Agenda packet — Mayor and City Council, March 15, 2023 (part 1 of 4)

Mayor and City Council of the City of San Bernardino Page 1

CITY OF SAN BERNARDINO
AGENDA

FOR THE

REGULAR MEETING OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO,

MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR

AGENCY TO THE REDEVELOPMENT AGENCY, MAYOR AND CITY COUNCIL OF THE CITY OF SAN

BERNARDINO ACTING AS THE SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT

AGENCY, AND MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE

HOUSING AUTHORITY, AND MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO

ACTING AS THE SAN BERNARDINO JOINT POWERS FINANCING AUTHORITY WEDNESDAY, MARCH 15, 2023
5:30 PM CLOSED SESSION 7:00 PM OPEN SESSION
FELDHEYM CENTRAL LIBRARY • SAN BERNARDINO, CA 92410 • WWW.SBCITY.ORG

Theodore Sanchez Helen Tran

Damon L. Alexander
COUNCIL MEMBER, WARD 1 COUNCIL MEMBER, WARD 7
MAYOR
Sandra Ibarra Charles E. McNeely
COUNCIL MEMBER, WARD 2 INTERIM CITY MANAGER
Juan Figueroa

Sonia Carvalho
COUNCIL MEMBER, WARD 3 CITY ATTORNEY
Fred Shorett

Genoveva Rocha
MAYOR PRO TEM, WARD 4 CITY CLERK
Ben Reynoso

COUNCIL MEMBER, WARD 5
Kimberly Calvin

COUNCIL MEMBER, WARD 6
Welcome to a meeting of the Mayor and City Council of the City of San Bernardino.

PLEASE VIEW THE LAST PAGES OF THE AGENDA FOR PUBLIC

COMMENT OPTIONS, OR CLICK ON THE FOLLOWING
LINK: TINYURL.COM/MCCPUBLICCOMMENTS
Please contact the City Clerk's Office (909) 3845002 two working days prior to the meeting for any requests for reasonable accommodation, to include interpreters.

To view PowerPoint presentations, written comments, or any revised documents for this meeting date, use this link: tinyurl.com/agendabackup.

Select the corresponding year and meeting date folders to view documents.

Mayor and City Council of the City of San Bernardino Page 2

CALL TO ORDER

Attendee Name
Council Member, Ward 1 Theodore Sanchez
Council Member, Ward 2 Sandra Ibarra
Council Member, Ward 3 Juan Figueroa
Mayor Pro Tem, Ward 4 Fred Shorett
Council Member, Ward 5 Ben Reynoso
Council Member, Ward 6 Kimberly Calvin
Council Member, Ward 7 Damon L Alexander
Mayor Helen Tran
Interim City Manager Charles E. McNeely
City Attorney Sonia Carvalho
City Clerk Genoveva Rocha

5:30 P.M.

CLOSED SESSION PUBLIC COMMENT

CLOSED SESSION p. 11
(A) CONFERENCE WITH LEGAL COUNSEL EXISTING LITIGATION (Pursuant to Government Code Section 54956.9(a) and (d)(1):

1. City of Arcadia, et al. v. Southern California Edison Corporation, Santa Barbara Superior Court Case No. 20 CV 02026

(B) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION – Initiation of litigation (pursuant to Gov. Code Section 54956.9(d)(4)): one case

7:00 P.M.

INVOCATION AND PLEDGE OF ALLEGIANCE

CLOSED SESSION REPORT

PUBLIC COMMENTS FOR ITEMS LISTED AND NOT LISTED ON THE AGENDA

CITY MANAGER UPDATE

MAYOR & CITY COUNCIL UPDATES/REPORTS ON CONFERENCES & MEETINGS

PRESENTATIONS

1. Proclamation for AmeriCorps Week 2023 – March 2023 (All Wards) p. 12

2. Proclamation for Women’s History Month – March 2023 (All Wards) p. 14

Mayor and City Council of the City of San Bernardino Page 3

CONSENT CALENDAR

3. Purchase of Dog Kennels for the Animal Shelter (All Wards) p. 16 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, authorize the City Manager, or designee, to execute the Goods Purchase Agreement with ShorLine for the purchase of new dog kennels to be installed at the animal shelter.

4. Irrevocable Agreement to Annex No. 2023373 (Ward 6) p. 45 Recommendation:

Adopt Resolution No. 2023042 of the Mayor and City Council of the City of San Bernardino, California, approving the application to the Local Agency Formation Commission to provi de City sewer services to property located within the unincorporated territory at 2971 North Macy Street, San Bernardino, California; and authorizing the City Manager to execute an Irrevocable Agreement to Annex.

5. Memorandum of Understanding Between the City of San Bernardino and the San Bernardino Municipal Water District Regarding the Land Designation of 796 E. 6th Street, 3250 Harrison Street, and Glendenning Way Properties (Wards 1 & 7) p. 61 Recommendation:

It is recommended that the Mayor and City Council of San Bernardino, California, adopt Resolution No. 2023043 of the Mayor and City Council of San Bernardino, California, approving a Memorandum of Understanding (MOU) between the City of San Bernardino and the San Bernardi no Municipal Water District regarding the land designation of 796 E. 6th Street, 3250 Harrison Street, and Glendenning Way and authorize the Interim City Manager, or his designee, to execute the MOU.

6. Adoption of Ordinance No. MC1613 (Annexation No. 31) (Ward 3) p. 197 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Ordinance No. MC1613 amending Ordinance No. MC1522 and levying special taxes to be collected during Fiscal Year 20232024 to pay the annual costs of the maintenance and servicing of landscaping, lighting, water quality improvements, graffiti, streets, street sweeping, parks and trail maintenance, a reserve fund for capital replacement, and administrative expenses with respect to City of San Bernardino Community Facilities District No. 20191 (Maintenance Services).

7. Approval of Commercial and Payroll Disbursements (All Wards) p. 207 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California approve the commercial and payroll disbursements for February 2023.

8. Investment Portfolio Report for January 2023 (All Wards) p. 263 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, accept and file the Monthly Investment Portfolio Report January 2023.

Mayor and City Council of the City of San Bernardino Page 4

9. Resolution No. 2023044 Authorizing the Recording of a Notice of Cessation of Special Tax Lien for Community Facilities District No. 20221 (Highland/Medical) of the City of San Bernardino. (Sixth Ward) p. 275
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, Adopt Resolution No. 2023044 of the City Council of the City of San Bernardino, Acting in its Capacity as the Legislative Body of Community Facilities District No. 20221 (Highland/Medical) of the Ci ty of San Bernardino, Authorizing the Recording of a Notice of Cessation of Special Tax Lien.

10. Receive and File San Bernardino Municipal Water Department’s Audited Annual Comprehensive Financial Report for Fiscal Year Ended June 30, 2022 p. 284 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, receive and file the San Bernardino Municipal Water Department’s audited Annual Comprehensive Financial Report for water and sewer utilities for Fi scal Year ended June 30, 2022.

PUBLIC HEARING

11. Development Permit TypeP 2203 (Ward 2) p. 444
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2023045 of the Mayor and City Council of the City of San Bernardino, California, approving Development Permit Type– P 2203 allowing the conversion of an existing twostory office building, containing approximat ely 9,988 square feet, into an apartment complex consisting of twelve (12) multiplefamily residential units on a project site consisting of three (3) parcels containing a total of approximately 0.68 acres located at 1490 N. D Street (APNs: 014518103, 04, and 13), within the Commercial Office (CO) zone and Adaptive Reuse (AR) Overlay, and finding the project is subject to a Categorical Exemption under the California Environmental Quality Act.

12. Public Hearing on Annexation No. 33 to Community Facilities District 20191 (Ward 3) p. 538
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Hold a Public Hearing; and

2. Adopt Resolution No. 2023046 of the Mayor and City Council of the City of San Bernardino, California, calling an election to submit to the qualified electors the question of levying a special tax within the area proposed to be annexed to Community Facilities District No. 20191 (Maintenance Services) (Annexation No. 33); and

3. Hold a special landowner election and canvass the election; and

4. Adopt Resolution No. 2023047 of the Mayor and City Council of the City of San Bernardino, California, declaring election results for Community Facilities District No. 2019 1 (Maintenance Services) (Annexation No. 33); and

5. Introduce, read by title only, and waive further reading of Ordinance No. MC1614 of the Mayor and City Council of the City of San Bernardino, California, amending Ordinance No.

MC1522 and levying special taxes to be collected during Fiscal Year 20232024 to pay annual costs of the maintenance and servicing of landscaping, lighting, water quality improvements, graffiti, streets, street sweeping, parks and trail maintenance, a reserve fund for capital replacement, and administrative expenses with respect to City of San Bernardino Community Facilities District No. 20191 (Maintenance Services); and

6. Schedule the adoption of Ordinance No. MC1614 for April 5, 2023.

Mayor and City Council of the City of San Bernardino Page 5

13. Public Hearing on Annexation No. 34 to Community Facilities District 20191 (Ward 3) p. 598
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Hold a Public Hearing; and

2. Adopt Resolution No. 2023048 of the Mayor and City Council of the City of San Bernardino, California, calling an election to submit to the qualified electors the question of levying a special tax within the area proposed to be annexed to Community Facilities District No. 20191 (Maintenance Services) (Annexation No. 34); and

3. Hold a special landowner election and canvass the election; and

4. Adopt Resolution No. 2023049 of the Mayor and City Council of the City of San Bernardino, California, declaring election results for Community Facilities District No. 2019 1 (Maintenance Services) (Annexation No. 34); and

5. Introduce, read by title only, and waive further reading of Ordinance No. MC1615 of the Mayor and City Council of the City of San Bernardino, California, amending Ordinance No. MC1522 and levying special taxes to be collected during Fiscal Year 20232024 to pay annual costs of the maintenance and servicing of landscaping, lighting, water quality improvements, graffiti, streets, street sweeping, parks and trail maintenance, a reserve fund for capital replacement, and administrative expenses with respect to City of San Bernardino Community Facilities District No. 20191 (Maintenance Services); and

6. Schedule the adoption of Ordinance No. MC1615 for April 5, 2023.

14. Substantial Amendment to the Fiscal Year 20212022 Annual Action Plan – HOME Investment Partnership American Rescue Plan Program (HOMEARP)(All Wards) p. 659 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Conduct a Public Hearing of the draft HOME Investment Partnership Allocation Plan;

2. Approve a Substantial Amendment to the Fiscal Year 20212022;

3. Approve the HOME Investment Partnership Allocation Plan; and

4. Authorize the Interim City Manager, or his designee, to execute any further documents as may be necessary to effectuate the submittal of the Substantial Amendment to the Fiscal Year 20212022 Action Plan.

15. Imposing Liens on Parcels of Real Property for Uncollected Business Registration Fees (All Wards) p. 710
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California:

1. Conduct a public hearing to receive public comment on the matter; and

2. Adopt Resolution No 2023050 of the Mayor and City Council of the City of San Bernardino, California, imposing liens on certain parcels of real property for unpaid Business Registration taxes and penalties; and

3. Direct the Agency Director of Administrative Services to remove any properties from the Business Registration Lien List (Exhibit A to the Resolution) which are resolved prior to the hearing.

DISCUSSION

16. Adopt Ordinance No. MC1612 Amending Section 8.24.050 of the Municipal Code (Notification of Administrative Hearing) (All Wards) p. 721 Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California: Adopt Ordinance No. MC1612 amending Section 8.24.050 of the San Bernardino Municipal Code regarding notification of administrative hearing decision and final report of delinquent solid waste charges to affected persons.

Mayor and City Council of the City of San Bernardino Page 6

ITEMS TO BE CONSIDERED FOR FUTURE MEETINGS

17. City Organization Realignment (All Wards) – Council Member Alexander p. 730

ADJOURNMENT
The next joint regular meeting of the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency will be held on April 05, 2023 at the Feldheym Central Library located at 555 West 6th Street, San Bernardino, California 92401.

Closed Session will begin at 5:30 p.m. and Open Session will begin at 7:00 p.m.

CERTIFICATION OF POSTING AGENDA

I, Genoveva Rocha, CMC, City Clerk for the City of San Bernardino, California, hereby certify that the agenda for the March 15, 2023, Regular Meeting of the Mayor and City Council and the Mayor and City Council acting as the Successor Agency to the Redevelopment Agency was posted on the City's bulletin board located at 201 North "E" Street, San Bernardino, California, at the San Bernardino Public Library located at 555 West 6th Street, San Bernardino, California, and on the City's website sbcity.org on Friday, March 10, 2023.

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

Mayor and City Council of the City of San Bernardino Page 7

NOTICE:

In accordance with Resolution No. 201889 adopted by the Mayor and City Council on March 21, 2018, the following are the rules set forth for Public Comments and Testimony:

Public Comments and Testimony:

Rule 1. Public comment shall be received on a first come, first served basis. If the presiding officer determines that the meeting or hearing may be lengthy or complicated, the presiding officer may, in his or her discretion, modify these rules, including the time limits stated below.

Rule 2. All members of the public who wish to speak shall fill out a speaker' s reservation card and turn in the speaker reservation card to the City Clerk prior to the time designated on the agenda. Comments will be received in the order the cards are turned in to the City Clerk. Failure of a person to promptly respond when their time to speak is called shall result in the person forfeiting their right to address the Mayor and City Council.

Rule 3. The presiding officer may request that a member of the public providing comment audibly state into the microphone, if one is present, his or her name and address before beginning
comment. If that person is representing a group or organization the presiding officer may request that the speaker identify that group or organization, including that group or organization' s Address.

Rule 4. Notwithstanding the provisions of Rule 2 and 3 above, a person shall not be required to provide their name or address as a condition of speaking.

Rule 5. Time Limits:

5. 01 Each member of the public shall have a reasonable time, not to exceed three ( 3) minutes per meeting, to address items on the agenda and items not on the agenda but within the subject matter jurisdiction of the Mayor and City Council.

5. 02 Notwithstanding the time limits set forth in subsection 5. 01 above, any member of the public desiring to provide public testimony at a public hearing shall have a reasonable time, not to exceed ( 3) minutes, to provide testimony during each public hearing.

Mayor and City Council of the City of San Bernardino Page 8

Any member of the public desiring to speak to the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency concerning any matter not on the agenda but which is within the subject matter jurisdiction of the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency may address the body at the end of the meeting, during the period reserved for public comments. Said total period for public comments shall not exceed 60 minutes, unless such time limit is extended by the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency. A threeminute limitation shall apply to eac h member of the public, unless such time limit is extended by the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency. No member of the public shall be permitted to "share" his/her three minutes with any other member of the public.

Speakers who wish to present documents to the governing body may hand the documents to the City Clerk at the time the request to speak is made.

The Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency may refer any item raised by the public to staff, or to any commission, board, bureau, or committee for appropriate action or have the item placed on the next agenda of the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency. However, no other action shall be taken nor discussion held by the Mayor and City Council and the Mayor and City Council Acting as the Successor Agency to the Redevelopment Agency on any item which does not appear on the agenda unless the action is otherwise authorized in accordance with the provisions of subdivision (b) of Section 54954.2 of the Government Code.

Public comments will not be received on any item on the agenda when a public hearing has been conducted and closed.

Mayor and City Council of the City of San Bernardino Page 9

PUBLIC COMMENT OPTIONS

Please use ONE of the following options to provide a public comment:

1) Written comments can be emailed to [email protected]. Written public comments received up to 4:00 p.m. on the day of the meeting (or otherwise indicated on the agenda) will be provided to the Mayor a nd City council and made part of the meeting record. They will not be read aloud unless you require an ADA accommodation.

Please note: messages submitted via email and this page are only monitored from the publication of the final agenda until the deadline to submit public comments. Please contact the City Clerk at 9093845002 or [email protected] for assistance outside of this timeframe.

2) Attend the meeting in person and fill out a speaker slip. Please note that the meeting Chair decides the cutoff time for public comment, and the time may vary per meeting. If you wish to submit your speaker slip in advance of the meeting, please submit y our request to speak using the form on the following page: https://tinyurl.com/mccpubliccomments

3) REMOTE PARTICIPATION VIA ZOOM (For public comment only meeting will not be viewable on Zoom)

a) You can use a mobile phone or a landline to dial into a Zoom meeting.

i) Dial (669) 9006833. When prompted, enter the Meeting ID: 6778459453 Passcode:2023

The public may begin joining the meeting on Zoom or by callingin to be added to the speaker queue at 5:15 PM for Closed Session.

Once admitted to the Zoom Public Comment meeting to request to speak at the appropriate time:

ii) Dial *9 from your phone to raise your hand via Zoom If calling in staff will confirm the last four digits of the caller's phone number and unmute them, the caller must then press *6 to speak from their device. Callers are encouraged, but not required, to identify themselves by name. Each caller will be provided three (3) minutes to speak.

If you are calling in, please turn your volume down on your television or other devices to limit any feedback when you speak.

Continued next page...

8) Join the Meeting by clicking on the Zoom link below:

Mayor and City Council of the City of San Bernardino Page 10

https://us06web.zoom.us/j/6778459453?pwd=ZTkzdUJtcDMrbmFNQnVDSFhva XQxZz09

Meeting ID: 677 845 9453
Passcode:2023

You can also Go to Zoom.us and click "Join a Meeting" at the top.

Enter the Meeting ID: 6778459453
Passcode:2023

Public Hearings:

If you are commenting on a Public Hearing, please stay signed on to the Zoom session or sign on when the Public Hearing is announced. You will be prompted by staff when the item is being discussed.
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CLOSED SESSION
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Sonia Carvalho, City Attorney
Department: City Attorney
Subject: Closed Session
Recommendation:
(A) CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (Pursuant to Government Code Section 54956.9(a) and (d)(1):

1. City of Arcadia, et al. v. Southern California Edison Corporation, Santa Barbara Superior Court Case No. 20 CV 02026
(B) CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION – Initiation of litigation (pursuant to Gov. Code Section 54956.9(d)(4)): one case

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11 PRESENTATIONS
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely
Department: Mayor's Office
Subject: Proclamation for AmeriCorps Week 2023 – March
2023 (All Wards)

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12 PROCLAMATION
OF THE

MAYOR AND CITY COUNCIL

“AMERICORPS WEEK”
WHEREAS, service is a hallmark of the American character and has the unique ability to bring people of all backgrounds together in common cause, and throughout our history citizens have stepped up to meet our most pressing challenges of the day by volunteering in their communities; and WHEREAS, AmeriCorps members and AmeriCorps Seniors volunteers programs provide opportunities for more than 200,000 Americans to serve their country through service at nonprofits, schools, public agencies, and community and faith-based groups across the country; and WHEREAS, in the City of San Bernardino and its service area, more than 400 AmeriCorps Seniors volunteers of diverse ages and backgrounds helped to meet local needs at more than 30 locations within the City of San Bernardino and its service area by responding to COVID-19, tutoring or mentoring children and youth, supporting veterans and military families, assisting frail and vulnerable seniors maintain their independent living skills, combatting the opioid epidemic, restoring the environment, responding to disasters, and providing one on one care for individuals with physical and developmental needs; and WHEREAS, AmeriCorps members and AmeriCorps Seniors volunteers encourage collaboration and partnerships, leveraging millions of volunteers in service and acquiring the support of business, foundation, and other local partners to increase the effectiveness of their initiatives; and WHEREAS, AmeriCorps and AmeriCorps Seniors programs bring people together across race, age, and zip codes to address critical issues facing the country, forge relationships and cultivate mutual respect, and help build resilient and thriving communities; and
WHEREAS, AmeriCorps members and AmeriCorps Seniors volunteers demonstrate dedication and patriotism by making an intensive commitment to service, a commitment that remains with them in their future endeavors; and
WHEREAS, through their service, AmeriCorps members and AmeriCorps Seniors volunteers strengthen the lives of their families, communities, of the City San Bernardino and its service area; and WHEREAS, national service represents a unique public-private partnership that invests in community solutions and leverages non-federal resources to strengthen community impact and increase the return on taxpayer dollars; and
WHEREAS, AmeriCorps Week is an opportunity to recognize the dedication and commitment of the more than 1.2 million Americans who have chosen to serve their country through AmeriCorps and millions more who have served in AmeriCorps Seniors and their community partners, and to encourage more Americans to follow their footsteps in service.

NOW THEREFORE, THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, do hereby proclaim March 12th-18th, as
AmeriCorps Week
Presented this 15th Day of March 2023

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0 PRESENTATIONS
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely
Department: Mayor's Office
Subject: Proclamation for Women’s History Month – March 2023 (All Wards)

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8 PROCLAMATION
OF THE

MAYOR AND CITY COUNCIL
“WOMEN’S HISTORY MONTH”
WHEREAS, in 1987, The United States Congress designated the month of March as “Women’s History Month” to commemorate and encourage the study, observance, and celebration of the vital role of women in American history; and WHEREAS, the U.S. Census Bureau estimates that 50.2% or 111,546 residents in the City of San Bernardino are women; and
WHEREAS, the contributions and accomplishments by women in the City of San Bernardino are vast, significant, and under-appreciated; and WHEREAS, women now serve San Bernardino in State and local elected office, including our Mayor, two city council members, our state senator, one of our County Supervisors, and members of our local and County school boards and community college board of trustees; and WHEREAS, women in San Bernardino continue to play a crucial role in our community as entrepreneurs, public servants, non-profit leaders, health care providers, educators, first responders, and volunteers; and
WHEREAS, many of the current achievements by women in San Bernardino would not have been possible without the women that came before them, blazing the trail, breaking the glass ceiling, and redefining expectations.

NOW THEREFORE, THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, do hereby proclaim March 2023 as
WOMEN’S HISTORY MONTH
and encourage citizens to become more aware of the significant contributions of women to our City and nation.

Presented this 15th Day of March 2023

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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Kris Watson, Director of Animal Services
Department: Animal Services
Subject: Purchase of Dog Kennels for the Animal Shelter (All Wards)
Recommendation
It is recommended that the Mayor and City Council of the City of San Bernardino, California, authorize the City Manager, or designee, to execute the Goods Purchase Agreement with Shor-Line for the purchase of new dog kennels to be installed at the animal shelter.

Background
Since 2019, the City has made several improvements to the animal shelter, including constructing play yards for the dogs, upgrading electrical panels throughout the facility, installing a new ventilation system into the cat ward as well as demolishing old buildings and adding two new modular offices to increase the level of service the department can offer to the public. To date, these investments by the City in the animal shelter have been crucial in resolving the most critical needs of the Department.

Discussion
One of the most critical areas of the shelter needing improvement is the veterinary isolation ward. Animals that are sick are traditionally kept in this area for treatment and to reduce disease transmission to the remainder of the healthy population. The shelter’s current isolation ward is original to the facility and is out of date with current animal welfare standards to prevent illness. In order to reduce disease transmission and properly safeguard the health of the animals entrusted to the shelter, a new veterinary isolation ward needs to be completed on campus.

The Department obtained a quote from Shor-Line for new kennels, consistent with current animal welfare standards. The kennels are larger than those in our current isolation ward and will have solid sides and kennel doors to reduce disease transmission between dogs. Shor-Line is the only large-scale manufacturer of dog kennels in the United States, and recently merged with the other manufacturer of kennels, Midmark. The kennels from Shor-Line include a patented drain design, are of

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high quality and made from stainless steel, making them easy to sanitize. There are older Shor-Line kennels at the shelter which were installed over forty years ago and are still in good working condition despite daily disinfection with harsh chemicals. The Department has included a single source justification for the purchase from Shor-Line due to the unique requirements for this purchase.

This is a crucial purchase for the Department. If Animal Services is unable to complete the additional dog kennel building, the Department will not have the kennel space needed to house the number of dogs coming into the shelter. Additionally, the level of care the Department can provide to sick animals will continue to be below current animal welfare standards.

Once installed, these new kennels will add 17 full size and 17 half size kennels to the isolation ward. An additional six smaller kennels will be added to the receiving area, expanding the space available for smaller dogs arriving overnight to the shelter. The kennels will be bolted to the cement floor, allowing them to be moved to another building or location in the future, if needed.
2021-2025 Strategic Targets and Goals
The request for the purchase of new dog kennels aligns with Strategic Target No. 3:

Improved Quality of Life. New kennels consistent with current animal welfare industry standards will increase the quality of care the shelter is able to provide to sick and injured pets. The new kennels will also improve the appearance of the animal shelter campus, leading to an improved quality of life for the pets impounded at the shelter and for members of the public visiting the facility.

Fiscal Impact
There is no fiscal impact to the General Fund for this purchase. The cost will be $184,860.37, and the Department will be using grant funding from the San Manuel Band of Mission Indians already included in the Animal Services FY 2022/23 Operating Budget for this purchase.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, authorize the City Manager, or designee, to execute the Goods Purchase Agreement with Shor-Line for the purchase of new dog kennels to be installed at the animal shelter.

Attachments
Attachment 1 – Shor-Line Goods Purchase Agreement
Attachment 2 – Quote San Bernardino Runs
Attachment 3 – Quote San Bernardino Double Deckers
Attachment 4 – Sole Source Justification Form
Attachment 5 – Sole Source Letter

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Ward:

All Wards
Synopsis of Previous Council Actions:

January 6, 2019 Staff presented an update regarding the Animal Control Program and a report from the Animal Control Commission regarding capital improvement funding sources.

September 18, 2019 Mayor and City Council appropriated funding from the Animal Shelter Improvement Fund for completion of an assessment of the shelter replacement costs and directed the City
Manager to issue bids for facility repairs and resources needed to effectively operate an animal shelter, field and licensing program independent of the Police Department.

December 4, 2019 Mayor and City Council approved Resolution No. 2019-356 authorizing the City Manager to engage Black O’Dowd and Associates to complete the electrical panel design, plans and specifications at a cost of $19,400 and to execute construction agreements with San Marino Roof Company Inc, for Roof
Replacement and Noble E&C Inc for Mold Abatement and
reconstruction of the main shelter building.

June 24, 2020 Mayor and City Council approved Resolution No. 2020-128 approving the Capital Improvement Program for FY 2020/21.

August 19, 2020 Mayor and City Council approved Resolution No. 2020-207 approving the total budget for the Electrical Service
Replacement Project in the amount of $213,000 and awarding of a construction contract with TSR construction to complete the electrical service upgrade at the shelter.

December 2, 2020 Mayor and City Council approved Resolution No. 2020-277, appropriating $81,000 from the Animal Shelter Improvement Fund and authorizing the Director of Finance to amend the FY 2020/21 CIP to include HVAC upgrades for a Cat Sanctuary at the Animal Shelter and awarding the construction contract to WCM & Associates, Inc. to complete the project.

April 7, 2021 Mayor and City Council approved Resolution No. 2021-87, accepting grant funding in the amount of $1,500,000 from the San Manuel Band of Mission Indians for Animal Shelter
improvements, programs and services.

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CITY OF SAN BERNARDINO

GOODS PURCHASE AGREEMENT
This Goods Purchase Agreement (“Agreement”) is entered into this 16th day of March 2023, by and between the City of San Bernardino, a charter city and municipal corporation organized under the laws of the State of California with its principal place of business at Vanir Tower, 290 North D Street, San Bernardino, California 92401, County of San Bernardino, State of California (“City”), and Shor-Line, a CORPORATION, with its principal place of business at 511 Osage Ave, Kansas City, Kansas 66105 (“Supplier”).

City and Supplier are sometimes individually referred to as “Party” and collectively as “Parties” in this Agreement.

Section 1. DEFINITIONS.

A. “Goods” means all machinery, equipment, supplies, items, parts, materials, labor or other services, including design, engineering and installation services, provided by Supplier as specified in Exhibit “A,” attached hereto and incorporated herein by reference.

B. “Delivery Date(s)” means that date or dates upon which the Goods is to be delivered to City, ready for approval, testing and/or use as specified in Exhibit “B.” Section 2. MATERIALS AND WORKMANSHIP.

When Exhibit “A” specifies machinery, equipment or material by manufacturer, model or trade name, no substitution will be made without City’s written approval.

Machinery, equipment or material installed in the Goods without the approval required by this Section 2 will be deemed to be defective material for purposes of Section 4. Where machinery, equipment or materials are referred to in Exhibit “A” as equal to any particular standard, City will decide the question of equality. When requested by City, Supplier will furnish City with the name of the manufacturer, the performance capabilities and other pertinent information necessary to properly determine the quality and suitability of any machines, equipment and material to be incorporated in the Goods. Material samples will be submitted at City’s request.

Section 3. INSPECTIONS AND TESTS.

City shall have the right to inspect and/or test the Goods prior to acceptance. If upon inspection or testing the Goods or any portion thereof are found to be nonconforming, unsatisfactory, defective, of inferior quality or workmanship, or fail to meet any requirements or specifications contained in Exhibit “A,” then without prejudice to any other rights or remedies, City may reject the Goods or exercise any of its rights under Section 4.C. The inspection, failure to make inspection, acceptance of goods, or payment for goods shall not impair City’s right to reject nonconforming goods, irrespective of City’s failure to notify Supplier of a rejection of nonconforming goods or revocation of acceptance thereof or to specify with particularity any defect in nonconforming goods after

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rejection or acceptance thereof.

Section 4. WARRANTY.

A. Supplier warrants that the Goods will be of merchantable quality and free from defects in design, engineering, material, and workmanship for a period of two (2) years, or such longer period as provided by a manufacturer’s warranty or as agreed to by Supplier and City, from the date of final written acceptance of the Goods by City as required for final payment under Section 7. Supplier further warrants that any services provided in connection with the Goods will be performed in a professional and workmanlike manner and in accordance with the highest industry standards.

B. Supplier further warrants that all machinery, equipment, or process included in the Goods will meet the performance requirements and specifications specified in Exhibit “A” and shall be fit for the purpose intended. City’s inspection, testing, approval, or acceptance of any such machinery, equipment, or process will not relieve Supplier of its obligations under this Section 4.B.

C. For any breach of the warranties contained in Section 4.A and Section 4.B, Supplier will, immediately after receiving notice from City, at the option of City, and at Supplier’s own expense and without cost to City:

1. Repair the defective Goods;

2. Replace the defective Goods with conforming Goods, F.O.B. City’s plant, office or other location of City where the Goods was originally performed or delivered; or

3. Repay to City the purchase price of the defective Goods.

If City selects repair or replacement, any defects will be remedied without cost to City, including but not limited to, the costs of removal, repair, and replacement of the defective Goods, and reinstallation of new Goods. All such defective Goods that is so remedied will be similarly warranted as stated above. In addition, Supplier will repair or replace other items of the Goods which may have been damaged by such defects or the repairing of the same, all at its own expense and without cost to City.

D. Supplier also warrants that the Goods is free and clear of all liens and encumbrances whatsoever, that Supplier has a good and marketable title to same, and that Supplier owns or has a valid license for all of the proprietary technology and intellectual property incorporated within the Goods. Supplier agrees to indemnify, defend, and hold City harmless against any and all third party claims resulting from the breach or inaccuracy of any of the foregoing warranties.

E. In the event of a breach by Supplier of its obligations under this Section 4, City will not be limited to the remedies set forth in this Section 4, but will have all the rights

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and remedies permitted by applicable law, including without limitation, all of the rights and remedies afforded to City under the California Commercial Code.

Section 5. PRICES.

