Agenda packet — City Council and Authorities Concurrent, September 19, 2023 (part 2 of 3)

MEMORANDUM OF UNDERSTANDING

BETWEEN THE

CITY OF SANTA CLARA AND THE

COUNTY OF SANTA CLARA

REGARDING THE PSYCHIATRIC EMERGENCY RESPONSE TEAM (PERT)

JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM

WHEREAS, the mission of the City of Santa Clara (hereinafter “CITY”) is to provide quality public services, facilities and opportunities that create, sustain, and enhance a safe, livable, and vibrant community for its diverse residents, businesses, and visitors. The CITY’s Santa Clara Police Department (hereinafter “SCPD”) is a progressive and professional organization dedicated to maintaining community partnerships which promote a high quality of life for the City’s diverse population; and

WHEREAS, the mission of the County of Santa Clara (hereina fter “COUNTY”) is to plan for the needs of a dynamic community, provide quality services, and promote a healthy, safe, and prosperous community for all; and

WHEREAS, COUNTY and CITY seek to collaborate to increase public safety and reduce recidivism among high risk people with mental illnesses and co-occurring mental illness and substance abuse through the Psychiatric Emergency Response Team Justice and Mental Health Collaboration Program (or “PERT Program”); and

WHEREAS, the partners listed above have agreed to enter into a collaborative agreement in which CITY and COUNTY Behavioral Health Services Department (hereinafter “BHSD”) will be partners on this collaborative effort to combine the unique resources, skills, experience, and training of personnel from two different professions (law enforcement and mental health services) to provide the best possible response to situations involving persons with mental illness; and

WHEREAS, the partners herein desire to enter into a Memorandum of Understanding (hereinafter "MOU") setting forth the roles, responsibilities, and services to be provided by the PERT Program; and

WHEREAS, the agencies recognize the need for cross-system collaboration to improve responses and outcomes for individuals with mental illnesses and substance abuse who come into contact with the justice system; and

WHEREAS, the partners recognize the need to increase public safety and to provide rapid intervention to a person in mental health crisis by de-escalating the situation and helping to stabilize the person in the least restrictive way possible, and then striving to get that person the help they need; and

WHEREAS, the partners are committed to providing services to those in need regardless of their ethnicity, gender, gender identity, sexual orientation, origin, religious or political beliefs, and/or creed;

NOW, THEREFORE, it is hereby agreed by and between the partners as follows:

DocuSign Envelope ID: 870E036A-0D8A-4CDE-B86D-4C57A53CAA46

Page 2 of 7 ends

ARTICLE 1
TERM; EXTENSIONS; TERMINATION

1.1 Term of Agreement. The initial term of this MOU is from the date the MOU is executed by both parties to December 31, 2023, or until the CITY’s available appropriation in the amount of $180,000 is exhausted, whichever occurs first.

1.2 Extension. This MOU may be extended should this pilot program be successful, the CITY and/or COUNTY identifies funding, and upon a written amendment of this MOU signed by both Parties. Extension of this MOU shall be contingent on COUNTY’s review of the use, need, and value of the PERT Program and COUNTY’s budget to ensure that the Behavioral Health Services Department (BHSD) PERT clinician(s) can be continued for each successive term.

1.3 Termination without Cause. Any Party may terminate this MOU without cause by providing sixty (60) day written notice.

ARTICLE 2

SCOPE OF SERVICES

2.1 The COUNTY shall provide the following for the PERT Program:
a. Participate in proactive responses for high-risk individuals with mental illness in conjunction with the SCPD PERT officer(s);
b. Develop and modify protocols for PERT Program response and information sharing policies and procedures, as necessary;
c. Identify one (1) full time BHSD clinician (hereinafter “BHSD PERT Clinician), who must be licensed to provide mental health services by appropriate State of California licensing authorities and must participate in a CITY background investigation and fingerprinting, prior to beginning work with the CITY.
d. Assign the identified BHSD PERT Clinician to work with the SCPD PERT officer(s) to perform the following tasks:
1) Conduct mental health evaluations, assessments, and crisis screening, for persons with serious mental illnesses including clients who are frequent users of emergency psychiatrist services, dual diagnosed clients and clients who are mentally ill; 2) Assist in determining the appropriate disposition supporting individuals’ needs and safety;
3) Consult with SCPD PERT officer(s) regarding disposition of individuals and law enforcement issues;
4) Maintain knowledge of the criteria for psychiatric disorders according to the current Diagnostic and Statistical Manual of Mental Disorders;
5) Maintain knowledge of current legal and ethical issues as they relate to mental illness;
6) Maintain licensing as required;
7) Ensure requirements for detention and transportation pursuant to Welfare and Institutions Code (WIC) Section 5150 are met;
8) Provide documentation to the PERT officer(s) supporting the decision to detain and transport a subject pursuant to WIC Section 5150;
9) Assist in coordination of transportation to mental health service centers, or facilities when such support and services would be beneficial (regardless of whether a 72- hour evaluation hold is issued), and there is cooperation from the subject; 10) Maintain a law enforcement security clearance;
DocuSign Envelope ID: 870E036A-0D8A-4CDE-B86D-4C57A53CAA46

Page 3 of 7 ends

11) Conduct presentations to inform others about the mission and focus of the PERT Program;
12) Provide mental health training and expertise to other SCPD Department staff. 13) Contribute toward providing metrics related to the PERT Program; 14) Engage in law enforcement activities that are related only to the PERT mission and focus; and
15) Abide by and follow all CITY policies while performing services under this MOU. e. Collaborate with the CITY in determining what training, if any, is necessary for the BHSD PERT Clinician during the duration of the MOU; and
f. Work with SCPD to identify any trainings that may be provided to officers to assist with appropriately responding to incidents involving individuals with mental illness and
substance abuse. Any identified courses and trainings must be certified by POST to ensure a consistent level of quality.

2.2 The CITY shall provide the following for the PERT Program:

a. Develop a detailed policy, procedure, process, and plan on implementing a specialized police mental health PERT Program;
b. Expand training for law enforcement to identify and respond to individuals with mental illness and provide cross-training of crim inal justice and mental health personnel; c. Establish a dedicated SCPD officer(s) to work with the BHSD PERT Clinician; d. Participate in the process of identifying the BHSD PERT Clinician to work with SCPD as part of the Community Response Team (CRT);
e. Assume primary responsibility for site control when responding to a crisis; f. Assume role of the primary responder when engaged with BHSD PERT Clinician; g. Issue basic tools to BHSD PERT Clinician to perform their duties and provide access to certain CITY facilities.
h. Determine whether phone consultation or on-site consultation is needed from the BHSD PERT Clinician;
i. Coordinate training exercises with the BHSD PERT Clinician to ensure proper collaboration when needed during a crisis;
j. Collaborate with the BHSD PERT Clinician by participating in trainings and meetings to ensure proper understanding of roles and responsibilities during crisis situations; k. Facilitate transportation for clients to the appropriate receiving facility when a WIC 5150 hold has been placed by the BHSD PERT clinician in response to a call for service to SCPD; l. Agree to provide review on overall effectiveness on BHSD PERT clinician deployments; m. Agree to provide information to BHSD PERT clinician regarding individuals who are involved in a crisis incident, when such information provides critical value to the safe resolution of those incidents;
n. Have an officer on scene with the PERT Clinician to provide the following services:
1) Assess the situation regarding safety for the officer, the BHSD PERT Clinician, the consumer, and bystanders;
2) Provide safety on scene; and
3) Evaluate the subject for any criminal behavior, as appropriate; o. Offer referrals or other assistance through the officer and PERT Clinician as the situation warrants, and if needed, assist the individual to the appropriate setting (either voluntarily or involuntarily);
p. Collaborate with the COUNTY in determining what training, if any, is necessary for the BHSD PERT Clinician during the duration of the MOU;
DocuSign Envelope ID: 870E036A-0D8A-4CDE-B86D-4C57A53CAA46

Page 4 of 7 ends

q. Modify and enhance policies, procedures, and protocols for the PERT Program and information sharing process, as necessary; and
r. Work in conjunction with the PERT Clinician, to draft and submit a Monthly Program Narrative Report to County no later than seven (7) days after the end of each month. The Quarterly Narrative Report shall include a summary of the PERT Program’s performance goals, milestones achieved, and any issues/concerns encountered during the reporting period.

ARTICLE 3

RELATIONSHIP OF PARTIES AND FINANCIAL REQUIREMENTS

3.1 Relationship of Parties. The COUNTY acknowledges and agrees that the work/services provided by the BHSD PERT Clinician under this MOU are performed as an independent contractor relative to the CITY. The BHSD PERT Clinician is part of the COUNTY workforce and will remain as employee of the COUNTY while providing services under this MOU.

3.2 Funding/Financial Responsibilities. Unless amended by the Board of Supervisors and the Santa Clara City Council, the annual contribution of the COUNTY and CITY to the Pilot Program expenses shall be as follows.
a. The COUNTY shall provide the following funding/financial responsibilities:
1) The COUNTY shall pay, up front, all personnel costs of the PERT Program (i.e., the fully weighted costs of salary and benefits for the BHSD PERT Clinician) in accordance with the COUNTY’s memorandum of understanding with applicable bargaining unit.
2) The COUNTY shall procure and supply the BHSD PERT Clinician with a laptop and cellphone. The initial and on-going costs for such equipment, maintenance and/or replacement shall be incurred by the COUNTY. The COUNTY shall retain ownership of the property at the conclusion of the MOU term. 3) The COUNTY shall pay for staff time and benefits as applicable. 4) The COUNTY is not obligated to provide services for which no reimbursement will be made when the CITY’s maximum financial obligation has been fully exhausted.

b. The CITY shall provide the following funding/financial responsibilities:
1) The CITY shall reimburse County for the salary and benefits of the BHSD PERT Clinician. The maximum financial obligation of CITY shall not exceed $180,000.

The CITY shall not be liable for any costs above this amount. 2) The CITY shall provide the BHSD PERT Clinician with a fitted protective vest at its sole expense.
3) The CITY shall pay for related expenses such as the registration, meal per diem, and lodging for any required attendance by the BHSD PERT Clinician to any conference, workshop, or training program(s).
c. Both the COUNTY and CITY shall collaboratively determine what training, if any, is necessary during the duration of the MOU.

1.4 Staffing. The CITY shall be involved with the process for identifying the COUNTY PERT Clinician to work from SCPD as part of the Community Response Team (CRT). The pilot program shall consist of one (1) full time clinician who must be licensed to provide mental health services by appropriate State of California licensing authorities.

DocuSign Envelope ID: 870E036A-0D8A-4CDE-B86D-4C57A53CAA46

Page 5 of 7 ends

a. The COUNTY PERT Clinician shall be required to participate in a CITY background investigation and be fingerprinted, with subsequent arrest notification, prior to beginning work with the CITY. b. The CITY shall issue the COUNTY PERT Clinician basic tools to perform their duties and provide access to certain CITY facilities.
c. The COUNTY PERT Clinician shall follow all CITY polices while performing services under this MOU.

3.3 Invoicing and Payment. The COUNTY shall be required to create and implement a timekeeping system to account for COUNTY staff time to be validated by CITY staff. In turn, the COUNTY shall invoice the CITY monthly for reimbursement. Both CITY and COUNTY representatives shall be required to monitor the monthly cost for the COUNTY PERT Clinician.

ARTICLE 4

MISCELLANEOUS PROVISIONS

4.1 Collaboration. Both the CITY and the COUNTY have jointly developed this MOU. All PERT Program partners are committed to working together to achieve the stated project goals through monthly meetings designed to develop and implementation, as we ll as monitor and evaluate the project. PERT Program Partners shall meet informally and as often as needed.

4.2 Record Retention. The CITY and COUNTY shall maintain all documents and records which demonstrate performance under this MOU for a minimum period of three (3) years, from the date of termination or completion of this MOU.

4.3 Compliance with Non-Discrimination and Equal Opportunity Laws: The CITY and COUNTY shall comply with all applicable Laws concerning nondiscrimination and equal opportunity in employment and contracting, including but not limited to the following: Santa Clara County’s policies for contractors on nondiscrimination and equal opportunity; Title VII of the Civil Rights Act of 1964 as amended; Americans with Disabilities Act of 1990; the Age Discrimination in Employment Act of 1967; the Rehabilitation Act of 1973 (Sections 503 and 504); the Equal Pay Act of 1963; California Fair Employment and Housing Act (Gov. Code § 12900 et seq.); California Labor Code sections 1101, 1102, and 1197.5; and the Genetic Information Nondiscrimination Act of 2008. CITY and COUNTY shall not discriminate in the provision of services provided under this contract because of age, race, color, national origin, ancestry, religion, sex, gender identity, gender expression, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status.

California Public Records Act. The Parties are public agencies subject to the disclosure requirements of the California Public Records Act (“CPRA”). In the event either Party receives a CPRA request for records related to the PERT program the Parties shall collaborate to comply with the CPRA and to prevent disclosure of exempt records, such as medical or mental health records.

4.4 Records and Confidentiality. Records created by the BHSD PERT Clinician, even while operating in collaboration with CITY, shall be considered County records, free from the control and direction of any other party to this MOU. Such records will be subject to all federal, state, and local laws and regulations regarding the protection of client/patient privacy and confidentiality.

Both Parties agree that all BHSD PERT Clinicians are County employees and shall follow the privacy requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

The BHSD shall train all BHSD PERT Clinicians on federal, state, and local policies and procedures with respect to the confidentiality, use and/or disclosure of protected health information of clients as necessary and appropriate for the BHSD PERT Clinicians to perform their functions. The BHSD shall provide BHSD PERT Clinicians with the appropriate Health System(s) policies and procedures, which are subject to change from time to time. The BHSD reserves the right to take appropriate DocuSign Envelope ID: 870E036A-0D8A-4CDE-B86D-4C57A53CAA46

Page 6 of 7 ends

action for violation of its policies; such action may include immediate termination of any BHSD PERT Clinician who violates Federal, State, or local law and policy.

4.5 Contract Execution. Unless otherwise prohibited by law or County policy, the parties agree that an electronic copy of a signed contract, or an electronically signed contract, has the same force and legal effect as a contract executed with an original ink signature. The term “electronic copy of a signed contract” refers to a transmission by facsimile, electronic mail, or other electronic means of a copy of an original signed contract in a portable document format. The term “electronically signed contract” means a contract that is executed by applying an electronic signature using technology approved by the County.

4.6 Indemnification and Insurance

a. Indemnification. In lieu of and notwithstanding the pro rata risk allocation, which might otherwise be imposed between the Parties pursu ant to Government Code Section 895.6, the Parties agree that all losses or liabilities incurred by Party shall not be shared pro rata but, instead, COUNTY and CITY agree that, pursuant to Government Code Section 895.4, each of the Parties hereto shall fully indemnify and hold each of the other Parties, their officers, board members, employees, and agents, harmless from any claim, expense or cost, damage or liability imposed for injury (as defined in Government Code Section 810.8) occurring by reason of the negligent acts or omissions or willful miscondu ct of the indemnifying party, its officers, employees or agents, under or in connection with or arising out of any work, authority or jurisdiction delegated to such party under this MOU. No party, nor any officer, board member or agent thereof shall be responsible for any damage or liability occurring by reason of the negligent acts or omissions or willful misconduct of the other Parties hereto, their officers, board members, employees, or agents, under or in connection with or arising out of any work authority or jurisdiction delegated to such other Parties under this MOU.

b. Insurance. Without limiting the indemnification of either party to this Agreement, each party shall maintain or cause to be maintained throughout the term of the Agreement the following insurance coverage: (i) a policy of commercial general liability with limits of liability not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) annual aggregate; (ii) a policy of automobile liability with limits of liability not less than one million dollars ($1,000,000) per occurrence and two million dollars ($2,000,000) annual aggregate (iii) a policy of workers’ compensation providing statutory coverage; and (iv) such other insurance or self-insurance as shall be necessary to insure it against any claim or claims for damages arising under the Agreement.

Insurance afforded by a commercial general liability policy shall be endorsed to provide coverage to the other party of the Agreement as an additional insured. Each party to this Agreement shall provide a Certificate of Insurance certifying that coverage as required herein has been obtained. The requirements of this section may be satisfied by the provision of similar coverage through a self- insurance program.

4.7 Notices. All notices required under the terms of this MOU will be in writing and must be transmitted by electronic mail or deposited in the United States Mail, certified mail, return receipt requested, addressed to the parties as set forth below:

COUNTY OF SANTA CLARA: CITY OF SANTA CLARA:

Bruce Copley, Director Rajeev Batra
BHSD Access and Unplanned Services Office of the City Manager [email protected] [email protected]
S. Bascom Ave., Suite 200 1500 Warburton Avenue
San Jose, CA 95128 Santa Clara, CA 95050
(408) 885-3957 (408)615-2210

DocuSign Envelope ID: 870E036A-0D8A-4CDE-B86D-4C57A53CAA46

Page 7 of 7 ends

By signing below, each agency approves the conditions set forth in this MOU as well as the submitted application and proposed project budget.

“COUNTY” County of Santa Clara

Gene Clark, CCPO, C.P.M. Date

Chief Procurement Officer
“CITY” City of Santa Clara, a Municipal
Corporation and Charter City

_____________________________________
Rajeev Batra Date
City Manager

APPROVED AS TO FORM AND LEGALITY: APPROVE AS TO FORM AND LEGALITY:

______________________________________ _____________________________________ Megan Wheelehan Date Office the City Attorney Date
Deputy County Counsel City of Santa Clara

APPROVED:

_______________________________________
Sherri Terao, E.d. D Date
Director
Behavioral Health Services Department

APPROVED:

________________________________________
Vincent DePaul Robben Date
Health Care Financial Manager County of
Santa Clara Health System
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1418 Agenda Date: 2/7/2023

REPORT TO COUNCIL

SUBJECT
Action on Approval of the Spending Plan for Supplemental Law Enforcement Services Fund and Related Budget Amendment

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
In 1996, Assembly Bill 3229 established the Citizen’s Option for Public Safety (COPS) program’s Supplemental Law Enforcement Services Fund (SLESF). The Legislature determined that there was a compelling need for additional resources at the local level for the purpose of ensuring public safety and established the COPS program to advance community policing in all counties. The COPS program awards non-competitive and non-matching grants to law enforcement agencies to fund frontline municipal police services. The City has used these funds in prior years to purchase officer safety and duty equipment, communications equipment and vehicles, among other things, that are all used directly and solely in the provision of frontline police services to the community.

Per Government Code §§ 30061-30063, cities are allocated a proportionate share of COPS funds by the California Department of Finance, through Santa Clara County. Proportionate shares are based on population estimates determined by the California Department of Finance.

This is not a fixed amount grant. Under the standard grant program allocation, the City of Santa Clara is eligible to receive a minimum of $100,000 annually. Each fall, Santa Clara County estimates the allocation for each law enforcement agency in the county; the actual amount paid varies from the projection and is unknown until the payment cycle is complete. Monthly distributions are received via wire transfer and the City’s Finance Department deposits these funds into a separate grant account.

These distributions are not received in equal installments from month-to-month; therefore, spending over the course of the payment cycle can be unpredictable.

In recent years, the City of Santa Clara has received COPS funding as follows:

Funding
Cycle
Minimum Amount
to be Allocated
Projected Allocation * Actual Amount
Received **
COP 11 - 12 $100,000 $224,246 $169,674
COP 12 - 13 $100,000 $191,055 $200,160
COP 13 - 14 $100,000 $191,913 $205,650
COP 14 - 15 $100,000 $191,446 $219,432
COP 15 - 16 $100,000 $189,093 $244,542
COP 16 - 17 $100,000 $190,585 $270,027
COP 17 - 18 $100,000 $196,976 $282,165
COP 18 - 19 $100,000 $196,976 $307,179
COP 19 - 20 $100,000 $195,075 $305,734
COP 20 - 21 $100,000 $196,119 $327,071
COP 21 - 22 $100,000 $200,298 $331,034
City of Santa Clara Printed on 4/4/2023Page 1 of 5
powered by Legistar™
23-1418 Agenda Date: 2/7/2023
Funding
Cycle
Minimum Amount
to be Allocated
Projected Allocation * Actual Amount
Received **
COP 11 - 12 $100,000 $224,246 $169,674
COP 12 - 13 $100,000 $191,055 $200,160
COP 13 - 14 $100,000 $191,913 $205,650
COP 14 - 15 $100,000 $191,446 $219,432
COP 15 - 16 $100,000 $189,093 $244,542
COP 16 - 17 $100,000 $190,585 $270,027
COP 17 - 18 $100,000 $196,976 $282,165
COP 18 - 19 $100,000 $196,976 $307,179
COP 19 - 20 $100,000 $195,075 $305,734
COP 20 - 21 $100,000 $196,119 $327,071
COP 21 - 22 $100,000 $200,298 $331,034
*The Projected Allocation column shows the California Department of Finance’s initial estimated grant allocation. **This column reflects the total amount received by the City; this report requests action on behalf of the Council for the additional funding received from FY 2021/22.

The COPS/SLESF grant does not have any application or other requirements; the monies are transferred to local entities through the County by operation of law (Government Code §§30061- 30063) and are to be expended in accordance with the requirements of those code sections. The Government Code contains the following requirements for a recipient agency:
· The funds shall be used exclusively for frontline law enforcement services · The funds cannot be used to supplant other existing funding sources for general law enforcement services
· The City Council shall appropriate existing and anticipated moneys exclusively to fund frontline municipal police services, in accordance with written requests submitted by the Chief of Police · Moneys in the fund shall not be transferred to, or intermingled with, the moneys in any other fund in the City treasury, except to the extent necessary to facilitate the appropriation and expenditure of those transferred moneys
· Once the appropriation of the grant funds is made, it cannot be subsequently altered by the City Council
· Administrative overhead costs cannot exceed of 0.5% of the City’s allocation · The funds cannot be used for a capital or construction project that does not directly support frontline law enforcement services

DISCUSSION
Santa Clara County’s estimated allocation for frontline law enforcement equipment for Fiscal Year 2022/23 is $3,339,482. Based on the January 2022 population estimate of 130,127, the City of Santa Clara expects to receive $200,980 in COPS funding, as presented in Attachment 1. Staff recommends appropriating these funds as part of this report.

On October 17, 2022, the Police Department received an additional allocation in the amount of $130,737 for the FY 2021/22 COPS grant, increasing the total amount received from $200,298 to $331,035. Staff recommends appropriating the additional funding of $130,737 as part of this report.

In accordance with grant requirements, staff is also presenting a spending plan to account for the FY 2022/23 grant and adjustments to the FY 2021/22 grant. The last spending plan was approved on January 25, 2022 (RTC #22-1559, Attachment 2) totaled $288,869 in purchases with the understanding the Police Department would return to City Council should additional funds become available. The last approved spending plan accounted for the anticipated FY 2021/22 grant as well as City of Santa Clara Printed on 4/4/2023Page 2 of 5
powered by Legistar™
23-1418 Agenda Date: 2/7/2023
additional funding for the FY 2020/21 grant.

In this memorandum, the Chief of Police requests that the City Council approve a spending plan totaling $331,717 to account for the FY 2022/23 grant ($200,980) plus the increase in the FY 2021/22 grant ($130,737). These grant funds will be used to support front line municipal police services, as described below.

Current
Priority
Equipment, Program or Service * Not to Exceed
Estimated Amount **
1 Fund an extension to the Psychiatric Emergency
Response Team (PERT) program with the County
of Santa Clara
$70,000
2 Training in the Communications Center related to
new Public Safety Dispatchers and calls for
service
$30,000
3 Batteries for P-25 radios $60,000
4 Canine equipment / training $15,000
5 Training of personnel to conduct “train the trainer”
courses internally to our organization on front line
law enforcement services/equipment
$26,717
6 Evidence collection equipment $60,000
7 Pilot program with Axon mobile Automated
License Plate Readers, expand the number of
fixed Automated License Plate Readers through
FLOCK and/or extend existing software service
agreement
$40,000
8 Axon Air software subscription and accessories to
support the Directed Aerial Response Team
$20,000
9 Firearms, ammunition and associated equipment $10,000 TOTAL $331,717
*Priorities may change over the course of the grant cycle and/or alternate funding sources may become available. **Estimates to be fleshed out (e.g. vendor, number of items, promotions, etc.) as funding becomes available over the grant cycle.

Staff will continue to evaluate priorities based on needs and the actual funding amount received as not all items may be funded.

If additional FY 2022/23 grant funds become available, staff will bring forward a budget adjustment.

ENVIRONMENTAL REVIEW
This action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.

FISCAL IMPACT
City of Santa Clara Printed on 4/4/2023Page 3 of 5
powered by Legistar™
23-1418 Agenda Date: 2/7/2023
In October 2022, the City of Santa Clara received official notice from the California Department of Finance that its expected Citizens’ Option for Public Safety allocation for FY 2022/23 is $200,980.

Also, in October 2022, the Police Department received additional funding of $130,737 for the COP 2021/22 allocation, bringing the total COP 2021/22 award to $331,035.

Budget actions are recommended to recognize the COPS grant revenue and appropriate the funding in the City’s Police Operating Grant Trust Fund, as detailed in the table below.

Budget Amendment
FY 2022/23
Current
Budget
Increase /
(Decrease)
Revised
Budget
Police Operating Grant Trust Fund
Revenue
Grant Funding - COP22 $10,760 $130,737 $141,497
Grant Funding - COP23 $0 $200,980 $200,980
Expenditures
Citizen’s Option for Public Safety FY
2021/22
$146,062 $130,737 $276,799
Citizen’s Option for Public Safety FY
2022/23
$0 $200,980 $200,980
Although equipment purchased with the grant funds will not initially create any additional cost for the City, it is possible that future repair or other servicing, or replacement costs, for such equipment would create an expense. The department will absorb such costs within future budget allocations.

COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Approve the spending plan for funds received from the Citizen’s Option for Public Safety Programs Supplemental Law Enforcement Services Fund; and

2. Approve a FY 2022/23 budget amendment in the Police Operating Grant Trust Fund to recognize revenue in the amount of $130,737 for the COPS 22 grant and $200,980 for the COPS 23 grant, increase the Citizen’s Option for Public Safety FY 2021/22 City of Santa Clara Printed on 4/4/2023Page 4 of 5
powered by Legistar™
23-1418 Agenda Date: 2/7/2023
appropriation in the amount of $130,737, and establish the Citizen’s Option for Public Safety FY 2022/23 appropriation in the amount of $200,980 (five affirmative Council votes required to appropriate additional revenue).

Reviewed by: Pat Nikolai, Chief of Police
Approved by: City Manager’s Office

ATTACHMENTS

1. Letter from the California Department of Finance with Citizens’ Option for Public Safety percentages and allocation

2. Report to Council #22-1559 from the January 25, 2022 City Council meeting City of Santa Clara Printed on 4/4/2023Page 5 of 5
powered by Legistar™

FIRST AMENDMENT TO THE

MEMORANDUM OF UNDERSTANDING BETWEEN

THE CITY OF SANTA CLARA AND THE COUNTY OF SANTA CLARA REGARDING

PSYCHATRIC EMERGENCY RESPONSE TEAM (PERT) JUSTICE AND MENTAL

HEALTH COLLABORATION PROGRAM

The Memorandum of Understanding (MOU) between the City of Santa Clara (CITY) and County of Santa Clara (COUNTY) regarding the Psychiatric Emergency Response Team (PERT) Justice and Mental Health Collaboration program is hereby amended as follows:

AMENDMENT TERMS AND CONDITIONS

1. Section 1.1 under Article 1 “Term; Extensions; Termination”, is hereby replaced in its entirety as follows:

“The initial term of this MOU is from the date the MOU is executed by both parties to December 31, 2025, or until the CITY’s available appropriation in the amount of $240,000 is exhausted, whichever occurs first.”

2. Section 2.2 under Article 2 “Scope Of Services”, is hereby modified to add the following provisions:

s. Identify a designated PERT Officer to collaborate and partner with the BHSD PERT Clinician.
t. The CITY shall collaborate with the BHSD on any PERT Clinician background clearance prior to city assignment.

3. Section 3.2.b.1 under Article 3 “Funding/Financial Responsibilities”, is hereby replaced in its entirety as follows:
“The CITY shall reimburse COUNTY for the salary and benefits of the BHSD PERT Clinician. The maximum financial obligation of CITY shall not exceed $240,000.

4. Section 4.7 under Article 4 “Notices”, is hereby replaced in its entirety as follows:

All notices required under the terms of this MOU will be in writing and must be transmitted by electronic mail or deposited in the United States Mail, certified mail, return receipt requested, addressed to the parties as set forth below:

COUNTY OF SANTA CLARA: CITY OF SANTA CLARA:

Bruce Copley, Director Jōvan D. Grogan
BHSD Access and Unplanned Services Office of the City Manager [email protected] [email protected]
S. Bascom Ave., Suite 200 1500 Warburton Avenue
San Jose, CA 95128 Santa Clara, CA 95050
(408) 885-3957 (408) 615-2210

Except as set forth herein, all other terms and conditions of the MOU shall remain in full force and effect; provided, however, in the event of any conflict between the terms of this First Amendment and the MOU, the terms of this First Amendment shall control. The MOU as amended by this First Amendment constitutes the entire MOU of the parties concerning the subject matter herein and supersedes all prior oral and written agreements, representations, and understandings concerning such subject matter.

IN WITNESS WHEREOF, the parties have executed this First Amendment as set forth below.

“COUNTY” County of Santa Clara

Matthew Hada Date
Chief Procurement Officer
“CITY” City of Santa Clara , a Municipal
Corporation and Charter City

_____________________________________
Jōvan D. Grogan Date
City Manager

APPROVED AS TO FORM AND LEGALITY: APPROVE AS TO FORM AND LEGALITY:

______________________________________ _____________________________________ Megan Wheelehan Date Glen R. Googins Date
Deputy County Counsel City Attorney

APPROVED:

_______________________________________
S herri Terao , E .d . D Date
Director
Behavioral Health Services Department

APPROVED:

________________________________________
V incent DePaul R obben Date
Health Care Financial Manager
County of Santa Clara Health System
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-117 Agenda Date: 9/19/2023

REPORT TO COUNCIL

SUBJECT
Action on Amendment No. 2 to the Grazing Lease with Joseph R. Paulo for a Portion of the Property Known as the Altamont Ranch, Alameda County, California, a Property Owned for Power Generation Purposes for Silicon Valley Power, Extending the Term Through September 26, 2027 with No Change to the Compensation.

