Santa Ana City Council
June 3, 2025

AGREEMENT WITH LANDSCAPE WEST MANAGEMENT SERVICES TO PROVIDE

MEDIAN AND RIGHT OF WAY LANDSCAPING SERVICES
THIS AGREEMENT is made and entered into on this 3RD day of June, 2025 by and between Landscape West Management Services, Inc., a California corporation (“Contractor”), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (“City”).

RECITALS
A. On April 4, 2025, the City issued Request for Proposal No. 25-058 (“RFP”), seeking proposals from qualified firms and organizations to provide landscaping maintenance and irrigation systems maintenance of street medians and public right-of-way amenities, vacant lots/parcels, slopes, channels, and easements.

B. Contractor submitted a timely and responsive proposal that was selected by the City.

Contractor represents that it is able and willing to provide the services described in the scope of work included in RFP 25-058.

C. In undertaking the performance of this Agreement, Contractor represents that it is knowledgeable in its field and that any services performed by Contractor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field.

NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows:

1. SCOPE OF SERVICES
Contractor shall perform during the term of this Agreement, the tasks and obligations including all labor, materials, tools, equipment, and incidental customary work required to fully and adequately complete the services described and set forth in Exhibit A, attached hereto and incorporated by reference.

2. COMPENSATION
a. City agrees to pay, and Contractor agrees to accept as total payment for its services for City, the rates and charges identified in Exhibit B. The total amount to be expended during the term of this Agreement shall not exceed $9,370,000. b. Payment by City shall be made within forty-five (45) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. City and Contractor agree that all payments due and owing under this Agreement shall be made through Automated Clearing House (ACH) transfers. Contractor agrees to execute the City’s standard ACH Vendor Payment Authorization and provide required documentation. Upon verification of the data provided, the City will be authorized to deposit payments directly into Contractor’s account(s) with financial institutions.

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Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City.

3. TERM
This Agreement shall commence on July 1, 2025 and continue for a three (3) year term with the option for the City to grant up to two (2), one (1) year extensions, exercisable by a writing by the City Manager and the City Attorney, unless terminated earlier in accordance with Section 15, below.

4. INDEPENDENT CONTRACTOR
Contractor shall, during the entire term of this Agreement, be construed to be an independent Contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Contractor performs the services which are the subject matter of this Agreement; however, the services to be provided by Contractor shall be provided in a manner consistent with all applicable standards and regulations governing such services. Contractor shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes.

5. OWNERSHIP OF MATERIALS
This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Contractor under this Agreement (“Documents & Data”). Contractor shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement.

Contractor represents and warrants that Contractor has the legal right to license any and all Documents & Data. Contractor makes no such representation and warranty in regard to Documents & Data which were provided to Contractor by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City’s sole risk.

6. INSURANCE
Contractor shall procure and maintain for the duration of the agreement, the following insurance coverages:

MINIMUM SCOPE AND LIMIT OF INSURANCE
Contractor shall maintain limits of insurance coverage in the following minimum amounts and City Council 16 – 71 6/3/2025

shall be at least as broad as:
• Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence and $2,000,000 aggregate.
• Automobile Liability (AL): Insurance Services Office Form CA 00 01 covering Code 1 (any auto), with combined single limits of $1,000,000. In the event Contractor does not maintain commercial automobile liability insurance, City will accept evidence of personal automobile insurance with existing limits, which can be lower than $1,000,000. • Workers’ Compensation (W/C): as required by the State of California, with statutory limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident, per employee, per policy for bodily injury or disease. This requirement can be waived if Contractor has no employees.

If Contractor maintains broader coverage and/or higher limits than the minimums shown above, City requires and shall be entitled to the broader coverage and/or the higher limits maintained by Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to City.

Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:

1. CGL and AL policies: City of Santa Ana, its City Council, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds with respect to liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, equipment, and personnel furnished in connection with such work or operations.

2. All required insurance policies: Insurance company(ies) agrees to waive all rights of subrogation against City, its City Council, its officers, officials, employees, agents, and volunteers for losses paid under the terms of any policy which arise from work performed by Contractor for City.

3. All required insurance policies: For any claims related to this contract, Contractor’s insurance coverage shall be primary and any insurance maintained by City, its City Council, its officers, officials, employees, agents, or volunteers shall not contribute with it.

4. All required insurance policies: A severability of interest provision must apply for all the additional insureds, ensuring that Contractor’s insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the insurer’s limits of liability.

5. Each insurance policy required herein shall provide that coverage shall not be canceled, suspended, voided, reduced in coverage or in limits, non-renewed by the carrier, or materially changed except after thirty (30) days prior written notice has been given to City.

Ten (10) days prior written notice shall be provided to City for policy cancellation or nonrenewal due to non-payment.

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6. Certificate Holder on each Evidence of Insurance certificate shall be: City of Santa Ana, Attention: Public Works Agency, M-21, Santa Ana, CA 92701. The name and location of the event should be included in the Description of Operations section of each certificate.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. City may require Contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention.

Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the state of California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to City.

Verification of Coverage
Contractor shall furnish City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements to Entity before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive Contractor’s obligation to provide them.

City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.

Claims Made Policies
If any of the required policies provide coverage on a claims-made basis:

1. The retroactive date must be shown and must be before the date of the contract or the beginning of work.

2. Insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of work.

3. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective date, Company must purchase “extended reporting” coverage for a minimum of three (3) years after completion of work.

Subcontractors
Contractor shall require and verify that all sub-contractors maintain insurance meeting all the requirements stated herein, and Contractor shall ensure that City is an additional insured on insurance required from sub-contractors.

Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

7. INDEMNIFICATION
Contractor agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability: (1) for personal City Council 16 – 73 6/3/2025

injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Contractor, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Contractor further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Contractor’s services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor.

8. INTELLECTUAL PROPERTY INDEMNIFICATION
Contractor shall defend and indemnify the City, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States’ letters patent, trademark, or copyright infringement, including costs, contained in the work product or documents provided by Contractor to the City pursuant to this Agreement.

9. RECORDS
Contractor shall keep records and invoices in connection with the work to be performed under this Agreement. Contractor shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Contractor under this Agreement. All such records and invoices shall be clearly identifiable. Contractor shall allow a representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Contractor under this Agreement.

10. CONFIDENTIALITY
If Contractor receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Contractor agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. “Confidential Information” shall include all City Council 16 – 74 6/3/2025

nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Contractor disclosed in a publicly available source; (c) is in rightful possession of the Contractor without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Contractor without reference to information disclosed by the City.

11. CONFLICT OF INTEREST CLAUSE
a. Contractor covenantsthat it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement.
b. No immediate family members of either the Mayor, City Council Member, or any appointed City Official, including appointed board and commission members, as defined under the City’s Municipal Code, whose position with the City shall award or influence the award of this Agreement, or any competing contract or amendment thereof, shall be employed in any capacity by the Contractor or have any other direct or indirect financial benefit or interest in this Agreement. c. The section also prohibits the awarding of any agreement, contract, grant, or any amendment to those awards, to any former full-time employee for one-year from date of employee separation except for any CalPERS retiree as authorized by City Council resolution
d. The Contractor must comply with all conflict of interest laws, ordinances, and regulations now in effect or hereafter to be enacted during the term of this Agreement.

The Contractor warrants that it is not now aware of any facts which conflict with the prohibitions defined above. If the Contractor hereafter becomes aware of any facts that might reasonably be expected to create a conflict of interest, it must immediately make full written disclosure of such facts to the City. Full written disclosure must include, but is not limited to, identification of all persons implicated and a complete description of all relevant circumstances. Failure to comply with the provisions of this paragraph will be a material breach of this Agreement.
e. Contractor covenants that none of its directors, officers, employees, or agents shall participate in selecting or administrating any subcontract supported (in whole or in part) by City funds stemming from the Agreement where the awarding of the subcontract has any direct or indirect financial benefit or interest to any individual, as defined in subsections (b) and (c) above.

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12. NON-DISCRIMINATION
Contractor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Contractor affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations.

13. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Contractor or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein.

14. ASSIGNMENT
Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City’s ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City.

15. TERMINATION
This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Contractor shall be entitled to receive and the City shall pay Contractor compensation for all services performed by Contractor prior to receipt of such notice of termination, subject to the following conditions:
a. As a condition of such payment, the Executive Director may require Contractor to deliver to the City all work product(s) completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Contractor consents to the City's use thereof for such purposes as the City deems appropriate.
b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement.

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16. WAIVER
No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies.

17. JURISDICTION - VENUE
This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement.

18. PROFESSIONAL LICENSES
Contractor shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Contractor shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement.

19. NOTICE
Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons:

To City:

City Clerk
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, CA 92702-1988
Fax: 714- 647-6956
With courtesy copies to:

Executive Director
Public Works Agency
City of Santa Ana
20 Civic Center Plaza (M-21)
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P.O. Box 1988
Santa Ana, California 92702
Fax: (714) 647-5635
To Contractor:

A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded.

20. MISCELLANEOUS PROVISIONS
a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney’s fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement.
[signature page to follow]
Landscape West Management Services, Inc.

Attn: Michael Garibay, President
1234 N. Blue Gum St.

Anaheim, CA 92806
Fax: 714-860-4705
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EXHIBIT A

SCOPE OF SERVICES
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CITY OF SANTA ANA
22 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 Contractor shall perform services as set forth below and furnish all labor, equipment, materials, and supervision to perform landscape maintenance as described herein including, but no limited to, the following:

I. GENERAL REQUIREMENTS

1. Compliance with Applicable Laws and Regulations
a. Contractor shall perform all requirements under and in strict observance of and compliance with all applicable laws, regulations, ordinances, codes and any other legislative or statutory requirements.
b. Contractor warrants that the performance of services under this contract shall be compliant with the current requirements of the Occupational Safety and Health Act (OSHA) and as it may be amended or updated throughout the term of thiscontract.

2. All locations and quantities are subject to change at any time in order to respond to unforeseen situations that may arise.
a. City will provide Contractor with as much advance notice as reasonably possible to allow Contractor to adjust schedules and workforces accordingly.

3. Oversee workforces to ensure that work is being performed with all due diligence, quickly, and thoroughly and for all the designated work area.

4. Perform scheduled and random checks with Project Manager or designee to ensure that all work is being performed satisfactorily.

5. Provide courteous interaction, direction, information, and referrals to all visitors, property owners, Police Officers, other City employees, or related agencies.

6. Anticipated Service Levels
a. Provide the required number of laborers, technicians, supervisors, and workers as specified below and throughout these specifications.
i. The City has determined these are the required staffing levels necessary to accomplish all of the work requirements within the allotted hours as indicated in the specifications.
b. Provide four (4) crews (12 laborers) each day (Monday – Friday) for scheduled work.
i. Contractor shall provide two (2) Irrigation Technicians as well as to conduct daily maintenance, troubleshooting, repairs and necessary work to ensure

EXHIBIT A

SCOPE OF SERVICES
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CITY OF SANTA ANA
23 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 irrigation systems are operating properly.
c. From time-to-time and site-to-site, more workers will be needed and Contractor must provide additional workers at the rates stated in Attachment A for services requested by the Project Manager or his/her designee.
d. City reserves the right to adjust the staffing levels based on the available budget allocated each year as part of the City’s annual budget process.

II. LANDSCAPE MAINTENANCE CREWS

1. Landscape Maintenance Crews shall be responsible to clean and maintain medians by removing weeds, trash, debris, mowing were applicable and other associated landscaping duties in order to maintain medians in a clean and attractive state.

2. Contractor to provide four (4) Crews as follows:

Crew size = Three (3) Laborers (12 laborers total)

3. Provide the necessary labor, materials and equipment to remove weeds from all medians, linear parks, sidewalk areas, planters, and public lots.

4. Provide the crews daily. The assignments may change during the day to respond to urgent requests.
a. Homeless camp debris removal may occur several times a week.

5. Remove by hand or mechanical means, all weeds from medians, sidewalk and street curb joint.

6. Remove the trash encountered in areas immediately adjacent to street medians including gutters, storm drains, culverts, and bike lanes.

7. Maintain and clean the tree wells to enhance appearance and cleanliness of City parkway tree wells by removing weeds and litter.

8. Remove all unwanted natural or environmental materials, including, but not limited to:
a. Bio-waste,
b. Hypodermic needles,
c. Dirt,
d. Silt,
e. Feces,
f. Soot, and
g. Weeds

9. Clean, cut, clear, and remove weeds and remove of light-to-medium amounts of trash by using hand-held equipment like weed eaters, rakes, brooms, and leaf blowers. a. Leave no piles, or residue with rake marks.
b. Sidewalk surface shall be clean of leaves, litter, and dirt.

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CITY OF SANTA ANA
24 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058

10. Crew must be self-directed and report directly to the main office of Contractor.

11. Crew must be “on-call” and carry a dedicated cell phone and be available during normal business hours on all workdays.

12. The Contractor shall collect all clippings, trimmings, cuttings, rubbish and debris, and posted signs at all work sites and dispose of same in a lawful manner per contract requirements at the Contractor’s expense.

13. All trash and debris shall be removed from all worksites the same day.

14. The Contractor shall rake, hand remove, or vacuum leaves that are not absorbed by planting.
a. This shall be done as often as required to maintain a neat appearance, or prevent plants from being smothered by seasonal leaf drop at least weekly or as directed by Projects Manager or designee.

15. After heavy windstorms, the entire contract area shall be cleaned of litter, fallen branches, etc.
a. Contractor shall respond to calls from Projects Manager or designee immediately. b. Contractor shall patrol all areas during heavy windstorms for trees down, fallen branches, hanging branches, debris, and other potential hazards.

16. The Contractor shall keep sidewalks and all paved areas in the medians and under overpasses swept and cleaned of any debris, weeds, dirt or soil. a. Tree wells shall be maintained weed free.

17. Additional duties that may be required of the Median Crew may include the following:
a. Clear catch basins during winter rain and storms,
b. Fill sandbags,
c. Remove extra trash and debris generated by special events, d. Remove litter and vegetation at City-owned parcels,
e. Remove homeless camp debris, and
f. Assist street sweepers in debris removal during weather events, such as wind or rain.

III. IRRIGATION TECHNICIAN

1. Provide two (2) Irrigation Technicians to perform daily inspections and routine irrigation systems repairs.

2. The Irrigation Technician shall physically inspect (by manual or semi-automatically running the Controller) the operation of all systems weekly. a. The Irrigation Technician shall maintain all sprinkler systems in such a way as to guarantee proper coverage and full working capability, and make whatever adjustments are necessary, including but not limited to:
i. Adjustment of heads or inserts, or
ii. Replacing of inserts, etc., to prevent excessive over spray/runoff into street right-of-ways or other areas not intended to receive irrigation over City Council 16 – 83 6/3/2025

CITY OF SANTA ANA
25 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 spray/runoff
b. A visual inspection of all irrigated areas shall occur, more often, but not less than one time per week.
i. All areas receiving marginal coverage shall be irrigated by a portable irrigation method. The Irrigation Technician shall furnish all hoses, nozzles, sprinklers, etc., necessary to accomplish this supplementary irrigation. ii. Care shall be exercised to prevent waste of water, erosion, and/or detrimental seepage into existing underground improvements or structures

3. The Irrigation Technician shall turn off irrigation system during periods of rainfall and times when suspension of irrigation is desirable to conserve water while remaining within the guidelines of horticulturally acceptable maintenance practices as determined by the Projects Manager or designee.
a. When the Projects Manager or designee acknowledges the necessity to turn on the water once again, all controllers shall be activated within twenty-four (24) hours. b. After 24 hours, the Projects Manager or designee at his discretion may elect to activate the controllers with City forces and deduct estimated time plus overhead from the Contractor’s monthly invoice.

4. Contractor shall submit a monthly irrigation report to the Projects Manager or designee.
a. The report shall be of the format required by the Projects Manager or designee and shall include, but not be limited to:
i. Controller location,
ii. Address, type of controller,
iii. Number of stations,
iv. Schedule, and run times for each station, turf, ground cover or shrub irrigation,
v. Condition of site, and
vi. Repairs made for each station.

5. Irrigation Technician shall maintain a log at each controller location.

6. Irrigation Technician shall provide efficient use of water at all times. a. The controllers shall be programmed and monitored to maintain adequate moisture, optimal for growth and appearance, while eliminating excessive runoff. i. Adequate soil moisture shall be determined by:

1. Visual observation, plant resiliency, and turgidity,

2. Rxamining cores removed by soil probe,

3. Moisture sensing devices, and

4. Programming irrigation controllers accordingly
ii. Considerations must be given to:

1. Soil texture,

2. Structure,

3. Porosity,

4. Water holding capacity,
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CITY OF SANTA ANA
26 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058

5. Drainage,

6. Compaction,

7. Precipitation rate,

8. Runoff,

9. Infiltration rate,

10. Percolation rate,

11. Evapotranspiration,

12. Seasonal temperatures,

13. Prevailing wind condition,

14. Time of day or night,

15. Type of plant and root structure

7. Irrigation Technician shall be responsible for and bear the cost of service and repair to all irrigation components from the remote control valve, downstream (including the remote control valve).
a. The responsibility includes, but is not limited to:
i. The remote control valve,
ii. Flow sensors,
iii. Lateral lines,
iv. Fittings,
v. Risers,
vi. All sprinkler heads, and
vii. Drip irrigation components

8. Monitoring Systems: Irrigation Technician shall weekly inspect the irrigation systems for broken and clogged heads, malfunctioning or leaking valves, or any other condition, which hampers the correct operation of the system.
a. Authorization must be obtained from the Project Manager or designee before proceeding with work not covered under normal maintenance work and the malfunctioning sprinkler system area shall be irrigated by a portable irrigation method until all authorized repairs have been completed to the Project Manager or designee’s satisfaction.
b. Each irrigation controller(s) and system shall be checked weekly for proper water scheduling and coverage.
c. Make all necessary adjustments to heads, which throw onto roadways, walkways, windows, or out of intended area of coverage.
d. Irrigation Technician shall clean and adjust sprinkler heads as needed for proper coverage.
e. Each system shall be manually operated at the irrigation controller and observed on a bi-monthly basis.
f. Controllers shall be programmed to water during nighttime hours between approximately midnight and 7:00 a.m.
i. No watering shall occur during the daytime unless associated with irrigation check/repairs or with prior approval by the Projects Manager or designee.

9. Irrigation Technician shall provide irrigation personnel fully trained in all phases of landscape irrigation systems operation, maintenance, adjustment, and repair. a. This is to include:
i. Diagnosis and repair of controllers,
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CITY OF SANTA ANA
27 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 ii. Valve wires,
iii. Control valves,
iv. Lateral lines,
v. Gate valves,
vi. Main lines,
vii. Strainers,
viii. Pressure regulators,
ix. Backflow devices,
x. Moisture sensors,
xi. Master valves, and
xii. Electric pedestals.
b. Irrigation Technician shall maintain an adequate stock of medium and high usage items for repair of all irrigation systems.

10. Automatic controllers and/or enclosures shall be locked while unattended.

11. All controller enclosures must be painted in approved colors, as needed, to prevent rusting and maintain good appearance.
a. System Maintenance: Once a year during the month of March, Irrigation Technician shall:
i. Wipe down the equipment in the irrigation controller cabinet to remove all dust and dirt,
ii. Clean all electrical connections,
iii. Install bait traps for control of ants,
iv. Replace batteries as required,
v. Clean and remove intruding soil in valve boxes and
vi. Replace gravel, as originally specified

12. Repairs made to the irrigation system must be made in accordance with the system’s original design with products equal to or higher quality than currently provided. a. Workmanship shall be performed in accordance with industry standards.

13. Irrigation Technician shall be responsible for regular monitoring of all systems and correcting for:
a. Coverage,
b. Adjustment, and
c. Clogging of lines and other sprinkler components.

14. All irrigation systems shall be inspected and adjusted on a weekly basis or more frequently as required, considering the water requirements of each remote control valve.
a. A written irrigation tracking sheet indicating the system location, date inspected, and watering schedule shall be submitted to the Projects Manager or designee at the end of each week.

15. Irrigation Technician shall observe and note deficiencies occurring from the original design of facilities and review these findings with the Projects Manager or designee so necessary improvements can be considered.

City Council 16 – 86 6/3/2025

CITY OF SANTA ANA
28 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058

16. All leaking or defective piping, valves, or other system components shall be repaired within twenty-four (24) hours of detection.

17. Contractor will keep system in operation by valve or head adjustment to keep all systems operating at manufacturer’s recommended operating pressure. a. This shall be accomplished by valve throttling pressure gaging. i. The valves should be throttled to prevent sprinkler heads from fogging, allowing droplets for effective watering.
b. The Projects Manager or designee may request a coverage test to evaluate proper settings, timing, usage, or maintenance of system

18. Contractor shall be responsible for periodic inspection of surface drains located within the landscaped areas.
a. These drains shall be checked to assure proper functioning. b. Remove any debris or vegetation that might accumulate at the inlet and prevent proper flow of water
IV. TRASH REMOVAL AND DISPOSAL:

1. The trash likely to be encountered during the course of cleaning includes but is not limited to:
a. Litter,
b. Trash,
c. Bio-waste and hypodermic needles,
d. Plastic and cardboard containers,
e. Plywood,
f. Wsed lumber,
g. Discarded furniture, and
h. Small appliances, toys and other household items

2. Remove and dispose of items listed above according to all applicable laws, codes, and requirements.

3. Note that trash removal is incidental to weed removal by either crew. It is included so that the areas looks clean after the weed removal work is completed.

4. Trash removal and disposal will be at the Contractors expense and must be included in the hourly price.

V. OPTIONAL AS-NEEDED: WEED ABATEMENT , DEBRIS REMOVAL , WEED SPRAYING

SERVICES

1. Crew Size: varies depending on need; City estimates, but does not guarantee or imply guarenteed hours per year for City-requested optional as-needed services.

2. All property (lots, channels, easements, alleys) designated by the City Projects Manager or Inspector and assigned to the contractor for weed abatement and cleaning City Council 16 – 87 6/3/2025

CITY OF SANTA ANA
29 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 shall be thoroughly cleaned of all weeds, grass, noxious growth, tree volunteers/shooters, trash, and rubbish in the following manner:
a. These as needed cleaning and services will be compensated at the regular hourly rate on the appropriate Price List item.
i. All associated debris will be disposed of by Contractor and billed as an appropriate line item.
b. All vegetation (weeds, grass) shall be cut or mowed to a height of not more than two (2) inches above the ground.
i. Vegetation cut or mowed shall be removed from the site. c. Trees with low hanging branches shall be trimmed to allow 7 feet of vertical clearance, as needed.
d. Trees, hedges, bushes and/or vines shall be trimmed back to property line as to not obstruct the public right of way, as needed.
e. City will issue a work order request for such work to be performed. f. Erosion control wattles (devices made of straw or wood) installed around the perimeter of fenced properties, shall be removed to allow for proper cleaning along the interior and exterior of the fence line.
i. Once cleaning is completed, Contractor shall replace wattles along the interior perimeter of the lot or as directed to by Projects Manager g. Removal and disposal of trash shall be billed as a separate line item. Pricing must be included in Attachment A.
i. These services include, but are not limited to:

1. Removal of litter, vegetation, weeds, and construction debris

2. Clear catch basins during winter rain and storms

3. Fill sandbags

4. Removal of homeless camp debris and rubbish.
h. Contractor shall have the physical and technical ability, and sufficient staff to provide weed control and pesticide spraying as required by City. i. Weed and pesticide spraying shall be performed in accordance with all applicable state and local regulations and laws.
ii. Weed and pesticide spraying shall be charged to the City according to pricing in Attachment A. Pricing shall include all labor and material costs.