Unless expressly provided otherwise, all prices and fees specified in Exhibit “C,” attached hereto and incorporated herein by reference, are firm and shall not be subject to change without the written approval of City. No extra charges of any kind will be allowed unless specifically agreed to in writing by City’s authorized representative. The total price shall include (i) all federal, state and local sales, use, excise, privilege, payroll, occupational and other taxes applicable to the Goods furnished to City hereunder; and (ii) all charges for packing, freight and transportation to destination.

Section 6. CHANGES.

City, at any time, by a written order, and without notice to any surety, may make changes in the Goods, including but not limited to, City’s requirements and specifications.

If such changes affect the cost of the Goods or time required for its performance, an equitable adjustment will be made in the price or time for performance or both. Any change in the price necessitated by such change will be agreed upon between City and Supplier and such change will be authorized by a change order document signed by City and accepted by Supplier.

Section 7. PAYMENTS.

A. Terms of payment, are net thirty (30) days, less any applicable retention, after receipt of invoice, or completion of applicable Progress Milestones. Final payment shall be made by City after Supplier has satisfied all contractual requirements. Payment of invoices shall not constitute acceptance of Goods.

B. If Progress Milestones have been specified in Exhibit “B,” then payments for the Goods will be made as the requirements of such Progress Milestones are met.

Progress payments for the Goods will be made by City upon proper application by Supplier during the progress of the Goods and according to the terms of payment as specified in Exhibit “B.” Supplier’s progress billing invoice will include progress payments due for the original scope of work and changes. Each “Item for Payment” shown in Exhibit “B” and each change order will be itemized on the invoice. Invoices for cost plus work, whether part of Exhibit “B” or a change order, must have subcontractor and/or supplier invoices attached to Supplier’s invoice. Other format and support documents for invoices will be determined by City in advance of the first invoice cycle.

C. Payments otherwise due may be withheld by City on account of defective Goods not remedied, liens or other claims filed, reasonable evidence indicating probable filing of liens or other claims, failure of Supplier to make payments properly to its subcontractors or for material or labor, the failure of Supplier to perform any of its other obligations under the Agreement, or to protect City against any liability arising out of Supplier’s failure to pay or discharge taxes or other obligations. If the causes for which

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payment is withheld are removed, the withheld payments will be made promptly. If the said causes are not removed within a reasonable period after written notice, City may remove them at Supplier’s expense.

D. Payment of the final Progress Milestone payment or any retention will be made by City upon:

1. Submission of an invoice for satisfactory completion of the requirements of a Progress Milestone as defined in Exhibit “B” and in the amount associated with the Progress Milestone;

2. Written acceptance of the Goods by City;

3. Delivery of all drawings and specifications, if required by City;

4. Delivery of executed full releases of any and all liens arising out of this Agreement; and

5. Delivery of an affidavit listing all persons who might otherwise be entitled to file, claim, or maintain a lien of any kind or character, and containing an averment that all of the said persons have been paid in full.

If any person refuses to furnish an actual release or receipt in full, Supplier may furnish a bond satisfactory to City to indemnify City against any claim or lien at no cost to City.

E. Acceptance by Supplier of payment of the final Progress Milestone payment pursuant to Section 7.D will constitute a waiver, release and discharge of any and all claims and demands of any kind or character which Supplier then has, or can subsequently acquire against City, its successors and assigns, for or on account of any matter or thing arising out of, or in any manner connected with, the performance of this Agreement. However, payment for the final Progress Milestone by City will not constitute a waiver, release or discharge of any claims or demands which City then has, or can subsequently acquire, against Supplier, its successors and assigns, for or on account of any matter or thing arising out of, or in any manner connected with, the performance of this Agreement.

Section 8. SCHEDULE FOR DELIVERY.

A. The time of Supplier’s performance is of the essence for this Agreement.

The Goods will be delivered in accordance with the schedule set forth in Exhibit “B.” Supplier must immediately notify City in writing any time delivery is behind schedule or may not be completed on schedule. In addition to any other rights City may have under this Agreement or at law, Supplier shall pay City the sum of $25.00 per item of Goods for each calendar day for which the item of Goods is unavailable beyond the scheduled delivery date(s) specified in Exhibit “B.”

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B. In the event that the Goods is part of a larger project or projects that require the coordination of multiple contractors or suppliers, then Supplier will fully cooperate in scheduling the delivery so that City can maximize the efficient completion of such project(s).

Section 9. TAXES.

A. Supplier agrees to timely pay all sales and use tax (including any value added or gross receipts tax imposed similar to a sales and use tax) imposed by any federal, state or local taxing authority on the ultimate purchase price of the Goods provided under this Agreement.

B. Supplier will withhold, and require its subcontractors, where applicable, to withhold all required taxes and contributions of any federal, state or local taxing authority which is measured by wages, salaries or other remuneration of its employees or the employees of its subcontractors. Supplier will deposit, or cause to be deposited, in a timely manner with the appropriate taxing authorities all amounts required to be withheld.

C. All other taxes, however denominated or measured, imposed upon the price of the Goods provided hereunder, will be the responsibility of Supplier. In addition, all taxes assessed by any taxing jurisdiction based on Supplier property used or consumed in the provision of the Goods such as and including ad valorem, use, personal property and inventory taxes will be the responsibility of Supplier.

D. Supplier will, upon written request, submit to City written evidence of any filings or payments of all taxes required to be paid by Supplier hereunder.

Section 10. INDEPENDENT CONTRACTOR.

Supplier enters into this Agreement as an independent contractor and not as an employee of City. Supplier shall have no power or authority by this Agreement to bind City in any respect. Nothing in this Agreement shall be construed to be inconsistent with this relationship or status. All employees, agents, contractors or subcontractors hired or retained by the Supplier are employees, agents, contractors or subcontractors of the Supplier and not of City. City shall not be obligated in any way to pay any wage claims or other claims made against Supplier by any such employees, agents, contractors or subcontractors or any other person resulting from performance of this Agreement.

Section 11. SUBCONTRACTS.

Unless otherwise specified, Supplier must obtain City’s written permission before subcontracting any portion of the Goods. Except for the insurance requirements in Section 13.A, all subcontracts and orders for the purchase or rental of supplies, materials or equipment, or any other part of the Goods, will require that the subcontractor be bound by and subject to all of the terms and conditions of the Agreement. No subcontract or order will relieve Supplier from its obligations to City, including, but not limited to Supplier’s insurance and indemnification obligations. No subcontract or order will bind City.

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Section 12. TITLE AND RISK OF LOSS.

Unless otherwise agreed, City will have title to, and risk of loss of, all completed and partially completed portions of the Goods upon delivery, as well as materials delivered to and stored on City property which are intended to become a part of the Goods. However, Supplier will be liable for any loss or damage to the Goods and/or the materials caused by Supplier or its subcontractors, their agents or employees, and Supplier will replace or repair said Goods or materials at its own cost to the complete satisfaction of City. Notwithstanding the foregoing, in the event that the City has paid Supplier for all or a portion of the Goods which remains in the possession of Supplier, then City shall have title to, and the right to take possession of, such Goods at any time following payment therefor. Risk of loss for any Goods which remains in the possession of Supplier shall remain with Supplier until such Goods has been delivered or City has taken possession thereof. Supplier will have risk of loss or damage to Supplier’s property used in the construction of the Goods but which does not become a part of the Goods.

Section 13. INDEMNIFICATION.

A. Supplier shall defend, indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence or willful misconduct of Supplier, its officials, officers, employees, agents, subcontractors and subconsultants arising out of or in connection with the Goods or the performance of this Agreement, including without limitation the payment of all consequential damages and attorneys’ fees and other related costs and expenses except such loss or damage which was caused by the sole negligence or willful misconduct of the City.

B. Supplier’s defense obligation for any and all such aforesaid suits, actions or other legal proceedings of every kind that may be brought or instituted against the City, its officials, officers, employees, agents, or volunteers shall be at Supplier’s own cost, expense, and risk. Supplier shall pay and satisfy any judgment, award, or decree that may be rendered against City or its officials, officers, employees, agents, or volunteers, in any such suit, action, or other legal proceeding. Supplier shall reimburse City and its officials, officers, employees, agents, and/or volunteers, for any and all legal expenses and costs incurred by each of them in connection therewith or in enforcing the indemnity herein provided.

C. Supplier’s obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the City, its officials, officers, employees, agents or volunteers.

Section 14. INSURANCE.

A. General. Supplier shall take out and maintain:

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1. Commercial General Liability Insurance, of at least $2,000,000 per occurrence/ $4,000,000 aggregate for bodily injury, personal injury and property damage, at least as broad as Insurance Services Office Commercial General Liability most recent Occurrence Form CG 00 01;

2. Automobile Liability Insurance for bodily injury and property damage including coverage for owned, non-owned and hired vehicles, of at least $1,000,000 per accident for bodily injury and property damage, at least as broad as most recent Insurance Services Office Form Number CA 00 01 covering automobile liability, Code 1 (any auto);

3. Workers’ Compensation in compliance with applicable statutory requirements and Employer's Liability Coverage of at least $1,000,000 per occurrence; and

4. Pollution Liability Insurance of at least $1,000,000 per occurrence and $2,000,000 aggregate shall be provided by the Supplier if transporting hazardous materials.

5. If Supplier is also the manufacturer of any equipment included in the Goods, Supplier shall carry Product Liability and/or Errors and Omissions Insurance which covers said equipment with limits of not less than $1,000,000.

6. Privacy/Network Security (Cyber Liability), of at least $1,000,000 per occurrence and aggregate for: (1) privacy breaches, (2) system breaches, (3) denial or loss of service, and (4) the introduction, implantation or spread of malicious software code, in a form and with insurance companies acceptable to the City.

B. Additional Insured; Primary; Waiver of Subrogation; No Limitation on Coverage. The policies required under this Section shall give City, its officials, officers, employees, agents or volunteers additional insured status. Such policies shall contain a provision stating that Supplier’s policy is primary insurance and that any insurance, self- insurance or other coverage maintained by the City or any additional insureds shall not be called upon to contribute to any loss, and shall contain or be endorsed with a waiver of subrogation in favor of the City, its officials, officers, employees, agents, and volunteers. The limits set forth herein shall apply separately to each insured against whom claims are made or suits are brought, except with respect to the limits of liability.

Requirements of specific coverage or limits contained in this section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance. Any available coverage shall be provided to the parties required to be named as additional insured pursuant to this Agreement.

C. Insurance Carrier. All insurance required under this Section is to be placed with insurers with a current A.M. Best’s rating no less than A-:VII, licensed to do business in California, and satisfactory to the City.

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D. Evidence of Insurance. Supplier shall furnish City with original certificates of insurance and endorsements effecting coverage required by the Agreement. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms supplied or approved by the City. All certificates and endorsements must be received and approved by the City before delivery commences. The City reserves the right to require complete, certified copies of all required insurance policies, at any time.

E. Subcontractors. All subcontractors shall meet the requirements of this Section before commencing work. In addition, Supplier shall include all subcontractors as insureds under its policies or shall furnish separate certificates and endorsements for each subcontractor. All coverages for subcontractors shall be subject to all of the requirements stated herein.

F. Freight. Supplier shall ensure that third party shippers contracted by Supplier have adequate insurance coverage for the shipped Goods.

Section 15. LIENS.

A. Supplier, subcontractors and suppliers will not make, file or maintain a mechanic’s or other lien or claim of any kind or character against the Goods, for or on account of any labor, materials, fixtures, tools, machinery, equipment, or any other things furnished, or any other work done or performance given under, arising out of, or in any manner connected with the Agreement (such liens or claims referred to as “Claims”); and Supplier, subcontractor and suppliers expressly waive and relinquish any and all rights which they now have, or may subsequently acquire, to file or maintain any Claim and Supplier, subcontractor and suppliers agree that this provision waiving the right of Claims will be an independent covenant.

B. Supplier will save and hold City harmless from and against any and all Claims that may be filed by a subcontractor, supplier or any other person or entity and Supplier will, at its own expense, defend any and all actions based upon such Claims and will pay all charges of attorneys and all costs and other expenses arising from such Claims.

Section 16. TERMINATION OF AGREEMENT BY CITY.

A. Should Supplier at any time refuse or fail to deliver the Goods with promptness and diligence, or to perform any of its other obligations under the Agreement, City may terminate Supplier’s right to proceed with the delivery of the Goods by written notice to Supplier. In such event City may obtain the Goods by whatever method it may deem expedient, including the hiring of another contractor or other contractors and, for that purpose, may take possession of all materials, machinery, equipment, tools and appliances and exercise all rights, options and privileges of Supplier. In such case Supplier will not be entitled to receive any further payments until the Goods is delivered.

If City’s cost of obtaining the Goods, including compensation for additional managerial

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and administrative services, will exceed the unpaid balance of the Agreement, Supplier will be liable for and will pay the difference to City.

B. City may, for its own convenience, terminate Supplier’s right to proceed with the delivery of any portion or all of the Goods by written notice to Supplier. Such termination will be effective in the manner specified in such notice, will be without prejudice to any claims which City may have against Supplier, and will not affect the obligations and duties of Supplier under the Agreement with respect to portions of the Goods not terminated.

C. On receipt of notice under Section 16.B, Supplier will, with respect to the portion of the Goods terminated, unless the notice states otherwise,

1. Immediately discontinue such portion of the Goods and the placing of orders for materials, facilities, and supplies in connection with the Goods,

2. Unless otherwise directed by City, make every reasonable effort to procure cancellation of all existing orders or contracts upon terms satisfactory to City; and

3. Deliver only such portions of the Goods which City deems necessary to preserve and protect those portions of the Goods already in progress and to protect material, plant and equipment at the Goods site or in transit to the Goods site.

D. Upon termination pursuant to Section 16.B, Supplier will be paid a pro rata portion of the compensation in the Agreement for any portion of the terminated Goods already delivered, including material and services for which it has made firm contracts which are not canceled, it being understood that City will be entitled to such material and services. Upon determination of the amount of said pro rata compensation, City will promptly pay such amount to Supplier upon delivery by Supplier of the releases of liens and affidavit, pursuant to Section 7.C.

Section 17. FORCE MAJEURE
A. Supplier shall not be held responsible for failure or delay in shipping nor City for failure or delay in accepting goods described herein if such failure or delay is due to a Force Majeure Event.

B. A Force Majeure Event shall mean an event that materially affects a Party’s performance and is one or more of the following: (1) Acts of God or other natural disasters occurring at the project site; (2) terrorism or other acts of a public enemy; (3) orders of governmental authorities (including, without limitation, unreasonable and unforeseeable delay in the issuance of permits or approvals by governmental authorities that are required for the work); (4) pandemics, epidemics or quarantine restrictions; and (5) strikes and other organized labor action occurring at the project site and the effects thereof on the work, only to the extent such strikes and other organized labor action are beyond the control of Supplier and its subcontractors, of every tier, and to the extent the effects

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thereof cannot be avoided by use of replacement workers. For purposes of this section, “orders of governmental authorities,” includes ordinances, emergency proclamations and orders, rules to protect the public health, welfare and safety, and other actions of the City in its capacity as a municipal authority.

C. In the event of any such excused interference with shipments, City shall have the option either to reduce the quantity provided for in the order accordingly or to exercise its right of cancellation as set forth in this Agreement.

Section 18. MISCELLANEOUS PROVISIONS.

A. Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address or at such other address as the respective parties may provide in writing for this purpose:

CITY:

City of San Bernardino
Vanir Tower, 290 North D Street
San Bernardino, CA 92401
Attn: Precious Carter
With Copy To:

City of San Bernardino
Vanir Tower, 290 North D Street
San Bernardino, CA 92401
Attn: City Attorney
SUPPLIER:

Shor-Line Kennels
511 Osage Ave
Kansas City, Kansas 66105
Attn: Timothy Hemmings
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

B. Assignment or Transfer. Supplier shall not assign or transfer any interest in this Agreement whether by assignment or novation, without the prior written consent of the City, which will not be unreasonably withheld. Provided, however, that claims for money due or to become due Supplier from the City under this Agreement may be assigned to a financial institution or to a trustee in bankruptcy, without such approval.

Notice of any assignment or transfer, whether voluntary or involuntary, shall be furnished promptly to the City.

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C. Successors and Assigns. This Agreement shall be binding on the successors and assigns of the Parties.

D. Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

E. Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel or otherwise.

F. Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in San Bernardino County.

G. Attorneys’ Fees and Costs. If any action in law or equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, each Party shall pay its own attorneys’ fees.

H. Interpretation. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party.

I. No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

J. Authority to Enter Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right and authority to make this Agreement and bind each respective Party.

K. Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

L. Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

M. City’s Right to Employ Other Suppliers. City reserves its right to employ other contractors in connection with the Goods.

N. Entire Agreement. This Agreement constitutes the entire agreement between the Parties relative to the Goods specified herein. There are no understandings, agreements, conditions, representations, warranties or promises with respect to this Agreement, except those contained in or referred to in the writing.

O. Electronic Signature. Each Party acknowledges and agrees that this Agreement may be executed by electronic or digital signature, which shall be considered

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as an original signature for all purposes and shall have the same force and effect as an original signature.
[SIGNATURES ON FOLLOWING PAGE]

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SIGNATURE PAGE TO GOODS PURCHASE AGREEMENT

BETWEEN THE CITY OF SAN BERNARDINO

AND SHOR-LINE
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the date first above written.

CITY OF SAN BERNARDINO
APPROVED BY:

Charles E. McNeely
Interim City Manager
ATTESTED BY:

GENOVEVA ROCHA
City Clerk
APPROVED AS TO FORM:

Best Best & Krieger LLP
City Attorney

SHOR-LINE
Signature
Name
Title

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Exhibit A
Goods Specifications
•17 double sided kennels, 12 feet by 4 feet with a guillotine door in the middle.
oFront kennel doors to have ½ stainless steel with PVC overlay and ½ clear glass
oMesh tops on all kennels
oT-cover drain in back of kennel
•17 single sided kennels, 6 feet by 4 feet with a T-cover drain in the back of the kennel
oFront kennel doors to have ½ stainless steel with PVC overlay and ½ clear glass
oMesh tops on all kennels
•Double decker kennels with 6 separate kennel spaces
oGuillotine door between kennels to increase space for housed pets oStainless steel with PVC overlay

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Exhibit B
Delivery Schedule
Goods to be delivered by November 30, 2023.

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Exhibit C
Fee Schedule

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41 City of San Bernardino
Finance Department, Purchasing Division

JUSTIFICATION OF SINGLE/SOLE SOURCE REQUEST

ITEM Description: __Shor-Line Kennels______________________DATE: __12/22/2022_______

Select Source:
__X _Sole Source: Item is manufactured and/or only distributed by one vendor. ____Single Source: Item is available from several vendors, but item is the only one that will work

Please answer all questions in detail, in order to prevent delays in the evaluation. Please do not provide one sentence answers. If any additional pages are needed to answer all questions, please attached all pages to this document.

1. Why is the acquisition restricted to this good/service/supplier? (Explain why the acquisition cannot be competitively bid). Please enter answer below:

Shor-Line and Midmark, merged in 2021, making this the only large-scale manufacturer of kennels in the US. The merged company has almost 100 years of experience in constructing kennels specifically for veterinary hospitals and animal shelters.

2. Describe the uniqueness of the purchase (why was the good/service/supplier chosen?) Please enter the answer below:

Shor-Line kennels use materials that are easy to sanitize and are proven to withstand daily wear and tear from large dogs. Shor-Line has a patented drain design making the kennels more sanitary and easier for staff to do daily cleaning and disinfection. The existing shelter has Shor-line kennels that were installed over 30 years ago – although the size of the kennels may not be consistent with current animal welfare industry standards, the kennels themselves are still in good working order and are a testament to the quality workmanship this company provides.

3. What are the consequences of not purchasing the good/service or contracting with the proposed supplier?
We would not be able to complete the additional dog kennel building and would not have the kennel space needed to house the number of dogs coming to the shelter. The level of care the department can provide to sick animals would continue to be below current animal welfare standards.

4. What market research was conducted to substantiate the single source, including evaluation of other items considered?
a. (Please provide a narrative of your efforts to identify other similar or appropriate goods/services, including a summary of how the department concluded that such alternative are either inappropriate

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42 or unavailable. The names, addresses and phone numbers of suppliers contacted and the reasons for not considering then must be included or an explanation of why the survey or effort to identify other goods/services was not performed.)

There is no alternative to these kennels. Chain link dog runs are not sufficient to house sick and injured animals. The materials used in the construction of these kennels as well as the design reduces the chance for illnesses to spread amongst the population. The construction of the drains is necessary for the department to ensure proper sanitation and humane housing of the dogs in their care.

5. How was the price offered determined to be fair and reasonable? Explain what the basis was for comparison and include cost analyses as applicable. (I.E. Compared to vendor’s previous or current offer to the city or to another agency/company – or any other method of comparison that will substantiate fair and reasonable pricing in the absence of competition) The price of the kennels is standard throughout the industry.

6. Describe any cost savings realized or costs avoided by acquiring the goods/services from this supplier.

In order to have something similar, we would need to have a contractor design and then build the kennels. It is unknown what the cost for this would be, or if the final product would be comparable to the kennels from Shor-Line. Shor-Line is a factory direct manufacturer of these products and have years of experience in this specialty.

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43 Shor-Line is a factory direct manufacture and is sole source in the veterinary education, animal control and animal humane organizations for custom Shor-Line products in the United States of America.

Thank You
Timothy Hemings
Southwestern Sales Rep
E: [email protected]
T: 1.800.444.1579, ext. 2354
C: 909.496.0251
shor-line.com

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2 CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Nathan Freeman, Agency Director of Community and
Economic Development
Department: Community, Housing, and Economic Development (CED) Subject: Irrevocable Agreement to Annex No. 2023-373 (Ward 6) Recommendation
It is recommended that the Mayor and City Council of San Bernardino, California, adopt Resolution No. 2023-042 of the Mayor and City Council of the City of San Bernardino, California:

1.Approving the application to the Local Agency Formation Commission to provide City sewer services to property located within the unincorporated territory at 2971 North Macy Street, San Bernardino, California; and

2.Authorizing the City Manager to execute an Irrevocable Agreement to Annex.

Background
In 1994, the California Government Code Section was amended by the addition of Section 56133, which requires the Local Agency Formation Commission (LAFCO) to approve the provision of new City services outside its corporate boundaries. The annexation of single parcels is not desirable since it creates uneven boundaries and creates confusion regarding the delivery of other City services. The subject property is contiguous to City boundaries; however, annexation of this property would result in other islands.

In September of 1997, the City of San Bernardino adopted Resolution No. 97-275, a policy relative to the provision of sewer services outside of City boundaries. The policy includes a payment of $1,300 for the initial sewer connection application processing fee. Additionally, petitioners will pay all LAFCO related fees directly to LAFCO and the normal sewer capacity and connection fees to the Water Department for processing the Irrevocable Annexation Agreement.

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2 The policy also requires the land use to be consistent with the City's General Plan and the property owner to execute an "Irrevocable Agreement to Annex" in the event that this property is included in an annexation proceeding sometime in the future.

Discussion
On December 13, 2022, the San Bernardino Water Department received a request for sewer services from the owners of a parcel located at 2971 North Macy Street (APN:
0268-051-32) for a connection to the sewer collection system. The property owner is abandoning the existing septic tank and desires to connect to the sewer collection.

The Water Department has indicated that there is adequate capacity at the wastewater treatment plant to serve the subject property and the Water Department has indicated that the existing industrial use is consistent with the City's General Plan. The Water Department has determined that there is an available 18-inch vitrified clay pipe sanitary sewer main within June Street, fronting the subject parcel.

LAFCO requires the Agency providing the service to complete the application. The resolution will allow the City to submit an application to LAFCO if approved by Mayor and City Council. Upon approval by LAFCO, the Irrevocable Agreement to Annex will be executed between the City and the property owner.
2021-2025 Strategic Targets and Goals
The Irrevocable Agreement to Annex is consistent with Key Target No. 4: Economic Growth & Development, specifically 4b: Update the General Plan and Development Code, as it ensures this property meets General Plan use and will be included in a future City annexation of this unincorporated area.

Fiscal Impact
There is no fiscal impact associated with this action. The sewer connection and application processing fee of $1,300 has been paid by the applicant. The applicant will also pay the corresponding sewer capacity and connection fees to the Water Department, and other LAFCO application fees.

Conclusion
It is recommended that the Mayor and City Council of San Bernardino, California, adopt Resolution No. 2023-042 of the Mayor and City Council of the City of San Bernardino, California:

2.Authorizing the City Manager to execute an Irrevocable Agreement to Annex.

Attachments
Attachment 1 - Resolution No. 2023-042
Attachment 2 - Exhibit A - Irrevocable Agreement to Annex

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2 Attachment 3 - Vicinity Map
Attachment 4 - Application
Ward
Sixth Ward
Synopsis of Previous Council Actions

September 2, 1997 The City of San Bernardino adopted Resolution No. 97-275 relative to the providing of sewer services outside of City boundaries.

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RESOLUTION NO. 2023-042

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

APPROVING THE APPLICATION TO THE LOCAL

AGENCY FORMATION COMMISSION TO PROVIDE CITY

SEWER SERVICES TO PROPERTY LOCATED WITHIN
THE UNINCORPORATED TERRITORY AT 2971 NORTH
MACY STREET, SAN BERNARDINO, CALIFORINA; AND

AUTHORIZING THE CITY MANAGER TO EXECUTE AN

IRREVOCABLE AGREEMENT TO ANNEX
WHEREAS, Octavio Quezada and Lucina A. Galicia, husband and wife as joint tenants, the owners of the property located in the unincorporated area at 2971 North Macy Street, San Bernardino, California, also known as Assessor’s Parcel Number 0268-051-32, have requested connection to the City of San Bernardino’s sewage system; and WHEREAS, said Property is located within the City’s Sphere of Influences; and WHEREAS, pursuant to Section 2.28.030 (Service outside City Limits) of the San Bernardino Municipal Code, the Mayor and City Council must approve any water and sewer service outside the corporate limits of the City of San Bernardino; and WHEREAS, pursuant to California Government Code Section 56133, a city or district may provide new or extended services by contract or agreement outside its jurisdictional boundaries subject to approval from the Local Agency Formation Commission (LAFCO); and WHEREAS, pursuant to Resolution No. 97-275 the property owners requesting connection to the City’s sewage system must pay all applicable fees required by the City, San Bernardino Municipal Water District, and LAFCO.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1.The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. That the Mayor and City Council of the City of San Bernardino hereby authorize an application to the LAFCO for the connection to the City’s sewage system for property located at 2971 North Macy Street, Assessor’s Parcel Number 0268-051-32, more fully described as follows:

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The North 100 feet of the South 170 feet of Lot 262, Tract No. 2258, in the County of San Bernardino, State of California, as per Plat recorded in Book 32 of Maps, Pages 72-77, inclusive, records of said County. Excepting therefrom the East 70 feet thereof. Also excepting therefrom the Northerly 10 feet thereof.

SECTION 3. The City Manager is hereby authorized to execute an Irrevocable Agreement to Annex No. 2023-373, a copy of which is attached as Exhibit “A”.

SECTION 4. The City Clerk of said City is hereby authorized and directed to file, or cause to be filed, a certified copy of this resolution with the Executive Officer of the LAFCO.

SECTION 5.The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, 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.

SECTION 6.Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 7. Effective Date. This Resolution shall become effective immediately.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 15th day of March 2023.

Helen Tran, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, CMC, City Clerk
Approved as to form:

Sonia Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2023-042, adopted at a regular meeting held on the 15th day of March 2023 by the following vote:

Council Members: AYES NAYS ABSTAIN ABSENT
SANCHEZ _____ _____ _______ _______
IBARRA _____ _____ _______ _______
FIGUEROA _____ _____ _______ _______
SHORETT _____ _____ _______ _______
REYNOSO _____ _____ _______ _______
CALVIN _____ _____ _______ _______
ALEXANDER _____ _____ _______ _______
WITNESS my hand and official seal of the City of San Bernardino this ___ day of ____________ 2023.

Genoveva Rocha, CMC, City Clerk

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50 EXHIBIT A

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

City of San Bernardino
290 N. D Street
San Bernardino, California 92401
Attn: City Manager
APN: 0268-051-32-0000
Exempt from Recording fee
pursuant to Gov't Code §§ 27383, 6103
(Space above for Recorder’s use)

IRREVOCABLE AGREEMENT TO ANNEX
No. 2023-373
This I r r e v o c a b l e A g r e e m e n t to A n n e x (“Agreement), is entered into this 15th day of March, 2023; by and between Octavio Quezada and Lucina A. Galicia, husband and wife as joint tenants, hereinafter referred to as “OWNERS,” and the CITY OF SAN BERNARDINO, a charter city and municipal corporation, hereafter referred to as a “CITY.” OWNERS and CITY may be referred to in this Agreement individually as “Party” and collectively as “Parties”.

RECITALS:

WHEREAS, OWNERS hold title to the one parcel located at 2971 North Macy Street, San Bernardino, California, and parcel is further described as follows:

T h e N o r t h 1 0 0 f e e t o f t h e S o u t h 1 7 0 f e e t o f L o t 2 6 2 , T r a c t N o . 2 2 5 8 , i n t h e C o u n t y o f S a n B e r n a r d i n o , S t a t e o f C a l i f o r n i a , a s p e r P l a t r e c o r d e d i n B o o k 3 2 o f M a p s , P a g e s 7 2 t o 7 7 , i n c l u s i v e , r e c o r d s o f s a i d C o u n t y . w i t h A s s e s s o r ’ s P a r c e l N u m b e r : 0 2 6 8 - 0 5 1 - 3 2 ( “ P r o p e r t y ” ) .

WHEREAS, the Property is within the CITY’s sphere of influence; and WHEREAS, OWNERS desire to obtain CITY’s sewage system and wastewater treatment plant service for the Property; and
WHEREAS, CITY’s sewage system and wastewater treatment plant service could be provided to the Property by connecting to the CITY’s sewage system; and WHEREAS, CITY’s sewage system and wastewater treatment plant have sufficient capacity to convey and treat the sewage generated by the Property; and WHEREAS, the covenants and conditions set forth herein shall create an equitable

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51 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____ servitude upon the parcel, and shall be fully binding upon OWNERS’ heirs, successors and assigns.