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
Silicon Valley Power (SVP) owns several remote sites, which were intended primarily for power generation purposes. Among these is a plot of land in Alameda County called the Altamont Property (Property). In 2016, the City executed a ground lease and Power Purchase and Sale Agreement (PPA) with Rooney Ranch, LLC for the production of 19 megawatts (MW) of renewable wind generation on the property. At that time, construction of the wind farm was anticipated to be completed in 2022. Construction is now anticipated to begin mid-year 2024. Delays to the construction were due to numerous legal and permitting issues with the original wind developer, sPower. In 2020, sPower merged with AES to form AES US. AES US then sold its stake to Salka Energy in 2022.

SVP also leases a portion of the Property for grazing pursuant to a lease agreement (Altamont Grazing Lease) Joseph R. Paulo (Lessee). Use of the property for grazing serves to control vegetation growth, reduce fire risk, and generate revenue.

DISCUSSION
The initial term of the Altamont Grazing Lease was five (5) years, with an option to extend for an additional five-year period and that option was exercised extending the term to September 2021. In November 2021, City Council authorized the City Manager to execute Amendment No. 1 to the Altamont Grazing Lease to extend the term for two additional years to September 26, 2023.

Due to anticipated construction of the wind farm, staff recommends entering into Amendment No. 2 to further extend the term of the Altamont Grazing Lease for an additional four years through September 26, 2027. In the event the wind farm construction requires portions of the Property to be off-limits to grazing and other activities during the term of the Grazing Lease, the City can either terminate the lease with 180 days’ notice or offer an amendment to the Lessee to reduce the grazing area instead of termination.

Once construction is completed, staff will issue a competitive solicitation for a future grazing lease for the Altamont Property. In the event that construction is completed before September 26, 2027, the City of Santa Clara Printed on 9/15/2023Page 1 of 2
powered by Legistar™
23-117 Agenda Date: 9/19/2023
Grazing Lease Agreement includes a provision for early termination which will allow the City to enter into a new agreement if desired.

ENVIRONMENTAL REVIEW
Staff recommends that the City Council determine that the actions being considered are exempt from the California Environmental Quality Act (“CEQA”) pursuant section 15301 of Title 14 of the California Code of Regulations as this action involves an extension of a lease with no expansion of existing uses.

FISCAL IMPACT
The proposed Amendment No. 2 to the Grazing Lease will result in revenue of about $8,000 annually which is budgeted in the Electric Utility Fund. Revenue may be decreased during construction if the available land for grazing is reduced by construction.

COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.

RECOMMENDATION
1 Determine the proposed actions are exempt from CEQA pursuant to Section 15301 of Title 14 of the California Code of Regulations; and
2 Authorize the City Manager to execute Amendment No. 2 to the Grazing Lease By and Between the City of Santa Clara, California and Joseph R. Paulo, an Individual for a Portion of the Property Known as the Altamont Ranch, Alameda County, to extend the term through September 26, 2027 with no change to the compensation in a final form approved by the City Attorney.

Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Altamont Grazing Lease

2. Amendment No. 1 to Altamont Grazing Lease

3. Proposed Amendment No. 2 to Altamont Grazing Lease
City of Santa Clara Printed on 9/15/2023Page 2 of 2
powered by Legistar™
EBIX No. S200002507

GRAZING LEASE BY AND BETWEEN

THE CITY OF SANTA CLARA, CALIFORNIA,
AND
JOSEPH R. PAULO, AN INDIVIDUAL,

FOR A PORTION OF THE PROPERTY

KNOWN AS THE ALTAMONT RANCH,

ALAMEDA COUNTY, CALIFORNIA
THIS GRAZING LEASE (herein "Lease") is entered into on this _ 2011, (herein the "Effective Date of this Lease") by and between the City of Santa Clara, a chartered California municipal corporation (herein "City") and Joseph R. Paulo, an individual sole proprietor with his principal place of business located at 4151 North Vasco Road, Livermore, CA 94551 ("Contractor"). Contractor and City may be referred to herein individually as a "Party" or collectively as the "Parties" or the "Parties to this agreement.

RECITALS
Whereas:

A. City owns a certain parcel of real property located in a rural area of Alameda County, State of California, known as the Altamont Ranch (herein the "Altamont Ranch") more particularly described in Exhibit A attached hereto and incorporated herein by reference;
B. City owns and operates its own municipal electric utility. The Altamont Ranch was purchased by City as a part of a comprehensive plan to acquire its own electric resources and the Benicia Ranch is part of City's long term plan to accomplish that public purpose;
C. City's intended primary purpose in owning the Altamont Ranch is to maintain and develop a wind farm on the property for the generation and transmission of electricity for sale or use by City;
D. To help meet carrying charges incurred by City and to maintain good economic use of the Altamont Ranch, City seeks to authorize other compatible uses of the Altamont Ranch not inconsistent with its primary purpose of electricity generation and transmission. Such other presently anticipated uses, all of which shall be subject to the above stated primary uses, include, landfill, mining, and cattle grazing; and
E. Lessee is aware of City's intention and desires to enter into this Lease under the terms and conditions set forth herein. Lessee acknowledges that the secondary uses proposed under this Lease shall be compatible and subservient to City's primary electric generation and transmission use.

Grazing Lease Between City and Joseph R. Paulo for portion of the Altamont Ranch (prepared 2/ l l /11
,lb 1iL aay of
Page I of 4
In consideration of the above referenced recitals and the following mutual covenants, agreements, and obligations of the Parties, the City and Lessee agree as follows:

LEASE PROVISIONS

1. Description of Premises: City agrees to lease to Lessee, and Lessee agrees to hire from City, a portion of the real property generally known as the Altamont Ranch, less the following areas within the perimeters of the ranch:
a. The area under the existing wind turbines;
b. The area covered by the wind farm maintenance roads; and c. The wind farm staging areas
Said area, which comprises the leased real property (herein the "Premises"), consists of five-hundred and forty (540) acres of ranch land, to be used for grazing purposes, and is more fully described in Exhibit B, attached hereto and incorporated herein by reference.

The Premises is leased on the terms and conditions and subject to the reservations set forth in this Lease, without improvements, except as expressly provided in this Lease.

2. Disclaimer of Warranty - Grazing Suitability: City makes no warranty of suitability for grazing on the premises which Lessee is authorized to do under this Lease.

3. Lease Subject to Rights of City and Others: This Lease is subject to the following conditions and restrictions:
a. All existing easements, servitudes, licenses, and rights-of-way for canals, ditches, levees, roads, highways, telegraph, telephone, and electric power lines, railroads, pipelines, and other purposes, whether recorded or not; b. The rights of other lessees under any existing or future oil, gas, and mineral lease or leases from future oil, gas, and mineral lease or leases from City affecting the entire or any portion of the Premises, whether recorded or not; and
c. The rights retained in City under this Lease, including but not limited to:
(1) City's intended purpose related to development, production and distribution of electrical power, exclusive use by City or its tenants of all areas and facilities on the Premises as described in Lease Provisions, Section 1 and Exhibit B;
Grazing Lease Between City and Joseph R. Paulo for portion of the Altamont Ranch [prepared 2/11/11

Page 2 ends

(2) the nonexclusive rights of ingress and egress to the Premises by existing roadways to City and its contractors, tenants or assigns, in order to gain access to their equipment and facilities; and (3) the nonexclusive water rights to all water wells, springs, ponds and their associated equipment.

4. Term: The initial term of this Lease is for five (5) years, commencing on the Effective Date of this Lease, and may be extended for an additional five (5) year period. Any extension of this Lease is subject to the discretion and written agreement of the parties hereto. Upon termination of this Lease, Lessee covenants and agrees to peacefully and quietly quit and surrender possession of the Premises and all appurtenances to City subject to all the convenants, conditions, terms and agreements of this Lease, and Lessee agrees to pay all monies then due and owing to City at such time, provided for in this Lease, or as a result of operations thereunder by Lessee, or in consequence thereof. At the termination of this Lease, Lessee shall promptly execute, acknowledge, and deliver to City a recordable quitclaim deed in a form satisfactory to City.

5. Use: The Premises shall be used solely for grazing purposes. Human occupancy overnight is not allowed, except under special circumstances as authorized in writing by City Manager. Commercial wholesale or retail sales operations are not allowed on the Premises.

6. Rent: Lessee shall pay City, on or before the Effective Date of this Lease, and semiannually thereafter, a semiannual rental payment (herein "Semiannual Base Rent") of $3,861.15, payable in advance. For purposes of this Lease, the Semiannual Base Rent shall be subsequently adjusted in conformity with the provisions of Section 19, Payment and Adjustments, of the General Provisions of this Lease.

7. Security Deposit: In addition to the above rent, to secure the faithful performance of Lessee's obligations hereunder, Lessee shall provide to City a security deposit in the sum of $5,000.00. Said security deposit will be deposited in a bank or savings institution in a certificate of deposit or similar investment vehicle in the name of City. All interest earned during the time the funds are retained as a security deposit are payable to Lessee. Said funds shall be retained during the entire term of this Lease and any extensions thereof. City may use therefrom such amounts as are reasonably necessary to remedy Lessee's default in performance under this Lease including defaults in the payment of rent, to repair damages caused by Lessee, and to clean the Premises if authorized, whether toward rent, damages, or otherwise during the term of this Lease, Lessee agrees to reinstate said total security deposit of $5,000.00 upon five days written notice delivered to Lessee in person or by mailing at the last known address as set forth in Section 46, Notices, of the General Provisions.

Grazing Lease Between City and Joseph R. Paulo for portion of the Altamont Ranch [prepared 2/11 / I l

Page 3 of 4 ends

8. Conservation and Maintenance Work - Nonreimbursable: Lessee, as additional rent under this Lease, shall at Lessee's own expense, perform all conservation and maintenance work in accordance with the specifications and guidelines set forth in the Special Provisions section of this Lease. Should Lessee fail to perform such work, City may arrange for the work to be completed and Lessee shall be required to reimburse City for costs incurred.

9. Improvements: All improvements constructed or installed under the provisions of this Lease, shall become the property of City and shall remain in place and intact upon the expiration or earlier termination of this Lease.

10. General Provisions: The General Provisions of this Lease are attached hereto and made a part hereof.

11. Special Provisions: The Special Provisions of this Lease are attached hereto and made a part hereof.

CITY OF SANTA CLARA, CALIFORNIA,
a chartered California municipal corporation
APPROVED AS TO FORM:
~I\ ELIZABE H. SILVER
Interim City Attorney
ATTE~
ROD DIRIDON, JR.

City Clerk
By:

Title:

Address:

Telephone:

Fax:
"CITY"
~ ~ -\I½'. if ~ tJ.JA.J-NNI:Mtif SPARAINO
ity Manager
1500 Warburton A venue
Santa Clara, CA 95050
Telephone: ( 408) 615-2210
Fax: (408) 241-6771
JOSEPH R. PAULO
Jl:1:idut
J~PAULO
4151 North Vasco Road
Livermore, CA 94550
(925) 447-7208
"CONTRACTOR"
Grazing Lease Between City and Joseph R. Paulo for portion of the Altamont Ranch [prepared 2/11/11

Page 4 ends

GENERAL PROVISIONS

GRAZING LEASE BY AND BETWEEN

THE CITY OF SANTA CLARA AND
JOSEPH R. PAULO.

FOR A PORTION OF THE PROPERTY KNOWN AS THE ALTAMONT RANCH.

ALAMEDA COUNTY, CALIFORNIA
The following General Provisions are incorporated into the Grazing Lease dated (herein the "Lease") by and between the City of Santa Clara ("herein "City") and Joseph R. Paulo, (herein "Lessee").

1. Representations: Lessee has examined, knows and accepts the condition and state of the Premises and all appurtenances thereto and acknowledges that City has made no representation concerning such condition, nor any agreement or promise to alter, improve, adapt, repair or keep in repair the Premises and appurtenances, or any item thereof, which has not been fully set forth in this Lease which contains all the agreements made and entered into between Lessee and City.

2. Federal Subsidy Participation (If Applicable): Lessees of agricultural land who wish to enter into any United States Department of Agriculture, Agricultural Stabilization and Conservation Service ("USDA/ASCS") programs or agreements shall do so solely at the discretion of an subject to the USDA/ASCS rules and regulations. City makes no guarantees regarding agricultural uses of the Premises regarding normal crop acreage, allotments for crops, or the qualification of the land for USDA/ASCS programs.

3. Subjection to City's Conservation and Maintenance Requirements: During the term of this Lease, Lessee shall apply the conservation measures and use the Premises in accordance with the Conservation and Maintenance Requirements set forth in the Special Provisions of this Lease. Lessee shall in no manner substantially change the contour or condition of the land constituting any part of the Premises except for such changes as shall be reasonably required to effect conservation and maintenance measures.

4. Installation and Removals: Subject to the prior written approval of City Manager, Lessee shall have the right to erect and pay any taxes imposed at its own expense, such temporary structures on the Premises as may be necessary or incidental to its use thereof under this Lease. All such structures shall remain the property of Lessee and Lessee shall remove same from the Premises prior to the expiration of the term of this Lease, or as said Lease may be extended. All property not so removed shall be deemed abandoned by Lessee and may be used or disposed of by City in any manner whatsoever without any liability to account to Lessee therefore, but such abandonment shall in no way reduce any obligation of Lessee hereunder to restore the Premises.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared2/ll/11
Page I of 14

5. Subject to Existing and Future Easement and Rights-of-Way: This Lease is subject to all outstanding easements and rights-of-way for location of any type of facility over, across, in and upon the Premises, or any portion thereof, and to the right of City to grant such additional easements and rights-of-way over, across, in an upon the Premises as it shall determine to be in the public interest; provided, that any such additional easement or right-of-way shall be conditioned on the assumption by the grantee thereof of liability to property destroyed or property rendered unusable on account of Grantee's exercise of its rights there under.

There are also reserved to City, and its assigns, all mineral rights in the Premises, together with such rights of access and use of the surface as may be necessary for the mining and saving of any mineral deposits located thereon or there under.

There are hereby reserved to the holders of such easements and rights-of-way as are presently outstanding or which may hereafter be granted, to any workers officially engaged in the construction, installation, maintenance, operation, repair or replacement of facilities located thereon, and to any federal, state or local official engaged in the official inspection thereof, such reasonable rights of ingress and egress over the Premises as shall be necessary for the performance of their duties with regard to such facilities.

6. Restoration of Premises: Before the expiration of this Lease or the prior termination thereof, Lessee shall, if required to do so by City, restore the Premises to the condition existing at the time of its entrance thereon under this Lease, or to such improved condition as they may have been placed in by City or Lessee during the term of this Lease, reasonable wear and tear and damaged by the elements or from other causes over which Lessee had no control excepted.

7. Liens: Lessee shall promptly discharge or cause to be discharged any valid lien, claim or demand of any kind, which at any time may arise or exist with respect to the Premises or materials or equipment furnished therefore, or any part thereof, and if the same shall not be promptly discharged by Lessee, City may discharge, or cause to be discharged, the same at the expense of Lessee.

8. Surrender: Upon the expiration of this Lease or its prior termination, in whole or in part, Lessee shall quietly and peacefully remove itself and its property from the Premises, or part thereof, as to which this Lease shall be terminated, and surrender the possession thereof to City. Upon failure or neglect of Lessee to so remove, City and its officers or agents may enter the Premises and cause the removal of all persons and property therefrom without recourse to any action or proceeding at law or in equity. Lessee hereby expressly waive any provision of law requiring notice to quit possession of the Premises. Such removal shall be at the sole cost and expense of Lessee and Lessee shall indemnify and save and hold harmless City, its officers, agents and employees for and from any and all liability or claims for damages of any nature whatsoever which may arise out of or be attributable to such removal.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/11 /l l

Page 2 of 14 ends

9. Damage to City's Property: In the event of the destruction of or damage to any City property located on or adjacent to the Premises by Lessee, or any of its officers, agents, servants, employees, subtenants, licensees or invitees, Lessee shall promptly repair or replace such property to the satisfaction of City, or pay to City an amount of money sufficient to compensate it for the loss or damage sustained, as City shall elect.

10. Nonliability of City: Lessee covenants that it will indemnify and save and hold harmless City, its officers, agents and employees for and from any and all liability or claims for loss of or damage to any property owned by or in the custody of Lessee, its officers, agents, servants, employees, subtenants, licensees or invitees, or for the death of or injury to any of the same which may arise out of or be attributable to the condition, state of repair of Lessee's use and occupancy of the Premises, or the furnishing of any utilities or services (including supply of water from wells or other sources), or any interruption therein or failure thereof, whether or not the same shall be occasioned by the negligence or lack of diligence of Lessee, its officers, agents, servants or employees.

11. Utilities and Services: Lessee shall pay for all water, gas, heat, light, power, telephone service, and for all other services supplied to the Premises except as otherwise provided in this Lease. In the event that City shall furnish Lessee with any utilities and services maintained by City which Lessee may require in connection with its use of the Premises, Lessee shall pay City the charges for such utilities and/or services in addition to the cash rent required under this Lease.

Such charges and the method of payment thereof shall be determined by the City Manager in accordance with applicable laws and regulations, on such basis as the City Manager may establish which ma include a requirement for the installation of adequate connecting and metering equipment at the sole cost and expense of Lessee. It is expressly agreed and understood that City in no way warrants the continued maintenance or adequacy of any utilities or services furnished by it to Lessee.

12. Entry by Owner: Lessee shall permit City, and City's agents and assigns, at all reasonable times, to enter the Premises, and to use the roads established on the premises now or in the future, for the purposes of inspection, compliance with the terms of this Lease, exercise of all rights under this Lease, posting notices, and all other lawful purposes. Lessee shall supply City, and its agents and assigns, with keys and other instruments necessary to effect entry on the Premises. Lessee shall make and keep pertinent records of all operations and conduct under this Lease and shall make them available to City and City's agents and assigns at all reasonable times for inspection.

13. Liability for Taxes: In accordance with California Revenue and Taxation Code, Section 107.6(a), City states that by entering into this Lease, a possessory interest subject to property taxes may be created. Lessee agrees that in entering into this Lease that its interest therein may be subject to a possible possessory interest tax Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/ l I/ 11

Page 3 of 14 ends

that may be imposed on such interest, and that such tax payment shall not reduce any rent due to City hereunder and any such tax shall be the liability of and be paid by Lessee, but only to the extent of Lessee's actual use of the property and not relating to any use or retained rights of City.

14. Covenant Against Contingent Fees: Lessee warrants that no person or agency has been employed or retained to solicit or secure this Lease upon an agreement or understanding for a commission, percentage, brokerage or contingent fee, excepting bona fide employees or bona fide established commercial agencies maintained by Lessee for the purpose of securing business. For breach or violation of this warranty, City in its discretion to require Lessee to pay, in addition to the rental or consideration, the full amount of such commission, percentage, brokerage, or contingent fee.

15. Disputes:
a. Except as otherwise provided in this Lease, any dispute concerning a question of fact arising under this Lease which is not disposed of by agreement shall be decided by the City Manager, who shall reduce that decision to wring and mail or otherwise furnish a copy thereof to Lessee.

The decision of the City Manager, shall be final and conclusive unless, within 30 days from the date of receipt of such copy, Lessee mail or otherwise furnish to the City Manager, a written appeal. The decision of the City Manager, for the determination of such appeals shall be final and conclusive. This provision shall not be pleaded in any suit involving a question of fact arising under this Lease as limiting judicial review of any such decision to cases where fraud by such official or his representative or board is alleged; provided, however, that any such decision shall be final and conclusive unless the same is fraudulent or capricious or arbitrary or so grossly erroneous as necessarily to imply bad faith or is not supported by substantial evidence. In connection with any appeal proceeding under this clause, Lessee shall be afforded an opportunity to be heard and to offer evidence in support of his appeal. Pending final decision of a dispute hereunder, Lessee shall proceed diligently with the performance of this Lease and in accordance with the decision of the City Manager. b. This "Disputes" clause does not preclude consideration of questions of law in connection with decisions provided for in Section 15a above. Nothing in this Lease, however, shall be construed as making final the decision of any administrative official, representative, or board on a question of law.

16. Labor Provision - Equal Opportunity Employer: During the term of this Lease, Lessee agrees not to discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/ I I/ I I

Page 4 of 14 ends

17. Failure of City to Insist on Compliance: The failure of City to insist, in any one or more instances, upon performance of any of the terms, covenants or conditions of this Lease shall not be construed as a waiver or relinquishment of City's right to future performance of any such terms, covenants or conditions and Lessee's obligations in respect to such future performance shall continue in full force and effect.

18. Rules and Regulations: Lessee shall comply with such rules and regulations regarding site security, ingress, egress, safety and sanitation as may be prescribed, from time to time, by the City Manager, of which the Premises forms a part.

19. Payment and Adjustments: All semiannual rent payments to City required under Lease Provisions Section 6, Rent, of this Lease shall be made by cash, check or postal money order made payable to the City of Santa Clara and delivered to the Finance Department of the City of Santa Clara, 1500 Warburton Avenue, Santa Clara, California 95050.
a. The Semiannual Base Rent during the initial term of this Lease may be modified pursuant to this Section 19, which rent Lessee agrees to pay to City, without deduction or offset other than for any discount earned as provided for in subsection b(1) below. The first Semiannual Base Rent payment is due on or before Lessee takes possession on the Effective Date of this Lease. Subsequent payments shall be made semiannually after the Effective Date (herein "Due Date").
b. Each semiannual rent payment may be adjusted in accordance with the following directions:
(1) Lessee will be allowed a $150.00 discount on each semiannual rent payment, other than the first payment, if such rent payment is received in full by City on or before 5:00 p.m. of the third day following the Due Date.
(2) A service charge of $30.00 will be made for each check, if any, returned for insufficient funds or which must be resubmitted for payment. Any such service charge shall be part of the rent due, owing and unpaid until paid in full. City also reserves the right to collect damages in an amount provided for in California Civil Code Section 1719, as amended, for any dishonored check received.
(3) Each successive two semiannual rent payments, exclusive of the first two Semiannual Base Rent payments, shall be adjusted by increase or decrease once each year on the anniversary date of entering into this Lease.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/ l I /1 I

Page 5 of 14 ends

(4) Two factors shall be used in calculate semiannual rent adjustments:
a. Changes in the number of grazing acres: In the event that the number of grazing acres is reduced from the
approximately 540 acres defined as the Original Leased
Acreage, an adjustment to the semiannual rent shall be
made based upon the ratio formed by the number of acres included in the Premises after the reduction, divided by the Original Leased Acreage. If such an acreage reduction
occurs at a time other than on the anniversary date of the Lease, an adjustment shall be made to the then current
semiannual rent payment on a prorata time basis with credit in the amount owed Lessee to be applied against the next semiannual rent payment.

20. Interest: Failure of Lessee to pay the semiannual rent by the Due Date shall constitute a default. In the event that Lessee fails to pay the applicable rent on or before the Due Date, in addition to any other remedy provided by this Lease, Lessee shall pay City the delinquent rent plus interest on the total delinquent rent at the annual rate of two percent (2%) over the Bank of America prime rate existing on the Due Date, compounded daily, from the date of first delinquency to the date the rent is received by City.

It is the intent of this provision that City shall be compensated by such additional sums for loss resulting from rental delinquency including costs incurred by City for servicing the delinquent account. City, at its option, may waive any such delinquency compensation required herein, upon written application of Lessee.

21. Administration: The City Manager shall have complete charge of the administration of this Lease, and shall exercise full supervision and general direction thereof insofar as the interests of City are affected. The term City Manager as used herein shall mean the City Manager or the City Manager's designee.

22. Termination by City: City shall have the right to terminate this Lease, in whole or in part, at any time, after thirty (30) days written notice to Lessee, upon breach by Lessee of any of the terms and conditions of this Lease.

23. Holding Over: Lessee expressly waives the benefits conferred by Section 1161, Subdivision 6 of the Code of Civil Procedure which relate to the holding over upon grazing land after the termination of this Lease.

24. Termination of Lease: In the event that City terminates this Lease on account of the breach by Lessee of any of the terms and conditions of this Lease no adjustment in advance rentals paid by Lessee shall be made and City shall be entitled to recover, and Lessee shall pay to City, all of the following amounts.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/ I l / 1 I

Page 6 of 14 ends

a. The cost incurred in resuming possession of the Premises; b. The costs incurred in performing any obligation on behalf of Lessee which is required to be performed under this Lease; and
c. An amount equal to the aggregate of all rents and charges assumed hereunder and not theretofore paid, less the net rentals, if any, collected by City on the reletting of the Premises. Such amounts shall be due and payable at the time when the rent under this Lease would become due and payable.

25. Termination of Rights - Restriction on City: If City should find from time to time that there is a municipal or public need for or use of the Premises, including appurtenance and improvements, or part thereof not otherwise reserved in City under the terms of this Lease which need or use is in conflict with the use of which Lessee makes of the Premises or part thereof, City can direct that any and all rights of Lessee hereunder shall immediately cease and terminate as to that portion of the Premises for which there is a need upon one hundred and eighty (180) days' written notice of intention to terminate without claim or charge to City, and any assignment, subletting and licensing by Lessee shall likewise be so conditioned.

26. Leasehold Improvements: Lessee, during the term and at the termination of this Lease, if not in default hereunder, may remove any of its personal property (including identification signs) from the Premises which can be removed without causing any damage to the Premises. Any personal property to be removed pursuant to this section must be removed from the Premises prior to the last day of this Lease.

27. Abandonment: Lessee shall not vacate or abandon the Premises at any time during the term; and if Lessee does abandon, vacate, or surrender the Premises, or is dispossessed by process of law, or otherwise, personal property belonging to the Lessee and left on the Premises shall be kept for a reasonable time by City, but in no event longer than fifteen (15) days after City gives Lessee notice to remove the property from the Premises, after which time, if it has not been reclaimed by Lessee, it may be treated by City as abandoned.

28. Insurance Hazards: Lessee shall not use the Premises nor permit others to use them, nor do or permit acts that will increase the existing rates of insurance on the structures, trees, or crops on the Premises, or cause a cancellation of any insurance policy covering, in whole or in part, the structures, trees, and crops; nor shall Lessee sell, or permit to be kept, used, or sold, in or about the Premises, any articles that are prohibited by the standard form of fire insurance policies. Lessee shall comply with all requirements, applying to the Premises, of any insurance Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/ 1111 I

Page 7 of 14 ends

organization or company, necessary for the maintenance of reasonable fire and public liability insurance covering the structures, trees, and crops.

29. Use: The Premises is leased to Lessee for the express purpose of feeding, grazing, maintenance, and production of livestock and livestock products including: cattle and horses only. Lessee shall not use, or permit to be used, any part of the Premises for any purpose other than the purposes for which the Premises are leased. All operations incident to this use of the Premises shall be carried on according to the best course of husbandry practical in the vicinity including maintaining fencing and providing firebreaks as may be required by governmental authority, law, order, rule or regulation; and on default of Lessee to do so, City reserves the right, after having given thirty (30) days' written notice, to take necessary remedial measures at the expense of Lessee, for which Lessee agrees to reimburse City on demand.

30. Waste: Lessee shall not commit, or permit others to commit, on the Premises, waste, or a nuisance, or any other act that could disturb the quiet enjoyment of City or any other tenant of City on reserved or adjacent property. Lessee understands and agrees that the storage and/or disposal of the Premises of any hazardous material that is unacceptable to any appropriate agency, whether local, county, state, or national is not permitted in or on the ground or into any drains, wash basins, toilets or the like, including storm drains. Lessee agrees to have any such liquid and/or material removed from the Premises including, if necessary, the hiring of a commercial disposal service, all at Lessee's expense and to the satisfaction of City.

31. Oil, Gas, and Mineral Rights Including Wind Rights: All rights in all minerals, oil, gas, wind, and other hydrocarbons located on, over or under the Premises are particularly reserved to City and are particularly excepted from the property covered by the terms of this Lease. Lessee expressly grants to City, and to lessees of these oil, gas, wind, and mineral rights, and to City's agents and licenses, a right of entry and a right-of-way for ingress and egress in and to, over and on, the Premises during the term of this Lease for the exploration, drilling, and mining of minerals, wind, oil, gas, and other hydrocarbons on the Premises.

32. Hunting Rights: Hunting or shooting on the Premises is expressly prohibited.

33. Timber Rights: All timber rights, of every kind and character, in the Premises are reserved to City, which has the right to cut and remove the timber, or otherwise exercise al timber rights, at all times during the term of this Lease; provided that no damage shall otherwise be done by City or those authorized by it to any cattle or horses of Lessee or other property rights of Lessee under this Lease. Lessee shall not cut down, destroy, or remove, any trees, or shrubs, known or hereafter standing or growing upon the Premises without the written consent of City Manager.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/11 /J I

Page 8 of 14 ends

34. Condemnation: If a part of the Premises is condemned for a public use, and the remaining part which is not condemned is retained by Lessee, this Lease shall terminate, as to the part taken, on the date that a certified coy of the final order of condemnation is filed in the office of the County Recorder. The semiannual rent payable under this Lease shall be adjusted in proportion to the number of acres remaining in the Premises following condemnation, in accordance with General Provisions, Section 19, of this Lease. City may, at its option, restore fences and replace access roads lost by the condemnation or City may terminate this Lease in accordance Section 25 of the General Provisions of this Lease. In the event that the Original Leased Acreage is reduced by more than fifty percent (50%), and the remaining acreage is less than that which is acceptable to the Lessee, the Lessee has the option, upon sixty (60) days' written notice to City, to terminate this Lease.

If the entire or a part of the Premises is taken or condemned, all compensation awarded on condemnation shall go to City, with Lessee having no claim to compensation. Lessee irrevocably assigns and transfers to City and right to compensation or damages to which Lessee may become entitled during the term of this Lease by the condemnation of the entire or a part of the Premises.

