Sanger City Council
September 7, 2023

ANY WRITINGS OR DOCUMENTS PROVIDED TO A MAJORITY OF THE CITY COUNCIL LESS THAN 72 HOURS PRIOR TO A

REGULAR MEETING REGARDING ANY ITEM ON THIS AGENDA WILL BE MADE AVAILABLE FOR PUBLIC INSPECTION, DURING NORMAL BUSINESS HOURS, AT THE CITY CLERK’S OFFICE & CITY HALL LOBBY LOCATED AT 1700 7TH STREET AND SANGER LIBRARY 1812 7TH STREET, SANGER, CA 93657. THE DOCUMENTS ARE ALSO AVAILABLE ON THE CITY’S WEBSITE, WWW.CI.SANGER.CA.US.

AGENDA

JOINT MEETING OF THE SANGER CITY COUNCIL AND THE CITY OF SANGER

AS SUCCESSOR AGENCY TO THE SANGER REDEVELOPMENT AGENCY
THURSDAY, SEPTEMBER 7, 2023
6:00 P.M.

COUNCIL CHAMBER
1700 7th Street, Sanger, California 93657
Prior to action by the Council on any item on this agenda, the public may comment on that item.

A. CALL TO ORDER
B. OPENING CEREMONIES
Invocation
Flag Salute
Roll Call
C. AGENDA APPROVAL, ADDITIONS AND/OR DELETIONS
D. PRESENTATION

1. Mid Valley Disposal’s Report to the Council.

E. PUBLIC FORUM
This portion of the meeting is reserved for persons desiring to address the Council on any matter not otherwise on the agenda and within the jurisdiction of the City Council.

Speakers shall address all comments to the Mayor and the Council as a body and not to any particular Councilmember or member of the staff. Speakers should limit their comments to three (3) minutes.

F. CONSENT CALENDAR
(Matters listed under the consent calendar are considered routine and will be enacted by one motion and one vote. There will be no separate discussion of these items. If discussion is desired, a member of the audience or a Councilmember may request an item be removed from the Consent Calendar and it will be considered separately.) AVAILABLE FOR REVIEW 72 HOURS

PRIOR TO THE CITY COUNCIL MEETING
AT THE SANGER LIBRARY, CITY CLERK’S

OFFICE AND THE SANGER CITY HALL
LOBBY.
1 City Council Agenda
September 7, 2023

Sanger City Council

1. SUBJECT: Minutes of the Special and Regular M eetings held on August 3, 2023.

RECOMMENDATION: That the City Council approve.

2. SUBJECT: Fire Department Monthly Report.

RECOMMENDATION: Informational item.

3. SUBJECT: Executive Assistant Position and Job Description.

RECOMMENDATION: That the City Council approve Resolution No. 2023- 45 establishing the position of Executive Assistant and approving the job description.

4. SUBJECT: Health Policy and Management Consulting Services with Health Management Associates and Participating Cities.

RECOMMENDATION: That the City Council approve the second amendment for the Health Management Services Agreement and Cooperative Agreement with Health Management Associates and Cities of Dinuba, Kingsburg, Selma, and Coalinga for the purposes of assisting with Medi-Cal Rate Range Intergovernmental Transport programs and managed care health insurance programs, and authorize the City Manager to execute the agreement on behalf of the City.

5. SUBJECT: Annexation of Property in Sanger Landscaping and Lighting Maintenance District No. 2 (Annexation No. 23-01).

RECOMMENDATION: That the City Council approve Resolution No. 2023- 46 Initiating Proceedings Pursuant to the Landscaping and Lighting Act of 1972 for the Annexation of Property in Sanger Landscaping and Lighting Maintenance District No. 2, Area 1, to Review the Improvements and Assessments for Fiscal Year 2023-2024, and to Set a Public Hearing for a Future Date.

6. SUBJECT: Annexation of Property into Community Facilities District 2005- 01, Annexation No. 4, Tract 6327.

RECOMMENDATION: That the City Council approve Resolution No. 2023- 47 stating its intention to annex certain territory into City of Sanger Community Facilities District 2005-1 (public services), setting a time and date for the public hearing thereon and adopting boundary map showing territory proposed to be annexed to Community Facilities District 2005-1 (Annexation No.4).

7. SUBJECT: Annexation of Property into Community Facilities District 2005-1, Annexation No. 5.

RECOMMENDATION: That the City Council approve Resolution No. 2023- 48 stating its intention to annex certain territory into City of Sanger Community Facilities District 2005-1 (public services), setting a time and date for the public hearing thereon and adopting boundary map showing territory proposed to be annexed to Community Facilities District 2005-1 (Annexation No. 5), and approving a Covenant regarding annexation of the territory into the Community Facilities District.
2 City Council Agenda
September 7, 2023

8. SUBJECT: Upgrade Council Chamber Audio-Video Equipment.

RECOMMENDATION: That the City Council approve a contract with NTM Productions to remove and replace Audio Visual equipment in council Chamber for city meetings and conferences in the amount of $56,371.86 and a 10% contingency.

Convene in Joint Session with Successor Agency to the Sanger Redevelopment Agency

9. SUBJECT: Consider declaring Assessor Parcel Number 332-042-94T (28.59 Acres) Surplus Land under The Surplus Land Act.

RECOMMENDATION: That the City Council adopt Resolution No. 2023-49 declaring Assessor’s Parcel Number 332-042-94T in the City of Sanger (The Property) Surplus Land pursuant to The Surplus Land Act (Government Code Sections 54220 Et Seq.). (Council Action)

10. SUBJECT: Consider declaring Assessor Parcel Number (“APN”) 332-042-59T as Surplus Land, Portion of APN 332-042-78T as Surplus Land, and Portion of APN 332-042-78T as Exempt Surplus Land under The Surplus Land Act.

RECOMMENDATION: That the City of Sanger as the Board of the Successor Agency to the Sanger Redevelopment Agency adopt Resolution No. 23- 02 declaring APN 332-042-59T as Surplus Land, approximately 12.66 Acres of APN 332-042-78T as Surplus Land, and 5 Acres of APN 332-042-78T as Exempt Surplus Land pursuant to The Surplus Land Act (Government Code Sections 54220 Et Seq.). (Successor Agency Action)

G. DEPARTMENT REPORTS

1. SUBJECT: Confirmation of Intent to Pursue Increase to Transient Occupancy Tax (TOT)
RECOMMENDATION: That the City Council confirm intent to increase the City of Sanger Transient Occupancy Tax (TOT) and direct staff to prepare Ballot Measure documents (resolution and ordinance for increase to 12%) for City Council’s review and approval at a future Council meeting in time for submittal to voters at March 5, 2024, Primary Election.

2. SUBJECT: Second Amended and Restated MOU between County of Fresno and the City of Sanger (Tax Sharing Agreement).

RECOMMENDATION: That the City Council approve Resolution No. 2023- 50 approving the Second Amended and Restated Memorandum of Understanding between the County of Fresno and the City of Sanger.

3. SUBJECT: South Digester Sludge Heater – WWTP.

RECOMMENDATION: That the City Council accept the quote from California Boiler to remove and replace the south sludge heater of the digester at the Water Treatment Plant in the amount not to exceed $94,605.81 and authorize the City Manager to execute the Service Provider Agreement and all related documents.

3 City Council Agenda
September 7, 2023

4. SUBJECT: Well 19 Drilling and Development.

RECOMMENDATION: That the City Council provide direction to Staff to advertise for bids for a project to drill and develop Well 19 prior to th e final approval of a funding agreement with the State Water Resources Control Board Division of Financial Assistance (DFA).

H. CITY MANAGER/STAFF COMMUNICATION

I. MATTERS INITIATED BY CITY COUNCILMEMBERS
(This portion of the meeting is reserved for Councilmembers to initiate new matters and to request updates and/or status on existing matters. Under this section, the Council may also take action on any items specifically agendized.)

1. SUBJECT: Interim City Manager Appointment and Approval of Agree ment for Employment of Interim City Manager.

RECOMMENDATION: That the City Council consider approval of Resolution No. 2023-51 appointing Greg Garner to the position of Interim City Manager and approving an Agreement for Employment establishing compensat ion and other terms and conditions in connection with said Agreement.

2. SUBJECT: Senate Bill 423 (Weiner) and Assembly Bill 309 (Lee).

RECOMMENDATION: That the City Council discuss and consider whether to submit Letters of Opposition regarding Senate Bill 423 and Assembly Bill 309 and provide direction to Staff.

3. SUBJECT: Informational Item - Warrant Study for stop signs at 7th and K Streets.

J. ADJOURNMENT

I certify under the penalty of perjury, under the laws of the State of California that the foreg oing agenda was posted in accordance with the applicable legal requirements. Dated this 1st day of September 2023.

Rebeca Padron, City Clerk

ADA COMPLIANCE AND REASONABLE ACCOMMODATIONS POLICY. The Council has adopted a Reasonabl e Accommodation Policy which is available on the City website at www.ci.sanger.ca.us or upon request by emailing the City Clerk at [email protected]. The Poli cy provides a procedure for receiving and resolving requests for accommodation to participate in this meeting. If you need assistance in order to attend this Council meeting or require auxiliary aids or services, e.g., hearing aids or signing services to make a presentation to the Council, please email the City Clerk or call by phone at (559) 876 -6300 extension 1350 so such aids or services can be arranged.

Accommodations should be requested as early as possible as additional time may be required in order to provide the requested accommodation.

4 City Council Agenda
September 7, 2023

NOTICE OF AVAILABILITY OF AGENDA DOCUMENTS. Writings related to the agenda are available at Sanger City Hall, 1700 7 th Street, Sanger, CA 93657 and are posted online at www.ci.sanger.ca.us. Writings provided to a majority of the City Council within 72 hours of the meeting regarding any item on this agenda will be made available for public inspection at the City Clerk’s Office located at Sanger City Hall, 1700 7 th Street, Sanger, CA 93567 and will be posted online at www.ci.sanger.ca.us.

5 THURSDAY, AUGUST 3, 2023
5:00 PM

COUNCIL CHAMBER
1700 7TH Street, Sanger, California 93657
A. C

ALL TO ORDER
Th
e City Council called their Special Meeting to order at 5:05 PM.

B. R

OLL CALL
P
resent: Mayor Frank Gonzalez, Mayor Pro Tem Daniel Martinez, Councilmember Esmeralda Hurtado, Councilmember Michael Montelongo, Councilmember Dolores Melendez

Absent: None
C. AGE

NDA APPROVAL
T
he Council by motion of Councilmember Montelongo approved the agenda as posted. The motion was seconded by Mayor Pro Tem Martinez and approved by the following vote:

AYE
S: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
D. P

UBLIC FORUM
Mr.

Rocha said a city manager should have experience with finances and a history of management services. He said being both the police chief and city manager is too much.

E. C

LOSED SESSION
T
he Council adjourned to Closed Session at 5:15 PM.

1. P
ursuant to Government Code Section 54956.9
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
City of Sanger v. Novato Fire Protection District
Fresno County Superior Court Case No. 20CECG02710

2. P
ursuant to Government Code Section 54957.6

CONFERENCE WITH LABOR NEGOTIATORS
Agency Designated Representatives: Acting City Manager, City Clerk/Deputy Personnel Officer
Employee Organization: Sanger Police Officers Association Minutes of a Special Meeting of the Sanger City Council F-1
6 City Council Special Meeting Minutes
August 3, 2023

3. Pursuant to Government Code Section 54957

PUBLIC EMPLOYEE APPOINTMENT/EMPLOYMENT
Title: Acting City Manager

The City Council reconvened their Special Meeting at 6:00 PM.

F. CITY ATTORNEY REPORT FROM CLOSED SESSION

City Attorney Hilda Cantu Montoy announced no reportable action was taken in Closed Session and the Council will continue discussion of an Acting City Manager.

G. ADJOURNMENT

Being no further business, the Council adjourned their Special Meeting at 6:01 PM.

ATTEST:

Sierra Delgado, Human R esources Tech

7 F-1
Minutes of a Regular Meeting of the Sanger City Council THURSDAY, AUGUST 3, 2023
6:00 P.M.

COUNCIL CHAMBER
1700 7'h Street, Sanger, Califomia 93657
A. CALL TO ORDER
The City Council called their meeting to order at 6:01 PM A. OPENING
The invocation was offered by Pastor Bobby Velasco from Believe Church.

The flag salute was led by Mayor Frank Gonzalez
Roll Call
Present Mayor Frank Gotualez, Mayor Pro Tem Daniel Martinez, Councilmember Esmeralda Hurtado, Councilmember Michael Montelongo, Councilmember Dolores Melendez

Absent: None
B. AGENDA APPROVAL" ADDITIONS AND/OR DELETIONS
The Council by motion of Councilmember Montelongo approved the Agenda as posted. The motion was seconded by Mayor Pro Tem Martinez and approved by the following vote:

AYES: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
C. CEREMONIAL MATTERS
Recognition of Alyssa Samorano, USA Boxing Nationals Champion.

Alyssa was not present at the time of recognition and it was motioned by Mayor Gonzalezto have it moved to the next available Council meeting.
8 City Council Regular Meeting Minutes
August 3, 2023

D. PUBLIC FORUM
Stephine, a local Sanger resident and home owner spoke to Council on the concerns she has with the safety of herself and others from the homeless that are trespassing and stealing from homes.

Mrs. Gonzalez, a local Sanger resident spoke to Council regarding garbage that is being illegally dropped off in the alley near her home. She also spoke on the concerns of the "Chicken Factory" employees not using the cross walk.

Mr. Rocha spoke to Council about the need for transparency regarding the last scheduled Council meeting on July 20 that was canceled due to the Mayor not being able to attend as well as other Councilmembers.

Mr. Carter, a local Sanger resident read a social media posting from an unidentified Councilmember regarding a special meeting that they were unable to attend. The meeting involved voting the next steps to start the search for a new City Manager. Mr. Carter said the Council was as transparent as possible.

E. CONSENT CALENDAR
The Council by motion of Mayor Pro Tem Martinezpulled Agenda Items F-6,F-7, F-8, and F-9 and approved the following items on the Consent Calendar:

1. SUBJECT: APPROVED - Minutes of the Special and Regular Meetings held on July 6 2023, and the Special Meeting held on July 13, 2023.
)
89675
AYES:

NOES:

ABSTAIN:

ABSENT:

SUBJECT: INFORMATIONAL ITEM - Warrants including CheckNos. 89375 through

3. SUBJECT: APPROVED - Payroll including Direct Deposit Nos. 60026 through 60259; Payroll Check Nos. 59006 through 59047; and Benefit Check Nos. 1900 through 1907.

SUBJECT: INFORMATIONAL ITEM - Police Department Monthly Report.

SUBJECT: INFORMATIONAL ITEM - Fire Department Monthly Report. 4 5
The motion was seconded by Councilmember Montelongo and approved by the following vote:

GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ
NONE
NONE
NONE
9 City Council Regular Meeting Minutes
August 3,2023

6. SUBJECT: Destruction of Public Records that Exceed Legal Retention Periods.

Public Comment:

Audience member Mr. Rocha spoke on his concerns of not knowing the timeline and/or duration of a document before a document can be destroyed.

After further discussion, the Council by motion of Mayor Pro Tem Martinezapproved Resolution No. 2023-37 atthorizing the destruction of certain records held by the Finance Department and City ClerVHuman Resources Department in accordance with State Law and the Sanger City Code. The motion was seconded by Councilmember Montelongo and approved by the following vote:

AYES: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
7 . SUBJECT: Letter of Support - Kings River Conservancy Grant: Peck Island.

Councilmember Hurtado asked for more information on the organization and who is requesting the letter of support. She also asked if there would be any water rights involved in obtaining the land and whether other cities have signed a support letter.

Acting City Manager Greg Gamer stated that the conservancy is to purchase the land for birds and native wildlife use. Acting City Manager Garner stated there are no water rights in the purchase and they are wanting the letter of support to apply for the grant that they not have yet received. Mayor Gotualez stated he knows that the City of Reedley has signed the letter.

Councilmember Montelongo stated his understanding of the conservancy was requested years prior and the use is for natural wildlife.

After further discussion, the Council by motion of Mayor Pro Tem Martinezapproved and authorized the Mayor to sign the Letter of Support for the Kings River Conservancy for grant funding to acquire the Peck Island Site in Fresno County. The motion was seconded by Councilmember Montelongo and approved by the following vote:

AYES: GONZALEZ,MARTINEZ,HURTADO,MONTELONGO,MELENDEZ,
NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
10 City Council Regular Meeting Minutes
August 3, 2023

8. SUBJECT: Approval of Final Parcel Map No. 2022-02
Public Comment
Mr. Rocha asked where the parcels were located. Acting City Manager Garner said the location is by Walmart.

After further discussion, the Council by motion of Councilmember Montelongo adopted Resolution No. 2023-38 approving the Final Parcel Map No. 2022-02. The motion was seconded by Mayor Pro Tem Martinez and approved by the following vote:

AYES: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ NOES: NONE
ABSTAIN: NONE
ABSENT: NONE

9. SUBJECT: Measure C Extension Local Transportation Program Funds.

After further discussion, the Council by motion of Mayor Pro Tem Martinez adopted Resolution No. 2023-39 certifying eligibility and claiming Measure C Extension Local Transportation Program Funds for Fiscal Year 2023-2024 and authorized the Administrative Services Director to sign and submit the Fiscal Year 2023-24 clums. The motion was seconded by Councilmember Montelongo and approved by the following vote:

AYES: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
G. PUBLIC HEARING

1. SUBJECT: Zoning Ordinance Map Amendment No. 2023-02 and Initiation of Annexation of Subject Properties and the Somerset Residential Community Project.

The Council held a public hearing to discuss Zoning Ordinance Map Amendment No. 2023-02 and Initiation of Annexation of Subject Properties and the Somerset Residential Community Project.

Public Comment:

Mrs. Gonzalez, a local Sanger resident spoke to Council on topic of the lot designs being too small and not realistic to the community's needs.
11 City Council Regular Meeting Minutes
August 3,2023

Unidentified member of the public spoke to Council on how the park and zoning project is a great project to bring new homes to the community. He stressed that growing the city is great, but the water issue has to be resolved.

Jim Robertson, from Somerset Valley Homes spoke to Council on his availability to answer any questions or concerns regarding the project.

Unidentified member of the public spoke to Council on how the water issue is being resolved.

They stated the park and zoning, along with housing is needed for growth of the city, along with revenue. He stated that this development has nothing to do with the city's water issue.

Mr. Carter, a local Sanger resident spoke to Council regarding a previous comment made by a member of the public and said there was no belittling or badgering involved during last meeting.

Unidentified member of the public spoke to Council on the concerns of the zoningand building of the homes. They stated that growth is good for the city, but questioned what the plan would be if the city has another water issue.

Mr. Rocha spoke to Council on how he did not like the plan and the zoning. He stated that the water issue is a bigger issue and there is no need to rush into building more homes.

The Council closed the public hearing.

The Council by motion of Mayor Pro Tem Martinez.

1. Waived the full reading and introduced by title only Ordinance No. 2023-07 an Ordinance of the City Council of the City of Sanger approving Zoning Ordinance Map Amendment No. 2023-02 for the pre-annexation zoning of two parcels from Fresno County's AE-10 (Exclusive Agricultural) to the City's R-1-6 (Single Family Residential Distrct) for two parcels of approximately 28.37 acres generally located south of E. North Avenue, east of S.

Bethel Avenue, and west of S. Greenwood Avenue (APNs 332-090-01 and332-090-03); and

2. Approved Resolution No. 2023-40, to request the Local Agency Formation Commission (LAFCo) to undertake proceedings for the Annexation of the Somerset Residential Community Project arca and surrounding properties into the City of Sanger.

The motion was seconded by Councilmember Montelongo and approved by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

GONZALEZ, MARTINEZ, MONTELONGO

HURTADO, MELENDEZ
NONE
NONE
12 City Council Regular Meeting Minutes
August 3, 2023

H. DEPARTMENT REPORTS

1. SUBJECT: Somerset Park Design Options.

Community Development Director David Brletic presented the examples park lay outs and a report on public input. A summary of those findings were that many members of the public prefer baseball/softball park options.

Public Comment:

Member of the public, Alan C. spoke to Council on the importance making a park that caters to all but mostly to the softball community.

Member of the public, Juliana spoke to Council on how she and her teammates have asked for more support from the City in providing a place to play softball. She said there are no options in Sanger that support softball, but only baseball. She asked them to consider making the park for softball for them to have a safe and clean place to practice and have tournaments.

Unidentified member of public spoke on how softball is important to her and her teammates. She stated that if the park is softball friendly it will build the way for more girls to become great softball players.

Mr. Rocha spoke on his agreement with the previous public comments regarding the park. He would like to see Sanger have more ADA friendly parks and have a sports complex, not just parks.

Unidentified member said the project and the park are great ideas. He stated that he would like to see some type of running path in the park to conduct boxing practice when they need to exercise.

Jim Robertson, from Somerset Valley Homes spoke to Council on his availability to answer any questions they may have about the project.

The Council by motion of Councilmember Montelongo voted to bring the item back on August 17,2023 for Council action. The motion was seconded by Mayor Pro Tem Martinez and approved by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ
NONE
NONE
NONE
The Council called for a recess at7:59 PM.

The Council resumed their meeting at 8:08 PM.
13 City Council Regular Meeting Minutes
August 3,2023

2. SUBJECT: Employee Health Insurance and Benefit Broker Services.

The Council by motion of Mayor Pro Tem Martinez approved the Insurance Brokerage Consultant Services Agreement with Keenan & Associates for the period of July 1,2023 to June 30,2026 and authorized the Acting City Manager to execute the Agreement. The motion was seconded by Mayor Gonzalez and approved by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ
NONE
NONE
NONE
1 2.

3. SUBJECT: Award of Design-Build Contract for Sanger Fire Station Remodel Project.

Public Comment:

Mr. Rocha spoke on his concern about any delay to fire services due to construction of the building.

He suggests building a separate station to house the employees.

Unidentified member of the public spoke on the importance of remodeling the station and the need to act fast for the safety of the employees and Sanger residents.

The Council by motion of Councilmember Montelongo:

Adopted Resolution No. 2023-41 awarding the design-build contract for the Sanger Fire Station Remodel Project to Diede Construction, Inc. in the amount of $9,305,000 and authorizing the Acting City Manager to execute the contract on behalf of the City; and Adopted Resolution No. 2023-42 approving funding a portion of the Fire Station Remodel Project from the General Fund Unassigned Balance in the amount of $2,000,000 and Replenishment of that Fund Balance with Ambulance Revenues.

The motion was seconded by Mayor Pro Tem Martinezand approved by the following vote:

AYES: GONZALEZ, MARTINEZ, HURTADO, MONTELONGO, MELENDEZ NOES: NONE
ABSTAIN: NONE
ABSENT: NONE
I. CITY MANAGEWSTAFF COMMUNICATION
None.
14 City Council Regular Meeting Minutes
August 3,2023
Page I of I
J. MATTERS INITIATED BY CITY COTINCILMEMBERS
Councilmember Hurtado requested and received consensus to have CISA make a presentation to Council regarding cyber security.

Councilmember Montelongo requested and received consensus to place an item on the next meeting agendato discuss legislative bill SB 423 rcgading housing projects.

K. ADJOURNMENT
There being no further business, the Council adjourned their meeting at 8:58 PM.

ATTEST
Sierra Delgado, Human Resources Tech
15 ('2
City of Sanger Fire Department
Greg Tarascou, Fire Chief
1700 7'h Street. Sanger, CA 93657. Phone (559) 575-6568. Fax (559) 575-6611 August 28,2023
To: Honorable Mayor and Council Members
Greg Garner, Acting City Manager
From: Greg Tarascou, Fire Chief
RE: FIRE DEPARTMENT REPORT FOR JULY
For the month of July, there were 321 calls for service for ambulance services within our area and within surrounding areas. Crews were also dispatched to 23 requests for services for fire calls, including house fires, trash and warming fires, building fires, vehicle fires and unintentional or false alarm calls. This total equates to 344 calls for service in July, or just over LL calls per day.

Chute times are measured from the time the station is notified of an alarm to the time the unit goes enroute.

For the month of July our average chute time remained at 63 seconds, well under our benchmark of 90 seconds. Approximately 81% of the time our crews have a chute time of less than 90 seconds. Our travel time is measured from the time the unit is enroute to the time that we arrive on scene. For July our enroute time was 5 minutes, 37 seconds within the City. This meets our benchmark of under 6 minutes within the City. On average the response time to calls originated outside of our City in June was approximately 9 minutes and 14 seconds, to which we responded outside of the City limits 69 times for medical-aid requests.

Administratively the Fire Department continues to remain active with the upcoming summer months. The weed abatement program continues as final letters to residents requesting compliance were issued the end of June. ln July we were able to gain 99% compliance with our overgrown lots and continue to work on the few that remain. The healthy amount of rain we saw in the winter coupled with the low temperatures in the spring have contributed to a very robust fuel load with wildland vegetation, including weed and brush in the City and we are considering a potential third request in the early fall before the winter months start. Lastly, we continued to have a very busy 4th of July with grass fires and a structure fire caused by illegal fireworks. ln totalthe Fire and Police Department issued l-5 citations for illegal fireworks with the social host ordinance continuing to be an effective tool.

I am of course always available to answer any questions you have 16 SANG
,,.,il,,
CR
--)
For the Meeting of:

Agenda Item No.:

CrrY oF SINGER
Rtr,PORT TO THE, CITY COUNCIL
Septembet 7,2023
ft
To:

From:

Subject:

Attachments:

Mayor and Councilmembers
Becky Padron, City Clerk/Deputy Personnel Officer
Executive Assistant Position and Job Desuiption
ResolutionNo. Ra 2J -rf5
Executive Assistant Job Description
CONFLICT OF INTEREST:

None known.

RECOMMENDATION:

That the City Council approve Resolution No.2o23 45 establishing the position of Executive Assistant and approving the job description.

EXECUTIVE SUMMARY:

The current job description for Administrative Secretary is outdated and no longer relevant to the current workforce. The proposed resolution will establish a new position of Executive Assistant that better describes the duties and responsibilities a department may need with respect to administrative and management support.

BACKGROUND:

Human Resources was asked to evaluate the job description of the Administrative Secretary position to determine whether the duties and responsibilities of the position are still relevant to the current workforce.

After review, it is determined that the secretarial duties listed in the job description are not consistent with the needs of City departments. Department Heads, Managers, and Supervisors can easily and quickly prepare their own correspondence, answer telephones, respond to email, make photocopies, etc.

Prepated by: Becky Padron, City Cletk/Deputy
Petsonnel Officer
Approved by:

REVIEW: City Manager: & Finance: CityAttomey:

TYPE OF ITEM:

Consent
Infotmational Item
Action Item
Department Report
COUNCIL ACTION: APPROVED DENIED NO ACTION
X Public Hearing
Matter Initiated by a Council Membet
Othet:

Continued to:

X
17 After further review, it appears that the Executive Assistant to the City Manager job description is more conducive to the administrative needs of City departments, which focuses not only on administrative duties but also on complex conhdential work involving establishing and implementing project coordination, supervision of employees, event coordination, and Department Head management support. As such, Staff is proposing amendments to the Executive Assistant to the City Manager job description which will establish a new and separate position of Executive Assistant. The Executive Assistant job description is not specific to one department.

The proposed salary range for the Executive Assistant is the same salary range for the Executive Assistant to the City Manager. No difference in salary is proposed.

REASON FOR RECOMMENDATION:

The Administrative Secretary job description is not relevant to the current workforce. The proposed Executive Assistant job descripion more adequately meets the administrative needs of some City departments.

The City provided a copy of the job description to the Sanger Middle Management Organization representatives with an opportunity to discuss through the meet and confer process. Mid Management has agreed to the proposed new position and job description.

F'ISCAI, IMPACT:

The salary diflerence between the first step of the Administrative Secretary position and the Executive Assistant position is approximately $1,400 per month.

ALTERNATIVES:

Do not approve the resolution and/or provide further direction to Staff.

ACTIONS FOLLOWING APPROVAL:

If approved, the Executive Assistantjob description will be incorporated into the City's Classification Plan. 18 RESoLUrroNNo. 2o23-45

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER CREATING A NEW

CLASSIFICATION, ESTABLISHING A SALARY RANGE, AND APPROVING A JOB

DESCRIPTION FOR A FULL TIME EXECUTIVE ASSITANT POSITION WHEREAS, Section 46-2 (3) empowers the City Manager to prepare or cause to be prepared position classification plans and revisions subject to approval by the City Council; and WHEREAS, the Interim City Manager has recommended that a new position classification be established for a full-time Executive Assistant responsible for coordinating and overseeing a wide variety of routine and"/or complex confidential work involved in providing administrative and technical support to a City department. A copy of the proposed job description is attached as "Attachment A".

NOW THEREFORE, the City Council of the City of Sanger resolves as follows:
l. The foregoing recitals are true and correct.

2. The Executive Assistant job description attached as Attachment A is approved.

3. The following salary range for the Executive Assistant position is approved:
* :& * * rl. rl. rf :1. * * * rt * * * rlc :1.

The foregoing Resolution was considered by the City Council for the City of Sanger, California, at a regular meeting of said Council held on the 7th day of September 2023 and approved by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

COI.INCILMEMBERS:

COTINCILMEMBERS:

COUNCILMEMBERS:

COUNCILMEMBERS:

ATTEST
$s,1 18 $5,374 $5,643 $5,925 $6.22r
Rebeca Padron, City Clerk/Deputy Personnel Officer
19 ExecutiveAssistant@

DEFINITION
the Executive As
wide varietv of routine andlor comnlex confi al work involved in orovidins administrative and technical sunnort to one of the Citv Deoartment Heads: establishes and implements Drocesses and orocedures that effective short and lons term initiatives: identifies and ve duties
com ses and
DISTINGI]ISHING STICS
ln sensitive to the
Head. including ffiive office administration, project coordination and management support work The work requires extensive
public contact, the frequent use of tact, discretion and independent judgment, knowledge of City activities and the ability to conduct independent projects.

EXAMPLES OF DUTIES
* Perform a wide variety of complex, responsible and confidential administrative professional duties for the Department
Head; perform special projects and assignments; coordinate and prioritize workflow; direct and oversee office operations;
A Screen calls, visitors, mail and e-mail; respond to requests for information and assistance in accordance wi Denafiment and Citv Polic v: resolve citizenth concerns and complaints when appropriate;
* Interpret City policies, rules and regulations in response to inquiries and complaints; refer inquiries as appropriate;
a Participate and assist in the administration of the Ci+fManager+ ef+eeDgpalL49q!; prepare reports, research, compile and analyze information to be used in special projects and reports;
* Independently compose responses to letters and a wide range of general correspondence for the City Manager and City Council;
* Make travel arrangements, maintain appointment schedules and calendars and arrange meetings, conferences and civic functions;
* Assist in assembling agenda
items as needed;
20 *@ an*maintain eld=!1AgkJg4gg doffice supplies and
equinment includins service contracts for the Department in accordance with psLsr; eity
@
* Schedule activities in the Council Chambers and Conference Room; * Maintain various logs and computer mailing lists;
* Coordinate community events and City employee events as requested including planning and coordinating activities, scheduling event itinerary and participation of outside vendors; coordinating other department employee assistance and maintaining contact with sponsors;
{. Assist the in the recruitment of vacant positions
by posting and advertising position vacancies, arranging interview schedules for prospective candidates and keeping records ofapplicants not selected for employment;
{' Attend and participate in staff meetings and related activities; attend workshops, conferences and classes to increase professional knowledge; t
{. Monitor and assist in preparing the budget for the @@;* Process invoices for payment and prepare purchase orders as necessary; *
eound+memUe+e
*
@* Review Travel Authorization Requests submitted by employees for approval of the ;
{. Review statements of City issued credit cards for approval of the€i+y*4anager Department Head;
* Perform related duties as assigned.

LE ICATI
Knowledge of:
) Modern office practices. methods. techniques and procedures including preparing business correspondence, filing and standard office equipment operation.

Adrzanced cdrrrini strative nrinninl and mefhods inclrrdino onnl seffino program development and implementation.
level of customer
communicatins with the oublic. contractors and Citv staff, 21 Ability to:
rules.

F Communicate effectively, both orally and in writing.
with the oublic" communitv
groups, and or ganizations
and those contacted during the course of work.
setting and meeting deadlines.
of reports.
oeneral nnlicv and leovrl orridelineq nnli ticall sensitive situationsln software.
agencies as necessary to assume assigned responsibilities. sensitivity in response to
such as scheduling*meetings and making conference/travel arrangements and in non-routine situations such as initial response to public complaints and/or recuests and imnlementins nrovements to intemal and external service de SSCS

MINIMUM OUALIFICATIONS
Experience:

Four years o lag
responsibilit), in related support positions, including experience that can be directlv related to the duties the office of executive-
level manager.

Education:

Equivalent to the completion of the twelfth grade supplemented by specialized training or courses in office technology, customer service, business communication, records management and related areas. An Associate's Degree in Arts or Science from an 22 accredited college in office practices. management" business administration or closely related field is hiehly desired.

License:

Possession of an appropriate California operator's license issued by the Department of Motor Vehicles.
23 Fot the Meeting of: September7,2023
Agenda Item No.

ClrYoF SINGER
REPORTTO THtr. COUNCIL
F-r
To:

From:

Subject:

Attachments:

Mayor and Councilmembers
Greg Tarascou, Fire Chief
second Amendment of contract for Health Policy and Management Consulting Services with Health Management Associates and Participating Cities
Second Amendment for Consulting Services Agreement
Original Consulting Services Agreement
CONFLICT OF INTEREST:

None known.

RECOMMENDATION:

That the City Council approve the second amendment for the Health Management Services Agreement and Cooperative Agreement with Health Management Associates (HMA) and Cities of Dinuba, Kingsburg, Selma, and Coalinga for the purposes of assisting with Medi-Cal Rate Range Intergovernmental Transport (IGT) programs and managed care health insurance programs; and authorize the city Manager to execute the contract on behalf of the city.

EXECUTIVE SUMMARY:

The purpose of the renewal of this contract is to continue to seek advice and obtain assistance in participating with the managed care systems and newly Participating Provider - Ground Emergency Medical Transport (PP-GEMT) programs that are available to the Fire Department's ambulance program. The purpose of this amendment is to better define the scope of services relating to the newly enacted PP-GEMT program that replaces the older IGT program and an increase in the hourly rate for consultant work. This continues to be a joint venture with the Fire Departments in Selma, Kingsburg, Coalinga and Dinuba and costs for HMA's services will be split equally the Departments Prepared bv: Gres Tarascou Apptoved by: U.nl't-
REVIEW: City Manage rt M Finance: City Attorney: _
TYPE OF ITEM:
x Consent
Info Item
Action Item
Department Report
Redevelopment Agency
COUNCIL ACTION: APPROVED DENIED NO ACTION
Public Hearing
Mattet Initiated by a Council Membet
Other
Continued to:
x
24 BACKGROUND
The Fire Department's ambulance service currently receives reimbursement for services from the different health care plans that are available from the State. Fresno County is known as a 'two-plan' county so the majority of our fee-for-service Medi-Cal patients have a supplemental plan, either Anthem Blue Cross or Cal-Viva. The PP-GEMT program provides reimbursement of costs to patients that have these supplemental plans. The ability for the Fire Department to utilize this revenue stream for unreimbursed costs will be determined once the contracts with these supplemental plans is established.

This program was called the "IGT Program" in previous years, however with this new State law the IGT and GEMT programs, which were separate before, now become one program under the PP-GEMT progftrm.

With this current contract the City of Sanger has included the other participating cities as parties to the contract to eliminate any potential confusion and share information and resources moving forward. The Sanger Fire Department will continue to act as an intermediary between HMA and the Fire Departments of Selma, Kingsburg, Coalinga and Dinuba to keep costs down by splitting the hourly rate of HMA's services between the five departments.

REASON FOR RECOMMENDATION:

None ofthe Fire Departments in the Central Valley have the technical expertise nor institutional knowledge that is required to navigate through the various health care plans and the associated State agencies. HMA's services will be instrumental in continuing this program to further seek additional revenues into the Fire Department.

F'ISCAI, IMPACT:

Per the contract the City of Sanger Fire Department agrees to pay HMA for their services arate of $322 per hour. All billable hours will be thoroughly documented and will be kept at a minimum. The Fire Chiefs from the other Cities have agreed to participate in this program and will be invoiced monthly for services from HMA. This contract is not to exceed $90,000 therefore the Fire Department's equal share would be $18,000 per year. These funds were budgeted during the budget process for FY 2023-24 within the Fire Department budget.

ALTERNATIVES:

Do not accept the amendment in which case the City will opt out of the cooperative agreement and will seek alternative sources for consultation services.

ACTIONS F'OI,I APPROVAL:

Upon approval, the attached documents will be signed by the City Manager. Staff from the cities of Kingsburg, Selma, Dinuba and Coalinga will present to their respective City Councils over the next two weeks and a final amendment will be delivered to HMA.
\\nas l\shared\Forms & Templates
25 SECOND AMENDMENT TO

HEALTH MANAGEMENT ASSOCIATES SERVICES AGREEMENT
AND

COOPERATIVE AGREEMENT
This Second Amendment to Health Management Associates Services Agreement and Cooperative Agreement ("Second Amendment") is made and entered into effective June 30,2022, by and between the CITY OF COALINGA, CITY OF DINUBA, CITY OF KINGSBURG, CITY OF SANGER, AND CITY OF SELMA (individually "City" and collectively "Cities"), and HEALTH MANAGEMENT ASSOCIATES, INC., a Michigan corporation ("Consultant"). The Cities and Consultant are sometimes collectively referred to herein as "Parties."

RECITALS
WHEREAS, The City and Consultant are parties to a certain Health Management Associates Services Agreement and Cooperative Agreement (ooAgreement") effective February 1 1, 202I. The original Agreement term is from June 30,202I, to June 30,2022.

WHEREAS, the City and Consultant have executed a First Amendment to Health Management Associates Services Agreement and Cooperative Agreement effective lune 30,2022 ("Amendment #1") which extended the term of the Agreement to June 30,2023.

The parties wish to amend the Agreement as further stated herein.

AGREEMENT
A. The Parties hereby extend the term of the Agreement an additional two (2) years per Section 2. Commencement of Services; Term of Agreement and Renewal of the Agreement.

The parties agree the term of the Agreement shall begin on the Effective Date and shall continue in effect until June 30,2025.

B. The Parties hereby amend the Agreement by adding the Scope of Services and Schedule of Compensation attached hereto as Exhibit A and incorporated by reference.

C. This Second Amendment is effective on July I,2023
D. Except as amended by this Second Amendment, all other terms and conditions of the Agreement remain in full force and effect.
[Signatures on next page]
26 NOW, THEREFORE, the parties have executed this Second Amendment to Agreement on the date(s) set forth below.

HEALTH MANAGEMENT ASSOCIATES, INC.

By:

Kelly Johnson, Vice President
Date:

CITY OF'SANGER CITY OF DINUBA
By: By:

Greg Garner, Acting City Manager Luis Patlan, City Manager Date: Date:

ATTEST: APPROVED AS TO FORM:

Rebeca Padron, City Clerk , City Attorney
APPROVED AS TO FORM: CITY OF COALINGA
By:

Hilda Cantu Montoy, City Attorney Marissa Trejo, City Manager Date:

APPROVED AS TO FORM:
, City Attomey
27 By:

CITY OF SELMA
Fernando Santillan, City Manager

APPROVED AS TO FORM
, City Attorney

CITY OF KINGSBURG
By:

Alexander Henderson, City Manager
APPROVED AS TO FORM:
, City Attomey
28 EXHIBIT A

SCOPE OF'SERVICES AND SCHEDULE OF COMPENSATION
I. Services
Consultant shall respond to requests from the Cities or any City regarding participation in applicable Voluntary Rate Range Program (VRRP) and the Public Provider Ground Emergency Medical Transportation (PP-GEMT) Intergovernmental Transfers (IGT) programs administered within the Medi-Cal program by the California Department of Health Care Services (DHCS).

Voluntary Rate Range Program (VRRP)
Areas of assistance include but are not limited to:
a) Helping the Cities understand VRRP, the IGT process, and the documents used to transact an IGT in order to make informed decisions on whether to participate and if so, how to participate.
b) Contacting DHCS and the relevant Health Plans to participate in VRRP, calculating the value of the IGT and the dollar amounts involved at each step of the process and submitting Attachment Bs and Letters of Interest (LOIs) once DHCS is ready to receive them.
c) Consultant shall work with the DHCS on behalf of City, and the Cities to resolve any questions and troubleshoot issues that arise.
d) Consultant shall assist the Cities and their respective staff to ensure all documents are correctly prepared for participation in VRRP, and work with the Health Plans to meet DHCS timelines.
e) Consultant shall assist the Cities determining whether VRRP payment amounts are correct and support the District in resolving any payment issues with DHCS and the Health Plans, if required.
0 Consultant will monitor state and federal policies to assess any impacts to VRRP.

Public Provider Ground Emergency Medical Transportation Program (PP-GEMT) Areas of assistance include but are not limited to:
29 a) Consultant shall provide subject matter expertise to support the District's understanding of PP-GEMT and the PP-GEMT IGT process.
b) Consultant shall provide the Cities with financial projections to estimate quarterly PP-GEMT IGT contributions, estimated payments from DHCs and the Health Plans, and potential impacts of PP-GEMT on future VRRP payments.
c) Consultant shall provide project management support to ensure timely submission of any DHCS required information for participation in PP-GEMT. d) Consultant will monitor state and federal policies to assess any impacts to PP- GEMT and attend DHCS PP-GEMT trainings and information sessions. e) Consultant shall coordinate and engage with DHCS to resolve any questions and troubleshoot issues, if required, which may include educating DHCS on potential cash flow issues and risks associated with PP-GEMT participation. 0 Consultant shall assist the Cities with the PP-GEMT IGT process, including any issues with the wiring of funds to DHCS.
g) Consultant shall provide the Cities with information regarding their quarterly PP- GEMT IGT contribution amounts, estimated payments from DHCS and the Health Plans, and net new funds from PP-GEMT.
h) Consultant shall assist the Cities determining whether PP-GEMT payment amounts are correct and support the District in resolving any payment issues with DHCS and the Health Plans, if required.

II. Schedule of Compensation
Subject to the maximum Contract Sum set forth in Section 3(a), Consultant shall provide services to the Cities at the following hourly rates or task amounts:

The Cities will pay Consultant $322.00 per hour for its work under this agreement effective July 1, 2023. Thereafter, Consultant's billing rates will increase no more than five percent (5%) on July 1 of each year unless agreed otherwise in writing. Consultant agrees to notify the Cities of the amount of increase in rates no less than 30 days prior to the rate increase. 30 HEALTH MANAGEMENT ASSOCIATES SERVICES AGREEMENT
AND

COOPERATIVE AGREEMENT
This Health Management Associates Services Agreement and Cooperative Agreement ("Agreement") is entered into between the CITY OF COALINGA, CITY OF DfNUgA, CIfy Of KINGSBURG, clrY oF SANGER, AND CITY oF SELMA (individually ,.City" and collectively "Citics"), and HEALTI{ MANAGEMENT ASSOCIATES, INC., a Michigan corporation ("Consultant"). This Agreement shall be effective as of the date of the last City to sign, which shall occur after execution by Consultant ("Effective Date"). The Cities and Consultant are sometimes collectively referred to herein as ooparties".

RECITALS
A. In order to ensure effrcient use of public resources, the Cities have used an informal affangement whereby services are provided by a consultant for participation in the Voluntary Rate Range Program (VRRP) and applicable Intergovernmental Transferprograms (IGTs) administered within the Medi-Cal program by the Califomia Department of Hialth Care Services @HCS).Under this arrangement the Cities have been reimbursing the City of Sanger for the individual City's portion of services provided by a consultant. With the transition of consultant service providers to a new consultant, the Cities desire to formalize the arrangement in this Agreement.

B. The City of Sanger has sought, by issuance of a Request for Proposals, the performance of the services defincd and described in this Agreement and as more fully set forth in Exhibit "A" ("Services").

B' Consultant submitted a proposal for perfonning the requested Services and is engaged in the business of furnishing such Services as a consultant and hereby warrants and represents that it is qualified, Iicensed, and professionally capable of performing the Services called for in the Request for Proposals and this Agreement.

C- The City of Sanger has selected Consultant to perform the requested Services on the basis of Consultant's demonstrated competence and professional qualifications.

D. The City of Sanger desires to retain Consultant, which is acceptable to the other Cities, and Consultant desires to provide Cities with Services on the terms and conditions as set forth in this Agreement.

OPERATIVE PITOVISIONS
NOW, THEREFORE, in consideration of the promises and mutual agreements herein, Cities and Consultant agree as follows:

AGREEMENT
I01236 0t0Il6617 70.6 cmh
31 l. Scope qfSerYiees. Consultant shall perform, to the satisfaction of the Cities in accordance with this Agreement, the Services described in the "Scope of Services and Schedule of Compensation" set forth in Exhibit "A" hereto and incorporated by reference herein, and as may be revised by mutual agreement of the Parties, Consultant warrants that it is qualified to perform the Services under this Agreement. Consultant shall be familiar with and shall comply with all State and Federal laws and regulations applicable to the Services to be performed under this Agreement.

2. Commeneeme{lt of Serviccsl Term o[ Asreement and Rengwal. The term of this agreement shall begin on the Effective Date and shall continue in effect until June 30,2022. The Agreement may be extended for an addition of one (1) year for up to and additional total of four (4) years with a written amendment to this Agreement signed by alithe Parties;however, any City may choose not to renew by providing written notice of nonrenewal to Consultant and thl remaining Cities at least 30 calendar days before June 30 of any year, and. thereafter the Agreement shall only be renewed as to remaining Cities and Consultant if otherwise agreed to by Consultant and the City of Sanger. Consultant shall commence the Services upon Citv of Sanger's issuance of a written "Notice to Proceed" and shall continue with the Services until Consultant, as determined by City of Sanger, has satisfactorily performed and completed the Services, or until such time as the Agreement is tenninated by either Consultant or the Cities in accordance with this Agreement, lvhichever is earlier.
(a) Coglmunity of Persnnrlel. Consultant shall make every reasonable effort to maintain the stability and continuity of Consultant's staff and subcontractors assigned to perform the Services under this Agreement. Consultant shall notifu the City of Sanger oiany changes in Consultant's staff and subcontractors assigned to perform the Services undeithis Agreement. (b) Additional Services. Consultant shall not be compensated for any sewices rendered in connection with its performance of this Agreement which are in addition to or outside of those set forth in this Agreement or Iisted in Exhibit "A," unless such additional services are authorized in advance and in writing by the City Manager of the City of Sanger after first having obtained approval from the other City Manager(s) from a majority of the other Cities. Consultant snatl be compensated for any such additional services in the amounts and in the manner agreed to by the City and Consultant.

3. eompensation for Services. Each City, through the City of Sanger consistent with the process described below, shall compensate Consultant for rendering the Seivices as follows:
(a) Subject to any limitations set forth in this Agreement, Consultant shall receive payment in the amounts specified within Exhibit "A" attached hereto and incorporated herein by reference, but not exceeding the maximum contract amount ofNinety-Thousand bollars ($90,000) ("Contract Sum").
(b) Each month Consultant shall invoice the City of Sanger for all work performed and expenses incurred during the preceding month. The invoicc shall detail charges by the following categories: labor (by subcategory), travel, materials, equipment. supplies, and sub-consultant contracts. (c) The City of Sanger shall independently review each invoice submitted by the Consultant to determine whethcr the work performed and expenses incured are in compliance with 20 1236.0101 /661770.6 cmh
32 the provisions of this Agreement, and distribute the invoice to the remaining Cities for similar review.

The invoiced amount shall be paid by the City of Sanger to Consultant within 30 calendar days unless any City disputes any charges or expenses. If any charges or expenses are disputed, the City of Sanger shall pay the undisputed amount, and notify Consultant of the nature and amount of the disputed charge or expense. The Parties shall seek to resolve the disputed items(s) by mutual agreement. (d) Each City shall be responsible for paying the City of Sanger for its share of the total invoice amount based on the total number of Cities who were participating in this Agreement at the time the work was performed or the oxpenses incurred. (Example: If there are five Cities participating in this Agreement during the relevant time period, then each City's payment obligation would be 1/5th of the total invoice amount.) Within 14 iatendar days after tle date of sendin-g the invoice by the City of Sanger to the other Cities for review, each City shall provide any comments it may have regarding whether the Services performed and expenses incurred are in compliance with the provisions of this Agreement to the City of Sanger. Failure to provide a timely response contesting either the Services performed or expcnses incurred may be treated by the City of Sanger as thosi invoice items not being contested or undisputed. The City of Sanger shall then invoice each City for its share of the total undisputed invoice amount submitted by the Consultant. Each City shallthen pay the City of Sanger within 30 calendar days. Amounts failed to be timely paid by any City shall acCrue interest at three percent (3%) per annum payable to the City of Sanger.

4. lndependent Qqnlragtsr Status, Consultant and its subcontractors shall perform the Services as independent contractors and not as officers, employees, agents or volunteers of the Cities. Nothing contained in this Agreement shall be deemed to crcate any contractual relationship between the Cities and Consultant's employees or subcontractors, nor shall anything contained in this Agreement be deemed to give any third payty, including but not limited to Consultant's employees or subcontractors, any claim or right of action against the cities,

5. Stanclard of Care. Consultant represents and warrants that it has the qualifications, experience and facilities necessary to properly perform the Services required under this Agreement in a thorough, competent and professional manner. Consultant shall at all times faithfully, competently and to the best of its ability, experience and talent, perform all Services described herein. In meeting its obligations under this Agreement, Consultant shall employ, at a minimum, generally accepted standards and practices utilized by persons engaged in providing services similar to those required of Consultant under this Agreement. Consultant represents that to the extent Consultant utilizes subcontractors, such subcontractors are, and will be, qualified in their frelds. Consultant also expressly represents that both Consultant and its subcontractors, if any, are now, and will be throughout their performance of the Services under this Agreement, properly licensed or otherwise qualified and authorizedto perform the Services required and contempiatei by this Agreement. Consultant and its subcontractors, if any, shall utilize the standard of care and skill customarily exercised by members of their profession, shall use reasonable diligence and best judgment while performing the Services, and shall comply with and keep themselves informed ofall applicable laws and regulations. Consultant represents and warrants Consultant and all subcontractors or sub-consultants are qualified to do business in California.

6. and Consultant shall, before
commencing any work under this Agreement, provide to the City of Sanger in writing: (a) the identity ofall subcontractors and sub-consultants (collectively referred to ai "subcontractors"), if a
-tA 1236.0 I0l /661770.5 cmh
33 any, Consultant intends to utilize in Consultant's performance of this Agreement; and (b) a detailed description of the full scope of Services to be provided by such subcontractors. Consultant shall only employ subcontractors pre-approved by City of Sanger and in no event shall Consultant replace an approved subcontractor without the advance written permission of City of Sanger, with the understanding that City of Sanger's permission will not be unreasonably withheld.

Notwithstanding any other provisions in this Agreement, Consultant shall be liable to the Cities for the performance of Consultant's subcontractors.

7. Subcontractor Provisions. Consultant shall include in its written agreements with its subcontractors, if any, provisions which: (a) impose upon the subcontractors the obligation to provide to the Cities the same insurance and indemnity obligations that Consultant owes to the Cities; (b) make clear that the Cities intend to rely upon the reports, opinions, conclusions and other work product prepared and performed by subcontractors for Consultant; and (c) entitle the Cities to impose upon subcontractors the assignment rights found elsewhere in this Agrcement.

8. Powqr to Act on Behalf of.eitv. Consultant shall not have any right, power, or authority to create any obligation, exprcss or implied, or make representations on betratf of any City except as may be expressly authorized in advance in writing from time to time by that City and then only to the extent of such authorization.

9. &lcqrd Keeping: Reports. Consultant shall keep complete records showing the type of Services performed, Consultant shall be responsible and shall require its subcontractors to keep similar records. Each City shall be given reasonable access to the records of Consultant and its subcontractors relating to that City for inspection and audit purposes. Consultant shall provide each City with a working draft of all reports and five (5) copies of all final reports prepared by Consultant under this Agreement for that City.
10' Ownership and Inspection of Documents. All data, tests, reports, documents, conclusions, opinions, recommendations and other work product generated by or produced for Consultant or its subcontractors in connection with the Services, regardless of the medium, including physical drawings and materials recorded on computer discs ("Work Product"), shall be and remain the property of the City for whom the work was performed. That City shall have the right to use, copy, modiff, and reuse the Work Product as it sees fit. Upon any City's request, Consultant shall make available for inspection and copying all such Work Product and all Work Product shall be turned over to the City promptly at City's request or upon withdrawal from or termination of this Agreement as to that City, whichever occurs first, Consultant shall not release any Work Product to third parties without prior written approval of the City Manager of the City for which the Services were provided. The City Manager for the City of Sanger may require thl release of any Work Product by Consultant, and may use the same, without restriction.

Consultant's obligations under this Section 10 shall survive termination ol or withdrawal from, this Agreement and shall survive for four (4) years after the date of expiration, withdrawal, or termination of this Agreement as to each individual City.

11. Colfidentialilv. All data, reports, conclusions, opinions, recommendations and other Work Product prepared and performed by and on behalf of Consultant in connection with the Services performed pursuant to this Agreement shall be kept confidential ancl shall be disclosed 401236.01 0l /661770.6 cmh
34 only to the Cities or any City, unless otherwise provided by law or expressly authorized by thc Cities or any City. Consultant shall not disclose or permit the disclosure of any confidential information acquired during performance of the Services, except to its agents, employees, affiliates, and subcontractors who need such confidential information in order to properly perform their duties relative to this Agreement. Consultant shall also require its subcontractors to be bound to these confidentiality provisions.
12, Qity Name and Logq. Consultant shall not use any City's name or insignia, photographs relating to projects for which Consultant's Services are rendered, or any publicity pertaining to the Consultant's Services under this Agreement in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of that City.

13. Conflicts of Interest. Consultant warrants that neither Consultant nor any of its employees have an interest, present or contemplated, in the Services. Consultant further warrants that neither Consultant nor any of its employees have real property, business interests or income that will be affected by the Services. Consultant covenants that no person having any such interest, whether an employee or subcontractor shall perform the Serviccs under this Agreement. l)uring the performance of the Services, Consultant shall not employ or retain the services of any p...on who is employed by the Cities or a member of any City Board or Commission. The Cities understand and acknowledges that Consultant may, as of the date of execution of this Agreement, be independently involved in the performance of similar for other governmental agencies and private parties. Consultant is unaware of any stated position of the Cities relative to such projects.

Any future position of a City on such projects shall not be considered a conflict of interest for purposes of this section. Each City understands and acknowledges that Consultant may, perform similar services for other govemmental agencies and private parties under this Agreement, and any such service shall not be considered aconflict ofinterest forpurposes ofthis section.

14. Non-l-iahility of Olficers and llmployees. No official, officer or employee of any City shall be personally liable to Consultant, or any successors in interest, in the event of a defauit or breach by that City for any amount which may become due Consuitant or its successor, or for any breach of any obligation under the terms of this Agreement.

15. Qities' Right to Enploy Other Consultants. This Agreement is non-exclusive with Consultant. The Citics reserves their right to employ other consultants in connection with the Services.

16. Withdrawal or'Iermirultion olAgreement. This Agreement shall terminate upon completion of the Services, or earlier pursuant to the following. a. Termination ot Withdrawal: Withoul Cause, This Agrcement may be terminated by the City of Sanger or Consultant at its discretion upon thirty (30) days prior written notice to the other party and the remaining Cities. Additionall y, any City may withdraw as a party to this Agreement at its discretion upon thirty (30) days prior written prior written notice tl thl other party and the remaining Cities. Withdrawal from this Agreement by a City shall not 50 1236.01 0 I I 66 1770.6 cmh
35 terminate this Agreement as to the other Parties, which shall continue and shall be of full force and effect as long as the consultant and at least one City remain aparty hereto. b. Termination by-.Citly of Sanger or Consultant: For Cause. Either the Consultant or City of Sanger may terminate this Agreement upon twenty (20) days prior written notice to the other party of a material breach, and a failure to cure within that time period. c. Compensation to Consultant Upon J'ennination. In the event termination is not due to fault attributable to Consultant and provided all other conditions for payment have been met, Consultant shall be paid compensation for Services performed prior to notice of termination.

As to any phase partially performed but for which the applicable portion of Consultant's compensation has not become due, Consultant shall be paid the reasonable value of its services provided. However, in no event shall such payment when added to any other payment duc under the applicable part of the work exceed the total compensation of such part as specified in Section 3 herein. In the event of termination due to Consultant's failure to perform in accordance with the terms of this Agreement through no fault of the Cities, the Cities (through the City of Sanger) may withhold an amount that would otherwise be payable as an offset to Cities' damages caused by such failure.
d. Effect of 'l'erminati-on. Upon receipt of a termination notice (or completion of this Agreement), Consultant shall: (i) promptly discontinue all Services affected (unliss the notice directs otherwise); and (ii) deliver or otherwise make available to any remaining participating Cities, without additional compensation, all data, documents, procedures, report{ estimates, summaries, Work Product and such other infonnation and materiais as may have been generated by or accumulated by the Consultant in performing this Agreement, whethei completed or in process. Following the termination of this Agreement for any reason whatsoever, the Cities shall have the right to utilize such information, Work Product and other documents, or any other works of authorship fixed in any tangible medium of expression, including but not limited to physical drawings, data magnetically or otherwise recorded on computer disks, or other writings prepared or caused to be prepared under this Agreement by Consultant. Consultant may not refuse to provide such writings or materials for any reason whatsoever. e. Compensation to Consultant Upon Withdraqal. In the event withdrawal by a City is not due to fault attributable to Consultant and provided all other conditions for payment have been met, Consultant shail be paid compensation by the withdrawing City for seivices performed prior to notice of withdrawal. As to any phase partially performed but for which the applicable portion of Consultant's compensation has not become due, Consultant shall be paid by the withdrawing City the reasonable value of its services provided. Flowever, in no event shall such payment when added to any other payment due under the applicable part of the Services exceed the total compensation of such part as specified in Section 3 herein. in the event of withdrawal due to Consultant's failure to perform in accordance with the terms of this Agreement through no fault of the withdrawingCifr,the withdrawing City (through the City of Sanger) may withhold an amount that would otherwise be payable as an offset io the wiindrawing City;s damages caused by such failure.
601236.0l0I/661770 6 cmh
36 f. Effbct--of Withdrawal. tJpon receipt of a notice of withdrawal, Consultant shall: (i) promptly discontinue all Services affected for the withdrawing City (unless the notice directs otherwise); and (ii) deliver or otherwise make available to the *ltt Oru*ing City, withoutadditional compensation, all data, documents, procedures, rcports, estimates, ,u*.uri"r, Work Product and such other information and materials as may have been generated by or accumulated by the Consultant in performing this Agreement lor the withdrawing-City, whetlher completed orin process. Following the withdrawal from this Agreement for any'reason whatsoever, the withdrawing City shall have the right to utilize such information, Work product and other documents, or any other works of authorship fixed in any tangible medium of expression, including but not limited to physical drawings, data magnetically ot otherwise recorded on computer disks, or other writings prepared or caused to be prepared under this Agreement by ^Consultant.