NOW, THEREFORE, the Parties hereto agree as follows:

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52 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____ SECTION I OWNERS AGREE:
a. To consent to the annexation of the Property to the CITY. OWNERS agree to covenant for itself, its agents, employees, contractors, heirs, successors and assigns (“Successors”) not in any way object to, protest, delay, frustrate or otherwise impede any annexation proceedings concerning the annexation of the Property to the CITY. OWNERS and their Successors shall cooperate in every reasonable way with the requests of the CITY, the San Bernardino Local Agency Formation Commission (“LAFCO”), or any other public agency in any proceedings to annex the Property to the CITY. The OWNERS and their Successor’s cooperation shall include, but not be limited to, the filing of all necessary applications, petitions, plans, drawings, and any other documentation or information required by the CITY, LAFCO, or any other public agency. b. To pay such annexation fees and costs and other municipal charges as would ordinarily be charged in the annexation of property to the CITY. Said fees shall be payable when the same becomes due and payable.
c. To pay all fees and charges and make all deposits required by the CITY to connect to and use the CITY’s sewage system and wastewater treatment plant service system, and further agrees to be bound by all CITY ordinances, rules and regulations respecting the sewage system.
d. To acknowledge that execution of this Agreement to annex is on behalf of all future heirs, successors and assigns; and that said Agreement shall be irrevocable without written consent of CITY.
e. To comply with the San Bernardino Municipal Code, General Plan (emphasis on the circulation plan-street section) and any rules and regulations promulgated by the Water Board of the San Bernardino Municipal Water Department relating to CITY’s sewage system and wastewater treatment plant service system.
f. To make application to LAFCO and allow CITY to make application on behalf of the OWNERS and pay all application fees, for approval to connect to CITY’s sewage system, pursuant to Section 56133 of the Government Code. g. To execute a standard form agreement with CITY stipulating the terms and conditions under which the connection to the CITY’s sewage system and wastewater treatment plant service system shall be made and maintained. h. OWNERS acknowledge and agree that if CITY determines that any attempted annexation fails or is unreasonably delayed because the OWNERS or Successor failed to exercise good faith and best efforts to cause or assist in permitting the annexation to occur, any connection to CITY’s sewage system and wastewater treatment plant service system permitted or authorized by this agreement may

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53 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____ be disconnected at the sole option of CITY and upon reasonable notice to the OWNERS to provide for alternative service.
i. OWNERS agree to maintain the Property in good condition and in compliance with reasonable standards. Reasonable standards are defined as the level of maintenance service necessary to keep the appearance and operation of the Property free from visible defects, deterioration, dirt and debris. j. OWNERS shall indemnify, defend, and hold the CITY and its officials and staff harmless from any and all liability, claims, costs (including reasonable attorneys’ fees), damages, expenses and causes of action resulting from any construction performed under or otherwise related to performance of this Agreement.

SECTION II CITY AGREES:
a. To allow OWNERS’ parcel, described hereinbefore, to connect to CITY’s sewage system and wastewater treatment plant service system, subject to payment of all applicable fees and permits.

SECTION III BE IT MUTUALLY AGREED, AS FOLLOWS:
a. City Clerk for CITY shall record this Agreement with the County Recorder. b. The benefit to the subject parcel will inure to the benefit of subsequent owners, their heirs, successors, and assigns, and the agreements, conditions, and covenants contained herein shall be binding upon them and upon the land. c. The approval granted to connect said parcel to CITY’s sewage system and wastewater treatment plant service system is contingent upon OWNERS securing approval from LAFCO.
d. This Agreement may be executed in counterparts.
e. CITY and OWNERS acknowledge that this Agreement is the product of mutual arms-length negotiation and drafting. Accordingly, the rule of construction which provides the ambiguities in a document shall be construed against the drafter of that document shall have no application to the interpretation and enforcement of this Agreement. In any action or proceeding to interpret or enforce this Agreement, the finder of fact may refer to any extrinsic evidence not in direct conflict with any specific provision of this Agreement to determine and give effect to the intention of the parties.
f. This Agreement may only be amended by the written consent of all of the Parties at the time of such amendment. If either Party commences an action against the other Party arising out of or in connection with this Agreement, the

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54 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____ prevailing party shall be entitled to have and recover from the losing Party reasonable attorneys’ fees and costs of suit, and, if CITY is awarded such attorneys’ fees and costs, such award shall constitute a lien upon the Property. g. Failure to insist on any one occasion upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times. h. This Agreement has been executed in and shall be governed by the laws of the State of California. Venue shall be in the County of San Bernardino.

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55 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____

SIGNATURE PAGE TO IRREVOCABLE AGREEMENT TO ANNEX
IN WITNESS WHEREOF, the Parties hereto have caused this agreement to be entered into as of the Effective Date set forth above.

CITY OF SAN BERNARDINO
Approved By:

OWNERS
__________________________________ _______________________________ Charles E. McNeely Signature
Interim City Manager
______ Octavio Quezada __________
Name
__________________________________
City Attorney
_______________________________
Signature
Attested By:
____ Lucina A Galicia
Name
__________________________________
Genoveva Rocha
CMC, City Clerk

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56 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____

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

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

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

WITNESS my hand and official seal.

Signature (Seal)

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57 IRREVOCABLE AGREEMENT TO ANNEX NO. 2023-373LAFCO SC # _____

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

WITNESS my hand and official seal.

Signature (Seal)

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58 Vicinity Map
Irrevocable Agreement to Annex
2023-373 (Ward 6)

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9 CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Nathan Freeman, Agency Director of Community, Housing,
and Economic Development
Department: Community, Housing, & Economic Development (CED) Subject: Memorandum of Understanding Between the City of San Bernardino and the San Bernardino Municipal Water
District Regarding the Land Designation of 796 E. 6th
Street, 3250 Harrison Street, and Glendenning Way
Properties (Wards 1 & 7)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2023-043 of the Mayor and City Council of San Bernardino, California, approving a Memorandum of Understanding (MOU) between the City of San Bernardino and the San Bernardino Municipal Water District regarding the land designation of 796 E. 6th Street, 3250 Harrison Street, and Glendenning Way and authorize the Interim City Manager, or his designee, to execute the MOU.

Background
The City of San Bernardino owns properties located at 3250 Harrison Street (APN:
0153-201-14-0000) and an undeveloped piece of land known as “Glendenning Way” (APN: 0153-161-07-0000).

The property located at 3250 Harrison Street was previously leased to the County of San Bernardino and designated as a Mountain Search and Rescue Station. The most recent lease with the County of San Bernardino expired in May of 2018 and the property has remained vacant since this time. Moreover, the property located at Glendenning Way is currently undeveloped and zoned for flood control use. The location, size, and zoning of this property would likely prohibit future residential or commercial development and offers limited future utility to the City.

The City of San Bernardino Municipal Water Department owns the property located at

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9 796 E. 6th Street (APN 0278-191-30). This property is approximately 2.48 acres and was most recently occupied by the School of Hope, which serviced developmentally disabled adults. The Water Department’s lease agreement with the School of Hope terminated in November of 2022. The Water Department has since determined that there is no use for this site.

In April of 2021, the Water Department conducted a groundwater well siting study to identify new well locations. The Water Department currently operates 51 groundwater wells which provide 100% of the Department’s water supply. However, additional wells are necessary to ensure efficient and reliable water supply for the community. The Water Department’s study identified several new potential groundwater well sites throughout the City, including the City-owned properties located at 3250 Harrison Street and Glendenning Way. These two properties are not currently designated for Water Department use.

At the request of City and Water Department staff, appraisals were performed on all three properties. The Water Department’s property, located at 796 E. 6th Street, was valued at $1,062,000, assuming that the existing structures were to be demolished and the site was ready for development. Additionally, 3250 Harrison Street was valued at $330,000 and Glendenning Way valued at $75,000.

Lastly, the cost of demolished the structure on the 796 E. 6 th Street is $687,500 (Attachment 6). When subtracting the cost of demolition from the appraised value of the property ($1,062,000), the net present value of the property is $374,500.

Discussion
Redesignation of land use of the aforementioned properties is proposed to allow the City to utilize the property located at 796 E 6 th Street as a homelessness navigation center and to allow the Water Department to utilize the 3250 Harrison and Glendenning Way properties for groundwater wells. The subject MOU, outlining the actions that will allow the redesignations, has been developed by Water Department and City staff, along with the City Attorney’s office.

On February 14, 2023, the Water Board unanimously approved the redesignation of all three properties and authorized the General Manager to execute the Memorandum of Understanding. Staff is now recommending that the City Council approve the redesignation of all three properties and authorize the City Manager to execute the Memorandum of Understanding.
2021-2025 Strategic Targets and Goals
This project is consistent with Key Target No 3. Improved Quality of Life. This project will contribute to ensuring the City is clean and attractive through mitigating the effects of homelessness and provide the much-needed infrastructure designed for sustained success.

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9 Fiscal Impact
As previously noted, the value of the Water Department property located at 796 E. 6th Street is calculated as follows: appraised value ($1,062,000) subtracting demolition costs of ($687,500) = net value of $374,500.

The value of City properties located at 3250 Harrison Street and Glendenning Way are $330,000 and $75,000, respectively (collectively $405,000).

At the conclusion of this Land Designation, the Water Department will owe the City $30,500 ($405,000 (Value of City properties) - $374,500 (Value of Water Property) = $30,500 due to City). This balance will be paid from the Water Department to the City resulting in a net zero value deficiency.

Conclusion
It is recommended that the Mayor and City Council of San Bernardino, California, adopt Resolution No. 2023-043 of the Mayor and City Council of San Bernardino, California, approving a Memorandum of Understanding (MOU) between the City of San Bernardino and the San Bernardino Municipal Water District regarding the land designation of 796 E. 6th Street, 3250 Harrison Street, and Glendenning Way and authorize the Interim City Manager, or his designee, to execute the MOU.

Attachments
Attachment 1 – Resolution of Intention No. 2023-043
Attachment 2 – Resolution Exhibit A - Memorandum of Understanding Attachment 3 – 796 E. 6th Street Appraisal
Attachment 4 – 3250 Harrison Street Property Appraisal
Attachment 5 – Glendenning Way Appraisal
Attachment 6 – 796 E. 6th Street Demolition Cost Estimate Ward:

First Ward; Seventh Ward
Synopsis of Previous Council Actions:

None

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RESOLUTION NO. 2023-043

RESOLUTION OF THE MAYOR AND CITY COUNCIL OF

THE CITY OF SAN BERNARDINO, CALIFORNIA,

APPROVING THE MEMORANDUM OF

UNDERSTANDING BETWEEN THE CITY OF SAN

BERNARDINO AND THE SAN BERNARDINO MUNICIPAL

WATER DISTRICT REGARDING THE LAND
DESIGNATION OF 796 E. 6TH STREET, 3250 HARRISON

STREET, AND GLENDENNING WAY PROPERTIES
WHEREAS, it has been the practice of the City and Water Department to document transfers between the General Fund, Water Fund, and Sewer Fund with Memorandums of Understanding between the Mayor and Common Council, acting as the highest governing body of the City with relation to the General Fund, and the Water Board, acting as the highest governing body of the City with relation to the Water Fund and Sewer Fund, to demonstrate compliance with Proposition 218 (Article XIII D, Section 6 of the Constitution of the State of California); and, WHEREAS, the City is the owner of that certain real property and improvements located at 3250 Harrison Street (Assessor Parcel Number 0153-201-14-0000), in the City of San Bernardino, County of San Bernardino, State of California, more particularly described in Attachment “2” to Exhibit “A” attached hereto and incorporated herein by this reference as though set forth in full (the “Harrison Street Property”); and, WHEREAS, the City is the owner of that certain real property and improvements located at Glendenning Way (Assessor Parcel Number 0153-161-07-0000), in the City of San Bernardino, County of San Bernardino, State of California, more particularly described in Attachment “3” to Exhibit “A” attached hereto and incorporated herein by this reference as though set forth in full (the “Glendenning Way Property”); and,
WHEREAS, the Harrison Street Property and Glendenning Way Property are designated for general government use and have a fair market value of three hundred thirty thousand dollars ($330,000) and seventy-five thousand dollars ($75,000), respectively, as determined by independent appraisal; and
WHEREAS, the best use of the Harrison Street Property and Glendenning Way Property would be designation for use by the Water Department; and, WHEREAS, the City of San Bernardino (“City”) is the owner of that certain real property and improvements comprising of approximately 2.5 acres located at 796 East 6th Street, in the City of San Bernardino, County of San Bernardino, State of California, a portion of the property with assessor’s parcel number 0278-191-30, more particularly described in Attachment “1” to Exhibit “A” attached hereto and incorporated herein by this reference as though set forth in full (the “6 th Street Property”); and,

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WHEREAS, the City previously designated the 6 th Street Property for use by the Water Department; and,
WHEREAS, the best use of the 6th Street Property would be to remove the designation for use by the Water Department; and,
WHEREAS, the 6th Street Property has a fair market value of one million sixty-two thousand dollars ($1,062,000) as determined by independent appraisal and this appraised value assumes demolition work at the property with an estimated cost of six hundred eighty-seven thousand five hundred dollars ($687,500) more particularly described in Attachment “4” to Exhibit “A” attached hereto and incorporated herein by this reference as though set forth in full (796 E. 6th Street Demolition Cost Estimate); and,
WHEREAS, given the value of the Harrison Street, Glendenning Way, and 6 th Street properties and the avoided demolition cost of the 6th Street Property, a balance of thirty thousand five hundred dollars ($30,500) remains requiring a transfer from the Water Fund to the General Fund.

BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:

SECTION 1. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. The City Manager of the City of San Bernardino, California is hereby authorized and directed to execute on behalf of the City of San Bernardino a Land Designation Memorandum of Understanding attached hereto as Exhibit “A” and incorporated herein by this reference as though set forth in full.

SECTION 3. The City Manager of the City of San Bernardino, California is hereby authorized and directed to execute such further documents as may be necessary to carry out the purposes of this Resolution, including any documents necessary to effectuate the designation of properties contemplated by the Memorandum of Understanding, so long as such further documents are approved as to form and content by the City Attorney’s Office.

SECTION 4. CEQA. The Mayor and City Council finds this Resolution is not subject to the California Environmental Quality Act (CEQA) in that the activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty, as in this case, 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.

SECTION 5. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end the provisions of this Resolution are declared to be severable.

SECTION 6. Effective Date. This Resolution shall become effective immediately.

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APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this 15th day of February 2023.

Helen Tran, Mayor
City of San Bernardino
Attest:

Genoveva Rocha, CMC, City Clerk
Approved as to form:

Sonia Carvalho, City Attorney

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CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Resolution No. 2023-043, adopted at a regular meeting held on the 15 th day of February 2023 by the following vote:

Genoveva Rocha, CMC, City Clerk

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67 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND WATER DEPARTMENT REGARDING LAND

DESIGNATIONS OF CERTAIN PROPERTIES
PAGE 1 OF 6

MEMORANDUM OF UNDERSTANDING

REGARDING LAND DESIGNATIONS OF CERTAIN PROPERTIES
This Memorandum of Understanding (“MOU”) is made and entered into this ___ day of ____________, 2023, by and between:
the City of San Bernardino (“City”), a charter city governed by the Mayor and City Council acting as the highest governing body of the City with regards to general government services;
and,
the San Bernardino Municipal Water Department (“Department”), a department of the City created by the City Charter and governed by the Water Board Commissioners of the City of San Bernardino (“Water Board”), acting as the highest governing body of the Department (individually the City and Department may be referred to as a “Party” and collectively the City and Department may be referred to as the “Parties”).

RECITALS:

WHEREAS, in accordance with the City Charter, the Mayor and City Council serve as the highest governing body of the City with respect to general tax revenues, expenditures, assets, and liabilities, collectively accounted for in the general fund; and,
WHEREAS, in accordance with the City Charter, the Water Board is the highest governing body of the City with respect to water utility and sewer utility revenues, expenditures, assets, and liabilities, collectively accounted for in the Water Fund and Sewer Fund, respectively; and, WHEREAS, the Mayor and City Council of the City have determined that it is the in the best interests of the City to designate for the use of the Department certain real property located at 3250 Harrison Street in the City of San Bernardino(the “Harrison Street Property”) with a fair market value of three hundred thirty thousand dollars ($330,000) as determined by independent appraisal, and certain real property located at Glendenning Way in the City of San Bernardino (the “Glendenning Way Property”) with a fair market value of seventy-five thousand dollars ($75,000) as determined by independent appraisal; and, WHEREAS, the Harrison Street Property and the Glendenning Way Property are more particularly described on Attachment “1” attached hereto and incorporated herein by this reference as though set forth in full; and,
WHEREAS, the Water Board has determined that approximately 2.5 acres of real property located at 796 East 6th Street in the City of San Bernardino (the “6th Street Property”) with a fair market value of one million sixty-two thousand dollars ($1,062,000) as determined by an independent appraisal, is no longer necessary for use by the Department; and,

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68 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND WATER DEPARTMENT REGARDING LAND

DESIGNATIONS OF CERTAIN PROPERTIES
PAGE 2 OF 6
WHEREAS, the 6th Street Property is more particularly described on Attachment “2” attached hereto and incorporated herein by this reference as though set forth in full; and, WHEREAS, an estimated six hundred eighty-seven thousand five hundred dollars ($687,500) of demolition work at the 6th Street Property is necessary to achieve the appraised fair market value; and, WHEREAS, given the value of the properties and the avoided demolition cost of the 6th Street Property, a balance of thirty thousand five hundred dollars ($30,500) remains requiring a transfer from the Department (specifically, from the Water Fund) to the City (specifically, to the General Fund); and, WHEREAS, it has been the practice of the City to document transfers between the General Fund, Water Fund, and Sewer Fund with Memoranda of Understanding to demonstrate compliance with Proposition 218 (Article XIII D, Section 6 of the Constitution of the State of California).

NOW, THEREFORE, the Parties agree as follows:

1. The recitals set forth in “RECITALS” are, by this reference, incorporated into and deemed a part of this MOU.

2. The City shall, by resolution of the Mayor and City Council, designate that certain real property and improvements at the Harrison Street Property and the Glendenning Way Property for use by the Department.

3. The Department accepts the designation of the Harrison Street Property and the Glendenning Way Property for use by the Department.

4. The Department shall, by resolution of the Water Board, remove the designation for use by the Department of the 6th Street Property.

5. The Department shall transfer thirty thousand five hundred dollars ($30,500) from the Department’s Water Fund to the City’s General Fund.

6. The City accepts the removal of the designation for use by Department of the 6th Street Property and a transfer of thirty thousand five hundred dollars ($30,500) from the Department’s Water Fund to the City’s General Fund.
[Signature Page Follows]

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69 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND WATER DEPARTMENT REGARDING LAND

DESIGNATIONS OF CERTAIN PROPERTIES
PAGE 3 OF 6

MEMORANDUM OF UNDERSTANDING

REGARDING LAND DESIGNATIONS OF CERTAIN PROPERTIES
By and between the City of San Bernardino, governed by the Mayor and City Council, and the San Bernardino Municipal Water Department, governed by the Water Board, for the land designation of certain properties.

Date: ______________________
Date: ______________________
APPROVED AS TO FORM:

By: ________________________________
City Attorney, Best Best & Krieger LLP
CITY OF SAN BERNARDINO:

By: ________________________________
Charles E. McNeely, City Manager

SAN BERNARDINO MUNICIPAL WATER
DEPARTMENT:

By: ________________________________
Miguel J. Guerrero, General Manager

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70 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND WATER DEPARTMENT REGARDING LAND

DESIGNATIONS OF CERTAIN PROPERTIES
PAGE 4 OF 6
Attachment “1”
Harrison Street Property and Glendenning Property
Marshall Blvd
Harrison Property
APN: 0153-201-14
Area: 3.7 acres
Appraised Value: $330,000
Harrison Street

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71 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND WATER DEPARTMENT REGARDING LAND

DESIGNATIONS OF CERTAIN PROPERTIES
PAGE 5 OF 6
Attachment “1”
Harrison Street Property and Glendenning Property
Glendenning Way
Glendenning Property
APN: 0153-161-07
Area: 1.8 acres
Appraised Value: $75,000
Valencia AveParkdale Drive

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72 MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY AND WATER DEPARTMENT REGARDING LAND

DESIGNATIONS OF CERTAIN PROPERTIES
PAGE 6 OF 6
Attachment “2”
6th Street Property
6th Street
6th Street Property
APN: Portion of 0278-191-30
Area: 2.5 acres
Appraised Value: $1,062,000
Pedley Road

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Appraisal Report Prepared on the
Former School of Hope Site Located at
796 E. Sixth Street, San Bernardino, CA
Consisting of 2.48 acres of APN 0278-191-30

Prepared for the City of San Bernardino
Municipal Water Department
Effective Date of Value
November 28, 2022
Prepared by
Steven R. Smith, MSREA, MAI, SRA
800 Community College #114
San Jacinto, CA 92583
[email protected]
909 856 6841

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Steven R. Smith, MSREA, MAI, SRA
• Real Estate Consultants • Market Studies • Risk Analysis • Appraisals • 800 Community College Drive #114, San Jacinto, CA 92583 909-856-6841, [email protected]
12/2/22
Purpose:

The purpose of the appraisal is to estimate the as is market value of 2.48 acres of land situated on a

23.11 acre parcel.

Intended Use/Client and Intended Users:

The intended use of this appraisal report is to provide asset value to the named client, as of the effective date for asset disposition. This report may not be used for any purpose, or by any other party, than to whom it is addressed, and the appraisers specifically disclaim any liability to such unauthorized third parties.

Scope of Work:

The scope of work included an inspection of the property and its environs and research into market data for comparison purposes.

Property Rights Appraised:

The unencumbered ownership interest.

Effective Date of Value: November 28, 2022

Market Value Estimates:
$1,062,000+5%

Respectfully,

Steven R. Smith, MSREA, MAI, SRA
AG 2123, expires 7/15/23

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PROPERTY HISTORY
The property has not sold in the last 3-years

MARKET AND EXPOSURE TIME
Exposure period is the amount of time the real property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Marketing period is an opinion of the amount of time it might take to sell the real property interest after the effective date of the appraisal.

Sales of similar type properties, including the sale comparables used in this report were analyzed and had a wide range of exposure periods. According to knowledgeable professionals, the marketing time for properties like the subject varies considerably. According to interviews with brokers and market participants involved in these transactions, an adequate exposure for the subject would be approximately one to three months if properly priced and marketed. Based on our findings, we believe an exposure and marketing time of 1-3 months for the subject property is considered reasonable and appropriate.

HYPOTHETICAL CONDITION
The property is being appraised as if it were vacant multi-Family zoned land available for development, free from contamination or environmental hazards.

PROPERTY DESCRIPTION
Property information came from assessor records online Internet research in an interview with the client. The overall property is 21.33 acres. The part being appraised is 2.48 acres as shown on the following map.

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At the request of the
client, we are appraising
the smaller parcel of 2.48
acres which has been used
as a school site, As If is a
standalone parcel which is
a hypothetical. Further we
are appraising the smaller
parcel as if it has been
cleared of all
improvements and site
improvements, is free
from contamination and
available for development.

The client informs us that
they are getting bids to
demolish the
improvements, clear the
site and dispose of the
materials on site.

This appraisal is as if the site were vacant and available for development to its highest and best use.

We have further been informed that the likely zoning on the property if not owned by the City would be Multi-Family residential.

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IMPROVEMENT DESCRIPTION
Property Type: Specialty – School/Classroom Buildings No. of Perm. Bldgs.: 5 (as shown below) Year Built: 1956 (estimated) Subject Unit Area (SF): 16,342 SF (NRA); as follows:

Parking: We estimate parking capacity of 35-40 vehicles throughout parking lot.

FF&E: Furniture, fixtures and equipment are not given any consideration in the valuation analysis.

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Improvement Discussions
Improvement #1 (Art Studio/Workshops): The interior improvements include a mix of vinyl tile, exposed concrete flooring, and ceramic tile in the restrooms. Partitions are painted drywall and ceilings are primarily stipple (“popcorn”) with some painted drywall in the restrooms. Lighting is primarily surface-mounted fluorescent throughout. There is a fire alarm system and 4 restrooms.

We observed many items of deferred maintenance and this improvement is considered to be in below average to poor condition. We note that we were provided with a hand-drawn sketch that showed the exterior measurements of this building to be 161’ x 45’ (area of 7,245 SF). Our on-site measurements of this building were 160’ x 36’ which calculates to an area of 5,760 SF – a figure that will be utilized in the valuation section of this report.

Improvement #2 (Administration Building): The interior improvements include carpet flooring throughout, ceramic tile in the restroom, painted drywall partitions, and a mix of stipple (“popcorn”) and T-bar ceiling with acoustic tiles. Lighting is primarily surface-mounted fluorescent lighting. There is a fire alarm system and we only observed two restrooms. We observed that the interior of this improvement had recently been updated with new carpet and paint and we did not see any items of deferred maintenance.

Improvement #3 (Classrooms): At the time of our inspection, the interior of this building was completely gutted, including demoed concrete for what appeared to be plumbing purposes, and we observed active remodeling taking place. It appears that there are 8 classrooms containing 1 to 2 restrooms per room. For the purposes of the valuation section of this report, it is an assumption of this report that the renovations have been completed.

Improvement #4 (Workshop): We were not provided interior access to this improvement during our inspection. The exterior of this improvement is in poor condition and it is our opinion that it does not provide contributory value to the property. As such, the square footage of this improvement will not be considered in the valuation section of this report.

Improvement #5 (Garden Shed): We were not provided interior access to this improvement during our inspection. The exterior of this improvement is in poor condition and it is our opinion that it does not provide contributory value to the property. As such, the square footage of this improvement will not be considered in the valuation section of this report.

Site Improvements
Site improvements include good-condition iron fencing/gates along the perimeter of the property, a permanent basketball hoop, some landscaping along the property’s frontage (including trees).

Approximately 61% of the subject property is paved with asphalt or concrete, most of which is worn and in need of repair/resurfacing. Additionally, there are two covered patio areas.

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HIGHEST AND BEST USE
The property is zoned for Public Service. It is the intent of the owners to demolish and dispose of the improvements on the property which have reached the end of their economic life.

We are appraising the property As If Vacant and available for its highest and best use. City officials indicated that if the land were vacant it would be zoned for Multi Family development.

Our data search included looking for medium to high density unimproved and unentitled residential land in the City. Most the high density residential land in the City has already been developed.

Therefore we included some lower density sales also.

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VALUATION ANALYSIS
The following analysis represents the Market Data (or Sales Comparison) Approach. The selection criterion included looking for sales that had zoning that would allow similar uses to that of the subject. Our survey uncovered sufficient comparable sales that were located in the subject’s market area within the City and considered useful value indicators for the subject site.

In the course of this assignment, we analyzed closed sales and active for-sale listings and ultimately selected several that are exemplary and considered to be most similar to the subject. The following is the list of selected comparables:

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1 Recent sales of properties that have one or more major points of comparison, indicates a range from $59 per Square Foot to $97 and a mean of $78, median of $76.

The Subject improvements are larger than most and a portion of the building size is worksho p area. For these reasons, I have concluded that the most probable a value is $65/SF within a 5% range, or $61.75 to $68.25.

The value based on 16,342 square feet of improvements at $65/SF calculates as $1,062,230.

My conclusion is that the most probable market value is closest to $1,062,000.

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ADDENDA
Definition of Market Value:
"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale." (Source: Code of Federal Regulations, Title 12, Chapter I, Part 34.42(g]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472)

Definition of As Is Market Value As is:
"The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date." (Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015); also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77471)
Definition of Hypothetical Condition:

A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. Comment: Hypothetical conditions are contrary to known facts about physical, legal, or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

Definition of Eminent Domain:
“The right of government to take private property for public use upon the payment of just compensation. The Fifth Amendment of the U.S. Constitution, also known as the takings clause, guarantees payment of just compensation upon appropriation of private property.” (Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 4th ed.)

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ASSUMPTIONS AND LIMITING CONDITIONS
This appraisal is subject to the following assumptions and limiting conditions:

No responsibility is assumed for matters legal in character or nature. No opinion is rendered as to title, which is assumed to be good and marketable. All existing liens, encumbrances, and assessments have been disregarded, unless otherwise noted, and the property is appraised as though free and clear, having responsible ownership and competent management.

We have examined the property described herein exclusively for the purposes of identification and description of the real property. The objective of our data collection is to develop an opinion of the highest and best use of the subject property and make meaningful comparisons in the valuation of the property.

The appraiser's observations and reporting of the subject improvements are for the appraisal process and valuation purposes only and should not be considered as a warranty of any component of the property. This appraisal assumes (unless otherwise specifically stated) that the subject is structurally sound, and all components are in working condition.

We will not be required to give testimony or appear in court because of having made an appraisal of the property in question, unless specific arrangements to do so have been made in advance, or as otherwise required by law.

We have noted in this appraisal report any significant adverse conditions (such as needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) discovered during the data collection process in performing the appraisal.

Unless otherwise stated in this appraisal report, we have no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and have assumed that there are no such conditions and make no guarantees or warranties, express or implied. We will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. We obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable public and/or private sources that we believe to be true and correct.

We will not disclose the contents of this appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice, and/or applicable federal, state or local laws.

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APPRAISER’S CERTIFICATIONS
We do hereby certify that, except as otherwise noted in this report:

We have made a personal inspection of the property that is the subject of this report.

We have no past, present or prospective interest or bias in the property that is the subject of this report and no personal interest or bias with respect to the parties involved.

To the best of our knowledge and belief, the statements of fact contained in this report, upon which the analysis, opinions, and conclusions expressed herein are based, are true and correct.

The analysis, opinions, and conclusions contained in this report are limited only by the reported assumptions and limiting conditions imposed by the terms of our assignment or by the undersigned and are our personal, impartial, and unbiased professional analysis, opinions, and conclusions.

The reported analysis, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and in conformity conforms to the requirements of the code of professional ethics and standards of professional appraisal practice of the Appraisal Institute.

The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

The Appraisal Institute has a voluntary program of continuing education requirements. Steven R. Smith is certified through 2020 with his education requirement.

In accordance with the Competency Provision of the Uniform Standards of Professional Appraisal Practice (USPAP), We have verified that our knowledge and experience is sufficient to allow us to competently complete this appraisal unless stated otherwise within this report.

The appraisers further certify and agree that:

Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan.

We have not appraised this property in the last three years.

Rubi Enriquez provided assistance in the preparation of this report.

Any person who receives a copy of this appraisal report as a consequence of disclosure requirements that apply to an appraiser's client, does not become an intended user of this report unless the client specifically identified them at the time of the assignment. The appraiser's written consent and approval must be obtained before this appraisal report can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media.

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APPRAISER QUALIFICATIONS
STEVEN R. SMITH, MSREA, MAI, SRA, AG 2123

MS IN REAL ESTA TE APPRAISAL, BA IN REAL ESTA TE FINANCE FULL TIME APPRAISER SINCE 1976. PART TIME UNIVERSITY INSTRUCTOR IN REAL ESTA TE A T CAL STA TE UNIVERSITY 2005-2015.

PRIOR WORK EXPERIENCE INCLUDED LOAN SERVICING, LOAN ORIGINA TION, LOAN ADMINISTRA TION, TITLE INSURANCE SALES, REAL ESTA TE SALE, MORTGAGE LENDING, AND REAL ESTA TE SALES MANAGEMENT.

APPRAISAL EXPERIENCE INCLUDES PERFORMING APPRAISALS AND MARKET STUDIES ON EXISTING, PROPOSED AND DISTRESSED PROPERTIES, NON-PERFORMING OR DESTABILIZED PROJECT.

COURT TESTIMONY EXPERIENCE INCLUDES A RANGE OF CIVIL AND CRIMINAL CASES, PROFESSIONAL LIABILITY

CASES, MORTGAGE FRAUD AND REAL ESTA TE FRAUD CASES, AS BOTH AN EXPERT WITNESS OR AS A REBUTTAL WITNESS. DEPOSITION TESTIMONY HAS ALSO INCLUDED IRS AND EMINENT DOMAIN CASES. NO COURT TESTIMONY HAS BEEN PROVIDED IN EITHER OF THESE TYPES OF CASES AS EVERYONE HAS SETTLED.

SEMINARS CREA TED AND DELIVERED INCLUDE:

MORTGAGE FRAUD AND THE APPRAISERS ROLE- AI-2005,
BUILDING TRANSFERABLE SKILL-SETS, AI – 2005,
PREDA TOR LENDING, CLIENT PRESSURES & APPRAISAL FRAUD, 2004, MORTGAGE FRAUD, CASES & CONSEQUENCES, 2002,
REAL ESTA TE FRAUD, APPRAISERS LIABILITIES & RESPONSIBILITIES, 2000, REAL ESTA TE FRAUD & THE APPRAISERS ROLE, 2000, APPRAISAL REVIEW- SREA - 1989.