35. Compliance with Law:
a. Lessee shall comply with all requirements of all governmental authorities, in force either now or in the future, affecting the Premises, and shall faithfully observe in his use of the Premises all laws, rules, and regulations of such authorities, in force either now or in the future. The judgment of a court of competent jurisdiction, or Lessee's admission in an action or a proceeding against him, whether City be a party to it or not, that Lessee has violated any law, rule, or regulation in his use of the Premises, shall be considered conclusive evidence of that fact as between City and Lessee. b. If, during the term of this Lease, a change in or addition of any law, regulation, or rule by such governmental authorities requires correction or alleviation of naturally occurring conditions, including, but not limited to weed and pest infestations or disease conditions, that exist wholly or in part at the start of this Lease, the required correction or alleviation shall be performed by Lessee unless otherwise directed by the City Manager. The cost of such correction or alleviation actions shall be borne by both City and Lessee in a proportion based on the extent to which the conditions required to be corrected exist on the Effective Date of this Lease. If Lessee fails to comply with any such law, regulation, or rule, City reserves the right to take necessary remedial measures at Lessee's expense, for which Lessee agrees to reimburse City on demand or City may terminate this Lease.

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/ I I / I I

Page 9 of 14 ends

c. For purposes of this Lease, the term "governmental authorities" shall not include the City, except that City shall have the right to enforce all provisions of this Lease in its role as lessor.
d. If during the term of this Lease any alteration of or addition to an artificial structure, including, but not limited to, buildings, fences, roads, dikes, and ditches is required to be made to the Premises, or any portion of the Premises, by law, regulation or rule of one of these governmental authorities and, if the alterations or additions are required as a result of the lack of care or maintenance of those portions of the Premises that Lessee is required by the terms of this Lease to care for and maintain, or as a result of the manner or mode of use of the Premises by Lessee, the alterations or additions shall be made and paid for by Lessee. If Lessee fails to comply with any such law, regulation or rule, City reserves the right to take necessary remedial measures at Lessee's expense, for which Lessee agrees to reimburse City on demand or City may terminate this Lease.

36. Nonliability of Owner for Damages: Lessee agrees to keep City, its City Council, officers and employees, successors and assigns, free from all liability and claim for damages arising from any injury, cost or expense, including all costs and reasonable attorney's fees in providing the defense to any claim arising from any cause to any person, including Lessee, or to property of any kind belonging to anyone, including Lessee, while in, upon, or in any way connected with the Premises, including the straying of livestock from the Premises during the term of any extension of this Lease, or any occupancy under this Lease.

37. Insurance Requirements: Lessee further agrees to purchase and maintain in force, during the term of this Lease at his own expense, general liability insurance, automobile liability insurance, and worker's compensation insurance in amounts and with all certificates and endorsements as set forth in Exhibit C attached hereto and incorporated herein by reference. Lessee, upon execution of this Lease and before commencing occupancy shall file with EBIX Inc., subject to the City's Attorney approval for adequacy of protection, proper certificates and endorsements as set forth in Exhibit C. Said policies shall not be terminated without thirty (30) days prior written notice to City. Lessee agrees that, if Lessee does not keep the required insurance policies in force, City may take out the necessary insurance and pay the premium. Repayment of the premium shall be part of the rental and payment shall be made within thirty (30) days of the date the premium was paid by City. Lessee further agrees to take out and keep in force during the term of this Lease at his own expense proper and adequate worker's compensation insurance.

38. Remedies of City on Default:

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/11/11
Page IO of 14
a. If Lessee breaches this Lease, City shall have, in addition to other rights or remedies, the right of reentry, after having given thirty (30) days' written notice, and the right to take possession of all livestock, crops on the Premises, harvested or unharvested, if any, and to remove all persons and property from the Premises. City may store the property removed in a public warehouse or elsewhere at Lessee's expense and for its account, City, at its election, shall become the owner of all property of which it has so taken possession, without being obligated to compensate Lessee for them.
b. If City elects to reenter, as provided above, or to take possession under legal proceedings or under any notice provided for by law, City may do either of the following:
(1) terminate this Lease, or
(2) from time to time, without terminating this Lease, relet the entire or an part of the Premises for such terms (which may extend beyond the term of this Lease) and at such rentals and other conditions as City in its sole discretion deems advisable. City also has the right to make alterations and repairs to the Premises. c. If City chooses to relet the entire or any part of the Premises, Lessee shall be immediately liable for payment to City and City, at its option, may apply rents received by City as follows:
(1) the payment of any indebtedness, except rent, due under this Lease from Lessee to City;
(2) the payment of expenses of reletting and of alterations and repairs; or
(3) the payment of rent due under this Lease and unpaid, with the residue, if any, being held by City and applied in payment of future rent as it becomes due and payable under this Lease.
d. If Lessee has been credited with rent to be received by reletting under the option in this subparagraph, above, and the rent has not been promptly paid to City by the replacement tenant; or if the rentals received from reletting under the option in this subparagraph, above, during any semiannual rental period are less than that to be paid during that semiannual rental period by Lessee under this Lease, Lessee shall pay the deficiency to City. This deficiency shall be calculated and paid monthly. e. No reentry or taking possession of the Premises by City shall be construed as an election by City to terminate this Lease unless written notice of such Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/11 /I l

Page 11 of 14 ends

an intention is given to Lessee or this Lease is declared to be terminated by a court of competent jurisdiction. Even though the reletting was without termination by City, City may at any future time elect to terminate this Lease for the previous uncured breach by Lessee. If City terminates this Lease for a breach, in addition to any other remedy City may have, City may recover from Lessee all damages City incurs by reason of the breach, including both the cost of recovering the Premises and the worth, at the time of termination, of the excess of the amount of rent and charges equivalent to rent specified in this Lease, for the remainder of the stated term, over the then reasonable rental value of the Premises for the remainder of the term. All of these amounts shall be immediately due from Lessee to City.
f. All of these rights shall be concurrent and cumulative and are in addition to, and not in derogation of, all other rights and remedies available to City. g. Nothing contained in this Lease, and no security or guarantee of Lessee that City holds now or in the future under this Lease, shall in any way constitute a bar or defense to an action by City in unlawful detainer or for recovery of the Premises.

39. Insolvency; Receiver: In addition to any action or failure to act which constitute a breach of the terms and conditions of this Lease under California law, any one, or any combination, of the following constitutes a breach of this Lease by Lessee:
a. The appointment of a receiver to take possession of all or substantially all assets of Lessee, or
b. A general assignment by Lessee for the benefit of creditors, or c. An action taken or suffered by Lessee under any insolvency or bankruptcy act.

40. Attorney's Fees on Default: In any action or proceeding by either party to enforce this Lease or any provision thereof, the prevailing party shall be entitled to all costs incurred and to reasonable attorney's fees.

41. Action of Receiver: If, in an action against Lessee, City has a receiver appointed to take possession of the Premises, or to collect the rents or profits derived from the Premises, or both, the receiver has the right, if it is necessary or convenient in order to collect rents or profits, to conduct the business of Lessee then being carried on the Premises and to take possession of any personal property belonging to Lessee and used in the conduct of the business, and to use personal property in conducting the business on the Premises. Neither the application for the appointment of the receiver, nor the appointment of the receiver, shall be Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/1 1 /11

Page 12 of 14 ends

construed as an election by City to terminate this Lease unless a written notice of such intention is given to Lessee.

42. Surrender of Lease Not Merger: The voluntary or other surrender by Lessee, or a mutual cancellation, of this Lease shall not work a merger, and shall, at City's option, terminate all existing subleases or subtenancies, or may, at City's option, operate as an assignment to City of any or all subleases or subtenancies.

43. Assignment or Subletting: Lessee may not assign this Lease, or any rights under it, and shall not sublet the entire or any part of the Premises, or any right or privilege appurtenant to the Premises, or permit any other person (the agents and servants of Lessee excepted) to occupy or use the entire or any portion of the Premises, without first obtaining City's written consent; provided that City shall not unreasonably withhold consent to assignment, sublease, or other transfer of use or possession of the Premises. A consent to one assignment, subletting, occupancy or use by another person is not a consent to a future assignment, subletting, occupancy or use by another person. An assignment or a subletting without City's consent shall be void, and shall, at City's option, terminate this Lease. No interest of Lessee in this Lease shall be assignable by operation of law without City's written consent. No assignment, subletting, or encumbrance by Lessee shall release it from any obligations hereunder.

44. Subordination: This Lease shall be subordinate to any mortgages or deeds of trust by City that may subsequently be placed on the Premises, to all advances made under them, to the interest on all obligations secured by them, and to all renewals, replacements, and extensions of them. Provided, however, the mortgagee or beneficiary in those mortgages or deeds of trust shall recognize this Lease in the event of foreclosure if Lessee is not in default under the terms of this Lease.

45. Waiver: The waiver by City of a breach of any term, covenant, or condition contained in this Lease shall not be treated as a waiver of such term, covenant, or condition, or as a waiver of a future breach of the same or any covenant, or condition contained in this Lease. The acceptance of rent by City shall not be treated as a waiver of a previous breach by Lessee of any term, covenant or condition of this Lease, other than the failure of Lessee to pay the particular rental so accepted, regardless of City's knowledge of a previous breach at the time of acceptance of rent.

46. Notices: Any notice to be given to either party by the other shall be in writing and shall be served either personally or be registered or certified mail address as follows:

Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [ prepared 2/11 / I l

Page 13 of 14 ends

City: City of Santa Clara
Attn: Electric Department
1500 Warburton Ave.

Santa Clara, CA 95050
Lessee: Joseph R. Paulo
4151 North Vasco Road
Livermore, CA 94550
Telephone (925) 447-7208
The address to which notices shall be mailed as aforesaid to either party may be changed by written notice given by such party to the other as hereinbefore provided.

47. Legal Effect: All covenants of Lessee contained in this Lease are expressly made conditions. The provisions of this Lease shall, subject to the provisions on assignment, apply to an bind the heirs, successors, executors, administrators, and assigns of all parties to this Lease; and all parties to this Lease shall be jointly and severally liable under it. The titles or headings to the paragraphs of this Lease are not a part of this Lease and shall have no effect on the construction or interpretation of any part of this Lease.

48. Time of Essence: Time is of the essence of this Lease.

49. Governing Law: The law of the State of California shall govern this Lease.

50. Amendment: This Lease may be amended only by a duly executed written document, signed by all parties to this Lease.

Ill
Ill
Ill
Ill
Ill
Ill
Grazing Lease Between City and Joseph R. Paulo for a portion of Altamont Ranch [prepared 2/1 1 /1 l

Page 14 of 14 ends

SPECIAL PROVISIONS
of the

GRAZING LEASE BY AND BETWEEN

THE CITY OF SANTA CLARA AND
JOSEPH R. PAULO.

FOR A PORTION OF THE PROPERTY KNOWN AS THE ALTAMONT RANCH

ALTAMONT COUNTY, CALIFORNIA

SOIL AND WATER CONSERVATION AND MAINTENANCE REQUIREMENTS Lessee shall apply conservation and maintenance measures and use the Premises by following generally accepted grazing practices. Lessee shall in no manner substantially change the condition of the Premises except for such changes prescribed by the City Manager.

1. Site Coordination: Lessee or his representative shall closely coordinate his operations with City Manager located at 1500 Warburton Avenue, Santa Clara, California 95050, telephone (408) 615-2210. Lessee shall be available at all times to correct emergency situations with regard to this Lease. Lessee shall provide City with emergency telephone numbers where Lessee may be contacted during working and nonworking hours. Lessee shall also provide at least one alternate point of contact (name, address, and phone number) who may act on behalf of Lessee in emergency situations. Lessee or his alternate(s) shall be available for contact seven days per week, 24 hours per day, and should arrive on site within two hours of an emergency.

2. Conservation and Maintenance Work: It is the intent of City that the land be utilized for multiple uses including, but not limited to, utility, grazing, wildlife habitat, recreation, and soil and water conservation. Lessee is required to participate in a conservation and maintenance program as outlined in these Special Provisions and as may be further directed from time to time by the City Manager based upon accepted range and grazing practices. The conservation and maintenance measures so selected are intended to provide for the long term productivity of the grazing area on the Premises while protecting the other natural resources and permitting a reasonable economic return to Lessee. Lessee will be responsible for performing conservation and maintenance of the Premises at his own expense. Should Lessee fail to perform required conservation or maintenance work, City reserves the right, after 30 days written notice, to hire others at the direction of the City Manager, to conduct such work at Lessee's expense. Hunting or shooting on the Premises is expressly prohibited. a. Grazing Management:
(1) Grazing Intensity: The amount of grazing must be sufficient each year to reduce overall fire hazard while protecting against soil erosion. It is the expressed concern of City that the range not be Grazing Lease Between City and Joseph R. Paulo for portion of Altamont Ranch [prepared 2/1 l /l l
Page I of6
overgrazed. Lessee agrees to avoid grazing where the soil is very wet or muddy and damage thereto is likely to occur. A pasture rotation plan for protection against overgrazing shall be submitted before September 1 of each year by Lessee to the City Manager for review and approval. This plan shall insure protection of all grazing areas on the Premises from overgrazing or related damage.

A minimum three inch stubble height of vegetation shall be maintained in each grazing area at all times.
(2) Season of Use: The grazing season is yearlong, subject to availability of feed and water.
(3) Livestock Distribution: Lessee shall strive for optimum distribution of livestock over the leased area. Salt blocks and feed supplements shall not be located within 1/4 mile of watering areas but shall be distributed uniformly throughout the leased area. (4) Animal Health: Lessee shall comply with all federal, state and local animal health laws, and regulations with respect to livestock grazing on the Premises.
(5) Removal of Dead Livestock: Lessee, at his own expense, shall immediately dispose of any dead animals in a manner satisfactory to the City Manager, and in accordance with local ordinances.

Disposal shall take place within 34 hours or sooner after notification to Lessee.
(6) Supplemental Feeding: Supplemental feeding may be allowed in any lease year provided Lessee annually submits a prior written request and subsequent written permission is granted from City Manager.
(7) Standard of Operation: Lessee agrees to manage and operate the ranch in an efficient and husbandman like manner following land use practices recognized at the best in the area.
(8) Alternate Compatible Uses: It is understood that City contemplates the erection and operation of wind powered structures, and possibly other forms of electrical generation, on the Premises. Also, the City may determine that there are other compatible uses for the number of grazing acres included in the Premises. To the extent that such uses reduce the number of grazing acres included in the Premises, the semiannual rental payments shall be adjusted in proportion to the number of grazing acres remaining in the Lease following the reduction, in Grazing Lease Between City and Joseph R. Paulo for portion of Altamont Ranch [prepared 2/11/1 I

Page 2 ends

accordance with General Provisions, Section 19, of this Lease. In the event that the Original Leased Acreage is reduced by more than fifty percent (50%), and the remaining acreage is less than that which is acceptable to the Lessee, written notice to City, to terminate this Lease. As between the City and Lessee, the City shall be solely responsible for anything relating to above electrical generation or compatible uses, and more specifically, for any personal injury or property damage in any way related thereto, including but not limited to the acts of negligence of City, its agents, employees, contractors, or assigns.
b. Livestock Water and Facilities: All watering systems presently on the Premises shall be for the exclusive use cattle or horses while this Lease applies to the areas where the systems are located. Lessee, at his own expense, shall frequently inspect and maintain existing and future livestock watering facilities during the term of this Lease, including:
springs, ponds, and water troughs. Maintenance includes, but is not limited to: maintaining water free of excessive amounts of algae, silt and manure; clearing obstructions away from drain and spillways, repairing float and valve mechanisms, cleaning or replacing blocked or damaged piping, repairing spring boxes, and stabilizing reservoir slopes. c. Water: During the term of this Lease, water shall be available to Lessee for Lessee's livestock from springs and pipelines presently existing on the Premises; and from the domestic well and pump located at the main ranch house, if required, and to the extent such use does not interfere with the domestic and animal water requirements of other Lessees at that location.

Water from the sources to or on the Premises available to Lessee under this Lease shall be used only on the Premises and in the performance of Lessee's obligations under this Lease. Lessee shall not export this water to other lands. City assumes no responsibility to Lessee for any water shortage from the facilities mentioned above and assumes no responsibility for and does not warrant, the quality or quantity of the water supply on or to the Premises.
d. Maintenance: Lessee shall care for the Premises and appurtenances of the Premises, including, but not limited to, all fences, corrals, springs, water troughs, and fire breaks, and maintain them in the same or better order and condition in which received, ordinary wear and tear excepted. Roads may serve as firebreaks provided that their function as roads is not degraded.

Discing of roads is strictly prohibited. All materials used in maintaining City owned facilities shall be of at least the same type of quality as those used in original construction. All materials used for such repairs shall become the property of City and shall not be removed by Lessee upon termination of this Lease.

Grazing Lease Between City and Joseph R. Paulo for portion of Altamont Ranch [prepared 2/11/11

Page 3 ends

e. Alterations: Lessee shall not make, or permit to be made, alterations of the Premises, without first obtaining City Manager's written consent.

Additions to, or alterations of, the Premises, except trade fixtures, shall become at once a part of the realty and belong to City. Lessee shall keep the Premises free from any liens arising out of any work performed, material furnished or obligations incurred by Lessee.
f. Management of Maintenance Areas: Maintenance areas shall be managed to prevent erosion. Lessee, at his own expense, shall control weeds on maintenance areas at a maximum height of 6" per year by mowing, chopping or spraying. No soil sterilants may be used. Any area on the Premises which is not grazed shall be considered a maintenance area. g. Pest Management: Lessee shall, at his own cost and expense, comply with all state, county, city, and district weed and rodent control programs. The following weeds and rodents shall be controlled to the satisfaction of City Manager whether under any control program of the state, county or city, or not.

Weeds Rodents
Artichoke thistle Ground squirrel
Purple star thistle
Rattleweed
Artichoke thistle and purple star thistle control shall be performed annually by April 1st on a nonreimbursable basis with a minimum 95% kill. The term "pesticide" includes herbicides, insecticides, fungicides, rodenticides, algaecides, and avicides. Lessee may apply limestone or commercial fertilizer to established meadows and pastures for soil improvement at his own expense and consistent with the terms of this Lease. All such improvements shall become and remain the property of City. Lessee shall be responsible for complying with all federal, state, and local environmental standards, including obtaining required permits.

Lessee, at least five working days prior to pesticide application, shall furnish City Manager the following information.
(1) Common name/concentration of the product.
(2) Formulation of the product.
(3) Amount to be used.
(4) Target pest or weed (if applicable).

Grazing Lease Between City and Joseph R. Paulo for portion of Altamont Ranch [prepared2/I 1/11
Page4 of6
(5) Crop and acreage to be treated.
(6) Application rate/acre.
(7) Time/frequency of application.

Lessee shall not proceed with the application program without a forty-eight (48) hour prior notification and subsequent receipt of City Manager's approval. h. Fire Prevention: Lessee agrees to repair and maintain all firebreaks to the extent such repairs or maintenance is required from time to time by governmental authority, law, order, rule or regulations (a copy can be obtained from the Solano County Fire Department). Lessee shall comply with local fire control and prevention regulations. In the event of any accidental or uncontrolled fire on the Premises, Lessee shall immediately contact the fire department and exercise due care to prevent damage to the Premises from such a fire.
(1) Equipment: All engine-driven equipment used by Lessee on the site must be equipped with properly operating spark arresters, mufflers, and tailpipe assemblies. In addition, any vehicle having a catalytic converter pollution device may not be driven off or improved roads due to the extreme heat generated by the device during the dry season. City will fence or otherwise secure equipment, structures, apparatus, and other critical items from grazing livestock, specifically including many windmills, wind power apparatus or other electrical generation facilities of City or other lessees of City, at City's sole discretion.
(2) Storage of Equipment and Materials: Equipment utilized in the operation of this Lease may be stored only in an area approved by City. No hazardous material shall be stored on the Premises pursuant to the General Provisions of this Lease.
i. Debris Removal: Lessee shall maintain all areas of the Premises in a neat, orderly appearance at all times. Broken down or discarded equipment or material shall be removed from the Premises immediately. Lessee may burn debris or waste located on the Premises only with the previous written permission of City Manager. Lessee must also obtain the appropriate permits from governmental agencies before any burning is done on the Premises.
j. Erosion Control: Lessee shall apply prudent erosion control measures as prescribed by City Manager and the Solano County Soil Conservation Service to reduce the loss of soil due to the actions of wind and water.

Grazing Lease Between City and Joseph R. Paulo for portion of Altamont Ranch [prepared 2/ I I / I I

Page 5 ends

k. Fence and Gate - Maintenance: Lessee shall be required to maintain all existing fence lines, cattle gates, and grates in good working condition.

1. Additional Conservation Work: Projects determined to be in the best interest of City may be approved by the City Manager for construction by Lessee on a cost sharing basis. Upon completion of such work and acceptance of same by City, Lessee shall receive payment in full for that portion of actual costs which City had agreed to pay, or shall receive rent credit in the same amount against rents payable under the terms of this Lease; provided however, that in no event shall such rent credit exceed the total amount of cash rent called for in the Lease. Lessee shall be responsible for maintenance of such completed projects at his own expense.

Ill
Ill
Ill
Ill
Ill
Grazing Lease Between City and Joseph R. Paulo for portion of Altamont Ranch (prepared 2/11 /11 Page 6 of6

STANDARD INSURANCE REQUIREMENTS

EXHIBIT C
During the term of this Agreement, Contractor shall purchase and maintain the following insurance policies with the indicated policy limits and endorsements:

A. Commercial General Liability (CGL), with policy limits not less than $ 1,000,000 for each occurrence covering bodily injury and property damage;

1. CGL Primary Insurance Endorsement; and

2. This CGL policy shall include an endorsement which adds the City of Santa Clara, its Council, employees, and officers as additional insureds.

B. Business Automotive Liability (BAL), with policy limits not less than $1,000,000; and
C. Workers' Compensation and Employers' Liability with policy limits of California statutory limits.

All insurance certificates, endorsements, coverage verifications and other items required pursuant to this Agreement shall be mailed directly to the City's insurance compliance representative as follows:

City of Santa Clara Electric Department
c/o EBIX Inc.

P.O. 12010-S2 or 151 North Lyon Avenue
Hemet, CA 92546-8010 Hemet, CA 92543
Telephone number: 951-766-2280
Fax number: 770-325-0409
Grazing Lease Between City and Schene Enterprises, Inc. for portion of Benicia Ranch [prepared 2/ 11/ I I Pagel of 1
October 24, 2017
City of Santa Clara
Attn: Diana Shiles
881 Martin Avenue
Santa Clara, CA 95111
Dear Diana,
This letter is in regard to the extension of the Altamont Ranch, Alameda County, California grazing lease.

The lease was executed with an effective date of September 26, 2011 for initial term of five (5) years and may be extended for an additional five (5) year term. In section four (4) of the lease it states the any extension is subject to the discretion and written agreement of both parties.

Please accept this letter as our written request to extend the grazing lease for the additional five (5) year term.

Note that our principal place of business, as indicated on lease, remains the same:
- 4151 N Vasco Road, Livermore, CA 94551
Our mailing address has changed to:
- 1452 N Vasco Road #293, Livermore, CA 94551
Please let me know should you need additional information or have any questions. We look forward to your response.

Sincerely ,
{!A&< u~{ (u
Charlene Paulo
Paulo Farms
Paulo Farms
1452 N Vasco Road #293
Livermore, CA 94551
925 .447 .7208 - fax 92S.443.6647 - charpau lo@ao l.com EBIX Insurance No. S200002507
AMENDMENT NO. 1

TO THE GRAZING LEASE BY AND BETWEEN
BElWEENTHE

CITY OF SANTA CLARA, CALIFORNIA,
AND
JOSEPH R. PAULO, AN INDIVIDUAL, FOR A PORTION OF THE PROPERTY

KNOWN AS THE ALTAMONT RANCH, ALAMEDA COUNTY, CALIFORNIA

PREAMBLE
This agreement ("Amendment No. 1") is entered into between the City of Santa Clara, California, a chartered California municipal corporation (City) and Joseph R. Paulo, an individual sole proprietor (Contractor). City and Contractor may be referred to individually as a "Party" or collectively as the "Parties" or the "Parties to this Agreement."

RECITALS
A. The Parties previously entered into an agreement entitled "Grazing Lease by and Between the City of Santa Clara, California, and Joseph R. Paulo, an Individual, for a Portion of the Property Known as the Altamont Ranch, Alameda County, California, dated September 26, 2011 (Agreement); and
B. The Parties entered into the Agreement for the purpose of having Contractor lease the property for cattle grazing on the City's Altamont Ranch located in Alameda County, and the Parties now wish to amend the Agreement to extend the term of the Grazing Lease for two additional years or until September 26, 2023.

NOW, THEREFORE, the Parties agree as follows:

AMENDMENT TERMS AND CONDITIONS

1. The introductory paragraph of Agreement refers to Joseph R. Paulo as "Contractor". All references to Contractor shall be replaced with "Lessee."

2. Section 4 of the Agreement, entitled "Term" is amended to read: The initial term of this Lease is for five (5) years, commencing on the Effective Date of this Lease and may be extended for an additional seven (7) year period or until September 26, 2023. Parties acknowledge and agree that this amendment reinstates and extends the lease as though the original lease term had never expired. Any further extension of this Lease is subject to the discretion and written agreement of the parties hereto. Upon termination of this Lease, Lessee convenants and agrees to peacefully and quietly quit and surrender possession of the Premises and all appurtenance to City subject to all the convenants, conditions, term and agreements of this Lease and Lessee agrees to pay all monies then due and owing to City at such time, provided for in this Lease, or as a result of operations thereunder by Lessee, or in consequence thereof. At the termination of this Amendment No. 1 to Agreement/Joseph R. Paulo
Rev. 10/25/19

Page 1 ends

Lease, Lessee shall promptly execute, acknowledge, and deliver to City a recordable quitclaim deed in a form satisfactory to City.

3. Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect. In case of a conflict in the terms of the Agreement and this Amendment No. 1, the provisions of this Amendment No. 1 shall control.

The Parties acknowledge and accept the terms and conditions of this Amendment No. 1 as evidenced by the following signatures of their duly authorized representatives.

Approved as to Form:

CITY OF SANTA CLARA, CALIFORNIA
a chartered California municipal corporation
Dated: N~~Q~~t~(Z QL\1 2.01-\
~ ~ ~ ~ ~~ City Attorney's Office IL D EA~SANA'NA
l{City M nager
"CITY"
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
JOSEPH R. PAULO
a individual sole proprietor
Dated : _S_e~~te_m __ be_r_1_5_,_,~2~0_2_1 _~--- -------- By (Signature) : ----,, q...,,c..,.,&.. ~=~-/2L-...e>~;P-___,,,~~~-=------- Name : _,.g6"--S_ P_H_R_._P_A_U_L_O _ _______ _
Title: Sole Proprietor
Principal Place of 1452 N. Vasco Road 293
Business Address: Livermore, CA 94551
Email Address : [email protected]
Telephone: (925) 447-7208
"CONTRACTOR"
Amendment No. 1 to AgreemenUJoseph R. Paulo
Rev. 10/25/2019

Page 2 ends

Ebix Insurance No. S200002507
AMENDMENT NO. 2

TO THE GRAZING LEASE BY AND

BETWEEN THE

CITY OF SANTA CLARA, CALIFORNIA,
AND
JOSEPH R. PAULO, AN INDIVIDUAL, FOR A PORTION OF THE PROPERTY

KNOWN AS THE ALTAMONT RANCH, ALAMEDA COUNTY, CALIFORNIA PREAMBLE·
This agreement ("Amendment No. 2") to the Grazing Lease is entered into between the City of Santa Clara, California, a chartered California municipal corporation (City) and Joseph R. Paulo, an individual sole proprietor (Lessee). City and Lessee may be referred to individually as a "Party" or collectively as the "Parties."

RECITALS
A. The Parties previously entered into an agreement entitled "Grazing Lease by and Between the City of Santa Clara, California, and Joseph R. Paulo, an individual, for a portion of the property known as the Altamont Rach, Alameda County, California," dated September 26, 2011 (Agreement) for the purpose of having Lessee lease the property for cattle grazing on the City's Altamont Ranch located in Alameda County;
B. The Agreement was previously amended by Amendment No. 1, dated November 4, 2021. The Agreement and all previous amendments are collectively referred to herein as the "Agreement as Amended"; and
C. The Parties now wish to amend the Agreement as Amended to extend the term of the Grazing Lease.

NOW, THEREFORE, the Parties agree as follows:

AMENDMENT TERMS AND CONDITIONS

1. Section 4 of the Agreement as Amended, entitled "Term" is amended to read:
"The term of this Lease is for sixteen (16) years, commencing on September 26, 2011. Any extension of this Lease is subject to the discretion and written agreement of the parties hereto. Upon termination of this Lease, Lessee covenants and agrees to peacefully and quietly quit and surrender possession of the Premises and all appurtenances to City subject to all the convenants, conditions, terms and agreements of this Lease, and Lessee agrees to pay all monies then due and owing to City at such time, provided for in this Lease, or as a result of operations thereunder by Lessee, or in consequence thereof. At the Amendment No. 2 to Agreement/Joseph R. Paulo
Rev. 10/25/19
Page1
termination of this Lease, Lessee shall promptly execute, acknowledge, and deliver to City a recordable quitclaim deed in a form satisfactory to City. "

2. Except as set forth herein, all other terms and conditions of the Agreement as Amended shall remain in full force and effect. In case of a conflict in the terms of the Agreement as Amended and this Amendment No. 2, the provisions of this Amendment No. 2 shall control.

The Parties acknowledge and accept the terms and conditions of this Amendment No. 2 as evidenced by the following signatures of the ir duly authorized representatives .

