0 Total Architectural Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $329,258 $329,258 $329,258 $0 $0 $0 $0 Total Survey & Engineering $50,000 $50,000 $50,000 $0
CONSTRUCTION INTEREST & FEESConstruction Loan Interest $1,790,354 $1,790,354 $783,280 $0Origination Fee $171,709 $171,709 $75,123 $0Credit Enhancement/Application Fee $0 $0Bond Premium $0 $0Cost of Issuance $0 $0Title & Recording $75,000 $75,000 $75,000 $0Taxes $7,399 $7,399 $7,399 $0Insurance $200,000 $200,000 $200,000 $0Employment Reporting $0 $0Other Construction Int. & Fees: Lender Expenses $47,400 $47,400 $20,738 $0Other Construction Int. & Fees: COI Contingency $35,000 $35,000 $0Other Construction Int. & Fees: (Specify) $0 $0Other Construction Int. & Fees: (Specify) $0 $0 Total Construction Interest & Fees $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,326,862 $2,326,862 $1,161,540 $0 $0 $0 $0 PERMANENT FINANCINGLoan Origination Fee $16,670 $16,670 $0Credit Enhancement/Application Fee $0 $0Title & Recording $20,000 $20,000 $0Taxes $0 $0 USES OF FUNDS 0 0 0 Total Residential Sources/Costs 0 0 HCD HOME Loan Commercial Sources/Uses
Source Name: Source Name:

Tax Credit Basis
70% PVC for
New
Const/Rehab
30% PVC for
Acquisition
Private
mortgage
financing
Residential Permanent Sources/Uses of Funds
Donated Land 0 Deferred costs Equity Investor
Total
Commercial
Sources/Costs
Comments
HOME 2021 Page 4 of 19 Dev Budget
12/1/21
USES OF FUNDS 0 0 0 Total Residential Sources/Costs 0 0 HCD HOME Loan Commercial Sources/Uses
Source Name: Source Name:

Tax Credit Basis
70% PVC for
New
Const/Rehab
30% PVC for
Acquisition
Private
mortgage
financing
Residential Permanent Sources/Uses of Funds
Donated Land 0 Deferred costs Equity Investor
Total
Commercial
Sources/Costs
Comments
Insurance $0 $0Other Perm. Financing Costs: Legal for Perm $35,000 $35,000 $0Other Perm. Financing Costs: Lender Expenses $20,000 $20,000 $0Other Perm. Financing Costs: (Specify) $0 $0Other Perm. Financing Costs: (Specify) $0 $0 Total Permanent Financing Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $91,670 $91,670 $0 $0 $0 Subtotals Forward $10,755,962 $507,340 $0 $0 $0 $0 $0 $0 $1,667,000 $0 $8,420,485 $21,350,787 $19,586,455 $0 $0 $0 $0 LEGAL FEESLegal Paid by Applicant $77,500 $77,500 $55,000 $0Other Attorney Costs: Lender Legal $85,000 $85,000 $37,188 $0Other Attorney Costs: Syndication $55,000 $55,000 $0Other Attorney Costs: (Specify) $0 $0 Total Attorney Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $217,500 $217,500 $92,188 $0 $0 $0 $0 RESERVESOperating Reserve $147,572 $147,572 $0Replacement Reserve $0 $0Transition Reserve $0 $0Rent Reserve $0 $0Other Reserve Costs: (Specify) $0 $0Other Reserve Costs: (Specify) $0 $0Other Reserve Costs: (Specify) $0 $0 Total Reserve Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $147,572 $147,572 $0 $0 $0 CONTINGENCY COSTSConstruction Hard Cost Contingency $1,804,566 $1,804,566 $1,804,566 $0 Soft Cost Contingency $288,245 $288,245 $288,245 $0
Total Contingency Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,092,811 $2,092,811 $2,092,811 $0 $0 $0 $0 OTHER PROJECT COSTSTCAC App/Allocation/Monitoring Fees $104,190 $104,190 $0Environmental Audit $5,000 $5,000 $5,000 $0Local Development Impact Fees $776,545 $776,545 $776,545 $0Permit Processing Fees $245,000 $245,000 $245,000 $0Capital Fees $563,500 $563,500 $563,500 $0Marketing $73,500 $73,500 $0Furnishings $70,000 $70,000 $70,000 $0Market Study $15,000 $15,000 $0 Accounting/Reimbursable $15,000 $15,000 $0Appraisal Costs $10,000 $10,000 $10,000 $0 Other Costs: Construction Management $145,000 $145,000 $145,000 $0Other Costs: Syndication Consulting $99,750 $99,750 $0Other Costs: Special Inspections/Testing $50,000 $50,000 $50,000 $0Other Costs: (Specify) $0 $0Other Costs: (Specify) $0 $0Other Costs: (Specify) $0 $0 Total Other Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,172,485 $2,172,485 $1,865,045 $0 $0 $0 $0 SUBTOTAL PROJECT COST $10,755,962 $507,340 $0 $0 $0 $0 $0 $0 $1,667,000 $0 $13,050,853 $25,981,155 $23,636,499 $0 $0 $0 $0 DEVELOPER COSTSDeveloper Overhead/Profit $2,200,000 $2,200,000 $2,200,000 $0 Consultant/Processing Agent $0 $0Project Administration $0 $0Broker Fees Paid to a Related Party $0 $0Construction Oversight by Developer $0 $0Other Developer Costs: (Specify) $0 $0 Total Developer Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,200,000 $2,200,000 $2,200,000 $0 $0 $0 $0 Total Development Costs (TDC) $10,755,962 $507,340 $0 $0 $0 $0 $0 $0 $1,667,000 $0 $15,250,853 $28,181,155 $25,836,499 $0 $0 $0 $0 $25,836,499 $0
DF 2019 $25,836,499
$2,200,000$2,200,000
$0$0
Developer Fee Contributed as Capital: $0
Total Developer Fee paid from development funding sources:

Total Developer Fee (equals Total Developer Costs above) :

Deferred Developer Fee payable on a priority basis from available Cash Flow:

Deferred Developer Fee payable from allowable 50% Distribution:

Total Eligible Basis:

HOME 2021 Page 5 of 19
(A)
(D)
(E)
(F)
Local development impact fees required to be paid to local government entities. Certification from local entities assessing fees also required. WAIVED IMPACT FEES ARE INELIGIBLE. No $0 0 Projects within a county with an unadjusted 9% threshold basis limit for a 2-bedroom unit equal or less than $1,982,271 $400,000 and within a census tract designated on the TCAC/HCD Opportunity Map as Highest or High Resource. (10%)
Yes
In yellow cells, enter Tract ID #
and TCAC/HCD Opportunity
Map Resource level County
eligibility: Yes TCAC/HCD Opportunity Area Map Tract ID #: 06061021040 Opportunity Map Resource level: High Resource

0.00 Proposed energy efficiency/resource conservation/indoor air quality items

0.00 (9) Meet all requirements of the U.S. Environmental Protection Agency Indoor Air Plus Program. (2%) No Project requires seismic upgrading of existing structures, and/or requires toxic or other environmental mitigation as certified by the Project architect/ engineer. (lesser of costs or 15% basis adjustment) No $0
(8) Install bamboo, stained concrete, cork, salvaged or FSC-Certified wood, ceramic tile, or natural linoleum in all common areas. (2%)
No
0 If Yes, select type of work: Enter Certified Costs of Work: $0 (6) Community Gardens of at least 60 square feet per unit. Permanent site improvements that provide a viable growing space within the Project including solar access, fencing, watering systems, secure storage space for tools, and pedestrian access. (1%)
No

0.00 (7) Install bamboo, cork, salvaged or FSC-Certified wood, natural linoleum, natural rubber, or ceramic tile in all kitchens, living rooms, and bathrooms (where no VOC adhesives or backing is also used). (1%) No

0.00 (4) Rehab Project buildings shall have 80% decrease in estimated TDV energy use (or improvement in energy efficiency) post rehab as demonstrated using the appropriate performance module of CEC software. (4%) No

0.00 (5) Irrigate only with reclaimed water, greywater, or rainwater (excepting water used for Community Gardens) or irrigate with reclaimed water, grey water, or rainwater in an amount that annually equals or exceeds 20,000 gallons or 300 gallons per unit, whichever is less. (1%) No

0.00 (B) Project applying under §10325 or §10326 of these regulations that include one or more of the features below. (up to 10%)
(1) Project shall have onsite renewable generation estimated to produce 50% or more of annual tenant electricity use. If the combined available roof area of the Project structures, including carports, is insufficient for provision of 50% of annual electricity use, then the Project shall have onsite renewable generation based on at least 90% of the available solar accessible roof area. Available solar accessible area is defined as roof area less north facing roof area for sloped roofs, equipment, solar thermal hot water and required local or state fire department setbacks and access routes. A Project not availing itself of the 90% roof area exception may also receive an increase under paragraph (2) only if the renewable generation used to calculate each basis increase does not overlap. (5%)
No
(3) Newly constructed Project buildings shall be 15% or more energy efficient than the 2016 Energy Efficiency Standards (California Code of Regulations, Part 6 of Title 24), except that if the local building department has determined that building permit applications submitted on or before December 31, 2016 are complete, then newly constructed Project buildings shall be fifteen percent (15%) or more energy efficient than the 2013 Energy Efficiency Standards (California Code of Regulations, Part 6 of Title 24). (4%) No