APPRAISER LIABILITY SEMINAR- SREA - 1988.

CAL LEAGUE OF SA VINGS INSTITUTIONS - APPRAISAL QUALITY CONTROL - 1988.

RESIDENTIAL APPRAISAL SEMINAR - AIREA - 1987.

BOSTON SAFE GUIDELINES - 1985-1988.

MORTGAGE BANKERS OF AMERICA-APPRAISAL REVIEW - 1984-86.

NARAMU-APPRAISAL REVIEW & FRAUD PREVENTION - 1984-1985.

UNIFORM APPRAISAL GUIDELINES - 1984-88.
99 POINT APPRAISAL REVIEW WORKSHOP - 1984-1986.

EXPERIENCE CREDIT WORKSHOP-USPAP COMPLIANCE, APPRAISAL INSTITUTE 1991.

USPAP COMPLIANCE, APMW, 1991.

ESTA TE AND LUXURY HOME APPRAISAL REVIEW – APPRAISAL INSTITUTE - 1997.

SPECIALTIES INCLUDE: LUXURY HOMES, AND FORENSIC APPRAISAL REVIEW CONTACT: 909-856-6841, WEB PAGE: HTTP://SRSREA.COM, EMAIL: [email protected]

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88 Integra Realty Resources
Los Angeles
Appraisal of Real Property
Former San Bernardino County Mountain Search & Rescue Station Special Purpose Property
3250 Harrison St.

San Bernardino, San Bernardino County, California 92404 Prepared For:

City of San Bernardino
Date of the Report:

August 24, 2022
Report Format:

Appraisal Report
IRR - Los Angeles
File Number: 121-2022-0071

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89 Subject Photographs
Former San Bernardino County Mountain Search & Rescue Station 3250 Harrison St.

San Bernardino, California

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91 Integra Realty Resources 16030 Ventura Boulevard T 818.290.5400 Los Angeles Suite 620 www.irr.com
Encino, CA 91436-4473
August 24, 2022
Michael Yarbrough
Real Property Manager
City of San Bernardino
290 North D St
San Bernardino, CA 92401
SUBJECT: Market Value Appraisal
Former San Bernardino County Mountain Search & Rescue Station 3250 Harrison St.

San Bernardino, San Bernardino County, California 92404 IRR - Los Angeles File No. 121-2022-0071
Dear Mr. Yarbrough:

Integra Realty Resources – Los Angeles is pleased to submit the accompanying appraisal of the referenced property. The purpose of the appraisal is to develop an opinion of the market value of the subject property. The interest appraised is the fee simple interest in the property. The client for the assignment is the City of San Bernardino. The intended user of this report is the client. The intended use of the report is for property disposition purposes.

No other party may use or rely on the information, opinions, and conclusions contained in this report.

The subject property is an existing special purpose property (search and rescue station) containing 3,506 square feet of building area. The property includes an office/living area, locker rooms, bathrooms, a kitchen, and a garage. The improvements were constructed circa 1977 and are vacant as of the effective appraisal date. The gross site area is 3.67 acres.

However, the useable land area is 1.10 acres or 47,916 square feet.

The appraisal conforms to the Uniform Standards of Professional Appraisal Practice (USPAP), the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute, and applicable state appraisal regulations.

Standards Rule 2-2 (Content of a Real Property Appraisal Report) contained in the Uniform Standards of Professional Appraisal Practice (USPAP) requires each written real property

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92 Michael Yarbrough
City of San Bernardino
August 24, 2022

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appraisal report to be prepared as either an Appraisal Report or a Restricted Appraisal Report. This report is prepared as an Appraisal Report as defined by USPAP under Standards Rule 2-2(a), and incorporates practical explanation of the data, reasoning, and analysis that were used to develop the opinion of value.

Based on the valuation analysis in the accompanying report, and subject to the definitions, assumptions, and limiting conditions expressed in the report, the concluded opinions of value are as follows:

Value Conclusion
Value Type & Appraisal Premise Interest Appraised Date of Value Value Conclusion Market Value Fee Simple August 10, 2022 $330,000
Extraordinary Assumptions and Hypothetical Conditions

1. Our client has provided us with a useable land area figure which excludes the land area impacted by the flood control easement. We assume this figure is accurate. If it is found to be inaccurate, our value conclusion may change.

1. None.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

The value conclusions are based on the following hypothetical conditions. A hypothetical condition is a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis.

The value conclusions are subject to the following extraordinary assumptions. An extraordinary assumption is an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions.

The value conclusion(s) in this report consider the impact of COVID-19 on the subject property.

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93 Michael Yarbrough
City of San Bernardino
August 24, 2022

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If you have any questions or comments, please contact the undersigned. Thank you for the opportunity to be of service.

Respectfully submitted,
Integra Realty Resources - Los Angeles
Jerardo Arciniega, MAI
California Certified General Real Estate
Appraiser #AG042445
Telephone: 818.290.5416
Email: [email protected]
Beth Finestone, MAI, AI-GRS, FRICS, CRE
California Certified General Real Estate
Appraiser #AG004030
Telephone: 818.290.5455
Email: [email protected]

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94 Table of Contents
Former San Bernardino County Mountain Search & Rescue Station Executive Summary 1
Identification of the Appraisal Problem 2
Subject Description 2
Sale History 2
Pending Transactions 2
Appraisal Purpose 2
Value Type Definitions 2
Property Rights Definitions 3
Client and Intended User 3
Intended Use 3
Applicable Requirements 3
Report Format 3
Prior Services 4
Appraiser Competency 4
Scope of Work 5
Economic Analysis 7
San Bernardino County Area Analysis 7
Surrounding Area Analysis 15
Residential Market Analysis 19
Property Analysis 24
Land Description and Analysis 24
Improvements Description and Analysis 32
Real Estate Taxes 39
Highest and Best Use 40
Valuation 42
Valuation Methodology 42
Land Valuation 43
Analysis and Adjustment of Sales 47
Land Value Conclusion 51
Cost Approach 52

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95 Table of Contents
Former San Bernardino County Mountain Search & Rescue Station Replacement Cost 52
Depreciation 54
Value Indication 56
Reconciliation and Conclusion of Value 57
Final Opinion of Value 57
Exposure Time 58
Marketing Period 58
Certification 59
Assumptions and Limiting Conditions 61
Addenda
A. Appraiser Qualifications
B. Flood Control Easement
C. Comparable Data
Land Sales

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96 Executive Summary 1
Former San Bernardino County Mountain Search & Rescue Station Executive Summary
Property Name
Address
Property Type
Owner of Record
Tax ID
Land Area (Gross) 3.67 acres; 159,865 SF
Land Area (Usable) 1.10 acres; 47,916 SF
Gross Building Area 3,506 SF
Percent Leased 0%
Year Built; Year Renovated 1977; 2003
Zoning Designation
Zoning Designation - Assumed
Highest and Best Use - As if Vacant
Highest and Best Use - As Improved
Exposure Time; Marketing Period 3 to 6 months; 3 to 6 months Effective Date of the Appraisal August 10, 2022
Date of the Report August 24, 2022
Property Interest Appraised
Market Value Indications
Cost Approach $330,000
Sales Comparison Approach Not Used
Income Capitalization Approach Not Used
Market Value Conclusion $330,000
The value reported above is subject to the definitions, assumptions, and limiting conditions set forth in the accompanying report of which this summary is a part. No party other than the City of San Bernardino may use or rely on the information, opinions, and conclusions contained in the report. It is assumed that the users of the report have read the entire report, including all of the definitions, assumptions, and limiting conditions contained therein.

PFC, Public Flood Control
Single-family residential
Fee Simple
Continued use as a search and rescue station
RE, Residential Estate
City of San Bernardino
0153-201-14
Former San Bernardino County Mountain Search & Rescue
3250 Harrison St.

San Bernardino, San Bernardino County, California 92404 Special Purpose - Search and Rescue Station
Extraordinary Assumptions and Hypothetical Conditions

1. None.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

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97 Identification of the Appraisal Problem 2
Former San Bernardino County Mountain Search & Rescue Station Identification of the Appraisal Problem
Subject Description
The subject property is an existing special purpose property (search and rescue station) containing 3,506 square feet of building area. The property includes an office/living area, locker rooms, bathrooms, a kitchen, and a garage. The improvements were constructed circa 1977 and are vacant as of the effective appraisal date. The gross site area is 3.67 acres. However, the useable land area is 1.10 acres or 47,916 square feet. A legal description of the property was not provided.

Property Identification
Property Name Former San Bernardino County Mountain Search & Rescue Station Address 3250 Harrison St.

San Bernardino, California 92404
Tax ID 0153-201-14
Owner of Record City of San Bernardino
Sale History
The subject property is currently owned by the City of San Bernardino. According to Joshua Dramitinos, Real Property Manager with the City of San Bernardino, the City acquired the property in 1931. To the best of our knowledge, no sales or transfers of ownership have taken place within a three-year period prior to the effective appraisal date.

Pending Transactions
Based on discussions with the appropriate contacts, the property is not subject to an agreement of sale or an option to buy, nor is it listed for sale, as of the effective appraisal date. However, we are aware that the City of San Bernardino intends to utilize our appraisal to negotiate a sale of the subject property, based on our appraised value.

Appraisal Purpose
The purpose of the appraisal is to develop an opinion of the market value of the subject property. The interest appraised is the fee simple interest in the property as of the effective date of the appraisal, August 10, 2022.

The date of the report is August 24, 2022. The appraisal is valid only as of the stated effective date.

Value Type Definitions
The definitions of the value types applicable to this assignment are summarized below.

Market Value
The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and

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Former San Bernardino County Mountain Search & Rescue Station assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider their own best interests;

3. A reasonable time is allowed for exposure in the open market;

4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. 1 Property Rights Definitions
The property rights appraised which are applicable to this assignment are defined as follows.

Fee Simple Estate
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.2 Client and Intended User
The client and intended user is City of San Bernardino. No other party may use or rely on the information, opinions, and conclusions contained in this report.

Intended Use
The intended use of the appraisal is for property disposition purposes. The appraisal is not intended for any other use.

Applicable Requirements
This appraisal report conforms to the following requirements and regulations:
 Uniform Standards of Professional Appraisal Practice (USPAP); and  Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute.

Report Format
Standards Rule 2-2 (Content of a Real Property Appraisal Report) contained in the Uniform Standards of Professional Appraisal Practice (USPAP) requires each written real property appraisal report to be prepared as either an Appraisal Report or a Restricted Appraisal Report. This report is prepared as an 1 Code of Federal Regulations, Title 12, Chapter I, Part 34.42[h]; also Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77472 2 Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015)

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Former San Bernardino County Mountain Search & Rescue Station Appraisal Report as defined by USPAP under Standards Rule 2-2(a), and incorporates practical explanation of the data, reasoning, and analysis used to develop the opinion of value.

Prior Services
USPAP requires appraisers to disclose to the client any other services they have provided in connection with the subject property in the prior three years, including valuation, consulting, property management, brokerage, or any other services. We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding the agreement to perform this assignment.

Appraiser Competency
No steps were necessary to meet the competency provisions established under USPAP. The assignment participants have appraised several properties similar to the subject in physical, locational, and economic characteristics, and are familiar with market conditions and trends; therefore, appraiser competency provisions are satisfied for this assignment. Appraiser qualifications and state credentials are included in the addenda of this report.

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Scope of Work 5
Former San Bernardino County Mountain Search & Rescue Station Scope of Work
Introduction
The appraisal development and reporting processes require gathering and analyzing information about the assignment elements necessary to properly identify the appraisal problem. The scope of work decision includes the research and analyses necessary to develop credible assignment results, given the intended use of the appraisal. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.

To determine the appropriate scope of work for the assignment, the intended use of the appraisal, the needs of the user, the complexity of the property, and other pertinent factors were considered. The concluded scope of work is described below.

Research and Analysis
The type and extent of the research and analysis conducted are detailed in individual sections of the report. The steps taken to verify comparable data are disclosed in the addenda of this report.

Subject Property Data Sources
The legal and physical features of the subject property, including size of the site and improvements, flood plain data, seismic zone designation, property zoning, existing easements and encumbrances, access and exposure, and condition of the improvements were confirmed and analyzed.

Availability of Information
Although the following items were requested from the property contacts and are pertinent to the assignment, they were not made available to Integra Realty Resources – Los Angeles. The inability to obtain this information and consider it in the analysis may affect the assignment results.  A title report for the property.

Inspection
Details regarding the property inspection conducted as part of this appraisal assignment are summarized as follows:

Property Inspection
Party Inspection Type Inspection Date
Jerardo Arciniega, MAI Interior and exterior June 2, 2022 Beth Finestone, MAI, AI-GRS, FRICS, CRE Interior and exterior June 2, 2022

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Scope of Work 6
Former San Bernardino County Mountain Search & Rescue Station Valuation Methodology
Three approaches to value are typically considered when developing a market value opinion for real property. These are the cost approach, the sales comparison approach, and the income capitalization approach. Use of the approaches in this assignment is summarized as follows:

Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Applicable Utilized
Sales Comparison Approach Not Applicable Not Utilized
Income Capitalization Approach Not Applicable Not Utilized The cost approach is the most reliable valuation method for the subject due to the following:
 There is sufficient data to develop reliable estimates of land value and replacement cost of the improvements.
 This approach is typically most relevant for properties for which sales and rental data is limited.

The sales comparison approach is not applicable to the assignment because:
 While there are sales of fire stations, we were unable to find sales of search and rescue stations. Additionally, the subject property is highly depreciated and is situated on land within a flood zone, has a Public Flood Control zoning, and a majority of the land is impacted by a flood control easement. As a result, there is limited or no sales data of properties which have all these features.

The income capitalization approach is not applicable to the assignment considering the following:
 There is not an active rental market for similar properties that would permit us to develop a reliable estimate of the property's income generating potential.  This approach does not reflect the primary analysis undertaken by a typical purchaser.

Similar properties are typically owner-occupied, decreasing the reliability of this approach.

Significant Appraisal Assistance
It is acknowledged that Alexa Amata made a significant professional contribution to this appraisal, consisting of conducting research on the subject and transactions involving comparable properties and assisting in report writing, under the supervision of the persons signing the report.

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San Bernardino County Area Analysis 7
Former San Bernardino County Mountain Search & Rescue Station Economic Analysis
San Bernardino County Area Analysis
San Bernardino County is located in southern California. It is 20,057 square miles in size and has a population density of 110 persons per square mile.

Population
San Bernardino County has an estimated 2022 population of 2,208,877, which represents an average annual 0.7% increase over the 2010 census of 2,035,210. San Bernardino County added an average of 14,472 residents per year over the 2010-2022 period, and its annual growth rate exceeded the State of California rate of 0.5%.

Looking forward, San Bernardino County's population is projected to increase at a 0.5% annual rate from 2022-2027, equivalent to the addition of an average of 10,810 residents per year. San Bernardino County's growth rate is expected to exceed that of California, which is projected to be

0.4%.

Employment
Total employment in San Bernardino County was estimated at 785,277 jobs as of June 2021. Between year-end 2011 and 2021, employment rose by 175,503 jobs, equivalent to a 28.8% increase over the entire period. There were gains in employment in nine out of the past ten years. Consistent with national trends, there were losses in 2020, with the onset of the COVID-19 pandemic, followed by a return to positive growth in 2021. San Bernardino County's rate of employment growth over the last decade surpassed that of California, which experienced an increase in employment of 15.3% or 2,256,471 jobs over this period.

A comparison of unemployment rates is another way of gauging an area’s economic health. Over the past decade, the San Bernardino County unemployment rate has been generally higher than that of California, with an average unemployment rate of 7.7% in comparison to a 7.4% rate for California. A higher unemployment rate is a negative indicator.

Population Compound Ann. % Chng
2010 Census 2022 Estimate 2027 Projection 2010 - 2022 2022 - 2027 USA 308,745,538 334,279,739 344,999,336 0.7% 0.6%
California 37,253,956 39,725,146 40,499,252 0.5% 0.4%
San Bernardino County 2,035,210 2,208,877 2,262,926 0.7% 0.5% Riverside San Bernardino MSA 4,224,851 4,723,071 4,869,116 0.9% 0.6% Source: Claritas
Population Trends

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San Bernardino County Area Analysis 8
Former San Bernardino County Mountain Search & Rescue Station Recent data shows that the San Bernardino County unemployment rate is 3.8% in comparison to a

3.9% rate for California, a positive sign that is consistent with the fact that San Bernardino County has outperformed California in the rate of job growth over the past two years.

The unemployment showed a significant increase in the 2020 year due to the COVID-19 pandemic.

The average unemployment rate for the 2021 year declined slightly, from 9.5% to 7.2%. The unemployment rate continued to decline in 2022 and was 3.8% as of April 2022. This is similar to the

3.9% rate during 2019 (pre-pandemic). Overall, the unemployment rate has completely recovered as of the current date. However, we note there are inflation and recession concerns as of the current date.

Employment Sectors
The composition of the San Bernardino County job market is depicted in the following chart, along with that of California. Total employment for both areas is broken down by major employment sector, and the sectors are ranked from largest to smallest based on the percentage of San Bernardino County jobs in each category.

Employment Trends
Total Employment (Year End) Unemployment Rate (Ann. Avg.) Year
San
Bernardino
County
%
Change California
%
Change
San Bernardino
County California
2011 609,774 14,735,619 13.1% 11.9%
2012 629,173 3.2% 15,223,789 3.3% 11.6% 10.5%
2013 653,764 3.9% 15,657,015 2.8% 9.9% 9.0%
2014 695,240 6.3% 16,089,814 2.8% 8.1% 7.6%
2015 724,618 4.2% 16,606,038 3.2% 6.5% 6.3%
2016 727,494 0.4% 16,930,563 2.0% 5.8% 5.5%
2017 754,169 3.7% 17,263,084 2.0% 5.0% 4.8%
2018 773,530 2.6% 17,573,378 1.8% 4.1% 4.3%
2019 802,486 3.7% 17,857,719 1.6% 3.9% 4.2%
2020 779,887 -2.8% 16,401,290 -8.2% 9.5% 10.2%
2021* 785,277 0.7% 16,992,090 3.6% 7.2% 7.3%
Overall Change 2011-2021 175,503 28.8% 2,256,471 15.3%
Avg Unemp. Rate 2011-2021 7.7% 7.4%
Unemployment Rate - April 2022 3.8% 3.9%
Source: U.S. Bureau of Labor Statistics and Moody's Analytics. Employment figures are from the Quarterly Census of Employment and Wages (QCEW). Unemployment rates are from the Current Population Survey (CPS). The figures are not seasonally adjusted. *Total employment data is as of June 2021; unemployment rate data reflects the average of 12 months of 2021.

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San Bernardino County Area Analysis 9
Former San Bernardino County Mountain Search & Rescue Station San Bernardino County has greater concentrations than California in the following employment sectors:

1. Trade; Transportation; and Utilities, representing 31.1% of San Bernardino County payroll employment compared to 17.5% for California as a whole. This sector includes jobs in retail trade, wholesale trade, trucking, warehousing, and electric, gas, and water utilities.

2. Government, representing 15.3% of San Bernardino County payroll employment compared to

14.6% for California as a whole. This sector includes employment in local, state, and federal government agencies.

San Bernardino County is underrepresented in the following sectors:

1. Education and Health Services, representing 15.4% of San Bernardino County payroll employment compared to 16.0% for California as a whole. This sector includes employment in public and private schools, colleges, hospitals, and social service agencies.

Employment Sectors - 2021

31.1%

15.4%

15.3%

11.2%

9.2%

6.5%

4.9%

2.9%

2.5%

0.5%

0.4%

17.5%

16.0%

14.6%

15.7%

9.9%

7.5%

5.2%

4.8%

2.8%

3.2%

2.8%
0% 5% 10% 15% 20% 25% 30% 35%
Trade; Transportation; and Utilities
Education and Health Services
Government
Professional and Business Services
Leisure and H ospitality
Manufacturing
Construction
Financial Activities
Other Services
Information
Natural Resources & Mining
San Bernardino County California
Source: U.S. Bureau of Labor Statistics and Moody's Analytics

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San Bernardino County Area Analysis 10
Former San Bernardino County Mountain Search & Rescue Station

2. Professional and Business Services, representing 11.2% of San Bernardino County payroll employment compared to 15.7% for California as a whole. This sector includes legal, accounting, and engineering firms, as well as management of holding companies.

3. Leisure and Hospitality, representing 9.2% of San Bernardino County payroll employment compared to 9.9% for California as a whole. This sector includes employment in hotels, restaurants, recreation facilities, and arts and cultural institutions.

4. Manufacturing, representing 6.5% of San Bernardino County payroll employment compared to

7.5% for California as a whole. This sector includes all establishments engaged in the manufacturing of durable and nondurable goods.

Major Employers
Major employers in San Bernardino County are shown in the following table.

Gross Domestic Product
Gross Domestic Product (GDP) is a measure of economic activity based on the total value of goods and services produced in a defined geographic area, and annual changes in Gross Domestic Product (GDP) are a gauge of economic growth.

Economic growth, as measured by annual changes in GDP, has been considerably lower in San Bernardino County than California overall during the past ten years. San Bernardino County has grown at a 2.2% average annual rate while California has grown at a 2.9% rate. San Bernardino County experienced a decline in GDP in the recent downturn but fared better than California. The area's GDP dropped by 1.9% in 2020 while California's GDP dropped by 2.8%. GDP figures for 2021 are not yet available at the local level, but GDP on a national level increased 5.7% in 2021, in contrast to the pandemic-related decrease of 3.4% in 2020.

Name Number of Employees
1 Arrowhead Regional Medical Center 18,000
2 Stater Bros. Markets 18,000
3 County of San Bernardino 17,400
4 San Bernardino City Unified School District 8,570
5 Ontario International Airport 7,510
6 Kaiser Medical Center 5,680
7 Loma Linda University Medical Center 4,680
8 Fontana Unified School District 3,950
9 Loma Linda University 3,910
10 San Manuel Band of Mission Indians 3,260
Major Employers - San Bernardino County
Source: Southern California Association of Governments Comprehensive Annual Financial Report, June 2021

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San Bernardino County Area Analysis 11
Former San Bernardino County Mountain Search & Rescue Station San Bernardino County has a per capita GDP of $37,549, which is 44% less than California's GDP of $67,435. This means that San Bernardino County industries and employers are adding relatively less value to the economy than their counterparts in overall state of California.

Household Income
San Bernardino County has a considerably lower level of household income than California. Median household income for San Bernardino County is $74,883, which is 15.8% less than the corresponding figure for California.

The following chart shows the distribution of households across twelve income levels. San Bernardino County has a greater concentration of households in the middle income levels than California.

Specifically, 28% of San Bernardino County households are between the $35,000 - $75,000 levels in household income as compared to 23% of California households. A lesser concentration of households is apparent in the higher income levels, as 50% of San Bernardino County households are at the $75,000 or greater levels in household income versus 57% of California households.

Gross Domestic Product
Year
($,000s)
San Bernardino
County % Change
($,000s)
California % Change
2011 67,336,498 2,063,827,500
2012 67,620,205 0.4% 2,113,096,400 2.4%
2013 69,149,978 2.3% 2,179,229,000 3.1%
2014 71,474,503 3.4% 2,256,054,700 3.5%
2015 74,181,095 3.8% 2,357,452,900 4.5%
2016 75,877,075 2.3% 2,427,894,600 3.0%
2017 78,146,465 3.0% 2,541,769,300 4.7%
2018 80,460,743 3.0% 2,643,576,300 4.0%
2019 83,759,253 4.1% 2,739,343,400 3.6%
2020 82,202,264 -1.9% 2,663,665,900 -2.8%
Compound % Chg (2011-2020) 2.2% 2.9%
GDP Per Capita 2020 $37,549 $67,435
Source: U.S. Bureau of Economic Analysis and Moody's Analytics; data released December 2021. The release of state and local GDP data has a longer lag time than national data. The data represents inflation-adjusted ""real"" GDP stated in 2012 dollars.

Median
San Bernardino County $74,883
California $88,967
Comparison of San Bernardino County to California - 15.8% Source: Claritas
Median Household Income - 2022

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San Bernardino County Area Analysis 12
Former San Bernardino County Mountain Search & Rescue Station Education and Age
Residents of San Bernardino County have a lower level of educational attainment than those of California. An estimated 22% of San Bernardino County residents are college graduates with four-year degrees, versus 35% of California residents. People in San Bernardino County are younger than their California counterparts. The median age for San Bernardino County is 34 years, while the median age for California is 38 years.

Household Income Distribution - 2022

7.3%

6.2%

9.4%

14.0%

11.9%

10.0%

8.0%

9.8%

5.7%

6.5%

5.0%

7.7%

6.7%

7.7%

11.6%

16.3%

13.7%

10.9%

7.9%

8.4%

4.2%

3.5%

1.4%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0%
Less than $15,000
$15,000 - $24,999
$25,000 - $34,999
$35,000 - $49,999
$50,000 - $74,999
$75,000 - $99,999
$100,000 - $124,999
$125,000 - $149,999
$150,000 - $199,999
$200,000 - $249,999
$250,000 - 499,999
$500,000 and more
San Bernardino County California
Source: Claritas

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San Bernardino County Area Analysis 13
Former San Bernardino County Mountain Search & Rescue Station Conclusion
The San Bernardino County economy will be affected by a growing population base and lower income and education levels. San Bernardino County experienced growth in the number of jobs over the past decade, and it is reasonable to assume that employment growth will occur in the future. While there is still some uncertainly in the markets as a result of the Covid-19 pandemic, overall, the long-term prospects for the region are positive. Having said that, inflation is of great concern nationally, and the Federal Reserve Board is increasing interest rates to help reduce inflation. The impacts of these changes are anticipated to slow the economy. The longer-term outlook is uncertain at this point.

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San Bernardino County Area Analysis 14
Former San Bernardino County Mountain Search & Rescue Station Area Map

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Surrounding Area Analysis 15
Former San Bernardino County Mountain Search & Rescue Station Surrounding Area Analysis
Location
The subject is located in the northern area of the city of San Bernardino within San Bernardino County.

Adjacent communities include Highland and Redlands to the east, Loma Linda to the south, and Rialto and Colton to the west. A map identifying the location of the property follows this section.

Access and Linkages
Primary highway access to the area is via the Foothill Freeway/Congressman George E. Brown, Jr.

Memorial Highway (SR-210). SR-210 is located approximately 0.4 miles south of the subject. There are on and off-ramps along Waterman Avenue, approximately one mile southwest of the subject. The property is also approximately three miles east of the San Bernardino Freeway (Interstate 215 or I- 215).

The major arterial streets providing access in a north and south direction are Mountain View Avenue and Waterman Avenue. The major arterial streets providing east and west access include E. 40th Street, W. 34th Street, Marshall Boulevard and E. Highland Avenue. Overall, vehicular access is considered to be average.

Public transportation is provided by Omnitrans, which provides access to neighboring cities. The Omnitrans rapid bus system is called sbX. The Ontario International Airport is approximately twenty miles southwest of the subject. Overall, the primary mode of transportation in the area is the automobile.

Demographics
A demographic profile of the surrounding area, including population, households, and income data, is presented in the following table.

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Surrounding Area Analysis 16
Former San Bernardino County Mountain Search & Rescue Station As shown above, the current population within a 3-mile radius of the subject is 151,603, and the average household size is 3.8. Population in the area has grown since the 2010 census, and this trend is projected to continue over the next five years. Compared to San Bernardino County overall, the population within a 3-mile radius is projected to grow at a slightly slower rate.

Median household income is $47,130, which is considerably lower than the household income for San Bernardino County. Residents within a 3-mile radius have a substantially lower level of educational attainment than those of San Bernardino County, and median owner-occupied home values are considerably lower.

Land Use
Predominant land uses in the immediate vicinity of the subject primarily consist of single-family residences. However, the subject is also adjacent to the Twin Creeks Spreading Grounds. A majority of the areas to the north, west and east are either owned or controlled by the San Bernardino County Flood Control District. Other land use characteristics are summarized as follows:

Surrounding Area Demographics
2022 Estimates 1-Mile Radius 3-Mile Radius 5-Mile Radius San Bernardino
County California
Population 2010 16,280 144,151 357,147 2,035,210 37,253,956 Population 2022 17,026 151,603 374,546 2,208,877 39,725,146 Population 2027 17,294 154,225 380,546 2,262,926 40,499,252 Compound % Change 2010-2022 0.4% 0.4% 0.4% 0.7% 0.5%
Compound % Change 2022-2027 0.3% 0.3% 0.3% 0.5% 0.4%
Households 2010 4,471 37,592 100,149 611,618 12,577,498 Households 2022 4,692 39,168 104,127 655,091 13,379,828 Households 2027 4,771 39,758 105,587 669,082 13,634,200 Compound % Change 2010-2022 0.4% 0.3% 0.3% 0.6% 0.5%
Compound % Change 2022-2027 0.3% 0.3% 0.3% 0.4% 0.4%
Median Household Income 2022 $32,847 $47,130 $54,654 $74,883 $88,967 Average Household Size 3.5 3.8 3.5 3.3 2.9
College Graduate % 7% 8% 13% 22% 35%
Median Age 29 30 31 34 38
Owner Occupied % 25% 46% 48% 63% 56%
Renter Occupied % 75% 54% 52% 37% 44%
Median Owner Occupied Housing Value $230,795 $280,743 $334,103 $440,750 $658,725 Median Year Structure Built 1965 1962 1969 1983 1976
Average Travel Time to Work in Minutes 28 30 30 34 33
Source: Claritas

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Surrounding Area Analysis 17
Former San Bernardino County Mountain Search & Rescue Station Immediate Surroundings
North Vacant land (San Bernardino County Flood Control District) South Single-family residences and vacant land owned or controlled by San Bernardino County Flood Control District
East Single-family residences
West Vacant land (San Bernardino County Flood Control District) and single-family residences further west
Outlook and Conclusions
The area is in the stability stage of its life cycle. Recent development activity in the immediate area is limited to scattered infill locations and has been centered on residential uses. It should be noted that there is still a level of uncertainty in the markets as result of the Covid-19 pandemic, inflation and rising interest rates.

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Surrounding Area Analysis 18
Former San Bernardino County Mountain Search & Rescue Station Surrounding Area Map

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Residential Market Analysis 19
Former San Bernardino County Mountain Search & Rescue Station Residential Market Analysis
The subject property is zoned PFC, Public Flood Control zone. This zone allows single-family dwelling units which legally existed prior to adoption of the PFC Zone. Development is allowed within the PFC zone, but any use other than for flood control purposes is subject to review. In addition, any development must be compatible with surrounding development and land use designations. Based on our conversations with City Planning staff, a low intensity use would be allowed.

The subject property is located in a single-family residential neighborhood. Based on our planning interviews, review of the zoning code, and analysis of the surrounding neighborhood, it is our opinion that a low intensity use would be possible on the subject property. The lowest intensity use in the surrounding area is single-family residential. Therefore, for the purposes of our analysis, we have included a residential market analysis. The following information is for improved single-family residential properties. This is included as the market for single-family land generally follows similar trends to the improved single-family market. However, we note that other factors, such as construction costs also impact land values.

