Santa Ana City Council
June 21, 2022

Inclusionary Housing Funds $484,000
Project-Based Vouchers Twenty-Five
(25)
The pre-commitment letter for Jamboree and WISEPlace provides the enforceable funding commitment from the City for $5,256,327 in HOME-ARP funds, and twenty-five (25) project-based vouchers for the development of the WISEPlace permanent supportive housing project located at 1411 N. Broadway, Santa Ana, CA 92706 (APN 398-523-04) (Exhibit 2).

The pre-commitment letter also includes a provision for an additional award of $484,000 in Inclusionary Housing Funds for relocation benefits, if necessary. This is because there are currently 20 shelter residents at WISEPlace. As occupants of transitional housing/an emergency shelter, WISEPlace clients do not meet the definition of a displaced person, because the housing they occupy is not permanent housing, and they do not pay for the housing. The purpose of the housing they currently occupy is temporary housing until they are matched with a permanent housing option. The units/beds they occupy does not meet the definition of a “dwelling” under the Uniform Relocation Act (“URA”), and further, the Department of Housing and Community Development issued guidance indicating that the temporary sheltering of homeless persons does not trigger “tenancy” under Civil Code section 1940 and related provisions.

However, while WISEPlace and Jamboree nor the City of Santa Ana have a legal requirement to provide relocation assistance to WISEPlace residents in the event they are not matched with an alternative housing or shelter option prior to the start of construction and would need to vacate the site, WISEPlace and the City will each provide $484,000 in a 50/50 split, if relocation assistance are to be provided to the site occupants per the same requirements of the URA or CA Relocation Regulations. If the 20 current WISEPlace residents are provided relocation assistance as calculated per the requirements as the URA and California State Relocation Regulations, the estimated total for relocation payments will be $968,000. WISEPlace will work with staff to relocate their 20 residents prior to the start of construction of the project. However, this additional assistance will provide a guarantee that full relocation benefits are available, if necessary, to the current residents if WISEPlace is unable to relocate them.

Among various other conditions in the pre-commitment letter, one of the primary conditions is that the developer must provide verification that it has secured all of its remaining financing for the development of the project in the form of the other enforceable funding commitments in the project’s capital stack, which may include 9% or 4% Federal Low Income Housing Tax Credits, State Housing Tax Credits, a commitment of affordable housing funds from the County of Orange or State of California, Section 8 project-based vouchers from the Orange County Housing Authority, or any other funding source needed in the project’s capital stack to develop the Project and close on the financing, before staff City Council 62 – 4 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

will return to the City Council for consideration of the Loan Agreements for this project.

The pre-commitment letter is also conditional on the developer securing any and all permits and discretionary approvals that may be required for the Project by the City. The pre-commitment does not obligate the City or any department thereof to approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the construction of the Project.

In compliance with the City’s Affordable Housing Funds Policies and Procedures, KMA has conducted a preliminary financial gap analysis to confirm the project’s underwriting, the financial gap, and other programmatic requirements related to the funding sources (Exhibit 3). KMA reviewed the developer’s estimates and projections of rents, expenses, reserves and development costs in accordance with industry-standard underwriting guidelines. Following this preliminary financial gap analysis and the procurement and deliberative process described above, staff recommends the full amount of the award to City Council for final approval.

Project Description
Following the RFP process, Jamboree in partnership with WISEPlace is being recommended by staff as the developers to co-develop an affordable housing community at 1411 N. Broadway (the “Project”). The proposed name for the Project is WISEPlace Permanent Supportive Housing (“WISEPlace PSH”). Renderings of the Project are attached as Exhibit 4.

Jamboree is an experienced affordable and permanent supportive housing developer focused on developing and rehabilitating housing throughout California. Since 1990, Jamboree has successfully built a portfolio of over 100 projects comprising over 10,000 units. Jamboree currently has $1.1 billion in permanent supportive housing, affordable and special needs housing projects under development and an estimated $3.2 billion in developments in its portfolio. Jamboree has extensive affordable housing financing experience, including securing 4% and 9% low income housing tax credits, and is well versed in navigating regulatory complexities.

Jamboree is one of the leading non-profit developers of a wide range of housing and community developments that serve families and individuals not served by traditional market rate developers. Jamboree develops, acquires, renovates, and manages high quality and permanently affordable family, senior and supportive housing communities throughout the State of California. Jamboree has experience developing and operating communities in Santa Ana including the recently opened permanent supportive housing project Heroes Landing, which is exclusively for veterans. Additionally, Jamboree has four completed developments in Santa Ana including Heroes’ Landing, First Point I and II, Metro East and Cornerstone, and one development under construction, North Harbor Village.

City Council 62 – 5 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

Jamboree has formed a qualified team to design and partner with in supporting the ongoing mission of the property. This includes, as Administrative General Partner and supportive services provider, the local non-profit WISEPlace, architecture firm Architecture Design Collaborative, the Orange County Health Care Agency, the Orange County Housing Finance Trust, and experienced property management firm Quality Management Group. On May 18, 2022, the Orange County Housing Finance Trust (“OCHFT”) approved an award of $2,480,030 in funding. Councilmember Penaloza voted in support of this award as City Council’s appointee to the OCHFT Board.

Since 1924, WISEPlace has served our homeless population, including unaccompanied women. WISEPlace has transformed the lives of more than 8,400 individuals experiencing homelessness since inception in the 1920s. Through the “WISEPlace Way”, clients can achieve personal stability through case management and counseling, financial empowerment, employment assistance, health and wellness, socialization activities, addiction recovery, housing retention assistance and the setting of and completion of personal goals. WISEPlace’s 90+ year history of serving the community has shown that these are the components necessary to help prevent and end homelessness.

Project Site
Jamboree, in partnership with WISEPlace, is proposing to develop 0.6 acres located on the site of WISEPlace’s current headquarters at 1411 N. Broadway. The site is located along Broadway and Sycamore Street, between 15th Street and Washington Avenue.

Main Street, one block east of Sycamore Street, has regular Orange County Transportation Authority bus service including Routes 53 and 83. The site is within onequarter mile of the Orange County Transportation Authority Route 60, with a stop at 17th Street and Broadway. The Project is within one mile of the Santa Ana Regional Transportation Center.

The Project site consists of an L-shaped parcel developed with a one- to two-story institutional building located within the Broadway Corridor District of the Midtown Specific Plan (SP-3) zoning designation. Through the City’s Adaptive Reuse Ordinance (“ARO”), residential use will be allowable by right. The existing one-story East-West wing facing Broadway will be renovated as part of an adaptive reuse, including three (3) units with the existing landmark building. The four-story new construction portion will face Sycamore and will have an additional 45 units. The Project will not require a zone change or amendment to the current land use through the ARO. The proposed development gained unanimous approval from the Historic Resources Commission on March 3, 2022 and the Planning Commission on May 9, 2022.

Proposed Project
The proposed Project includes 47 studio Permanent Supportive Housing (“PSH”) units and one (1) two-bedroom manager’s unit. 100% of the units will be set aside for extremely low-income households at 30% Area Median Income. The studio units will be designated as PSH for persons experiencing chronic homelessness. Fourteen (14) units will serve City Council 62 – 6 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

individuals experiencing chronic homelessness with a mental illness, financed by the Mental Health Services Act (“MHSA”). Services will be provided for these residents on site by the Orange County Health Care Agency.

The project consists of the adaptive reuse of the one-story East-West wing facing Broadway, in order to preserve the landmark status of the existing building. The existing North-South wing facing Sycamore will be demolished to accommodate the new construction of a four-story building, with a podium-parking garage on the ground floor and three levels of wood frame construction above. The massing on the fourth floor facing Broadway is stepped back to provide a seamless indoor-outdoor community room space on the fourth floor. The building architecture is complementary to the existing building’s Spanish Colonial Revival style, while being differentiated and distinguishable from the existing architecture. The sight lines along Broadway are preserved to maintain the historic character from that street frontage. The ground floor amenities include a community garden, barbeque area and seating, dog run, and renovation of the existing patio and planters. The indoor amenities include two community rooms, a community kitchen, laundry rooms on each floor, a computer room, and a fitness center.

Resident Services
WISEPlace will coordinate the delivery of all services, including those anticipated to be committed through the Orange County Health Care Agency. A comprehensive range of services will be offered to assist residents achieve and maintain self-sufficient, healthy and purposeful lives. Working under the Housing First model and the “WISEPlace Way”, WISEPlace will utilize strategies from an array of evidence-based models and practices to ensure residents have access to all required services.

Thanks to the customized WISEPlace Way of comprehensive, person-centered wrap around services, even in highly vulnerable populations, personal self-sufficiency can be reached. In 2021, WISEPlace achieved the following outcomes:
 77% of clients transitioned into stable housing
 72% of clients increased their savings
 39% of clients decreased their mental health symptoms  100% of clients were linked with benefits and resources  95% of clients retained housing
The Project will provide on-site supportive services for the PSH residents that provide stability, community, and life skills training to adults diagnosed with a mental illness who are homeless. An on-site Resident Clinical Services Coordinator will provide case management services for the MHSA units.

WISEPlace will provide wrap-around services and coordination to activate the community amenity spaces on site to meet the needs of all residents. An on-site Case Worker and Resident Services Coordinator will create a Supportive Services Plan for the PSH City Council 62 – 7 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

community, ensuring residents have access to needed services to maintain housing, onsite community building activities, and links to partner organizations.

Community Inclusion
As part of the development process, the development team has engaged local partners to provide input on the proposed development. The Project team held two community outreach meetings open to the public in February and March 2022. The team also met with the Willard, Downtown, and Floral Park Neighborhood Associations. The development has also received letters of support from several community organizations including but not limited to Santa Ana Rotary, Dr. Snow of UC Irvine, Santa Ana Elks, United Way, United to End Homelessness, Providence, Assistance League, Mariposa, Working Wardrobes, Santa Ana Kiwanis, and Justice League.

The one-story adaptive reuse project will include commercial in the existing community room space facing Broadway. A museum displaying the history of the Y.W.C.A. and landmark building will be open to the public during regular business hours. WISEPlace plans to partner with community organizations such as Orange County School of the Arts for periodic art installations as well.

Finally, WISEPlace will continue to serve the broader community out of the development as it will maintain its headquarters on-site upon completion.

Parking
The proposed site plan includes 20 covered parking spaces in the gated parking garage with an entrance on Sycamore Street. The parking ratio is 0.42 spaces per PSH unit.

While the development team has included 20 parking stalls, PSH located near transit is not required to provide any parking under State law. The developer has agreed to provide a Parking Management Plan as part of the Density Bonus Agreement.

Unit Mix
The target population for WISEPlace PSH includes individuals experiencing chronic homelessness with a local preference for residents of the Santa Ana community.

Fourteen (14) units will serve special needs formerly homeless with a mental illness. A total of 47 studio units (100%) are reserved for extremely low-income individuals at or below 30% of the Area Median Income (AMI). These 47 units are specifically designated for permanent supportive housing for persons who are experiencing chronic homelessness. The proposed unit mix and rent restrictions are as follows:

Bedroom
Size
30%

AMI (PSH)
Manager’s
Unit Total Units
Studio 47 47
Two-Bedroom 1 1
TOTAL 47 1 48
City Council 62 – 8 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

Density Bonus Agreement
Jamboree requires approval of a Density Bonus Agreement (“DBA”) to allow the construction of the WISEPlace PSH Project (Exhibit 5). The Planning Commission recommended approval of the Density Bonus Agreement on May 9, 2022 by a vote of 5:0 (Commissioners McLoughlin and Pham absent) (Exhibit 6). In order for the Planning Commission to recommend approval of the Density Bonus Agreement, the Historic Resources Commission recommended approval of the Project on March 3, 2022 by a vote of 8:0 (Commissioner Frazier absent) (Exhibit 7). Jamboree has paid the City's Density Bonus Setup fee in the amount of $22,097.27 to prepare the agreement.

The California Density Bonus law allows developers proposing five or more residential units to seek increases in base density for providing on-site housing units in exchange for providing affordable units on site. To help make constructing on-site affordable units feasible, the law allows developers to seek up to three incentives/concessions and an unlimited number of waivers, which are essentially variances from development standards that would help a project be built without significant burden and without detriment to public health. The first version of the Density Bonus Law was adopted in 1979 and has since been amended at various times. Recent revisions allow affordable housing developers to request incentives/concessions and/or waivers for 100-percent affordable developments, even if they do not require a numerical density bonus.

Moreover, in early 2017, the law was amended to restrict the ability of local jurisdictions to require studies to “justify” the density bonus and requested incentives/waivers and places the onus on local jurisdictions to prove that the incentives/concessions or waivers are not financially warranted.

The purpose of the State Density Bonus Law is to encourage the development and availability of affordable housing by requiring the inclusion of affordable housing units within new developments. Pursuant to California Government Code sections 65915 (d)(1) and 65915 (e)(1), a local jurisdiction is limited in its ability to deny requested concessions and waivers and is preempted from denying the Density Bonus Agreement application. Due to the project’s 100-percent affordability the developer can seek up to three density bonus concessions and unlimited waivers, pursuant to Section 65915 et al. of the California Government Code (Density Bonuses and Other Incentives). Although the City has analyzed the Project for several areas of concern, the conditions of approval proposed for the Project are intended to address any of the Project’s potential impacts. Table 1 outlines the incentives/concessions and waivers requested by Jamboree and WISEPlace:

Table 1 Requested Incentives/Concessions
Standard Required Provided
Building Height and Number of
Stories
The maximum building height for all
buildings is 35 feet, or three stories,
whichever is less – Broadway
Corridor District of the Midtown
Specific Plan (SP-3) zoning
designation
The new building is proposed
at a height of 54 feet and 6-
inches and four stories –
Requires Concession (1 of
3), Cal. Gov’t Code Sec.
65915 (d)(1)(2)(B)
City Council 62 – 9 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

Standard Required Provided
Underground Utility
Installations
All utilities as part of the proposed
project shall be required to be
installed underground – Section 41-
626 of SAMC - Underground utility
installations.

All proposed utilities will be
undergrounded with the
exception of existing
overhead power lines over the
existing building along with
recorded Southern California
Easement (to remain) –
Requires Concession (2 of
3), Cal. Gov’t Code Sec.
65915 (d)(1)(2)(B)
As designed, the Project is eligible to exercise its ability to seek State density bonus incentives and/or concessions because it is a 100-percent affordable project for permanent supportive housing. However, the Project does not seek an increase in allowable dwelling units as the Project is designed as an adaptive reuse project. Pursuant to Article XVI.II (Adaptive Reuse) in the SAMC, adaptive reuse projects can exceed the maximum general plan density provided the adaptive reuse project complies with the development standards.

In addition, the site is parked in compliance with California Government Code Section Cal. 65915 (p)(4). Pursuant to the California Density Bonus Law, and upon the request of the developer, a City cannot impose any minimum vehicular parking requirement for a rental supportive housing development, as defined in Section 50675.14 of the California Health and Safety Code. Although not required to provide parking, the site provides twenty (20) total parking spaces, or 0.42 spaces per unit, which includes two accessible parking stalls.

Lastly, pursuant to the adaptive reuse ordinance, parking spaces are not required for any converted use within the building. Therefore, no parking is required for the administrative/residential portions of the converted building within the one-story portion of the building.

Key Terms in the Density Bonus Agreement
The following is a list of key terms in the Density Bonus Agreement:
 Term of Agreement. The term of the Agreement shall commence on June 21, 2022 and shall continue until the date that is fifty-five (55) years after the City issues the last certificate of occupancy for the Project.  Project. Developer shall develop, operate, and maintain, or cause the development, operation and maintenance of, the Property as a forty-eight (48) unit rental residential community, with forty-seven (47) Affordable Units for Extremely Low Income Tenants.
 Unit Mix. No less than forty-eight (48) Units, which shall be comprised of fortyseven (47) studio units designated as Affordable Units pursuant to the terms and conditions of the Agreement.
 Affordable Rent Schedule. The rents shall be the maximum Monthly Rent that may be charged to and paid by an Extremely-Low Income Tenant whose income City Council 62 – 10 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

does not exceed thirty (30%) of the area median income for Orange County.  Selection of Tenants. Each Affordable Unit shall be leased to Eligible Households that are chronically homeless and document-ready individuals on the Coordinated Entry List. All residents will be referred from the County of Orange Coordinated Entry System. Developer shall give preference in leasing units to households that live and/or work in the City of Santa Ana or who have an active Housing Choice Voucher.
 Onsite Supportive Services, Programs and Amenities. Developer shall provide residents of the Project, or cause to be provided to residents of the Project, access to discounted or no-cost onsite supportive services, programming and amenities that promote independent living and economic mobility and include but are not limited to health and wellness services, social activities, and physical or recreational amenities.
 Maintenance. Owner shall, at all times during the term of this Agreement, cause the Property and the Project to be maintained in a decent, safe and sanitary manner, regardless of cause of the disrepair, to the extent commercially reasonable.
 Onsite Parking Management Plan. Developer has agreed to provide twenty (20) onsite parking stalls for residents and visitors of the Project and actively monitor the parking demand of the Project site. Developer shall continually monitor and take commercially reasonable measures to manage the parking demand of the Project site - to mitigate the use of offsite parking spaces on private or public properties and/or right-of-way. Prior to issuance of the Certificate of Occupancy, Developer shall submit and obtain approval from the Planning and Building Agency of a Parking Management Plan ("PMP") to address the parking demands of the Project. The approved PMP shall be adhered to and be enforced by the Project at all times.

The Density Bonus Agreement has been pre-signed by the developer indicating their acceptance of the terms. The agreement is not considered final until the City Council has reviewed and approved the agreement, and the agreement is executed by all parties.

CDBG Loan Forgiveness
In 1993, the former Community Redevelopment Agency of the City of Santa Ana (“Former Agency”) provided WISEPlace, formerly known as the YWCA of South Orange County, a $50,000 predevelopment loan of tax increment funds for the purposes of developing a Single Room Occupancy Hotel (“SRO”) project on the site. However, this project was deemed financially infeasible by the Former Agency, and in August 1999, the $50,000 predevelopment loan was forgiven by the Former Agency.

In 1996, the City provided WISEPlace a $900,000 loan of Community Development Block Grant (“CDBG”) funds (“CDBG Loan”) to finance the rehabilitation of the site for the purposes of providing permanent affordable rental housing. The CDBG Loan was City Council 62 – 11 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

structured with a 55-year term and a 1% simple interest rate. The loan repayments were to be made from 50% of the project’s residual receipts.

In 2001, the City amended the terms of the CDBG Loan. At that time, the outstanding principal balance of the loan was set at $916,265, which consisted of two components:
(1) a $250,000 component, and (2) a $666,616 component. The amended promissory note set the loan term at 55 years – starting in 2002 and ending in 2056. The interest rate was set at 1% and was applied to the $666,265 component of the CDBG Loan, which resulted in annual interest payment of $6,662.65 per year.

WISEPlace was required to make interest only payments of $6,662.65 per year for the 55-year loan term. However, as long as the project was not in default, the amended promissory note required the City to forgive $16,666 of the CDGB Loan per year for the first 15 years. This resulted in $250,000 of the $916,265 CDBG Loan being forgiven. The current outstanding loan balance is currently $723,446.41. Per the terms of the amended promissory note, WISEPlace is required to continue paying annual interest only payments until the end of the loan term in 2056. The entire balance of the CDBG Loan ($723,446.41 plus interest) will become due and payable at that time.

The current financial structure of the Project requires WISEPlace to enter into a long-term ground lease with a to-be-formed Tax Credit partnership. The Tax Credit partnership will consist of WISEPlace, Jamboree and a Tax Credit Investor. However, per discussions with Jamboree and WISEPlace, the Tax Credit partnership cannot assume any of WISEPlace’s existing debt – including the existing CDBG Loan. Furthermore, given that the Tax Credit partnership will be ground leasing the site from WISEPlace, there are no available sales proceeds to pay off the existing CDBG Loan. As such, to effectuate the proposed WISEPlace PSH project, WISEPlace is requesting forgiveness of the existing CDBG Loan.

Staff recommends that the City Council approve WISEPlace’s CDBG Loan forgiveness request. As discussed above, the amended promissory note already allowed for loan forgiveness during the first 15 years of the loan term. The additional loan forgiveness would be in line with past City actions regarding loans provided to WISEPlace. In addition, the CDBG Loan is structured with interest only payments; therefore, none of the outstanding principal balance is currently being paid down. This would leave an outstanding balance of $723,446.41 plus interest to be repaid in full in Year 2056.

Additionally, as part of the proposed Project, the City will be placing new City loan(s) on the Project. Thus, the City will still be entitled to receive residual receipts from the PSH project.

ENVIRONMENTAL IMPACT
Pursuant to the Adaptive Reuse Ordinance (Ordinance No. NS-2874), the proposed project is found and determined to be consistent with the General Plan of the City of Santa Ana. Therefore, in accordance with the California Environmental Quality Act, the City Council 62 – 12 6/21/2022
Pre-Commitment of Affordable Housing Funds for Jamboree and WISEPlace June 21, 2022

recommended action is exempt from further review under Section 15194 (Affordable Housing Exemption), as this project meets all the required criteria as a 100-percent affordable/permanent supportive housing development. Based on this analysis, a Notice of Exemption, Environmental Review No. 2022-05 will be filed for this project.

FISCAL IMPACT
The various agreements, including the loan agreements, are estimated to be finalized for City Council approval in FY 2022-23. Upon future approval of the loan agreements, funds will be budgeted and available as shown below:

Fiscal
Year
Accounting
Unit – Account
#
Fund Description
Accounting Unit,
Account
Description
Amount
FY 22-23 18218780-
69152

HOME-ARP
Program Loans & Grants $5,256,327
FY 22-23 41718820-
69152
Inclusionary Housing
Fund Loans and Grants $484,000
Total Loans 5,740,327
The forgiveness of the CDBG Loan will have two impacts. First, the $6,662.65 per year for the remainder of the loan term will no longer be paid to the City. Second, the entire balance of the CDBG Loan due to the City will be forgiven and no longer payable to the City.

EXHIBITS

1. Staff Report from December 7, 2021

2. Pre-Commitment Letter with Jamboree and WISEPlace

3. Preliminary Financial Gap Analysis by Keyser Marston Associates

4. Proposed Project Renderings / Preliminary Site Plan

5. Density Bonus Agreement

6. Planning Commission Staff Report from May 9, 2022

7. Historic Resources Commission Staff Report from March 3, 2022 Submitted By: Steven A. Mendoza, Assistant City Manager Approved By: Kristine Ridge, City Manager
City Council 62 – 13 6/21/2022

SANTA ANA CITY COUNCIL
Vicente Sarmiento
Mayor
[email protected]
Phil Bacerra
Mayor Pro Tem, Ward 4
[email protected]
Thai Viet Phan
Ward 1
[email protected]
Nelida Mendoza
Ward 2
[email protected]
Jessie Lopez
Ward 3
[email protected]
Johnathan Ryan Hernandez
Ward 5
[email protected]
David Penaloza
Ward 6
[email protected]
MAYOR
Vicente Sarmiento

MAYOR PRO TEM
Phil Bacerra

COUNCILMEMBERS
Johnathan Ryan Hernandez
Jessie Lopez
Nelida Mendoza
David Penaloza
Thai Viet Phan

CITY OF SANTA ANA

COMMUNITY DEVELOPMENT AGENCY
20 Civic Center Plaza M-25
Santa Ana, California 92702
www.santa-ana.org

CITY MANAGER
Kristine Ridge

CITY ATTORNEY
Sonia R. Carvalho

CLERK OF THE COUNCIL
Daisy Gomez
June 21, 2022
Tish Kelly Sent via E-mail
Vice President, Development
Jamboree Housing Corporation
Brateil Aghasi
Chief Executive Officer
WISEPlace
Re: WISEPlace Permanent Supportive Housing
1411 N. Broadway, Santa Ana, CA 92706
Pre-Commitment Letter for HOME – American Rescue Plan (“HOME –ARP”) Loan, Inclusionary Housing Funds Loan, Twenty-Five (25) Project-Based Vouchers, and CDBG Loan Forgiveness
Dear Mses. Kelly and Aghasi,
Jamboree Housing Corporation (“Jamboree”), in partnership with the fee owner of the WISEPlace apartment development (“Owner,” and collectively with Jamboree, the “Developer”), requested financial assistance in connection with the proposed development of a forty-eight (48) unit affordable housing complex, with forty-seven (47) units restricted for chronically homeless individuals, to be located at 1411 N. Broadway, Santa Ana, CA 92706 (APN 398-523-04) (the “Project”).

The Project will be an adaptive reuse of the existing one-story structure and the demolition of the existing two-story gym structure along Sycamore. The new construction component will include one story within the existing building along Broadway and a fourstory new building along Sycamore. The Project requires a Density Bonus Agreement to be approved by the City Council.

The City of Santa Ana (“City”) and the Housing Authority of the City of Santa Ana (“Housing Authority”) have reviewed the Developer's request for assistance, and at the EXHIBIT 2
City Council 62 – 14 6/21/2022
P a g e | 2
City Council / Special Housing Authority meeting on June 21, 2022, the City Council and Housing Authority Board authorized and approved issuance of this pre-commitment letter evidencing the preliminary award of (collectively, the “City Assistance”):
- A loan in the maximum amount of $5,256,327 funded from the HOME Investment Partnerships Program – American Rescue Plan (“HOME –ARP”) funds held by the City of Santa Ana for the Project (“HOME-ARP Loan”); - A loan in the maximum amount of $484,000 from the Inclusionary Housing Fund held by the City for the Project (“Inclusionary Loan”) to be used for relocation purposes only if necessary;
- Twenty-Five (25) U.S. Department of Housing and Urban Development Project-Based Vouchers (“PBV”) from the Housing Authority of the City of Santa Ana.

This letter shall evidence the City’s pre-commitment of the City Assistance to the Developer for the Project subject to the conditions described below.

City Assistance:

The amount of the proposed City Assistance has been determined based upon the City’s review of the Developer's request for the receipt of the City Assistance and the development proforma and projected cash flows for the Project submitted by the Developer to the City (“Proforma”). The City Manager has authority to approve revised development proformas and projected cash flows for the Project; provided, however, that the City Assistance is not increased or extended.

The City Assistance shall include the following loan terms:
 The HOME-ARP Loan shall be for a maximum principal amount of $5,256,327, or as much thereof as is disbursed for hard and soft costs in constructing the Project, provided from the HOME Investment Partnerships Program – American Rescue Plan fund:
o A portion of the $5,256,327 will be in the form of capital funds, repayable from residual receipts.
o The remaining portion of the $5,256,327 will be in the form of capitalized operating subsidy reserve.
o The exact amounts may be determined at construction closing.  3% simple interest per annum.
 Repayment from 50% of Residual Receipts (pro-rata with payments due in connection with other financing provided by other public agencies) (after payment of operating expenses, including social services expenses and monitoring fees, debt service, any deferred developer fee, and partnership fees to be described in the Agreement), with the remaining 50% to be disbursed to the Developer.

EXHIBIT 2
City Council 62 – 15 6/21/2022
P a g e | 3
o Any repayments to the soft loans must be based on the pro rata share of all the soft loan balances (the same as the residual receipts splits).  Remaining principal and accrued interest due upon the 55th anniversary of the issuance of Certificate of Occupancy or earlier upon sale, refinancing or an uncured default. On that date, the City agrees to review the performance of the Property and consider in good faith any reasonable request by Developer to modify the terms or extend the term of the City Promissory Note. Additionally, the City will receive 50% of the net proceeds received from any sale or refinancing of the Project in order to repay any outstanding principal or interest due on the City Promissory Note, after payment of outstanding conventional debt, payment in full of any deferred developer fee, payment for any necessary repairs, and establishment of any reserves and transaction costs.
 Cost savings from the Project, if any, will be applied first to pay down the City Assistance, subject to compliance with the Tax Credit Allocation Committee (“TCAC”) Regulations and California Health and Safety Code, as applicable.  After all other funding sources have been secured through enforceable funding commitments, a HOME Subsidy Layering Review is required in order to confirm the eligible amount of HOME-ARP funds committed to the Project.  An environmental review in compliance with the National Environmental Policy Act is required prior to entering into a Loan Agreement for the HOME-ARP funds committed to the Project.

The HOME-ARP Loan shall also require specific HOME-ARP designated units in the Project. The City’s preliminary HOME-ARP Cost Allocation Analysis suggests that approximately nine (9) units in the Project will be designated as HOME-ARP assistedunits.