0.00 Project where at least 95% of the project's upper floor units are serviced by an elevator. (10%) Yes Project wherein at least 95% of the building(s) is constructed as a Type III as defined in the California Building Code, or a Type III/Type I combination, in which case, the Type I 15% increase above is not allowed. (10%) No
$1,982,271

0.00 (2) Project shall have onsite renewable generation estimated to produce 75% or more of annual common area electricity use. If the combined available roof area of the Project structures, including carports, is insufficient for provision of 75% of annual electricity use, then the Project shall have onsite renewable generation based on at least 90% of the available solar accessible roof area. Available solar accessible area is defined as roof area less north facing roof area for sloped roofs, equipment, solar thermal hot water and required local or state fire department set-backs and access routes. A Project not availing itself of the 90% roof area exception may also receive an increase under paragraph (1) only if the renewable generation used to calculate each basis increase does not overlap. (2%)
No

0.00 $0
$0
Project wherein at least 95% of the building(s) is constructed as Type I as defined in the California Building Code, in which case, the Type III 10% increase below is not allowed. (15%) No $0
Project where a day care center is part of the development. (2%) No $0 Project where 100 percent of the Low Income units are for Special Needs populations. (2%) No $0 Project certifies that (1) they are subject to a project labor agreement within the meaning of §2500(b)(1) of the Public Contract Code, or (2) they will use a skilled and trained workforce as defined by §25536.7 of the Health and Safety Code to perform all onsite work within an apprenticeable occupation in the building and construction trades. (5%)
No
$0
New construction project required to provide parking beneath residential units (not "tuck under" parking) or through construction of an on-site parking structure of two or more levels. (10%) No $0
TOTAL UNADJUSTED THRESHOLD BASIS LIMIT (TBL): $19,822,707 TBL ADJUSTMENTS §10327(c)(5)(A-F): Yes/No
Project paid in whole or part out of public funds subject to a legal requirement for the payment of state or federal prevailing wages or financed in part by a labor-affiliated organization requiring the employment of construction workers who are paid at least state or federal prevailing wages. (20%) Yes
$3,964,541
4+ Bedrooms $552,147 0 $0
Number of Manager Units in Project: 1 TOTAL UNITS: 49
2 Bedrooms $387,200 17 $6,582,400
3 Bedrooms $495,616 17 $8,425,472
SRO/Studio $278,397 0 $0
1 Bedroom $320,989 15 $4,814,835
Unit Size 1/5/21 TCAC Threshold Basis Limits (TBL) Number of Units Basis x Number of Units
Rep Name:
2021 TCAC Threshold Basis Limit for HCD Developer Fee 2017 UMR §8312(c) & (b) and High Cost Test for HCD Limits on Development Costs 2017 UMR §8311(a) & (b) (revised 3/24/21) Complete all yellow shaded cells; see cell comments for tips Project Name: Pleasant Grove Phase II County: Placer HCD Phase: Origination HOME 2021 Page 6 of 19 TBL and High Cost Test
Origination 9% Credits New Construction TCAC Project #:

HCD Contract #s:

HCD Limit Project Amt.
$2,200,000 $2,200,000 $0
$2,200,000 $2,200,000 $0
Deferred Developer Fee payable on a priority basis from available Cash Flow $0 $0 $0 $0
$2,200,000
$0 $0
substantial rehab = construction cost for rehab work (excluding contractor profit and overhead) in excess of $38,000 per unit a1. Number of units (include manager's unit)
a2. First 30 units at: $28,000 each $0
a3. Units in excess of 30 at: $11,500 each $0
a4. Total new construction and substantial rehab (a2 + a3) $0 with construction cost for rehab work (excluding contractor profit and overhead) between $11,500 - $38,000 per unit b1. Number of units (include manager's unit)
b2. First 30 units at: $13,000 each $0
b3. Units in excess of 30 at: $5,500 each $0
b4. Total acquisition and non-substantial rehab (b2 + b3) $0 c1. Number of units (include manager's unit)
c2. Total other at: $2,000 per unit $0
$0
Section 3. UMR §8312(a) for Projects without tax credits (choose only one in the 'a', 'b' or 'c' subsections) a. New construction and substantial rehab projects UMR §8312(a)(1) c. All other projects UMR §8312(a)(3)
b. Acquisition and rehab projects UMR §8312(a)(2)
d. Maximum allowable Developer Fee (a4 + b4 + c2)
Developer Fee Contributed as Capital Deferred Developer Fee HCD 2021 Developer Fee Calculator - revised 2/4/21 (complete YELLOW shaded cells) Project Phase: Proposed Project Type:

Project Name: Pleasant Grove Phase II
Project's Developer Fee Summary
Maximum Total Developer Fee - 1e
Max Developer Fee payable from development funding sources - 1e Deferred Developer Fee payable exclusively from Sponsor Distributions Total Budgeted or Actual Developer Fee
HOME 2021 Page 7 of 19 Dev Fee 2022
(5) Maximum Supportive Services Costs 48 $58,512
(3) UMR §8314(e)(3): Total number of units where the Sponsor, their affiliate, or a service provider under contract to provide Supportive Services at the Project has both: (A) qualified staff devoted exclusively to oversight and quality control of resident services in affordable housing, including the Project; and (B) a system to track and report on tenant outcomes, such as changes in employment status and income. Do not include units included in items (1) and (2) above.
48 $1,219 $58,512
(4) UMR §8314(e)(4): Total number of units anticipated to be offered Supportive Services provided by the Project Sponsor, a Sponsor affiliate, or contracted service provider that do not satisfy the criteria in items (1), (2) and (3) above. 0 $290 $0 (1) UMR §8314(e)(1): Total number of Supportive Housing (SH) units anticipated to be restricted to individuals or families experiencing chronic homelessness as defined consistent with Health and Safety Code (HSC) §50675.14. 0 $4,732 $0 (2) UMR §8314(e)(2): Total number of Supportive Housing (SH) units (other than those restricted to individuals or families experiencing chronic homelessness pursuant to HSC §50675.14), PLUS the total number of units restricted to occupancy by Special Needs Populations (SNP)* under any HCD program. (*click here for definition - §7301(s) of the MHP Regulations). Do not include units included in (1) above. 0 $3,548 $0
Supportive Services Costs - HCD 2017 UMR Limits (for projects with HCD funding) - 2.5% annual increase HCD UMR §8301(t): “Supportive Services” - social, health, educational, income support and employment services and benefits, coordination of community building and educational activities, individualized needs assessment, and individualized assistance with obtaining services and benefits.

HCD UMR §8301(u): “Supportive Services Costs” - the costs of providing tenants service coordination, case management, and direct resident and Supportive Services. It includes: (1) the cost of providing tenants with information on and referral to social, health, educational, income support and employment services and benefits, coordination of community building and educational activities, individualized needs assessment, and individualized assistance with obtaining services and benefits; (2) salaries, benefits, contracted services, telecommunication expenses, travel costs, supplies, office expenses, staff training, maintenance of on-site equipment used in services programs, such as computer labs, incidental costs related to resident events, and other similar costs approved by the Department.