CITY OF SANTA CLARA, CALIFORNIA
a chartered California municipal corporation
Dated: Approved as to Form: ------- -------
GLEN R. GOGGINS
City Attorney
"CITY"
JOVAN D. GROGAN
City Manager
City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone : (408) 615-2210
Fax: (408) 241-6771
JOSEPH R. PAULO
an individual sole proprietor
Dated: __,~
2 --""-)~ /J tf:--1-=-/.J-_____,O J.-==---=3'---------- By (Signature): _ __,,,,D"-----'0--'----__ Pc_~ _____ ___ _ Name:SEPHR. PAULO --"-- ------ ------- --
Ti tie: _S_o_l_e_P_r_o._pr_ie_t_o_r ______ _____ _
Principal Place of 1452 N. Vasco Road 293
Business Address: Livermore , CA 94551 _ ___ :,__ ____ ____ _ ___ _ Email Address: _c=h..:...::a::..:..ri::...pa::..:..u=l-=-o@-"-"--'a..:...::o:...:..:l.c..::.c-=-om:...:....:...._ _______ __ _ Telephone: ---'(._9_25_,)'--4_4_7_-7_2_0_8 __________ _ "LESSEE"
Amendme nt No. 2 to Agreement/Josep h R. Paulo
Rev. 1 0/25/2019

Page 2 ends

City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1136 Agenda Date: 9/19/2023

REPORT TO COUNCIL AND SUCCESSOR AGENCY TO THE FORMER

REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARA

SUBJECT
Action on Resolution Approving a Purchase and Sale Agreement and Other Documents as Necessary Related to the Sale of the Techmart Building Parcel Located at 5201 Great America Parkway [APN: 104-55-013]

BACKGROUND
California Redevelopment Dissolution Laws require all successor agencies to sell all of their assets pursuant to a Department of Finance approved Long Range Property Management Plan (LRPMP).

The Successor Agency to the Former Redevelopment Agency of the City of Santa Clara (Successor Agency) has sold several parcels as required by law including: Santa Clara Gateway Parcel #2, Santa Clara Hilton, the North South parcel, and Great America Theme Park. Proceeds from the sale of these assets were first used to retire Successor Agency debt. Now that all Successor Agency debt has been retired, all land sale proceeds are being distributed to taxing agencies upon closing.

As provided in Health and Safety Code Section 34179(j), on July 1, 2016, oversight of Successor Agency activities was transferred to the Countywide Oversight Board (Oversight Board). The Oversight Board appointed two of its members (Glen Williams, County of Santa Clara and Ngoc Chim, West Valley-Mission Community College District) as a subcommittee to work with the Successor Agency to complete the sale of all its properties.

The Successor Agency owns approximately 1.58 acres of land located at 5201 Great America Parkway [APN: 104-55-013] (Property). The Property is encumbered by a long-term ground lease with Hudson Pacific Properties (Tenant) and is currently being utilized as a multi-tenant office building commonly known as the Techmart Building. The Successor Agency owns the land and the Tenant owns the building improvements.

The Ground Lease was first executed by the Redevelopment Agency in 1998 and has been amended once in 2006.

The existing Ground Lease provides for several terms of note:
· The primary term of the lease expires on June 1, 2053. There are two additional 10-year options to extend the term. The remaining term of the lease plus extensions is approximately 50 years (2073).
· The operation of the Property is supported by the property owned by the City of Santa Clara (Common Area). The Common Area includes the Convention Center Garage, all surface parking areas, sidewalks and driveways within the Convention Center Complex. The Lease provides the Tenant with rights to 1,081 parking spaces within the Common Area.

City of Santa Clara Printed on 9/15/2023Page 1 of 4
powered by Legistar™
23-1136 Agenda Date: 9/19/2023
As part of the 2016 Settlement Agreement with the County of Santa Clara, Santa Clara Unified School District, et al., the Tenant’s Common Area rights per the Lease were to be documented in Covenants, Conditions and Restrictions (CC&Rs). Under the oversight of the Superior Court, CC&Rs were prepared and recorded on the City-owned Common Area property on December 21, 2020.

In compliance with the Surplus Land Act, Gov’t Code § 54220 et seq., on October 19, 2021, the City Council, acting as the governing body of the Successor Agency, adopted Resolution 21-1 declaring the Property as surplus pursuant to Government Code Section 54221(b)(1) and authorized the issuance of a Notice of Availability (NOA). On January 22, 2022, the NOA was issued to provide sixty (60) days for affordable housing interests to notify the Successor Agency of their interest in acquiring the Property. The Successor Agency did not receive any notifications of interest by the March 26, 2022 deadline.

With the concurrence of the Countywide Oversight Board subcommittee, in June 2023, the Successor Agency’s broker, Eastdil Secured, commenced marketing the site to potential buyers. In July and August 2023, three bidding rounds were conducted. At the conclusion of the second round, potential buyers were requested to provide the Successor Agency with their highest and best offer.

Final offers from three firms were submitted on August 25, 2023. The highest offer submitted was from Techmart Owner, LLC with a purchase price of $22,500,000. Techmart Owner, LLC is an affiliate of a vertically integrated national real estate company. With an office in San Francisco, their portfolio includes more than 19.3 million square feet and $17.9 billion in assets under management..

DISCUSSION
Key terms of the proposed Purchase and Sale Agreement (Agreement) between the Successor Agency and Techmart Owner, LLC, a Delaware limited liability company. (Buyer) for the Property include:

Purchase Price: $22,500,000
Deposit: A deposit of $600,000 (Deposit) to be deposited into escrow, three days following the execution of Purchase and Sale Agreement. The Deposit will become non-refundable after the expiration of the Diligence Period.

Diligence Period: Approximately thirty (30) days following the execution of the Agreement.

Closing: Closing to five (5) days following the expiration of the Diligence Period.

Estoppel Seller will deliver a Seller’s Estoppel prior to Closing. Buyer has requested that Seller deliver a Tenant Estoppel prior to Closing. Successor Agency will work with Hudson Pacific to deliver the Tenant in a form acceptable to Buyer.

The Surplus Land Act also requires that all dispositions of surplus land record an affordability covenant against the land. As no entity responded to the Successor Agency’s NOI in 2022, an affordability covenant is required to be recorded against the Property providing that 15% of the units for any future housing project on the Property must be set aside for lower income households as defined by Section 50079.5 of the California Health and Safety Code for a period of 55 years. The City of Santa Clara Printed on 9/15/2023Page 2 of 4
powered by Legistar™
23-1136 Agenda Date: 9/19/2023
Successor Agency’s requirement to record this covenant prior to the close of escrow is included in the Agreement.

A draft form of Agreement is attached to this Report. The final Agreement will be reviewed by the City Attorney’s Office for consistency with the terms in this Report and to assure that to the maximum extent possible, hazardous materials liabilities and any issues with respect to the leases on the Property are assumed by the Buyer. Final execution of the Agreement is subject to the approval of the Countywide Oversight Board anticipated to occur on September 22, 2023.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to the CEQA Guidelines section 15378(a) as it has no potential for resulting in either direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.

FISCAL IMPACT
The sale of the Techmart Parcel will provide $22,500,000 in sales proceeds (less customary closing costs and broker fees) to the Successor Agency. Sale proceeds will be distributed to the taxing entities and the City of Santa Clara, as a taxing entity will receive approximately 10% of any sale proceeds.

COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.

RECOMMENDATION
That the City Council acting as the governing board of the Successor Agency to the Redevelopment Agency of the City of Santa Clara adopt a Resolution authorizing the City Manager/Executive Officer to negotiate and execute a Purchase and Sale Agreement between the Successor Agency to the Redevelopment Agency of the City of Santa Clara and Techmart Owner, LLC. for the Techmart Parcel located at 5201 Great America Parkway (APN: 104-55-013) at a purchase price of $22,500,000 and authorizing the City Manager to execute all documents necessary, including an affordability covenant and minor modifying amendments, in final forms approved by the City Attorney, to implement the Purchase and Sale Agreement and close escrow.

Reviewed by: Ruth Mizobe Shikada, City Manager’s Office Approved by: Jōvan D. Grogan, City Manager/Executive Officer

ATTACHMENTS

1. Form of Purchase and Sale Agreement
City of Santa Clara Printed on 9/15/2023Page 3 of 4
powered by Legistar™
23-1136 Agenda Date: 9/19/2023

2. Resolution
City of Santa Clara Printed on 9/15/2023Page 4 of 4
powered by Legistar™

AGREEMENT FOR PURCHASE AND SALE OF

PROPERTY BY AND BETWEEN

SELLER:

SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY

OF THE CITY OF SANTA CLARA

and

BUYER:

TECHMART OWNER, LLC

PROPERTY: Techmart Parcel 2
ADDRESS: 5201 Great America Parkway, Santa Clara, California

EXECUTION DATE: [TBD]

2 AGREEMENT FOR PURCHASE AND SALE OF PROPERTY

This Agreement for Purchase and Sale of Property (this "Agreement") is executed by and between Seller, as identified in the Key Terms (set forth below), and Buyer, as identified in the Key Terms, as of the Execution Date (as defined in the Defined Terms below). Buyer and Seller hereby agree that Seller shall sell to Buyer and Buyer shall purchase from Seller, upon the following terms and conditions and for the Purchase Price set forth in the Key Terms, the Property, as defined in the Defined Terms.

LIMITATION OF SELLER'S LIABILITY AND BUYER'S WAIVER OF
IMPORTANT RIGHTS:

BUYER AGREES THAT EXCEPT AS EXPRESSLY PROVIDED IN THIS

AGREEMENT AND THE DOCUMENTS TO BE DELIVERED BY SELLER
PURSUANT TO SECTION 7.3 BUYER IS BUYING THE PROPERTY "AS IS, WHERE IS WITH ALL FAULTS AND LIMITATIONS" (AS MORE FULLY S ET FORTH IN THIS AGREEMENT).

NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN T HIS

AGREEMENT, SELLER'S LIABILITY AND BUYER'S SOLE AND EXCLUSIVE

REMEDY IN ALL CIRCUMSTANCES AND FOR ALL CLAIMS (AS THAT

TERM IS DEFINED IN THE DEFINED TERMS, AND ALL REFERENCES IN THIS AGREEMENT TO "CLAIMS," "CLAIM," "Claims," or "Claim" SHALL

HAVE SUCH MEANING) OF WHICH BUYER HAS KNOWLEDGE PRIOR TO

CLOSING ARISING OUT OF THIS AGREEMENT OR THE SALE OF THE

PROPERTY TO BUYER INCLUDING, BUT NOT LIMITED TO, SELLER'S

BREACH OR TERMINATION OF THIS AGREEMENT, THE CONDITION OR

QUALITY OF THE PROPERTY, SELLER'S TITLE TO THE PROPERTY, THE

OCCUPANCY STATUS OF THE PROPERTY, THE SIZE, SQUARE FOOTAGE,

BOUNDARIES, OR LOCATION OF THE PROPERTY, ANY COST OR EXPENSE

INCURRED BY BUYER IN CONDUCTING ITS INVESTIGATION AND/OR

DUE DILIGENCE IN PREPARATION FOR THE PURCHASE OF THE

PROPERTY, OBTAINING OTHER ACCOMMODATIONS, MOVING, STORAGE

OR RELOCATION EXPENSES, OR ANY OTHER COSTS OR EXPENSES

INCURRED BY BUYER IN CONNECTION WITH THIS AGREEMENT SHALL BE LIMITED AS PROVIDED IN SECTION 11.2 OF THIS AGREEMENT.

IF BUYER DELIVERS THE APPROVAL NOTICE (DEFINED IN SECTION 3.2

BELOW) TO SELLER ON OR PRIOR TO THE EXPIRATION OF THE

DILIGENCE PERIOD (AS DEFINED IN THE DEFINED TERMS), THEN BUYER

SHALL NOT BE ENTITLED TO A RETURN OF THE DEPOSIT (AS DEFINED

IN THE KEY TERMS) IN THE EVENT THAT THIS AGREEMENT IS

TERMINATED BY SELLER AS RESULT OF BUYER'S BREACH OF THE TERMS OF THIS AGREEMENT; PROVIDED THAT (A) ANY CONDITIONS

3 PRECEDENT BENEFITING BUYER HEREUNDER HAVE BEEN SATISF IED

OR WAIVED, (B) SELLER HAS PERFORMED FULLY OR TENDERED

PERFORMANCE OF ITS CLOSING OBLIGATIONS HEREUNDER, (C) SELLER

IS NOT OTHERWISE IN BREACH OF THE TERMS OF THIS AGREEMENT,

AND ( D) SELLER IS OTHERWISE WILLING TO CONVEY THE PROPERTY PURSUANT TO THIS AGREEMENT.

EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY AGREES THAT

THE PARTIES SHALL NOT BE LIABLE TO EACH OTHER UNDER ANY

CIRCUMSTANCES FOR ANY SPECIAL, CONSEQUENTIAL, OR PUNITIVE

DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING

NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER LEGAL OR

EQUITABLE PRINCIPLE, THEORY, OR CAUSE OF ACTION ARISING OUT

OF ANY CLAIM, INCLUDING, BUT NOT LIMITED TO, THE
AFOREMENTIONED CLAIMS.

ANY REFERENCE TO A RETURN OF THE DEPOSIT CONTAINED IN THIS

AGREEMENT SHALL MEAN A RETURN OF THE DEPOSIT, LESS ANY

ESCROW CANCELLATION FEES APPLICABLE TO BUYER UNDER THIS

AGREEMENT AND LESS FEES AND COSTS PAYABLE FOR SERVICES AND

PRODUCTS PROVIDED BY ESCROW AGENT DURING ESCROW AT
BUYER'S REQUEST. UPON RETURN OF THE DEPOSIT TO BUYER, THIS

AGREEMENT SHALL BE TERMINATED, AND BUYER AND SELLER SHALL

HAVE NO FURTHER LIABILITY, OBLIGATION, OR RESPONSIBILITY TO

EACH OTHER IN CONNECTION WITH THIS AGREEMENT, EXCEPT AS TO

ANY PROVISIONS OF THIS AGREEMENT WHICH EXPRESSLY SURVIVE TERMINATION OF THIS AGREEMENT. IF THE SALE TO BUYER CLOSES,

THEN BUYER AND SELLER SHALL HAVE NO FURTHER LIABILITY,

OBLIGATION, OR RESPONSIBILITY TO EACH OTHER IN CONNECTION

WITH THIS AGREEMENT EXCEPT AS TO ANY PROVISIONS OF THIS AGREEMENT WHICH EXPRESSLY SURVIVE CLOSING.

SELLER'S LIMITATION OF LIABILITY AND BUYER'S WAIVERS PROVIDED

IN THIS AGREEMENT ARE A MATERIAL PART OF THE CONSIDERATION

TO BE RECEIVED BY SELLER UNDER THIS AGREEMENT AS AGREED TO BY BUYER AND SELLER.

SUBJECT TO, AND EXCEPT AS EXPRESSLY S ET FORTH IN THIS

AGREEMENT, BUYER FURTHER WAIVES THE FOLLOWING, TO THE
FULLEST EXTENT PERMITTED BY LAW:
(A) ANY CLAIMS ARISING FROM THE ADJUSTMENTS OR

PRORATIONS OR ERRORS IN CALCULATING THE

ADJUSTMENTS OR PRORATIONS THAT ARE OR MAY BE

DISCOVERED AFTER CLOSING, WHICH CLAIMS SHALL BE

RESOLVED IN ACCORDANCE WITH THE PROVISIONS OF

4 SECTION 5.2(E) OF THIS AGREEMENT;

(B) ANY REMEDY OF ANY KIND THAT BUYER MIGHT

OTHERWISE BE ENTITLED TO AT LAW OR EQUITY
(INCLUDING, BUT NOT LIMITED TO, RESCISSION OF THIS

AGREEMENT), EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT;

ARISING FROM OR RELATED IN ANYWAY TO THIS
AGREEMENT;

(D) ANY RIGHT TO AVOID THE SALE OF THE PROPERTY OR

REDUCE THE PRICE OR HOLD SELLER LIABLE FOR ANY

CLAIMS ARISING OUT OF THE CONDITION, CONSTRUCTION,

REPAIR, OR TREATMENT OF THE PROPERTY, OR ANY

DEFECTS, APPARENT OR LATENT, THAT MAY NOW OR

HEREAFTER EXIST WITH RESPECT TO THE PROPERTY,

INCLUDING BUT NOT LIMITED TO ANY CLAIMS RELATING

TO ANY ORDINANCES AND ANY REPAIR COSTS REQUIRED
THEREUNDER;

(E) ANY CLAIMS ARISING OUT OF ENCROACHMENTS,

EASEMENTS, BOUNDARIES, SHORTAGES IN AREA OR ANY

OTHER MATTER THAT WOULD BE DISCLOSED OR

REVEALED BY A SURVEY OR INSPECTION OF THE PROPERTY
OR SEARCH OF PUBLIC RECORDS;

(F) ANY CLAIMS ARISING OUT OF THE SQUARE FOOTAGE, SIZE,

OR LOCATION OF THE PROPERTY, OR ANY INFORMATION

PROVIDED ON THE MULTIPLE LISTING SERVICE, OR

BROCHURES OR WEB SITES OF SELLER OR SELLER'S AGENT

OR LISTING BROKER OR ANY STATEMENTS, ACTIONS OR
CONDUCT OF SELLER'S AGENT OR LISTING BROKER; AND

(G) ANY CLAIMS ARISING OUT OF TENANTS OR OCCUPANTS OF

THE PROPERTY OR INCOME, IF ANY, TO BE DERIVED FROM

THE PROPERTY OR HAZARDOUS MATERIALS (AS DEFINED
IN THE DEFINED TERMS OF THIS AGREEMENT).

THE ABOVE PROVISIONS SHALL SURVIVE THE CLOSING OF THE

TRANSACTION CONTEMPLATED HEREBY, OR THE EARLIER TERMINATION OF THE AGREEMENT, IF PERMITTED. IF THERE IS A CONFLICT BETWEEN THE

ABOVE PROVISIONS AND THE REMAINDER OF THIS AGREEMENT, THE PROVISIONS OF THE REMAINDER OF THIS AGREEMENT SHALL PREVAIL.

5 SELLER'S INITIALS _________/__ BUYER'S INITIALS _________/__

6 ARTICLE I.

KEY TERMS

The following "Key Terms" shall apply to this Agreement:

1.1 "Seller": Successor Agency to the Redevelopment
Agency of the City of Santa Clara

"Seller's Contact Person": Ruth Shikada

"Seller's Notice Address":

City Manager's Office
City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
Attn: Ruth Shikada ([email protected])
With copies to:

City Attorney's Office
City of Santa Clara
1500 Warburton Avenue
Santa Clara, CA 95050
Attn: Glen Googins
Googins([email protected])

1.2 "Buyer":

"Specify Buyer Entity Type":

"Buyer's Contact Person":

"Buyer's Notice Address":

With copies to:

Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, California 90071
Attn: Jesse Shapiro and Allison Kidd

7 Email: [email protected] and
[email protected]

1.3 "Purchase Price": $2 2,5 00,000.00

1.4 "Deposit": A deposit in an amount equal to $600,000.00 (the "Deposit") shall be delivered to Escrow Agent by wire transfer no later than three (3) Business Days after the Execution Date. If Buyer delivers an Approval Notice, the Deposit will be non-refundable from and after the expiration of the Diligence Period (e xcept upon a default by Seller or as specifically provided in this Agreement). In addition to, and not in lieu of the delivery to the Escrow Agent of the Deposit, concurrently with the execution of this Agreement, Buyer shall also wire transfer to the Escrow Agent, for delivery to Seller, the amount of one thousand and 00/100 Dollars ( $1000.00) (the
"Independent Consideration"),
which Independent Consideration Seller and Buyer hereby mutually acknowledge and agree represents adequate bargained for consideration for Seller's execution and delivery of this Agreement and Buyer's right to elect to purchase the Property as provided herein.

Said Independent Consideration is in addition to and independent of any other consideration or payment provided for in this A greement, is nonrefundable to Buyer in all events and shall not be applied to the Purchase Price at Closing. The Independent Consideration shall immediately be released by the Escrow Agent and delivered by wire transfer to Seller. The Escrow Agent is hereby authorized and directed by Buyer and Seller to release the Independent Consideration to Seller immediately upon the Escrow Agent's receipt thereof, without further direction.

1.5 "Closing Date": [INSERT DATE], or such earlier date as Buyer may elect in its sole discretion by delivering written notice to Seller, provided that the Closing Date shall not be earlier than five (5) Business Days after expiration of the Diligence Period.

1.6 "County": Santa Clara County located in the State.

1.7 "State": California.

ARTICLE II.

DEFINED TERMS

2.1 Definitions. The following "Defined Terms" shall have the

8 following meanings when used in this Agreement:

(a) “Affordability Covenant”: as defined in Section 7.3. (b) "Agreement": This Agreement for Purchase and Sale of Property executed by both Seller and Buyer.

(d) "Bid Package": All documentation and information provided to or otherwise made available to Buyer at least five (5) Business Days prior to execution of this Agreement, by Seller, by Seller's agent or on the Seller's website related to the Property, which documentation and information is listed on Exhibit G attached hereto.

(e) "Bill of Sale": As defined in Section 7.3.

(f) "Business Day": Any day, other than a Saturday, Sunday or legal holiday, on which business is conducted by national banking institutions in San Francisco, California.

(g) "Claims": Any and all claims, demands, causes of action, whether administrative or judicial, losses, costs (including any and all reasonable attorneys' fees, court costs, and reasonable costs of investigation, litigation, and settle ment), expenses, sanctions, orders, curtailments, interest, liabilities, penalties, fines, expenses, liens, judgments, compensation, fees, loss of profits, injuries, death, response costs and/or damages, of any kind whatsoever, whether direct or indirect, known or
unknown, fixed or contingent, joint or several, criminal or civil, or in law or in equity. .

(h) "Closing": The closing of the transaction contemplated by this Agreement.

(i) “Convention Center Campu s Declaration of Covenants, Conditions and Restrictions ( Convention Center Campus
CC&Rs)”: That certain Declaration of Covenants, Conditions and Restrictions by the City of Santa Clara and the Successor Agency to the Redevelopment Agency of the City of Santa Clara, collectively, the Declarant, recorded on December 14, 2020 as Instrument No. 24756283.

(j) "Deed": The grant deed conveying fee title to the Real Property,

9 subject only to the Acceptable Encumbrances, to Buyer, duly executed by Seller and acknowledg ed and in proper form for recordation in the County.

(k) "Diligence Period": The period commencing on [INSERT DATE] and ending at 5:00 p.m. Pacific time on [INSERT
DATE].

(l) "Escrow Agent": First American Title Insurance Company, National Commercial Services, 1737 N orth First Street, Suite 500, San Jose, California (Escrow Officer: Linda Tugade; email:
[email protected]; telephone: (408) 579-8340).

(m) "Event": Any fire or other casualty affecting the Property or any actual or threatened taking or condemnation of all or any portion of the Property.

(n) "Execution Date": The date set forth on the cover page of this Agreement, which date shall be the later of the date(s) Buyer and Seller have each executed this Agreement.

(o) "Hazardous Materials": Any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum, its derivatives, by-products and other hydrocarbons, or any substance having any constituent elements displaying any of the foregoing characteristics. The term
"Hazardous Materials"
includes, without limitation, any substance regulated under any and all federal, state and local statutes, laws (including case law), regulations, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions, whether now or hereafter in effect, relating to human health, the environment or to emissions, discharges or releases of
pollutants, contaminants toxic substances, hazardous
substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous materials or wastes or the clean-up or other remediation thereof.

(p) "Hazardous Materials Laws": all federal, state and local laws, ordinances, rules and regulations now or hereafter in force, as amended from time to time, and all federal and state court decisions, consent decrees and orders interpreting or enforcing

10 any of the foregoing, in any way relating to or regulating human health or safety, or industrial hygiene or environmental conditions, or protection of the environment, or pollution or contamination of the air, soil, surface water or groundwater, and includes, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 United States Code section 9601, et seq., the Resource Conservation and Recovery Act, 42 United States Code section 6901, et seq., and the Clean Water Act, 33 United States Code section 1251, et seq.; the California Hazardous Waste Control Act, California Health & Safety Code ("H.&S.C. ") §§25100 et seq.; California
Hazardous Substance Account Act, H.&S.C. §§25300 et seq.; the California Safe Drinking Water and Toxic Enforcement Act, H.&S.C. §§25249 et seq .; the California Hazardous Waste Management Act, H.&S.C. §§25170.I et seq.; H.&S.C. §§25501 et seq. (Hazardous Materials Response Plans and Inventory); the Porter Cologne Water Control Act, Ca. Water Code §§13000 et seq.; H.&S.C. §§25280, et seq. (Undergr ound Storage of Hazardous Substances); H.&S.C. §25915 et seq.; H.&S.C. § 25359.7; H.&S.C. §§2595 et seq.; Cal Labor Code§§ 6501.5 et seq.; and Title 22 of the California Code of Regulations, all as amended to the date hereof.

(p) "Hazardous Materials Reports": Any and all studies, reports, analyses, information, or other written records regarding the presence or absence of Hazardous Materials at, on, in, under or relating to the Land.

(q) "Intangible Property": The Permits and any oth er personal property that is not physical in nature that is owned by Seller and that relates to or involves the Real Property, including, without limitation intellectual property or goodwill.

(r) "Land": Fee title to the parcel of real property located in the County and State, as more particularly described on the attached Exhibit A. If the legal description is not complete or is inaccurate, this Agreement shall not be invalid provided the identity of the Property can otherwise be determined from this Agreement, in which event the legal description shall be completed or corrected after the Execution Date and prior to the expiration of the Diligence Period to meet legal requirements as mutually agreed by the parties, such agreement not to be unreasonably withheld. (s) "Leases": The Techmart Lease and any and all other leases, tenancies, licenses and other rights of occupancy or use of or for any

11 portion of the Real Property or the Personal Prope rty (including all amendments and renewals thereof).
(t) "Net Proceeds": The Proceeds less any sums r easonably incurred by Seller prior to Closing to process and resolve a claim with Seller's insurance company or any condemning authority, including but not limited to reasonable attorneys' fees and costs.
(u) "Permits": Any and all licenses, permits, authoriza tions, certificates of occupancy and other approvals that are i n effect for the current use and operation of the Property.
(v) "Personal Property": All tangible personal property and fixtures owned by Seller and located on or attached to the Real Property. "Personal Property" does not include prope rty owned by others such as Tenants under Leases. The term "Personal Property" shall not include insurance policies, utility deposits or bank accounts. (w) "Pre-Existing Insurance Claims": Any insurance claims made or to be made by Seller for any Event occurring prior to the Execution Date relating to the Property or any portion thereof.
(x) "Proceeds": Any insurance proceeds or condemnation awards payable to Seller on account of any Event.
(y) "Proceeds from Pre-Existing Insurance Claims": Any proceeds resulting from any Pre -Existing Insurance Claims, regardless of whether such proceeds are received prior to or after Closing. (z) "Property": Collectively, the Real Property, the Personal Property and the Intangible Property.
(aa) "Prorations Date": The day prior to the Closing Date. (bb) "Real Property": The Land, together with Seller's interest in the buildings and other improvements and fixtures located thereon or attached thereto, together with Seller's interest in all rights of ways, streets, alleys,· air rights, development rights, water rights, riparian rights and to water stock,
ingress and egress, easements, rights,
privileges, hereditaments and appurtenances thereto or in any way appertaining thereto.

(cc) "Service Contracts": Any and all management, service, maintenance, supply or operating contracts, or other agreements, however termed, written or oral, affecting the use, ownership, maintenance or operation of all or any pa rt of the Property (but specifically excluding any Leases and any management agreements).

12 (dd) "Survey": The ALTA Survey prepared by [INSERT SURVEY INFORMATION]

(ee) “Techmart Assignment and Assumption of Ground Lease”: That certain grant deed and assignment and assumption between assignor, CarrAmerica Techmart, LLC, a Delaware limited liability company, and assignee, Hudson Techmart Commerce Center, LLC, a Delaware limited liability company.

(ff) "Techmart Lease": That certain Ground Lease between Seller, as landlord, and CarrAmerica Techmart, LLC, dated May 13, 1998, and recorded on May 15, 1998 as Instrument No. 14185856, as assigned to Hudson Pacific Properties, Inc, a Maryland corporation by a an Assignment and Assumption of Ground Lease, dated April 1, 2015, as amended by that certain Amendment to Ground Lease, dated as of July 12, 2006 and recorded on October 26, 2006 as Instrument No. 19158820.

(gg) "Techmart Tenant": [Hudson Techmart Commerce Center, LLC, a Delaware limited liability company], the tenant under the Techmart Lease.

(hh) "Tenants": The tenant under the Techmart Lease and those other persons or entities holding rights of tenants under Leases, if any.

(ii) “Title Commitment”: The commitment for issuance of an owner’s title insurance policy issued by the Title company in favor of Buyer in the full amount of the Purchase Price.

(jj) "Title Company": First American Title Insurance Company at the office selected by the Escrow Agent.

(kk) "Title Policy": A 2021 ALTA extended Owner's Title Insurance Policy insuring Buyer as the fee owner of the Property in the amount of the Purchase Price with such endorsements as Buyer shall reasonably request, subject only to the Acceptable Encumbrances.

(ll) “Title Report”: The First American Title Insurance Company Preliminary Report dated as of [INSERT DATE] ; Order Number:
[INSERT NUMBER].

2.2 Other Defined Terms. Other capitalized terms contained in this Agreement shall have the meanings assigned to them herein.

13 ARTICLE III.

CONDITION

3.1 Information Regarding Property. Seller has provided and may in the future provide to Buyer documents and information pe rtaining to the Property, including without limitation, the Bid Package. All of such information is provided simply as an accommodation to Buyer, and except as otherwise provided in this Agreement or in any documents delivered by Seller pursuant to Section 7.3, Seller makes no representations as to their accuracy or completeness. Buyer understands that some of such documents and information were provided by others to Seller and were not prepared by or verified by Seller. In no event shall Seller be obligated to deliver or make available to Buyer any of Seller's internal memoranda, attorney -c
lient
privileged materials or appraisals of the Property, if any.