The Inclusionary Loan shall have the same terms above and be for a maximum principal amount of $484,000, or as much thereof as is disbursed for relocation benefits for current WISEPlace residents in the event the residents are not matched with an alternative housing or shelter option prior to the start of construction and would need to vacate the site, provided from the Inclusionary Housing Fund. If relocation assistance is to be provided to the site occupants per the same requirements as the Uniform Relocation Act (“URA”) or California Relocation Regulations, the Owner will also contribute an equal amount, dollar for dollar, in matching funds to the Inclusionary Loan. For example, if the twenty (20) current WISEPlace residents are provided relocation assistance as calculated per the requirements of the URA and California State Relocation Regulations, the estimated total for relocation payments will be $968,000, to be paid equally by the Inclusionary Loan and the Owner. The Owner will work with staff to relocate their 20 WISEPlace residents prior to the start of construction of the project. The Inclusionary Loan is for relocation purposes only, so if the Owner is able to relocate residents prior to the start of construction of the project, then the Inclusionary Loan funds shall be EXHIBIT 2
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proportionately reduced, or will not be required at all if all residents are relocated prior to the commencement of the project.

Project-Based Vouchers:

The basic terms of the award are as follows:
 Funding Source: The twenty-five (25) PBVs will be funded exclusively out of the tenant-based voucher program annual budget authority received by the Housing Authority from the U.S. Department of Housing and Urban Development (HUD).  Rents: The PBV Housing Assistance Payments (HAP) Contract rents below are preliminary and contingent upon a reasonable rent determination to be conducted by the Housing Authority at the time of execution of the HAP Contract:
o Studio: $1,682
In accordance with HUD regulations and SAHA’s Administrative Plan, these rents are subject to review prior to the execution of a HAP contract.  Annual Amount: The Project will receive PBVs for twenty-five (25) units:

Unit Size
30% AMI
No. Units Proposed Rent
Studio 25 $1,682
The estimated maximum annual amount received under this award is $560,100.

These estimates assume 100% occupancy of the units over the twelve-month period with contract rent amounts limited to the current applicable Santa Ana Housing Authority Payment Standard.
 Term: The HAP Contract will have a term of twenty (20) years. Any time before the expiration of the HAP Contract, the Developer may request an additional twenty (20) years, subject to a determination by the Housing Authority that it is appropriate to continue providing permanent supportive housing for chronically homeless individuals or to expand housing opportunities and HUD funding. Subsequent extensions are subject to the same requirements.
 Units Receiving Assistance: The maximum number of units receiving PBV assistance will be twenty-five (25).
 Local Preference:
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local residents from the City of Santa Ana based on the City’s local residency screening criteria.
o An absolute preference shall be for current WISEPlace residents who are unable to be relocated prior to the start of construction and who qualify for relocation assistance paid for by the Inclusionary Loan and the Owner until the completion of the project. The “absolute” nature of this preference means that these current WISEPlace shelter residents will be selected if determined eligible for occupancy at the project before any other applicants are to be determined eligible.

CDBG Loan Forgiveness:

In 1996, the City provided the Owner a $900,000 loan of Community Development Block Grant (“CDBG”) funds (“CDBG Loan”) to finance the rehabilitation of the site for the purposes of providing permanent affordable rental housing. The CDBG Loan was structured with a 55-year term and a 1% simple interest rate. The loan repayments were to be made from 50% of the project’s residual receipts.

In 2001, the City amended the terms of the CDBG Loan. At that time, the outstanding principal balance of the loan was set at $916,265, which consisted of two components:
(1) a $250,000 component, and (2) a $666,616 component. The amended promissory note set the loan term at 55 years – starting in 2002 and ending in 2056.

The current outstanding CDBG Loan balance is currently $723,446.41. Per the terms of the amended promissory note, the Owner is required to continue paying annual interest only payments until the end of the loan term in 2056. The entire balance of the CDBG Loan ($723,446.41 plus interest) will become due and payable at that time. Following the fulfillment of the conditions provided herein, the entirety of the CDBG Loan will be forgiven by the City, including any interest that may have accrued since the date of this letter.

General Provisions:

The City's obligation to provide the City Assistance and CDBG Loan Forgiveness to the Project is subject to each of the following conditions:
 Developer must provide proof that it has secured all of its remaining financing for the development of the Project in the form of enforceable funding commitments, which may include 9% or 4% Federal Low Income Housing Tax Credits, State Housing Tax Credits, a commitment of affordable housing funds from the County of Orange or State of California, Section 8 project-based vouchers from the Orange County Housing Authority, or any other funding source needed in the Project’s capital stack to develop the Project before staff will return to the City Council for consideration of the HOME-ARP Loan Agreement and Inclusionary Loan Agreement.

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 100% of the affordable units (less one (1) manager’s unit) in the Project will be restricted to extremely low-income, chronically homeless households at 30% of the Area Median Income.
 The Project consists of forty-seven (47) permanent supportive housing units for chronically homeless individuals and families. All individuals and families shall be referred from the Orange County Coordinated Entry System except for those current WISEPlace residents who qualify for an absolute preference.  The rent standards for the Project must comply with the strictest of the standards imposed by TCAC and the HOME Program regulations, or other funding sources contributed to the Project, as applicable and with respect to the units assisted by each applicable funding source.
 All provided funding and Project requirements shall conform to the City’s most recently adopted Affordable Housing Funds Policies and Procedures, unless alternative requirements are expressly provided in the executed Loan Agreements for the City Assistance or any other documents related to the development of the Project.
 Approval of all required entitlements and discretionary actions, to allow the adaptive reuse and construction (as applicable) of a forty-eight (48) unit affordable housing complex, with forty-seven (47) units restricted for chronically homeless individuals, to be located at 1411 N. Broadway, Santa Ana, CA 92706 (APN 398- 523-04).
 The City's obligation to provide the City Assistance and CDBG Loan Forgiveness is and shall remain subject to all covenants, conditions, and restrictions set forth in the Loan Agreements, and in particular the City's analysis of the available funding sources and development and operating costs of the Project and the overall economic feasibility of the Project.
 Review and approval of the Loan documents evidencing the City Assistance by the City Council including the Loan Agreement(s), Promissory Note(s), Affordability Restrictions and Deed(s) of Trust.
 Developer must provide proof that it has received and reviewed three general contractor bids, and that all subcontractors are competitively bid out. Specifically, the Developer must obtain three general contractor bids; all subcontractors must be competitively bid out; and the City must review and approve the final general contractor’s contract.
 Execution of HAP Contracts and all necessary documents for the PBV’s.  Compliance with applicable federal regulations set forth in 24 Code of Federal Regulations (CFR) Part 570 and 24 CFR Part 983, applicable HOME-ARP requirements, and all other federal, state, and local laws and regulations.

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Developer, at its sole cost and expense, will be responsible for securing any and all permits and discretionary approvals that may be required for the Project by the City or any other federal, state, or local governmental entity having jurisdiction over the Property or Project. Notably, this pre-commitment letter shall not obligate the City or any department thereof to approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the construction, rehabilitation, installation or operation of the Project.

This pre-commitment letter for the Project will expire on June 21, 2024.

If you have any questions or require any additional information regarding this precommitment letter, please contact Judson Brown, Housing Division Manager, by telephone at (714) 667-2241 or by e-mail at [email protected].

Sincerely,
On behalf of the City of Santa Ana:
________________________________
Kristine Ridge
City Manager
On behalf of the Housing Authority of
the City of Santa Ana:
________________________________
Steven A. Mendoza
Executive Director
Attest:
_________________________________
Daisy Gomez
Clerk of the Council / Recording Secretary

APPROVED AS TO FORM
Sonia R. Carvalho
Authority General Counsel
___________________________
By: Ryan O. Hodge
Assistant City Attorney
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500 SOUTH GRAND AVENUE, SUITE 1480  LOS ANGELES, CALIFORNIA 90071  PHONE 213.622.8095 2206004.SA.TRB
WWW.KEYSERMARSTON.COM 19090.018.025
ADVISORS IN:

Real Estate
Affordable Housing
Economic Development

BERKELEY
A. Jerry Keyser
Debbie M. Kern
David Doezema

LOS ANGELES
Kathleen H. Head
James A. Rabe
Gregory D. Soo-Hoo
Kevin E. Engstrom
Julie L. Romey
Tim R. Bretz

SAN DIEGO
Paul C. Marra

MEMORANDUM
To: Judson Brown, Housing Division Manager
City of Santa Ana
From: Tim Bretz
Date: June 4, 2022
Subject: WISEPlace Permanent Supportive Housing – Preliminary Financial Gap Analysis
At your request, Keyser Marston Associates, Inc. (KMA) prepared a preliminary financial gap analysis for the project proposed to be developed at 1411 North Broadway (Site) by WISEPlace and Jamboree Housing Corporation (collectively “Developer”). The Developer is proposing to construct a 48-unit apartment project with 47 units designated as Permanent Supportive Housing (PSH) units and restricted to extremely-low income households (Project). One unit will be unrestricted and reserved for an on-site manager.

The Developer is requesting financial assistance from the City of Santa Ana (City) for the purposes of developing the Project. The purpose of this KMA analysis is to evaluate the Developer’s request for financial assistance.

EXECUTIVE SUMMARY
Estimated Financial Gap
The results of the KMA preliminary financial gap analysis are compared to the Developer’s financial assistance request in the following table:

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KMA Developer Difference
Total Development Costs $28,726,000 $28,785,000 ($59 ,000) Outside Funding Sources 23,529,000 23,529,000 -0-
Financial Gap $5,197,000 $5,256,000 ($59,000)
As shown in the preceding table, KMA estimates the Project’s financial gap at $5.20 million, which is $59,000, or approximately 1% less than the Developer’s financial gap estimate. This differential can be considered inconsequential for a Project of this magnitude.

Proposed Funding Sources
The following summarizes the proposed funding sources for the Project:

1. The Housing Authority of the City of Santa Ana (Housing Authority) proposes to provide twenty-five (25) Section 8 Project-Based Vouchers (PBVs) that are allocated to the Housing Authority by the United States Department of Housing and Urban Development (HUD).

2. The Developer is proposing to apply for 9% Federal Low Income Housing Tax Credits (Tax Credits) that are competitively awarded by the California Tax Credit Allocation Committee (TCAC). The net Federal Tax Credit proceeds are estimated at $20.05 million.

3. The Developer was awarded a $2.48 million loan of Mental Health Services Act (MHSA) funds from the Orange County Housing Finance Trust (OCHFT).

4. The Developer applied for a $1.0 million loan of Affordable Housing Program (AHP) funds that are awarded by the Federal Home Loan Bank of San Francisco.

PROJECT DESCRIPTION
WISEPlace currently owns the Site, and uses the location for their headquarters. The property has earned a Landmark Designation for serving women as the former YWCA.

The Site is improved with a one-story structure facing Broadway and a two-story structure along Sycamore Street. As the Landmark Designation status prohibits EXHIBIT 3
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demolition and redevelopment of the property, the Developer is proposing an adaptive reuse of the existing one-story structure. The Developer proposes to demolish the existing two-story structure along Sycamore Street, which would then be replaced with a newly constructed four-story building.

In order to develop the Project, WISEPlace proposes to ground lease the Site to the Developer (partnership between WISEPlace and Jamboree Housing Corporation) for $1 per year. The ground lease will be for a term of at least 65 years.

The proposed scope of development can be described as follows:

1. The Site is comprised of 0.6 acres, or 26,136 square feet of land area.

2. The Project’s unit mix is as follows:

Number of
Units
Unit Size
(SF)
Studio Units 47 410
Two-Bedroom Units 1 979
Total / Weighted Average 48 422

3. The gross building area (GBA) is estimated at 31,428 square feet, which is comprised of the following:
a. The residential living area is estimated at 20,267 square feet; b. The community room / leasing / social service GBA is estimated at 6,502 square feet; and
c. The circulation / common area GBA is estimated at 4,659 square feet.

4. The Project includes 20 at-grade structured parking spaces, which equates to approximately 0.4 parking spaces per unit.

5. The Project’s proposed affordability mix is as follows:

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Tax Credit @ 30% Median / Low HOME 47
Unrestricted Manager’s Unit 1
Total Units 48

FINANCIAL GAP ANALYSIS
KMA prepared a pro forma analysis to assist in evaluating the Developer’s proposal. The analysis is located at the end of this memorandum, and is organized as follows:

Table 1: Estimated Development Costs
Table 2: Stabilized Net Operating Income
Table 3: Financial Gap Calculation
Table 4: Capitalized Operating Subsidy Reserve Analysis Table 5: Cash Flow Analysis
ESTIMATED DEVELOPMENT COSTS (TABLE 1)
KMA reviewed the Developer’s development cost estimates, and then independently prepared a pro forma analysis for the Project. The resulting development costs are estimated as follows:

Direct Costs
The direct cost estimates assume that the Project will be subject to State of California and/or Federal Davis Bacon prevailing wage requirements. The direct costs applied in this analysis are based on estimates provided by the Developer and can be summarized as follows:

1. The Developer estimated the off-site improvement costs at $463,000. City staff should verify the scope and cost of the off-site improvements required to serve the Project.

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2. The on-site improvement costs are estimated at $54 per square foot of land area, or $1.41 million. This includes the demolition costs of one existing building.

3. The residential building costs are estimated at $425 per square foot of GBA, or $13.36 million. This includes the podium parking costs for 20 podium parking spaces. In addition, this line item includes the adaptive reuse costs for the existing one-story building which will remain on the Site.

4. A $192,000 allowance for furnishing, fixtures and equipment is provided.

5. A 14% allowance for contractor fees and general requirements is provided, which is the maximum allowed by TCAC.

6. An allowance for construction bonds / general liability insurance at 2% of construction costs is provided.

7. A direct cost contingency allowance equal to 5% of other direct costs is provided.

KMA estimates the total direct costs at $18.85 million. This equates to $597 per square foot of GBA
It is important to note that the Project’s direct cost estimates are at the high end of the typical range for similar affordable housing projects. Per the Developer, they worked with their in-house general contractor to estimate the direct costs used in this analysis.

The Developer stated that their cost estimates are based on similar developments that were recently bought out and also based on feedback from major subcontractors with regards to current pricing. However, the construction industry is currently experiencing exponential increases in costs due to supply chain issues and labor shortages.

In addition, the Developer noted that the Project consists of a hybrid of adaptive reuse/rehabilitation and new construction. Based on the Developer’s experience, unforeseen conditions are often discovered when opening up existing walls, foundations, roofs, etc. that lead to increased costs. Furthermore, the historic nature of the building adds additional complexity, as the Developer will need to work around and refurbish existing features. The direct cost budget includes additional costs such as support for the existing roof while removing load-bearing walls and replacing items that are in disrepair with items that match the building’s historic character.

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Prior to formally committing any funds, the City should review the general contractor’s contract to confirm the validity of the cost estimates used in this analysis. If the costs identified in the general contractor’s contract differ from the estimates used in this analysis, this analysis may need to be updated accordingly.

Indirect Costs

1. The architecture, engineering and consulting costs are estimated at 7% of direct costs

2. The Developer estimates the public permits and fees costs at $1.49 million, or approximately $31,000 per unit. City staff should verify the accuracy of this estimate.

3. The taxes, insurance, legal and accounting costs are estimated at 3% of direct costs.

4. The Developer included an $85,000 allowance for relocation costs in the development budget.

5. An approximately $2,700 per unit allowance for marketing and leasing costs is provided.

6. The Developer Fee is set at $2.20 million, which is the maximum amount allowed to be included in the Project by TCAC.

7. An indirect cost contingency allowance equal to 10% of other indirect costs is provided.

KMA estimates the total indirect costs at $6.25 million.

Financing Costs
The financing costs for the Project are estimated as follows:

1. The construction period and absorption period interest costs are estimated at $1.16 million. This estimate is based on the following assumptions:
a. A $16.58 million construction loan;
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b. A 5.25% interest rate;
c. A 20-month construction period with a 50% average outstanding loan balance; and
d. A 10-month absorption/conversion period with a 100% average outstanding balance.

2. The financing fees for the construction loan are estimated at 1.25 points, or $207,000.

3. The following capital reserves are included:
a. A $2.10 million Capitalized Operating Subsidy Reserve (COSR) is provided.

The COSR was sized based on the estimated operating deficits over a 20- year period (See Table 4 for KMA estimate).
b. A $146,000 capitalized operating reserve, which is equal to three months of operating expenses.

4. The Tax Credit fees are estimated at $107,000 based on the following:
a. A $2,000 application fee;
b. A $410 per unit monitoring fee; and
c. Four percent (4%) of gross Tax Credit proceeds for one year.

KMA estimates the total financing costs at $3.72 million.

Total Development Costs
As shown in Table 1, KMA estimates the total development costs at $28.73 million, which equates to approximately $598,500 per unit. This is $59,000 less than the Developer’s estimate, which equates to a less than 1% differential.

It is important to note that the total development costs include a $2.10 million COSR, which will be used to fund operations over a 20-year period. When the $2.10 million is removed from the total development costs, the total construction costs equate to $26.63 million, or $554,700 per unit.

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In addition, as noted above, the direct cost estimates are at the high end of the typical range. KMA recommends that the City require the Developer to receive three general contractor bids, and ensure that all subcontractors are competitively bid out. If the costs included in the final general contractor contract differ from those utilized in this analysis, this analysis may need to be updated accordingly.

STABILIZED NET OPERATING INCOME (TABLE 2)
The Project’s funding sources include Tax Credits, an OCHFT Loan, and an AHP Loan. In addition, the City intends to utilize HOME – American Rescue Plan (HOME-ARP) funds for the Project. These programs publish the applicable income limits for households that are qualified for reside in the development.

TCAC publishes rent standards for projects that receive Tax Credits. In addition, the HOME Program publishes rent standards that KMA recommends the City utilize to comply with HOME-ARP regulations. Given that the Project is structured as a 100% PSH project reserved for homeless households, the Developer assumes that the tenants will pay rent payments equal to 30% of Supplemental Security Income (SSI).

The Developer will be required to adhere to the strictest of the standards imposed by the funding sources contributed to the Project.

Achievable Rent Income
The Project rents must adhere to the most restrictive of the requirements imposed by the funding sources. The rents used in this analysis are based on 2022 information published by HUD and TCAC. The maximum allowable rents, net of the appropriate utility allowances, are estimated as follows:1
1 The Project will pay for all utilities. Therefore, no utility allowance is deducted from the rents.

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Rent Restriction
Studio
Units
30% AMI TCAC / Low HOME / 30% SSI (PSH)2
Number of Units 47
Low HOME Rent $1,186
TCAC Rent $711
30% SSI Rent3 $286
Applicable Rent $286
Estimated Effective Gross Income
KMA estimates the Project’s effective gross income (EGI) at approximately $583,300 based on the following assumptions:

1. The gross rental income is estimated at $161,300.

2. The PBV subsidy overhang is estimated at $418,800 based on a payment standard of $1,682 for studio units.

3. Laundry and miscellaneous income is estimated to average $9 per unit per month for a total of $5,200 per year.

4. A vacancy and collection allowance equal to 7% of gross rental income is provided, which equates to $41,000.

5. The first year COSR withdrawal is estimated at $39,000 Estimated Operating Expenses
KMA estimates the Project’s operating expenses at approximately $583,400 based on the following assumptions:

1. The general operating expenses are estimated at approximately $8,450 per unit per year. This is at the high end of the typical range for similar affordable 2 AMI = Area Median Income
3 Per Developer.

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housing projects. Per the Developer, the Heroes Landing project currently operates at $7,200 per unit. Heroes Landing includes 76 units, and as such, economies of scale will be lost at the Project due to its smaller size. In addition, given that the Project is 100% PSH units, the Developer is implementing voicedown security measures, which adds $36,000 to the annual operating budget.

2. KMA assumes the Developer will apply for the property tax abatement that is accorded to non-profit housing organizations that own and operate apartment units that are restricted to households earning less than 80% of the Median. The Developer estimates that the Project will incur $6,700 per year in property tax assessment override costs.

3. The Developer is proposing to provide social services at an estimated cost of $149,800 per year, or $3,170 per PSH unit. This estimate is at the high end of the typical range. Per the Developer, this budget includes a 1.5 full-time equivalent (FTE) case manager, a 0.5 FTE resident services coordinator, and miscellaneous expenses such as staff benefits, supplies and indirect costs including administration, insurance, legal and accounting. The City should develop a social services plan with the Developer to ensure that the social services provided to the Project align with the Developer’s proposed social services budget.

4. The Project will be subject to an OCHFT monitoring fee set at $4,800 per year.

5. The Developer provided an allowance for replacement reserve deposits at $360 per unit per year, which meets the requirements of both TCAC and the OCHFT Program.

Stabilized Net Operating Income
The Project’s effective gross income is estimated at $583,000, and the operating expenses are estimated at $583,000. This results in an estimated stabilized net operating income of $0. It’s important to note, that the Project’s NOI would be negative without the subsidy provided by the COSR.

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FINANCIAL GAP CALCULATION
The financial gap is estimated by deducting the available outside funding sources from the Project’s total development costs. The outside funding sources anticipated to be received by the Project are described in the following sections of this analysis.

Available Funding Sources
Permanent Loan
The Project’s NOI does not support a permanent loan.

Tax Credit Proceeds
Tax Credit Basis
KMA estimates the net Tax Credit proceeds at $20.05 million. This estimate is based on the following assumptions:

1. The Project’s eligible Tax Credit basis is equal to the lesser of the depreciable costs for the 48 Tax Credit units, or the threshold basis limits established by TCAC. In this case, the Project’s depreciable costs are less than the threshold basis limits allowed by TCAC.

2. To increase the competitiveness of the Project’s Tax Credit application in the TCAC tiebreaker process, the Developer is proposing to voluntarily exclude a portion of the eligible Tax Credit basis.

3. The Project is located in a designated “Difficult to Develop” census tract.

4. The current Tax Credit regulations set the annual Tax Credit rate at 9.0%. This rate is applied over the 10-year Tax Credit period.

5. 100% of the Project’s building area is located in units that qualify for Tax Credits.

6. The net syndication value supported by the Tax Credit is ultimately determined based on competitive market conditions and on the timing of the disbursements.

Based on currently available information, KMA and the Developer estimate the proceeds at $0.94 per gross Federal Tax Credit dollar.

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OCHFT Loan
The Developer received an award for a $2.48 million loan from OCHFT.

AHP Loan
The Developer applied for a $1.0 million loan of AHP funds.

Deferred Developer Fee
The Developer is not proposing to defer any of the Developer Fee as a permanent funding source.

Total Available Funding Sources
As shown in Table 3, KMA estimates the outside funding sources available to the Project to be $23.53 million.

Estimated Financial Gap
Based on the preceding analysis, KMA estimates the Project’s financial gap as follows:

Total Development Costs $28,726 ,000
(Less) Total Available Outside Funding Sources (23,529,000) Financial Gap $5,197,000
Per Unit $108,300
As shown in the table above, KMA estimates that the Project exhibits a $5.20 million financial gap. In comparison, the Developer is requesting $5.26 million in financial assistance from the City. This equates to a $59,000, or approximately 1% differential, which can be considered inconsequential for a Project of this magnitude.

CAPITALIZED OPERATING SUBSIDY RESERVE ANALYSIS (TABLE 4) KMA also conducted a COSR analysis to estimate the amount of capitalized operating assistance necessary to sustain the Project’s operations for a 20-year period.

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The following describes the basic cash flow assumptions:

1. Year 1 is based on the pro forma rent and expense assumptions presented in the stabilized NOI analysis (Table 2).

2. Additional revenue and expense assumptions are as follows:
a. The affordable rental income, PBV subsidy income and miscellaneous income are escalated at 2.0% per year.
b. The general operating expenses and OCHFT monitoring fees are escalated at 3.0% per year.
c. The property taxes are escalated at 2.0% per year.
d. The social service expenses are escalated at 2.5% per year. e. The replacement reserve deposits remain constant.

As shown in Table 4, the Project’s NOI is negative in Year 1, and becomes increasingly negative over the 20-year period. KMA estimates that the operating deficits during this 20-year period total $2.12 million. In comparison, the Developer is assuming a $2.10 million COSR for the Project, which is approximately equal to the KMA estimate.

CASH FLOW ANALYSIS (TABLE 5)
KMA prepared a 55-year cash flow analysis for the Project. The cash flow analysis is based on the assumptions outlined above. As shown in the cash flow, the Project operates at a break-even amount during the first 20 years due to the withdrawal of funds from the COSR.

However, it is important to note that the COSR is expected to be fully expended by Year

20. At that time, the Project’s NOI will become immediately negative, and the Project will not be operationally feasible.

As such, the City must anticipate that the Project will require additional operating subsidies after Year 20, or the Project will need to be restructured to generate more rental income. Furthermore, under the current structure, the Project does not generate any residual receipts payments.

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CONCLUSIONS / RECOMMENDATIONS
The following summarizes the conclusions of the KMA analysis:

1. Based on the currently available information, it is KMA’s conclusion that the Developer’s request for $5.26 million in financial assistance from the City is supported by the Project’s economics.

2. It is important to note that, with the use of a COSR, the Project is structured to be operationally feasible for only 20 years. After Year 20, the Project’s NOI is expected to be negative. As such, the Project will need to identify additional operating subsidies or complete a financial restructuring by that time.

3. The Developer’s direct costs estimates are at the high end of the typical range.

As such, KMA recommends that the City require:
a. The Developer should obtain three general contractor bids; b. All subcontractors should be competitively bid out; and c. The City should review the final general contractor’s contract, and if the costs differ from those used in this analysis, this analysis may need to be updated.

4. The City will receive Regional Housing Needs Assessment (RHNA) credit for 47 Extremely Low Income units.

EXHIBIT 3
City Council 62 – 34 6/21/2022
TABLE 1

ESTIMATED DEVELOPMENT COSTS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Direct Costs 1
Off-site Improvements 2 $463,000
On-site Improvements 26,136 Sf Land $54 /Sf Land 1,410,000 Residential Building Costs 31,428 Sf GBA $425 /SF GBA 13,357,000 Furnishings, Fixtures & Equipment 192,000
Contractor Fees / General Requirements 14% Construction Costs 2,132,000 General Liability Insurance / Const Bonds 2% Construction Costs 305,000 Contingency Allowance 5% Other Direct Costs 893,000
Total Direct Costs 31,428 Sf GBA $597 /Sf GBA $18,752,000 II. Indirect Costs
Architecture, Engineering & Consulting 7% Direct Costs $1,219,000 Public Permits & Fees 2 48 Units $31,049 /Unit 1,490,000 Taxes, Insurance, Legal & Accounting 3% Direct Costs 563,000 Relocation Costs 85,000
Marketing & Leasing 48 Units $2,667 /Unit 128,000
Developer Fee 3 11% Eligible Costs 2,200,000
Contingency Allowance 10% Other Indirect Costs 569,000
Total Indirect Costs $6,254,000
III. Financing Costs
Interest During Construction 4 $16,577,000 Loan Amount 5.25% Interest $1,160,000 Financing Fees
Construction Loan $16,577,000 Loan Amount 1.25 Points 207,000 Capitalized Reserves
COSR 5 2,100,000
Operating Reserve 3 Months Op Exp 146,000
TCAC Fees 6 107,000
Total Financing Costs $3,720,000
IV. Total Construction Costs (Net COSR) 48 Units $554,700 /Unit $26,626,000 Total Development Costs 48 Units $598,500 /Unit $28,726,000 1 2 Based on Developer estimate. City staff should verify this estimate. 3 Equal to the maximum amount allowed by TCAC.
4 5 Based on Developer estimate. See TABLE 4 for KMA estimate. 6 Includes a $2,000 application fee; $410/unit monitoring fee; and 4% of the gross Tax Credit proceeds for one year.

Includes debt on the 90% of the Tax Credit Equity that will not be funded during construction. Assumes a 20-month construction period with a 50% average outstanding balance and a 6-month absorption period with a 100% average outstanding balance.

Estimates assume that Federal Davis Bacon and/or State prevailing wage requirements will be imposed on the Project. The direct costs are based on Developer estimates, and will need to be verified with general contractor bids.

Prepared by: Keyser Marston Associates, Inc.

File name: Santa Ana Wiseplace_6 4 22.xlsx; Pro Forma_9%; trb EXHIBIT 3
City Council 62 – 35 6/21/2022
TABLE 2

STABILIZED NET OPERATING INCOME
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Income 1
Manager's Unit 1 Unit $0 /Unit/Month $0
Base Income
Tax Credit @ 30% Median/Low HOME/30% SSI
Studio Units @ (410-Sf) 47 Units $286 /Unit/Month 161,300 Section 8 Subsidy Income
Tax Credit @ 30% Median/Low HOME/30% SSI
Studio Units @ (410-Sf) 25 Units $1,396 /Unit/Month 418,800 Laundry/Miscellaneous Income 48 Units $9 /Unit/Month 5,200 Gross Rent Income 48 Units $585,300
COSR Withdrawl 39,000
(Less) Vacancy & Collection Allowance 7.0% Gross Rent Income (41,000) Effective Gross Rent Income $583,300
II. Operating Expenses
General Operating Expenses 48 Units $8,450 /Unit $405,600 Property Taxes 2 48 Units $139 /Unit 6,700
Social Services 47 Affordable Units $3,170 /Affordable Unit 149,000 OCHFT Monitoring Fee 48 Units $100 /Unit 4,800
Replacement Reserve 48 Units $360 /Unit 17,300
Total Operating Expenses 48 Units $12,154 /Unit $583,400 III. Stabilized Net Operating Income ($100)
1 2
Based on Orange County 2022 Incomes distributed by HUD. As pertinent, the rents are based on rents published in 2022 by TCAC and the HOME Program. The Project will pay all utilities.