Single-Family Sale Trends
The health of the housing industry and demand are generally tied to the health of the economy. While the COVID-19 pandemic caused a great deal of uncertainty in the economy, housing has not been adversely impacted the way other sectors of the economy were impacted. The fact that work-from- home has become an accepted reality has somewhat lessened the impact of location as being the most important factor in home purchases. Pricing of single-family residences continued to increase throughout the pandemic. Inventory has been low over the past few years. Interest rates were historically low at the end of the 2021 year. However, the Federal Reserve increased interest rates in both June and July of this year in an effort to combat inflation. This has led to a slight decrease in demand over the last two months.

Redfin reports that prices for single-family residences in San Bernardino were up 19.4% in June 2022 compared to June 2021. They report the median sale price in June 2022 was $477,500. However, they report the marketing time as slightly longer in June 2022, with an average marketing time of 22 days compared to 18 days the prior year. Redfin reports 162 homes were sold in June 2022, a slight decrease from the 170 homes which were sold in June 2021.

The following chart was provided by Redfin and shows the median sale price in San Bernardino over the last three years.

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Residential Market Analysis 20
Former San Bernardino County Mountain Search & Rescue Station As shown, the median sale price in San Bernardino was approximately $350,000 at the start of 2020 and was $477,500 as of June 2022. Overall, price levels have grown significantly over the last few years. However, brokers report they no longer expect this rate of increase to continue due to the significant increases in interest rates over the last few months.

The following chart shows information on sale-to-list price ratios in San Bernardino.

As shown above, in late 2020 the sale-to-list price ratio climbed above 100%. This means that the average home was selling above list price. The sale-to-list price ratio has remained above 100% since late 2020. However, as shown on the chart, the ratio has started to fall in the last few months. Redfin reports 21.3% of homes had price drops in the last year. They report this is a 12.7 point increase year-

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Residential Market Analysis 21
Former San Bernardino County Mountain Search & Rescue Station over-year. However, on a percentage basis, the number of homes with price drops have more than doubled in the last year.

Interest Rates
Interest rates for 30-year fixed-rate mortgages were at historic lows of approximately 3% at the end of the 2021 year. However, interest rates have risen significantly in the last few months. The following chart was provided by Freddie Mac (Federal Home Loan Mortgage Corporation).

As shown above, interest rates were declining between 2020 and the end of 2021. However, interest rates have risen significantly in the last few months and a 30-year fixed rate mortgage is currently above 5% compared to 3% at the beginning of the year. This interest rate increase significantly reduces buying power and puts downward pressure on housing prices. The brokers we interviewed when confirming sales indicated the rise in interest rates has already begun to impact pricing and that they anticipate price levels to begin to stabilize or even decline.

Monthly Single-Family Sale Trends
Due to the recent increases in interest rates, we conducted the following analysis of price levels over the last few months. The following information was compiled by utilizing the Multiple Listing Service (MLS). The following table shows trends in single-family home prices in the city of San Bernardino over the past seven months.

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Residential Market Analysis 22
Former San Bernardino County Mountain Search & Rescue Station Single-Family Residential Sale Trends
January 2022 February 2022 March 2022 April 2022 May 2022 June 2022 July 2022 Number of Sales 156 151 190 163 169 172 137
Median Sale Price $435,000 $444,000 $458,500 $480,000 $470,000 $476,000 $475,000 % Change From Prior Month 2.07% 3.27% 4.69% -2.08% 1.28% -0.21% Median Price / SF $326 $331 $337 $336 $339 $345 $328
% Change From Prior Month 1.53% 1.81% -0.30% 0.89% 1.77% -4.93% Source: Multiple Listing Service
As shown on the preceding table, the median price for single-family homes increased over the first four months of 2022. However, the median price was relatively flat between April and July and only ranged from $470,000 to $480,000. This is consistent with our broker interviews and the Redfin reported average sale price of $477,500 for June 2022. In addition, the number of homes sales in July was lower than any of the prior six months. Although this decline in the number of home sales has only occurred in the latest month, it may be indicative of a decline in housing demand due to interest rate increases.

Construction Costs
The preceding data relates to the improved single-family market. To gain an understanding of the residential land market we researched construction costs trends. Construction costs impact land value if their growth rate is substantially different than growth rates for improved properties.

The following table shows the California Construction Cost Index (CCCI) as reported by the State of California Department of General Services (DGS). The data includes costs for properties within the cites of San Francisco and Los Angeles only. However, the general trend shown is generally reflective of construction costs within the subject market area.

California Construction Cost Index (CCCI)
2018 2019 2020 2021 Jun-22
June CCCI 6,598 6,854 7,041 7,746 8,925
% Change from Prior Year 3.88% 2.73% 10.01% 15.22%
Source: California Department of General Services
As shown on the preceding data, construction costs have increased significantly in the last two years.

DGS reports increases of approximately ten to fifteen percent over the past two years. The Redfin data indicated a nearly twenty percent increase in the sale prices of improved single-family homes within San Bernardino. The increases in price levels for single-family homes have slightly outpaced the increase in single-family home prices over the last year. This puts slight upward pressure on land prices.

Conclusion
The subject property’s assumed zoning is a residential estate zone with a highest and best use of residential development. The preceding analysis shows the single-family residential market was strong

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Residential Market Analysis 23
Former San Bernardino County Mountain Search & Rescue Station with significant price increases through 2021. June 2022 year-over-year data also shows significant price increased compared to June 2021. However, there have been significant interest rate increases in the last two months. As a result, we also analyzed monthly home sales over the first seven months of the year. This data shows single-family home prices in the city of San Bernardino have begun to stabilize. In addition, the number of homes sold in July 2022 was lower than the prior six months.

Finally, constructions costs have increased, although at a slightly lower rate than improved single- family home values. Overall, after years of significant price level increases, the increase in interest rates may be causing prices and demand to stabilize.

Based on the data presented and our conversations with market participants, the market for residential land is anticipated remain stable in the near future. However, we note that if interest rates and construction costs continue to rise, this may negatively impact the residential land market in the subject area.

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Land Description and Analysis 24
Former San Bernardino County Mountain Search & Rescue Station Property Analysis
Land Description and Analysis
Land Description
Land Area (Gross) 3.67 acres; 159,865 SF
Land Area (Usable) 1.10 acres; 47,916 SF
Source of Land Area Public Records
Primary Street Frontage Harrison - 475± feet
Shape Irregular
Corner No
Environmental Hazards None reported or observed
Ground Stability No problems reported or observed
Flood Area Panel Number 060281
Date July 14, 2022
Zone A
Description Within 100-year floodplain
Insurance Required? Yes
Zoning; Other Regulations
Zoning Jurisdiction City of San Bernardino
Zoning Designation PFC, Public Flood Control
Zoning Designation (Assumed) RE
Description Residential Estate
Legally Conforming? Appears to be legally nonconforming Zoning Change Likely? No
Permitted Uses Single-family residences, accessory dwelling units, day care homes, and community care facilities
Minimum Lot Area 1 acre
Maximum Density None
Maximum Floor Area Ratio None
Utilities
Service Provider
Water City of San Bernardino
Sewer City of San Bernardino
Electricity Southern California Edison
Natural Gas Southern California Gas Company
Local Phone Multiple providers

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Land Description and Analysis 25
Former San Bernardino County Mountain Search & Rescue Station Easements, Encroachments and Restrictions
A current title report was not provided for review. However, we are aware that there is an easement which impacts a significant portion of the subject property. David Drake, Division Chief of the San Bernardino County Flood Control District (SBCFCD), indicated SBCFCD has an easement over a majority of the subject property. He indicated the flood control area is called the Twin Creek Spreading Grounds. The easement was granted in 1941 to SBCFCD. Mr. Drake provided the following map which shows the easement area shaded in blue.

The preceding map shows the subject property outlined in yellow. The SBCFCD has an easement over the area shaded in blue. We also note that areas shaded in red are owned in fee by the SBCFCD. As shown above, the easement impacts a significant portion of the site. The above map also shows that all the subject improvements are located outside of the easement area.

Our client provided us with a copy of the easement. The easement is a perpetual easement granted for flood control and water conservation purposes. The easement language indicates the easement is on, over and across the property and grants the rights to construct, inspect, maintain and repair channels and structures for the purposes of confining and conserving the waters of the East Twin

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Land Description and Analysis 26
Former San Bernardino County Mountain Search & Rescue Station Creek. The easement also grants the right to enter and pass over the land, deposit tools, to take from the earth rock, sand and gravel for the purpose of excavating, widening, deepening, and rectifying a channel, and for the construction, maintenance and repair of embankments, and any other structures for the purposes of flood control and water conservation purposes. Finally, the easement indicates the SBCFCD has all the rights necessary to confine waters within the easement areas.

Based on our review of the easement language and our conversations with Mr. Drake, the subject property owner or any prospective buyer would have no rights over the land area impacted by the easement. Mr. Drake indicated the SBCFCD has complete jurisdiction over the easement area and they would not allow any private use of the area. As a result, the easement impacts the useable land area of the subject property.

A potential buyer of the subject property would be required to purchase the entire land area.

However, in our opinion, a buyer would not assign any value to the land area impacted by the easement because the SBCFCD has essentially all the rights over the area. We have therefore deducted the land area subject to the easement from the gross land area to arrive at a useable land area. Our client has provided us with an estimated useable land figure of 1.10 acres. We have relied on their provided figure. We also note that we got a similar figure utilizing Google Earth. We have assumed their provided figure is accurate. If it is found to be inaccurate, our value conclusions may change.

As indicated earlier, we were not provided with a title report for the subject property. Besides the easement already discussed, we are not aware of any other easements, encroachments, or restrictions that would adversely affect value. This valuation assumes there are no other adverse impacts from easements, encroachments, or restrictions, and further assumes that the subject has clear and marketable title.

Land Area
The following table summarizes the subject’s land area.

Land Area Summary
Tax ID SF Usable SF Unusable SF Acres Usable Acres
Unusable
Acres
0153-201-14 159,865 47,916 111,949 3.67 1.10 2.57
Source: Public Records
The subject property consists of 3.67 gross acres. However, a majority of the subject property is subject to a flood control easement. The City of San Bernardino provided us with an estimate of 1.10 acres for the area outside of the easement area. We have utilized their provided figure as the useable land area. This figure represents 30% of the land area with 70% of the land area impacted by the flood control easement. We assume that these figures are accurate. If they are found to be inaccurate, our value conclusions may change.

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Land Description and Analysis 27
Former San Bernardino County Mountain Search & Rescue Station Flood Hazard Status
The following table indicates applicable flood hazard information for the subject property, as determined by review of available flood maps obtained from the Federal Emergency Management Agency (FEMA).
`Flood Hazard Status
Community Panel Number 060281
Date July 14, 2022
Zone A
Description Within 100-year floodplain
Insurance Required? Yes
The map above shows the subject property outlined in red. The blue shaded area is Zone A, which represents areas within a 100-year floodplain. The gray and orange striped area is Zone X – Areas with reduced flood risk due to levees. The black stripe marks to the north and south of the subject represent the levees. We note there is a drainage ditch to the south of the subject. The Zone A places additional regulations on development. David Drake with SBCFCD indicated that building in flood zones is more restrictive today than when the subject improvements were constructed. He indicated a new development would likely be required to be elevated over the surface. The easterly portion of the site is zoned Zone X. Development potential would not be impacted over this area.

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Land Description and Analysis 28
Former San Bernardino County Mountain Search & Rescue Station Topography
The site is of the useable land area is generally level and at street grade. The topography does not result in any particular development limitations.

Drainage
No particular drainage problems were observed or disclosed at the time of field inspection on the useable land area. This appraisal assumes that surface water collection, both on-site and in public streets adjacent to the subject, is adequate.

Zoning
The subject property is zoned Public Flood Control (PFC) Zone by the City of San Bernardino. The purpose of this zoning district is for the continuation, maintenance, and expansion of public flood control facilities. The subject property is within a flood control area. The properties to the north, west and south are owned or controlled by the San Bernardino Flood Control District. David Drake, Division Chief, with the SBCFCD indicated they own the land area in the subject area in fee or have easements on the properties. He stated they have an easement over a portion of the subject property. We spoke with Travis Martin, Associate Planner, with the City of San Bernardino. He indicated development is allowed within the PFC zone, but any use other than for flood control purposes is subject to review. In addition, any development must be compatible with surrounding development and land use designations. The surrounding land use designations are single-family residential designations, which are low intensity uses. Based on our conversations with City Planning staff, a low intensity use on the subject property would be allowed.

The subject property is located in a single-family residential neighborhood. Based on our planning interviews, review of the zoning code, and analysis of the surrounding neighborhood, it is our opinion that a low intensity use would be possible on the subject property. The lowest intensity use in the surrounding area is single-family residential. The surrounding land area, which is not within the PFC Zone, is zoned Residential Estate and Residential Suburban. The area to the west of the flood control area is zoned Residential Estate. This zoning designation has larger lot size requirements and is therefore less dense than the RS zoning to the east.

Based on our interviews, the subject property has low density development potential. There are little to no sales of publicly zoned land. In order to determine the market value of the subject site, we have considered the development potential of the subject and utilized transactions with involved the sale of properties with similar low density development potential. As a result, we have assumed the subject zoning would be similar to its surrounding, non-publicly owned sites. Accordingly, we appraise the subject land that is outside of the easement area as if it were allowed to be developed with a residential use, the lowest intensity use in the surrounding neighborhood.

The following table summarizes the zoning requirements for the Residential Estate zone designation.

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Land Description and Analysis 29
Former San Bernardino County Mountain Search & Rescue Station Zoning Summary
Zoning Jurisdiction City of San Bernardino
Zoning Designation (Assumed) RE
Description (Assumed) Residential Estate
Legally Conforming? Appears to be legally nonconforming Zoning Change Likely? No
Permitted Uses Single-family residences, accessory
dwelling units, day care homes, and
community care facilities
Category Zoning Requirement
Minimum Lot Area 1 acre
Minimum Lot Width (Feet) 150
Minimum Lot Depth (Feet) 100
Minimum Setbacks (Feet) Front yard: 35 feet
Side yards: 5 feet
Rear yard: 20 feet
Maximum Building Height 3 stories of 45 feet
Maximum Site Coverage 35%
Maximum Density None
Maximum Floor Area Ratio None
Parking Requirement 2 covered spaces within an enclosed garage for single-family dwellings
Source: City of San Bernardino Zoning Ordinance
We are not experts in the interpretation of zoning ordinances. An appropriately qualified land use attorney should be engaged if a determination of compliance with zoning is required.

Potential Development Density
Approximately 70% of the site is impacted by a flood control easement. As a result, this portion of the subject property is unusable and has no development potential. The remaining land area is not impacted by the easement. However, a majority of the remaining land area is within Flood Zone A.

According to David Drake, this area can be developed but the development would need to be slightly elevated due to the flood zone. Our assumed zoning is Residential Estate which allows a single-family residence at a maximum density of one unit per acre. The useable subject area is approximately 1.10 acres. As a result, the maximum development potential under the assumed zoning is one single-family residence.

Conclusion of Site Analysis
As was previously discussed, approximately 70% of the site is impacted by a flood control easement.

This area has no development potential. The remaining 30% of the land area is not impacted by the easement. This is the subject’s useable land area. The usable portion of the site’s physical

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Land Description and Analysis 30
Former San Bernardino County Mountain Search & Rescue Station characteristics and the availability of utilities result in a functional site, suitable for a variety of uses including those permitted by zoning.

Plat Map

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Land Description and Analysis 31
Former San Bernardino County Mountain Search & Rescue Station Flood Hazard Map

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Improvements Description and Analysis 32
Former San Bernardino County Mountain Search & Rescue Station Improvements Description and Analysis
Overview
The subject property is an existing special purpose property (search and rescue station) containing 3,506 square feet of building area. The property includes an office/living area, locker rooms, bathrooms, a kitchen, and a garage. The improvements were constructed circa 1977 and are vacant as of the effective appraisal date. The gross site area is 3.67 acres. However, the useable land area is 1.10 acres or 47,916 square feet. The following description is based on the inspection of the property.

Improvements Description
`Name of Property Former San Bernardino County Mountain Search & Rescue Station General Property Type Special Purpose
Property Sub Type Search and Rescue Station
Competitive Property Class C
Occupancy Type Single Tenant
Percent Leased 0%
Number of Buildings 1
Stories 1
Construction Class D
Construction Type Wood frame
Construction Quality Average
Condition Poor to fair
Gross Building Area (SF) 3,506
Useable Land Area (SF) 47,916
Floor Area Ratio (GBA/Land SF) 0.07
Building Area Source Inspection
Year Built 1977
Year Renovated 2003
Actual Age (Yrs.) 45
Estimated Effective Age (Yrs.) 30
Estimated Economic Life (Yrs.) 35
Remaining Economic Life (Yrs.) 5
Number of Parking Spaces 25
Source of Parking Count Estimate based on parking lot area Parking Type Surface parking lot
Parking Spaces/1,000 SF GBA 7.13
We found no public records regarding the year the fire station was constructed. Joshua Dramitinos, Real Property Manager with the City of San Bernardino, indicated they do not have any records and the construction date is unknown. However, he indicated in 1977 a lease was executed with the San Bernardino County Mountain Search and Rescue (SBCMSR). As a result, we have assumed the building was constructed circa 1977. Mr. Dramitinos also indicated the SBCMSR made improvements to the property including a new roof and driveway in 2003.

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Improvements Description and Analysis 33
Former San Bernardino County Mountain Search & Rescue Station Construction Details
Foundation Concrete
Structural Frame Wood frame
Exterior Walls Stucco
Roof Shingle
Drive-in Doors 4
Floors Carpet tiles in the living area/office space, vinyl sheet floors in the locker room, bathrooms, and kitchen, and concrete floors in the garage area.

Walls Primarily painted drywall
Ceilings Spray on acoustic plaster in the office/living area and locker room; painted drywall in the bathrooms, kitchen and garage.

Lighting Incandescent light fixtures in the office/living area, bathrooms and kitchen; fluorescent lights in the locker room and garage.

HVAC Roof Central Mounted
Plumbing Appears to be adequate
Restrooms There is a bathroom/shower area which includes a ceramic tiled shower, two wall hung porcelain sinks and two separate toilet rooms. The bathroom area lacks any recent renovation and is in fair condition.

Sprinklers None
Kitchen Equipment There is a kitchen with base and wall mounted cabinets in fair condition. The base cabinets have a ceramic tile countertop and backsplash. The kitchen also includes a dual basin porcelain sink. There is a stand-alone four-burner gas range/oven within the kitchen and a water heater. There is no space for a dishwasher and no refrigerator was present at the time of our inspection. The kitchen lacks any significant renovation and is in fair condition.

Garages The garage area has two corrugated metal roll up doors at the front of the property and an additonal two doors at the rear. The garage area also has concreted floors and painted drywall walls and ceilings with fluorescent lighting.

The garage area is 64 feet in depth and can house multiple fire trucks.

Ceiling Height Approximately 14 feet in the garage and 9 feet in the other areas.

Landscaping None
No. of Parking Spaces There is a parking lot to the south of the building. The parking lot was not stripped. We have estimated a total of approximately 25 parking spaces based on the land area of the parking lot.

Gates/Fencing The rear yard area has chainlink fencing. There is also a chainlink fence and gate which provide access to the paved parking lot area.

Paving Asphalt and concrete paving
Occupancy Status
The property is currently vacant. The subject property was previously occupied by San Bernardino Mountain Search and Rescue and utilized as one of their stations. According to our client, the property was initially leased to SBCMSR in 1977. Mr. Dramitinos did not have the date the property was vacated. Based on street views and aerials, SBCMSR vacated the property between 2018 and 2019.

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Improvements Description and Analysis 34
Former San Bernardino County Mountain Search & Rescue Station Improvements Analysis
Quality and Condition
The improvements are of average quality construction and are in poor to fair condition. The subject property has been vacant for over three years and has not had any recent renovation to the living areas. The kitchen, bathrooms, and locker rooms were in poor to fair condition. The living room/office area was in fair to average condition. However, the garage was in average condition.

The exterior of the building was in fair condition. However, the site improvements were in poor condition. The parking lot and paved rear area were in poor condition. Overall, the property was in poor to fair condition. The garage was the portion of the property that was in the best condition.

Functional Utility
The improvements appear to be adequately suited to a search and rescue operation. Based on the property inspection and consideration of the foregoing, there do not appear to be any significant items of functional obsolescence for a search and rescue use. In addition, the condition of the property is poor to fair overall. Significant improvements would be required to make the space operational.

Deferred Maintenance
Deferred maintenance is identified based on the property inspection. The rear door which provided access to the kitchen was broken by a trespasser and needs to be replaced. City Public Works staff noted the door was damaged by a trespasser and were planning to board up the doorway. In addition, some of the locker doors no longer close properly. We did not test the heating or air conditioning. Our analysis assumes these items are functioning. The subject property lacks any recent renovation and is in poor to fair condition. However, there were no signs of items which needed immediate repair other than the doors already discussed. Our depreciation analysis considers the condition of items such as the locker doors within the subject property. We note that the parking lot was in very poor condition.

In our analysis, we have considered the parking lot improvements as fully depreciated.

Planned Capital Expenditures
To the best of our knowledge, there are no planned capital expenditures.

ADA Compliance
Based on the property inspection and information provided, there are no apparent ADA issues.

However, ADA matters are beyond the scope of expertise of the assignment participants, and further study by an appropriately qualified professional would be recommended to assess ADA compliance.

Hazardous Substances
An environmental assessment report was not provided for review, and environmental issues are beyond the scope of expertise of the assignment participants. No hazardous substances were observed during the inspection of the improvements; however, detection of such substances is outside the scope of expertise of the assignment participants. Qualified professionals should be consulted. Unless otherwise stated, it is assumed no hazardous conditions exist on or near the subject.

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Improvements Description and Analysis 35
Former San Bernardino County Mountain Search & Rescue Station Personal Property
The appraisal assignment is specifically focused on the value of the real property only. Items of personal property are excluded from consideration.

Site Improvements
The subject has site improvements consisting of an asphalt paved parking lot, concrete paved driveway and rear yard area, and chain-link fencing. The improved area is not completely fenced. The western parking lot boundary is not fenced and can be assessed through the vacant land area to the south and west. The parking lot is in poor condition. The concrete driveway is in average condition and the rear concrete paved yard is in poor condition. We have estimated the areas of the site improvements utilizing Google Earth.

Conclusion of Improvements Analysis
In comparison to competitive properties in the market, the subject improvements are rated as follows:

Improvements Ratings
Access Average
Visibility/Exposure Average
Design and Appearance Below Average
Age/Condition Below Average
Bathrooms Below Average
Kitchens Below Average
Landscaping Below Average
Garages Average
Overall, the quality, condition, and functional utility of the improvements are below average for their age and location. The parking lot improvements are in poor condition. The kitchen and bathroom facilities are in poor to fair condition. Only the garage and the front driveway were in average condition. The property may still function as a search and rescue center or similar use, but the improvements are highly depreciated.

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Improvements Description and Analysis 36
Former San Bernardino County Mountain Search & Rescue Station Westerly view of the subject from across Harrison Street.

Photo taken June 2, 2022.

Northwest view of the subject.

Photo taken June 2, 2022.

Southerly view of the subject.

Photo taken June 2, 2022.

Northeasterly view of the subject.

Photo taken June 2, 2022.

View of locker room.

Photo taken June 2, 2022.

View of garage.

Photo taken June 2, 2022.

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Improvements Description and Analysis 37
Former San Bernardino County Mountain Search & Rescue Station View of the bathroom.

Photo taken June 2, 2022.

View of the kitchen.

Photo taken June 2, 2022.

View of the office/living area.

Photo taken June 2, 2022.

View of the land area subject to the flood control
easement.

Photo taken June 2, 2022.

Northerly view of the subject.

Photo taken June 2, 2022.

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Improvements Description and Analysis 38
Former San Bernardino County Mountain Search & Rescue Station Floor Plan

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Real Estate Taxes 39
Former San Bernardino County Mountain Search & Rescue Station Real Estate Taxes
Real estate tax assessments are administered by the Assessor of San Bernardino County and are estimated by jurisdiction on a county basis for the subject. The property is subject to the property tax rules of the State of California, which control the activities and policies of local assessment jurisdictions. These laws were significantly modified on June 7, 1978, when the State’s voters passed Proposition 13, adding Article XIIIA to the State Constitution.

Proposition 13 abolished the practice of periodic reassessment of properties based on market value appraisals. Instead, real property is subject to reassessment (i.e., revaluation at full or partial current market value) only when changes in ownership or new construction take place. Otherwise, increases in assessed value are limited to a general rate of 2%, plus the rates needed to service any bonded indebtedness. Special assessments can also be added and are often related to the installation of infrastructure. Generally speaking, property taxes in San Bernardino County tend to range from 1.1% to 1.4% of a property’s assessed value. Due to California’s tax laws, most properties within San Bernardino County have very similar effective tax rates.

The subject parcels are owned by the City of San Bernardino and therefore are not subject to real estate taxes. They are located in tax rate area 7228 which carries a 2021/2022 tax rate of 1.2923%.

Real estate taxes would be adjusted upon sale of the subject property.

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Highest and Best Use 40
Former San Bernardino County Mountain Search & Rescue Station Highest and Best Use
The highest and best use of a property is the reasonably probable use resulting in the highest value, and represents the use of an asset that maximizes its productivity.

Process
Before a property can be valued, an opinion of highest and best use must be developed for the subject site, both as though vacant, and as improved or proposed. By definition, the highest and best use must be:
 Physically possible.
 Legally permissible under the zoning regulations and other restrictions that apply to the site.  Financially feasible.
 Maximally productive, i.e., capable of producing the highest value from among the permissible, possible, and financially feasible uses.

As Though Vacant
First, the property is evaluated as though vacant, with no improvements.

Physically Possible
The physical characteristics of the site impose restrictions on development as approximately 70% of the site is located within a floodway and subject to a flood control easement. In addition, the majority of the remaining area is within Flood Zone A which is an area with 100-year flooding. David Drake, Chief with SBCFCD indicated no development would be allowed within the easement area. He indicated development is possible in the area not impacted by the easement. However, he indicated there would be additional safety requirements due to the flood zone. Overall, the subject’s flood control easement and partial location within a floodway, impose restrictions on development and potential uses.

Legally Permissible
The site is zoned PFC, Public Flood Control. Based on our interviews with planning staff, SBCFCD staff and a review of the zoning code, a low intensity use similar to the characteristics of surrounding developments would be allowed. The lowest intensity zone in the surrounding area is RE, Residential Estate. For the purposes of our analysis, based on the surrounding uses, we have assumed the subject property is zoned RE, Residential Estate. Permitted uses include single-family residences, accessory dwelling units, day care homes, and community care facilities. There is a flood control easement which impacts 70% of the property. No development is legally permissible within this area. There are no other apparent legal restrictions, such as easements or deed restrictions, effectively limiting the use of the property. Given prevailing land use patterns in the area, only low density uses such as single- family residential is given further consideration in determining highest and best use of the site, as though vacant.

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Highest and Best Use 41
Former San Bernardino County Mountain Search & Rescue Station Financially Feasible
Based on the accompanying analysis of the market, there is currently adequate demand for single- family residences in the subject’s area. It appears a newly developed single-family residential use on the site would have a value commensurate with its cost. Therefore, single-family residential is considered to be financially feasible.

Maximally Productive
There does not appear to be any reasonably probable use of the site that would generate a higher residual land value than single-family residential. Accordingly, single-family residential developed to the normal market density level permitted by zoning, is the maximally productive use of the property.

Conclusion
Development of the site for single-family residential is the only use which meets the four tests of highest and best use. Therefore, it is concluded to be the highest and best use of the property as though vacant.

As Improved
The subject site is developed with a special purpose property consisting of a search and rescue station.

The existing improvements, while in poor to fair condition, can continue to be utilized. Based on our analysis, there does not appear to be any alternative use that could reasonably be expected to provide a higher present value than a search and rescue use, and the value of the existing improved property exceeds the value of the site, as if vacant. For these reasons, use as a search and rescue station, is concluded to be maximally productive and the highest and best use of the property as improved.

Most Probable Buyer
Taking into account the size and characteristics of the property and its special purpose use, the likely buyer is search and rescue type agency or an owner-user.

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Valuation Methodology 42
Former San Bernardino County Mountain Search & Rescue Station Valuation
Valuation Methodology
Appraisers usually consider three approaches to estimating the market value of real property. These are the cost approach, sales comparison approach and the income capitalization approach.

The cost approach assumes that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility. This approach is particularly applicable when the improvements being appraised are relatively new and represent the highest and best use of the land or when the property has unique or specialized improvements for which there is little or no sales data from comparable properties.

The sales comparison approach assumes that an informed purchaser would pay no more for a property than the cost of acquiring another existing property with the same utility. This approach is especially appropriate when an active market provides sufficient reliable data. The sales comparison approach is less reliable in an inactive market or when estimating the value of properties for which no directly comparable sales data is available. The sales comparison approach is often relied upon for owner-user properties.

The income capitalization approach reflects the market’s perception of a relationship between a property’s potential income and its market value. This approach converts the anticipated net income from ownership of a property into a value indication through capitalization. The primary methods are direct capitalization and discounted cash flow analysis, with one or both methods applied, as appropriate. This approach is widely used in appraising income-producing properties.

Reconciliation of the various indications into a conclusion of value is based on an evaluation of the quantity and quality of available data in each approach and the applicability of each approach to the property type.

The methodology employed in this assignment is summarized as follows:

Approaches to Value
Approach Applicability to Subject Use in Assignment
Cost Approach Applicable Utilized
Sales Comparison Approach Not Applicable Not Utilized
Income Capitalization Approach Not Applicable Not Utilized We begin our valuation by determining the value of the underlying land. The second step is to determine the depreciated replacement cost of the improvements and add it to the value of the land to determine an overall value.

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Land Valuation 43
Former San Bernardino County Mountain Search & Rescue Station Land Valuation
To develop an opinion of the subject’s land value, as if vacant and available to be developed to its highest and best use, we utilize the sales comparison approach. Our search for comparable sales focused on transactions within the following parameters:
 Location: Properties within a two-mile radius of the subject property  Size: Properties 0.5 to 5 acres in size.
 Use: Sites that can be put to low density, single-family residential uses. As previously discussed, for the purposes of our analysis, we have assumed a Residential Estate zoning designation for the subject.
 Transaction Date: January 2021 through the present.

For this analysis, we use price per usable acre as the appropriate unit of comparison because market participants typically compare sale prices and property values on this basis. The most relevant sales are summarized in the following table.

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Land Valuation 44
Former San Bernardino County Mountain Search & Rescue Station Summary of Comparable Land Sales
No. Name/Address
Sale Date;
Status Sale Price
Usable SF;
Usable Acres Zoning
$/SF
Land $/Acre
1 SEC Glendenning Way Jun-22 $250,000 74,052 RS $3.38 $147,059 Glendenning Way Closed 1.70
San Bernardino
Tax ID: 0153-372-02, 03, 04, 05, 08
2 425 Arrowhead Road Mar-22 $425,000 146,362 RE $2.90 $126,488 425 Arrowhead Rd. Closed 3.36
San Bernardino
3 Harrison Canyon Rd Mar-22 $100,000 53,579 RS $1.87 $81,301 Harrison Canyon Rd Closed 1.23
San Bernardino
Tax ID: 0270-143-27
4 890 1/2 East Marshall Blvd Aug-21 $35,000 26,000 RE $1.35 $58,636 890 1/2 E. Marshall Blvd. Closed 0.60
San Bernardino
Tax ID: 0153-391-01
Subject 47,916 RE
Former San Bernardino County Mountain
Search & Rescue Station

1.10 San Bernardino, CA
Comments: This listing broker indicated the sale consisted of five parcels of land. He stated the property was unentitled at the time of sale and the buyer planned to construct two single-family residences on the property. He also said the property is next to the flood control bank, with residential surroundings on all other sides.