Consultant may not refuse to provide such writings or materials for uny .ruron whatsoever. l7 ' Insurance. Consultant shall obtain and maintain in full force and effect during theterm of this Agreement the insurance policies set forth in Exhibit "8" attached hereto and incoryorated herein by this reference as to each City. All insurance policies shall be subject to City of Sanger approval as to form and content. These requirements aie subject to amendment orwalver if so approved in writing by the City Manager of Sanger. Consultant stratt provide the Cityof sanger with copies of required certificates of insurance upon request. l8' lndemnitv and Defense. Consultant hereby agrees to indemnifl, defend and holdthe Cities and each of them, their officials, officers, "*piny".r, agents, and volunteers harmless from and against all claims, demands, causes of action, uriionr, d-amages, losses, expenses, andother liabilities, (including without limitation reasonable attomey fees and costs of liiigation) ofevery nature arising out of the acts, errors, or omissions constituting negligence, gross negligencc, willful misconduct or fraud of Consultant or its subcontractors [t"ti"g to the performance ofservices described herein, consultant's duty to defend and indemnii, th; cities shalt not extendto injuries or damages that are the result of the Cities' sole negligen"" o, willful misconduct.

Consultant's duty to defend shall immediately arisc when a claim is asserted and/or alawsuit is initiated against the Cities or any City arising out of or occurring in connection with the acts, errors, or omissions constituting negligence, gross negligence, fraud or willful misconduct ofConsultant or its subcontractors relating to the performance of Services described herein and regardless of whether others may owe the Cities o. any City a duty of defense and/or indemnity.Consultant and Cities agree that said indemnity and defense obligations shall survive theexpiration, withdrawal from, or termination of this Agreement for any ltems specified herein that arose or occurred during the term of this Agreement for a period of two (2) yeais, (Example: City"A" withdraws from the Agreement after six months. Consultant's'ind"*niiy and defense obligations as to City "A" shall survive for an additional two (2) years. However, if City ,.B,, simultaneously remains a party to the Agreement until it expires, Consultant's indemnity anddefense obligations as to City "8" shall survive for an additional two (2) years from the date ofexpiration.) In no event shall any Party be liable to the other for indirect, consequential, special orliquidated damages. 70 1236.0101 /661 770 6 cmh
37 19. Assignment. Neither this Agreement nor any duties or obligations hereunder shall be assignable by Consultant without the prior written consent of City of Sanger. In the event of an assignment to which the City of Sanger has consented, the assignee shall agree in writing to personally assume and perform the covenants, obligations, and agreements herein contained. In addition, Consultant shall not assign the payment of any monies due Consultant from any City under the terms of this Agreement to any other individual, corporation or entity. The Cities retain the right to pay any and all monies due Consultant directly to Consultant. Any such assignment shall not release Consultant from performance of its obligations and responsibilities under this Agreement.

20. Form and Service of Notices. All notices required or pbrmitted to be given under this Agreement shall be in writing and shall be personally delivered, or sent by facsimile, email or certified mail, postage prepaid and retum receipt requested, addressed as follows:

To Cities
Tim Chapa
City Manager
City of Sanger
1700 Seventh Street
Sanger, CA93657
To an individual City:

City of Sanger:

Tim Chapa, City Managcr
City of Sanger
1700 Seventh Street
Sanger, CA93657
City of Kingsburg:

Alexander Henderson, City Manager
City of Kingsburg
1401 Draper St
Kingsburg, CA 93631
To Consultant:

Jeffrey M. DeVries,
Contract Director
Health Management Associates, Inc,
120 N. Washington Square, Suite 705
Lansing, MI48933
City of Coalinga:

Marissa Trejo, City Manager
City of Coalinga
155 West Durian
Coalinga, CA932l0
City of Dinuba:

Luis Patlan, City Manager
City of Dinuba
405 E. El Monte Way
Dinuba, CA 93618
City of Selma:

Teresa Gallavan, City Manager
City of Selma
1710 Tucker St
Selma, CA93662
Notice shall be deemed effective on the date personally delivered ortransmitted by facsimile, emaii or if mailed, three (3) days after deposit of the same in the custody of thc United States postal Service.
8A1236.0tA116617 70 6 cmh
38 21. Entire Agreement. This Agreement, including the attachments, represents the entire Agreement betwecn Cities and Consultant and supersedes ali prior negotiations, representations or agreements, either written or oral with respect to the subject matter herein. This Agreement may be amended only by written instrument signed by both Cities and Consultant.

22. Successors and Assisn$. Subject to the provisions of Section l9 of this Agreement, this Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and assigns.

23. Aglhority. The signatories to this Agreement warrant and represent that they have the legal right, power, and authority to execute this Agreement and bind their rcspectivc cntities.

24. Severability. In the event any term or provision of this Agreement is declared to be invalid or illegal for any rcason, this Agreement will remain in full force and effect and will be interpreted as though such invalid or illegal provision were not a part of this Agreement. The remaining provisions will be construed to preserve the intent and purpose of this Agreement and the Parties will negotiate in good faith to modify any invalidated provisions to preserve each Party's anticipated benefi ts.

25. Appljgable Law and Interpretation and Venug. This Agreement shall be interpreted in accordance with the laws of the State of California. The language of all parts of this Agreiment shall, in all cases, be construed as a whole, according to its fair meaning, and not stricily for or against either party. This Agreement is entered into by the Cities and Consultant in the County of Fresno, California. Consultant shall perform the Services required under this Agreement primarily in the County of Fresno, Califomia, as well as Tulare County, California. Thus, in thc event of litigation, the Parties agree venue shall only lie with the appropriate state or federal court in Fresno County, California.

26. Attorney"s l"ees. If any Parry is required to commence any proceeding or legal action to enforce or interpret any term, covenant, or condition of this Agreement, the prevailing party in such proceeding or action shall be entitled to recover from the other party its reasonable attorneys' fees and legal expenses.

27. Amendments and W4iver. This Agreement shall not be modified or amended in any way, and no provision shall be waived, except in writing signed by the Parties hereto. No waiver of any provision of this Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any such waiver constitute a continuing or subsequent waiver of the same provision. Failure of any Party to enforce any provision of this Agreement shall not constitute a waiver of the right to compel enforcement of the remaining provisions of this Agreement.

28. Third Parly Bcneficiaries. Nothing in this Agreement shall be construed to confer any rights upon any party not a signatory to this Agreement. 29' Execution in Counteearts. This Agreement may be executed in counterparts, including by electronically transmitted signature such as by facsimile or email, such that the 901236 0l0I/661'? 70 6 cmh
39 signatures may appear on separate signature pages. A copy or an original, with all signatures appended together, shall be deemed a fully executed Agreement.

30. Nqn-Disqimination. Consultant shall not discriminate on the basis of any protected class under federal or State law in the provision of the Services or with respect to any Consultant employees or applicants for employment. Consultant shall ensure that any subcontractors are bound to this provision. A protected class, includes, but is not necessarily limited to race, color, national origin, ancestry, religion, age, sex, sexual orientation, marital status, and disability.
3L Compliance with All Laws. In providing the Services required under this Agreement, Consultant shall at all times comply with all applicable laws of the United States, the State of Califomia, and with all applicable regulations promulgated by federal, state, regional, or local administrative and regulatory agencies, now in force and as they may be enacted, issued, or amended during the term of this Agreement.

NOW, THEREFORE, the Cities and Consultant have executed this Agreement on the date(s) set forth below.

HEALTH MANAGEMENT
ASSOCIATES,INC.

CITY OF SANGER
By
Kelly Johnson, Vice President
By
Tim Chapa, Manager
Date: il ( 0zd

APPROVED AS TO FORM
Hilda Cantu Montoy, C Attorney
Date:
[Signatures continued on next page,l
01236.O101 t661170.6 cmh 10
40 signatures may. appear.on separate signature pages. A copy or an original, with all signaturesappended together, shall be deemed a n try executed Ag.eement. 30' Non'Discrimination- Consultant shall not discriminate on the basis of anyprotected class under federalor State law in the provision of the Services or with *p.rt to anyconsultant employees or applicana for empioyment. consulunt shall .nrurJ t6at anysubcontractors are bound to-thisprovision" A prorected class, includes, but is not necessarilylim.ited to race, color, nationalorigin, ancestry, teiigion, *gr, **i, **ual orientation, maritat status,and disability. 3l' Comnliange.-with-All Laws. In providing the Services required under thisAgreement, Consultant shall at atl times comply with all apiticable laws of the unit"O siates, theState of Califomia, and.with all applicable regulations promulgated by federal, state, ffinal, orlocal administrative and regulatory agencies, now in foice and-as they may be enacted, issued, oramended during the term of this Agreement.

NOW, THEREFORE, the Cities and Consultant have executed this Agreement on the date(s) setforth below.

By

HEALTH MANAGEMENT
ASSOCIATES,INC.

Date: lt l
Vice President
lSignatures continucd on ncxt page]

CITY OF SANGER
By
Tim Chapa" City Manager
Date:

APPROVED AS TO FORM
Hilda Cantu Montoy, City Attorney
0 1236.0101/66t770.6 cmh l0
41 CITY OF COALINGA
Trejo, City
Date: lirr l7t\?)

CITY OF KINGSBTJRG
Alexander Henderson, City Manager
Date

APPROVED AS TO FORM
, City Attomey

CITY OF SELMA
Byt
Teresa Gallavan, City Manager
Date:

APPROVED AS TO FORM
, City Attomey
By:

APPROVED AS TO FORM
..t L'
N\ OLL Attomey

CITY OF DINUBA
Luis Patlan, City Manager
Date:

APPROVED AS TO FORM
, City Attorney
Attachments:

Exhibit A: Scope of Services and Schedule of Compensation Exhibit B: Insurance
01216.0101/661770.6 cmh ll
42 CITY OF COALINGA
Marissa Trejo, City Manager

CITY OT'
By;
Date: Z
JFI
2 APPRO AS TO FORM
ilt hqa City Attomey

CITY OF SELMA
By:

Teresa Gallavan, City Manager
Date:

APPROVED AS TO FORM
, City Attomey
By
City Manager
Date:

APPROVED AS TO FORM
, City Attorney

CITY OF DINUBA
By
Luis Patlan, City Manager
Date:

APPROVED AS TO FORM
, City Attorney
Attachments:

Exhihit A: Scope of Services and Schedule of Compensation Exhibit B: Insurance
01236.0101/661 770.6 cmh 11
43 CITY OF COALINGA
By:

Date
, City Attorney

CITY OF DINUBA
City Manager
Date: & /

APPROVED AS TO FORM
Marissa Trejo, City Manager

CITY OF KINCSBURG
Alexander Henderson, City Manager
Date:

APPROVED AS TO FORM
, City Attorney

CITY OF SELMA
By:

Teresa Gallavan, City Manager
Date:

APPROVED AS TO FORM
, City Attorney
By

APPROVED AS TO FORM
, City Attorney
Attachments:

Exhibit A: Scope of Services and Schedule of Compensation Exhibit B: Insurance
01236,01 0l/6617?0,6 cmh ll
44 CITY OF COALINGA
Marissa Trejo, City Manager

CITY OF KINCSBURC
Alexander Henderson, City Manager
Date:

APPROVED AS TO FORM
, City Attorney

CITY OF
City Manager
Date:

APPROVED AS TO FORM
, City Attomey
By:

Date:

APPROVED AS TO FORM
, City Attorney

CITY OF DINUBA
By:

Luis Patlan, City Manager
Date:

APPROVED AS TO FORM
, City Attorney
Attachments:

Exhibit A: Scope of Services and Schedule of Compensation Exhibit B: Insurance
012360101/6617?06 cmh ll
45 EXHIBIT A

SCOPE OT SERVICES AND SCHEDULE OF COMPENSATION
I. Services
Consultant shall respond to requests from the Cities or any City regarding participation in the Voluntary Rate Range Program (VRRP) and applicable Intergovernmental -Transier
programs
(IGTs) administered within the Medi-Cal program by the Califomia Department of Health Care services (DHCS). Areas of assistance include bul are not limited to:
(a) Helping the Cities understand VRRP, the IGT process, and the documents used to transact an IGT in order to make informed decisions on whether to participate in VRRp and if so, how to participate.
(b) Conl.auting DHCS and the relevant Health Plans to participate in VRRp, calculating the value of the IGT and the dollar amounts involved at each step of the process, and submitting Attachment B's and Letters of Interest once DHCS is ready to reieive them. (c) Consultant shall work with DHCS on behalf of City, and the Cities to resolve any questions and troubleshoot issues that arise. (d) Consultant shall assist the Cities and their respective staff to ensure all documents are correctly prepared for participation in the IGT program, and work with the relevant Health Plans to meet the DHCS timelines.

II. Schedule of Compensation
Subject to the maximum Contract Sum set forth in Section 3(a), Consultant shall provide services to Cities at the following hourly rates or task amounts:
(a) The Cities will pay Consultant $295.00 an hour for its work under this Agreement.
0 1236,010 I / 6617 70.6 cmh 12
46 EXHIBIT B

INSURANCE
A. Insurance Requirements
i. Consultant shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than two million dollars ($2,000,000) per occurrence for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability. If a general aggregate limit applies, either the general aggregate limit shall apply separately to this projecVlocation or the general aggregate limit shall be twice the required occurrcnce limit.

Consultant's general liability policies shall be endorsed using Insurance Services Office form CG 20 l0 (or equivalent) to provide that each City and its officers, off,rcials, employees, and agents shall be additional insureds under such policies. For construction projects, an endorsement providing completed operations coverage for the additional insured, ISO form CG 2A 37 @r equivalent), is also required. ii. Any failure to comply with reporting provisions of the policies by Consultant shall not affect coverage provided for each City.
iii. Coverage shall state that Consultant insurance shall apply separately to each insured against whom c'laim is made or suit is brought, except with respects to the limits of the insurer's liability.
iv. coverage shall contain a waiver of subrogation in favor of each city. v. Coverage shall provide coverage for Consultant's obligations of indemnity and defense under Section l8 of this Agreement.

B. Business Automobile Liability
i' Consultant shall provide auto liability coverage for owned, non-owned, and hired autos using ISP Business Auto Coverage form CA 00 01 (or equivalent) with a limit of no less than two million dollars ($2,000,000) per accident.

Workers' Compensation and Employers' Liability
i' Consultant shall maintain Workers' Compensation Insurance (Statutory Limits) and Employers' Liability Insurance with limits of at least one million dollars ($1,000,000).

Consultant shall submit to each City, along with the certificate of insurance, a waiver of subrogation endorsement in favor of each City, its officers, agents, employees, and volunteers.

Professional Liability
Consultant shall maintain professional liability insurance that insures against professional enors and omissions that may be made in performing the Services to be rendered in connection with this Agreement, in the minimum amount of one million dollars C.

D
01236.01A1rc6n70.6 cmh l3
47 ($ 1,000,000) per claim and in the aggregate. Any policy inception date, continuity date, or retroactive date must be before the effective date of this agreement, and Consultant agrees to maintain continuous coverage through a period no less than three (3) years after completion of the services required by this agreement.

E, All Coverages
i. Each insurance policy required by the agreement shall be endorsed to state that coverage shall not be suspended, voided, cancelled, or reduced in limits except after thirty (30) days' prior written notice has been given to the City of Sanger, except that ten (10) days' prior written notice shall apply in the event of cancellation for nonpayment of premium.
ii. All self-insurance, self-insured retentions, and deductibles must be declared and approved by each City regarding that City's coverage.
iii. Evidence of Insurance - Prior to commencement of the Services, the Consultant shall furnish each City with certificates, additional insured endorsements, and waivers of subrogation evidencing compliance with the insurance requirements above. The Consultant must agree to provide complete, certified copies of all required insurance policies of requested by each City regarding that City's coverage.
iv. Acceptability of Insurers - Insurance shall be placed with insurers admitted in the State of Califomia with an AM Best rating of A- VII or higher. 01236,0101 166l'170.6 cmh t4
48 For the Meeting of: Septembet7,2023
Agenda Item No.

CrrY oF SINGER

REPORTTO THE COUNCIL
f-S
To:

From:

Subject:

Mayor and Council Members
David Brletic, Community Development Director
Resolution Initiating Proceedings Pursuant to the Landscaping and Lighting Act of 1972 for the Annexation of Property into Sanger Landscaping and Lighting Maintenance District No. 2, Area 1, to Review the Improvements and Assessments for Fiscal Year 2023-2024, and to Set a Public Hearing (Annexation No. 23-01) Attachments:

1. ResolutionNo.Zo 23 -4 b

2. Petition and Waiver from D.R. Horton CA3, Inc.

CONFLICT OF INTEREST:

None known.

RECOMMENDATION:

That the City Council approve Resolution No2oA4La Resolution Initiating Proceedings Pursuant to the Landscaping and Lighting Act of 1972 for the Annexation of Property into Sanger Landscaping and Lighting Maintenance District No. 2, Area 1, to Review the Improvements and Assessments for Fiscal Year 2023-2024, and to Set a Public Hearing for a Future Date.

EXNCUTIVE SUMMARY:

The City of Sanger has two established Landscaping and Lighting Maintenance Districts to maintain City parks, landscaped areas, block walls, and streetlight operation and maintenance. Sanger Landscaping and Lighting Maintenance District No. 2 ("LLMD No. 2") was established in 2004 to cover the cost of maintaining all streetlights, landscaping, and irrigation systems within the LLMD No. 2 City public right- of-way, and to cover the cost of maintaining special amenities located within the LLMD No. 2 City public right-olway or easements, including, but not limited to, maintaining masonry walls, storm water holding Prepared by: Dawid Riletic Approved by:
01236.01,05/905567.7
REVIEW: City W^n^grr'@- Finance: City Attorneyi _
TYPE OF ITEM:

Consent
Info Item
Action Item
Department Report
Redevelopment Agency
COUNCIL ACTION: APPROVED DENIED NO ACTION
X
X
Public Hearing
Matter Initiated by a Council Member
Other
Continued to:
49 ponds, and roundabouts. Approval of the proposed Resolution will start the process to allow annexation of the lots in a new residential subdivision into LLMD No. 2 being developed by D.R. Horton CA3, Inc. ("Applicant").

BACKGROUND:

The Landscaping and Lighting Act of 1972, California Streets and Highways Code Section 22500 et. seq. was designed to allow local governments the ability to collect assessments to defray the cost of maintaining street lighting, and landscaped areas within the public right-of-way. These costs were recognized as costs, which directly benefit property owners by increasing the value of their property.

Adequate street lighting increases safety and decreases crime. Well-kept landscaped areas enhance the quality of life in neighborhoods and directly affect the marketability and value of property.

Applicant is currently seeking to develop 63-lot subdivision located southwest of North Avenue and Greenwood Avenue, Tract 6327, as part of Phase II of Vesting Tentative Tract Map No. 5826 ("Property"). The Applicant has submitted a final map Tract 6327, for Phase II of Tract 5826 for approval by the City Council, which will be considered by the City Council as part of a separate Agenda item at a meeting. A condition of approval for Trcct 5826 requires that the lots in Tract 5826 annex into LLMD No. 2. Consistent with that requirement, the Applicant has submitted a petition and waiver to the City, requesting annexation into LLMD No. 2 and agreeing to the initial assessment amount of $116.00 per lot for the fiscal year. Thereafter, the property would be subject to the annual levy amounts approved by Council for LLMD No. 2 for each fiscal year.

The Applicant has also (i) waived certain resolutions, report, notices of hearing, and right of majority protest, and consented to a public hearing and adoption of a Resolution by the City Council ordering annexation and levy of the Property; and (ii) expressly waived any requirement to have a ballot and majority protest proceeding per Government Code Section 53753 or as may be permitted by the Act. As a result of this waiver, the annexation process can be expedited as no report by the City Engineer is required to be prepared and filed with the City Clerk, nor is a ballot and majority protest required.

The attached Resolution initiates the proceedings for Annexation of the Property in Sanger Landscaping and Lighting Maintenance District No. 2, Area 1, and sets a public hearing date for the proposed annexation and levy for September 7,2023.

Approving the Resolution does not annex the Property implement the assessment; it only starts the process and allows for further discussion. The Council will make a final decision on this matter at the November 2, 2023 hearing.

REASON FOR RECOMMENDATION:

The LLMD No. 2 assessment is utilized to offset the costs of streetlight and right of way maintenance and operations within the established LLMD No. 2 area. Street lighting and well-maintained landscaping increases safety and the quality of life and directly affects the actual property values of homes and businesses located in the City of Sanger. As new development occurs in Sanger, annexing the property to LLMD No. 2 will help ensure that property is maintained. Annexation is also a necessary component to allow for the development of 63 new single-family residences, and to help assist with the City's housing stock.

FISCAL IMPACT:
50 Each lot that is annexed will pay the current rate of $1 16.00 for the Fiscal Year, or $7,308 total for all 63 proposed lots. Thereafter, the City Council will approve assessment amounts for Area I of LLMD No. 2, which may be adjusted to reflect increases based on the consumer price index.

ALTERNATIVES:

One alternative would be to deny the application and not annex the property into LLMD No. 2. In this case, the Council should also provide direction whether or not it intends to relieve the Applicant of condition of approval No. 5l for Vesting Tentative Tract Map No. 5826, which requires the annexation in order to approve the Final Map.

ACTIONS F'OLLOWING APPROVAL:

Staffanticipates that the City Clerk will file the diagram and assessment with the Fresno County Auditor- Controller concurrently with the recording of the final map. 51 RESoLUTToN No. 2c234a

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER

INITIATING PROCEEDINGS PURSUANT TO THE LANDSCAPING
AND LIGHTING ACT OF 1972 FOR THE ANNEXATION OF

PROPERTY INTO SANGER LANDSCAPING AND LIGHTING
MAINTENANCE DISTRICT NO. 2, AREA I., TO REVIEW THE
IMPROVEMENTS AND ASSESSMENTS F'OR FISCAL YEAR 2023.2024, AND TO SET A PUBLTC HEARING. (ANNEXATTON NO.23-01)
WHEREAS, the Landscaping and Lighting Act of 1972 ("Act") provides and establishes procedures for annexing properties to an existing Landscaping and Lighting Assessment District; and
WHEREAS, on April 1, 2004 the Sanger City Council established the "sanger Landscape and Lighting Maintenance District No. 2" ("LLMD No. 2") to levy and collect assessments to cover the cost of maintaining all streetlights, landscaping, and inigation systems within the LLMD No. 2 public right-of-way, ffid to cover the cost of maintaining special amenities located within the LLMD No. 2 public right-of-way or easements, including, but not limited to, maintaining masonry walls, storm water holding ponds, and roundabouts; and WHEREAS, the City Council has determined that, to finance the installation, operation, and maintenance of landscaping and lighting improvements which benefit the aforementioned tracts and public lands, they should be annexed into the District; and WHEREAS, not only will annexing this new development into the existing district ensure that all benefitting parcels share equally in the costs to maintain the improvements, but consolidating the benefitting developments into a single assessment district will facilitate their management by the City; and
WHEREAS, the proceedings for the annexation of the aforementioned tracts and public lands to the District are authorized by and will be conducted pursuant to the provisions of the Landscaping and Lighting Act of 1972,Part 2 (commencing with Section 22500) of Division 15 of the California Streets and Highways Code; and
WHEREAS, pursuant to Streets and Highways Code section 22608, resolutions, reports, notices of hearing, and the right of majority protest may be waived with the written consent of all landowners of the territory to be annexed; and
WHEREAS, D.R. Horton CA3, Inc., is the landowner of the property proposed for annexation and generally located at the Southwest of the intersection of Greenwood Avenue and North Avenue, and which is also known as Tract 6327, Phase II of Tract 5826, whose final map is will be considered by the City Council, as further described or depicted on Exhibit o'A" ("Subject Property"); and

52 WHEREAS, D.R. Horton CA3, Inc., has provided a petition for annexation and written consent to waiver of resolutions, reports, notices of hearing, and the right of majority protest regarding the Subject Property, as well as consenting to the amount of the proposed levy for the current fiscal year; and
WHEREAS, as a result, no report by the City Engineer is required to be prepared and filed with the City Clerk which outlines the land to be annexed, etc.; and WHEREAS, this City Council now desires to proceed to adopt this Resolution of Intention to declare its intent to annex the Subject Property into LLMD No. 2, and to set and speci$ the levy and collection of assessments, and to set a time and place for a public hearing relating to the annexation of the subject property into LLMD No. 2, Area 1.

NOW, THEREFORE, the City Council of the City of Sanger does resolve as follows:
l. The City Council proposes to annex the property into Area I of Sanger Landscaping And Lighting Maintenance District No. 2 formed by the City Council for the City of Sanger per adoption of Resolution 3604 in April of 2004 and pursuant to the Landscaping and Lighting Act of 1972 (Section 22500 and following, Streets and Highways Code). The property proposed to be annexed is identified on Exhibit "A."

2. The property proposed to be annexed and to be specifically charged for the improvements shall include all of the land identified on Exhibit "A" (Tract 6327, Phase II of Tract 5826) and shall be designated "Sanger Landscaping & Lighting Maintenance District No. 2, Annexation No. 23-01."

3. The improvements which are provided for the properties within Sanger Landscaping & Lighting Maintenance District No. 2, and which shall be provided for the property within Sanger Landscaping & Lighting Maintenance District No. 2, Area 1, Annexation No. 23- 01 by and through the assessments levied annually thereon shall include the following:
(a) The installation or construction of public lighting, facilities, including, but not limited to, street lights;
(b) The installation or planting of landscaping, including, but not limited to, street trees, parkways, and median islands;
(c) The installation or construction of irrigation systems; (d) Special amenities including, but not limited to, maintaining masonry walls, storm water holding ponds, and roundabouts; and
(e) The maintenance and servicing of any of the foregoing.

4. The City Engineer of the City of Sanger is hereby designated the engineer for the annexation proceedings. The City Council finds that the landowner has presented a written consent, and that the engineer is not required to prepare and file with the City

53 Clerk a report in accordance with Article 4 of Chapter 1 of the Landscaping and Lighting Act of 1972 for the annexation proceedings, consistent with the Landscaping and Lighting Act of 1972.

5. The City Engineer is hereby directed to review, and modifu the assessments levied against parcels previously within LLMD No. 2 district boundaries in accordance with Article 4 of Chapter I of the Landscaping and Lighting Act of 1972 for the annexation proceedings, as required by Chapter 2 of Part 2 of Division 15 of the Landscaping and Lighting Act of 1972. The proposed assessments upon the lots and parcels of land are set forth in Exhibit "B."

6. Notice is given that on the 2nd day of November, 2023, at the hour of 6:00 p.m., in the regular meeting place of the City Council being the Council Chambers located at 1700 7th Street, Sanger, California 93657, a public hearing will be held where this City Council will consider the authorization for the annexation of Annexation No. 23-01 to Sanger Landscaping & Lighting Maintenance District No. 2, Area 1, the proposed method and apportionment of the levy with Annexation No. 23-01 and all other matters as set forth in this Resolution of Intention. Pursuant to the petition, all of the landowner(s) within Annexation No. 23-01 have waived all applicable resolutions, reports, notices of hearing, and the right of majority protest.

At such public hearing, the testimony or protest of all interested persons for or against the annexation of Annexation No. 23-01 or the imposition of levy of assessments within Annexation No. 23-01 will be heard.

7. This Resolution shall be effective upon adoption.

The foregoing resolution was considered by the City Council of the City of Sanger at a regular meeting of said Council held on the 7th day of September 2023, and adopted by the following vote:

AYES
NOES

ABSTAIN
ABSENT
ATTEST

Rebeca Padron, City Clerk
54 EXHIBIT A
Proposed Boundaries of Annexation No. 23-01 to Sanger Landscaping & Lighting Maintenance District No.2, Area 1, City of Sangero Fresno County, California The Subject Property is situated in the State of California, County of Fresno, City of Sanger and is described as follows:

OUTLOT B AS SHOWN ON THE MAP ENTITLED ''FINAL MAP OF TRACT NO. 5826, PHASE 1 OF TRACT 5826" IN THE CITY OF SANGER, COUNTY OF FRESNO, STATE OF CALIFORNIA, AS MAP RECORDED FEBRUARY 13, 2O23,IN BOOK g2,PAGES 74 THROUGH 78 OF TRACT MAPS, FRESNO COUNTY RECORDS.

EXCEPTING THEREFROM ALL THAT LAND GRANTED TO THE CITY OF SANGER IN GRANT DEED RECORDED MARCH 23,2023 AS DOCUMENT NO. 2023-0025845, MORE PARTICULARLY DESCRIBED AS FOLLOWS :

THAT PORTION OF THE EAST TI2 OF THE NORTHEAST II4 OF THE NORTHWEST 1/4 OF SECTION 27, TOWNSHIP 14 SOUTH, RANGE 22 EAST, MOUNT DIABLO BASE AND MERIDIAN, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTH QUARTER CORNER OF SAID SECTION 27; THENCE SOUTH OO1O'44'' WEST ALONG THE EAST LINE OF SAID EAST II2 A DISTANCE OF 132s.09 FEET TO THE SOUTHEAST CORNER OF SAID EAST 1/2; THENCE NORTH 89"57'32' WEST ALONG THE SOUTH LINE OF SAID EAST TI2 A DISTANCE OF 36.00 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE NORTH 89"57'32U WEST CONTINUING ALONG THE SOUTH LINE OF SAID EAST II2 A DISTANCE OF 45.98 FEET; THENCE LEAVING SAID SOUTH LINE NORTH 33"40'46' WEST A DISTANCE 115.16 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 5O.OO FEET; THENCE NORTHEASTERLY, 37 .04 FEET ALONG SAID TANGENT CURVE THROUGH A CENTRAL ANGLE OF 4226'56"; THENCE LEAVING SAID TANGENT CURVE SOUTH 76"07'42'EAST A DISTANCE OF 92,04 FEET TO A POINT ON A LINE PARALLEL WITH AND 36.00 FEET WEST OF SAID EAST LINE; THENCE SOUTH 0o10'44" WEST ALONG SAID PARALLEL LINE A DISTANCE OF 103.42 FEET TO THE TRUE POINT OF BEGINNING.

Assessor's Parcel Number(s) : 332-090-2I
The property is subject to a pending map for Tract 6327, Phase II of Tract 5826, whose final map will be considered by the City Council. The boundaries of the annexation shall be comprised of lots 1-63, inclusive, Tract 6327, Phase II of Tract 5826. The boundaries of Tract 6327, Phase II of Tract 5826 are depicted as follows:

55 PHASE 2 OF TRACT 5826
rllI l_L -l-i -l l-l 1 lI:':--r
NORTf{AVENUE
l-t iltTl
=
l_l lll_l]
CAIttERItIE AVENL/E
a
zr{
5 Foo
r- | --rtll
[]
Le,s ^
il$%'5
*_- I ____-,
tl
Ir-]

HUNTER AVENT'E
q
zg
9l
oe.
oEo
-t--l
--l
E
IJ]
z
H
o
Fztr)
tt)
d
a n
IIItli
L-L I

DIAMONDA
LEGEND

LIMITS OF SUBDIVISION

LOT LINE

ROAD CENTERLINE
EX|6NNG ROAD RTGHT OF WAY LINE
PROPOSED RI6I.{I OF WAY LINE
SECIIoN ttr\tE
@,R.F"G,

56 Exhibit B
Rate and Apportionment
Lots I through 63, inclusive, of Tract 6327, Phase II of Tract 5826, proposed to be levied as follows:

Lot
I
2 J
4 5
6 7
8 9
10 l1
12 I3
t4
15 l6
t7
18 T9
20 2t
22 23
24 25
26 27
28 29
30 31
32 JJ
34 35
36 37
Landowner
D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

Proposed Assessment (FY 23-24)
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$l16.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$l16.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$l16.00
D.R. Horton CA3
D.R. Horton CA3
D.R. Horton CA3
D.R. Horton CA3
D.R. Horton CA3
D.R. Horton CA3
Inc
Inc
Inc
Inc
Inc
Inc

57 38
39 40
4T
42 43
44 45
46 47
48 49
50 51
52 53
54 55
56 57
58 s9
60 6l
62 63
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
D.R. Horton
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
CA3
Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.
)
)
)
,
)
,
t
)
)
,
t
)
)
)
,
)
t
t
)
)
)
)
)
,
,
t
$l16.00
$1r6.00
$l r6.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$116.00
$r 16.00
$l r6.00
$r r6.00
$116.00
$116.00
$116.00
$1r6.00
$116.00
$116.00
$116.00
$r 16.00
PageT of7
58 Il.R.H{tHIItn'm.
l+prerocdr &t'4
Petition (Including Consent And Waiver) Requesting Annexation To Sanger Landscape and Lighting Maintenance District No. 2 (Truct 6321, Vesting Tentative Tract Map No. 5826 - Phase II)
Dear City Council of the City of Sanger:

The undersigned landowner does hereby certify under penalty of perjury that the following statements are all true and conect:
l. The undersigned is authorized to represent the landowner identified below and is its designated representative to request and petition the City Council (the "Council") of the City of Sanger (the "City") for annexation to Sanger Landscape and Lighting Maintenance District No. 2 ("District No. 2") pursuant to the provisions of Landscaping and Lighting Aet of 1972 ("Act"), commencing at California Streets and Highways Code section 22500 et seq., and to authorize certain other consents and waivers contained herein. The boundaries of the territory to be annexed are described on Exhibit "A" hereto and by this reference incorporated herein.

2. The landowner hereby certifies that as of the date indicated opposite of the undersigned's signature, the landowner listed herein is the owner of the property within the proposed annexation boundary of District No. 2, (the "Properly"), which Property's boundary is further described in Exhibit "A" hereto.

3. The landowner, pursuant to Sections 22607 and22585 et seq. of the Act, hereby requests that proceedings be commenced:
(a) To annex the Property to District No. 2 for the purposes including the following:

The installation or construction of public lighting, facilities, including, but not limited to, street lights;
The installation or planting of landscaping, including, but not limited to, street trees, parkways, and median islands;
The installation or construction of irrigation systems; Special amenities including, but not limited to, maintaining masonry walls, storm water holding ponds, and roundabouts; and
The maintenance and servicing of any of the foregoing.
(b) To authorize the levy of assessmEnts on the Property in accordance with the rate and method of apportionment of District No. 2 to finance the above-mentioned services, incidental expenses and fees; and
(c) To authorize the issuance of bonds for District No. 2 if applicable.

4. In accordance with the provisions of the Act, and specifically Section 22608 for annexation proceedings, resolutions, reporto notices of hearing, and right of majority protest shall be waived wilh written consent of the owners of property within the tenitory to be annexed, the RE
a
a
a
a
a
01236.Otgsnffi%t.2
59 landowner (i) expressly waives the resolutions, report, notices of hearing, and right of majority protest, and consents to a public hearing and adoption of a Resolution by the City Council ordering annexation and levy of the Property; and (ii) expressly waives any requirement to have a ballot and majority protest proceeding per Government Code Section 53753 or as may be permitted by the Act.

5. The landowner expressly waives all applicable waiting periods for the election and waives the requirement for analysis, engineer's report, etc., and consents to not having such materials provided to the landowner, and expressly waives any requirements as to the form of the ballot.

6. The landowner acknowledges and agrees that the initial annual levy for the District No. 2, Area l, is currently $l16.00 per parcel, and that the levy may be adjusted by the City in the future consistent with the Act.

7. The undersigned warrants it is the owner of one hundred percent (100%) of the Property. The undersigned warrants that there are no liens or encumbrances on the Property in the favor of any lender, including but not limited to any deeds of trust, mortgages, leases, or liens of a similar nature.

8. The undersigned agrees to execute such additional or supplemental agreements as may be required by the City to provide for any actions and conditions under this petition, including any amount of cash deposit required to pay for the City's costs related to annexing into District No. 2.

9. The undersigned agrees to cooperate with the City, its attorneys and consultants and provide all information and disclosures required by the City regarding the assessment to purchasers of the Property or any part of it.
[Remainder of Page Intentionally Left Blank]
60 It.R.H0ffiUlt'i#*
7ftlnetd: &u*
IN WITNESS WHEREOF, I hereunto set my hand this
2023.

Atl. ou, or
OWNER:

D.R. Horton CA3,Inc., a Delaware
corporation
By
Name Hatch
Its: Vice President and
President of the Central Valley Division
The address of *re above owner for receiving notices is:

D.R. Horton CA3,Inc.
419 W. Murray Avenue
Visalia, CA 93291
Attention: David Hatch
Phone: (559) 636-9850
E-mail : [email protected]
With a copy to: D.R. Horton, America's Builder
11241 Slater Avenue NE, Suite 120
Kirkland, WA 98033
Attention: Jonathan Smith, Steve Abrams,
and Matthew Charles Tranah
E-mail: ir$milh {{tdrhortqn.com,
sdabrams i,drhorjle&g_o8, and
nr ctra n ah i r irdrhorton. Q_oll-!

FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF SANGER THTS DAYOF . * ,2023.

To:
01236.0105n6793t.2
Rebeca Padron, City Clerk
61 EXHIBIT A
The Property is situated in the State of Califomia, County of Fresno, City of Sanger, and pending recordation of the final map for Tract 6327, Phase II of Tract 5826, is described as follows:

THE LAND REFERRED TO HEREIN BELOWAS SITUATED IN THE CITY OF

SANGER, COUNTY OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

OUTLOT B AS SHOWN ON THE MAP ENTITLED "FINAL MAP OF TRACT NO. 5826, PHASE 1 OF TRACT 5826", IN THE CITY OF SANGER, COUNTY OF FRESNO, STATE OF CALIFORNIA, AS MAP RECORDED FEBRUARY 13, 2Q23,IN BOOK 92, PAGES 74 THROUGH 78 OF TRACT MAPS, FRESNO COUNTY RECORDS.

EXCEPTING THEREFROM ALL THAT LAND GRANTED TO THE CITY OF SANGER IN GRANT DEED RECORDED MARGH 23,2A23 AS DOCUMENT NO.2023-0025845, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

THAT PORTION OF THE EAST 112 OF THE NORTHEAST 1A AF THE NORTHWEST 1A AF SECTION 27, TOWNSHIP 14 SOUTH, RANGE 22 EAST, MOUNT DIABLO BASE AND MERIDIAN, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTH QUARTER CORNER OF SAID SECTION 27.

THENCE SOUTH O'10'44'WEST ALONG THE EAST LINE OF SAID EAST 1/2 A DISTANCE OF 1325.09 FEET TO THE SOUTHEAST CORNER OF SAID EAST 1/2; THENCE NORTH 89'57'32'' WEST ALONG THE SOUTH LINE OF SAID EAST 1/2 A DISTANCE OF 36.00 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE NORTH 89'57'32" WEST CONTINUING ALONG THE SOUTH LINE oF sAlD EAST 1/2 A DISTANCE oF 45.98 FEET;THENCE LEAVTNG SAID SOUTH LINE NORTH 33'40'46'WEST A DISTANCE 115.16 FEET TO THE

BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 50.00 FEET; THENCE NORTHEASTERLY, 37.04 FEETALONG SAtD TANGENT CURVE THROUGH A CENTRAL ANGLE oF 42"26'56";THENCE LEAV|NG SAID TANGENT CURVE SOUTH 76"07'42" EAST A DISTANCE OF 92.04 FEET TO A POINT ON A LINE PARALLEL WTH AND 36.00 FEET WEST OF SA]D EAST LINE; THENCE SOUTH O"1O'44'' WEST ALONG SAID PARALLEL LINE A DISTANCE OF 103.42 FEET TO THE TRUE POINT OF BEGINNING.

Assessor's Parcel Number(s): 332-090-21
After recordation of the finalmap for Tract 6327,Phase II of Tract 5826, the boundaries of the annexation shall be comprised of lots l-63, inclusive, of the Tract 6327, Phase II of Tract 5826. TheboundariesofTract632T,PhasellofTract5S26aredepicted,andannexed,asset forth below;
4 0t236.0105/767931.2
62 PHASE 2 OF TRACT 5826
l_l 1 Lr

NORTHAVENUE
T-I
r-t nlf

HEIDIAVENUE
CAT}IERINE AVEMJE

HUNTER AVENUE
- -: L-l lll_]-_l
I
-j
___l
I
___- )
sS ra
Fz
ID
rQ
-lFt-
U
F]
Fz
I
ts-l
O
zHH
t!
'&
\-,
U
()
tr r-l T-t-l
LEGEND

DIAMONDAVENUE
LIMITS OF SUBDIWSrcN

LOT LINE
ROND CENTEruINE

EXISTING ROAD RIGHT OF WAY LINE

PROPASED RIEHI OF WAY LINE

SECI'ON IINE
2@23"@426845
a"R,F"e"
0 1
SCALE: 1 1
63 CALIFORNIA ACKNOWTEDGMENT CIVIL CODE 51189
:R5- E: {$Si1*Fl€{tr;i€+iiiijp$i+#I$
A notary public or other officer completing this certificate verifies onlythe identity of the individualwho signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

State of California
County of )
o" \QrrtulfZ\ ,?o73 before r., J] V\u'n o
Ttrrriir\Hr\#re
tnsert Name ond rit'te af theJ Darc
lit
personally appeared
Nome(s)of Signerls/
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 hisiher/their signature(s) on the instrument the person{s), or the entity upon behalf of which the person(s) acted, executed the instrument. t
@.,
A. E, PULt00.truNoz
Notary Public - California
Tulare Countv
Commission * Z:ia:s:

Comm. Expires Feb 22, 2015
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
Place Notary Seal ond/or Stamp Above Signoture of Notary Public

OPTIONAL
Completing this information can deter alterotian of the document or fraudulent reattachment of this form to on unintended document.

Description of Attached Document
Title or Type of Document:

DocumentDate: Number of Pages: _.-.-----.'-
Signer(s) Other Than Named Above:

Gapacity(ies) Claimed by Signer(s|
Signer's Name: Signer's Name:
tr Corporate Officer - Title(s): tr Corporate Officer - Title(s) El Partner- u Lirnited cI General
E lndividual E Attorney in Fact
o Trustee g Guardian or Conservator
n Other;
Signer is Representing Signer is Representing:
$E€4Ss$l'qhAE{@}i}*}q}tR-!SWgeedSq.€S*&$*5'S {fdS
O2019 National Notary Association
fl Partner - fl Limited tr General
il lndividual n Attorney in Fact
tr Trustee n Guardian or Conservator
tr Other:
64 RSANGE
r ,$-___l
For the Meeting of: September7,2023
Agenda Item No.:

F-uCrrYoF SINGER
RE,PORTTO THE, CIry COUNCIL
To:

From:

Subject:

Mayor and Council Members
David Brletic, Community Development Director
Initiation of Proceedings for the Annexation of Property into Community Facilities District 2005-1, Annexation No. 4rTract 6327, Phase II of Vesting Tentative Tract Map No.5826
Attachments:
l. Resolution No. 2,. "l-17

2. Petition and Waiver from D.R. Horton CA3,Inc.

CONF'I,ICT OF INTEREST:

None known.

RECOMMENDATION:

That the Council Approve Resolution No2olr, 7 stating its intention to annex certain tenitory into City of Sanger Community Facilities District 2005-1 (public services), setting a time and date for the public hearing thereon and adopting boundary map showing territory proposed to be annexed to Community Facilities District 2005-l (Annexation No. 4).

F].XECI SUMMARY:

The attached resolution will initiate the proceedings for the annexation of the development project known as Tract 6327, Phase II of Vesting Tentative Tract Map No. 5826 (the "Project"), into Community Facilities District ("CFD") 2005-I. The conditions of approval for the Project require it to annex into CFD 2005-1, which was established as an annexable district to provide funding to offset the increased cost for public safety and open space and parks maintenance created by new development.

Ptepared by: David Apptoved by:

REVIEW: City Manage ,, (& Finance: City Attorney: _
TYPE OF ITEM:
_X_ Consent
Info Item
_X_ Action Item
Deoartment Reoort
Redevelooment AEencv
COUNCIL ACTION: APPROYED DENIED NO ACTION
Public Hearing
Mattet Initiated by a Council Member
Other
Continued to:
65 BACKGROUND
On July 7,2005, by Resolution No. 3758, the City Council established CFD 2005-1, a Mello Roos Community Facilities District with the intention that future development within the City would annex into this District. The special taxes collected from the property owners within the District are collected and used pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982-, being Chapter 2.5,Part 1, Division 2,Title 5 of the Government Code of the State of California, as amended (the "Act") to provide funding to offset the increased cost for public safety and open space and parks maintenance created by new development, specifically listed as follows:
(a) fire protection and suppression services;
(b) emergency medical services including ambulatory services; (c) community information with regard to public safety; (d) earthquake and other emergency relief programs;
(e) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) of the Act;
(0 park operation and maintenance expenses;
(g) repair and replacement of park facilities;
(h) direct and indirect expenses incurred by the City in carrying out its duties with respect to the District, including the costs incurred by the City and or County in formation of the district, annexation and annual contract administration.

Property owner assessments are paid as a component of the property tax collection process. As was originally envisioned with the establishment of the CFD, future residential projects not included in the initial formation process are required to go through an annexation process in order to be included in CFD 2005-01. Projects may be annexed one at a time, or in a group if they are ready at the same time.

The subdivision known as Tract, 6327, Phase II of Vesting Tentative Tract Map No. 5826, makes up Annexation No. 4 and is owned by D.R. Horton CA3, Inc. The Project includes the development of 63 single family residential units located at the southwest corner of North and Greenwood Avenues. The boundaries of the Project consist of the area within assessor's parcel number 332-090-21as depicted on Attachment A to the Resolution. As with all residential subdivisions, conditions of approval for the subdivision require annexation into CFD 2005-01 prior to recordation of the final subdivision map.

Adoption of the resolution represents the first steps that must be taken in the annexation process and also establishes October 19,2023 as the public hearing date for the final consideration of the annexation of the property into CFD 2005-1.

REASON FOR RECOMMENDATION:

The CFD 2005-l assessment is utilized to offset the costs of public safety and open space and parks maintenance created by new development. As development occurs in Sanger, annexing the prope(y to the CFD will help ensure that the City can continue to provide these services. Annexation is also a necessary component to allow for the development of 63 new single-family residences, as conditioned upon the tentative map.

FISCAL IMPACT:

The 2023124 Fiscal Year CFD 2005-1 assessment for single family residential development is 66 approximately $693.08 per dwelling unit. Based on this figure, the estimated annual revenue that will be received by the City for all 63 units will be 543,664.04. Because CFD 2005-1 includes an annual CPI adjustment, this amount will grow over time. The process for annexation is funded by the developer and no General Fund monies are used for this effort.

ALTERNATIVES:

One alternative would be to deny the application and not annex the property into CFD 2005-1. In this case, the Council should also provide direction whether it intends to relieve the Applicant of condition of approval No. 52 for Vesting Tentative Tract Map No. 5826, which requires the annexation in order to approve the Final Map.

ACTIONS FOLLOWING APPROVAL:

Staff anticipates that the City Clerk will file the diagram and assessment with the Fresno County Auditor- Controller concurrently with the recording of the final map. 67 RESOLUTION No. 2o ZS -L(-7

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER

STATING ITS INTENTION TO ANNEX CERTAIN TERRITORY INTO
CITY OF SANGER COMMUNITY FACILITIES DISTRICT 2OO5-1
(PUBLIC SERVICES), SETTING A TIME AND DATE FOR THE PUBLIC

HEARING THEREON AND ADOPTING BOUNDARY MAP SHOWING

TERRITORY PROPOSED TO BE ANNEXED TO COMMUNITY
FACILITTES DTSTRICT 2005-1 (ANNEXATTON NO. 4)
WHEREAS, the City Council of the City of Sanger, California, (hereinafter the "City Council"), at this time desires to authorize the annexation of territory to City of Sanger Community Facilities District No.2005-l ("CFD No. 2005-1") pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part I, Division 2,Title 5 of the Government Code of the State of California, as amended (the "Act"); and
WHEREAS, CFD No. 2005-l was formed to finance (i) fire protection and suppression services; (ii) emergency medical services including ambulatory services; (iii) community information with regard to public safety; (iv) earthquake and other emergency relief programs; (v) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) of the Act; (vi) park operation and maintenance expenses; and (vii) repair and replacement of park facilities; in addition to those provided in or required for the territory within CFD No. 2005-1 and will not be replacing services already available; and
WHEREAS, CFD No. 2005-l was formed pursuant to:
a
a
a
A Resolution entitled "A Resolution of the City Council of the City of Sanger Declaring its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982" (the "Resolution of Intention"), adopted on May 19,2005,
A Resolution entitled "A Resolution of the City of Sanger of Formation of City of Sanger Community Facilities District No. 2005-l (Public Services), Authorizing the Levy of a Special Tax Within the District, Preliminarily Establishing an Appropriations Limit for the District and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors of the District" (the "Resolution of Formation"), adopted on July 7,2005; and A Resolution entitled "A Resolution of the City of Sanger Calling SpecialElection Within Community District No. 2005- l (Public Services)," adopted on July 7,2005, and an election was held on July 7 ,2005 authorizing the levy of special taxes within CFD No. 2005- I on July 7,2005, wherein all the landowners within CFD 2005-1 voted in favor of a proposition related thereto; and
WHEREAS, a petition and waiver (collectively, the "Petition") requesting the institution of proceedings for annexation to CFD No. 2005-1 signed by all of the landowners within the proposed tenitory to be annexed (the "Property"), which Property is more fully described in this Resolution as the territory to be annexed, has been received, filed with and accepted by the City Clerk of the City of Sanger; and
68 WHEREAS, the Property is proposed to be annexed to CFD No. 2005-l and such territory shall be known and designated as "City of Sanger Community Facilities District No. 2005-l (Public Services"), Annexation No. 4 "("Annexation No. 4"); and WHEREAS, this City Council, as legislative body of the CFD No. 2005-1, now desires to proceed to adopt this Resolution of Intention to annex the territory of Annexation No. 4 into CFD No. 2005-1, to specifr the services to be financed from the proceeds of the levy of special taxes within Annexation No. 4, to set and specifu the special taxes that would be levied within the territory to finance such services, and to set a time and place for a public hearing relating to the annexation of Annexation No.4 into CFD No. 2005-1; and
WHEREAS, a diagram showing the boundaries of Annexation No. 4 proposed to be annexed has been submitted, and a copy of the diagram shall be kept on file with the transcript of these proceedings.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Sanger as follows
1 The City Council hereby specifically finds that all of the facts set forth in the recitals above of this Resolution are true and correct and incorporated herein.

2. The City Council authorizes, resolves and confirms the following:
a. The proceedings for annexing Annexation No. 4 into CFD No. 2005-1 are authorized and initiated by this legislative body pursuant to the authorization of the Act and pursuant to the Petition.

The public convenience and necessity require that Annexation No. 4 be added to CFD No. 2005-1 in order to pay the costs and expenses for the authorized additional services generated from new development within the City and this City Council declares its intention to annex Annexation No. 4 to CFD No. 2005- l.

A general description of the boundaries of Annexation No. 4 proposed to be annexed is as follows:

All that territory proposed to be annexed to CFD No. 2005-1, as such property is shown on a map designated as "Proposed Boundaries of Annexation Map No. 4 of Community Facilities District No. 2005-1 (Public Services), City of Sanger, Fresno County, California," attached hereto as Exhibit "A" and hereby incorporated by reference.

The name of the district is "City of Sanger Community Facilities District No. 2005-l (Public Services)" and the designation for the territory to be annexed shall be "City of Sanger Community Facilities District No. 2005-1 (Public Services), Annexation No. 4."
The services that are authorized to be financed by CFD No. 2005-1 shall include the City services authorized under Section 53313 of the Act, which include the following services, to the extent those services are in addition to those provided in the territory of CFD No. 2005-l before CFD No. 2005-l was created (or, with as to territory which may be annexed to CFD No. 2005-1, before such territory b
c
d.
2 e.
69 was annexed to CFD No. 2005-l), with the first priority being fire and emergency medical service, then police and public safety, and finally park maintenance costs, identified more specifically as follows:

PUBLIC SERVICES
(a) fire protection and suppression services;
(b) emergency medical services including ambulatory services; (c) community information with regard to public safety; (d) earthquake and other emergency relief programs;
(e) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) of the Act; (0 park operation and maintenance expenses;
(g) repair and replacement of park facilities;
(h) direct and indirect expenses incurred by the City in carrying out its duties with respect to the District, including the costs incurred by the City and or County in formation of the district, annexation and annual contract administration.

In accordance with Section 53313 of the Act, the additional services may not supplant services available within the territory when the district was created or annexed.

The same types of services which are authorized to be financed by CFD No. 2005-1 are the types of services to be provided in Annexation No. 4. If, and to the extent possible, such services shall be provided in common within CFD No. 2005-1 and Annexation No.

4. It is the further intention of this City Council that, except where funds are otherwise available to CFD No. 2005-l and Annexation No. 4 to pay for services, a special tax sufficient to pay for such services to be provided in CFD No. 2005-1 and Annexation No. 4, and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in Annexation No. 4, will be levied annually within the boundaries of such Annexation No. 4. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit "E}" (the "Rate and Method of Apportionment"), which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within proposed Annexation No. 4 to clearly estimate the maximum amount that such person will have to pay.

The special tax proposed to be levied within Annexation No. 4 for services to be supplied within Annexation No. 4 shall be equal to the special tax levied to pay for the same services in CFD No. 2005-1, to the extent that the actual cost of providing the services in Annexation No. 4 is equivalent to the cost of providing those services in CFD No. 2005-1. Notwithstanding the foregoing, the special tax may not be levied at a rate that is higher than the maximum special tax authorized to be levied pursuant to the Rate and Method of Apportionment.

The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as f,
J
70 Ob
applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the City as described in the "Special Tax Report for the City of Sanger Community Facilities District No. 2005-l (Public Services) adopted on July 7,2005, with respect to CFD No. 2005-1.

The maximum special tax rate in CFD No. 2005-1 shall not be increased as a result of the annexation of Annexation No. 4 to CFD No. 2005-1.

Notice is given that on the 19th day of October,2023, at the hour of 6:00 p.m., in the regular meeting place of the City Council being the Council Chambers located at 1700 7th Street, Sanger, California 93657, a public hearing will be held where this City Council will consider the authoization for the annexation of Annexation No. 4 to CFD No. 2005-1, the proposed method and apportionment of the special tax to be levied with Annexation No. 4 and all other matters as set forth in this Resolution of Intention. Pursuant to the Petition, all of the landowners within Annexation No. 4 have waived all applicable notices of the hearing and any time-period for the hearing.

As presented at the meeting, all of the landowners and/or registered voters within CFD No.2005-1 have been notified of the hearing by the posting of the agenda, or waiver, and that the hearing will occur on the same date as this Resolution.

The City Council hereby confirms and approves of such time period, waivers and notifications.

At such public hearing, the testimony of all interested persons for or against the annexation of Annexation No. 4 or the levying of special taxes within Annexation No.4 will be heard.

At such public hearing, protests against the proposed annexation of Annexation No. 4, the levy of special taxes within Annexation No. 4 or any other proposals contained in this resolution may be made orally by any interested person. Any protests pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the inegularities or defects to which objection is made. All written protests shall be filed with the City Clerk prior to the time fixed for the public hearing. Written protests may be withdrawn at any time before the conclusion of the public hearing.

If (i) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within CFD No. 2005-1, (ii) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within Annexation No. 4, (iii) owners of one-half or more of the area of land in the tenitory included in CFD 2005-1, or (iv) owners of one-half or more of the area of land in the tenitory included in Annexation No. 4, file written protests against the proposed annexation of Annexation No. 4 to CFD No. 2005-1 and the proposed special taxes and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the City Council on the annexation of Annexation No. 4 to CFD 2005-1.
h.
4 71
If, following the public hearing described herein, the Council determines to annex Annexation No. 4 to the CFD No. 2005-l and levy a special tax thereon, the Council shall then submit the annexation of the Property and levy of the special tax to the qualified voters of the Property with respect to Annexation No.

4. If at least twelve ( 12) persons, who need not necessarily be the same twelve (12) persons, have been registered to vote within the tenitory of Annexation No. 4 for each of the ninety (90) days preceding the close of the public hearing, the vote shall be by registered voters residing within Annexation No. 4, with each voter having one (1) vote. Otherwise, the vote shall be a mail-ballot election or hand-delivered ballot election, consistent with Section 53327.5 of the Act, by the landowners of the Property who are owners of record at the close of the public hearing, with each landowner having one (l) vote for each acre or portion of an acre of land owned within the Property. The number of votes to be voted by a particular landowner shall be specified on the ballot provided to that landowner.

The City may accept advances of funds or work-in-kind from any sources, including, but not limited to, the city itself, private persons or private entities, for any authorized purpose, including, but not limited to, paying the cost incurred in annexing the Property to the CFD No. 2005-1. CFD No. 2005-l may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the Council, with or without interest.

4. This resolution shall be effective upon adoption.

The foregoing resolution was considered by the City Council of the City of Sanger at a regular meeting of said Council held on the 7th day of September,2023, and adopted by the following vote:

AYES:

NOES
ABSTAIN:

ABSENT:

ATTEST:

Rebeca Padron, City Clerk
l
aJ
5 72
Exhibit A
PROPOSED BOUNDARIES OF ANNEXATION MAP NO. 4 OF
COMMUNTTY FACTLTTTES DTSTRICT NO. 2005-1 (PUBLIC SERVTCES),

CITY OF SANGER, FRESNO COUNTY, CALIFORNIA
The Property is situated in the State of California, County of Fresno, City of Sanger, and pending recordation of the final map for Tract 6327, Phase II of Tract 5826, is described as follows:

OUTLOT B AS SHOWN ON THE MAP ENTITLED ''FINAL MAP OF TRACT NO. 5826, PHASE 1 OF TRACT 5826",IN THE CITY OF SANGER, COLINTY OF FRESNO, STATE OF CALIFORNIA, AS MAP RECORDED FEBRUARY 13, 2O23,IN BOOK 92, PAGES 74 THROUGH 78 OF TRACT MAPS, FRESNO COUNTY RECORDS.

EXCEPTING THEREFROM ALL THAT LAND GRANTED TO THE CITY OF SANGER IN GRANT DEED RECORDED MARCH 23,2023 AS DOCUMENT NO. 2023-0025845, MORE PARTICULARLY DESCRIBED AS FOLLOWS :

THAT PORTION OF THE EAST II2 OF THE NORTHEAST 114 OF THE NORTHWEST 1/4 OF SECTION 27, TOWNSHIP 14 SOUTH, RANGE 22 EAST, MOUNT DIABLO BASE AND MEzuDIAN, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTH QUARTER CORNER OF SAID SECTION 27; THENCE SOUTH OO1O'44'' WEST ALONG THE EAST LINE OF SAID EAST II2 A DISTANCE OF 1325.09 FEET TO THE SOUTHEAST CORNER OF SAID EAST 1/2; THENCE NORTH 89"57'32" WEST ALONG THE SOUTH LINE OF SAID EAST 1/2 A DISTANCE OF 36.00 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE NORTH 89"57'32'' WEST CONTINUING ALONG THE SOUTH LINE OF SAID EAST II2 A DISTANCE OF 45.98 FEET; THENCE LEAVING SAID SOUTH LINE NORTH 33"40'46' WEST A DISTANCE I 1 5.16 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 5O.OO FEET; THENCE NORTHEASTERLY, 37 .04 FEET ALONG SAID TANGENT CURVE THROUGH A CENTRAL ANGLE OF 42O26,56''; THENCE LEAVING SAID TANGENT CURVE SOUTH 76"07'42" EAST A DISTANCE OF 92.04 FEET TO A POINT ON A LINE PARALLEL WITH AND 36.00 FEET WEST OF SAID EAST LINE; THENCE SOUTH 0o10'44" WEST ALONG SAID PARALLEL LINE A DISTANCE OF 103.42 FEET TO THE TRUE POINT OF BEGINNING.