Assumes the Developer will apply for the property tax welfare exemption accorded to non-profit housing organizations that own and operate apartment units restricted to households earning no more than 80% AMI.

Prepared by: Keyser Marston Associates, Inc.

File name: Santa Ana Wiseplace_6 4 22.xlsx; Pro Forma_9%; trb EXHIBIT 3
City Council 62 – 36 6/21/2022
TABLE 3

FINANCIAL GAP CALCULATION
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Available Funding Sources
Federal 9% Tax Credit Equity 1
Gross Tax Credit Value $21,331,000
Syndication Rate $0.94 /Tax Credit Dollar
Net Tax Credit Equity $20,049,000
OC Housing Finance Trust 2 $2,480,000
AHP 2 $1,000,000
Deferred Developer Fee 2 $0
Total Available Funding Sources $23,529,000
II. Financial Gap Calculation
Total Development Costs $28,726,000
(Less) Total Available Funding Sources (23,529,000)
III. Financial Gap 48 Units $108,300 /Unit $5,197,000
1 2 Based on Developer estimate.

Assumes a $18.2 million eligible basis, plus a 130% difficult-to-develop premium, a 9.0% Tax Credit rate and an applicable fraction of 100%.

Prepared by: Keyser Marston Associates, Inc.

File name: Santa Ana Wiseplace_6 4 22.xlsx; Pro Forma_9%; trb EXHIBIT 3
City Council 62 – 37 6/21/2022
TABLE 4

CAPITALIZED OPERATING SUBSIDY RESERVE ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 I. Gross Residential Income 1
Gross Rent Income $161,300 $164,526 $167,817 $171,173 $174,596 $178,088 $181,650 $185,283 $188,989 $192,768 $196,624 Section 8 Subsidy Income 418,800 427,176 435,720 444,434 453,323 462,389 471,637 481,070 490,691 500,505 510,515 Laundry/Miscellaneous Income 5,200 5,304 5,410 5,518 5,629 5,741 5,856 5,973 6,093 6,214 6,339 (Less) Vacancy & Collection Allowance (40,971) (41,790) (42,626) (43,479) (44,348) (45,235) (46,140) (47,063) (48,004) (48,964) (49,943) Effective Gross Rent Income $544,329 $555,216 $566,320 $577,646 $589,199 $600,983 $613,003 $625,263 $637,768 $650,524 $663,534 II. Operating Expenses 2
General Operating Expenses $405,600 $417,768 $430,301 $443,210 $456,506 $470,202 $484,308 $498,837 $513,802 $529,216 $545,092 Property Taxes 6,700 6,834 6,971 7,110 7,252 7,397 7,545 7,696 7,850 8,007 8,167 Social Services 149,000 152,725 156,543 160,457 164,468 168,580 172,794 177,114 181,542 186,081 190,733 OCHFT Monitoring Fee 4,800 4,944 5,092 5,245 5,402 5,565 5,731 5,903 6,080 6,263 6,451 Replacement Reserve 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 Total Operating Expenses $583,400 $599,571 $616,207 $633,322 $650,929 $669,043 $687,679 $706,851 $726,575 $746,867 $767,743 III. Net Operating Income ($39,071) ($44,355) ($49,887) ($55,675) ($61,730) ($68,060) ($74,676) ($81,588) ($88,806) ($96,343) ($104,209) IV. Required COSR Amount (20-Year Total) ($2,116,781)
1 2
The affordable rents, PBV subsidy and
miscellaneous income are assumed to increase
by 102.0%/year. Assumes Year 1 is at
stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement reserves remain constant.

EXHIBIT 3
City Council 62 – 38 6/21/2022
TABLE 4

CAPITALIZED OPERATING SUBSIDY RESERVE ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1
Gross Rent Income
Section 8 Subsidy Income
Laundry/Miscellaneous Income
(Less) Vacancy & Collection Allowance
Effective Gross Rent Income
II. Operating Expenses 2
General Operating Expenses
Property Taxes
Social Services
OCHFT Monitoring Fee
Replacement Reserve
Total Operating Expenses
III. Net Operating Income
IV. Required COSR Amount (20-Year Total)
1 2
The affordable rents, PBV subsidy and
miscellaneous income are assumed to increase
by 102.0%/year. Assumes Year 1 is at
stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement reserves remain constant.

Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 $200,556 $204,567 $208,659 $212,832 $217,089 $221,430 $225,859 $230,376 $234,984 520,725 531,140 541,762 552,598 563,650 574,923 586,421 598,150 610,113 6,466 6,595 6,727 6,861 6,999 7,138 7,281 7,427 7,575
(50,942) (51,961) (53,000) (54,060) (55,141) (56,244) (57,369) (58,516) (59,687) $676,805 $690,341 $704,148 $718,231 $732,595 $747,247 $762,192 $777,436 $792,985 $561,445 $578,289 $595,637 $613,506 $631,912 $650,869 $670,395 $690,507 $711,222 8,331 8,497 8,667 8,841 9,017 9,198 9,382 9,569 9,761
195,501 200,388 205,398 210,533 215,796 221,191 226,721 232,389 238,199 6,644 6,844 7,049 7,260 7,478 7,703 7,934 8,172 8,417
17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 $789,221 $811,318 834,052 $857,440 $881,504 $906,261 $931,731 $957,937 $984,898 ($112,416) ($120,977) ($129,904) ($139,210) ($148,908) ($159,013) ($169,539) ($180,501) ($191,914) EXHIBIT 3
City Council 62 – 39 6/21/2022
TABLE 5

CASH FLOW ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Income $161,300 $164,526 $167,817 $171,173 $174,596 $178,088 $181,650 $185,283 $188,989 $192,768 Section 8 Subsidy Income 418,800 427,176 435,720 444,434 453,323 462,389 471,637 481,070 490,691 500,505 City COSR Withdrawl 2 39,071 44,355 49,887 55,675 61,730 68,060 74,676 81,588 88,806 96,343 Laundry/Miscellaneous Income 5,200 5,304 5,410 5,518 5,629 5,741 5,856 5,973 6,093 6,214 (Less) Vacancy & Collection Allowance (40,971) (41,790) (42,626) (43,479) (44,348) (45,235) (46,140) (47,063) (48,004) (48,964) Effective Gross Rent Income $583,400 $599,571 $616,207 $633,322 $650,929 $669,043 $687,679 $706,851 $726,575 $746,867 II. Operating Expenses 2
General Operating Expenses $405,600 $417,768 $430,301 $443,210 $456,506 $470,202 $484,308 $498,837 $513,802 $529,216 Property Taxes 6,700 6,834 6,971 7,110 7,252 7,397 7,545 7,696 7,850 8,007 Social Services 149,000 152,725 156,543 160,457 164,468 168,580 172,794 177,114 181,542 186,081 OCHFT Monitoring Fee 4,800 4,944 5,092 5,245 5,402 5,565 5,731 5,903 6,080 6,263 Replacement Reserve 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 Total Operating Expenses $583,400 $599,571 $616,207 $633,322 $650,929 $669,043 $687,679 $706,851 $726,575 $746,867 III. Net Operating Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 IV. Cash Flow Available for Contingent Payments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 (Less) Asset and Partnership Fees 4 0 0 0 0 0 0 0 0 0 0 (Less) Deferred Developer Fee 0 0 0 0 0 0 0 0 0 0
V. Cash Flow after Contingent Payments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Nominal Dollars $0 $0 NPV @ 6% Discount Rate
VI. Residual Receipt Payments to CIty $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Nominal Dollars $0 $0 NPV @ 6% Discount Rate
VII. Residual Receipt Payments to OCHFT $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Nominal Dollars $0 $0 NPV @ 6% Discount Rate
VIII. Net Cash Flow to Developer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Nominal Dollars $0 $0 NPV @ 6% Discount Rate
1 2
3 4
The affordable rents and miscellaneous income
are assumed to increase by 102.0%/year.

Assumes Year 1 is at stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement and operating reserves remain
constant.

Assumes fees increase at 103.0%/year.

SEE TABLE 4
EXHIBIT 3
City Council 62 – 40 6/21/2022
TABLE 5

CASH FLOW ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1
Gross Rent Income
Section 8 Subsidy Income
City COSR Withdrawl 2
Laundry/Miscellaneous Income
(Less) Vacancy & Collection Allowance
Effective Gross Rent Income
II. Operating Expenses 2
General Operating Expenses
Property Taxes
Social Services
OCHFT Monitoring Fee
Replacement Reserve
Total Operating Expenses
III. Net Operating Income
IV. Cash Flow Available for Contingent Payments
(Less) Asset and Partnership Fees 4
(Less) Deferred Developer Fee
V. Cash Flow after Contingent Payments
Nominal Dollars
VI. Residual Receipt Payments to CIty
Nominal Dollars
VII. Residual Receipt Payments to OCHFT
Nominal Dollars
VIII. Net Cash Flow to Developer
Nominal Dollars
1 2
3 4
The affordable rents and miscellaneous income
are assumed to increase by 102.0%/year.

Assumes Year 1 is at stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement and operating reserves remain
constant.

Assumes fees increase at 103.0%/year.

SEE TABLE 4
Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 $196,624 $200,556 $204,567 $208,659 $212,832 $217,089 $221,430 $225,859 $230,376 $234,984 $239,683 510,515 520,725 531,140 541,762 552,598 563,650 574,923 586,421 598,150 610,113 622,315 104,209 112,416 120,977 129,904 139,210 148,908 159,013 169,539 180,501 191,914 6,339 6,466 6,595 6,727 6,861 6,999 7,138 7,281 7,427 7,575 7,727 (49,943) (50,942) (51,961) (53,000) (54,060) (55,141) (56,244) (57,369) (58,516) (59,687) (60,881) $767,743 $789,221 $811,318 $834,052 $857,440 $881,504 $906,261 $931,731 $957,937 $984,898 $808,844 $545,092 $561,445 $578,289 $595,637 $613,506 $631,912 $650,869 $670,395 $690,507 $711,222 $732,559 8,167 8,331 8,497 8,667 8,841 9,017 9,198 9,382 9,569 9,761 9,956 190,733 195,501 200,388 205,398 210,533 215,796 221,191 226,721 232,389 238,199 244,154 6,451 6,644 6,844 7,049 7,260 7,478 7,703 7,934 8,172 8,417 8,669 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 $767,743 $789,221 $811,318 834,052 $857,440 $881,504 $906,261 $931,731 $957,937 $984,898 $1,012,638 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($203,793)
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
EXHIBIT 3
City Council 62 – 41 6/21/2022
TABLE 5

CASH FLOW ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1
Gross Rent Income
Section 8 Subsidy Income
City COSR Withdrawl 2
Laundry/Miscellaneous Income
(Less) Vacancy & Collection Allowance
Effective Gross Rent Income
II. Operating Expenses 2
General Operating Expenses
Property Taxes
Social Services
OCHFT Monitoring Fee
Replacement Reserve
Total Operating Expenses
III. Net Operating Income
IV. Cash Flow Available for Contingent Payments
(Less) Asset and Partnership Fees 4
(Less) Deferred Developer Fee
V. Cash Flow after Contingent Payments
Nominal Dollars
VI. Residual Receipt Payments to CIty
Nominal Dollars
VII. Residual Receipt Payments to OCHFT
Nominal Dollars
VIII. Net Cash Flow to Developer
Nominal Dollars
1 2
3 4
The affordable rents and miscellaneous income
are assumed to increase by 102.0%/year.

Assumes Year 1 is at stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement and operating reserves remain
constant.

Assumes fees increase at 103.0%/year.

SEE TABLE 4
Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 $244,477 $249,367 $254,354 $259,441 $264,630 $269,922 $275,321 $280,827 $286,444 $292,173 $298,016 634,761 647,456 660,405 673,614 687,086 700,828 714,844 729,141 743,724 758,598 773,770 7,881 8,039 8,200 8,364 8,531 8,702 8,876 9,053 9,234 9,419 9,607 (62,098) (63,340) (64,607) (65,899) (67,217) (68,561) (69,933) (71,331) (72,758) (74,213) (75,697) $825,021 $841,522 $858,352 $875,519 $893,030 $910,890 $929,108 $947,690 $966,644 $985,977 $1,005,696 $754,535 $777,172 $800,487 $824,501 $849,236 $874,713 $900,955 $927,983 $955,823 $984,498 $1,014,033 10,155 10,358 10,565 10,777 10,992 11,212 11,436 11,665 11,898 12,136 12,379 250,258 256,514 262,927 269,500 276,238 283,144 290,222 297,478 304,915 312,538 320,351 8,929 9,197 9,473 9,757 10,050 10,352 10,662 10,982 11,312 11,651 12,000 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 $1,041,178 $1,070,541 $1,100,752 $1,131,835 $1,163,816 $1,196,721 $1,230,575 $1,265,408 $1,301,247 $1,338,122 $1,376,063 ($216,156) ($229,019) ($242,400) ($256,316) ($270,787) ($285,830) ($301,467) ($317,718) ($334,603) ($352,145) ($370,366) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
EXHIBIT 3
City Council 62 – 42 6/21/2022
TABLE 5

CASH FLOW ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1
Gross Rent Income
Section 8 Subsidy Income
City COSR Withdrawl 2
Laundry/Miscellaneous Income
(Less) Vacancy & Collection Allowance
Effective Gross Rent Income
II. Operating Expenses 2
General Operating Expenses
Property Taxes
Social Services
OCHFT Monitoring Fee
Replacement Reserve
Total Operating Expenses
III. Net Operating Income
IV. Cash Flow Available for Contingent Payments
(Less) Asset and Partnership Fees 4
(Less) Deferred Developer Fee
V. Cash Flow after Contingent Payments
Nominal Dollars
VI. Residual Receipt Payments to CIty
Nominal Dollars
VII. Residual Receipt Payments to OCHFT
Nominal Dollars
VIII. Net Cash Flow to Developer
Nominal Dollars
1 2
3 4
The affordable rents and miscellaneous income
are assumed to increase by 102.0%/year.

Assumes Year 1 is at stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement and operating reserves remain
constant.

Assumes fees increase at 103.0%/year.

SEE TABLE 4
Year 33 Year 34 Year 35 Year 36 Year 37 Year 38 Year 39 Year 40 Year 41 Year 42 Year 43 $303,976 $310,056 $316,257 $322,582 $329,034 $335,615 $342,327 $349,173 $356,157 $363,280 $370,546 789,246 805,031 821,131 837,554 854,305 871,391 888,819 906,595 924,727 943,222 962,086 9,800 9,996 10,196 10,399 10,607 10,820 11,036 11,257 11,482 11,711 11,946 (77,211) (78,755) (80,331) (81,937) (83,576) (85,247) (86,952) (88,691) (90,465) (92,275) (94,120) $1,025,810 $1,046,327 $1,067,253 $1,088,598 $1,110,370 $1,132,578 $1,155,229 $1,178,334 $1,201,900 $1,225,938 $1,250,457 $1,044,454 $1,075,787 $1,108,061 $1,141,303 $1,175,542 $1,210,808 $1,247,132 $1,284,546 $1,323,083 $1,362,775 $1,403,658 12,626 12,879 13,137 13,399 13,667 13,941 14,219 14,504 14,794 15,090 15,392 328,360 336,569 344,983 353,608 362,448 371,509 380,797 390,317 400,075 410,076 420,328 12,360 12,731 13,113 13,507 13,912 14,329 14,759 15,202 15,658 16,128 16,611 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 $1,415,100 $1,455,266 $1,496,593 $1,539,116 $1,582,868 $1,627,887 $1,674,207 $1,721,868 $1,770,909 $1,821,369 $1,873,289 ($389,290) ($408,940) ($429,340) ($450,518) ($472,498) ($495,309) ($518,978) ($543,535) ($569,008) ($595,430) ($622,832) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
EXHIBIT 3
City Council 62 – 43 6/21/2022
TABLE 5

CASH FLOW ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1
Gross Rent Income
Section 8 Subsidy Income
City COSR Withdrawl 2
Laundry/Miscellaneous Income
(Less) Vacancy & Collection Allowance
Effective Gross Rent Income
II. Operating Expenses 2
General Operating Expenses
Property Taxes
Social Services
OCHFT Monitoring Fee
Replacement Reserve
Total Operating Expenses
III. Net Operating Income
IV. Cash Flow Available for Contingent Payments
(Less) Asset and Partnership Fees 4
(Less) Deferred Developer Fee
V. Cash Flow after Contingent Payments
Nominal Dollars
VI. Residual Receipt Payments to CIty
Nominal Dollars
VII. Residual Receipt Payments to OCHFT
Nominal Dollars
VIII. Net Cash Flow to Developer
Nominal Dollars
1 2
3 4
The affordable rents and miscellaneous income
are assumed to increase by 102.0%/year.

Assumes Year 1 is at stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement and operating reserves remain
constant.

Assumes fees increase at 103.0%/year.

SEE TABLE 4
Year 44 Year 45 Year 46 Year 47 Year 48 Year 49 Year 50 Year 51 Year 52 Year 53 Year 54 $377,956 $385,516 $393,226 $401,090 $409,112 $417,294 $425,640 $434,153 $442,836 $451,693 $460,727 981,328 1,000,954 1,020,973 1,041,393 1,062,221 1,083,465 1,105,134 1,127,237 1,149,782 1,172,777 1,196,233 12,185 12,428 12,677 12,930 13,189 13,453 13,722 13,996 14,276 14,562 14,853 (96,002) (97,922) (99,881) (101,879) (103,916) (105,994) (108,114) (110,277) (112,482) (114,732) (117,026) $1,275,466 $1,300,976 $1,326,995 $1,353,535 $1,380,606 $1,408,218 $1,436,382 $1,465,110 $1,494,412 $1,524,300 $1,554,786 $1,445,768 $1,489,141 $1,533,815 $1,579,830 $1,627,225 $1,676,041 $1,726,323 $1,778,112 $1,831,456 $1,886,399 $1,942,991 15,699 16,013 16,334 16,660 16,994 17,333 17,680 18,034 18,394 18,762 19,137 430,836 441,607 452,648 463,964 475,563 487,452 499,638 512,129 524,932 538,056 551,507 17,110 17,623 18,152 18,696 19,257 19,835 20,430 21,043 21,674 22,324 22,994 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 17,300 $1,926,714 $1,981,685 $2,038,248 $2,096,450 $2,156,338 $2,217,961 $2,281,371 $2,346,618 $2,413,756 $2,482,842 $2,553,930 ($651,247) ($680,709) ($711,253) ($742,915) ($775,732) ($809,744) ($844,989) ($881,508) ($919,344) ($958,541) ($999,144) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
0 0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0 0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
EXHIBIT 3
City Council 62 – 44 6/21/2022
TABLE 5

CASH FLOW ANALYSIS
9% TAX CREDITS

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
I. Gross Residential Income 1
Gross Rent Income
Section 8 Subsidy Income
City COSR Withdrawl 2
Laundry/Miscellaneous Income
(Less) Vacancy & Collection Allowance
Effective Gross Rent Income
II. Operating Expenses 2
General Operating Expenses
Property Taxes
Social Services
OCHFT Monitoring Fee
Replacement Reserve
Total Operating Expenses
III. Net Operating Income
IV. Cash Flow Available for Contingent Payments
(Less) Asset and Partnership Fees 4
(Less) Deferred Developer Fee
V. Cash Flow after Contingent Payments
Nominal Dollars
VI. Residual Receipt Payments to CIty
Nominal Dollars
VII. Residual Receipt Payments to OCHFT
Nominal Dollars
VIII. Net Cash Flow to Developer
Nominal Dollars
1 2
3 4
The affordable rents and miscellaneous income
are assumed to increase by 102.0%/year.

Assumes Year 1 is at stabilization.

General operating expenses are assumed to
increase by 103.0%/year, property taxes at
102.0%/year, social services at 102.5%/year and
replacement and operating reserves remain
constant.

Assumes fees increase at 103.0%/year.

SEE TABLE 4
Year 55
$469,941
1,220,158
15,150
(119,367)
$1,585,882
$2,001,281
19,520
565,295
23,684
17,300
$2,627,080
($1,041,198)
$0
0 0
$0
$0
$0
$0
EXHIBIT 3
City Council 62 – 45 6/21/2022
TABLE 1

PRELIMINARY HOME-ARP COST ALLOCATION WORKSHEET - STANDARD MODEL

WISEPLACE PSH PROJECT

SANTA ANA, CALIFORNIA
Step 1: Determine Comparability, Select Method of Cost Allocation Net Residential SF 20,267 Step 2: Proposed HOME-ARP Investment 1 $5,256,327
Step 3: Calculate Actual Cost of HOME-ARP Units
Total Development Costs 1 $28,785,652
Ineligible Development Costs 2 (4,261,666)
Unit-Specific Upgrades 0
Relocation Costs 0
Assign Relocation Exclusively to HOME Units? NA
Base Project Cost $1,210 /Sf Gross Residential SF $24,523,986 Number of Units # of Bdrms Unit Size Cost/Unit Total HOME-ARP Costs 34 Studio 400 $484,018 $16,456,615
Subtotal HOME Unit Costs $16,456,615
Add: Relocation Costs Allocated Exclusively to HOME-ARP Units (if applicable) $0 Actual Cost of HOME-ARP Units $16,456,615
Step 4: Calculate Maximum Project Subsidy
Unit Size # of Units 2022 Max Subsidy/Unit Maximum Subsidy 0 Bedroom 34 $159,754 $5,431,636
1 Bedroom 0 $183,132 0
2 Bedroom 0 $222,694 0
3 Bedroom 0 $288,094 0
4 Bedroom 0 $316,236 0
Maximum Project Subsidy 34 $5,431,636
Step 5: Maximum HOME-ARP Investment, Lesser of
Proposed Investment (Step 2) $5,256,327
Actual Cost of HOME Units (Step 3) $16,456,615
Maximum Project Subsidy (Step 4) $5,431,636
Maximum HOME-ARP Investment 34 HOME-ARP Units $5,256,327 1 2
Includes $0 in Santa Ana Project Delivery costs.

The ineligibe costs include: off-site improvements, community building, capitalized reserves and furnishings.

Prepared by: Keyser Marston Associates, Inc.

File name: Santa Ana Wiseplace_6 4 22.xlsx; HOME-ARP; trb EXHIBIT 3
City Council 62 – 46 6/21/2022
WISEPlace
Supportive Housing
• 47 studio homes, and 1 two-bedroom for
onsite property manager
• Future residents will pay no more than 30%
of their income on rent
• Extremely low-income (30% AMI) individuals
experiencing chronic homelessness
EXHIBIT 4
City Council 62 – 47 6/21/2022
Existing Site Plan
Existing Building to Remain
126’-10” ±53’
North-South
Wing to be
Demolished
Portion of
Existing
Building to be
Demolished
EXHIBIT 4
City Council 62 – 48 6/21/2022
First Floor Plan
Adaptive Reuse New Construction
EXHIBIT 4
City Council 62 – 49 6/21/2022
Typical Floor Plan
EXHIBIT 4
City Council 62 – 50 6/21/2022
Fourth Floor Plan
EXHIBIT 4
City Council 62 – 51 6/21/2022
South Elevation
EXHIBIT 4
City Council 62 – 52 6/21/2022
West Elevation
EXHIBIT 4
City Council 62 – 53 6/21/2022
Renderings
EXHIBIT 4
City Council 62 – 54 6/21/2022
3716D-20 3716D-20 3716D-20 3716D-20
0 5 10 20 Feet
Scale: 1" = 10'

COPYRIGHT C

WISEPLACE PSH

SANTA ANA, CA
23231 SOUTH POINTE DR.

LAGUNA HILLS, CA 92653
949.267.1660

CHRIS WEIMHOLT
# 190090ENTITLEMENT SUBMITTAL 03/15/2022
N. BROADWAY

PROPERTY LINE / LIMIT OF WORK

PROPERTY LINE / LIMIT OF WORK

PROPERTY LINE / LIMIT OF WORK

LIMIT OF WORK LIMIT OF WORK

LIMIT OF WORK

PROPERTY LINE / LIMIT OF WORK
N.SYCAMORE ST. EXISTING TREE - PROTECT IN PLACE REFERENCE LEGEND 123456789
10111213141516

EXISTING SIDEWALK - PROTECT IN PLACEEXISTING PAVING - PROTECT IN PLACEEXISTING CURB AND GUTTER - PROTECT IN PLACEEXISTING FREESTANDING WALL - PROTECT IN PLACEEXISTING PLANTER WALL - REPAIR TO MATCH EXISTINGEXISTING FENCING - PROTECT IN PLACEEXISTING GATE - PROTECT IN PLACEEXISTING UTILITY - PROTECT IN PLACEEXISTING STEPS - PROTECT IN PLACEEXISTING BUILDING COLUMN - PROTECT IN PLACE

BUILDING OVERHANG - PER ARCHITECTBUILDING DOOR - PER ARCHITECTNEW PEDESTRIAN PAVING AT RIGHT OF WAY - BY OTHERSNEW VEHICULAR PAVING AT DRIVEWAY - BY OTHERSNEW TRANSFORMER - BY OTHERS 17 PARAPET WALL - BY ARCHTIECT18 EXISTING MONUMENT SIGN - RELOCATION TBD19 OUTDOOR BBQ LIGHTING

FENCE LEGEND

SITE AMENITIES LEGEND

GATE LEGEND

FOR MATERIALS, COLORS, FINISHES AND MODELS, SEE MASTER
CONSTRUCTION LEGEND, SHEET L1.XX
P-1

PAVING LEGEND
P-2

ITEM DESCRIPTION DETAIL

CONCRETE PAVING
P-3P-4P-5
F-1F-2
SA-1SA-2SA-3SA-4SA-5
G-1G-2G-3

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX

CONCRETE STEPSCONCRETE RAMPSYNTHETIC TURF

MOW CURB
PERIMETER FENCE - 6' HTDOG FENCE - 42" HT

OUTDOOR KITCHEN AND GRILL

DINING FURNISHINGS

LOUNGE FURNISHINGSBENCH
DOG WASTE STATIONENTRY GATE - 6' HTPERIMETER GATE - 6' HTDOG GATE - 42" HT

DETAIL X
SHEET L.X.XX
R-1R-2

HANDRAIL AT RAMPHANDRAIL AT STEPS

RAILING LEGEND

DETAIL X
SHEET L.X.XX

DETAIL X
SHEET L.X.XX
SA-6 COMPOST BIN DETAIL X SHEET L.X.XX
P-6 DETAIL X SHEET L.X.XX PEDESTAL PAVINGP-7 DETAIL X SHEET L.X.XX DECOMPOSED GRANITE F-3 DETAIL X SHEET L.X.XX MOVABLE SCREENING FENCE
SA-7 RAISED PLANTERS DETAIL X SHEET L.X.XX
13 9
PA
PA
PA
PAPA
P-1
P-2
R-1
PA
11 TYP.

G-1
F-1
18 3
3 4
12 12
9 1
16 15
SA-1
SA-2SA-3SA-4
F-2
G-2
G-3
P-7
8 1
11 15
65 13
4 P-4
R-2
Ground LevelConstructionPlan
L1.01
PA
2 TYP.
13 P-1
9 R-1
P-3
PAPA
F-1
2 P-5
SA-5
PA
PA
PA
9 F-3
PA
14 G-2
G-2 G-2
PA
PA
PA
P-1
PA
PA
(3)
SA-6SA-7
PA
PA PA
EXHIBIT 4
 City Council 62 – 556/21/2022  1 9138-126780\1517029.2
RECORDING REQUESTED BY:

AND WHEN RECORDED MAIL TO:

City of Santa Ana
Clerk of the Council
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: Clerk of the Council
________________________________________________________________________ Free Recording pursuant to
Government Code 27383

DENSITY BONUS HOUSING AGREEMENT
This DENSITY BONUS HOUSING AGREEMENT (“Agreement”), made and entered into this 21st day of June, 2022, by and between the City of Santa Ana, a charter city and municipal corporation of the State of California (“City”), and North Broadway Housing Partners LP, a California limited partnership (“Developer”). City and Developer are sometimes referred to collectively as the “Parties” and individually as a “Party.”

RECITALS
A. On or about March 10, 2022, JHC-Acquisitions LLC, a California limited liability company (“JHC-Acquisitions”) and WISEPlace, a California nonprofit corporation (“Property Owner”), entered into that certain Option to Lease (the “Option Agreement”), pursuant to which the Property Owner granted to JHC-Acquisitions an option to ground lease that certain property located within the City of Santa Ana, County of Orange, State of California, commonly known as 1411 N. Broadway Avenue, Santa Ana, California, 92706, and legally described as set forth in Exhibit A attached hereto and incorporated herein by this reference as if set forth in full (“Property”).