3.2 Diligence Period. Buyer's obligation to purchase the Property is conditioned upon B uyer's review and approval, prior to the expiration of the Diligence Period and in Buyer's sole and absolute discretion, of all matters p ertaining to the physical, structural, electrical, mechanical, soil, drainage, environmental, economic, tenancy, zoning, land use and other governmental compliance matters and conditions respecting the Property, including without limitation the items include in the Bid Package. If, prior to the expiration of the Diligence Period, based upon Buyer's review, examination and/or inspection of the Property, Buyer determines in its sole and absolute discretion, for any reason or no reason whatsoever, that it no longer intends to acquire the Property, then Buyer shall notify Seller of such determination in writing prior to the expiration of the Diligence Period , whereupon this Agreement, and the obligations of the parties to purchase and sell the Property hereunder, shall terminate, and Escrow Agent shall promptly release the Deposit and interest accrued thereon to Buyer without any requirement for notice to, or authorization from, Seller. If, however, on or before the expiration of the Diligence Period, Buyer determines that it intends to proceed with the acquisition of the Prope rty, then Buyer shall notify Seller of such determination in writing prior to the expiration of the Diligence Period ("Approval Notice"). If Buyer fails to deliver the Approval Notice to Seller on or before the expiration of the Diligence Period, Buyer shall be deemed to have disapproved of all of the foregoing matters, this Agreement and the obligations of the parties hereunder shall terminate, and Escrow Agent shall promptly release the Deposit and interest accrued thereon to Buyer without any requirement for notice to, or authorization from, Seller.

3.3 Access. Subject to the rights of the Tenant pursuant to the Techmart Lease, until the Closing Date, provided this Agreement is not earlier terminated as

14 permitted herein, Buyer and Buyer's agents and contractors shall be entitled to enter upon the Property at all reasonable times, but only for the pur pose of conducting tests and making site inspections and investigations. In doing so, however, Buyer agrees (a) that no invasive testing may be conducted without Seller's prior consent, which may be withheld by Seller in its sole discretion, (b) not to cause any damage or make any physical changes to the Property (other than in de minimis respects) and (c) not to unreasonably interfere with the rights of Tenants or others who may have a legal right to use or occupy the Property. Seller or its representative shall have the right to be present to observe any testing or other inspection performed on the Property, provided in no event shall the unavailability of Seller or its representative delay any such testing or inspection. Under no circumstances shall the right of entry granted herein be interpreted as delivery of possession of the Property prior to Closing. Buyer shall maintain (or cause its agents and contractors to maintain) at all times during its entry upon the Property, commercial general liability insurance with limits of not less than Two Million Dollars ($2,000,000) combined single limit, bodily injury, death and property damage insurance per occurrence wit h proper endorsements naming Seller as an additional insured. At Seller's request, Buyer, Buyer's agents and contractors shall each deliver a certificate issued by the insurance carrier of each such policy to Seller evidencing the endorsements naming Seller as an additional insured prior to entry upon the Property.

3.4 Indemnification. Buyer hereby agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to Seller) Seller, its board members, its officers, its employees and the Countywide Oversight Board members (collectively, “Seller Indemnified Parties”) from and against any and all Claims to the extent resulting from, arising from, or occasioned in whole or in part by any act or omission by Buyer, its agents, contractors, employees, representatives or invitees resulting from Buyer’s entry, inspection and examination of or on the Property (but not including any claims resulting from the discovery or disclosure of pre -existing physical or environmental conditions or the non- negligent aggravation of pre -existing physical or environmental conditions on, in, under or about the Property ), except to the extent resulting from, arising from, or occasioned in whole or in part by any negligence or willful misconduct of any Seller Indemnified Parties. The provisions of this Section shall survive Closing or termination of this Agreement for a period of one (1) year.

3.5 Estoppel. Prior to the expiration of the Diligence Period , and as a condition precedent to Closing for the benefit of Buyer, Seller shall have obtained and delivered to Buyer (i) an estoppel certificate, addressed to Buyer and such other parties as Buyer may reasonably designate, from

15 Seller in the form attached hereto as Exhibit D (the "Techmart Estoppel"). The Techmart Estoppel shall be dated no earlier than thirty (30) days prior to the Closing Date.

3.6 Buyer's Obligations with Respect to Inspections. If following Seller's prior written approval, Buyer or its agents, employees or contractors take any sample from the Property in connection with any invasive testing, Buyer shall, upon the request of Seller, provide to Seller a portion of such sample being tested to allow Seller, if it so chooses, to perform its own testing. As soon as reasonably practicable after Buyer’s physical examinations of the Property, Buyer shall repair the damage, if any, caused by physical examinations conducted by Buyer or its agents, to substantially the condition of the Property immediately prior to such examination. Buyer shall not suffer or permit the filing of any liens arising from such inspections against the Property. If any such liens are filed, Buyer shall within thirty (30) days of knowledge thereof, cause them to be released, bonded over, or otherwise eliminated from being a lien upon the Property. In the event the transaction contemplated by this Agreement is not closed for any reason whatsoever, Buyer shall remain obligated with respect to the indemnities contained in Section 3.4 and the repair obligations set forth in this Section 3.6. The provisions of this Section shall survive termination of this Agreement for a period of one (1) year.

3.7 Condition of the Property. Buyer hereby acknowledges that prior to the expiration of the Diligence Period Seller is obligated to have provided Buyer sufficient opportunity make such independent factual, physical and legal examinations and inquiries as Buyer deems necessary and desirable with respect to the Property and the transaction contemplated by this Agreement. Any inspections conducted by Buyer after the expiration of the Diligence Period do not and shall not in any way relieve Buyer of any of its obligations under this Agreement, and the following provisions shall survive Closing:

(a) As of the Closing , Buyer does hereby acknowledge and agree to and with Seller that, except as otherwise expressly provided in this Agreement (including without limitation Section 9.2 and Section

13.1) and the Deed and the other documents to be delivered pursuant to Section 7.3: (i) Buyer is expressly purchasing the Property in its existing condition
"AS IS, WHERE IS, AND WITH ALL
FAULTS" whether known or unknown with respect to all facts, circumstances, conditions and defects, both patent and latent; (ii) Seller has no obligation to inspect for, repair or correct any such facts, circumstances, conditions or defects or to compensate Buyer for same; (iii) Seller specifically bargained for the assumption by

16 Buyer of all responsibility to inspect and investigate the Property and Buyer’s acknowledges the risk of adverse conditions and has structured the Purchase Price an d other terms of this Agreement in consideration thereof; (iv) Buyer undertook all such inspections and investigations of the Property as B uyer deems necessary or appropriate with respect to the Property and the suitability of the Property for Buyer's inte nded use, and based upon same, Buyer is relying strictly and solely upon such inspections and examinations and the advice and counsel of its own consultants, agents, legal counsel and officers and Buyer is and will be fully satisfied that the Purchase Price is fair and adequate consideration for the Property; (v) Seller is not making and has not made any warranty or representation with respect to any materials, any marketing information, or offering memoranda, or pamphlets listing or describing the property, or other data provided by Seller or others on behalf of Seller to Buyer (whether prepared by or for the Seller or others) or the education, skills, competence or diligence of the preparers thereof or the physical condition or quality or any other aspect of all or any part of the Property as an inducement to Buyer to enter into this Agreement and thereafter to purchase the Property or for any other purpose; and (vi) prior to the expiration of the Diligence Period, Buyer had full access to the Bid Package and thoroughly reviewed or had a reasonable opportunity to review this Agreement and the contents of the Bid Package and freely consulted with persons of Buyer's own choosing regarding the terms and conditions of this Agreement and the Bid Package, including but not limited to consultation with legal counsel of its own choosing.

(b) EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS

AGREEMENT, THE DEED, AND THE OTHER DOCUMENTS
TO BE DELIVERED PURSUANT TO SECTION 7.3, SELLER

HEREBY DISCLAIMS ALL WARRANTIES OF ANY KIND OR

NATURE WHATSOEVER (INCLUDING WARRANTIES OF

HABITABILITY AND FITNESS FOR PARTICULAR

PURPOSES), WHETHER EXPRESSED OR IMPLIED,

INCLUDING, BUT NOT LIMITED TO WARRANTIES WITH

RESPECT TO THE PROPERTY, TAX LIABILITIES, ZONING,

LAND VALUE, AVAILABILITY OF ACCESS OR UTILITIES,

INGRESS OR EGRESS, GOVERNMENTAL APPROVALS, OR
THE SOIL CONDITIONS OF THE LAND. BUYER FURTHER

ACKNOWLEDGES THAT BUYER IS BUYING THE
PROPERTY "AS IS" AND IN ITS PRESENT CONDITION AND

THAT EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN

THIS AGREEMENT, THE DEED AND THE OTHER

DOCUMENTS TO BE DELIVERED PURSUANT TO SECTION

17 7.3, BUYER IS NOT RELYING UPON ANY REPRESENTATION

OF ANY KIND OR NATURE MADE BY SELLER, OR ANY OF

ITS EMPLOYEES OR AGENTS WITH RESPECT TO THE LAND

OR THE PROPERTY, AND THAT, IN FACT, NO SUCH

REPRESENTATIONS WERE MADE EXCEPT AS EXPRESSLY

SET FORTH IN THIS AGREEMENT, THE DEED AND THE

OTHER DOCUMENTS TO BE DELIVERED PURSUANT TO
SECTION 7.3.

PROVISION OF THIS AGREEMENT , SELLER MAKES NO

WARRANTY WITH RESPECT TO THE PRESENCE ON OR

BENEATH THE LAND (OR ANY PARCEL IN PROXIMITY
THERETO) OF HAZARDOUS MATERIALS. BY

ACCEPTANCE OF THIS AGREEMENT AND THE DEED,

BUYER ACKNOWLEDGES THAT BUYER'S

OPPORTUNITY FOR INSPECTION AND INVESTI GATION

OF SUCH LAND HAS BEEN ADEQUATE TO ENABLE

BUYER TO MAKE BUYER'S OWN DETERMINATION

WITH RESPECT TO THE PRESENCE ON OR BENEATH
THE LAND OF SUCH HAZARDOUS MATERIALS.

(d) EXCEPT TO THE EXTENT THE SAME CONSTITUTES A
BREACH OF SELLER’S REPRESENTATION HEREUNDER

OR AS OTHERWISE SET FORTH IN THIS AGREEMENT OR

THE OTHER CLOSING DOCUMENTS , BUYER

ACKNOWLEDGES AND AGREES THAT SELLER SHALL

NOT BE RESPONSIBLE FOR ANY CLAIMS ARISING OUT

OF OR RELATING TO MOLD AND/OR OTHER

MICROSCOPIC ORGANISMS AT THE PROPERTY

INCLUDING BUT NOT LIMITED TO PROPERTY

DAMAGES, PERSONAL INJURY, ADVERSE H EALTH

EFFECTS, LOSS OF INCOME, EMOTIONAL DISTRESS,

DEATH, LOSS OF USE OR LOSS OF VALUE AND BUYER

HEREBY IRREVOCABLY RELEASES SELLER, ITS BOARD

MEMBERS, ITS OFFICERS, ITS EMPLOYEES AND ITS
OVERSIGHT BOARD MEMBERS FROM THE SAME.

BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ

AND UNDERSTANDS THIS DISCLOSURE AND RELEASE

AND AGREES TO THE PROVISIONS CONTAINED
HEREIN.

(e) Other than as expressly set forth in this Agreement, in the Deed and in the other documents to be delivered by Seller pursuant to

18 Section 7.3, neither Seller nor any agents, representatives, or employees of Seller have made any representations or warranties, direct or indirect, oral or written, express or implied, to Buyer or any agents, representatives, or employees of Buyer with respect to the Property, including, without limitation, (a) the physical condition of the Property (including the presence or absence of Hazardous Materials), zoning, set-back and other ordinances, codes, regulations, rules, requirements and orders affecting occupancy or operation of the Property, plans, specifications, any affordable housing restrictions or requireme nts, costs or other estimates, projections, including income and expense projections concerning the same, and (b) the Property's compliance with any environmental laws, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.),, the Clean Water Act (33 U.S.C. Section 1251 et seq.), the Safe Drinking Water Act (42 U.S.C. Section 300f et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the California Hazardous Waste Control Law (California Health and Safety Code Sections 25100- 25600), the Porter -Cologne Water Quality Control Act (California Health and Safety Code Section 13000 et seq.), and the Safe Drinking Water and Toxic Enforcement Act (California Health and Safety Code Section 25249.5 et seq.). As of the Closing, Buyer specifically waives and releases Seller and its respective successors, assigns, board members, Oversight Board members, representatives, employees, agents, adjustors, accountants, officers, officials, and attorneys from (1) all warranties, express, implied, statutory or otherwise (including wa rranties of merchantability and warranties of fitness for use or acceptability for the purpose intended by Buyer) with respect to the Property or its condition or the prospects, operations or results of operations of the Property except with respect to the express representations and warranties contained in th is Agreement, the Deed and the other documents to be delivered pursuant to Section 7.3, and (2) except with respect to Claims arising out of Seller's breach of any representation, warranty, covenant or agreement in this Agreement, the Deed and any other documents delivered by Seller pursuant to Section 7.3, and/or any other Excluded Claims, all Claims that Buyer would have against Seller.

In connection with this Section 3 .7, Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows:

19 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE

AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. OR RELEASED PARTY"

Thus, notwithstanding the provisions of Section 1542 or of any si milar statute, and for the purpose of implementing a full and complete release, Buyer expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all Claims which are known and all Claims which Buyer does not know or suspect to exist in Buyer's favor at the time of execution of this Agreement and that this Agreement contemplates the extinguishment of all such Claims (other than Excluded Claims).

Initials of Buyer:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

20 ARTICLE IV.

CONDITIONS FOR CLOSING

4.1 Seller Conditions. The parties acknowledges that Seller’s execution of this Agreement and the effectiveness of Buyer’s execution of this Agreement are each subject to the approval of (i) Seller’s Governing Board and (ii) Seller’s Countywide Oversight Board (collectively, the “Board Approvals”). If Buyer has executed this Agreement prior to receipt of the Board Approvals and thereafter the Board Approvals are not obtained by [INSERT DATE], then, from and after such date and without limitation of Buyer’s rights hereunder, Buyer shall have the right, by delivering written notice to Seller and Escrow Agent, to rescind its execution of this Agreement and, upon such notice of recession, the Deposit (to the extent any has been deposited by Buyer) shall be returned immediately to Buye r in full by Escrow Agent and the parties shall have no further rights and obligations to each other hereunder. Seller shall use commercially reasonable efforts to obtain the Board Approvals within the applicable time periods set forth above and shall provide Buyer with prompt notice of Seller's receipt of the Board Approvals. If this Agreement is disapproved by any of these entities, Seller shall immediately notify Buyer in writing of the disapproval and this Agreement shall automatically terminate, the Deposit (to the extent any has been deposited by Buyer) shall be returned immediately to Buyer in full by Escrow Agent and the parties shall have no further rights and obligations to each other hereunder.

4.2 Buyer's Conditions. The obligation of Buyer to purchase the Property from Seller, and to perform the obligations required to be performed by Buyer at the Closing, are subject to each of the following conditions precedent
("Buyer's Conditions"):

(a) Closing Documents. Seller shall have tendered at Closing all closing documents to which Seller is a party.

(b) Compliance with Agreement. Seller shall have performed and complied in all material respects with its obligations under this Agreement.

(c) Representations and Warranties. All of Seller's representations and warranties under Sections 9.2, Section 13.16 and elsewhere in this Agreement shall have been true and correct as of the Effective Date and true and correct in all material respects as of Closing.

(d) Title Policy. The Title Company shall have irrevocably and

21 unconditionally committed to issue, but for payment of premium (other than premium or other cost to be paid by the Seller pursuant to this Agreement), the Title Policy.

(e) Required Estoppel. Seller shall have delivered, not later than the two (2) days prior to the expiration of the Diligence Period, to Buyer the Techmart Estoppel in the form attached as Exhibit D, which estoppel shall not contain any information that is materially inconsistent with Seller's representations and warranties contained in this Agreement or the Techmart Lease provided to Buyer during the Diligence Period, and shall not claim any default by Seller or outstanding indemnity obligation of Seller under the Techmart Lease.

(f) Techmart Lease. The Techmart Lease shall be in full force and effect, neither Seller nor Techmart Tenant shall be in breach or default of any of its obligations under the Techmart Lease (including any indemnity obligation that has not yet been performed), and there shall be no circumstance which currently or with notice or the passage of time or both could become a breach or default under the Techmart Lease.

4.3 Effect of Non-Satisfaction of a Condition. If any condition set forth in Section 4.1 is not satisfied or waived by Buyer on or before the Closing Date, Buyer may, in its sole and absolute discretion, terminate this Agreement by notice to the Seller. If this Agreement is terminated pursuant to this Article IV, notwithstanding any other provision of this Agreement, (a) all Buyer documents and funds, including the Deposit and any interest thereon, shall be returned to Buyer, and (b) neither party shall have any further rights or obligations hereunder, except for any obligations which expressly survive the termination of this Agreement and the payment of any escrow and title cancellation fees, which shall be borne equally by Buyer and Seller.

22 ARTICLE V.

TERMS OF PAYMENT; CLOSING ADJUSTMENTS

5.1 Payment of Purchase Price. The Purchase Price shall be paid as follows:

(a) Credit for Deposit. If Buyer fails to deliver the Deposit as and when required by this Agreement, Seller, at Seller's sole discretion, may terminate this Agreement by providing notice to Buyer of such termination and, thereafter, this Agreement shall be terminated and neither party shall have any further rights or obligations hereunder, except for those provisions that expressly survive termination. If and only to the extent Buyer in its sole discretion and dealing entirely with the Escrow Agent (it being acknowledged by Buyer that Seller shall have no responsibility or liability in connection therewith) supplies Buyer's Taxpayer Identification Number to the Escrow Agent and executes all necessary forms required by the Escrow Agent, the Deposit shall be held in an interest bearing account with a financial institution selected by Buyer.

Any accrued interest shall belong to Buyer. At Closing Buyer shall receive a credit against the Purchase Price in the amount of the Deposit (less any accrued interest thereon) and the Deposit (less any accrued interest thereon) shall be delivered to Seller. Any accrued interest on the Deposit shall be delivered upon Closing by the Escrow Agent to Buyer by wire transfer of good federal funds from the Escrow Agent. Upon Buyer’s delivery of the Approval Notice, the Deposit shall become immediately non -refundable to Buyer except as
otherwise expressly provided in this Agreement, including, without limitation, in the event that th is Agreement is terminated (A) due to a default by Seller, (B) due to the Seller Conditions set forth in Section 4.1 not being met; or (C) as a result of the failure of a condition to Closing benefiting Buyer.

If the sale is not consummated solely because of the Buyer's default in its obligation to close hereunder (subject to all applicable extensions and notice and cure periods) with all conditions to Buyer's obligation to close having been satisfied, the terms of Section 11.1 shall apply.

(b) Payment at Clos ing. The balance of the Purchase Price, subject to the prorations and adjustments for which provision

23 is herein made, shall be paid by Buyer to the Escrow Agent by wire transfer to Escrow Agent's account at the time of Closing, and the Escrow Agent shall i mmediately upon Closing
disburse such funds pursuant to the Closing Statement. Buyer understands and acknowledges that the purchase of the
Property and this Agreement IS NOT contingent on Buyer
obtaining financing for the purchase of the Property. Wired funds must be received in the Escrow Agent's account prior to 12:00 p.m. Pacific Standard Time on the Closing Date for Seller to receive the benefit of such funds. Accordingly, if funds are received after 12:00 p.m. Pacific Standard Time on any day, they shall not be deemed received until the following Business Day.

5.2 Prorations; Adjustments; Closing Costs. The following adjustments and prorations shall be computed as of 11:59 p.m. on the Prorations Date and the Purchase Price shall be adjusted to reflect such prorations; provided, however, the figures utilized by Seller for the proration of rents, security deposits and other expenses for the Property may be calculated using information from a date prior to the Prorations Date, but in no event more than four (4) Business Days prior to the Prorations Date. All costs and expenses of the Property with respect to the period on and prior to the Prorations Date shall be charged to Seller. All costs and expenses of the Property with respect to the period after the Prorations Date shall be charged to Buyer.
(a) Revenues and Expenses. Seller shall be entitled to receive all revenues and shall be charged with all expenses relating to the ownership and operation of the Prope rty through the Prorations Date. All revenues and expenses shall be prorated as of the Prorations Date. If, as of Closing, any rent is in arrears for the calendar month in which Closing occurs but not for prior periods , there shall be no proration of delinquent rent or revenues. All revenues from the Property collected by Seller after Closing shall be credited first to the obligations then owing to Seller for its period of ownership, remitting the balance due to Buyer for the period after the Closing, if any, but Seller will not institute litigation against any such tenant until six months after the Closing and no such litigation shall seek termination of the Lease in question, termination of the tenant's right to possession under such Lease or seek to obtain all or any pa rt of any security for such Lease. All revenues from the Property received by Buyer after the Closing shall be applied to rent for the period on and after the Closing Date before payment by Buyer to Seller for application to revenues delinquent as of the Closing.

Buyer will use reasonable efforts for a period of not more than one

24 hundred eighty (180) days following the Closing to include in its rent invoices, the amount of any delinquent rents as of the Closing. In no event shall Buyer be obligated to bring any suit against any Tenant or exercise any of its rights or remedies under any L ease in order to collect any such Revenue. The provisions of this Section shall survive Closing.
(b) Lease Prepayments. Buyer shall receive credits against the Purchase Price at Closing for any prepaid rents paid to Seller by the Techmart Tenant.

(c) Taxes and Assessments; Pending and Certified Liens. To the extent applicable, taxes and assessments for the year of Closing shall be prorated as of the Prorations Date upon the amount of such taxes for the year of Closing (using any maximum discount available) if the amount of such taxes is known at the ti me of Closing; if such amount cannot be then ascertained, proration shall be based upon the amount of the taxes for the preceding year (using any maximum discount available). If any tax proration shall be based upon the amount of taxes for the year precedi ng the year of Closing, such taxes, at the request of either party, shall be reprorated and adjusted between the parties , on the basis of the tax bills for the year of
Closing when received (using any maximum discount available).

To the extent that Seller completes any tax appeal which results in savings for periods prior to but not after Closing, Seller shall subject to rights of the Techmart Tenant be entitled to retain all savings. To the extent that Seller completes any tax appeal which results in savings for periods prior to and after Closing, the parties agree to reprorate any such taxes and to share in the costs of such appeal, including attorney's fees and costs, based on the parties' prorata ownership of the Property for such tax period.

City/County, public liens and/or similar liens (collectively, "Public Liens"), if any, certified or for which the work has been substantially completed on the date of Closing and for which payment is due in full as of the Closing, shall be paid by Seller.

Any Public Liens for which an installment payment is due and/or for which the owner of the Property has the right to make installment payments on an annual basis (as opposed to being paid in a lump sum), shall be prorated for the year of Closing.

Buyer shall assume all obligations for any other Public Liens payable from and after Closing. Other assessments not included on the regular p roperty tax bills, license fees for transferred licenses, and state or municipal fees and taxes for the Property for the applicable fiscal period during which Closing takes place shall be adjusted as of the Prorations Date on the basis of the most

25 recent ascertainable assessments and rates, and shall be re- prorated as necessary pursuant to Section (f) below. The provisions of this Section shall survive Closing.

(d) Other Prorations. In addition to the previously stated adjustments and prorations at Closing the parties shall also make such adjustments and prorations to the Purchase Price as are customary and usual in transactions similar to the transaction contemplated by this Agreement for ground leased properties located in the County, unless otherwise expressly provided in this Agreement.

(e) Re-proration and Post-Closing Adjustments. In the event that any adjustments or prorations cannot be appor tioned or adjusted at Closing by reason of the fact that final or liquidated amounts have not been ascertained, or are not available as of such date, the parties hereto agree to ap portion or adjust such items on the basis of their best estimates of the amounts at Closing and to re -prorate any and all of such amounts promptly when the final or liquidate d amounts are ascertained. In the event of any omission or mathematical error on the Closing Statement, or if the prorations, ap portionments and computations shall prove to be incorrect for any reason, the same shall be promptly adjusted when determined and the appropriate party paid any monies owed. This provision shall survive Closing for a period of twelve (12) months.

(f)
Tenant Pay Items. Notwithstanding anything to the contrary in this Section 5.2, (i) to the extent the Techmart Tenant is paying any expenses (including, without limitation, real property taxes and assessments and/or utility charges) otherwise subject to proration hereunder directly to the applicable governmental entity, utility or services provider, or other third
party, no
proration of such expenses shall be made at Closing, and ( ii) to the extent that the Techmart Tenant is responsible for payment directly to the applicable service provider of 100% of any category of expenses otherwise subject to proration in the form of operating expense reimbursements under the Techmart Lease, no proration of such expenses shall be made at Closing.

5.3 Costs and Expenses. Closing and Escrow costs shall be allocated between Buyer and Seller in accordance with the custom of Santa Clar a County.

Attorneys' fees, consulting fees, and other due diligence expenses shall be borne by the party incurring such expense. The provisions of this Section shall survive Closing.

26 ARTICLE VI.

TITLE

6.1 Title Report. The Title Report and the Survey were included in the Bid Package. Buyer shall take title to the Real Property subject only to the following, all of which shall be deemed "Acceptable Encumbrances":

(a) Exception Numbers. [TBD] reflected on the Title Report; (b) Liens for real property taxes and assessments not yet due and payable, subject to any prorations provided for herein; (c) Reserved;

(d) Matters disclosed by the Survey;

(e) Zoning and other regulatory laws and ordinances affecting the Property (but not violations thereof);

(f) Any other matters that are approved in writing by Buyer after the Execution Date.

6.2 Updated Title Report. On or before the Closing Date, Buyer and/or Seller may, from time to time, cause the Title Company to update the Title Report.

If the updated Title Re port contains exceptions that do not constitute Acceptable Encumbrances, Buyer may deliver to Seller written objection thereto prior to the completion of the Closing. If Buyer timely and properly delivers written objection(s) to any such item(s) other than an Acceptable Encumbrance, then Seller shall notify Buyer three (3) Business Days after receipt of Buyer's notice of Buyer's title objections (but, in any event, prior to the Closing Date) whether Seller elects to remove, discharge or correct the same to Buyer’s reasonable satisfaction (and Seller's failure to respond in writing within such period shall be deemed an election by Seller not to remove, discharge or correct Buyer's title objections), and Seller shall have the right but not the obligation to use reasonable diligence to remove, discharge or correct (to Buyer’s reasonable satisfaction) such liens, encumbrances or objections and shall have a period of thirty (30) days after receipt of notice thereof in which to do so (and if necessary the Closing Date shall be extended on a day for day basis) provided that Seller is diligently pursuing such removal, discharge or correction; provided, however, Buyer shall be deem ed to object to any consensual liens or encumbrances disclosed in the updated Title Report without any need to object to such items in writing or otherwise . Seller shall not in any event be obligated to

27 pay any sums of money or to litigate any matter in order to remove, discharge or correct any lien, encumbrance or objection; provided, however, Seller shall be obligated to remove, discharge or correct any consensual liens and encumbrances disclosed in the updated Title Report.

Any attempt by Seller to remove other title exceptions (i.e., exceptions that Seller is not obligated to remove pursuant to the preceding sentence or otherwise in this Article VI) shall not impose an obligation upon Seller to remove such exceptions. If Seller shall be unwilling or unable to remove or discharge such other liens, encumbrances or objections within such period, then Buyer may, at its option, no later than five (5) Business Days after Seller notifies Buyer of Seller's unwillingness or inability, either terminate this Agreem ent or accept title in its then existing condition witho ut reduction of the Purchase Price. If Buyer shall elect to terminate this Agreement, the Deposit shall be returned to Buyer, this Agreement shall terminate, and thereafter neither Seller nor Buyer shall have any further rights or obligations hereunder except with respect to such obligations of this Agreement which specifically survive termination. If the updated Title Report contains no exceptions other than those reflected on the Title Report and other Acceptable Encumbrances or if Buyer fails to give written notice of objection(s) to Seller prior to completion of Closing, all matters reflected on the updated Title Report shall, except with respect to matters that are deemed objections of Buye r, be deemed Acceptable Encumbrances, this Agreement shall remain in full force and effect and Buyer shall, subject to satisfaction of the conditions set forth in Section 4.1 and further subject to Section 13.1, be obligated to complete the transaction as required by this Agreement. For the avoidance of doubt, Seller shall cause all mortgages, security agreements and deeds of trust encumbering the Property to be released of record not later than Closing.

ARTICLE VII.

ESCROW AND CLOSING

7.1 Escrow Instructions. Upon execution of this Agreement, each of the parties hereto shall deposit an executed counterpart of this Agreement with the Escrow Agent, and this Agreement shall serve as the instructions to the Escrow Agent as the escrow holder for consummation of the purchase and sale contemplated hereby. Seller and Buyer agree to execute such reasonable additional and supplementary escrow instructions as may be appropriate to enable the Escrow Agent to comply with the terms of this Agreement; provided, however, that in the event of any conflict between the provisions of this Agreement and any supplementary escrow instructions, the terms of this Agreement shall control.

7.2 Time and Place. Closing shall take place on the Closing Date or s uch

28 earlier date as may be mutually acceptable to the parties with all deliveries to be made in escrow to the Escrow Agent on or prior to the Closing Date , as applicable; provided, however, that pursuant to Section 6.2 Seller at Seller's option may extend the Closing Date for purposes of curing objections to the status of title that were timely and properly raised by Buyer.

7.3 Seller's Deposit of Documents. Not later than 5:00 p.m. Pacific time on the date prior to the Closing Date, Seller shall deposit or cause to be deposited into escrow with the Escrow Agent the following items:
(a) an executed and acknowledged Deed in recordable form with respect to the Real Property, in the form of Exhibit B hereto, together with any State, County and local transfer tax declarations and forms required to be executed by Seller;
(b) an executed Certificate of Non-Foreign Status in the form of Exhibit H hereto;
(c) an executed combined Buyer - Seller Closing Statement prepared by the Escrow Agent reflecting all financial aspects of the transaction ("Closing Statement");

(d) a completed State of California Form 593;
(e) two (2) executed counterpart originals of an Assignment and Assumption of Lease (the "Assignment of Lease") in the form of Exhibit E hereto;
(f) an executed Bill of Sale (the "Bill of Sale") in the form of Exhibit F hereto;
(g) an executed Affordability Covenant (the “Affordability Covenant”) in the form of Exhibit I hereto;
(h) appropriate evidence of existence, good standing, qualification in California (if applicable), and authorization reasonably satisfactory to Buyer and satisfactory to the Title Company regarding the consummation of the transaction contemplated by this Agreement and reflecting that the documents executed by Seller at Closing were duly authorized and executed;
(i) An executed and acknowledged Owners Affidavit, to the extent and in such form as the Title Company shall reasonably require in order for the Title Policy to be issued at Closing (including a mechanics lien indemnity, if required);

29 (j) a "GAP" indemnity, to the extent and. in such form as the Escrow Agent shall reasonably require in order to close on the Closing Date (k) an executed Seller Closing Certificate that all of Seller's warrant ies and representations remain true and correct in all material respects as of Closing in the form of Exhibit C.