Assessor's Parcel Number(s) : 332-090-2I
After recordation of the final map for Tract 6327, Phase II of Tract 5826, the boundaries of the annexation shall be comprised of lots 1-63, inclusive, of the Truct6327, Phase II of Tract 5826. The boundaries ofTract6327, Phase II ofTract 5826 are depicted, and annexed, as set forth below:
73 PHASE 2 OF TRACT 5826
63 oz 5961 80
57 47 4B 49
56 50
4d
46 45 44 43
54 53
42 27
52 41 28
5140 29
JC 3A
38 31
26 37 2t
2536 33
2435 34
oe
zz
1 2 3 4
21 2011 10 I I 7 6 5
,to
12 t.t 14 15 16 17 18
_r__J _ I l-] ll_l 1 Lr __i

NORTHAVENUE
T_I
l TltTl

HEIDIAVENUE

CATIIERINE AVEMJE
=
L_l ilt_l-_l
r52a
3F
oo
__l
I
-l
I
r--l--lt_=* l^o$^
Z I o(a",a{N I
E,l$Eij&tUI
u F_ I ___-,_'
L___ I
L_ I __J

HLINTER AVENUE
o
zlrl
14 U
t-t T-t- I
t_1_i
LEGEND
DIAMOI\DAVENUE

LIMITS OF SUBDIVISION

LOT LINE

ROAD CENTERLINE

EXISTTVG ROAO RIOHT AF WAY LINE

PROPOSED RIGHT OF WAY LINE

SECIION IINE
2{023"40}25845
(c),,R,F.@,,
SCALE: 1
74 Exhibit B

RATE AND METHOD OF APPORTIONMENT
Lots I through 63, inclusive, of Tract 6327, Phase II of Tract 5826,proposed to be levied as follows:

Lot
1 2
aJ
4 5
6 7
8 9
10 1t
I2
l3
t4
15 t6
t7
18 t9
20 2t
22 23
24 25
26 27
28 29
30 31
32 JJ
34 35
36 37
38 39
Landowner
D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3. Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3, [nc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

Proposed Assessment (FY 23-24)
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$6e3.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
75 40
4T
42 43
44 45
46 47
48 49
50 51
52 53
54 55
56 57
58 59
60 6t
62 63
D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3, Inc.

D.R. Horton CA3,Inc.

D.R. Horton CA3,Inc.
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$693.08
$6e3.08
$693.08
$693.08
76 II.R,HIIHIIIN trdf
fr,ne,r'tca'e bu+#er
R"E: Petition (Including Consent And Waiver) Requesting Annexation To Community F'acility District No. 2005-1 (Tract 6327, Phase II of Vesting Tentative Tract Map No. 5826)
Dear City Council of the City of Sanger:

The undersigned landowner does hereby certify under penalty of perjury that the following statements are all true and correct:
l. The undersigned is authorized to represent the landowner identified below and is its designated representative to request and petition the City Council(the "Council") of the City of Sanger (the "City") for annexation to City of Sanger Community Facilities District No. 2005- I (Public Services) (the "CFD") pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the "Act"), being Chapter 2.5 of Part I of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code and to authorize certain other consents and waivers contained herein. The boundaries of the teritory to be annexed are described on Exhibit'?" hereto and by this reference incorporated herein.

2. The landowner hereby certifies that as of the date indicated opposite of the undersigned's signature, the landowner listed herein is the owner of the property within the proposed annexation boundary of the CFD (the "Property"), which Property's boundary is further described in Exhibit "A" hereto.

3. The landowner, pursuant to Sections 53318 and 53339 et seq. of the Act, hereby requests that proceedings be commenced:
(a) To annex the Properfy to the CFD for the purpose of (i) fire protection and suppression services; (ii) emergency medical services including ambulatory services; (iii) community information with regard to public safety; (iv) earthquake and other emergency relief programs; (v) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) ofthe Act; (vi) park operation and maintenance expenses; (vii) repair and replacement of park facilities, and (viii) direct and indirect expenses incurred by the City in carrying out its duties with respect to the District, including the costs incured by the City and or County in fonnation of the district, annexation and annual contract administration; (b) To authorize the levy of special taxes on the Property in accordance with the rate and method of apportionment of the CFD to finance the above-mentioned services, incidental expons€s and fees; and
(c) To authorize the issuance of bonds for the CFD and (iv) if applicable, to establish and/or change an appropriations limit for the CFD.

4. In accordance with the provisions of the Act, and specifically Sections 53326(a\ and 53327(b) thereof allowing certain time and conduct requirements relative to a special 01236.4105t733446.2
77 (c) To authorize the issuance of bonds for the CFD and (iv) if applicable, to establish and/or change an appropriations limit for the CFD.

4. In accordance with the provisions of the Act, and specifically Sections 53326(a) and 53327(b) thereof, allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included or annexed to a community facilities district and concurrence of the election official conducting the election, the landowner (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a resolution approving the annexation to the CFD and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the Califomia Elections Code.

5. The landowner waives any requirement for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand- delivered ballot to be retumed as quickly as possible to the designated election official, being the office of the City Clerk and the undersigned requests that the results of said election be canvassed and reported to the Council at the same meeting of the Council as the public hearing on the annexation of the Property to the CFD or the next available meeting.

6. The landowner expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot.

7. The landowner expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the Califomia Government Code or other laws or procedurcs, including but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code.

8. The landowner acknowledges and agrees that the initial annual levy for the CFD is currently $693.08 per parcel, and that the levy may be adjusted in the future consistent with the Act.

9. The undersigned warrants that there are no registered voters residing on the Property and that it is the owner of one hundred percent (100%) of the Property. 'l'he undersigned warrants that there are no liens or encumbrances on the Property in the favor of any lender, including but not limited to any deeds of trust, mortgages, leases, or liens of a similar nature.

10. The undersigned warrants that there is no outstanding debt on the Property. i 1. The undersigned agrees to execute such additional or supplemental agreements as may be required by the City to provide for any actions and conditions under this petition, including any amount of cash deposit required to pay for the City's costs related to annexing into the CFD. The undersigned further agrees that this petition shall not be considered as filed with )
0t236.0105t733446.2
78 12. The undersigned agrees to cooperate with the City, its attorneys and consultants and provide all information and disclosures required by the City regarding the special taxes to purchasers ofthe Property or any part ofit.
[Remainder of Page Intentionally Left Blank]
a
4t216.010st?33446.2
79 [.nH0HmN.w
r{lnerkdc &$r
IN WITNESS WHEREOF,Ihereuntosetmyhandthis Au Ourof fiUSusi ,2023 OWNER:

D.R. Horton CA3, Inc., a Delaware
corporation
Name:

Its: Vice President and
President of the Central Valley Division
By
The address ofthe above owner for receiving notices is:

D.R. Horton CA3,Inc.
419 W. Murray Avenue
Visalia, CA 93291
Attention: David Hatch
Phone: (559) 636-9850
E-mail : [email protected]
With a copy to: D.R. Horton, America's Builder
I l24l SlaterAvenue NE, Suite 120
Kirkland, WA 98033
Attention: Matt Farris, Melissa Trunnell
and Kristin Hock
E-mail : [email protected];
[email protected] ;
kri stinhock(@drhorton.com

FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF SANGER THIS DAY OF 2023.

To:
0t236.0105nn446.2
Rebeca Padron, City Clerk
80 EXHIBIT A

THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE

OF CALIFORNIA, COTINTY OF FRESNO, CITY OF SANGER AND IS DESCRIBED AS FOLLOWS:

THE LAND REFERRED TO HEREIN BELOWAS SITUATED IN THE CITY OF

SANGER, COUNTY OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:

OUTLOT B AS SHOWN ON THE MAP ENTITLED ''FINAL MAP OF TRACT NO, 5826, PHASE 1 OF TRACT 5826'" IN THE CITY OF SANGER, COUNTY OF FRESNO, STATE OF CALIFORNIA, AS MAP RECORDED FEBRUARY 13, 2023,IN BOOK 92, PAGES 74 THROUGH 78 OF TRACT MAPS, FRESNO COUNTY RECORDS.

EXCEPTING THEREFROM ALL THAT LAND GRANTED TO THE CITY OF SANGER IN GRANT DEED RECORDED MARCH 23,2023 AS DOCUMENT NO. 2023-0025845, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

THAT PORTION OF THE EAST 1N AF THE NORTHEAST 114 OF THE NORTHWEST 1A AF SECTION 27, TOWNSHIP 14 SOUTH, RANGE 22 EAST, MOUNT DIABLO BASE AND MERIDIAN, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTH QUARTER CORNER OF SAID SECTION 27.

THENCE SOUTH 0'10'44" WEST ALONG THE EAST LINE OF SAID EAST 1/2 A DISTANCE OF 1325.09 FEET TO THE SOUTHEAST CORNER OF SAID EAST 1/2; THENCE NORTH 89"57'32" WEST ALONG THE SOUTH LINE OF SAID EAST 1/2 A DISTANCE OF 36.00 FEET TO THE TRUE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE NORTH 89'57'32* WEST CONTINUING ALONG THE SOUTH LINE OF SAID EAST 1/2 A DISTANCE OF 45.98 FEET;THENCE LEAV|NG SAID SOUTH LINE NORTH 33'40'46" WESTA DISTANCE 115.16 FEETTO THE

BEGINNING OF A TANGENT CURVE CONCAVE TO THE NORTHWEST HAVING A RADIUS OF 50.00 FEET; THENCE NORTHEASTERLY, 37.04 FEET ALONG SAID TANGENT CURVE THRoueH A CENTRAL ANGLE oF 4z'26'a6";THENCE LEAVTNG SAID TANGENT CURVE SOUTH 76"07'42" EAST A DISTANCE OF 92.04 FEET TO A POINT ON A LINE PARALLEL WITH AND 36,00 FEET WEST OF SAID EAST LINE; THENGE SOUTH A'1A'44" WESTALONG SAID PARALLEL LINEA DISTANCE OF 143.42 FEET TO THE TRUE POINT OF BEGINNING.

Assessor's Parcel Number(s): 332-09A-Zl
5 olx6.atas/733446.2
81 CALIFORNIA ACKNOWLEDGMENT crvrl coDE s 1189
A notary public or other officer completing this certificate verifies onlylhe 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
Countyof -l-trlora
before me,
Dote
On
I
l(c
personally appeared T>a.,ri
r Here lnserT Nome ond Title
c\\io\c\n
the Officer
Name(s) of Signer(s)
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 heisheithey 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. ,-'+E>b, A, E. PUL;D0-MUN0Z
dffii
t'"?J,:il''.;,t',Y"'''
Wtu,,SllTF;:[i'.T ii:
"
",
z
I cedify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.

WITNESS my hand and officialseal.

Signature
Ploce Notory Seol and/or Stomp Above Signature of Notory Public

OPTIONAL
Completing this informstion can deter ulterstion of the dacument or froudulent reattachment of this form to an unintended document.

Description of Attached Document
Title or Type of Document:

Document Date: NumberofPages: _.

Signe(s) Other Than Named Above:

Capacity(ies) Claimed by SiEner(s)
Signer's Name: Signer's Name;
El Corporate Officer - Title(s): n Corporate Officer - Title(s) Et Partner- o Limited E General
tr lndividual Er Attorney in Fact
n Trustee n Guardian or Conservator
n Partner- n Limited u General
tr lndividual tr Attorney in Fact
Ei Trustee n Guardian or Conservator
fl Other; ft Other:

Signer is Representing: Signer is Representing:
{]*&ffitK#&Hsqfii$q$$rs. FSSsfS
O2019 National Notary Association
82 For the Meeting of: Septemb er 7 ,2023
Agenda Item No.:

CrrYoF SnNGER
RE,PORTTO THE CIryCOUNCIL
r-7
To:

From:

Subject:

Mayor and Council Members
David Brletic, Community Development Director
Initiation of Proceedings for the Annexation of Property into Community Facilities District 2005-1, Annexation No. 5, consisting of Parcel Map No. 2022-02, and approval of associated Covenant Regarding Land Development for the Final Map of Parcel Map No. 2022-02, Community Facilities District No. 2005-01 (Surf Thru,Inc.).

Attachments:

1. Resolution No. pc2J-Vf

2. Petition and Waiver from SURF THRU,INC.

3. Covenant Regarding Land Development for the Final Map of Parcel Map No.2022-02, Community Facilities District No. 2005-01
OF INTEREST:

None known.

RECOMMENDATION:

That the Council Approve Resolution No2:2fl-.{ stating its intention to annex certain territory into City of Sanger Community Facilities District 20051 (public services), setting a time and date for the public hearing thereon and adopting boundary map showing territory proposed to be annexed to Community Facilities District 2005-1 (Annexation No. 5), and approving a Covenant regarding annexation of the territory into the Community Facilities District.

EXECUTIVE SUMMARY:

The attached resolution will initiate the proceedings for the annexation of the development project known as Parcel Map No. 2022-02 (the "Project") into Community Facilities District ("CFD") 2005-l Prepated by: David Btletic Approved by:

REVIEW: City Manage ,t 6 Finance: City Attorneyi _
TYPE OF ITEM:

Consent
Info Item
Action Item
Depattment Report
Redevelopment Agency
COUNCIL ACTION: APPROYED DENIED NO ACTION
_x_
X
Public Hearing
Matter Initiated by a Council Member
Other
Continued to:
83 and provide for a Covenant to ensure that the Project will remain in the CFD and future buyers will have notice of the same. The conditions of approval for the Project require it to annex into CFD 2005- 1, which was established as an annexable district to provide funding to offset the increased cost for public safety and open space and parks maintenance created by new development.

BACKGROUND:

On July 7,2005, by ResolutionNo. 3758, the City Council established CFD 2005-1, a Mello Roos Community Facilities District with the intention that future development within the City would annex into this District. The special taxes collected from the property owners within the District are collected and used pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5,Part 1, Division 2,Title 5 of the Govemment Code of the State of California, as amended (the "Act") to provide funding to offset the increased cost for public safety and open space and parks maintenance created by new development, specifically listed as follows:
(a) fire protection and suppression services;
(b) emergency medical services including ambulatory services; (c) community information with regard to public safety; (d) earthquake and other emergency relief programs;
(e) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) of the Act;
(0 park operation and maintenance expenses;
(g) repair and replacement of park facilities;
(h) direct and indirect expenses incurred by the City in carrying out its duties with respect to the District, including the costs incurred by the City and or County in formation of the district, annexation and annual contract administration.

Property owner assessments are paid as a component of the property tax collection process. As was originally envisioned with the establishment of the CFD, future residential projects not included in the initial formation process are required to go through an annexation process in order to be included in CFD 2005-01. Projects may be annexed one at a time, or in a group if they are ready at the same time.

Parcel Map No. 2022-02 makes up Annexation No. 5 and is owned by Surf Thru, Inc. The Project includes the development of 4 commercial parcels located on the north side of E. Jensen Avenue, west of N. Bethel Avenue, immediately south of and adjacent to Fowler Switch Canal, consisting of approximately 3.142+ acres. The boundaries of the Project consist of the area within assessor's parcel number 315-021-23 as depicted on Attachment A to the Resolution.

Adoption of the resolution represents the first steps that must be taken in the annexation process and also establishes October 19,2023 as the public hearing date for the final consideration of the annexation of the property into CFD 2005-1. The Resolution also authorizes a Covenant to be recorded on the Project property requiring it to be annexed into the CFD and giving notice to future buyers of the same.

REASON FOR RECOMMENDATION:

The CFD 2005-l assessment is utilized to offset the costs of public safety and open space and parks maintenance created by new development. As development occurs in Sanger, annexing the property to the CFD will help ensure that the City can continue to provide these services. ! 84 F'ISCAL IMPACT:

The 2023124 Fiscal Year CFD 2005-l assessment for commercial development is $0.193 per square foot.

Based on this figure, the estimated annual revenue that will be received by the City for all 4 parcels will be approximately $2,288.59. Because CFD 2005-1 includes an annual CPI adjustment, this amount will grow over time. The process for annexation is funded by the developer and no General Fund monies are used for this effort.

ALTERNATIVES
One alternative would be to deny the application and not annex the property into CFD 2005-1. In this case, the Council should also provide direction whether or not it intends to relieve the Applicant of condition of approval No. 4.q. for Parcel Map No. 2022-02, which requires the annexation in order to approve the Final Map.

ACTIONS FOLLOWING APPROVAL:

Staffanticipates that the City Clerk will file the diagram and assessment with the Fresno County Auditor- Controller concurrently with the recording of the final map. 85 RESOLUTION NO. 2ON- Ll 8

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER

STATING ITS INTENTION TO ANNEX CERTAIN TERRITORY INTO
CITY OF SANGER COMMUNITY FACILITIES DISTRICT 2005.1
(PUBLIC SERVICES), SETTING A TIME AND DATE FOR THE PUBLIC

HEARING THEREON AND ADOPTING BOUNDARY MAP SHOWING

TERRITORY PROPOSED TO BE ANNEXED TO COMMUNITY
FACTLTTTES DTSTRTCT 2005-1 (ANNEXATTON NO. 5) AND COVENANT

APPROVAL
WHEREAS, the City Council of the City of Sanger, California, (hereinafter the "City Council"), at this time desires to authorize the annexation of territory to City of Sanger Community Facilities District No. 2005-1 ("CFD No. 2005-1") pursuant to the terms and provisions of the "Mello-Roos Community Facilities Act of 1982", being Chapter 2.5, Part l, Division 2,Title 5 of the Government Code of the State of California, as amended (the "Act"); and
WHEREAS, CFD No. 2005-l was formed to finance (i) fire protection and suppression services; (ii) emergency medical services including ambulatory services; (iii) community information with regard to public safety; (iv) earthquake and other emergency relief programs; (v) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) of the Act; (vi) park operation and maintenance expenses; and (vii) repair and replacement of park facilities; in addition to those provided in or required for the territory within CFD No. 2005-l and will not be replacing services already available; and
WHEREAS, CFD No. 2005-1 was formed pursuant to:
a
a
a
A Resolution entitled "A Resolution of the City Council of the City of Sanger Declaring its Intention to Establish a Community Facilities District and to Authorize the Levy of Special Taxes Pursuant to the Mello-Roos Community Facilities Act of 1982" (the "Resolution of Intention"), adopted on May 19,2005,
A Resolution entitled "A Resolution of the City of Sanger of Formation of City of Sanger Community Facilities District No. 2005-l (Public Services), Authorizing the Levy of a Special Tax Within the District, Preliminarily Establishing an Appropriations Limit for the District and Submitting Levy of the Special Tax and the Establishment of the Appropriations Limit to the Qualified Electors of the District" (the "Resolution of Formation"), adopted on July 7,2005; and A Resolution entitled "A Resolution of the City of Sanger Calling Special Election Within Community District No. 2005-1 (Public Services)," adopted on July 7,2005, and an election was held on July 7,2005 authorizing the levy of special taxes within CFD No.2005-l on July 7,2005, wherein all the landowners within CFD 2005-l voted in favor of a proposition related thereto; and
WHEREAS, a petition and waiver (collectively, the "Petition") requesting the institution of proceedings for annexation to CFD No. 2005-1 signed by all of the landowners within the proposed tenitory to be annexed (the "Property"), which Property is more fully described in this Resolution as the territory to be annexed, has been received, filed with and accepted by the City Clerk of the City of Sanger; and
86 WHEREAS, the Property is proposed to be annexed to CFD No. 2005-l and such territory shall be known and designated as "City of Sanger Community Facilities District No. 2005-l (Public Services"), Annexation No. 5 "("Annexation No. 5"); and WHEREAS, this City Council, as legislative body of the CFD No. 2005-1, now desires to proceed to adopt this Resolution of Intention to annex the territory of Annexation No. 5 into CFD No. 2005-1, to speciff the services to be financed from the proceeds of the levy of special taxes within Annexation No. 5, to set and specifu the special taxes that would be levied within the territory to finance such services, and to set a time and place for a public hearing relating to the annexation of Annexation No. 5 into CFD No. 2005-1; and
WHEREAS, a diagram showing the boundaries of Annexation No. 5 proposed to be annexed has been submitted, and a copy of the diagram shall be kept on file with the transcript of these proceedings.

NOW' THEREFORE' BE IT RESOLVED by the City Council of the City of Sanger as follows:

The City Council hereby specifically finds that all of the facts set forth in the recitals above of this Resolution are true and correct and incorporated herein.

2. The City Council authorizes, resolves and confirms the following a. The proceedings for annexing Annexation No. 5 into CFD No. 2005-l are authorized and initiated by this legislative body pursuant to the authorization of the Act and pursuant to the Petition.

The public convenience and necessity require that Annexation No. 5 be added to CFD No. 2005-l in order to pay the costs and expenses for the authorized additional services generated from new development within the City and this City Council declares its intention to annex Annexation No. 5 to CFD No. 2005-

1. c. A general description of the boundaries of Annexation No. 5 proposed to be annexed is as follows:

All that tenitory proposed to be annexed to CFD No. 2005-1, as such property is shown on a map designated as "Proposed Boundaries of Annexation Map No. 5 of Community Facilities District No. 2005-1 (Public Services), City of Sanger, Fresno County, California," attached hereto as Exhibit "A" and hereby incorporated by reference.

The name of the district is "City of Sanger Community Facilities District No. 2005-l (Public Services)" and the designation for the territory to be annexed shall be "City of Sanger Community Facilities District No. 2005-1 (Public Services), Annexation No. 5."
The services that are authorized to be financed by CFD No. 2005-l shall include the City services authorized under Section 53313 of the Act, which include the following services, to the extent those services are in addition to those provided in the territory of CFD No. 2005-1 before CFD No. 2005-1 was created (or, with as to territory which may be annexed to CFD No. 2005-1, before such territory b.
d.
e
2 87
was annexed to CFD No. 2005-l), with the first priority being fire and emergency medical service, then police and public safety, and finally park maintenance costs, identified more specifically as follows:

PUBLIC SERVICES
(a)
(b)
(c)
(d)
(e)
fire protection and suppression services;
emergency medical services including ambulatory services; community information with regard to public safety;
earthquake and other emergency relief programs;
other public safety services, including police protection services, authorized to be funded under Section 533 l3(a) or (b) ofthe Act; park operation and maintenance expenses;
repair and replacement of park facilities;
direct and indirect expenses incurred by the City in carrying out its duties with respect to the District, including the costs incurred by the City and or County in formation of the district, annexation and annual contract administration.
(f)
(e)
(h)
f.

In accordance with Section 53313 of the Act, the additional services may not supplant services available within the territory when the district was created or annexed.

The same types of services which are authorized to be financed by CFD No. 2005- 1 are the types of services to be provided in Annexation No. 5. If, and to the extent possible, such services shall be provided in common within CFD No. 2005- 1 and Annexation No. 5.

It is the further intention of this City Council that, except where funds are otherwise available to CFD No. 2005-l and Annexation No. 5 to pay for services, a special tax sufficient to pay for such services to be provided in CFD No. 2005-l and Annexation No. 5, and related incidental expenses authorized by the Act, secured by recordation of a continuing lien against all non-exempt real property in Annexation No. 5, will be levied annually within the boundaries of such Annexation No. 5. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit "8" (the "Rate and Method of Apportionment"), which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within proposed Annexation No. 5 to clearly estimate the maximum amount that such person will have to pay.

The special tax proposed to be levied within Annexation No. 5 for services to be supplied within Annexation No. 5 shall be equal to the special tax levied to pay for the same services in CFD No. 2005-1, to the extent that the actual cost of providing the services in Annexation No. 5 is equivalent to the cost of providing those services in CFD No. 2005- l. Notwithstanding the foregoing, the special tax may not be levied at a rate that is higher than the maximum special tax authorized to be levied pursuant to the Rate and Method of Apportionment.

The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same J
88 ob'
penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the City as described in the "Special Tax Report for the City of Sanger Community Facilities District No. 2005-l (Public Services) adopted on July 7,2005, with respect to CFD No. 2005-1.

The maximum special tax rate in CFD No. 2005-l shall not be increased as a result of the annexation of Annexation No. 5 to CFD No. 2005-1.

Notice is given that on the 19th day of October,2023, at the hour of 6:00 p.m., in the regular meeting place of the City Council being the Council Chambers located at 1700 7th Street, Sanger, California 93657, a public hearing will be held where this City Council will consider the authorization for the annexation of Annexation No. 5 to CFD No. 2005-1, the proposed method and apportionment of the special tax to be levied with Annexation No. 5 and all other matters as set forth in this Resolution of Intention. Pursuant to the Petition, all of the landowners within Annexation No. 5 have waived all applicable notices of the hearing and any time-period for the hearing.

As presented at the meeting, all of the landowners andlor registered voters within CFD No. 2005-l have been notified of the hearing by the posting of the agenda, or waiver, and that the hearing will occur on the same date as this Resolution.

The City Council hereby confirms and approves of such time period, waivers and notifications.

At such public hearing, the testimony of all interested persons for or against the annexation of Annexation No. 5 or the levying of special taxes within Annexation No. 5 will be heard.

At such public hearing, protests against the proposed annexation of Annexation No. 5, the levy of special taxes within Annexation No. 5 or any other proposals contained in this resolution may be made orally by any interested person. Any protests pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the irregularities or defects to which objection is made. All written protests shall be filed with the City Clerk prior to the time fixed for the public hearing. Written protests may be withdrawn at any time before the conclusion of the public hearing.

If (i) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within CFD No. 2005-7, (ii) 50% or more of the registered voters, or six (6) registered voters, whichever is more, residing within Annexation No. 5, (iii) owners of one-half or more of the area of land in the territory included in CFD 2005-1, or (iv) owners of one-half or more of the area of land in the territory included in Annexation No. 5, file written protests against the proposed annexation of Annexation No. 5 to CFD No. 2005-1 and the proposed special taxes and such protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of the decision by the City Council on the annexation of Annexation No. 5 to CFD 2005-1.
h.
4 89
If, following the public hearing described herein, the Council determines to annex Annexation No. 5 to the CFD No. 2005-1 and levy a special tax thereon, the Council shall then submit the annexation of the Property and levy of the special tax to the qualified voters of the Property with respect to Annexation No.

5. If at least twelve (12) persons, who need not necessarily be the same twelve (12) persons, have been registered to vote within the territory of Annexation No. 5 for each of the ninety (90) days preceding the close of the public hearing, the vote shall be by registered voters residing within Annexation No. 5, with each voter having one (1) vote. Otherwise, the vote shall be a mail-ballot election or hand-delivered ballot election, consistent with Section 53327.5 of the Act, by the landowners of the Property who are owners of record at the close of the public hearing, with each landowner having one (l) vote for each acre or portion of an acre of land owned within the Property. The number of votes to be voted by a particular landowner shall be specified on the ballot provided to that landowner.

The City may accept advances of funds or work-in-kind from any sources, including, but not limited to, the City itself, private persons or private entities, for any authorized purpose, including, but not limited to, paying the cost incurred in annexing the Properly to the CFD No. 2005-1. CFD No. 2005-1 may enter into an agreement with the person or entity advancing the funds or work-in-kind, to repay all or a portion of the funds advanced, or to reimburse the person or entity for the value, or cost, whichever is less, of the work-in-kind, as determined by the Council, with or without interest.

If after the public hearing described herein the Council determines to annex Annexation No. 5 to the CFD No. 2005-l and levy a special tax thereon, the City Council authorizes the City Manager or designee to enter into an agreement with Surf Thru, Inc., entitled "Covenant Regarding Land Development for the Final Map of Parcel Map No. 2022-02, Community Facilities District No. 2005-01."

5. This resolution shall be effective upon adoption.

The foregoing resolution was considered by the City Council of the City of Sanger at a regular meeting of said Council held on the 7th day of September, 2023, and adopted by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST
l.

J
4 5
Rebeca Padron, City Clerk
90 Exhibit A
PROPOSED BOUNDARIES OF'ANNEXATION MAP NO. 5 OF
COMMUNTTY FACTLTTTES DISTRICT NO. 2005-1 (pUBLrC SERVTCES), crTY oF SANGER, FRESNO COUNTY, CALIFORNIA
The Property is situated in the State of California, County of Fresno, City of Sanger, and pending recordation of the final map for Parcel Map No. 2022-02, is described as follows:

LECAL DESCRIPTION
REAL PROPERTY IN THE CITY OF SANGER, COUNry OF FRESNO, STATE OF CALIFORNIA, OESCRIBED AS FOLLOWS:

THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 16, TOIYNSHIP 14 SOUTH. RANGE 22 EAST, MOUNT DIABLO BASE ANO MERIDIAN, ACCORDINO TO

THE OFFICIAL PLAT THEREOT, LYING SOUTH OF THT SOUTHERLY LINE OF THE FOWLER SWITCH CANAL, AS SAID CANAL IS DESCRIEED IN THE DEED RECORDED IN BOOK TO5, PACE 412 OF DEEDS, FRESNO COUNry RECORDS.

EXCEPTINC THEREFROM THE FOLLOWING DESCRIBED PROPERTY:

BEGINNING AT THE SOUTHEAST CORNER OF SAIO SECTION 16, THENCE SOUTH 89' 46' WEST, ALONG THE SOUTH LINE OF SAID SECTION 16, A DISTANCE OF 600.00 FEFI; THENCE NORTH O' 47' EAST, PARALLEL WITH ANO 600.00 TEil WEST OF THE EAST LINE OF SAID SECTION 16, A DISTANCE OF 465.46 FETT TO THE SOUTHERLY RIGHT-OF_WAY LINE OF IHE FOWLER SWITCH CANAL; THENCE NORTH 63' 19' 34" FIST, ALONC SAID SOUIHERLY RIGHT-OF-WAY LINE OF THE FOWLER SWITCH CANAL, A DISTANCE OF 676.00 FEfi TO SAID EAST LINE OF SECTION 16; THENCE SOUTH 0' 47' WEST, ALONG SAID EAST LINE OF SECTION 16, A DISTANCE OT 766.54 FEET TO THE POINT OF BEGINNING.

ALSO EXCEPTING THEREFROM THAT PORTION THEREOF CONVEYEO TO THE COUNry OF FRESNO BY DEED DATED MAY 22, 1961, AND RECORDED IN BOOK 4558 OF OFFICIAL RECORDS OF FRESNO COUNTY, CALIFORNIA, AT PAGE 646 IN THE OFFICE OF THE COUNTY RECORDER OF FRESNO COUN]^',, CALIFORNIA,
ALSO EXCEPT|NG THEREFROM IHAT PORTION OF LANO CONVEYED TO THE CNT OF SANGER, A MUNICIPAL CORPORATION. IN GRANT DEED RECORDED OCTOBER 18, 2CI22 AS INSTRUMENT NO 2422-0125649 0F OFFICIAL RECORDS.

Assessor's Parcel Number(s) : 3 | 5 -02I -23
After recordation of the final map for Parcel Map No. 2022-02, the boundaries of the annexation shall be comprised of Parcels A through D, inclusive, of Parcel Map No. 2022-02.

The boundaries of Parcel Map No. 2022-02 are depicted, and annexed, as set forth below:

A-l
91 l$qtrll$cb
BtsIS 0F BETailNCS*
ft $w urE @tr s6ftffi f *frd 1g ffitP r4s. R& Z ffi, @m mo N M tRrN' ra16ft E r &49 EN ffi d r@ # rc. 2or1-01, ffi ur& ftrJ N w 71 6 ru @^tPcnN&wMnm@ P*.RCELMAP NO. 2O22{.2
BErNG Il{ THE SouT}trAST QUAmm 0f SECnol{ 16, mmSBIp 14 SoUTI! RAliGE E2 EAS'I. I{OUM DIABU} BASE AI'ID MIRIDIAN,
Iil TTM CNY OT SANCER COUNTY OT TRESNO. STATE OF CAI,ITOR}IIA coNslsTlilc oF 2 sHlE"rs
SHEIII 2 OF 2
'o!r0 r/t 'rcN Pri le.
lacElll'
+ ffircerutr,DffiEb@
^ tmE s v.'x $'rtun aPE rffi 6 *, M 0.5.
. ,". @s t@ Mr^ sHm 0N 4er rf \o. a1.-0r, \ r" iffi a w71 Fm& wsrpG 79 r s. rc.c.

ME ffiSIASffi O
(F w m. 7rr, imr{ M 150rreffi ^rffi
#--q$t
(
. b, lrcsE E@ ill^ .S MoN @@ 6 u- r,
ffi flffi s9. o.R.r,c
/ \* rFqE tffi ilil o
\ r- 1q 2022. A s6N N
IMBEro@YCONffDT*dNOFffiO
A FEi ff m MED il uy r4. 1s1, rN ffix Gs
^r PG ea nrod #, o.RF.c.
oElJ, tuwoFrcNodw
l.
,2
IFr<?tt i&
1o,\srfi!
*"*".i-3;"*'-
A
b
AVETI'EA a
-\r
JENSEIIs
*."",:.,.\ aj2:

I
\
$latre,!,lm \ re26'4i:@oNddFfu ]o$1d19
Etr-r-tr-;=
WL
wLc
PM'
NI
92 Exhibit B

RATE AND METHOD OF'APPORTIONMENT
Parcels A through D, inclusive, of Parcel Map No. 2022-02, proposed to be levied as follows Parcel Landowner
SurfThru, Inc.

Surf Thru,Inc.

Surf Thru,Inc.

SurfThru, Inc.

Proposed Assessment (FY 23-24)
$447.37
$346.24
$392.18
$1,102.80
A
B
c
D
B-l
93 11837 Bolthouse Dr. t1400
Bakersfield, CA 93311
661-369-8938
RE: Petition (Including Consent And Waiver) Requesting Annexation To Community Facility District No. 2 005- I (Pa rcel l.Iap 2022-02) Dear City Council of the City of Sanger:

The undersigned landowner does hereby certiff under penalty of perjury that the following statements are all true and correct:

1. The undersigned is authorized to represent the landowner identified below and is its designated representative to request and petition the City Council (the "Council") of the City of Sanger (the "City") for annexation to City of Sanger Community Facilities District No. 2005- 1 (Public Services) (the "CFD") pursuant to the provisions of the Mello-Roos Community Facilities Act of 1982 (the "Act"), being Chapter 2.5 of Part 1 of Division 2 of Title 5 (commencing with Section 53311) of the California Government Code and to authorize certain other consents and waivers contained herein. The boundaries of the territory to be annexed are described on Exhibit "A" hereto and by this reference incorporated herein.

2. The landowner hereby certifies that as of the date indicated opposite of the undersigned's signature, the landowner listed herein is the owner of the property within the proposed annexation boundary of the CFD (the "Property"), which Property's boundary is further described in Exhibit "A" hereto.

3. The landowner, pursuant to Sections 53318 and 53339 et seq. of the Act, hereby requests that proceedings be commenced:
(a) To annex the Property to the CFD for the purpose of (i) fire protection and suppression services; (ii) emergency medical services including ambulatory services; (iii) community information with regard to public safety; (iv) earthquake and other emergency relief programs; (v) other public safety services, including police protection services, authorized to be funded under Section 53313(a) or (b) of the Act; (vi) park operation and maintenance expenses; (vii) repair and replacement of park facilities, and (viii) direct and indirect expenses incurred by the City in carrying out its duties with respect to the District, including the costs incurred by the City and or County in formation of the district, annexation and annual contract administration; 01236.0t051733446.2
94 (b) To authorize the levy of special taxes on the Properly in accordance with the rate and method of apportionment of the CFD to finance the above-mentioned services, incidental expenses and fees; and
(c) To authorize the issuance of bonds for the CFD and (iv) if applicable, to establish and/or change an appropriations limit for the CFD.

4. In accordance with the provisions of the Act, and specifically Sections 53326(a) and 53327(b) thereof allowing certain time and conduct requirements relative to a special landowner election to be waived with the unanimous consent of all the landowners to be included or annexed to a community facilities district and concurrence of the election offrcial conducting the election, the landowner (i) expressly consents to the conduct of the special election at the earliest possible time following the adoption by the Council of a resolution approving the annexation to the CFD and (ii) expressly waives any requirement to have the special election conducted within the time periods specified in Section 53326 of the Act or in the Califomia Elections Code.

5. The landowner waives any requirement for the mailing of the ballot for the special election and expressly agrees that said election may be conducted by mailed or hand- delivered ballot to be returned as quickly as possible to the designated election official, being the office of the City Clerk and the undersigned requests that the results of said election be canvassed and reported to the Council at the same meeting of the Council as the public hearing on the annexation of the Property to the CFD or the next available meeting.

6. The landowner expressly waives all applicable waiting periods for the election and waives the requirement for analysis and arguments relating to the special election, as set forth in Section 53327 of the Act, and consents to not having such materials provided to the landowner in the ballot packet, and expressly waives any requirements as to the form of the ballot.

7. The landowner expressly waives all notice requirements relating to hearings and special elections, whether by posting, publishing or mailing, and whether such requirements are found in the California Elections Code, the California Govemment Code or other laws or procedures, including but limited to any notice provided for by compliance with the provisions of Section 4101 of the California Elections Code.

8. The landowner acknowledges and agrees that the initial annual levy for the CFD is currently $0.193 per square foot, and that the levy may be adjusted in the future consistent with the Act.

9. The undersigned wanants that there are no registered voters residing on the Property and that it is the owner of one hundred percent (100%) of the Property. The undersigned warrants that there are no liens or encumbrances on the Property in the favor of any lender, including but not limited to any deeds of trust, mortgages, leases, or liens of a similar nature.

10. The undersigned warants that there is no outstanding debt on the Property 7 0t236.01051733446.2
95 11. The undersigned agrees to execute such additional or supplemental agreements as may be required by the City to provide for any actions and conditions under this petition, including any amount of cash deposit required to pay for the City's costs related to annexing into the CFD. The undersigned further agrees that this petition shall not be considered as filed with the City for purposes of commencing proceedings for the CFD under the Act unless and until deemed filed by the City in its absolute discretion.

12. The undersigned agrees to cooperate with the City, its attomeys and consultants and provide all information and disclosures required by the City regarding the special taxes to purchasers ofthe Property or any part ofit.
[Remainder of Page Intentionally Left Blank]
^t
aD36.0105/733446.2
96 IN WITNESS WHEREOF, I hereunto ser my hand this 1fh auy ot /fuauf ,ZOZI.

OWNER:

SURF THRU,INC.
a California Corporation
Scott D. Howry, President
vr, 1,q DHa^-:

Name SLofl- D- f/our,J.*Its: f ,e$',{_r**
The address of the above owner for receiving notices is:

To: SURF THRU,INC
Scott D. Howry, President
With a copy to

FILED IN THE OFFICE OF THE CITY CLERK OF THE CITY OF SANGER THIS DAY OF 2023.

Rebeca Padron, City Clerk
01236.0105n3f$6.2
97 EXHIBIT A

THE LAND REFERRED TO IN THIS REPORT IS SITUATED IN THE STATE

OF CALIFORNIA, COUNTY OF FRESNO, CITY OF SANGER AND IS
DESCRIBED AS FOLLOWS:

LEGAL DESCRIPTION

RFAL PROPERW IN THE CITY OF SANGER, COUNTY OF FRESNO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOIVS:

THAT PORTION OF THE SOUTHE{ST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 16, TOWNSHIP 14 SOUTH, RANGE 22 EAST, MOUNT DIABLO BASE ANO MERIDIAN, ACCORDING TO THE OFFICIAL PI.AT THEREOF, LYING SOUTH OF THE SOUTHERLY LINE OF THE FOWLER SWITCH CANAL, AS SAID CANAL IS DESCRIBED IN THE DEED RECOROED IN BOOK 305, PACE 412 OF DEEDS, FRESNO COUNTY RECORDS.

EXCEPTING THEREFROM THE FOLLOWING DESCRIBED PROPERTY:

BEGINNING AT THE SOUTHSAST CORNER OF SAID SECTION 16, THENCE SOUTH 89' 46' WEsr, ALONG THE S0UTH LINE oF SAID SEcTloN 16, A DTSTANCE OF 600.00 FEEI; THENCE NORTH O' 47' EAST, PARALLEL IJVITH AND 600.00 FEET WEST oF THE EAST LINE OF SAID SECTTON 16, A OISTANCE OF 465.46 FEET TO THE SOUTHERLY RIGHT-OF-WAY LINE OF THE FOWLER SWITCH CANAL; THENCE NORTH 63 19' 34" EAST, ALONG SAID SOUTHERLY RIGHT-OF-WAY LINE OF THE FOWLER SWITCH CANAL, A DISTANCE OF 576.00 FEEr TO SAID EASr UNE OF SECTION 16; THENCE SOUTH 0' 47'WEST, ALONG SAl0 EAST L|NE OF SECTION 16, A DISTANCE OF 766.54 FEET TO THE POINT OF BEGINNING.

ALSO EXCEPTINO THEREFROM fiAT PORTION THEREOF CONVEYED TO IHE COUNTT OF FRESNO BY DEED DATED MAY 22, 1961. AND RECORDED IN BOOK 4558 OF OFFICIAL RECORDS OF FRESNO COUNTY, CALIFORNIA, AT PAGE 646 IN THE OFFICE OF'THE COUNTY RECORDER OF FRESNO COUNTf, CALIFORNIA.

ALSO EXCEPTING THEREFROM THAT PORTION OF I.ANO CONVP/ED TO THE CIW OF SANGER, A MUNICIPAL CORPORATION, IN GRANT DEED RECORDED OCTOEER 18, 2022 AS INSTRUMENT NO. 2022-4129649 0F OFFICTAL RECORDS.

Assessot's Parcel Number(s): 315-02L-23
5 01236.01,05t733446.2
98 WHEN RECORDED MAIL TO:

City Clerk
City of Sanger
1700 7th Street
Sanger, CA93657
NO FEE - Government Code 6103 & 27383
APN:315-021-23
PARCEL MAP NO. 2A22.A2

COVENANT REGARDING LAND DEVELOPMENT FOR THE
F'INAL MAP OF'PARCEL MAP NO. 2022-02
COMMUNITY F'ACILITIES DISTRICT NO. 2OO5-01
99 Covenant Regarding Land Development for the Final Map of Parcel Map Na.2A22-02
Community Facilities District No. 2005-01
Page2
This covenant and agreement is by and between the City of Sanger, a general law city ("City''), and Surf Thru, Inc., a California corporation ("Covenantor") located al llB3T Bolthouse Dr., #400 Bakersfield, CA 9331 l, and is effective the date first appearing on the Clerk's Attestation and signature for the City of Sanger.

RECITALS
A' Covenantor is the owner and developer of that certain real property in the City of Sanger, County of Fresno, State of Califomia, hereinafter referrcd to as "the Subject Property,o, and more particularly described as:

Parcels A through D, inclusive, of parcel Map No. 2022-02,in the city of Sanger, county of Fresno, State of california, according to the map thereof recorded in Book - of parcel Maps, at pages Fresno County Records,
B' A condition of approval of Tentative Parcel Map No. 2022-A2 is arequirement that, prior to Final Map recotdation, the Covenantor will annex the property to a Community Facilities District (CFD) to provide special tax revenue for the anticipated cost increases associated with providing city services (i.e., police, fire, ambulance, paramcdic, parks maintenance, etc.). The Covenantor is also required to disclose to all potential lot buyers that the Subject property is part of a Community Facilities District. Said condition is set forth in Planning Commission Resolution No. 2023-01 as Condition No. 4.q (hereafter,'CFD Condition',).

C. The Covenantor and the City desire to enter into this covenant (o'Covenant") providing for such annexation and notice to satisfli the CFD Condition for the Subject property portion of Tentative Parcel Map No. 2022-02.

COVENANT AND AGREEMENT
In consideration of the foregoing recitals which are incorporated by reference and to satisfy the CFD Condition, the Covenantor hereby covenants, prornises, and agrees with the City for the benefit of the City and benefitted properties that the Subject Property shall be held, conveyed, encumbered, used, occupied, developed, maintained, and improved subject to the following covenants, conditions, and restrictions, which are for the purpose of enhancing attractiveness, 100
Covenant Regarding Land Development for the Final Map of Parcel Map No.2A22-A2
Community Facilities Disrrict No. 2005-01

usefulness, value, desirability, and safety of the Subject Property, the surrounding property and the public at large, and to minimize possible adverse effects on the public health, safety, peace:
and general welfare. Each of the covellants, conditions, and restrictions contained in this Covenant shall run with the Subject Properly and shall be binding upon and inure to the benefit of each succcssive owner of the Subject Property and Covenantor's heirs, successors, and assigns during Covenantor' s ownership thereof.

L The Covenantor agrees that prior to the recordation of Parcel Map No. 2022-02, Covenantor will annex the property to a CFD to provide special tax revenue for the anticipated cost increases associated with providing City services (i,e., police, fire, ambulance, paramedic, parks maintenance, etc,). The City and the Covenantor agree that annexation into City of Sanger Community Facilities District No. 2005-1 (Public Services) will meet the requirement of the CFD Condition to annex into a CFD for the Subject Property.

2. The Covenantor agree to disclose to all potential lot buyers, prior to transfer of ownership, that the parcel within the Subject Property is part of a CFD.

3. The conditions of this Covenant are intended to benefit the Subject Property, the public, the City and its public properties. Accordingly, it is agreed the City shall have the right to enforce this Covenant by any legal or equitable means, including, but not limited to, obtaining an order of specific perfonnance, against the Covenantor and such person or persons in actual possession of Subject property who directly or who through any agent violate the tenns hereof. 4' The waiver by eitherparty of a breach by the other of any provision of this Covenant shall not constitute a continuing waiver or a waiver of any subsequent breach of either the same or a different provision of this Covenant. No provisions of this Covenant may be waived unless in writing and signed by all parties to this Covenant, Waiver of any one provision herein shall not be deemed to be a waiver of any other provision herein.

5. If either party is required to commence any proceeding or legal action to enforce or interpret any term or condition of this Covenant, including enforcement of a lien thereunder or under the CFD, the prevailing party in such proceeding or action shall be entitled to recover from the other party its reasonable attorney's fees and legal expenses. For the purposes of this Covenant, "attorneys' fees" and "legal expenses" include, without limitation, paralegals' fees and expenses, attorneys, consultants fees and expenses, expert witness fees and expenses, and all other expenses 101
Covenant Regarding Land Development for the Final Map of Parcel Map No.2022-02
Community Facilities District No. 2005-01

incurred by the prevailing pafty's attomeys in the course of the representation of the prevailing party in anticipation of and/or during the course of litigation, whether or not otherwise rccoverable as "attorneys' fees" or as "costs" undsr California law, and the same may be sought and awarded in accordance with Califomia procedure as pertaining to an award of contractual attorneys' fees. 6' The provisions of this Covenant shall be deemed independent and severable and the validity or partial invalidity or unenforceability of any one provision or portion thereof shall not affect the validity or enforceability of any other provision hereof. Whenever the context of the Covenant so requires, in interpreting this Covenant, any gender includes the other genders, the singular includes the plural, and the plural includes the singular. 7 ' This Covenant shall not be deemed to confer any rights upon any individual or entity which is not a party hereto. The parties hereto expressly disclaim any such third-party benefit.
8' This Covenant may be amended only by a written instrument signed by both the City and the record owner of the Subject Property. Such instrument must be recorded in the Official Records of the County of Fresno.

9. This Covenant may be executed in any number of counterpafts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument.
102
Covenant Regarding Land Development for the Final Map of Parcel Map No.2022-02
Community Facilities District No. 2005-01

IN WITNESS WIIEREOF, the parties duly executed this Covenant.

City:

CITY OF SANGER
a Municipal Corporation
By:

Tim Chapa, City Manager
(Attach Notary Aclvtow ledgment)
ATTEST:

By:

Rebeca Padron
City Clerk
Date
APPROVED AS TO FORM:

Covenantor:

SURF THRU, INC.
a California Corporation
By:

Scott
(Attach Notary Aclcnowledgment)
Hilda Cantu Montoy
CityAttorney
103
|;
A notary pu blic or othe r officer comp leting thiscertificate verifies only the ide ntity of the ind ividuawho signed the docume nt to which this certificate IS attached, and not th e trut hfulness, accu racy or
VA of

ACKNOWLEDGIVIENT
State of California
County of Kern
onJ before me, Anita Sinco Kerchner, Notary public
(insert name and title of the officer)
in
l,::#Hilifl,:5:fj:1'3!,lto"oY
under the raws orthe state or carirornia that the roresoins WITNESS my hand and officialseal.

Sign (
(Seal)
104
Fot the Meeting of:

Agenda Item No.:

Septembet 7,2023
f-tCrrYoF SexcER
RE,PORTTO THE, CIry COUNCIL
To: Mayor and City Council
From: Patrick Chaffee, Administrative Services Director Subject: Upgrade Council Chamber Audio-Visual Equipment Attachments: 1) A/V Quote
CoNrltct or h'lrnnnst:

None known.

RncoMnnnNo.q,rroN
That the City Council approve contract with NTM Productions to remove and replace Audio Visual equipment in Council Chamber for city meetings and conferences in the amount of $56,371.86 and a l0%o Contingency.

Exncurrvn Sunnu.l,ny
City staff received two quotes. Staff compared quotes from NTM Productions and Adaptive Integration and found that NTM offered competitive pricing and an open schedule to perform the installation within the month of September.

BacxcRouNo
In March of 2020, the city needed to quickly adapt meetings and allow for public participation to be conducted remotely due to accommodations required by the coronavirus pandemic. The solution that allowed the city to do that was effective in the moment but was not intended to be long-term. As A/V systems have evolved to meet municipalities needs and organizations have settled on effective designs, now is an optimal time to invest in a permanent solution that will serve the cities needs for decades to come.

Prepared by: Patrick Chaffee Approved by:

REVIEW: CityManage rt 6{e Finance: City Attorney: _
TYPE OF ITEM:

ACTION
X
X
Consent
Info Item
Action Item
Department Report
Redevelopment Agency
COUNCIL ACTION: APPROYED DENIED NO
Public Hearing
Matter Initiated by a Council Member
Other
Continued to:
105
The City Council approved a budget amendment for $100,000 to upgrade the Audio-Visual equipment for City Hall in the 2022123 mid-year budget revision. The scope of work included adding large display panels to city hall, the conference room, and offices, modernizing the technology used to conduct council meetings, and organizingthattechnology into the background with a permanent installation. This goal was to plan for the installation when a Council meeting was cancelled and allow for additional time to install and test equipment.

City staff found two contractors capable of performing the work. NTM Productions was recommended by the City of Reedley after performing similar work at their city hall. Adaptive Integration was recommended by the city's IT contractor Unity IT for having done similar work with other client cities.

After on-site reviews of the cities needs, each contractor submitted quotes for work. NTM Productions provided the lowest bid, the administrative services director and the founder of Unity IT agreed that they would be best fit for selection.

This bid is for the design and installation of audio-visual equipment to upgrade city hall. This includes removing the existing analog amplifier in the chamber, installing a new remotely operated digital amplifier and equipment in service room at the corner of the building, running all the required cabling out of site between the chamber and the service room, and replacing speakers and microphones. The new system will be remotely controlled from a terminal installed at the City Clerk's station. The city will source displays and display mounts with local retailers separate from this bid, and NTM agreed to install them on the East and West side of the council room and an additional monitor in the council meeting room. Customizable software will be configured by NTM to be controlled from the City Clerk's desk.

The original bid was amended with additions for a ceiling mounted short-throw projector, two wireless microphones, replacing/integrating the speakers in the lobby and meeting room, installing afiav interface connection to the portable podium, and ceiling mounts for East and West displays. As work commences, staff requests up to 10% contingency be made available for change orders to accommodate for similar requests that may come up during installation.

X'tsclI,Innplcr
$100,000 in funding for upgrades was included in the 2022123 mid-year budget revision one-time funds for technology upgrades, furniture, and installation services to upgrade City Hall. While the quote for work this work is for $56,371.86, staff requests council authorize up to 10% of the contract amount to be made available for change orders made during installation to accommodate for any needs discovered after the initial quote was made. This includes items like wireless microphones or installing a north facing ceiling mounted projector that were not included in the original scope of work.

AlrnRN,trrvns
The City Council can reject the recommendation and provide additional direction to staff.

AcrroNs X'or,LowrNc Appnov,q.L
City staff will contract with NTM Productions, order equipment, and install during the month of September 2023.
106
ATTACHMENT 1
107
Audio / Video / Lighting / Network / Security
Proposal To:

City of Sanger
For:

City of Sanger Council Chambers
August 30, 2023
108
ABOUT USNTM Productions
Our Passion
NTM Productions strives to increase effective
communication through technology. Whether it is a
gymnasium, stadium, city board room, theatre, sanctuary, or concert hall we think that the audio visual experience should be one to remember.

Our Team
NTM employs the best of the best when it comes to
managing and installing your next project. NTM has a
dedicated project managers to make sure your project
moves smoothly. NTM has trained and certified technicians to make sure the project is done right the first time. NTM also has office staff to support your next equipment rental or technical questions.

Our Story
For over a decade NTM Productions has provided Audio,
Video, Theatrical Lighting and Control Systems to clients throughout the U.S. NTM productions started humbly in the garage of its owner Nathan McGuigan. Over the past 15 years NTM has grown into being the central valleys leading AVL contractor and equipment rental provider.
109

BOARD ROOM
SCOPE
Remove projector screen, projector, equipment racks under desks, microphones.

Install 2 new city provided LG displays with city provided mounts Install new system core processor to be used as the base unit of the system Install 2 new cameras for live recording and streaming of meetings Install 1 new touch panel for control of all aspects of the system including, on/off, volume, displays on/off, recording start, etc.

Install 6 new in ceiling speakers for added clarity in the council chambers Install 8 new 15" shure gooseneck microphones
Install amplifier to power new speakers in council chambers Install new network switch for the AV items to live within Install new video switcher to be controlled via Qsys
Install new HDMI to SDI and SDI to HDMI to SDI converters for displays and computer inputs.

Install new SDI to USB for audio feed to zoom.

Displays and mounts provided by City. Installed by NTM.

AUDIO

IMAGE QTY DESCRIPTION NOTES PRICE PRICE EXT LABOR EXT TOTAL 1 QSC CORE 110f $3,300.00 $3,300.00 $0.00 $3,300.00
1 QSC SLQSE-110-P $400.00 $400.00 $0.00 $400.00
1 QSC SLQUD-110-P $225.00 $225.00 $0.00 $225.00
1 QSC TSC-70-G3 $1,550.00 $1,550.00 $0.00 $1,550.00
1 QSC TSC-710t-G3 $445.00 $445.00 $0.00 $445.00
1 QSC NS26-300+ $2,995.00 $2,995.00 $0.00 $2,995.00
2000 FS 58708 $0.35 $700.00 $0.00 $700.00
5 Sonance 40132 $600.00 $3,000.00 $0.00 $3,000.00
Confidential Proposal
Version 1.0 August 30, 20233 of 7Equipment prices include any required accessories. Labor prices include design, engineering, installation and
programming.
110
AUDIO TOTAL $35,390.99
8 Shure MX415RLPDF/S $251.00 $2,008.00 $0.00 $2,008.00
8 Shure MX400SMP $139.00 $1,112.00 $0.00 $1,112.00
2 Shure SB900B $118.00 $236.00 $0.00 $236.00
2 Shure QLXD24/SM58-G50 $1,099.00 $2,198.00 $0.00 $2,198.00 1 LEA Professional LEA-
CONNECT-354 $2,494.00 $2,494.00 $0.00 $2,494.00
1 Shure SBC200-US $239.00 $239.00 $0.00 $239.00
1 Skaarhoj BLUEPILL-V1 $779.00 $779.00 $0.00 $779.00
1 RF Venue DISTRO4 $579.00 $579.00 $0.00 $579.00
2 Shure UA864US $484.00 $968.00 $0.00 $968.00
100 Belden 1694A 0101000 $0.90 $90.00 $0.00 $90.00
1 C2G C2G31012 Podium $868.99 $868.99 $0.00 $868.99
8 NTM Productions General
Materials
5 pin connectors and cables
for local microphones $38.00 $304.00 $0.00 $304.00
1 NTM Productions Installation $10,900.00 $10,900.00

IMAGE QTY DESCRIPTION NOTES PRICE PRICE EXT LABOR EXT TOTAL VIDEO
Confidential Proposal
Version 1.0 August 30, 20234 of 7Equipment prices include any required accessories. Labor prices include design, engineering, installation and
programming.
111
VIDEO TOTAL $17,418.56

IMAGE QTY DESCRIPTION NOTES PRICE PRICE EXT LABOR EXT TOTAL 2 QSC NC-12x80 $4,175.00 $8,350.00 $0.00 $8,350.00
4 Global Cache IP2IR-P
Display control for 2
displays inside council
chambers and 1 outside
lobby
$179.99 $719.96 $0.00 $719.96
1 Blackmagic
Design SWATEMSCN2/1ME2/H
D
$1,695.00 $1,695.00 $0.00 $1,695.00
5 Lumantek ez-SHV+
2 main displays and 1
overflow closed chambers
display
$199.00 $995.00 $0.00 $995.00
3 Lumantek ez-HSV+ Dual input for
presentations to screens $199.00 $597.00 $0.00 $597.00
500 Belden 1694A 0101000 $0.90 $450.00 $0.00 $450.00
1 Inogeni SDI2USB3 $495.00 $495.00 $0.00 $495.00
2 Chief XCM1U $560.00 $1,120.00 $0.00 $1,120.00
2 Chief CMA110S $65.60 $131.20 $0.00 $131.20
1 Epson V11H956620 $2,499.00 $2,499.00 $0.00 $2,499.00
1 Chief CMA440 $132.00 $132.00 $0.00 $132.00
1 Chief CMS006 $19.20 $19.20 $0.00 $19.20
1 Chief RPAU $215.20 $215.20 $0.00 $215.20
Confidential Proposal
Version 1.0 August 30, 20235 of 7Equipment prices include any required accessories. Labor prices include design, engineering, installation and
programming.
112
BOARD ROOM TOTAL $52,809.55
Confidential Proposal
Version 1.0 August 30, 20236 of 7Equipment prices include any required accessories. Labor prices include design, engineering, installation and
programming.
113

PAYMENT SCHEDULE
50% deposit
50% upon completion
EQUIPMENT TOTAL $41,909.55
SHIPPING TOTAL $0.00
ENGINEERING $0.00
INSTALLATION $10,900.00
MANAGEMENT $0.00
PROGRAMMING $0.00
LABOR TOTAL $10,900.00
SUBTOTAL $52,809.55
TOTAL 8.5% $3,562.31
PROJECT TOTAL $56,371.86

SIGNED DATE

PRINT NAME TITLE

SIGNED DATE

PRINT NAME TITLE

ACCEPTANCE

FINANCIAL
TERMS
I accept this proposal and hereby authorize NTM Productions to proceed with the installation of the included systems at the facilities of City of Sanger constructing at 1700 7th Street Sanger, CA 93657 as described in the totality of this document. I further authorize NTM Productions to be granted the facility access that will be required to complete this project in a workmanlike and timely manner and for payment to be made to NTM Productions. In keeping with the Terms of Payment listed above: It has been made clear to me that there exist no understandings regarding this project with any relevant party unless and until City of Sanger and NTM Productions agree to such additional or alternate understandings in writing. Project cost and pricing are dependent upon a continual flow of work without interruption or delays imposed by City of Sanger or their staff, construction, other building trades or any other party, and additional costs may be incurred by City of Sanger from NTM Productions. If such delays result in additional costs that are not covered by the pricing in this proposal: I agree that any additions to and/or deletions from the materials and labor to be provided by my acceptance of this proposal and any resulting change(s) in cost of this project shall only be by way of written change order(s) and shall be valid only after being signed by City of Sanger and NTM Productions. This proposal is valid only if accepted in writing by City of Sanger and deposit payment received no later than December 2, 2022.