B. Each of Developer and JHC-Acquisitions is an affiliate of Jamboree Housing Corporation, a California nonprofit public benefit corporation. Developer and the Property Owner intend for (i) Developer to assume from JHC-Acquisitions all of JHC-Acquisitions’ rights and obligations under the Option to Lease, and pursuant thereto to ground lease the Property from Property Owner, and (ii) the Property Owner to become a non-managing member of the limited liability company that serves as Developer’s managing general partner.

C. Developer is proposing to develop an affordable rental residential community consisting of forty-eight (48) units with forty-seven (47) units of permanent supportive housing for homeless individuals and 6,500 square feet of community space and common areas on the Property, as more particularly set forth in Density Bonus Application No. DBA-2022-1 (“Project”).

D. Santa Ana Municipal Code sections 41-1600, et seq. (“City Density Bonus for Affordable Housing”), and California Government Code sections 65915, et seq. (“State Density EXHIBIT 5
City Council 62 – 56 6/21/2022
2 9138-126780\1517029.2
Bonus Law”), set forth a process to provide increased residential densities and incentives, concessions, and waivers to property owners or developers who guarantee that a portion of their residential development will be available to low income, very-low income, or senior (also known as "qualified") households. These regulations are intended to materially assist the housing industry in providing adequate and affordable housing for all economic segments of the community and to provide a balance of housing opportunities for very-low income, low income and senior households throughout the city.

E. The Project is proposing a total number of forty-eight (48) residential units, including forty-seven (47) units for extremely-low income households and one manager’s unit.

The Project will provide 20 total onsite parking spaces or 0.42 spaces per unit. No parking concession is requested or provided.

F. The Project complies with the affordable housing requirements set forth in the State Density Bonus Law and City Density Bonus for Affordable Housing. For purposes of this Agreement, the Project shall be the “housing development” as defined in the State Density Bonus Law.

G. In light of the purpose of the State Density Bonus Law and City Density Bonus for Affordable Housing, and the express provisions of Government Code Section 65915(d)(2)(B), the City has determined to grant Developer’s application for one concession and one waiver.

H. This Agreement, and the exhibits attached hereto and incorporated herein by reference, are intended to set forth the terms and conditions for the implementation of the Project’s requirement to provide affordable housing units in exchange for receiving the density bonus concession and waiver set forth herein.

NOW, THEREFORE, in consideration of the above recitals, which are incorporated herein by this reference, and of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS AND EXHIBITS

1.1 Definitions. In addition to the terms that may be defined elsewhere in this Agreement, the following terms when used in this Agreement shall be defined as follows:

1.1.1 "Adjusted for family size appropriate to the unit" shall have the meaning set forth by Health and Safety Code Section 50052.5(h).

1.1.2 "Affordable Rent" means the maximum Monthly Rent that may be charged to and paid by an Eligible Household for the Affordable Units, as required by the terms of this Agreement. The Affordable Rent shall be adjusted to reflect a reasonable utilities allowance for utilities paid by the household using the Santa Ana Housing Authority Multi-Family Housing Utility Allowance Schedule, and shall be updated no less than annually.

EXHIBIT 5
City Council 62 – 57 6/21/2022
3 9138-126780\1517029.2

1.1.3 “Affordable Rent Schedule” means a rent schedule established as of the date of issuance of an occupancy permit (exclusive of tenant utility payments or security deposits) for the required number/percentage of the total number of units in the Project which are to be rented or available for rent to Extremely-Low Income Tenants. Said Affordable Rent Schedule shall be established at the time of the issuance of the occupancy permit (“Initial Rent Schedule”) and shall be created in accordance with Health and Safety Code section 50053(b), and shall be updated no less than annually.

1.1.4 "Affordable Units" means forty-seven (47) units, which shall be comprised of forty-seven (47) studio units for Extremely-Low Income Tenants. Any change to the number or distribution of Affordable Units is subject to City Manager approval.

1.1.5 "Agreement" means this Density Bonus Housing Agreement.

1.1.7 "City" means the City of Santa Ana, California

1.1.8 "City Council" means the City Council of the City of Santa Ana.

1.1.9 "City Attorney" means the City Attorney for the City of Santa Ana.

1.1.10 "City Manager" means the City Manager for the City of Santa Ana.

1.1.11 "City's Planning Commission" means the Planning Commission for the City of Santa Ana.

1.1.12 ''Density Bonus Housing Agreement Term" means the period during which this Agreement shall be in full force and effect, as provided for in Section 6 below.

1.1.14 "Developer" means North Broadway Housing Partners LP and its permitted successors and assigns to all or any part of the Property, Project or this Agreement.

1.1.15 "Effective Date" means the date the Developer and the City shall record or cause to be recorded in the Official Records for Orange County, California, an executed original of this Agreement, pursuant to section 4.1 herein.

1.1.16 "Eligible Household" means a Household whose income does not exceed the qualifying limit for an “Extremely-Low Income Tenant” as defined herein.

1.1.17 “Extremely-Low Income Tenant” means persons and families whose income does not exceed thirty (30%) of the area median income for the Orange County, California Primary Metropolitan Statistical Area (“PMSA”), adjusted for household size, as published by the California Department of Housing and Community Development (“HCD”).

1.1.18 "Household" means all persons residing in a Unit.

EXHIBIT 5
City Council 62 – 58 6/21/2022
4 9138-126780\1517029.2

1.1.19 "Median Income" means the Orange County, California area median income, adjusted for family size, as periodically published by HCD.

1.1.20 "Monthly Rent" means the total of monthly payments for: (a) use and occupancy of each Affordable Unit and land and facilities associated therewith; (b) any separately charged fees or service charges assessed by Developer which are required of all tenants, other than security deposits, application fees or credit check fees; (c) a reasonable allowance for an adequate level of service of utilities not included in (a) or (b) above, including garbage collection, sewer, water, electricity, gas and other heating, cooking and refrigeration fuels, but not including telephone or cable service, to the extent applicable and charged to tenant; and, (d) possessory interest, taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than Developer. In the event that certain utility charges are paid by the landlord rather than the tenant, no utility allowance shall be deducted from the rent for that type of utility charge.

1.1.21 "Project" means that certain affordable residential development as more particularly described in Recital B and Section 2 of this Agreement.

1.1.22 "Property" means that certain real property more particularly described in the legal description in Exhibit A and improvements thereon.

1.1.23 "State Density Bonus Law" means Government Code sections 65915, et seq., as they exist on the Effective Date.

1.1.24 "Unit" means a residential dwelling unit within the Project to be constructed or caused to be constructed by Developer pursuant to this Agreement.

1.1.25 "Unrestricted Units" means the Units within the Project to be constructed or caused to be constructed by Developer to a Household without restriction.

1.1.26 “Very-Low Income Tenant” means persons and families whose income does not exceed fifty (50%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HCD.

1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement:

1.2.1 Exhibit A – Legal Description of the Property

1.2.2 Exhibit B – Tenant Verification

1.2.3 Exhibit C – Annual Tenant Recertification

1.2.4 Exhibit D – Annual Rental Housing Compliance Report

1.2.5 Exhibit E – Notice of Affordability Restrictions on Transfer of Property EXHIBIT 5
City Council 62 – 59 6/21/2022
5 9138-126780\1517029.2

2. DEVELOPMENT OF THE PROPERTY

2.1 Project. Developer shall develop, operate, and maintain, or cause the development, operation and maintenance of, the Property as a forty-eight (48) unit rental residential community, with forty-seven (47) Affordable Units for Extremely Low Income Tenants.

2.2 Density Bonus. The Project Units are allowed under the City’s Adaptive Reuse Ordinance. Therefore, no density bonus is required or provided.

2.3 Development Concessions, Incentives, and Waivers. As set forth in the City entitlements, Developer petitioned for and is hereby granted the following concessions, incentives, and waivers as part of the approval of Density Bonus Application No. DBA-2022-1 for the Project:

2.3.1 Onsite parking shall be provided in compliance with Government Code Section 65915(p)(4). No parking concession is requested or provided. Pursuant to the Project plans, the Developer is proposing to provide 20 total onsite parking spaces or 0.42 spaces per unit.

2.3.2 The permitted building height for this Project shall be increased in accordance with Government Code Section 65915(d)(2)(B), such that the maximum building height for this Project shall be 54 feet and 6 inches and four (4) stories.

2.3.3 Certain development standards for this Project shall be waived in accordance with Government Code Section65915(d)(2)(B), such that all proposed utilities will be undergrounded with the exception of existing overhead power lines over the existing building along with the recorded Southern California Easement (to remain).

2.4 No Further Concessions, Incentives, or Waivers. Developer acknowledges and agrees that the concessions, incentives, and waivers set forth in section 2.3 above fully satisfies any duty City may have under the City Density Bonus for Affordable Housing, the Density Bonus Law, or any other law or regulation to provide any density bonus incentive or to waive any building, zoning, or other requirement in connection with a density bonus. By this Agreement, Developer releases any and all claims Developer may have against City in any way relating to or arising from City’s obligation to waive requirements of or provide development incentives pursuant to the City Density Bonus for Affordable Housing and the Density Bonus Law applicable to the Project.

2.5 Unrestricted Units. The Project, for purposes of this Agreement, may have no more than one (1) Unrestricted Unit (i.e. – manager’s unit) comprised of one (1) two-bedroom unit.

2.6 Affordable Units. The Project, for purposes of this Agreement, shall have no less than forty-eight (48) Units, which shall be comprised of forty-seven (47) studio units designated as Affordable Units pursuant to the terms and conditions of this Agreement. The Affordable Units shall be consistent with all applicable City approvals.

EXHIBIT 5
City Council 62 – 60 6/21/2022
6 9138-126780\1517029.2

2.7 Minimum Development Standards for Affordable Units. The Affordable Units shall be constructed in accordance with all applicable City approvals.

2.8 Permits and Processing; Compliance with Laws. Developer, at its sole cost and expense, or as otherwise set forth in a separate written agreement, shall secure or cause to be secured any and all permits that may be required for development of the Project by City or any other federal, state, or local governmental entity with jurisdiction over the Property or Project.

Upon securing any and all required permits, and all necessary financing and property interests, Developer shall carry out and perform the development, operation, and maintenance of the Project or cause the performance of the development, operation, and maintenance of the Project, in conformity with all applicable federal, state, and local laws and regulations, and all conditions of approval issued by the City Council and City's Planning Commission for the Project. Any changes to the Project shall be reviewed by the City to determine compliance with this Agreement. If any changes to the Project shall materially alter the ability of Developer to comply with any terms of this Agreement in City’s sole determination, then City and Developer shall meet and confer to address amendments and revisions to this Agreement as necessary.

2.9 Relocation Prior to Development of Project. If relocation is required prior to the completion of development of the Project, Developer shall have the sole and exclusive responsibility for providing relocation assistance and paying all relocation costs as may be required to comply with applicable federal and state laws and regulations. In addition to any other indemnity provided by Developer under this Agreement, Developer shall indemnify, defend (with counsel of City’s choosing and the consent of Developer, which shall not be unreasonably withheld and which may be joint defense counsel upon City's and Developer's consent), and hold harmless City and all of its officials, officers, employees, representatives, volunteers and agents from any and all alleged or actual claims, causes of action, liabilities, and damages from any third party for relocation assistance, benefits and costs prior to the completion of the development of the Project.

2.10 Local Sourcing Plan. Developer agrees to make a good faith effort to encourage contractors and suppliers to hire and procure locally, to the extent that it is cost effective and does not delay the overall project development schedule. Prior to issuance of a Building Permit, Developer shall develop and submit or cause the development and submittal to the Community Development Agency (the “CDA”) a local sourcing plan for the Project targeting, to the extent commercially reasonable, the hiring of qualified workers, construction contractors, or the purchasing of goods locally within the City of Santa Ana. The plan must be reviewed and approved by the CDA which if not granted or denied within five (5) business days, shall be deemed approved (with such approval not to be unreasonably withheld, conditioned or delayed) and be implemented for the construction of the project prior to issuance of Building Permit.

2.11 Mechanic's Liens; Indemnification. Developer shall take all actions reasonably necessary to remove any future mechanic's liens or other similar liens (including design professional liens) against the Property or Project, or any part thereof, by reason of work, labor, services, or materials supplied or claimed to have been supplied to Developer or caused by, at the direction of, or on behalf of Developer. Prior to the recording of this Agreement (or memorandum thereof) pursuant to Section 4.1 below, Developer shall provide evidence from the Title Company of any new recordings against the Property or Project. City hereby reserves all rights to post notices EXHIBIT 5
City Council 62 – 61 6/21/2022
7 9138-126780\1517029.2
of non-responsibility and any other notices as may be appropriate upon a filing of a mechanic's lien. In addition to any other indemnity provided by Developer under this Agreement, Developer shall indemnify, defend (with counsel of City’s choosing and the consent of Developer, which shall not be unreasonably withheld - and which may be joint defense counsel upon City's and Developer's consent), and hold harmless City and all of its officials, officers, employees, representatives, volunteers and agents from any and all alleged or actual claims, causes of action, liabilities, and damages from any third party by reason of a mechanic's lien or work, labor, services, or materials supplied or claimed to have been supplied to Developer or caused by, at the direction of, or on behalf of, Developer.

3. AFFORDABILITY

3.1 Total Affordability Term. Each Affordable Unit shall be restricted to use and occupancy by an Eligible Household for a total period of no less than fifty-five (55) years ("Total Affordability Term"). The Total Affordability Term for an Affordable Unit shall commence on the date that the building in which the Affordable Unit is located receives all required occupancy permits from the City.

3.2 Memorializing Commencement of Total Affordability Term. Developer shall keep or cause to be kept detailed records of the commencement date of the Total Affordability Term for each Affordable Unit. City shall have the right to review and verify said records without a fee from City to Developer to ensure that the commencement date specified by Developer for an Affordable Unit coincides with the date that the initial Affordable Unit received all permits from City required for occupancy of the Unit. In the event that a conflict exists between the date specified by Developer for the commencement of the Total Affordability Term for an Affordable Unit and the date specified by City's issuance of all required permits for occupancy of the Unit, the date specified by City's issuance of all required permits for occupancy of the Unit shall control.

3.3 Levels of Affordability.

3.3.1 Extremely-Low Income Tenants. Subject to the terms of Section 5, Developer covenants that no less than forty-seven (47) Affordable Units in the Project shall at all times during the Density Bonus Housing Agreement Term be rented to, or held vacant and available for immediate occupancy by Extremely-Low Income Tenants, at an Affordable Rent.

4. OPERATION OF THE PROJECT BY DEVELOPER

4.1 Payment of Density Bonus Setup Fee. Prior to the Effective Date, Developer delivered payment to City of the required density bonus setup fee in the amount of one-eighth (1/8th) of one percent (1%) of the total estimated construction budget for the Project.

4.2 Recording of Documents. No later than issuance of building permits for the Project, Developer and the City shall record or cause to be recorded in the Official Records for Orange County, California, an executed original of this Agreement. City shall cooperate with Developer in promptly executing in recordable form this Agreement. The date of recording of the Agreement shall be the Effective Date of the Agreement. Upon the date of recording, the terms and conditions EXHIBIT 5
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of this Agreement shall be binding upon and run with the Property and the Project. It is the express intent and agreement between the Parties that this Agreement shall remain binding and enforceable against the Property, the Project, and the Units to ensure compliance with the State Density Bonus Law and City Density Bonus Law, and to ensure the continued supply of Affordable Units in the Project, except as expressly set forth in this Agreement.

4.2 Rental of Units. Upon the completion of construction of the Project and receipt by Developer of all required permits for the occupancy of the Units, Developer shall rent or cause to be rented each Affordable Unit for the Total Affordability Term for such Affordable Unit in accordance with the terms and conditions set forth in this Agreement, which provide among other terms and conditions for the rental of each Affordable Unit at an Affordable Rent to an Eligible Household for the Total Affordability Term.

4.3 Location of Affordable Units. During the Density Bonus Housing Agreement Term, the Affordable Units shall be dispersed throughout the Project in accordance with the terms and conditions set forth in this Agreement.

4.4 Occupancy Levels. The number of persons permitted to occupy each Affordable Unit shall not exceed two persons.

4.5 Use of the Property. All uses conducted on the Property by Developer, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all applicable provisions of the Santa Ana Municipal Code and other applicable federal, state, and local laws, rules, and regulations. The Project shall at all times during the term of this Agreement be used as a rental supportive housing complex and none of the Affordable Units in the Project, nor shall the Property or any portion thereof, ever be used as a hotel, motel, dormitory, fraternity or sorority house, rooming house, hospital, nursing home, sanitarium or rest home, or be converted to condominium ownership. All of the community facilities and any social programs provided to the Project’s residents shall be available on an equal, nondiscriminatory basis to residents of all Units at the Project.

4.6 Maintenance. Developer shall, at all times during the term of this Agreement, cause the Property and the Project to be maintained in a decent, safe and sanitary manner, regardless of cause of the disrepair, to the extent commercially reasonable. City, and any of its employees, agents, contractors or designees shall have the right to enter upon the Property at reasonable times following not less than -forty-eight (48) hours’ prior written notice and in a reasonable manner to inspect the Project. If at any time Developer fails to maintain the Project or the Property in accordance with this Agreement and such condition is not corrected within seven (7) days after written notice from City with respect to debris and waste material, or within thirty (30) days after written notice from City with respect to general maintenance, landscaping and building improvements, unless Developer has initiated corrections and City has agreed to a reasonable amount of time to complete corrections, then City, in addition to whatever remedy it may have at law or at equity, shall have the right to enter upon the applicable portion of the Project or the Property and perform all acts and work necessary to protect, maintain, and preserve the Project and the Property, and to attach a lien upon the Property, or to assess the Property, in the amount of the expenditures arising from such acts and work of protection, maintenance, and preservation EXHIBIT 5
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by City and/or costs of such cure, including a reasonable administrative charge, which amount shall be promptly paid by Developer to City upon demand. Notwithstanding the foregoing, City acknowledges and agrees that the priority of any such lien shall be deemed to be the date such lien is filed, and not the date this Agreement is recorded.

4.6.1 Property Maintenance Agreement. Subject to review and applicability by the Planning and Building Agency (the “PBA”), the CDA, the Public Works Agency (the “PWA”), and the City Attorney to ensure that the Property and all improvements located thereupon are properly maintained, Developer shall execute a maintenance agreement with the City of Santa Ana or Housing Authority, as applicable, prior to occupancy which shall be recorded against the Property and which shall be in a form reasonably satisfactory to the City Attorney. The maintenance agreement shall contain covenants, conditions and restrictions relating to the following:
(a) Compliance with operational conditions applicable during any period(s) of construction or major repair (e.g., proper screening and securing of the construction site; implementation of proper erosion control, dust control and noise mitigation measure; adherence to approved project phasing etc.);
(b) Compliance with ongoing operational conditions, requirement and restrictions as applicable, the proper storage and disposal of trash and debris, and/or restrictions on certain uses;
(c) Ongoing compliance with approved design and construction parameters, signage parameters and restrictions as well as landscape designs, as applicable; (d) Ongoing maintenance, repair and upkeep of the Property and all improvements located thereupon (including but not limited to controls on the proliferation of trash and debris about the Property; the proper and timely removal of graffiti; the timely maintenance, repair and upkeep of damaged, vandalized and/or weathered buildings, structures and/or improvements; the timely maintenance, repair and upkeep of exterior paint, parking striping, lighting and irrigation fixtures, walls and fencing, publicly accessible bathrooms and bathroom fixtures, landscaping and related landscape improvements and the like, as applicable);
(e) If Developer and the owner of the Property are different (e.g., if the applicant is a tenant or licensee of the Property or any portion thereof), both the applicant and the owner of the Property shall be signatories to the maintenance agreement and both shall be jointly and severally liable for compliance with its terms;
(f) The maintenance agreement shall further provide that any party responsible for complying with its terms shall not assign its ownership interest in the Property or any interest in any lease, sublease, license or sublicense, except as set forth herein or unless the prospective assignee agrees in writing to assume all of the duties and obligations and responsibilities set forth under the maintenance agreement; EXHIBIT 5
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(g) The maintenance agreement shall contain provisions relating to the enforcement of its conditions by the City and shall also contain provisions authorizing the City to recover costs and expenses which the City may incur arising out of any enforcement and/or remediation efforts which the City may undertake in order to cure any deficiency in maintenance, repair or upkeep or to enforce any restrictions or conditions upon the use of the Property. The maintenance agreement shall further provide that any unreimbursed costs and/or expenses incurred by the City to cure a deficiency in maintenance or to enforce use restrictions shall become a lien upon the Property in an amount equivalent to the actual costs and/or expense incurred by the City (provided, however, that City acknowledges and agrees that the priority of any such lien shall be deemed to be the date such lien is filed, and not the date this Agreement is recorded); and,
(h) The execution and recordation of the maintenance agreement shall be a condition precedent to the issuance of the Certification of Occupancy.

4.7 Management Plan. Prior to Certificate of Occupancy, Developer shall submit for the reasonable approval of City a “Management Plan” which sets forth in detail the property management duties, a tenant selection process in accordance with this Agreement, a security system (comprised of security cameras with audio voice down capability) and crime prevention program, the procedures for the collection of rent, the procedures for eviction of tenants, the rules and regulations for the Property and manner of enforcement, a standard lease form, an operating budget, the identity and emergency contact information of the professional property management company to be contracted with to provide onsite property management services at the Property (“Property Manager”), and other matters relevant to the management of the Property. The Management Plan shall require Developer to adhere to a fair lease and grievance procedure. The management of the Property shall be in compliance with the Management Plan as approved by City.

If City determines that the performance of the Property Manager is deficient based upon the standards set forth in the approved Management Plan and in this Agreement, City shall provide written notice to Developer of such deficiencies and Developer shall use commercially reasonable efforts to correct such deficiencies. In the event that such deficiencies have not been cured within thirty (30) days, or, if cure is not reasonably possible within 30 days, then unless actions to commence a cure are taken within 30 days and continued thereafter with diligence, City shall have the right to require Developer to immediately remove and replace the Property Manager with another property manager or property management company which is reasonably acceptable to the City Manager, which is not related to or affiliated with Developer, and which has not less than five (5) years’ experience in property management, including significant experience managing housing facilities of the size, quality and scope of the Project. City acknowledges that Developer’s investor limited partner has the right, under Developer’s limited partnership agreement, to direct the general partner to remove the Property Manager. Developer agrees to give City notice of the proposed replacement Property Manager. Such proposed replacement Property Manager shall be subject to the City’s approval (with such approval not to be unreasonably withheld, conditioned or delayed).

4.8 Rental Lease Agreement. Developer shall prepare and obtain City’s approval, which approval shall not be unreasonably withheld, conditioned or delayed, of a rental lease EXHIBIT 5
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agreement (“Lease Agreement”). All Lease Agreements must 1) identify the names and ages of all members of the household who will occupy the Affordable Unit; and 2) state that the Household’s right to occupy the Affordable Unit is subject to compliance with the Median Income requirements, as periodically published by HCD. All Lease Agreements must be consistent with the terms contained in this Density Bonus Agreement.

4.8.1 Prohibited Lease Terms. The Lease Agreement may not contain any of the following provisions:
(a) Agreement to be Sued. Agreement by the tenant to be sued, to admit to guilt, or to a judgment in favor of the Developer in a lawsuit brought in connection with the lease;
(b) Treatment of Property. Agreement by tenant that the Developer may take, hold, or sell personal property of household members without notice to tenant and a court decision on the rights of the parties. This prohibition, however, does not apply to an agreement by the tenant concerning disposition of personal property remaining in the housing unit after the tenant has moved out of the unit. The Developer may dispose of this personal property in accordance with State law; (c) Excusing Developer of Responsibility. Agreement by the tenant not to hold the Developer of the Developer’s agent legally responsible for any action or failure to act, whether intentional or negligent;
(d) Waiver of Notice. Agreement of the tenant that the Developer may institute a lawsuit without notice to the tenant;
(e) Waiver of Legal Proceedings. Agreement by the tenant that the Developer may evict the tenant or household members without instituting a civil court proceeding in which the tenant has the opportunity to present a defense, or before a court decision on the rights of the parties;
(f) Waiver of a Jury Trial. Agreement by the tenant to waive any rights to a trial by jury;
(g) Waiver of Right to Appeal Court Decision. Agreement by the tenant to waive the tenant’s right to appeal, or to otherwise challenge in court, a court decision in connection with the lease; and
(h) Tenant Chargeable with Cost of Legal Action Regardless of Outcome.

Agreement by the tenant to pay attorney’s fees or other legal costs even if the tenant wins in a court proceeding by the Developer against the tenant. The tenant, however, may be obligated to pay attorney’s fees and costs if the tenant loses, if provided for under applicable law or court ruling.

4.9 Selection of Tenants.

4.9.1 Developer shall review the selection of tenants for the Affordable Units in compliance with lawful and reasonable criteria and the requirements of this Agreement. Each Affordable Unit shall be leased to Eligible Households that are chronically homeless and document-ready individuals on the Coordinated Entry List. All residents will be referred from the County of Orange Coordinated Entry System.

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4.9.2 Local preference for Santa Ana residents and workers in tenant selection for the Affordable Units shall be a requirement of the Project. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by the State of California, the Developer shall give preference or cause for the preference in leasing the Affordable Units to households that live and/or work in the City of Santa Ana or who have an active Housing Choice Voucher issued by the Housing Authority of the City of Santa Ana or any other Public Housing Authority.

4.9.3 Prior to the rental or lease of an Affordable Unit to a tenant(s), Developer shall require the tenant(s) or cause for the tenant(s) to be required to execute a written lease and to complete a Tenant Income Verification Form (in substantially the form attached hereto as Exhibit B) certifying that the tenant(s) occupying the Affordable Unit is/are an Eligible Household and otherwise meet(s) the eligibility requirements established for the Affordable Unit. Developer shall verify the income of the tenant(s) as set forth herein. Developer and City shall be entitled to rely on the Tenant Income Verification Form and supporting documentation provided by tenant(s) unless Developer or City has knowledge of, or a reasonable basis for belief as to, the inaccuracy or falsehood of any of the supporting documentation.

4.10 Income Verification and Certification.

Developer covenants to City that it will at all times abide by all specific compliance standards set forth in the regulatory agreements entered into between the Developer and all public funding sources. Developer will abide by all standards including but not limited to number of extremely-low and very-low and low-income affordable units by number of bedrooms, standards for qualifying household incomes and other qualifying criteria. Developer shall provide City with a certified copy of each of the recorded regulatory agreements applicable to the Project. The compliance standards set forth in said regulatory agreements are hereby incorporated by reference as fully set forth herein. In the event of a conflict between this Agreement and the regulatory agreements: (1) the more stringent requirement shall prevail if such interpretation eliminates the relevant conflict; or (2) regulatory agreements, or any of them, shall prevail.

Developer shall be entitled to rely on the Tenant Income Verification Form and supporting documentation provided by tenant(s) unless Developer has knowledge of, or a reasonable basis for belief as to, the inaccuracy or falsehood of any of the supporting documentation. Developer shall make reasonable efforts to verify or cause to be verified that the income and asset statement provided by an applicant in an income certification is accurate by taking, at a minimum, at least one of the following steps as a part of the verification process: (1) obtain three months consecutive pay stubs for the most recent pay period, (2) obtain an income tax return for the most recent tax year, (3) obtain an income verification form from the applicant’s current employer, (4) obtain an income verification form from the Social Security Administration and/or the California Department of Social Services if the applicant receives assistance from either of such agencies, or (5) if the applicant is unemployed and has no such tax return, obtain another form of independent verification.

4.10.1 Gross Household Income. Gross household income means all income from whatever source from all adult Household members, which is anticipated to be received during the EXHIBIT 5
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12-month period following the date of the determination of Gross Household Income. The applicable sources of income are defined in California Code of Regulations Title 25 Housing and Community Development Section 6914.

4.10.2 Annual Recertification. Developer agrees to recertify or cause to be recertified household eligibility annually. Notification of Annual Tenant Recertification shall be sent to the household in substantially the form attached hereto as Exhibit C. An Annual Rental Housing Compliance Report (“Annual Compliance Report”) shall be sent by Developer to the City in substantially the form attached hereto as Exhibit D for City’s review and approval. The Annual Compliance Report shall be due to the City within 30 days of the anniversary of the commencement of the Total Affordability Term, which is the date that each building receives all required occupancy permits from the City.

4.11 Monitoring and Recordkeeping. Throughout the Term of this Agreement, Developer shall annually complete or cause to be completed and submit to City a Certification of Continuing Program Compliance in the form provided by City. Developer agrees to pay annually to City a fee (“City Monitoring Fee”), for the purpose of paying the actual costs associated with the City’s obligation to monitor Developer’s compliance with the affordability restrictions contained in this Agreement related to the Affordable Units, not to exceed monitoring costs for up to forty-seven (47) Affordable Units. The City Monitoring Fee, including any increases thereto, is set by City resolution, based on review and analysis of the actual costs incurred by City to perform said monitoring activities. As of the Effective Date, the City Monitoring Fee is One Hundred Eleven Dollars and Ninety-One Cents ($111.91) per unit. Representatives of City shall be entitled to enter the Property if necessary after review of above documentation, upon at least forty-eight (48) hours written notice, to monitor compliance with this Agreement, and shall be entitled to inspect the records of the Project relating to the Affordable Units and to conduct an independent audit or inspection of such records at a location within the City that is reasonably acceptable to the City without a fee from the City. Developer agrees to cooperate with City in making the Property and the records of the Project relating to the Affordable Units available for such inspection or audit. Developer agrees to maintain or cause for the maintenance of each record of the Project for no less than five (5) years after creation of each such record.