VI. OTHER PROVISIONS/ REQUIREMENTS

1. Contractor Data Entry for Maintenance Work
a. The City uses a public reporting APP (mySantaAna), or other designated APP, to record all work performed.
b. The Contractor will be required to utilize the City’s computerized system (APP), or other system, to record ALL maintenance work performed for this contract. c. The City will provide training and instruction to the Contractor on the use of the APP.
d. The Contractor will be required to obtain a cellular/Wi-Fi enabled electronic device, City Council 16 – 88 6/3/2025

CITY OF SANTA ANA
30 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 cellular phone for each crew, to perform the required data entry in the field. i. The Contractor will be solely responsible for maintaining the device in working order to complete the required data entry for the City. e. The Contractor will be required to obtain a cellular internet data plancost using one of the following carriers:
i. AT&T wireless,
ii. Verizon,
iii. T-Mobile or
iv. Sprint

2. Maintenance Function Checklist and Reports
a. Daily Attendance Sign in Sheet: Provided by the Contractor on a daily basis by 7:30 am, including the signatures of each laborer and crew assignment, date, and hours to be worked.
i. Contractor shall update the hours worked if any laborer leaves early. b. Daily Work Report: Prepared by Contractor on a daily basis and specifies the work performed; date performed; and labor, materials and supplies used, and amount of trash and debris collected (measurement method to be agreed upon).
c. Weekly Report
i. Due: Monday of every week
ii. Contents: Ensure that the report contains all the required and approved content, which may include, but not limited to:

1. Description of work completed

2. Description of the actual inspection, observation, repair and/or maintenance of landscaping, signage, lighting, streetscape, and graffiti
d. Report Guidelines:
i. Submit records in the time required, in the method required, and on the forms required.
ii. Include any pertinent information or backup documentation with your reports.
iii. Monthly payment will not be made until reports are received by City. e. Documentation
i. Digital Photo Sampler Report

1. Take a series of before-and-after photos of items, areas, or incidents that Contractor responds to as specified by City.

2. Maintain these photos electronically and make them available for inspection by City at any time.

3. Identify photos by location, description, etc. before or after, date and time of photo taken.

3. Meetings
a. General Guidelines
City Council 16 – 89 6/3/2025

CITY OF SANTA ANA
31 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 i. Document all meetings and ensure corresponding action list is generated, initiated, and completed by the time required.
b. Attendees
i. Project Manager and/or designee and Contract Supervisor must attend meetings, in person, with the Public Works management team. c. Operational Meetings
i. Purpose: To address issues regarding:

1. Upcoming events,

2. Blackout dates,

3. Scheduling; and

4. Other issues of concern
ii. Held on: Third Thursday of every month or as specified iii. Location: 220 S. Daisy, Santa Ana, CA 92703
d. Service Level Inspections
i. Provide an English-speaking Contract Supervisor to tour the contracted area with the Project Manager or his/her designee twice a month to determine compliance with the specifications and to discuss required work. ii. Contractor's Supervisor must be authorized to sign documents and/or effect changes to the work being performed.

4. Contractor Employees
a. Regarding all Contractor Employees:
i. Ensure that all Contractor employees performing work in conjunction with this project are always courteous, professional, competent, and do not cause any undue disturbances.
ii. Ensure any employee who is determined by the Project Manager or his/her designee to be incompetent, working inefficiently, disorderly, intemperate or otherwise objectionable is immediately removed from work under this agreement and replaced with a satisfactory replacement. iii. The City of Santa Ana is committed to a safe workplace. The Project Manager or his/her designee may direct Contract Supervisor to immediately remove any worker who is unfit for duty.
iv. Employees must present a neat, well-groomed appearance at all times. v. Perform the work while minimizing disturbance to the citizens, residences, and businesses.
vi. Workers must have basic knowledge, experience, skills and abilities in general labor, custodial maintenance, landscaping maintenance, cleaning, trash handling, landscape care and street safety procedures to perform the scope of work requirements in accordance with the specifications at all times.

1. Workers who do not demonstrate these capabilities shall be replaced at the request of the Project Manager or his/her designee.

5. Contract Supervisors and Laborers
a. Provide an English-speaking Contract supervisor and laborers who are fully trained and knowledgeable in all aspects of these requirements:

City Council 16 – 90 6/3/2025

CITY OF SANTA ANA
32 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 i. Equipped with a working, fully-charged cellular phone, capable of taking and sending photos and emails, to enable immediate contact with Project Manager and/or designee.
b. Contract Supervisor and laborers must demonstrate skills including, but not limited to the following:
i. Basic principles of supervision, directing, planning, controlling, training and appropriate safety procedures.
ii. Contract Supervisor must be able to tour the Area with a Project Manager or his/her designee on an as-needed basis for the purpose of determining compliance with these specifications or to discuss required work. iii. Contract Supervisor is responsible for ensuring the crews are accomplishing the scheduled work per the specifications.

6. Uniform and Safety Vests
a. Pay for and bear the maintenance cost of uniforms for all employees working on the project.
i. The uniforms must bear Contractor’s company name.
b. The uniform must be worn as a complete unit and be fitted properly. ii. The uniform must be maintained in a clean and neat order with no rips, tears, or permanent stains present.
c. Must wear identification and appropriate safety vest at all times, which must be furnished by the Contractor.

7. Vehicles and Equipment
a. Ensure that all contractor vehicles and equipment used in performing work in conjunction with this project are:
i. Mechanically and operationally sound;
ii. Have well-maintained exteriors;
iii. Clean;
iv. Have well-organized tool racks;
v. Bear Contractor’s company name, which is to be visible on both sides of the vehicle;
vi. Have current California registrations and licenses
b. City of Santa Ana Public Works Agency authorized contractors will be required to have identification signage on all vehicles at all times while working in an official capacity for the City.
i. Such signage shall be of a professional manner and maintained neat in appearance, free of graffiti, easily identifiable and in sound condition. ii. All costs associated with the fabrication of such signage shall be borne by the contractor. Contact City Staff prior to ordering.

Signage Type and Material Shall Be:
• Plastic with Magnetic Backing. Painted on Vehicle or similar (Taped Signs Not allowed).

City Council 16 – 91 6/3/2025

CITY OF SANTA ANA
33 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 Such Signage Shall State:

Authorized Contractor
City of Santa Ana
Public Works Agency
and
• Name of Contractor and Contractor Telephone Number
Signage Letter Minimum Size:
• 2-inches for: Authorized Contractor
City of Santa Ana
Public Works Agency
• 1-inch for all other information
c. Vehicles must have 360-degree operational warning lights or traffic notification light bars.
d. Have a suitable stake side compactor truck or trailer for hauling weeds, rubbish, and brush. Trucks should have sufficient capacity to minimize trips and maximize productivity; (typically a 2-ton capacity). The truck hall be equipped with an arrow board for lane closures.
e. Provide power and hand tools of sufficient quantity and quality to handle the job as specified. Examples of such tools are string trimmers (weed eaters), brush cutters, catch bags, sod cutters, loppers, handsaws, and various hand tools. f. Provide and assure usage of appropriate safety equipment as required by Cal/OSHA for all hand crews, including, but not limited to hearing protection, dust masks, helmets, boots, gloves, goggles, chaps, shin guards). g. Replace immediately, any equipment that does not meet the foregoing as may be determined by Project Manager and/or designee’s sole discretion. h. Ensure that all crews, equipment, and trash are secure in vehicles at all times.

8. Place of Business
a. Maintain an office at a fixed location corresponding to current business license. b. Maintain an assigned telephone number under Contractor’s personal name or the legal company name.

9. Traffic Controls
a. Maintain clear ingress and egress areas, sidewalks, vehicle travel lanes, driveways, and the like at all times unless immediate work prohibits such clearance
b. Inspect and identify any condition(s) that renders any portion of the areas under maintenance unsafe, as well as any unsafe practices occurring thereon and keep a log indicating date inspected and action taken.
c. Notify the Project Manager or his/her designee immediately of any unsafe condition that requires major correction.
d. Cooperate fully with City in the investigation of any accidental injury or death occurring on the designated work areas, including a complete written report thereof to the Project Manager or his/her designee within five (5) days following the occurrence.

City Council 16 – 92 6/3/2025

CITY OF SANTA ANA
34 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058 e. Most work should be performed without obstructing the flow of traffic whenever possible.
i. If lane closure is required, abide by WATCH manual.

10. Performance during inclement weather
During periods of inclement weather, i.e. rain/wind; Contractor’s workforce shall accomplish work not affected by such weather, i.e. litter pick up/spent blossom removal, preventative maintenance, etc.
a. Contractor shall stake and re-tie trees as required. b. Drains shall be checked and cleaned as necessary.
c. Contractor shall remove all branches and debris resulting from inclement weather.
d. Contractor may be required to perform additional clean-up tasks due to inclement weather.

11. Recycling
a. All organic waste (including leaves, grass clippings, brush, branches, and tree parts) resulting from work performed under this contract shall be recycled through composting or processing for use as mulch.
i. Organic waste cannot be taken to the landfill.
b. The names and addresses of the licensed green-waste composting or processing companies, and haulers, along with the tonnages used and receipts, shall be provided to the Projects Manager or designee in a monthly written report and an annual written report.

12. Disposal
a. At least 100% of all landscape debris will be disposed of through a landscape material recycling center or reused in some manner.
i. The Contractor shall dispose of all cuttings, weeds, leaves, trash, and other debris from the operation as work progresses.
ii. The City shall not be responsible for the disposal. C iii. ontractor shall pay all disposal fees and provide documentation evidence of recycling to include location, tonnage, etc. on a monthly basis to the City. iv. Contractor shall dispose of all trash and debris.
v. Contractor shall dispose of all landscape debris through a landscape material recycling center.
vi. Contractor shall pay all disposal fees and submit a copy of receipt as part of the landscape monthly reports.
b. At no time is the Contractor permitted to use City dumpsters.

13. Damage Repair
a. All damage incurred by the Contractor’s operations shall be repaired or replaced in kind and size at the Contractor’s expense.
b. Irrigation repairs shall be completed within twenty-four (24) hours using approved materials.
c. Non-irrigation repairs shall be completed within seven (7) working days and shall be repaired using only pre-approved materials.

City Council 16 – 93 6/3/2025

CITY OF SANTA ANA
35 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058

14. Vandalism
a. Contractor shall be responsible for the labor to repair damaged landscaping caused by vandalism or vehicle accidents with material costs to be reimbursed by City.
i. The Contractor shall submit invoicing to establish cost of materials.

15. Holidays
City Observed Holidays
a. The designated Contractor holidays for this contract shall be:
i. New Year's Day
ii. Martin Luther King Jr. Day
iii. President's Day
iv. Cesar Chavez Day
v. Memorial Day
vi. Independence Day
vii. Labor Day
viii. Veteran's Day
ix. Thanksgiving Day Holidays
x. Christmas Day Holidays

16. Penalties and Fines
a. Failure to comply with specifications of contract or requests from the Projects Manager or designee and/or creating unnecessary delays, as determined by the Projects Manager or designee, may be cause for fines and penalties in the table below until said request(s) is completed.
i. This shall be deducted from routine monthly maintenance payments.

Table: Liquidated Damages
LN VIOLATION Amount
1 Failure to perform required/scheduled work: missed or late, in correct number of workers per contract, missed meetings without prior notification.
$100.00 per
occurrence per day
2 Safety violation and/or failure by Contractor to comply with the most current Work Area Traffic Control Manual (W.A.T.C.H.) $200.00 per
occurrence
3 Failure to remove any significant amount of litter/debris (generated by crews) from work site same day as
generated.
$200.00 per
occurrence
4 Blowing or sweeping debris onto private property, public streets, parking lots or into storm drains.
$200.00 per
occurrence
5 Failure to provide reports, schedules and other deliverables without notice and agreement by CR.
$100.00 per
occurrence
City Council 16 – 94 6/3/2025

CITY OF SANTA ANA
36 MEDIAN AND RIGHT OF WAY LANDSCAPING MAINTENANCE – RFP #25-058

17. Maintenance Frequency Schedule

FUNCTION FREQUENCY
Turf Maintenance
Mowing Once/Week
Edging Once/Week
Clipping Removal Once/Week
String Trimming Once/Week
Pest and Weed Control Weekly
Visual Inspection Weekly
Chemical Weed Control As needed
Debris Removal Once/Week
Ground Cover Maintenance
Trim Monthly
Pest and Weed Control Weekly
Visual Inspection Once/Week
Debris Removal Once/Week
Shrub, Vine and Tree Maintenance
Trim Shrubs Monthly or sooner if
needed
Trim Vines Four (4) times a year
Visual Inspection Once/Week
Debris Removal Once/Week
Hardscape Maintenance Weekly
Median with no/turf planting Weekly
Debris Removal Once/Week
Grounds Policing/Litter Removal Once/Week
All other Areas Every week
City Council 16 – 95 6/3/2025

EXHIBIT B

COMPENSATION
City Council 16 – 96 6/3/2025
Exhibit B
1234 North Blue Gum St. Anaheim, CA 92806 - P: (714) 860-4702 F: (714) 860-4705 City Council 16 – 97 6/3/2025

1234 North Blue Gum St. Anaheim, CA 92806 - P: (714) 860-4702 F: (714) 860-4705 City Council 16 – 98 6/3/2025
Public Works Agency
www.santa-ana.org/pw
Item # 17
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 3, 2025
TOPIC: Agreement for McFadden Avenue Transit Signal Priority Pilot Project

AGENDA TITLE
Agreement with Arcadis U.S., Inc. to Implement the McFadden Avenue Transit Signal Priority Pilot Project (No. 25-6031) (Non-General Fund)

RECOMMENDED ACTION
Approve an agreement with Arcadis U.S., Inc. to implement the McFadden Avenue Transit Signal Priority Pilot Project for an amount not to exceed $1,107,502, for a term beginning June 3, 2025 and ending June 2, 2027, with provisions for two one-year extensions (Agreement No. A-2025-XXX).

GOVERNMENT CODE §84308 APPLIES: Yes

DISCUSSION
The Public Works Agency’s Engineering Division (PWA) is responsible for the administration and oversight of all Capital Improvement Projects in the City, whereas the Traffic Engineering Section oversees the operations and maintenance of the City’s Traffic Signal system. The Traffic Signal system is comprised of approximately 310 traffic signals that are interconnected via fiber optic communication and dynamically adjust traffic signal timings based on real-time traffic conditions to improve traffic flow and reduce congestion.

On October 15, 2025, City Council approved a cooperative agreement with Orange County Transportation Authority (OCTA) recognizing $3,690,000 in Regional Early Action Planning (REAP 2.0) grant funding to deliver the McFadden Avenue Transit Signal Priority Pilot Project (Project). Under the cooperative agreement, the City of Santa Ana agreed to deliver the Project including implementation and evaluation of an innovative Transit Signal Priority (TSP) system. The project will include planning, assessing, deploying, and testing the TSP system. On September 17, 2024, the City Council approved the construction of the McFadden Avenue corridor roadway improvements that will prioritize active transportation and promote transit use. To ensure McFadden Avenue is accessible, safe, and secure for all modes of travel, it is important to provide highly reliable public transportation along the corridor. The proposed TSP project will improve OC Bus travel time, schedule reliability, reduce fuel City Council 17 – 1 6/3/2025
Agreement for McFadden Avenue Transit Signal Priority Pilot June 3, 2025

consumption and emissions while also maintaining traffic flow and improving corridor safety along McFadden Avenue. The grant funding will finance the entire cost of the TSP deployment in addition to bus stop improvements and all associated design and administration costs.

McFadden Avenue is a multi-modal corridor with many travelers, ranging from motorists to bicyclists and pedestrians, using this route to commute to work, school, and other key destinations. Additionally, OCTA operates the OC Bus Route 66 along the corridor, which has one of the highest ridership rates in the County transit system. In 2022, OCTA, in partnership with City of Santa Ana, studied the McFadden Avenue corridor to evaluate traffic flow and transit operations in preparation for the construction of active transportation improvements. From the study, a Transit Signal Priority Project was identified as a key upgrade to help enhance the corridor. The TSP is a strategy that modifies traffic signal timing to give OC buses priority at signalized intersections. Priority is achieved by extending green light times for OC buses, shortening red light times, or changing when green phases occur in the traffic signal cycle. TSP will be achieved via a cloud-based system that will collect real time speed and location data from OCTA’s Traffic Operation Center and interface with the City’s Traffic Management Center. The OCTA buses are currently equipped with comprehensive data collection, remote network communications, and location tracking that exchange information between the bus operator and the OCTA Traffic Operation Center (TOC). The cloud server will utilize algorithms to analyze the incoming data from the busses and transmit the data to the City’s traffic signal controllers instructing them to adjust signal timing to accommodate the transit vehicle. The project will enhance the corridor traffic flow by assessing, deploying, and testing TSP at 19 signalized intersections on McFadden Ave. between Harbor Boulevard and Grand Avenue.

The McFadden Avenue Transit Signal Priority Pilot Project will be delivered in two phases: this phase (Phase 1) will implement and evaluate the TSP system and Phase 2 will construct bus stop improvements at 25 bus stops, including bus stop relocations with concrete bus pads, bus shelters, trash receptacles, and solar powered lighting fixtures. The bus stop improvements will be constructed per City of Santa Ana standards and after project completion will become City property and subject to regularly scheduled maintenance. A Phase 2 construction contract will be brought to City Council for consideration in September 2025.

On January 14, 2025, PWA released Request for Proposal (RFP) No. 24-122, by which it sought the services of a qualified consulting firm to implement the McFadden Avenue Transit Signal Priority Pilot Project.

The RFP was advertised and proposals were received electronically via PlanetBids, the City’s online procurement management and publication system, on February 12, 2025.

The City notified a total of 932 regional vendors via PlanetBids, one of which is Santa Ana based. Fifty-two vendors requested bidding documents and three proposals were City Council 17 – 2 6/3/2025
Agreement for McFadden Avenue Transit Signal Priority Pilot June 3, 2025

received and evaluated by a selection committee. Based on criteria outlined in the RFP, the following summarizes the top responding firms:

Firm City Ranking
Arcadis U.S., Inc. Irvine, CA 1
Iteris, Inc. Santa Ana, CA 2
Advantec Consulting Irvine CA 3
Arcadis U.S., Inc. is an accomplished engineering, construction management, and environmental consulting firm. Arcadis U.S., Inc. has over 66 years of experience working with public and private agencies throughout the country and Southern California. They have played a key role in the selection and deployment of TSP technologies at over 5,000 signalized intersections, working with every major traffic signal controller manufacturer. Arcadis is currently performing work as the prime engineering firm on the Harbor Boulevard Innovative Corridor Project to enhance traffic signal operations and safety along Harbor Boulevard. Their experience supporting OCTA and other agencies nationwide in deploying intersection technologies offers reassurance towards their work to enhance transit operations along McFadden Avenue while also maintaining traffic flow and improving corridor safety. Staff recommends awarding the agreement to Arcadis U.S., Inc. to implement the McFadden Avenue Transit Signal Priority Pilot Project (Exhibit 1).

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

FISCAL IMPACT
Funds are available in the following account for the current year and will be budgeted and made available for the next fiscal year:

Fiscal Year
Accounting
Unit -
Account #
Fund
Description Accounting Unit,
Account Description Amount
2024-25 14717613-
66220
(25-6031)
Street Safety
Programs
Regional Early Action
Planning –
Improvements Other
Than Buildings
$1,107,502
Total: $1,107,502

EXHIBIT(S)

1. Agreement with Arcadis U.S., Inc.

Submitted By: Nabil Saba, P.E., Executive Director – Public Works Agency Approved By: Alvaro Nuñez, City Manager
City Council 17 – 3 6/3/2025
AGREEMENT WITH ARCADIS U.S. INC. TO PROVIDE TRANSIT SIGNAL

PRIORITY PROJECT SERVICES
THIS AGREEMENT is made and entered into on this 3rd day of June, 2025 by and between Arcadis U.S., Inc., a Delaware corporation, (“Consultant”), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (“City”).

RECITALS
A. On January 15, 2025, City issued Request for Proposal (“RFP”) No. 24-122, by which it sought qualified consultants to provide services for the City’s McFadden Avenue Transit Signal Priority Pilot.

B. Consultant submitted a responsive proposal that was selected by the City. Consultant represents that it is able and willing to provide the services described in the scope of work that was included in RFP 24-122.

C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field.

NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows:

1. SCOPE OF SERVICES
Consultant shall perform during the term of this Agreement, the tasks and obligations including all labor, materials, tools, equipment, and incidental customary work required to fully and adequately complete the services described and set forth in the scope of work that was included in RFP No. 24-122, which is attached hereto as Exhibit A and incorporated by reference.  COMPENSATION
D City agrees to pay, and Consultant agrees to accept as total payment for its services for City, the rates and charges identified in Exhibit B, which is attached hereto and incorporated by reference. The total compensation for services provided shall not exceed 2QH0LOOLRQ2QH+XQGUHGand Seven Thousand, Five Hundred and Two Dollars ($07,502) during the term of the Agreement, including any extension periods.

E Payment by City shall be made within forty-five (45) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. City and Consultant agree that all payments due and owing under this Agreement shall be made through Automated Clearing House (ACH) transfers. Consultant agrees to execute the City’s standard ACH Vendor Payment Authorization and provide required documentation. Upon verification of the data provided, the City will be authorized to (;+,%,7
City Council 17 – 4 6/3/2025
deposit payments directly into Consultant’s account(s) with financial institutions.

Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City.

3. TERM
This Agreement shall commence on the date first written above for a two (2) year term, unless terminated earlier in accordance with Section 15, below. The term of this Agreement may be extended for up to two (2), one-year periods upon a writing executed by the City Manager and the City Attorney.

4. INDEPENDENT CONTRACTOR
Consultant shall, during the entire term of this Agreement, be construed to be an independent Consultant and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes.

5. OWNERSHIP OF MATERIALS
This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement (“Documents & Data”). Consultant shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement.

Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City’s sole risk.

6. INSURANCE
Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require any subcontractors to obtain and maintain insurance as described below for the entire Term of this Agreement against claims for injuries to persons or damage to property which may arise from or in connection with services, products and materials supplied to City. Total cost of such insurance shall be borne by Consultant.

City Council 17 – 5 6/3/2025

MINIMUM SCOPE OF INSURANCE
Coverage shall be at least as broad as:

1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence and $2,000,000 aggregate. Required policy limits can be met with primary and umbrella/excess insurance policies.

2. Automobile Liability: Insurance Services Office Form CA 00 01 covering Code 1 (any auto), with limits no less than $1,000,000 combined single limits. In the event Consultant does not maintain commercial automobile liability insurance, City will accept evidence of personal automobile insurance.

3. Workers’ Compensation: as required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. Coverage is not required if Consultant has no employees and signs request to waive such insurance.

4. Professional Liability: with limits no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate.

If the Consultant maintains broader coverage and/or higher limits than the minimum requirements for each line of coverage shown above, City requires and shall be entitled to the broader coverage and/or the higher limits maintained by Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to City.

Other Insurance Provisions
The insurance policies are to contain, or be endorsed to contain, the following provisions:

1. City, its City Council, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds, under Consultant’s CGL, Professional Liability, and Automobile Liability policies, with respect to any liability arising out of work or operations performed by or on behalf of the Instructor including materials, parts, equipment, and personnel furnished in connection with such work or operations.

2. Consultant’s Insurance company(ies) agrees to waive all rights of subrogation against City, its City Council, its officers, officials, employees, agents, and volunteers for losses paid under the terms of any policy which arise from work performed by Consultant under this Agreement.

3. For any claims related to this contract, Consultant’s insurance coverage shall be primary and any insurance maintained by City, its City Council, its officers, officials, employees, agents, or volunteers shall not contribute with it.

4. A severability of interest provision must apply for all the additional insureds, ensuring that Consultant’s insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the insurer’s limits of liability.

5. Insurance policies required herein shall provide that coverage shall not be canceled, suspended, voided, reduced in coverage or in limits, non-renewed by the carrier, or City Council 17 – 6 6/3/2025
materially changed except after thirty (30) days prior written notice has been given to City. Ten (10) days prior written notice shall be provided to City for policy cancellation or non-renewal due to non-payment of premium.

6. Certificate Holder on each Evidence of Insurance certificate shall be: City of Santa Ana, Attention: Cesar Rodriguez, 20 Civic Center Plaza, M-43, Santa Ana, CA 92701.

The name and location of project must be included in the Description of Operations section of each certificate.

Self-Insured Retentions
Self-insured retentions must be declared to and approved by the City. The City may require the Consultant to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention.

Acceptability of Insurers
Insurance is to be placed with insurers authorized to conduct business in the State of California with a current A.M. Best rating of no less than A:VII, unless otherwise acceptable to City.

Verification of Coverage
Consultant shall furnish City with original Certificates of Insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive Consultant’s obligation to provide them.

City reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.

Special Risks or Circumstances
City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances.

7. INDEMNIFICATION
Consultant agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Consultant, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party City Council 17 – 7 6/3/2025
challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Consultant’s services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.

8. INTELLECTUAL PROPERTY INDEMNIFICATION
Consultant shall defend and indemnify the City, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States’ letters patent, trademark, or copyright infringement, including costs, contained in the work product or documents provided by Consultant to the City pursuant to this Agreement.

9. RECORDS
Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement.

10. CONFIDENTIALITY
If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. “Confidential Information” shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City.

11. CONFLICT OF INTEREST CLAUSE
City Council 17 – 8 6/3/2025
Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement.

12. NON-DISCRIMINATION
Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations.

13. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein.