ACCEPTANCE

CITY OF SANGER

NTM PRODUCTIONS
Confidential Proposal
Version 1.0 August 30, 20237 of 7Equipment prices include any required accessories. Labor prices include design, engineering, installation and
programming.
114
Fot the Meeting of:

Agenda Item No.:

September 7,2023
f-7CrrY oF SINGER

REPORT TO THE, CITY COUNCIL
To: Mayor and Councilmembers
From: Tim Chapa, City Manager
Subject: Consider declaring Assessor Parcel Number ("APN") 332-042-94T (28.59 Acres) surplus land under the Surplus Land Act
Attachments: (A) Resolution Declaring Surplus Land
(B) Map
CONFLICT OF INTEREST: ,
None known.

RECOMMENDATION
It is recommended that the City Council of the City of Sanger adopt Resolution No.20n- I 1 titled:

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER, CALIFORNIA, DECLARING ASSESSOR',S PARCEL NUMBER 332-042-94T IN THE CITY OF SANGER (THE pROpERTy)

SURPLUS LAND PURSUANT TO THE SURPLUS LAND ACT (GOVERNMENT CODE SECTIONS s4220 Er SEQ.)

EXECUTIVE SUMMARY
The City of Sanger ("City") owns real property consisting of approximately 28.59 acres, located northeast of the intersection at Academy Avenue and Central Ave in the City of Sanger (APN: 332-042-94T) ("Property"). The Property is vacant/unimproved land zoned Industrial/Manufacturing and generates no tax revenues to the City. In the event the City wishes to pursue the sale of the Property for potential development to further its economic development goals and objectives the City must first meet the requirements under the Surplus Land Act ("SLA"). The proposed resolution is intended to comply with the SLA by first declaring the Property as surplus.

Prepated by: Apptoved by:

REVIETV: City Manager: hLa Finance: City Attorney:

TYPE OF ITEM:

Consent
Informational Item
Action Item
Depattment Report
COUNCIL ACTION: n APPROVED tr DENIED ! NO ACTION
Public Hearing
Matter Initiated by a Council Member
Othet:

Continued to:
x
x
115
BACKGROUND:

On October 9,2019, Governor Newsom signed Assembly Bill ("AB") 1486. AB 1486, which amended the SLA effective January 1,2020, changed the existing, long-standing definition of "surplus land"; providing that land shall be declared either o'surplus land" or "exempt surplus land" before a local agency may take any action to sell or lease land; and adding a new limitation providing that an "agency's use" ooshall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development," or "property disposed of for the sole purpose of investment or generation or revenue." AB 1486 further added provisions prohibiting a City from negotiation of any disposition of the Property prior to compliance with the procedural requirements of the SLA. Prior to AB 1486, the SLA did not require local agencies to first declare land surplus and did not limit leases that changed the use of land held by local agencies.

Steps to take before disposing of land. The SLA adds steps that local agencies must followbefore entering negotiations to sell or lease surplus land. These steps must be taken in a particular order, and now include:
o Taking formal action at a regular public meeting to either declare the land "surplus land" or "exempt surplus land," supported by written findings. If a local agency declares surplus land 'oexempt," the 2021 Guidelines direct the agency to send HCD the written determination of exemption at least 30 days before disposing of the land. o Sending out a "notice of availability" to HCD as well as to specified public agencies and nonprofits announcing that the land is available for low- and moderate-income housing, open space and park and recreation, school facilities, or development in infill opportunity zones or transit village plans.
o Giving these entities 60 days to respond to the notice of availability. During this time, the local agency may not issue a request for proposals regarding the surplus land. o The agency must send HCD descriptions of any notices of availability sent and any negotiations conducted with responding entities.

If one of the entities/agencies receiving the notice of availability desires to purchase or lease the Property, it must notifu the City of its interest to do so in writing within 60 days of receiving the City's notice, and the City and the entity/agency so responding may negotiate price and terms for the disposition of the Property. If the City receives multiple notices of interest, the SLA establishes priorities, with first priority given to entities that agree to use the Property for affordable housing. Finally, in the event no agreement is reached between the City and any interested entity/agency after a good faith negotiation period of 90 days, the land may be disposed of without further regard to the SLA.

Penalties for Non-Compliance. Any violations of the SLA are subject to harsh penalties; between 30 percent to 50 percent of the final sale price for the property. The HCD, Attomey General, and any beneficially interested person or entity may bring an action to enforce the Act. HCD is empowered to notifu the California Attorney General if a local agency fails to correct the issues raised, and injunctive and declaratory relief can be pursued. Upon the conclusion of negotiations with an interested buyer but prior to disposing of the surplus land, report to the State Department of Housing and Community Development a description of any notices transmitted on such land, a sunmary of negotiations conducted with entities responding to that notice, and any restrictions proposed to be recorded against the property upon disposition, including affordability covenants. HCD then has 30 days to notifu the agency of any violations of the Act.

Citv's Compliance. To comply with the SLA, City staff compiled a list of property inventory to be 116
designated exempt and surplus by the Council. Once the Council declares property as surplus, it must issue a Notice of Availabilrty per SLA requirements including sending to HCD.

REASON FOR RECOMMENDATION:

Staff has determined that there is no further goveflrmental use for the Property and is recommending that the City Council declare the Property as "surplus land" and complete the surplus property disposition process in accordance with the SLA.

FISCAL IMPACT:

Direct costs for undergoing the sale of the Properties involve an appraisal(s) and traditional real estate broker services, which will be offset by any proceeds received from the sale of the Properties. The exact final costs for these services are not known given the complexity and unknown factors when negotiating under the SLA process.
117
RESOLUTION NO. zO?3.- 141

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER, CALIFORNIA, DECLARTNG ASSESSOR'S PARCEL NUMBER 332-042-947

IN THE CITY OF SANGER(THE PROPERTY) SURPLUS LAND PURSUANT TO THE SURPLUS LAND ACT (GOVERNMENT CODE SECTTONS s4220 Er sEQ.)
WHEREAS, the City of Sanger ("City") owns certain real property consisting of approximately 28.59 acres located near the intersection of Central and Academy Ave, Sanger, California ("Property"); and
WHEREAS, the Surplus Land Act, codified in California Government Code sections 54220 et seq., ("SLA") defines 'osurplus land" as land owned in fee by any local agency for which the local agency's governing body takes formal action in a regular public meeting declaring that land is surplus land and is not necessary for the agency's use; and
WHEREAS, effective January I,2020, AB 1486 amended the SLA to require cities to formally declare City-owned properties as "surplus land" or 'oexempt surplus land" prior to taking actions to dispose of such properties; and
WHEREAS, the Property (APN 332-042-94T) falls within the definition of "surplus land" pursuant to Government Code section 54221, as amended by AB 1486; and WHEREAS, in order to pursue new uses for the Property, including the possible disposition through a sale or lease of the property, the City must comply with the SLA; and WHEREAS, a declaration of surplus land and the issuance of Notices of Availability are procedures required by the SLA with the intent of prioritizing affordable housing; and WHEREAS, the City may satisfy the SLA by declaring property as surplus land; h<iwever, such a declaration does not require the City to subsequently dispose of such property; and WHEREAS, staff has identified APN 332-042-94T inthe City as surplus land; and WHEREAS, upon Council's declaration of Property as surplus, City staff will send a written notice of availability of the property by electronic mail or by certified mail to all the entities identified in Government Code section 54222; and
WHEREAS, subject to Govemment Code section 54227, if one of the entities/agencies desires to purchase or lease the property after having received notice, it must indicate its interest to do so in writing within 60 days of receiving the City's notice, and the City and the entity/agency so responding to the notice may negotiate price and terms forthe disposition ofthe Property; and WHEREAS, pursuant to Government Code 54223, in the event no agreement is reached between the City and any interested entity/agency after a good faith negotiation period of 90 days, the Property may be disposed of without fui.ther regard to the Surplus Land Act. 118
NOW THEREFORE, the City Council of the City of Sanger, State of California resolves as follows

1. Recitals and Findings. Theforegoingrecitalsardfficknerfrsretueardmrrect ard are hereby incorporated and adopted as the findings of the City Council.

2. Surplus Land. Based on the above recitals, the City Council hereby declares Assessor's Parcel Number 332-042-94T in the City of Sanger as surplus land as authorized under the Surplus Land Act.

3. Official Action. The City Manager, or his designee, is directed to send all notices and take all actions required by the Surplus Land Act.

4. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable.

5. Effective Date. This resolution is effective upon adoption. **{.*
The foregoing resolution was considered by the City Council of the City of Sanger at a regular meeting of said Council held on theTth day of September 2023,and adopted by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:

Rebeca Padron, City Clerk
119
APN 332-042-947
SUBDIVIDED LAND & POR. SFC'S. 25 & 26, T 14 S-, R. 22 E., M. D. B. & M +/OIE-
Ihrb {rrEp is rbrA6sesstrH{purposgs ordy-
ll 16 not to !€ corrslfued es por&ayihg legF/
onn€rsh'i, or dtyisilns of l€nd t# purposss
oa rorrrng or sr/bovdSon t'rr,
I rvo(nv r
aTYOlcs.4ff6€n
r,s
s.N6
9:010

9.o14
9-A89419rri oq
lu
s
g
u!
Iax Rafe Araa
$-0€,s 71-0w
71414
332-04
rHoo'
Ap.
ty
,[
(g)
fHt rll-
-.=--J'
!Jlu
t
Ac,
{FRryrrF
(13
fi3
lli
{
l.lt
=vt
rlo
s.R.A" Ac.
gts.5t'a.
't.N
2,91 Ax,

3.324c.
t?,66rqc"

2.264c.
,
I
f
4,8lAc. I
,3s !J) (@ft\(o
I
CETVTRAL * t? zsl nrlsrfoi
Annadate Eslates - Tr- No" ZZS1 _ plat Parcel Map No. 83-2, Bk. 41, Pg. 85 Bk.25, Pg.45 Parcal Map No. 8S3, BR' 43, Pg. 82
Parcel Map ldo. 3159 - 8k.23, Pg- 55 Parcat Map No. 87-2, Bk- 46, pg. 1g Parcel Map tr/o. 5762 - Bk. 37, Fg. 56 Farlell Map No. 88-1, Bk. 48, Pg- 55 ot
J
Ur
a
rt{o
Parc*l Map lVo" 89-1, Bk" 50, Pg.2V
Parul Map No. 201742, 8k.74, Pgs.

Cert. af Farcel Map Waiver No. 12-21 ,
Recurdof SurueyBk 63, Pg.70
70 &71
M. 79117,7-1*14
Assessur's M4p Akfiz - PC.M
,rr9b - i{s€esm/s Srock fv'urnbers $lroln ln EAtpeer
llssesso/s oarcd lt#nbers,Sfrorfr, in Ci,{ates
,w

56.3846.
rto.0'
n67
2s.77 A4
.sJ

23.76 Ac.'&
-r
m
J
urae
t
() 733-t90-'t4
sl{r.34t
i5,
1O7.47 Ac.
t!$r
5/.65Ac.

CIrYAF
SAr\tG€R
7 tH.4rt
{rt.g,
I
I
l

19.03 Ac.
''9r,

24.18'!J)

SAJVGER
?
{:n35t
Ac,.
@
T
cJrvoF

SAATGER
:liEr

93.40 Ac"
crrv or
S4'TJGER
ctwoF
SAIV6ERAc.

T
Aa
ar.*} Fir4&Sf
S p*scer r
t f?f,lfr
iqc.
sto
:s
rc,44
PAF1C€L ?
t"5.SOl
rr''Ll
fn J4!
?6
,,_3_9
87 {9.4c
':?_q,
3O.57Ic
r,i-a,
2A"OA Ac.

Ac.

T
R.A"

2. t:il
fr10
tg16ffie0
Caunty af Fresno, Calif.
120
Fot the Meeting of: September 7,2023
Agenda Item No.: F-/O
CrrY oF SINGER-

SUCCESSOR AGENCY
RE,PORT TO THE, CIry COUNCIL
To:

From:

Subject:

Mayor and Councilmembers
David Brletic, Community Development Director
Consider declaring Assessor's Parcel Number ("APN") 332-042-59T as surplus land; portion of APN 332-042-78T as surplus land, and portion of APN 332-042- 78T as exempt surplus land under the Surplus Land Act
Attachments: (A) Resolution Declaring Surplus Land and Exempt Surplus Land (B) Map
CONFLICT OF INTEREST:
"None kFrown."

RB,COMMENDATION
It is recommended that the City Council of the City of Sanger as the Board of the Successor Agency to the Sanger Redevelopment Agency adopt Resolution No. J3-O2 iitled "A Resolution of the City Council of the City of Sanger as Board to the Successor agency to the Sanger Redevelopment Agency Declaring Assessor's Parcel Number 332-042-59T as Surplus Land, Approximately 12.66 Acres of APN 332-042-78T as Surplus Land, and 5 Acres of APN 332-042-78T as Exempt Surplus Land Pursuant To The Surplus Land Act (Government Code Sections 54220 Et Seq.)." EXECUTIVE SUMMARY:

The Successor Agency to the former Community Redevelopment Agency of the City of Sanger ("Successor Agency") owns real property consisting of approximately 17.66 acres, located northeast of the intersection at Academy Avenue and Central Ave in the City of Sanger. The Property is vacant and unimproved. It generates no tax revenues to the City, so the City wishes to pursue the sale of the Property for potential development except for 5 acres which have been used by City as a Stormwater Basin for over 20 years Prepared by: David Brletic Approved by:

REVIEW: City Manager: /4t, Finance: City Attorney:

TYPE OF ITEM:

X Consent
Informational Item
X Action Item
Department Repott
COUNCIL ACTION: n APPROVED tr DENIED ! NO ACTION
Public Hearing
Matter Initiated by a Council Member
Othet:

Continued to:
121
The properties were previously designated as Assessor's Parcel Numbers 332-040-59T and 332-040-787 in the Successor Agency's Long Range Property Management Plan ("LRPMP") and are now designated as APN's 332-042-59T and 332-042-18T. In the event the City wishes to pursue the sale of the properties, the City must first meet the requirements under the Surplus Land Act ("SLA"). The proposed resolution is intended to comply with the SLA by first declaring the property surplus or exempt surplus.

BACKGROUND:

On October 9,2019, Governor Newsom signed Assembly Bill ("AB") 1486. AB 1486, which amended the SLA effective January 1,2020, to include, among others, changing the existing, long-standing definition of "surplus land"; providing that land shall be declared either "surplus land" or "exempt surplus land" before a local agency may take any action to sell or lease land; and adding a new limitation providing that an "agency's use" "shall not include commercial or industrial uses or activities, including nongovernmental retail, entertainment, or office development," or "property disposed of for the sole purpose of investment or generation or revenue." AB 1486 further added provisions prohibiting the local agencies including cities and successor agencies from negotiation of any disposition of the property prior to compliance with the procedural requirements of the Surplus Land Act. Prior to AB 1486, the Surplus Land Act did not require local agencies to first declare land surplus and did not limit leases that changed the use of land held by local agencies.

Steps to take before disposing of land. The SLA adds steps that local agencies must follow before entering negotiations to sell or lease surplus land. These steps must be taken in a particular order, and now include:
o Taking formal action at a regular public meeting to either declare the land "surplus land" or "exempt surplus land," supported by written findings. If a local agency declares surplus land "exempt," the 2021 Guidelines direct the agency to send HCD the written determination of exemption at least 30 days before disposing of the land.
o Sending out a "notice of availability" to HCD as well as to specified public agencies and nonprofits announcing that the land is available for low- and moderate-income housing, open space and park and recreation, school facilities, or development in infill opportunity zones or transit village plans. o Giving these entities 60 days to respond to the notice of availability. During this time, the local agency may not issue a request for proposals regarding the surplus land. o The agency must send HCD descriptions of any notices of availability sent and any negotiations conducted with responding entities.

If one of the entities/agencies receiving the notice of availability desires to purchase or lease the Property, it must notifu the City of its interest to do so in writing within 60 days of receiving the City's notice, and the City and the entity/agency so responding may negotiate price and terms for the disposition of the Property. If the City receives multiple notices of interest, the SLA establishes priorities, with first priority given to entities that agree to use the Property for affordable housing. Finally, in the event no agreement is reached between the City and any interested entity/agency after a good faith negotiation period of 90 days, the land may be disposed of without further regard to the SLA.

Penalties for Non-Compliance. Any violations of the SLA are subject to harsh penalties; between 30 percent to 50 percent of the final sale price for the property. The HCD, Attomey General, and any beneficially interested person or entity may bring an action to enforce the Act. HCD is empowered to notiff the Califomia Attorney General if a local agency fails to correct the issues raised, and injunctive and 122
declaratory relief can be pursued. Upon the conclusion of negotiations with an interested buyer but prior to disposing of the surplus land, report to the State Department of Housing and Community Development a description of any notices transmitted on such land, a swnmary of negotiations conducted with entities responding to that notice, and any restrictions proposed to be recorded against the property upon disposition, including affordability covenants. HCD then has 30 days to notifr the agency of any violations of the Act.

City's Compliance. To comply with the SLA, staff compiled a list of property inventory to be designated exempt and surplus by the Council as Successor Board. Once the property is declared surplus, the City as Successor Agency must issue aNotice of Availability per SLA requirements including sending to HCD.

REASON FOR RECOMMENDATION:

Except for 5 acres portion of APN 332-042-78T that the Staff recommends be declared as exempt surplus property, Staff has determined that there is no further govemmental use for APN 332-042-59T and 12.66 acres of APN 332-042-78T and is recommending that the City Council as Successor Agency Board declare the Property as "surplus land" and complete the surplus property disposition process in accordance with the SLA.

FISCAL IMPACT:

Direct costs for undergoing the sale of the Properties involve an appraisal(s) and traditional real estate broker services, which will be offset by any proceeds received from the sale ofthe Properties. The exact final costs for these services are not known given the complexity and unknown factors when negotiating under the SLA process.
123
RESoLUTToN No. _23 -o Z

A RESOLUTION OF THE CITY COUNCIL OF CITY OF SANGER AS

BOARD TO THE SUCCESSOR AGENCY TO THE SANGER

REDEVELOPMENT AGENCY DECLARING ASSESSOR'S PARCEL
NUMBER 332-042-59T AS SURPLUS LAND, APPROXIMATELY 12 ACRES OF ASSESSOR'S PARCEL NUMBER 332.042-78T AS SURPLUS LAND, AND APPROXIMATELY 5 ACRES OF ASSESSOR'S PARCEL NUMBER 332.042- 78T AS EXEMPT SURPLUS LAND PURSUANT TO THE SURPLUS LAND ACT (GOVERNMENT CODE SECTTONS 54220 ET SEQ.)
WHEREAS, the City of Sanger as Successor Agency to the Sanger Redevelopment Agency ("Successor Agency") owns certain real property consisting of approximately 17.66 acres located near the intersection of Central and Academy Ave, Sanger, Califomia; and WHEREAS, the 17.66 acres were previously designated as Assessor's Parcel Numbers 332-040-59T and 332-040-78T in the Successor Agency's Long Range Property Management Plan ("LRPMP") and are now designated as332-042-59T and 332-042-78T respectively; and WHEREAS, APN's 332-042-59T and 332-042-78T are depicted in Exhibit A which is attached and incorporated herein; and
WHEREAS, the Surplus Land Act, codified in California Government Code sections 54220 et seq., ("SLA) specifies procedures for local agencies to declare property as surplus or exempt surplus and for disposition of said property; and WHEREAS, effective January I,2020, AB 1486 amended the SLA to require cities to take formal action in a regular public meeting to declare agency-owned properties as "surplus land" or "exempt surplus land" prior to taking actions to dispose of such properties; and WHEREAS, staff has identified the property comprised of APN 332-042-59 as falling within the definition of "surplus land" pursuant to Government Code section 54221, as amended by AB 1486; and
WHEREAS, staff has identified approximately 12.66 acres of Assessor's Parcel Number 332-040-78T as falling within the definition of "surplus land" and approximately 5 acres of Assessor's Parcel Number 332-040-78T as falling under the definition of "exempt surplus land" under the SLA (See property depiction on Exhibit A); and WHEREAS, the basis for finding the approximately 5 acres of Assessor's Parcel Number 332- 040-78T as exempt is that (i) the 5 acres have been used as a Stormwater Basin for City for over 20 years; the Successor Agency's Long Range Property Management Plan approved by the state Department of Finance references the 5 acres as a ponding basin; and (iii) the Successor Agency will transfer said 5 acres to the City for its current and continued public use as a Stormwater Basin which thereby meets the requirements of the SLA per Gov. Code 954221subd. (f)(1)(D).). and WHEREAS, in order to pursue new uses for the properties, including the possible disposition through a sale of the properties, the Successor Agency must comply with the SLA; and WHEREAS, a declaration of surplus land and the issuance of Notices of Availability are procedures required by the SLA with the intent of prioritizing affordable housing; and 124
WHEREAS, the City may satisfy the SLA by declaring property as surplus land; however, such a declaration does not require the City to subsequently dispose of such property; and WHEREAS, upon Council's declaration of Property as surplus, Successor Agency staff will send a written notice of availability of the properties by electronic mail or by certified mail to all the entities identified in Government Code section 54222;and WHEREAS, subject to Government Code section 54227, if one of the entities/agencies desires to purchase or lease the properties after having received notice, it must indicate its interest to do so in writing within 60 days ofreceiving the SumorAgsncy's notice, and the $rerfuerry and the entity/agency so responding to the notice may negotiate price and terms for the disposition of theproperties; and
WHEREAS, pursuant to Government Code 54223, in the event no agreement is reached between the City and any interested entity/agency after a good faith negotiation period of 90 days, the properties may be disposed of without furlher regald to the Surplus Land Act.

NOW THEREFORE, the City Council of the City of Sanger as Successor Agency Board of the City of Sanger, Stale ofCalifomiaresolves as folloun:

1. Recitals and Findings. The foregoing recitals and attachments are true and correct and are hereby incorporated and adopted as the findings of the City Council as Successor Agency Board; and.

2. Declaration of Surplus Land and Exempt Surplus Land. Based on the above recitals, the City Council hereby declares (i) APN 332-042-59T as surplus land, (ii) 12.66 acres of APN 332-042-78T as surplus land, and (iii) approximately 5 acres of APN 332-042-785 exempt surplus land as authorized under the Surplus Land Act.

3. Official Action. Successor Agency staff is directed to send all notices and take all actions required by the Surplus Land Act. proceed with the notification and negotiation requirements of the amended Surplus Land Act, as amended, to facilitate the possible disposition and reuse of the property.

4. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable.

5. Effective Date. This resolution is effective upon adoption. *. t * * ,|. * {< * {. * * * {< * rl. * * * * * *,1. * {. rF tc {. {< *:* :|< {. * * {.,1.,1. * * * {. *,1. * * * 125
The foregoing resolution was considered by the City of Sanger as Board to the Successor Agency of the Sanger Redevelopment Agency at ajoint meeting held on the 7th day of September 2023, and adopted by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:

Rebeca Padron, City Clerk
126
APN 332-042-59T and 332-042-787
SUBDIVIDED LAND & POR. SEC'S. 25 & 26, T 14 5", R. 22 E., M. D. B. & M -rfoIE-
trfur fiBp ir JbrA6sasernerdp'po.ses on{y"
,l is no{ lo br cffsbued as portr€tfig legaf
orrisrshF or drgrsns of lsnd lbr r'rlrFose.t
of ronrlxt or $,roovrii$fi rb$.

Iax RafeAraa
c.Ws 714ffi
9-006 7t-o?8
332-04
ui\q
@) ,[
Iu tJ
t
Ac.3"
q
q
t{
E.
r,s
sal0
9-014
9-0r8
9-019
t t'/ORfH r
}j(t)
\
t*6
i rlL-----J
fFRJy,crF
Parcel Map tVo. 89-t, 8k.50, P9.27
Parcsl Map No. 201V42, 8k.74, Pgs.
krL of Parcel Map Waiver Na" 12-21,
Record of Suwey Bk. 63, P9,70
70 &71
M.79117,7-1&14
1'.8ffi'
0h
fi3
fiS
rri
{
ru
tl?
r4
Ac"s
gl9.5l'

CEI TEYTL

0. 2
Ln
@)

6.5/Ad.
{t0AG
CJTf OF
s4li6:5r? 3.324c
s.

2.264c. T
I
@bj)
e
,{S 13,4,
12 (a
ciqa
{t!
etI()
f
I
esl:o
sl3,(oh
Annadate Esfate$ _ Tr. No. ZZS1 _ p1r1 Parcel Map lVo. 83-2, 8k" 41, Pg. 85 Bk. 25, Pg. 45 Parcal Map I'lo.8$3, Bk 43, Pg. 82
Parcel Map IVo. 3759 - 8k.23, PS. 55 Parcet Map hlo. AT-2, Bk. 46, pg IS Pareel Map tu{o. 5762 - Bk.37, Pg" 56 Parwl Map t'fia.88-t,8k" 48, P9.55 I
I
I
ftlolts - rsesssr's 81o6ft ,9umberc Stpryn rn Fdlpseo
/qs€e$sof,$ pgrcei ttttmbars Srotrn in Ctrcbg
Assesso/s Map 8k332 - Pg.O4
Countv af Fresno. C,alrf
(_J
1&.0'
,tfr7
eq
56"384c,

23.77 Ac-
Ell
€9
eF4.3 96' 23, 76 Ac.
3eJtn
ar(r() r33.?90-r4
3 /31 3{t
107.47 Ar. ./
';p,r
57"65,ttc,
CINOF
&qN,GER
Itrs)
7 ty.121
I
,l

19.03 Ac,
i,!1.

24.18 ,O'
54JVG€R
{:!,14
\3
@
T
SANGEF
rS'r

03.0OAc
c{rvoF
$4IVGEF
at.E3' Ftd't 55
Ac"
',1&'
23,10
PAM€I
l:3 rq
Ac.
pt6 PAFCEL2
I?$.0o,
arph
t"0 7il
t8
i32.
87"45 Ac,
3fl,57tc.
i26t
r.2Al
2O.OA Ac.
rt
t'4
ifirrsAr'a6ER
33,59Ac.

PAR2
ts.l4
17J16t2020
127
For the Meeting of,
Agenda Item No.:

CrrY oF SINGER
Rtr,PORT TO THE, CIry COUNCIL
September 7,2023
!-
To:

From:

Subject:

Mayor and Councilmembers
David Brletic, Community Development Director
Confirmation of Intent to Pursue Increase to Transient Occupancy Tax (TOT) and Submitting Ballot Measure to Voters at the March 5,2024 Primary Election.

Attachments: City Council of the City of Sanger ResolutionNo. 4621.

Hotel Market Study and Feasibility Analysis - UpdatedMay 2022 CONF'LICT OF INTEREST:

None known.

RECOMMENDATION:

Staff recommends that the City Council confirm intent to increase the City of Sanger Transient Occupancy Tax (TOT) and direct staff to prepare Ballot Measure documents (resolution and ordinance for increase to I2%o) for City Council's review and approval at a future Council meeting in time for submittal to Voters at March 5,2024, Primary Election.

EXECUTIVE SUMMARY:

Transient Occupancy Tax (TOT), also known as a "Hotel Tax," is a tax that is paid on the rental price of a hotel room. The City of Sanger has previously considered an increase to the existing Transient Occupancy Tax. The City Council has previously provided staff direction, and has initiated and supported multiple projects related to the Transient Occupancy Tax and possible increase. Currently the City of Sanger has a 4%o Transient Occupancy Tax. Transient Occupancy Tax for neighboring jurisdictions in Fresno and Tulare County range from 8% to l2o/o. Staff recommendation is to increase the Transient Occupancy Tax to l2o/o. Staff is requesting direction for submittal of Ballot Measure to Voters at the March 5,2024, Primary Election.

Prepared by: David Brletic Approved by:
1 2
REVIEW: City Manager: u Finance: City Attorney:

TYPE OF ITEM:

X
Consent
Informational Item
Action Item
COUNCILACTION: APPROVED DENIED NOACTION
Public Hearing
Matter Initiated by a Council Member
Othet
Continued to:X Department Report
128
PROJECT BACKGROUND SUMMARY:

Transient Occupancy Tax (TOT), also known as a "Hotel Tax," is a tax that is paid on the rental price of a hotel room. Transient Occupancy Tax (TOT) can be an important part of local government budget.

Residents of the local jurisdiction are typically supportive of Transient Occupancy Tax (TOT), as it almost exclusively generated from outside the local jurisdiction, not the local tax payer.

The City of Sanger has previously considered an inuease to the Transient Occupancy Tax. The City Council of the City of Sanger has previously provided staff direction, and has initiated and supported multiple projects related to the Transient Occupancy Tax and possible increase. Following is a summary of events/actions related to the Transient Occupancy Tax and possible increase:

V
Sanger City Code since I 960. This code section establishes a 4oh Transient Occupancy Tax

2. May 5, 2016, Sanger City Council, adopted Resolution No. 4621 directing staff to place an increase from 4o/o Transient Occupancy Tax to 4%o Transient Occupancy Tax on the November 8,2016 ballot. This measure was not placed on the November 8,2016 ballot.

3. December 2019, the City contracted for preparation of Hotel Marhet Study and Feasibilitlz Anallzsis to analyze feasibility of development of a hotel(s) in the North Academy Conidor.

Study includes analysis of already existing City of Sanger 4Yo Transient Occupancy Tax and consideration of possible increase.

4. May 2022, Hotel Market Study and Feasibility Analysis updated to take into consideration possible economic impacts from COVID-19.

5. October 2022, annexation of the North Academy Corridor completed.

Currently the City of Sanger has a 4Yo Transient Occupancy Tax. Transient Occupancy Tax for neighboring jurisdictions in Fresno and Tulare County range from 8% to 72Yo. Sanger City Council, Resolution No. 4621, recommend an increase to 10olo. As previously mentioned, this measure was not placed on the November 8,2016 ballot. Staff recommendation is to increase the Transient Occupancy Taxto l2o/o.

REASON FOR RECOMMENDATION:

City Council of the City of Sanger has previously considered an increase to the Transient Occupancy Tax and has previously provided staff direction to initiate an increase to Transient Occupancy Tax. Staff recommends the Transient Occupancy Tax to be increased to l2o/o, in line with multiple local jurisdictions (Fresno, Selma, Kingsburg).

FISCAL IMPACT:

The initial cost to add a ballot measure to the March 24, 2024, Primary Election would be between $20,000 and $25,000. Once established, there should be minimal administrative expense to audit the monthly or quarterly returns of affected motel operators.

ALTERNATIVES:

The City Council may choose not to consider establishment of a Transient Occupancy Tax (Hotel Tax). 1 Sqnocr Cif'v Cnde Chqnfer 60 - Tqwqfinrr Artinle Trqn ci enf f)nnr rncnnrr TAL has been in the ACTIONS FOLLOWING APPROVAL:
129
Staff will prepare a resolution including ballot language and the ordinance amendment for City Council review in time for March 5,2024 election.
130
RESOLUTION NO. 4621

A RESOLUTION OF THE CITY OF SANGER APPROVING THE PLACEMENT OF A TRANSIENT OCCUPANCY TAX INCREASE ON TI{E NOVEMBER 8, 2016 GEN"SRAL ELECTION BALLOT
WHEREAS, Transient Occupancy Tax (TOT) is paid as a percentage of the cost of hotel accommodations; and
WHEREAS, TOT generates additional tax revenues for the community from non- resident taxpayers ; and
WHEREAS, TOT revenues can be used for any Council-approved project or purpose; and
WHEREAS, Many cornmunities in California utilize TOT to fund incentives for developers to consffuct new hotel facilities; and
WHEREAS, Sanger's 4%TOT rate is among the lowest in Califomia and is the lowest among nine neighboring communiti€s surveyed; and
WIIEREAS, Increasing the TOT rate wouldbring $anger's rate closer to the average rate charged in Fresno County cities and the State; and WHEREAS, Any change to Sanger's TOT must be approved by a majority of Sanger voters; and
WHEREAS, Government Code Sec. 53724 requires that the City Council, by Resolution or Ordinance, approve placing the possible increase in TOT rate on ballot for voter approval.

NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Sanger, County of Fresno, State of Califomia that staff be directed to prepare a resolution and a measure to increase Sanger's Transient Occupancy Tax Rate for placement on the November 8, 2016 General Election Ballot for voter consideration. * * +,t * {r * +* * * * * + * * * * + t * *
131
I hereby certi$ that the foregoing is a full, tue and correct copy of a Resolution duly and regularly adopted and passedly the City Council for the City of $anger, California, at a regular meetiag held on the 5h day of May, 20l6,by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

COUNCIL MEMBERS:

COTJNCIL MEMBERS:

COLJNCIL MEIvIBERS:

COI.JNCIL MEMBERS:

CANTU, ONTIVEROS, PACHECO, GARZA
NONE
NONE
NONE
Clerk
132

Hotel Market Study and Feasibility Analysis
Report
City of Sanger, Fresno County, California 93657

Prepared For:

City of Sanger
1700 7th Street
Sanger, California 93657

Prepared By:

Cushman & Wakefield Western, Inc.

Valuation & Advisory
425 Market Street, Suite 2300
San Francisco, California 94105
C&W File ID: 23-38002-900271
133

CUSHMAN & WAKEFIELD WESTERN, INC.
425 MARKET STREET, SUITE 2300
SAN FRANCISCO, CALIFORNIA 94105

CUSHMAN & WAKEFIELD

Hotel Market Study and Feasibility Analysis - City of
Sanger
Fresno County, California 93657

134

Cushman & Wakefield Western, Inc.
425 Market Street, Suite 2300
San Francisco, California 94105
cushmanwakefield.com

May 9, 2022

Mr. David Brletic
Community Development Director
City of Sanger
1700 7th Street
Sanger, California 93657
Re: Hotel Market Study and Feasibility Analysis - City of Sanger Sanger, Fresno County, California 93657
C&W File ID: 23-38002-900271
Dear Mr. Brletic:

In fulfillment of our agreement as outlined in the contract with the City of Sanger, we are pleased to transmit our Market Study and Feasibility Report dated May 9, 2022. This reports updates a Market Study and Feasibility Study prepared for the City of Sanger dated December 16, 2019. Our updated research and analysis, which included a review of the performance of existing supply in the neares t hotel markets which are used by visitors to Sanger, analysis of visitation statistics, particularly Kings C anyon and Sequoia National Park usage, and other area economic and population trends, were used to determine the potential for new hotel development in Sanger. We also considered the locational aspects of Sanger relative to transportation and demand generators.

As a result of our work, it is our opinion that potential exists for a hotel in Sanger at the intersection of Academy Avenue and California State Route 180. This location has t he greatest access and visib ility attributes which are critical to maximizing lodging performance. While we are of the opinion that demand exis ts for a hotel in Sanger, the proposed hotel as described in this study, is not economically viable as a private investment. In order to motivate a developer to take on the project, public incentives would be required to support the project’s feasibility.

The analysis contained in this assignment is based upon assumptions and estimates that are subject to uncertainty and variation. These estimates are often based on data obtained in interviews with third parties, and such data are not always completely reliable. In addition, we make assumptions as to the future behavior of consumers and the general economy, which are highly uncertain. However, it is inevitable that some assumptions will not materialize and unanticipated events may occur that will cause actual achieved operating results to differ from the financial analyses contained in this report and these differences may be material. Therefore, while our analysis was conscientiously prepared on the basis of our experience and the data available, we make no warranty that the conclusions presented will, in fact, be achieved. Additionally, we have not been engaged to evaluate the effectiveness of management and we are not responsible for future marketing efforts and other management actions upon which actual results may depend.

We take no responsibility for any events, conditions, or circumstances affecting the market that exists subsequent to the last day of our analysis, March 3, 2023.

This assignment has been prepared in compliance with the Uniform Standards of Professional Appraisal Practice (USPAP) for an appraisal assignment.
135
Mr. David Brletic
City of Sanger
May 9, 2022
Page II
Cushman & Wakefield Western, Inc.

CUSHMAN & WAKEFIELD II

The opinions in this report are qualified by certain assump tions, limiting conditions, certifications, and definitions.

We particularly call your attention to the extraordinary assumptions and hypothetical conditions listed below.

Extraordinary Assumptions
For a definition of Extraordinary Assumptions please se e the Glossary of Terms & Definitions. The use of extraordinary assumptions, if any, might have affected the assignment results.

The prospective value estimates are based upon market par ticipant attitudes and perceptions existing as of the effective date of our appraisal, and assumes the subject property is completed and/or ac hieves stabilization as of our prospective date. We assume no material change in overall market conditions between the date of inspection and effective date of value, except for those identified within the report. It is assumed that the proposed improvements are constructed in a quality manner as described in the report. If the design, cost, or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could materially impact the value conclusion reported herein.

Hypothetical Conditions
For a definition of Hypothetical Conditions please see the Glossary of Terms & Definitions. The use of hypothetical conditions, if any, might have affected the assignment results.

This appraisal does not employ any hypothetical conditions.

This letter is invalid as an opinion of value if detached from the report, which contai ns the text, exhibits, and Addenda.

Respectfully submitted,
CUSHMAN & WAKEFIELD WESTERN, INC.

Elaine Sahlins, MAI, CRE
Executive Director
California -Certified General Real Estate
Appraiser License No. AG 002987
[email protected]
(415) 773-3531 Office Direct

136

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER TABLE OF CONTENTS

CUSHMAN & WAKEFIELD III

Table of Contents
Introduction ................................................................................................................................................................ 1 Operational Assumptions ....................................................................................................................................... 3 Regional Map ............................................................................................................................................................. 5 Fresno County CBSA Regional Market Analysis ....................................................................................................... 6 Local Area Map ........................................................................................................................................................ 13 Local Area Analysis .................................................................................................................................................. 14 Local Area Characteristics ................................................................................................................................... 15 National Parks ...................................................................................................................................................... 16 Fresno Yosemite International Airport ................................................................................................................. 18 Local Demographics ............................................................................................................................................ 20 Property Analysis ..................................................................................................................................................... 22 Site Description .................................................................................................................................................... 22 Improvements Description ................................................................................................................................... 24 U.S. Lodging Industry Overview .............................................................................................................................. 25 Hotel Supply is Slowing ........................................................................................................................................ 25 Segmentation Changes—Permanent or Temporary? ......................................................................................... 26 Top 25 Markets .................................................................................................................................................... 27 Hotel Transaction Overview ................................................................................................................................. 28 Investor Profile ..................................................................................................................................................... 29 Lodging Market Supply and Demand Analysis – Sanger Hotel ............................................................................... 31 Supply and Demand Analysis – Clovis Hotel Market ........................................................................................... 31 Supply and Demand Analysis – Fresno Airport Hotel Market .............................................................................. 36 Projection of Occupancy and Average Rate ............................................................................................................ 48 Forecast of Revenue and Expense and Net Present Value .................................................................................... 57 Comparable Analysis – Industry Averages and Comparable Hotels ................................................................... 58 Departmental Revenues ...................................................................................................................................... 63 Departmental Expenses ....................................................................................................................................... 63 Undistributed Operating Expenses ...................................................................................................................... 65 Fixed Expenses .................................................................................................................................................... 69 Projection of Income and Expense ...................................................................................................................... 70 Investment Considerations ................................................................................................................................... 74 Discounted Cash Flow Model .............................................................................................................................. 79 Direct Capitalization ............................................................................................................................................. 80 Feasibility Analysis ................................................................................................................................................... 81 Transient Occupancy Tax (TOT) Analysis ............................................................................................................... 83 Assumptions and Limiting Conditions .................................................................................................................. 85 Certification .......................................................................................................................................................... 88 137

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER TABLE OF CONTENTS

CUSHMAN & WAKEFIELD IV

Addenda Contents ................................................................................................................................................... 89 138

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER INTRODUCTION

CUSHMAN & WAKEFIELD 1

Introduction
Scope of Work and Methodology
This report is intended to comply with the repor ting requirements outlined under the USPAP. The following methodology was used to develop the analysis and findings.  Relevant data about the overall economics, demand generators, leisure attractions, and lodging trends was gathered by Cushman & Wakefield from the client, in-house databases, Smith Travel Research (STR), and other public sources.

 In December 2019, Cushman & Wakefield performed a Hotel Market Study and Feasibility Analysis Report for the City of Sanger. As part of the scope of that assignment, stakeholder interviews were conducted with representatives provided by the City of Sanger and included persons associated with:
o Sanger Unified School District
o Initiative Foods
o Pitman Farms
o American Legion
o Local Wineries
o Fresno County Office of Tourism

The current (2023) assignment was also informed by the findings from these interviews. For the current assignment, a representative of Fowler Packing was interviewed.

 The existing lodging inventory in Sanger was consid ered, however, the existing transient lodging is not representative of the longer term potential of the market due to its age and location.

 Information for known proposed hotel projects was researched. We did not i dentify any potential hotel projects in Sanger.

 Based on the data gathered and other resources, Cushman & Wakefield i dentified two representative hotel markets that serve as proxies for hotel use in Sanger: these two markets are represented by a select group of hotels in Clovis and by a select group of hotel s proximate to the Fresno International Airport. The performance of these two markets was analyzed including the use of custom Smith Travel Research trend reports and the specific hotel properties.

 From our research in the market, favorable locational attributes for a hotel in Sanger were considered.

 Trends and impact on hotel use in Sanger were analyzed including  Transient demand growth including commercial and leisure use of hotel rooms in the City of Sanger  Group demand growth including groups use of hotels as discussed by stakeholders  Induced demand from new inventory development
 Visitation to the nearby national parks
 Any additional future demand generators and their market impact  Based on our consideration of our research, we dev eloped a program of hotel facilities that would be potentially viable. The facility prog ram includes the number of room s, type of hotel, affiliation or independent, meeting space, and other amenities. We also identified an optimal location.

 The proposed hotel is estimated to be a 90-room branded limited-service hotel with moderate meeting space, a swimming pool, fitness room, and amenities typica l of this type of property. Examples of brands and their respective standards, are (in no particular order) Hampton Inn, Fairfield Inn, and Holiday Inn Express.
139

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER INTRODUCTION

CUSHMAN & WAKEFIELD 2

 The timing for the development of the hotel was estimated.

 Using the analysis from the prior steps, a foreca st of supply and demand was prepared resulting in a stabilized occupancy level for the proposed hotel in Sanger. The forecast was developed based on a quantification of patterns of demand by day and by month. The projection of occupancy and average rate resulted in a forecast of potential room revenue.

 The forecast of room revenue was expanded into a ten-year projection of revenue using industry performance trends and comparable hotel performance data from our databases. The expanded forecast resulted in a market supported forecast of net income profitability.

 The determination of feasibility was based on a compar ison of the economic benefits (net present value or economic value of the proposed hotel improvements) relative to the development costs. To determine the net present value, a 10-year discounted cash flow analysis was prepared using market valuation parameters (discount and capitalization rates). Deve lopment costs (capital investment) were estimated from published sources and budgets from comparable hotel projects. Any residual results from the comparison was evaluated for the potential of entrepreneurial development incentive. A land value contribution was included. The feasibility analysis for this assignment resulted in a gap (a financial loss) between the total estimated development costs and the potential net present value of the proposed hotel.

 The analysis assumes that the site is vacant and fully ready for development including all infrastructure and utilities.

 At the client’s request, we have re searched transient occupancy taxes in nearby jurisdictions. Estimates of potential transient occupancy taxes for the proposed property were prepared.

 The research, analysis, and findings are presented in th is report with illustrative charts and graphics.

The scope of this assignment required collecting primar y and secondary data relative to the proposed hotel in Sanger. The depth of the analysis is intended to be appropriate in relation to the significance of the development of opinions as presented herein. The data have been analyzed and confirmed with sources believed to be reliable, in the normal course of business, leading to the conclusions set forth in this report. The analysis does not include any highest and best use analysis of any particular site.

140

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER INTRODUCTION

CUSHMAN & WAKEFIELD 3

Quality Control
Cushman & Wakefield Western, Inc. has an internal Quality Control Oversight Program. This Program mandates a “second read” of all appraisals. Assignments prepared and signed solely by designated members (MAIs) are read by another MAI who is not participating in the assignment. Assignments prepared, in whole or in part, by non- designated appraisers require MAI participation, Quality Control Oversight, and signature.

Operational Assumptions
For the purposes of this report, we assumed that the subject will be operated as a full-service, chain-affiliated hotel with a supporting reservation system. We further assumed that the subjec t will be operated by competent and experienced management familiar with the operation of fu ll-service hotels in the United States, and more specifically, Sanger, California. A market rate management fee of 3.0 percent of total revenue has been in used in the analysis.

Franchise Agreement
The analysis assumes the property will be affiliated with a franchise with a major hotel company. Brands such as Fairfield Inn by Marriott, Holiday Inn Express by IHG, Hampton Inn by Hilton are some options that could be considered. We have not prepared the analysis assuming a particular brand. A market rate franchise fee of 5.5 percent of room revenue has been used in the analysis. Please note that these only include royalty fees.

Advertising/marketing fees and reservations fees have been included in marketing expenses and rooms expenses, respectively. The actual franchise fees may vary depending on the brand.

Identification of Property
Property Name: Proposed Hotel – City of Sanger
Location: Sanger, Fresno County, California 93657
Dates of Inspection and Valuation
Date of Prospective
Opening:

January 1, 2026
Intended Use and Users of The Study
Intended Use: This analysis is intended to provide an opi nion of the anticipated feasibility of a proposed hotel in the City of Sanger for the use of the client in evaluating potential hotel development. This report is not intended for any other use.

Intended User: This appraisal report was prepared for the exclusive use of City of Sanger. Use of this report by others is not intended by the appraiser. 141

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER INTRODUCTION

CUSHMAN & WAKEFIELD 4

The property will be newly constructed and assumed to be in compliance with whatever brand standards are in place for the particular franchise. Any future upgrading cost are assumed to be covered by the reserve for replacement.

Property Rights
The analysis assumes that the interest is the fee simple estate, including the contributory value of the furniture, fixtures and equipment. The analysis assumes that the hotel will be, and shall remain, open and operational.

142

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL MAP

CUSHMAN & WAKEFIELD 5

Regional Map

143

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 6

Fresno County CBSA Regional Market Analysis
Introduction
Fresno County is comprised of the entire Fresno Core Based Statistical Area (Fresno CBSA) and had an estimated population of over one million residents, according to the Experian Marketing Solutions. The city of Fresno is the county seat of Fresno County and the principal city of the region with a population of 524,150 residents. Fresno is located within the Central Valley of California, bridging from the coastal mountain range of Monterey County to the Sierra Mountain Range. It is known for its rich soil and is the richest and most productive agricultural county in the United States. The county ranks 5th largest in land area with 6,018 square miles and 11th in population out of 58 counties statewide.

The county consists primarily of flat farmland with foothills to the east and fertile delta lands to the south, west and northwest. Cities within Fresno County include Fresno, Clovis, Coalinga, Coalinga, Fowler, Huron, Kerman, Kingsburg, Mendota, Orange Cove, Parlier, Reedley, Sanger, San Joaquin, and Selma. Fresno County borders Merced, Madera, and Mono Counties to the north, Monterey, Kings, and Tulare Counties to the south, Inyo County to the east and San Benito County to the west. The following map depicts the Fresno CBSA region.

Source: CoStar Group, Inc.

Macro Trends
The economy continues to recover and evolve from the impacts of the COVID-19 pandemic and the economic crisis that followed. Right now, the Russian invasion of Ukraine, high inflation, the Federal Reserve’s interest rate hikes, and continuing supply chain issues ar e further compounding market volatility. With this, it is important to take in mind that data lags, and industry participants are still trying to accurately determine some of the effects these events will, or have had, on the commercial real estate market. In other sections of the report, we will discuss these effects and impacts on the immediate market and subject property in as much detail as possible. For this market analysis section of the report, we ask that you keep in mind that some macro trends may not affect the subject property directly.
144

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 7

Current Trends
The economy in Fresno County continues to improve behind strong job growth and population increases due to strong migration trends. As of December 2022, total non-farm employment measured approximately 381,200 jobs, rising by 3.0 percent from December 2021. The information and leisure & hospitalit y employment sectors are leading employment gains in the region, climbing 6.5 percent and 6.1 percent over the previous year. At the end of 2022, the unemployment rate in the Fresno CBSA measured 6.2 percent, falling 0.7 percentage points from year- end 2021.

Furthermore, the shift in consumer spending to on line shopping has boosted both logistics and manufacturing demand in Fresno County. Increased e-commerce demand has required more storage and delivery options, leading to expansion in logistics in the Fresno CBSA over the last few years. Additionally, the agriculture sector and Fresno County farms will help drive regional performance as the region is one of the biggest agricultural producers in the United States. According to the California Department of Food and Agriculture, the Fresno CBSA was the largest producer of almonds and pistachios in 2021 (latest data available). However, rising food prices, due to inflation, have caused households to reevaluate their spending and l ed to reduced domestic shipments during the year.

Fresno County is also facing significant headwinds as drought conditions cause weaknesses in the agricultural sector. Nevertheless, the Fresno County CBSA came in as the third highest California agricultural producer, behind Kern County and Tulare County.

The recent events detailed below reveal current economic conditions in the Fresno CBSA:
 There are several colleges and universities in the Fresno CBSA supporting higher learning. California State University-Fresno, University of California-Merced (the Fresno Center) and University of California-San Francisco (the Fresno Medical Education Program).
 In January 2019, the Fresno Yosemite International Airport (FAT) announced plans to expand their airport to help accommodate the growing demand in the region. The project, FATforward, is a multi-year, multi-phase project that is estimated to cost $120 million. Th e project includes a new co ncourse, parking garage, international facility and a terminal expansion. Construction began in 2021 and full completion is expected by year-end 2024. The first phase of FATforward was a new, four level parking garage with over 900 spaces and opened in November 2021. Phase 2 of the terminal expansion project will add a new Transportation Security Administration, airline baggage handling area, and a new upper-level concourse. FATforward plans to add 1,220 jobs and generate $182 million in economic activity in the region.  Through year-end 2022, FAT served approximately 2.1 million passengers, showcasing a 12.0 percent increase in a year-over-year comparison. The twelve-month period of 2022 represented an historic record for passenger growth at FAT and eclipsed 2019 passenger traffic; the previous record high of almost 2.0 million passengers.

Additionally, FAT grew at a faster rate than most airpor t across the United States, ranking 13th in terms of growth in passenger traffic in 2022. FAT is served by several airlines including Delta, Southwest Airlines, United Airlines and American. The airport hopes to increase the number of passengers passing through the Fresno CBSA with additional flights to Dallas-Fort Worth and Las Vegas in 2023, as well as the return of daily seasonal service to Chicago.
 According to California Association of Realtors, sale prices of single-family homes in the Fresno CBSA experienced a decline in demand over the last few months and sale prices have fallen in response. This is likely due to higher mortgage rates and high prices driving pros pective buyers out of the market. In January 2023, Fresno County median home prices came in at $375,000, a 5.1 percent decrease year-over-year. Home prices in the Fresno CBSA remain some of the most affordable in Ca lifornia and is the fifth highest in the Central Valley region. Moreover, building permits in the region ro se 4.4 percent for single-family home construction in a year-over-year comparison through December 2022, according to the National Association of Homebuilders. 145

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 8

 Building of the California High Speed Rail Line began in early 2015, and the first 29-mile segment of the line will be constructed between Fresno and Madera. An initial $6.0 billion worth of funds was generated through bonds from California Proposition 1A, but the entire project, which is set to link San Francisco and Los Angeles by 2030, will cost an estimated $60.0 billion. Since July 2020, the California High Speed Rail Authority has hired over 4,000 workers across 32 job sites in Central Valley. The Merced to Fresno section of the California High Speed Rail Line spans 65 miles and will connect the Central Valley to Silicon Valley. Additionally, there will be a station in downtown Fresno with connecting transportation provid ers such as Amtrak, Fresno Area Express and Greyhound in close proximity to the station.

Demographic Characteristics
The demographic characteristics of Fresno County are generally weaker than the demographic traits of the national average. At 33 years, the median age of residents in the region is six years younger than that of the national median age of 39 years. County residents are less likely to graduate from college compared to adults across the United States with 21.1 percent of adults in in the CBSA having earned a bachelor’s degree or advanced university degree, compared to 32 percent of adults across the U.S. have achieved similar levels of educational attainment. Lower levels of educational attainment translate to lower household incomes in the Fresno CBSA compared to the nation overall. At $59,633, the median annual income falls 10.2 percent below national levels.

The following chart compares the demographic characteristics of Fresno CBSA with those of the United States:

Population
The Fresno CBSA regional population growth has trailed national population growth, averaging 0.5 percent annually from 2012 through 2022. Du ring the same time period, Fresno CBSA's population growth has trailed national population expansion by an average of 10 basis points and is forecast to decrease to an average annual growth rate of 0.2 percent through 2027.
146

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 9

The following chart compares population growth between Fresno CBSA and the United States:

The following table shows Fresno CBSA’s annualized population growth:

Households
Generally, a region's household formation trends are directly tied to its overall population growth, as an increase in the population drives demand for real estate. From 2012 through 2022, the Fresno CBSA regional household formation growth rate has trailed national expansion, averaging 0.6 percent annually. In the same ten-year period, Fresno CBSA's household formation growth has trailed national growth by an average of 20 basis points and is forecast to increase to an average annual growth rate of 0.7 percent through 2027.

The chart below compares household formation growth between Fresno CBSA and the United States:
147

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 10

Gross Metro Product
Gross Metro Product (GMP) is defined as the market va lue of all final goods and services produced within a metropolitan area, and when compared to the nation’s Gross Do mestic Product (GDP), can determine shifting economic trends in a given region. Economic growth in Fresno CBSA has beat national economic expansion over the decade, averaging 2.3 percent an nually from 2012 thro ugh 2022. Over the decade, Fresno CBSA GMP has beat national expansion by an average of 20 basis points and is forecast to increase to an average annual growth rate of 2.8 percent through 2027.

The chart below compares gross product growth by year for Fresno CBSA and the United States:

Employment Distribution
The Education & Health Services sector dominates Fresno CBSA as the largest employment sector with roughly

21.4 percent of the regional workforc e, compared to 16.1 per cent on the national level. Fresno CBSA offers a diverse mix of industry employment with the Trade, Transportation & Utilities and Government sectors accounting for 20.3 percent and 19.5 percent of total employment, respectively. Together, these three industries comprise 61.2 percent of the region’s share of employment.

The following chart compares non-farm employment sectors for Fresno CBSA and the United States:
148

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 11

Major Employers
The following table lists Fresno CBSA’s largest employers:

Employment Growth
From 2012 through 2022, the Fresno CBSA regional empl oyment growth has beat national expansion, averaging

2.5 percent annually. During the same time period, Fresno CBSA's employment growth has beat national expansion by an average of 120 basis points and is forecast to dec rease to an average annual growth rate of 0.8 percent through 2027.

The following chart illustrates employment growth for Fresno CBSA and the United States:
149

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 12

Unemployment
From 2012 through 2022, the Fresno CBSA regional unemployment rate decreased at an average annual rate of

8.2 percent, compared to the nation's unemployment rate which decreased at an average annual rate of 7.7 percent.

Fresno CBSA's unemployment rate is forecast to increase by an average annual rate of 2.8 percent between 2023 and 2027.

The graph below illustrates unemployment rates for Fresno CBSA, the State of California, and the United States:

Conclusion
Fresno County’s economy is at risk as the economy slowed through the end of 2022. However, the key industries of agriculture and logistics will contribute to growth over the near and long-term. High demand in e-commerce will continue to fuel transportation and warehousing in Fresno County as companies like Amazon move into the region.

In November 2022, Amazon opened a new 183,00 square foot last-mile distribution warehouse in Fresno, replacing the former industrial facility at 2325 South Cedar Avenue.

Sustained industrial expansion in the Fresno CBSA will help support long term economic growth. Through the near term, new housing will support future population growth and housing permits in the region have climbed due to the attractive housing market.
150

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LOCAL AREA MAP

CUSHMAN & WAKEFIELD 13

Local Area Map

151

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 14

Local Area Analysis
The city of Sanger is situated within Fresno County, in Central California, about 13.0 miles east of the city of Fresno, roughly 138.0 miles east-southeast of San Jose, and nearly 100.0 miles north of Bakersfield. The boundaries of the city are generally California Avenue to the north, North and Goodfellow avenues to the south, Quality and Newmark avenues to the east, and Bethel Avenue and the surrounding neighborhoods to the west, encompassing approximately 5.5 square miles.

Access
Surface street access through Sanger is via several major north/south and east/west directional arterials. The primary north/south directional thoroughfares within the city include Bethel Avenue, Academy Avenue, and Newmark Avenue. East/west stretching roadways include Jensen Avenue, Annadale Avenue, and North Avenue.

Bethel and Academy avenues provide access to Kings Canyon Road (Sierra Gateway Scenic Highway 180) to the north of the city. Jensen Avenue begins its westerly r oute from its intersection wi th Academy Avenue, providing access to State Route 99 and State Route 41, before terminating at James Road, south of the city of Jamesan, in Fresno County.

Kings Canyon Road runs concurrently with the Sierra Gateway Scenic Highway, State Highway 180 (SR-180), through the city of Sanger. In total, SR-180 is roughly 112.3 miles long and spans in an east/west direction from its eastern terminus in Kings Canyon National Park, to its western terminus at State Route 33 (SR-33) in Mendota.

In nearby Fresno, State Route 41 (SR-41) is generally a north/south directional highway that is approximately 185.5 miles in length. Along its route, it begins in the south at SR-1 in Morro Bay and traverses north, providing access to US-101 in Atascadero, I-5 near Lemoore, SR-99 in Fresno, SR-49 in Oakhurst and terminates in at SR-140 in Yosemite National Park.

State Route 168 (SR-168) is separated into three segments, obstructed by the Sierra Nevada Mountains. In total, the length is nearly 124.0 miles and it is generally a southwest/northeast directional highway. The west end begins at SR-41/SR-180 in Fresno, and the east end terminates at SR-266 at Oasis.

State Route 99 (SR-99) is about 425.0 miles in length and is the former Mexico to Canada highway. It begins in the south at I-5 near Wheeler Ridge and terminates in the north at SR-36 near Red Bluff. Along the route, it provides access to the counties of Kern, Tulare, Fresno, Madera , Merced, Stanislaus, San Joaquin, Sacramento, Sutter, Butte, and Tehama.