Developer shall allow the City to conduct annual inspections of each of the Affordable Units on the Property after the date of construction completion, with not less than forty-eight (48) hours prior written notice. Developer shall commence to cure or cause the commencement to cure any defects or deficiencies found by the City while conducting such inspections within ten (10) business days of written notice thereof, or such longer period as is reasonable within the reasonable discretion of the City.

4.12 Notice of Affordability Restrictions on Transfer of Property. In the event the Property Owner wishes to sell or transfer the Property, or the Developer wishes to sell or transfer the Project and assign the ground lease to the Property, during the Total Affordability Term, the City and the Developer shall execute and deposit into escrow, or record against the Property, a Notice of Affordability Restrictions on Transfer of the Property as contained herein (Exhibit E).

The sale or transfer of the Property, or assignment of ground lease, shall not be effective unless EXHIBIT 5
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and until the City and the transferee execute the documents necessary to transfer the Density Bonus Agreement obligations from the Developer to the transferee.

4.13 Onsite Supportive Services, Programs and Amenities. Throughout the Term of this Agreement, and to the extent such can be coordinated with and supplied by philanthropic and other social welfare providers, Developer shall provide residents of the Project, or cause to be provided to residents of the Project, access to discounted or no-cost onsite supportive services, programming and amenities that promote independent living and economic mobility and include but are not limited to: health and wellness services, social activities, and physical or recreational amenities.

4.14 Alternative Transportation and Energy Source, Resource Conservation, and LEED Certification. While not a condition of the Project’s Density Bonus, in recognition of the City’s desire to optimize the energy efficiency of the Project, Developer agrees to consult with the project design team, a CABEC certified 2016 Certified Energy Analyst, a LEED AP Homes (low-rise and mid-rise), LEED AP BD+C (high rise), National Green Building Standard (NGBS) Green Verifier, or GreenPoint Rater (one person may meet both of these latter qualifications) early in the Project design process to evaluate a building energy model analysis and identify and consider energy efficiency or generation measures. Prior to the meeting, the energy analyst shall complete an initial energy model based on either current T24 standards or, if the Project is eligible, the California Utility Allowance Calculator using best available information on the Project. To the extent financially feasible for the Project, Developer agrees to incorporate and optimize energy efficient building materials, methods, and amenities.

4.15 Onsite Property Manager. The Project shall have 24-hour on-site Property management services and personnel. Up-to-date 24-hour contact information for the on-site personnel shall be provided to the following City agencies on an ongoing basis:
(a) Police Department
(b) Fire Department
(c) Planning and Building Agency
(d) Community Development Agency

4.16 Emergency Evacuation Plan. Developer shall submit and obtain approval of an Emergency Evacuation Plan (the EEP) from City Police and Fire Protection agencies prior to issuance of a Certificate of Occupancy. Up-to-date 24-hour emergency contact information for the on-site personnel shall be provided to the City on an ongoing basis and the approved EEP shall be kept onsite and also be submitted to the following City agencies:
(a) Police Department
(b) Fire Department
(c) Planning and Building Agency
(d) Community Development Agency

4.17 Crime Free Housing Policy. Developer shall work with City staff to develop a crime free housing policy, procedure, and design plan (the “CFH Plan”). Developer shall submit and obtain approval from the PBA that the CFH Plan meets the requirements of this Subsection 4.17 prior to issuance of the Certificate of Occupancy. The approved CFH Plan shall be implemented and administered by Property management.

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4.18 Onsite Parking Management Plan. Developer has agreed to provide twenty (20) onsite parking stalls for residents and visitors of the Project and actively monitor the parking demand of the Project site. Developer shall continually monitor and take commercially reasonable measures to manage the parking demand of the Project site - to mitigate the use of offsite parking spaces on private or public properties and/or right-of-way. Prior to issuance of the Certificate of Occupancy, Developer shall submit and obtain approval from the Planning and Building Agency of a Parking Management Plan (the "PMP") to address the parking demands of the Project. The approved PMP shall be adhered to and be enforced by the Project at all times.

4.19 Marketing and Resident Selection Plan. Each Affordable Unit shall be leased to Eligible Households selected by Developer who meet all of the requirements provided herein.

Prior to Certificate of Occupancy, Developer shall prepare and obtain City’s approval of a marketing program and resident selection plan for the leasing of the Affordable Units at the Project (“Marketing Program”). The leasing of the Affordable Units shall thereafter be marketed in accordance with the Marketing Program as the same may be amended from time to time with City’s prior written approval. Upon request, Developer shall provide City with periodic reports with respect to the leasing of the Housing Units.

4.19.1 The Marketing Program shall include, but is not limited to, marketing and community outreach activities, proposed tenant selection criteria, occupancy standards, income requirements, timeline and details for outreach and marketing, data collection, record keeping and monitoring, procedures for complaints, and compliance assessment. Components of the resident selection plan shall include, but are not limited to, the application process, interview procedure, apartment offer and assignment, rejected applications, and wait list management. All requirements set forth herein shall be incorporated in the Marketing Program.

5. EFFECT OF LOSS OF PROJECT SUBSIDY AND/OR FORECLOSURE It is anticipated that the Project will be supported by various subsidy programs, including, without limitation, Project-Based Section 8 rental subsidy payments, and a capitalized operating subsidy reserve (collectively with any other subsidies committed to the Project as of the Effective Date, the “Project Subsidy”). Notwithstanding anything to the contrary contained in this Agreement, if, during the “Density Bonus Housing Agreement Term” (as defined in Section 6 below), (i) any portion of the Project Subsidy is reduced, terminated or not renewed, through no fault of Developer, such that the Project Subsidy as it exists as of the Effective Date is no longer available (or available in a lesser amount) then the Developer may request approval of the City (any such request, an “Affordability Adjustment Request”) to (a) allow persons and families whose income does not exceed sixty (60%) of the area median income for the Orange County, California PMSA, adjusted for household size, as published by HCD (“60% Households”) to rent and occupy some or all of the Affordable Units (any such Affordable Units, the “Adjusted Affordable Units"), and (b) to increase the rent on the Adjusted Affordable Units to rents that are affordable to 60% Households, pursuant to Health and Safety Code section 50053(b).

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Concurrently with any Affordability Adjustment Request, Developer shall provide City with evidence of the anticipated reduction or termination of the Project Subsidy, and of the adjustments and increases necessary to enable the Project to attain, and to maintain throughout the Density Bonus Housing Agreement Term, a positive cash flow. Developer’s Affordability Adjustment Request and/or the termination of special and/or target population requirements is subject to the City’s approval, such approval not to be unreasonably withheld, conditioned or delayed.

Upon City’s approval of any Affordability Adjustment Request, Developer hereby agrees to the following:

A. Developer shall provide tenants in the Adjusted Affordable Units with at least sixty (60) days’ written notice of any rent increase and shall notify each tenant that if they have received a tenant-based voucher from the Santa Ana Housing Authority or any other governmental entity they may use such voucher to pay the rent for their Adjusted Affordable Unit; B. No later than sixty (60) days prior to the proposed implementation of any rent increase, Developer shall submit to City a schedule of any proposed increase in the rent for review and approval by City (such approval not to be unreasonably withheld, conditioned or delayed).

6. TERM OF THIS AGREEMENT
The term of this Agreement ("Density Bonus Housing Agreement Term") shall commence on the Effective Date and shall continue until the date that is fifty-five (55) years after the City issues the last certificate of occupancy for the building in which the Affordable Units are located.

7. DEFAULT AND TERMINATION; INDEMNIFICATION

7.1 Default. Failure or delay by any Party to perform any term or provision of this Agreement, which is not cured within thirty (30) days after receipt of notice from the other Party specifying the default (or such other period specifically provided herein), constitutes a default under this Agreement; provided, however, if such default is of the nature reasonably requiring more than thirty (30) days to cure, the defaulting Party shall avoid default hereunder by commencing to cure within such thirty (30) day period, and thereafter diligently pursuing such cure to completion. Except as required to protect against further damages, the injured Party may not institute proceedings against the Party in default until the time for cure has expired. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default.

7.2 Rights and Remedies Cumulative. The rights and remedies of the Parties are cumulative, and the exercise by either Party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party. Notwithstanding anything to the contrary contained in this Agreement, in no event shall either Party be liable for speculative, consequential, punitive or other indirect damages, and each Party waives any right to collect speculative, consequential, punitive or other indirect damages against the other Party.

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7.3 Indemnification. In addition to any other indemnity specifically provided in this Agreement, Developer agrees to defend (with counsel of City’s choosing and the consent of Developer, which shall not be unreasonably withheld, conditioned or delayed and which may be joint defense counsel upon City's and Developer's consent) indemnify and hold harmless City and its respective officers, officials, agents, employees, representatives, and volunteers (collectively, "Indemnitees") from and against any loss, liability, claim, or judgment arising from any act or omission of Developer in connection with its obligations under this Agreement, except to the extent caused by the negligence or willful misconduct of any of the Indemnitees.

7.4 Termination. Prior to the issuance of building permits for the Project, Developer has the right to terminate this Agreement by written notice to City if one or more of the following does not occur: (1) approval and execution of a ground lease between Property Owner and Developer (or an entity formed by Developer to lease the Property) in their reasonable discretion for the lease of the Property; or, (2) receipt by Developer of all financing required for the Project.

8. ASSIGNMENT; COVENANTS RUN WITH THE LAND

8.1 Assignment by Developer.

8.1.1 Prohibited Transfers or Assignments. Except as authorized in this Section or Section 8.1.2 below, Developer shall not sell, transfer, or assign the Property or Project in whole or in part, or transfer or assign Developer's rights and obligations in this Agreement, in whole or in part, without City's prior written approval, which shall not be unreasonably withheld, conditioned or delayed (“Permitted Transfer”); provided, however, Developer shall have the right without City’s prior written approval to transfer or assign the Property, Project and/or Developer’s rights and obligations in this Agreement to any entity that is controlled by, or is under common control with, Developer or Developer’s managing general partner, and Developer shall thereafter be released from any future obligations under this Agreement. In connection with Permitted Transfer, Developer shall: (i) notify City in writing of the sale, transfer, or assignment of all or any portion of the Property, and (ii) deliver to City an assignment and assumption agreement (or other agreement) in a form approved by City in its reasonable discretion and executed by Developer and its transferee/assignee pursuant to which Developer's transferee/assignee assumes all of Developer's covenants and obligations set forth herein with respect to the Property or the portion thereof so transferred. Any request for transfer or assignment of the Agreement by Developer shall require the payment of fees or a deposit to pay for the City’s actual, documented expenses to review the request. Upon the delivery of the assignment and assumption agreement as provided for above for a Permitted Transfer, or in the event of a sale of the Property/Project as provided for in this Section 8.1.1, Developer shall be released from any future obligations under this Agreement.

8.1.2 Lease of Property. Developer agrees and declares that the Property and the Project shall be leased, rented, used, occupied, operated, and approved subject to all obligations set forth or incorporated in this Agreement, all of which are for the purpose of enhancing and protecting the value and attractiveness of the Property and the Project. All of the obligations set forth or incorporated in this Agreement shall constitute covenants which run with the land and EXHIBIT 5
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shall be binding on Developer and its successors and assigns, and all parties having or acquiring any right, title or interest in, or to any part of the Property or Project. Developer further understands and agrees that the Density Bonus permit approvals received for this Project have been made on the condition that Developer and all subsequent lessees, or other successors and assigns of the Property and/or Project lease and rent the Affordable Units in accordance with the terms and conditions stipulated in Sections 4, 5 and 6 of this Agreement for a term of fifty-five (55) consecutive years commencing upon the date of issuance of the last certificate of occupancy for the Project.

8.1.3 Subsequent Assignment. As used in this Agreement, the term "Developer" shall be deemed to include any such transferee or assignee after the date such sale, transfer, or assignment occurs in compliance with this Agreement.

8.1.4 Unpermitted Assignments Void. Any sale, transfer, or assignment made in violation of this Agreement shall be null and void, and City shall have the right to pursue any right or remedy at law or in equity to enforce the provisions of the restriction against unpermitted sales, transfers, or assignments.

8.2 Covenants Run with the Land. The Property shall be used, occupied and improved subject to the covenants, conditions, and restrictions set forth herein. The covenants, conditions, restrictions, reservations, equitable servitudes, liens and charges set forth in this Agreement shall run with the Property and shall be binding upon Developer and all persons having any right, title or interest in the Property, or any part thereof, their heirs, and successive owners and assigns, shall inure to the benefit of City and its successors and assigns, and may be enforced by City and its successors and assigns. The covenants established in this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor of City and its successors and assigns, and the parties hereto expressly agree that this Agreement and the covenants herein shall run in favor of City. Furthermore, all of the covenants, conditions, and restrictions contained herein shall also constitute easements in gross running in favor of City. City is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. Developer hereby declares its understanding and intent that the burden of the covenants set forth herein touch and concern the land and that the Developer's lease interest in the Property is rendered less valuable thereby. Developer hereby further declares its understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property by the citizens of City and by furthering the health, safety, and welfare of the residents of City.

9. MISCELLANEOUS

9.1 Entire Agreement. This Agreement and all of its exhibits and attachments set forth and contain the entire understanding and agreement of the parties with respect to the density bonus incentive and concession provided to the Project, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or EXHIBIT 5
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expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement.

9.2 Amendment. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance approved by the City Council, or through the City Manager as detailed herein, and signed on behalf of each Party. The City Manager shall have the authority to make approvals, issue interpretations, execute documents, waive provisions, and/or enter into amendments of this Agreement on behalf of City, including but not limited to amendments to this Agreement for consistency with other Project agreements, funding sources or to assist Developer in obtaining other funding sources. Any requested alteration, change or modification of the Agreement by Developer shall require the payment of fees or deposit by Developer to City, as applicable, to pay for City’s actual, documented expenses to review the request. Each alteration, change, or modification to this Agreement shall be recorded against the Property in the Official Records of Orange County, California.

9.3 Notices.

9.3.1 Delivery. As used in this Agreement, "notice" includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. All notices shall be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) two (2) days after deposit in the United States mail in a sealed envelope, first class mail and postage prepaid, and addressed to the recipient named below; or (iv) one (1) day after deposit with a known and reliable next-day document delivery service (such as Federal Express), charges prepaid and delivery scheduled next-day to the recipient named below, provided that the sending party receives a confirmation of delivery from the delivery service provider. All notices shall be addressed as follows:

If to City: City of Santa Ana
Community Development Agency
20 Civic Center Plaza (M-26)
P.0. Box 1988
Santa Ana, California 92702
Attention: Housing Manager
With a copy to: Office of the City Attorney
City of Santa Ana
20 Civic Center Plaza, 7th Floor (M-29)
Santa Ana, California 92702
If to Developer: During construction:

Jamboree Housing Corporation
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17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Chief Executive Officer
Following construction:

Jamboree Housing Corporation
17701 Cowan Ave., Suite 200
Irvine, CA 92614
Attention: Asset Manager
With copies to: Rutan & Tucker, LLP
18575 Jamboree Road, 9th Floor
Irvine, CA 92612
Attention: Patrick D. McCalla
And to: WISEPlace
1411 N. Broadway
Santa Ana, CA 92706
Attention: Brateil Aghasi
And to: Odu & Associates, PC
31805 Temecula Parkway #720
Temecula, CA 92592
Attention: Nkechi C. Odu, Esq.

9.3.2 Change of Address. Either Party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a Party, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change.

9.4 Severability. If any term, provision, covenant or condition of this Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform, taking into consideration the purposes of this Agreement.

9.5 Interpretation and Governing Law. This Agreement and any dispute hereunder shall be governed and interpreted in accordance with the laws of the State of California without regard to conflict of law principles. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the Parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not be employed in interpreting this Agreement, all Parties having been represented by counsel in the negotiation and preparation hereof.

9.6 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.

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9.7 Singular and Plural. As used herein, the singular of any word includes the plural, and vice versa, as context so dictates. Masculine, feminine, and neuter forms of any word include the other as context so dictates.

9.8 Intentionally Omitted.

9.9 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.

9.10 Computation of Days. Unless otherwise specified in this Agreement or any Exhibit attached hereto, use of the term "days" shall mean calendar days. For purposes of this Agreement and all Exhibits attached hereto, "business days" shall mean every day of the week except Saturdays, Sundays, official State holidays as recognized in Government Code Section 19853(a) or successor statute, and any days in which Santa Ana City Hall is closed for business.

9.11 Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights upon the default of the other Party, shall not constitute a waiver of such Party's right to insist and demand strict compliance by the other Party with the terms of this Agreement thereafter.

9.12 Non-Discrimination. In performing its obligations under this Agreement, Developer shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other related activities. Developer affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations.

9.13 Third Party Beneficiaries. No person or entity, other than City and Developer shall have any right of action based upon any provision of this Agreement.

9.14 Force Majeure. Neither Party shall be deemed to be in default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other Acts of God, fires, epidemics or pandemics as declared by federal, state, or local emergency resolution, wars, riots or similar hostilities, strikes and other labor difficulties beyond the Party's control (including the Party's employment force), court actions (such as restraining orders or injunctions), or other causes reasonably beyond the Party's control, including delays by any governmental entity (although the City may not benefit from this provision for a delay that results from City's failure to perform its obligations under this Agreement), or an insurance company of either party. If any such events shall occur, the term of this Agreement and the time for performance by either Party of any of its obligations hereunder may be extended by the written agreement of the Parties for the period of time that such events prevented such performance.

9.15 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefited thereby of the covenants to be performed hereunder by such benefited Party.

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9.16 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all permitted successors in interest to the Parties to this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain from doing some act hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon every portion of the Property; (b) runs with the Property and each portion thereof; and (c) is binding upon each Party and each successor in interest approved pursuant to this Agreement during ownership of the Property or any portion thereof.

9.17 Counterparts. This Agreement may be executed by the Parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the Parties had executed the same instrument.

9.18 Jurisdiction and Venue. Any action at law or in equity under this Agreement or brought by a Party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of Orange, State of California, and the Parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.

9.19 Project as a Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the development of the Project is a private development, that neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between City and Developer is that of a government entity regulating the development of private property and the Developer of such property.

9.20 Further Actions and Instruments. Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and in the satisfaction of the Project and conditions of this Agreement. Upon the request of either Party at any time, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or the Project or to evidence or consummate the transactions contemplated by this Agreement. City hereby authorizes City Manager to take such other actions and negotiate and execute any additional agreements or amendments to this agreement as may be reasonably necessary or proper to fulfill the City's obligations under this Agreement. The City Manager may delegate her or his powers and duties under this Agreement to an authorized management level employee of the City.

9.21 Estoppel Certificate. Within ten (10) business days following a written request by any of the Parties, the other Party shall execute and deliver to the requesting Party a statement certifying that (i) either this Agreement is unmodified and in full force and effect or there have been specified (date and nature) modifications to the Agreement, but it remains in full force and effect as modified; and (ii) either there are no known current uncured defaults under this EXHIBIT 5
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Agreement or that the responding Party alleges that specified (date and nature) defaults exist. The statement shall also provide any other reasonable information requested. The failure to timely deliver this statement shall constitute a conclusive presumption that this Agreement is in full force and effect without modification, except as may be represented by the requesting Party, and that there are no uncured defaults in the performance of the requesting Party, except as may be represented by the requesting Party.

9.22 No Subordination; Mortgagee Protection; Covenants Do Not Impair Liens. City's approval of the necessary land use entitlements that authorize Developer to develop, operate, and maintain the Project or to cause the development, operation and maintenance of the Project was based upon Developer's obligation to provide the Affordable Units pursuant to the State Density Bonus Law, City Density Bonus for Affordable Housing, and the terms and conditions of this Agreement. For the Term of the Density Bonus Housing Agreement, this Agreement shall have priority over any and all mortgages, deeds of trust, and other similar forms of secured financing recorded against the Property or any portion thereof. Developer expressly understands and acknowledges that state law requires preservation of affordability covenants in connection with the approval of this density bonus project. This Agreement shall not prevent or limit Developer, in Developer’s reasonable discretion, from encumbering the Property or any portion thereof of or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property or Project and such action shall not constitute an assignment of this Agreement. No violation or breach of covenants, conditions, restrictions, provisions, or limitations contained in this Agreement shall defeat or render invalid or diminish or in any way impair the lien or charge of any mortgage or deed of trust or security instrument.

9.23 Attorneys' Fees and Costs. If either Party to this Agreement commences an action against the other Party to this Agreement arising out of or in connection with this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees, expert witness fees, costs of investigation, and costs of suit from the losing Party.

9.24 Authority to Execute. The person or persons executing this Agreement on behalf of each Party warrants and represents that he or she/they have the authority to execute this Agreement on behalf of his or her/their corporation, partnership or business entity and warrants and represents that he or she/they has/have the authority to bind the Party to the performance of its obligations hereunder.
{Signatures on following page}
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EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY
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Order No: 09196820-919-KRC-KRE
EXHIBIT “A”
All that certain real property situated in the County of Orange, State of California, described as follows:

PARCEL 1:

THE EAST 130.00 FEET OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN

THE FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1869 IN BOOK “B”, PAGE 410 OF JUDGMENTS OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED, AS FOLLOWS:

BEGINNING AT A POINT 1028.50 FEET SOUTH OF THE NORTHEAST CORNER OF SECTION 12, TOWNSHIP 5 SOUTH, RANGE 10 WEST, SAN BERNARDINO MERIDIAN;
THENCE WEST 319.70 FEET TO A PORTION THE CENTERLINE OF SYCAMORE STREET, AS DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA, SAID POINT BEING THE TRUE POINT OF BEGINNING; THENCE WEST 310.37 FEET TO THE SOUTHWEST CORNER OF THE LAND DESCRIBED IN A DEED TO T. J.

MULLINIX RECORDED OCTOBER 29, 1897 IN BOOK 33, PAGE 197 OF DEEDS OF SAID ORANGE COUNTY; THENCE NORTH 77 FEET 1 INCH;
THENCE EAST 310.37 FEET TO SAID CENTERLINE;
THENCE SOUTH 77 FEET 1 INCH TO THE TRUE POINT OF BEGINNING.

PARCEL 2:

THE WEST HALF OF THAT PORTION OF THE LAND ALLOTTED TO JACOB ROSS, AS DESCRIBED IN THE

FINAL DECREE OF PARTITION OF THE RANCHO SANTIAGO DE SANTA ANA, WHICH WAS ENTERED SEPTEMBER 12, 1868 IN BOOK “B”, PAGE 410 OF JUDGEMENT OF THE DISTRICT COURT OF THE 17TH JUDICIAL DISTRICT IN AND FOR LOS ANGELES COUNTY, CALIFORNIA, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT 1028.50 FEET SOUTH OF THE NORTHEAST CORNER OF SECTION 12, TOWNSHIP 5 SOUTH, RANGE 10 WEST, SAN BERNARDINO MERIDIAN;
THENCE WEST 630.00 FEET;
THENCE SOUTH 75.00 FEET;
THENCE EAST 630.00 FEET;
THENCE NORTH 75.00 FEET TO THE POINT OF BEGINNING.

THE EAST LINE OF SAID WEST HALF BEING THE CENTERLINE OF SYCAMORE STREET, AS DESCRIBED IN THAT CERTAIN FINAL JUDGMENT, SUPERIOR COURT CASE NO. 23280, A CERTIFIED COPY OF WHICH WAS RECORDED JANUARY 8, 1929 IN BOOK 227, PAGE 401 OF OFFICIAL RECORDS OF ORANGE COUNTY, CALIFORNIA.

Assessor’s Parcel Number: 398-523-04
MAP
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EXHIBIT B

TENANT VERIFICATION
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1 TENANT INCOME CERTIFICATION
 Initial Certification  Recertification  Other ____________ Effective Date: _____________________
Move-In Date: ______________________
(MM-DD-YYYY)

PART I - DEVELOPMENT DATA
County: _______________ TCAC#: BIN#:

If applicable, CDLAC#:

Property Name:

Address:

Unit Number: # Bedrooms: Square Footage: ___________
PART II. HOUSEHOLD COMPOSITION
 Vacant (Check if unit was vacant on December 31 of the Effective Date Year) HH
Mbr # Last Name First Name
Middle
Initial
Relationship to Head
of Household
Date of Birth
(MM/DD/YYYY)
Student Status
(Check One)
Last 4 digits of
Social Security #
1 HEAD
2 3
4 5
6 7
PART III. GROSS ANNUAL INCOME (USE ANNUAL AMOUNTS)
HH
Mbr #
(A)
Employment or Wages
(B)
Soc. Security/Pensions
(C)
Public Assistance
(D)
Other Income
TOTALS $ $ $ $
Add totals from (A) through (D), above TOTAL INCOME (E): $ PART IV. INCOME FROM ASSETS
HH
Mbr #
(F)
Type of Asset
(G)
C/I
(H)
Cash Value of Asset
(I)
Annual Income from Asset
TOTALS: $ $
Enter Column (H) Total Passbook Rate
If over $5000 $_____________ X 0.06% = (J) Imputed Income $ Enter the greater of the total of column I, or J: imputed income TOTAL INCOME FROM ASSETS (K) $ (L) Total Annual Household Income from all Sources [Add (E) + (K)] $

HOUSEHOLD CERTIFICATION & SIGNATURES
The information on this form will be used to determine maximum income eligibility. I/we have provided for each person(s) set forth in Part II acceptable verification of current anticipated annual income. I/we agree to notify the landlord immediately upon any member of the household moving out of the unit or any new member moving in. I/we agree to notify the landlord immediately upon any member becoming a full time student.

Under penalties of perjury, I/we certify that the information presented in this Certification is true and accurate to the best of my/our knowledge and belief. The undersigned further understands that providing false representations herein constitutes an act of fraud. False, misleading or incomplete information may result in the termination of the lease agreement.

Signature (Date) Signature (Date)
Signature (Date) Signature
FT/PT/NA
FT/PT/NA
FT/PT/NA
FT/PT/NA
FT/PT/NA
FT/PT/NA
FT/PT/NA
(Date)
Tenant Income Certification (April 2021)
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2 Tenant Income Certification (April 2021)
PART V. DETERMINATION OF INCOME ELIGIBILITY
RECERTIFICATION ONLY:

TOTAL ANNUAL HOUSEHOLD
INCOME FROM ALL SOURCES:

From item (L) on page 1 $
Unit Meets Federal
Income Restriction at:
 60%  50%
Current Federal LIHTC
Income Limit x 140%:
$
If Applicable, Current Federal Bond
Income Limit per Family Size:

Household Income as of Move-in:

Or Federal A.I.T. at:
 80%  70%  60%  50%
 40%  30%  20%
Unit Meets State Deeper
Targeting Income Restriction
at:
 Other ______%
Household Income exceeds
140% at recertification:
 Yes  No
$
$
Household Size at Move-in:

PART VI. RENT
Tenant Paid Monthly Rent: $ Federal Rent Assistance: $____________ *Source: ______ Monthly Utility Allowance:

Other Monthly Non-optional charges:
$ Non-Federal Rent Assistance: $____________ (*0-8)
$ Total Monthly Rent Assistance: $____________
GROSS MONTHLY RENT FOR UNIT:
(Tenant paid rent plus Utility Allowance &
other non-optional charges) $
*Source of Federal Assistance
1 **HUD Multi-Family Project Based Rental Assistance (PBRA) 2 Section 8 Moderate Rehabilitation
3 Public Housing Operating Subsidy
4 HOME Rental Assistance
5 HUD Housing Choice Voucher (HCV), tenant-based
6 HUD Project-Based Voucher (PBV)
7 USDA Section 521 Rental Assistance Program
8 Other Federal Rental Assistance
0 Missing
** (PBRA) Includes: Section 8 New Construction/Substantial Rehabilitation; Section 8 Loan Management; Section 8 Property Disposition; Section 202 Project Rental Assistance Contracts (PRAC)
Maximum Federal LIHTC Rent Limit for
this unit: $
If Applicable, Maximum Federal & State
LIHTC Bond Rent Limit for this unit:

Unit Meets Federal Rent Restriction at:

Or Federal A.I.T. at:

If Applicable, Unit Meets Bond Rent
Restriction at:

Unit Meets State Deeper
Targeting Rent Restriction at:
$
 60%  50%
 80%  70%  60%
 50%  40%  30%
 20%
 60%  50%
 Other: ________%
PART VII. STUDENT STATUS
*Student Explanation:

ARE ALL OCCUPANTS FULL TIME STUDENTS? If yes, Enter student explanation* 1 AFDC / TANF Assistance (also attach documentation) 2 Job Training Program
 Yes  No 3 Single Parent/Dependent Child
Enter
1-5
4 Married/Joint Return
5 Former Foster Care
PART VIII. PROGRAM TYPE
Identify the program(s) for which this household’s unit will be counted toward the property’s occupancy requirements.