A. Supportive Services Units: Total number of
units: 49 Certification Year - based on completion or update date from Universal Application ('General' worksheet cell K10): 2023 Total Units
Max PUPY
Expense Max Costs
HOME 2021 Page 8 of 19 Supportive Services Costs
Comments
No. FTE Employee Job Title Salary/Wages Value of Free Rent 1 1.00 On-Site Manager(s) $42,560 $0
On-Site Assistant Manager(s) $0 $0
Supportive Services Staff Supervisor(s) $0
1 1.00 Supportive Services Coordinator, On-Site $50,000 Other Supportive Services Staff (inc. Case Manager) $0
1 1.00 On-Site Maintenance Employee(s) $41,600 $0
On-Site Leasing Agent/Administrative Employee(s) $0 $0
On-Site Security Employee(s) $0 $0
$0 $0
$0 $0
Total Salaries and Value of Free Rent Units $134,160 $0 6711 Payroll Taxes $9,124 Show free rent as an
6722 Workers Compensation $4,562 expense?
6723 Employee Benefits $4,562 Yes
Employee(s) Payroll Taxes, Workers Comp. & Benefits $18,248 Total Employee(s) Expenses $152,408
Job Title(s) of Employee(s) Living On-Site Unit Type
(No. of bdrms.) Square Footage
On-Site Manager(s) 2 850
0 0
0 0
Total Square Footage 850
Revenue - Income Residential Commercial Comments
Rent Revenue - Gross Potential $0
Restricted Unit Rents $638,160
Unrestricted Unit Rents $0
Tenant Assistance Payments
Subsidy Program Name $0
Subsidy Program Name $0
Operating Subsidies $0
Other: (specify) $0 $0
Laundry and Vending Revenue $2,940
Garage and Parking Spaces $0 $0
Miscellaneous Rent Revenue $0 $0
Gross Potential Income (GPI) $641,100 $0
Vacancy Rate: Restricted Units 5.0%
Vacancy Rate: Unrestricted Units 5.0%
Vacancy Rate: Tenant Assistance Payments 5.0%
Vacancy Rate: Other: (specify) 5.0%
Vacancy Rate: Laundry & Vending & Other Income 5.0%
Vacancy Rate: Commercial Income 50.0%
Vacancy Loss(es) $32,055 $0
Effective Gross Income (EGI) $609,045 $0
Expenses Residential Commercial Comments
Administrative Expenses: 6200/6300
Conventions and Meetings $0 $0
Advertising and Marketing $2,250 $0
Other Renting Expenses $0 $0
Office/Administrative Salaries -- from above $0 $0
Office Expenses $0 $0
Office or Model Apartment Rent $0 $0
Management Fee $35,280 $0
Site/Resident Manager(s) Salaries -- from above $42,560 $0 Administrative Free Rent Unit -- from above $0 $0
Legal Expense -- Project $2,500 $0
Audit Expense $6,500 $0
Bookkeeping Fees/Accounting Services $12,608 $0
Miscellaneous Administrative Expenses $5,500 $0
Total Administrative Expenses $107,198 $0
5121
Pleasant Grove Phase II
Employee Information
Employee Units
Income Limit
None
Year 1 Annual Operating Budget
Acct. No.
5120/5140
12/1/21 Year 1 Annual Income and Expenses
Acct. No.
5910
5170
5990
5220/5240
6351
6203
6210
6250
6310
6311
6312
6320
6330
6331
6340
6350
6390
6263T
HOME 2021 Page 9 of 19 Operating
Pleasant Grove Phase II
12/1/21 Year 1 Annual Income and Expenses
Expenses Residential Commercial Comments
Utilities Expenses: 6400
Electricity $9,925 $0
Water $12,743 $0
Gas $0 $0
Sewer $12,743 $0
Other Utilities: (specify) $0 $0
Total Utilities Expenses $35,411 $0
Operating and Maintenane Expenses: 6500 Comments
Payroll -- from above $41,600 $0
Supplies $0 $0
Contracts $23,800 $0
Operating & Maintenance Free Rent Unit -- from above $0 $0 Garbage and Trash Removal $7,840 $0
Security Contract $0 $0
6531 Security Free Rent Unit -- from above $0 $0
Heating/Cooling Repairs and Maintenance $20,545 $0
Snow Removal $0 $0
Vehicle & Maintenance Equipment Operation/Reports $0 $0 Miscellaneous Operating and Maintenance Expenses $250 $0 Total Operating & Maintenance Expenses $94,035 $0
Taxes and Insurance: 6700 Comments
Real Estate Taxes $8,684 $0
Payroll Taxes (Project's Share) -- from above $9,124 $0 Property and Liability Insurance (Hazard) $81,974 $0
Other Insurance (e.g. Earthquake) $0 $0
Fidelity Bond Insurance $0 $0
Worker's Compensation -- from above $4,562 $0
Health Insurance/Other Employee Benefits--from above $4,562 $0 Miscellaneous Taxes, Licenses, Permits & Insurance $0 $0 Total Taxes and Insurance $108,906 $0
Supportive Services Costs: 6900 Comments
Staff Supervisor(s) Salaries - from above $0 $0
Services Coordinator Salaries, On-Site - from above $50,000 $0 Other Supportive Services Staff Salaries - from above $0 $0 Supportive Services Admin Overhead $0 $0
Other Supportive Services Costs: (specify) $0 $0
Other Supportive Services Costs: (specify) $0 $0
Total Supportive Services Costs $50,000 $0
Total Operating Expenses $395,550 $0 Comments
Funded Reserves: 7200 Residential Commercial
Required Replacement Reserve Deposits $24,500 $0
Other Reserves: (specify) $0 $0
Other Reserves: (specify) $0 $0
Other Reserves: (specify) $0 $0
Total Reserves $24,500 $0
Ground Lease Residential Commercial
Ground Lease $0 $0
Total Ground Lease $0 $0
Net Opereating Income $188,995 $0
Financial Expenses: 6800 Comments
1st Mortgage Debt Service $157,493 $0
2nd Mortgage Debt Service $0 $0
3rd Mortgage Debt Service $0 $0
HOME Monitoring Fee $12,051 $0
Miscellaneous Financial Expenses: (specify) $0 $0
Miscellaneous Financial Expenses: (specify) $0 $0
Miscellaneous Financial Expenses: (specify) $0 $0
Total Financial Expenses $169,544 $0
Cash Flow $19,451 $0
Asset Management/Similar Fees $39,500 $0
Per Year Per Month
Total Operating Expenses Per Unit
$8,072 $673
$8,072 $673
$6,875 $573
6520
Acct. No.
6450
6451
6452
6453
6400T
6510
6515
6729
6521
6525
6530
6546
6548
6570
6590
6500T
6710
6711
6720
6900T
6721
6722
6723
6790
6700T
6990
6990
6990
6990
6990
6990
6890
7210
7220
7230
7240
6820
6830
6840
6890
Without RE Taxes, Social Services Coordinator or Social Services/Social Programs and With the Value of Rent Fee Units Included
6890
6890
6800T
7190
Without any Adjustments
With the Value of Rent-Free Units Included
HOME 2021 Page 10 of 19 Operating
(a)
(b)
(c)
(d)
1 2
3 (a)
(b)
(c)
(d)
4a
4b HCD Required Operating Reserve Amount (Non-Tax Credit Project - 4 months) - must be included in 'Dev Budget' if no tax credits $179,865 If Reserve amounts are different than the required amount, enter reserve amounts and how they are calculated below:

Misc. Financial Expenses: $12,051
Total Annual Mandatory Debt Service: $169,544
HCD Required Operating Reserve Amount (Tax Credit Project - 3 months) - must be included in 'Dev Budget' for tax credit projects $134,899 2nd Mortgage Debt Service $0
3rd Mortgage Debt Service $0
Replacement Reserve amount (from above): $24,500
Mandatory Permanent Debt Service (enter lender name below):
1st Mortgage Debt Service Century Housing $157,493
HCD Required Replacement Reserve Amount - must be included in 'Operating' budget $24,500 Operating Reserve Calculator UMR §8308
Total Operating Expenses (including Property Taxes and excluding Service Coordinator salary): $345,550 If a third-party physical needs assessment (PNA) was performed for this Project, must attach PNA: PNA per unit amount: $0 Replacement Reserve amount = New construction: lesser of (a), (b) and (c) above; Rehab: lesser of (b) and (c) $24,500 Replacement Reserve Calculator UMR §8309

0.6% of new construction costs (structures excluding contractor profit, overhead, and general requirements and insurance): $15,712,033 $94,272 $500 per unit: $500 $24,500
HCD Reserve Requirements (all reserve withdrawals will require prior HCD approval) Project Name: Pleasant Grove Phase II Number of Project Units: 49 12/1/21 HOME 2021 Page 11 of 19 Reserves
12/1/21
1 Income From Housing Units Inflation Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20

2.5% 638,160 654,114 670,467 687,229 704,409 722,019 740,070 758,572 777,536 796,974 816,899 837,321 858,254 879,711 901,703 924,246 947,352 971,036 995,312 1,020,1952.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 02.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 02.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Operating Subsidies 2.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

2.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Gross Potential Income - Housing 638,160 654,114 670,467 687,229 704,409 722,019 740,070 758,572 777,536 796,974 816,899 837,321 858,254 879,711 901,703 924,246 947,352 971,036 995,312 1,020,195 Other Income

2.5% 2,940 3,014 3,089 3,166 3,245 3,326 3,409 3,495 3,582 3,672 3,763 3,858 3,954 4,053 4,154 4,258 4,364 4,474 4,585 4,700