Traffic Counts
The city of Sanger is situated to the south of Kings Canyon Road (SR-180). The following table lists annual average daily traffic counts (AADT) since 2011 on Kings Canyon Road at Academy Avenue. 152

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 15

As shown, traffic counts along Kings Canyon Road and Academy Avenue have increased by an average annual percentage change of 12.1 perce nt (Back) and 3.2 percent (Ahead) from 2011 through 2020. Due to an ongoing Federal Transportation Improvement Program to improve and expand the highway from the Southeast growth area to Downtown Fresno, traffic counts declined by 19.5 percent in 2017. The final segment of the roughly $55.0 million project was completed in December 2020. Since the completion of the improvement program, traffic counts (Back) have steadily increased while traffic counts (Ahead) hav e remained flat, with the exception of 2020 during the nationwide COVID-19 shutdown.

Local Area Characteristics
The city of Sanger was founded in 1888 as a stop along the Southern Pacific Railroad in an area that was developed with farms, ranches, and orange groves. In May 1911, the city was officially incorporated, and today is known as the “Nation’s Christmas Tree City,” as well as the gateway city to the Sequoia National Park and Kings Canyon National Park. Sanger has a total population of approximatel y 26,304 residents as of the 2022 Census estimate, making it Fresno County’s third largest city by population, behind Fresno (543,660) and Clovis (123,665).

Fresno is the closest “big city” to Sanger, situated about 13.0 miles to the west. Sanger is about 25.0 miles south of the Sierra National Forest, 33.0 miles west of the Kings Canyon National Park, 43.0 miles northwest of the Sequoia National Park, and 55.5 miles south of Yosemite National Park.

The Sanger Police Department, Fire Department, Cham ber of Commerce, Depot Museum, Sanger Parks and Recreation Department, and the Fresno County Library, Sanger Branch are all situated adjacent to one another south of Jensen Avenue, between West and Hoag avenues. Land uses within Sanger include a mix of single- and multi-family residential developments, with neighborhood-serving commercial, retail, and office uses interspersed.

The commercial uses are primarily located along Academy Avenue and there are a number of community parks, schools, religious organizations, and some vacant lots incorporated throughout the city. Many of these Year
2011 12,300 ---- 11,100 ----
2012 12,300 0.0 % 11,100 0.0 %
2013 15,200 23.6 11,500 3.6
2014 15,200 0.0 11,500 0.0
2015 16,000 5.3 12,800 11.3
2016 19,000 18.8 14,000 9.4
2017 15,300 (19.5) 15,300 9.3
2018 15,300 0.0 15,300 0.0
2019 21,000 37.3 15,300 0.0
2020 34,500 64.3 14,700 (3.9)
Avg. Annual % Change 12.1 % 3.2 %
The traffic count year is from October 1st through September 30th. Very few locations in California are actually counted continuously. The annual average daily traffic is the total volume for the year divided by 365 days.

Back AADT usually represents traffic South or West of the count location, and Ahead AADT usually Source: Department of Transportation
Traffic Counts: Kings Canyon Road (SR-180) at Academy Avenue Annual
Average Daily
Traffic (Back) % Change
Annual
Average Daily
Traffic (Ahead) % Change
153

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 16

improvements were constructed between 1973 and 1984, with more recent construction, including single-family neighborhoods, located around the peripheral of the city.

There are several recurring events that take place within the city each year:
 The Annual Blossom Bus Tour which occurs during the last weekend in February. Celebrating since 2015, the tour travels along the 62-mile World Famous Blossom Trail and visits local distilleries, retail shops, and restaurants.
 During the first Saturday in March is the Blossom Trail Festival. Held in Downtown Sanger since 1989, the annual event features a vintage car show with over 200 vehicles, the Blossom Trail run, a Car Show (since 2006), a Lego Car Show (since 2017), food trucks, arts and crafts, children’s activities, and live music.  The Cinco De Mayo Celebration in Downtown Sanger began in 2019 and features a beer garden, food vendors, live music, and fun activities.
 A Fourth of July Spectacular which includes fireworks, water slides, food, and live music, is held at the Sanger High School practice field. Also in July is the Fruit Trail Bus annual event, celebrating since 2016, makes stops at local wineries and fruit stations, distilleries, and local retailers.  A Trunk or Treat festival on Halloween in Downtown Sanger has been held since 1988 and offers safe trick or treating for children, as well as games and prizes.
 December annual events include the Light up the Night event, encouraging businesses to decorate their store fronts and participate in the Christmas Display Contest; t he Tree Lighting ceremony is held in Brehler Square Park and includes a visit from Santa and special perform ances by the Sanger High School choir; the Nation’s Christmas Tree City Toyland Parade in Downtown Sanger celebrates with vendors, arts and crafts, kids activities, and live music; and the Trek to the Nation’ s Christmas Tree bus tour which is always held on the second Sunday in December, begins in Downtown Sanger and ends in the Kings Canyon National Park.

National Parks
As previously mentioned, the city of Sanger is known as the gateway city to two national parks, Sequoia and Kings Canyon, as it is the last incorporated city before passing through the west gate of both parks. Tourism is a major economic contributor in Fresno County and the surrounding towns closest to the parks.

Kings Canyon National Park
Kings Canyon was previously called General Grant National Park and established in 1890. Expanded and renamed in 1940, the park is best known for its massive sequoia trees, most notably the giant General Grant Tree in Grant Grove. Situated in southern Sierra Nevada, about 50.0 m iles east of the subject site, the approximately 461,901- acre park spans over two counties: Fresno and Tulare. It is home to some of the world’s largest stands of giant sequoia trees, is surrounded by several 14,000-foot peak s, and is made up of rivers, streams, tall mountain meadows, and deep canyons. Outdoor recreation includes camping, horseback riding, rock climbing, skiing and snowshoeing, backpacking, day hikes, scenic drives and viewpoints, among others.

Sequoia National Park
South of and contiguous with Kings Canyon is the Sequoia National Park. Also established in 1890, it encompasses an area of roughly 404,064 acres and is roughly 60.0 miles southeast of the subject site. Mount Whitney, at 14,505 feet, is the highest point in the Un ited States, and is contained within the park. Known for the General Sherman tree, which grows in the Giant Forest, it is the largest tree in the world. Mo st notable park attractions include the Giant Forest Museum which was constructed in 1928; Moro Rock, a granite dome situated in the middle of the park; Sherman Tree Trail, a nearly 1.0 mile roundtrip, paved trail that takes hikers through an area of giant sequoia trees; Tokopah Falls, a 1,200 foot tall waterfall accessible via an easy 3.4 mile roundtrip hike along the Marble Fork of the 154

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 17

Kaweah River; and Tunnel Log, a 275 foot tall, 21 foot wide tree that fell across the road in 1937, that was burrowed through a year later, making the road passable.

Approximately 202,430 acres of old-growth forests are shared by the Sequoia and Kings Canyon national parks, and together were designated by UNESCO as the Sequoia-Kings Canyon Biosphere Reserve in 1976. Popular outdoor recreational activities within the park include hiking, camping, fishing, and backpacking. Although face coverings are not required while visiting Sequoia National Park, social distancing is recommended. The following chart illustrates visitation statistics at both parks since 2010.

As can been seen in the chart above, park visitation has steadily fluctuated at both parks since 2010. The most notable decline at Sequoia was in 2013 by 17.8 percent because of a government sh utdown that lasted from October 1st through the 17th. The government shutdown effe cted Kings Canyon as well, but by 4.0 percent that year. The most significant declines reported by Kings Canyon were in 2014 by 11.5 percent due to limited snowfall and the temporary closures of several campgrounds, and by 6.8 percent in 2015 because of the Rough Fire in August of that year.

Both parks reported healthy increases, Kings Canyon of 29.8 percent and Sequoia of 14.3 percent, in 2016. In 2018, Kings Canyon reported an increase in visitors of 0.9 percent, however, Sequoia reported a decline of 4.8 percent in the same year, most notably in October 2018, three separate fires were burning within the park. The Alder Fire, the largest of the three, was discovered on October 4th, and burned more than 1,300 acres. Full containment of the fires was reached in November.

A government shutdown that began at the end of December 2018 and lasted into January 2019, coupled with heavy snow, severe weather, and various road closures in F ebruary, May, and July 2019 effected visitation to Kings Canyon by 9.6 percent that year. State and national mandated shutdowns ordered in mid-March 2020 in response to the COVID-19 pandemic effected visitor visitation to both parks, resulting in declines of 34.3 percent and 36.1 percent for Kings Canyon and Sequoia, respectively.

Year
2010 598,205 ---- 1,002,979 ----
2011 566,810 (5.2) % 1,006,583 0.4 %
2012 591,033 4.3 1,106,584 9.9
2013 567,544 (4.0) 909,274 (17.8)
2014 502,268 (11.5) 1,039,137 14.3
2015 468,106 (6.8) 1,097,464 5.6
2016 607,479 29.8 1,254,688 14.3
2017 692,932 14.1 1,291,256 2.9
2018 699,023 0.9 1,229,594 (4.8)
2019 632,110 (9.6) 1,246,053 1.3
2020 415,077 (34.3) 796,086 (36.1)
2021 562,918 35.6 1,059,548 33.1
2022 640,986 13.9 1,153,199 8.8
Avg. Annual % Change (0.6) % 0.5 %
YTD 1/2022 21,971 ---- 32,564 ----
YTD 1/2023 14,363 (34.6) % 26,006 (20.1) %
Source: National Park Service, US Department of the Interior National Parks Recreation Visitation
Kings Canyon % Change Sequoia % Change
155

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 18

During 2021, visitation recovered as COVID-19 restrictions were eased, resulting in an increase of 35.6 percent at Kings Canyon and 33.1 percent at Sequoia. Advanced camp ing reservations were required at Kings Canyon and Sequoia for the 2021 summer season to ensure proper COVID-19 mitigations and were still in place for the 2022 summer season.

It is important to note, below-normal precipitation and an unprecedented heat wave throughout the Pacific Northwest in 2021 intensified and expanded drought conditions in almost all areas west of the Rockies. Reportedly, 2021 was the driest of all the drought years in the last 100 years, and drought conditions affects water-dependent activities including fishing, boating, skiing, as well as low streamflow and reduced snowpack. Drought conditions increases risk for wildfires, which also has a major impact on outdoor recreation and park visitation.

During the summer months of 2022, several fires were igni ted by lightning strikes, including the Avalanche Fire (July 18), the Siberian Fire (July 19), and the Summit Fire (August 3 and August 23). These fires were located within remote wilderness areas and did not cause any threat to life, property, trails or infrastructures.

There were a number of storm systems that hit the st ate of California between De cember 31, 2022, and January 25, 2023. Flooding and substantial snow accumulation caused considerable damage to the Generals Highway, the main transportation route between the parks, as well as most areas within the parks. As a result, year-to-date through January 2023, Kings Canyon and Sequoia have experienced decreases in visitors, 34.6 percent and 20.1 percent, respectively. Improved weather during the spring and summer months is expected, therefore, the outlook is positive.

Fresno Yosemite International Airport
The Fresno Yosemite International Airport is located approximately 10.0 miles northwest of Downtown Sanger and is the only major air carrier airport in the Central Valley. Major carriers currently providing service at the airport include AeroMexico, Alaska Airlines, A llegiant, American Airlines, Delta, Frontier, United, and Volaris and offers non-stop flights to 11 U.S. destinations including Chicago, Dallas/Fort Worth, Dallas, Las Vegas, Los Angeles, Phoenix, Portland, Salt Lake City, San Diego, San Fr ancisco, Seattle, and three Mexico cities including Guadalajara, Leon, and Morelia. There are two runways: one of 9,539 feet and the other of 8,008 feet. The airport also serves as a base to several military, law enforcem ent, firefighting, and medical air units. The following chart illustrates total passengers to the airport since 2016.

Year
2016 1,339,299 ---- 201,623 ---- 1,540,922 ----
2017 1,333,750 (0.4) % 205,083 1.7 % 1,538,833 (0.1) %
2018 1,542,933 15.7 223,030 8.8 1,765,963 14.8
2019 1,703,015 10.4 261,474 17.2 1,964,489 11.2
2020 828,263 (51.4) 162,364 (37.9) 990,627 (49.6)
2021 1,690,707 104.1 257,606 58.7 1,948,313 96.7
Avg. Annual % Change 4.8 % 5.0 % 4.8 %
YTD 11/2021 1,546,095 ---- 228,847 ---- 1,774,942 ----
YTD 11/2022 1,726,442 11.7 % 281,786 23.1 % 2,008,228 13.1 % Fresno Yosemite International Airport
Pax Traffic % Change Pax Traffic % Change Pax Traffic % Change Domestic International Total
Source: Fresno Yosemite International Airport
156

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 19

In 2018, total passenger counts increased at record levels of 14.8 percent due to expanded flight frequencies and services to new destinations. For the calendar year 2019, Fresno Yosemite International Airport officials announced historic passenger traffic serving 1.96 million passengers, representing an 11.2 percent increase over calendar year 2018. However, in 2020, passenger counts declined sharply in both domestic and international traffic, down 51.4 percent and 37.9 percent, respectively, as a result of t he COVID-19 pandemic and global travel restrictions that followed.

In 2021, passenger counts were nearly recovered to pre-pandemic visitors, having increased by 104.1 percent and

58.7 percent in domestic and international passengers, respectively. Year-to-date, total passenger counts have continued to improve, having reported a domestic increase of 11.7 percent and international increase of 23.1 percent, which is a good indicator of continued future growth and suggests a very positive outlook for local hotels.

An approximately $115.0 million improvement and expansion of the airport broke ground in September 2020. The project includes a new International Arrivals facility, construction of a three-level parking garage, expanded baggage facilities and security checkpoints, a new upper-lev el concourse in the existing terminal, and added tenant operations and concession space. Construction is slated for completion in late 2024.

Covid-19 Impacts on Air Travel
The arrival of the COVID-19 pandemic, and world-wide travel bans and restrictions that followed to help mitigate the spread of the virus, has had a devastatingly negative impact on the air line industry. The lowest number of passengers screened through Transportation Security Administration (TSA) airport checkpoints occurred on April 13, 2020, when just 87,534 passengers we re screened that day; a decline of 96.0 percent when compared to the same day one year prior.

As of the writing of this report, airport passenger counts are steadily increasing. On February 20, 2023, more than

2.46 million passengers were screened through TSA airport checkpoints; a dramatic increase from March 15, 2020, when less than 954,000 passengers were screened. The number of passengers screened on the same day in 2021 was 963,280.

It should be noted, more than 1.0 million passengers hav e been screened through TSA checkpoints every day since March 11, 2021. TSA officials have reported the demand for domestic air travel is increasing faster than was originally expected, and daily travel volumes will likely continue to rise steadily.

For the month of January 2022, Airlines 4 America repo rted airline passenger volumes fell 2.6 percent below January 2019 levels. In first quarter 2023, 13 large to m edium U.S. airports are seeing double-digit seat growth versus first quarter 2019. Of the 65 locations, 36 are showing growth, while 11 are showing double-digit reductions.

Further, schedules for first quarter 2023 show that Frontie r, Spirit and Allegiant continue to lead capacity growth, while American, Delta, Southwest and United are slower to restore capacity.

OAG, a global travel data provider, released their Frequency and Capacity Trend Statistics report for the month of January 2023, stating global airline capacity was sitting 3.3 percent above December 2022 and is edging closer to 2019 levels, now just 7.7 percent behind the same month in 2019. The United States remains the largest global domestic air market in capacity terms and is nearly fully recovered, now just 0.9 percent below 2019 levels.

The U.S. Travel Association released its biannual forecast on November 29, 2022, stating domestic business travel volume is expected to continue to improve, with a slight slowdown in 2023 as the economy enters a mild recession.

However, a full volume recovery is forecasted for 2024. 157

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 20

Local Demographics
Understanding the demographics of a region helps to ascertain the underlying fundamentals of real estate supply and demand. The following discussion is based upon an Experian Marketing Solutions, Inc. demographic study for a one, three, and five-mile radius of the subject property. To add perspectiv e, we have also included data for the city of Sanger City, Fresno County, and the state of California. This data is presented in the following chart followed by a discussion of population trends, household growth trends, and income and education levels.

Population
Population in 2022 within a one, three, and five-mile radius of the subject property has been estimated at 1,007,540, 1,649,379, and 3,082,285 resident s, respectively. Population statistics for a one-mile radius show that between 2010 and 2022, population increased at a compound annual rate of approximately 0.7 percent, in line with growth rate experienced by the city of Sanger City and above t he growth rate experienced by the state of California.

Through 2027, the population within the subject’s one-mile area is expected to increase at a compound rate of 0.8 percent. Overall, population growth within the one-mile radius is expected to outpace the five-mile radius as well as the state level but will trail the other areas.

Households
A household consists of all the people occupying a single housing unit. While individual members of a household purchase goods and services, these purc hases actually reflect household needs and decisions and levels of disposable income. Thus, the household (and subsequently in come) is one of the critical units to be considered when reviewing market data and forming conclusions about the demographic impact on existing and proposed facilities.

Population
2000 Census 793,373 1,288,942 2,398,331 19,908 798,997 33,859,654 2010 Census 928,517 1,524,063 2,869,216 24,279 930,453 37,253,929 2022 Estimate 1,007,540 1,649,379 3,082,285 26,741 1,012,298 39,595,638 2027 Projection 1,046,877 1,714,717 3,184,437 28,038 1,053,409 40,655,996 % Growth 2022 - 2027 0.8% 0.8% 0.7% 1.0% 0.8% 0.5%
% Growth 2010 - 2022 0.7% 0.7% 0.6% 0.8% 0.7% 0.5%
% Growth 2000 - 2010 1.6% 1.7% 1.8% 2.0% 1.5% 1.0%
Households
2027 Projection 335,248 534,943 995,147 7,908 334,350 13,956,257 2022 Estimate 322,000 513,248 960,553 7,522 320,742 13,541,839 2010 Census 291,484 465,242 875,307 6,662 289,391 12,577,510 2000 Census 253,737 398,627 744,356 5,489 252,826 11,498,168 % Growth 2022 - 2027 0.8% 0.8% 0.7% 1.0% 0.8% 0.6%
% Growth 2010 - 2022 0.8% 0.8% 0.8% 1.0% 0.9% 0.6%
% Growth 2000 - 2010 1.4% 1.6% 1.6% 2.0% 1.4% 0.9%
Income
2022 Est. Average Household Income $84,386 $82,527 $82,340 $66,277 $82,483 $120,874 2022 Est. Median Household Income $61,410 $61,216 $60,240 $52,579 $59,633 $82,187 Pop. Age 25+ By Educational Attainment
High School Graduate (or GED) 21.8% 22.7% 24.0% 23.5% 21.6% 20.1% Bachelor's Degree 14.0% 12.2% 11.5% 7.7% 13.5% 20.6%
Master's Degree 4.5% 3.9% 3.8% 1.8% 4.3% 8.3%
Age 18 and older 67.9% 67.5% 67.6% 65.4% 67.9% 73.8%
Demographic Summary
Source: © 2022 Experian Marketing Solutions, Inc. • All rights reserved California StateFresno CountySanger City100 miles50 miles25 miles 158

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER REGIONAL ANALYSIS

CUSHMAN & WAKEFIELD 21

According to Experian, between 2010 and 2022 household formation has occurred at a 0.8 percent compound rate of positive growth within the subject’s one-mile area. Through 2027, households within the one-mile radius are expected to grow at a similar pace of 0.8 percent per year. As shown in the chart, household growth rates in the city of Sanger City and Fresno County are expected to outpace the estimated growth rate for the one-mile radius.

Income
Income levels in a trade area reflect the potential exp enditures of the residents; thus, forming an important component of trade area analysis. In other words, aver age household income times the number of households yields one significant measure of an area's retail sales potential.

According to Experian, average household income within a one-mile radius is $84,386, which is between the county and state levels of $82,483 and $120,874, respectively. A pproximately 7.7 percent of the population over the age of 25 in the city of Sanger City has a Bachelor’s Degree versus 13.5 percent in the county. Additionally, 1.8 percent of the city of Sanger City residents have a Master’s Degree and roughly 4.3 percent of Fresno County residents have achieved the same.

Conclusion
The local market area benefits from its close proximity to Kings Canyon Road (Highway 180), the direct route to Kings Canyon and Sequoia national parks. Sanger is located about 13.0 miles east of Fresno, around 138.0 miles east-southeast of San Jose, and approximately 100.0 miles north of Bakersfield. The city’s demographics point to moderate increases in population and household growth, which in turn should help the local area economy.

In addition, Kings Canyon and Sequoia national parks are majo r tourist destinations in the area, attracting over 640,000 visitors and 1.1 million visitors, respectively, in 2022. The Parks feature a variety of natural attractions for sightseeing and the areas offer a wide variety of outdoor acti vities including hiking, biking, climbing, and fishing.

The year-to-date visitation for Kings Canyon and Sequoi a national parks are reporting a decline in January, however, with the spring and summer mont hs approaching, visitation is expect ed to increase, which is a positive sign. Overall, the short-term and long-term outlook for the local area is considered favorable, which extends to the lodging market.
159

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER SITE DESCRIPTION

CUSHMAN & WAKEFIELD 22

Property Analysis
Site Description

Location: The City of Sanger is located s outh of State Route 180 which runs east/west through the heart of the San Joaquin Valley from State Route 33 in Mendota through Fresno, and then east towards the Sierra Nevada to Kings Canyon National Park. SR 180 handles a wide range of traffic volumes, from an average daily in 2020 of 15,450 near Kerman, to over 97,000 at the highly congested SR 16 8 interchange, reportedly the most- traveled highway segment in the San Joaquin Valley.

The business and civic entities in Sanger are located near the center of town, approximately 2.5 miles south of State Route 180. Academy Avenue, which runs north/south is the main commercial street and the critical thoroughfare in Sanger which intersect with State Route 180. It is our opinion that a site at the intersection of Academy Avenue and State Route 180 would be the optimal location to consider for hotel development. This location would be convenient for users that are doing businesses in Sanger and would be attractive for guests that are visiting the National Parks, or area wineries, attending events.

This area is of the 180 Highway Corridor. The Highway 180 corridor east of Fresno is an active path of urban expansion. Sanger city leaders have long viewed the land between Highway 180 and the city’s northern boundary as a place for new development. The city has completed, and continues to refine, master plans for several thousand acres in this area.

Residential, highway commercial, big box retail, and hospitality are among the land uses being considered. The annexation of over 350 acres of land bordering Academy Avenue is well along and is expected to stimulate investment. Early investment in development of the 31.2 acre 180 Commercial Site brought needed infrastructure that will support master plan implementation. This area is also within a Federally designated Opportunity Zone; the impact of th is designation has not been directly considered in the analysis.

While the analysis does not consider a specific site within the specific area, it does assume that the performance of a hotel would be maximized with State Route 180 frontage and access. The forecast assumes that the hotel would be located in this area with prominent visibility and ready access from the highway.

Land Area: The analysis assumes that an amply sized site is available for development. The site is assumed to accommodate the proposed hotel improvements, an outdoor pool area, surface parking, landscaping, and other required facilities.
160

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER SITE DESCRIPTION

CUSHMAN & WAKEFIELD 23

Utilities: The analysis assumes all utilities are available to the subject site.

Land Use Restrictions: The analysis assumes that the proposed hotel improvements will comply with all land regulations. We did not evaluation the zoning or entitlements for specific land use of the property and recommend an expert opinion to determine whether any adverse conditions exist.

The analysis assumes that a site is available and ready for development with all necessary infrastructure.

161

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER IMPROVEMENTS DESCRIPTION

CUSHMAN & WAKEFIELD 24

Improvements Description
Based on our analysis, it is our recommendation that the proposed lodging facility is a 90-room limited service hotel that will be professionally managed and franchised with a brand from a major hotel company. The property is expected to offer a complimentary breakfast, approximatel y 1,500 square feet of indoor meeting space, a pool, fitness room, and a typical complement of back-of-the-house facilities.

Meeting and Banquet Space
While a branded select-service hotel would typically ha ve modest meeting space, we understand from our stakeholder interviews, that local users would require some meeting/event space. We recommend a ratio of no more than 15 to 20 square feet per guest room for this property (or 1,350 to 1,800 square feet for a 90 room hotel), to maintain the operating efficiencies expected for the product type. We are assuming around 1,500 square feet of meeting space.

Other
 Market Pantry
 Fitness center
 Business center
 Swimming pool

Reserve for Replacement
In order to ensure that the proposed hotel in Sanger is maintained in a competitive position throughout the holding period, we deducted a reserve for replacement equal to 4.0 percent of total revenues per year. The reserve is assumed to be ramped up in the first two years as is typical for new hotel construction.

162
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER U.S. LODGING INDUSTRY OVERVIEW

CUSHMAN & WAKEFIELD 25

U.S. Lodging Industry Overview
Year in Review 2022: A Rising Tide Helped Lodging Sail Past the Sirens The post-COVID recovery was well underway in 2022. Despite a rocky start to the year with the continued influence of the Omicron variant, year-end U.S. hotel revenues were 44.0 percent higher than in 2021. As expected, the gains were dominated by room rate growth. After the Omicron variant caused a rocky start in the first quarter, by the end of 2022, overall demand was up 11.0 percent, while the av erage daily rate was up over 19.0 percent. In nominal terms, the ADR (average daily rate) in 2022 set a new record, exceeding the prior peak of $130.98 set in 2019.

Annual performance from 1995 through 2022 is summarized below.

Hotel Supply is Slowing
In 2022, occupancy registered a strong improvement to 62.7%, which is still below the peak of 66% in 2018.

Although the number of room nights sold in 2019 was 1.6% higher than in 2018, the increasing hotel inventory in the U.S. has been steadily growing. Since 2018, supply growth increased a total of 4.5% from roundly 5.3 to 5.6 million occupied room nights while demand was flat in 2022 relative to 2018, at approximately 1.3 billion occupied room nights a year.

Rooms that were closed or changed to other uses because of the pandemic have been more than replaced, and the pace and revenue performance recovery in 2021 and 2022 has reinvigorated developers. STR reports that after over two years of contraction, the pipeline increased in December 2022. New projects in planning states continued to increase, and development projects that have been paused during the pandemic resumed, resulting in a larger number of rooms under construction. As a ratio of exis ting supply, the luxury segment has the most rooms under construction. Consistent with the trends of the past deca de, the largest volume of hotel rooms under construction Year Supply
1995 3,684,186 --- 869,076,832 --- --- 64.6 % --- $65.44 --- $42.29 --- 1996 3,771,797 2.4 % 886,359,732 2.0 % (0.4) % 64.4 (0.4) % $69.64 6.4 % $44.84 6.0 % 1997 3,900,088 3.4 908,450,698 2.5 (0.9) 63.8 (0.9) $73.74 5.9 $47.06 4.9 1998 4,051,540 3.9 933,549,677 2.8 (1.1) 63.1 (1.1) $77.08 4.5 $48.66 3.4 1999 4,203,498 3.8 961,710,833 3.0 (0.7) 62.7 (0.7) $79.85 3.6 $50.05 2.9 2000 4,323,681 2.9 996,868,882 3.7 0.8 63.2 0.8 $84.15 5.4 $53.16 6.2 2001 4,425,629 2.4 963,763,385 (3.3) (5.7) 59.7 (5.5) $83.11 (1.2) $49.59 (6.7) 2002 4,494,997 1.6 967,449,306 0.4 (1.2) 59.0 (1.2) $82.04 (1.3) $48.38 (2.4) 2003 4,542,770 1.1 980,328,706 1.3 0.3 59.1 0.3 $82.18 0.2 $48.59 0.4 2004 4,563,998 0.5 1,020,459,461 4.1 3.6 61.3 3.6 $85.67 4.2 $52.48 8.0 2005 4,563,711 (0.0) 1,048,737,086 2.8 2.8 63.0 2.8 $90.47 5.6 $56.96 8.5 2006 4,576,386 0.3 1,053,747,575 0.5 0.2 63.1 0.2 $97.24 7.5 $61.34 7.7 2007 4,630,977 1.2 1,060,982,919 0.7 (0.5) 62.8 (0.5) $103.68 6.6 $65.08 6.1 2008 4,737,124 2.3 1,034,284,909 (2.5) (4.8) 59.8 (4.7) $106.73 2.9 $63.84 (1.9) 2009 4,868,986 2.8 968,524,324 (6.4) (9.1) 54.5 (8.9) $97.63 (8.5) $53.21 (16.7) 2010 4,949,145 1.6 1,038,833,388 7.3 5.6 57.5 5.5 $97.52 (0.1) $56.08 5.4 2011 4,968,305 0.4 1,086,503,585 4.6 4.2 59.9 4.2 $101.21 3.8 $60.64 8.1 2012 4,984,401 0.3 1,116,315,787 2.7 2.4 61.4 2.4 $105.49 4.2 $64.73 6.7 2013 5,008,766 0.5 1,136,789,845 1.8 1.3 62.2 1.3 $109.49 3.8 $68.08 5.2 2014 5,036,763 0.6 1,181,672,840 3.9 3.4 64.3 3.4 $114.64 4.7 $73.69 8.2 2015 5,079,796 0.9 1,209,902,747 2.4 1.5 65.3 1.5 $119.89 4.6 $78.23 6.2 2016 5,145,984 1.3 1,227,200,572 1.4 0.1 65.3 0.1 $123.57 3.1 $80.74 3.2 2017 5,226,808 1.6 1,254,689,818 2.2 0.7 65.8 0.7 $126.40 2.3 $83.13 3.0 2018 5,321,715 1.8 1,282,718,233 2.2 0.4 66.0 0.4 $129.57 2.5 $85.56 2.9 2019 5,417,515 1.8 1,302,940,409 1.6 (0.2) 65.9 (0.2) $130.98 1.1 $86.30 0.9 2020 5,203,605 (3.9) 834,827,744 (35.9) (32.0) 44.0 (33.3) $103.31 (21.1) $45.41 (47.4) 2021 5,460,438 4.9 1,146,590,213 37.3 32.4 57.5 30.9 $124.96 21.0 $71.89 58.3 2022 5,562,756 1.9 1,272,551,729 11.0 9.1 62.7 8.9 $148.83 19.1 $93.28 29.8 Av g Annual
% Change 1.5 % 1.4 % (0.1) % (0.1) % 3.1 % 3.0 %
Source: STR-Costar / Cushman & Wakefield
Republication or other re-use of this data without the express written permission of STR is strictly prohibited U.S. Historical Operating Statistics - 1995 through 2022 % Change Demand % Change Eq. Index Occ % Change A DR % Change RevPA R % Change 163
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER U.S. LODGING INDUSTRY OVERVIEW

CUSHMAN & WAKEFIELD 26

are in the upscale and upper upscale segments. These ar e typically wood-frame, sele ct-service hotels that are more efficient to build and more profitable to operate.

Outdoor-Oriented Lodging a New National Category
Demand for leisure lodging and lower rates has also influenced a new wave of hotel product. Outdoor-oriented lifestyle lodging, often marketed as affordable, is beco ming a new national category. Brands such as Autocamp and Under Canvas offer n on-traditional lodging units in Airstream trailers and luxury tents. Hotel upcycling and sustainable practices are helping to drive this growing segment as well. Neil DiPaola, who founded Autocamp, is opening Field Station hotels in outdoor destinations by redeveloping existing older hotels. Starwood and AJ Capital Partners recently launched Field & Stream, an outdoor-focus ed hotel brand that will also seek to grow with conversions of older hotels. Smaller hotel brands, such as Basecamp and LOGE Camps, are establishing market presence in local drive-to outdoor destinations. This expanding segment is part of the evolution of hotels that offer experiences—expanding from room rentals and restaurants to providing activities and events on a regular schedule.

With higher interest rates and construction costs, conversion of older properties pres ents a stronger investment premise than new building in many markets. Hilton’s new brand Spark, IHG’s Voco, and Best Western’s Vib are all actively promoting their conversion programs. New hotel construction is still expected to be modest over the next few years.

Segmentation Changes—Permanent or Temporary?
2022 was a year of recovery for many hotel markets across the U.S., and the trend is anticipated to continue in 2023. While revenue per available room (RevPAR) forecasting is unanimously positive from market participants and industry experts, the strength of the gains varies widely. As recently noted by Citibank, RevPAR outlooks from leading industry consultants ranged considerably. STR mode stly raised its 2023 forecast outlook to +3.7% (from +3.4%) with Lodging Analytics Consulting Research (LARC) at 6.8% RevPAR growth. These expectations reflect a slower recovery pattern than in 2022, framed by differ ing views of a potential recession and a general caution after three years of unexpected impacts from the pandemic.

The pandemic effects have been wide-ranging, from the init ial government responses that halted travel and then provided financial assistance—some of which was spent on tr avel—to challenges in the labor market. The shifts in hotel demand patterns are likely to be the longest lasting. By the summer of 2020, leisure travel boomed for outdoor destinations, particularly from drive-to travelers. Downtown markets depe ndent on transient business and large- group demand faltered with corporate restrictions and t he expansion of remote work. With a moderated business travel sector, secondary sources of demand prior to 2020—are being competit ively pursued including retirees, remote workers, construction and infrastructure crews, and sports teams. These hotel users have been particularly beneficial to lower-rated properties. While many participan ts are anticipating higher room rates in 2023, some market participants are concerned that the lower level of business travelers could stagnate rates.

Evolving Effects of Remote Work
Remote work and return-to-office patterns are still evolving. With fewer employees at office work sites, hotel use has also changed, particularly for urban properties. Mid-week transient business demand in urban markets is still constrained. Virtual conference calls and meetings have become commonplace for everyday interactions, especially if an airline flight can be avoided. Just as drive-to leisure was the first segment to return in 2020, regional drive-to business trips are increasing. On the bright side, the use of group events for culture building, training and social engagement proved to be an efficient practice fo r many businesses. The strengthening of group demand may help those urban hotels that relied more heavily on transient business travel prior to the pandemic. Knowland, a provider of meeting market data and solutions, anticipates that on a national basis, this segment of the industry will be fully recovered to 2019 levels by 2023.
164
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER U.S. LODGING INDUSTRY OVERVIEW

CUSHMAN & WAKEFIELD 27

While the mid-week national and global airline-based business travel is still well below pre-pandemic levels, the question of whether these shifts are structural is still up for debate.

Improved International Travel
According to the U.S. Travel Association, the restoration of international travel continues to be a critical part of a full U.S. economic recovery. The association does not expe ct international travel to fully recover until 2025. The reduction of vaccination and testing hurdles in 2021 and 2022 have improved inbound visitation, but external circumstances continue to suppress this segment. The numbe r of international travelers to the U.S. in 2022 was constrained due to the strong dollar, higher global inflation, recession fears, the Russia-Ukraine War, and pandemic- related policies in several countries. The volume of outbound visitation to the U.S. from Europe largely is similar to 2019. Inbound travel from Asia is expected to steadily impr ove in 2023, as China lifted its travel ban at the end of 2022. This shift is especially important for San Francisc o, Hawaii and other West C oast hotel markets that have accommodated most of this demand.

Top 25 Markets
The top 25 markets, as defined by CoStar, continue to show varied performance. Leisure-driven destinations remain stronger performers, while urban areas dependent on bu siness, convention and inbound international visitation remain below 2019 revenue levels. The following chart compares the performance of these markets between 2019 and 2022, ranked from smallest to largest percentage change.

By mid-year 2022, eight of the 25 markets had RevPAR that was at or above 2019 levels, but that number increased to 15 by the end of the year. Of the remaining 10 markets, eight achieved Rev PAR levels within 5% of their 2019 levels. San Francisco is in the middle of a perfect storm of turmoil, including the cost of debt, tech companies; a challenging perspective of social conditions; record high office and retail vacancies; and lagging convention attendance and limitations on its inbou nd Asian visitation. It continues to be the worst performing of the top 25 markets. Once a perpetual top-three hotel market prior to the pandemic, the city’s recovery is well eclipsed by the improvement of most of the other markets.
165
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER U.S. LODGING INDUSTRY OVERVIEW

CUSHMAN & WAKEFIELD 28

Other Impacts on Lodging Performance
Many of the issues resulting from the pandemic remain top of mind for the industry.  Labor issues remain challenging. Hotels are still struggling with a shorta ge of workers, particularly in the culinary department. The hospitality sector has 500,000 fewer workers relative to 2020 levels. An aging population, many of whom are retiring earlier than expected since the pandemic, have vacated traditional white- collar jobs. Although the pay may be lower, hospitality work ers are seeing opportunity in these types of jobs, with benefits and traditional work hours. Hotel payroll costs have soared in order to attract and retain workers,.

Hotel Management reports that hospitality wages have jumped 18% since 2019. Higher insurance costs add to the burden. Hotel operators continue to refine operational structures with fewer employees and to implement efficiency strategies to control costs.
 Cybersecurity investments remain high. Hotel companies, large and small, are receptacles of extensive personal information and continue to be targeted at many levels.  Inflation has declined but is still high. Despite higher revenues, the increased costs of supplies and services continue to stress operating profitability. Hotel servic e practices continue to evolve, particularly in the housekeeping and food and beverage departments. Front desk staff are now trained to explain the options for daily housekeeping and the opening and closing hours of outlets. Individual properties are being operated as best serves their guests and operating environments.
 Sustainability practices are expected at all levels of hotels. Eliminating single-use plastics, sheet changes and housekeeping, and providing local food and beverage options are choices that are promoted by operators and sought after by guests.
 With dynamic pricing here to stay for corporate accounts, revenue management technology is critical.

Operators continue to invest in new operating and sale systems to better yield rates and operate efficiently.

Technology expenses will be an ongoing consideration in P&L statements.  Many hotel PIPs postponed in 2020 and 2021, are now in process or being planned for 2023. While supply chain logistics have eased somewhat, costs of materials, FF&E, and labor are higher than prior to the pandemic.

The continued increase in room revenue will be aggressi vely pursued for these hotels to support their return on investment.

Hotel Transaction Overview
Even against the broader context of a rising interest rate environment, hotel transaction activity held up relatively well in 2022, as several large, high-profile portfolio and single-asset transactions helped lift volumes to reach levels consistent with what was recorded in 2021.
166
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER U.S. LODGING INDUSTRY OVERVIEW

CUSHMAN & WAKEFIELD 29

Note that transaction volume data incl udes trades of multi-property portfolios and some large gaming properties.

Brookfield’s $2.8 billion acquisition of Watermark Lodging Trust arose as t he year’s largest portfolio trade, encompassing 25 properties. Several other high-profile properties also traded hands, including the Montage Laguna Beach ($661 million), the Waldorf Asto ria Washington, D.C. ($ 375 million) and the Sheraton New York Hotel & Tower ($375 million). Other large transactions in 2022 included the $1.445 billion purchase of Woodspring Suites Hotels by Blackstone from Brookfield and Summit Hotels and GIC’s $7 66.5 million acquisition of 27 hotels from NewcrestImage.

Notwithstanding the relatively strong volume posted in 2022, brokers reported that numerous deals were withdrawn, re-traded or postponed through 2H 2022 due to the rise in interest rates, resulting in lower-than-expected year-end results.

Despite the relatively tumultuous and volatile interest rate environment, hotel assets remain an attractive investment prospect given strong revenue performance. Investors remain drawn to luxury hotels in high barrier-to-entry markets and destination resort properties. In addition, prevailing hotel acquisition investments are increasingly supported by attractive discounts to replacement costs and by a diminishing supply pipeline. Tr ansactions that include the assumption of well-priced debt have also grown more appealing.

Refinancing has been more challenging, although valuations have improved since the nadir of the pandemic. About $15 billion in hotel CMBS loans are coming due in the next tw o years. Market participants are waiting to see if extensions and forbearance w ill postpone actual refinancing transactions until interest rates moderate. While the timing of debt maturity may cause some owners to sell or recapitalize, the prospect of distressed transactions is not universally expected.

Investor Profile
Private equity buyers, including family offices, generally comprise the largest group of hotel buyers, though that share shifted in 2021 with institutional and equity funds growing more active in the wake of pandemic. Many participants are reportedly first-time hotel buyers, having been attracted to the asset class as an alternative to other investment options.
167
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER U.S. LODGING INDUSTRY OVERVIEW

CUSHMAN & WAKEFIELD 30

Despite the sector’s relatively healthy revenue performance conditions, transaction volume in 2023 is anticipated to moderate amid broader financial market volatility, macr oeconomic uncertainty and rising interest rates. Buyers will continue to have the stronger negotiating position, al though some sellers may not bring their properties to market until the macroeconomic climate is more favorable. Non-institutional property transactions, which can be financed by local and regional banks and SBA loans, are proving to be not as affected as larger institutional grade assets.

Hotels’ strong underlying performance conditions have attracted a wider range of buyers than in prior years, all as traditional hotel buyers on the private side continue to selectively evaluate investment options as financial conditions ease. Private equity remains primed with substantial dry powder, providing further upward lift to projected volumes in the chapter ahead. The current high interest rate environment is viewed as more of a short-term challenge, while confidence abounds for longer-term continued hotel revenue pe rformance. Transaction velocity is anticipated to rebound in the second half of the year.

Conclusions and Outlook
Sentiment is less cautious and more enthusiastic. Since the onset of the pandemic, uncertainty has framed every consideration of performance and investment in t he hotel industry. With the pos itive performance trends in 2022 solidifying, most participants are more confident about continued positive performance. Some pundits are concerned that the poor recovery of business travel may hamper the improving trends. With the removal of most pandemic restrictions and an improvement in outcomes from COVID-19 infections, the uncertainty has moderated, and optimism is more universal.

Consistent with the trends since the onset of the pandemic, nationally the lodging market is trending upward; locally, it varies. The patterns established in 2020 and 2021 supported the robust hotel market recovery in 2022. Strong drive to destination markets, impa cted urban hotels, higher leisure demand and rates, constrained inbound international travel and group meetings as a substitute for individual business travel have shifted the overall performance of many markets. Some markets have thrived with these changes, and others have deteriorated. The individual market segments and performance may or may not be restored to their pre-pandemic structure.

Despite the potential macroeconomic h eadwinds, an improving revenue performance in 2022 has shifted market sentiment. Uncertainty for many hotel market participants has morphed into a cautiously optimistic outlook with the improving performance metrics in the context of overall real estate investment choices. 168
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 31

Lodging Market Supply and Demand Analysis – Sanger Hotel As of the date of inspection, the transient lodging supply in Sanger is extremely limited. The Townhouse Motel is an older exterior corridor motel which has not been directly considered in the analysis. Visitors to Sanger seeking overnight accommodations have to secure rooms in other areas. A La Quinta hotel in Fowler is approximately 9.0 miles to the southwest. Hotels near the Fresno International Airport are approximately 12 miles from Sanger and those in Clovis are approximately 14 miles from Sanger, both to the northwest. According to local stakeholders, most guests of Sanger businesses and institutions either stay by the airport in Fresno or in Clovis as these are the closest hotel clusters to Sanger
The supply analysis was expanded to consider these two most proximate clusters of hotel properties The attraction of the Clovis hotels for Sanger guests is the proximit y to Sanger, and the new and branded hotel inventory. The advantages of the Fresno set of hotels is their proximity to the airport and for some, the lower price points. We have evaluated both sets of hotels as proxies for supply and demand trends in preparing the analysis for a potential hotel Sanger.

Note that the analysis considers these markets, as they are currently performing as benchmarks for the Sanger markets. We did not perform forecasts for either market or consider any changes in supply.

In the analysis of supply and demand, supply signifies an available hotel room and demand is represented by an occupied hotel room – both on a nightly basis.

Supply and Demand Analysis – Clovis Hotel Market
Based on our discussion with Sanger stakeholders, the majority of guests coming to Sanger that need hotel rooms for business, school, sports, and leisure events are staying in Clovis. The following chart shows the hotels in Clovis that have been considered as representative of that market.

Competitive Hotels Profile
Hotel/Location
Year
Opened
Number of
Rooms
Total Meeting
Space (SF )
Meeting Space SF
per Room
Restaurant
Lounge
Swimming Pool
Exercise Facilities
Gift / Sundry Shop
Business Center
Guest Laundry
Comp. Breakfast
1 Courtyard By Marriott Fresno Clovis 2021 123 1,440 11.7 X X X X X X X 1450 Shaw Avenue, Clovis
2 Fairfield Inn & Suites Fresno Clovis 2009 85 572 6.7 X X X X X X 50 Clovis Avenue, Clovis
3 Holiday Inn Express & Suites Clovis Fresno Area 2009 91 420 4.6 X X X X X X 650 W Shaw Avenue, Clovis
4 Hilton Garden Inn Clovis 2009 99 1,200 12.1 X X X X X X X 520 W Shaw Avenue, Clovis
5 Hampton by Hilton Inn & Suites Clovis-Airport North 2009 86 720 8.4 X X X X X X 855 Gettysburg Avenue, Clovis
6 Homewood Suites by Hilton Fresno Airport Clovis 2010 83 812 9.8 X X X X X X 835 Gettysburg Avenue, Clovis
7 La Quinta Inns & Suites Clovis 2019 79 1,200 15.2 X X X X X 1508 Clovis Avenue, Clovis
8 Home2 Suites by Hilton Clovis Fresno 2020 111 None 0.0 X X X X X X 810 Santa Ana Avenue, Clovis
9 TownePlace Suites Fresno Clovis 2020 114 600 5.3 X X X X X X 580 W Shaw Avenue, Clovis
Amenities
169
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 32

The supply includes a mix of limited-service, select-service, and extended-stay hotels and all of the properties are affiliated with national brands. The hotels in the mark et cater to business travelers mid-week and accommodate leisure travelers, and sports and social groups on the weekend. Clovis is also proximate to Fresno State University which is an important driver of local hotel usage. These hotels are also closer to Yosemite than those at the Fresno International Airport. With the exception of the La Quinta, most of the hotels in Clovis that were considered for this analysis were constructed in 2009 and 2010. A new wave development occurred more recently, when two new extended-stay hotels opened in 2020 and the Courtyard opene d in 2021. All of the hotels in the Clovis set offer fewer than 123 rooms and meeting space that ranges between approximately 5 and 15 square feet per room.

The composite performance of this set of hotels has been analyzed with data from STR, a data and analytics specialist is recognized by the lodging industry as the standard source of reliable data, provided operating statistics on the local market as a whole. In reviewing the data compiled by STR, it is important to note some of its limitations.

We have found that because hotels are occasionally drop ped in and out of STR samples, and not every property reports data in a consistent and timely manner, the overa ll quality of this information may be affected. These variables can sometimes skew the data for a particular market. However, we find that STR data is generally relied upon by typical hotel investors. Therefore, it has been considered in this study. The table shown below illustrates the combined operating statistics for the competitive set.

From 2011 to 2019, the supply of hotels has been stable. Occupancy was steadily in the low-80 percent range, constrained by the available inventory and the strong seasonal/weekly trends in demand. With more demand than supply for many nights of the year, the limitations in hotel room inventory has allowed for annual average rate growth.

In 2020 the increase in new supply and the impact of the COVID-19 pandemic resulted in a significant decline in rate and occupancy, although overall demand (occupied room nights) increased almost 12 percent. Since then demand has continued to improve with an increase in 2022 of 69 percent over 2019 levels. Average rate in 2022 was at an historic high, registering an increase from 2019 of over seven percent.

Seasonal Market Trends - Clovis
Based on the data provided by STR, we have evaluated t he seasonal nature of the Clovis hotel market. The occupancy and average daily rates by month and day of week for the most recent twelve months are shown in the following chart.

Year Rooms Supply % Change Demand % Change Occ % Change ADR % Change % Change 2014 444 162,060 ----- 127,542 ----- 78.7% ----- $116.25 ----- $91.49 ----- 2015 444 162,060 0.0% 132,667 4.0% 81.9% 4.0% $123.08 5.9% $100.75 10.1% 2016 444 162,060 0.0% 134,864 1.7% 83.2% 1.7% $128.59 4.5% $107.01 6.2% 2017 444 162,060 0.0% 135,203 0.3% 83.4% 0.3% $131.41 2.2% $109.64 2.5% 2018 444 162,060 0.0% 135,075 -0.1% 83.3% -0.1% $137.83 4.9% $114.88 4.8% 2019 497 181,415 11.9% 147,303 9.1% 81.2% -2.6% $138.54 0.5% $112.49 -2.1% 2020 683 249,257 37.4% 164,840 11.9% 66.1% -18.6% $111.51 -19.5% $73.74 -34.4% 2021 800 291,839 17.1% 233,676 41.8% 80.1% 21.1% $127.29 14.2% $101.92 38.2% 2022 871 317,915 8.9% 248,787 6.5% 78.3% -2.3% $148.63 16.8% $116.31 14.1% Avg Annual Percent
Change 8.8% 8.7% -0.1% 3.1% 3.0%

REPUBLICATION OR OTHER RE-USE OF THIS DATA WITHOUT THE EXPRESS WRITTEN PERMISSION OF STR IS STRICTLY PROHIBITED Market Supply, Demand, Occupancy, ADR and RevPAR
Source: STR
RevPAR
170
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

33CUSHMAN & WAKEFIELD 33

Sunday Monday Tuesday Wednesday Thursday Friday Saturday January 59% 79% 87% 90% 83% 89% 91%
February 55% 71% 84% 89% 89% 93% 87%
March 64% 82% 91% 88% 83% 89% 90%
April 63% 76% 88% 90% 83% 76% 82%
May 59% 82% 93% 90% 79% 75% 74%
June 63% 78% 88% 90% 82% 83% 84%
July 55% 75% 91% 89% 80% 83% 90%
August 49% 70% 76% 75% 72% 83% 73%
September 48% 64% 70% 69% 65% 59% 61%
October 52% 65% 72% 74% 74% 70% 69%
November 65% 83% 93% 94% 90% 92% 85%
December 67% 82% 90% 92% 87% 91% 90%
Low > 0% < 65.0% Average Low 59%
Mid > 65.0% < 75.0% Average Mid 71%
High > 75% < 100.0% Average High 86%
Seasonal Occupancy Analysis - Clovis Hotel Market
171
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 34

The occupancy has been categorized into three tiers based on occupancy levels. The Clovis hotel market is very strong and achieves high occupancies most nights of the year. The slower periods typically occur on Sundays.

The average rate trends are shown in the chart on the following page. 172
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

35CUSHMAN & WAKEFIELD 35

Sunday Monday Tuesday Wednesday Thursday Friday Saturday January $136.58 $147.03 $152.13 $147.32 $149.64 $157.81 $154.32 February $140.18 $149.42 $155.76 $161.33 $165.47 $176.60 $165.50 March $138.20 $153.07 $159.36 $156.22 $156.87 $159.67 $158.91 April $138.87 $152.25 $158.69 $160.35 $155.35 $153.09 $153.19 May $134.75 $146.05 $150.60 $150.46 $143.40 $140.13 $141.36 June $137.78 $149.18 $154.17 $153.40 $149.14 $149.41 $147.73 July $139.51 $146.89 $159.30 $158.10 $149.29 $161.18 $157.84 August $140.02 $149.82 $152.86 $152.43 $146.53 $163.79 $152.24 September $127.19 $137.57 $140.41 $138.28 $136.25 $135.48 $133.58 October $124.12 $127.64 $133.45 $132.79 $130.45 $129.08 $126.49 November $132.47 $147.50 $156.14 $157.13 $153.18 $149.03 $142.81 December $136.32 $142.71 $148.03 $146.59 $147.33 $146.81 $145.15 Low > $0.00 < $145.00 Average Low $135.54
Mid > $145.00 < $150.00 Average Mid $147.65
High > $150.00 < Average High $157.37
Seasonal Average Daily Rate Analysis - Clovis Hotel Market 173
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 36

Unlike the occupancy trends, the average rates on a daily and monthly basis in Clovis show more fluctuations.

Average rates are typically high during mid-week, driven by co mmercial travelers. More sensitively priced leisure demand influences the weekend rates. The annual monthly occupancies and average rates are summarized in the following chart.

Supply and Demand Analysis – Fresno Airport Hotel Market The second location where visitors stay, that was ment ioned by Sanger business owners and stakeholders from the 2019 Market Study, is the Fresno airport hotel market. These hotels are used by Sanger hotel visitors who are more price sensitive or seek the proximity to the airport for ease of transit. The following chart shows the hotels in Fresno that have been considered as representative of that market.

Seasonality - Monthly Analysis
Month Occupancy ADR
Jan - 22 67.3% $129.14
Feb - 22 85.9% $149.12
Mar - 22 85.8% $145.28
Apr - 22 83.1% $150.40
May - 22 80.0% $159.81
Jun - 22 84.0% $155.40
Jul - 22 79.1% $153.36
Aug - 22 79.8% $145.00
Sep - 22 81.2% $149.18
Oct - 22 79.9% $153.71
Nov - 22 71.6% $151.96
Dec - 22 62.2% $135.87
Total 78.3% $148.63
Source: STR
174
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 37

With the exception of the Fairfield Inn and Hampton Inn, the hotels in the Fresno airport market are older and represent a more diverse hotel product inventory. Two of the hotels, the Wyndham Garden and the Piccadilly Inn are relatively larger with a higher ratio of meeting space. These properties attract business travelers during the week and leisure guests on the weekend. The larger properties also accommodate some tour and travel demand.

The composite performance of this set of hotels as sourced from STR is presented below.

From 2011 to 2017, the supply of hotels in this market was stable and occupancy climbed steadily. Between 2018 and 2022, 206 new rooms opened, increasing supply 36 percent. With the new capacity demand was increasing in 2019, as was average rate, driven by demand and the pric ing power of the new Hampton Inn. The impact of the pandemic and additional new supply is evident in the redu ced market performance in 2020. The market started recovering in 2021 and absorption of the new supply c ontinued. By the end of 2022, demand actual declined as new hotels opened outside the competitive set. While occupancy was still below historic levels, the average daily rate was at a record high resulting in a new RevPAR peak.

Competitive Hotels Profile
Hotel/Location
Year
Opened
Number of
Rooms
Total Meeting
Space (SF )
Meeting Space SF
per Room
Restaurant
Lounge
Swimming Pool
Exercise Facilities
Gift / Sundry Shop
Business Center
Guest Laundry
Comp. Breakfast
1 Wyndham Garden Fresno Yosemite Airport 1975 210 10,000 47.6 X X X X X X 5090 E Clinton Way, Fresno
2 Piccadilly Inn Airport 1972 185 5,500 29.7 X X X X X X 5115 E McKinley Avenue, Fresno
3 Best Western Plus Fresno Airport Hotel 1989 106 780 7.4 X X X X X X 1551 N Peach Avenue, Fresno
4 Quality Inn Fresno Yosemite Airport 1989 77 420 5.5 X X X X 5113 E McKinley Avenue, Fresno
5 Fairfield Inn & Suites Fresno Yosemite International Airport 2018 92 1,090 11.8 X X X X X X 1535 N Peach Avenue, Fresno
6 Hampton Inn Fresno Airport 2019 115 572 5.0 X X X X X X 1515 N Peach Avenue, Fresno
Amenities
Year Rooms Supply % Change Demand % Change Occ % Change ADR % Change % Change 2014 579 211,366 ----- 124,861 ----- 59.1% ----- $75.02 ----- $44.32 ----- 2015 579 211,335 0.0% 130,641 4.6% 61.8% 4.6% $79.14 5.5% $48.92 10.4% 2016 579 211,213 -0.1% 124,455 -4.7% 58.9% -4.7% $75.48 -4.6% $44.48 -9.1% 2017 578 210,970 -0.1% 143,936 15.7% 68.2% 15.8% $79.11 4.8% $53.97 21.4% 2018 593 216,582 2.7% 146,310 1.6% 67.6% -1.0% $83.87 6.0% $56.66 5.0% 2019 680 248,115 14.6% 170,131 16.3% 68.6% 1.5% $93.67 11.7% $64.23 13.4% 2020 785 286,525 15.5% 147,760 -13.1% 51.6% -24.8% $86.95 -7.2% $44.84 -30.2% 2021 785 286,525 0.0% 177,487 20.1% 61.9% 20.1% $100.48 15.6% $62.24 38.8% 2022 785 286,525 0.0% 170,402 -4.0% 59.5% -4.0% $112.53 12.0% $66.92 7.5% Avg Annual Percent
Change 3.9% 4.0% 0.1% 5.2% 5.3%

REPUBLICATION OR OTHER RE-USE OF THIS DATA WITHOUT THE EXPRESS WRITTEN PERMISSION OF STR IS STRICTLY PROHIBITED Market Supply, Demand, Occupancy, ADR and RevPAR
Source: STR
RevPAR
175
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 38

Seasonal Market Trends – Fresno Airport Market
Based on the data provided by STR, we have evaluated the seasonal nature of the Fresno Airport hotel market.

The occupancy and average daily rates by month and day of week for the most recent twelve months are shown in the following charts.
176
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

39CUSHMAN & WAKEFIELD 39

Sunday Monday Tuesday Wednesday Thursday Friday Saturday January 39% 52% 59% 60% 58% 67% 72%
February 46% 52% 60% 66% 72% 82% 80%
March 55% 65% 73% 70% 66% 75% 81%
April 55% 60% 69% 72% 71% 70% 76%
May 52% 63% 68% 70% 68% 67% 67%
June 52% 54% 64% 68% 69% 77% 78%
July 46% 54% 67% 72% 67% 77% 79%
August 32% 45% 48% 48% 51% 61% 51%
September 33% 39% 44% 44% 46% 45% 45%
October 36% 46% 54% 54% 50% 46% 47%
November 43% 56% 62% 65% 68% 68% 64%
December 41% 53% 58% 63% 61% 65% 69%
Low > 0% < 65.0% Average Low 52%
Mid > 65.0% < 75.0% Average Mid 63%
High > 75% < 100.0% Average High 78%
Seasonal Occupancy Analysis - Fresno Airport Hotel Market 177
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 40

The occupancy has been categorized into three tiers. The Fresno Airport hotel market has more pronounced peaks and valleys than Clovis. The commercial demand mid-week is largely driven by agricultural and government interests, and construction and service crews. Leisure visitors are accommodated on the weekends and during the summer. Both the Clovis and the Fresno Airport market serve as gateways for visitors to the three nearby national parks: Yosemite, Sequoia, and Kings Canyon.

The average rate trends are shown in the following chart. 178
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

41CUSHMAN & WAKEFIELD 41

Sunday Monday Tuesday Wednesday Thursday Friday Saturday January $103.96 $111.33 $117.31 $116.06 $113.69 $115.62 $113.69 February $102.03 $110.64 $119.12 $118.32 $118.28 $128.87 $121.70 March $102.83 $114.67 $118.14 $116.40 $113.13 $113.93 $115.37 April $102.67 $111.59 $118.52 $117.54 $115.68 $112.78 $111.71 May $100.91 $111.18 $114.82 $116.14 $110.92 $106.43 $104.02 June $103.24 $110.90 $114.92 $115.03 $114.52 $112.91 $107.80 July $100.77 $115.09 $118.81 $118.34 $113.86 $115.76 $113.98 August $101.39 $109.71 $113.03 $115.11 $109.06 $125.99 $107.46 September $96.35 $106.19 $111.86 $108.62 $109.23 $104.05 $101.34 October $97.86 $102.42 $104.78 $103.83 $103.27 $99.21 $99.29 November $102.55 $119.10 $125.30 $126.85 $121.35 $115.72 $112.51 December $104.36 $114.97 $116.13 $116.36 $115.98 $111.86 $111.15 Low > $0.00 < $110.00 Average Low $103.64
Mid > $110.00 < $115.00 Average Mid $112.82
High > $110.00 < Average High $118.47
Seasonal Average Daily Rate Analysis - Fresno Airport Hotel Market 179
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 42

The average rates in the Fresno Airport hotel market are within a relatively narrow range most days of the year.