Select one of the following.
 9% Allocated Federal Housing Tax Credit
 4% Allocated Federal Housing Tax Credit
 Tax-Exempt Bond Only (No tax credits)
Select all that apply.
 HOME (including TCAP)
 CDBG
 Other HUD, including 202, 811, and 236
 National Housing Trust Fund
 USDA Rural Housing Service, including 514, 515, and 538  Other state or local housing programs

SIGNATURE OF OWNER/REPRESENTATIVE
Based on the representations herein and upon the proof and documentation required to be submitted, the individual(s) named in Part II of this Tenant Income Certification is/are eligible under the provisions of Section 42 of the Internal Revenue Code, as amended, and the Land Use Restriction Agreement (if applicable), to live in a unit in this Project.

SIGNATURE OF OWNER/REPRESENTATIVE DATE
Current Federal LIHTC Income Limit per
Family Size (Federal Income Restriction at
60%, 50% or A.I.T. (20% - 80%)): $
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3 Tenant Income Certification (April 2021)
PART IX. SUPPLEMENTAL INFORMATION FORM
The California Tax Credit Allocation Committee (CTCAC) requests the following information in order to comply with the Housing and Economic Recovery Act (HERA) of 2008, which requires all Low Income Housing Tax Credit (LIHTC) properties to collect and submit to the U.S. Department of Housing and Urban Development (HUD), certain demographic and economic information on tenants residing in LIHTC financed properties. Although the CTCAC would appreciate receiving this information, you may choose not to furnish it. You will not be discriminated against on the basis of this information, or on whether or not you choose to furnish it. If you do not wish to furnish this information, please check the box at the bottom of the page and initial.

Enter both Ethnicity and Race codes for each household member (see below for codes).

TENANT DEMOGRAPHIC PROFILE
HH
Mbr # Last Name First Name
Middle
Initial Race Ethnicity Disabled
1 2
3 4
5 6
7 The Following Race Codes should be used:
1 – White – A person having origins in any of the original people of Europe, the Middle East or North Africa. 2 – Black/African American – A person having origins in any of the black racial groups of Africa. Terms such as “Haitian” apply to this category.
3 – American Indian/Alaska Native – A person having origins in any of the original peoples of North and South America (including Central America), and who maintain tribal affiliation or community attachment. 4 – Asian – A person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent:
4a – Asian India 4e – Korean
4b – Chinese 4f – Vietnamese
4c – Filipino 4g – Other Asian
4d – Japanese
5 – Native Hawaiian/Other Pacific Islander – A person having origins in any of the original peoples of Hawaii, Guam, Samoa, or other Pacific Islands:
5a – Native Hawaiian 5c – Samoan
5b – Guamanian or Chamorro 5d – Other Pacific Islander
6 – Other
7 – Did not respond. (Please initial below)
Note: Multiple racial categories may be indicated as such: 31 – American Indian/Alaska Native & White, 41 – Asian & White, etc.

The Following Ethnicity Codes should be used:
1 – Hispanic – A person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race.

Terms such as “Latino” or “Spanish Origin” apply to this category. 2 – Not Hispanic – A person not of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin, regardless of race.
3 – Did not respond. (Please initial below)
Disability Status:
1 – Yes
If any member of the household is disabled according to Fair Housing Act definition for handicap (disability):
• A physical or mental impairment which substantially limits one or more major life activities; a record of such an impairment or being regarded as having such an impairment. For a definition of “physical or mental impairment” and other terms used, please see 24 CFR 100.201, available at http://fairhousing.com/legal-research/hud-regulations/24-cfr-100201-definitions. • “Handicap” does not include current, illegal use of or addiction to a controlled substance. • An individual shall not be considered to have a handicap solely because that individual is a transgender. 2 – No
3 – Did not respond (Please initial below)
 Resident/Applicant: I do not wish to furnish information regarding ethnicity, race and other household composition. (Initials) __________ __________ _________ __________ __________ __________ __________ (HH#) 1. 2. 3. 4. 5. 6. 7.

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INSTRUCTIONS FOR COMPLETING

TENANT INCOME CERTIFICATION
This form is to be completed by the owner or an authorized representative.

Part I - Development Data
Enter the type of tenant certification: Initial Certification (move-in), Recertification (annual recertification), or Other. If other, designate the purpose of the recertification (i.e., a unit transfer, a change in household composition, or other state-required recertification).

Effective Date Enter the effective date of the certification. For move-in, this should be the move-in date.

For annual income recertification’s, this effective date should be no later than one year from the effective date of the previous (re)certification.

Move-In Date Enter the most recent date the household tax credit qualified. This could be the move-in date or in an acquisition rehab property, this is not the date the tenant moved into the unit, it is the most recent date the management company income qualified the unit for tax credit purposes.

Property Name Enter the name of the development.

County
TCAC#
Enter the county (or equivalent) in which the building is located.

Enter the project number assigned to the property by TCAC. Please include hyphens between the state abbreviation, four digit allocating year, and project specific number.

For example: CA-2010-123
BIN # Enter the building number assigned to the building (from IRS Form 8609).

Address Enter the physical address of the building, including street number and name, city, state, and zip code.

If applicable, CDLAC# If project is awarded 4% bonds please enter the project number assigned to the property by CDLAC. Please include hyphens between the state abbreviation, four digit allocating year, and project specific number. For example: 16-436
Unit Number Enter the unit number.
# Bedrooms
Square Footage
Vacant Unit
Enter the number of bedrooms in the unit.

Enter the square footage for the entire unit.

Check if unit was vacant on December 31 of requesting year. For example, for the collection of 2011 data, this would refer to December 31, 2011.

Part II - Household Composition
List all occupants of the unit. State each household member’s relationship to the head of household by using one of the following definitions:

H Head of Household S Spouse U Unborn Child/Anticipated A Adult Co-Tenant O Other Family Member Adoption or Foster C Child F Foster child(ren)/adult(s)
L Live-in Caretaker N None of the above
Date of Birth
Student Status
Last Four Digits of Social Security
Number
Enter each household member’s date of birth.

Check FT for Full-time student, PT for Part-time student, or N/A if household member is not a student and question does not apply.

For each tenant 15 years of age or older, enter the last four digits of the social security number or the last four digits of the alien registration number. If the last four digits of SSN or alien registration is missing, enter 0000. For tenants under age 15, social security number not required, although please enter 0000.

If there are more than 7 occupants, use an additional sheet of paper to list the remaining household members and attach it to the certification.

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Part III - Annual Income
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income, including acceptable forms of verification.

From the third party verification forms obtained from each income source, enter the gross amount anticipated to be received for the twelve months from the effective date of the (re)certification. Complete a separate line for each income-earning member. List each respective household member number from Part II. Include anticipated income only if documentation exists verifying pending employment. If any adult states zero-income, please note “zero” in the columns of Part III.

Column (A) Enter the annual amount of wages, salaries, tips, commissions, bonuses, and other income from employment; distributed profits and/or net income from a business.

Column (B) Enter the annual amount of Social Security, Supplemental Security Income, pensions, military retirement, etc.

Column (C) Enter the annual amount of income received from public assistance (i.e., TANF, general assistance, disability, etc.).

Column (D) Enter the annual amount of alimony, child support, unemployment benefits, or any other income regularly received by the household.

Row (E) Add the totals from columns (A) through (D), above. Enter this amount.

Part IV - Income from Assets
See HUD Handbook 4350.3 for complete instructions on verifying and calculating income from assets, including acceptable forms of verification.

From the third party verification forms obtained from each asset source, list the gross amount anticipated to be received during the twelve months from the effective date of the certification. If individual household member income is provided, list the respective household member number from Part II and complete a separate line for each member.

Column (F) List the type of asset (i.e., checking account, savings account, etc.) Column (G) Enter C (for current, if the family currently owns or holds the asset), or I (for imputed, if the family has disposed of the asset for less than fair market value within two years of the effective date of (re)certification).

Column (H) Enter the cash value of the respective asset.

Column (I) Enter the anticipated annual income from the asset (i.e., savings account balance multiplied by the annual interest rate).

TOTALS Add the total of Column (H) and Column (I), respectively.

If the total in Column (H) is greater than $5,000, you must do an imputed calculation of asset income. Enter the Total Cash Value, multiply by

0.06% and enter the amount in (J), Imputed Income.

Row (K)
Row (L)
Enter the greater of the total in Column (I) or (J)
Total Annual Household Income From all Sources Add (E) and (K) and enter the total

HOUSEHOLD CERTIFICATION AND SIGNATURES
After all verifications of income and/or assets have been received and calculated, each household member age 18 or older must sign and date the Tenant Income Certification. For move-in, it is recommended that the Tenant Income Certification be signed no earlier than 5 days prior to the effective date of the certification.

Total Annual Household Income from all
Sources
Current Federal LIHTC Income Limit per
Unit Meets Federal Income Restriction at
60%, 50% or A.I.T (20% - 80%)
Current Bond Income Limit per Family
Size
Part V – Determination of Income Eligibility
Enter the number from item (L).

Enter the Current Move-in Income Limit for the household size – specifically, the max income limit for the federal 60%, 50% or A.I.T (20% - 80%) set aside.

Enter the Current most restrictive Move-in Income Limit for the household size – specifically, the max income limit incorporating both federal and in some instances more restrictive state standards as reflected in the 50% or 60% set aside detailed in the Bond Regulatory Agreement.

EXHIBIT 5
City Council 62 – 88 6/21/2022
6 Tenant Income Certification (April 2021)
For recertifications only. Enter the household income from the move-in certification.

Enter the number of household members from the move-in certification.

For recertifications only. Multiply the current LIHTC Maximum Move-in Income Limit by 140% and enter the total. 140% is based on the Federal Set-Aside of 20/50 or 40/60, or A.I.T. (20% - 60% = 140% X 60%, 70% = 140% X 70% and 80% = 140% X 80%) as elected by the owner for the property, not deeper targeting elections of 30%, 40%, 45%, 50%, etc. Below, indicate whether the household income exceeds that total. If the Gross Annual Income at recertification is greater than 140% of the LIHTC Income Limit per Family Size at Move-in date (above), then the available unit rule must be followed.

Check the appropriate box for the income restriction that the household meets according to what is required by the federal set-aside(s) for the project.

If your agency requires an income restriction lower than the federal limit, enter the percent required.

Part VI - Rent
Household Income at Move-in
Household Size at Move-in
Current Federal LIHTC Income Limit x
140%
Unit Meets Federal Income Restriction
at or Federal A.I.T. at
Unit Meets State Deeper Targeting
Income Restriction at
Tenant Paid Monthly Rent
Federal Rent Assistance
Non-Federal Rent Assistance
Total Monthly Rent Assistance
Source of Federal Rent Assistance
Monthly Utility Allowance
Other Monthly Non-Optional Charges
Gross Monthly Rent for Unit
Maximum LIHTC Rent Limit for this
unit
Maximum LIHTC Bond Rent Limit for
this unit
Unit Meets Federal Rent Restriction at
or Federal A.I.T. at
Unit Meets Bond Rent Restriction at
Unit Meets State Deeper Targeting Rent
Restriction at
Enter the amount the tenant pays toward rent (not including rent assistance payments such as Section 8).

Enter the amount of rent assistance received from a federal program, if any.

Enter the amount of non-federal rent assistance received, if any.

Enter the amount of total rent assistance received, if any.

If federal rent assistance is received, indicate the single program source.

Enter the utility allowance. If the owner pays all utilities, enter zero.

Enter the amount of non-optional charges, such as mandatory garage rent, storage lockers, charges for services provided by the development, etc.

Enter the total of Tenant Paid Rent plus Utility Allowance and other non-optional charges.

The total may NOT include amounts other than Tenant Paid Rent, Utility Allowances and other non-optional charges. In accordance with the definition of Gross Rent in IRC §42(g)(2)(B), it may not include any rent assistance amount.

Enter the maximum allowable gross rent for the unit. This amount must be the maximum amount allowed by the Current Income Limit per Family Size – specifically, the max rent limit for the federal 50%, 60% or A.I.T. (20% - 80%) set aside. This does not include state deeper targeting levels.

Enter the maximum allowable gross rent for the unit. This amount must be the maximum amount allowed by the Current Income Limit per Family Size – specifically, the max rent incorporating both federal and in some instances more restrictive state standards as reflected in the 50% or 60% set aside detailed in the Bond Regulatory Agreement.

Indicate the appropriate rent restriction that the unit meets according to what is required by the federal set-aside(s) for the project.

Indicate the appropriate rent restriction that the unit meets according to what is required by the federal and state law for the project.

If your agency requires a rent restriction lower than the federal limit, enter the percent required.

Part VII - Student Status
If all household members are full time* students, check “yes”. Full-time status is determined by the school the student attends. If at least one household member is not a full-time student, check “no.” If “yes” is checked, the appropriate exemption must be listed in the box to the right. If none of the exemptions apply, the household is ineligible to rent the unit.

EXHIBIT 5
City Council 62 – 89 6/21/2022
7 Tenant Income Certification (April 2021)
Part VIII – Program Type
Select the program(s) for which this household’s unit will be counted toward the property’s occupancy requirements. One response from the first column must be selected.

SIGNATURE OF OWNER/REPRESENTATIVE
It is the responsibility of the owner or the owner’s representative to sign and date this document immediately following execution by the resident(s).

The responsibility of documenting and determining eligibility (including completing and signing the Tenant Income Certification form) and ensuring such documentation is kept in the tenant file is extremely important and should be conducted by someone well trained in tax credit compliance.

These instructions should not be considered a complete guide on tax credit compliance. The responsibility for compliance with federal program regulations lies with the owner of the building(s) for which the credit is allowable.

PART IX. SUPPLEMENTAL INFORMATION
Complete this portion of the form at move-in and at recertification’s (only if household composition has changed from the previous year’s certification).

Tenant Demographic Profile Complete for each member of the household, including minors. Use codes listed on supplemental form for Race, Ethnicity, and Disability Status.

Resident/Applicant Initials All tenants who wish not to furnish supplemental information should initial this section.

Parent/Guardian may complete and initial for minor child(ren).

EXHIBIT 5
City Council 62 – 90 6/21/2022

TENANT INCOME CERTIFICATION QUESTIONNAIRE
One Form per Adult Member of the Household
NAME: TELEPHONE NUMBER:
_______________________________________________________ ________________________ Initial Certification BIN #_________________________
Re-certification
Other Unit #_________________________

INCOME INFORMATION

YES NO MONTHLY GROSS INCOME

1. I am self-employed. (List nature of self employment) _______________________________________________
(use net income from self-employment only)
$_________________

2. I have a job and receive wages, salary, overtime pay, commissions, fees, tips, bonuses, and/or other compensation: List the businesses and/or companies that pay you:

Name of Employer
1)__________________________________________
2)__________________________________________
3)__________________________________________
$_________________
$_________________
$_________________

3. I receive cash contributions of gifts including rent or utility payments, on an ongoing basis from persons not living with me. $_________________

4. I receive unemployment benefits. $_________________

5. I receive Veteran’s Administration, GI Bill, or National Guard/Military benefits/income. $_________________

6. I receive periodic social security payments. $_________________

7. The household receives unearned income from family members age 17 or under (example:

Social Security, Trust Fund disbursements, etc.). $_________________

8. I receive Supplemental Security Income (SSI). $_________________

9. I receive disability or death benefits other than Social Security. $_________________

10. I receive Public Assistance Income (examples: TANF, AFDC) $_________________

11. I am entitled to receive child support payments.

I am currently receiving child support payments.

If yes, from how many persons do you receive support? ________ I am currently making efforts to collect child support owed to me. List efforts being made to collect child support:
$_________________
$_________________

12. I receive alimony/spousal support payments $__________________

13. I receive periodic payments from trusts, annuities, inheritance, retirement funds or pensions, insurance policies, or lottery winnings.

If yes, list sources:
1)_____________________________________
$__________________
$__________________

14. I receive income from real or personal property. (use net earned income) $__________________

15. Student financial aid (public or private, not including student loans) Subtract cost of tuition from Aid received
*For Households receiving Section 8 Assistance Only
$__________________

ASSET INFORMATION

YES NO INTEREST RATE CASH VALUE

16. I have a checking account(s).

If yes, list bank(s)
1)_____________________________
2)_____________________________
_______%
_______%
$____________
$____________
Tenant Income Questionnaire (July 2018)
EXHIBIT 5
City Council 62 – 91 6/21/2022

17. I have a savings account(s)
If yes, list bank(s)
1)________________________________
2)________________________________
_______%
_______%
$_____________
$_____________

18. I have an EBT, Debit Visa, MasterCard account(s). (Including Social Security wages, Unemployment, Public Assistance, Disability, Etc…) If yes, list sources(s) of income being received/type of account(s) 1)________________________________
2)________________________________
3)________________________________
$_____________
$_____________
$_____________

19. I have a revocable trust(s)
If yes, list bank(s)
1)_______________________________ _______% $_____________

20. I own real estate.

If yes, provide description:
_____________________________________________
$____________

21. I own stocks, bonds, or Treasury Bills
If yes, list sources/bank names
1)_______________________________
2)_______________________________
3)_______________________________
______%
______%
______%
$____________
$____________
$____________

22. I have Certificates of Deposit (CD) or Money Market Account(s).

If yes, list sources/bank names
1)_______________________________
2)_______________________________
3)_______________________________
_______%
_______%
_______%
$____________
$____________
$____________

23. I have an IRA/Lump Sum Pension/Keogh Account/401K.

If yes, list bank(s)
1)_______________________________
2)_______________________________
_______%
_______%
$____________
$____________

24. I have a whole life insurance policy.

If yes, how many policies __________ $_____________

25. I have cash on hand.
$_____________

26. I have disposed of assets (i.e. gave away money/assets) for less than the fair market value in the past 2 years.

If yes, list items and date disposed:
1)_________________________________________
2)_________________________________________
$_____________
$_____________

STUDENT STATUS
YES NO

Does the household consist of all persons who are full-time students (Examples: K-12, College, Trade School, etc.)? Does the household consist of all persons who have been a full-time student 5 months in the current calendar year? Does your household anticipate becoming an all full-time student household in the next 12 months?

If you answered yes to any of the previous three questions are you:
• Receiving assistance under Title IV of the Social Security Act (AFDC/TANF/Cal Works - not SSA/SSI) • Enrolled in a job training program receiving assistance through the Job Training Participation Act (JTPA) or other similar program
• Married and filing (or are entitled to file) a joint tax return • Single parent with a dependant child or children and neither you nor your child(ren) are dependent of another individual
• Previously enrolled in the Foster Care program (currently age 18-24) UNDER PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION PRESENTED ON THIS FORM IS TRUE AND ACCURATE TO THE BEST OF MY/OUR KNOWLEDGE. THE UNDERSIGNED FURTHER UNDERSTANDS THAT PROVIDING FALSE REPRESENTATIONS HEREIN CONSTITUES AN ACT OF FRAUD. FALSE, MISLEADING OR INCOMPLETE INFORMATION WILL RESULT IN THE DENIAL OF APPLICATION OR TERMINATION OF THE LEASE AGREEMENT.
_________________________________ ________________________________________ ______________________

PRINTED NAME OF APPLICANT/TENANT SIGNATURE OF APPLICANT/TENANT DATE _________________________________________________ _____________________

WITNESSED BY (SIGNATURE OF OWNER/REPRESENTATIVE) DATE
Tenant Income Questionnaire (July 2018)
EXHIBIT 5
City Council 62 – 92 6/21/2022
28 9138-126780\1517029.2

EXHIBIT C

ANNUAL TENANT RECERTIFICATION
EXHIBIT 5
City Council 62 – 93 6/21/2022
Tax Credit Program Recertification Notice
02/01/2022
Dear Resident:

Our records show that you are due for your annual recertification on Wednesday, June 1, 2022. To complete our review of your income and family composition, you must meet with Sharese Flowers and supply the required information at least three weeks before that date. Please contact Sharese Flowers at (909) 889-8417 as soon as possible to set up an appointment.

The Internal Revenue Service (IRS) requires that we annually recertify all household incomes as defined by the section 42 LIHTC Program. An annual recertification must be completed to continue occupancy in your unit.

Thank you in advance for your cooperation.

Sincerely,
Property Manager
Vista Pointe Apartments
2170 North Rancho Avenue
Colton, CA 92324
Phone: (909) 889-8417 TTY:(711) -
Resident Name
2190 Rancho Avenue
Colton, CA 92324
EXHIBIT 5
City Council 62 – 94 6/21/2022
29 9138-126780\1517029.2

EXHIBIT D

ANNUAL RENTAL HOUSING COMPLIANCE REPORT
EXHIBIT 5
City Council 62 – 95 6/21/2022
Project: Date:

Address: Reporting Period:

Total # of Units in the Project: # of Affordable Units:

Very-Low Income Units
Compliance Report Completed By: Low Income Units
Phone Number:

Unit #
Household
Name
Household
Size
Household
Income
# of
Bedrooms
Gross
Rent
Utility
Allowance
Net
Rent
Date 1st
Occupied
Date of Last
Income
Recertification
Income
Restriction
(Very-Low or Low)

HOUSING OPPORTUNITY ORDINANCE COMPLIANCE REPORT

ANNUAL RENTAL HOUSING COMPLIANCE REPORT
Prepared by: Keyser Marston Associates, Inc.

File name: Exhibit D - Annual Rental Housing Compliance.xlsx Page 1 EXHIBIT 5
City Council 62 – 96 6/21/2022
30 9138-126780\1517029.2

EXHIBIT E

NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY EXHIBIT 5
City Council 62 – 97 6/21/2022

EXHIBIT E

NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY NOTICE IS HEREBY GIVEN that the CITY OF SANTA ANA, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California, has entered into a Density Bonus Agreement with North Broadway Housing Partners LP, a California limited partnership (“Developer”). The Density Bonus Agreement imposes income and affordability covenants on designated units (the “Affordable Units”) within the property located at 1411 N. Broadway Avenue, Santa Ana, Orange County, and further described in the legal description provided in Exhibit A to the Density Bonus Agreement (the “Property”).

The Density Bonus Agreement was recorded as Document/Instrument Number ______________________, and shall remain in effect until _______________ ______, 20____ (the “Termination Date”) (Insert date of the termination of the “Total Affordability Term”). The Density Bonus Agreement imposes the following income and affordability restrictions on the Affordable Units.

Number of Bedrooms Extremely-Low
Income
Households
Low
Income
Households
Studio Units 47
One-Bedroom Units
Two-Bedroom Units
Three-Bedroom Units
Four-Bedroom Units
In the event the fee owner of the Property (“Property Owner”) wishes to sell or transfer the Property prior to the Termination Date, or the Developer wishes to assign the ground lease to the Property, the City and the Property Owner and/or Developer shall execute and deposit into escrow, or record against the Property, this Notice of Affordability Covenants on Transfer of the Property. Further, any assignment of ground lease shall not be effective unless and until the City and transferee execute the documents necessary to transfer the Density Bonus Agreement obligations from the Developer to the transferee.

This Notice of Affordability Covenants on Transfer of the Property in no way modifies the provisions of the Density Bonus Agreement. In the event of any conflict between this Notice of Affordability Covenants on Transfer of the Property and the Density Bonus Agreement, the terms of the Density Bonus Agreement shall prevail.

IN WITNESS WHEREOF, the Parties hereto have duly executed this Notice of Affordability Restrictions on Transfer of Property as of the dates set forth below. [Signatures on Following Pages]
EXHIBIT 5
City Council 62 – 98 6/21/2022

SIGNATURE PAGE
TO

NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY CITY:

CITY OF SANTA ANA
A California Charter City and Municipal
Corporation
By: _______________________
Name: Kristine Ridge
Its: City Manager_____________
Date: ________________________
APPROVED AS TO LEGAL FORM:

By: ________________________
Ryan O. Hodge
Assistant City Attorney
EXHIBIT 5
City Council 62 – 99 6/21/2022

SIGNATURE PAGE
TO

NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY PROPERTY OWNER:

A
By:_______________________
Name:

Its:

Date: ________________________
EXHIBIT 5
City Council 62 – 100 6/21/2022

SIGNATURE PAGE
TO

NOTICE OF AFFORDABILITY RESTRICTIONS ON TRANSFER OF PROPERTY DEVELOPER:

A
By:_______________________
Name:

Its:

Date: ________________________
EXHIBIT 5
City Council 62 – 101 6/21/2022
City Manager Office
santa-ana.org/city-managers-office
Item # 63
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 21, 2022
TOPIC: Coronavirus Nonprofit Fiscal Recovery Fund
AGENDA TITLE:

Approve the Coronavirus Nonprofit Fiscal Recovery Fund Program in the amount of $550,000 to Provide Financial Relief to Non-Profit Organizations Located on City-Owned Land (Revive Santa Ana Program)

RECOMMENDED ACTION

1. Approve an amendment to the Revive Santa Ana spending plan to add the Coronavirus Nonprofit Fiscal Recovery Fund in the amount of $550,000 and decrease the amount for Community Center Renovations by $550,000

2. Direct the City Attorney to finalize and authorize the City Manager to execute agreements with non-profit organizations awarded funds as part of the Coronavirus Nonprofit Fiscal Recovery Fund program for a one-year term beginning June 22 , 2022 through June 21, 2023, subject to non-substantive changes approved by the City Manager and City Attorney, and direct the Risk Manager or designee to determine the necessary insurance requirements applicable for each project.

DISCUSSION
Background
In July 2021, the City of Santa Ana received approximately $128.3 million in Coronavirus State and Local Fiscal Recovery Funds (SLFRF) through the American Rescue Plan Act of 2021. These funds provide critical funding for resources to respond to the COVID-19 pandemic, address the economic fallout, and prepare for a recovery plan that is rooted in equity and transparency. To guide the City of Santa Ana through identifying and prioritizing expenditure areas for the City’s share of Coronavirus State and Local Fiscal Recovery Funds, the City launched Revive Santa Ana, a comprehensive COVID-19 pandemic recovery initiative designed to deliver both short-term and long-term health, financial, educational, and other support to the Santa Ana community. Revive Santa Ana is divided into five main categories: Recovery from the Pandemic; Direct Assistance Programs; Public Health and Safety; Critical Infrastructure; and City Fiscal Health.

City Council 63 – 1 6/21/2022
Coronavirus Nonprofit Fiscal Recovery Fund
June 21, 2022

Using SLFRF to Provide Assistance to Nonprofits: Coronavirus Nonprofit Fiscal Recovery Fund for Organizations Located on City-Owned Parcels
Under the SLFRF expenditure guidelines provides by the U.S. Treasury, the City may use SLFRF funds to aid nonprofits. Accordingly, the nonprofits may use these funds to mitigate public health or negative economic impacts as a result of the COVID-19 pandemic. Under this program, staff recommends that the City enter into grant agreements with the Delhi Center and the Santa Ana Historical Preservation Society to provide these nonprofit organizations with recovery funds.

Over the years, the City of Santa Ana has entered into ground lease agreements of cityowned land with non-profit organizations that provide community benefits to the residents of Santa Ana. For example, in 1975 the City of Santa Ana entered into an agreement with the Santa Ana Historical Preservation Society to restore, preserve and operate the HoweWaffle House and Carriage House as a historical landmark. In 2000, the City of Santa Ana entered into a ground lease with the Delhi Center for the construction of a community center on city-owned land.

These community assets serve as essential resources to the residents of Santa Ana.

They were severely impacted by the COVID-19 pandemic, losing much of their operating revenue, and putting the vital services they provide to our community at risk. To help mitigate the losses caused by the pandemic, staff is proposing to allocate $550,000 from the American Rescue Plan Act to be put towards a Coronavirus Nonprofit Fiscal Recovery Fund to assist non-profit organizations maintain and preserve facilities located on cityowned land as follows:

Non-Profit Organization Proposed Allocation
Delhi Center $ 506,608.51
Santa Ana Historical Preservation Society $ 43,391.49

ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.

City Council 63 – 2 6/21/2022
Coronavirus Nonprofit Fiscal Recovery Fund
June 21, 2022

FISCAL IMPACT
Funds are available for expenditure in Fiscal Year 2021-22. Any remaining balances not expended at the end of the fiscal year will be carried forward to the following fiscal year.

Fiscal
Year
Accounting
Unit - Account
No.
(Project No.)
Fund
Description
Accounting Unit -
Account No.