14. ASSIGNMENT
Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City’s ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City.

15. TERMINATION
This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions:
a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product(s) completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and City Council 17 – 9 6/3/2025
Consultant consents to the City's use thereof for such purposes as the City deems appropriate.
b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement.

16. WAIVER
No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies.

17. JURISDICTION - VENUE
This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement.

18. PROFESSIONAL LICENSES
Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement.

19. NOTICE
Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons:

To City:

City Clerk
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, CA 92702-1988
Fax: (714) 647-6956
With courtesy copies to:

City Council 17 – 10 6/3/2025
Executive Director, Public Works Agency
City of Santa Ana
20 Civic Center Plaza (M-21)
P.O. Box 1988
Santa Ana, California 92702
Fax: (714) 647-5635
To Consultant:

A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded.

20. MISCELLANEOUS PROVISIONS
a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney’s fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement.

Arcadis U.S., Inc.

Attn: Ramin Massoumi, Global Director
18401 Von Karman Avenue, Suite #300
Irvine, CA 92612
City Council 17 – 11 6/3/2025
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written.

ATTEST: CITY OF SANTA ANA
Jennifer L. Hall Alvaro Nuñez
City Clerk City Manager
APPROVED AS TO FORM:

SONIA R. CARVALHO CONSULTANT:

City Attorney
By:

Kyle Nellesen
Assistant City Attorney (title)
Tax ID#
RECOMMENDED FOR APPROVAL:

Nabil Saba
Executive Director
Public Works Agency

By: Ramin Massoumi
Title: Global Director
le Nellesen
i t t Cit Att

y: Ramin Massoumi
Nabil Saba
Digitally signed by
Nabil Saba
Date: 2025.05.05
09:56:12 -07'00'
City Council 17 – 12 6/3/2025

EXHIBIT A
City Council 17 – 13 6/3/2025

CITY OF SANTA ANA

SCOPE OF WORK
McFadden Avenue Transit Signal Priority Pilot Project

INTRODUCTION
The City of Santa Ana is one of the largest and most densely populated cities in Orange County. Santa Ana has a population of over 310,000 and serves as the county seat. With many large industries and firms, Santa Ana is also a family-friendly city, with rich culture on display in the city’s museums and many tourist attractions. The City of Santa Ana is centrally located in the heart or Orange County and is bounded by Interstate-5 to the north, Interstate-405 to the south and State Route-55 to the east. The City has over 100 miles of roadway including 15 major arterials that move over 500,000 vehicles per day.

Within the City of Santa Ana, McFadden Avenue is a four-lane arterial with average daily traffic volumes ranging from 12,000 to up to 22,000 vehicles per day. The corridor is primarily four-lane arterial divided by a striped median that serves as a two-way left turn lane, except for a brief residential section between Bristol Street and Standard Avenue where it is mostly reduced to a two-lane undivided roadway. In 2022, McFadden Avenue between Harbor Boulevard and Grand Avenue was reclassified from a secondary (4-lane, undivided) arterial to divided collector (2-lane, divided) to make way for active transportation improvements for improved pedestrian and bicycle safety and mobility. In December 2024, the City of Santa Ana began construction of active transportation improvements along the 4-mile segment of McFadden Avenue between Harbor Boulevard and Grand Avenue to prioritize pedestrian and bicycle safety and promote transit use. The improvements include a Class II buffered bicycle lane, bulb outs at intersections, bus stop improvements, enhanced signage and striping and traffic signal intelligent transportation systems. In order to make space for the active transportation improvements, the removal of one thru lane in each direction was required to accommodate the bicycle lanes and associated amenities along McFadden Avenue within the City. Construction started December 2024 and will continue through 2025.

McFadden Avenue is a multi-modal corridor with many motorists, bicyclists and pedestrians using this busy route to commute to work and school. The Orange County Transportation Authority (OCTA) also operates OC Bus Route 66 along the corridor, which has one of the highest ridership rates in the County transit system. In 2022, with the proposed capacity reductions under design, an evaluation of potential impacts on traffic flow and transit operations was conducted to evaluate the severity of the impacts and identify solutions that could reduce or reverse the impacts. OCTA, in partnership with City of Santa Ana, prepared the Santa Ana Transit Cooperative Study (Attachment A) which provided a list of suggested transit improvements to help reduce the traffic impacts of the capacity reduction and further encourage ridership. From the study, Transit Signal Priority was identified as a key upgrade to help mitigate the impacts. This project seeks to alleviate the impacts by planning, assessing, deploying, and testing Transit Signal Priority on McFadden Ave between Harbor Boulevard and Grand Avenue within City of Santa Ana.

EXHIBIT I

SCOPE OF SERVICES
City Council 17 – 14 6/3/2025

CITY OF SANTA ANA
2 PROJECT DESCRIPTION AND BACKGROUND
The project area includes 19 signalized intersections owned and operated by City of Santa Ana along McFadden Avenue from Harbor Boulevard to Grand Avenue, as listed in Table 1: Project Intersections.

City of Santa Ana has made significant investments in the signal infrastructure to enable the communication between the signalized intersections to the Traffic Management Center (TMC). The controllers along the corridor are Econolite 2070 with ASC/3 firmware or Econolite Cobalt with EOS firmware controller in Type 332 or NEMA Type P Cabinets and communicate back the TMC via Fiber Optic or Twisted Pair Communication. The traffic signals are operated utilizing Econolite’s Centracs Advanced Traffic Management System (ATMS). The active transportation project currently under construction will replace all the controllers with Econolite Cobalt ATC Controllers with EOS firmware, upgrade all communication to Fiber Optic communication, and upgrade the current loop detection to Video Detection Systems at all 19 intersections.

Table 1: Project Intersection
No. Intersection No. Intersection
1 McFadden Avenue and Harbor Boulevard 11 McFadden Avenue and Shelton Street 2 McFadden Avenue and Riverview Marketplace 12 McFadden Avenue and Flower Street 3 McFadden Avenue and Jackson Street 13 McFadden Avenue and Broadway 4 McFadden Avenue and Mohawk Drive 14 McFadden Avenue and Main Street 5 McFadden Avenue and Fairview Street 15 McFadden Avenue and Orange Avenue 6 McFadden Avenue and Sullivan Street 16 McFadden Avenue and Maple Street 7 McFadden Avenue and Center Street 17 McFadden Avenue and Standard Avenue 8 McFadden Avenue and Raitt Street 18 McFadden Avenue and Hathaway Street 9 McFadden Avenue and Pacific Avenue 19 McFadden Avenue and Grand Avenue 10 McFadden Avenue and Bristol Street
OCTA’s Route 66 bus line runs from the City of Huntington Beach through Santa Ana to the City of Irvine primarily along McFadden Avenue. OCTA’s Route 66 bus line through McFadden Avenue operates on approximately 10-minute headways during the peak periods and 20 minutes during off-peak periods with approximately 39 bus stops, as shown in Figure 1 below. The OCTA buses along Bus Route 66 host a suite of equipment that allows for comprehensive data collection, remote network communications, and location tracking that exchange information between the bus operator and the OCTA Traffic Operation Center (TOC). Each bus is equipped with a Cradlepoint router (IBR1100 or IBR1700) with cellular connection to the OCTA’s Conduent OrbCAD Computer-Aided Dispatch/Automatic Vehicle Location (CAD/AVL) system. Bus locations are polled by the OrbCAD system and uploads the General Transit Feed Specification (GTFS) package to the Swiftly data engine roughly every ten (10) seconds. This level of location tracking and schedule status is often sufficient to support priority service systems, like centralized and/or cloud-based transit signal priority (TSP) systems, that ingest this information to make informed priority requests to other traffic systems.

City Council 17 – 15 6/3/2025

CITY OF SANTA ANA
3 Figure 1: Project Area and Intersections
The focus of this project is to implement and evaluate the innovative TSP solution, as a successful implementation and study could lead to deployments of similar solutions on other City of Santa Ana arterials. The project is funded by the Regional Early Action Planning Grants of 2021 (REAP 2.0) administered by the California Department of Housing and Community Development (HCD) in collaboration with the Governor’s Office and Planning Research (OPR), the Strategic Growth Council (SGC), and the California Air Resources Board (CARB). As the designated Metropolitan Planning Organization (MPO) for Southern California, the Southern California Association of Governments (SCAG) released a Call for Applications for the REAP 2.0 funds. Funding for the project was awarded to OCTA who submitted the grant application on behalf of the City of Santa Ana. OCTA will administer the grant documentations and will reimburse the City of Santa Ana for the engineering and implementation of the project with REAP 2.0 funds. The consultant shall provide an understanding of the funding requirements throughout the delivery of the Project.

SCOPE OF WORK
The City of Santa Ana desires to retain an experienced consultant to implement the McFadden Avenue Transit Signal Priority Pilot (Project). The project length is approximately 4 miles and includes 19 signalized intersections, starting from Harbor Boulevard to Grand Avenue in the City of Santa Ana (Figure 1). The City of Santa Ana owns and operates the traffic signal along this segment of McFadden Avenue.

This Scope of Work describes work elements necessary for the various tasks related to the McFadden Avenue Transit Signal Priority Pilot. The consultant shall work directly for the City of Santa Ana which is serving as the lead agency for study and implementation of transit signal priority (TSP). The major project components of this scope of work include the following elements to be completed in close coordination with OCTA:

Assessment of Existing Conditions
x Comprehensive data collection and field reviews
x Coordinate and verify data and field reviews
x Develop key performance indicators to baseline existing conditions x Identification of existing transit bottlenecks, delays, and traffic signal limitations for multimodal operations
City Council 17 – 16 6/3/2025

CITY OF SANTA ANA
4 x Determine benefits of the TSP solution on project corridor Conceptual Planning
x Develop proposed strategy to implement recommended solutions x Evaluate, Assess and Recommend a Cloud Based Transit Signal Priority System x Prepare cost estimate for TSP deployment, including operations and maintenance x Identify non-TSP improvements to improve bus speeds and reliability for the corridor x Develop Implementation Plan for project corridor
Deployment and Analysis
x Procure and Implement an innovative cloud based TSP solution x Evaluate and assess the technology solutions implemented x Conduct ongoing data analysis and stakeholder engagement x Compare performance measure to the existing baseline conditions All electronic data procured and supporting the Project shall be provided on digital media in formats consistent with City of Santa Ana.

I. Task 1: Project Management
This task focuses on the management of the project to ensure that the project meets funding expenditure, milestone, and reporting deadlines.

Subtask 1.1: Administration and Project Management
This sub-task includes the requirements for schedules, cost control, progress reports, invoicing, and administration of all consultant work.

Project Management Plan: The consultant shall provide a comprehensive plan for project management to communicate the scope of work, constraints, and technical requirements to all project participants. The plan shall include coordination strategies with project stakeholders to ensure timely completion of project.

The plan shall also include an organization chart with description of participant responsibilities, a baseline schedule prepared using the Critical Path Method, and work breakdown structure that identifies the duration and completion of key project activities milestones. The budgeted hours and resource allocation for each task and subtask shall also be defined. The consultant shall submit a copy of the Project Management Plan (PMP) for this Project within thirty (30) calendar days of contract execution.

Elements of the PMP shall include:
x Project description and map indicating project area
x Project schedule for project tasks and technical studies including project milestones and delivery and review of intermediate project deliverables x Project organization with names of key staff/sub-consultants and their responsibilities x Key staff directory
x Project controls including schedule and budget
x Document management procedures including electronic document filing index x Applicable standards
x Applicable computer software
x Communications procedures
x Quality management procedures
x Risk Management procedures including a risk register
City Council 17 – 17 6/3/2025

CITY OF SANTA ANA
5 The draft PMP shall be provided to the City of Santa Ana Project Manager for review and input. At the discretion of the City of Santa Ana Project Manager, it may be distributed to project participants at the start of the project. If distributed to project participants, a kick-off meeting shall be held to review the plan requirements within thirty (30) calendar days of contract execution.

Monthly Progress Status Reports and Schedule Updates: The consultant shall prepare and submit an initial Project Master Schedule following contract execution. Upon approval by City of Santa Ana, the schedule will become the Project Baseline Schedule. The following elements must be included by consultant in the Baseline Schedule:
x Work items and deliverables identified in accordance with a Work Breakdown Structure (WBS) reflecting the requirements of this scope of work developed by consultant and approved by City of Santa Ana.
x Work items of third parties that may affect or be affected by consultant’s activities and develop proposed solution.
x The Project Master Schedule shall include all data necessary to represent the total project and the critical path shall be clearly identified.
x The order, sequence and interdependence of significant work items shall be reflected in the Project Master Schedule.

The consultant shall prepare and submit monthly progress reports to City of Santa Ana Project Manager including updates on key milestones, Project schedule, and percent complete detail for each task, particularly worked done during the reporting period. The Project progress and schedule updates shall be reported as Earned Value (percent complete) against the Baseline Schedule. The report will also describe anticipated activities to be undertaken in the next reporting period, and any new or changed, challenges or risks that may affect schedule, scope, and budget.

Subtask 1.2: Project Development Team Meetings
A Project Kick-Off Meeting shall be scheduled with City of Santa Ana immediately following the contract execution. The meeting will include administrative items, such as progress reports and invoicing requirements, and Project critical path. The consultant shall prepare the agenda and notes following the meeting.

The project team members will include City of Santa Ana Project Manager, OCTA and key project stakeholders that will help guide the direction of the study. The consultant shall schedule, coordinate, and attend monthly project development team meetings. The consultant shall prepare meeting materials on project related issues discussed, including agendas, power point presentations, handouts, progress plans, meeting notes and notations for specific or directed follow-up action items.

Subtask 1.3: Agency Project Oversight
In addition to regular monthly project development team meetings, the consultant shall schedule and attend project-specific coordination meetings, as necessary (estimate minimum of 10 meetings), in this project. Coordination meetings/technical workshops with stakeholders shall be held to discuss issues pertinent to the analysis, configuration, and effects of the project. During these meetings, City of Santa Ana and OCTA, and other key stakeholders may provide directions for the project. The consultant shall prepare meeting materials on technical issues for discussion, including agendas, power point presentations, handouts, progress plans, meeting minutes and notations for specific or directed followup action items. The printed format of meeting materials shall be appropriate to the purpose of the meeting City Council 17 – 18 6/3/2025

CITY OF SANTA ANA
6 and could include scaled black and with and/or color roll plots, 11” x 17” and/or 8.5” x 11” handouts and/or presentation boards.

Subtask 1.4: Grant Plans and Outcomes
This sub-task includes the development of plan and reporting documents required to adhere to the grant funding guidelines (REAP 2.0) for the project.

REAP Goals and Outcomes: The consultant shall work with City of Santa Ana staff to develop a methodology to report on how the project works towards REAP 2.0 goals. This methodology shall be presented to OCTA for approval. Once approved, the consultant shall assist City of Santa Ana in monitoring the project through each Task to ensure it continues to meet the goals and assist City of Santa Ana staff in addressing any reporting questions and concerns.

Task 1 – Deliverables (One hard copy and an electronic version of each):
- Resource Loaded Project Master Schedule
- Monthly Progress Reports with Project Earned Value vs. Baseline Schedule updates - Project Management Plan
- Monthly Progress Reports
- Kick-Off Meeting agenda and notes
- PDT meeting materials, agendas, and notes
- Coordination meeting/technical workshop materials, agendas, and notes - REAP Grant reports and plans
II. Task 2: Existing Analysis and Assessment
This task includes the data collection effort necessary to develop a thorough understanding of all the Project corridor needs and challenges.

Subtask 2.1: Existing Conditions Survey
This sub-task includes the data collection and field survey for the Project corridor to capture existing signal and transit operations.

The consultant shall coordinate with City to collect the following data necessary to thoroughly understand existing traffic conditions for the Project corridor and be able to develop transit supportive timing, as applicable.

1. Existing timing charts/sheets that include current coordination plans, traffic as-built drawings, aerial photos, maps, traffic collision data as available, and special intersection signal operations.

Consultant shall also collect any as-built or related construction plans impacting signal operations relevant to this Project.

2. Signal timing and signal priority preferences, including, but not limited to, those related to pedestrian and bicycle timing, phase sequence modifications and preferences, and special operations such as conditional service, coordination preferred phase re- service, and ring-barrier logic, as well as the timing optimization software preference.

3. Historically counts, including average daily traffic (ADT) and turning movement counts (vehicle, bicycle, and/or pedestrian), along the project corridor for weekday and weekend periods City Council 17 – 19 6/3/2025

CITY OF SANTA ANA
7 OCTA Existing System: The consultant shall coordinate with OCTA to survey and evaluate all existing transit equipment and operations that would be relevant to a cloud based TSP implementation. This coordination should include cybersecurity discussions with the OCTA Information Services team to ensure the proposed solution is viable within the existing environment. The consultant shall also coordinate with the OCTA Transit Planning and Bus Operations staff to collect bus operations, such as ridership, dwell time, and on-time performance for bus lines 66 along the project corridor.

Field Survey: The consultant shall review the geometric layout, transit bus stop locations, at-grade rail crossings, verify and/or inventory existing traffic signal control and intelligent transportation systems (ITS) equipment, and identify any operational deficiencies for each intersection or road segment along the project corridor. The review shall include an assessment of the existing intersection lane geometry, traffic conditions, and traffic signal or ITS/telemetry control equipment along the corridor and at each intersection. Techniques utilized shall include but not be limited to visual inspection, available as-built plans, agency consultation, and agency provided aerial photos. Consultant will inspect and inventory the interior of each traffic controller assembly and ITS telematics cabinets, identify and report deficiencies to the City operations staff, and make recommendations for equipment upgrades that would make significant impacts to signal and/or transit operations.

Consultant shall investigate and document factors that are expected to affect signal and transit progression including, but not limited to: intersections with high pedestrian or bicyclist volumes; oversaturated intersections; uneven lane distribution; high volumes of trucks and buses; high-volume unsignalized intersections, including interchanges; parking maneuvers; presence and location of bus stops; differing signal timing patterns among local agencies; etc.

Existing Conditions Survey Memorandum: Following the collection of all data and field surveys, the consultant shall prepare a memorandum summarizing the corridor’s existing condition. The consultant shall also include an identification of all planned and programmed improvements (bike lane projects, intersection improvements, traffic signal improvements, transit improvements, etc.) on the project corridor. The identification of these projects shall at least include a list, summarizing all improvements.

A photo document of each cabinet visited should be included in the Existing Conditions Survey Memorandum. The Existing Conditions Survey Memorandum shall also include a figure summarizing the existing corridor network’s ITS and TSP elements. This figure should provide enough information as a standalone image to use for meetings and discussions with corridor agencies and other Project stakeholders.

Subtask 2.2: Project Benefit Analysis
This sub-task will build off the Existing Analysis and Assessment and generate existing metrics to measure Project effectiveness. The existing travel and safety conditions will be fully baselined and evaluated using high-resolution vehicle probe, high-resolution origin-destination (O-D), and stakeholder datasets.

Performance Metric Data Collection: The consultant shall pull data from the traffic signal controllers, OCTA Swiftly platform (e.g. On-Time Performance, Speed Maps, Run Times), on-board bus videos, and/or consultant proposed high-resolution probe (vehicle speed and O-D) to measure the project corridor’s baseline performance. The consultant shall coordinate with project stakeholders to identify key performance indicators that will baseline the existing travel and safety conditions along the project corridor and surrounding area, which may include, but is not limited to:
x Average Travel Time, Delay, and Speeds
x Bottlenecks in vehicular traffic
City Council 17 – 20 6/3/2025

CITY OF SANTA ANA
8 x Delay in bus speeds that can be related to travel time (traffic delay), dwell time (boarding/alighting), signal delay, or turnout delay (waiting to re-enter traffic from a bus turnout) All data collected shall be accessible by City of Santa Ana and OCTA.

Project Benefit Memorandum: The Consultant shall prepare a memorandum summarizing all datasets, methodology, and provide a comprehensive picture of the corridor and surrounding area. A graphical summary of the metrics to use at meetings and stakeholder discussions shall also be prepared. The consultant shall also identify additional metrics that could be available once the new detection and TSP solutions are implemented.

Task 2 – Deliverables (One hard copy and an electronic version of each):
- Existing Conditions Survey Memorandum
- Project Benefit Memorandum
III. Task 3: Conceptual Planning
The City of Santa Ana in coordination with OCTA developed a Cooperative Transit Study with recommended transit solutions to augment active transportation improvements under construction on the McFadden Avenue corridor, Attachment A. This task will develop an implementation plan that pulls from the City/OCTA Cooperative Transit Study recommendations, City's current status on the McFadden Bicycle Boulevard construction project, current corridor conditions, and stakeholder input.

Consultant shall develop a conceptual plan for implementation of a cloud-based TSP solution and identify methods that improve speed and reliability of transit operations without major impacts to regular traffic flow.

Subtask 3.1: Transit Signal Priority Concept Development The consultant shall present to and receive consensus from City of Santa Ana and OCTA on the approach for enhancing transit signal priority on the corridor. This proposed strategy shall implement cloud based TSP along the stretch of McFadden Avenue that encompasses the OCTA bus lines 66. The approach will include key stakeholder input and shall consider institutional constraints on reasonability. Additionally, the TSP concept will include impact avoidance and minimization strategies as well as benefits and risks among disadvantaged communities and geographical areas along the corridor.

Subtask 3.2: Evaluation and Assessment of Transit Signal Priority Systems The consultant shall evaluate and assess a minimum of (3) three cloud based TSP system and provide recommendations to City and OCTA. The evaluation should include a minimum:
x Functionality of TSP system with signal controllers and ATMS in City of Santa Ana. x Functionality of TSP system with multiple signal controller and/or ATMS vendors, including but not limited to Econolite, Swarco, and Yunex.
x Functionality of TSP system with Swiftly or OCTA’s CAD/AVL for bus location data. x Reporting and Performance Monitoring capabilities.
x TSP System Dashboard ease of use
x System Scalability
x Cost of Licensing and Support
x Communication drops that may impact bus locations on a corridor. x Firewalls and cybersecurity requirements.

City Council 17 – 21 6/3/2025

CITY OF SANTA ANA
9 The final recommended TSP solution along with the necessary equipment (e.g. server in the City’s TMC) and/or configuration needs on the corridor shall be summarizes shortly after the field surveys to minimize delays due to internal agency coordination, especially with the IT staff. The consultant’s recommendation shall be based on the City’s existing upgrade plans along McFadden Ave, as it will upgrade the detection and signal traffic controllers. The recommended TSP software to be procured and implemented as part of Task 4 and 5.

Subtask 3.3: Transit Signal Priority Draft Plan Cost Estimates The consultant shall prepare detailed cost estimate for implementing the proposed TSP. The cost estimates shall include software licensing fees, software support and maintenance cost, hardware, integration, implementation, and any other additional resources costs.

Subtask 3.4: Risk Register
The consultant shall develop a risk register that identifies potential risks associated with implementing the proposed TSP enhancements and strategies for mitigating these risks.

Subtask 3.5: Develop an Implementation Plan
Upon stakeholders’ approval of the conceptual plan, the consultant will develop a detailed Implementation Plan Report for enhancing TSP and improving bus speeds and reliability on the McFadden Avenue Corridor.

Subtask 3.6: Maintenance Plan
Develop a strategy to maintain the project including TSP, detection, and other ITS improvements.

Task 3 – Deliverables (One hard copy and an electronic version of each):
- Transit Signal Priority Conceptual Plan Memorandum
- Project Cost Estimates Memorandum
- Master Project Risk Register
- Implementation Plan Report
- Maintenance Plan Memorandum
IV. Task 4: Procure TSP System and Hardware
Orange County does not currently have TSP implemented; however, OCTA in coordination with Orange County agencies will soon be piloting a TSP system along Harbor Boulevard. Implementation results from the Harbor Boulevard TSP Pilot as still unknown and may not be available in time to be used in this project.

Nonetheless, OCTA and City of Santa Ana have made investments in the existing signal infrastructure and buses that can be leveraged to implement a solution with minimal to no additional construction required in the field. This sub-task will include the procurement of an innovative cloud based TSP solution.

The consultant shall furnish the TSP system per the assessment and recommendations in Task 3 and per the system requirements described in this section. This shall include any additional 3rd party software, operating systems, applications, hardware, and any other utilities necessary for the operation of the TSP system. While the TSP system concept and specific requirements are detailed in in Task 3, the following provides a narrative of the minimum TSP system to be provided along with its features and functionality.