Average rates are typically high during mid-week, driven by co mmercial travelers. More sensitively priced leisure demand influences the weekend rates. The annual monthly occupancies and average rates are summarized in the following chart.

Comparison of Clovis and Fresno Airport
The Clovis market supports a stronger hotel market performance in both rate and occupancy than the airport market. This can be attributed to its location proximate to Fresno State, more availability of nearby food and beverage options, and a newer range of hotel properties . The newer branded hotel products are also more supportive of higher average rates. The following chart shows the comparative ratios of the two markets.

The Fresno market has been more challenged in the post-pandemic recovery due to the absorption of new supply and its RevPAR is approximately half that of the Clovis market.

Seasonality - Monthly Analysis
Month T-12 Occ. T-12 ADR
Jan - 22 47.2% $101.62
Feb - 22 60.9% $118.32
Mar - 22 58.7% $113.59
Apr - 22 59.2% $113.72
May - 22 64.0% $117.86
Jun - 22 69.2% $113.95
Jul - 22 67.4% $112.92
Aug - 22 65.2% $109.97
Sep - 22 66.3% $111.71
Oct - 22 65.4% $114.12
Nov - 22 48.0% $112.77
Dec - 22 42.5% $105.64
Total 59.5% $112.53
Source: STR
Comparison of Clovis and Fresno Hotel Markets
Average Rate Occupancy RevPAR
Clovis $148.63 78.3% $116.31
Fresno Airport  $112.53 59.5% $66.92
180
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 43

Regional Hotel Demand
In additional to local demand, it is our opinion that a hotel near the intersection of Academy Avenue and State Route 180 would benefit significantly from the proximity to two National Parks. Sequoia and Kings Canyon National Parks.

The drive from Sanger to Sequoia National Park is less than one-and-a-half hours and less than one hour from Kings Canyon National Park. Neither park has conventional lodging more proximate than Fresno (approximately two hours) or Visalia (approximately 45 minutes) as shown in the following illustration provided by Fresno County Economic Development Corporation.

NATIONAL PARK ACCESS

Source: NPS.Gov
Visitation at the two local parks had been at record levels in 2017 and 2018 and declined slightly in 2019. While attendance declined in 2020 with the pandemic, the numbers improved in 2021 and surpassed 2019 levels in 2022.

Sequoia and Kings Canyon parks are popular as drive to destinations for local California residents and are part of tour itineraries which include Yosemite National Park and Death Valley National Park. The national park tours attract domestic and international bus tours. Below are recaps of the Recreational and non-Recreational Visitation trends in Sequoia and King Canyon parks. The data is all sourced from the National Park Service. 181
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 44

%
Change
2010 1,002,979 4,616 0.5%
2011 1,006,583 0.4% 5,974 29.4% 0.6%
2012 1,106,584 9.9% 6,868 15.0% 0.6%
2013 909,274 ‐17.8% 5,017 ‐27.0% 0.6%
2014 1,039,137 14.3% 3,566 ‐28.9% 0.3%
2015 1,097,464 5.6% 5,898 65.4% 0.5%
2016 1,254,688 14.3% 13,151 123.0% 1.0%
2017 1,291,256 2.9% 13,549 3.0% 1.0%
2018 1,229,594 ‐4.8% 17,480 29.0% 1.4%
2019 1,246,053 1.3% 15,987 ‐8.5% 1.3%
2020 796,086 ‐36.1% 10,252 ‐35.9% 1.3%
2021 1,059,548 33.1% 11,633 13.5% 1.1%
2022 1,153,199 14,160 * 1.2%
*2022 Non‐recreational amount estimated
Park Statistics - King's Canyon National Park
%
Change
2010 598,205 21,664 3.6%
2011 566,810 ‐5.2% 21,603 ‐0.3% 3.8%
2012 591,033 4.3% 21,702 0.5% 3.7%
2013 567,544 ‐4.0% 19,733 ‐9.1% 3.5%
2014 502,268 ‐11.5% 27,328 38.5% 5.4%
2015 468,106 ‐6.8% 31,756 16.2% 6.8%
2016 607,479 29.8% 30,638 ‐3.5% 5.0%
2017 692,932 14.1% 28,326 ‐7.5% 4.1%
2018 699,023 0.9% 28,923 2.1% 4.1%
2019 632,110 ‐9.6% 29,261 1.2% 4.6%
2020 415,077 ‐34.3% 17,122 ‐41.5% 4.1%
2021 562,918 35.6% 23,976 40.0% 4.3%
2022 640,986 27,228 * 4.2%
*2022 Non‐recreational amount estimated
Park Statistics - Sequoia National Park
Total Total
Non-Recreational Visitor
% of
Recreational
%
Change
Recreational Visitor
Total Total
Non-Recreational Visitor
% of
Recreational
Recreational Visitor
%
Change
182
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 45

As seen from the data, visitation to Sequoia National Park is almost twice the level of Kings Canyon and it is likely there is some overlap in individual visitors. The data show s extremely positive historical trends, however fires in 2018 have suppressed some activity. Traffic trends in 2019 were mixed. All of the data points showed a decline in 2020 due to constraints from the pandemic but improved in in 2021 and 2022. By the end of 2022, most of locations were at or near pre-pandemic numbers.

Traffic counts for the Sequoia National Park entrances show the majority of visitation is from April through October, although some of the winter months have seen increased traffic in recent years.

TRAFFIC COUNTS – SEQUOIA NATIONAL PARK

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Annual Total 2023 2,055 2,055
2022 2,192 3,365 3,603 6,992 8,252 10,705 15,429 11,453 7,134 5,930 4,704 4,305 84,064 2021 6,031 4,829 4,468 5,761 9,956 13,201 13,778 9,308 1,437 914 1,965 1,503 73,151 2020 3 , 9 2 5 4 , 1 8 10000 1 5 , 6 2 0 1 3 , 8 9 8 3 , 6 1 0 2 , 6 4 6 4 , 6 4 5 2 , 0 5 4 5 0 , 5 7 9 2019 1,518 2,368 4,698 8,130 9,677 15,670 18,246 17,746 13,091 7,226 3,920 4,254 106,544 2018 2,482 3,303 6,232 6,675 11,833 15,979 19,474 16,639 11,999 5,455 4,466 2,579 107,116 2017 3,375 2,470 3,558 6,810 10,427 15,711 24,572 16,141 10,456 4,994 3,597 4,224 106,335 2023 69 69
2022 58 75 66 70 442 1,442 2,340 4,646 3,495 1,966 238 73 14,911 2021 67 77 64 86 510 1,843 2,566 4,519 3,492 1,970 229 64 15,487 2020 6 6 7 3 6 3000 2 , 4 8 1 4 , 5 4 2 3 , 4 9 2 1 , 5 9 0 2 3 5 6 5 1 2 , 6 0 7 2019 65 73 61 99 481 1,763 2,429 4,581 3,502 3,492 218 57 16,821 2018 68 82 54 90 338 1,810 2,030 4,579 3,453 1,535 245 75 14,359 2017 79 75 60 84 1,054 1,883 2,297 4,538 3,520 1,593 236 81 15,500 2023 1,313 1,313
2022 1,289 1,202 2,872 3,365 8,961 11,689 19,507 18,511 11,982 6,949 2,938 1,990 91,255 2021 1,267 1,202 3,617 4,189 11,203 14,322 19,548 18,456 11,963 7,020 2,938 1,900 97,625 2020 1 , 4 2 8 1 , 3 3 90000 1 9 , 5 9 0 1 8 , 5 9 6 1 1 , 9 2 0 5 , 7 5 8 2 , 9 5 0 2 , 0 6 4 6 3 , 6 4 5 2019 1,351 1,273 3,578 4,305 11,202 15,340 19,235 18,533 11,994 11,920 2,972 2,076 103,779 2018 1,284 1,217 3,662 4,228 11,198 14,777 19,399 18,497 11,976 5,539 2,945 1,992 96,714 2017 1,235 1,171 3,705 4,176 11,231 14,301 19,516 18,537 11,790 5,711 3,011 1,919 96,303 2023 274 274
2022 271 397 836 669 629 508 518 443 307 1,239 317 249 6,383 2021 278 442 619 881 812 638 551 448 328 1,136 331 253 6,717 2020 2 5 4 4 0 9 7 5 6000 5 3 6 4 4 7 3 2 8 1 , 3 8 7 3 1 5 2 5 2 4 , 6 8 4 2019 249 368 838 891 707 651 524 424 321 328 342 250 5,893 2018 288 470 929 855 713 619 511 437 321 1,660 330 249 7,382 2017 288 405 781 873 640 658 468 447 299 1,441 302 252 6,854 2023 7,357 7,357
2022 9,367 9,436 14,889 18,960 22,768 22,808 25,534 22,956 21,102 18,466 12,540 9,904 208,730 2021 15,282 12,582 18,535 23,266 22,704 23,545 26,159 21,819 4,167 838 5,847 7,373 182,117 2020 11,347 11,401 5,150 0 0 19,214 26,621 25,596 10,604 12,572 15,725 9,260 147,490 2019 8,268 9,199 15,409 19,303 20,323 20,924 24,261 23,488 21,216 18,376 14,240 11,609 206,616 2018 11,724 11,923 15,445 18,585 21,448 20,854 23,898 21,938 19,678 16,757 12,245 16,239 210,734 2017 9,771 8,645 15,000 21,799 22,750 25,035 29,371 27,229 24,334 18,745 14,561 12,597 229,837 -8.3%

1.0%
-96.5%

14.6%

23.5%
-28.6%
-2.0%
TRAFFIC COUNT AT ASH MOUNTAIN ENTRANCE (Lane 1)
-20.5%
-20.2%

7.7%
-3.4%

TRAFFIC COUNT AT SOUTH FORK
-95.7%
-5.0%

43.4%

53.4%
-38.7%

7.3%

0.4%

0.4%

TRAFFIC COUNT AT LOST GROVE
-98.6%
-6.5%

1.5%
-3.7%

22.8%
-25.1%

17.1%
-7.4%

TRAFFIC COUNT AT LOOKOUT POINT
-99.5%

0.7%

10.7%
-97.6%

14.9%

44.6%
-52.5%
-0.5%
Change From
Previous Year
TRAFFIC COUNT AT ASH MOUNTAIN ENTRANCE (Lane 2)
183
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 46

TRAFFIC COUNT – KINGS CANYON NATIONAL PARK

In addition to the demand from park visitors, we are of the opinion that a hotel location with ready access to State Route 180 would also serve other nearby communities. T he towns of Reedy and nearby Fowler and Selma offer relatively limited hotel inventory and support stable agricultural business. The follow ing map shows the proximate location of these locales.

FRESNO COUNTY COMMUNITIES

Source: Fresno County EDC
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Annual Total 2023 4,921 4,921
2022 8,365 6,183 7,774 13,048 26,864 34,112 43,230 31,758 28,562 19,212 8,024 5,300 232,432 2021 10,149 7,876 7,221 13,552 28,001 35,538 42,282 28,851 10,258 5,483 10,765 6,005 205,981 2020 7,959 7,078 2,952 0 0 22,403 36,247 33,015 15,542 15,068 8,656 4,165 153,085 2019 6,475 4,074 8,445 14,662 19,716 34,083 37,467 40,278 27,763 20,079 10,518 6,847 230,407 2018 7,795 6,449 7,915 14,051 26,492 34,649 45,199 38,784 29,529 19,272 11,711 10,447 252,293 2017 6,992 5,547 8,692 13,846 25,920 36,278 48,040 37,113 29,892 19,603 11,416 8,720 252,059 2023 0 0
2022 0 0 0 493 4,643 5,099 8,241 7,382 6,204 2,370 727 82 35,241 2021 0 0 0 1,243 6,219 6,988 9,137 6,968 6,204 205 587 71 37,622 2020 0 0 0 0 0 0 8,008 7,581 6,387 971 691 60 23,698
2019 0 0 0 1,232 6,623 6,296 8,221 7,786 6,551 1,014 570 57 38,350 2018 0 0 0 1,232 8,015 8,237 10,628 9,987 7,223 1,598 600 0 47,520 -6
58 -38
-19
1893

TRAFFIC COUNT AT CEDAR GROVE
-100
0 13
-97
12 34
-33
-8
Change Fro
Previous Ye

TRAFFIC COUNT AT BIG STUMP
184
HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER LODGING MARKET SUPPLY AND DEMAND ANALYSIS – SANGER HOTEL

CUSHMAN & WAKEFIELD 47

With the exception of the La Quinta hotel in Fowler, bus iness and leisure travelers are also seeking lodging well outside the area.

185

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

CUSHMAN & WAKEFIELD 48

Projection of Occupancy and Average Rate
We have considered the performance of the two markets as the basis for forecasting occupancy and average rate for a proposed hotel in Sanger. Both the Clovis and Fresno Airport markets have different influences on their performance, as does Sanger.

Projection of Occupancy
To estimate the potential occupancy for a hotel in Sanger, we have developed an analysis based on 90 available room nights. The calculations are forecast for a stabilized occupancy. New hotels require a ramp-up period of one to three years to be absorbed and reach stabilization. A ten-year forecast of revenue and expense is included later in the report which includes a projection of the initial years’ performance.

The forecast of occupancy for a hotel near the inte rsection of Academy Avenue and State Route 180 has been developed using a seasonal analysis that considers the performance of the two closest hotel markets in Clovis and the Fresno Airport. As discussed earlier, the two markets have different occupancy profiles but some consistency with strong mid-week commercial demand and the accommodation of leisure guests on weekends and in the summer. We have also considered the findings from our research in the forecast for Sanger.

Three categories of occupancy are established based on the performance of the two proxy hotel markets as shown in the following chart.

Using these occupancy categories, the occupancy by day of the week and by month and the corresponding average occupancies are then applied to develop the occupancy fo recast for a hotel in Sanger. These charts are shown below.

Estimated Occupancy Seasonal Ranges - Proposed Hotel Sanger Average Low 59% Average  Low 52% Low 56%
Average Mid 71% Average  Mid 63% Mid 70%
Average High 86% Average  High 78% High 82%
Baseline for SangerClovis Hotel Market Seasonality Fresno Airport Hotel Market Seasonality 186

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

49CUSHMAN & WAKEFIELD 49

Sunday Monday Tuesday Wednesday Thursday Friday Saturday January Low Low Low Low Low Low Low
February Low Mid Mid Mid Mid Mid Mid
March Low Mid Mid High Mid High High
April Low Mid Mid High High High High
May Low Mid High High High High High
June L owH ighH ighH ighH ighH ighH igh
July Low High High High High High High
August Low Mid High High High High High
September Low Mid Mid High High High High
October Low Mid Mid High High High High
November Low Mid Mid Mid Mid Mid Mid
December Low Low Mid Mid Low Low Low
Seasonal Occupancy Forecast - Sanger Hotel
Sunday Monday Tuesday Wednesday Thursday Friday Saturday January 56% 56% 56% 56% 56% 56% 56%
February 56% 70% 70% 70% 70% 70% 70%
March 56% 70% 70% 82% 70% 82% 82%
April 56% 70% 70% 82% 82% 82% 82%
May 56% 70% 82% 82% 82% 82% 82%
June 56% 82% 82% 82% 82% 82% 82%
July 56% 82% 82% 82% 82% 82% 82%
August 56% 70% 82% 82% 82% 82% 82%
September 56% 70% 70% 82% 82% 82% 82%
October 56% 70% 70% 82% 82% 82% 82%
November 56% 70% 70% 70% 70% 70% 70%
December 56% 56% 70% 70% 56% 56% 56%
Total 56% 70% 73% 77% 75% 76% 76%
Seasonal Occupancy Analysis - Forecast Sanger
187

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

CUSHMAN & WAKEFIELD 50

The average occupancies are applied to the number of days in each month based on 52 weeks a year based on one available hotel room. For example, a 55 percent occu pancy for a month which has four Mondays results in occupancy on Mondays in that month of 220 occupied room nights of 400 available room nights.

188

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

51CUSHMAN & WAKEFIELD 51

Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Number
of Weeks
4 January 202 202 202 202 202 202 202 1,411
4 February 202 252 252 252 252 252 252 1,714
4 March 202 252 252 295 252 295 295 1,843
4 April 202 252 252 295 295 295 295 1,886
5 May 252 315 369 369 369 369 369 2,411
4 June 202 295 295 295 295 295 295 1,972
5 July 252 369 369 369 369 369 369 2,465
4 August 202 252 295 295 295 295 295 1,929
4 September 202 252 252 295 295 295 295 1,886
5 October 252 315 315 369 369 369 369 2,357
4 November 202 252 252 252 252 252 252 1,714
5 December 252 252 315 315 252 252 252 1,890
52 Occupied  Nights 2,621 3,259 3,419 3,602 3,496 3,539 3,539 23,477 Available Room Nights 32,760
Estimated Stabilized Occupancy 71.7%
Occupied Nights per Week- Forecast for Sanger Hotel
189

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

CUSHMAN & WAKEFIELD 52

Based on this analysis, we have forecast a stabilized rounded occupancy of 72.0 percent.

The forecast is based on a hypothetical year with four to five weeks per month. Based on the specific year, the number of weeks may shift from month to month. We do not anticipate that this has a material impact on the analysis.

Projection of Average Rate
The same methodology was used to develop a forecast of average rate for a proposed hotel in Sanger as if stabilized in 2022 dollars. Using the seasonal ranges established earlier for the hotel markets in Clovis and Sanger, three seasonal average rate categories were estimated for a hotel in Sanger. The models uses Sanger as the base for the penetration but the result considers both markets. The positioned rate for the Sanger Hotel in each seasonal category is based on an 85 to 90 percent penetration level to the Clovis market as shown below.

The average rate positioning reflects a 90 room new ly constructed nationally branded hotel and an estimated occupancy that is well below the perf ormance of the Clovis ma rket and stronger than the Fresno Airport Market.

Note that that average rate of the Fresno Airport ma rket, although tampered by the impact of the pandemic, increased significantly with the opening of new hotels in 2018 and 2019 and additional inventory outside the competitive set in recent years. New nationally branded properties have been able to achieve rate significantly above the market average. This potential has been considered in the positioning of a newly built hotel in Sanger.

The seasonal estimates for the Sanger hotel are shown in the charts below.

Penetration to Clovis Market
Average Low $135.54 Average Low $103.64 85% Average Low Low $115.21 Average Mid $147.65 Average Mid $112.82 85% Average Mid Mid $125.51 Average High $157.37 Average High $118.47 90% Average High High $141.64 Average Rate Levels ‐ Fresno Airport MarketAverage Rate Levels ‐ Clovis Market Average Rate Estimate ‐ Sanger Estimated Rate Postioning - Sanger Hotel (2022$)
190

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

53CUSHMAN & WAKEFIELD 53

Sunday Monday Tuesday Wednesday Thursday Friday Saturday January Low Mid Mid Mid Mid High High
February Low High High High High High High
March Low High High High High High High
April Low High High High High High High
May Low Mid High High Mid High High
June Low Mid High High Mid Mid Mid
July Low Mid High High Mid Mid Mid
August Low Mid High High Mid High High
September Low Low Low Low Low High High
October Low Low Low Low Low Low Low
November Low Low Low Low Low Low Low
December Low Low Low Low Low Low Low
Seasonal Average Daily Rate Forecast - Sanger Hotel
Sunday Monday Tuesday Wednesday Thursday Friday Saturday January $115.21 $125.51 $125.51 $125.51 $125.51 $141.64 $141.64 February $115.21 $141.64 $141.64 $141.64 $141.64 $141.64 $141.64 March $115.21 $141.64 $141.64 $141.64 $141.64 $141.64 $141.64 April $115.21 $141.64 $141.64 $141.64 $141.64 $141.64 $141.64 May $115.21 $125.51 $141.64 $141.64 $125.51 $141.64 $141.64 June $115.21 $125.51 $141.64 $141.64 $125.51 $125.51 $125.51 July $115.21 $125.51 $141.64 $141.64 $125.51 $125.51 $125.51 August $115.21 $125.51 $141.64 $141.64 $125.51 $141.64 $141.64 September $115.21 $115.21 $115.21 $115.21 $115.21 $141.64 $141.64 October $115.21 $115.21 $115.21 $115.21 $115.21 $115.21 $115.21 November $115.21 $115.21 $115.21 $115.21 $115.21 $115.21 $115.21 December $115.21 $115.21 $115.21 $115.21 $115.21 $115.21 $115.21 Seasonal Average Daily Rate Forecast - Forecast Sanger
191

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

CUSHMAN & WAKEFIELD 54

Average Rate Conclusion
The occupancies developed above are multiplied by the number of occupied nights and then by the average rate to calculate room revenue resulting below.
192

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

55CUSHMAN & WAKEFIELD 55

Seasonal Room Revenue Forecast and Average Daily Rate - Proposed Sanger Hotel Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Average January $23,226 $25,302 $25,302 $25,302 $25,302 $28,554 $28,554 $181,541 $128.64 February $23,226 $35,692 $35,692 $35,692 $35,692 $35,692 $35,692 $237,380 $138.53 March $23,226 $35,692 $35,692 $41,791 $35,692 $41,791 $41,791 $255,677 $138.75 April $23,226 $35,692 $35,692 $41,791 $41,791 $41,791 $41,791 $261,775 $138.81 May $29,032 $39,534 $52,239 $52,239 $46,289 $52,239 $52,239 $323,811 $134.30 June $23,226 $37,031 $41,791 $41,791 $37,031 $37,031 $37,031 $254,934 $129.28 July $29,032 $46,289 $52,239 $52,239 $46,289 $46,289 $46,289 $318,667 $129.28 August $23,226 $31,627 $41,791 $41,791 $37,031 $41,791 $41,791 $259,049 $134.30 September $23,226 $29,032 $29,032 $33,993 $33,993 $41,791 $41,791 $232,857 $123.48 October $29,032 $36,290 $36,290 $42,491 $42,491 $42,491 $42,491 $271,576 $115.21 November $23,226 $29,032 $29,032 $29,032 $29,032 $29,032 $29,032 $197,418 $115.21 December $29,032 $29,032 $36,290 $36,290 $29,032 $29,032 $29,032 $217,740 $115.21 Total $301,933 $410,247 $451,084 $474,443 $439,667 $467,526 $467,526 $3,012,425 $128.31 193

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER PROJECTION OF OCCUPANCY AND AVERAGE RATE

CUSHMAN & WAKEFIELD 56

The forecast is prepared in baseline 2022 dollars. Construction of a limited-service hotel typically requires 12 to 15 months once construction begins. It is difficult to predict the amount of time to secure a site and entitlements and financing as each project is different. The predevelopment period can be extensive.

For the purposes of this analysis, the forecast assu mes that the hotel would open on January 1, 2026 and the projection of revenue and expense that will be set forth later in the report begins on that date. The average rate is prepared in 2022 dollars and is then adjusted to reflect the period when the hotel is expected to be complete and then operating. This calculation is estimated based on expected growth rates as depicted below.

Projection of Room Revenue
Using the forecasted occupancy and rate analysis, a projection of room revenue has been developed showing the estimated ramp up of the hotel as illustrated below.

Projected Projected
Year ADR Growth ADR
Base Year --- $128.31
2023 6.0% $136.01
2024 5.0% $142.81
2025 3.0% $147.10
2026 3.0% $151.51
2027 3.0% $156.06
Stabilized 3.0% $160.74
Subject's Projected ADR - Calendar Year
Room Revenue Forecast - Sanger Hotel
Calendar Year: 2026 2027 Stabilized 2029 2030
Projection Year: 1 2 3 45
Estimated Ramp‐Up
Occupancy 65.0% 71.0% 72.0% 72.0% 72.0%
Occupancy Ramp up Ratio 90% 98%
ADR $151.51 $156.06 $160.74 $165.56 $170.53
Room Revenue $3,235,123 $3,639,762 $3,801,757 $3,915,810 $4,033,284 194

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 57

Forecast of Revenue and Expense and Net Present Value
Methodology
Based on the market for transient accommodations in the hotel’s area, we have forecast future rooms revenue for the proposed hotel in Sanger. In this section of the report, we provide an analysis of the performance of comparable properties, and industry averages, in order to forecast all other revenues and expenses for the proposed hotel in Sanger through a 10-year holding period. The projection begins on January 1, 2023. The proposed hotel in Sanger is projected to reach a stabilized level of operation in year three of the 10-year holding period.

The forecast is converted into an indication of economic or net present value using a discounted cash flow analysis.

The future benefits of income-producing properties, such as hotels and motels, is net income before debt service and depreciation, derived by a projection of income and expense, along with any expected reversionary proceeds from a sale. In the discounted cash flow method, anticipat ed future net income streams and a reversionary value are discounted to provide an opinion of net present value at a chosen yield rate (internal rate of return or discount rate). In this section of the report, we have utilized the discounted cash flow method to value the proposed hotel in Sanger and considered the first year, stabilized year and deflated stabilized direct capitalization rates.

195

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 58

Comparable Analysis – Industry Averages and Comparable Hotels In order to bolster our forecast for the proposed hotel in Sanger, we have analyzed the operating performance of hotel industry averages and various comparable hotels.

Illustrated on the following page are aggregate averages for four selected property descriptive categories from the most recent HOST Report, published by STR.

Those comparative categories that were analyzed include:

A table detailing the operating performance of five comp arable hotels follows the industry averages table. The comparable statements were taken from our in-house database.

Comparables Categories
Affiliation: Chain-Affiliated
Geographic Region: Pacific
Location: Highway
Price Category: Upper Midscale
196

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 59

Income & Expense Industry Averages - Full Service Hotels Chain-Affiliated Pacific Highway Upper Midscale
Ratio to Ratio to Ratio to Ratio to
Sales PAR POR Sales PAR POR Sales PAR POR Sales PAR POR Occupancy 74.5% 80.1% 63.9% 67.9%
Average Hotel Size (Number of Rooms) 312 339 141 206
Average Rate $202.53 $246.92 $128.36 $124.77

REVENUE
Rooms 63.9% $54,931 $202.53 64.7% $72,125 $246.92 62.6% $29,798 $128.36 77.4% $30,801 $124.77 Other Operated Departments 4.2% $3,567 $13.15 5.2% $5,823 $19.94 7.5% $3,583 $15.43 2.5% $986 $3.99 Miscellaneous Income 3.5% $2,995 $11.04 4.5% $4,967 $17.00 2.7% $1,265 $5.45 2.4% $947 $3.84 TOTAL REVENUE 100.0% $85,956 $316.92 100.0% $111,426 $381.47 100.0% $47,607 $205.07 100.0% $39,779 $161.14

DEPARTMENTAL EXPENSES
Rooms 26.3% $14,420 $53.17 27.1% $19,581 $67.04 25.0% $7,437 $32.03 28.7% $8,841 $35.82 Other Departmental Expenses 73.0% $2,604 $9.60 71.2% $4,143 $14.18 77.9% $2,790 $12.02 48.2% $475 $1.92 TOTAL
DEPARTMENTAL EXPENSES 40.1% $34,484 $127.14 41.6% $46,396 $158.84 41.0% $19,508 $84.03 37.5% $14,927 $60.47

UNDISTRIBUTED

OPERATING EXPENSES
Administrative & General 7.9% $6,795 $25.05 7.5% $8,343 $28.56 9.4% $4,468 $19.24 9.2% $3,665 $14.85 Marketing 7.1% $6,109 $22.53 6.4% $7,169 $24.54 7.2% $3,410 $14.69 7.0% $2,780 $11.26 Franchise Fees 1.4% $1,200 $4.43 1.0% $1,110 $3.80 3.6% $1,728 $7.44 3.9% $1,543 $6.25 Utility Costs 2.8% $2,443 $9.01 4.0% $3,061 $10.48 5.6% $2,138 $9.21 5.1% $1,655 $6.70 Property Operations & Maintenance 4.1% $3,499 $12. 90 2.7% $4,429 $15.16 4.5% $2,673 $11.52 4.2% $2,028 $8.21 Information & Telecommunications Systems 1.4% $1,215 $4.48 1.4% $1,519 $5.20 1.6% $780 $3.36 1.3% $505 $2.05

TOTAL UNDISTRIBUTED
OPERATING EXPENSES 24.7% $21,262 $78.39 23.0% $25,631 $87.75 31.9% $15,197 $65.46 30.6% $12,176 $49.33 Management Fee 3.5% $3,025 $11.15 3.3% $3,680 $12.60 3.2% $1,527 $6.58 3.3% $1,322 $5.35 GROSS OPERATING PROFIT 31.6% $27,185 $100.23 32.1% $35,718 $122.28 23.9% $11,374 $48.99 28.5% $11,354 $45.99 Taxes 3.5% $3,050 $11.24 2.8% $3,094 $10.59 2.5% $1,179 $5.08 3.0% $1,211 $4.91 Insurance 0.9% $766 $2.82 1.0% $1,150 $3.94 1.4% $668 $2.88 1.4% $576 $2.33 Reserve for Replacement 2.7% $2,284 $8.42 2.4% $2,653 $9.08 1.8% $836 $3.60 1.4% $568 $2.30

INCOME BEFORE OTHER
FIXED CHARGES 24.5% $21,085 $77.74 25.9% $28,821 $98.67 18.3% $8,690 $37.43 22.6% $8,998 $36.45 Totals may not add due to rounding
SOURCE: THE HOST REPORT 2020, STR, REPUBLICATION OR OTHER RE-USE OF THIS DATA WITHOUT THE EXPRESS WRITTEN PERMISSION OF STR IS STRICTLY PROHIBITED 197

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 60

Income & Expense Comparables - Full Service Hotels
Hotel 1 Hotel 2 Hotel 3 Hotel 4 Hotel 5
Ratio to Ratio to Ratio to Ratio to Ratio to
Sales PAR POR Sales PAR POR Sales PAR POR Sales PAR POR Sales PAR POR Occupancy 79% 79% 76% 80% 79%
Number of Rooms 75-100 150 to 175 50-100 50-75 100-125
Average Rate $139 $157 $167 $128 $131

OPERATING REVENUE
Rooms 98.4% $40,308 $138.99 95.6% $45,043 $156.91 99.0% $46,302 $167.13 97.9% $37,473 $127.85 98.3% $38,104 $131.33 Other Operated Departments 1.6% $637 $2.19 4.4% $2,050 $7.14 1.0% $488 $1.76 2.1% $817 $2.79 1.7% $644 $2.22 TOTAL OPERATING REVENUE 100.0% $40,944 $141.19 100.0% $47,093 $164.05 100.0% $46,790 $168.90 100.0% $38,293 $130.65 100.0% $38,748 $133.55

DEPARTMENTAL EXPENSES
Rooms 24.3% $9,803 $33.80 22.3% $10,067 $35.07 25.6% $11,862 $42.82 27.0% $10,116 $34.51 19.2% $7,303 $25.17 Other Operated Departments 46.1% $294 $1.01 11.0% $225 $0.78 56.9% $278 $1.00 36.7% $301 $1.03 19.2% $124 $0.43 TOTAL DEPARTMENTAL EXPENSES 24.7% $10,096 $34.82 21.9% $10,292 $35.85 25.9% $12,140 $43.82 27.2% $10,417 $35.54 19.2% $7,427 $25.60 DEPARTMENTAL INCOME 75.3% $30,848 $106.37 78.1% $36,801 $128.20 74.1% $34,650 $125.08 72.8% $27,876 $95.11 80.8% $31,321 $107.95

UNDISTRIBUTED

OPERATING EXPENSES
Administrative & General 10.3% $4,216 $14.54 8.1% $3,824 $13.32 7.5% $3,527 $12.73 8.5% $3,263 $11.13 9.6% $3,715 $12.80 Marketing 6.8% $2,795 $9.64 4.8% $2,258 $7.87 7.2% $3,348 $12.09 6.7% $2,551 $8.70 7.8% $3,011 $10.38 Franchise Fees 4.9% $2,016 $6.95 8.7% $4,093 $14.26 4.9% $2,285 $8.25 5.9% $2,265 $7.73 5.9% $2,290 $7.89 Property Operations & Maintenance 4.9% $1,998 $6.89 3.0% $1,397 $4.87 1.0% $452 $1.63 3.9% $1,484 $5.06 4.5% $1,749 $6.03 Utility Costs 4.0% $1,633 $5.63 2.7% $1,281 $4.46 3.4% $1,596 $5.76 5.4% $2,080 $7.10 2.7% $1,029 $3.55 TOTAL UNDISTRIBUTED 30.9% $12,657 $43.64 28.7% $13,535 $47.15 24.0% $11,207 $40.45 30.4% $11,644 $39.73 30.5% $11,793 $40.65

OPERATING EXPENSES
Management Fees 3.0% $980 $3.57 2.3% $1,075 $3.75 0.0% $0 $0.00 0.0% $0 $0.00 2.9% $1,128 $3.89 GROSS OPERATING PROFIT 44.4% $18,191 $62.73 47.1% $22,191 $77.30 50.1% $23,443 $84.63 42.4% $16,232 $55.38 47.4% $18,400 $63.41

FIXED CHARGES
Taxes 3.1% $1,255 $4.33 4.8% $2,249 $7.83 2.9% $1,340 $4.84 2.6% $983 $3.35 3.5% $1,346 $4.64 Insurance 1.0% $411 $1.42 0.5% $212 $0.74 0.6% $265 $0.96 0.8% $301 $1.03 1.3% $503 $1.73 Reserve for Replacement 4.0% $1,638 $5.65 0.0% $0 $0.00 0.0% $0 $0.00 0.0% $0 $0.00 4.0% $1,550 $5.34 NET OPERATING INCOME 36.4% $14,887 $51.34 41.8% $19,730 $68.73 46.6% $21,839 $78.84 39.0% $14,948 $51.00 38.6% $15,001 $51.69

0.117480285 Holiday Inn Express & Suites 0.137
198

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 61

Financial Projections
A summary of the underlying rationale and assumptions used in developing the annual operating performance for the subject hotel is presented in the following text. Fundamental to the opinions of operating results is the assumption of competent and efficient management at the property level, a well-coordinated marketing plan for the hotel, and a well-devised yield management strategy. Am ong the primary responsibilities of management are the maintenance of a quality facility, t he execution of an adequate marketing effo rt, and operating in a cost efficient manner.

General Inflation and Growth Assumptions
The following table provides the historical and forecast annual average CPI in the United States:

The historical average annual CPI from 2000 through 2021 is 2.49 percent according to the U.S. Bureau of Labor Statistics. Inflation jumped to 8.05 percent in 2022. The forecast annual average CPI over the next 10 years according to Moody’s Analytics equates to 2.34 percent. Based on review of historical and forecast Consumer Price Index data, and discussions with market participants, the forecast annual average CPI over the analysis period is estimated to be 4.05 percent in Year 1, and 2.43 percent thereafter.

Our projections incorporate an opinion of general price inflation based upon economic projections, tempered by our observations and expectations derived from historical perspectives both locally and nationally. Accordingly, to portray price level changes, we have assumed an average CPI inflation rate of 3.0 percent per year throughout the 10-year projection period. This assumption is intended only to portray an expected long-term trend in price movements, rather than for a specific interval in time.

Operating Revenues and Expenses during the Holding Period Operating revenues and expenses for the subject are projected using a computer program developed for Cushman & Wakefield. This program was especially designed to reflect the operating characteristics of a hotel property. The computer model is based upon the theory that hotel revenues and expenses have an independent fixed component and a dependent component that varies in proportion to occupancy and the overall use of the facility. An estimate of each revenue and expense line item can be made by calculating the fixed and variable percentage components of an established level of revenue or expense. The fixed component is held constant, while the variable component is adjusted for the future incremental changes in occupancy and utilization levels.

CONSUMER PRICE INDEX - HISTORICAL AND FORECAST
CPI-U (All Urban Consumers- U.S.) - Index: 1982-84 = 100 Year Inflation Rate Year Inflation Rate Year Inflation Rate 2000 3.37% 2011 3.14% 2022 8.05%
2001 2.82% 2012 2.07% 2023* 4.05%
2002 1.60% 2013 1.47% 2024* 2.43%
2003 2.30% 2014 1.62% 2025* 2.14%
2004 2.67% 2015 0.12% 2026* 2.07%
2005 3.37% 2016 1.27% 2027* 2.06%
2006 3.22% 2017 2.13% 2028* 2.11%
2007 2.87% 2018 2.44% 2029* 2.15%
2008 3.81% 2019 1.81% 2030* 2.14%
2009 -0.32% 2020 1.25% 2031* 2.13%
2010 1.64% 2021 4.69% 2032* 2.11%
Source: U.S. Bureau of Labor Statistics; *Forecast- Moody’s Analytics-12/2022 199

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 62

Based on our review of the hotel’s prospective operating performance, as well as our analysis of comparable hotel income and expense statements and industry norms, we ha ve derived base levels of income and expense. The units of comparison include percentage of departmental and/or total revenue, amount per available room, and amount per occupied room. These units of comparison are the basis for calculating the fixed and variable component relationships for each line item.

The table on the following page summarizes the percentage of each line item assumed to be fixed or variable.

These ratios were developed based on discussions with management and are consistent with industry norms. The variable component of each revenue and expense item fluctuates directly with changes in occupancy and/or rate.

After reviewing the U.S. hotel industry averages, and the performance of comparable hotels, we have developed a 10-year projection of income and expense, with the firs t year beginning January 1, 2026. Considering the current state of the competitive hotel market, we believe that the proposed hotel in Sanger will achieve stabilization by January 1, 2028.

The projection of income and expense is intended to refl ect the appraiser’s opinion of how a typical buyer would project the proposed hotel in Sanger's operating results. Depending on the dynamics of the local market, a typical buyer's projection may be adjusted upward or downward. We have attempted to incorporate these considerations into this analysis.

Summary of Fixed and Variable Component for Each Revenue and Expense Revenue or Expense Category
Variability In
Relation To
Revenue
Rooms 0 % 100 % ---
Minor Operated Departments 70 30 Occupanc y
Other Income 70 30 Occupanc y
Expense
Rooms 60 % 40 % Occupanc y
Minor Operated Departments 50 50 Min. Optd. Depts.

Undistributed Operating Expenses
Administrative & General 75 % 25 % Total Revenue
Management Fee 0 100 Total Revenue
Marketing 70 30 Total Revenue
Franchise Fees 0 100 Rooms Revenue
Property Operations & Maintenance 70 30 Total Revenue
Utilities 90 10 Total Revenue
Information & Telecommunications Systems 75 25 Total Revenue Fixed Charges
Property Taxes 100 % 0 % Total Revenue
Insurance 100 0 Total Revenue
Reserve for Replacement 0 100 Total Revenue
Percent
Fixed
Percent
Variable
200

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 63

Departmental Revenues
Rooms Revenue
The hotel’s projected rooms revenue is based upon the projected occupancy and average rate analysis detailed previously, and reiterated as follows.

Other Operated Department Revenue
This includes revenue generated from all other operated departments in the hotel. For the proposed hotel in Sanger, this is anticipated to consist of revenue from a market pantry and miscellaneous items. Our analysis for the subject is outlined in the following table.

Departmental Expenses
Departmental expenses are based on expense items that are attributable to a specific profit center.

Room Revenue Forecast - Sanger Hotel
Calendar Year: 2026 2027 Stabilized 2029 2030
Projection Year: 1 2 3 45
Estimated Ramp‐Up
Occupancy 65.0% 71.0% 72.0% 72.0% 72.0%
Occupancy Ramp up Ratio 90% 98%
ADR $151.51 $156.06 $160.74 $165.56 $170.53
Room Revenue $3,235,123 $3,639,762 $3,801,757 $3,915,810 $4,033,284 Other Operated Departments Revenue Analysis
Industry Averages Low High
Ratio to Total Revenue 2.5% 7.5%
Ratio to Rooms Revenue 3.2% 12.0%
Per Occupied Room $3.99 $19.94
Comparable Hotels Low High
Ratio to Total Revenue 1.0% 4.4%
Ratio to Rooms Revenue 1.1% 4.6%
Per Occupied Room $1.76 $7.14
Forecast of Other Operated Departments
Revenue
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Revenue 2.0% 1.9%
Ratio to Rooms Revenue 2.0% 1.9%
Per Occupied Room $3.09 $3.04
Per Occupied Room Deflated $2.75 $2.55
201

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 64

Rooms Expense
Rooms department expenses include expenses incurred as a result of the operation of the rooms department in renting guest rooms and public areas. They include such items as salaries and wages, employee benefits, travel agent commissions, contract cleaning, guest transportati on, laundry and dry cleaning, linen, operating supplies, reservations, uniforms, and other costs. Salaries, wages, and employee benefits account for a substantial portion of this category. Although payroll varies somewhat with occupancy (because managers can schedule maids, bell personnel, and house cleaners to work when demand requires), much of a hotel's payroll is fixed. Front desk personnel, public area cleaners, the ho usekeeper, and other supervisors must be maintained at all times. As a result, salaries, wages, and employee benefits are only moderately sensitive to changes in occupancy.

Commissions represent remuneration to travel agents fo r booking rooms. Because these fees are based on a percentage of rooms revenue, they are highly dependent on occupancy and rate. Reservations is a similar expense and can also reflect the cost of a franchise reservation system that typically bills as a percentage of rooms revenue.

China, glassware, and linen; operating supplies; other operating expenses; and uniforms are only slightly affected by changes in volume. The following table outlines our analysis of the hotel’s rooms department expense.

Other Operated Department Expense
This category considers those expenses incurred as a result of generating revenue in the other operated departments. Our analysis is outlined in the following table.

Rooms Expense Analysis
Industry Averages Low High
Ratio to Rooms Revenue 25.0% 28.7%
Per Occupied Room $32.03 $67.04
Comparable Hotels Low High
Ratio to Rooms Revenue 19.2% 27.0%
Per Occupied Room $25.17 $42.82
Forecast of Rooms Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Rooms Revenue 24.3% 22.8%
Per Occupied Room $36.81 $36.66
Per Occupied Room Deflated $32.70 $30.70
202

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 65

Undistributed Operating Expenses
Undistributed operating expenses are costs borne by the ent ire operation and not attributable to any one specific department or profit center.

Administrative and General
The administrative and general expense line item accounts for expenses related to the management and operation of the hotel property. It includes salaries and wages, employee benefits, cash overages and shortages, credit card commissions, credit and collection, data processing, donations, dues and subscriptions, operating supplies, postage, professional fees, provision for doubtful accounts, security, transportation, travel and entertainment, and other miscellaneous costs. Most administrative and general expenses are relatively fixed. The exceptions are cash overages and shortages; commissions on credit card charges; provision for doubtful accounts, which are moderately affected by the number of transactions or to tal revenue; and salaries, wages, and benefits, which are very slightly influenced by volume. Our analysis of the hotel’s administrative and general expense is outlined in the following table.

Other Operated Departments Expense Analysis
Industry Averages Low High
Ratio to Other Operated Departments Revenue 48.2% 77.9% Per Occupied Room $1.92 $14.18
Comparable Hotels Low High
Ratio to Other Operated Departments Revenue 11.0% 56.9% Per Occupied Room $0.43 $1.03
Forecast of Other Operated Departments Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Other Operated Departments Revenue 40.9% 40.3% Per Occupied Room $1.26 $1.23
Per Occupied Room Deflated $1.12 $1.03
Administrative and General Expense Analysis
Industry Averages Low High
Ratio to Total Sales 7.5% 9.4%
Per Available Room $3,665 $8,343
Comparable Hotels Low High
Ratio to Total Sales 7.5% 10.3%
Per Available Room $3,263 $4,216
Forecast of Administrative & General Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 6.8% 6.2%
Per Available Room $2,478 $2,689
Per Available Room Deflated $2,201 $2,252
203

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 66

Note that some of the comparables do not have an Info rmation & Telecommunication Systems expense line item and these expenses are included the Administrative & General category. We have included a separate Information & Telecommunication Systems expense line item in the forecast.

Management Fee
The projection of income and expense assumes competent management by a professional management company.

We anticipate that upon a sale, a prude nt investor would retain competent management, with fees structured at current market rates. Some companies provide management services alone, while others offer both management services and a brand name affiliation. When a management company has no brand identification, the property owner can often acquire a franchise that provides t he necessary image and recognition. Management fees have typically equated to roughly 2.0 to 5.0 percent of total revenues. Based upon our knowledge of the industry, we are of the opinion that to obtain competent management services for the proposed hotel in Sanger during the long term, a 3.0 percent of total revenues per year management fee expense is appropriate.

Marketing Expenses
Marketing expenses reflect a lodging facility’s costs involving advertising and promotion in order to obtain and retain customers for its products and services. Expenses inclu de salaries and wages, employee benefits, dues and subscriptions, operating supplies, postage, telephone, trade shows, travel and entertainment, advertising and merchandising expenses, other marketing activities, and applicable fees and commissions. The following table outlines our analysis of the proposed hotel in Sanger’s forecasted marketing expense.

Franchise Fee
A franchise affiliation typically provides a hotel property with brand name identification and a supporting reservation system. In addition, a franchisee also provides national and/or international advertising and marketing.

Fees charged for by a hotel franchise company typically include the following: a royalty fee, an advertising/marketing fee, and a reservation fee. According to the standard fees charged for limited-service affiliations, the franchise fees are projected to be 5.50 percent of room revenue per year (please note that these only include royalty fees).

Advertising/marketing fees and reservations fees have been included in marketing expenses and rooms expenses, respectively.

Marketing Expense Analysis
Industry Averages Low High
Ratio to Total Sales 6.4% 7.2%
Per Available Room $2,780 $7,169
Comparable Hotels Low High
Ratio to Total Sales 4.8% 7.8%
Per Available Room $2,258 $3,348
Forecast of Marketing Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 5.7% 5.3%
Per Available Room $2,089 $2,289
Per Available Room Deflated $1,856 $1,917
204

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 67

Property Operations and Maintenance
Property operations and maintenance expenses include salaries and wages, employee benefits, costs of supplies and outside contracts, painting and decorating, rubbish removal, furniture repairs, waste removal, engineering supplies, uniforms, and other costs associated with maintaining the physical plant of the hotel structure. It is important to note for this line item that if a property is incurring property operations and maintenance expenses which are low, then the property is most likely deferring expenditures that will ultimately need to be made, as opposed to saving money. Our analysis of the propos ed hotel in Sanger’s future property operations and maintenance expense is outlined in the following table.

Utilities
A hotel’s utility costs are derived from the expense associated with the heating of water, the heating and cooling of public areas and guestrooms, lighting, cooking, and other energy uses. Costs associated with such utility operations generally include the cost of electricity, fuel, steam, and water. A large portion of a lodging facility’s energy consumption is relatively fixed. Public areas, and corri dors must be continually lighted and climate-controlled, regardless of occupancy. The energy cost of an additional occupied room (i.e., a few hours of light, television, heat, or air conditioning) is minimal. The following table illustrates our analysis of the hotel’s utility expense.

Property Operations and Maintenance Expense Analysis
Industry Averages Low High
Ratio to Total Sales 2.7% 4.5%
Per Available Room $2,028 $4,429
Comparable Hotels Low High
Ratio to Total Sales 1.0% 4.9%
Per Available Room $452 $1,998
Forecast of Property Operations & Maintenance
Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 3.6% 3.4%
Per Available Room $1,333 $1,456
Per Available Room Deflated $1,185 $1,219
Utility Cost Analysis
Industry Averages Low High
Ratio to Total Sales 2.8% 5.6%
Per Available Room $1,655 $3,061
Comparable Hotels Low High
Ratio to Total Sales 2.7% 5.4%
Per Available Room $1,029 $2,080
Forecast of Utility Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 4.0% 3.6%
Per Available Room $1,467 $1,567
Per Available Room Deflated $1,303 $1,312
205

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 68

Information & Telecommunications Systems
This line item was previously included in the Administrative and General category, however the Uniform System of Accounts For The Lodging Industry (Eleventh Revised Edition) called for it to be removed and included in a separate line item under The following table illustrates our analysis of the hotel’s Information & Telecommunications Systems expense.

Gross Operating Profit
For hotels, gross operating profit, alternately known as house profit or income before fixed charges is calculated as all operating revenues less all operating expenses plus fi xed expenses. The gross operating profit ratio to total revenue is a common metric used when comparing one hotel’s performance to another hotel. It is often preferred to the comparison of net operating income ratios as fixed expenses, specifically property taxes and insurance can vary greatly based on location. The hotel’s projected gross operating profit ratio is summarized in the following table.

The forecast of Gross Operating Profit is supported by the market indicators.

Information & Telecommunications Systems Expense Analysis Industry Averages Low High
Ratio to Total Sales 1.3% 1.6%
Per Available Room $505 $1,519
Comparable Hotels Low High
Ratio to Total Sales 0.0% 1.4%
Per Available Room $0 $683
Forecast of Information & Telecommunications
Systems Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 1.0% 1.0%
Per Available Room $378 $411
Per Available Room Deflated $336 $344
Gross Operating Profit
Industry Averages Low High
Ratio to Total Sales 23.9% 32.1%
Per Available Room $11,354 $35,718
Comparable Hotels Low High
Ratio to Total Sales 42.4% 50.1%
Per Available Room $16,232 $23,443
Forecast of Gross Operating Profit
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 45.9% 49.0%
Per Available Room $16,822 $21,067
206

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 69

Fixed Expenses
Fixed expenses includes any expenses that relate to the ownership of the hotel, including property taxes, building and contents insurance, reserve for replacement and any applicable land, building, and equipment rent.

Property Taxes
In California, real and personal property are assessed at 100 percent of market value. A reassessment is triggered upon sale, or major improvement of the property and the sales price becomes the new assessed value. Additionally, it is legally mandated that assessed values cannot increase more than 2.0 percent per year.

Since our analysis assumes a sale of the proposed hotel in Sanger as of the date of value and at the end of a 10- year holding period, property taxes at the property are expected to change. In order to determine the hotel’s future property taxes, we have used an iterative program that mult iplies the economic value of the fee simple interest in the subject by a tax rate. For purposes of this analysis, the tax rate of 1.2302 percent has been utilized. Based on the unrounded market value of the proposed hotel in S anger as determined in this appraisal of $18,044,756 and the tax rate, the hotel’s first year property tax burden has been calculated at roundly $222,000 ($18,044,756 *

1.2302%). In the remaining years, the hotel’s property taxes are forecast to increase at the state allowed rate of 2.0 percent per year.

Note that a sale of the proposed hotel in Sanger at the end of a 10-year holding period would also trigger a reassessment. In order to account for this reassessmen t, we have loaded the terminal capitalization rate used in this analysis with the stabilized tax rate.

Insurance
The insurance expense category consists of the cost of insuring the hotel and its contents against damage or destruction by fire, weather, boiler explosion, plate glass breakage, and so forth. Furthermore, general liability income costs are also included in this category. Over the past several years, insurance costs for many hotels have fluctuated dramatically. Based upon the hotel’s current insurance expenses, industry averages, and our knowledge of typical hotel insurance policies, we have projected the proposed hotel’s insurance expenses as follows.

Reserve for Replacement
Most hotel management agents account for the frequent replacement of furniture, fixtures, and equipment ("FF&E") by establishing a fund commonly referred to as a reserve for replacement, which is generally funded from a hotel’s Insurance Expense Analysis
Industry Averages Low High
Ratio to Total Sales 0.9% 1.4%
Per Available Room $576 $1,150
Comparable Hotels Low High
Ratio to Total Sales 0.5% 1.3%
Per Available Room $212 $503
Forecast of Insurance Expense
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 1.5% 1.4%
Per Available Room $567 $600
Per Available Room Deflated $503 $502
207

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 70

cash flow. In theory, a sufficient amount of money is available to replace FF&E at the end of its useful life. Industry experience indicates that a reserve for replacement of 2. 0 percent to 5.0 percent of total revenue is generally sufficient to provide for the timely replacement of FF&E. We have concluded with a reserve for replacement of 4.0 percent of total revenue per year throughout the projection period. The reserve for replacement is ramped up in the initial years, reflecting the new construction.

Net Operating Income
For hotels, net operating income is calculated as all operating revenues less all operating expenses. The net operating income ratio to total revenue is a common metric used when comparing one hotel’s performance to another hotel. The hotel’s projected net operating income ratios are summarized in the following table.

The anticipated profitability of the proposed hotel is supported by the market data.

Projection of Income and Expense
The following tables depict a detailed forecast of the hotel’s income and expense through the stabilized year and a summary 10-year projection on a fiscal basis beginning Ja nuary 1, 2026. Stabilization is assumed to occur as of January 1, 2028. The statements are expressed in inflated dollars for each fiscal year.

Net Operating Income Analysis
Industry Averages Low High
Ratio to Total Sales 18.3% 25.9%
Per Available Room $8,690 $28,821
Comparable Hotels Low High
Ratio to Total Sales 36.4% 46.6%
Per Available Room $14,887 $21,839
Forecast of Net Operating Income
Year One
(2026)
Stabilized Year
(Stabilized)
Ratio to Total Sales 35.7% 37.6%
Per Available Room $13,055 $16,178
208

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 71

Projection Year: 1 2 3 4
Calendar Year: 2026 2027 Stabilized 2029
Days in Year: 365 365 365 365
Number of Rooms: 90 90 90 90
Rooms Available: 32,850 32,850 32,850 32,850
Occupied Rooms: 21,353 23,324 23,652 23,652
Occupancy: 65.0% 71.0% 72.0% 72.0%
Average Rate: $151.51 $156.06 $160.74 $165.56
RevPAR: $98.48 $110.80 $115.73 $119.20
$ % $ % $ % $ %
(000's) Gross PAR POR (000's) Gross PAR POR (000's) Gross PAR POR (000's) Gross PAR POR

REVENUES
Rooms $3,235 98.0% $35,944 $151.50 $3,640 98.1% $40,444 $156.07 $3,802 98.1% $42,244 $160.75 $3,916 98.1% $43,511 $165.57 Other Operated Departments 66 2.0% $733 3.09 70 1.9% 778 3.00 72 1.9% 800 3.04 74 1.9% 822 3.13 Total Revenues 3,301 100.0% $36,678 154.60 3,710 100.0% 41,222 159.07 3,874 100.0% 43,044 163.79 3,990 100.0% 44,333 168.70

DEPARTMENTAL COSTS
Rooms 786 24.3% 8,733 36.81 837 23.0% 9,300 35.89 867 22.8% 9,633 36.66 893 22.8% 9,922 37.76 Other Operated Departments 27 40.9% 300 1.26 28 40.0% 311 1.20 29 40.3% 322 1.23 30 40.5% 333 1.27 Total Departmental Costs 813 24.6% 9,033 38.08 865 23.3% 9,611 37.09 896 23.1% 9,956 37.88 923 23.1% 10,256 39.02 DEPARTMENTAL INCOME 2,488 75.4% 27,644 116.52 2,845 76.7% 31,611 121.98 2,978 76.9% 33,089 125.91 3,067 76.9% 34,078 129.67 UNDISTRIB. OPERATING EXPENSES
Administrative & General 223 6.8% 2,478 10.44 234 6.3% 2,600 10.03 242 6.2% 2,689 10.23 250 6.3% 2,778 10.57 Marketing 188 5.7% 2,089 8.80 199 5.4% 2,211 8.53 206 5.3% 2,289 8.71 212 5.3% 2,356 8.96 Franchise Fees 178 5.4% 1,978 8.34 200 5.4% 2,222 8.58 209 5.4% 2,322 8.84 215 5.4% 2,389 9.09 Property Operations & Maintenance 120 3.6% 1,333 5.62 126 3.4% 1,400 5.40 131 3.4% 1,456 5.54 135 3.4% 1,500 5.71 Utility Costs 132 4.0% 1,467 6.18 137 3.7% 1,522 5.87 141 3.6% 1,567 5.96 146 3.7% 1,622 6.17 Information & Telecommunications Systems 34 1.0% 378 1.59 36 1.0% 400 1.54 37 1.0% 411 1.56 38 1.0% 422 1.61 Total Undistrib. Operating Expenses 875 26.5% 9,722 40.98 932 25.2% 10,356 39.96 966 24.9% 10,733 40.84 996 25.1% 11,067 42.11

MANAGEMENT FEES
Base Management Fee 99 3.0% 1,100 4.64 111 3.0% 1,233 4.76 116 3.0% 1,289 4.90 120 3.0% 1,333 5.07 Total Management Fees 99 3.0% 1,100 4.64 111 3.0% 1,233 4.76 116 3.0% 1,289 4.90 120 3.0% 1,333 5.07 GROSS OPERATING PROFIT 1,514 45.9% 16,822 70.91 1,802 48.5% 20,022 77.26 1,896 49.0% 21,067 80.16 1,951 48.8% 21,678 82.49

FIXED CHARGES
Property Taxes 222 6.7% 2,467 10.40 226 6.1% 2,516 9.71 231 6.0% 2,566 9.77 236 5.9% 2,618 9.96 Insurance 51 1.5% 567 2.39 52 1.4% 578 2.23 54 1.4% 600 2.28 55 1.4% 611 2.33 Reserve for Replacement 66 2.0% 734 3.09 111 3.0% 1,237 4.77 155 4.0% 1,722 6.55 160 4.0% 1,778 6.76 Total Fixed Charges 339 10.2% 3,767 15.88 390 10.5% 4,330 16.71 440 11.4% 4,889 18.60 451 11.3% 5,007 19.05 NET OPERATING INCOME 1,175 35.7% 13,055 55.03 1,412 38.0% 15,692 60.55 1,456 37.6% 16,178 61.56 1,500 37.5% 16,671 63.44

OPERATING RATIOS
Other Operated Departments/Rooms 2.0% 1.9% 1.9% 1.9%
Franchise Fee/Rooms 5.5% 5.5% 5.5% 5.5%
Detailed Forecast Through Stabilization - Hotel Market Study and Feasibility Analysis - City of Sanger - Sanger, CA 209

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 72

Ten Year Forecast - Hotel Market Study and Feasibility Analysis - City of Sanger - Sanger, CA Projection Year: 1 2 3 4 5 6 7 8 9 10
Calendar Year: 2026 2027 Stabilized 2029 2030 2031 2032 2033 2034 2035 Days in Year: 365 365 365 365 365 365 365 365 365 365
Number of Rooms: 90 90 90 90 90 90 90 90 90 90
Rooms Available: 32,850 32,850 32,850 32,850 32,850 32,850 32,850 32,850 32,850 32,850 Occupied Rooms: 21,353 23,324 23,652 23,652 23,652 23,652 23,652 23,652 23,652 23,652 Occupancy: 65.0% 71.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% 72.0% Average Rate: $151.51 $156.06 $160.74 $165.56 $170.53 $175.64 $180.91 $186.34 $191.93 $197.69 RevPAR: $98.48 $110.80 $115.73 $119.20 $122.78 $126.46 $130.26 $134.16 $138.19 $142.33 $ % $ % $ % $ % $ % $ % $ % $ % $ % $ % (000's) Gross (000's) Gross (000's) Gross (000's) Gross (000's) Gross (000's) Gross (000's) Gross (000's) Gross (000's) Gross (000's) Gross

REVENUES
Rooms $3,235 98.0% $3,640 98.1% $3,802 98.1% $3,916 98.1% $4,033 98.1% $4,154 98.1% $4,279 98.1% $4,407 98.1% $4,539 98.1% $4,676 98.1% Other Operated Departments 66 2.0% 70 1.9% 72 1.9% 74 1.9% 77 1.9% 79 1.9% 81 1.9% 84 1.9% 86 1.9% 89 1.9% Total Revenues 3,301 100.0% 3,710 100.0% 3,874 100.0% 3,990 100.0% 4,110 100.0% 4,233 100.0% 4,360 100.0% 4,491 100.0% 4,625 100.0% 4,765 100.0%

DEPARTMENTAL COSTS
Rooms 786 24.3% 837 23.0% 867 22.8% 893 22.8% 920 22.8% 948 22.8% 976 22.8% 1,005 22.8% 1,036 22.8% 1,067 22.8% Other Operated Departments 27 40.9% 28 40.0% 29 40.3% 30 40.5% 31 40.3% 32 40.5% 32 39.5% 34 40.5% 34 39.5% 36 40.4% Total Departmental Costs 813 24.6% 865 23.3% 896 23.1% 923 23.1% 951 23.1% 980 23.2% 1,008 23.1% 1,039 23.1% 1,070 23.1% 1,103 23.1% DEPARTMENTAL INCOME 2,488 75.4% 2,845 76.7% 2,978 76.9% 3,067 76.9% 3,159 76.9% 3,253 76.8% 3,352 76.9% 3,452 76.9% 3,555 76.9% 3,662 76.9% UNDISTRIB. OPERATING EXPENSES
Administrative & General 223 6.8% 234 6.3% 242 6.2% 250 6.3% 257 6.3% 265 6.3% 273 6.3% 281 6.3% 289 6.2% 298 6.3% Marketing 188 5.7% 199 5.4% 206 5.3% 212 5.3% 218 5.3% 225 5.3% 231 5.3% 238 5.3% 245 5.3% 253 5.3% Franchise Fees 178 5.4% 200 5.4% 209 5.4% 215 5.4% 222 5.4% 228 5.4% 235 5.4% 242 5.4% 250 5.4% 257 5.4% Property Operations & Maintenance 120 3.6% 126 3.4% 131 3.4% 135 3.4% 139 3.4% 143 3.4% 147 3.4% 152 3.4% 156 3.4% 161 3.4% Utility Costs 132 4.0% 137 3.7% 141 3.6% 146 3.7% 150 3.6% 154 3.6% 159 3.6% 164 3.7% 169 3.7% 174 3.7% I n f o r m a t i o n & T e l e c o m m u n i c a t i o n s S y s t e m s3 41 . 0 % 3 61 . 0 % 3 71 . 0 % 3 81 . 0 % 4 01 . 0 % 4 11 . 0 % 4 21 . 0 % 4 31 . 0 % 4 51 . 0 % 4 61 . 0 % Total Undistrib. Operating Expenses 875 26.5% 932 25.2% 966 24.9% 996 25.1% 1,026 25.0% 1,056 25.0% 1,087 25.0% 1,120 25.1% 1,154 25.0% 1,189 25.1%

MANAGEMENT FEES
Base Management Fee 99 3.0% 111 3.0% 116 3.0% 120 3.0% 123 3.0% 127 3.0% 131 3.0% 135 3.0% 139 3.0% 143 3.0% GROSS OPERATING PROFIT 1,514 45.9% 1,802 48.5% 1,896 49.0% 1,951 48.8% 2,010 48.9% 2,070 48.8% 2,134 48.9% 2,197 48.8% 2,262 48.9% 2,330 48.8%

FIXED CHARGES
Property Taxes 222 6.7% 226 6.1% 231 6.0% 236 5.9% 240 5.8% 245 5.8% 250 5.7% 255 5.7% 260 5.6% 265 5.6% I n s u r a n c e 5 11 . 5 % 5 21 . 4 % 5 41 . 4 % 5 51 . 4 % 5 71 . 4 % 5 91 . 4 % 6 01 . 4 % 6 21 . 4 % 6 41 . 4 % 6 61 . 4 % Reserve for Replacement 66 2.0% 111 3.0% 155 4.0% 160 4.0% 164 4.0% 169 4.0% 174 4.0% 180 4.0% 185 4.0% 191 4.0% Total Fixed Charges 339 10.2% 390 10.5% 440 11.4% 451 11.3% 461 11.2% 473 11.2% 484 11.1% 497 11.1% 509 11.0% 522 11.0% NET OPERATING INCOME 1,175 35.7% 1,412 38.0% 1,456 37.6% 1,500 37.5% 1,549 37.7% 1,597 37.6% 1,650 37.8% 1,700 37.7% 1,753 37.9% 1,808 37.8% 210

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 73

Capitalization
Capitalization is defined as the process of converting a series of anticipated future periodic installments of net income into present value. The anticipated net income stream is converted into a value opinion by a rate that attracts capital to purchase investments with similar characterist ics, such as risk, terms and liquidity. The capitalization process takes into consideration the quantity, quality and durability of the income stream in determining which rates are appropriate for valuing the subject hotel.