Description
Amount
2021-
22 18113013-
Various
(Project No.
2213xx)
American
Rescue
Plan Act

ARPA-CMO,
Coronavirus
Nonprofit Fiscal
Recovery Fund
$ 550,000
Total $ 550,000
Submitted By: Kristine Ridge, City Manager
Approved By: Kristine Ridge, City Manager
City Council 63 – 3 6/21/2022
Clerk of the Council Office
www.santa-ana.org/cc
Item # 64
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 21, 2022
TOPIC: Designate Voting Delegate for League of California Cities 2022 General Assembly
AGENDA TITLE:

Designate a Voting Delegate and Up to Two Alternates for League of California Cities 2022 General Assembly

RECOMMENDED ACTION
Designate a voting delegate and up to two alternates for the League of California Cities' Annual Business Meeting (during General Assembly) on Friday, September 9, 2022.

DISCUSSION
The League of California Cities’ (Cal Cities) 2022 Annual Conference & Expo is scheduled from September 7 through 9, 2022, in Long Beach. Of particular significance at the conference is the Annual Business Meeting, where Cal Cities provides member cities, like the City of Santa Ana, an opportunity to consider and act on resolutions that establish Cal Cities policy.

To expedite the conduct of business, every city is required to designate a voting representative and up to two alternates who will represent the City at the League Business Meeting (Exhibit 1). These designations must be made by City Council action. Cal Cities bylaws indicate that each city is entitled to one vote to take a position on matters affecting municipal or League policy as referenced in Exhibit 1.

ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.

FISCAL IMPACT
There is no fiscal impact associated with this action.

EXHIBIT(S)

1. League of California Cities Correspondence - Designation of Voting Delegates and Alternates
City Council 64 – 1 6/21/2022
Designate Voting Delegate for League of California Cities 2022 General Assembly June 21, 2022

Submitted By: Daisy Gomez, Clerk of the Council
Approved By: Kristine Ridge, City Manager
City Council 64 – 2 6/21/2022
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org DATE: June 1, 2022
TO: City Managers and City Clerks
RE: DESIGNATION OF VOTING DELEGATES AND ALTERNATES
League of California Cities Annual Conference & Expo – September 7-9, 2022 Cal Cities 2022 Annual Conference & Expo is scheduled for September 7-9, 2022 in Long Beach. An important part of the Annual Conference is the Annual Business Meeting (during General Assembly) on Friday, September 9. At this meeting, Cal Cities membership considers and acts on resolutions that establish Cal Cities policy.

In order to vote at the Annual Business Meeting, your city council must designate a voting delegate. Your city may also appoint up to two alternate voting delegates, one of whom may vote if the designated voting delegate is unable to serve in that capacity.

Please complete the attached Voting Delegate form and return it to Cal Cities office no later than Friday, September 2. This will allow us time to establish voting delegate/alternate records prior to the conference.

Please view Cal Cities’ event and meeting policy in advance of the conference. • Action by Council Required. Consistent with Cal Cities bylaws, a city’s voting delegate and up to two alternates must be designated by the city council.

When completing the attached Voting Delegate form, please attach either a copy of the council resolution that reflects the council action taken, or have your city clerk or mayor sign the form affirming that the names provided are those selected by the city council. Please note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone. • Conference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. Conference registration will open by June 1 on the Cal Cities website. In order to cast a vote, at least one voter must be present at the Business Meeting and in possession of the voting delegate card. Voting delegates and alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the Voting Delegate Desk. This will enable them to receive the special sticker on their name badges that will admit them into the voting area during the Business Meeting.

Council Action Advised by August 31, 2022
City Council 64 – 3 6/21/2022
• Transferring Voting Card to Non-Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the Business Meeting, they may not transfer the voting card to another city official. • Seating Protocol during General Assembly. At the Business Meeting, individuals with the voting card will sit in a separate area. Admission to this area will be limited to those individuals with a special sticker on their name badge identifying them as a voting delegate or alternate. If the voting delegate and alternates wish to sit together, they must sign in at the Voting Delegate Desk and obtain the special sticker on their badges.

The Voting Delegate Desk, located in the conference registration area of the Long Beach Convention Center, will be open at the following times: Wednesday, September 7, 8:00 a.m. – 6:00 p.m.; Thursday, September 8, 7:00 a.m. – 4:00 p.m.; and Friday, September 9, 7:30 a.m.–12:30 p.m. The Voting Delegate Desk will also be open at the Business Meeting on Friday, but will be closed during roll calls and voting.

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

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

Once again, thank you for completing the voting delegate and alternate form and returning it to Cal Cities office by Friday, September 2. If you have questions, please call Darla Yacub at (916) 658-8254.

Attachments:
• Annual Conference Voting Procedures
• Voting Delegate/Alternate Form
City Council 64 – 4 6/21/2022
1400 K Street, Suite 400, Sacramento, CA 95814 • 916.658.8200 • calcities.org Annual Conference Voting Procedures

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

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

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

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

5. Voting. To cast the city's vote, a city official must have in their possession the city's voting card and be registered with the Credentials Committee. The voting card may be transferred freely between the voting delegate and alternates, but may not be transferred to another city official who is neither a voting delegate or alternate.

6. Voting Area at Business Meeting. At the Business Meeting, individuals with a voting card will sit in a designated area. Admission will be limited to those individuals with a special sticker on their name badge identifying them as a voting delegate or alternate.

7. Resolving Disputes. In case of dispute, the Credentials Committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the Business Meeting.

City Council 64 – 5 6/21/2022
CITY:________________________________________
2022 ANNUAL CONFERENCE

VOTING DELEGATE/ALTERNATE FORM
Please complete this form and return it to Cal Cities office by Friday, September 2, 2022. Forms not sent by this deadline may be submitted to the Voting Delegate Desk located in the Annual Conference Registration Area. Your city council may designate one voting delegate and up to two alternates.

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

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

1. VOTING DELEGATE
Name:

Title:

2. VOTING DELEGATE - ALTERNATE 3. VOTING DELEGATE - ALTERNATE Name: Name:

Title: Title:

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

Name: ____________________________________ Email_________________________________ Mayor or City Clerk_________________________ Date____________ Phone________________ (circle one) (signature) Please complete and return by Friday, September 2, 2022 to:

Darla Yacub, Assistant to the Administrative Services Director E-mail: [email protected]; Phone: (916) 658-8254
City Council 64 – 6 6/21/2022
Clerk of the Council Office
www.santa-ana.org/departments/clerk-of-the-council/
Item # 65
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 21, 2022
TOPIC: Lobbyist Ordinance
AGENDA TITLE:

Ordinance Relating to Lobbyist Disclosure Policy

RECOMMENDED ACTION

1. Approve the first reading of an ordinance to implement a Lobbyist Registration Policy.

2. Provide staff direction for registration and penalty fees.

DISCUSSION
At the May 3 meeting of the City Council, Management Partners presented the Santa Ana Lobbyist Registration Assessment dated April 18, 2022. The assessment involved a review of the existing regulations adopted in Santa Ana that affect lobbyists, why public agencies adopt laws and regulations related to lobbying, what is and is not lobbying, and issues related to adoption of lobbyist registration and reporting requirements.

Management Partners researched the definition of lobbyist and the requirements for lobbyists in the following cities:
 Anaheim,
 Bakersfield,
 Los Angeles,
 Long Beach,
 Riverside,
 San Diego,
 Santa Monica, and
 Stockton.

It was determined that Bakersfield, Riverside and Stockton have not adopted regulations requiring registration by lobbyists. The requirements for Anaheim, Los Angeles, Long Beach, San Diego, and Santa Monica were presented and focused on the following:
 The definition of “lobbyist,” including any exclusions; City Council 65 – 1 6/21/2022
Lobbyist Ordinance
June 21, 2022

 Reporting requirements, such as the frequency of disclosures, registration fees, and other prohibited activities; and
 Fines or other penalties for failing to follow the ordinance.

Following the presentation, the Mayor and Council discussed the report and regulations requiring registration by lobbyists in comparable cities and directed that a draft ordinance be prepared for further consideration.

Major observations from the May 3, 2022, meeting which guided the development of the draft ordinance, are provided below.
 The Mayor and City Council support efforts to bring further transparency to government decision-making.
 Lobbyists can organize voices, build momentum for projects and issues, and provide technical or specialized information, but these interests should be balanced with the community’s right to know the interests that attempt to influence decisions by government and to evaluate whether these interests create undue influence over decision-makers.
 In November 2021, the Mayor and City Council amended the City’s Sunshine Laws. The initial draft of this ordinance included requirements related to lobbyist registration and reporting that should be considered as a new proposed ordinance as developed.
 In defining “lobbyist,” emphasis should be placed on people, businesses and other entities including non-profit organizations that are paid to engage decision-makers in a manner to influence a position on an item.
 The definition of “lobbyist” should be based on the amount of compensation received rather than on the number of hours the lobbyist worked. This will facilitate administration of the ordinance and avoid potentially burdensome timekeeping requirements for lobbyists and City staff.
 Residents, community groups, neighborhood associations, and other stakeholders expressing their views to individual Council members or at public meetings should be exempt from lobbyist regulations.
 The names of city officials the lobbyist has spoken to should be disclosed.  Various penalty options should be considered including a fine as a first offense with additional penalties accruing for flagrant or ongoing violations.  Language should be clear, and to the extent possible, easy for lobbyists to comply with and for staff to administer. A goal is to ensure program costs are recovered and the program is sustainable.
 Lobbyist registration and reporting should continue to be discussed as a possible Charter amendment.

As suggested, the initial draft of the ordinance that included regulations pertaining to lobbyists developed by the City Attorney’s Office was used by Management Partners as a starting point in drafting the new regulations for consideration. Also utilized were the new article and numbering protocols identified therein. New or revised language was City Council 65 – 2 6/21/2022
Lobbyist Ordinance
June 21, 2022

developed to address comments and suggestions made during the May 3, 2022, Council meeting. The draft ordinance, which is included as an attachment to this document, has been reviewed by City Attorney's Office and their changes and suggestions were incorporated.

Highlights of the draft ordinance are provided below.
 Added language related to the purpose and intent of the regulation. Specifically, new language indicates the purpose for enacting these regulations is to promote public confidence and trust, preserve the integrity of local government decisionmaking, and provide members of the community with access to information about persons and organizations who attempt to influence decisions of City government through the use of paid lobbyists.
 Provided the definition of lobbyist. As there was not a Council majority consensus, staff suggested a threshold amount for the calendar month as an effort to compromise. As written, “lobbyist” is defined as any individual or entity who receives or becomes entitled to receive $500 or more in consideration in a calendar month, other than reimbursement for reasonable travel expenses, to communicate, directly or through his/her agents with any elected or appointed official of the City, member of the City Executive Team, or Legislative Body, board or commission of the City, for the purpose of influencing legislative or administrative action of the City of Santa Ana or any regional agency in which Santa Ana has a voting role.
 Expanded the definition of “lobbyist” to include non-profit organizations.  Added a definition of “client” which is the person who compensates a lobbyist or lobbying firm for the purpose of attempting to influence a legislative or administrative action and the person on whose behalf a lobbyist or lobbying firm attempts to influence such municipal action even if the lobbyist or lobbying firm is compensated by another person for such representation.
 Added language related to the information to be disclosed at the time of registration and established that the registration expires and must be renewed annually.
 Provisions related to the exemptions to the definition of “lobbyist” were retained from the initial draft of the proposed ordinance at the November 16, 2021 Council meeting and were expanded.
 Provisions related to quarterly reporting including information required to be disclosed. Deadlines included in the initial draft of the proposed ordinance were retained and effective dates updated.
 Added language requiring use of the Clerk of the Council’s electronic filing system to file online registration forms and disclosure reports. Added language providing that duly authorized owners or officers of lobbying firms shall review the contents and electronically verify under penalty of perjury that s/he believes the contents are true, correct and complete based on personal knowledge or on information and belief.

City Council 65 – 3 6/21/2022
Lobbyist Ordinance
June 21, 2022

 Expanded the section related to registration fees to provide that the City Council may, by resolution, set the registration fee as well as fees for renewal and late filing. Staff is seeking direction from Council.
 Retained language that the Clerk of the Council will make all lobbyist registration and disclosure reports available online to the public and make copies available through the Clerk of Council’s Office.
 Added language related to the duties of the Clerk of the Council including a provision that the Clerk may issue notices advising of registration and filing obligations. If, within 10 days of the issuance of the notice, the lobbyist complies or furnishes satisfactory evidence that s/he is exempt, a violation will be deemed not to have occurred. This section also requires that registration forms and disclosure reports be maintained for five years.
 Added language that would enable an unregistered lobbyist to make a presentation at a public meeting of the Mayor and City Council after making certain disclosures related to his/her lobbying activities and agreement to register within seven calendar days and pay a late registration fee.

Lobbyist Registration and Disclosure Fees
In addition to the ordinance, fees related to the lobbyist registration and disclosure program shall be set by resolution. Annual review of the fees is encouraged to ensure the costs related to program administration are fully recovered. Other items to be considered in setting the fee are provided below.
 The registration fee should include the cost for the registration of the lobbyist as well as a cost per client. Registration forms and annual and quarterly disclosure reports related to larger firms with more clients will be more complex, requiring more staff time to review and process.
 A penalty for late registration and late filing of disclosure reports should be established to recover the additional costs related to notices and recordkeeping.  Registration should expire each year and require renewal if the lobbyist continues to qualify for registration. Payment of a renewal fee should cover the costs related to this process and processing of the annual and quarterly reporting requirements.

A preliminary fiscal impact analysis of a lobbyist registration implementation policy and disclosure e-filing module procurement from an existing vendor, NetFile, was conducted.

The subscription-based software costs approximately $10,000 annually to procure. To implement such a policy, the Clerk of the Council recommends that an additional full-time office specialist be hired to fulfill the functions required of the policy which will be requested during the 2022-2023 Mid-Year Budget Update. Staff estimates that the annual personnel cost is $40,000. In summary, there will be a $40,000 expense associated with implementation of the lobbyist registration policy. This increase in expenses will require an appropriation adjustment.

City Council 65 – 4 6/21/2022
Lobbyist Ordinance
June 21, 2022

ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.

FISCAL IMPACT
There is no fiscal impact associated with this action at this time but staff will be requesting the addition of a full-time staff position at the Mid-Year Budget Update to fulfill the functions required by the Lobbyist Disclosure Policy.

EXHIBIT(S)

1. Ordinance
Submitted By: Daisy Gomez, Clerk of the Council
Approved By: Kristine Ridge, City Manager
City Council 65 – 5 6/21/2022
ORDINANCE NO. XXX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA, ADDING ARTICLE XI ENTITLED “LOBBYIST
REGISTRATION” TO CHAPTER 2 OF THE SANTA ANA MUNICIPAL CODE

THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES HEREBY ORDAIN AS FOLLOWS:

Section 1. Article XI entitled “Lobbyist Registration” is hereby added to Chapter 2 of the Santa Ana Municipal Code to read, in its entirety, as follows:

ARTICLE XI. – LOBBYIST REGISTRATION
Sec. 2-905. – Purpose and Intent.

It is the purpose and intent of the City Council of the City of Santa Ana in enacting these regulations to promote public confidence and trust, preserve the integrity of local government decision-making, and provide members of the community with access to information about persons and organizations who attempt to influence decisions of City government through paid lobbyists. Through these regulations, lobbyists shall be required to register themselves and their clients and disclose the nature of their lobbying efforts, compensation, donations, and fundraising efforts and this information shall be accessible to members of the public.

Sec. 2-906. – Definitions.
(a) “City official” shall mean any elected or appointed official of the City of Santa Ana, city officer as defined in Section 2-300 of this Code, member of the Council, as it may be amended from time to time.
(b) “Client” means both the person who compensates a lobbyist or lobbying firm for the purpose of attempting to influence a legislative or administrative action and the person on whose behalf a lobbyist or lobbying firm attempts to influence such municipal action even if the lobbyist or lobbying firm is compensated by another person for such representation. (c) “Gift” shall have the same meaning as in Section 2-852(e) of this Code. (d) "Lobby" or "Lobbying" means communicating, for compensation, for the purpose of influencing a municipal legislative or administrative action or decision. (e) "Lobbyist" means any individual, business entity or organization, including a non-profit organization, that receives or becomes entitled to receive five hundred dollars ($500) or more in consideration in a calendar month, other than reimbursement for reasonable travel expenses, to City Council 65 – 6 6/21/2022
communicate, directly or through his or her agents, on behalf of any other person or entity, with any elected or appointed official of the City for the purpose of influencing legislative or administrative action of the City of Santa Ana. This subsection shall apply only to this Article.

Sec. 2-907. – Registration required.
(a) Any individual or entity that qualifies as a lobbyist pursuant to this Code shall register with the Clerk of Council within fifteen (15) business days of qualifying as a lobbyist on a registration form provided by the City, and shall thereon disclose:

1. Lobbyist/lobbying firm;

2. Business mailing address;

3. Email address;

4. Telephone number;

5. The names of all owners of the lobbyist business;

6. The names of each individual lobbyist;

7. A description of the nature of the business entity or corporation;

8. The name, business address, telephone number, and email address of each client receiving lobbying services;

9. The nature of each client’s business;

10. A brief description of the governmental decision that the lobbyist seeks to influence on each client’s behalf, the desired outcome, and the names of the officials the lobbyist has contacted on each client’s behalf;

11. The name of each person employed or retained by the lobbyist to engage in lobbying activities on each client’s behalf; and

12. The date, amount, and description of any payment made to, or on behalf of any city official or member of an official’s family. Payments to be disclosed include gifts, meals, fees, salaries, and any other form of compensation or renumeration. (b) A lobbyist shall file an amendment to his or her registration and reporting form within fifteen (15) business days of representation of a new client or any change in the information required to be disclosed on the form related to existing clients. (c) No person who qualifies as a lobbyist shall contact or communicate with any official of the City without first registering as a lobbyist and identifying himself or herself as a lobbyist. (d) Lobbyists shall report to the Clerk of the Council the names of all officials contacted about a government decision eight (8) days prior to any public hearing on that decision. (e) An entity or person that registers as a lobbyist retains that status through January 2 of the following calendar year unless it terminates that status by giving notice, in writing, on the form provided to the Clerk of the Council.
(f) Lobbyist registration expires on January 2 of each year and shall be renewed on or before January 3 or the next business day if the lobbyist requalifies as a lobbyist.

City Council 65 – 7 6/21/2022
Sec. 2-908. – Exemptions from registration.

The following persons or entities are exempt from registration as a lobbyist:
(a) Any public official acting in his or her official capacity and any government official or employee acting within the scope of his or her employment. (b) A person acting without any compensation or consideration other than reimbursement or payment of reasonable travel expenses.
(c) Any person representing themselves in attempting to obtain decisions related to their own property or business.
(d) Any person appearing solely as a speaker at, or providing written statements that become part of the record of a public hearing or enforcement proceeding at the city. (e) Any person whose only activity is submitting a bid on a competitively bid contract, submitting a written response to or participating in an oral interview related to a request for proposals or qualifications, or negotiating the terms of a written agreement with any city agency following a request for proposals or request for qualifications process. (f) Any organization exempt from federal taxation pursuant to Section 501(c)(3) of the Internal Revenue Code, which receives funding from any federal, state, or local government agency for the purpose of representing the interests of indigent persons and whose primary purpose is to provide direct services to those persons, if the individual or individuals represented by the organization before any City agency provide no payment to the organization for that representation. This exemption shall not apply to direct contacts with a city official in any situation other than a publicly noticed meeting, for the purpose of attempting to influence a City decision with regard to any city funding the organization is seeking nor to any person employed by the organization with respect to his or her activities related to the organization. (g) A newspaper or other regularly published periodical, radio or television station or network, including any individual who owns, publishes or is employed by such entity, when in the ordinary course of business, it publishes or broadcasts news, editorials or other comments, or paid advertising, which directly or indirectly attempts to influence City officials or employees regarding current or future City legislation, administrative decisions, or City Council elections or local initiative measures, if such entity or individual engages in no other activities to influence a municipal decision.

Sec. 2-909. – Required disclosure reports.
(a) Annual reports.

1. Lobbyists shall file yearly disclosure reports with the Clerk of Council on a form prepared by the Clerk of Council specifying in detail the following:
a) The nature of the issues they are trying or tried to influence through lobbying of City officials;
City Council 65 – 8 6/21/2022
b) Identify each client and the amount of compensation received from each client for communicating using any means with City officials for the purpose of influencing a municipal legislative or administrative action or decision; c) All campaign contributions and gifts to elected City officials; d) All fundraising activities conducted on behalf of City elected officials; e) All contributions or gifts to political campaigns;
f) All contributions or gifts made at the behest of City elected officials; g) All contributions or gifts to political campaigns made at the behest of elected City officials;
h) All contributions or gifts to religious institutions made at the behest of elected City officials;
i) All contributions or gifts to non-profit organizations made at the behest of elected City officials;
j) All payments received by the lobbyist for services as a consultant to the City or any City agency;
k) Any compensated work done for a political campaign of an elected City official; and
l) Past lobbying activity in the City.

2. Yearly disclosure reports shall be filed with the Clerk of Council no later than October 1st starting in 2023.
(b) Quarterly Political Contributions Reports. Lobbyist shall file quarterly reports regarding contributions to an elected City official or the controlled committee of an elected City official. 1) All reports will be on a form prepared by the Clerk of Council. 2) Each report will be filed with the Clerk of Council no later than January 1st, April 1st, July 1st, and September 1st of every year starting in 2023. (c) Quarterly Fundraising Activity Reports. Lobbyists shall file a quarterly report with the Clerk of Council if the lobbyist, within the last 12 months:
1) Engaged in fundraising activities on behalf of an elected City official and/or an elected City official’s controlled committee and knows or has reason to know that the fundraising activity resulted in a contribution or contributions; or 2) Delivered or acted as an intermediary for one or more contributions to an elected City official and/or any of an elected City official’s controlled committees. 3) All reports will be on a form prepared by the Clerk of Council. 4) Each report will be filed with the Clerk of Council no later than January 1st, April 1st, July 1st, and September 1st of every year starting 2023.

City Council 65 – 9 6/21/2022
Sec. 2-910. – Online disclosure of report forms and reports.

Every lobbying firm or lobbyist required to file a registration form or disclosure report shall use the Clerk of the Council’s electronic filing system to file such forms or reports online. It is unlawful for a lobbying firm to file a registration form or disclosure report unless a duly authorized owner or officer has reviewed the contents and electronically verified under penalty of perjury that he or she believes the contents to be true, correct, and complete based on personal knowledge or on information and belief. In the event the Clerk’s online filing system is not capable of accepting a required form or report, a lobbying firm or lobbying shall file that form or report in an electronic format with the Clerk on or before the deadline.

Sec. 2-911. – Registration fee.

The City may charge a lobbyist registration fee including fees related to the annual renewal and penalties to cover the costs associated with administering the lobbyist registration and disclosure program. The fees shall be in such amounts established by resolution of the City Council.

Sec. 2-912. – Disclosure reports made available to the public.

The Clerk of Council shall make all lobbyist registration and disclosure reports available online to the public and copies available through the Clerk of Council’s office.

Sec. 2.913. – Powers and duties of the Clerk of the Council. (a) The Clerk of the Council may issue a notice of filing obligations to any person or entity who a City official or other person has reason to believe should file a registration form or disclosure report. Before sending the notice, the Clerk shall determine whether facts exist to warrant sending a notice. If, within ten (10) business days after the Clerk has sent a written notice, the person or entity either complies with this Chapter or furnishes satisfactory evidence to the Clerk that he or she is exempt from the filing obligations, a violation will be deemed not to have occurred.
(b) The Clerk of the Council shall report apparent violations of this Chapter to the City Attorney’s Office.
(c) The Clerk of the Council shall preserve all registration forms and disclosure reports required to be filed under this Chapter for a period of five (5) years from the date of filing.

These registration forms and disclosure reports shall constitute part of the public records and shall be open to public inspection. Copies shall be made available by the Clerk upon request and payment of any lawful copy charges.
(d) The Clerk of the Council shall have the power to adopt all reasonable and necessary procedures to implement this Chapter.

City Council 65 – 10 6/21/2022
Sec. 2.914.- Appearance of an unregistered lobbying.

If a lobbyist who has not registered appears at a public meeting of an legislative body of the City to make a presentation on behalf of a client, the lobbyist will be permitted to make the presentation upon stating, on the record, the following: 1) The lobbyist’s full name, business address and telephone number; 2) The name, business address, and telephone number of any individual or entity by whom the lobbyist is employed, retained or engaged for compensation to perform lobbying services in the city; and 3) The legislative or administrative action of the city with respect to which the lobbyist has been employed, retained or engaged.

The lobbyist shall be required to file the required registration form and pay the registration fee and any penalty fee set by resolution, to the Clerk of the Council within seven (7) business days of such presentation.

Sec. 2-915. – Penalty for violation.
(a) Every violation of the provisions of this Article may be charged as either a misdemeanor or as an infraction in the discretion of the citing officer or city attorney and, upon conviction thereof, shall be punishable as provided for in section 1-8 of this Code. (b) Each day any violation of any said provision of this chapter shall continue shall constitute a separate offense.
(c) Any person convicted of violating this Article may not act as a lobbyist within the City or otherwise attempt to influence City legislation for compensation for one year after such a conviction.
(c) Residents of the City of Santa Ana shall have standing to bring a civil action for enforcement of this Article.
(d) Use of criminal enforcement and/or administrative citations shall not prevent or preclude the city from seeking injunctive relief and civil penalties in court for violations of this Article.

Section 2. If any section, subsection, sentence, clause, phrase or portion of this ordinance is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this ordinance. The City Council of the City of Santa Ana hereby declares that it would have adopted this ordinance and each section, subsection, sentence, clause, phrase or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

Section 3. This Ordinance shall become effective thirty (30) days after its adoption.

Section 4. The Clerk of Council shall certify the adoption of this Ordinance and shall cause the same to be published as required by law.

City Council 65 – 11 6/21/2022
ADOPTED this ____ day of ______, 2022.
_________________________

VICENTE SARMIENTO
Mayor

APPROVED AS TO FORM
SONIA R. CARVALHO
City Attorney
By: _________________________
Laura A. Rossini
Chief Assistant City Attorney
AYES: Councilmembers: _________________________________ NOES: Councilmembers: _________________________________ ABSTAIN: Councilmembers: _________________________________ NOT PRESENT: Councilmembers: _________________________________

CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify that the attached Ordinance No. XXX to be the original ordinance adopted by the City Council of the City of Santa Ana on ______________, 2022, and that said ordinance was published in accordance with the Charter of the City of Santa Ana.

Date: ______________________ ________________________________

DAISY GOMEZ
Clerk of the Council
City of Santa Ana
City Council 65 – 12 6/21/2022
Finance and Management Services
www.santa-ana.org/finance
Item # 66
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 21, 2022
TOPIC: Voter Ballot Measure Resolution for the November 8, 2022 General Municipal Election to Restructure Non-Cannabis Business License Tax Rates and Chapter 21 of the Santa Ana Municipal Code
AGENDA TITLE:

Direct Staff to Place a Proposed Santa Ana Business License Tax Equity and Flexible Tax Holiday Voter Ballot Measure for Public Consideration at the November 8, 2022 General Municipal Election; Adopt a Resolution, Authorize and Designate City Councilmembers to File an Argument; Direct City Attorney to File an Impartial Analysis; and Other Related Documents Calling for a General Municipal Election and Consolidating it with the Statewide General Election

RECOMMENDED ACTION

1. Adopt a Resolution of the City Council of the City of Santa Ana calling for the placement on the ballot of a measure for the November 8, 2022 General Municipal Election for the submission to the qualified voters of a proposed Ordinance regarding a business license tax equity and flexible tax holiday measure and providing for the filing of Argument and Rebuttal Statements.

2. Request that the Board of Supervisors of Orange County Consolidate the City’s General Municipal Election with the Statewide General Election.

3. Authorize the filing of Arguments and Rebuttals.
a. Designate up to five (5) Councilmembers to author an Argument and Rebuttal Statement.

4. Direct the City Attorney to prepare an Impartial Analysis.

5. Direct the Clerk of the Council to publish legal notices as required by law.

DISCUSSION
At the May 17, 2022 City Council Meeting, staff presented to City Council a proposed Voter Ballot Measure for the November 8, 2022, General Election to accomplish the following:

City Council 66 – 1 6/21/2022
Voter Ballot Measure Resolution to Restructure Business License Tax Code June 21, 2022

1. Restructure non-cannabis business license tax rates and charges, to improve tax equity among all business sizes, with the aim of achieving an overall net revenue neutral result, designed to reflect current best practices and to recognize the impact of home-based businesses and the new “gig” economy.

2. Provide a flexible Tax Holiday period for unlicensed, past due, or under-assessed businesses to obtain a valid business license or satisfy unpaid or unassessed taxes.

3. Align with closely associated provisions of the City of Santa Ana’s Business License Tax Code, Santa Ana Municipal Code (“SAMC”) Chapter 21.

The current business license tax rate structure of the SAMC Chapter 21 favors large businesses, whose contributions to the City are indirectly subsidized by medium and small businesses, whose effective tax rates are considerably higher than large businesses due to the steeply regressive nature of the gross receipts tax rate schedules originally adopted. The intent of the proposed restructuring of the City’s non-cannabis business license tax rates is to effectively achieve such a proportional rate structure that is both simpler and more equitable to medium and small businesses, home-based businesses, and independent contractors and free-lancers.