Subtask 4.1: TSP System Overview
City Council 17 – 22 6/3/2025

CITY OF SANTA ANA
10 The TSP system shall be cloud-based and hosted online by the system vendor platform. The consultant is responsible for the TSP system on the cloud-hosted platform and is responsible for interfacing with Swiftly or OCTA’s CAD/AVL and traffic signal system. Other than the items noted in the general work overview that is the responsibility of by City of Santa Ana or OCTA, all items needed to support the TSP system will be the responsibility of the consultant.

The TSP system shall include functionality to monitor the system and associated equipment, system management and configuration functions, data storage and management, and troubleshooting capabilities from a central location. The system shall provide the functionality to interface with the system from a central location or from the field for maintenance and testing purposes.

The TSP system shall interface with Swiftly or OCTA’s CAD/AVL over a secure network connection if the interface is with the central CAD/AVL system. The TSP system shall interface with the traffic signal controllers over a secure network connection at City’s TMC. The TSP system shall provide end-to-end network security and security monitoring functionality. The TSP system shall comply with all network security requirements by City of Santa Ana and OCTA.

Subtask 4.2: TSP Cloud Functionality
The core functionality of the TSP system is expected to reside in the cloud-hosted application platform.

This section outlines the key functions that are expected to be part of the cloud-hosted application. At a minimum, TSP system shall be able to:

1. Monitor TSP Transit Vehicles and Traffic Signals – The TSP system is expected to maintain a continuously updated status of all active TSP-enabled transit vehicles and signals. It is envisioned that a map-based user interface showing real-time system activity could serve this function.

2. Priority Request Generation (PRG) – The TSP system is expected to function as the PRG.

As part of the PRG function, the system needs to be able to:

3. Priority Request Server (PRS) – The TSP system is expected to function as the PRS.

4. Manage and Archive Data – The TSP system is expected to collect, store, and disseminate system data for analysis and evaluation.

5. Maintain Reporting and Performance Monitoring System – The TSP system is expected to provide system reporting and performance monitoring information, preferably in a dashboard format as part of the user interface. Performance measures would include items such as:
transit vehicle travel time, transit travel time variability, overall TSP requests, TSP requests granted/rejected, TSP request status, traffic signal controller status, TSP action taken by the signal controller, and communications status (latency, uptime, response from controller, response from transit vehicle, etc.).

Subtask 4.3: Traffic Signal System
The TSP system is expected to send transit signal priority request messages to, and retrieve priority request status messages from, the traffic signal controller at the project signals in the City of Santa Ana using NTCIP communications protocols. The controller functionality in response to the priority request messages will be the responsibility of City. The TSP system shall utilize City’s Econolite 2070 ASC3 or Econolite Cobalt EOS controllers for this purpose.

City Council 17 – 23 6/3/2025

CITY OF SANTA ANA
11 The System Vendor shall clearly state and detail out the proposed method in which the proposed TSP system will send priority request messages to and obtain priority request status messages from the traffic signal controller. The consultant shall be responsible for coordination and all integration work with signal system manufacturer (Econolite), to achieve end-to-end functionality of the TSP system.

Subtask 4.4: Detailed Design Documentation
The consultant shall submit detailed design documentation for approval by City. The detailed design documents will identify all system components, including any equipment, and provide a narrative description of the function and architecture of the major systems and subsystems proposed by the vendor. The documentation should provide system block diagrams identifying all interfaces between system components, including external systems, that would need to interface with the TSP system. The detailed design documents must include design plans for all hardware installations. The detailed design documents should also include interface control documents and communication specifications, for all internal and external system interfaces, including those between different software and hardware systems within the transit on-board or central CAD/AVL, city communication systems, and traffic signal controllers.

As part of the detail design documentation, the consultant shall provide criteria for Factory Acceptance Testing (FAT) for any hardware needed to be procured for the project.

Hardware and software purchases shall not be conducted prior to the approval of the detailed design documentation. For any and all hardware supplied by the consultant, the consultant shall provide City of Santa Ana with hardware submittals for review and approval. The consultant shall provide copy of the FAT results for approval prior to delivery of the hardware. It shall be the consultant responsibility to provide any ancillary equipment such as cables, mounting rails, etc. with the provided hardware.

Task 4 – Deliverables (One hard copy and an electronic version of each):
- Procure Transit Signal Priority System and Hardware
- Detailed Design Documentation
V. Task 5: Installation, Integration and Deployment
This task will focus on implementation and configuration and will leverage the Task 2 detailed surveys to implement TSP solutions. The consultant shall provide all labor, equipment, and ancillary items necessary to install, integrate, and deploy a fully operational TSP system.

Subtask 5.1: Implementation Plan
An Implementation Plan shall be prepared for review and approval by City of Santa Ana Project Manager prior to the start of any installation work. The plan shall describe all aspects of hardware and software installation. This includes facility and vehicle surveys, communications testing, site preparation, pre-wiring requirements, equipment and vehicle staging, production installation and sequencing, quality assurance and control, and scheduling. The Plan will also describe installation and configuration of all software systems, including the back-office applications, interfaces and web applications, and their respective schedules.

The Plan will describe the power and communication requirements for each piece of equipment and at each installation location. The communication requirements will include a description of any networking equipment necessary to connect the system devices to agency network.

The implementation Plan shall also include criteria for pilot test acceptance which will test various City Council 17 – 24 6/3/2025

CITY OF SANTA ANA
12 attributes of the system in real-time setting, including but not limited to, accurate bus arrival time prediction, communication latency and confirmation of two-way communication. The vendor shall detail the capabilities that would be tested for the pilot deployment and prepare a test plan for the pilot deployment. In addition, the Implementation Plan shall include procedure for final testing acceptance, which would include a requirement that the system is operational 99% of the time for 90-day period.

Subtask 5.2: Transit System Integration
It is expected that consultant will utilize Swiftly or OCTA’s existing CAD/AVL system for the purpose of obtaining transit vehicle location, tracking, and status information. It is also understood that various TSP systems may have different approaches for how this is accomplished.

The consultant is ultimately responsible for end-to-end functionality of the complete TSP system, and all work and coordination required with City of Santa Ana devices necessary to fully develop and integrate the TSP system with OCTA’s CAD/AVL system will be the responsibility of the consultant.

Subtask 5.3: Central CAD/AVL Integration
If the proposed solution includes integration with OCTA’s existing CAD central management system, the consultant shall be responsible for upgrading the central CAD/AVL polling rate of all fleet vehicles to an optimal system frequency as approved by OCTA. It is expected that the consultant will need to coordinate with OCTA devices to determine what modification, if any, are needed to the existing system to support the new faster polling rate. If any modifications are identified to be required, it will be the consultants responsibility to perform the work to achieve the faster polling rate including furnishing, installing and configuring updated servers, expanding server storage capacity, updating operating systems, etc.

The consultant shall integrate its TSP cloud application platform with OCTA’s central CAD/AVL system to obtain transit vehicle location and status information. This includes establishing a secured internet connection to the CAD/AVL central server and coordination with OCTA IT staff to establish such connection.

Subtask 5.4: Traffic Signal Controller Integration
The City of Santa Ana utilizes Econolite Centracs ATMS for traffic signal management and operations.

All traffic signal controllers operating at the intersections are Econolite 2070’s with ASC/3 firmware or Econolite Cobalt with ASC/3 firmware. All traffic signals communicate back to the City’s TMC over an ethernet connection. All traffic signals communicate back to the City’s central office over a combination of fiber optic and twisted pair copper, with those on copper are in the process of being upgraded to fiber optic communications.

It is expected that the consultant will utilize the City’s existing Ethernet-based traffic communications network for the purpose of sending and receiving priority request messages and priority request status messages, respectively, directly to the traffic signal controllers.

The consultant is ultimately responsible for end-to-end functionality of the complete TSP system, and all work and coordination required with Econolite necessary to fully develop and integrate the TSP system with City’s traffic signals will be the responsibility of the consultant. All integration work with Econolite and the method of integration shall be identified by the consultant in the response to this RFP.

The consultant shall integrate its TSP cloud application platform with City’s traffic signal controllers to send priority request messages and receive priority request status messages. This includes establishing a secured internet connection to each City’s TMC/central office and coordination with City Council 17 – 25 6/3/2025

CITY OF SANTA ANA
13 each city’s IT staff to establish such connection in conformance to each agency’s IT policies. If needed, the consultant may elect to furnish and install a communications server at TMC/central office to facilitate communications between its TSP cloud application platform and the traffic signal controllers.

Subtask 5.5: System Configuration and Deployment
The consultant shall set up and configure the TSP system including entering all system and configuration parameters. This includes integrating the 19 signalized intersections and one bus route under this project into the TSP cloud application platform.

The consultant shall configure initial settings such as conditional parameter and other operating parameters. Values for conditional parameters shall be approved by City of Santa Ana. The consultant shall develop TSP signal timing parameters for each intersection traffic signal controller. These include controller parameters for defining the transit phase, values for early green and green extension, maximum priority call time, minimum time between consecutive priority requests, etc. The TSP signal timing parameters will be submitted to City for their review and approval. Upon approval, the consultant shall coordinate with City to implement the approved timing parameters into each controller.

The consultant will also be responsible for any timing modifications necessary for the operation of the TSP. Timing modifications shall include, but is not limited to basic timing, coordination timing, and transit parameters available in the City’s system. Close coordination with City staff will be necessary to ensure modifications are made per City standards and preference.

Subtask 5.6: Pilot Deployment Testing
The consultat shall activate and deploy the TSP system at two intersections initially to assess issues related to latency, communications with buses or CAD/AVL, etc. Consultant shall submit test results for every test completed as included in the approved pilot test plan. The consultant shall note any exceptions to a test such as test conditions, corrective actions, or re-testing. The pilot deployment testing phase is not complete until the test report is approved by City of Santa Ana.

Subtask 5.7: Full System Configuration and Deployment
Following acceptance of Pilot Deployment Testing, the consultant shall then activate and deploy the TSP system at all intersections for field operation and fine-tune all system settings, configuration parameters, and controller timing parameters to satisfy the system requirements.

Transit Signal Priority Implementation Technical Memorandum: The consultant shall prepare a memorandum detailing the TSP solution, including the logic for implementing the recommended solution and timing and how it can be scaled to other corridors and citywide. The memorandum shall also include any challenges regarding the procurement, configuration, and implementation that can be addressed for future implementations. The consultant shall share the draft of this memorandum with all stakeholders to provide their input for additional consideration outside of the prototype area.

Task 5 – Deliverables (One hard copy and an electronic version of each):
- Implementation Plan Memorandum
- Pilot TSP Deployment
- Full System Deployment
- Summary of System Configurations
City Council 17 – 26 6/3/2025

CITY OF SANTA ANA
14 VI. Task 6: Project Evaluation and Assessment
Subtask 6.1: Technology Evaluation and Assessment
This sub-task will continue to monitor, evaluate, assess, and modify the solutions to ensure it meets the expectations and proof of technology of the project.

Proof of Technology: Immediately following the implementation of the project solutions and for a minimum period of three (3) months, the consultant shall evaluate and assess the solutions based on the metrics identified in Sub-Task 2.2. During this period, the consultant shall make the necessary adjustments to equipment configuration, timing, and technology based on field visits, agency comments, and the system reporting.

Technology Evaluation and Assessment Technical Memorandum: The consultant shall prepare a memorandum summarizing the proof of technology evaluation and assessment completed as part of this sub-task. This memorandum shall include the consultant’s recommendation for fine tuning the system, including any infrastructure improvements to achieve the performance desired by each stakeholder in their jurisdiction.

Subtask 6.2: Performance Measure Comparison
Concurrently with and following Sub-Task 6.1, the consultant shall collect the same performance metrics determined in Sub-Task 2.2. City of Santa Ana reserves the right to validate the performance data’s accuracy. Should City determine that the data is not meeting the minimum requirements for data accuracy, City will require the consultant to determine how long and how much of the data is inaccurate and provide a written plan of how the consultant plans to remedy the data inaccuracy.

The consultant shall prepare a Performance Measure Comparison Memorandum to summarize all qualitative and quantitative improvements identified.

Task 6 – Deliverables (One hard copy and an electronic version of each):
- Technology Evaluation and Assessment Technical Memorandum - Performance Measure Comparison Memorandum
VII. Attachments
A. Attachment A – Santa Ana Cooperative Transit Study
City Council 17 – 27 6/3/2025

CITY OF SANTA ANA
15 Project Schedule and Milestones
Task Starting Date Ending Date
Kickoff Meeting & Notice To Proceed May 2025 May 2025
Existing Analysis and Assessment May 2025 July 2025
Conceptual Planning June 2025 August 2025
Procure and Install TSP System September 2025 December 2025 Technology Evaluation and Assessment January 2026 February 2026 City Council 17 – 28 6/3/2025

EXHIBIT B
City Council 17 – 29 6/3/2025
City of Santa Ana
RFP No. 24-122: McFadden Avenue
Transit Signal Priority Pilot
Cost Proposal | March 19, 2025
City Council 17 – 30 6/3/2025
Arcadis U.S., Inc.
18401 Von Karman Avenue
Suite 300
Irvine, CA 92612
www.arcadis.com
March 19, 2025
ATTN: Cesar Rodriguez, PE, TE | Senior Civil Engineer
City of Santa Ana, Public Works Agency
20 Civic Center Plaza | Santa Ana, CA 927018
SUBJECT: COST PROPOSAL FOR MCFADDEN AVENUE TRANSIT SIGNAL PRIORITY PILOT (RFP NO. 24-122) Dear Mr. Rodriguez:
%VGEHMW97-RGMWTPIEWIHXSWYFQMXXLIIRGPSWIHGSWXTVSTSWEPXSTVSZMHIXVEJɚGERHMRXIPPMKIRXXVERWTSVXEXMSR systems engineering services for the McFadden Avenue Transit Signal Priority Pilot Project.

This proposal is submitted contingent upon the successful negotiation and execution of a mutually agreeable contract between Arcadis and the City of Santa Ana.

Thank you for the opportunity to present our proposal. We look forward to collaborating with the City on this important project. Should you have any questions, please do not hesitate to contact me directly at (562) 221-2118 or via email at [email protected], or reach out to Paul Frislie, our designated Project Manager, at (562) 234-5286 or via email at [email protected].

Sincerely,
Ramin Massoumi, PE | Global Director – Intelligent Mobility Services | Arcadis U.S., Inc. 18401 Von Karman Avenue, Suite 300, Irvine, CA 92612
Tel. 562.221.2118 | [email protected]
Sincerely,
City Council 17 – 31 6/3/2025

CITY OF SANTA ANA
Certification - I certify that I have read, understand and agree to the terms and conditions of this Request for Proposals. I have examined the Scope of Services (Exhibit I) and am qualified to provide services being requested as specified herein. I understand and agree that I am responsible for reporting any errors, omissions or discrepancies to the City for clarification prior to the submission of my proposal.

PROPOSER’S STATEMENT: I have read, understood and agree to the terms and conditions on all pages of the Request for Proposals. Upon request, I will transfer and deliver goods or services to the City in accordance with said terms and conditions.

Project Tasks Total Cost
Task 1: Project Management $95,465.89
Task 2: Existing Analysis and Assessment $49,044.63
Task 3: Conceptual Planning $127,312.78
Task 4.1-4.3: Procure TSP System and Hardware Not to Exceed $0,000
Task 4.4: Detailed Design Documentation $54,209.56
Task 5: Installation, Integration and Deployment $121,334.44 Task 6: Project Evaluation and Assessment $60,134.43
Total Project Cost: $07,501.7
__________________________________________________________________________________

LEGAL NAME OF COMPANY PHONE AND FAX NUMBERS
__________________________________________________________________________________

BUSINESS ADDRESS
__________________________________________________________________________________

PRINTED NAME OF AUTHORIZED AGENT TITLE
__________________________________________________________________________________

SIGNATURE OF AUTHORIZED AGENT DATE E-MAIL ADDRESS
__________________________________________________________________________________

CITY OF SANTA ANA BUSINESS LICENSE NUMBER
(PLEASE PROVIDE IF AVAILABLE, BUT NOT REQUIRED UNTIL AND IF AN AWARD IS MADE TO PROPOSER.)

EXHIBIT C
PROPOSER’S CERTIFICATION, PROPOSAL PRICING
Arcadis U.S., Inc. Tel. 562.221.2118 | Fax: N/A
18401 Von Karman Avenue, Suite 300, Irvine, CA 92612
Ramin Massoumi, PE Global Director – Intelligent Mobility Services March 19, 2025 [email protected]
164909
_________________________

PRINTED NAME OFAUTHOR
_________________________

SIGNATURE OF AUTHORIZE
Ramin Massoumi, PE
City Council 17 – 32 6/3/2025
Finance and Management Services
www.santa-ana.org/finance
Item # 18
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 3, 2025
TOPIC: Annual Statement of Investment Policy

AGENDA TITLE
Resolution Approving the City’s Annual Statement of Investment Policy 2025-2026; Annual Statement of Investment Policy 2025-2026

RECOMMENDED ACTION

1. Adopt a Resolution approving the City’s 2025-2026 Investment Policy.

RESOLUTION NO. 2025-XXX entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE CITY’S STATEMENT OF INVESTMENT POLICY 2025-2026

2. Receive and file the Annual Statement of Investment Policy 2025-2026.

GOVERNMENT CODE §84308 APPLIES: No

DISCUSSION
In accordance with State law, the Finance and Management Services Agency annually submits a resolution approving the City’s Investment Policy (Exhibit 1) and the Annual Statement of Investment (Exhibit 2).

The investment policy outlines the following primary goals:
• To assure compliance with all Federal, State, and local laws governing the investment of monies;
• To provide for the safety of principal;
• To provide for the maintenance of sufficient liquidity; and • To provide an investment return within the parameters of the Statement of Investment Policy and Investment Portfolio guidelines.

The investment policy applies to all financial assets of the City with the exception of individual employee retirement contribution funds and deferred compensation, which are specifically excluded. Bond Proceeds are restricted and are invested in compliance with this investment policy following the specific requirements of their applicable bond resolutions. Finance investment staff continuously evaluates the City’s policy with City Council 18 – 1 6/3/2025
Annual Statement of Investment Policy
June 3, 2025

regards to industry standards and best practices to determine if any newly adopted state rules or regulations are required to be incorporated within the document or if any industry enhancements are recommended. The City’s investment advisor also reviewed the policy and did not recommend any changes at this time. As a result, no updates to the Investment Policy are recommended for FY 2025–26. The current investment policy was previously submitted to the California Municipal Treasurers Association (CMTA) for review and to receive re-certification. CMTA re-certification was received May 31, 2022.

The submission for re-certification should be considered only every 3 – 5 years.

Per the Local Agency Investment Guidelines published yearly by the California Debt and Investment Advisory Commission (CDIAC), there are no federal and regulatory changes made for 2025. As such, the proposed 2025–26 Investment Policy remains unchanged from the prior year.

Staff recommends that City Council adopt a Resolution approving the City’s 2025-26 Investment Policy.

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. Resolution

2. Annual Statement of Investment Policy
Submitted By: Alex Trinidad, Acting Executive Director, Finance and Management Services Agency
Approved By: Alvaro Nuñez, City Manager
City Council 18 – 2 6/3/2025
Resolution No. 2025-XX

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA ANA APPROVING THE CITY’S
STATEMENT OF INVESTMENT POLICY 2025-2026

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF SANTA ANA AS FOLLOWS:

Section 1. The City Council of Santa Ana hereby finds, determines and declares as follows:

A. California Government Code §53646, provides that each city may have a written statement of investment policy to govern investment of the City’s monies.

B. Pursuant to §53646, the City Treasurer shall annually submit a Statement of Investment Policy for City Council consideration.

C. The City Treasurer has submitted the attached Statement of Investment Policy to this Council at its regular meeting of June 3, 2025, for its consideration.

Section 2. The City Council of the City of Santa Ana has duly considered and approves the City’s Statement of Investment Policy submitted by the City Treasurer.

Section 3. The City Treasurer shall submit quarterly reports to the City Council stating all investments made in the preceding quarter and that such investments have been made in conformance with the City’s investment policy.

Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall attest to and certify the vote adopting this Resolution.

ADOPTED this _____day of __________, 2025.
_____________________
Valerie Amezcua
Mayor
EXHIBIT 1
City Council 18 – 3 6/3/2025
Resolution No. 2025-XX

APPROVED AS TO FORM:

Sonia Carvalho, City Attorney
By:________________________
Andrea Garcia-Miller
Assistant City Attorney
AYES: Councilmembers: __________________________
NOES: Councilmembers: __________________________
ABSTAIN: Councilmembers: __________________________
NOT PRESENT: Councilmembers: __________________________

CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, JENNIFER L. HALL, City Clerk, do hereby attest to and certify the attached Resolution No. ___________ to be the original resolution adopted by the City Council of the City of Santa Ana on ________________, 2025.

Date: ____________________ ________________________________ Jennifer L. Hall, City Clerk
City of Santa Ana
City Council 18 – 4 6/3/2025
City of Santa Ana
EXHIBIT 2
JUNE 03, 2025

INVESTMENT POLICY
STATEMENT 2025-26
City Council 18 – 5 6/3/2025

TABLE OF CONTENTS
Page
Introduction.................................................................................................................................1

1.0 Policy ...............................................................................................................................1

2.0 Scope...............................................................................................................................1

3.0 Prudence..........................................................................................................................2

4.0 Objectives ........................................................................................................................3

5.0 Delegation of Authority .....................................................................................................6

6.0 Ethics and Conflicts of Interest .........................................................................................7

7.0 Authorized Financial Institutions and Qualified Broker-Dealers............................................8

8.0 Authorized and Suitable Investments ..............................................................................8

9.0 Prohibited Investments and Investment Practices...........................................................13

10.0 Investment Pools/Mutual Funds......................................................................................14

11.0 Collateralization/Security for Deposit of Public Funds......................................................15

12.0 Safekeeping and Custody...............................................................................................15

13.0 Diversification.................................................................................................................16

14.0 Internal Controls.............................................................................................................16

15.0 Reporting........................................................................................................................17

16.0 Policy Considerations .....................................................................................................18

17.0 Policy Review, Certification, and Adoption ......................................................................19 ...........................................................................................................................................

City Council 18 – 6 6/3/2025
July 1, 2025 -
June 30, 2026
City of Santa - Annual
Statement of Investment Policy Page 1

CITY OF SANTA ANA

ANNUAL STATEMENT OF INVESTMENT POLICY
JULY 1, 2025 – JUNE 30, 2026
INTRODUCTION: The purpose of this Statement of Investment Policy is intended to provide specific criteria for the prudent investment of City of Santa Ana (City) funds and to set investment objectives, policies, establish guidelines, and define responsibilities for the investment of idle or unexpended funds for the City. The ultimate investment goal is to enhance the economic status of the City while protecting funds under management and meeting the daily cash flow demands of the City.

1.0 POLICY
The policy of the City of Santa Ana is to invest idle or unexpended funds within the scope of this investment policy in a prudent and suitable manner that will provide, within the parameters of this investment policy, the highest reasonable investment return relative to the risk being assumed while maintaining maximum security and meeting all cash flow demands. This policy is intended to comply with Federal law and the Code of California for investment of public funds. In instances in which this policy is more restrictive than Federal or State law, this policy shall be controlling.

This policy is fixed and general in nature; it defines authorized investments and guides the investment decisions and security selection process. The City’s Investment Policy will be regularly reviewed and adjusted to create an investment portfolio that is suitable for the City given current conditions.

2.0 SCOPE

2.1 Applicability of Investment Policy
This investment policy applies to all funds and investment transactions of the City.

These funds are accounted for in the Annual Comprehensive Financial Report (ACFR), which includes the following:
• General Fund
• Special Revenue Funds
• Capital Projects Funds (includes restricted bond proceeds) • Enterprise Funds (includes restricted bond proceeds)
• Trust and Agency Funds
• Internal Service Funds
• Any new fund created by the City of Santa Ana, unless specifically exempted
City Council 18 – 7 6/3/2025
July 1, 2025 -
June 30, 2026
City of Santa - Annual
Statement of Investment Policy Page 2
The restricted bond proceeds are invested in compliance with this investment policy and applicable bond resolutions. Individual employee retirement contribution funds and deferred compensation are excluded from this policy.

2.2 Pooling of Funds
Except for cash in certain restricted and special funds, the City of Santa Ana will consolidate cash balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping and administration. Investment income will be allocated to the various funds based on their respective participation and in accordance with generally accepted accounting principles.

3.0 PRUDENCE

3.1 Standard of Care – Prudent Investor
The City investment program shall be managed in a professional and prudent manner worthy of the public trust and review. The standard of prudence to be used by City Investment Officials shall be the "prudent investor rule" standard and shall be applied in the context of managing the overall investment portfolio.