2.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 02.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Gross Potential Income - Other 2,940 3,014 3,089 3,166 3,245 3,326 3,409 3,495 3,582 3,672 3,763 3,858 3,954 4,053 4,154 4,258 4,364 4,474 4,585 4,700 Gross Potential Income - Total 641,100 657,128 673,556 690,395 707,654 725,346 743,479 762,066 781,118 800,646 820,662 841,179 862,208 883,763 905,858 928,504 951,717 975,509 999,897 1,024,895 Vacancy Assumptions
Restricted Units 5.0% 31,908 32,706 33,523 34,361 35,220 36,101 37,003 37,929 38,877 39,849 40,845 41,866 42,913 43,986 45,085 46,212 47,368 48,552 49,766 51,010 Unrestricted Units 5.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Tenant Assistance Payments 5.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other: (specify) 5.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Laundry/Vending/Other Income 5.0% 147 151 154 158 162 166 170 175 179 184 188 193 198 203 208 213 218 224 229 235Commercial Income 50.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Vacancy Loss 32,055 32,856 33,678 34,520 35,383 36,267 37,174 38,103 39,056 40,032 41,033 42,059 43,110 44,188 45,293 46,425 47,586 48,775 49,995 51,245 Effective Gross Income 609,045 624,271 639,878 655,875 672,272 689,079 706,305 723,963 742,062 760,614 779,629 799,120 819,098 839,575 860,565 882,079 904,131 926,734 949,902 973,650Operating Expenses & Reserve Deposits

3.5% 336,866 348,656 360,859 373,489 386,561 400,091 414,094 428,588 443,588 459,114 475,183 491,814 509,028 526,844 545,283 564,368 584,121 604,565 625,725 647,625 Real Estate Taxes 2.0% 8,684 8,858 9,035 9,216 9,400 9,588 9,780 9,975 10,175 10,378 10,586 10,797 11,013 11,234 11,458 11,688 11,921 12,160 12,403 12,651Supportive Services Costs 2.5% 50,000 51,250 52,531 53,845 55,191 56,570 57,985 59,434 60,920 62,443 64,004 65,604 67,244 68,926 70,649 72,415 74,225 76,081 77,983 79,933 Replacement Reserve 0.0% 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 24,500 Other Reserves 0.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Ground Lease 2.0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Commercial Expenses 3.5% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Expenses & Reserves 420,050 433,264 446,925 461,049 475,652 490,749 506,359 522,497 539,183 556,435 574,273 592,716 611,786 631,503 651,890 672,970 694,767 717,306 740,611 764,709 Net Operating Income 188,995 191,007 192,953 194,825 196,620 198,329 199,947 201,466 202,879 204,179 205,356 206,404 207,312 208,072 208,674 209,108 209,363 209,428 209,292 208,941Debt Service1st Mortgage 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 157,493 Bridge Loan (repaid from Investor equity) 0 0 0 0 02nd Mortgage 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 03rd Mortgage Debt Service 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0HOME Monitoring Fee 3.0% 12,051 12,413 12,785 13,168 13,564 13,970 14,390 14,821 15,266 15,724 16,196 16,681 17,182 17,697 18,228 18,775 19,338 19,918 20,516 21,132Misc. Financial Expenses: (specify) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Required Debt Service 169,544 169,906 170,278 170,661 171,057 171,463 171,883 172,314 172,759 173,217 173,689 174,174 174,675 175,190 175,721 176,268 176,831 177,411 178,009 178,625 Cash Flow after all debt service 19,451 21,102 22,675 24,164 25,563 26,866 28,064 29,152 30,120 30,962 31,668 32,229 32,637 32,882 32,953 32,840 32,532 32,017 31,283 30,317Debt Service Coverage Ratio (DSCR) 1.11 1.12 1.13 1.14 1.15 1.16 1.16 1.17 1.17 1.18 1.18 1.19 1.19 1.19 1.19 1.19 1.18 1.18 1.18 1.17 Use of Cash Flow After Debt Service - HCD Projects
Asset Mgmt./ Similar Fees 19,451 21,102 22,675 24,164 25,563 26,866 28,064 29,152 30,120 30,962 31,668 32,229 32,637 32,882 32,953 32,840 32,532 32,017 31,283 30,317 Deferred Developer Fee prior to Distributions & residual receipt payments 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Cash Available for Residual Receipts Loans and Sponsor Distributions 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Sponsor Distributions 50% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0HCD Residual Payment 50% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other Residual Payments 0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other Residual Payments 0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other Residual Payments 0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Other Residual Payments 0% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Max Asset Mgmt/Similar Fees 3.5% 39,500 40,883 42,313 43,794 45,327 46,914 48,556 50,255 52,014 53,834 55,719 57,669 59,687 61,776 63,938 66,176 68,492 70,890 73,371 75,939Cumulative paid Deferred Dev. Fee 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Deferred Developer Fee budgeted for payment prior to distributions and residual receipt payments 0
Residential Exp. (w/o Real Estate Taxes & Sup. Services) Pleasant Grove Phase IIIs Income from Restricted Units based on Restricted or Proposed Rents? Restricted Rents Restricted Unit RentsUnrestricted Units
Subsidy Program NameSubsidy Program Name
Tenant Assistance PaymentsOther: (specify)Laundry & VendingOther Income Commercial Income Cash Flow Analysis
HOME 2021 Page 12 of 19 Cash Flow
Purpose
Column 2:Column 3:Column 4:1. The Previous Participation Certificate, including Schedule A, must be completed in its entirety and signed by all applicants, proposed general partners, developer and development consultant with whom the sponsor has a comprehensive development services contract, and affiliates applying to any one of the Agencies.2. For CTCAC only- applicants applying for points for the property management agent experience, and there is an executed property management agreement, the property management agency must also complete the Previous Participation Certificate and Schedule A.3. All other participants, or members of the development team, who are only involved in the Project on a fee for service basis and for whom #1 and #2 above do not apply, must provide a resume or complete Schedule A which details rental housing projects in which they previously participated.4. Attach extra sheets as you need them. Be sure to indicate "Continued on Attachments" wherever appropriate. Sign each additional page that you attach if it refers to you or your record.