Discounted Cash Flow Analysis
Discounted cash flow analysis can be used to develop an opinion of present value of an income stream. Periodic cash flows and the projected reversion amount at the end of a holding period are discounted at an appropriate rate.

Our analysis refers to an all-cash purchase. The following text details our analysis.

Reversionary Capitalization
Based upon our knowledge of current investment returns required by typical hotel in vestors, along with factors affecting investment risk specific to the proposed hotel in Sanger, Discount Rate Selection
We have employed a reversionary capitalization rate of 9.23 percent for the proposed hotel in Sanger. As discussed previously, the reversionary capitalization rate of 8.00 percent has been loaded with the stabilized tax rate of 1.2302 percent.

The discount rate is the rate of return which equals the su m of the real return anticipated in the investment plus a change in value and any risk premiums associated with t he specific investment when compared to alternative investments. It is the average annual rate of return nece ssary to attract capital based upon the overall investment characteristics.

The discount rate selection requires the appraiser to interpret the attitudes and expectations of market participants.

Discount rates are partly a function of perceived risks. Risk is a function of general economic conditions and characteristics of the investment. The critical elements of an investment include the quantity and certainty of gross income, operating expenses, and resultant net income over some future time period. Value is a reflection of future income expectations and such elements are risky.

A determination of the proper discount and capitalization rates for the subject involved speaking with investors and brokers of hotel properties throughout the country, discussing investment parameters with other hospitality industry experts, and considering the results of several published investment surveys.

Selection of Applicable Rates of Return
The investor surveys summarized in the following chart have been used in our selection of the appropriate discount and terminal capitalization rates for the subject hotel. 211

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 74

Our analysis of applicable terminal capitalization and discou nt rates for the proposed hotel in Sanger specifically considered the building type and condition, the current local hotel market conditions, estimated future trends in the local and national market for transient accommodations, and current investor considerations and required returns on investment for similar hotel investments.

Investment Considerations
Before determining the appropriate risk rate(s) to apply to the subject, a review of recent market conditions, particularly in the financial markets, is warranted. The following subsection provides review of these trends, ending with a summary of the investment considerations impac ting the subject property. The trends are based upon the appraiser’s market research, discussions with participants in the market, and the relative position of the subject property within its market.

The Commercial Real Estate (CRE) market is driven by investor demand and strong liquidity. We are monitoring the impacts on both factors from the Federal Reserve’s recent and forecast interest rate hikes, inflation, and other macroeconomic factors, which have increased uncertaint y in the financial and CRE markets. Since its onset in March 2020, the COVID-19 pandemic has also had a dramatic effect on both investor demand and liquidity as the market navigated COVID’s actual and perceived impacts. The market perceives that we are near the end of the pandemic. As we have throughout the pandemic, Cushman & Wakefield is closely monitoring the latest developments resulting from the COVID-19 pandemic and re covery, as well as its effects on the subject and its market.

Current Trends and Economic Conditions
Throughout 2022, the U.S. economy wrestled with high inflation and rising interest rates. In response, the Federal Reserve (the Fed) responded aggressively to subdue wage and price pressures as rates surged higher and financial conditions tightened. At the beginning of 2023, we are still in the throes of a bear market as mortgage rates have more than doubled, and credit spreads continue to widen. Nevertheless, the economy continues to display impressive job numbers, unemployment remains low, and inflation appears to be easing.

These market inconsistencies are gi ving mixed signals and causing many to wonder whether there will be a recession this year. While experts are divided on the topic, there is no denying that the economy is slowing down.

Fourth quarter advanced estimates by the Bureau of Economic Analysis, show that gross domestic product (GDP) slowed in the fourth quarter of 2022 to 2.9%; down from 3. 2% in third quarter. Right now, even though there are signs of improvement, inflation remains high by many measures and the Fed is expected to continue to increase Investor Surveys
Avg. Range Avg. Avg.

PWC Real Estate Investor Survey - 4th Quarter 2022
Luxury/Upper-Upscale 6.5% - 11.0% 9.3% 4.0% - 9.5% 7.1% 5.8% - 9.5% 7.7% Full-Service 8.0% - 12.0% 10.0% 5.0% - 9.0% 7.3% 5.0% - 10.0% 8.1% Limited-Service Midscale/Economy 10.0% - 14.0% 11.4% 8.0% - 11.5% 9.8% 8.0% - 12.5% 10.1% Select-Service 10.0% - 14.0% 11.4% 7.0% - 10.0% 8.5% 7.5% - 11.5% 9.1% RERC - 4th Quarter 2022
All Hotels / Average 8.3% - 10.3% 9.5% 6.7% - 9.0% 7.9% 7.2% - 9.5% 8.3% West Region - First Tier¹ 9.0% - 12.5% 10.3% 6.5% - 10.0% 8.3% 7.5% - 10.0% 8.8% West Region - Second Tier² 10.0% - 14.0% 11.4% 8.0% - 12.5% 9.5% 9.0% - 12.5% 10.0% West Region - Third Tier³ 11.0% - 14.5% 12.3% 9.0% - 12.5% 10.3% 9.5% - 13.0% 10.9% 1 - First-tier investment properties are defined as new or newer quality construction in prime to good locations. 2 - Second-tier investment properties are defined as aging, former first-tier properties, in good to average locations. 3 - Third-tier investment properties are defined as older properties with functional inadequacies and/or in marginal locations.

Range Range
Discount Rate Going-In Cap. Rate Terminal Cap. Rate
212

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 75

rates in an effort to bring prices under control. Furthermore, a congressional clash over raising the debt ceiling could ripple out into the financial markets if lawmakers fail to reach a deal.

Ultimately, the U.S. is a consumer led economy, and consumer spending fell 0.2% between November to December and was revised to show a drop of 0.1% between October and November 2022. Further, last year’s holiday sales were sluggish for many retailers and the overall spending figures for the final two months of 2022 were the weakest in two years. As the Fed drives up borrowing rates to slow spending, growth and surging prices, there is a high likelihood of it continuing to impact the consumer which could also lead to a recession.

The following graph displays historical and projected U.S. real GDP percentage change (annualized on a quarterly basis) from first quarter 2016 through fourth quarter 2026:

The current wave of inflation began in 2021, immediately following the pandemic in 2020. Its rise has been largely attributed to various causes, including pandemic-related fiscal and monetary stimulus, shortages in the global supply chain, price gouging, and as of 2022, the Russian in vasion of Ukraine. At the beginning of 2023, inflation appears to be loosening its grip on the economy, although its grip is uneven with some categories faring better than others. For December 2022, the Bureau of Labor Statistics reports (BLS) reported that the Consumer Price Index (CPI) fell 0.1% over November 2022 and 6.5% from the sa me time last year, marking the sixth straight monthly deceleration since its peak in mid-2011. The core CPI (minus food and energy) fell 1.0 percent in December 2022 and eased to 5.7% from 6.0% from the previous month.

In early 2022, the Federal Reserve was holding the federal funds rate at around zero. They were buying billions of dollars of bonds every month to stimul ate the economy, but various measures of inflation kept inching up and reaching 40-year highs. To combat inflation, the Federal Reserve has employed multiple increases to the effective federal funds rate in 2022. This strategy appears be working as the Feds approved the smallest increase since they started to raise rates last March. On February 1, 2023, the central bank announced a quarter-point rate increase, setting its target range at 4.5-4.75%. This is the eighth consecutive increase and is up from near zero a year ago.

The following table displays when the Federal Open Market Committee met, their federal funds rate changes, and their federal funds rate target ranges:
213

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 76

The Effective Federal Funds Rate is an interest rate that calculates the effective median interest rate of overnight federal funds transactions from the previous day and is published daily by the Federal Reserve Bank of New York.

The current effective federal funds rate is now targeted between 4.50% and 4.75%. This rate, and all interest rates, tend to move in the same direction as inflation, however they typically lag because they are also the primary tool used by central banks to manage inflation. Conversely, when inflation is falling and economic growth is slowing, central banks may lower interest rates to stimulate the economy.

The Federal Reserve generally shoots for the dual objective of maximum employment and stable inflation near 2%.

The former objective has been satisfied. For January 2023, non-farm payrolls increased by 517,000, far exceeding the 187,000-market estimate. This pushed the unemployment rate down to 3.4%, the lowest it has been since May 1969. The Fed’s focus on raising interest rates until it is clear inflation is heading back towards target appears to be working. Inflation is moderating, but on the downside, the higher interest rates may affect GDP growth and reverse the employment trend in the coming months.

The following graph compares CPI and Core CPI data (January 2018 – December 2022) with the Federal Funds Rate from (January 2018 – February 2023):

214

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 77

U.S. Real Estate Market Implications
In 2022, real estate investment sales were down over the prior year but were still elevated relative to history. In fact, 2022 marked the second most active year for sales volume over time, according to MSCI Real Estate Capital Analytics. While the year started out on a high note, deal activity slowed consecutively each quarter as uncertainty grew. At the end of the year, total deal volume amounted to $687.8 billion for the five main property types combined (multi-family, office, retail, industrial and hotel). While this is a 14.1% drop over last year, it is still 75% higher than 2020, and 26% higher than 2019. Interestingly, at 4%, the retail sector was the only sector to show an increase of sales relative to 2021.

Typically, fourth quarter is the busiest quarter and has the most deal volume of any quarter as investors rush to deploy capital before year end. Fourth quarter 2022, however, was the weakest of the year – even slower than the pace in first quarter which typically has the least amount traded. Overall, volume was down about 14% for the fourth quarter average in the five years prior to Covid.

The cause for such a unique fourth quarter was the fact that interest rates surged in 2022 and pushed up mortgage costs. The imbalance between higher mortgage costs and still-low cap rates resulted in fewer deals. While cap rates have started to move upward, they are still not on par with interest rates. Until these two find a better equilibrium, deal volume will continue to face downward pressure.

The following graph compares national transaction volume by property type from 2012 through year-end 2022:

According to PricewaterhouseCoopers (PwC) Real Estate Investor Survey, the average overall cap rates saw increases in 30 survey markets, four that held steady , and just one decrease when compared to the previous quarter. Across the board, the average change is a 15-basis-point increase. When comparing cap rates to the same time last year, a few markets stand out. The Chicago office market saw a year-over-year increase of 56 basis points, Los Angeles’s office market jumped 65 basis points, and San Francisco increased 49 basis points over fourth quarter 2021.

Over the next six months, surveyed investors foresee ov erall cap rates increases in 20 markets, while cap rates are expected to hold steady in 9 markets and decrease in one. Average cap rates are expected to remain steadier in Central Business District (CBD) environments, especi ally when compared to their suburban counterparts. This is mostly due to the higher barriers to entry and lack of available land. As such, CBD markets generally retain higher rental rates and occupancy levels.
215

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 78

Given the current economic environment, it is not surprising that many market experts are anticipating cap rates to inch up for most markets and property types. Nevertheless, this change in direction is expected to remain relatively modest in the near term with moderate increases. In an environment with rising finance costs and interest rates; however, this may limit the benefits of leverage for investors seeking new acquisitions.

The following chart displays an overall cap rate analysis of six distinct property classes during third quarter 2022, and compares them to the previous quarter:

According to a recent Moody’s Analytics study, the recent interest rate hikes and upward cap rate movement have put a strain on the Commercial mortgage-backed securiti es (CMBS) market. In third quarter 2022 (latest data available), about $5.5 billion, or 28% of new CMBS issuance suffered negative leverage, meaning the cost of debt exceeds the projected returns on investment. For compar ison, the amount of CMBS exhibiting negative leverage was just 8% last quarter. While jumps were seen across all asset classes, industrial and multifamily experienced the largest by share count at 35.9% and 30.8%, respectively.

Conclusion
The U.S. economy is facing interest rate and inflationary challenges while other measures remain strong. This is causing mixed signals and much speculation about a possi ble recession. The Federal Reserve is taking steps to address inflation by raising interest rates, but this may have negative impacts on consumer spending and economic growth. Despite low unemployment, GDP slowed in the f ourth quarter of 2022 along with consumer spending. As a result of this, investment activity has slowed as investors wait for the market to find its footing.

Selection of Applicable Rates of Return – Conclusion
The surveys show limited-service hotel discount rates ranging from 10.0 percent to 14.0 percent with the averages ranging from 11.4 percent to 11.4 perce nt. Given the unproven location of the proposed hotel in Sanger, the new construction, as well as the growing local market, we utilized a discount rate of 10.0 percent. While this is below the survey averages, it our experience that newly constructed hotels in Northern California typically trade for overall capitalization rates at the lower end of the range of the surveys.

Terminal capitalization rates for limited-service hotels ranged from 8.0 percent to 12.5 percent with averages ranging from 10.1 percent to 10.1 percent. Given the hotel’s expected good quality condition, new construction, and location in a secondary market in No rthern California, we used a terminal capitalization rate of 8.0 percent. The terminal capitalization rate is adjusted by the property ta x rate. This loaded terminal capitalization rate of 9.23 percent is applied to the net operating income before proper ty taxes in the reversion year, as will be shown in the discounted cash flow analysis..
216

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 79

Discounted Cash Flow Model
Our valuation analysis and discounted cash flow model ar e presented on the following page. Incorporated in our model are these assumptions and opinions.

Projection Period: 10 years with sale/ref inancing at beginning of the following year.

Internal Rate of Return: We have utilized a discount rate of 10.0 percent (annually) in this analysis.

Terminal Capitalization Rate: We have utilized a terminal capitalization rate of 9.23 percent in this analysis (including a 8.00 percent terminal rate and a

1.2302 percent tax rate). The terminal capitalization rate is applied to the 11
th year net operating income. We have
deducted 2.0 percent for closing co sts from the projected sale price to determine the reversionary value.

The discounted cash flow analysis indicates a rounded market value of $18,000,000 ($200,000 per room).

Discounted Cash Flow Analysis - Hotel Market Study and Feasibility Analysis - City of Sanger - Sanger, CA ANNUAL

PROJECTION NET OPERATING DISCOUNT PRESENT COMPOSITION CASH ON CASH

YEAR INCOME FACTOR VALUE OF YIELD RETURN

10.00%
2026 $1,175,000 x 0.909091 = $1,068,182 5.92% 6.53%
2027 $1,412,000 x 0.826446 = $1,166,942 6.47% 7.84%
Stabilized $1,456,000 x 0.751315 = $1,093,915 6.06% 8.09% 2029 $1,500,000 x 0.683013 = $1,024,520 5.68% 8.33%
2030 $1,549,000 x 0.620921 = $961,807 5.33% 8.61%
2031 $1,597,000 x 0.564474 = $901,465 5.00% 8.87%
2032 $1,650,000 x 0.513158 = $846,711 4.69% 9.17%
2033 $1,700,000 x 0.466507 = $793,062 4.39% 9.44%
2034 $1,753,000 x 0.424098 = $743,444 4.12% 9.74%
2035 $1,808,000 x 0.385543 = $697,062 3.86% 10.04%
Total Present Value of Cash Flows $9,297,110 51.52% 8.67% Average

REVERSION
2036 $2,137,000 / 9.23% $23,152,201
Less: Cost of Sale @ 2.00% 463,044
Net Reversion $22,689,157
x Discount Factor 0.385543
$8,747,646
Total Present Value of Reversion $8,747,646 48.48%
Total Present Value $18,044,756 100.00%
ROUNDED: $18,000,000
Number of Rooms 90
Estimated Value Per Room $200,000
Year-One Statistics
Room Revenue Multiplier 5.6
Gross Revenue Multiplier 5.5
Going-In Capitalization Rate 6.5%
Stabilized Statistics
Room Revenue Multiplier 4.7
Gross Revenue Multiplier 4.6
Stabilized Capitalization Rate 8.1%
Stabilized Deflated
Room Revenue Multiplier 5.0
Gross Revenue Multiplier 4.9
Stabilized Capitalization Rate 7.6%
217

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FORECAST OF REVENUE AND EXPENSE AND NET PRESENT VALUE

CUSHMAN & WAKEFIELD 80

Direct Capitalization
Direct capitalization is a method used to convert an opinion of a single year’s income expectancy into an indication of value. The single year’s income is typically designed to reflect a proposed hotel in Sanger's stabilized level of operation and revenue potential. The c onversion into a value indication is accomplished in one direct step by dividing the income by an appropriate capitalization rate.

The previously illustrated investor surveys revealed a range of going-in overall rates for hotels are as follows:

The following table illustrates overall capitalization rates for the proposed hotel in Sanger that have been derived based on our opinion of value via the discounted cash flow method. Note that the stabilized year’s net income has been deflated to first projection year dollars at the underlying 3.0 percent inflation rate.

The overall capitalization rates are at the low end of the range reflecting t he new construction and unlikeliness of additional competition. On the whole, the rates are considered appropriate for a hotel such as the proposed hotel in Sanger.

Investor Surveys - Overall Capitalization Rates
Range Avg.

PWC Real Estate Investor Survey - 4th Quarter 2022
Luxury/Upper-Upscale 4.0% - 9.5% 7.1%
Full-Service 5.0% - 9.0% 7.3%
Limited-Service Midscale/Economy 8.0% - 11.5% 9.8%
Select-Service 7.0% - 10.0% 8.5%
RERC - 4th Quarter 2022
All Hotels / Average 6.7% - 9.0% 7.9%
West Region - First Tier¹ 6.5% - 10.0% 8.3%
West Region - Second Tier² 8.0% - 12.5% 9.5%
West Region - Third Tier³ 9.0% - 12.5% 10.3%
1 - First-tier investment properties are defined as new or newer quality construction in prime to good locations. 2 - Second-tier investment properties are defined as aging, former first-tier properties, in good to average locations. 3 - Third-tier investment properties are defined as older properties with functional inadequacies and/or in marginal locations.

Going-In Cap. Rate
Year Overall Capitalization Rate
Year One 6.5%
Stabilized Year 8.0%
Stabilized Year Deflated to Year One 7.6%
$1,374,600
$1,296,000
Implied Overall Capitalization Rates
Net Operating Income
$1,109,000
218

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FEASIBILITY ANALYSIS

81CUSHMAN & WAKEFIELD 81

Feasibility Analysis
The evaluation of the feasibility of the proposed hotel considers the difference between the economic value of the property as complete relative to the estimate cost of development. The economic value of the property was developed earlier in the report. The estimated development cost was prepared using data from limited-service hotel projects in Northern California.

The consultants are not cost estimators and the actual cost s could vary from the estimates. Construction costs in the area are rising rapidly and according to constructi on professionals, budgets from even recently completed projects understate current expectations. We recommend consulting with construction professionals for greater reliability.

We have reviewed recent hotel construction cost comparables in the San Francisco Bay Area shown below.

These projects are in the San Francisco Bay Area. Based on information from MVS (Marshall Valuation Services), compared to Fresno, costs of wood frame construction in Alameda are 5.1 percent lowe r, 3.1 percent higher in Santa Clara County, and 8.8 percent higher in Contra Costs County. Also notes these costs are based on 2019 and 2021 costs. Costs have escalated since then.

The estimated development budget for the proposed hotel in Sanger is shown below.

Note that these costs are estimates only and the actual costs may vary depending on the design and timing of the proposed improvements. The land is estimated based on a typically allocation from hotel development budgets.

Comparable Hotel Costs per Room
Hotel A B C D
Construction Budget Date 2021 2021 2021 2019
Number of Rooms 100 to 125 175 to 200 75 to 100 60 to 80 County Santa Clara Alameda Contra Costa Alameda
Construction Type Modular Traditional Traditional Traditional Location: % of Total % of Total % of Total % of Total
Hard $187,869 76.6% $196,422 76.5% $203,714 86.3% $184,349 73.5% Soft 22,849 9.3% 40,469 15.8% 19,675 8.3% N/A N/A
Working and Preopening 1,658 0.7% N/A N/A 0 0.0% 45,488 18.1% FF&E 18,553 7.6% 19,756 7.7% 12,791 5.4% 21,000 8.4%
Development Fee 14,225 5.8% N/A N/A N/A N/A N/A N/A
Total $245,153 100.0% $256,647 100.0% $236,180 100.0% $250,838 100.0% Estimated Construction Cost - Proposed Hotel Sanger
Item Cost per Room Total Cost
Hard Costs $190,000 $17,100,000
Soft Costs 8% $15,200 $1,368,000
FF&E $18,000 $1,620,000
Total Construction Costs $223,200 $20,088,000
Entrepreneurial Incentive 0% $0 $0
Subtotal without Land $223,200 $20,088,000
Estimated Land Allocation 15% $33,480 $3,013,200
Total With Land $256,680 $23,101,200
Rounded $23,100,000
Source: Cushman & Wakefield
219

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER FEASIBILITY ANALYSIS

82CUSHMAN & WAKEFIELD 82

Using this cost estimate, our opinion of the feasibility based on the recommended improvements is calculated in the following chart.

The analysis is based on the development costs and cons iders an entrepreneurial incentive to the developer to take on the project and allocates a land value. Note that in this scenario, no entrepreneurial incentive has been allocated in the budget. With the increases in construc tion and financing costs, we have seen in the current environment that developers motivated to undertake pr ojects based on their particular investment strategy, anticipate deferring their expected profit until the hotel stabilizes.

For the purposes of determining the potential feasibility, we have developed an estimate of development costs. The estimate is based on figures derived from hotel construction cost data in our files, and is developed consistent with industry practices. However, actual local and regional construction costs may vary significantly from our estimate.

As such, we strongly recommend that the Client obtain estimates from professionals experienced in establishing hotel construction costs. We make no warranties regarding the accuracy of this estimate.

The stated economic gap shown in the analysis is predicated on a number of assumptions including the site’s location, to the number of rooms, to the starting date, and many others. The forecast of occupancy, average rate, and revenue and expense are subject to conditions in place currently and our understanding of the market. While the basis of the analysis is reasonable given the current market conditions, any changes in any of the variables could impact the analysis, findings, and conclusions of the assignment.

As shown in the chart, considering a development profit upon completion of the project would deter the undertaking of the project based on the anticipated economic returns.

Cost
Prospective Market Value upon Completion $18,000,000
less: Estimated Construction Cost $23,100,000
Difference ($5,100,000)
Source: Cushman & Wakefield
Feasibility Analysis
220

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER TRANSIENT OCCUPANCY TAX ANALYSIS

CUSHMAN & WAKEFIELD 83

Transient Occupancy Tax (TOT) Analysis
At the request of the client, we are including an analysis of potential transient occupancy tax for the proposed hotel in Sanger. The transient occupancy tax rate of nearby jurisdictions was researched and is presented below.

The potential TOT generated by the proposed hotel in Sanger is shown in the following chart.

Transient Occupancy Tax Rates
City of Fresno 12.0%
County of Tulare 10.0%
City of Turlock 9.0%
Modesto 9.0%
Merced 10.0%
Forecast of Potential Transient Occupancy Tax (TOT) - Proposed Hotel Sanger ($000) P r o j e c t i o n Y e a r : 123456789 1 0
Calendar Year: 2026 2027 Stabilized 2029 2030 2031 2032 2033 2034 2035 Room Revenues $3,235 $3,640 $3,802 $3,916 $4,033 $4,154 $4,279 $4,407 $4,539 $4,676 TOT Tax Rates and Annual Tax
9% $291 $328 $342 $352 $363 $374 $385 $397 $409 $421
10% 324 364 380 392 403 415 428 441 454 468
11% 356 400 418 431 444 457 471 485 499 514
12% 388 437 456 470 484 498 513 529 545 561
Cummulative TOT Amount
9% $291 $619 $961 $1,313 $1,676 $2,050 $2,435 $2,832 $3,240 $3,661 10% 324 688 1,068 1,459 1,863 2,278 2,706 3,147 3,601 4,068 11% 356 756 1,174 1,605 2,049 2,506 2,976 3,461 3,961 4,475 12% 388 825 1,281 1,751 2,235 2,734 3,247 3,776 4,321 4,882 221

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER RECONCILIATION AND FINAL VALUE OPINION

CUSHMAN & WAKEFIELD 84

Extraordinary Assumptions
For a definition of Extraordinary Assumptions please se e the Glossary of Terms & Definitions. The use of extraordinary assumptions, if any, might have affected the assignment results.

The prospective value estimates are based upon market par ticipant attitudes and perceptions existing as of the effective date of our appraisal, and assumes the subject property is completed and/or ac hieves stabilization as of our prospective date. We assume no material change in overall market conditions between the date of inspection and effective date of value, except for those identified within the report. It is assumed that the proposed improvements are constructed in a quality manner as described in the report. If the design, cost, or quality differs from that which has been considered herein, the value conclusions could be impacted accordingly. Any undue delay in the construction time line could materially impact the value conclusion reported herein.

Hypothetical Conditions
For a definition of Hypothetical Conditions please see the Glossary of Terms & Definitions. The use of hypothetical conditions, if any, might have affected the assignment results.

This appraisal does not employ any hypothetical conditions. 222

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ASSUMPTIONS AND LIMITING CONDITIONS

CUSHMAN & WAKEFIELD 85

Assumptions and Limiting Conditions
"Report" means the appraisal or consulting report and conclusion s stated therein, to which t hese Assumptions and Limiting Conditions are annexed.
"Property" means the subject of the Report.
"C&W" means Cushman & Wakefield, Inc. or its subsidiary that issued the Report. "Appraiser(s)" means the employee(s) of C&W who prepared and signed the Report.

The Report has been made subject to the following assumptions and limiting conditions:
 No opinion is intended to be expressed and no responsibility is assumed for the legal description or for any matters that are legal in nature or require legal expertise or specialized knowledge beyond that of a real estate appraiser. Title to the Property is assumed to be good and marketable and the Property is assumed to be free and clear of all liens unless otherwise stated.

No survey of the Property was undertaken.
 The information contained in the Report or upon which the Report is based has been gathered from sources the Appraiser assumes to be reliable and accurate. The owner of the Property may have provided some of such information. Neither the Appraiser nor C&W shall be responsible for the accuracy or completeness of such information, including the correctness of estimates, opinions, dimensions, sketches, exhibits and factual matters. Any authorized user of the Report is obligated to bring to the attention of C&W any inaccuracies or errors that it believes are contained in the Report.  The opinions are only as of the date stated in the Report. Changes since that date in external and market factors or in the Property itself can significantly affect the conclusions.  The Report is to be used in whole and not in part. No part of the Report shall be used in conjunction with any other analyses.

Publication of the Report or any portion thereof without the prior written consent of C&W is prohibited. Reference to the Appraisal Institute or to the MAI designation is prohibited. Except as may be otherwise stated in the letter of engagement, the Report may not be used by any person(s) other than the party(ies) to whom it is addressed or for purposes other than that for which it was prepared. No part of the Report shall be conveyed to the public through advertising, or used in any sales, promotion, offering or SEC material without C&W's prior written consent. Any authorized user(s) of this Report who provides a copy to, or permits reliance thereon by, any person or entity not authorized by C&W in writing to use or rely thereon, hereby agrees to indemnify and hold C&W, its affiliates and their respective shareholders, directors, officers and employees, harmless from and against all damages, expenses, claims and costs, including attorneys' fees, incurred in investigating and defending any claim arising from or in any way connected to the use of, or reliance upon, the Report by any such unauthorized person(s) or entity(ies).
 Except as may be otherwise stated in the letter of engagement, the Appraiser shall not be required to give testimony in any court or administrative proceeding relating to the Property or the Appraisal.  The Report assumes (a) responsible ownership and competent management of the Property; (b) there are no hidden or unapparent conditions of the Property, subsoil or structures that render the Property more or less valuable (no responsibility is assumed for such conditions or for arranging for engineer ing studies that may be required to discover them); (c) full compliance with all applicable federal, state and local zoning and environmental regulations and laws, unless noncompliance is stated, defined and considered in the Report; and (d) all required licenses, certificates of occupancy and other governmental consents have been or can be obtained and renewed for any use on which the value opinion contained in the Report is based.
 The physical condition of the improvement s considered by the Report is based on vi sual inspection by the Appraiser or other person identified in the
Report. C&W assumes no responsibility for t he soundness of structur al members or for the condition of mechanical equipment, plumbing or electrical components.  The forecasted potential gross income referred to in the Report may be based on lease summaries provided by the owner or third parties. The Report assumes no responsibility for the authenticity or completeness of lease information provided by others. C&W recommends that legal advice be obtained regarding the interpretation of lease provisions and the contractual rights of parties.
223

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ASSUMPTIONS AND LIMITING CONDITIONS

CUSHMAN & WAKEFIELD 86

 The forecasts of income and expenses are not predictions of the future. Rather, t hey are the Appraiser's best opinions of current market thinking on future income and expenses. The Appraiser and C&W make no warranty or representation that these forecasts will materialize. The real estate market is constantly fluctuating and changing. It is not the Appraiser's task to predict or in any way warrant the cond itions of a future real estate market; the Appraiser can only reflect what the investment community, as of the date of the Report, envisages for the future in terms of rental rates, expenses, and supply and demand.
 Unless otherwise stated in the Report, the existence of potentia lly hazardous or toxic materials that may have been used in the construction or maintenance of the improvements or may be located at or about the Property was not considered in arriving at the opinion of value. These materials (such as formaldehyde foam insulation, asbestos insulation and other potentially hazardous materials) may adversely affect the value of the Property. The Appraisers are not qualified to detect such substances. C&W recommends that an environmental ex pert be employed to determine the impact of these matters on the opinion of value.
 Unless otherwise stated in the Report, compliance with the re quirements of the Americans with Disabilities Act of 1990 (ADA) has not been considered in arriving at the opinion of value. Failure to comply with the requirements of the ADA may adversely affect the value of the Property. C&W recommends that an expert in this field be employed.  If the Report is submitted to a lender or investor with the prior approval of C&W, such party should consider this Report as only one factor together with its independent investment considerations and underwriting criteria, in its overall investment decision. Such lender or investor is specifically cautioned to understand all Extraordinary Assumptions and Hypothetical Conditions and the Assumptions and Limiting Conditions incorporated in this Report.  In the event of a claim against C&W or its affiliates or their respective officers or employees or the Appraisers in connection with or in any way relating to this Report or this engagemen t, the maximum damages recoverable shall be the amount of the monies actually collected by C&W or its affiliates fo r this Report and under no circumstances shall any claim for consequential damages be made.
 If the Report is referred to or included in any offering mate rial or prospectus, the Report shall be deemed referred to or included for informational purposes only and C&W, its employees and the Appraiser have no liability to such recipients.

C&W disclaims any and all liability to any party other than the party that retained C&W to prepare the Report.  Any estimate of insurable value, if included within the agreed upon scope of work and presented within this report, is based upon figures derived from a national cost estimating service and is developed consistent with industry practices. However, actual local and regional construction costs may vary signific antly from our estimate and individual insurance policies and underwriters have varied specifications, e xclusions, and non-insurable items. As such, we strongly recommend that the Client obtain estimates from professionals experienced in establishing insurance coverage for replacing any structure. This analysis should not be relied upon to determine insurance co verage. Furthermore, we make no warranties regarding the accuracy of this estimate.
 By use of this Report each party that uses this Report agrees to be bound by all of the Assumptions and Limiting Conditions, Hypothetical Conditions and Extraordi nary Assumptions stated herein.  The estimated operating results presented in this report are based on an evaluatio n of the overall ec onomy, and neither take into account nor make provision for the effect of any sharp rise or decline in local or national economic conditions. To the extent that wages and other operating expenses may advance during the economic life of the property, we expect that the prices of rooms, f ood, beverages, and services will be adjusted to at least offset these advances. We do not warrant that the estimates will be attained, but t hey have been prepared on the basis of information obtained during the course of this study and are intended to reflect the expectations of typical investors.  Appraising hotels is both a science and an art. Although this analysis employs various mathematical calculations to provide value indications, the final estimate is subjective and may be influenced by our experience and other factors not specifically set forth in this report.
 Any distribution of the total value between the land and im provements or between partial ownership interests applies only under the stated use. Moreover, separate allocations between components are not valid if this report is used in conjunction with any other analysis.
224

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ASSUMPTIONS AND LIMITING CONDITIONS

CUSHMAN & WAKEFIELD 87

 This report assumes that the subject will maintain an affiliation with nationally recognized limited service brand. If the subject does not maintain a similar affiliation, it could have a negative impact on the hotel’s market value.  Our financial analyses are based on estimates and assumptions which were developed in connection with this appraisal engagement. It is, however, inevitable that some assumptions will not materialize and that unanticipated events may occur which will cause actual achieved operating results to differ from the financial analyses contained in this report, and these differences may be material. It should be further noted that we are not responsible for the effectiveness of future management and marketing efforts upon which the projected results contained in this report may depend.  Unless otherwise noted, we were not given a soil report to review. However, we assume that the soil’s load-bearing capacity is sufficient to support existing and/or proposed structure(s) . We did not observe any evidence to the contrary during our physical inspection of the property. Drainage appears to be adequate.  Unless otherwise noted, we were not given a title report to review. We do not know of any easements, encroachments, or restrictions that would adversely affect the site’s use. However, we recommend a title search to determine whether any adverse conditions exist.
 Unless otherwise noted, we were not given a wetlands survey to review. If subsequent engineering data reveal the presence of regulated wetlands, it could materially affect property value. We recommend a wetlands survey by a professional engineer with expertise in this field.
 Unless otherwise noted, we observed no evidence of toxic or hazardous substances during our inspection of the site.

However, we are not trained to perform technical environmental inspections and recommend the hiring of a professional engineer with expertise in this field.
 We did not inspect the roof nor did we make a detailed inspection of the me chanical systems. The appraisers are not qualified to render an opinion regarding the adequacy or condition of these component s. The client is urged to retain an expert in this field if detailed information is needed.  By use of this Report each party that uses this Report agrees to be bound by all of the Assumptions and Limiting Conditions, Hypothetical Conditions and Extraordinary Assumptions stated herein.

225

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER CERTIFICATION

CUSHMAN & WAKEFIELD 88

Certification
I certify that, to the best of my knowledge and belief:
 The statements of fact contained in this report are true and correct.  The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.  I have no present or prospective interest in the property that is t he subject of this report, and no personal interest with respect to the parties involved.
 I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.  Our engagement in this assignment was not contingent upon developing or reporting predetermined results.  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.  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 & Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice.  The use of this report is subject to the requirements of the Appraisa l Institute relating to re view by its duly authorized representatives.
 Elaine Sahlins, MAI, CRE, did not make a personal inspection of the property that is the subject of this report.  No one provided significant real property appraisal assistance to the persons signing this report.  We have provided services regarding the proposed hotel in Sanger within the prior three years.  As of the date of this report, Elaine Sahlins, MAI, CRE, has completed the continuing education program for Designated Members of the Appraisal Institute.

Elaine Sahlins, MAI, CRE
Executive Director
California -Certified General Real Estate
Appraiser License No. AG 002987
[email protected]
(415) 773-3531 Office Direct

226

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ADDENDA CONTENTS

CUSHMAN & WAKEFIELD 89

Addenda Contents
Addendum A:  Glossary of Terms and Definitions
Addendum B:  Qualifications of The Appraisers

227

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ADDENDA CONTENTS

CUSHMAN & WAKEFIELD 90

Addendum A:

Glossary of Terms and Definitions
The following definitions of pertinent terms are taken from The Dictionary of Real Estate Appraisal, Sixth Edition (2015), published by the Appraisal Institute, Chicago, IL, as well as other sources.

As Is Market Value
The estimate of the market value of real property in its curr ent physical condition, use, and zoning as of the appraisal date. (Proposed Interagency Appraisal and Evaluation Guidelines, OCC-4810-33-P 20%)
Band of Investment
A technique in which the capitalization rates attributable to co mponents of a capital investment are weighted and combined to derive a weighted-average rate attributable to the total investment.

Cash Equivalency
An analytical process in which the sale price of a transaction with nonmarket financing or financing with unusual conditions or incentives is converted into a price expressed in terms of cash.

Depreciation

1. In appraising, a loss in property value from any cause; the difference between the cost of an improvement on the effective date of the appraisal and the market value of the improvement on the same date. 2. In accounting, an allowance made against the loss in value of an asset for a defined purpose and computed using a specified method.

Ellwood Formula
A yield capitalization method that provides a formulaic solution for developing a capitalization rate for various combinations of equity yields and mortgage terms.

The formula is applicable only to properties with stable or stabilized income streams and properties with income streams expected to change according to the J- or K-factor pattern. The formula is
RO = [YE – M (YE + P 1/Sn¬ – RM) – ΔO 1/S n¬] / [1 + ΔI J] where
RO = Overall Capitalization Rate
YE = Equity Yield Rate
M = Loan-to-Value Ratio
P = Percentage of Loan Paid Off
1/S n¬ = Sinking Fund Factor at the Equity Yield Rate
RM =Mortgage Capitalization Rate
ΔO = Change in Total Property Value
ΔI = Total Ratio Change in Income
J = J Factor
Also called mortgage-equity formula.

Exposure Time

1. The time a property remains on the market. 2. The estimated length of time the 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; a retrospective estimate based on an analysis of past events assuming a competitive and open market. See also marketing time.

Extraordinary Assumption
An assumption, directly related to a specif ic assignment, as of the effective date of the assignment results, which, if found t o be false, could alter the appraiser’s opinions or conclusions.

Comment: Extraordinary assumptions presume as fact otherwise uncertain information abo ut physical, legal, or economic character istics of the proposed hotel in Sanger; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis. 228

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ADDENDA CONTENTS

CUSHMAN & WAKEFIELD 91

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.

Hypothetical Conditions
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 proposed hotel in Sanger; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.

Insurable Value
A type of value for insurance purposes.

Intended Use
The use or uses of an appraiser’s reported appraisal, appraisal review, or appraisal consulting assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment.

Intended User
The client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report by the appraiser on the basis of communication with the client at the time of the assignment.

Leased Fee Interest
A freehold (ownership interest) where the possessory interest has been granted to another party by creation of a contractual la ndlord-tenant relationship (i.e., a lease).

Leasehold Interest
The tenant’s possessory interest created by a lease. See also negative leasehold; positive leasehold.

Market Rent
The most probable rent that a property should bring in a compet itive and open market reflecting all conditions and restrictions of the lease agreement, including permitted uses, use restrictions, expense obligations, term, concessions, renewal and purchase options, and tenant improvements (TIs).

Market Value
As defined in the Agencies’ appraisal regulations, the most probab le price which a property should bring in a competitive and o pen 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 are 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 so ld unaffected by special or creative financing or sales conces sions granted by anyone associated with the sale.1
Marketing Time
An opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal. Marketing time differs from exposure time, which is always presumed to precede the effective date of an appraisal. (Advisory Opinion

1 “Interagency Appraisal and Evaluation Guidelines.” Federal Register 75:237 (December 10, 2010) p. 77472. 229

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ADDENDA CONTENTS

CUSHMAN & WAKEFIELD 92

7 of the Appraisal Standards Board of The Appraisal Foundation and Statement on Appraisal Standards No. 6, “Reasonable Exposure Time in Real Property and Personal Property Market Value Opinions” address the determination of reasonable exposure and marketing time.) See also exposure time.

Mortgage-Equity Analysis
Capitalization and investment analysis procedures that recognize how mortgage terms and equity requirements affect the value of income-producing property.

Prospective Opinion of Value
A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are pr oposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long-term occupancy.

Prospective Value upon Reaching Stabilized Occupancy
The value of a property as of a point in time when all improvements have been physically constructed and the property has been leased to its optimum level of long- term occupancy. At such point, all capital outlays for tenant improvements, leasing commissions, marketing costs and other carrying charges are assumed to have been incurred.

Special, Unusual, or Extraordinary Assumptions
Before completing the acquisition of a property, a prudent purchas er in the market typically exercises due diligence by making customary enquiries about the property. It is normal for a Valuer to make assumptions as to the most likely outcome of this due diligence process and to rely on actual information regarding such matters as provided by the client. Special, unusual, or extraordinary assumptions may be any additional assumptions relating to matters covered in the due diligence process, or may relate to other issues, such as the identity of the purchaser, the physical state of the property, the presence of environmental pollutants (e.g., ground water contamination), or the ability to redevelop the property. 230

HOTEL MARKET STUDY AND FEASIBILITY ANALYSIS - CITY OF SANGER ADDENDA CONTENTS

CUSHMAN & WAKEFIELD 93

Addendum B:

Qualifications of The Appraisers

231

Elaine Sahlins, MAI Executive Director
Valuation & Advisory
Practice Group Member | Hospitality and Gaming
Cushman & Wakefield Western, Inc.

Professional Expertise
Ms. Sahlins is Executive Director in the Hospitality and Gaming practice of Cushman & Wakefield where she provides appraisal and consulting services for hotels and casinos. Ms. Sahlins specializes in the analysis of complex hospitality assets including new development, shared-ownership and gaming properties. With over 25 years of experience, Ms. Sahlins has appraised thousands of hotel and gaming properties.

A seasoned appraiser and consultant, Ms. Sahlins has performed valuations and market and feasibility studies of hotel and gaming properties throughout the United States. Previously a Managing Director of HVS in the San Francisco Office and a Senior Review Appraiser at Bank of America, Ms. Sahlins began her hotel real estate career in acquisitions at VMS Realty in Chicago.

Ms. Sahlins’ appraisal and consulting projects span all types of hospitality and casino properties including select- and full-service hotels, destination resorts and gaming properties. She performs assignments for lenders, developers, attorneys, management companies and owners relating to financing, feasibility and other real estate issues. Ms. Sahlins is a regular presenter at real estate conferences in California. The author of numerous articles relating to hotel and gaming real estate, she has prepared and published surveys of hotel development costs since 1998.

Memberships, Licenses, Professional Affiliations and Education  Designated Member, Appraisal Institute (MAI #359228). As of the current date, Elaine Sahlins, MAI has completed the requirements of the continuing education program of the Appraisal Institute.
 Member, Counselors of Real Estate (CRE Designation)
 Certified General Real Estate Appraiser in the following states:
 Alaska – 108527
 California – AG002987
 Colorado – CG.200000567
 Hawaii – 1126
 Nevada – A.0207203-CG
 Oregon – C001237
 Utah – 9467366-CG00
232
CUSHMAN & WAKEFIELD 2

 Washington – 1102338
 Master of Professional Studies, School of Hotel Administration, Cornell University  Bachelor of Arts, Barnard College, Columbia University

233
CUSHMAN & WAKEFIELD 3

ALASKA

CALIFORNIA

234
CUSHMAN & WAKEFIELD 4

COLORADO

HAWAII

235
CUSHMAN & WAKEFIELD 5

NEVADA

OREGON

236
CUSHMAN & WAKEFIELD 6

UTAH

WASHINGTON

237
Fot the Meeting of:

Agenda Item No.:

Septembu 7,2023
!-zCrrYoF SaNGER
RE,PORTTO THtr, CIry COUNCIL
To:

From:

Subject:

Mayor and Councilmembers
David Brletic, Community Development Director
Approval of Second Amended and Restated MOU Between County of Fresno and the City of Sanger (Tax Sharing Agreement).

Attachments: (l) Second Amended and Restated MOU Between County of Fresno and the City of Sanger (Tax Sharing Agreement).
(2) Resolution No. 2023- 5t-, Approval of Second Amended and Restated MOU Between County of Fresno and the City of Sanger (Tax Sharing Agreement).

CONFLICT OF INTEREST:

None known.

RECOMMENDATION:

Staff recommends that the City Council approve Resolution No. 2023-5o approving the Second Amended and Restated Memorandum of Understanding between the County of Fresno and the City of Sanger.

EXECUTIVE SUMMARY:

The 2005 Amended and Restated Memorandum of Understanding ("2005 MOU") is a comprehensive agreement covering development, annexations, sales taxes, property taxes, and other matters, between the City of Sanger and County of Fresno. The 2005 MOU has been in place since 2005, has received a series of four (4) amendments, and expired December 13,2022. City of Sanger staff has worked with County of Fresno staff to make additional changes to the comprehensive agreement set forth in the 2005 MOU. The proposed Second Amended and Restated MOU Between County of Fresno and the'City of Sanger (Tax Sharing Agreement) will extend the agreement for an additional 15 years, through July 1, 2036, with the same terms that have been in place.

Prepated by: David Brletic Approved by:

REVIETV: City Manager: kb Finance: City Attorney:

TYPE OF ITEM:

Consent
Infotmational Item
Action Item
Depattment Report
COUNCIL ACTION: APPROVED DENIED NO ACTION
X
Public Hearing
Matter Initiated by a Council Member
Other
Continued to:x
238
PROJECT BACKGROUND SUMMARY:

December 13,2005, the City of Sanger, and the County of Fresno entered into the 2005 Amended and Restated Memorandum of Understanding (*2005 MOU"). The 2005 MOU is a comprehensive agreement covering development, annexations, sales taxes, property taxes, and other matters. The 2005 MOU served in part as City and County master property tax transfer agreement under subdivision (d) of section 99 of the Revenue and Taxation Code.

The 2005 MOU also included provisions relating to redevelopment and included as a party the former Sanger Redevelopment Agency, which CITY dissolved on February 1,2012, following the State adopted comprehensive legislation, Assembly Bill Xl26 (Stats. 20ll,1st Ex. Sess. Chp. 5), dissolving California redevelopment agencies and prohibiting further redevelopment activities under the California Community Redevelopment Law (former Health and Safety Code Section 33000 et seq.).

Following adoption of the agreement, the 2005 MOU when through the following series of amendments:

1. October 31,2017, the City of Sanger, and County of Fresno executed the First Amendment to the 2005 MOU to address annexations by City of Sanger of substantial sales tax generating uses within the City's Sphere of Influence.

2. April 23, 2019, the City of Sanger, and County of Fresno executed the Second Amendment to the 2005 MOU to address modifications to the Standards of Annexation.

3. November 3,2020, City of Sanger and County of Fresno executed the Third Amendment to the 2005 MOU to accommodate extension of the 2005 MOU for one year from the expiration date of December 13,2020, and to provide additional time for both Parties to complete ongoing negotiations regarding a longer-term extension.

4. November 16,202l,the City of Sanger, and County of Fresno executed the Fourth Amendment to the 2005 MOU to accommodate extension of the 2005 MOU for one year from the expiration date of December 13, 202I, and to provide additional time for both Parties to complete ongoing negotiations regarding a longer-term extension.

The 2005 MOU, as amended, expired December 13,2022. City of Sanger staff has worked with County of Fresno staff to make additional changes to the comprehensive agreement set forth in the 2005 MOU.

The proposed Second Amended and Restated MOU Between County of Fresno and the City of Sanger (Tax Sharing Agreement) will extend the agreement for an additional 15 years, through July l, 2036, with the same terms that have been in place.

REASON FOR RECOMMENDATION:

The proposed Second Amended and Restated MOU Between County of Fresno and the City of Sanger (Tax Sharing Agreement) will extend the agreement for an additional 15 years, through July 1, 2036, with the same terms that have been in place. These terms are similar to most other Cities in Fresno County.

FISCAL IMPACT:

None known.

ALTERNATIVES:

The City Council may choose not to approve ResolutionNo. 2023-_, and direct staff to request specific modification of the Second Amended and Restated MOU Between County of Fresno and the City of Sanger (Tax Sharing Agreement).
239
ACTIONS FOLLOWING APPROVAL:

Following City Council adoption of ResolutionNo. 20n-59,the resolution will be submitted to Fresno County to be included with review and adoption of the Second Amended and Restated Memorandum of Understanding between the County of Fresno and the City of Sanger by Fresno County Board of Supervisors. All required documents will be executed the Mayor, City Manager, City Clerk and City Attorney.
240
1 2
3 4
5 o
7 8
o
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 SECOND AMENDED AND RESTATED

MEMORANDUM OF UNDERSTANDING BETWEEN

THE COUNTY OF FRESNO AND THE CITY OF SANGER

THIS SECOND AMENDED AND RESTATED MEMORANDUM OF UNDERSTANDING (hereinafter "RESTATED MOU') is made and executed this day of _, 2005 by and between the COUNTY OF FRESNO, a political subdivision of the State of California (hereinafter referred to as "COUNTY"), and the City of SANGER, a municipal corporation of the State of California (hereinafter referred to as "C|TY").

WITNESSETH
WHEREAS on December 13 2005 NTY and CITY entered into a comorehensive aoreement coverinq development, annexations. sales taxes. propertv taxes. and other matters. referred to as the 2005 Amended and Restated Memorandum of Understandino ("2005 MOU"): and WHEREAS. the 2005 MOU served in oart as COUNTY's and CITY's master orooertv tax transfer aqreement under subdivision (d) of section 99 of the Revenue and Taxation Code: and WHEREAS the 2005 MOIJ also included relatino to redevelooment and included as a partv the former Sanger Redevelopment Aoencv, which CITY dissolved on Februarv 1. 2012, followino the State adooted comorehensive leois n. Assemblv BillXl 26 (Stats. 2011.1st Ex. Sess.

Chp. 5). dissolvinq California redevelopment aqencies and prohibitino further redevelopment activities under the California Communitv Redevelopment Law (former Health and Safetv Code Section 33000 et seq.): and
WHEREAS. on October 31.2O17 COUNTY and CITY executed a First Amendment to the 2005 MOU to address annexation bv Citv of substantial sales tax qeneratinq uses within the Citv's Sphere of lnfluence, and
WHEREAS. on Aoril 23 2019 COUNTY a CITY executed a Second Amendment to the 2005 MOU to address modifications to the Standards of Annexation: and WHERFAS o Novemher ? )O)O eOll and CITY executed a Third Amendment to then 2005 MOU to accommodate extension of the 2005 MOU for one vear from the expiration date of December 13. 2020, and to provide additional time for both Parties to complete onooinq neootiations regardinq a longer-term extension: and
I
241
I
2 3
4 5
6 7
8 I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 WHEREAS. on ber 16. 2021. COUNTY and CITY executed a Fourth Amendment to the 2005 MOU to accommodate extension of the 2005 MOU for one vear from the expiration date of December 13, 2021, and to provide additional time for both Parties to complete onqoinq neootiations reoardinq a lonqer-term extension: and
WHEREAS. the 2005 MOU as ed. is set to exoire December 13,2022. and WHEREAS. COUNTY and CITY desire to make additional chanoes to their comorehensive aqreement set forth in the 2005 MOU. and to the term of their comprehensive aoreement for an additional 15 vears: and
WHEREAS due to the aoe of the 2OO5 OU and the desire to make additional chanoes.

UNTY and ITY h into RESTATED M
on , which superseded and replaced the 2005 MOU: and
WHEREAS the R MOU ex nirecl nd COUNTY and CITY desire to enter a new lono- term MOU.

WHEREAS, COUNTY and CITY wish to work together to develop a fair and equitable approach to tax sharing and the encouragement of sound economic growth; and WHEREAS, in order to encourage economic development and environmentally sound land use planning, it is important that any tax sharing among COUNTY and CITY be determined in advance and that such arrangements not be fiscally detrimental to either COUNTY or CITY; and WHEREAS, COUNTY and CITY recognize the importance of COUNTY and CITY services and are prepared to cooperate in an effort to address COUNTYs and CITYs fiscal issues; and WHEREAS, through annexation CITY provides the opportunity for economic growth and development to support public services for CITY and COUNTY; and WHEREAS, close cooperation between COUNTY and CITY is necessary to maintain the quality of life throughout Fresno County and deliver needed services in the most cost-efficient mannerto all CITY and COUNTY residents; and
WHEREAS, COUNTY recognizes the need for orderly growth within and adjacent to CITY and for supporting appropriate annexations and promoting the concentration of development within CITY; and WHEREAS, CITY recognizes that development within CITY limits may also have the effect of 2 242
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
concentrating revenue-generating activities within CITY rather than in unincorporated areas and that, as a result of Proposition 13 and its implementing legislation, annexation by CITY of unincorporated territory can result in a loss of revenue sources for COUNTY unless there is significant new development activity as a result of annexation; and
WHEREAS, annexation is appropriate where it results in the development of urban uses in response to a cleady demonstrated community demand, and it can be a valuable tool in the physical and economic development of CITY and COUNTY; and
WHEREAS, the parties recognize that COUNTY General Plan Goal LU-G provides that COUNTY will direct urban growth and development within the cities spheres of influence to existing incorporated cities and will ensure that all development in city fringe areas is well planned and adequately served by necessary public facilities and infrastructure and furthers countywide economic development goals; and WHEREAS, the parties recognize that when urban growth and development is directed to cities there is a lost opportunity of development by COUNTY in the unincorporated area and that sharing of local sales and use taxes generated by such development would serve as a tool for the COUNTY to participate in receiving a share of that new revenue; and WHEREAS, it is the interest of the parties to require all new urban development to pay a roughly proportionate share of the cost of urban services and infrastructure created by the development, whether it occurs in the CITY or in the adjacent unincorporated area of the CITY's sphere of influence.

NOW, THEREFORE, COUNTY and CITY hereby agree as follows:

ARTICLE I

DEFINITIONS
Unless the particular provision or context othenruise requires, the definitions contained in this article and in the Revenue and Taxation Code shall govern the construction, meaning, and application of words used in this RESTATED MOU.

1.1 "Base property tax revenues" means property tax revenues allocated by tax rate equivalents to all taxing jurisdictions as to the geographic area comprising a given tax rate area annexed in the fiscal year immediately preceding the tax year in which property tax revenues are apportioned pursuant to this RESTATED MOU, including the amount of State reimbursement of the homeowners'and 3 243
1 2
3 4
5 6
7 8
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 business inventory exemptions.

1.2 "Property tax increment" means revenue from the annual tax increment, as "annual tax increment" is defined in Section 98 of the Revenue and Taxation Code, attributable to the tax rate area for the respective tax year.

1.3 "Substantial development" or "substantially developed" means real property which, prior to annexation, has an improvement value to land value ratio equal to or greater than 1.25.1, as of the lien date in the fiscal year in which the annexation becomes effective under the Cortese-Knox Local Government Reorganization Act, and on and after January 1,2000, the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000.

1.4 "Property tax revenue" means base property tax revenue, plus the property tax increment for a given tax rate area.