Comments: The listing broker indicated the property had been legally subdivided into three lots and was ready to be built. As a result, the property was entitled at the time of sale. We also confirmed the sale with the buyer's broker, Meljorie Castelo. She confirmed the property had been subdivided into three lots and three residences could be constructed on the property. However she stated the buyer purchased the property for truck parking, but may eventually construct residences on the property.

Comments: The listing broker indicated the property was unentitled at the time of sale. She stated she did not represent the buyer but believes he purchased the property to construct a single-family residence. She said the property included views of the area to the south.

The property is located on a canyon with single-family residential surroundings.

Comments: The listing broker was one of the owner's of the property. She indicated the property did not have legal access and that an easement would need to be granted over an adjacent single family residence. Her parents owned the residence to the south and would not grant one. Although it has a Marshall Boulevard street address, it does not have frontage on Marshall Boulevard. However, the buyer of this property also purchased an adjacent residence. The listing broker stated the sale price for this property considered the fact that it did not have legal access. The property is adjacent to the flood control area. The surroundings to the north, west and south primarily consist of single-family residences and vacant sites.

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Land Valuation 45
Former San Bernardino County Mountain Search & Rescue Station Comparable Land Sales Map

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Land Valuation 46
Former San Bernardino County Mountain Search & Rescue Station Sale 1
SEC Glendenning Way
Sale 2
425 Arrowhead Road
Sale 3
Harrison Canyon Rd
Sale 4
890 1/2 East Marshall Blvd

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Land Valuation 47
Former San Bernardino County Mountain Search & Rescue Station Analysis and Adjustment of Sales
The sales are compared to the subject and adjusted to account for material differences that affect value. Adjustments are considered for the following factors, in the sequence shown below.

Adjustment Factor Accounts For Comments
Effective Sale Price Atypical economics of a transaction, such as demolition cost or
expenditures by buyer at time of
purchase.

No adjustments were warranted.

Real Property Rights Fee simple, leased fee, leasehold, partial interest, etc.

No adjustments were warranted.

Financing Terms Seller financing, or assumption of
existing financing, at non-market
terms.

No adjustments were warranted.

Conditions of Sale Extraordinary motivation of buyer
or seller, assemblage, forced sale.

No adjustments were warranted.

Market Conditions Changes in the economic
environment over time that affect
the appreciation and depreciation
of real estate.

As indicated in the residential
market analysis, single-family
residence prices showed a nearly
20% increase over the last year.

However, prices have been
generally level the last three
months due to increasing interest
rates. In addition, construction costs
have also increased at a rate of
approximately 15% over the last
year. This nearly offsets the
increases in improved property
values. As a result, we have utilized
a rate of 5% per year up to May
2022 for improving market
conditions.

Location Market or submarket area
influences on sale price;
surrounding land use influences.

All of the comparables are within
two miles of the subject property
and were similar in terms of
location.

Access/Exposure Convenience to transportation
facilities; ease of site access;
visibility; traffic counts.

Sale No. 1 has frontage and access
along two streets. It was superior in
terms of access and required a
downward adjustment. Sale No. 4
lacks legal access. It was therefore

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Land Valuation 48
Former San Bernardino County Mountain Search & Rescue Station Adjustment Factor Accounts For Comments
inferior in terms of access and
required an upward adjustment.

Size Inverse relationship that often
exists between parcel size and unit
value.

The useable land area for the
subject property is 1.1 acres. Sale
No. 2 was over three acres in size
and was inferior. An upward
adjustment was warranted.

Shape and
Topography
Primary physical factors that affect
the utility of a site for its highest
and best use.

Sale Nos. 1 and 4 have rectangular
shapes which are more suitable for
development. These sales were
superior in terms of shape and
required downward adjustments.

Zoning Government regulations that affect
the types and intensities of uses
allowable on a site.

All of the sale comparables are
zoned for low density single-family
residential development. No
adjustments were warranted.

Entitlements The specific level of governmental
approvals attained pertaining to
development of a site.

According to both the seller’s
broker and the buyer’s broker, Sale
2 had approvals for a three lot
subdivision. It was therefore
superior in terms of entitlements
and required a downward
adjustment.

View Accounts for any scenic views. The comparables located north of 40th Street are located in a canyon
with views. Sales 2 and 3 were
superior in terms of view. These
sales required downward
adjustments.

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Land Valuation 49
Former San Bernardino County Mountain Search & Rescue Station Adjustment Factor Accounts For Comments
Flood Zone Accounts for additional
development requirements and
flood zone insurance requirements.

Sale 2 is the only comparable which
is within Flood Zone A. It required
no adjustments. Sale 3 is located
within Flood Zone X, where no flood
insurance is required. It was
superior and required a downward
adjustment. Sales 1 and 3 are
located within Flood Zone X-500,
which includes areas inundated by
500-year flooding, compared to the
subject’s 100-year flooding area.

These comparables were also
superior and required downward
adjustments.

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Land Valuation 50
Former San Bernardino County Mountain Search & Rescue Station The following table summarizes the adjustments we make to each sale.

Land Sales Adjustment Grid
Subject Comparable 1 Comparable 2 Comparable 3 Comparable 4 Name Former San
Bernardino County
Mountain Search
& Rescue Station
SEC Glendenning
Way
425 Arrowhead
Road
Harrison Canyon
Rd
890 1/2 East
Marshall Blvd
Address 3250 Harrison St. Glendenning Way 425 Arrowhead Rd. Harrison Canyon Rd.
890 1/2 E.

Marshall Blvd.

City San Bernardino San Bernardino San Bernardino San Bernardino San Bernardino County San Bernardino San San Bernardino San Bernardino San Bernardino State California CA CA CA CA
Sale Date Jun-22 Mar-22 Mar-22 Aug-21
Sale Status Closed Closed Closed Closed
Sale Price $250,000 $425,000 $100,000 $35,000
Square Feet 159,865 74,052 146,362 53,579 26,000
Acres 3.67 1.70 3.36 1.23 0.60
Usable Square Feet 47,916 74,052 146,362 53,579 26,000
Usable Acres 1.10 1.70 3.36 1.23 0.60
Price per Usable Acre $147,059 $126,488 $81,301 $58,636 Property Rights Fee Simple Fee Simple Fee Simple Fee Simple % Adjustment – – – –
Financing Terms Cash to seller Cash to seller Cash to seller Cash to seller % Adjustment – – – –
Conditions of Sale
% Adjustment – – – –
Market Conditions 8/10/2022 Jun-22 Mar-22 Mar-22 Aug-21 Annual % Adjustment Variable – 1% 1% 4%
Cumulative Adjusted Price $147,059 $127,753 $82,114 $60,982 Location – – – –
Access/Exposure Superior – – Sign. Inferior
Size – Inferior – –
Shape and Topography Superior – – Superior
Zoning – – – –
Entitlements – Superior – –
View – Superior Superior –
Flood Zone Superior – Superior Superior
Overall Comparability Superior Superior Superior Slightly Inferior Indicated Value $65,000

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Land Valuation 51
Former San Bernardino County Mountain Search & Rescue Station Land Value Conclusion
Based on the foregoing discussion of comparability, the market data and the subject property may be arrayed as shown below:

Land Valuation Array
Item No. Overall Comparability
Market Conditions Adjusted Price
Per Acre
1 Superior $147,059
2 Superior $127,753
3 Superior $82,114
Subject
4 Slightly Inferior $60,982
The sale comparables range from $60,982 to $147,059 per acre. Sale No. 1 is rectangular in shape and has frontage on two streets. It was superior overall. Sale No. 2 had approvals for a three-lot subdivision and was superior in terms of entitlements. Based on the analysis, we have bracketed the underlying land value of the subject as inferior to Sale 3 at $82,114 per acre and slightly superior to Sale 4 ($60,982 per acre). Sale 4 was considered to be the most similar. It is adjacent to the flood control area, but lacks frontage and direct access. As a result, it was slightly inferior. Based on our comparison analysis, we arrive at a land value conclusion as follows:

Land Value Conclusion
Indicated Value per Usable Acre $65,000
Subject Usable Acres 1.10
Indicated Value $71,500
Rounded $70,000
A potential buyer of the subject property would be required to purchase the entire land area.

However, in our opinion, a buyer would not assign any value to the land area impacted by the easement because the SBCFCD has essentially all the rights over the area. We have therefore deducted the land area subject to the easement from the gross land area to arrive at a useable land area. In our opinion, the area impacted by the flood control easement has a nominal value. As such, although the above analysis is done on a useable land area basis, the resulting value conclusion is applicable to the entire subject property land area.

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Cost Approach 52
Former San Bernardino County Mountain Search & Rescue Station Cost Approach
The steps taken to apply the cost approach are:
 Develop an opinion of the value of the land as though vacant and available to be developed to its highest and best use, as of the effective date of the appraisal;  Estimate the replacement cost new of the existing improvements using Marshall Valuation Service;
 Estimate depreciation from all causes and deduct this estimate from replacement cost new to arrive at depreciated replacement cost of the improvements; and  Add land value to the depreciated replacement cost of the improvements to arrive at a market value indication for the property overall.

Replacement Cost
Replacement cost is the estimated cost to construct, at current prices as of a specified date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout. Estimates of replacement cost for the purpose of developing a market value opinion include three components: direct costs, indirect costs (also known as soft costs) and entrepreneurial incentive.

Direct Costs
Direct costs are expenditures for labor, materials, equipment and contractor’s overhead and profit.

We use Marshall Valuation Service (MVS) as the basis of our direct cost estimate. In addition to direct costs, MVS includes certain indirect costs such as architectural and engineering fees, and interest on building loan funds during construction.

Indirect Costs
MVS does not include all of the indirect costs that are appropriate in a replacement cost estimate.

Therefore, we add an allowance for the following indirect costs that are not contained within MVS:
taxes and carrying costs on land during construction; legal and accounting fees; and marketing and finance costs prior to stabilization. We estimate that a 10% allowance for additional indirect costs is appropriate.

Entrepreneurial Incentive
Entrepreneurial incentive is the financial reward that a developer would expect to receive in addition to recovering all direct and indirect costs. This is the expected compensation that would be necessary to motivate a developer to undertake the project. Entrepreneurial incentive for similar properties typically ranges from 10% to 15%. An estimate of 15% is applied to the total replacement costs used in this analysis.

Replacement Cost New
The following tables show our replacement cost estimates for the subject building improvements and site improvements.

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Cost Approach 53
Former San Bernardino County Mountain Search & Rescue Station Replacement Cost Estimate
Building Improvements
Bldg Name MVS Building Type MVS Class Quality Quantity Unit Unit Cost Cost New Fire Station D Average 3,506 SF $227.46 $797,475
Subtotal - Building Costs $797,475
Plus: Indirect Cost 10% $79,747
Subtotal $877,222
Plus: Entrepreneurial Incentive 15% $131,583
Total Building Costs $1,008,806
Site Improvements
Item Quality Quantity Unit Unit Cost Cost New
Asphalt paving Average 11,000 SF $3.69 $40,590
Concrete paving - Rear Yard Average 1,500 SF $6.54 $9,810 Concrete Driveway Average 1,900 SF $6.54 $12,426
Chain-Link Fencing Average 360 LF $29.54 $10,634
Subtotal - Site Improvement Costs $73,460
Plus: Indirect Cost 10% $7,346
Subtotal $80,806
Plus: Entrepreneurial Incentive 15% $12,121
Total Site Improvement Costs $92,927
Overall Property
Building Improvements $797,475
Site Improvements $73,460
Furniture, Fixtures & Equipment $0
Subtotal - Replacement Cost New $870,935
Plus: Indirect Cost 10% $87,094
Subtotal $958,029
Plus: Entrepreneurial Incentive 15% $143,704
$1,101,733
Source: Marshall Valuation Service except for Indirect Costs and Entrepreneurial Incentive, which are appraiser's estimates.

Total Replacement Cost New
Former San Bernardino County Mountain Search
& Rescue Station
Building Improvements - Unit Costs
Building 1 Name:

MVS Building Type: Fire Station Unit SF Current Multiplier 1.090 Const Class: D Unit Cost $152.00 Local Multiplier 1.130 Quality: Average Sprinklers: Story Ht Multiplier 1.046
Quality Rating: Average HVAC Adjust $24.55 Perimeter Multiplier 1.000 Section/Page Section 15, Page 14 Other:

Economic Life 35 Subtotal: $176.55 Final Unit Cost $227.46 Source: Marshall Valuation Service
Former San Bernardino County Mountain Search & Rescue Station The subject property is an average quality fire station. MVS does not include roof mounted HVAC units in their average quality fire station costs. As a result, an adjustment was warranted for HVAC. A height multiplier was also required due to the height of the garage.

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Cost Approach 54
Former San Bernardino County Mountain Search & Rescue Station Site Improvements - Unit Costs
Quality: Average Unit Cost $2.79 Current Multiplier 1.170 Section: 66 Other: Local Multiplier 1.130
Page: 3 Other:

Unit: SF Subtotal: $2.79 Final Unit Cost $3.69
Quality: Average Unit Cost $4.95 Current Multiplier 1.170 Section: 66 Other: Local Multiplier 1.130
Page: 3 Other:

Unit: SF Subtotal: $4.95 Final Unit Cost $6.54
Quality: Average Unit Cost $4.95 Current Multiplier 1.170 Section: 66 Other: Local Multiplier 1.130
Page: 3 Other:

Unit: SF Subtotal: $4.95 Final Unit Cost $6.54
Quality: Average Unit Cost $25.25 Current Multiplier 1.170 Section: 66 Other: Local Multiplier 1.000
Page: 4 Other:

Unit: LF Subtotal: $25.25 Final Unit Cost $29.54
Source: Marshall Valuation Service
Site Improvement 1 Name:

Site Improvement 2 Name:

Site Improvement 3 Name:

Site Improvement 4 Name:

Asphalt paving
Concrete paving - Rear Yard
Concrete Driveway
Chain-Link Fencing
Depreciation
Depreciation is the difference between the replacement cost new of the improvements and their contribution to overall property value on the effective date of the appraisal. There are three major causes of depreciation:

1. Physical deterioration - The loss in value due to the wear and tear that begins when a building is completed and placed into service. Physical deterioration can be curable (referred to as deferred maintenance) or incurable.

2. Functional obsolescence - The loss in value due to changes in market tastes and standards.

Similar to physical deterioration, functional obsolescence can be curable or incurable.

3. External obsolescence - The loss in value due to negative external influences. These influences can be temporary or permanent and are generally incurable by the owner, landlord or tenant.

There are three principal methods of estimating depreciation: the market extraction method, the economic age-life method, and the breakdown method. The economic age-life method is used in this analysis.

Economic Age-Life Method
In the economic age-life method, depreciation is estimated by dividing the effective age of the improvements by their total economic life. This method results in a lump sum estimate for all depreciation, including the loss in value from all physical, functional and external obsolescence.

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Cost Approach 55
Former San Bernardino County Mountain Search & Rescue Station Deferred Maintenance - Prior to applying the ratio from the economic age-life method, deferred maintenance is deducted. The rear door which provided access to the kitchen was broken and needed to be replaced. At the time of our inspection, the doorway was being enclosed. We have assumed that the broken door has been repaired. The subject property lacks any recent renovation and is in poor to fair condition. However, there were no signs of items which needed immediate repair other than the door already discussed. We note that the parking lot was in very poor condition. In our analysis, we have considered the parking lot improvements as fully depreciated. As a result, no additional adjustment for deferred maintenance was warranted.

Functional Obsolescence – A deduction for functional obsolescence is intentionally withheld from the preceding effective age/total economic life ratio. We have not made an adjustment for functional obsolescence.

External Obsolescence - A deduction for external obsolescence is intentionally withheld from the preceding effective age/total economic life ratio. We have not made an adjustment for external obsolescence.

Final Estimate of Depreciation
Our estimate of depreciation and calculation of depreciated replacement cost are shown in the following tables.

Estimate of Depreciation
Building Improvements
Replacement Cost New $1,008,806
Less: Deferred Maintenance $0
Remaining Cost $1,008,806
Depreciation: Economic Age-Life Method 75.0% -$756,604
Total Depreciation -$756,604
Depreciated Replacement Cost $252,201
Site Improvements
Replacement Cost New $92,927
Less: Deferred Maintenance $0
Remaining Cost $92,927
Depreciation: Economic Age-Life Method 89.4% -$83,076
Total Depreciation -$83,076
Depreciated Replacement Cost $9,851
Overall Property
Replacement Cost New $1,101,733
Deferred Maintenance $0
Remaining Cost $1,101,733
Depreciation: Economic Age-Life Method -$839,680
Total Depreciation -$839,680
Depreciated Replacement Cost $262,053
Rounded: $260,000

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Cost Approach 56
Former San Bernardino County Mountain Search & Rescue Station Depreciation Worksheet - Building Improvements
Bldg
# Bldg Name
Effective
Age (Yrs)
Economic
Life (Yrs)
S/L
Deprec. %
Other
Deprec.
%
Replacement
Cost New
% of
Overall
RCN
Other
Deprec.
$
1 Former San Bernardino County Mountain Search & Rescue Station30 35 85.7% 75.0% $1,008,806 100.0% $756,604 Total $1,008,806 100.0% $756,604
The straight line depreciation results in a depreciation rate of 85.7%. A depreciation rate of over 80% is indicative of a property that is beyond its useful life. We have considered that the garage still provides good utility and is in average condition. Based on our inspection and considering the utility of the garage, a deprecation rate of 75% would be appropriate for the subject property.

Depreciation Worksheet - Site Improvements
Site
Imp
# Item
Effect
Age
(Yrs)
Life
Expect
(Yrs)
S/L
Deprec
%
Replacement
Cost New
% of
Overall
RCN
Wtd. Avg. S/L
Deprec.
1 Asphalt paving 11 11 100.0% $51,346 55.3% 55.3%
2 Concrete paving - Rear Yard 16 16 100.0% $12,410 13.4% 13.4% 3 Concrete Driveway 10 16 62.5% $15,719 16.9% 10.6%
4 Chain-Link Fencing 12 17 70.6% $13,453 14.5% 10.2%
Total $92,927 100.0% 89.4%
According to the client, the building roof and the concrete driveway were replaced in 2003, nearly twenty years ago. We note that the concrete driveway was in average condition compared to the rear yard concrete paving and the asphalt paved parking lot. No other improvements were reported. Due to the lack of any significant renovation in many years, the building is highly depreciated.

In addition, the asphalt paved parking lot and the rear concrete paved lot areas are cracking and are at the end of their life expectancies. In our opinion these site improvements are fully depreciated. The concrete paved driveway is in better condition than the parking lot and warranted a lower effective age.

Value Indication
By combining our land value conclusion with the depreciated replacement cost of the improvements, we arrive at a value indication by the cost approach as shown in the following table.

Value Indication by Cost Approach
Depreciated Replacement Cost $260,000
Land Value $70,000
Indicated Property Value $330,000
Rounded $330,000

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Reconciliation and Conclusion of Value 57
Former San Bernardino County Mountain Search & Rescue Station Reconciliation and Conclusion of Value
The cost approach is the only applicable method. This is the most reliable valuation method for the subject due to it being a special purpose property. The sales comparison and income approaches are not judged to be applicable. For the sales comparison approach, while there are sales of fire stations, we were unable to find sales of search and rescue stations. Additionally, the subject property is highly depreciated and is situated on land within a flood zone, has a Public Flood Control zoning, and a majority of the land is impacted by a flood control easement. As a result, there is limited or no sales data of properties which have all these features. The income approach is not applicable, as there is not an active rental market for similar properties that would permit us to develop a reliable estimate of the property’s income generating potential. Therefore, only the cost approach is utilized.

Summary of Value Indications
Cost Approach $330,000
Sales Comparison Approach Not Used
Income Capitalization Approach Not Used
Reconciled $330,000
Final Opinion of Value
Based on the preceding valuation analysis and subject to the definitions, assumptions, and limiting conditions expressed in the report, our opinion of value is as follows:

1. None.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

The value conclusion(s) in this report consider the impact of COVID-19 on the subject property.

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58 Former San Bernardino County Mountain Search & Rescue Station Exposure Time
Exposure time is the length of time the subject property would have been exposed for sale in the market had it sold on the effective valuation date at the concluded market value. Based on the concluded market value stated previously, it is our opinion that the probable exposure time is 3 to 6 months.

Marketing Period
Marketing time is an estimate of the amount of time it might take to sell a property at the concluded market value immediately following the effective date of value. We estimate the subject’s marketing period at 3 to 6 months.

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Certification 59
Former San Bernardino County Mountain Search & Rescue Station Certification
We certify that, to the best of our knowledge and belief:

1. The statements of fact contained in this report are true and correct.

2. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions.

3. We have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved.

4. We have performed no services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding the agreement to perform this assignment.

5. We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

6. Our engagement in this assignment was not contingent upon developing or reporting predetermined results.

7. Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

8. Our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice as well as applicable state appraisal regulations.

9. The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

10. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

11. Jerardo Arciniega, MAI, and Beth Finestone, MAI, AI-GRS, FRICS, CRE, made a personal inspection of the property that is the subject of this report.

12. Significant real property appraisal assistance was provided by Alexa Amata who has not signed this certification.

13. We have experience in appraising properties similar to the subject and are in compliance with the Competency Rule of USPAP.

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Certification 60
Former San Bernardino County Mountain Search & Rescue Station

14. As of the date of this report, Jerardo Arciniega, MAI, and Beth Finestone, MAI, AI-GRS, FRICS, CRE, have completed the continuing education program for Designated Members of the Appraisal Institute.

Jerardo Arciniega, MAI
California Certified General Real Estate Appraiser
#AG042445
Beth Finestone, MAI, AI-GRS, FRICS, CRE
California Certified General Real Estate Appraiser
#AG004030

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Assumptions and Limiting Conditions 61
Former San Bernardino County Mountain Search & Rescue Station Assumptions and Limiting Conditions
This appraisal and any other work product related to this engagement are limited by the following standard assumptions, except as otherwise noted in the report:

1. The title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and competent management and is available for its highest and best use.

2. There are no existing judgments or pending or threatened litigation that could affect the value of the property.

3. There are no hidden or undisclosed conditions of the land or of the improvements that would render the property more or less valuable. Furthermore, there is no asbestos in the property.

4. The revenue stamps placed on any deed referenced herein to indicate the sale price are in correct relation to the actual dollar amount of the transaction.

5. The property is in compliance with all applicable building, environmental, zoning, and other federal, state and local laws, regulations and codes.

6. The information furnished by others is believed to be reliable, but no warranty is given for its accuracy.

This appraisal and any other work product related to this engagement are subject to the following limiting conditions, except as otherwise noted in the report:

1. An appraisal is inherently subjective and represents our opinion as to the value of the property appraised.

2. The conclusions stated in our appraisal apply only as of the effective date of the appraisal, and no representation is made as to the effect of subsequent events.

3. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated.

4. No environmental impact studies were either requested or made in conjunction with this appraisal, and we reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law, the appraisal assumes that such statement will be favorable and will be approved by the appropriate regulatory bodies.

5. Unless otherwise agreed to in writing, we are not required to give testimony, respond to any subpoena or attend any court, governmental or other hearing with reference to the property without compensation relative to such additional employment.

6. We have made no survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be scaled accurately for size. The appraisal

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Assumptions and Limiting Conditions 62
Former San Bernardino County Mountain Search & Rescue Station covers the property as described in this report, and the areas and dimensions set forth are assumed to be correct.

7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any, and we have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in our appraisal.

8. We accept no responsibility for considerations requiring expertise in other fields. Such considerations include, but are not limited to, legal descriptions and other legal matters such as legal title, geologic considerations such as soils and seismic stability; and civil, mechanical, electrical, structural and other engineering and environmental matters. Such considerations may also include determinations of compliance with zoning and other federal, state, and local laws, regulations and codes.

9. The distribution of the total valuation in the report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. The appraisal report shall be considered only in its entirety. No part of the appraisal report shall be utilized separately or out of context.

10. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or any reference to the Appraisal Institute) shall be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the persons signing the report.

11. Information, estimates and opinions contained in the report and obtained from third-party sources are assumed to be reliable and have not been independently verified.

12. Unless otherwise stated in the report, no consideration has been given to personal property located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered.

13. The current purchasing power of the dollar is the basis for the values stated in the appraisal; we have assumed that no extreme fluctuations in economic cycles will occur.

14. The values found herein are subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from this list of Assumptions and Limiting Conditions.

15. The analyses contained in the report necessarily incorporate numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of material changes in the competitive environment and other matters. Some estimates or assumptions, however, inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will vary from our estimates, and the variations may be material.

16. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific survey or analysis of the property to determine whether the physical aspects

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Assumptions and Limiting Conditions 63
Former San Bernardino County Mountain Search & Rescue Station of the improvements meet the ADA accessibility guidelines. We claim no expertise in ADA issues, and render no opinion regarding compliance of the subject with ADA regulations.

Inasmuch as compliance matches each owner’s financial ability with the cost to cure the non- conforming physical characteristics of a property, a specific study of both the owner’s financial ability and the cost to cure any deficiencies would be needed for the Department of Justice to determine compliance.

17. The appraisal report is prepared for the exclusive benefit of you, your subsidiaries and/or affiliates. It may not be used or relied upon by any other party. All parties who use or rely upon any information in the report without our written consent do so at their own risk.

18. No studies have been provided to us indicating the presence or absence of hazardous materials on the subject property or in the improvements, and our valuation is predicated upon the assumption that the subject property is free and clear of any environment hazards including, without limitation, hazardous wastes, toxic substances and mold. No representations or warranties are made regarding the environmental condition of the subject property. IRR - Los Angeles, Integra Realty Resources, Inc., and their respective officers, owners, managers, directors, agents, subcontractors or employees (the “Integra Parties”), shall not be responsible for any such environmental conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist.

Because we are not experts in the field of environmental conditions, the appraisal report cannot be considered as an environmental assessment of the subject property.

19. The persons signing the report may have reviewed available flood maps and may have noted in the appraisal report whether the subject property is located in an identified Special Flood Hazard Area. However, we are not qualified to detect such areas and therefore do not guarantee such determinations. The presence of flood plain areas and/or wetlands may affect the value of the property, and the value conclusion is predicated on the assumption that wetlands are non-existent or minimal.

20. We are not a building or environmental inspector. The Integra Parties do not guarantee that the subject property is free of defects or environmental problems. Mold may be present in the subject property and a professional inspection is recommended.

21. The appraisal report and value conclusions for an appraisal assume the satisfactory completion of construction, repairs or alterations in a workmanlike manner.

22. IRR - Los Angeles is an independently owned and operated company. The parties hereto agree that Integra shall not be liable for any claim arising out of or relating to any appraisal report or any information or opinions contained therein as such appraisal report is the sole and exclusive responsibility of IRR - Los Angeles. In addition, it is expressly agreed that in any action which may be brought against the Integra Parties arising out of, relating to, or in any way pertaining to the engagement letter, the appraisal reports or any related work product, the Integra Parties shall not be responsible or liable for any incidental or consequential damages or losses, unless the appraisal was fraudulent or prepared with intentional misconduct. It is further expressly agreed that the collective liability of the Integra Parties in any such action shall not exceed the fees paid for the preparation of the assignment (unless

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Assumptions and Limiting Conditions 64
Former San Bernardino County Mountain Search & Rescue Station the appraisal was fraudulent or prepared with intentional misconduct). It is expressly agreed that the fees charged herein are in reliance upon the foregoing limitations of liability.

23. IRR - Los Angeles is an independently owned and operated company, which has prepared the appraisal for the specific intended use stated elsewhere in the report. The use of the appraisal report by anyone other than the Client is prohibited except as otherwise provided.

Accordingly, the appraisal report is addressed to and shall be solely for the Client’s use and benefit unless we provide our prior written consent. We expressly reserve the unrestricted right to withhold our consent to your disclosure of the appraisal report or any other work product related to the engagement (or any part thereof including, without limitation, conclusions of value and our identity), to any third parties. Stated again for clarification, unless our prior written consent is obtained, no third party may rely on the appraisal report (even if their reliance was foreseeable).

24. The conclusions of this report are estimates based on known current trends and reasonably foreseeable future occurrences. These estimates are based partly on property information, data obtained in public records, interviews, existing trends, buyer-seller decision criteria in the current market, and research conducted by third parties, and such data are not always completely reliable. The Integra Parties are not responsible for these and other future occurrences that could not have reasonably been foreseen on the effective date of this assignment. Furthermore, it is inevitable that some assumptions will not materialize and that unanticipated events may occur that will likely affect actual performance. While we are of the opinion that our findings are reasonable based on current market conditions, we do not represent that these estimates will actually be achieved, as they are subject to considerable risk and uncertainty. Moreover, we assume competent and effective management and marketing for the duration of the projected holding period of this property.

25. The appraisal is also subject to the following:

Extraordinary Assumptions and Hypothetical Conditions

1. None.

The use of any extraordinary assumption or hypothetical condition may have affected the assignment results.

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Addenda
Former San Bernardino County Mountain Search & Rescue Station Addendum A
Appraiser Qualifications

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Jerardo Arciniega, MAI
Integra Realty Resources - Los
Angeles
irr.com
T 818.290.5400
16030 Ventura Blvd.

Suite 620
Encino, CA 91436-4473
Experience
Mr. Arciniega, Associate Director, has been appraising real property since 2005. He is responsible for real estate analysis, data collection and studies including interviewing buyers, sellers, brokers and tenants with regard to the details of transactions and market conditions, as well as report writing for narrative appraisal assignments concerning all major real estate categories. Property types which he has appraised include retail, office, and industrial buildings, apartments, single-family residences, mobile home parks, gas stations, nurseries, renewable energy sites, self-storage facilities, and special purpose properties. He has worked on many high-profile right-of-way projects, including the Los Angeles Metro Purple Line expansion, the State Route-91 Corridor Improvement Project, among many others. His work also encompasses litigation support related to potential value diminution, eminent domain, and other issues.

He has successfully appraised properties for various client groups such as public agencies (Los Angeles Department of Water and Power, Metropolitan Water District, Metropolitan Transportation Authority, cities of Riverside, Culver City, and South Gate), financial institutions, law firms, and individual property owners. In addition, he has represented property owners in assessment appeal cases.

Professional Activities & Affiliations
Member: Appraisal Institute, June 2019
Member: International Right of Way Association
Chairman: Southern California Chapter of the Appraisal Institute, Northwestern Branch, 2nd Chair Licenses
California, Certified General Real Estate Appraiser, AG042445, Expires May 2023 Education
B.A., Economics (Cum Laude), California State University, Northridge Continuous participation in classes and seminars in pertinent study areas.