Furthermore, on May 17, 2022, City Council approved staff’s recommended three-part phased approach comprised of: (1) a leading consolidation Ordinance of Rates and Schedules; (2) the adoption of a Voter Ballot Measure; and (3) a trailing cleanup Reconciliation Ordinance, that would accomplish the following:

I. Phase One was the Consolidation Ordinance, which was presented to City Council for adoption and first read on June 7, 2022. The Consolidation Ordinance includes the adoption of a consolidated Rates and Schedules to unify all non-cannabis tax rates, schedules, and charges currently contained in Articles V through X of SAMC Chapter 21, respectively, into a single article (Article X) for clarity and cohesion.

II. Phase Two is the Voter Ballot Measure Resolution and Ordinance. The Resolution would give notice of a General Municipal Election to be held in the City of Santa Ana on November 8, 2022 for the submission of a Ballot Measure to the qualified voters of a proposed Ordinance restructuring non-cannabis business licensing rates. The proposed Ordinance would act to convert all regular brick and mortar businesses, excepting warehouses, state licensed contractors, itinerant businesses, and various miscellaneous independent contractors from a steeply regressive set of gross receipts tax rate structures to a proportional set of single gross receipts tax rates. The Ordinance includes reduced minimum basic tax rate amounts and a maximum gross receipts tax cap amount.

City Council 66 – 2 6/21/2022
Voter Ballot Measure Resolution to Restructure Business License Tax Code June 21, 2022

As part of Phase Two, staff recommended ending several voluntary business license tax “exclusions/exemptions” given under SAMC Chapter 21 for public utilities making franchise payments to the City and for private physicians maintaining patient offices on hospital premises in the City. Staff, however, also recommended establishing a special public policy tax “exemption” for individuals providing immediate and extended family member in-home childcare services.  Elimination of tax exclusion for public utilities making franchise payments.

Franchise payments relate directly to public utilities’ authorization to work in the public right of way. The 1905 Broughton Act and the Franchise Act of 1937 authorize granting a franchise to a public utility to use public streets and highways for public utility purposes. The franchise granted is not a general authorization to do business or to use anything other than public streets and highways. Thus, public utility franchisees are not excluded by state statute from City business license requirements even though they pay an annual franchise fee to the City for use of the public right of way. Their exclusion from Santa Ana business license taxation has been entirely a voluntary one, granted by City ordinance that reflected an earlier desire to facilitate the expansion of public utility services in the first half of the last century. Excepting Santa Ana, only one other of California’s most populous 13 cities (Riverside) grants such an exclusion.
 Elimination of exemption for private physicians maintaining patient offices on hospital premises. The exemption for private physicians maintaining patient offices on hospital premises also reflected an earlier model for the provision of hospital care where hospitals were organized on a nonprofit basis and hence were deemed nontaxable. The exemption for hospitals was extended to include all medical services provided by doctors having admitting rights to said hospitals. The nature of hospitals has changed significantly over time so that such facilities are no longer non-profit. For this reason, a system that exempts physicians from normal business license requirements because of the location of their office within the City is no longer justifiable and results in unequal treatment opposite other physicians.
 Establishment of a family member childcare exemption. An equitable exception, however, is justifiable in the case of individuals providing childcare services to their own immediate and extended family members residing within the City. Staff recommended that public policy should endeavor to maximize the provision of in-home childcare services, especially when provided by one Santa Ana family member to another.

City Council 66 – 3 6/21/2022
Voter Ballot Measure Resolution to Restructure Business License Tax Code June 21, 2022

Staff also recommended a conversion in business license tax assessment methodologies, minor adjustments to flat and variable flat rates for all other businesses, and removal of a small number of obsolete business type categories.  Conversion of tax assessment methodologies. Convert ambulance services, professional offices (doctors, engineers, attorneys, accountants, etc.), and pawnbrokers and vehicles for hire (buses, limousines, etc.) from variable and fixed flat rates to single gross receipts.

In addition to a changeover in assessment methodologies, minor adjustments to flat and variable rates for all other businesses, removal of a small number of obsolete business type categories, and the adjustment of business license exclusions/exemptions to better reflect current circumstances and public policy aims, staff recommended the adoption of a flexible Tax Holiday Program.  Establishment of a flexible Tax Holiday Program. The purpose of a Tax Holiday Program would be to allow a flexible period (which will vary based on a business’ tax status and assessment period) for unlicensed, past due, or under-assessed businesses to obtain a valid business license or satisfy unpaid or unassessed taxes. This is desirable as the proposed restructuring of non-cannabis business license tax rates and tax methodologies will result in a substantial portion of the City’s underground economy become willing to surface and become legitimate licensed businesses, contributing annually to the maintenance of the City’s marketplace infrastructure. A Tax Holiday allows for two forms of tax reconciliation: (1) unlicensed businesses may shed their past tax liability by fully licensing themselves and paying all tax obligations for the current year; and (2) licensed businesses who are past due for the current year or who have been under-assessed may come current with their tax obligations without penalty. Staff recommended that the Tax Holiday Program be for a period of not less than 12 months. Staff also recommended that the commencement and conclusion of the flexible Tax Holiday Program be at the administrative discretion of the City Manager. In exercising this discretion, staff recommended that the program conform to the differing tax periods reflecting participating businesses’ underlying business license tax assessment categories.

As part of Phase Two, annual Cost Price Index (“CPI”) adjustment of gross receipts tax rates will cease with the adoption of the proposed of proportional rates.

However, annual CPI adjustment of the minimum basic gross receipts tax rate amount, application and renewal processing charges, and other miscellaneous charges, together with flat rates, and In Lieu Deposit amounts will continue as these rates, charges, and amounts will otherwise erode in value over time due to the effect of inflation. Proportional rates do not require adjustment as they rise and City Council 66 – 4 6/21/2022
Voter Ballot Measure Resolution to Restructure Business License Tax Code June 21, 2022

fall with the volume of business done and so naturally account for inflationary/deflationary effects. Flat rate tax assessments are recommended to continue for business types where long standing customary industry practice and ease of customer compliance and City administration warrant; e.g. state-licensed contractors, residential rentals, home occupations, free-lance independent contractors, etc.

III. Phase Three is a Reconciliation Ordinance; to be adopted after the approval by Santa Ana voters of the Voter Ballot Measure, which would act to comprehensively reconcile the procedural processes of the Business License Tax Code to successfully administratively implement Phase Two (approved Voter Ballot Measure).

Therefore, staff recommends that the City Council adopt the resolution necessary to place the Voter Ballot Measure before the voters of Santa Ana to : (1) restructure non-cannabis business license tax rates and charges to improve tax equity among all business sites, with the aim of achieving an overall net revenue neutral result designed to reflect current best practices, and to recognize the impact of home-based businesses and the new “gig” economy; and (2) provide a flexible Tax Holiday period for unlicensed, past due, or underassessed businesses to obtain a valid business license or satisfy unpaid or unassessed taxes; and (3) align with closely associated provisions of SAMC Chapter 21 to the voters of Santa Ana. By placing the measure on the ballot, the City Council is not endorsing or taking a position, but rather asking the voters of Santa Ana to consider improving business licensing tax equity among all business sizes, reflect current best practices, recognize the impact of home-based businesses and the new “gig” economy, and to provide a flexible tax holiday period. If approved by the voters, the measure is intended to have a revenueneutral fiscal impact to the City.

ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.

FISCAL IMPACT
The Voter Ballot Measure is intended to be revenue neutral, but there will be an expense associated with placement of a Voter Ballot Measure on the November 8, 2022 General Election Ballot, which is a budgeted expense. Staff confirmed with the Clerk of the Council the latest estimate of $100,000 for the ballot question.

Funds are budgeted and made available in the following accounts for the specified year:

Fiscal
Year
Accounting
Unit-Account #
Fund
Description
Accounting Unit,
Account Description
Amount
FY 22-23 01107031-62300
Clerk of the
Council –
Admin.

Contract ServicesProfessional $100,000
City Council 66 – 5 6/21/2022
Voter Ballot Measure Resolution to Restructure Business License Tax Code June 21, 2022

EXHIBIT(S)

1. Resolution
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Kristine Ridge, City Manager
City Council 66 – 6 6/21/2022
Resolution No. 2022-XXX

RESOLUTION NO. 2022-XXX

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

SANTA ANA CALLING FOR THE PLACEMENT ON THE
BALLOT OF A MEASURE FOR THE NOVEMBER 8, 2022

GENERAL MUNICIPAL ELECTION FOR THE SUBMISSION

TO THE QUALIFIED VOTERS OF AN ORDINANCE TO

RESTRUCTURE NON-CANNABIS BUSINESS LICENSE

TAX RATES AND PROVIDING FOR THE FILING OF

ARGUMENT AND REBUTTAL STATEMENTS
WHEREAS, as a charter city, and subject to voter approval, the City of Santa Ana is authorized to levy business license taxes to raise revenue for municipal purposes, pursuant to Section 5 of Article XI of the California Constitution and Section 200 of the City Charter; and
WHEREAS, the City’s business license tax rate structure appears in Chapter 21 of the Santa Ana Municipal Code; and
WHEREAS, the City wishes to restructure non-cannabis business license tax rates within the City of Santa Ana to improve tax equity among all business sizes, reflect current best practices, recognize the impact of home-based businesses and the new “gig” economy, and to provide a flexible tax holiday period for unlicensed, past due, or underassessed businesses, with the intent to have a revenue-neutral fiscal impact to the City; and
WHEREAS, all taxes imposed by local government are deemed to be either general taxes or special taxes, pursuant to Section 2(a) of Article XIII C of the California Constitution; and
WHEREAS, business license taxes are a type of general taxes, which are defined as any tax imposed for general governmental purposes; and WHEREAS, Section 2(b) of Article XIII C of the California Constitution provides that a local agency cannot impose, extend, or increase any general tax unless and until that tax is submitted to the electorate and approved by a majority vote at an election that is consolidated with a regularly scheduled general election for members of the governing body of the local government, except in cases of emergency declared by a unanimous vote of the governing body; and
WHEREAS, the City Council has called and given notice of a general municipal election to be held in the City of Santa Ana on November 8, 2022 to elect certain municipal officers and requested that the Orange County Board of Supervisors consolidate the City’s general municipal election with the statewide general election; and EXHIBIT 1
City Council 66 – 7 6/21/2022
Resolution No. 2022-XXX

WHEREAS, pursuant to California Elections Code Section 9222, the City Council has authority to submit to voters a proposition for the repeal, amendment, or enactment of any ordinance, to be voted upon at any succeeding regular or special city election, and if the proposition submitted receives a majority of the votes cast on it at the election, the ordinance shall be repealed, amended, or enacted accordingly; and WHEREAS, the City has determined to submit a proposed ordinance to voters at the November 8, 2022 general municipal election to restructure non-cannabis business license tax rates.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Santa Ana as follows:

Section 1. The above recitals are true and incorporated herein by reference.

Section 2. The following Ordinance shall be submitted to the voters for enactment at the City of Santa Ana’s general municipal election to be held on November 8, 2022, with identification as determined in accordance with the California Elections Code:

MEASURE ___: SANTA ANA BUSINESS LICENSE TAX

EQUITY AND FLEXIBLE TAX HOLIDAY MEASURE
Shall Chapter 21 of the Santa Ana Municipal Code be amended to restructure non-cannabis business license tax rates within the City of Santa Ana to improve tax equity among all business sizes, reflect current best practices, recognize the impact of home-based businesses and the new “gig” economy, and to provide a flexible tax holiday period for unlicensed, past due, or under-assessed businesses, with the intent to have a revenue-neutral fiscal impact to the City?
Yes
No
Section 3. The text of the Ordinance to be submitted to the voters is attached to this Resolution as Exhibit A and incorporated herein by this reference.

Section 4. If the proposition receives a majority of the votes cast on it at the election, the Ordinance shall be enacted accordingly.

Section 5. Pursuant to California Elections Code Section 9280, the City Council hereby directs the Clerk of the Council to transmit a copy of the Ordinance to the City Attorney, who shall prepare an impartial analysis of the measure, which shall not exceed 500 words in length.

City Council 66 – 8 6/21/2022
Resolution No. 2022-XXX

Section 6. Pursuant to California Elections Code Section 9282, the City Council, or a member or members of the City Council authorized by that body, or an individual voter who is eligible to vote on the measure, or bona fide association of citizens, or a combination of voters and associations, may file a written argument for or against any city measure, which shall not exceed 300 words in length.

Section 7. Pursuant to California Elections Code Section 9287, if more than one argument for or more than one argument against the Ordinance is submitted to the Clerk of the Council within the time prescribed by law, the Clerk shall select one of the arguments in favor and one of the arguments against the Ordinance for printing and distribution to the voters, giving preference and priority, in the order named, to the arguments of the following:
(a) The City Council, or member or members of the City Council authorized by that body.
(b) The individual voter, or bona fide association of citizens, or combination of voters and associations, who are the bona fide sponsors or proponents of the measure.
(c) Bona fide associations of citizens.
(d) Individual voters who are eligible to vote on the measure.

Section 8. In accordance with California Elections Code Section 9285, when an argument in favor and an argument against the Ordinance have been selected to be printed in the voter information guide, the Clerk shall send a copy of the argument in favor of the measure to the authors of the argument against the measure and a copy of an argument against the measure to the authors of the argument in favor of the measure.

The author or a majority of the authors may prepare and submit a rebuttal argument not exceeding 250 words. Rebuttal arguments shall be printed in the same manner as the direct arguments and shall immediately follow the direct argument which it seeks to rebut.

This Section shall only apply to the election on the Ordinance to be held on November 8, 2022.

Section 9. In accordance with California Elections Code Section 10002, the City Council requests the Orange County Board of Supervisors to permit the county elections official to render specified services to the City relating to the conduct of an election, for which the City shall reimburse the County in full for the services performed upon presentation of a bill to the City. The Board of Supervisors is also requested to consent and agree to the consolidation of the City’s general election with any other election occurring on November 8, 2022, and the City hereby consents to any such consolidation.

Section 10. The services requested by the City of the county elections official, or such other official as may be appropriate and authorized to perform, include: the preparation, printing, and mailing of sample ballots and polling place cards; the establishment or appointment of precincts, polling places, and elections officers; opening and closing of polling places, and making such publications as are required by law in City Council 66 – 9 6/21/2022
Resolution No. 2022-XXX

connection therewith; the furnishing of ballots, voting booths, and other necessary supplies or materials for polling places; the canvassing of the returns of the election and the furnishing of the results of such canvassing to the Clerk of the Council; and the performance of such other election services as may be requested by the City.

Section 11. All persons qualified to vote at municipal elections in the City on the day of election herein provided shall be qualified to vote on the Ordinance hereby submitted at the general municipal election.

Section 12. In all particulars not recited in the Resolution, the election shall be held and conducted as provided by law for holding general municipal elections in the City.

Section 13. Notice of the time and place of holding the general municipal election is given, and the Clerk of the Council is authorized, instructed, and directed to give further or additional notice of the election in the time, form, and manner as required by law.

Section 14. The Clerk of the Council shall receive the canvass as it pertains to the general municipal election and shall certify the results to the City Council, as required by law.

Section 15. Pursuant to California Elections Code Section 9295, this Resolution and the attached Ordinance will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the sample ballot. The examination period will end on the day that is seventy-five (75) days prior to the date set for the election.

Section 16. If any section, subsection, sentence, clause, phrase or provision of this Resolution or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity of any other provision or applications, and to this end the provisions of this Resolution are declared to be severable. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or provisions thereof be declared invalid or unconstitutional.

Section 17. This Resolution shall take effect immediately upon its adoption by a majority of the City Council.

Section 18. The Clerk of Council is hereby directed to certify to the passage and adoption of this Resolution and to file a certified copy of this Resolution with the Orange County Board of Supervisors and the Registrar of Voters of Orange County at least eightyeight (88) days before the date of the election.

ADOPTED this ____ day of _____, 2022.

City Council 66 – 10 6/21/2022
Resolution No. 2022-XXX

Vicente Sarmiento
Mayor
APPROVED AS TO FORM:

Sonia R. Carvalho
City Attorney
By:

John M. Funk
Chief Assistant City Attorney

AYES: Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers

CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, DAISY GOMEZ, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2022 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on _____________________, 2022.

Date:

Clerk of the Council
City of Santa Ana
City Council 66 – 11 6/21/2022
Resolution No. 2022-XXX

EXHIBIT A
ORDINANCE NO. NS _____

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

SANTA ANA AMENDING ARTICLES IV, IX, AND X OF
CHAPTER 21 OF THE SANTA ANA MUNICIPAL CODE TO

RESTRUCTURE NON-CANNABIS BUSINESS LICENSE
TAX RATES AND ADDING ARTICLE XIV TO CHAPTER 21

OF THE SANTA ANA MUNICIPAL CODE TO PROVIDE A

FLEXIBLE TAX HOLIDAY FOR UNLICENSED, PAST DUE,

OR UNDERASSESED BUSINESSES
The People of the City of Santa Ana do ordain as follows:

Section 1. As a charter city, and subject to voter approval, the City of Santa Ana is authorized to levy business license taxes to raise revenue for municipal purposes, pursuant to Section 5 of Article XI of the California Constitution, Section 200 of the City Charter, and Section 2(b) of Article XIII C of the California Constitution.

Section 2. By this Ordinance submitted for voter approval, the City wishes to restructure non-cannabis business license tax rates within the City of Santa Ana to improve tax equity among all business sizes, reflect current best practices, recognize the impact of home-based businesses and the new “gig” economy, and to provide a flexible tax holiday period for unlicensed, past due, or under-assessed businesses, with the intent to have a revenue-neutral fiscal impact to the City.

Section 3. Article IV (Exemptions) of Chapter 21 of the Santa Ana Municipal Code (Licenses), Sections 21-48 and 21-49, is hereby amended to read as follows:

Sec. 21-48. - Business licensing—Specified exemptions.
(a) A business license shall not be required for the conducting of any entertainment, concert, exhibition or lecture on scientific, historical, literary, religious or moral subjects whenever the receipts of any such activity are to be appropriated to any church or school or to any religious or benevolent purpose within the city. (b) A business license shall not be required for any person under eighteen (18) years of age, who is a citizen resident of the city, and who is enrolled in an institution of secondary education; provided, however, such person has no employee or employees working for him or her.

City Council 66 – 12 6/21/2022
Resolution No. 2022-XXX

(c) A business license shall not be required for any attorney whose only business done in the city is in the courts operated in this city, nor for any doctor whose only business done in the city is surgery and/or consultation in a regularly established hospital in the city; provided, however, that the maintenance of an office, facility, or establishment within the city used in connection with any attorney’s appearance in any court within the city, or any doctor’s surgery or consultation performed at any hospital within the city shall not be hereby exempted from the city’s business licensing requirements.
(d) A business license shall not be required for any other licensed person providing professional services not having a fixed place of business within the city and not engaged in other than the occasional furnishing of professional services wholly negotiated and contracted for outside the city.
(e) A business license shall not be required for any business done in the city where the business conducted is only occasional and incidental to a regularly established business conducted elsewhere.
(f) A business license shall not be required for any commercial traveler whose business is limited to goods, wares, and merchandise sold or dealt in at wholesale in this state, or for any salesman or agents representing vendors which have, do, or would normally supply goods for resale to licensees of the city. (g) A business license shall not be required for any individual whose business is limited to providing in-home childcare to immediate or extended family members. The phrase “immediate or extended family members” shall mean such individual’s direct children, children by adoption, children by marriage, grandchildren (direct, by adoption, or by marriage), nieces or nephews (direct, by adoption, or by marriage), and any foster children or other minor under eighteen (18) years of age living as part of the same residential household.

Sec. 21-49. - Business licensing—Specified exclusions.

Except as may be otherwise specifically provided in this Chapter, the terms hereof shall not be deemed to apply or construed to require the payment of a license tax by any of the following persons:
(1) Any public utility making franchise payments to the city, except to the extent said public utility engages in retail sales or services within the city not covered or otherwise authorized by such franchise,
(12) Banks, including national banking associations, federal credit unions, and financial corporations, to the extent that a city may not levy a license tax upon them under the provisions of Article XIII, Section 27 of the State Constitution.

City Council 66 – 13 6/21/2022
Resolution No. 2022-XXX

(23) Insurance companies or associations engaged in the sale and servicing of insurance and their direct agents, including bailbond agents and life agents, but not including brokers or bailbond brokers or life and disability insurance analysts or insurance solicitors to the extent that a city may not levy a license tax upon them under the provisions of Article XIII, Section 28 of the State Constitution. (34) Any governmental agency or subdivision and the employees thereof, to the extent they are engaged in the business of such governmental agencies or subdivisions. (45) Any state alcoholic beverage licensee engaged in the manufacture, sale, purchase, possession, or transportation of alcoholic beverages within the state to the extent that a city may not levy a license tax upon them under provisions of Article XX, Section 22 of the State Constitution.

Section 4. Article IX (Miscellaneous) of Chapter 21 of the Santa Ana Municipal Code (Licenses), Section 21-113, is hereby amended to read as follows:

Sec. 21-113. - Telephone services.

Every person engaged in the business of providing telephone services shall pay an annual business fee according to Section 21-119(2) of this Chapter. For the purpose of this section, "gross receipts" shall have the same meaning as in Section 21-3, except that only those receipts derived from providing telephone services within the city shall be included, and further excepting that only receipts resulting from intrastate telephone services shall be included.

Section 5. Article X (Rates and Schedules) of Chapter 21 of the Santa Ana Municipal Code, Sections 21-116 through 21-121, is hereby amended to read as follows:

ARTICLE X. - RATES AND SCHEDULES
Sec. 21-116. - Applicability of article.

The tax for any license required by any Section of this Chapter shall be set forth in this article for the particular business involved. The tax and the duration of the license shall be annual, quarterly, monthly, and daily as indicated in this article. The letter "A" following the tax shall indicate an annual rate; the letter "Q" shall indicate a quarterly rate; the letter "M" shall indicate a monthly rate; the letter "D" shall indicate a daily rate. No letter following the tax shall indicate a variable duration as determined in connection with other applicable provisions set forth elsewhere in the Santa Ana Municipal Code. In place of a tax, the letter “C” shall denote a specified charge. The applicability of the charge shall be determined by the Business License Tax Code provision establishing it. In the place of either a tax or charge, the letter “T” shall denote a specified qualifying threshold amount. The applicability of the qualifying threshold amount shall be determined by the Business License Tax Code provision establishing it.

City Council 66 – 14 6/21/2022
Resolution No. 2022-XXX

Sec. 21-117. - New business license tax.
(a) A license tax for a new business shall be paid in advance or a deposit taken in lieu thereof prior to any new business activity being undertaken. (b) All new businesses for whom flat fees are made the basis for fixing the amount of such license shall pay in advance an amount equal to one-quarter (¼) of the annual fee therefor for each quarter and fraction of a quarter remaining during the period for which the new license is issued, except as otherwise specified hereinafter. (c) All new businesses for whom the gross receipts of such business are made the basis for fixing the amount of such license shall pay their annual fee based on actual gross receipts received during the period for which the new license is issued. For any business which is commenced subsequent to April first, the renewal fee shall be based upon an annualization of the actual gross receipts received during the period for which the new license is issued. In the event an applicant fails to submit a report of the actual gross receipts received pursuant to Section 21-77, the fee shall be based on the collector's estimate of the actual gross receipts received pursuant to Section 21-79. In lieu of payment in advance, each applicant shall post a deposit in the amount hereinafter indicated.
(1) All new businesses beginning business on or after April first of the current year but before April first of the following year shall post a deposit of two hundred dollars ($200.00).
(2) All new businesses beginning business on or after March first of the current year but before April first of current year shall post a deposit equivalent to one and onetwelfth (1 1/12 ) of the required deposit for all new businesses beginning April first.

Where an applicant's fee is determined to be in excess of the amount of the specified deposit, said deficiency shall be added without interest or penalty to the amount of the applicant's renewal fee as calculated pursuant to Sections 21-77 or 21-79. Where an applicant ceases to transact and carry on the business licensed on or before the expiration of the period for which the new license is issued, and where the applicant's fee is determined to be in excess of the amount of the specified deposit, the applicant shall remain liable for said deficiency which shall be deemed due and collectible at the same time and in the same manner as all other annual gross receipts fees due and payable upon renewal.

Where an applicant's fee is determined to be less than the amount of the specified deposit, said surplus shall be applied without interest as a credit against the amount of the applicant's renewal fee as calculated pursuant to Sections 21-77 or 21-79. Where an applicant ceases to transact and carry on the business licensed on or before the expiration of the period for which the new license is issued, and where the applicant's fee is determined to be less than the amount of the specified deposit, said surplus may be City Council 66 – 15 6/21/2022
Resolution No. 2022-XXX

requested by applicant as a refund; provided, however, that such request must be made in writing and must be made within one (1) year of the expiration of the initial license period.
(d) Notwithstanding subsection (b) above, unless an adjustment or exemption is obtained pursuant to this Chapter, the minimum tax pursuant to this section shall be ten dollars ($10.00) per year in the amount as specified in Section 21-120n.

Sec. 21-118. - Same; nonresident businesses.
(a) All new businesses located elsewhere, excluding businesses engaged in the business of pushcart vending or in erecting, maintaining and selling of advertising space on off-premises commercial advertising signs in the city or engaged in the operation of coin-operated machines or devices, or engaged otherwise in vending operations, but transacting and carrying on business in the city, and for whom flat rates or variable flat rates are made the basis for fixing the amount of such license, shall have the option of paying the flat rate or variable flat rate amount or basing the amount of their tax upon their attributable gross receipts in accordance with Section 21-119(1), to which no basic tax rate amount shall be added, but for which a two-hundred-dollar-annual deposit shall be required to offset any tax due should applicant cease operation before the expiration of the license term. Provided further that all such businesses who so elect shall pay in advance an amount therefor as set forth in Section 21-117, subsection (c) above. Said deposit to be applied as a credit or to be taken as a refund in the same manner as is set forth in Section 21-117, subsection (c). (b) All new businesses located elsewhere, but transacting and carrying on business in the city for whom gross receipts are made the basis for fixing the amount of such license, shall base their tax upon attributable gross receipts in a manner similar to that of all other similarly classified businesses for whom gross receipts are made the basis for fixing the amount of their license, to which no basic tax rate amount shall be added.

Provided further that all such businesses shall pay in advance an amount therefor as set forth in Section 21-117, subsection (c) above. Said deposit to be applied as a credit, or to be taken as a refund in the same manner as is set forth in Section 21-117, subsection (c). (c) Unless an adjustment of exemption is obtained pursuant to this Chapter, the minimum tax pursuant to this section shall be ten dollars ($10.00) per year in the amount as specified in Section 21-120n.

Sec. 21-119. - Gross receipts tax rates.

Gross receipts tax rates for the different classifications are as follows:
(1) Classification "A"—All businesses for which no tax is specified elsewhere in this article, including, but not limited to: retail businesses and sales at retail, services (including real estate brokers, real estate developers, insurance brokers, life and disability insurance analysts, stock and bond brokers, commission agents, brokers or merchants, City Council 66 – 16 6/21/2022
Resolution No. 2022-XXX

building and loans, professional services, ambulance services, and recreational services), hotels, motels, theaters, and food establishments:

For each separate place of business licensed, a basic rate of $60.00, subject to adjustment for inflation/deflation in accordance with section 21-120, plus:
$0.500.65 per $1,000.00to ..... $100,000.00

0.30 per 1,000.00 to .....500,000.00

0.20 per 1,000.00 to .....1,000,000.00

0.15 per 1,000.00 over .....1,000,000.00
(2) Classification "B"—Manufacturing, processing, wholesale businesses and sales at wholesale, sales of gasoline and motor fuels, and telephone services, and public utility services:

For each separate place of business licensed, a basic rate of $60.00, subject to adjustment for inflation/deflation in accordance with section 21-120, plus:
$0.300.50 per $1,000.00to .....$100,000.00

0.25 per 1,000.00 to .....300,000.00

0.20 per 1,000.00 to .....600,000.00

0.15 per 1,000.00 to .....1,000,000.00

0.10 per 1,000.00 over .....1,000,000.00
(3) Classification "C"—Rental of commercial real estate:

For the first property location licensed, a basic rate of $60.00, subject to adjustment for inflation/deflation in accordance with section 21-120, plus:
$0.500.65 per $1,000.00 to .....$100,000.00

0.30 per 1,000.00 to .....$500,000.00

0.20 per 1,000.00 to .....1,000,000.00

0.15 per 1,000.00 over .....1,000,000.00
For each additional property location licensed, a basic rate of $10.00, subject to adjustment for inflation/deflation in accordance with section 21-120, plus:
$0.500.65 per $1,000.00 to .....$100,000.00

0.30 per 1,000.00 to .....$500,000.00

0.20 per 1,000.00 to .....1,000,000.00
City Council 66 – 17 6/21/2022
Resolution No. 2022-XXX