Specific Line InstructionsBlock 1: Fill in the name and location of the affordable multifamily rental housing Project.

Pleasant Grove Phase II

PREVIOUS PARTICIPATION CERTIFICATE
CTCAC Regs. 10325(g)(5)(B) & 10326(f)(6)(B), MHP Regulation 7320(b)(3), HOME Regulation 8212(d)(1)(C) 12/1/21
This form provides the Agencies with a certified report of all previous participation in all affordable multifamily rental housing projects. The Agencies require that you certify your records of previous participation in Agencies', other government-assisted, and nongovernment-assisted projects by completing and signing this form, before your Project application or participation can be approved.

Instructions - Previous Participation Certificate

1. Be sure that Schedule A is filled in completely, accurately and the certification is properly dated and signed, because it will serve as a record of your previous experience. All multi-family rental housing projects must be listed. Applicants are reminded that previous participation pertains to the individual principal within an entity as well as the entity itself.HOME ONLY - to receive points for similar project experience, this information must be provided by the applicant, developer, owner, and managing general partner for subsidized projects of the same type proposed in the application. Such projects must have been completed during the 5-year period specified in the HOME NOFA. To receive points you must indicate whether the project is a rental new construction or rental rehabilitation project by entering "yes" or "no" underneath the P-I-S date.MHP ONLY - list subsidized rental housing projects completed by the developer or development consultant with whom the Project Sponsor has a comprehensive development services contract. Include the projects in which the entity was responsible for overseeing or performing the full range of comprehensive development activities including: financial packaging, selection of consultants, selection of the construction contractor and property management agent, oversight of architectural design, construction management and other aspects of the development process. In addition, for each project submitted for operation experience, attach a narrative describing the Project Sponsor's role and responsibilities using MHP's form.2. Even if you have never participated in an affordable multi-family rental housing project, you must complete the Previous Participation Certificate. If you have no previous projects to list, fill in your name in column 1, and write across the form by your name - "No previous participation." List all (nationwide) of your previous affordable multifamily rental housing projects. Identify all Agencies' projects first in Column 2A, then other government agency assisted projects in Column 2B, then nongovernment-assisted projects in Column 2C. Identify the project name, location, type of subsidy, number of units, and indicate if the project is being used in scoring to gain points, if applicable.

List your role in all previous projects. Give the month/day/year the principal's role began and ended and the month/day/year the project was placed-in-service (P-I-S).

CTCAC ONLY - for the General partner and Management Company/Principal, to the extent that the type of information requested is the same between this attachment and UA XX and UA XY, the information should match or requested points may not be awarded in these categories.Indicate all defaults, foreclosures, sales, instances of IRS noncompliance, and issuance of IRS Form 8823.

Block 2: Alphabetically list the full names, last name first, of all principals (including corporations) and affiliates and their addresses.

Block 3: Beside the name of each principal, fill in the role that each party listed will perform.

Block 4: Fill in the percentage ownership in the proposed Project that each principal is expected to have.

Block 5: Fill in the IRS employer number of every party listed, including affiliates.

Block 6: In the box below the statement of certification, fill in the name of all principals and affiliates. Beside the name of each principal and affiliate, each party must sign the form. In addition, each person who signs the form should fill in the date that he/she signs and their telephone number.

Instructions - Schedule A

Page 13 of 19 ends

Roseville City CouncilApril 3, 2024

Roseville City Council
April 3, 2024