Appraisal Institute courses completed:

Advanced Concepts and Case Studies
Advanced Income Capitalization
Quantitative Analysis
Advanced Market Analysis and Highest & Best Use
Business Practices & Ethics
Annual SCCAI Litigation Seminar
General Appraiser Income Approach (403G), Part I
General Appraiser Income Approach (404G), Part II
General Appraiser Sales Comparison Approach
General Appraiser Site Valuation and Cost Approach
General Appraiser Report Writing and Case Studies
General Appraiser Market Analysis and Highest and Best Use Real Estate Finance Statistics and Valuation Modeling
[email protected] - 818.290.5416

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Beth B. Finestone, MAI, AI-GRS, FRICS, CRE
Integra Realty Resources - Los
Angeles
irr.com
T 818.290.5400
16030 Ventura Boulevard
Suite 620
Encino, CA 91436-4473
Experience
Ms. Finestone, Managing Director for and a principal of INTEGRA REALTY RESOURCES – LOS ANGELES, has been with the firm since 2004 and has been appraising in Southern California since 1981. She has specialized in valuation and consulting services related to public agency clients and for major, investment grade commercial properties, e.g., office, industrial, retail, multifamily, land, and special purpose properties, for over 30 years.

Ms. Finestone previously held senior positions with Finestone & Associates and Cushman & Wakefield of California. At Finestone & Associates from 1996 through 2003, she specialized in real estate appraisal, valuation and consulting services with focus on preparation of appraisals for industrial, commercial, and special purpose properties. This focus included consultation services, due diligence work, litigation support, and expert witness designation.

At Cushman & Wakefield of California, Inc. from 1983 through 1996, Ms. Finestone was in the Los Angeles Appraisal Services Group, specializing in real estate valuation and consulting. By the end of her tenure, she was responsible for the management the Los Angeles Valuation Advisory Services Group, including preparation and review of appraisal reports, business development, consulting and litigation work, management and coordination of multi property assignments and national accounts, professional staff development, and support staff supervision.

Ms. Finestone’s clients include public agencies, right of way firms, lenders, institutional investors, major corporations, law firms, and individual property owners. Her services include a wide range of specialized studies including value diminution (from both internal and external influences), market demand, feasibility, severance damages and project benefits, investment analysis, assessment allocation, reuse analysis, and the valuation of partial interests including leasehold, leased fee, possessory interests, and minority interests.

Recent assignments include the 22 flowage easements for the State of California Department of Water Resources, 35 easements related to a culvert upgrade project in Los Angeles County, more than 100 partial acquisitions related to the California High Speed Rail Authority Project, 39 properties for the SR 91 Improvement Project, 10 properties for the Devore Interchange Improvements Project, and 28 properties for the Lakeview and Tustin Avenues/Rose Drive Grade Separation Project. Ms. Finestone has also been active in the appraisal of large tracts of mitigation land for Orange County Transportation Authority (OCTA). She has been involved in the appraisal of a number of mitigation parcels in Northern California for the High Speed Rail Authority. These involved land banks and conservation easements.

Ms. Finestone also has significant experience valuing transportation corridor properties and pipeline easements. She has been extensively involved in valuing and doing counseling and consulting work related to rail corridors and crossings as part of the proposed high speed rail project in Central California. In addition, she has also appraised a number of federally owned properties, including the West Los Angeles Federal Building, federal courthouses in Los Angeles and Orange counties, and two Army
[email protected] - 818.290.5455

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Beth B. Finestone, MAI, AI-GRS, FRICS, CRE
Integra Realty Resources - Los
Angeles
irr.com
T 818.290.5400
16030 Ventura Boulevard
Suite 620
Encino, CA 91436-4473
Experience (Cont'd)
Reserve centers in the Los Angeles area. Much of this work has included a consulting component to aide clients in making feasibility and reuse studies of their properties. Ms.

Finestone also has significant appraisal review experience and has reviewed large numbers of appraisals for Hatch Mott MacDonald, OCTA, City of Ontario, and the Los Angeles Unified School District.

Professional Activities & Affiliations
Appraisal Institute, Member (MAI) , December 1988
Appraisal Institute, General Review Specialist, June 2015 Royal Institute of Chartered Surveyors, Fellow (FRICS) , August 2008 Member: International Right of Way Association
Counselor of Real Estate (CRE) , November 2015
Licenses
California, Certified General Real Estate Appraiser, AG004030, Expires August 2024 Education
M.B.A., Pepperdine University
B.S., Kinesiology, University of California, Los Angeles Successfully completed numerous real estate and related courses and seminars sponsored by the Appraisal Institute, accredited universities, and others Currently certified by the Appraisal Institute’s program of continuing education for its designated members
Qualified Before Courts & Administrative Bodies
Superior courts in California within the counties of Los Angeles and Orange Tax Appeal Boards of Los Angeles and San Diego counties Arbitration testimony at hearings in Los Angeles County Miscellaneous
Los Angeles Business Journal 2009 Nominee for Executive of the Year – Women Making a Difference, May 2009
Designated one of Real Estate Southern California’s 2006 Women of Influence, October 2006 [email protected] - 818.290.5455

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About IRR
Integra Realty Resources, Inc. (IRR) provides world-class commercial real estate valuation, counseling, and advisory services. Routinely ranked among leading property valuation and consulting firms, we are now the largest independent firm in our industry in the United States, with local offices coast to coast and in the Caribbean.

IRR offices are led by MAI-designated Senior Managing Directors, industry leaders who have over 25 years, on average, of commercial real estate experience in their local markets. This experience, coupled with our understanding of how national trends affect the local markets, empowers our clients with the unique knowledge, access, and historical perspective they need to make the most informed decisions.

Many of the nation's top financial institutions, developers, corporations, law firms, and government agencies rely on our professional real estate opinions to best understand the value, use, and feasibility of real estate in their market.

Local Expertise...Nationally!
irr.com

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Addenda
Former San Bernardino County Mountain Search & Rescue Station Addendum B
Flood Control Easement

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Addenda
Former San Bernardino County Mountain Search & Rescue Station Addendum C
Comparable Data

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Addenda
Former San Bernardino County Mountain Search & Rescue Station Land Sales

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Land Sale Profile Sale No. 1
Location & Property Identification
SEC Glendenning Way Property Name:

Sub-Property Type: Residential
Glendenning Way Address:

San Bernardino, CA 92404 City/State/Zip:

San Bernardino County:

Suburban Market Orientation:

IRR Event ID: 2891376
Sale Information
$250,000 Sale Price:
$250,000 Effective Sale Price:
06/02/2022 Sale Date:

Sale Status: Closed
$/Acre(Gross): $147,059
$/Land SF(Gross): $3.38
$/Acre(Usable): $147,059
$/Land SF(Usable): $3.38
Grantor/Seller: Desher Family Trust
Grantee/Buyer: Jose Rodolfo Garcia & Patricia
Cordova V Sandra
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Verified By: Jerardo Arciniega, MAI
Verification Date: 08/11/2022
Confirmation Source: William Quimby, Hamilton
Landon Real Estate,
760-406-0419
Verification Type: Confirmed-Seller Broker
Secondary Verific. Source: Assessor, Data Service
Sale Analysis
Proposed Use Desc.: 2 Single family residences
Entitlement @ T.O.S.: No
Improvement and Site Data
0153-372-02, 03, 04, 05, 08 Legal/Tax/Parcel ID:

1.70/1.70 Acres(Usable/Gross):
74,052/74,052 Land-SF(Usable/Gross):

Usable/Gross Ratio: 1.00
Shape: Rectangular
Corner Lot: No
Zoning Code: RS
Zoning Desc.: Residential Suburban
Flood Plain: Yes
Flood Zone: X500
Source of Land Info.: Public Records
Comments
This listing broker indicated the sale consisted of five parcels of land. He stated the property was unentitled at the time of sale and the buyer planned to construct two single-family residences on the property. He also said the property is next to the flood control bank, with residential surroundings on all other sides.

SEC Glendenning Way

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Land Sale Profile Sale No. 2
Location & Property Identification
425 Arrowhead Road Property Name:

Sub-Property Type: Residential
425 Arrowhead Rd. Address:

San Bernardino, CA 92404 City/State/Zip:

San Bernardino County:

Suburban Market Orientation:

IRR Event ID: 2891398
Sale Information
$425,000 Sale Price:
$425,000 Effective Sale Price:
03/31/2022 Sale Date:

Sale Status: Closed
$/Acre(Gross): $126,488
$/Land SF(Gross): $2.90
$/Acre(Usable): $126,488
$/Land SF(Usable): $2.90
$141,667 /Approved Lot$/Unit:

Grantor/Seller: Donald Bradford Henderson
Grantee/Buyer: Empire TA Corporation
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Document Type: Deed
Recording No.: 122824
Verified By: Jerardo Arciniega, MAI
Verification Date: 08/11/2022
Confirmation Source: Robert Lakes, Pacific Rim
Realty, 951-452-3377
Verification Type: Confirmed-Seller Broker
Secondary Verific. Source: Assessor, Deed
Improvement and Site Data
0270-093-23 Legal/Tax/Parcel ID:

3.36/3.36 Acres(Usable/Gross):
146,361/146,361 Land-SF(Usable/Gross):

Usable/Gross Ratio: 1.00
No. of Units (Potential): 3
Shape: Other
Corner Lot: No
Zoning Code: RE
Zoning Desc.: Residential Estate
Flood Plain: Yes
Flood Zone Designation: A
Source of Land Info.: Public Records
Comments
The listing broker indicated the property had been legally subdivided into three lots and was ready to be built. As a result, the property was entitled at the time of sale. We also confirmed the sale with the buyer's broker, Meljorie Castelo.

She confirmed the property had been subdivided into three lots and three residences could be constructed on the
property. However she stated the buyer purchased the
property for truck parking, but may eventually construct residences on the property.
425 Arrowhead Road

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Land Sale Profile Sale No. 3
Location & Property Identification
Harrison Canyon Rd Property Name:

Sub-Property Type: Residential
Harrison Canyon Rd. Address:

San Bernardino, CA 92404 City/State/Zip:

San Bernardino County:

Suburban Market Orientation:

IRR Event ID: 2891495
Sale Information
$100,000 Sale Price:
$100,000 Effective Sale Price:
03/07/2022 Sale Date:

Sale Status: Closed
$/Acre(Gross): $81,301
$/Land SF(Gross): $1.87
$/Acre(Usable): $81,301
$/Land SF(Usable): $1.87
Grantor/Seller: Robert C Clark Jr
Grantee/Buyer: Mike Quintero
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Verified By: Jerardo Arciniega, MAI
Verification Date: 08/11/2022
Confirmation Source: Eileen Valenti, Coldwell
Banker, 951-675-6769
Verification Type: Confirmed-Seller Broker
Secondary Verific. Source: Assessor, Data Service
Improvement and Site Data
0270-143-27 Legal/Tax/Parcel ID:

1.23/1.23 Acres(Usable/Gross):
53,578/53,578 Land-SF(Usable/Gross):

Usable/Gross Ratio: 1.00
Corner Lot: No
Zoning Code: RS
Zoning Desc.: Residential Suburban
Flood Plain: Yes
Flood Zone Designation: X
Source of Land Info.: Public Records
Comments
The listing broker indicated the property was unentitled at the time of sale. She stated she did not represent the buyer but believes he purchased the property to construct a
single-family residence. She said the property included views of the area to the south. The property is located on a canyon with single-family residential surroundings.

Harrison Canyon Rd

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Land Sale Profile Sale No. 4
Location & Property Identification
890 1/2 East Marshall Blvd Property Name:

Sub-Property Type: Residential
890 1/2 E. Marshall Blvd. Address:

San Bernardino, CA 92404 City/State/Zip:

San Bernardino County:

Suburban Market Orientation:

IRR Event ID: 2891515
Sale Information
$35,000 Sale Price:
$35,000 Effective Sale Price:
08/30/2021 Sale Date:

Sale Status: Closed
$/Acre(Gross): $58,636
$/Land SF(Gross): $1.35
$/Acre(Usable): $58,636
$/Land SF(Usable): $1.35
$35,000 /Potential Unit$/Unit:

Grantor/Seller: Katherine Elaine Machoskie
Grantee/Buyer: Luis R Venegas
Assets Sold: Real estate only
Property Rights: Fee Simple
% of Interest Conveyed: 100.00
Financing: Cash to seller
Verified By: Jerardo Arciniega, MAI
Verification Date: 08/15/2022
Confirmation Source: Katie Machoski, Compass,
949-355-9722
Verification Type: Confirmed-Seller Broker
Secondary Verific. Source: Assessor, Data Service
Improvement and Site Data
0153-391-01 Legal/Tax/Parcel ID:

0.60/0.60 Acres(Usable/Gross):
26,000/26,000 Land-SF(Usable/Gross):

Usable/Gross Ratio: 1.00
No. of Units (Potential): 1
Shape: Rectangular
Topography: Level
Corner Lot: No
Zoning Code: RE
Zoning Desc.: Residential Estate
Flood Plain: Yes
Flood Zone: X500
Source of Land Info.: Public Records
Comments
The listing broker was one of the owner's of the property. She indicated the property did not have legal access and that an easement would need to be granted over an adjacent single family residence. Her parents owned the residence to the south and would not grant one. Although it has a Marshall Boulevard street address, it does not have frontage on
Marshall Boulevard. However, the buyer of this property also purchased an adjacent residence. The listing broker stated the sale price for this property considered the fact that it did not have legal access. The property is adjacent to the flood control area. The surroundings to the north, west and south primarily consist of single-family residences and vacant sites.
890 1/2 East Marshall Blvd

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1 Appraisal Report Prepared on APN: 0153-161-07, San Bernardino, California (92404) Prepared for City of San Bernardino Municipal Water Department Effective Date of Value (Date of Inspection) January 26, 2022 Prepared by Steven R. Smith, MSREA, MAI, SRA and Thomas C. Wood 800 Community College Drive #114 San Jacinto, CA 92583 http://srsrea.com [email protected] 909-856-6841 0153-161-07

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2 Steven R. Smith, MSREA, MAI, SRA • Real Estate Consultants • Market Studies • Risk Analysis • Appraisals • 800 Community College Drive #114, San Jacinto, CA 92583 909-856-6841, [email protected] January 28, 2022 Purpose: The purpose of the appraisal is to formulate and express our supportable opinion of the property value of the subject property, as of the effective date of value. Intended Use/Client and Intended Users: The intended use of this appraisal report is to provide asset value to our clients for the purpose of a land exchange transaction, as it relates to the subject property. Our client, the intended user of this report, is the City of San Bernardino Municipal Water Department. This report may not be used for any other purpose than expressed above, nor by any other party, than to whom it is addressed, and the appraisers specifically disclaim any liability to such unauthorized third parties. Scope of Work: The scope of work included a full inspection of the subject property, the neighborhood and environs, the local market area, the IMRMLS MLS, Realist, CoStar Comps, LoopNet and NDC Data, for market data. Property Rights Appraised: The Fee Simple Estate in the subject property is being appraised. Effective Date of Value: January 26, 2021 (date of inspection) Market Value Conclusion: Indicated Fee Simple Estate Value of APN 0153-161-07: $75,000 (rounded) Respectfully, _____________________________ _________________________ Steven R. Smith, MSREA, MAI, SRA, Thomas C. Wood AG 2123, expires 7/15/23 AR 3004032, expires 8/16/22

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3 Table of Contents THE INTRODUCTION ............................................................................................................................................. 4 THE LOCATION ...................................................................................................................................................... 4 PROPERTY INFORMATION ..................................................................................................................................... 6 MARKET ANALYSIS / HIGHEST AND BEST USE CONCLUSION ................................................................................. 10 VALUATION ANALYSIS ......................................................................................................................................... 10 APPRAISER’S CERTIFICATIONS .............................................................................................................................. 15 ASSUMPTIONS AND LIMITING CONDITIONS ......................................................................................................... 16 ADDENDUM ......................................................................................................................................................... 17 APPRAISER QUALIFICATIONS ............................................................................................................................... 20

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4 THE INTRODUCTION CURRENT OWNERSHIP/PROPERTY HISTORY According to our review of public records, title to the subject parcel is currently vested in the City of San Bernardino. Public records indicate that the subject parcel has not had a full market transfer during the past five years and our review of LoopNet indicates that it is not currently listed for sale. MARKET AND EXPOSURE TIME Sales of similar type properties were analyzed and had a wide range of exposure periods. According to knowledgeable professionals, the marketing time for properties like the subject varies considerably. Based on our research, we believe an exposure and marketing time of six to twelve months for the subject property, if properly priced, is considered reasonable and appropriate. HYPOTHETICAL CONDITIONS/EXTRAORDINARY ASSUMPTIONS No hypothetical conditions or extra ordinary assumptions have been utilized for this report. SUBJECT OCCUPANCY Subject is vacant land. THE LOCATION San Bernardino County/Inland Empire The appraised property is located in the southwestern portion of San Bernardino County and the western portion of the region known as the “Inland Empire," one of the fastest growing regions in the State of California. From 2010-2020, the United States Census Bureau reports that the two-county area of the Inland Empire (Riverside-San Bernardino) added 374,988 people to reach 4,599,839 up 8.9%. The Inland Empire forms the largest Metropolitan Statistical Area (MSA) in the nation with over 27,308 square miles and its population ranks the Inland Empire as the 13th most populous MSA in the United States, as of 2020. Although the region's large industries had been affected by the Great Recession (2006-2011), the Inland Empire is projected to remain California's fastest-growing region for some time to come. Inexpensive land prices (compared to Los Angeles and Orange Counties), a large supply of vacant land, and a transport network where many highways and railroads intersect have made the Inland Empire a major shipping hub. Some of the nation's largest manufacturing companies have chosen the Inland Empire for their distribution facilities including Toyota Motor Corporation's North American Parts and Logistics Distribution (NAPLD) center in Ontario and APL Logistics in Rancho Cucamonga. More than 80 percent of the state's imported cargo is shipped through the Los Angeles/Inland Empire Corridor.

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5 The City of San Bernardino The subject property is located in the northeastern portion of the City of San Bernardino, in the 7th Council Ward District. San Bernardino is strategically located at the hub of an extensive transportation network and is within short commuting distances of major employment centers in Southern California. Several major transportation systems pass through the City, including three major freeways – the San Bernardino (I-10) Freeway, the Riverside (I-215) Freeway and the Foothill (210) Freeway. San Bernardino is bordered by the cities of Colton and Loma Linda on the south; Redlands and Highland on the east; the San Bernardino National Forest on the north; and the City of Rialto on the west. The City's location is well positioned as an intermodal logistics hub. The City hosts the Burlington Northern and Santa Fe (BNSF) Railway's Intermodal freight transport yard, the Yellow Freight Systems' cross-docking trucking center, and Pacific Motor Trucking. Large warehouses for Kohl's, Mattel, Pep Boys, and Stater Bros. have been developed near the San Bernardino International Airport (former Norton AFB). The City’s financial health has been improving in recent years, recovering from a 2012 bankruptcy. According to the City’s 2019 Comprehensive Annual Financial Report, there has been a notable increase in taxable value of property within the City, a clear reflection of improvements in the local economy. Specifically, the City of San Bernardino experienced a net taxable value increase of 9.5% for the 2019- property tax roll, which was a greater increase than the 6.5% growth expected countywide.

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6 Subject Neighborhood The subject’s neighborhood consists primarily of residential zoning and includes some flood control, public recreation, public facilities, and commercial zoning, as well. The neighborhood may be described as Waterman Avenue (CA 18) to the west, 40th Street to the north, Del Rosa Avenue to the east, and the 210 Freeway to the south. The subject property is located along the western side of a flood control pathway between Valencia Avenue to the west, Parkdale Street to the north, and Glendenning Avenue to the south. There are restaurants, retail buildings, major medical facilities, religious buildings, schools, public parks, and access to the 210 Freeway – all within 2 miles of the subject. PROPERTY INFORMATION (APN: 0153-161-07) Lot size: 79,655 SF / 1.83 Acres (irregularly shaped lot [raw land] with generally level topography) Tax Information: The subject property is in tax area 7228 but is not subject to property tax as it is owned by a government entity.

Subject Zoning The subject property has (PFC) Public Flood Control zoning. Per the City’s municipal code, the purpose of the PFC zone is to provide for the continuation, maintenance, and expansion of public flood control facilities.

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7 Zoning Map: Plat Map:

Flood Zone: The subject property is located within flood zone X. Earthquake Zone: The subject property is not located on a fault line. Improvements: None.

PARKDALE DRIVE

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8 EASEMENTS Public utility and roadway easements are considered typical. No adverse conditions, easements or encroachments were observed during the inspection of either site. Identification of these items is of a legal nature and an attorney specializing in this field should be consulted for their opinion concerning these items. This report is not intended to render any opinion whatsoever regarding any adverse title conditions, easements or encroachments that may affect the subject property. Our value estimate is, however, predicated upon there being no adverse title conditions, easements or encroachments that would cause a loss in value or prohibit development and no responsibility is assumed for any such conditions or for any expertise or knowledge required to discover them. SUBJECT PHOTOS The following subject photos represent only a sampling of the photos taken during our inspection. We have retained all subject photos in our workfile, which are available upon request. Southerly view from subject’s northern (apex) end at Parkdale Drive

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9 Southwest entry to the subject property from Glendenning Way Northerly view of subject from onsite

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10 MARKET ANALYSIS / HIGHEST AND BEST USE CONCLUSION (See addendum for Highest and Best Use definitions) As mentioned, the subject has flood control zoning – a land use for which there is no significant active sales market. The subject is, however, located directly adjacent to a residential neighborhood along its western boundary line and there is an active market for residential land within the subject’s City of San Bernardino market. In consideration of the subject’s zoning, a market purchase of the subject property would likely be purely speculative in nature. The buyer would need to take all the required steps of petitioning the City of San Bernardino for a zoning change to residential use, which is the use adjacent directly west of the subject. Only if a zoning change were to be granted (there are no guarantees this could be achieved,) then, considering the subject’s irregular (triangular) shape, the subject could be developed with one-to-two single family residential improvements. The location, shape (triangular,) and size (1.83 acres) of the subject property combined with the time, costs, and uncertainty associated with obtaining a zoning change would likely be prohibitive and serve as a deterrent to a typical residential developer/buyer. Conclusion (As Is - Vacant) Based on the above discussions, it is our conclusion that the subject’s highest and best use, as is (vacant and available for development,) would likely be for the property to remain vacant/undeveloped and under governmental ownership. VALUATION ANALYSIS The following analysis represents only the Market Data (or Sales Comparison) approach to value. The income and cost approaches to value were considered and have been excluded due as their inclusion is not required to obtain credible results for the purpose of this report. Sales Comparison Approach There is a dearth of sales data for vacant land with flood control zoning throughout southern California and, as a result, we will utilize sales of residentially zoned land – a land use which the subject is located directly adjacent to – and apply an appropriate discount in our valuation. An investigation was undertaken to locate sales of vacant residential land properties in the subject’s market area that could be used to provide direct market indications of the subject’s value. Our survey focused primarily on the properties most comparable to the subject, including lot sizes between 1 and 5 acres (subject is 1.83 acres,) within 10 miles of the subject, that occurred within the past 2 years. Our search revealed a significant number of vacant residential land sales in the subject’s greater market area, including the 20 sales utilized as comparables in our valuation.

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11 List of Comparables

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12 Considering the utilized comparables’ close proximity to the subject (within 10 miles,) their sizes (range of 1 to 4.3 acres,) their dates of sale (within ±22 months,) and the abundance (20) of comparables utilized, we determined that individual adjustments to the comparables would not be required. Our selected comparables have a dollar per acre range of $25,686 to $85,385 with an average of $61,820. As mentioned, the subject’s flood control zoning is a detriment to its developability and marketability and, thus a discount would be appropriate. In this regard, it is our opinion that the subject’s market value would most likely fall below the average of the data set, somewhere between $30,000 and $50,000 dollars per acre. As such, we have selected a rounded $40,000 per acre for the subject which indicates a value of $73,200 for the subject’s 1.83 acres. We conclude that the market value of the subject’s fee simple estate, as of 1/26/2022 is: SEVENTY-FIVE THOUSAND DOLLARS $75,000 (rounded) Map of Comparables

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15 APPRAISER’S CERTIFICATIONS We do hereby certify that, except as otherwise noted in this report: We have made a personal inspection of the properties that are the subject of this report. We have no past, present or prospective interest or bias in the properties that are the subject of this report and no personal interest or bias with respect to the parties involved. To the best of our knowledge and belief, the statements of fact contained in this report, upon which the analysis, opinions, and conclusions expressed herein are based, are true and correct. The analysis, opinions, and conclusions contained in this report are limited only by the reported assumptions and limiting conditions imposed by the terms of our assignment or by the undersigned and are our personal, impartial, and unbiased professional analysis, opinions, and conclusions. The reported analysis, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice and in conformity conforms to the requirements of the code of professional ethics and standards of professional appraisal practice of the Appraisal Institute. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. The Appraisal Institute has a voluntary program of continuing education requirements. Steven R. Smith is certified through 2022 with his education requirement. In accordance with the Competency Provision of the Uniform Standards of Professional Appraisal Practice (USPAP), We have verified that our knowledge and experience is sufficient to allow us to competently complete this appraisal unless stated otherwise within this report. The appraisers further certify and agree that: Our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. This appraisal assignment was not based on a requested minimum valuation, a specific valuation, or the approval of a loan. Our firm has not appraised the subject properties within the last three years. Steven R. Smith, MSREA, MAI, SRA AG 2123, expires 7/15/23 Thomas C. Wood AR 3004032, expires 8/16/22

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16 ASSUMPTIONS AND LIMITING CONDITIONS This appraisal is subject to the following assumptions and limiting conditions: No responsibility is assumed for matters legal in character or nature. No opinion is rendered as to title, which is assumed to be good and marketable. All existing liens, encumbrances, and assessments have been disregarded, unless otherwise noted, and the property is appraised as though free and clear, having responsible ownership and competent management. We have examined the property described herein exclusively for the purposes of identification and description of the real property. The objective of our data collection is to develop an opinion of the highest and best use of the subject property and make meaningful comparisons in the valuation of the property. The appraiser's observations and reporting of the subject improvements are for the appraisal process and valuation purposes only and should not be considered as a warranty of any component of the property. This appraisal assumes (unless otherwise specifically stated) that the subject is structurally sound, and all components are in working condition. We will not be required to give testimony or appear in court because of having made an appraisal of the property in question, unless specific arrangements to do so have been made in advance, or as otherwise required by law. We have noted in this appraisal report any significant adverse conditions (such as needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) discovered during the data collection process in performing the appraisal. Unless otherwise stated in this appraisal report, we have no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and have assumed that there are no such conditions and make no guarantees or warranties, express or implied. We will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because we are not experts in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. We obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable public and/or private sources that we believe to be true and correct. We will not disclose the contents of this appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice, and/or applicable federal, state or local laws. The Client is the party or parties who engage an appraiser (by employment contract) in a specific assignment. A party receiving a copy of this report from the client does not, as a consequence, become a party to the appraiser-client relationship. Any person who receives a copy of this appraisal report as a consequence of disclosure requirements that apply to an appraiser's client, does not become an intended user of this report unless the client specifically identified them at the time of the assignment. The appraiser's written consent and approval must be obtained before this appraisal report can be conveyed by anyone to the public through advertising, public relations, news, sales, or other media.

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17 ADDENDUM Definition of Market Value: In accordance with USPAP 2020-2021, Market Value is defined as a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the value definition that is identified by the appraiser as applicable in an appraisal. Market Value is further defined by agencies that regulate federally insured financial institutions in the United States as follows: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1. Buyer and seller are typically motivated; 2. Both parties are well informed or well advised and each acting in what they consider their best interests; 3. A reasonable time is allowed for exposure in the open market; 4. Payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto; and 5. The price represents the normal consideration for the property sold unaffected by special or creative financing or sales commissions granted by anyone associated with the sale. Definition of As Is Market Value: "The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date." (Source: Appraisal Institute, The Dictionary of Real Estate Appraisal, 6th ed. (Chicago: Appraisal Institute, 2015); also, Interagency Appraisal and Evaluation Guidelines, Federal Register, 75 FR 77449, December 10, 2010, page 77471). Highest and Best Use Definitions: Highest and best use is defined as: “The reasonably, probable legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible and that results in the highest value. The four criteria the highest and best use must meet are legal permissibility, physical possibility, financial feasibility and maximum productivity.” The above definition of the “Highest and Best Use” is in reference to land that is unimproved. In cases of improved land, a determination of the contributory value of the improvements to the land must be made. The improvements found on a site may be of inappropriate use but will usually continue until the land value in its highest and best use exceeds the total value of the property in its existing use. The subject property is vacant and, therefore, its highest and best use will be solely analyzed as if unimproved and available for development. It should be noted that a highest and best use determination represents an appraiser's opinion based on their judgment and the application of several forms of analyses. Like value, it is not a fact that can be found. The highest and best use of land as though vacant and property as improved must meet four basic tests. These tests consist of the following (see addendum for supportive definitions):

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18 1. Is the use legally permissible or reasonably possible? 2. Is the use physically possible on the site? 3. Is the use economically and financially feasible under proposed and projected market conditions? 4. Is the use estimated to be the most productive among the alternatives that are legally permissible, physically possible, and economically feasible? Highest and Best Use - As If Vacant Highest and Best Use of the site as vacant assumes that a parcel of land is vacant or could be vacant by demolishing the improvements. Given this assumption, this analysis determines the size, quality, and function that would provide the highest return to the land. The four criteria of the Highest and Best Use (see above) provide a basis for analysis. To form an opinion as to the Highest and Best Use as if vacant, we considered the physical attributes of the subject property, its zoning, location and known governmental influences, and the uses of surrounding properties. An in-depth feasibility analysis on the possible alternative uses of the site is beyond the scope of this appraisal assignment. However, in analyzing the subject property, we have investigated the regional, city, and neighborhood characteristics, as well as overall market conditions. Details regarding each category are presented in respective sections of this appraisal report. Highest and Best Use – As Improved The highest and best use of an improved property at a given time means that use of the land, which produces the most benefits and, therefore, the highest improved property value. The “use” in the case of improved property refers to the type of use, as well as how this use is to be exercised in the future. In determining the highest and best use of the property as improved, three use potentials exist: 1. the present improvements are demolished, and the land is used for another purpose; 2. the present improvements are retained without substantial physical or operational changes; 3. the present improvements are retained but with significant changes in the physical property (i.e., remodel/addition) or its management. Supportive Definitions for Highest and Best Use Analysis: Legally Permissible Legal permissibility depends on public restrictions such as zoning, building codes, as well as the private or contractual restrictions found in deeds and long-term leases. Current information regarding private restrictions was not provided in this assignment. However, there appears to be no deed or easement restrictions on the property that could affect development. A restriction or long-term ground lease does not encumber the land. Therefore, legal restrictions as they apply to the subject property are primarily the public restrictions of zoning. An industrial development would be considered a legally allowed use and consistent with those of the surrounding area.

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19 Physically Possible The size, shape, terrain, soil conditions, accessibility, and availability of utilities for a parcel of land affect its utility and adaptability. The physical characteristics of the subject site appear to be adequate in terms of shape, size, topography, available utilities and accessibility. Although the exact soil composition is unknown, it appears that the soil is also adequate to support building improvements. Therefore, it appears that the physical characteristics would allow for the legally permissible uses. Financially Feasible and Maximally Productive According to the Real Estate Terminology Handbook, a real estate project is feasible when the analysis indicates that there is a likelihood of satisfying the explicit objectives and when a selected course of action is tested in the context of specific constraints and limited resources. The feasibility of a real estate project is normally related to its economic potential.