7.4 Buyer's Deposit of Documents. Not later than 5:00 p.m. Pacific time on the date prior to the Closing Date (except as otherwise noted) , Buyer shall deposit or cause to be deposited into escrow with the Escrow Agent the following items:
(a) the balance of the Purchase Price in the amount required by Section 5.1(b) hereof;
(b) any State, County and local transfer tax declarations and forms required to be executed by Buyer;
(c) an executed Closing Statement;
(d) an executed Cer tificate of Buyer that all of Buyer's warranties and representations remain true in all material respects as of Closing in the form of Exhibit C hereto;
(e) evidence reasonably satisfactory to Seller and the Escrow Agent reflecting that all documents executed by Buyer at Closing were duly authorized and executed;
(l) a Certificate of Good Standing from the Secretary of State in which Buyer is organized (if Buyer is a corporation, limited partnership or limited liability company);
(g) a completed Preliminary Change of Ownership form; and (h) Two (2) duplicate originals executed by Buyer of the Assignment of Leases.

7.5 Other Documents. Buyer and Seller shall each deliver such other documents as are otherwise reasonably required by the Title Company to consummate the purchase and sale of the Property in accordance with the terms hereof. Unless the pa rties otherwise agree in writing, the E scrow Agent is hereby designated as the "Reporting Person" for the transaction pursuant to Section 6045(e) of the United States Code and the regulations promulgated thereunder. If requested in writing by either party, the Escrow Agent shall confirm its status as the "Reporting Person" in writing, which such writing shall comply with the requirements of Section 6045(e) of the United States Code and the regulations promulgated thereunder.

30 7.6 Possession. Possession of the Property, subject to the Techmart Lease, shall be surrendered to Buyer at Closing.

7.7 Tenant and Service Contractor Notices. Immediately after Closing, Buyer shall deliver to Techmart Tenant a copy of the Notice to Tenant, and to all vendors under Service Contracts, if any, a copy of the Notice to Service Contractor. The provisions of this Section 7.7 shall survive the Closing.

ARTICLE VIII.

ENVIRONMENTAL MATTERS

8.1 Release. Without limiting Section 3.6, Buyer acknowledges that Seller is not in any manner responsible to Buyer for the presence of any Hazardous Materials at, on, in, under or relating to the Property, if any. Buyer hereby specifically and irrevocably releases the Seller, its board members, its officers, its employees and its Oversight Board members from any and all Claims relating to the presence on or under, or the escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Materials on the Property, if any, including without limitation, any residual contamination, in, on, under or about the Property or affecting natural resources, whether prior to or following Closing, and also including, without limitation, any liability due to asbestos -containing materials at the Prope rty. BUYER'S

CLOSING HEREUNDER SHALL BE DEEMED TO CONSTITUTE AN

EXPRESS WAIVER OF BUYER'S AND ITS SUCCESSORS' AND

ASSIGNS' RIGHTS TO SUE SELLER AND OF BUYER'S RIGHT TO

CAUSE ANY OF SELLER'S BOARD MEMBERS, OFFICERS,

EMPLOYEES OR OVERSIGHT BOARD MEMBERS TO BE JOINED

IN AN ACTION BROUGHT UNDER ANY FEDERAL, STATE OR

LOCAL LAW, RULE, ACT, OR REGULATION NOW EXISTING OR

HEREAFTER ENACTED OR AMENDED WHICH PROHIBITS OR

REGULATES THE USE, HANDLING, STORAGE,

TRANSPORTATION OR DISPOSAL OF HAZARDOUS MATERIALS

OR WIDCH REQUIRES REMOVAL OR REMEDIAL ACTION WITH

RESPECT TO SUCH I -IAZARDOUS MATERIALS, SPECIFICALLY
INCLUDING BUT NOT LIMITED TO FEDERAL "CERCLA",
"RCRA", AND "SARA" ACTS. The acknowledgments of Buyer and the release contained in this Section of this Agreement shall survive Closing or termination of this Agreement. Notwithstanding anything to the contrary in this Agreement, the waivers, releases and other provisions limiting Seller's liability set forth in this Section 8.1 and elsewhere in this Agreement shall be inapplicable to any claims based on, resulting from or arising out, whether in whole in part, of (a) breach of Seller's express representations

31 and warranties hereunder, subject to Section 9.5, (b) Seller's fraud or intentional wrongdoing, (c) the right of Buyer to name Seller or any agents, representatives, or employees of Seller as a defendant in any third party claim filed against Buyer or its agents, affiliates, successors or assigns, to the extent such claim arose as a r esult an event or circumstance that occurred during Seller's (or its predecessor Redevelopment Agency of the City of Santa Clara's) period of ownership of the Property and was not caused by the acts or omissions of Buyer or such agents, affiliates, successors or assigns, (d) claims of Buyer, its successors or assigns against Seller for indemnification or contribution arising under the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.

Section 9601, et. seq.) or any similar fede ral, state or local statute, rule or ordinance relating to liability of property owners for environmental matters to the extent such claim arose as a result of a release or other occurrence during Seller's (or its predecessor Redevelopment Agency of the Ci ty of Santa Clara's) period of ownership of the Property and was not caused by the acts or omissions of Buyer or such successors or assigns, (e) claims made by Techmart Tenant alleging defaults by Seller, as landlord, related to the period of Seller's ownership of the Property, (f) claims relating to or arising from properties of Seller other than the Property and/or claims against Seller in its regulatory capacity (as o pposed to its proprietary capacity), and/or (g) breach of Seller’s obligations that expressly survive Closing or termination of this Agreement including, without limitation, pursuant to Section 5.2 (Prorations; Adjustments; Closing Costs), Section

13.16 (B roker) and Section 16.1 (Attorneys’ Fees; Jurisdiction; Venue) (collectively, the “Excluded Claims”).

8.2 Indemnification. Without limiting the provisions of Section 3.4, effective as of the Closing and expressly conditioned on the Closing having occurred, Buyer hereby agrees to indemnify, protect, hold harmless and defend (by counsel reasonably satisfactory to Seller) Seller, its board members, its officers, its employees and its Oversight Board members from and against any and all claims, losses, damages, liabilities, fines, penalties, charges, administrative and judicial proceedings and orders, judgments, remedial action requirements, enforcement actions of any kind, and all costs and expenses actually and reasonably incurred in connection therew ith (including, but not limited to, reasonable attorney's fees and expenses), solely to the extent arising from: (1) the failure of Buyer, its agents, employees, or contractors to comply with any Hazardous Materials Law relating in any way whatsoever to the handling, treatment, presence, removal, storage, decontamination, cleanup, transportation or disposal of Hazardous Materials into, on, under or from the Property ; (2) the presence in, on or under the Property of any Hazardous Materials, to the extent introduced to the Property on or after the Closing Date, or any releases or discharges of any Hazardous Materials into, on, under or from the Property,

32 to the extent such release or discharge is initiated on or after the Closing Date; or (3) any activity carried on or undertaken on or off the Property subsequent to the conveyance of the Property to Buyer, whether by Buyer or any employees, agents, contractors or subcontractors of Buyer at any time occupying or present on the Property, in connection with the handling, treatment, removal, storage, decontamination, cleanup, transport or disposal of any Hazardous Materials at any time located or present on or under the Property. The foregoing indemnity shall further apply to any contamination of any property or natural resources in connection with the generation, use, handling, treatment, storage, trans port or disposal of any such Hazardous Materials on or after the Closing Date, and irrespective of whether any of such activities were or will be underta ken in accordance with Hazardous Materials Laws.

8.3 Confidentiality of Hazardous Materials Reports. Unless and until the Closing actually occurs, Buyer, its agents, consultants and employees shall keep confidential all Hazardous Materials Reports and other information received or completed by Buyer in Buyer's independent factual, physical and legal examinations and inquiries of the Property , except that: (a) if Closing does not occur for any reason other than due to Seller’s default hereunder, Buyer shall if requested
by Seller in writing promptly after
receipt provide copies thereof to Seller; and (b) Buyer may disclose the same (i) to its consultants if Buyer first advises such consultants to keep such Hazardous Materials Reports and related documentation confidential, (ii) as required by applicable law , rule, regulation, (iii) in connection with litigation or other judicial or regulatory proceedings and (iv) to its consultants, attorneys, accountants and advisors, investors and current and potential investors and other financing sources. Unless and until the Closing actually occurs, neither the contents nor the results of any test, re port, analysis, opinion or other information shall be disclosed by Buyer, its agents, consultants and employees without Seller's prior written approval not to be unreasonably withheld, delayed or conditioned unless and until Buyer is legally required to make such disclosure; provided, however, Buyer may disclose as permitted under clause (b) of this Section 8.3 prior to Closing and to anyone after Closing. The provisions of this Section 8.3 shall survive the termination of this Agreement.

ARTICLE IX.

WARRANTIES AND REPRESENTATIONS AND

COVENANTS

9.1 Buyer's Representations and Warranties. Buyer warrants and represents that: (a) Buyer has the full right, power, and authority to purchase the Property

33 from Seller as provided in this Agreement and to carry out Buyer's obligations hereunder; (b) if Buyer is an entity, Buyer is duly formed and in good standing under the laws of the sta te in which it is organized and duly authorized to conduct business in the State or if Buyer is an individual, Buyer is lawfully capable of entering into and performing the obligations under this Agreement, provided however, in the event that Buyer assigns this Agreement to an entity pursuant to the terms of Article IX of this Agreement, any such entity shall be duly formed and in good standing under the laws of the state of its formation and qualified to transact business in the State; (c) all requisite action necessary to authorize Buyer to enter into this Agreement and to carry out Buyer's obligations has been obtained; (d) this Agreement has been duly authorized, executed and delivered by Buyer; and (e) to Buyer’s knowledge, the execution of this Agreement and the Closing to occur hereunder do not and will not violate any contract, covenant or other agreement to which Buyer may be a party or by which Buyer may be bound. The provisions of this Section shall survive Closing.

9.2 Seller’s Representations and Warranties. Seller represents and warrants to Buyer:
(a) Authorization. Seller is an existing public entity under the laws of the State of California. Seller has the full right, power, and authority to execute and deliver this Agreement, the Deed and the other documents to be executed by Seller pursuant to Section 7.3 and sell, assign, transfer and convey fee simple title to the Property as provided in this Agreement, and to carry out Seller’s obligations hereunder [, and, upon receipt of t he Board Approvals,] all requisite action necessary to authorize Seller to enter into this Agreement and to carry out Seller’s obligations hereunder has been, or at the Closing will have been, taken. [As of Seller’s execution of this Agreement, Seller has received all Board Approvals.]
(b) No Conflict. Seller is not prohibited from consummating the transactions contemplated in this Agreement by any law, regulation, agreement, instrument, restriction, order or judgment.
(c) No Bankruptcy Proceedings. There are no assignments for the benefit of creditors, receiverships, conservatorships, or voluntary or involuntary proceedings in bankruptcy or pursuant to any other debtor relief laws contemplated or filed by Seller or pending against Seller or the Property.
(d) Litigation. There are no suits , arbitrations, mediations, investigations or other proceedings or causes of action which are

34 pending or, to Seller ’s Knowledge, threatened against or affecting Seller or the Prope rty in any cour t of competent jurisdiction or otherwise.
(e) Leases. The only Lease currently in effect to which Seller (and/or any prior owner of the Property or any portion thereof) is party or is otherwise binding upon the Property is the Techmart Lease and no person or entity is in possession, has a right to possess or occupy all or any portion of the Property other than pursuant to the Techmart Lease (including any subleases thereunder). The Techmart Lease is in full force and effect on the t erms set forth therein and Seller has delivered to Buyer a true, correct and complete copy of the Techmart Lease. The Techmart Lease has not been amended or modified except pursuant to written modifications or amendments, t rue, correct and complete copies of which have been delivered by Seller to Buyer. There are no defaults by Seller under the Techmart Lease and t o the best of Seller ’s knowledge, there are no defaults by Techmart Tenant under the Techmart Lease. Seller has good title to· the Techmart Lease and has not assigned or pledged t he Techmart Lease.
(f) Service Contracts. The Seller is not pa rty to, nor is the Seller's interest in the Property bound by, any Property management agreement or other Service Contract. From and after Closing, neither Buyer nor the Property shall be bound any property management agreement or other Service Contract of Seller.
(g) Compliance With Law. Seller has not received any written notice stating that the Property violates any federal, state, municipal and other governmental statutes, ordinances, by-laws, rules, regulations or any other legal requirements and which have not been cured, and to Seller’s knowledge, no such violation exists.
(h) No Violation. The execution of this Agreement and the Closing to occur hereunder do not and will not violate any contract, covenant or other agreement to which Seller may be a party or by which Seller may be bound.
(i) No Rights to Purchase. Other than Buyer pursuant to this Agreement, no person or entity has a contract or option to purchase, letter of intent, right of first refusal or first offer, or similar rights with respect to the Property that is now outstanding.
(j) No Condemnation. Seller has not received any notice that any condemnation or eminent domain proceedings are pending or threatened against the Property , and to ’ no such proceedings are

35 pending or, to Seller’s knowledge, threatened.
(k) No Unrecorded Agreements. Neither Seller nor its predecessor Redevelopment Agency of the City of Santa Clara has entered into or executed any unrecorded agreement or lease that would be binding on the Property and/or Buyer as of the Closing, other than the Techmart Lease.
(l) Employees. Seller has no employees with respect to the Property (m) Ownership. Seller is the owner of the Personal Property and Intangibles, free and clear of any liens or encumbrances. (n) ERISA. Neither the Property nor any portion thereof is the asset of an employee benefit plan as defined in Section 3(3) of ERISA or covered under Title I, Part 4 of ERISA or Section 4975 of the Internal Revenue Code.
(o) OFAC. Seller (i) is not acting, directly or i ndirectly, for or on behalf of any person, group, entity or nation named by any Executive Order or the United States Department of the Treasury as a terrorist, "Specially Designated and Blocked Persons", or other banned or blocked person, group, entity, na tion or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Asset Control ("OFAC") of the United States Department of the Treasury; and (ii) is not engaged, directly or indirectly, in any de alings or transactions and is not otherwise associated with such person, group, entity or nation.

9.3 Seller's Knowledge; Survival. For purposes of this Agreement, Seller's "knowledge" or words of similar import means the actual knowledge of Ruth Shikada, in her capacity as [_____________] of the Seller and who is the person most knowledgeable of Seller ’s representations and warranties contained in this Agreement , after reasonable and diligent inquiry and investigation including, without limitation, inquiry of the Techmart Tenant. The representations and warranties of Seller contained in this Agreement shall survive the Closing and the recordation of the Deed for a period of Twelve (12) months, at which time they will be deemed to be merged into and superseded by the Deed and other documents executed by Seller and delivered pursuant to Section 7.3, except with respect to claims made in accordance with Section 9.4.

36 9.4 Limitations. Notwithstanding anything in this Agreement to the contrary, Seller's liability for breaches of the representations and warranties set forth in Section 9.2 is subject to the following limitations:
(a) Filing of Claim. Any claim by Buyer against Seller for a breach of a covenant, representation or warranty must be asserted during the period of twelve (12) months following the Closing and any litigation related to such claim must be brought within twelve (12) months following the Closing.

(b) Actual Knowledge. If Buyer proceeds with Closing despite having the right to terminate this Agreement on account of any breach of a representation or warranty by Seller as to which Buyer has actual knowledge of before Closing (except to the extent such breach is the result of
Seller's fraud or intentional
wrongdoing), Buyer shall have no claim for any such breach of a representation or warranty, and, by proceeding with Closing as aforesaid, Buyer shall be deemed to have waived all claims based on or resulting from the breach of any such representations, warranties or covenants. For purposes of this Agreement, Buyer's "knowledge" or words of similar i mport means the actual knowledge of Sam Hamilton without any independent
investigation and does not inc lude any imputed or constructive knowledge that may be attributed to such individual.

(c) Threshold Amount. If the Closing occurs, Buyer shall have no recourse against Seller until the aggregate claims for breach of any of Seller's covenants, representations or warranties under this Agreement exceed $25,000.00 (the
"Threshold Amount").

Once the Threshold Amount has been reached as to any one or more matters in the aggregate, Buyer shall be entitled to recourse against the Seller for the dollar value of all aggregate claims, subject to Sections 9.5 and 9. 6.

9.5 Aggregate Liability. If the Closing occurs, the aggregate liability of Seller arising pursuant to or in connection with the representations and warranties of Seller under this Agreement or any document executed or delivered in connection herewith shall not exceed one hundred thousand dollars ($100,000) ("Liability Limitation"). The provisions of this Section shall survive Closing.

9.6 Consequential or Punitive Damages. Neither Seller nor Buyer shall be liable to the other under this Agreement for special, incidental or consequential damages or for punitive or exemplary damages except (i)

37 where such party's acts or omissions constitute fraud or willful misconduct, (ii) to the extent awarded against Seller or Buyer, as applicable, in favor of a third party and/or (iii) as otherwise expressly set forth herein. Provided that in no event shall Seller’s liability under this Section 9.6 exceed the amount set forth in 9.5 above.

9.7 Seller's Covenants. Seller covenants and agrees as follows until the Closing:

(a) Insurance. Seller shall cause to be maintained in force Seller's existing Property coverage insurance and commercial general liability insurance upon the Property in the amounts not less than such amounts as are, on the Execution Date, carried by Seller.

(b) Operation and Maintenance, Seller shall, subject to the terms and conditions of the Leases, operate, maintain, and repair the Property in substantially the same manner as prior to the Execution Date pursuant to its normal course of business. Except to the extent required to comply with applicable law or as the tenants under the Leases are permitted to do without Seller’s consent and at such tenants’ cost, the Seller shall not materially alter the Property (or permit the material alteration of the Proper ty) after the Execution Date without Buyer’s prior written consent.

(c) Personal Property. Seller shall not remove any Personal Property from the Property unless Seller replaces the same before the Closing with Personal Property of equivalent or better utility and quality to the items removed.
(d) Title. Seller shall not fu rther encumber the Property (or permit the same to be further encumbered) without the written consent of Buyer. Seller will not apply for or permit any variance, change or modification with respect to any zoning of the Property or use of the Property without Buyer's written consent.

(e) Leases. Seller shall not enter into, terminate, modify or amend any Leases. Seller shall not grant any consent or approval under the Techmart Leases. Seller shall not waive any conditions or obligations under the Techmart Leases or guarantees of Techmart Lease. Seller shall not enter into any non
-di
sturbance or analogous
agreements with any Techmart Tenants or subtenants. Seller will, promptly, and, in any event, not later than one ( 1) Business Day following receipt, give Buyer a true and complete copy of any notices, re ports, statements, demand or material correspondence received from or delivered to the Techmart Tenant. Seller will not give a notice of default to the Techmart Tenant or apply any portion

38 of the security deposit, in each case without Buyer's written consent. (f) Notice of Material Changes. Upon learning of any event, changed condition or circumstance or receiving any notice or documentation or otherwise acquiring knowledge (any of the foregoing being referred to herein as a "Changed Condition") which makes any representation or warranty of Seller to Buyer under this Agreement not true, incomplete or incorrect or any default by the tenant under any Leases, Seller shall promptly notify Buyer in writing thereof.

Within five (5) Business Days after notification in writing by Seller to Buyer of any such Changed Condition that is not due a breach or default by Seller under this Agreement, Seller, at Seller’s own option and expense, may elect by written notice to Buyer to remedy the Changed Condition such that Seller ’s representations are accurate, and the Closing Date may be extended for up to ten (10) days after the scheduled Closing Date in order for Seller to effectuate such remedy. If Seller does not elect to effectuate such remedy so as to cause Seller's representations to be accurate, or if Seller so elects but then fails to complete such remedy within such ten (10) day period, then Buyer may elect, by written notice to Seller given at any time thereafter, to terminate this Agreement, in which event ( 1) neither Buyer nor Se ller shall have any further obligation under this Agreement, except for the obligations which expressly survive the termination of this Agreement, and (2) the Deposit together with accrued interest thereon shall be returned to Buyer.

(g) No Other Contract . Seller will not enter into any other agreement or option to sell the Property or any portion of, or interest in, the Property. Seller will not market the Property for sale. Seller will not enter into any other agreements or contracts, including, without limitation any Service Contracts or Property management agreements, that will be binding on the Property or Buyer at Closing.

ARTICLE X.

ASSIGNMENT

Buyer may not, prior to the Closing, assign this Agreement, nor may any of Buyer's rights hereunder be transferred in any manner, nor may any of Buyer's rights hereunder or any ownership interest in Buyer be transferred in any manner to any person or entity, without Seller's specific prior written consent, which consent may be

39 withheld by Seller for any reason whatsoever except, however, that Buyer shall have the right to assign this Agreement, without Seller’s consent, to an entity controlled by, or under common control with, Buyer; provided, however, any such assignment shall be binding on Seller only to the extent Buyer provides Seller with written intent to so assign, specifically naming the assignee and providing the signature block for the assignee, no later than the Closing Date and a certification by Buyer that the assignee is controlled by, or under common control with, Buyer. If Buyer assigns this Agreement pursuant to the terms hereof: (a) the assignee shall be liable (jointly and severally with assignor) for all of Buyer's obligations hereunder; (b) the assignor (i.e., the original Buyer hereunder) shall remain obligated (but jointly and severally with assignee) with respect to all of Buyer's obligations hereunder; and (c) the assignor and any assignee shall execute such instruments of assignment and assumption in form reasonably acceptable to Seller in confirmatio n of the provisions hereof. “Control” means (a) the power to direct the management and policies, directly or indirectly, of an entity through the ownership of voting securities, contract or otherwise or (b) the ownership, directly or indirectly, of at least fifty percent (50%) of the ownership interests of an entity.

ARTICLE XI.

DEFAULT

11.1 Buyer's Default. If Buyer shall fail to close the transaction contemplated hereby as and when required, except if such failure is as a result of any Seller default or failure of a condition, the Deposit shall be paid over to Seller as agreed and, liquidated damages and not as a penalty, it being acknowledged by Buyer and Seller that in such event Seller will suffer substantial damages but such damages are incapable of exact ascertainment. After payment to Seller of the Deposit, neither Seller nor Buyer shall have any further rights or obligations hereunder except that Buyer and Seller shall remain obligated with respect to the obligations which specifically survive termination. If subsequent to Closing Buyer shall fail to comply with its obligations contained herein which survive Closing, Seller, in addition to an rights and remedies provided herein, shall be entitled to any and all remedies available at law or in equity.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

40 SELLER AND BUYER ACKNOWLEDGE THAT IN THE EVENT BUYER

SHOULD FAIL TO CLOSE THE TRANSACTION CONTEMPLATED HEREBY

SOLELY AS A RESULT OF A DEFAULT BY BUYER, THEN SELLER'S

DAMAGES WOULD BE DIFFICULT TO DETERMINE, AND THAT THE

DEPOSIT IS A REASONABLE ESTIMATE OF SELLER'S DAMAGES

RESULTING FROM SU CH FAILURE TO CLOSE THE TRANSACTION
RESULTING SOLELY FROM A DEFAULT BY BUYER. SELLER AND BUYER FURTHER AGREE THAT THIS SECTION 11.1 IS INTENDED TO AND DOES

LIQUIDATE THE AMOUNT OF DAMAGES DUE SELLER, AND SHALL BE

SELLER'S EXCLUSIVE REMEDY AGAINST BUYER, BOTH AT LAW AND IN

EQUITY, ARISING FROM OR RELATED TO SUCH FAILURE BY BUYER TO

CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS

AGREEMENT, OTHER THAN WITH RESPECT TO BUYER'S INDEMNITY AND CONFIDENTIALITY OBLIGATIONS HEREUNDER , AND SELLER’S RIGHT TO RECOVER ITS REASONABLE ATTORNEYS’ FEES AND
EXPENSES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED

DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT

IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO S ELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.

Buyer Seller

11.2 Seller's Default. If Seller is in default of this Agreement before or at the Closing, Buyer may elect either:
(a) to terminate this Agreement, in which case the Deposit (plus accrued interest) shall be promptly returned to Buyer, and neither Buyer nor Seller shall have any further liability hereunder; or

(b) to seek specific performance of Seller's obligations hereunder, plus recover the costs and expenses of enforcing this Agreement.

Buyer expressly waives all other remedies, including suit for damages, provided that nothing herein precludes a claim against Seller after Closing for a breach of any representations and warranties , subject to the limitations of Section 9.4 hereof. If Buyer does not bring suit under option (b) above within six (6) months of the scheduled Closing, Buyer shall be deemed to have elected option (a) above.

11.3 No Obligation of Seller after Closing. Buyer expressly acknowledges and agrees that Seller has no obligat ions with respect to the Property that survive Closing, except as specifically set forth in this Agreement.

The provisions of this Section shall survive Closing.

41 ARTICLE XII.

NO JOINT VENTURE

Buyer acknowledges and agrees that Seller is not a venturer, co -venturer, insurer, guarantor or partner of Buyer in Buyer ’s development of, construction upon and resale of the Property, and that Seller shall bear no liability whatsoever resulting from or arising out of Buyer ’s ownership and development of, and construction upon, the Property. The provisions of this A rticle shall survive Closing.

ARTICLE XIII.

MISCELLANEOUS

13.1 Risk of Loss.

(a) Seller shall, subject to the rights of Techmart Tenant, retain all rights with respect to any Pre -Existing Insurance Claims and any Proceeds from Pre-
Existing Insurance Claims.

(b) Seller agrees to give Buyer prompt notice of any Event occurring after the Execution Date and before the Closing Date.

(c) If on or after the Execution Date and prior to Closing, any Event (“Termination Event ”) shall occur (i) which would cost an amount, greater than, or equal to $500,000 (as reasonably determined by a third party contractor approved by Buyer) to repair and/or restore, (ii) (A) which would materially interfere with the present use of or access to such Property and/or permit Techmart Tenant to terminate the Techmart Lease or abate rent, or (B) with respect to which any
mortgagee of Techmart Tenant is not required to apply (or does not apply) proceeds of insurance or condemnation
awards, as applicable, sufficient to complete such restoration and/or repair, as applicable, (iii) which would cause the Property to be in violation of applicable law (including any applicable zoning laws and/or parking requirements
thereunder), or (i v) which is not fully covered by Seller's insurance policies and that is not Techmart Tenant's obligation

42 to repair and restore pursuant to the Techmart Lease, Buyer shall have the right to terminate this Agreement by giving notice to Seller within ten (10) Business Days after Buyer has received notice from Seller of the Event and the Closing Date shall be extended, if necessary, to provide sufficient time for Buyer to make such elec tion (and Buyer's failure to make· such election shall be deemed Buyer's election not to terminate this Agreement). Upon such termination, the Deposit shall be promptly returned to Buyer, and neither party shall have any further rights or obligations hereunder except with respect to the provisions of this Agreement which specifically survive termination. If
Buyer or Seller does not so timely elect to terminate
this Agreement, Seller shall not be obligated to repair the Property, Closing shall take place as provided herein and at Closing Seller shall assign to Buyer all interest of Seller in and to the Net Proceeds (if any).
(d) If, on or after the expiration of the Diligence Period and prior to Closing, any Event that is not a Termination Event shall occur, Buyer may not terminate this Agreement, Seller shall not be obligated to repair the Property, and Closing shall take place as provided herein, and at Closing Seller shall assign to Buyer all interest of Seller in and to the Net Proceeds.
(e) At Closing, Buyer shall receive a credit for any Net Proceeds received by Seller prior to Closing. Seller shall, subject to the Techmart lease, retain the exclusive right to process and ha ndle the claim related to any Event occurring prior to Closing with Seller ’s insurance company. Seller makes no representation or warranty with respect to the amount of the Net Proceeds, including, without limitation, whether Buyer will be entitled to the actual cash value or the replacement cost of the Property. Seller and Buyer agree to use good faith efforts to cooperate with each other in negotiating and resolving the amount of the Net Proceeds, including, without limitation, promptly providing any and all materials requested by the insurance company and promptly responding to any and all inquiries from the insurance company. Seller shall not agree to the amount of the Net Proceeds with the insurance company without Buyer's consent.
(f) Seller and Buyer each expressly waive the provisions of California Civil Code Section 1662 and hereby agree that the provisions of this Agreement shall govern the parties’ obligations in the event of any damage or destruction to the Real Property or the taking of all or any part of the Real Property, as applicable.

43 (g) The provisions of this Section shall survive Closing.

13.2 Construction. The terms "Seller" and "Buyer" whenever used in this Agreement shall include the heirs, personal representatives, successors and assigns of the respective parties hereto; provided, however, that Buyer's right of assignment is restricted by the provisions hereof. Whenever used, the singular number shall include the plural and the plural the singular, and the use of any gender shall include all genders. The term "including" as used herein shall in all instances mean "including, but not limited to".

The headings in this Agreement are intended solely for convenie nce of reference and shall be given no effect in the interpretation of this Agreement. This Agreement and any related instruments shall not be construed more strictly against one party than against the other by virtue of the fact that initial drafts may have been prepared by counsel for one of the parties, it being recognized that this Agreement and any related instruments are the product of extensive negotiations between the parties hereto.

13.3 Counterparts and Electronic Signatures. This Agreement may be executed in multiple counterparts by the parties hereto. All counterparts so executed shall constitute one agreement binding upon all parties , notwithstanding that all parties are not signatories to the original or the same counterpart. Each counterpart shall be deemed an original Agreement all of which shall constitute one agreement to be valid as of the date of this Agreement. Facsimile, documents executed, scanned and transm itted electronically and electronic signatures shall be deemed original signatures for purposes of this Agreement and all matters related thereto, with such facsimile, scanned and electronic signatures having the same legal effect as original signatures.