The “prudent investor rule” provides, pursuant to California Government Code Section 53600.3, that investments shall be made with judgment and care. When investing, reinvesting or managing public funds a trustee shall act with care, skill, prudence and diligence under circumstances then prevailing. Investment officers acting in accordance with written procedures and this investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from exceptions are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this policy.

The City is governed by the California Government Code, Sections 16429.1 and Title 5, Division 2, Part 1, Chapter 4, entitled Financial Affairs, commencing with section 53630.

Each investment transaction and the entire portfolio must comply with California Government Code, Sections 53600 and 53635 et seq. and this policy.

3.2 Written Investment Procedures
City Investment Officials shall establish written procedures consistent with this investment policy for the operation of the investment program. Procedures should include but not be limited to: authorized personnel, segregation of duties, internal controls, wire transfer agreements, daily cash flow review, basis for awarding bids, portfolio inventory, and reporting. The procedures document is intended to provide guidance for staff and to provide continuity in the event of an interruption of services of the Treasury and Customer Services Manager and/or Assistant Finance Director.

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4.0 OBJECTIVES
The primary objectives, in priority order, for the City of Santa Ana’s investment activities shall be Safety, Liquidity, and Yield:

4.1 Safety of Principal
Safety of principal is the foremost objective of the City of Santa Ana, care must be taken to ensure the preservation of capital and the protection of principal.

Each investment transaction shall be undertaken in a manner that seeks to ensure preservation of capital in the overall portfolio. The objective will be to mitigate credit risk and interest rate risk by following guideline listed below.

A. Credit Risk
Credit Risk is the risk of loss due to the failure of the security issuer or backer to redeem the outstanding debt at the stated maturity date. Credit risk also applies to the overall market perception of the financial strength and capacity of the issuer. The City of Santa Ana will minimize credit risk by:
i. Limiting investments to authorized investments as set forth in Section 10.0 of this investment policy;
ii. Pre-qualifying the financial institutions, broker-dealers, intermediaries, and advisors with which the City will do business; iii. Diversifying the investment portfolio so that potential losses on individual securities will be minimized.
iv. Holding a minimum percentage of the total portfolio in highly marketable short-term treasuries, checking with interest, government pooled account, or a combination of all three. The minimum percentage shall be set monthly by the FMSA Investment Advisory Committee based on a rolling twenty-four month analysis of the City’s minimum cash position requirements adjusted for any exceptional anticipated cash out flows.

B. Market or Interest Rate Risk
Market or interest rate risk is the risk that the market value of securities in the portfolio may fall due to changes in general interest rates. The City of Santa Ana will minimize interest market interest rates, by:
i. Structuring the investment portfolio so that securities mature to meet cash requirements for ongoing operations, thereby avoiding the need to sell securities on the open market prior to maturity, and
ii. Purchasing investments with the intent to hold until maturity; and
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iii. By investing operating funds primarily in shorter-term securities, money market mutual funds, or similar investment pools and limiting the average maturity of the portfolio to 3 years using the securities’ stated final maturities.

4.2 Liquidity
The investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that securities mature concurrent with cash needs to meet anticipated demands (static liquidity). Furthermore, since all possible cash demands cannot be anticipated, the portfolio should consist largely of securities with active secondary or resale markets (dynamic liquidity). The City’s cash flow shall be updated on a daily basis and will be considered prior to the investment of securities, which will reduce the necessity to sell investments for liquidity purposes.

4.3. Yield (Return on Investment)
The City's investment portfolio shall be designed with the objective of attaining a market-average rate of return throughout budgetary and economic cycles taking into account the investment risk constraints and liquidity needs. The return on investments is to be accorded secondary importance compared to the safety and liquidity objectives described above. The core of investments will focus on relatively low risk securities with an expectation of earning a reasonable return relative to the risk being assumed. It is the general policy of the City to hold investments until market value equals or exceeds amortized cost or book value of the security. Securities shall not be sold prior to maturity with the following exceptions:

A. a declining credit security could be sold early to minimize loss of principal;
B. a simultaneous purchase of a security and the sale of another (security swap) to enhance the quality, yield, or target duration in the portfolio; or
C. a sale of a specific security prior to its maturity and a capital gain or loss recorded in order to improve the credit quality, liquidity, or rate of return of the portfolio in response to market conditions and/or City risk preferences;
D. general liquidity needs of the investment portfolio require that a security be sold;
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E. Pre-payment of City debt or contribution servicing obligation. In the event the City is presented with an option for prepayment of a City debt or contribution servicing obligation, the following analysis will be conducted by with regards to a comparison between the amortized savings, which may be realized by exercising such prepayment option and:
i. the current portfolio yield;
ii. the trend of the debt or contribution servicing obligation; iii. whether variances in the trend are substantial;
iv. the City’s net cash position; and
v. the market value of investment instrument(s) recommended by staff to be liquidated to fulfill a prepayment election.

When selling a security prior to maturity, City Investment Officials and/or officers (see generally subsection 5.1 et seq. - Investment Authority and Responsibility) must be prepared to justify the reasons and explain any gains or losses.

Compliance with the investment policy does not measure return, but rather manages risk. Policy compliance does not provide a benchmark to meet or exceed, but is a model to follow. The City will benchmark its investment to an agreed upon treasury index.

The City shall strive to maintain one hundred percent (100%) investment of idle funds after consideration for a compensating balance to cover the cost of services provided by the City’s depository bank. The funds available for investment are determined by cash flow projections updated daily.

Investments are monitored so that legal limits on types of investments are not exceeded.

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5.0 DELGATION OF AUTHORITY

5.1 Investment Authority and Responsibility
The authority for conducting investment transactions resides with the Executive Director of Finance and Management Services Agency (FMSA) as chief fiscal officer and ex officio City Treasurer. The Executive Director for (FMSA) under the general direction of the City Council, shall be responsible for all investment transactions undertaken and shall establish a system of controls to regulate the investment activities of subordinate officials.

5.2 Delegation of Authority
The Executive Director for FMSA or her/his designees (Investment Officials) shall invest all funds for the City in accordance with the City adopted investment policy.

The Executive Director for FMSA hereby delegates day-to-day responsibility for the investment of City funds to the FMSA Financial Analyst. Managerial and supervisory responsibility for the investment of City funds may be held by either the Assistant Director of Finance and Management Services (Assistant Director) or the Treasury and Customer Services Manager (Treasury Manager). Each designee shall act in accordance with the established policies and internal controls set forth in the investment policy.

5.3 The Executive Director may engage the services of external investment management advisors to assist in the management of the City’s investment portfolio in a manner consistent with the City’s objectives. Such advisors may be granted discretion to purchase and sell investment securities in accordance with the Policy. Such advisors must be registered with the Security and Exchange Commission, and possess experience in public funds investment management. Such engagement and/or delegation by the Executive Director shall not remove or diminish her/his investment responsibility.

5.4 Assignment of Activities
Supporting and ancillary activities, including but not limited to: cash flow analysis, municipal or corporate bond credit worthiness evaluation, investment risk assessment, portfolio analysis, purchase and sale recommendation, safekeeping, policy and investment procedures review recommendation, and monthly and quarterly reporting, may be assigned to qualified persons within Treasury or within the FMSA Accounting or Administrative Services divisions as deemed appropriate by either the Director and/or Assistant Finance Director.

5.5 Qualified Persons
Qualified Persons shall refer to: (1) persons holding either a California Municipal Treasurers Association, California Treasury Certificate and/or Certified California Municipal Treasurer Certificate; or an Association of Public Treasurers of the United States and Canada, Certified Public Finance Administrator Certificate, or a National Association of State Treasurers Certificate in Public Treasury Management; or (2) City Council 18 – 12 6/3/2025
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persons who are performing investment related duties under the guidance and direction of certificate holders. Working together, Investment Officials and Qualified Persons comprise the FMSA investment staff.

5.6 FMSA Investment Advisory Committee
To provide a regular departmental forum and consultive body for evaluating investment portfolio performance and strategy, internal procedures and controls, and for making recommendations to the Executive Director for FMSA in her/his capacity as chief fiscal officer and City Treasurer, a FMSA Investment Advisory Committee is established. All authorized Investment Officials are de facto standing members of the FMSA Investment Advisory Committee. At the discretion of the Executive Director for FMSA, other FMSA investment staff may be authorized membership on the committee. Meetings shall be held regularly on a basis determined by the Executive Director for FMSA. The FMSA Investment Advisory Committee’s evaluations and recommendations are subject to the approval of the Executive Director for FMSA, who services as committee chair.

6.0 ETHICS AND CONFLICTS OF INTEREST

6.1 Investment Officials and Officers
Investment Officials, officers, and employees involved in the investment process shall refrain from personal business activity that could conflict with the proper execution and management of the investment program, or that could impair their ability to make impartial decisions. Investment Officials, officers and employees shall disclose any material interests in financial institutions with which they conduct business. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Investment Officials, officers and employees shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of the City of Santa Ana.

6.2 Statement of Economic Interests
Investment Officials and officers authorized to approve investment decisions shall be required to submit an annual Statement of Economic Interests, also known as a Form 700 in accordance with California Government Code, Section 1090 et seq. The Form 700 provides transparency and ensures accountability in two ways:
1) It provides necessary information to the public about official’s and officer’s personal financial interests to ensure that officials and officers are making decisions in the best interest of the public and not enhancing their personal finances.
2) It serves as a reminder to the public official of potential conflicts of interest so the official or officer can abstain from making or participating in governmental decisions that are deemed conflicts of interest.

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7.0 AUTHORIZED FINANCIAL INSTITUTIONS AND QUALIFIED BROKER-DEALERS

7.1 If the City utilizes a SEC registered external investment advisor, the advisor shall maintain a list of authorized broker-dealers and complete the appropriate due diligence required by the SEC. The external investment advisor may use its own list of approved broker/dealers and financial institutions for investment purposes on behalf of the City.

The investment advisor shall submit the list of approved broker/dealers to the City’s FMSA investment staff on an annual basis. The Executive Finance Director may restrict the use of a broker/dealer which may be deemed unsuitable.

8.0 AUTHORIZED AND SUITABLE INVESTMENTS

8.1 Allowable Investment Instruments – State Law
California Government Code Section 53601 establishes allowable investment instruments applicable to all local agencies along with maximum maturities, maximum specified percentages of total portfolio, and minimum quality requirements.

Section 53601.1 authorizes local agencies to invest in financial futures or financial option contracts in any of the allowable investment categories enumerated in section 53601.

8.2 Authorized Investments
City of Santa Ana further restricts permitted investments to those listed below and where applicable, the Investment Advisory Committee may reduce maximum maturities, or maximum specified percentages of total portfolio (concentration limits), and may increase minimum quality requirements. Within this scope, the City diversifies its investments by types of investments, maturity dates, concentration limits, and quality requirements.

A. United States Treasury Bills, Notes, and Bonds, for which the full faith and credit of the United States are pledged for payment of principal and interest. Purchases of this category shall not exceed five years to maturity. There is no percentage limit in this category.

B. Obligations issued by a Federal Agency or a United States Government Sponsored Enterprise. Federal Agency Issues include, but are not limited to GNMA (Government National Mortgage Association), FFCB (Federal Farm Credit Bank), FHLB (Federal Home Loan Bank), FHLMC (Federal Home Loan Mortgage Corporation), FNMA (Federal National Mortgage Association), FHA (Federal Housing Administration), and TVA (Tennessee Valley Authority).

Although there is no percentage limitation on these issues, purchases of this category shall not exceed five years to maturity and the “prudent investor" rule shall apply for a single agency name as U.S. Government backing is implied rather than guaranteed.

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C. Supranational Obligations in United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase or sale within the United States. Investments under this subdivision shall be rated “AA” or better by an NRSRO and shall not exceed thirty (30%) percent of the cost value of the investment portfolio.

D. Bills of exchange or time drafts drawn on and accepted by a commercial bank, otherwise known as banker's acceptances, which are eligible for purchase by the Federal Reserve System. Purchases of banker's acceptances may not exceed one hundred eighty (180) days or forty percent (40%) of the cost value of the Fund which may be invested pursuant to this section. However, no more than thirty percent (30%) of the City's cost value of the investment portfolio may be invested in the banker’s acceptances of any one commercial bank pursuant to this section.

E. Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a Nationally Recognized Statistical Rating Organization (NRSRO). The entity that issues the commercial paper shall be organized and operating within the United States, as a general corporation, shall have total assets in excess of five-hundred, million dollars ($500,000,000), and has debt other than commercial paper, if any, that is rated "A" or higher by NRSRO. The entity is organized within the United States as a special purpose corporation, trust, or limited liability company; has program wide credit enhancements including, but not limited to: over-collateralization, letters of credit, or a surety bond; has commercial paper that is rated “A-1” or higher, or the equivalent, by an NRSRO Eligible commercial paper shall have a maximum maturity of two hundred seventy (270) days or less. The City may purchase no more than ten percent (10%) of the outstanding commercial paper of any single corporate issue. Purchases of commercial paper may not exceed twenty-five percent (25%) of the investment portfolio.

F. Repurchase Agreements. For purposes of this section, the term "repurchase agreement” means a purchase of securities by the local agency pursuant to an agreement by which the seller will repurchase the securities on or before a specified date and for a specified amount and will deliver the underlying securities to a third-party custodian. The City may invest in repurchase agreements with primary dealers of the Federal Reserve with which the City has entered into a Securities Industry and Financial Markets Association (SIFMA) Master Repurchase Agreement (MRA) which specifies terms and conditions of repurchase agreements. The market value of securities used as collateral for repurchase agreements shall not be allowed to fall below one hundred two percent (102%) of the value of the repurchase agreement and shall be adjusted no less than quarterly by the tri-party custodial agent. The investments in repurchase agreements shall be in compliance if the underlying securities are City Council 18 – 15 6/3/2025
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brought back up to one hundred two percent (102%) no later than the next business day. The underlying collateral shall be limited to United States Government Treasury Bills, Notes, and Bonds, or obligations issued by a Federal Agency or United States Government Sponsored Enterprises obligations. Upon the written approval of the Executive Director for FMSA, substituted securities may be pledged for collateral but shall consist only of investments permitted within this investment policy with a maximum maturity of five (5) years. If there is a default of the broker, the collateral securities can be sold. Since the securities are valued daily, it is likely that the sale proceeds will equal or exceed the value of the repurchase agreement amount. Purchases in this category shall not exceed one (1) year or twenty percent (20%) of the cost value of the investment portfolio. Retail repurchase agreements and reverse agreements shall not be authorized for purchase.

G. Negotiable certificates of deposit issued by a nationally or state-chartered bank, a savings association or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union or by a state-licensed branch of a foreign bank. However, the City shall not invest in negotiable certificates of deposit issued by a state or federal credit union if a member of the City Council or any City personnel with investment decision making authority also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or the supervisory committee of the state or federal credit union issuing the negotiable certificates of deposit. Effective January 1, 2020 no more than fifty percent (50%) of the cost value of the City’s investment portfolio may be invested in deposits, including certificates of deposit, through a placement service as authorized under Government Code 53601.8 (excludes negotiable certificates of deposit authorized under Section 53601(i)). On January 1, 2026, the maximum percentage of the portfolio shall revert back to thirty percent (30%) percent. Investments made pursuant to Government Code Section 53635.8 remain subject to a maximum of thirty percent (30%) of the cost value of the investment portfolio. The amounts so invested shall be subject to the limitations of Government Code Section 53638 which generally provides that the deposit shall not exceed the shareholder’s equity of any depository bank, or the total net worth of any depository savings association or federal association, or the total of the unimpaired capital and surplus of an insured industrial loan company.

Purchases of this category shall not exceed five years to maturity.

H. Local Agency Investment Fund - State Pool. The City may invest in the Local Agency Investment Fund (LAIF) established by the State Treasurer under California Government Code Section 16429.1 for the benefit of local agencies.

LAIF provides daily liquidity; therefore, there is no final stated maturity for this investment category. Although there is no percentage limitation on this fund, the "prudent investor" rule shall apply for a single agency name. In keeping with LAIF deposit limit investments, City LAIF investments shall not exceed $75 million per active account, unless a greater deposit limit for regular accounts is authorized by the State Treasurer during the term of this Statement of Investment Policy, in which case City LAIF investments may increase up to that limit.

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I. California Cooperative Liquid Assets Securities System (CLASS) Prime Fund – Joint Powers of Authority Pool. The City may invest in the California CLASS Prime Fund established by a joint exercise of powers entity authorized under California Government Code Section 6509.7 for the benefit of all public agencies in the State of California that have authority to invest their treasury funds. The California CLASS Prime Fund provides daily liquidity; therefore, there is no final stated maturity for this investment category. Although there is no percentage limitation on this fund, the “prudent investor” rule shall apply for a single agency name. The California CLASS Prime Fund does not limit a maximum or minimum investment balance, in which case City California CLASS Prime Fund investments may increase or decrease based on pool performance, daily cash flow needs, etc.

J. City of Santa Ana Bonds. The City may invest in bonds issued by the City or agency of the City including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the City or agency of the City. The City shall at all times adhere to restrictions and limitations of the bond indenture. Purchases of this category shall not exceed five years to maturity. There is no percentage limit in this category.

K. Other State of California Local Agency Bonds. The City may invest in other State of California Local Agency Bonds. Notes, warrants or other evidence of indebtedness of any local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. Investments in this category shall be restricted to instruments that have a ranking of A-1 or higher, or the equivalent by not less than two of the following nationally recognized statistical rating organizations: Moody’s, Standard & Poor’s or Fitch. Purchases of this category shall not exceed five years to maturity. There is no percentage limit in this category.

L. Medium Term Corporate Notes (MTN) defined as all corporate and depository institution debt securities with a maximum remaining maturity of five years or less, issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment shall be rated in a rating category of "A" or its equivalent or better by a nationally recognized rating service.

Purchases in this category shall not exceed five (5) years to maturity or thirty percent (30%) of the cost value of the investment portfolio. Purchases in a single issuer in this category shall not exceed five percent (5%) of the cost value of the investment portfolio.

M. A mortgage pass-through security, collateralized mortgage obligation, mortgagebacked or other pay-through bond, equipment lease-backed certificate, consumer receivable pass-through certificate, or consumer receivable-backed bond. Securities eligible for investment under this subdivision shall be rated in a rating category of “AAA” or its equivalent or better by an NRSRO and have a maximum remaining maturity of City Council 18 – 17 6/3/2025
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five years or less. Purchase of securities authorized by this subdivision shall not exceed 10 percent of the agency's surplus moneys that may be invested pursuant to this section.

N. Shares of beneficial interest otherwise known as money market shares issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940. The company shall have met either of the following criteria:

1. Attain the highest ranking or the highest letter and numerical rating provided by not less than two NRSROs, and

2. Retained an investment adviser registered or exempt from registration with the Securities and Exchange Commission with not less than five (5) years’ experience investing in the securities and obligations authorized by subsection (a) to (k), inclusive, and subdivisions (m) to (o), inclusive, of Section 53601 of the Government Code and with assets under management in excess of five-hundred, million dollars ($500,000,000). The purchase price of shares of beneficial interest, (mutual funds) purchased pursuant to this subdivision shall not include any commission that these companies may charge.

Investments in this category shall be restricted to money market mutual funds that seek to maintain a Net Asset Value of $1. Money market mutual funds provide daily liquidity; therefore, there is no final stated maturity for this investment category. Investments in mutual funds shall be restricted to funds that have the highest ranking or the highest letter and numerical rating provided by not less than two of the following nationally recognized statistical rating organizations: Moody's, Standard & Poor's or Fitch. Purchases in this category shall not exceed 20% of the book value of the investment portfolio.

Purchases in a single mutual fund shall not exceed 10% of the book value of the Portfolio.

8.3 Suitability of Investments
Suitability, not simply return, is the standard for selecting investments for the portfolio.

The Executive Director for FMSA, and all authorized Investment Officials and other supporting FMSA investment staff shall review the following when selecting or recommending investments for the City:
• Sufficient liquidity to meet current obligations
• Appropriate level of market risk
• Diversified portfolio
• Legal investments
• Market rate of return
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The Executive Director for FMSA and his/her designees are not required to invest in all the investment options authorized in this Statement of Investment Policy.

Selection will be based on cash flow characteristics, exposure to market risk, rate of return, the technical ability of the staff responsible for administering the program, and the availability of time and tools for staff to engage in conservative, but effective, management of the City’s investment portfolio.

9.0 PROHIBITED INVESTMENTS AND INVESTMENT PRACTICES

9.1 Ineligible Investments - State Law
Certain investments, however, are prohibited by California Government Code Section 53601.6. Accordingly, the City shall not invest in any inverse floaters, range notes, mortgage derived, or interest-only strips or other securities which could result in zero-interest accrual if held to maturity. However, prohibited securities that were purchased and are currently held in the City's portfolio, as of the date of this policy adoption, which were previously allowed under the California Government Code, yet are now prohibited due to changes in the Code may be held until their maturity dates.

9.2 Disallowed Investments - Higher Perceived Risk
Besides investments prohibited by statute, this policy disallows investments in the following due to a higher perceived risk:
• Investment agreements – contracts regarding funds deposited by an investor often separated into those offered by banks and those offered by insurance companies commonly known as Guaranteed Investment Contracts (GICs) or Guaranteed Investment Agreements (GIAs);
• Securities lending agreements – agreements allowing local agencies to earn incremental income on their investment portfolio by loaning securities in their portfolio to financial services companies for a limited time; • Unregistered securities – purchases of private resales of unregistered securities to institutions, such as Securities Act of 1933, Section 5, Rule 144A securities.

9.3 Prohibited Investment Practices
Assets of the City shall not be invested pursuant to the following investment practices:
• Trading of securities strictly for speculation or solely for the realization of short-term trading gains.
• A contract providing for the compensation of an agent or fiduciary solely based upon the performance of the invested assets.
• If a fiduciary or other third party with custody of public investment transaction records of the City fails to produce records within a reasonable City Council 18 – 19 6/3/2025
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time, when requested by the City, the City shall make no new investments with or through the fiduciary or third party and shall not renew maturing investments with or through the fiduciary or third party.

9.4 Prohibited Investment Practices
Assets of the City shall not be invested pursuant to the following investment practices:
• Trading of securities strictly for speculation or solely for the realization of short-term trading gains.
• A contract providing for the compensation of an agent or fiduciary solely based upon the performance of the invested assets.
• If a fiduciary or other third party with custody of public investment transaction records of the City fails to produce records within a reasonable time, when requested by the City, the City shall make no new investments with or through the fiduciary or third party and shall not renew maturing investments with or through the fiduciary or third party.

10.0 INVESTMENT POOLS/MUTUAL FUNDS
Government sponsored investment pools (Local Agency Investment Fund (LAIF), County Pools, Joint Powers Authority Pools, and the State Treasury Voluntary Investment Program Fund), are sources for short-term cash management.

Before seeking City Council approval for participation in one or more additional investment pools/money market mutual funds, the Executive Director for FMSA or his/her designees will conduct a thorough investigation the prospective pool prior to recommending City investment.

Before recommending investing in a prospective pool, the following issues must be reviewed and considered:

The pool must meet the requirements of state statue description of eligible investment securities, and a written statement of investment policy and objectives.

A description of interest calculations and how it is distributed, and how gains and losses are treated.
i. A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.
ii. A description of who may invest in the program, size and frequency of minimum and maximum deposits, how many withdrawal transactions are allowed (daily, monthly, quarter, annually, etc.), and whether advance notice is required for withdrawal transactions. iii. A description of how and who in the governing body of the program is City Council 18 – 20 6/3/2025
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authorized to make program changes, including frequency. The description must include how program participants are informed of program changes and impacts.
iv. A schedule for receiving statements and portfolio listings. v. A description of how reserves, retained earnings, etc. are utilized by the pool.
vi. A model of the fee schedule, and when and how it is assessed. vii. A description of eligibility and/or acceptance of bond proceeds. viii. The pool must contain only the types of investment allowed by California Code.

Upon approval for participation in one or more additional investment pools the FMSA investment staff shall thereafter on an annual basis investigate and reconfirm the pool’s compliance with items listed above and shall monitor the pool’s performance reports.

11.0 COLLATERALIZATION/SECURITY FOR DEPOSIT OF PUBLIC FUNDS Money must be deposited in state or national banks, state or federal savings associations or state or federal credit unions in the State of California. It may be in inactive deposits, active deposits or interest-bearing active deposits. The deposits cannot exceed the amount of the bank's or savings and loan's paid up capital and surplus.