1.5 "Tax apportionment ratio" means the tax apportionment ratio of the parties for a given fiscal year and shall be ascertained by dividing the amount determined for each party pursuant to Revenue and Taxation Code Sections 96(a) or 97(a), whichever is applicable, by that party's gross assessed value, and by then dividing the sum of the resulting tax rate equivalents of both parties into each party's tax rate equivalent to produce the tax apportionment ratio.

1.6 "Tax rate equivalent" means the factor derived for an agency by dividing the property tax levy for the prior fiscal year computed pursuant to Section 97 of the Revenue and Taxation Code by the gross assessed value of the real property within the jurisdiction of the agency for the prior fiscal year.

1.7 "Effective Date" shall mean the last date that all the parties hereto execute this RESTATED MOU between COUNTY and CITY.

1.8 "Urban development" or "urban type development" shall mean development not allowed in areas designated Agriculture, Rural Residential or River lnfluence in COUNTY's General Plan or its applicable community plans as of the Effective Date of this RESTATED MOU.

ARTICLE II

ANNEXATIONS BY CITY
4 244
1 2
3 4
5 6
7 I
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28

2.1 Any annexations undertaken by CITY following the date of the execution of this RESTATED MOU shall be consistent with both the terms of this MOU and the standards (hereinafter "The Standards" or "Standards") as set forth in Exhibit "1", attached hereto and incorporated by reference herein as if set fourth fully at this point. This RESTATED MOU shall not apply to annexations proposed by CITY which are not in compliance with its terms or which fail to meet The Standards. lf a proposed annexation is not in compliance with the terms of this RESTATED MOU, including but not limited to, The Standards, then the property tax exchange provisions of Article lll of this RESTATED MOU shall not apply in regards to that proposed non-complying annexation. An exchange of property tax revenues between COUNTY and CITY for any such non-complying annexation shall be handled individually pursuant to subdivision (e) of Section 99 of the Revenue and Taxation Code or by the negotiation of a standalone property tax exchange agreement between COUNTY and CITY.

2.2 ln order to encourage the orderly processing of proposed annexations, CITY shall, at least thirty (30) days prior to filing any annexation proposal with the Fresno County Local Agency Formation Commission (hereinafter "LAFCO"), notify COUNTY of its intention to file such proposal and the date upon which CITY expects such proposalto be filed. Upon COUNTY's request, CITY agrees to meet with COUNTY to review whether its proposed annexation complies with The Standards. Within fifteen (15) days after the date COUNTY receives notice by the CITY of its annexation proposal, COUNTY shall notify CITY in writing if it has determined that the proposed annexation is inconsistent with The Standards.

Upon receipt of such notification, CITY may either modify the proposal to address the inconsistencies with the Standards identified in the COUNTY's written notice or adopt a resolution finding that the proposed annexation is, in CITY's determination, consistent with The Standards. lf County fails to give such notice within the fifteen-day period, the annexation shall be conclusively deemed consistent with all provisions of this article and The Standards.

2.3 lf CITY adopts a resolution making the findings described in Section 2.2, above, then COUNTY may challenge such findings by appropriate court action filed within thirty (30) days of receipt of written notice of the adoption of CITYs resolution. The court shall independently review the evidence and determine whether the proposed annexation is consistent with the Standards.

As an alternative to a judicial challenge by the COUNTY, the parties may within the aforesaid 5 245
I
2 3
4 5
b
7 I
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 thirty (30) day period mutually agree in writing to arbitrate their dispute through proceedings conducted in accordance with the rules established by the American Arbitration Association. The parties upon agreeing to arbitrate will proceed with arbitration in a timely manner. The arbitrator hearing the matter shall independently review the evidence and determine whether the proposed annexation is consistent with The Standards.

Costs incurred by the prevailing party, either in court proceedings or the arbitration proceedings, shall be paid by the non-prevailing party The parties agree that CITY shall not proceed to LAFCO with the proposed annexation until the dispute is finally resolved either by court or arbitration proceedings. lf CITY attempts to proceed with such proposed annexation prior to the expiration of the period in which COUNTY may file its court action or agree to arbitrate, or prior to the final conclusion of such court or arbitration proceeding, then the propertytaxexchange provisions of Article lll of this RESTATED MOU shall not apply to that proposed annexation.

Notwithstanding the foregoing, the CITY may proceed to LAFCO under this RESTATED MOU if court or arbitration proceedings are not completed within thirty (30) days after the filing thereof provided, however, that LAFCO in its resolution of approval, at the request of the CITY, conditions such approval upon the Executive Officer's receipt of a certified copy of the document evidencing the finality of the aforesaid court or arbitration proceedings determining that the proposed annexation is consistent with the Standards, or alternatively, receipt of a written stipulation of the CITY and COUNTY agreeing that the annexation complies with the Standards and permitting the completion of such proposed annexation. lf LAFCO declines to conditionally approve the annexation as provided in this paragraph, or CITY fails to timely request such conditional approval of the annexation, then the property tax exchange provisions of Article lll of this RESTATED MOU shall not apply and such annexation. lf, at the request of the CITY, LAFCo approves the annexation over the objections of the County, such approval by LAFCo shall be deemed good cause for the COUNTY at its option to terminate this RESTATED MOU.

2.4 For the purpose of promoting economic development and job creation, an Alternate Standard for Annexation for industrial or regional commercial uses is hereby created. ln the place of The Standards set forth in Exhibit 1, the Alternate Standard for Annexation shall apply to and govern the review of annexation proposals for industrial or regional commercial uses. Annexation proposals for 6 246
1 2
3 4
5 6
7 8
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 industrial/regional commercial uses shall include a conceptual development plan, as described herein.

The conceptual development plan shall consist of the economic objectives to be achieved, the service and financing strategy and its schedule, and shall include a map of the proposed prezoning. The conceptual development plan's schedule shall include milestones for major project components, to measure the progress of the project. Due to the complexity of such projects the development schedule for planning and implementation may reasonably require a period of from five to ten years. The annexation proposal shall be submitted to and reviewed by the COUNTY pursuant to Section 2.2.

Annexation proposals that comply with the criteria of this Section 2.4 shall, be deemed to comply with Section 2.1. The annexation application to be submitted to LAFCO shall be considered complete upon adoption of the prezoning by the CITY. COUNTY and CITY agree to meet annually to review the progress toward the achievement of the economic development objectives and to identify ways to promote mutual economic development objectives. The proposed annexation made under this Alternate Standard for Annexation described in this Section 2.4 should not create islands and annexation boundaries must ultimately minimize creation of peninsulas, corridors, or other distortion of boundaries.

2.5 Section 2.4 shall not apply if CITY rezones an area that was annexed using the Alternate Standard forAnnexation to azone otherthan lndustrial/RegionalCommercialwithout COUNTYs consent.

ARTICLE III

EXCHANGE OF PROPERTY TAX REVENUES TO BE
MADE UNDER SECTION 99 OF THE REVENUE AND TAXATION CODE

3.1 The property tax revenues collected in relation to annexations covered by the terms of this RESTATED MOU shall be apportioned between CITY and COUNTY as set forth in Sections 3.2 and 3.3 below. The parties acknowledge that, pursuant to Sections 54902,54902.1 and 54903 of Government Code and Section 99 of the Revenue and Taxation Code, the distribution of such property tax revenues will not be effective until the revenues are collected in the tax year following the calendar year in which the statement of boundary changes and the map or plat is filed with the County Assessor and the State Department of Tax and Fee Administration.

3.2 ln regards to the annexation of real properties which are not considered substantially developed at the time of annexation, COUNTY will retain all of its base property tax revenue upon 7 247
1 2
3 4
5 6
7 I
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
annexation. The amount of the property tax increment for special districts whose services are assumed by CITY shall be combined with the property tax increment of the COUNTY, the sum of which shall be allocated between CITY and COUNTY pursuant to the following tax apportionment ratio:

COUNTY: 630/o o/o
CITY: 37o/o o/o
Effective July 1 ,2023, these property tax-sharing ratios shall be as shown in Exhibit "2".

3.3 ln regards to the annexation of real properties which are considered substantially developed at the time of annexation, property tax revenue (base plus increment) will be reallocated as follows: a detaching or dissolving district's property tax revenue (base plus increment) shall be combined with COUNTY's and the sum of which shall be allocated between CITY and COUNTY pursuant to the ratio set forth in Section 3.2.

ARTICLE IV

DEVELOPMENT WITHIN AND ADJACENT

TO CITY'S SPHERE OF INFLUENCE

AND COUNTY CAPIT IMPROVEMENT FEES

4.1 COUNTY shall not approve any discretionary development permits for new urban development within CITY's sphere of influence unless the development shall have first been referred to CITY for consideration of possible annexation. lf CITY does not, within sixty (60) days of receipt of notice from COUNTY, adopt a resolution of application to initiate annexation proceedings before LAFCO, COUNTY may approve development permits forthat new urban development. COUNTY's approvalshall take into consideration CITY's general plan and be consistent with COUNTY's general plan policies, provided, that the development is orderly and does not result in the premature conversion of agricultural lands.

4.2 Within the CITY's sphere of influence, COUNTY shall require compliance with development standards that are comparable to CITY's and charge fees reflecting the increased administrative and implementing cost where such CITY standards are more stringent than COUNTY's.

These requirements shall apply to discretionary development applications approved by COUNTY. For purposes of this Agreement, "discretionary development applications" shall mean General Plan I
248
I
2 3
4 5
6 7
8 I
10 11
12 13
14 15
16 17
18 19
2Q
21 22
23 24
25 26
27 28
Amendments, Rezoning, Tentative Tract Maps, Tentative Parcel Maps, Conditional Use Permits, Director Review and Approvals, and Variances.

4.3 CITY development fees shall be charged for any discretionary development applications to be approved by the COUNTY within CITY's sphere of influence. To establish or amend CITY development fees, CITY shall conduct a public hearing and notify property owners in accordance with State Law. At the conclusion of that hearing, CITY shall adopt a resolution describing the type, amount, and purpose of CITY fees to be requested for COUNTY adoption.

4.4 CITY shall transmit the adopted resolution to the COUNTY for its adoption of the fees.

CITY shall include a draft ordinance for COUNTY's adoption with appropriate supporting documentation or findings by the CITY demonstrating that the fees comply with the Mitigation Fee Act (Section 66000 and following, of the Government Code) and other applicable State Law requirements. CITY fees may also include CITY's and COUNTY's increased administrative costs and inspection charges, provided those costs similarly comply with the Mitigation Fee Act and other applicable State Law requirements.

4.5 COUNTY shall collect the applicable CITY development fees for infrastructure and facilities at the time of final map approval or issuance of building permits as established by the fee schedule. Or, COUNTY shall require the applicant to present a voucher issued by CITY evidencing the payment of the fees directly to CITY, or written confirmation by CITY that fees are inapplicable. lf COUNTY imposes and collects fees on behalf of CITY, COUNTY shall transfer the fees to CITY at the earliest time legally permitted.

4.6 CITY shall give COUNTY at least thirty (30) days' notice before implementing any new fees or an amendment to existing fees. Notwithstanding this Section 4.6, or any other provision of this MOU, CITY shall be solely responsible for determining the amount of the fees and setting them in accordance with law. This Section 4.6 shall not be construed as a representation by COUNTY as to the propriety of the fees or the procedures used in setting them.

4.7 CITY shall hold harmless, defend and indemnify the COUNTY from all claims, demands, litigation of any kind whatsoever arising from disputes relating the enactment of or the collection of CITY development fees by the County.

4.8 lf COUNTY adopts capital improvement fees, CITY shall require that an applicant for any I
249
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
land use entitlement or permit within CITY shall pay all COUNTY, public improvements fees applicable to the entitlement or permit. At the COUNTY's request, CITY shall either timely impose and collect all such fees or shall require the applicant to present a voucher issued by COUNTY evidencing the payment of fees directly to COUNTY. lf adopted by COUNTY, the fees are to mitigate the impact of development on required COUNTY facilities and services including, but not limited to, the criminal justice system, health, social services, parks, transportation and library. lf CITY imposes and collects fees on behalf of COUNTY, CITY shall transfer the fees to COUNTY at the earliest time legally permissible to do so.

COUNTY may impose new fees and amend existing fees from time to time in its sole discretion and in accordance with applicable law. COUNTY shall give CITY at least thirty (30) days notice before implementing any new fees or an amendment to existing fees. Notwithstanding this Section 4.8, or any other provision of this RESTATED MOU, COUNTY shall be solely responsible fordetermining the amount of the fees and setting them in accordance with law. This Section 4.8 shall not be construed as a representation by CITY as to the propriety of the fees or the procedures used in setting them. lf COUNTY imposes capital improvement fees and CITY collects capital improvement fees on behalf of COUNTY, this RESTATED MOU serves as a joint powers agreement under Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code for the purpose of CITY's collection of capital improvement fees on behalf of COUNTY.

4.9 COUNTY shall hold harmless, defend and indemnify the CITY from all claims, demands, litigations of any kind whatsoever arising from disputes relating to the enactment or collection of COUNTY capital improvements fees.

4.10 COUNTY shall support urban unification and consolidation of urban services. To this end, COUNTY shall oppose the creation of new governmental entities within CITY's sphere of influence, except for such entities that may be necessary to address service requirements that cannot be addressed by annexation to CITY. CITY and COUNTY will support transition agreements with current service providers which recognize the primary role of cities as providers of urban services and where current service providers have participated in service master planning.

4.11 Within CITY's sphere of influence and for the two-mile area beyond that sphere of influence, COUNTY and CITY agree that, in the early stages of preparation of land use and general plan 10 250
1 2
3 4
5 6
7 8
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 amendments, they shall consult at a staff level in such fashion as to provide meaningful participation in the policy formulation process and shall likewise consult on other policy changes which may have an impact on growth or the provision of urban services. CITY shall also be given the opportunity to respond to COUNTY before the final document is prepared for presentation to COUNTY's Planning Commission.

COUNTY agrees that it will solicit comments from CITY in the preparation of any lnitial Study required by the California Environmental Quality Act undertaken within the area. lf CITY determines such urban development may have a significant effect on the environment, the COUNTY shall require an Environmental lmpact Report to be prepared if a fair argument can be made in support of the CITY's finding.

Notwithstanding anything to the contrary herein, because of state-mandated directives, including without limitation, the state Regional Housing Needs Allocation, COUNTY may consider approval of urban development in areas that are not currently planned for urban development, in order to meet its obligations under a state-mandated directive.

4.12 City may, at any time during the term of this RESTATED MOU, file the appropriate application with LAFCo to modify or expand the City's sphere of influence. Any change in the CITY's sphere of influence proposed by either COUNTY or CITY which would modify the area depicted in Exhibit "3" requires the mutual consultation of both parties prior to submission to LAFCO.

ARTICLE V

IMPLEMENTATION OF SALES TAX

REVENUE COLLECTION

5.1 Pursuantto the Bradley Burns Uniform Local Sales and Use Tax Law, Part 1.5, Division 2, of the Revenue and Taxation Code (commencing with Section 7200), CITY shall, concurrent with the execution of this RESTATED MOU, amend its local sales and use tax ordinance, as needed, to comply with the terms of this RESTATED MOU. The amendment of CITY's sales and use tax ordinance (hereinafter referred to as "Ordinance Amendment") described in this Section 5.1 shall be timely forwarded to the State Department of Tax and Fee Administration so that it will become operative as of the first July 1 following the CITY reaching the threshold forth in subsections 5.2.1 and 5.2.2. The Ordinance Amendment shall enable COUNTY, pursuant to its sales and use tax ordinance, to collect a 11 251
I
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 portion of the sales and use tax revenues generated within the incorporated areas of CITY in accordance with the applicable rate set forth on Exhibit 4", attached hereto and incorporated by reference as if set forth fully at this point. The format of this amendment by CITY to its local sales and use tax ordinance shall likewise provide as a credit against the payment of taxes due under such ordinance, an amount equal to any sales and use tax due to COUNTY.

5.2 Except as otherwise provided herein, CITY further agrees that the Ordinance Amendment shall likewise provide for the periodic reallocation of additional sales tax revenues generated within the incorporated areas of CITY in accordance with the schedule set forth on Exhibit "4". Each subsequent incremental adjustment shall go into effect at the commencement of the fiscal year indicated. These periodic adjustments shall enable COUNTY, pursuant to its sales and use tax ordinance, to collect that portion of the sales and use tax revenues generated within the incorporated areas of CITY equal to the applicable percentage as specified in Exhibit "4". These periodic adjustments shall automatically go into effect provided that:

5.2.1 CITY receives sales tax revenues per capita in an amount greater than fifty percent (50%) of the sales tax revenue per capita collected by all Fresno Gounty cities when taken as a group during the most recent fiscal year for which State Department of Tax and Fee Administration information is available, then it hereby agrees to reallocated sales tax revenues with COUNTY beginning in fiscal year 2023-2024 in accordance with the provisions of this article; and

5.2.2 CITY's annual sales tax revenue information is available for the State Department of Tax and Fee Administration allows City to reallocate sales tax revenue at the percentage designated in Exhibit "4" and still have a net increase in its remaining sales tax revenue when compared with the fiscal year immediately preceding the fiscal year described above. The periodic phase in of sales tax reallocation described herein shall be delayed from year-to-year if CITY falls below the sales tax reallocation threshold as identified in Section 5.2. ln those years in which CITY does not meet the sales tax reallocation threshold, CITY's sharing proportion shall continue at the same rate as in the last year in which CITY met or exceeded the threshold. When, in a subsequent year, CITY again meets or exceeds the threshold, the 12 252
1 2
3 4
5 6
7 I
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
sharing proportion of Clry shall be at the next higher sharing proportion shown on Exhibit "4", and the annual phase-in shall continue therefrom.

5.3 The Ordinance Amendment is intended to reduce CITY's sales tax rate from its then- existing level to a level which thereby enables COUNTY, pursuant to its sales tax ordinance, to continue collecting those amounts set forth in the previous provisions of this article as well as the applicable percentages set forth on Exhibit "4". ln addition, each periodic adjustment is intended by the parties to enable COUNTY to collect an amount equivalent to the applicable percentage specified in Exhibit "4".

5.4 Whenever CITY proposes an annexation of unincorporated territory which generates "substantial sales tax revenue" (as defined in this section 5.4 below) for COUNTY, CITY, agrees to further amend its local sales and use tax ordinance as set forth in this section. Notwithstanding the language of subsections 5.2.1 and 5.2.2, this additional amendment shall become operative no later than the commencement of the next calendar quarter following the date upon which such annexation is certified as complete by the Executive Officer of LAFCO. This additional amendment shall decrease CITY's sales tax rate to yield an amount of substantial sales tax revenue being collected by COUNTY in the area to be annexed, thus enabling COUNTY to increase its sales tax rate by a corresponding percentage which shall continue to accrue to COUNTY throughout the term of this RESTATED MOU. Any such additional amendment made by CITY pursuant to this section shall be cumulative and likewise preserve intact any periodic adjustments previously implemented pursuant to this RESTATED MOU. Further, CITY agrees that it shall not split or separate areas into smaller annexations for the purpose of, or having the effect of, creating an annexation or annexations which, individually, do not generate substantial sales tax revenue, but which would generate such revenue if combined. For purposes of this article, the term "substantial sales tax revenue" shall be defined as sales tax revenue derived from taxable sales in the area annexed equalto at least:

5.4.1 lf only information for less than one fiscal year exists, then $100,000 in taxable sales in the most recent quarter for which such information from the State Department of Tax and Fee Administration is available in writing or electronic or magnetic media, and projected to a full four quarters, at least
$400,000 in taxable sales.
13 253
I
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 5.4.2 lf information for one or more years exist, then $400,000 in taxable sales in the most recent year for which such information from the State Department of Tax and Fee Administration is available in writing or electronic or magnetic media.

5.4.3 Modified Calculation for Area Depicted in Exhibit 6 - Whenever CITY proposes an annexation of unincorporated territory identified which generates substantial sales tax revenue for COUNTY (as defined herein), as depicted in Exhibit 6, and CITY uses the provisions and requirements of Section 2.4 of this MOU (An Alternate Standard for Annexation for lndustrial and Regional Commercial uses) to process said annexation, the substantial sales tax-sharing provisions for that area shall be modified using the distribution schedule delineated below and phased out over a period of six years as follows:

First year. COUNTY receives 5% base plus 100% of local sales tax revenue generated by substantial sales tax generator. CITY receives no revenue from substantial sales tax generator.

Second Year. COUNTY receives 5% base plus 80% of local sales tax revenue generated by substantial sales tax generator. CITY receives 20% from substantial sales tax generator.

Third Year. COUNTY receives 5% base plus 60% of local sales tax revenue generated by substantial sales tax generator. CITY receives 40% from substantial sales tax generator.

Fourth Year. COUNTY receives 5% base plus 40o/o of local sales tax revenue generated by substantial sales tax generator. CITY receives 60% from substantial sales tax generator.

Fifth Year. COUNTY receives 5% base plus 20% of local sales tax revenue generated by substantial sales tax generator. CITY receives 80% from substantial sales tax generator.

Sixth Year. COUNTY receives 5% base plus 0% of local sales tax revenue generated by substantial sales tax generator. CITY receives 110o/o from substantial sales tax generator. This distribution method continues until the end of this agreement.

This adjustment shall comply with the requirements and procedures of the California Department of Tax and Fee Administration. Any such distribution calculation made by CITY pursuant to this subsection shall take into consideration actual sales tax revenues collected within the substantial sales tax generator area in the last four quarters as reported by the Department of Tax and Fee Administration and/or other reliable 14 254
1 2
3 4
5 6
7 8
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 source to be determined by the Fresno County Auditor-Controller/Treasurer-Tax Collector to reflect actual sales tax revenues collected in the annexed area where the substantial sales tax generator is located.

The distribution calculation shall reflect an increase or decrease in the revenue to be received by COUNTY in the subsequent year depending on the actual sales tax revenue generated by the substantial sales tax generator in the prior year. Nothing in this subsection 5.4 alters the duties of the parties pursuant to subsections 5.1 through 5.3, inclusive.

5.5 lf CITY fails to amend its sales tax ordinance as provided in section 5.1 , or if the Ordinance Amendment fails to provide for the periodic reallocation of additional sales tax revenues as provided in section 5.2, the subsections therein, and Exhibit "4", or if CITY fails to further amend its sales tax ordinance upon the annexation of unincorporated territory which generates substantial sales tax revenue for COUNTY as provided in section 5.4, or if CITY splits or separates areas into smaller areas as prohibited by section 5.4, then this RESTATED MOU shall immediately terminate and, in particular, no master property tax exchange agreement under subdivision (d) of Section 99 of the Revenue and Taxation Code, shall exist between CITY and COUNTY.

5.6 CITY and COUNTY further agree that the annual report of the State Department of Tax and Fee Administration and the Department of Finance Annual Population Estimates shall be used as the data source for the purpose of calculating the per capita sales tax revenue pursuant to this RESTATED MOU.

5.7 Application of the formula to be used in the allocation of revenues pursuant to section 5.2 is illustrated in Exhibit "5", attached hereto and incorporated by reference herein as if set forth fully at this point.

ARTICLE VI

COUNTY AND CITY ASSURANCES ON USE OF REVENUE

6.1 COUNTY recognizes that certain revenue reallocated to it by this RESTATED MOU would othenryise have been appropriated by CITY to meet demands for services. ln light therefore, COUNTY agrees to use such new revenue in order to maintain levels of COUNTY services that are supportive of CITY services, unless the Federal or state governments materially reduce the level of funding for such services. Examples of such COUNTY services include, but are not limited to, the criminal justice system, 15 255
1 2
3 4
5 6
7 8
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 public health, and other similar services.

6.2 CITY agrees to continue enforcement of laws which result in the collection of fines and forfeitures.

ARTICLE VII

COOPERATIVE EFFORTS AT LEGISLATIVE REFORM

7.1 CITY and COUNTY agree to work jointly for state legislation and appropriations that would improve the fiscal condition of both CITY and COUNTY.

ARTICLE VIII

GENERAL PROVISIONS

8.1 Term of MOU
This RESTATED MOU shall commence as of the date of execution by COUNTY and CITY and shall remain in effect for a period of fifteen (15) years, unless terminated prior to that time by mutual agreement of the parties or as otherwise provided by this RESTATED MOU. ln addition, should all or any portion of this RESTATED MOU be declared invalid or inoperative by a court of competent jurisdiction, or should any party to this RESTATED MOU fail to perform any of its obligations hereunder as determined by a court of competent jurisdiction, or should any party to this RESTATED MOU take-any action to frustrate the intentions of the parties as expressed in this RESTATED MOU as determined by a court of competent jurisdiction, then in such event, this entire RESTATED MOU, as well as any ancillary documents entered into by the parties in order to fulfill the intent of this RESTATED MOU, shall immediately be of no force and effect and, in particular, no property tax exchange agreement, as required by Section 99 of the Revenue and Taxation Code, shall exist between the CITY and COUNTY as to unincorporated property.

8.2 Geooraphic Application of RESTATED MOU
This RESTATED MOU shall apply only to the area identified as the City of Sanger's Sphere of lnfluence and Future Growth Area as depicted in Exhibit 3. This RESTATED MOU shall not apply to any sphere of influence beyond the area depicted in Exhibit 3 unless and until the parties mutually agree to amend this RESTATED MOU.

Chanqes in Law8.3 Termination Due
16 256
1 2
3 4
5 6
7 8
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 The purpose of this RESTATED MOU is to alleviate in part the revenue shortfall experienced by COUNTY which may result from CITY's annexation of revenue-producing or potentially revenue- producing properties located within the unincorporated area of COUNTY. The purpose of this RESTATED MOU is also to enable CITY to proceed with territorial expansion and economic growth consistent with the terms of existing law as mutually understood by the parties as well as to maximize each party's ability to deliver essential governmental services. ln entering into this RESTATED MOU, the parties mutually assume the continuation of the existing statutory scheme for the distribution of available tax revenues to local government and that assumption is a basic tenet of this RESTATED MOU. Accordingly, it is mutually understood and agreed that this RESTATED MOU may, by mutual agreement be terminated should changes occur in statutory law, court decisions or state administrative interpretations which negate the basic tenets of this RESTATED MOU.

8.4 Modification
This RESTATED MOU and all of the covenants and conditions set forth herein may be modified or amended only by a writing duly authorized and executed by COUNTY and CITY.

8.5 Enforcement
COUNTY and CITY each acknowledge that this RESTATED MOU cannot bind or limit themselves or each other or their future governing bodies in the exercise of their discretionary legislative power.

However, each party agrees that it will insofar as is legally possible, fully carry out the intent and purposes of this RESTATED MOU, if necessary by administrative action independent of ordinances, and that this RESTATED MOU may be enforced by injunction to the extent allowed by law.

8.6 Entire Agreement and Supersession
With respect to the subject matter hereof, this RESTATED MOU supersedes any and all previous negotiations, proposals, commitments, writings, and understandings of any nature whatsoever between COUNTY and CITY except as otherwise provided herein.

8.7 Notice
All notices, requests, certifications or other correspondence required to be provided by the parties to this RESTATED MOU shall be in writing and shall be delivered by first class mail or an equal or better form of delivery to the respective parties at the following addresses:
17 257
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
COUNTY
County Adm inistrative Officer
County of Fresno
Hall of Records, Room 300
228l Tulare Street
Fresno, CA 93721
CITY
City Manager
City of Sanger
City Hall
1700 Seventh Street
Sanger, CA 93657

8.8 Renesotiation
lf COUNTY enters into an agreement or memorandum of understanding, which includes a master property tax exchange agreement under subdivision (d) of Section 99 of the Revenue and Taxation Code, with another city that has terms and conditions more favorable in the aggregate to that city than those terms and conditions contained in this RESATED MOU, COUNTY agrees that it will negotiate such terms and conditions upon written request from CITY, with the intent of offering that more favorable agreement.

Negotiations shall conclude thirty (30) days from the date of receipt of notice by COUNTY and, if agreement is tentatively reached during that period, the legislative bodies of the parties shall approve any such amendment within thirty (30) days following the date of the tentative agreement. COUNTY and CITY are not required to reach agreement.

8.9 Notice of Breach
Prior to this RESTATED MOU being terminated as expressly provided in this RESTATED MOU, COUNTY shall provide notice to CITY of any breach of this RESATED MOU by the City, and CITY shall comply with this RESTATED MOU within thirty (30) days after the date of receipt of notice. lf CITY fails to timely comply with the terms and conditions of this RESTATED MOU, this RESTATED MOU shall terminate. During the thirty (30) day notice period and until CITY certifies in writing that it is in compliance with the provisions of this RESTATED MOU and COUNTY agrees in writing, no property tax exchange agreement, as required by Section 99 of the Revenue and Taxation Code, shall exist between COUNTY and CITY with respect to any pending annexations.

Prior to this RESTATED MOU being terminated as expressly provided in this RESTATED MOU, CITY shall provide notice to COUNTY of any breach of this RESTATED MOU by the COUNTY, and COUNTY shall comply with the terms and conditions of this RESTATED MOU within thirty (30) days after the date of receipt of notice. lf COUNTY fails to timely comply with the terms and conditions of this RESTATED MOU, this RESTATED MOU shall terminate. During the thirty (30) day notice period and 18 258
1 2
3 4
5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
27 28
until COUNTY certifies in writing that it is in compliance with the provisions of this RESTATED MOU and CITY agrees in writing, at the election of the CITY, no property tax exchange agreement, as required by Section 99 of the Revenue and Taxation Code, shall exist between COUNTY and CITY with respect to any pending annexations.

Except as otherwise provided, the parties hereto have executed this RESTATED MOU in the County of Fresno, State of California, on the dates set forth above.

8.10 No Waiver of Government Claims Act
For all claims arising from or related to this RESTATED MOU, nothing in this RESTATED MOU establishes, waives, or modifies any claims presentation requirements or procedures provided by law, including the Government Claims Act (Division 3.6 of Title 1 of the Government Code, beginning with section 810).

8.11 Governing Law and Venue
This RESTATED MOU shall be administered and interpreted under the laws of the State of California.

Jurisdiction of litigation arising from this RESTATED MOU shall only be in California. Any action brought to interpret or enforce this RESTATED MOU, or any of the terms or conditions hereof, shall be brought and maintained in the Fresno County Superior Court.

8.12 Authorization to Execute
COUNTY and CITY each represent and warrant that the individuals signing this RESTATED MOU are duly authorized to do so by their respective legislative bodies and that their signatures on this RESTATED MOU legally bind COUNTY and CITY to the terms of this RESTATED MOU.

8.13 Counterparts
This RESTATED MOU may be signed in counterparts, each of which is an original, and all of which together constitute this RESTATED MOU.
(Signature page follows. )
19 259
1 2
3 4
5 6
7 I
I
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 lN WITNESS WHEREOF, the parties hereto have executed this RESTATED MOU in the County of Fresno, State of California, on the last date set forth below County of Fresno, a Political
Subdivision of the State of California
(couNrY)
By:

Sal Quintero, Chairman of the
Board of Supervisors of the County of Fresno
Date
Attest:

Bernice E. Seidel
Clerk of the Board of Supervisors
County of Fresno, State of California
Clerk to the Board of Supervisors
Deputy
City of Sanger, a Municipal
Corporation of the State of California (CITY)
Frank Gonzales, Mayor, City of Sanger
Date
Attest:

Rebeca Padron
City Clerk
By:

Rebeca Padron, City Clerk
City of Sanger
Tim Chapa, City Manager
By
Greg Garner, Acting City Manager
City of Sanger
Approved as to Legal Form
City Attorney, City of Sanger
By
Hilda Cantu Montoy, City Attorney
City of Sanger
By:

By:
20 260
EXHBIT 2
SANGER
Effective July 1, 2023,hhe property tax sharing ratios shall continue as follows:

County City Effective Date
63% 37% Julv L,2024
63% 37% Julv L,2O25
630/o 37% July L,2026
63% 37% July L,2027
630/o 37% July 1,2028
63% 37% Julv L,2029
63% 37% Julv 1,2030

63.0% 37.O% July 1,2031

63.O% 37.O% Julv 1,2032

63.0% 37.0% July 1,2033

63.O% 37.0% July L,2034

63.OYo 37.0% July 1,2035

63.O% 37.O% July 1,2036

63.O% 37.O% Julv 1,2037

63.O% 37.O% Julv 1, 3038
261

CALIFORNA CALIFORNIA
oz
uotU
t
ac
=i
CITY OF SANGER Depottment of Public Wotk ond Pldnning
Developm ent Serui ces Division
Legend
I Sanger City Limits
il.,H,! city of Sanger Sphere of lnfluence
N
-@'
s
Ptepated by CtlUVA|'JC
aj:i4350Deysdpl41G /$i//aps\;,per4l-
oo
El
I
l,.""="
MUSCAT
zo
zo
d
oIF
I
Miles
0 0.275 0.55 1.1 1.65 2.2
262
EXHBIT 4
Effective July 1 ,r:t, the Sales Tax Revenue Sharing Proportion shall be as follows

YEAR CITY
1 2
3 4
5 6
7 II
10 11
12 13
14 15
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
5o/o
263
City
Sales Tax
Revenue
2017 - 2018
Population
January 1, 2018
Per Capita
Tax Revenue
2017 - 2018
Sales Tax
Revenue
2018 - 2019
Population
January 1, 2019
Per Capita
Tax Revenue
2018 - 2019
Meets 50%
Criteria
2017 - 2018
Meets 50%
Criteria
2018 - 2019
Growth
over 1/2%
Sales Tax
Revenue
Growth

A B C D E F G F I J
Clovis 20,088,192$ 113,501 176.99$ 21,398,962$ 116,609 183.51$ A A Yes 6.53% Coalinga 795,842$ 16,516 48.19$ 946,569$ 16,944 55.86$ B B Yes 18.94% Firebaugh 887,447$ 7,893 112.43$ 825,341$ 7,980 103.43$ A A No -7.00% Fowler 1,290,773$ 6,161 209.51$ 1,415,099$ 6,220 227.51$ A A Yes 9.63% Fresno 86,000,524$ 536,593 160.27$ 91,798,987$ 542,012 169.37$ A A Yes 6.74% Huron 174,745$ 7,281 24.00$ 182,158$ 7,302 24.95$ B B Yes 4.24% Kerman 1,913,749$ 15,335 124.80$ 1,981,109$ 15,767 125.65$ A A Yes 3.52% Kingsburg 975,836$ 12,397 78.72$ 1,141,664$ 12,551 90.96$ A A Yes 16.99% Mendota 611,472$ 12,201 50.12$ 674,507$ 12,278 54.94$ B B Yes 10.31% Orange Cove 176,743$ 9,443 18.72$ 225,323$ 9,460 23.82$ B B Yes 27.49% Parlier 424,544$ 15,460 27.46$ 444,697$ 15,658 28.40$ B B Yes 4.75% Reedley 1,687,854$ 25,797 65.43$ 1,755,297$ 25,873 67.84$ B B Yes 4.00% Sanger 2,320,636$ 26,418 87.84$ 2,325,388$ 27,005 86.11$ A A No 0.20% San Joaquin 185,302$ 4,124 44.93$ 252,989$ 4,144 61.05$ B B Yes 36.53% Selma 5,515,388$ 24,327 226.72$ 6,482,913$ 24,402 265.67$ A A Yes 17.54% Sales Tax Revenue
Total All Cities 123,049,047$ 833,447 131,851,003$ 844,205 Per Capita All Cities 147.64$ 156.18$
50% Minimum 73.82$ 78.09$
170,813 170,990
Table 1: Sales Tax Revenue Allocation Application FY 2018-19 Data Unincorporated Population
Total County Population
Sales Tax Revenues: Columns A & D, Source: State Board of Equalization Annual Report Statistical Apendix; Fiscal Year Data Available in January of Next Calender Year Population Data: Columns B & E, Source: Source State Department of Finance January 1, Population Estimates; Available in May of that Calender Year Per Capita Sales Tax All Cities (FY 2017-18) Sum Collumns A & B. Then divide the column A summed total by the column B summed total. The Result is listed in Column C as "Per Capita Cities" Per Capita Sales Tax All Cities (FY 2018-19) Sum Collumns D & E. Then divide the column D summed total by the column E summed total. The Result is listed in Column F as "Per Capita Cities" 50% Minimum Criteria: The Pervious Calculations divided by 2. Then a comparison of this number with the numbers in collumns C & F is made. Results are reflected in columns G & H . "A" means above, "B" Below the Criteria.

Sales Tax Revenue Growth: Column J; Compute percentage growth of Sales Tax Revenue: Change in Sales Tax Revenue in Column D compared to Column A.

Growth Criteria: If the Sales Tax Revenues of the city grew by at least 1/2%, the results are reflected in column I with a "YES" EXHIBIT 5
Er\ntE r r I
Deportment 4 Public Wbtt<s ond Plonning
Developm ent Serui ces D ivis ion
N
-@'
S
I'aefrared b), CHU lAtlt.)
G.\.4 36 0 D e I s & P ln \l; I $lMats i5p€4/t4
I
I
BUTLER
Legend
I Sanger City Limits
il,1'# City of Sanger Sphere of tnfluence
@ suBSTANTTAL sALES TAX GENERATTNG AREA, 23.50 AcRES

TULARE TULARE
il it-tlril-t rr|lrlllttttlrrtrilrrr-ttt]trtirllrtrltrrt Miles
0 0.05 0.1 0.2 0.3 0.4
264
RESOLUTION NO 2o 23-gO

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANGER

APPROVING THE SECOND AMENDED AND RESTATED

MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY OF

FRESNO AND CITY OF SANGER
WHEREAS, on December 13, 2005, the City of Sanger (City) and the County of Fresno (County) entered into a comprehensive agreement covering development, annexations, sales taxos, property taxes, and other matters, referred to as the 2005 Amended and Restated Memorandum of Understanding (*2005 MOU"); and
WHEREAS, the 2005 MOU served in part as CITY's and COLINTY's master property tax transfer agreement under subdivision (d) of section 99 of the Revenue and Taxation Code; and
WHEREAS, the 2005 MOU also included provisions relating to redevelopment and included as a party the former Sanger Redevelopment Agency, which CITY dissolved on February l, 2012, following the State adopted comprehensive legislation, Assembly Bill Xl 26 (Stats. 20II,lst Ex. Sess. Chp. 5), dissolving California redevelopment agencies and prohibiting further redevelopment activities under the California Community Redevelopment Law (former Health and Safety Code Section 33000 et seq.); and
WHEREAS, on October 31, 2017, CITY and COUNTY executed a First Amendment to the 2005 MOU to address annexation by City of substantial sales tax generating uses within the City's Sphere of Influence; and
WHEREAS, on April 23,2019, CITY and COUNTY executed a Second Amendment to the 2005 MOU to address modifications to the Standards of Annexation; and WHEREAS, on November 3, 2020, CITY and COUNTY executed a Third Amendment to the 2005 MOU to accommodate extension of the 2005 MOU for one year from the expiration date of December 13,2020, and to provide additional time for both Parties to complete ongoing negotiations regarding a longer-term extension; and
WHEREAS, on November 16, 2021, CITY and COUNTY executed a Fourth Amendment to the 2005 MOU to accommodate extension of the 2005 MOU for one year from the expiration date of December 13, 2021, and to provide additional time for both Parties to complete ongoing negotiations regarding a longer-term extension; and WHEREAS, the 2005 MOU, as amended, is set to expired December 13,2022; and WHEREAS, CITY and COUNTY desire to make additional changes to their comprehensive agreement set forth in the 2005 MOU, and to extend the term of their comprehensive agreement for an additional 15 years.
265

NOW THEREFORE, IT IS HEREBY RESOLVED, BY THE CITY COUCNIL OF THE CITY OF SANGER AS FOLLOWS:

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

SECTION 2. The City Council approves the Seconded Amended and Restated Memorandum of Understanding Between the County of Fresno and City of Sanger Exhibit A.

SECTION 3. The City Council authorizes the Mayor, City Manager, City Clerk and City Attorney to execute the required documents.

The foregoing Resolution was considered by the City Council of the City of Sanger at a regular meeting of said Council held on the 7th day of September 2023, and approved by the following vote:

AYES:

NOES:

ABSTAIN
ABSENT:

COUNCILMEMBERS:

COUNCILMEMBERS:

COUNCILMEMBERS:

COUNCILMEMBERS:

Rebeca Padron, City Clerk
266
For the Meeting of: September7,2023
Agenda Item No.

CrrYoF SINGER

REPORTTO THE, CITY COUNCIL
0-i
To:

From:

Subject:

Attachments: 1) Quote - California Boiler
2) Service Provider Agreement
CONFLICT OF INTEREST:

None known
RECOMMENDATION:

Staff recommends that the City Council accept the quote from California Boiler to remove and replace the south sludge heater of the digester at the Waste Water Treatment Plant in the amount not to exceed $94,605.81 and authorize the City Manager to sign the Service Provider Agreement and all related documents.

EXECUTIVE SUMMARY:

The City currently operates domestic and industrial waste water treatment plants at the city's Corporation Yard. Recently the south sludge heater located on the digester failed leaving only the north heater operational. Public Works staff was able to locate one company that was willing to provide a quote for the required repairs. Another company was interested as well but was not able to locate all the parts and they could not provide a quote. Currently the digester is only able to utilize the north sludge heater and there is no redundancy. Staff is recommending the entire south unit be removed and replaced for an amount not to exceed $94,605.81.

Prepated by: Tohn F Mrrlli Approved by:

REVIEW: City Manage ,, & Finance: Citv Attotnev:

Mayor and Council Members
John F. Mulligani Public Works Director
Remove and Replace South Digester Sludge Heater - WWTP
TYPE OF ITEM:

Consent
Info Item
X Action Item
X Deoarlment Reoort
Redevelooment Asencv
COUNCIL ACTION: APPROVED DENIED NO ACTION
Public Hearing
Matter Initiated by a Council Member
Other
Continued to:
267
BACKGROUND:

The City operates a domestic and industrial waste water treatrnent plant at the City's Corporation Yard.

Recently the sludge digester's south heater failed and it became inoperable. The equipment is old and needs inspection and remanufacture. The other contractor the crty utilizes for boiler maintenance was not able to obtain all the required parts and therefore was not able to provide a quote. The quote that staffobtained is from California Boiler for a total not to exceed $94,605.81. Any additional costs that arise during the inspection process or installation will be addressed as appropriate. The quote is at prevailing wage.

The contractor is located in Visalia, California. There is a 6 - 8 week lead-time for parts and the actual expected job timing is2 -3 weeks. In the meantime, staff is utilizing the north sludge heater to process both domestic and industrial sludge.

REASON FOR RECOMMENDATION:

The digester is a critical part of the domestic and industrial effluent treatrnent process. The unit is aged and in need of repair. Currently the processing of sludge is only being handled by one boiler unit and there is no redundancy.

FISCAL IMPACT:

The total fiscal impact of the inspection and remanufacture of the south sludge heater is not to exceed $94,605.81. Once the entire south heating unit is disassembled, there may be more repairs to be performed and those additional costs will be billed on a time and material basis. Funds are available in the Sewer Fund to cover this project. 621,-070-501-7230.

ALTERNATIVES:

The digester's south sludge heater will be out of service until repaired. There is apossibility of non- compliance with the State permit to operate if the digester fails.

ACTIONS F'OI, APPROVAL:

Service Provider will sign the agreement followed by City Manager's signature. 268
ATTACHMENT 1
269
CALIFOtrlNIA BOILEFI
SFF|VInF . 6)ARTS . SAI FS . FIFNTAI S
From
Quote For
California Boiler
7341 West Goshen Avenue
Visalia CA 93291
(559) 62s-5151
www.californiaboiler.com

SANGER VI'WTP
333 NORTH ST.

SANGER CA 93657
(55e)876-3952
Quote No.

TYPe
Prepared By
Created On
0002691
Repair
Nathan Merriweather
02t10t2023
Description of Work
California Boiler is pleased to provide the following proposal for your consideration.

Remove and replace the following of your south sludge heater. . Remove and replace, boiler tubes, tube sheets and both ends of Morrison tube. . Complete 3rd party A-1 inspection bf vessel.
r Remove and replace Power Flame burner with OEM.
. Complete start up as per Power Flame standards.

Expected job timing:
e (3) Boilermakers 2 weeks
. (1) Technician 2-3 days
. 1 week to have tube sheets made.

Notes / Payment Terms / Approval
a. Approximately 6-8 week lead time upon receiving signed quote and purchased order. Lead time is sublect to change due to the possibility of events outside of our control.
b. Labor is based on straight time (7:00 AM-5:00 PM, Monday through Friday) unless otherwise stated. Overtime or weekend labor may be provided at your request.
c. Please see attachment for Standard Terms and Conditions. By signing this proposal, Sanger Wastewater Treatment is acknowledging that we have read and accept the attached California Boiler Terms and Conditions. d. Any additional parts or service outside of the scope of work can be provided/performed on T&M or a separate quote may be submitted. e. Construction Permits, State Operating, if needed, California Boiler is willing to assist for an additional charge. f. San Joaquin Valley Air Pollution Control District permits are not included in this bid. lf needed, California Boiler is willing to assist for an additional charge.
h. This proposal is valid for 15 days.

L Based on approved credit.

J. Freight is not included with pricing.

K.25o/o due upon acceptance 65% due upon notice of equipment to ship 10% due upon completion along with applicable freight charges.

L. Standard terms and conditions apply.

Services to be completed
[Commercial Hot Water] Boiler - Boiler
Upon Arrival LOTO and complete JSA
Cut and remove all boiler tubes.

Cut and remove both tube sheets.

Cut and remove safe ends of Morrison tube.

Gather information to have new tube sheets made.

Weld in new tube sheet.
270
weld rn new sate ends.
lnstall new boiler tubes.

Hydro unit.
3rd party Al inspection.

Close up fireside.
lnstall new burner utilizing existing gas train and controls.

Conduct OEM start up. Submit startup report.

General site cleanup
Item Amt
Equipment
Fees
Labor
Materials
Parts

SUBTOTAL
[email protected]/o

GRAND TOTAL
$100.00
$2,921.92
$62,780.00
$15,957.00
$10,671.8s
$92,430.77
$2,175.04
$94,605.81
Terms and Gonditions

SALES AND PAYMENT TERMS AND CONDITIONS
The following sets forth the sale, payments and condition policies of Califomia Boiler lnc.

It constitutes the general agreement between Califomia Boiler Inc. ("California Boiler lnc.", the "Company" or "we") and you, its customer, under lvhich products, service and parts are sold, credit is extended and paymenls are expected.

This policy supersedes all previous sales and credit, payment terms and conditions, and finance policies issued by Califomia Boiler lnc. and shall remain in effect until furlher notice. The company reserves the right to change this policy and agreement at any time.

EXTENSION OF CRED]T
Credit is one of the most important services Califomia Boiler lnc. offers to you as a customer.

An open line of credit is established for you based upon your needs, iinancial strength, and history of meeting your credit obligations. ln order to insure you the best possible prices and service, we must enforce a credit and collections policy based upon sound business principals and good judgment.

INVOICING AND PAYMENT TERMS
Payment Terms are 25% down payment or as specified- (This is not refundable on equipment sales in process) balance Net 30 (upon approval of credit) on all invoices unless olher arrangements are made in advance of shipment. UNLESS OTHERWISE SPECIFIED DIFFERENTLY ON THE ATTACHED PROPOSAL. When opening a new account with an order, the Company may require a deposit with the initial order so as not to delay shipments lvhile credit references and financial information are being reviewed. We reserve the right to suspend or terminate any further perfonnance under this agreement or otheMise in the evenl payment is not made when due. Quotes are valid for 30 days. Equipment will not be started up unless 90% of the purchase price has been paid.

Shipment Terms Unless olherwise specified in writing signed by an authorized representalive of the Company, all shipments are F.O.B. the manufacturers factory or California Boiler lnc. warehouse as applicable. Title to the merchandise shall pass to the buyer upon delivery to the carrier at the F.O.B. point and thereafter all risk of loss or damage shall be the buyers.

Service Gharges We reserve the right to take action lo collect any invoice that is not paid when due. We also assess a late payment SERVICE CHARGE on the day following the due date and monthly thereafter against all amounts remaining unpaid on each such date. Subject to any limitations that may be imposed by applicable law, the amount of this charge is 1 % of the amount remaining unpaid on each such date.

This policy applied to customers who permit lheir account to become delinquent. lt is your responsibility to notify California Boiler lnc. of any extenuating circumstances that may affect your payment and work out a solution. Please know lhat our interest lies, not in collecting a service charge, but receiving timely payments of your irvoice.
271
IN WARR.ANTY MATERIALS AND DISCLAIMER OF WARRANTIES
You will rely solely on the warranty provided by the manufacturer. Your sole and exclusive remedy for breach of warranty shall be as provided in the manufacturers standard warranty unless otherwise specifically expressed in writing. (Standard Manufacturers Warranty is twelve (12) months from start-up, Califomia Boiler lnc. labor warranty is ninety (90) days from start-up).

You will be invoiced in the regular manner for all materials and parts even though it may be an ln-warranty transactions. Credits will be issued after factory credits are accepted. Please nole that withholding payment of any invoice in anticipation of an ln-wananty credit is not consistent with our terms of sale.

Califomia Boiler lnc. makes no warranty expressed or implied of any kind. We make no claim of fitness or merchantability or any other warranty, expressed or implied. Nor is anyone else, whether employed by California Boiler lnc. or nol, authorized to do so, on our behalf. We specifically disclaim the wananty of merchantability and the warranty of fitness.

For any items or components proposed as a substitute to specified items, it is urderstood that seller makes no guarantee that the approvirg authoriiy will accept the products submitted.
ln no event shall Califomia Boiler lnc. be liable to you or any person, corporation or other qpe of legal entity for any special, direct, indirect, incidental, liquidated or consequential damage of any kind. lncluding but not limited to, loss of products, loss of time, loss of use, loss of production, loss of savings or revenues, cosl of replacement goods, labor costs or other charges in connection with product use or malfunction.

The repair or replacement of defoctive parts whether such claims are alleged in strict liability, negligence, torl, contEct or otherwise, and even if California Boiler lnc. is informed in advance of the possibility of such damages.

CLAIMS
You are responsible for inspecting merchandise on receipt and for filing claims with the carriers for damage or loss. All claims for shortages and damages must be made in Miting to the caniers wilhin ten (10) days of receipt. We suggest you call the carrier immediately upon noticing any possible freight related damage and anange for inspection before proceeding while unpacking. Photographs taken while the delivery truck is still on sight are recommended if possible.

Under no circumstances may you withhold payment or clErge the Company for freight or warranty related claims.

No claim for the expenses incured for corrective work done on merchandise provided by the Company will be considered or accepted unless specificalg agreed to in writing, in advance of the work being done, by an authorized manager of the Company.

INFORMATION AND ASSISTANCE
lf at any time you have a question on an invoice from the Company, a call or nole to our accounting department will bring prompt action loward getting the problem resolved.
lf it becomes necessary, at California Boiler lnc.s discretion, to take legal action in order to collect your account, California Boiler lnc. shall be entifled to recover, in addition to any other recovery, its court costs, reasonable aftomeys fees and all other collection expenses. lf you have any questions regarding this policy, please contact our office.

We appreciate your business and look forward to providing you with reliable equipment, parts and service.

Please acknowledge below your receipt and agreement to the provisions of this policy statement.

Return the original to:

Califomia Boiler lnc-
'1800 Newport Circle
Santa Ana, CA 92705
Phone: (714) 891-0701
Fax: (714)8914320
www.CaliforniaBoiler.com
APPLICABLE LAW: This agreement shall be governed by; the substantive laws of the State of California By my signature below, I authorize work to begin and agree to pay the Grand Total according to the terms and conditions of this agreement.

Name: Date:

Signature:
272
&
CALIFOtrINIA BOILEtrl
SERVICE. PARTS. SALES' RENTALS
Expected job timing:

California Boiler Sent You a Quote
California Boiler submitted a quote for SANGER WWTP for your review and approval. Click here to view details, approve, or request changes to the quote.

California Boiler is pleased to provide the following proposal for your consideration. Remove and replace the following of your south sludge heater. o Remove and replace, boiler tubes, tube sheets and both ends of Morrison tube. . Complete 3rd party A-1 inspection of vessel.
o Remove and replace Power Flame burner with OEM.
. Complete start up as per Power Flame standards.
. (3) Boilermakers 2 weeks
. (1)Technician 2-3 days
. L week to have tube sheets made
Notes / Payment Terms / Approval
a. Approximately 6-8 week lead time upon receiving signed quote and purchased order. Lead time is subject to change due to the possibility of events outside of our control. b. Labor is based on straight time (7:00 AM-5:00 PM, Monday through Friday) unless otherwise stated. Overtime or weekend labor may be provided at your request. c. Please see attachment for Standard Terms and Conditions. By signing this proposal, Sanger Wastewater Treatment is acknowledging that we have read and accept the attached California Boiler Terms and Conditions.
d. Any additional parts or service outside of the scope of work can be provided/performed on T&M or a separate quote may be submitted.
e. Construction Permits, State Operating, if needed, California Boiler is willing to assist for an additional charge.
f. San Joaquin Valley Air Pollution Control District permits are not included in this bid. lf needed, California Boiler is willing to assist for an additional charge. h. This proposal is valid for 15 days.
l. Based on approved credit.

J. Freight is not included with pricing.
273
K.25% due upon acceptance 65% due upon notice of equipment to ship 10% due upon completion along with applicable freight charges.

L. Standard terms and conditions apply.

Quote: REV1 Rebuild South Sludge Heater Quote for Repair at SANGER WWTP Amount: 594,605.81
Prepared By: Nathan Merriweather
Address: 333 NORTH ST., SANGER, CA 93657
<a
href="https://app.servicetrade.com/quoteview/view?id=gFQTEUflJnNFT%2FGwLl4lkjliAA0yz6aWyTwQ KTw3cnN RBzmfCchRjmA%2BlTZHmwlhErNAxKhHnq5ShulGPnF5ERM4vm%2FZUOxSAfsUnOUd5w%286 %2BllJQnVJUf%zBR%2Bkjn4uMjBElH j4c%o3D" target="_blank" style="" 16px;="f6px'tt helvetica,="Helvetica," arial,="4p;g1," sans-serif;="sans-serif;" #fffffi;="#fFffff;" hone;="1'1gg1g'" 3px;=rrJ,p1'tt #1b619b;="#1b5L9b;" L2px="L2px" solid="solid" 18px="1-8px" inline-block;="1n;1n"- block;">View and Respond to Quote
lf you have any questions or concerns about this quote or you have received this email in error, please contact Nathan Merriweather at [email protected] or (559) 725-2628.

Thank you I
California Boiler
(ssg) 62s-s1s1
dcalla ha n @ca lifornia boiler.com
7341- West Goshen Avenue
Visalia, CA 93291
274
ATTACHMENT2
275

SERVICE PROVIDER AGREEMENT BETWEEN THE CITY OF SANGER

AND CALIFORNIA BOILER
THIS AGREEMENT is made on September 7,2023, by and between the CITY OF SANGER, a municipal corporation of the State of California, ("City") and Califomia Boiler ("Service Provider").

RECITALS
A. The City is in need of replacing the wastewater digester south sludge heater and issued a request for quotes.

B. Service Provider submitted a quote and represents and warrants that it has the experience and qualifications to provide services under this Agreement.

C. After review and consideration, City desires to enter a contract with Service Provider to provide said services.

AGREEMENT
NOW, THEREFORE, the parties incorporate the foregoing recitals and agree as follows:

L Services. Service Provider agrees to perform the services herein set forth at the compensation and upon the terms and conditions herein expressed, and Service Provider hereby agrees to perform such services for said compensation, and upon said terms and conditions City hereby authorizes Service Provider to commence work on September 8,2023.

2. Obligations. duties and responsibilities of Service Provider. It shall be the duty, obligation and responsibility of the Service Provider, in a skilled and professional manner, to perform, furnish and supply to the City the services and supplies in accordance with the service requirements set forth in EXHIBIT A titled "Quote No. 0002691 - Remove and Replace South Sludge Heater" attached hereto and incorporated by reference.

3. Compensation.

A. Payment. Service Provider shall provide monthly invoices to the City for Services completed. Compensation shall be made for Services identified in the invoice that the City in its sole discretion, concludes has been satisfactorily performed. Payment shall be made within thirty (30) calendar days of receipt of each invoice unless the City notifies the Service Provider that a dispute as to the invoice exists. Compensation for this Agreement shall not exceed $94.605.81.

B. Payment Limited to Satisfactory Services. Payments to Service Provider by City shall not excuse Service Provider from its obligation to replace unsatisfactory deliverables, including equipment, components, materials, or services even if the unsatisfactory character of such deliverables, equipment, components, materials, or Services may not have been apparent or detected at the time such payment was made.

Page I of6
276
Deliverables, equipment, components, materials, and services that do not conform to the requirements of this Agreement may be rejected by City and in such case must be replaced by Service Provider without delay at no cost to the City.

C. Withhold Payments. If Service Provider fails to provide Services in accordance with Service Provider's obligation under this Agreement, the City may withhold any and all payments due Service Provider until such failure to perform is cured, and Service Provider shall not stop work as a result of the City's withholding of payments as provided herein.

D. Audit and Inspection of Records. Service Provider agrees to maintain and make available to the City, during regular business hours, accurate books and accounting records relating to its Services. Service Provider will permit City to audit, examine and make excerpts and transcripts from such books and records, and to make audits of all invoices, materials, payrolls, records or personnel and other data related to all other matters covered by this Agreement, whether funded in whole or in part under this Agreement, Service Provider shall maintain such data and records in an accessible location and condition for a period of not fewer than five years after final payment under this Agreement or until after hnal audit has been resolved, whichever is later. The State of California or any Federal agency having an interest in the subject matter of this Agreement shall have the same rights as conferred upon City by this Section. Service Provider shall include the same audit and inspection rights and record retention requirements in all subcontracts. 4 Date and Term This Agreement shall be effective on
September 7,2023, and shall continue in full force and effect through January 31,2024, unless otherwise terminated earlier by one of the parties pursuant to Section 7 of this Agreement.

5. Independent Contractor. In the furnishing of the services provided herein, the Service Provider is acting as an independent contractor and not as an employee ofthe City. Service Provider acknowledges and agrees that at all times, Service Provider or any agent or employee of Service Provider shall be deemed at all times to be an independent contractor and is wholly responsible for the manner in which it performs the services and work requested by City under this Agreement. Service Provider, its agents, and employees will not represent or hold themselves out to be employees of the City at any time. Service Provider or any agent or employee of Service Provider shall not have employee status with City, not be entitled to participate in any plans, arrangements, or distributions by City pertaining to or in connection with any retirement, health or other benefits that City may offer its employees. Service Provider or any agent or employee of Service Provider is liable for the acts and omissions of itself, its employees, and its agents. Service Provider shall be responsible for all obligations and payments, whether imposed by federal, state, or local laws, including, but not limited to, FICA, income tax withholdings, unemployment compensation, insurance, and other similar responsibilities related to Service Provider's performing services and work, or any agent or employee of Service Provider providing same.

Nothing in this Agreement shall be construed as creating an employment or agency relationship between City and Service Provider or any agent or employee of Service Provider. Any terms in this Agreement referring to direction from City shall be construed as providing for direction as to policy and the result of Service Provider's work only, and not as to the means by which such a result is obtained. City does not retain the right to control the means or the method by which