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20 APPRAISER QUALIFICATIONS STEVEN R. SMITH, MSREA, MAI, SRA, AG 2123 MS IN REAL ESTATE APPRAISAL, BA IN REAL ESTATE FINANCE FULL TIME APPRAISER SINCE 1976. PART TIME UNIVERSITY INSTRUCTOR IN REAL ESTATE AT CAL STATE UNIVERSITY 2005-2015. PRIOR WORK EXPERIENCE INCLUDED LOAN SERVICING, LOAN ORIGINATION, LOAN ADMINISTRATION, TITLE INSURANCE SALES, REAL ESTATE SALE, MORTGAGE LENDING, AND REAL ESTATE SALES MANAGEMENT. APPRAISAL EXPERIENCE INCLUDES PERFORMING APPRAISALS AND MARKET STUDIES ON EXISTING, PROPOSED AND DISTRESSED PROPERTIES, NON-PERFORMING OR DESTABILIZED PROJECT. COURT TESTIMONY EXPERIENCE INCLUDES A RANGE OF CIVIL AND CRIMINAL CASES, PROFESSIONAL LIABILITY CASES, MORTGAGE FRAUD AND REAL ESTATE FRAUD CASES; AS BOTH AN EXPERT WITNESS OR AS A REBUTTAL WITNESS. DEPOSITION TESTIMONY HAS ALSO INCLUDED IRS AND EMINENT DOMAIN CASES. NO COURT TESTIMONY HAS BEEN PROVIDED IN EITHER OF THESE TYPES OF CASES AS EVERYONE HAS SETTLED. SEMINARS CREATED AND DELIVERED INCLUDE: MORTGAGE FRAUD AND THE APPRAISERS ROLE- AI-2005, BUILDING TRANSFERABLE SKILL-SETS, AI – 2005, PREDATOR LENDING, CLIENT PRESSURES & APPRAISAL FRAUD, 2004, MORTGAGE FRAUD, CASES & CONSEQUENCES, 2002, REAL ESTATE FRAUD, APPRAISERS LIABILITIES & RESPONSIBILITIES, 2000, REAL ESTATE FRAUD & THE APPRAISERS ROLE, 2000, APPRAISAL REVIEW- SREA - 1989. APPRAISER LIABILITY SEMINAR- SREA - 1988. CAL LEAGUE OF SAV I N G S INSTITUTIONS - APPRAISAL QUALITY CONTROL - 1988. RESIDENTIAL APPRAISAL SEMINAR - AIREA - 1987. BOSTON SAFE GUIDELINES - 1985-1988. MORTGAGE BANKERS OF AMERICA-APPRAISAL REVIEW - 1984-86. NARAMU-APPRAISAL REVIEW & FRAUD PREVENTION - 1984-1985. UNIFORM APPRAISAL GUIDELINES - 1984-88. 99 POINT APPRAISAL REVIEW WORKSHOP - 1984-1986. EXPERIENCE CREDIT WORKSHOP-USPAP COMPLIANCE, APPRAISAL INSTITUTE 1991. USPAP COMPLIANCE, APMW, 1991. ESTATE AND LUXURY HOME APPRAISAL REVIEW – APPRAISAL INSTITUTE - 1997. SPECIALTIES INCLUDE: LUXURY HOMES, AND FORENSIC APPRAISAL REVIEW CONTACT: 909-856-6841, WEB PAGE: HTTP://SRSREA.COM, EMAIL: [email protected]

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21 THOMAS C. WOOD, AR 3004032 FULL TIME APPRAISER SINCE 2016, PROVIDING COMMERCIAL AND RESIDENTIAL PROPERTY VA L U AT I O N SERVICES IN LOS ANGELES AND ORANGE COUNTIES AND THE INLAND EMPIRE AREA OF THE SOUTHERN CALIFORNIA REGION. MY EXPERIENCE HAS A FOCUS ON COMMERCIAL PROPERTIES, EMINENT DOMAIN, AND EASEMENT V ALUATION. EDUCATION: MCKISSOCK – NOVEMBER 2020 THRU APRIL 2021 GENERAL APPRAISER INCOME APPROACH – 60 HOURS GENERAL APPRAISER SITE VALUATION AND COST APPROACH – 30 HOURS GENERAL APPRAISER MARKET ANALYSIS HIGHEST AND BEST USE – 30 HOURS GENERAL APPRAISER REPORT WRITING AND CASE STUDIES – 30 HOURS WESTERN GOVERNERS UNIVERSITY - JULY 2020 BACHELOR OF SCIENCE BUSINESS MANAGEMENT MCKISSOCK – FEBRUARY/MARCH 2020 2020-2021 USPAP UPDATE COURSE – 7 HOURS ADV ANCED RESIDENTIAL APPLICATIONS AND CASE STUDIES – 15 HOURS LAWS AND REGULATIONS FOR CALIFORNIA APPRAISERS – 4 HOURS STATISTICS, MODELING, AND FINANCE – 15 HOURS SOUTH TEXAS COLLEGE - AUGUST 2019 ASSOCIATE OF ARTS IN BUSINESS ADMINISTRATION APPRAISAL INSTITUTE - FEBRUARY 2017- FEBRUARY 2018 BASIC APPRAISAL PRINCIPALS – 30 HOURS BASIC APPRAISAL PROCEDURES – 30 HOURS GENERAL APPRAISER SALES COMPARISON APPROACH – 30 HOURS REAL ESTATE APPRAISAL TRAINEE/SUPERVISOR – 30 HOURS ONLINE BUSINESS PRACTICES AND ETHICS – 5 HOURS 2018-2019 USPAP UPDATE COURSE – 7 HOURS ALLIED SCHOOLS - JUNE 2016 REAL ESTATE APPRAISAL PRINCIPALS AND PRACTICES – 60 HOURS RESIDENTIAL SALES COMPARISON AND INCOME APPROACHES – 30 HOURS RESIDENTIAL APPRAISER SITE VALUATION AND COST APPROACH – 15 HOURS RESIDENTIAL APPRAISER MARKET ANALYSIS AND HIGHEST AND BEST USE – 15 HOURS REAL ESTATE APPRAISAL REPORT WRITING – 15 HOURS 2016-2017 USPAP UPDATE COURSE – 15 HOURS REAL ESTATE APPRAISAL TRAINEE/SUPERVISOR – 4 HOURS

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Item # Line Item Description Quantity Unit Unit Cost Extended Cost Time (CD) 1 Demo plans 1 LS 1,000.00 $      1,000.00$         10 2 Permits 1 LS 2,000.00 $      2,000.00$         5
3 Insurance 1 LS 10,000.00 $     10,000.00$       0
4 Mobilization /Demobilization 1 LS 5,000.00 $      5,000.00$         1 5 Edison LOTO 1 LS 2,500.00 $      2,500.00$         5 6 Gas service disconnection 1L S ‐$               ‐ $                  5 7 Underground gas demo 1 LS 15,000.00 $     15,000.00$       5 8 Telephone and internet 1 LS 2,500.00 $      2,500.00$         1 9 Water demo 1L S ‐$               ‐ $                  1 10 Hazmat testing 25 EA 560.00 $         14,000.00$       3 11 Hazmat mitigation 1 LS 60,000.00 $     60,000.00$       10 12 Hazmat hauling/disposal 1 LS 20,000.00 $     20,000.00$       2 13 Interior removal/demo 1 LS 20,000.00 $     20,000.00$       1 14 External/shell demo 30,000 SF 7.50 $             225,000.00$      15 15 AC & concrete demo 60,000 SF 4.50 $             270,000.00$      20 16 Hauling of shell material 150 TON 60.00 $           9,000.00$         5 17 Hauling of concrete material 500 TON 60.00 $           30,000.00$       10 18 Clearing vegetation/trees/shrubs 1 LS 1,500.00 $      1,500.00$         2 687,500.00$     101
School of Hope Demolition Estimate                                                                                                                                   January 10, 2023 Notes Related to Reduced Estimate.

Current rates for transportation of large equipment
This can be reduced or eliminated if performed in house Service disconnection only. Edison is currently working on undergrounding these lines Disconnection of service at the customer valve
The cost for terminating Gas service could be free of charge if purchasing party plans to obtain Gas Connection on site
This is for on‐site work and could be reduced if there is only one service Will focus on paint and asbestos testing
For full demo, this will be for preparing only with protective measures For full demo, this will be for hauling and fees at dump site Current dump rates
This hauling is very costly. If material can be buried on site, that will help reduce costs.

This is based on current fees
Leave access onto the site interior for demo work
Leave perimeter trees in tact rather than take all from the site The estimate above includes all probable costs, inclusive of the 3 most common phases, of a project from it's conception through the end of demolition. With the greatest costs being in the demolition and hauling of material from on site concrete, a limited plan can be negotiated in an effort to save money where necessary. Some activities are expected to overlap on the schedule; therefore a 120 day contract for construction will be sufficient.

Unit Costs Updated 12/12/2022:The costs here fall in‐line with the latest information provided on the demolition. Some services can be performed in‐house to provide a cost savings. Other services can be eliminated or reduced due to the current status of the property, and what may not be necessary for the purchasing party.  
  
 
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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Nathan Freeman, Agency Director of Community, Housing,
and Economic Development
Department: Community, Housing, & Economic Development (CED) Subject: Adoption of Ordinance No. MC-1613 (Annexation No. 31) (Ward 3)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Ordinance No. MC-1613 amending Ordinance No. MC-1522 and levying special taxes to be collected during Fiscal Year 2023-2024 to pay the annual costs of the maintenance and servicing of landscaping, lighting, water quality improvements, graffiti, streets, street sweeping, parks and trail maintenance, a reserve fund for capital replacement, and administrative expenses with respect to City of San Bernardino Community Facilities District No. 2019-1 (Maintenance Services).

Background
On June 5, 2019, the Mayor and City Council adopted Resolution No. 2019-81, a Resolution of Intention to form Community Facilities District No. 2019-1 (Maintenance Services) of the City of San Bernardino (the “Resolution of Intention”), pursuant to the provisions of the “Mello-Roos Community Facilities Act of 1982”. A public hearing was set for July 17, 2019, for the issue of establishment of the community facilities district.

Discussion
On March 1, 2023, Ordinance No. MC-1613 was introduced for first reading to the Mayor and City Council. The Ordinance is now being returned to the Mayor and City Council for adoption. The Ordinance will become effective 30 days from the date of adoption.

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2021-2025 Strategic Targets and Goals
This project is consistent with Key Target No 1. Improved Operational & Financial Capacity and Key Target No 4. Economic Growth & Development. This project will contribute to ensure that the City is clean and attractive and provide infrastructure designed for long term economic growth.

Fiscal Impact
There is no fiscal impact associated with the recommended action of this item. All costs associated with annexing property into the District has been borne by the Property Owner. By annexing the subject property into the District, the costs of maintaining improvements located within the development will be financed through special taxes levied on the parcels within CFD 2019-1 and not through the City’s General Fund.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Ordinance No. MC-1613 amending Ordinance No. MC-1522 and levying special taxes to be collected during Fiscal Year 2023-2024 to pay the annual costs of the maintenance and servicing of landscaping, lighting, water quality improvements, graffiti, streets, street sweeping, parks and trail maintenance, a reserve fund for capital replacement, and administrative expenses with respect to City of San Bernardino Community Facilities District No. 2019-1 (Maintenance Services).

Attachments
Attachment 1 – Ordinance No. MC-1613 (Ordinance Levying Special Taxes) Attachment 2 – Exhibit A – Description of Services
Attachment 3 – Exhibit B – Description of Territory
Attachment 4 – Project Location Map
Ward:

Third Ward
Synopsis of Previous Council Actions:

June 5, 2019 Mayor and City Council adopted Resolution No. 2019-81, a Resolution of Intention to form Community Facilities District No. 2019-1 (Maintenance Services) of the City of San Bernardino (the “Resolution of Intention”), pursuant to the provisions of the “Mello- Roos Community Facilities Act of 1982.”
July 17, 2019 Mayor and City Council adopted Resolution No. 2019-178 establishing Community Facilities District No. 2019-1; Resolution No. 2019-179 declaring election results for Community Facilities District No. 2019-1; and conducted the first reading of Ordinance No. MC- 1522 levying special taxes to be collected during FY 2019-20 to pay annual costs of maintenance, services and expenses with respect to Community Facilities District No. 2019-1.

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August 7, 2019 Mayor and City Council conducted the final reading of Ordinance No.

MC-1522 levying special taxes to be collected during FY 2019-20 to pay annual costs of maintenance, services and expenses with respect to Community Facilities District No. 2019-1.

January 18, 2023 Mayor and City Council adopted Resolution No. 2023-017, a Resolution of Intention to annex territory into Community Facilities District No. 2019-1 (Maintenance Services) of the City of San Bernardino (the “Resolution of Intention”), pursuant to the provisions of the “Mello-Roos Community Facilities Act of 1982.”
March 1, 2023 Mayor and City Council adopted Resolution No. 2023-40 calling an election to submit to the qualified electors the question of levying a special tax within the area proposed to be annexed to Community Facilities District No. 2019-1 (Annexation No. 31), and adopted Resolution No. 2023-41 declaring election results for Community Facilities District No. 2019-1 (Annexation No. 31); and introduced Ordinance No. MC-1613 amending Ordinance No. MC-1522.

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Ordinance No. MC-1613
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0 ORDINANCE NO. MC-1613

AN ORDINANCE OF THE MAYOR AND CITY COUNCIL

OF THE CITY OF SAN BERNARDINO, CALIFORNIA,
AMENDING ORDINANCE NO. MC-1522 AND LEVYING

SPECIAL TAXES TO BE COLLECTED DURING FISCAL
YEAR 2023-2024 TO PAY THE ANNUAL COSTS OF THE

MAINTENANCE AND SERVICING OF LANDSCAPING,

LIGHTING, WATER QUALITY IMPROVEMENTS,

GRAFFITI, STREETS, STREET SWEEPING, PARKS AND

TRAIL MAINTENANCE, A RESERVE FUND FOR

CAPITAL REPLACEMENT, AND ADMINISTRATIVE

EXPENSES WITH RESPECT TO CITY OF SAN
BERNARDINO COMMUNITY FACILITIES DISTRICT NO.
2019-1 (MAINTENANCE SERVICES)
WHEREAS, the Mayor and City Council (the "City Council") of the City of San Bernardino (the "City") has heretofore adopted Resolution No. 2019-81, stating that a community facilities district to be known as "City of San Bernardino Community Facilities District No. 2019-1 (Maintenance Services), County of San Bernardino, State of California" (the "Community Facilities District"), is proposed to be established under the provisions of Chapter 2,5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the "Mello-Roos Community Facilities Act of 1982" (the "Act"), and fixing the time and place for a public hearing on the formation of the Community Facilities District; and
WHEREAS, notice was published and mailed to the owners of the property in the Community Facilities District as required by law relative to the intention of the City Council to establish the Community Facilities District and the levy of the special taxes therein to provide certain services, and of the time and place of said public hearing; and WHEREAS, on March 1, 2023, at the time and place specified in said published and mailed notice, the City Council opened and held a public hearing as required by law relative to the formation of the Community Facilities District, the levy of the special taxes therein and the provision of services by the Community Facilities District; and WHEREAS, at the public hearing all persons desiring to be heard on all matters pertaining to the formation of the Community Facilities District, the levy of the special taxes and the provision of services therein were heard, and a full and fair hearing was held; and WHEREAS, subsequent to said hearing, the City Council adopted resolutions entitled "Resolution of the City Council of the City of San Bernardino Establishing Calling An Election for the Purpose of Submitting the Question of the Levy of the Proposed Special Tax to the Qualified Electors of the Proposed Community Facilities District; Authorizing the Levy of Special Taxes; and Establishing the Appropriations Limit for the Proposed Community Facilities District" (the "Resolution of Formation") which resolution established the Community Facilities District, authorized the levy of a special tax within the District, and called an election within the District on

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Ordinance No. MC-1613
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0 the proposition of levying a special tax, and establishing an appropriations limit within the District; and
WHEREAS, an election was held within the Community Facilities District in which the sole eligible landowner elector approved said propositions by more than the two-thirds vote required by the Act.

THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO DO ORDAIN AS FOLLOWS:

SECTION 1.Findings. It is necessary that the City Council of the City of San Bernardino levy special taxes pursuant to Sections 53340 of the Government Code to provide and finance the costs of certain types of services, and related costs within the Community Facilities District, including (i) the maintenance and servicing of landscaping, lighting, water quality improvements, graffiti, streets, street sweeping, and park maintenance, (ii) a reserve fund for capital replacement, and (iii) administrative expenses, all as more completely described in Exhibit "A" to Resolution No. 2019-81, attached hereto and by this reference made a part hereof.

SECTION 2.Levy of Special Taxes. Special taxes shall be and are hereby levied for the Fiscal Year 2023-2024, and each Fiscal Year thereafter, on all parcels of real property within the District which are subject to taxation, which are identified in Exhibit "B" attached hereto. Pursuant to said Section 53340, such special taxes shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale, and Lien priority in case of delinquency as is provided for ad valorem taxes.

SECTION 3.Transmittal to County. The City Clerk shall immediately following adoption of this ordinance transmit a copy hereof to the Board of Supervisors and the County Auditor of the County of San Bernardino together with a request that the special taxes as levied hereby be collected on the tax bills for the parcels identified in Exhibit "B" hereto, along with the ordinary ad valorem property taxes to be levied on and collected from the owners of said parcels.

SECTION 4.Authorization to Publish Ordinance. City Clerk of the City of San Bernardino shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted under section 36933 of the Government Code of the State of California.

SECTION 5.Effective Date. This ordinance shall become effective thirty (30) days after its adoption.

APPROVED and ADOPTED by the City Council and signed by the Mayor and attested by the City Clerk this ____ day of _______, 2023.

Helen Tran, Mayor
City of San Bernardino

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Ordinance No. MC-1613
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0 Attest:

Genoveva Rocha, CMC, City Clerk
Approved as to form:

Sonia Carvalho, City Attorney

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Ordinance No. MC-1613
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0 CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO) ss

CITY OF SAN BERNARDINO )
I, Genoveva Rocha, CMC, City Clerk, hereby certify that the attached is a true copy of Ordinance No. MC-1613, introduced by the City Council of the City of San Bernardino, California, at a regular meeting held the ____ day of ______, 2023. Ordinance No. MC-1613 was approved, passed and adopted at a regular meeting held the ____ day of ______, 2023 by the following vote:

Genoveva Rocha, CMC, City Clerk

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EXHIBIT A

DESCRIPTION OF AUTHORIZED SERVICES
The services which may be funded with proceeds of the special tax of CFD No. 2019-1, as provided by Section 53313 of the Act, will inc lude all costs attribut able to maintaining, servicing, cleaning, repairing and/or replacing landscaped areas (may include reserves for replacement) in public street right-of-ways, public landscaping, public open spaces and other simila r landscaped areas officially dedicated for public use. These services including the following:
(a) maintenance and lighting of parks, parkways , streets, roads and open space, which maintenance and lighting services may inc lude, without lim itation, furnishing of electrical power to street lights and traffic signals; repair and replacement of damaged or inoperative light bulbs, fixtures and standards; maintenance (including irrigation and replacement) of landscaping vegetation s ituated on or adjacent to parks, parkways, streets, roads and open space; maintenance and repair of irrigation facilities; maintenance of public signage; graffiti removal fr om and maintenance and repair of public struc tures situated on parks, parkway s, streets, roads and open space; maintena nce and repair of playground or recreation program equipment or facilities situated on any park; and (b) maintenance and operation of water qualit y improvements which include storm drainage and flood protection facilities, including, without limitation, drainage inlets, catch basin inserts, infiltration basins, flood control channels, fossil fuel filters, and similar facilities. Maintenance services may include but is not limited to the repair, removal or replac ement of all or part of any of the water quality improvements, fossil fuel filters within the public right-of-way including the removal of petroleum hydrocarbons and other pollutants from water runoff, or appur tenant facilities, clearing of inle ts and outlets; erosion repairs; and cleanup to improvements, and other it ems necessary for the maintenance, servicing; or both of the water quality basin improvements within flood control channel improvements; and (c) public street sweeping, on the segments of the arterials within the boundaries of CFD No. 2019-1; as well as local roads within residential s ubdivisions located within CFD No. 2019-1; and any portions adjacent to the properties within CFD No. 2019-1.

In addition to payment of the cost and expense of the forgoing services, proceeds of the special tax may be expended to pay “Administrative Expenses,” as said term is defined in Exhibit B to this resolution of intention.

The above services shall be limited to those provided within the boundaries of CFD No. 2019-1 or for the benefit of the properties within the boundaries of CFD No. 2019-1, as the boundary is expanded from time to time by anticipated annexations, and said services may be financed by proceeds of the special tax of CFD No. 2019-1 only to the extent that they are in addition to those pr ovided in the territory of CFD No. 2019-1 before CFD No. 2019-1 was created.

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EXHIBIT B

DESCRIPTION OF PROPOSED TERRITORY TO BE ANNEXED
The City of San Bernardino Community Facilities District No. 2019-1 (Maintenance Servic es) (the “CFD No. 2019-1” ) Annexation No. 31 is currently comprised of one (1) parcel, located within the City boundaries. The property is identified by the following San Bernardino County Assessor's Parcel Number (APN).

APN Owner Name
0142-211-29 Elliot Precision Block Co.

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PENSYLVANIA
AVE
RANCHO

AVENARANGA ST

RIALTO AVE
^_
£¤66

MILL ST
16TH ST

SPRUCE ST

SIERRA W

AYNINTH ST

CAMPUS WAY
2ND ST

MAGNOLIA AVE

ORANGE SHOW RD
4TH STRANCHO AVE
17TH ST

BASE LINE ST

SECOND ST

PEPPER AV

PACIFIC ST

CEDAR AVE

TIPPECANOE ST

CENTRAL AVE
M

ERIDIAN AVE

SAN BERNARDINO AVE
M

T VERNON AVE

NORMAN RD

PENNSYLVANIA AVE
W
ATERM
AN AVE

CITRUS AVE

EUCALYPTUS AVE

ACADEMY ST
M
T.VIEW
AVE

COLTON AVE

REDLANDS BLVD

MILL ST
§¨¦
215
£¤66
CFD NO. 2019-1 (MAINTENANCE SERVICES)
ANNEXATION NO. 31

PROJECT MAP

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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Barbara Whitehorn, Agency Director of Administrative Services Department: Finance
Subject: Approval of Commercial and Payroll Disbursements (All Wards)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California approve the commercial and payroll disbursements for February 2023.

Background
Completed commercial and payroll disbursement registers are submitted to the Mayor and City Council for approval. This happens on a regular basis, typically every meeting for the most recently completed disbursement registers.

The detailed warrant registers are available on the City Website, and are updated weekly by the Finance Department. The registers may be accessed by copying the following link into an internet browser:
https://sbcity.org/city_hall/finance/warrant_register
Discussion
Gross Payroll
Bi-Weekly for February 16, 2023 $2,753,633.88
Monthly for February 15, 2023 $26,950.00
Total Payroll Demands: $2,780,583.88 The following check registers are being presented for approval:

February 9, 2023 2022/23 (Register #35) $2,910,388.87
February 13, 2023 2022/23 (Register #36) $6,000.00
February 16, 2023 2022/23 (Register #37) $1,660,815.42
Total commercial check demands: $4,577,204.29

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2021-2025 Strategic Targets and Goals
Approval of the noted check and EFT registers for commercial and payroll disbursements align with Key Target No. 1: Improved Operational & Financial Capacity by creating a framework for spending decisions.

Fiscal Impact
Amounts noted in the disbursement registers have no further fiscal impact. Amounts were paid consistent with existing budget authorization and no further budgetary impact is required.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino approve the commercial and payroll disbursements for February 2023.

Attachments
Attachment 1 Payroll Summary Report for February 2023 Attachment 2 Commercial checks & Payroll Register #35 Attachment 3 Commercial checks & Payroll Register #36 Attachment 4 Commercial checks & Payroll Register #37 Attachment 5 Commercial EFT Registers #1415-1429 Ward:

All Wards
Synopsis of Previous Council Actions:

The following Electronic Funds Transfer (EFT) registers presented for approval:

January 5 to February 7, 2023 2022/23 (Register #1415-1429) $ 2,346,868.50 Total commercial EFT demands: $2,346,868.50

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9 CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Barbara Whitehorn, Agency Director of Administrative Services Department: Finance
Subject: Investment Portfolio Report for January 2023 (All Wards)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, accept and file the Monthly Investment Portfolio Report January 2023.

Background
The City’s Statement of Investment Policy requires that a monthly Investment Portfolio Report be prepared and submitted to the Mayor and City Council. The Director of Finance will prepare, review, and present the City’s Investment Portfolio Report and confirm that the portfolio is in compliance with the City’s Investment Policy.

Discussion
The Investment Portfolio Report provides a synopsis of investment activity for the City’s investment portfolio for the month ended January 31, 2023.

The City’s Investment Portfolio is in full compliance with the City’s current Investment Policy and California Government Code section 53601, and there is sufficient cash flow from a combination of liquid and maturing securities, bank deposits, and income to meet the City’s expenditure requirements.
2021-2025 Strategic Targets and Goals
The acceptance and filing of the attached Investment Portfolio Report aligns with Key Target No. 1: Improved Operational & Financial Capacity by implementing, maintaining, and updating a fiscal accountability plan.

Fiscal Impact
There is no fiscal impact associated with receiving and filing the monthly investment

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Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, accept and file the Monthly Investment Portfolio Report for January 2023.

Attachments
Attachment 1 Investment Portfolio Management Summary Report January 2023
Ward:

All Wards
Synopsis of Previous Council Actions:

N/A

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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: March 15, 2023
To: Honorable Mayor and City Council Members
From: Charles E. McNeely, Interim City Manager;
Barbara Whitehorn, Agency Director of Administrative Services Department: Finance
Subject: Resolution No. 2023-044 Authorizing the Recording of a Notice of Cessation of Special Tax Lien for
Community Facilities District No. 2022-1
(Highland/Medical) of the City of San Bernardino. (Sixth Ward)
Recommendation:

It is recommended that the Mayor and City Council of the City of San Bernardino, California, Adopt Resolution No. 2023-044 of the City Council of the City of San Bernardino, Acting in its Capacity as the Legislative Body of Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, Authorizing the Recording of a Notice of Cessation of Special Tax Lien.

Background
The City Council of the City of San Bernardino, California (the “City”), previously formed Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California (“CFD No. 2022-1”) and the qualified electors approved the levy of special taxes on the real property located within the CFD No. 2022-1 for the purpose of financing the provision of certain services and the acquisition and construction of certain facilities.

Discussion
On January 11, 2023, the City received a formal request from Warmington Highland Village Associates, L.P. (the “Property Owner”) to cause the cancelation of the special tax obligation of CFD No. 2022-1. Section 5330.5 of the Government Code allows for the cessation of special taxes by recording a notice of cessation of special tax.

The Property Owner requested cancelation of the special tax obligation because the planned structure for development of the property has changed. The Property Owner is going to build out the property, rather than selling it to a secondary merchant builder.

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With this structure, the Property Owner no longer requires a CFD in place for development. Because no bonds have been issued and no taxes collected, this cessation is appropriate under the Mello-Roos Act.

It is recommended that this resolution be adopted and that a Notice of Cessation and Extinguishment of Special Tax Lien be recorded with the County Recorder for the County of San Bernardino.
2021-2025 Strategic Targets and Goals
This project is consistent with Key Target No. 1. Improved Operational & Financial Capacity and Key Target No. 4: Economic Growth & Development. This project will contribute to ensure that the City is clean and attractive and provide infrastructure designed for long-term economic growth.

Fiscal Impact
There is no fiscal impact to the City, as administrative costs related to the establishment and cessation of CFD No. 2022-1 are paid by a deposit of Warmington Residential California, Inc. (the “Developer”) pursuant to the Developer Deposit Agreement entered into on July 1, 2022 by and between the Developer and the City.

Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, Adopt Resolution No. 2023-044 of the City Council of the City of San Bernardino, Acting in its Capacity as the Legislative Body of Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino, Authorizing the Recording of a Notice of Cessation of Special Tax Lien.

Attachments
Attachment 1 – Resolution 2023-044
Attachment 2 – Notice of Cessation of Special Tax Lien
Ward:

Sixth Ward
Synopsis of Previous Council Actions:

July 20, 2022 Mayor and City Council of the City of San Bernardino, California:

1. Adopted Resolution No. 2022-141 Declaring Intention to Establish Proposed Community Facilities District No. 2022- 1(Highland/Medical) of the City of San Bernardino;

2. Adopted Resolution No. 2022-142 of the Mayor and City Council of the City of San Bernardino, California, Declaring Necessity to Incur a Bonded Indebtedness of Proposed Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino August 17, 2022 Mayor and City Council of the City of San Bernardino, California:

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1. Adopted Resolution No. 2022-186 Amending and Supplementing the Resolution Declaring Intention to Establish Proposed Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino; and

2. Adopted Resolution No. 2022-187 of the Mayor and City Council of the City of San Bernardino, California, Amending and Supplementing the Resolution Declaring Necessity to Incur a Bonded Indebtedness of Proposed Community Facilities District No. 2022-1 (Highland/Medical) of the City of San Bernardino October 5, 2022 Mayor and City Council of the City of San Bernardino, California:

1. Adopted Resolution No. 2022-216 Establishing Community Facilities District No. 20221 (Highland/Medical) of the City of San Bernardino, County of San Bernardino, State of California, and the boundaries thereof and approving a Funding Agreement;

2. Adopted Resolution No. 2022-217 Determining the Necessity to Incur a Bonded Indebtedness for Community Facilities District No. 2022-1 (Highland/Medical), Submitting to the Qualified Electors of the Community Facilities District a Proposition to Authorize the Levy of a Special Tax Therein, to Authorize such Community Facilities District to Incur a Bonded Indebtedness Secured by the Levy of a Special Tax Therein to Finance Certain Types of Public Facilities and to Establish an Appropriations Limit for such Community Facilities District and Calling a Special Election for the Community Facilities District on a Proposition for Incurring such Bonded Indebtedness;

3. Adopted Resolution No. 2022-218 Calling a Special Election and Submitting to the Voters of Community Facilities District No. 20221 (Highland/Medical) of the City of San Bernardino Propositions Regarding the Annual Levy of Special Taxes within the Community Facilities District to Pay Principal of and Interest on Bonds Thereof and to Pay the Costs of Public Facilities and Establishing an Appropriations Limit Therefore;

4. Adopted Resolution No. 2022-219 Declaring the Results of the Consolidated Special Elections within Community Facilities District No. 20221 (Highland/Medical); and

5. Introduced, read by title only and waived further reading of Ordinance No. MC-1599 of the Mayor and City Council of the City of San Bernardino, California, Acting as the Legislative Body of Community Facilities District No. 2022-1 (Highland/Medical), Authorizing the Levy of Special Taxes in such Community Facilities District.

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Resolution No. 2023-044
Resolution 2023-044
March 15, 2023

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Mayor and City CouncilMarch 15, 2023

Mayor and City Council
March 15, 2023