The bank or savings and loan must secure the active and inactive deposits with eligible securities having a market value of one-hundred, ten percent (110%) of the total amount of the deposits. State law also allows as an eligible security, first trust deeds having a value of one-hundred, fifty percent (150%) of the total amount of the deposits. A third class of collateral is letters of credit drawn on the Federal Home Loan Bank (FHLB).

The Treasurer may waive, at his/her discretion, security for that portion of a deposit which is insured pursuant to federal law. Currently, the first two-hundred, fifty-thousand dollars ($250,000) of a deposit is federally insured.

12.0 SAFEKEEPING AND CUSTODY

12.1 Perfected Interest and Delivery versus Payment
In accordance with California Government Code Section 53601, to protect against potential losses caused by collapse of individual securities dealers, all securities owned by the City, except securities used as collateral for repurchase agreements, shall be kept in safekeeping with "perfected interest" by the City’s custodial bank or a third party bank trust department, acting as agent for the City under the terms of a custody agreement executed by the bank and by the City. Perfected interest refers to establishment of a superior ownership right in and legal control over the securities assets held by the bank custodian on the City’s behalf and is intended to protect the City from the custodial bank’s own creditors in the event of City Council 18 – 21 6/3/2025
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a bank default and filing for bankruptcy. All securities, excepting investments which are not deliverable (such as LAIF, California CLASS Prime Fund, direct time certificates of deposit, and money market mutual funds), will be received and delivered using standard “delivery versus payment”. Delivery versus payment refers to delivery of securities with an exchange of money for the securities at the time of delivery, rather than delivery of securities with an exchange of a signed receipt for the securities.

13.0 DIVERSIFICATION
The purpose of diversification is to reduce overall portfolio risk while attaining market rates of return and to enable the City to meet all anticipated cash requirements. The investment portfolio shall consist of various types of securities approved by state statute and this Statement of Investments Policy. Investments shall vary in issuers, asset classes, industries and maturities to meet City’s financial obligations. Diversifying the investment portfolio will help mitigate the loss of funds as a result of failure of any one issuer. Investments shall further be diversified between structures and imbedded options within the security.

The investments shall be diversified by:
• Limiting investments to avoid over-concentration in securities of a specific issuer (excluding treasury bills).
• Limiting investment in securities that have higher credit risks. • Limiting certificates of deposit to the maximum federally insured amount. • Investing in securities with varying maturities.
• Investing a minimum percentage of the total portfolio as established by the FMSA Investment Advisory Committee in highly marketable short-term treasuries, checking accounts with interest, government pooled account, or a combination of all three (See Section 4.1 (A)(iv)).

14.0 INTERNAL CONTROLS
The Executive Director for FMSA is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the entity are protected from loss, theft or misuse. The Finance Department, with oversight and approval of the Executive Director for FMSA, has developed a system of internal investment controls and a segregation of responsibilities of investment functions in order to assure an adequate system of internal control over the investment function. No investment personnel may engage in an investment transaction except as provided for under the terms of this policy and the procedure established by the Executive Director for FMSA.

Internal control procedures address:
• Control of collusion
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• Control of fraud
• Control of misrepresentation by third parties
• Control of employee error
• Separation of transaction authority from accounting and record keeping • Custodial safekeeping
• Delivery versus payment
• Clear delegation of authority
• Conformation of transactions for investment and wire transfers • Written procedures for placing of investment transactions • FMSA Investment Advisory Committee
In addition, cash balances are reconciled daily by non-investment employees and reconfirmed by the City's accounting staff. Accounting staff also verifies investment activities and holdings on a regular basis which are reviewed by the FMSA Investment Advisory Committee. The Executive Director for FMSA, at his/her discretion, shall establish a process for annual independent reviews by an external auditor to the extent contemplated by generally accepted auditing standards, during the course of the City’s annual audit.

15.0 REPORTING
Government Code Section 53646(b)(1) previously mandated that annual investment policies and quarterly reports be rendered to the legislative body (for the City of Santa Ana - the City Council). AB 2853 amended Government Code Section 53646 making these requirements permissive rather than mandatory. Although the Annual Statement of Investment Policy and Quarterly Reports to City Council are no longer required, we believe it to be both prudent and in keeping with the spirit of the City’s Sunshine Policy that these documents continue to provided. The Executive Director for FMSA shall therefore continue to render to the City Council an annual Statement of Investment Policy and regular reports to the City Manager and the City Council containing detailed information on all securities, investments, and moneys of the City. Pursuant to Government Code 53607 the reports shall include monthly transactions for the reporting period. The reports will be submitted to the City Manager and City Council on a monthly basis and will be rendered formally to the City Council on a quarterly basis as part of a scheduled open City Council Meeting agenda within forty-five
(45) days following the end of each quarter.

The report will contain the following information on the funds that are subject to this investment policy:
1) Type of investment and name of issuer;
2) Date of maturity;
3) Par amount;
City Council 18 – 23 6/3/2025
July 1, 2025 -
June 30, 2026
City of Santa - Annual
Statement of Investment Policy Page 18
4) Dollar amount invested in all securities, and investments and monies held by the City (amortized cost or book value);
5) Weighted average maturity of the investments;
6) Current market value as of the date of report of all funds held by the City and under the management of any outside party that is not also a local agency or LAIF and the source of the valuation;
7) Source of the market value information;
8) A list of the any funds, investments or programs, including loans, under the management of contracted parties such as LAIF, investment. pools, outside money managers, and securities lending agents);
9) A statement of compliance with the investment policy or an explanation for non-compliance; and
10) A statement of the local agency’s ability to meet its pool’s expenditure requirements for the next six months, as well as an explanation of why sufficient money will not be available if that is the case.

16.0 POLICY CONSIDERATIONS

18.0 Exemptions
Any investment currently held that does not meet the guidelines of this policy shall be exempted from the requirements of this policy as long as it was in compliance with State of California law and the City’s investment policy in effect at the time of purchase. At maturity or liquidation, such monies shall be reinvested only as provided by this policy.

18.1 Stabilization Fund
Except for cash in certain restricted and special funds, the consolidation of cash balances from all funds and the maintenance of portfolio liquidity (both static and dynamic) as provided for in this policy taken together with the monthly affirmation to the City Manager and City Councilmembers of the City’s ability to meet its pool’s expenditure requirements for the next six months shall be deemed to functionally meet and exceed the requirements of Article VI., Sec. 610, of the City of Santa Ana Charter as relates to the maintenance of a stabilization fund.

18.2 Amendments
In the event this policy is amended prior to the end of its twelve month fiscal year term the amended Statement of Investment Policy shall be resubmitted to City Council for review and adoption by City Council Resolution.

18.3 Approval
This Statement of Investment Policy is approved by City Council on this 03th day of June, 2025 pursuant to City Council Resolution # 2025-2 .

City Council 18 – 24 6/3/2025
July 1, 2025 -
June 30, 2026
City of Santa - Annual
Statement of Investment Policy Page 19

17.0 POLICY REVIEW, CERTIFICATION, AND ADOPTION

15.1 Policy Review
This Statement of Investment Policy shall be reviewed at least annually to ensure its consistency with the overall objectives of preservation of PRINCIPAL, LIQUIDITY, AND YIELD, and to: 1) reflect changes in applicable California state codes, 2) maintain its relevance to current financial and economic trends, and 3) meet the needs of the City of Santa Ana.

15.2 Policy Certification
This certified Statement of Investment Policy will be resubmitted to the Association of Public Treasurers of the United States and Canada (APTUS&C) and the California Municipal Treasurers Association (CMTA) for review and re-certification every five (5) years, or more often in the event of significant legislative changes, or changes in industry standards, or substantive non-administrative modifications to the body of the policy statement, exclusive of revisions or additions to appendices or glossaries. In FY 2019-20, the City of Santa Ana received Investment Policy Certifications from both the APTUS&C at the international North American level and the CMTA at the state level, and in FY 2021-22, the City of Santa Ana received Investment Policy Certification from CMTA at the state level.

15.3 Adoption
The Executive Director for FMSA shall annually render this Statement of Investment Policy to the City Council and City Manager. The City Council shall annually review and adopt this Statement of Investment Policy by resolution at a public meeting.

Submitted to the Santa Ana City Council for approval, this 3rdth day of June 2025.

Alex Trinidad, CPA
Acting. Executive Director & City
Treasurer Finance & Management
Services Agency
RP
City Council 18 – 25 6/3/2025
July 1, 2025 -
June 30, 2026
City of Santa - Annual
Statement of Investment Policy Page 20

ALLOWABLE INVESTMENT INSTRUMENTS PER STATE GOVERNMENT
CODE (AS OF JANUARY 1, 2025)A APPLICABLE TO ALL LOCAL AGENCIESB See “Table of Notes for Figure 1” on the next page for footnotes related to this figure.

INVESTMENT
TYPE

MAXIMUM

MATURITYC

MAXIMUM

SPECIFIED
% OF

PORTFOLIOD

MINIMUM

QUALITY

REQUIREMENTS
GOV'T
CODE

SECTIONS
Local Agency Bonds 5 years None None 53601(a)
U.S. Treasury Obligations 5 years None None 53601(b)
State Obligations—
CA And Others 5 years None None 53601(c)
53601(d)
CA Local Agency Obligations 5 years None None 53601(e)
U.S Agency Obligations 5 years None None 53601(f)
Bankers’ Acceptances 180 days 40%E None 53601(g)
Commercial Paper—Non-Pooled FundsF
(under $100,000,000 of investments)
270 days
or less
25% of the
agency’s moneyG
Highest letter and
numberrating by an
NRSROH
53601(h)(2)(c)
Commercial Paper—Non-Pooled FundsI
(min. $100,000,000 of investments)
270 days
or less
40% of the
agency’s moneyG
Highest letter and
numberrating by an
NRSROH
53601(h)(2)(c)
Commercial Paper—
Pooled FundsJ
270 days
or less
40% of the
agency’s moneyG
Highest letter and
numberrating by an
NRSROH
53635(a)(1)
Negotiable Certificates of Deposit 5 years 30%K None 53601(i) Non-negotiable Certificates of Deposit 5 years None None 53630 et seq.

Placement Service
Deposits 5 years 50%L None 53601.8 and 53635.8
Placement Service
Certificates of Deposit 5 years 50%L None 53601.8 and 53635.8 Repurchase Agreements 1 year None None 53601(j)
Reverse Repurchase Agreements and
Securities Lending Agreements 92 daysM 20% of the base
value of the portfolio NoneN 53601(j)
Medium-Term NotesO 5 years
or less 30% “A” rating category or
its equivalent or better 53601(k)
Mutual Funds And Money
Market Mutual Funds N/A 20%P MultipleQ, R 53601(l) and 53601.6(b) Collateralized Bank DepositsS 5 years None None 53630 et seq. and 53601(n)
Mortgage Pass–Through and
Asset–Backed SecuritiesT
5 years
or lessT 20% “AA” rating category or
its equivalent or betterT 53601(o)
County Pooled
Investment Funds N/A None None 27133
Joint Powers Authority Pool N/A None MultipleU 53601(p) Local Agency Investment Fund (LAIF) N/A None None 16429.1 Voluntary Investment Program FundV N/A None None 16340
Supranational ObligationsW 5 years
or less 30% “AA” rating category or
its equivalent or better 53601(q)
Public Bank Obligations 5 years None None 53601(r), 53635(c) and 57603
City Council 18 – 26 6/3/2025
City Council 18 – 27 6/3/2025
Planning and Building Agency
www.santa.ana.org/pb
Item # 19
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
June 3, 2025
TOPIC: Density Bonus Agreement No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S. Harbor Boulevard)

AGENDA TITLE
Density Bonus Agreement No. 2025-02 to Facilitate the Construction of a Residential Development Consisting of Thirty-Six (36) Attached For-Sale Townhomes, Which Includes Four (4) Units Designated as Affordable to Moderate Income Households, at 125 and 205 South Harbor Boulevard

RECOMMENDED ACTIONS

1. Adopt a resolution approving Density Bonus Agreement No. 2025-02; and RESOLUTION NO. 2025-XXX entitled A RESOLUTION OF THE CITY COUNCIL

OF THE CITY OF SANTA ANA APPROVING DENSITY BONUS AGREEMENT NO. 2025-02 TO ALLOW A THIRTY-SIX UNIT SINGLE-FAMILY ATTACHED TOWNHOME DEVELOPMENT FOR THE PROPERTY LOCATED AT 125 AND 205 SOUTH HARBOR BOULEVARD (APN: 144-311-15 & 144-311-14)

2. Determine that, pursuant to the California Environmental Quality Act (CEQA) and the CEQA Guidelines, the recommended action is exempt from further review under Section 15195 (Residential Infill Exemption), as this project meets all the threshold criteria set forth in Section 15192 (Threshold Requirements for Exemption); and

3. Approve a Density Bonus Agreement with 205 S Harbor Plaza, LLC, for a 55-year term, for a for-sale residential development consisting of thirty-six (36) attached forsale townhomes, which includes four (4) units designated as affordable to moderate-income households at 125 and 205 S. Harbor Boulevard. (Agreement No.

A-2025-XXX)
GOVERNMENT CODE §84308 APPLIES: Yes
City Council 19 – 1 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

EXECUTIVE SUMMARY
City Ventures Homebuilding, LLC, representing property owner John Rezvani, Managing Member of 205 S Harbor Plaza, LLC, is requesting approval of Density Bonus Agreement (DBA) No. 2025-02 to allow the construction of thirty-six (36) attached for-sale townhomes, with four (4) units proposed as affordable to moderate income households earning 80 to 120-percent of the area median income (AMI), on a 1.81-acre site located at 125 and 205 S. Harbor Boulevard. As proposed, the project will utilize waivers from development standards and/or development concessions as memorialized by the density bonus agreement pursuant to California Government Code Sections 65915 through 65918 and Santa Ana Municipal Code (SAMC) Sections 41-1600 through 41-1607. The request satisfies the purpose and intent of the Harbor Mixed Use Corridor Specific Plan (SP2) to provide additional affordable housing stock to an underserved segment of the region’s population. As a result, staff recommends approval of the DBA.

Planning Commission Action
On April 28, 2025, the Planning Commission held a public hearing for the project and voted 5:0:2, with Chair Oliva and Commissioner Pham absent, to approve Vesting Tentative Tract Map (VTTM) No. 2025-02 and to approved certain deviations (a concession and waivers or reductions in development standards), modifying both sets of conditions to require varied paint colors on plaster/stucco areas to distinguish units and aesthetically enhance verticality of individual units. Moreover, pursuant to Section 41-1607 of the SAMC, the Planning Commission made the required findings to approve waivers from the development standards and a development concession, to be memorialized in the Density Bonus Agreement. Pursuant to Section 41-1602(d), the DBA requires City Council approval.

DISCUSSION
Table 1: Project and Location Information
Item Information
Project Address and Council Ward 125 & 205 S. Harbor Boulevard – Ward 1 Nearest Intersection Harbor Boulevard and First Street
General Plan Designation Urban Neighborhood-50 (UN-50)
Zoning Designation Harbor Mixed Used Transit Corridor Specific Plan (SP-2) – Corridor (CDR) subzone
North Commercial (restaurant, retail, personal service, office) East Santa Anita Park
South Residential (multifamily) Surrounding Land Uses
West Warehouse, Trade school, Manufacturing
Property Size 1.81 acres (1.44 acres net after right-of-way easements) Existing Site Development Developed with multiple buildings used for auto service/sales City Council 19 – 2 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

Item Information
Use Permissions Multi-Family Residential (permitted under Harbor Mixed Use Transit Corridor Plan, as part of SB 330 request)
Zoning Code Sections Affected
Uses Article XVI.I (Density Bonus); Corridor subzone within the Harbor Mixed Use Transit Corridor Plan (SP-2);
and Chapter 34 (Subdivisions)
Project Description
The project includes the construction of a new residential development consisting of 36 townhouse units and 9,567 square feet of open space (common and private combined).

Additionally, the applicant is proposing to merge the properties at 125 and 205 S. Harbor Boulevard through an administrative lot merger process. The development will consist of four residential buildings that are three-stories in height and will provide onsite bicycle parking. The units will include private balconies, with some offering ground floor patios. The units have been designed with families in mind, offering 13 four-bedroom units and 23 threebedroom units, and of the three-bedroom units, three are designed as live/work units. Every unit will contain a two-car garage at ground level (tuck-under building design) with residential units above, and the project site will contain ten guest parking spaces, for a total of 82 parking spaces, exceeding the requirements of SP-2. However, to proactively address parking management policies, staff is recommending conditions of approval similar to those for other residential infill projects that would incorporate parking management practices in the Covenants, Conditions, and Restrictions (CC&Rs) that will be recorded against the property.

Of the total units in the development, four units are proposed to be affordable to moderateincome households earning 80-120 percent of the AMI, which is currently set at $154,800, adjusted for a four-person household size, as published by the California Department of Housing and Community Development (HCD). The affordable units will be two (2) threebedroom, three-bath units and two (2) four-bedroom, four-bath units. The proposed affordable units will be 1,352 and 1,610 square feet in size and will contain full kitchens, bedrooms, bathrooms, and open/common (living) areas.

Approximately 7,616 square feet or approximately 12 percent (12%) of the total site area will be open space provided through private exterior ground-level porches/front yards and upper decks distributed throughout the site. The remainder of the open space will be provided as a 1,951-square-foot common open courtyard within the site’s interior. The design and layout of the proposed common open space would function as a passive outdoor area, providing functional amenities to residents (e.g., picnic tables, BBQ, etc.). The open space would feature a shade trellis, hardscaping materials, trees, vines, and shrubs. The proposed landscaping includes, but is not limited to, pink trumpet, purple orchid, tulip, sweet bay, African sumac, southern magnolia, fern pine, Brisbane box, and crape myrtle trees, as well as a variety of shrubs. Lastly, each unit will also contain decks/private balconies for the use of each unit’s owners.

City Council 19 – 3 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

The project features a contemporary architectural style similar to many multiple-family or mixed-use residential communities under construction in Santa Ana and the region. The overall design, massing, features, and materials of the new construction will be compatible with the scale of buildings in the area. The contemporary industrial architectural style would include stucco finish, corrugated metal, brick veneer, metal awnings, and high quality architectural detailing (e.g., exterior lighting, entry doors, fenestration, etc.).

Moreover, the residential structures are designed to fully screen all mechanical equipment within the structure, parapet walls, and landscaping. Overall, the project will include a design and solid construction materials that will ensure that the project ages well for the duration of the building’s lifetime.

Density Bonus
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 five incentives/concessions and an unlimited number of waivers or reductions in development standards. The incentives/concessions are generally reductions in site development standards or modification of zoning code requirements or architectural design requirements, and waivers are essentially variances from development standards (a site or construction condition).

The first version of the Density Bonus Law was adopted in 1979 and has since been amended at various times. 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.

Pursuant to the California Density Bonus law, a project’s affordability level is determined by dividing the number of proposed affordable units by the allowable “base” density (i.e., 50 du/ac). Moreover, the State density bonus law states that units added by a density bonus are excluded from the calculations. The base density for the 1.81-acre site at 50 du/ac is 91 units. However, only 36 units are being proposed, which is well within the allowable base density. Of the total units in the development, four units are proposed to be affordable.

Therefore, the project would have an 11-percent (11%) affordability rate. As such, State density bonus law allows the developer to request a maximum density bonus of six percent (6%).

Due to the project’s 11-percent (11%) affordability rate, the developer can seek one density bonus incentive/concession and unlimited waivers, pursuant to Section 65915 et al. of the California Government Code (Density Bonuses and Other Incentives). In addition, California Assembly Bill No. 2345, approved September 28, 2020, revised the State Density Bonus City Council 19 – 4 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

Law originally adopted in 1979 to provide additional benefits for projects that include qualifying affordable housing. For this project, the developer is not requesting a state density bonus for additional units but will avail themselves of the incentive/concession and waivers that are required to be provided by State density bonus law for projects with the requisite affordability.

The purpose of the State Density Bonus Law is to encourage the development and availability of affordable housing. Pursuant to California Government Code Sections 65915 (d)(1) and 65915 (e)(1), a local jurisdiction is limited in its ability to deny requested incentives, concessions, and waivers. The City has analyzed the project and has identified several areas of potential impacts; however, the conditions of approval proposed for the project are intended to address the project’s potential impacts.

Pursuant to SB 330 and the General Plan Land Use Element, the developer has selected the Harbor Mixed Use Transit Corridor Specific Plan (SP-2) development standards for a tuck-under building type to design the projects. However, pursuant to the Density Bonus Law, the developer is seeking a specific concession and waivers from certain SP-2 standards to facilitate development of the project. Table 2 below outlines the concession and waivers requested by the applicant and approved by the Planning Commission on April 28, 2025.

Table 2: Requested Concession and Waivers
Standard Required by SP-2 or the
SAMC
Provided
Parking Location SP-2, Ch. 3, Table 3-7. Off-Street Parking Standards (pg. 3-11) Vehicular Access
(Concession)
From alley/side street, if
present
Access from Harbor Boulevard
instead of Figueroa Street
Building Frontage SP-2, Ch. 3, Frontyard/Porch Frontage Type, 1 (pg. 3-9) Dimensions – Width (Waiver) 12 ft. min. wide symmetrical entry 4 ft. wide symmetrical entry
Setback SP-2, Ch. 3, Table 3-5. Building Placement (pg. 3-10) Public Street (Waiver) 8 ft. max. 8.5 ft.

Open Space* SP-2, Ch. 3, Table 3-9. Onsite Open Space Requirements (pg. 3- 13)
Common – Area (Waiver) 15% of lot (9,409 sq. ft.) 3% of lot (1,951 sq. ft.) Private – Area (Waiver) 90 sq. ft. per dwelling unit
(3,240 sq. ft. total)
Min. not provided for Units 1 & 2
(7,616 sq. ft. total)
Private – Dimensions
(Waiver) 6’ min. dimension Min. not provided for Units 1, 2, & 11 *Open space based on net useable parcel area
Onsite Parking
To proactively address any neighborhood parking impacts that could result from the project, the conditions of approval for the VTTM and terms of the DBA include provisions requiring City Council 19 – 5 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

the following parking management practices, to be incorporated into the final, recorded CC&Rs, and applicable throughout the life of the project:
• Requiring onsite parking permits (such as stickers or hang-tags) for any parking in the surface guest parking spaces;
• Policies for maximum time vehicles may be parked in the surface guest spaces; • Policies for towing unauthorized vehicles; vehicles parked in unauthorized locations, such as fire lanes; vehicles parking in surface guest parking without a sticker, hangtag, or other identifiers; and vehicles parked longer than any maximum guest parking timeframes allowed; and
• Routine garage inspections to ensure garages are available for vehicle parking.

Affordable Housing Opportunity and Creation Ordinance
The proposed development is subject to the requirements of the City’s Affordable Housing Opportunity and Creation Ordinance (AHOCO), which requires rental unit developments to provide a minimum number of affordable units, depending on the proposed affordability level (i.e., low income, very low income, extremely low income, or a combination). In this case, the developer is proposing to provide moderate-income for-sale units. Pursuant to the AHOCO, the applicant is required to provide five percent (5%) moderate-income onsite affordable units.

The project exceeds the five percent (5%) affordable housing requirement for the ownership category of the City’s Affordable Housing Opportunity and Creation Ordinance (AHOCO) by providing four (4) onsite units to be affordable to moderate-income (80- 120%) households and significantly enhancing the opportunity for income eligible Santa Ana households to own a home in the City at a lower cost. The units will be dispersed throughout the community. The affordable units will be two (2) three-bedroom, three-bath units and two (2) four-bedroom, four-bath units. The proposed affordable units will be 1,352 and 1,610 square feet in size and will contain full kitchens, bedrooms, bathrooms, and open/common (living) areas. The developer’s Inclusionary Housing Plan has been reviewed and approved by the City’s Housing Division.

Public Notification and Community Outreach
Project notifications were posted, published, and mailed in accordance with City and State regulations. In addition, staff contacted the provided contacts for the Riverview West and Santa Anita Neighborhood Association to ensure they were aware of the project and Planning Commission public hearing. As the City Council's approval of this agreement does not constitute a public hearing, no public notification or community outreach is required under applicable state law or local ordinances prior to Council action.

City Council 19 – 6 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

ENVIRONMENTAL IMPACT
Pursuant to the requirements of the California Environmental Quality Act (CEQA), an Environmental Impact Report (EIR) was prepared and certified in 2014 in order to address the potential environmental impacts associated with the Harbor Mixed Use Corridor Specific Plan. A mitigation monitoring and reporting program (MMRP), findings of fact, and a statement of overriding consideration were adopted with the 2014 EIR.