13.4 Severability and Waiver. Invalidation of any one Section or provision of this Agreement by judgment or court order shall in no way affect any other Section or provision. Failure of any party to this Agreement to insist on the full performance of any of its provisions by the other party (or parties) shall not constitute a waiver of such performance unless the party failing to insist on full performance of the provision declares in writing signed by it that it is waiving such performance. A waiver of any breach under this Agreement by any party, unless otherwise expressly declared in writing, shall not be a continuing waiver or waiver of any subsequent breach of the same or other provision of this Agreement. The provisions of this Section shall sur vive Closing.

13.5 Governing Law. The laws of the State of California (without regard to conflicts of law) shall govern the validity, construction, enforcement and interpretation of this Agreement.

13.6 Further Acts. In addition to the acts and deeds recited in this Agreement and contemplated to be performed, executed, and/or de livered under this

44 Agreement, Seller and Buyer agree to perform, execute and/or deliver or cause to be delivered, executed and/or delivered at Closing or after Closing all further acts, fees, and assurances reasonably necessary to consummate the transactions contemplated hereby.

13.7 Notices. All notices, demands, requests, and other communications required or permitted hereunder shall be in writing. Any notice given by a party's attorney shall be deemed notice given by such party. All such notices, demands, requests and other communications (and copies thereof) shall be deemed to be delivered: (a) if sent by messenger, upon personal delivery to the party to whom the notice is directed; (b) if sent by email on (i) the Business Day sent so long as such email notice is sent within business hours (i.e., 8 A.M. Pacific Time - 5 P.M. Pacific Time) on that Business Day (unless a different time period is provided here) or (ii) the n ext Business Day if sent after business hours (i.e., 8 A.M. Pacific Time - 5 P.M. Pacific Time) on the Business Day sent or sent on a day other than a Business Day, and in either case such email notice is followed by notice pursuant to
provisions (a) or (c ) of this Section or the party to whom such email notice is given acknowledges receipt; or (c) if sent by overnight courier, with request for next Business Day delivery, on the next Business Day after sending; addressed as follows (or to such other address as the parties may specify by notice given pursuant to this Section):

TO SELLER: To the Seller's Notice Address set forth in the Key Terms

TO BUYER: To the Buyer's Notice Address set forth in the Key Terms

13.8 Entire Agreement and Amendment. This Agreement contains the entire understanding between Buyer and Seller with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be modified, amended, changed, waived, discharged or terminated orally. Any such action may occur only by an instrument in writing signed by the party against whom enforcement of the modification, change, waiver, discharge or termination is sought.

13.9 Recording. This Agreement shall not be recorded. Buyer agrees that recording this Agreement shall constitute a default by Buyer. Nothing herein shall prohibit Buyer from recording a notice of lis pendens in the event of a specific performance action under Section 11.2.

13.10 Exhibits. The Exhibits that are referenced in and attached to this Agreement are incorporated in, and made a part of, this Agreement for all purposes.

13.11 Time of the Essence. Seller and Buyer expressly agree that time is of the essence with respect to this Agreement. If the final day of any period or any date of performance under this Agreement falls on a date which is not a

45 Business Day, then the final day of the period or the date of performance, as applicable, shall be extended to the next day which is a Business Day.

13.12 No Third Party Beneficiary. This Agreement is solely between Seller and Buyer and no other party shall be entitled to rely upon any provision hereof for any purpose whatsoever.

13.13 Limitation on Liability. Buyer expressly agrees that the obligations and liabilities of Seller under this Agreement and any document referenced herein shall not constitute pe rsonal obligations of the officers, directors, shareholders, employees, agents, representatives, trustees, partners , members, certificate holders, or other principals of Seller. Notwithstanding anything to the contrary, Seller's liability, if any, arising in connection with this Agreement or with the Property shall be limited to the amount set forth in Section 9.5 or Section 11.2 above, as applicable, for the recov ery of any judgment against Seller, and Seller shall not be personally liable for any such judgment or deficiency after execution thereon. The limitations of liability contained in this paragraph shall apply equally and inure to the benefit of all of Seller's board members, officers, employees and Oversight Board members. The provisions of this Sec tion shall survive te rmination and Closing.

13.14 Legal Counsel and Joint Authorship. Each of Buyer and Seller has received independent legal advice from attorneys of its choice with respect to the advisability of making and executing this Agreement and the documents which, under the terms of this Agreement, are to be executed and delivered by Seller or Buyer or both at Closing (the "Closing Documents") or waived its right to do so. Buyer hereby acknowledges that Seller's counsel is not representing the Buyer or any interests of Buyer in connection with this Agreement or any other matter and that, unless Buyer is represented by counsel, Buyer has made the informed decision to not consult with an attorney of Buyer's choice prior to the execution of this Agreement. In the event of any dispute or controversy regarding authorship of this Agreement or the Closing Documents, Buyer and Seller shall be conclusively deemed to be the joint authors of this Agreement and the Closing Documents and no provision of this Agreement or the Closing Documents shall be interpreted against Buyer or Seller by reason of authorship.

13.15 Prohibited Persons. Neither Buyer nor, to Buyer's knowledge, any of its respective officers, directors, shareholders, partners, members or affiliates (including without limitation indirect holders of equity interests in Buyer) is an entity or person (i) that is listed in the Annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 24, 2001 ("E013224"), (ii) whose name appears on the United States Treasury Department's Office of Foreign Assets Control ("OFAC") most current list of "Specifically Designated National and Blocked Persons" (which list may be

46 published from time to time in various mediums including, but not limited to, the OFAC website) (iii) who commits, threatens to commit or supports "terrorism", as that term is defined in EO13224, (iv) is subject to sanctions of the United States government or is in violation of any federal, state, municipal or local laws, statutes, codes, ordinances, orders, decrees, rules or regulations relating to terrorism or money laundering, including, without limitation, EOl3224 and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, or (v) who is otherwise affiliated with any entity or person listed above (any and all pa rties or persons described in clauses (i) - (v) above are herein referred to as a "Prohibited Person"). Buyer covenants and agrees that Buyer shall not (aa) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person, or (bb) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224. The provisions of this Section shall survive Closing or termination of this Agreement.

13.16 Broker. Seller represents and warrants to Buyer that Seller has not incurred, and shall not have incurred as of the Closing, any liability for the payment of any brokerage fee or commission in c onnection with the transaction contemplated in
this Agreement, other than to Eastdil Secured ("Eastdil").

Seller shall pay a commission to Eastdil at Closing pursuant to the terms of a separate written agreement between Seller and Eastdil. Buyer represents and warrants to Seller that Buyer has not incurred, and shall not have incurred as of the Closing, any liability for the payment of any brokerage fee or commission in connection with the transaction contemplated in this Agreement. Seller and Buyer hereby agree to defend, indemnify and hold harmless the other from and against any and all claims of any other person claiming a brokerage fee or commission through the indemnifying party .

The provisions of this Section 13.16 shall survive Closing or termination of this Agreement.

ARTICLE XIV.

ESCROW TERMS

The Escrow Agent shall hold the Deposit in escrow on the following terms and conditions:

(a) The Escrow Agent shall deliver the Deposit to Seller or Buyer, as the case may be, in accordance with and subject to the terms and conditions of this Agreement.

47 (b) Any notice to or demand upon the Escrow Agent shall be in writing and shall be sufficient only if received by the Escrow Agent within the applicable time periods set forth herein, if any. Notices to or demands upon the Escrow Agent shall be sent in accordance with Section 13.7 hereof, to the Contact Person and address set forth in the Defined Terms. Notices from the Escrow Agent to Seller or Buyer shall be delivered to them in accordance with Section 13.7 of this Agreement.

(c) If the Escrow Agent shall have received notice signed by either party advising that litigation between the parties over entitlement to the Deposit has been commenced, the Escrow Agent shall, on demand of either party, deposit the Deposit with the clerk of the court in which such litigation is pending. If at any time the Escrow Agent is uncertain of its duties hereunder or if Escrow Agent for any other reason is no longer willing to serve as escrow agent, the Escrow Agent may, on notice to the parties, take such affirmative steps as it may, at its option, elect in order to terminate its duties as the Escrow Agent, including, but not limited to, the deposit of the Deposit with a court of competent jurisdiction and the commencement of an action for interpleader, the reasonable costs of which shall be borne by whichever of the parties is the losing party. Upon the taking by the Escrow Agent of such action described, the Escrow Agent shall be released of and from all liability hereunder as escrow agent, except for the gross negligence or willful misconduct of Escrow Agent.

(d) The Escrow Agent shall not incur any liability in acting upon any signature, notice, demand, request, waiver, consent, receipt or other paper or document believed by the Escrow Agent to be genuine. The Escrow Agent may assume that any person purpor ting to give it any notice on behalf of any party in accordance with the provisions hereof has been duly authorized to do so, or is otherwise acting or failing to act under this Section except in the case of the Escrow Agent's gross negligence or willful misconduct.
(e) The terms and provisions of this Article shall create no right in any person or entity other than the parties and their respective successors and permitted assigns and no third party shall have the right to enforce or benefit from the terms hereof.
(f) The Escrow Agent has executed this Agreement for the sole purpose of agreeing to act as such in accordance with the terms of this Agreement.

ARTICLE XV.

48 RADON DISCLOSURE

Radon is a naturally occurring radioactive gas that when accumulated in a building in sufficient quantities may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines may have been found in buildings in the state where the Property is located. Additional information regarding radon and radon testing may be obtained from your county or state health unit. Buyer represents and warrants that he/she/it has not relied on the accuracy or co mpleteness of any representations that have been made by the Seller and/or Listing Broker as to the presence of radon and that the Buyer has not relied on the Seller's or Listing Broker's failure to provide information regarding the presence or effects of any radon found on the Property. Real estate brokers and agents are not generally qualified to advise buyers on radon treatment or its health and safety risks.

ARTICLE XVI.

LITIGATION

16.1 Attorneys' Fees; Jurisdiction; Venue. In the event of any litigation arising out of or under this Agreement the prevailing party shall be entitled to collect from the non-prevailing party reasonable attorneys' fees and costs. Buyer and Seller hereby submit to the jurisdiction of the Civil Courts of the State and the United States District Courts located in the State in respect of any suit or other proceeding brought in connection with or arising out of this Agreement and venue shall be in the County. The provisions of this Section shall survive Closing.

16.2 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BYLAW,

THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND

INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A

TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,

OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS

AGREEMENT AND ANY DOCUMENT EXECUTED IN CONNECTION

HEREWITH OR RELATED HERETO, OR ANY COURSE OR CONDUCT,

COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A

MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS
TRANSACTION.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

49 50

Buyer and Seller have executed this Agreement as of the Execution Date.

SELLER:

SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY OF THE CITY OF SANTA CLARA,
a separate public entity

________________________
JŌVAN GROGAN
Executive Director
1500 Warburton Avenue
Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
Date: ________________________
ATTEST:

_____________________________

NORA PIMENTEL
Agency Secretary

BUYER:

[ INSERT BUYER INFORMATION]

By: ___________________________
Name:

Title:

APPROVED AS TO FORM

_______________________________
GLEN R. GOOGINS
Agency General Counsel

51 EXECUTION BY ESCROW AGENT
The Escrow Agent executes this Agreement for the purposes of acknowledging its Agreement to serve as escrow agent in accordance with the terms of the Agreement and to acknowledge receipt of the Deposit of Six Hundred Thousand and 00/100 Dollars ($600,000.00) (if in the form of a check, subject to clearance) from Buyer as the Deposit due thereunder.

FIRST AMERICAN TITLE INSURANCE COMPANY

By: _________________________________
Name: L. Tugade
Title: Escrow Officer

Date: __________________, 2023

A-1

EXHIBIT A

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA CLARA, COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

B-1

EXHIBIT B

FORM OF GRANT DEED

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Attention:

MAIL TAX STATEMENT TO:

Attention:

(Space Above Line for Recorder's Use Only)
The undersigned grantor(s) declare(s):

Documentary transfer tax is: $
( ) Computed on full value of property conveyed, or
( ) Computed on full value less value of liens and encumbrances remaining at time of sale. ( ) Unincorporated area: ( ) City of _____________, and

GRANT DEED

FOR VALUE RECEIVED, the receipt and sufficiency of which are hereby acknowledged, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARA, a separate public entity, hereby grants to________ ______, a ________________ , all of that certain real property more particularly described in Schedule 1 attached hereto and incorporated herein by this reference, together with any and all tenements, hereditaments, easements, rights -of-way, appurtenances, development rights or intangible Property anywise appertaining to the same, subject to (a) all real property taxes not yet due and payable, (b) all special assessments not yet due and payable, if any, (c) all other liens, leases, easements, encumbrances, covenants, conditions, restrictions and other matters of record, and (d) all matters affecting the status of title that would be revealed by an accurate survey of the subject property.

Grantor disclaims any and all express or implied warranties regarding the Property other than the implied warranties stated in Section 1113 of the California Civil Code.

Dated: ___,2023

B-2

SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA CLARA, a separate public entity

By: ______________________
Its: ______________________

APPROVED AS TO FORM

_______________________ __________________________
GLEN R. GOOGINS JOVAN GROGAN
Agency General Counsel Executive Director
1500 Warburton Avenue
ATTEST: Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
_______________________

NORA PIMENTEL
Agency Secretary Date: _____________________

B-3

STATE OF CALIFORNIA )
)
COUNTY OF _______________ )

On _____________________, 2023 before me, _____________________________, (insert name and title of the officer)

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

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

WITNESS my hand and official seal.

Signature: ________________________________ (Seal)

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

C-1

EXHIBIT C-2

FORM OF CERTIFICATE OF SELLER

_____________________________, as __________________________ of _______________, a __________________________, the Seller under that certain agreement for Purchase and Sale of Property dated ____________________, 2023, by and between Buyer and Seller (the “Agreement”) does hereby Certify that all representations and warranties of Buyer set forth in the Agreement remain true in all material respects as of _______________________, 2023.

________________________________
a(n) ____________________________

By:

Name: ___
Title: _____________________________

D-1

EXHIBIT D

FORM OF SELLER ESTOPPEL
PROPERTY: 5201 Great America Parkway, Santa Clara, California

To: [BUYER]

The undersigned SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARA, a separate public entity ("Seller"), or its predecessor-in-title, has heretofore leased or subleased to Tenant certain land described on Exhibit A hereto (the "Real Property") pursuant to that certain ground lease described in Exhibit B hereto (the "Ground Lease").

Seller hereby certifies to Buyer that as of the date hereof:

(a) The Ground Lease is in full force and effect, and has not been modified, amended, or supplemented, orally or in writing, except as listed on Exhibit B. There are no other agreements between Lessor and Assignor with respect to the Real Property or the Ground Lease except as listed on Exhibit B.

(b) Seller has constructed, or caused to be constructed, certain “Common Improvements” within the Common Area , as defined in Section 1403 of the Ground Lease. Seller as owner of Common Area, shall continue to operate and maintain the Common Improvements in accordance with and subject to the rights and obligations as set forth in the Ground Lease, subject to compliance by the Tenant and its obligations with respect to the Common Area and Common Improvements. Seller and Tenant’s rights and obligations are further defined in the Convention Center Campus Declaration of Covenants, Conditions and Restrictions, recorded on December 14, 2020 as Instrument No. 24756283.

(c) The monthly base rent currently due under the Ground Lease equals $[INSERT AMOUNT]. Any rent and other sums due Seller under the Ground Lease have been paid in full. To Seller's actual knowledge, (i) Tenant is not in breach or default of any of its obligations under the Ground Lease (including any indemnity obligation that has not yet been performed) and (ii) there is no circumstance which currently or with notice or the passage of time or both could become a breach or default under the Ground Lease.

(d) No written notice of default has been given to Tenant alleging any default on the part of Tenant under the Ground Lease which remains outstanding. No written notice of default has been given to Seller alleging any default on the part of Seller under the Ground Lease which remains outstanding.

(e) Seller owns the fee interest in the Real Property, and such interest is not subject to any

D-2

mortgage or other material encumbrance.

(f) The term of the Ground Lease will expire on June 1, 2053, unless extended. Tenant has no right to terminate the Ground Lease, in whole or in part, except, the extent contained in the Ground Lease. Tenant has not given Seller not ice of any termination of the Ground Lease.

(g) Seller confirms and agrees that Buyer, any leasehold pledgee, or lender providing a loan to Buyer and/or its affiliates, and their respective successors and/or assigns, may rely on the statements contained herein.

(h) To the extent of any conflict or inconsistency between the G round Lease and this instrument, this instrument shall govern.

Dated and effective as of the day set forth above.

Seller:

By:

Name:

Title:

D-3

E-1

EXHIBIT E

FORM OF ASSIGNMENT AND ASSUMPTION OF LEASE

THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made and entered into as of ______________, 2023, by and between __________, a ________________ ("Assignor"), and ____________________, a ________________ (“Assignee”).

Recitals
A. Assignor, as seller, and Assignee, as buyer, entered into that certain Agreement of Purchase and Sale dated as of ___, 2023 (the "Agreement"), pursuant to which Assignor agreed to sell to Assignee, and Assignee agreed to acquire from Assignor, among other things, Assignor's ownership interest in the land legally described on Exhibit A attached hereto and all of Assignor's right, title and interest in the building located at such parcel commonly known as ____________________ (the "Property"), including Assignor's interest in the ground lease related thereto, in each case, subject to the terms and conditions in the Agreement.

B. As pai r of the acquisition transaction contemplated by the Agreement, Assignor has agreed to assign to Assignee, and Assignee has agreed to assume, Assignor's interest as landlord (together with all rights and obligations relating thereto) under the Techmart Lease (as defined in the Agreement).

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor and Assignee agree as follows:

1. Transfer and Assignment by Assignor. Effective as of the date hereof, Assignor hereby transfers and assigns to Assignee all of Assignor's right, title and interest, in, to and under the Techmart Lease.

2. Assumption by Assignee. Effective as of the date hereof, Assignee hereby accepts the foregoing assignment and assumes all of the duties, obligations, liabilities, commitments and covenants of Assignor accruing from and after the date hereof with respect to or arising under the Techmart Lease.

3. Indemnification by Assignor. Assignor hereby agrees to indemnify, defend and hold harmless Assignee, and its partners, directors, members, shareholders, affiliates, managers, employees and agents, from, of and against any and all claims, demands, liabilities, losses, damages, costs and expenses (including, without limitation, reasonable attorneys' fees) ("collectively, "Claims") arising out of or relating to the breach by Assignor of any of the obligations, terms or covenants of Assignor, under or pursuant

E-2

to the Techmart Lease, which obligations, terms or covenants accrued prior to the date hereof. The indemnification obligation contained in this Section 3 shall be subject to the limitations on liabilities and other provisions contained in the Agreement relating to the Assignor's liability.

4. Indemnification by Assignee. Assignee hereby agrees to indemnify, defend and hold harmless Assignor, and its partners, officers, directors, members, shareholders, affiliates, managers, employees and agents, from, of and against any and all Claims a rising out of or relating to the breach by Assignee of any of the other obligations, terms or covenants of Assignor, under or pursuant to the Techmart Lease, which other obligations, terms or covenants accrue from and after the date hereof. The indemnification obligation contained in this Section 4 shall be subject to all applicable limitations on liabilities and other provisions contained in the Agreement relating to Assignee's liability.

5. Further Assurances. The parties hereto covenant and agree to execute such further instruments and take such further action as may be reasonably required by either party to fully effectuate the terms and provisions of this Assignment and the transactions contemplated herein, provided such instruments or actions do not increase such party’s obligations or reduce such party’s rights other than to a de minimis extent.

6. Survival of Provisions. The covenants and obligations contained in this Assignment shall survive the consummation of the closing of the transactions contemplated by the Agreement and this Assignment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

7. Attorneys' Fees and Costs. If either party commences an action for the judicial interpretation, reformation, enforcement or rescission hereof, the prevailing party will be entitled to a judgment against the other party for an amount equal to reasonable attorneys' fees and court and other costs incurred.

8. Governing Law. This Assignment shall be governed by and construed in accordance with the laws of the State of California.

9. Counterparts. This Assignment may be executed in counterparts which, when integrated, shall constitute one original of this Assignment.

10. Conflict. In the event of any conflict or inconsistency between the terms hereof and the t erms of the Agreement, the terms of the Agreement shall govern and control. Without limitation of the foregoing, all waivers, releases and other limitations on liability expressly set forth in the Agreement shall apply to this Assignment and the liabilities of the parties hereunder.

11. No Representation. Except as expressly set f orth in the Agreement or this Assignment, it is hereby acknowledged that Assignor makes no representation or warranty

E-3

of any kind or nature relative to the Techmart Lease. Assignor represents and warrants that it has good title to and has not assigned or pledged the Techmart Lease.

[signatures on following page]
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be executed by their duly authorized officers on the date first written above.

ASSIGNOR:

SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY OF THE CITY OF SANTA CLARA,
a separate public entity

APPROVED AS TO FORM

_______________________ __________________________
GLEN R. GOOGINS JŌVAN GROGAN
Agency General Counsel Executive Director
1500 Warburton Avenue
ATTEST: Santa Clara, CA 95050
Telephone: (408) 615-2210
Fax: (408) 241-6771
_______________________

NORA PIMENTEL
Agency Secretary Date: _____________________

ASSIGNEE:

______________________, a _____________
By:

Name:

Title:

E-4

EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF LEASES

LEGAL DESCRIPTION OF PROPERTY

Real property in the City of Santa Clara, County of Santa Clara, State of California, described as follows:

"ADJUSTED PARCEL 2" AS SHOWN AND DESCRIBED IN THAT CERTAIN NOTICE OF LOT LINE ADJUSTMENT RECORDED MARCH 24, 1998 AS INSTRUMENT NO. 14106143, OFFICIAL RECORDS OF SANTA CLARA COUNTY, CALIFORNIA, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHWESTERLY CORNER OF PARCEL 2, AS SHOWN ON THAT CERTAIN AMENDED PARCEL MAP RECORDED IN BOOK 581 OF MAPS, PAGES 9 THRU 11, SANTA CLARA COUNTY RECORDS, SAID POINT OF BEGINNING ALSO BEING POINT "P-2" AS SHOWN ON SAID MAP, AND SAID POINT BEING DISTANT THEREON NORTH 31° 56' 14" EAST, 383.76 FEET FROM THE CITY OF SANTA CLARA

BRASS PIN MONUMENT AT THE INTERSECTION OF BUNKER HILL LANE AND GREAT AMERICA PARKWAY; THENCE FROM SAID POINT OF BEGINNING, SOUTH 00° 00' 34" EAST, 191.50 FEET; THENCE SOUTH 89° 59' 26" WEST, 7.00 FEET; THENCE SOUTH 45° 00' 34" EAST, 92.63 FEET; THENCE NORTH 00° 00' 34" WEST, 7.00 FEET; THENCE NORTH 89° 59' 26" EAST, 191.57 FEET; THENCE NORTH 00° 00' 34" WEST, 149.97 FEET; THENCE NORTH 89° 59' 26" EAST, 29.93 FEET; THENCE NORTH 00° 00' 34" WEST, 130.03 FEET; THENCE SOUTH 89° 59' 26" WEST, 65.04 FEET; THENCE NORTH 00° 00' 34" WEST, 30.00 FEET; THENCE SOUTH 89° 59' 26" WEST, 10.00 FEET; THENCE SOUTH 00° 00' 34" EAST,

30.00 FEET; THENCE SOUTH 89° 59' 26" WEST, 55.00 FEET; THENCE SOUTH 00° 00' 34" EAST, 30.00 FEET; THENCE SOUTH 89° 59' 26" WEST, 25.00 FEET; THENCE NORTH 00° 00' 34" WEST, 20.00 FEET; THENCE SOUTH 89° 59' 26" WEST, 30.00 FEET; THENCE SOUTH 00° 00' 34" EAST, 20.00 FEET; THENCE SOUTH 89° 59' 26" WEST, 94.96 FEET TO THE POINT OF BEGINNING.

EXCEPTING THEREFROM THE IMPROVEMENTS EXISTING ON THAT CERTAIN REAL PROPERTY AS OF MAY 15, 1998, AS GRANTED TO CARRAMERICA TECHMART, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY IN THE DEED RECORDED MAY 15, 1998 AS INSTRUMENT NO. 14185857 OF OFFICIAL RECORDS, WHICH IMPROVEMENTS ARE AND SHALL REMAIN REAL PROPERTY.

APN: 104-55-013

E-2

F-1

EXHIBIT F

FORM OF BILL OF SALE

THIS BILL OF SALE is made by the undersigned, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SANTA CLARA, a
separate public entity ("Seller"), in favor of and to ___________________________, a __________________________ (“Buyer”).

WHEREAS, Seller, as seller, and Buyer, as buyer, entered into that certain Agreement of Purchase and Sale dated as of ____________, 2023 (the "Agreement"), pursuant to which Seller agreed to sell to Buyer, and Buyer agreed to acquire from Seller, among other things, Seller's ownership interest in the land legally described on Exhibit A attached hereto and all of Seller's right, title and interest in the building located at such parcel commonly known as ______________________________ (the "Property"), including Seller's interest in certain real and personal property related thereto, in each case, subject to the terms and conditions in the Agreement;

WHEREAS, as part of the acquisition transaction contemplated by the Agreement, Seller is to sell, convey, and transfer to Buyer, by bill of sale, the Personal Property (as defined in the Agreement and as more particularly described on Exhibit B attached hereto) and the Intangible Property (as defined in the Agreement).

NOW, THEREFORE, pursuant to the Agreement, and in consideration of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Seller by these presents does GIVE, GRANT, CONVEY, ASSIGN, TRANSFER, BARGAIN, SELL, REMISE, RELEASE, ALIENATE, SET OVER, and CONFIRM, unto Buyer, its successors and assigns, forever, as an entirety, all of Seller's right, title, and interest, if any, in and to (a) the Personal Property (as defined in the Agreement); and (b) the Intangible Property (as defined in the Agreement).

Except as otherwise expressly provided in the Agreement, Seller makes no representations or warranties whatso ever, regarding said Personal Property or the Intangible Property, including, without limitation, any representations or warranties related to title, quality, merchantability or fitness for a particular purpose.

In the event of any conflict or inconsistency between the terms hereof and the terms of the Agreement, the terms of the Agreement shall govern and control. Without limitation of the foregoing, all limitations on liability expressly set forth in the Agreement shall apply to this Bill of Sale and the liabilities of Seller hereunder.

F-2

IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be executed by its duly authorized officer this ________ day of _____________________, 2023.

SELLER:

SUCCESSOR AGENCY TO THE REDEVELOPMENT

AGENCY OF THE CITY OF SANTA CLARA,
a separate public entity

APPROVED AS TO FORM

_______________________ ________________________
GLEN R. GOOGINS J
ŌVAN GROGAN
Agency General Counsel Executive Director
1500 Warburton Avenue
Santa Clara, CA 95050
ATTEST: Telephone: (408) 615-2210
Fax: (408) 241-6771

_______________________
NORA PIMENTEL Date: ___________________
Agency Secretary

F-3

F-4

EXHIBIT A TO BILL OF SALE LEGAL DESCRIPTION
[To be attached.]

F-5

EXHIBIT B TO BILL OF

SALE PERSONAL

PROPERTY
[To be attached.]

G-1

EXHIBIT G

ITEMS CONTAINED IN BID PACKAGE

[Seller to provide.]

H-1

EXHIBIT H

FORM OF CERTIFICATE OF NON-FOREIGN STATUS

AFFIDAVIT PURSUANT TO FOREIGN

INVESTMENT AND REAL PROPERTY TAX ACT

To inform ___________________, a _________________________ ("Transferee"), that withholding of tax under Section 1445 of the Internal Revenue Code of 1986, as amended (collectively, the "Code"), will not be required upon transfer of certain real property to Transferee by _________________ ("Transferor"), the undersigned hereby certif ies the following on behalf of Transferor:

1. Transferor is not a foreign person, foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder).

2. Transferor is not a disregarded entity as defined in Treasury Regulation § 1.1445- 2(b)(2)(iii).

3. Transferor's U.S., taxpayer identification number is as follows: _________________.

4. Transferor's office address is as follows:

________________________________________.

Transferor understands that this Certification may be disclosed to the Internal Revenue Service by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Transferor understands that Transferee is relying on this Certification in determining whether withholding is required upon said transfer.

Under penalty of perjury I declare that I have examined this Certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Transferor.

Date: _____________, 2023 TRANSFEROR:
____________________________,
a ___________________________

By: ___________________________
Name: _________________________
Title: __________________________

I-1

EXHIBIT I

AFFORDABILITY COVENANT
(per Government Code Section 54233)

If ten (10) or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the property shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the California Health and Safety Code, or affordable rent, as defined in Section 50053 of the California Health and Safety Code, to lower income households, as defined in Section 50079.5 of the California Health and Safety Code. Rental units shall remain affordable to and occupied by lower income households for a period of 55 years for rental housing and 45 years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of 65915 of the California Government Code. These requirements shall be covenants or restrictions running with the land and shall be enforceable against any owner who violates a covenant or restriction and each successor-in-interest who continues the violation by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5 of the California Government Code.

Date: ______________________

_____________________________________[LOCAL AGENCY NAME] By: ____________________________
Name: __________________________
Title: ___________________________

Resolution/Techmart Purchase and Sale Agreement
Rev: 11/22/17

Page 1 of 3 ends

RESOLUTION NO.