As proposed, the development is not anticipated to have additional environmental impacts not addressed in the 2014 EIR. Furthermore, in accordance with the California Environmental Quality Act (CEQA), the recommended action is exempt from further review under Section 15195 (Residential Infill Exemption), as this project meets all the threshold criteria set forth in Section 15192 (Threshold Requirements for Exemptions).

This exemption applies to projects or sites that:

1. Meet the threshold criteria set forth in section 15192; provided that with respect to the requirement in section15192(b) regarding community-level environmental review, such review must be certified or adopted within five years of the date that the lead agency deems the application for the project to be complete pursuant to Section 65943 of the Government Code.

2. Meet both of the following size criteria:

A. The site of the project is not more than four acres in total area.

B. The project does not include any single level building that exceeds 100,000 square feet.

3. Meet both of the following requirements regarding location:

A. The project is a residential project on an infill site.

B. The project is within one-half mile of a major transit stop.

4. Meet both of the following requirements regarding number of units:

A. The project does not contain more than 100 residential units.

B. The project promotes higher density infill housing. The lead agency may establish its own criteria for determining whether the project promotes higher density infill housing except in either of the following two circumstances:
1) A project with a density of at least 20 units per acre is conclusively presumed to promote higher density infill housing.
2) A project with a density of at least 10 units per acre and a density greater than the average density of the residential properties within 1,500 feet shall be presumed to promote higher density infill housing unless the preponderance of the evidence demonstrates otherwise.

5. Meets the following requirements regarding availability of affordable housing: The project would result in housing units being made available to moderate, low, or very low income families as set forth in either A or B below:

City Council 19 – 7 6/3/2025
VTTM No. 2025-02 and DBA No. 2025-02 – Santa Ana 9 Townhomes (125 and 205 S.

Harbor Blvd.)
June 3, 2025

A. The project meets one of the following criteria, and the project developer provides sufficient legal commitments to the appropriate local agency to ensure the continued availability and use of the housing units as set forth below at monthly housing costs determined pursuant to paragraph (3) of subdivision (h) of Section 65589.5 of the Government Code. 1) At least 10-percent of the housing is sold to families of moderate income, or
2) Not less than 10-percent of the housing is rented to families of low income, or
3) Not less than 5-percent of the housing is rented families of very low income.

B. If the project does not result in housing units being available as set forth in subdivision (A) above, then the project developer has paid or will pay in-lieu fees pursuant to a local ordinance in an amount sufficient to result in the development of an equivalent number of units that would otherwise be required pursuant to subparagraph (A).

The project site is not more than four acres in area, the project does not include any single level building exceeding 100,000 square feet, and the project is an infill development within one-half mile of a major transit stop. Moreover, the development promotes higher density infill housing, does not contain more than 100 residential units, and results in housing units made available to moderate income families. Based on this analysis, a Notice of Exemption, Environmental Review No. 2024-80, will be filed for this project.

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

EXHIBITS

1. Resolution – Density Bonus Agreement

2. Draft Density Bonus Agreement

3. April 28, 2025 – Planning Commission Staff Report and Exhibits Submitted By: Ali Pezeshkpour, AICP, Acting Executive Director of Planning and Building Agency, and Michael L. Garcia, Executive Director of Community Development Agency
Approved By: Alvaro Nuñez, City Manager
City Council 19 – 8 6/3/2025
Resolution No. 2025-XX

RESOLUTION NO. 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

SANTA ANA APPROVING DENSITY BONUS AGREEMENT
NO. 2025-02 TO ALLOW A THIRTY-SIX UNIT SINGLEFAMILY ATTACHED TOWNHOME DEVELOPMENT FOR THE PROPERTY LOCATED AT 125 AND 205 SOUTH
HARBOR BOULEVARD (APN: 144-311-15 & 144-311-14)

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS:

Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows:

A. City Ventures Homebuilding, LLC (“Applicant”), on behalf of John Rezvani, Managing Member of the 205 S Harbor Plaza, LLC (“Property Owner”), is requesting approval of Density Bonus Agreement No. 2025-02 (DBA-2025- 02) to allow the construction of a thirty-six unit attached townhome development, four of which are proposed as onsite moderate-income affordable units, for the property located at 125 and 205 South Harbor Boulevard (“Project”).

B. The California Density Bonus generally law allows developers 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 also generally allows developers to seek incentives/concessions or waivers of, or reductions in, development standards.

C. Section 41-1607 of the Santa Ana Municipal Code (SAMC) requires an application for a deviation (incentives/concessions and/or waivers or reductions) to be approved by the Planning Commission.

D. On April 28, 2024, the Planning Commission of the City of Santa Ana held a duly noticed public hearing and, at that time, considered all testimony, written and oral, and approved, based on findings, the application for one concession/incentive and waivers/reductions of development standards, to be memorialized in Density Bonus Agreement No. 2025-02 as well as the Vesting Tentative Tract Map No. 2025-02 (County Map No. 19329).

E. SAMC Section 41-1602(d) requires that Density Bonus Housing Agreements, which memorializes deviations, be submitted to the City Council for their approval pursuant to Section 421 of the City’s Charter.

City Council 19 – 9 6/3/2025
Resolution No. 2025-XX

F. On June 3, 2025, the City Council of the City of Santa Ana held a duly noticed public meeting and, at that time, considered approval of Density Bonus Agreement No. 2025-02.

G. The City Council hereby approves Density Bonus Agreement No. 2025-02.

This Agreement allows for the construction of the proposed Project in accordance with the provisions of State Density Bonus Law and SAMC Section 41-1607, and in accordance with Vesting Tentative Tract Map No. 2025-02 (County Map No. 19329), as conditioned.

Section 2. Pursuant to the requirements of the California Environmental Quality Act (CEQA), an Environmental Impact Report (EIR) was prepared and certified in 2014 in order to address the potential environmental impacts associated with the Harbor Mixed Use Corridor Specific Plan. A mitigation monitoring and reporting program (MMRP), findings of fact, and a statement of overriding consideration were adopted with the 2014 EIR.

As proposed, the development is not anticipated to have additional environmental impacts not addressed in the 2014 EIR. Furthermore, in accordance with the California Environmental Quality Act (CEQA), the recommended action is exempt from further review under Section 15195 (Residential Infill Exemption), as this Project meets all the threshold criteria set forth in Section 15192 (Threshold Requirements for Exemptions).

This exemption applies to projects or sites that:

1. Meet the threshold criteria set forth in section 15192; provided that with respect to the requirement in section 15192(b) regarding community-level environmental review, such review must be certified or adopted within five years of the date that the lead agency deems the application for the project to be complete pursuant to Section 65943 of the Government Code.

2. Meet both of the following size criteria:

A. The site of the project is not more than four acres in total area.

B. The project does not include any single level building that exceeds 100,000 square feet.

3. Meet both of the following requirements regarding location:

A. The project is a residential project on an infill site.

B. The project is within one-half mile of a major transit stop.

4. Meet both of the following requirements regarding number of units:

A. The project does not contain more than 100 residential units.

B. The project promotes higher density infill housing. The lead agency may establish its own criteria for determining whether the project promotes higher density infill housing except in either of the following two circumstances:
1) A project with a density of at least 20 units per acre is conclusively presumed to promote higher density infill housing.
2) A project with a density of at least 10 units per acre and a density greater than the average density of the residential properties within 1,500 feet shall be presumed to promote higher density infill housing unless the preponderance of the evidence demonstrates otherwise.

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Resolution No. 2025-XX

5. Meets the following requirements regarding availability of affordable housing: The project would result in housing units being made available to moderate, low, or very low income families as set forth in either A or B below:

A. The project meets one of the following criteria, and the project developer provides sufficient legal commitments to the appropriate local agency to ensure the continued availability and use of the housing units as set forth below at monthly housing costs determined pursuant to paragraph (3) of subdivision (h) of Section 65589.5 of the Government Code.
1) At least 10-percent of the housing is sold to families of moderate income, or
2) Not less than 10-percent of the housing is rented to families of low income, or
3) Not less than 5-percent of the housing is rented families of very low income.

B. If the project does not result in housing units being available as set forth in subdivision (A) above, then the project developer has paid or will pay in-lieu fees pursuant to a local ordinance in an amount sufficient to result in the development of an equivalent number of units that would otherwise be required pursuant to subparagraph (A).

The project site is not more than four acres in area, the project does not include any single level building exceeding 100,000 square feet, and the project is an infill development within one-half mile of a major transit stop. Moreover, the development promotes higher density infill housing, does not contain more than 100 residential units, and results in housing units made available to moderate income families. Based on this analysis, a Notice of Exemption, Environmental Review No. 2024-80, will be filed for this project.

However, all applicable mitigation measures in the original EIR and associated MMRP will be enforced.

Section 3. The Applicant shall indemnify, protect, defend and hold the City and/or any of its officials, officers, employees, agents, departments, agencies, authorized volunteers, and instrumentalities thereof, harmless from any and all claims, demands, lawsuits, writs of mandamus, referendum, and other proceedings (whether legal, equitable, declaratory, administrative or adjudicatory in nature), and alternative dispute resolution procedures (including, but not limited to arbitrations, mediations, and such other procedures), judgments, orders, and decisions (collectively “Actions”), brought against the City and/or any of its officials, officers, employees, agents, departments, agencies, and instrumentalities thereof, that challenge, attack, or seek to modify, set aside, void, or annul, any action of, or any permit or approval issued by the City and/or any of its officials, officers, employees, agents, departments, agencies, and instrumentalities thereof (including actions approved by the voters of the City) for or concerning the project, whether such Actions are brought under the Ralph M. Brown Act, California Environmental Quality Act, the Planning and Zoning Law, the Subdivision Map Act, Code of Civil Procedure sections 1085 or 1094.5, or any other federal, state or local constitution, statute, law, ordinance, charter, rule, regulation, or any decision of a court of competent jurisdiction. It is expressly agreed that the City shall have the right to approve City Council 19 – 11 6/3/2025
Resolution No. 2025-XX

the legal counsel providing the City’s defense, and that Applicant shall reimburse the City for any costs and expenses directly and necessarily incurred by the City in the course of the defense. City shall promptly notify the Applicant of any Action brought and City shall cooperate with Applicant in the defense of the Action.

Section 4. The City Council of the City of Santa Ana, at its regular meeting, hereby approves Density Bonus Agreement No. 2025-02 as contained in Exhibit A, attached hereto and incorporated as though fully set forth herein. This decision is based upon the evidence submitted at the above said hearing, which includes, but is not limited to: the Request for Planning Commission Action dated April 28, 2024, and exhibits attached thereto; the Request for City Council Action dated June 3, 2025, and exhibits attached thereto; and the public testimony, written and oral, all of which are incorporated herein by this reference.

Section 5. This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall attest to and certify the vote adopting this resolution.

ADOPTED this ____ day of ___________, 2025.
_______________________
Valerie Amezcua
Mayor
APPROVED AS TO FORM:

Sonia R. Carvalho, City Attorney
By:________________________
Melissa M. Crosthwaite
Senior Assistant City Attorney
AYES: Councilmembers _______________________________________ NOES: Councilmembers _______________________________________ ABSTAIN: Councilmembers _______________________________________ NOT PRESENT: Councilmembers _______________________________________ City Council 19 – 12 6/3/2025
Resolution No. 2025-XX

CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, , Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2025-XX to be the original resolution adopted by the City Council of the City of Santa Ana on________________, 2025.

Date: ________________ ____________________________________ Clerk of the Council
City of Santa Ana
City Council 19 – 13 6/3/2025
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RECORDING REQUESTED BY:

AND WHEN RECORDED MAIL TO:

City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, California 92702
Attention: City Clerk
Free Recording pursuant to
Government Code §§ 6103 and 27383

DENSITY BONUS HOUSING AGREEMENT WITH DECLARATION OF

COVENANTS, CONDITIONS AND RESTRICTIONS
125-205 South Harbor Boulevard; APN: 144-311-14, 144-311-15 This DENSITY BONUS HOUSING AGREEMENT WITH DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS (“Agreement”), is made and entered into this day of , 2025 (“Effective Date”), for reference purposes only, by and between the City of Santa Ana, a charter city and municipal corporation of the State of California (“City”), and Santa Ana 9 Inv, LLC, a Delaware limited liability company (“Developer”). City and Developer are sometimes referred to collectively as the “Parties” and individually as a “Party.”

RECITALS
A. Developer is the owner of that certain property located within the City of Santa Ana, County of Orange, State of California, commonly known as 125 and 205 South Harbor Boulevard, Santa Ana, California, and legally described as set forth in Exhibits A-1 and A-2, which are attached hereto and incorporated herein by this reference as if set forth in full (“Property”).

B. Developer is proposing to develop a residential development consisting of no more than thirty six (36) units, four (4) of which are proposed as moderate income residential ownership units on the Property, as more particularly set forth in Density Bonus Application No. 2024-02 (“Project”).

C. 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 Bonus Law”), set forth a process to provide increased residential densities and incentives, concessions, and waivers to property owners or developers who restrict a portion of their residential development to Moderate Income Households, as specified. 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 throughout the City.

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D. The Project complies with the affordability requirements for a housing development as set forth in the State Density Bonus Law and City Density Bonus for Affordable Housing.

E. 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)(A), the City has determined that the Project is eligible for one (1) incentive or concession, and waivers as prescribed by the State Density Bonus Law.

F. 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 waivers 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 “Affordability Covenants” means restrictions on the sale and conveyance of the Property pursuant to California Government Code Section 65915 that ensure that the Property will be preserved for Moderate Income Households for at least fifty-five (55) years for owner-occupied housing units and will be sold or resold only to persons or families of very low, low, or moderate income, as defined in Section 50052.5 of the California Health and Safety Code.

1.1.2 “Adjusted for Family Size Appropriate to the Unit” or “Adjusted for Household Size” shall have the meaning set forth by Health and Safety Code Section 50052.5(h).

1.1.3 “Administrative Procedures Manual” shall mean the City’s Administrative Procedures Manual: Ownership Housing Development, setting forth rules and regulations for the City’s homeownership program.

1.1.4 “Affordability Term” means the duration of the Affordability Covenants as set forth in Section 3.1.

1.1.5 “Affordable Housing Cost” means the total housing costs paid by a qualifying Moderate Income Household in accordance with California Health and Safety Code Section 50052.5, and implementing regulations of Sections 6920, 6924 and 6930 of Title 25 of the California Code of Regulations for Moderate Income Households. The Affordable Housing Cost shall not exceed thirty-five percent (35%) times one hundred ten percent (110%) of the Orange County Median Income Adjusted for Family Size Appropriate for the Unit. For Moderate Income Households whose gross income exceeds 110% of Median Income, the Affordable Housing Cost shall not exceed thirty five percent (35%) of the gross income of the household.

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1.1.6 “Affordable Housing Resale Restrictions” means the restrictions imposed on each Affordable Unit that restrict sales to qualified Eligible Households pursuant to a local preference for families who live or work in the City of Santa Ana at an Affordable Sales Price, in the form of Exhibit B attached hereto.

1.1.7 “Affordable Sales Price” means the maximum sales price that can be charged for an Affordable Unit as set forth in Section 3.3.1.

1.1.8 “Affordable Units(s)” means the four (4) unit(s), which shall comprise of two (2) three-bedroom units and two (2) four-bedroom units, which always must be proportionate to the unit mix for the property. Any change to the number, bedroom size, location, or distribution of Affordable Units is subject to City Manager approval.

1.1.9 “Agreement” means this Density Bonus Housing Agreement With Declaration of Covenants, Conditions and Restrictions.

1.1.10 “Benchmark Down Payment” is a component of the Affordable Sales Price calculations. For the purposes of this Agreement, the Benchmark Down Payment is set at 5% of the total Affordable Sales Price. The Benchmark Down Payment is used solely as a component for determining the Affordable Sales Price for an Affordable Unit. It does not represent a cap on the down payment amount that can be contributed by a Homebuyer.

1.1.11 "Certificate of Occupancy" means a certificate or approval of a final inspection from the City.

1.1.12 “City” means the City of Santa Ana, California.

1.1.13 “City Attorney” means the City Attorney for the City of Santa Ana.

1.1.14 “City Council” means the City Council of the City of Santa Ana.

1.1.15 “City Deed of Trust” means the deed of trust to be executed by the Homebuyer and recorded against Affordable Unit the Homebuyer’s obligations under the City Promissory Note, substantially in the form attached hereto as Exhibit D.

1.1.16 “City Manager” means the City Manager for the City of Santa Ana.

1.1.17 “City's Planning Commission” means the Planning Commission for the City of Santa Ana.

1.1.18 “City Promissory Note” means the promissory note executed by the Homebuyer evidencing Homebuyer's agreement to pay the City Equity Share, substantially in the form attached hereto as Exhibit C.

1.1.19 “Density Bonus Application” shall mean the Density Bonus Application No. 2024-02 for the Project.

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1.1.20 “Developer” means 205 South Harbor Plaza, LLC, a California limited liability company, and its permitted successors and assigns to all or any part of the Property, Project or this Agreement.

1.1.21 “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 4.2 herein.

1.1.22 “Eligible Household” means a Household whose income does not exceed the “Moderate Income Household” qualifying limit as defined herein.

1.1.23 “First Lien” means the lien of the institution making the purchase money mortgage loan to Homebuyer for the purchase of an Affordable Unit. For the avoidance of doubt, the City’s Deed of Trust shall be subordinate to the First Lien.

1.1.24 “Gross Household Income” means all income from whatever source from all adult Household members, which is anticipated to be received during the 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. The definition includes the following specific requirements:
(a) Except as provided in subdivision (b), all payments from all sources received by the head of Household (even if temporarily absent) and each additional member of the Household who is not a minor shall be included in the annual income of a Household. Gross Household Income shall include, but not be limited to:
(i) The gross amount, before any payroll deductions, of wages and salaries, overtime pay, commissions, fees, tips and bonuses; (ii) The net income from operation of a business or profession or from rental or real or personal property (for this purpose, expenditures for business expansion or amortization of capital indebtedness shall not be deducted to determine the net income from a business);
(iii) Interest and dividends;
(iv) The full amount of periodic payments received from social security, annuities, insurance policies, retirement funds, pensions, disability or death benefits and other similar types of periodic receipts (but see subdivision (2)(c)); (v) Payments in lieu of earnings, such as unemployment and disability compensation, worker's compensation and severance pay; (vi) Public Assistance. If the public assistance payment includes an amount specifically designated for shelter and utilities which is subject to adjustment by the public assistance agency in accordance with the actual cost of shelter and utilities, the amount of public assistance income to be included as income shall consist of:

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(1) The amount of the allowance or grant exclusive of
the amount specifically designated for shelter and utilities, plus (2) The maximum amount which the public assistance
agency could in fact allow for the Household for shelter and utilities. (vii) Periodic and determinable allowances such as alimony and child support payments, and regular contributions or gifts received from persons not residing in the dwelling;
(viii) All regular pay, special pay and allowances of a member of the Armed Forces (whether or not living in the dwelling) who is head of the Household or spouse or domestic partner (but see subdivision (b)(v));
(ix) Where a Household has net assets in excess of $5,000, income shall include the actual amount of income, if any, derived from all of the net Household assets or 10 percent of the value of all such assets, whichever is greater. For purposes of this section, net Household assets means value of equity in real property other than the Household's full-time residence, savings, stocks, bonds, and other forms of capital investment. The value of necessary items such as furniture and automobiles shall be excluded. (b) The following items shall not be considered as income:
(i) Casual, sporadic or irregular gifts;
(ii) Amounts which are specifically for or in reimbursement of the cost of medical expenses;
(iii) Lump-sum additions to Household assets, such as
inheritances, insurance payments (including payments under health and accident insurance and worker's compensation), capital gains and settlement for personal or property losses; (iv) Amounts of educational scholarships paid directly to the student or to the educational institution, and amounts paid by the government to a veteran for use in meeting the costs of tuition, fees, books and equipment. Any amounts of such scholarships, or payments to veterans not used for the above purposes of which are available for subsistence are to be included in income;
(v) The special pay to a serviceman head of a Household away from home and exposed to hostile fire;
(vi) Relocation payments made pursuant to federal, state, or local relocation law;
(vii) Foster child care payments;
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(viii) The value of coupon allotments for the purchase of food pursuant to the Food Stamp Act of 1964 which is in excess of the amount actually charged the eligible Household;
(ix) Payments received pursuant to participation in the following volunteer programs under the ACTION Agency:
(1) National Volunteer Antipoverty Programs which
include VISTA, Service Learning Programs and Special Volunteer Programs. (c) National Older American Volunteer Programs for persons aged 60 and over which include Retired Senior Volunteer Programs, Foster Grandparent Program, Older American Community Services Program, and National Volunteer Program to Assist Small Business Experience, Service Corps of Retired Executive (SCORE) and Active Corps of Executives (ACE)

1.1.25 “Homebuyer” means an Eligible Household that has entered into an agreement to purchase an Affordable Unit in accordance with this Agreement.

1.1.26 “Homebuyer Documents” means the Affordable Housing Resale Restrictions, the City Promissory Note, and the City Deed of Trust.

1.1.27 “Household” means all the persons who will occupy the Affordable Unit as their primary residence. The size of a prospective Household must be compatible with the size of the Affordable Unit to be purchased. Unless otherwise approved in writing by the City, which the City may withhold in its reasonable discretion, the minimum number of occupants is three (3) for three-bedroom units and four (4) for four-bedroom units. A child who is subject to a legallybinding shared-custody agreement, in which the child resides with the Household at least 50% of the time, is counted as a member of the Household. For the purpose of calculating the Household income and not the number of occupants, excluded from the definition of Household are live-in caregivers/caretakers, foster children, unborn children and children being pursued for legal custody or adoption that are not currently living with the Household.

1.1.28 “Housing Cost” means and includes all of the following costs associated with ownership of an Inclusionary Unit as defined in Title 25 of the California Code of Regulations Section 6920:
(a) Principal and interest on a mortgage loan at the defined interest rate; (b) Property tax and assessments;
(c) Fire and casualty insurance covering replacement value of property improvements;
(d) Property maintenance and repairs;
(e) A reasonable utility allowance, as determined by the City; and City Council 19 – 19 6/3/2025
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(f) Homeowner Association assessments and dues.

1.1.29 “Median Income” means the Orange County, California area median income, Adjusted for Household Size pursuant to California Health and Safety Code § 50052.5(h), as periodically published by HCD.

1.1.30 “Moderate Income Household(s)” means a Household whose income does not exceed One Hundred Twenty Percent (120%) of the area median income for the Orange County, California PMSA as published by HCD.

1.1.31 “Primary Residence” means that the Homebuyer is occupying the Affordable Unit for at least ten (10) months out of any twelve (12) month period.

1.1.32 “Project” means that certain affordable residential development as more particularly described in the Recitals and Section 2 of this Agreement.

1.1.33 “Project Approvals” means all approvals, conditions, and entitlements issued by the City, inclusive of the Planning Commission and City Council.

1.1.34 “Property” means that certain real property more particularly described in the legal description in Exhibit A and improvements thereon.

1.1.35 “Request for Default” means the request for default attached hereto as Exhibit I.

1.1.36 “State Density Bonus Law” means Government Code Section 65915, et seq., as they exist on the Effective Date.

1.1.37 “Supportable Mortgage” means the mortgage amount that can be supported by a Moderate Income Household based on the Affordable Housing Cost calculations.

The mortgage calculation is based on the prevailing market interest rate for a 30-year fully amortizing mortgage with a fixed interest rate. The Supportable Mortgage shall be determined in accordance with the City’s Administrative Procedures Manual, provided that it should be determined for a Moderate Income Household consistent with the requirements of this Agreement and State Density Bonus Law.

1.1.38 “Transfer” means any sale, assignment, conveyance, lease or transfer, voluntary or involuntary, of any interest in the Property. Without limiting the generality of the foregoing, Transfer shall include (i) a transfer by devise, inheritance or intestacy; (ii) creation of a life estate or joint tenancy interest; (iii) a gift of all or any portion of the Property; or (iv) any voluntary conveyance of the Property.

1.1.39 “Transferee” means any natural person or entity who obtains ownership or possessory rights in the Property pursuant to a Transfer.

1.1.40 “Term” means the period during which this Agreement shall be in full force and effect, as provided for in Section 5.1 below.

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1.1.41 “Unit” means a residential dwelling unit within the Project to be constructed or caused to be constructed by Developer.

1.1.42 “Unrestricted Units” means the Units within the Project to be constructed or caused to be constructed by Developer and sold at market rate without restriction.

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: Affordable Housing Resale Restrictions, Equity Sharing and Regulatory Agreement

1.2.3 Exhibit C: City Promissory Note

1.2.4 Exhibit D: City Deed of Trust

1.2.5 Exhibit E: Income Verification Form

1.2.6 Exhibit F: Certification of Continued Occupancy

1.2.7 Exhibit G: Notice of Affordability Restrictions on Transfer of Property

1.2.8 Exhibit H: Request for Default

1.2.9 Exhibit I: Affordable Sales Price

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 thirty six (36) Units, with four (4) Affordable Units for Eligible Households and thirty two (32) Unrestricted Units in accordance with this Agreement and the Project Approvals. Notwithstanding anything to the contrary contained herein, in no event shall this Agreement apply to any of the Unrestricted Units and such Unrestricted Units shall not be subject to any of the covenants, restrictions, requirements, or provisions of this Agreement which are applicable to the Affordable Units and this Agreement shall not be recorded on the title of any of the Unrestricted Units.

2.2 Density Bonus. The Project shall have thirty six (36) Units, to be sold, owned, occupied, operated, and maintained pursuant to the terms and conditions of this Agreement.

Developer understands and agrees that Developer is not requesting an increase in density and that this Agreement does not allow or approve an increase in residential density over the allowed density regulations of the City. Developer shall not construct or develop, or otherwise claim a right to construct or develop any additional residential units on the Property under this Agreement.

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:

2.3.1 Concession. In accordance with Government Code Section 65915(d)(1), the Project is granted one (1) concession as follows: The Project shall not be required to provide vehicular access from a secondary street and may provide vehicular access from Harbor Boulevard, subject to the Project Approvals.

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2.3.2 Waivers. In accordance with Government Code Section 65915(e), provided the Project complies with the Project Approvals, the Project is granted the following waivers or reductions from Building Frontage, Setback and Onsite Open Space Requirements:
(a) The requirement of City Municipal Code Section 41-592.3 and SP2, Ch. 3, Frontyard/Porch Frontage Type, to provide a minimum porch width of 12 feet is reduced to 4 feet.
(b) The requirement of City Municipal Code Section 41-592.3 and SP2, Ch. 3, Table 3-5, to provide a maximum street setback of 8 feet is waived to 8.5 feet. (c) The requirement of City Municipal Code Section 41-592.3 and SP2, Ch. 3, Table 3-9, to provide minimum private open space of 90 square feet per unit is waived for Units 1 and 2.
(d) The requirement of City Municipal Code Section 41-592.3 and SP2, Ch. 3, Table 3-9, for minimum six foot dimensions applicable to private open space is reduced for Units 1, 2 and 11, subject to the following: Units 1 and 2 shall have a minimum of 70 square feet, and Unit 11 shall have a minimum of 90 square feet. (e) The requirement of City Municipal Code Section 41-592.3 and SP2, Ch. 3, Table 3-9 for common open space is reduced from 9,409 square feet, which is 15% of the lot area, to 1,951 square feet.

2.4 Parking Requirements. Onsite parking shall be provided in compliance with Government Code Section 65915(p). The Project shall provide not less than seventy one (71) parking spaces.

2.5 No Further Concessions, Incentives, or Waivers. Developer acknowledges and agrees that no further concessions, incentives, waivers or parking requirements are requested, and that the terms set forth in Section 2.3 and 2.4 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.

2.6 Unit Mix.

2.6.1 Unrestricted Units. The Project, for purposes of this Agreement, may have no more than thirty two (32) Unrestricted Units, as set forth Section 2.6.3, below, plus any Released Units, as set forth in Section 3.6 below, and pursuant to the terms and conditions of this Agreement. Any change to the unit distribution of the Unrestricted Units may affect the comparability of the Affordable Units and is subject to City Manager approval.

2.6.2 Affordable Units. The Project, for purposes of this Agreement, shall have no less than four (4) Affordable Units, for Moderate Income Households, as set forth in Section City Council 19 – 22 6/3/2025
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2.6.3, and pursuant to the terms and conditions of this Agreement. The Affordable Units shall be consistent with the Project Approvals, comparable in bedroom distribution and amenities to the Unrestricted Units, and shall be located throughout the Project as required under Santa Ana Municipal Code section 41-1602(c)(5).

2.6.3 Unit Mix. Two (2) Affordable Units shall be three-bedroom units and two (2) shall be four-bedroom units. The Affordable Units shall be consistent with the Project Approvals for the Project.

2.7 Minimum Development Standards for Affordable Units. The Affordable Units shall be constructed with the same exterior appearance and interior features, fixtures, and amenities, and shall use the same type and quality of materials as provided for any base Unrestricted Units, regardless of whether such Unrestricted Units are in the Project.

Notwithstanding the foregoing, nothing herein shall be construed to limit the ability of purchasers of Unrestricted Units to purchase upgrades for such units.

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 having or claiming jurisdiction over the Property or Project. Upon securing any and all 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, inclusive of the Project Approvals. Any changes to the Project shall be reviewed by the City Manager 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 reasonable 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 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 City Council 19 – 23 6/3/2025
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thereof) pursuant to Section 4.2 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 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, conditioned or delayed 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 Affordability Term. The Affordability Term for each Affordable Unit shall commence on the date the Affordable Unit receives a certificate occupancy and expire fifty-five (55) years later (each an “Affordability Term”).

3.2 Memorializing Commencement of Affordability Term. Developer shall keep or cause to be kept detailed records of the commencement date of the Affordability Term for each Affordable Unit until that Affordable Unit is sold to a Homebuyer in accordance with this Agreement or released pursuant to Section 3.6 hereof. 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 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. Each Affordable Unit shall be initially sold to and occupied by an Eligible Household for an Affordable Sales Price, and any resale shall be subject to the Affordable Housing Resale Restrictions and the City Deed of Trust recorded against the Affordable Unit.

3.3.1 Affordable Sales Price. Developer covenants that, during the Term of this Agreement, each Affordable Unit shall be sold to, or held vacant for sale to, an Eligible Household for an Affordable Sales Price. The Affordable Sales Price is equal to the sum of the Supportable Mortgage plus, if applicable, the Benchmark Down Payment. Prior to the sale of any Affordable Unit, Developer shall provide the City with at least thirty (30) days’ written notice of the determined amount, and the City shall have ten (10) days to approve or disapprove of the proposed Affordable Sales Price. The Affordable Sales Price for the initial sale of the Affordable Units shall be as calculated in Exhibit I.

3.4 Notice to City. Prior to entering into an agreement for the transfer of an Affordable Unit, Developer shall provide at least thirty (30) days written notice to the City, along City Council 19 – 24 6/3/2025
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with a proposed written agreement setting forth the terms of the sale, including the proposed Affordable Sales Price.

3.5 Homebuyer Documents. The sale of each Affordable Unit is subject to satisfaction of the following conditions:

3.5.1 Each Homebuyer shall execute the Affordable Housing Resale Restrictions, which shall be recorded against the Affordable Unit.

3.5.2 The Affordable Housing Resale Restrictions shall include the following occupancy requirements: The Owner shall occupy and continually use the Affordable Unit as the Homebuyer’s Primary Residence during the Total Affordability Term. On an annual basis, the City’s Program Manager will send the Homebuyer an Occupancy Recertification Form to be filled out and returned to the City within thirty (30) days of receipt. The Owner shall affirm that they are occupying the Affordable Unit as their Primary Residence. The Owner will be required to submit copies of two current utility bills, or other evidence of occupancy that is acceptable to the City, as part of the annual recertification process.

3.5.3 The Affordable Housing Resale Restrictions shall provide for the terms of resale and the distribution of proceeds from any sale, as follows:
(a) The Homebuyer shall execute the City Promissory Note evidencing Homebuyer's agreement to pay the City Equity Share, and record the City Deed of Trust against the Affordable Unit to secure the City Promissory Note. (b) During the Affordability Term, prior to the Transfer of an Affordable Unit, each Homebuyer shall agree to the City Promissory Note, and execute the Affordable Housing Resale Restrictions, the City Deed of Trust, the Notice of Restrictions, and the Request for Default, which shall be recorded against each Affordable Unit. In the event a Homebuyer seeks to Transfer an Affordable Unit during the Affordability Term, the City, in its sole and absolute discretion, may approve an assignment and assumption agreement for subsequent sales of the Property to Eligible Households during the Affordability Term. The Affordable Housing Resale Restrictions shall provide that Affordable Units shall only be Transferred to an Eligible Household for an Affordable Sales Price during the Affordability Term, and the City Deed of Trust securing the City Promissory Note shall remain a lien on the Property. (c) During the Affordability Term, if a Transfer complies with the requirements of the Affordable Housing Resale Restrictions, then the Homebuyer selling the Affordable Unit shall be entitled to closing proceeds after payment of a First Lien for the Affordable Unit, and the City Equity Share shall be an obligation of the new Homebuyer, pursuant to the City Promissory Note and City Deed of Trust recorded against the Property. (d) Following the expiration of the Affordability Term for the Affordable Unit, the City Equity Share shall become due and payable upon a Transfer of the Property.

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(e) The City Equity Share includes an amount equal to the “initial subsidy” and “proportionate share of appreciation,” in accordance with California Government Code section 65915(c)(2), and shall be determined as follows:
(i) An amount equal to the difference between the fair market value of the Affordable Unit at the time of the initial purchase and the Affordable Sales Price (the “Initial Subsidy”), plus
(ii) An amount equal to the product of (1) the appreciation of the Affordable Unit, as measured by the increase in the fair market value of the Affordable Unit at the time of the sale to the Homebuyer and the resale of the Affordable Unit, and (2) the percentage that the Initial Subsidy represented of the fair market value of the Affordable Unit when it was purchased by the Homebuyer (the “Proportionate Share of Appreciation”). (f) Payment of the City Equity Share is subject to the following: (1) payment to satisfy a First Lien from a primary lender, as approved by City at the time of the initial sale, or subsequent approval in the event of a refinance event, and (2) an amount equal to the down payment and the cost of improvements paid by the Homebuyer. Following payment of the City Equity Share, the Homebuyer shall receive the remainder of any closing proceeds, less any costs of closing, including any and all real estate broker commissions. (g) When the City Equity Share becomes due, the proceeds from the sale of the Property shall first satisfy a First Lien, and the Homebuyer shall receive proceeds for the value of any improvements and any down payment actually paid. The City Equity Share shall be paid prior to disbursement of remaining sales proceeds to the Homebuyer.

3.5.4 In order to assist City with calculation of the City Equity Share, Developer or a Homebuyer, as applicable, shall provide City with a calculation of the fair market value of each Affordable Unit at the initial sale which shall be determined as follows:
(a) For the initial sale, Developer shall propose to the City a fair market value based on a price per square foot that is based on comparable sales of other units within the Project.
(b) Except for the initial sales subject to sub-paragraph (a), prior to the sale of an Affordable Unit, a qualified appraiser shall conduct an appraisal of the Affordable Unit to determine fair market value without the restrictions of this Agreement. If a seller or prospective Homebuyer disputes the appraised value, then that party may pay for the costs of a second appraisal and, if there is still disagreement, the average of the two appraisals shall be used to determine the fair market value.
(c) The fair market value of the Affordable Unit, as determined in accordance with the above, shall be provided to the City for approval or disapproval, which City shall provide within thirty (30) days of receipt of the proposed fair market value. If City does not provide a written response within such time period, then the proposed fair market value shall be deemed approved by the City.

City Council 19 – 26 6/3/2025
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3.6 Alternative Compliance. If, for the initial sale of an Affordable Unit, a Homebuyer has not been identified by the Developer for certification by the City within 90 days of the issuance of a Certificate of Occupancy for such unit and good faith marketing efforts by Developer, as outlined in Section 4.13, Developer shall provide the City written notice that a Homebuyer has not been identified for the Affordable Unit; the notice to the City shall include a description of additional plans to market the Affordable Unit subject to City’s reasonable review and approval. If Developer is still unable to identify a Homebuyer within an additional 90 days following implementation of the additional marketing plan approved by the City, Developer may sell the Affordable Unit to a qualified nonprofit housing corporation pursuant to, and subject to the requirements of, the State Density Bonus Law (“Nonprofit Unit”). At close of such a sale, provided that the Developer has complied with all requirements of the State Density Bonus Law, including but not limited to recording an equity sharing agreement against the Nonprofit Unit required under Government Code Section 65915(c)(2)(C), the Nonprofit Unit shall not be subject to any requirement of this Agreement and this Agreement shall terminate as to and cease to be a burden on or encumbrance against that Nonprofit Unit. Upon Developer’s request in connection with a sale of a Nonprofit Unit approved by the City, City agrees to provide documentation, in a form subject to City’s reasonable approval, terminating this Agreement as to that Nonprofit Unit at the close of the sale.

4. OPERATION OF THE PROJECT BY DEVELOPER

4.1 Payment of Density Bonus Setup Fee. A Density Bonus Setup Fee in the amount of $12,685.03, was paid by the Developer on March 27, 2025.

4.2 Recording of Documents; Priority.

4.2.1 Prior to 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, and Developer shall deliver the proof of recording as required by Section 4.2.3, below. 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 of this Agreement shall be binding upon and run with the Property and Project for the Term of this Agreement. It is the express intent and agreement between the Parties that this Agreement shall remain binding and enforceable against the Affordable Units for the Term of this Agreement 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.

4.2.2 The Agreement shall be recorded against the Property and have priority over those matters of public record, except as approved in writing by the City; provided, however, prior to issuance of a Certificate of Occupancy for the Project, the Parties may execute an amendment to this Agreement or other appropriate instrument that ensures that the requirements of this Agreement, upon the creation of the Affordable Units and the recordation of this Agreement, are properly recorded against each Affordable Unit and memorializes Owner's obligation to provide the Affordable Units on a for-sale basis in accordance with this Agreement and, upon the recording of such instrument as to the individual Affordable Units, the City may determine, in its sole and absolute discretion, to a release of this Agreement to the Property as a whole. Provided, however, City Council 19 – 27 6/3/2025
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this Agreement shall terminate and be of no further force and effect on the Unrestricted Units or any common areas of the Property as provided in Section 5.1.

4.2.3 Prior to issuance of building permits for the Project, Developer shall cause to be provided to City a condition of title guarantee (or other evidence acceptable to the City) that demonstrates this Agreement is senior to any other lien, deed of trust, mortgage, or other interest in the Property or the Project, except any Developer construction loan, Developer mortgage or deed of trust, or other interest in the Property or the Project approved by the City in writing, which approval shall not be unreasonably conditioned, withheld, or delayed. The City shall have not less than ten (10) days to determine that this Agreement (or an amended version of the Agreement restricting the Affordable Units) has senior rights. If City disapproves the evidence provided by Developer, then Developer agrees and acknowledges that City may withhold the building permit unless and until Developer provides evidence satisfactory to the City demonstrating priority of this Agreement or an amendment thereto.

4.3 Occupancy Levels. Developer shall not apply or permit any occupancy requirements that violate local, state or federal law during the development or sale of the Affordable Units.

4.4 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.

4.5 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. Developer, until a Homeowners’ Association (“HOA”) is established, at which point, the HOA and each Homebuyer shall be fully and solely responsible for costs of maintenance, repair, addition and improvements. City, and any of its employees, agents, contractors or designees shall have the right to enter upon the Property at reasonable times and in a reasonable manner to inspect the Project, after providing notice as follows: (i) at least a 24-hour notice to Developer and Homebuyer of the Affordable Unit which will be inspected, or (ii) at least 48 hours’ notice to Developer, which shall promptly give notice to Owners of the Affordable Unit to be inspected.

4.6 Preparation and Recordation of Transfer Documents. Developer shall prepare and obtain City’s approval, which approval shall not be unreasonably withheld, conditioned or delayed, of the Affordable Housing Resale Restrictions, the City Promissory Note, the City Deed of Trust, and the Notice of Affordability Restrictions, for each Affordable Unit to Eligible Households required by Section 3 of this Agreement in substantially the forms attached hereto as Exhibits B, C, D, and G, respectively. Developer shall not sell an Affordable Unit unless and until the City has reviewed and approved the Homebuyer as an Eligible Household for the purchase of the Affordable Unit, and the Homebuyer has executed and submitted to the Program Director, in recordable form, the Affordable Housing Resale Restrictions, the City Deed of Trust, and the Notice of Affordability Restrictions, and the approved financing for the Homebuyer, including the executed City Promissory Note. City’s approval of the Homebuyer as an Eligible Household City Council 19 – 28 6/3/2025
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pursuant to this Section 4.6 shall not be unreasonably conditioned, withheld, or delayed. City shall have thirty (30) days to review a request to approve a proposed Homebuyer.

4.7 Selection of Homebuyers.

4.7.1 Developer shall be responsible for the selection of Homebuyers for the Affordable Units in compliance with lawful and reasonable criteria and the requirements of this Agreement.

4.7.2 In selecting Homebuyers for the Affordable Units, Developer shall apply a preference for Santa Ana residents and workers to the extent permissible by law. Subject to applicable laws and regulations governing nondiscrimination and preferences in housing occupancy required by the State of California, the Developer shall give preference in purchasing 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.

4.7.3 Qualified applicants for Affordable Units will be screened and “lotterized.” A waiting list will be created from a lottery generated from the initial pool of qualified homebuyer applications. The waiting list will track applicant name and contact information, lottery number (or designated number after the initial lottery), household income, household size, status of application, and any other information deemed necessary. The waiting list will be maintained as an electronic file and available for audit by the City of Santa Ana in accordance with resident selection procedures as set forth herein.

4.7.4 Prior to the sale of an Affordable Unit, Developer shall require the Homebuyer to execute a written purchase sale agreement substantially similar to the Form PSA, and a written certification from the Homebuyer verifying compliance with the requirements for an Eligible Household and all other eligibility requirements established for the Affordable Unit.

Developer shall verify the income of the Homebuyer as set forth herein.

4.8 Income Verification and Certification. Developer shall verify income of prospective Homebuyers and certify the verification to the City; provided, however, that Developer shall not be liable for any fraud or mistake in performing its duties pursuant to this Section 4.8. In evaluating prospective Homebuyers, Developer shall consider the following sources of income in order of preference: (i) employment income; (ii) business income; (iii) income from Social Security, Supplemental Security Income (SSI), welfare, disability, or pension payments; and (iv) alimony or child support. To verify income, Developer shall comply with the procedures set forth in Section A-3 of the Administrative Procedures Manual. Subject to the foregoing preferences, Developer shall consider Gross Household Income from all adult Household members, which is anticipated to be received during the 12-month period following the date of the determination of Gross Household Income. Within fifteen (15) days of delivery of an executed contract for purchase of an Affordable Unit by a prospective Homebuyer, Developer shall provide City with the Income Verification Form set forth in Exhibit F and the Certification of Continuing Occupancy set forth in Exhibit G.

4.9 DELETED
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4.10 DELETED

4.11 DELETED

4.12 Marketing and Resident Selection Plan.

4.12.1 Prior to Certificate of Occupancy, Developer shall prepare and obtain City’s approval, which approval shall not be unreasonably conditioned, withheld, or delayed, of a marketing program and resident selection plan for the sale of the Affordable Units at the Project (“Marketing Program”). City shall have thirty (30) days to review a proposed Marketing Program.

The sale 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 sale of the Affordable Units.

4.12.2 The Marketing Program shall include marketing and community outreach activities, proposed Homebuyer 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 the application process, interview procedure, Affordable Unit offer and assignment for selected homeowners, rejected applications, and wait list management. All requirements set forth herein shall be incorporated in the Marketing Program.

4.13 Non-Discrimination in Housing. Developer, and any successors in interest, shall not discriminate any person or group of persons on account of race, color, religion, sex, gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, familial or marital status, disability, veteran or military status, genetic information, political affiliation or opinion, medical condition, pregnancy or pregnancy-related condition, or condition of physical or mental disability or other handicap, age, or source of income or status with regard to public assistance in the transfer, use, occupancy, tenure or enjoyment of the Property or the Affordable Units, and the Developer, or any person claiming under or through it, shall not establish or permit any such practice of discrimination or segregation with reference to the selection, location, number, use or occupancy of any Homebuyer or resident of the Property or the Affordable Units.

4.14 Monitoring and Recordkeeping. Throughout the Term of this Agreement, on or before January 31 of each year, Developer shall annually complete or cause to be completed and submit to City the Annual Compliance Report in the form set forth in Exhibit G for each year until all Affordable Units are sold. Representatives of City shall be entitled to enter the Property if necessary after review of above documentation, upon at least forty-eight (48) hour 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 Unit reasonably 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.

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4.15 Developer shall allow the City to conduct annual inspections of the Affordable Units on the Property after the date of construction completion, with reasonable notice, which shall be at least twenty four (24) hours in advance, unless a shorter time is required in an emergency, to Developer for the Term of this Agreement. 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.

5. TERM OF THIS AGREEMENT

5.1 Term. This Agreement shall continue until all Affordable Units have been sold to Homebuyers pursuant to this Agreement (the “Term”). Upon the issuance of a Certificate of Occupancy for all of the Affordable Units in a building, this Agreement shall terminate as to the Unrestricted Units and the common area associated with that building. If there are no Affordable Units in a particular building, this Agreement shall terminate as to the Unrestricted Units in that building and the common area associated with that building upon the issuance of the Certificate of Occupancy for Affordable Units in the prior building. Upon the initial sale of each Affordable Unit and execution and recordation (as applicable) of the Homebuyer Documents pursuant to Section 3.5, or sale of an Affordable Unit as a Released Unit pursuant to Section 3.6, this Agreement shall terminate and be of no further force and effect with respect to such Affordable Unit. Upon the initial sale of all Affordable Units to Eligible Households pursuant to this Agreement, this Agreement shall terminate and be of no further force and effect. While not necessary to effect the termination of this Agreement, the Parties shall cooperate to execute and record a release or termination as to the Unrestricted Units, common area of the Project, or the Affordable Units as per the terms of this Section.

5.2 Continuing Obligation to Pay the City Equity Share. Notwithstanding the expiration of the Term, the City shall have the right to receive payment for the City Equity Share, and enforce the Affordable Housing Resale Restrictions, the City Promissory Note, and the City Deed of Trust until satisfactory payment of the City Equity Share pursuant to the terms of those agreements.

6. DEFAULT AND TERMINATION; INDEMNIFICATION

6.1 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 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 within an additional sixty (60) days following the conclusion of such thirty (30) day period (for a total of ninety (90) days). 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.

6.2 Remedies.

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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 claims, demands, or causes of action arising from or related to Developer’s performance of its obligations under this Agreement, including the approval of this Agreement, except to the extent caused by the active negligence or willful misconduct of Indemnitees.

7. ASSIGNMENT; COVENANTS RUN WITH THE LAND

7.1 Assignment by Developer.

7.1.1 Prohibited Transfers or Assignments. 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, unless the sale, transfer, or assignment complies with this Section 7. With the exception of sale, transfer, or assignment occurring after the recordation of this Agreement to an entity wholly owned by Developer, if Developer seeks to sell, transfer or assign the Property or Project, or any rights and obligations in this Agreement, Developer shall request City’s written consent, and City shall respond within thirty (30) days with a written approval or denial, which City may determine in its reasonable discretion. City’s failure to respond to the request within thirty (30) days shall be deemed an approval.

7.1.2 Sale or Conveyance of Property. Developer agrees and declares that the Property and the Project shall be held, conveyed, mortgaged, encumbered, leased, rented, used, occupied, operated, sold, and approved subject to all obligations set forth or incorporated in this Agreement in accordance with the terms of Section 5.1 hereof, 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 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 approvals received for this Project have been made on the condition that Developer and all subsequent owners, or other successors and assigns of the Property and/or Project sell the Affordable Units in accordance with the covenants, conditions and restrictions of this Agreement. Notwithstanding anything to the contrary contained herein, in the event that Developer or any successor in interest elects not to construct the Project, or any portion thereof, this Agreement shall terminate as to and cease to be a burden on or encumbrance against the Property or such portion thereof upon expiration or earlier termination of the entitlements for the Project.

7.1.3 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.

7.1.4 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.

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7.2 Covenants Run with the Land. The Property shall be used, occupied and improved subject to the covenants, conditions, and restrictions set forth herein in accordance with the terms of Section 5.1 hereof. The covenants, conditions, restrictions, reservations, equitable servitudes, liens and charges set forth in this Agreement shall run with the Property in accordance with the terms of Section 5.1 hereof 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. 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 interest in the Property is rendered less valuable thereby. Developer hereby further declares its understanding and intent that the agreement provides a public benefit in furtherance of 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.

8. MISCELLANEOUS

8.1 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 of the Project, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or 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.

8.2 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 that further the intent of this Agreement. 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, for the City’s review of the request. Each alteration, change, or modification to this Agreement shall be recorded against the Property in the Official Records of Orange County, California.

8.3 Notices.

8.3.1 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 City Council 19 – 34 6/3/2025
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