A RESOLUTION OF THE SUCCESSOR AGENCY TO THE

FORMER REDEVELOPMENT AGENCY OF THE CITY OF SANTA
CLARA, CALIFORNIA (“SUCCESSOR AGENCY”) AUTHORIZING

THE CITY MANAGER/EXECUTIVE OFFICER TO NEGOTIATE

AND EXECUTE A PURCHASE AND SALE AGREEMENT WITH

TECHMART OWNER, LLC RELATED TO THE SALE OF
TECHMART PARCEL LOCATED AT 5201 GREAT AMERICA
PARKWAY [APN 104 -55-013], TO MAKE MINOR

MODIFICATIONS AND RECORD DOCUMENTS AS

NECESSARY TO IMPLEMENT THE AGREEMENT AND CLOSE
ESCROW

BE IT RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

WHEREAS, the former Redevelopment Agency of the City of Santa Clara (“Former RDA”), along with all redevelopment agencies in the State of California, was dissolved effective February 1, 2012 in accordance with AB 1X 26 (the "Dissolution Act"); WHEREAS, Former RDA, prior to its dissolution, acquired certain properties including the property located at 5201 Great America Parkway ("Techmart Property") for redevelopment purposes; WHEREAS, the Dissolution Act, as amended by AB 1484, clarified that the successor agency is a separate legal entity from the City;
WHEREAS, the City in accordance with the Dissolution Act elected to act as the successor agency to the Former RDA;
WHEREAS, in accordance with the Dissolution Act the assets of the Former RDA were transferred to the Successor Agency to the Former RDA (“Successor Agency”); WHEREAS, the Successor Agency prepared a Long Range Property Management Plan ("LRPMP") in accordance with the Dissolution Act, which LRPMP calls for the Successor Agency to dispose of its properties and the proceeds of sale to be used first to pay enforceable obligations of the Successor Agency and if there are remaining proceeds after payment of enforceable obligations, for the distribution of the remaining proceeds to the affected taxing entities was approved by the Oversight Board to the Successor Agency and the California Department of Resolution/Techmart Purchase and Sale Agreement
Rev: 11/22/17

Page 2 of 3 ends

Finance ("DOF");
WHEREAS, the LRPMP calls for the Successor Agency to dispose of the Techmart Property; WHEREAS, the Techmart Property is leased to Hudson Pacific Properties for an office building (“Office Lease”);
WHEREAS, the Successor Agency adopted Resolution 21-1 declaring the Techmart Property as surplus and published a Notice of Availability pursuant to the Surplus Land Act; WHEREAS, under the Surplus Land Act the Successor Agency is required to record Affordability Covenants pursuant to Government Code Sections 54233 and 54233.5; WHEREAS, the Oversight Board to the Successor Agency authorized a disposition process for the disposition of the Former RDA's properties, including the Techmart Property, including hiring a real estate broker to solicit offers for the Techmart Property; WHEREAS, the Successor Agency is charged with securing the highest offer possible in the sale of its assets;
WHEREAS, the Successor Agency conducted a marketing / bidding process consistent with the LRPMP and at the conclusion of that effort identified the buyer with the highest offer; WHEREAS, the Successor Agency received several offers to purchase the Techmart Property and following a review and negotiating process, the highest responsive bidder was determined to be Techmart Owner LLC (“Techmart Owner”) with a purchase price of $22,500,000; WHEREAS, the Techmart Property is leased to Hudson Pacific Properties for an office building (“Office Lease”);
WHEREAS, the City Council acting as the governing board of the Successor Agency has determined that sale of the Techmart Property is in the best interest of the Successor Agency, meets the requirements of the LRPMP and is consistent with the Dissolution Laws.

NOW THEREFORE, BE IT FURTHER RESOLVED BY THE CITY OF SANTA CLARA AS FOLLOWS:

1. That the City Council acting as the Governing Body of the Successor Agency to the Resolution/Techmart Purchase and Sale Agreement
Rev: 11/22/17

Page 3 of 3 ends

Redevelopment Agency of the City of Santa Clara (Successor Agency) finds the above recitals are accurate.

2. That City Council acting as the Governing Body of the Successor Agency hereby approves the sale of the Techmart Property to Techmart Owner;

3. That the City Manager as the Executive Officer of the Successor Agency is authorized to negotiate and to execute the Purchase and Sale Agreement with Techmart Owner as consistent with the staff report and is further authorized to execute any and all documents necessary to accomplish the transfer of the Techmart Property, including, but not limited to, affordability covenant, bills of sales, assignment and assumptions agreements, grant deeds, estoppel certificates, amendments and ancillary documents.

4. Effective date. This resolution shall become effective immediately.

I HEREBY CERTIFY THE FOREGOING TO BE A TRUE COPY OF A RESOLUTION PASSED

AND ADOPTED BY THE CITY OF SANTA CLARA, CALIFORNIA, AT A REGULAR MEETING THEREOF HELD ON THE DAY OF , 2023, BY THE FOLLOWING VOTE:

AYES: COUNCILORS:

NOES: COUNCILORS:

ABSENT: COUNCILORS:

ABSTAINED: COUNCILORS:

ATTEST:

NORA PIMENTEL, MMC

ASSISTANT CITY CLERK

CITY OF SANTA CLARA
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1056 Agenda Date: 9/19/2023

REPORT TO COUNCIL

SUBJECT
Silicon Valley Power 2022 Power Content Label

COUNCIL PILLAR
Deliver and Enhance High Quality Efficient Services and Infrastructure

BACKGROUND
The Power Source Disclosure (PSD) program was established by Senate Bill (SB) 1305 (Stats. 1997, ch. 796) in an effort to provide retail electricity consumers “accurate, reliable, and simple to understand information on the sources of energy that are used to provide electric services.” In 2016, the California Energy Commission (CEC) adopted modifications to the regulations to incorporate statutory changes to program rules and reporting requirements as required by Assembly Bill (AB) 162 (Stats. 2009, ch. 313) and AB 2227 (Stats. 2012, ch. 616). AB 1110 (Stats. 2016, ch. 656) modified the PSD Program and Power Content Label by requiring retail suppliers to disclose the greenhouse gas (GHG) emissions intensity (the rate of emissions per unit of electricity) associated with each electricity portfolio beginning in 2021 for the 2020 reporting year. AB 1110 also required the CEC, among other things, to determine a format for disclosing unbundled California eligible renewable energy credits (RECs) as a percentage of annual retail sales to be shown as an offset.

The law requires that electricity retail suppliers, which includes the City of Santa Clara’s Electric Department dba Silicon Valley Power (SVP), disclose to customers which types of resources are used to generate the electricity being sold to them. SVP is required to use the reporting format developed by the CEC called the Power Content Label (PCL). The data that is used to create the PCL comes from SVP’s PSD report that is audited through a third party and submitted to the CEC.

Additionally, the CEC combines information from all in-state generation plant owners, information on electricity imports and exports provided by the California Independent System Operator (CAISO), and other grid balancing authorities serving the state to create California’s overall energy mix called the “CA Power Mix”. The CEC states that the CA Power Mix appears on the PCL as a reference point, and it is not an exact apples-to-apples comparison of a retail supplier’s fuel mix. 2022 PCL Format
In 2020, the CEC established a new PCL that includes comparative emissions calculations along with the percentage of energy resources that is attributed to each SVP label. SVP will continue to address carbon emissions reductions through all avenues available in order to meet ambitious climate targets set by both the City and the State.

The PCL format is broken down into two major sections. The left side of the PCL highlights the carbon intensity of each of the types of electricity products that SVP offers its customers. The right City of Santa Clara Printed on 9/15/2023Page 1 of 4
powered by Legistar™
23-1056 Agenda Date: 9/19/2023
side displays the percentages of energy sources that make up each product. SVP has three types of electricity products offered to our customers. Below we describe how the new PCL format affects the reporting on each product:
· SVP Residential Mix
· SVP Non-Residential
· SVP Green Power Standard Mix -SVP can no longer show energy offsets that do not fall under the CEC eligible renewable definition. The Green-e certified RECs are not recognized by the CEC unless they are also registered as California Eligible Renewable.

A notice of PCL availability and link to the SVP website will be published on customers’ electric utility bills in October and on the Silicon Valley Power website. The PCL will be used in other publications and marketing materials as needed.

DISCUSSION
State Compliance
SVP is in full compliance with the state’s Renewables Portfolio Standard (RPS) requirement, which has a different set of rules and requirements from the PCL.

Power Content Labels
There are two different PCLs attached. The first label displays only the three energy products and the CA Power Mix per CEC reporting guidelines. This PCL will be submitted to the CEC and published for retail customers. The second label combines the three energy products into SVP’s Overall Power mix. It also incorporates the CAISO’s annual emission’s factor on an hourly basis for any unspecified energy purchased. SVP will publish the PCL including the overall SVP power mix. In summary:
· The City’s residential load is a 100% carbon-free and renewable energy mix. · The non-residential power mix consists of 33.1% renewable resources. With the inclusion of large hydroelectric generation (capacity sized over 30 MW), SVP’s 2022 Power Mix is 41.9% greenhouse gas (GHG) free.

Information reported in the PCL includes the SVP operating data for City-owned power plants, generation plants operated by the Northern California Power Agency, and power purchase agreements. For other specific energy resources, SVP uses information from invoices and RECs that are accounted for in SVP's Western Renewable Energy Generation Information System (WREGIS) account. Per the guidelines, agencies or utilities where a specific generation source (i.e. wind, solar, geothermal, hydro, coal, natural gas, etc.) could not be identified, staff must assign these resources as "unspecified source of power".

Changes from Previous Year
The SVP Overall Power Mix’s Eligible Renewables increased from 28.1% in 2021 to 33.3% in 2022 primarily due to the addition of three new eligible hydroelectric generators and a solar project.

Although SVP added two large hydroelectric resources to its portfolio in 2022, the percentage of large hydroelectric decreased from 13.3% in 2021 to 12.1% in 2022 due to the drought and SVP’s City of Santa Clara Printed on 9/15/2023Page 2 of 4
powered by Legistar™
23-1056 Agenda Date: 9/19/2023
growth in retail sales. SVP’s retail sales grew by 9% between 2021 and 2022. The increase in retail sales also caused SVP to purchase more power from unspecified sources. SVP’s unspecified source of power increased from 27.2% in 2021 to 32.7% in 2022. However, SVP was able to decrease use of its natural gas-based resources from 31.4% to 21.9%.

A number of projects have experienced delays in their commercial operation. These delays can occur for a variety of reasons including but not limited to permitting, transmission development, environmental policies and approvals, legislative mandates, supply chain issues, and unforeseen events such as the COVID19 pandemic. The SVP-owned eligible hydroelectric Grizzly Powerhouse has remained offline since 2018 due to damaged transmission infrastructure but is expected to return to service when PG&E completes the construction of the new transmission line and generation tie line currently anticipated for fall of 2023. This resource generates an average of 43,000 MWh a year.

SVP contracted for 49.5 MW of power from the Altamont wind project that was intended to be in commercial operation in 2020. However, due to permitting delays, commercial operation has been delayed until 2025/2026 resulting in approximately 169,000 MWh per year that did not arrive to our customers. Staff continues to work towards procuring additional renewable and carbon-free energy resources.

Upcoming Years
SVP is heavily engaged in clean energy procurement for the future. These resources are in various stages of development and negotiations and are estimated to achieve commercial operation over the next several years. Additional opportunities are continuously identified by SVP, but not all negotiations will lead to final agreements, or a project may fail to achieve commercial operation.

In 2022, the City entered into two new power purchase agreements. One is a baseload geothermal resource that will be online in 2025 and the other is a large wind project scheduled to be online in 2025. The total forecasted generation is approximately 1,306,600 MWh annually. Staff will keep the Council updated on these two projects.

SVP has launched the Large Commercial Renewable Energy program. This voluntary program will enable SVP or our customers to procure up to 100% renewable energy for industrial and large commercial customers that want to exceed SVP’s current Non-Residential product offering.

ENVIRONMENTAL REVIEW
This item does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15060 of Title 14 of the California Code of Regulations as this item is solely for informational purposes.

FISCAL IMPACT
There is no economic or fiscal impact with the exception of staff time in preparing this report.

COORDINATION
This report has been coordinated with the City Attorney’s Office and the Finance Department.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a City of Santa Clara Printed on 9/15/2023Page 3 of 4
powered by Legistar™
23-1056 Agenda Date: 9/19/2023
Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.

RECOMMENDATION
Note and file Silicon Valley Power’s 2022 Power Content Label(s).

Reviewed by: Manuel Pineda, Chief Electric Utility Officer Approved by: Jōvan Grogan, City Manager

ATTACHMENTS

1. 2022 SVP Power Content Label for CEC Official

2. 2022 SVP Power Content Label with SVP’s Overall Power Mix with CAISO emission factor City of Santa Clara Printed on 9/15/2023Page 4 of 4
powered by Legistar™
2022 POWER CONTENT LABEL
City of Santa Clara dba Silicon Valley Power
https://www.siliconvalleypower.com/svp-and-community/about-svp/power-content-label Greenhouse Gas Emissions Intensity
(lbs CO2e/MWh) Energy Resources SVP
Residential
SVP Non-
Residential
Green
Power
Standard
2022 CA
Power Mix
Eligible Renewable1 34.6% 33.1% 100.0% 35.8%
Biomass & Biowaste 0.0% 1.8% 0.0% 2.1%
0 562 0 422 Geothermal 0.0% 6.3% 0.0% 4.7%
Eligible Hydroelectric 0.0% 8.7% 0.0% 1.1%
Solar 19.4% 7.0% 100.0% 17.0%
Wind 15.2% 9.3% 0.0% 10.8%
Coal 0.0% 0.0% 0.0% 2.1%
Large Hydroelectric 65.4% 8.8% 0.0% 9.2%
Natural Gas 0.0% 23.3% 0.0% 36.4%
Nuclear 0.0% 0.0% 0.0% 9.2%
Other 0.0% 0.0% 0.0% 0.1%
Unspecified Power2 0.0% 34.8% 0.0% 7.1%
TOTAL 100.0% 100.0% 100.0% 100.0%
Percentage of Retail Sales Covered by Retired Unbundled RECs3: 0% 0% 100% 1The eligible renewable percentage above does not reflect RPS compliance, which is determined using a different methodology. 2Unspecified power is electricity that has been purchased through open market transactions and is not traceable to a specific generation source. 3Renewable energy credits (RECs) are tracking instruments issued for renewable generation. Unbundled renewable energy credits (RECs) represent renewable generation that was not delivered to serve retail sales. Unbundled RECs are not reflected in the power mix or GHG emissions intensities above.

For specific information about this electricity portfolio, contact: City of Santa Clara dba Silicon Valley Power (408) 244-SAVE (7283)
For general information about the Power Content Label, visit: https://www.energy.ca.gov/programs-and-topics/programs/power-source- disclosure-program
Green Power StandardSVP Residential SVP Non-Residential 2022 CA Utility Average
0 200
400
600
800
1000
SVP Residential
SVP Non-Residential
Green Power Standard
2022 CA Utility Average
■
■
■
■
2022 POWER CONTENT LABEL
City of Santa Clara dba Silicon Valley Power
Greenhouse Gas Emissions
Intensity (lbs CO2e/MWh) Energy Resources SVP Overall
Mix
2022 CA
Power Mix
Eligible Renewable1 33.3% 35.8%
Biomass & Biowaste 1.7% 2.1%
305 422 Geothermal 5.9% 4.7%
Eligible Hydroelectric 8.2% 1.1%
Solar 8.0% 17.0%
Wind 9.6% 10.8%
Coal 0.0% 2.1%
Large Hydroelectric 12.1% 9.2%
Natural Gas 21.9% 36.4%
Nuclear 0.0% 9.2%
Other 32.7% 0.1%
Unspecified Power2 0.0% 7.1%
TOTAL 100.0% 100.0%
Percentage of Retail Sales Covered by
Retired Unbundled RECs3: 0%
1The eligible renewable percentage above does not reflect RPS compliance, which is determined using a different methodology.
2Unspecified power is electricity that has been purchased through open market transactions and is not traceable to a specific generation source.
3Renewable energy credits (RECs) are tracking instruments issued for renewable generation.

Unbundled renewable energy credits (RECs) represent renewable generation that was not delivered to serve retail sales. Unbundled RECs are not reflected in the power mix or GHG emissions intensities above.

For specific information about this
electricity portfolio, contact:

City of Santa Clara dba Silicon Valley Power
(408) 244-SAVE (7283)
For general information about the
Power Content Label, visit:
https://www.energy.ca.gov/programs-and-
topics/programs/power-source-disclosure-program
SVP Overall Mix with
CAISO annual
emissions factor
2022 CA Utility Average
0 200
400
600
800
1000
SVP Overall
Mix with
CAISO annual
emissions
factor
■
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-990 Agenda Date: 9/19/2023

REPORT TO COUNCIL

SUBJECT
Report on Actions Taken During City Council Recess to Accept $150,000 Cybersecurity Grant From the Bay Area Urban Areas Security Initiative and Approve the Related Budget Amendment

BACKGROUND
On July 11, 2023, the City Council authorized the City Manager/Executive Officer of Santa Clara Stadium Authority/Contract Administrator for Sports and Open Space Authority/Executive Director for Housing Authority to approve items vital to the function of the City during the Council recess period of July 19, 2023 to August 21, 2023 by resolution.

DISCUSSION
During the City Council recess, one grant agreement was executed related to cybersecurity. The City Manager approved the item to accept this grant funding in the total amount of $150,000 for cybersecurity improvements from the Department of Homeland Security Grant Assistance Program.

The agreement was fully executed by the City Attorney’s Office on July 19, 2023. Given the timing of City Council agenda production and internal report deadlines, this agreement was not able to be placed on the last meeting in July prior to the recess, thus this action was taken during the Council recess for City staff to meet grant timelines.

This funding is from the Bay Area Urban Areas Security Initiative (UASI) grant funds, granted by the Department of Homeland Security through the California Office of Emergency Services. The funding from this grant is specifically targeted at cybersecurity improvements for members of Bay Area UASI, of which the City of Santa Clara is a member. The U.S. Department of Homeland Security consolidated the Cities of San Jose, Oakland, and San Francisco Urban areas into a combined Bay Area Urban Area (“UASI Region”), which includes the City of Santa Clara. The City and County of San Francisco is designated as the fiscal agent for the purpose of allocation and distribution of federal Urban Areas Security Initiative program grant funds. The grant requires execution of an agreement (Attachment 1) with the City of Santa Clara and the City and County of San Francisco.

The City applied for this grant to implement cybersecurity improvements as part of our multi-phase efforts to replace aging technology infrastructure with enhanced cybersecurity and redundancy outcomes in mind. This includes implementing an Application Centric, Zero Trust Architecture, providing additional layers of security to protect mission critical systems and sensitive data.

This grant will fund one-time hardware equipment that is currently unfunded. This specific work will accelerate efforts to strengthen the City’s cybersecurity posture and redundancy.

FISCAL IMPACT
City of Santa Clara Printed on 9/15/2023Page 1 of 3
powered by Legistar™
23-990 Agenda Date: 9/19/2023
The City will receive $150,000 in the form of a reimbursable grant from the Bay Area UASI, which will be used to purchase one-time equipment for Cybersecurity improvements. A budget amendment is recommended below to recognize and appropriate this grant funding.

Budget Amendment
FY 2023/24
Current Increase/
(Decrease)
Revised
Other City Departments Operating
Grant Trust Fund
Revenue
Grant Funding $0 $150,000 $150,000
Expenditure
Information Technology - Bay Area
Urban Areas Security Initiative
$0 $150,000 $150,000

COORDINATION
This report was coordinated by the City Manager’s Office, Finance Department, and the Information Technology Department.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.

PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any report to council may be requested by contacting the City Clerk’s Office at (408) 615-2220, email [email protected] <mailto:[email protected]> or at the public information desk at any City of Santa Clara public library.

RECOMMENDATION

1. Note and file the Report on Actions Taken During Council Recess from July 19, 2023 to August 21, 2023; and

2. Approve the FY 2023/24 Budget Amendment in the Other City Departments Operating Grant Trust Fund to recognize grant revenue in the amount of $150,000 and establish a Bay Area Urban Areas Security Initiative appropriation in the amount of $150,000 (Five affirmative Council votes required to appropriate additional revenue ).

City of Santa Clara Printed on 9/15/2023Page 2 of 3
powered by Legistar™
23-990 Agenda Date: 9/19/2023
Reviewed by: Maria Le, Assistant to the City Manager
Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Agreement between the City and County of San Francisco and the City of Santa Clara for the distribution of FY 2021 UASI grant funds
City of Santa Clara Printed on 9/15/2023Page 3 of 3
powered by Legistar™

FY 21 UASI – CITY OF SANTA CLARA Page 1 of 21 JUNE 1, 2023

AGREEMENT BETWEEN THE CITY AND COUNTY OF

SAN FRANCISCO AND THE CITY OF SANTA CLARA
FOR THE DISTRIBUTION OF FY 2021 UASI GRANT FUNDS

THIS AGREEMENT is made this JUNE 1, 2023 in the City and County of San Francisco, State of California, by and between the CITY OF SANTA CLARA (“SUBRECIPIENT") and the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation (“San Francisco" or "City"), in its capacity as fiscal agent for the Approval Authority, as defined below, acting by and through the San Francisco Department of Emergency Management (“DEM”).

RECITALS

WHEREAS, The United States Department of Homeland Security (“DHS”) consolidated the separate San Jose, Oakland, and San Francisco Urban Areas into a combined Bay Area Urban Area (“UASI Region”) for the purpose of application for and allocation and distribution of federal Urban Areas Security Initiative (“UASI”) program grant funds; and

WHEREAS, The Bay Area Urban Area Approval Authority (“Approval Authority”) was established as the Urban Area Working Group (“UAWG”) for the UASI Region, to provide overall governance of the homeland security grant program across the UASI Region, to coordinate development and implementation of all UASI program initiatives, and to ensure compliance with all UASI program requirements; and

WHEREAS, The UASI General Manager is responsible for implementing and managing the policy and program decisions of the Approval Authority, directing the work of the UASI Management Team personnel, and performing other duties as determined and directed by the Approval Authority, and

WHEREAS, San Francisco has been designated as the grantee for UASI funds granted by the DHS through the California Office of Emergency Services (“Cal OES”) to the UASI Region, with responsibility to establish procedures and execute subgrant agreements for the distribution of UASI program grant funds to jurisdictions selected by the Approval Authority to receive grant funding; and

WHEREAS, San Francisco has been designated to serve as the fiscal agent for the Approval Authority, and to establish procedures and provide all financial services for distribution of UASI program grant funds within the UASI Region; and

WHEREAS, Pursuant to grant allocation decisions by the Approval Authority, the UASI Management Team has asked San Francisco to distribute a portion of the regional UASI grant funds to SUBRECIPIENT on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 2 of 21 JUNE 1, 2023 ARTICLE 1

DEFINITIONS

1.1 Specific Terms. Unless the context requires otherwise, the following capitalized terms (whether singular or plural) shall have the meanings set forth below:

(a) “ADA” shall mean the Americans with Disabilities Act (including all rules and regulations there under) and all other applicable federal, state and local disability rights legislation, as the same may be amended, modified or supplemented from time to time.

(b) “Authorized Expenditures” shall mean expenditures for those purposes identified and budgeted in Appendix A, attached hereto and incorporated by reference as though fully set forth herein.

(d) “Fiscal Quarter” shall mean each period of three calendar months commencing on July 1, October 1, January 1, and April 1, respectively.

(e) “Grant Funds” shall mean any and all funds allocated or disbursed to SUBRECIPIENT (Unique Entity ID#: RK62GLSXRUK9) under this Agreement. This Agreement shall specifically cover funds allocated or disbursed from Cal OES Grant No. 2021-0081, Cal OES ID No. 075-95017, CFDA No. 97.067, per Cal OES award notice dated October 27, 2021

(f) “Grant Plan” shall mean the plans, performances, events, exhibitions, acquisitions or other activities or matter, and the budget and requirements, described in Appendix A and the WebGrants system. If SUBRECIPIENT requests any modification to the Grant Plan, SUBRECIPIENT shall submit a written request to the UASI General Manager with the following information: Scope of change requested, reason for change, proposed plan for change, summary of approved and requested modifications to the Grant Plan, and any necessary approvals in support of change (e.g., EHP).

(g) “Indemnified Parties” shall mean: (i) San Francisco, including all commissions, departments including DEM, agencies, and other subdivisions of San Francisco; (ii) San Francisco’s elected officials, directors, officers, employees, agents, successors, and assigns; and (iii) all persons or entities acting on behalf of the foregoing.

(h) “Losses” shall mean any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, judgments, fees, expenses and costs of whatsoever kind and nature (including legal fees and expenses and costs of investigation, of prosecuting or defending any Loss described above) whether or not such Loss be founded or unfounded, of whatsoever kind and nature.

(i) “Reimbursement Request” shall have the meaning set forth in Section 3.10(a).

1.2 Additional Terms. The terms “as directed,” “as required” or “as permitted” and similar terms shall refer to the direction, requirement, or permission of City. The terms “sufficient,” “necessary” or “proper” and similar terms shall mean sufficient, necessary or proper in the sole judgment of City. The terms “approval,” “acceptable” or “satisfactory” or similar terms shall mean approved by, or acceptable or satisfactory to, City. The terms “include,” “included” or “including” and similar terms shall be deemed to be followed by the words “without limitation.” The use of the term “subcontractor,” “subgrantee,” “successor” or “assign” herein refers only to a subcontractor, subgrantee, successor or assign expressly permitted under Article 8.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 3 of 21 JUNE 1, 2023

1.3 References to this Agreement. References to this Agreement include: (a) any and all appendices, exhibits, schedules, and attachments hereto; (b) any and all statutes, ordinances, regulations or other documents expressly incorporated by reference herein; and (c) any and all amendments, modifications or supplements hereto made in accordance with Section 10.2. References to articles, sections, subsections or appendices refer to articles, sections or subsections of or appendices to this Agreement, unless otherwise expressly stated. Terms such as “hereunder,” “herein” or “hereto” refer to this Agreement as a whole.

1.4 Reference to laws. Any reference in this Agreement to a federal or state statute, regulation, executive order, requirement, policy, guide, guideline, information bulletin, or instruction shall mean that statute, regulation, executive order, requirement, policy, guide, guideline, information bulletin, or instruction as is currently in effect and as may be amended, modified or supplemented from time to time.

ARTICLE 2
ALLOCATION AND CERTIFICATION OF GRANT FUNDS;

LIMITATIONS ON SAN FRANCISCO'S OBLIGATIONS

2.1 Risk of Non-Allocation of Grant Funds. This Agreement is subject to all federal and state grant requirements and guidelines, including DHS and Cal OES requirements, guidelines, information bulletins, and instructions, the decision-making of the Cal OES and the Approval Authority, the terms and conditions of the grant award; the approved application, and to the extent applicable the budget and fiscal provisions of the San Francisco Charter. The Approval Authority shall have no obligation to allocate or direct disbursement of funds for this Agreement in lieu of allocations for new or other agreements.

SUBRECIPIENT acknowledges and agrees that grant decisions are subject to the discretion of the Cal OES and Approval Authority. Further, SUBRECIPIENT acknowledges and agrees that the City shall have no obligation to disburse grant funds to SUBRECIPIENT until City and SUBRECIPIENT have fully and finally executed this Agreement. SUBRECIPIENT acknowledges and agrees that if it takes any action, informal or formal, to appropriate, encumber or expend Grant Funds before final allocation decisions by Cal OES and the Approval Authority, and before this Agreement is fully and finally executed, it assumes all risk of possible non-allocation or non-reimbursement of funds, and such acknowledgement and agreement is part of the consideration of this Agreement.

2.2 Certification of Controller; Guaranteed Maximum Costs. No funds shall be available under this Agreement without prior written authorization certified by the San Francisco Controller. In addition, as set forth in Section 21.19 of the San Francisco Administrative Code:

(a) San Francisco's obligations hereunder shall not at any time exceed the amount approved in the grant award and/or by the Approval Authority, and certified by the Controller for the purpose and period stated in such certification.

(b) Except as may be provided by San Francisco ordinances governing emergency conditions, San Francisco and its employees and officers, and the UASI Management Team and its personnel, are not authorized to request SUBRECIPIENT to perform services or to provide materials, equipment and supplies that would result in SUBRECIPIENT performing services or providing materials, equipment and supplies that are beyond the scope of the services, materials, equipment and supplies specified in this Agreement, unless this Agreement is amended in writing and approved as required by law to authorize the additional services, materials, equipment or supplies. San Francisco is not required to pay SUBRECIPIENT for services, materials, equipment or supplies that are provided by SUBRECIPIENT that are beyond the scope of the services, materials, equipment and supplies agreed upon herein and which were not approved by a written amendment to this Agreement having been lawfully executed by San Francisco.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 4 of 21 JUNE 1, 2023 (c) San Francisco and its employees and officers, and the UASI Management Team and its personnel, are not authorized to offer or promise to SUBRECIPIENT additional funding for this Agreement that would exceed the maximum amount of funding provided for herein. Additional funding for this Agreement in excess of the maximum provided herein shall require lawful approval and certification by the Controller. San Francisco is not required to honor any offered or promised additional funding that exceeds the maximum provided in this Agreement that requires lawful approval and certification of the Controller when the lawful approval and certification by the Controller has not been obtained.

(d) The Controller is not authorized to make payments on any agreement for which funds have not been certified as available in the budget or by supplemental appropriation.

2.3 SUPERSEDURE OF CONFLICTING PROVISIONS. IN THE EVENT OF ANY CONFLICT BETWEEN ANY OF THE PROVISIONS OF THIS ARTICLE 2 AND ANY OTHER

PROVISION OF THIS AGREEMENT, THE APPLICATION DOCUMENTS OR ANY OTHER

DOCUMENT OR COMMUNICATION RELATING TO THIS AGREEMENT, THE TERMS OF THIS ARTICLE 2 SHALL GOVERN.

ARTICLE 3

PERFORMANCE OF THE AGREEMENT

3.1 Duration of Term. The term of this Agreement shall commence on JUNE 1, 2023 and shall end at 11:59 p.m. San Francisco time on MARCH 31, 2024.

3.2 Maximum Amount of Funds. In no event shall the amount of Grant Funds disbursed hereunder exceed ONE HUNDRED FIFTY THOUSAND DOLLARS ($150,000). The City will not automatically transfer Grant Funds to SUBRECIPIENT upon execution of this Agreement.

SUBRECIPIENT must submit a Reimbursement Request under Section 3.10 of this Agreement, approved by the UASI Management Team and City, before the City will disburse Grant Funds to SUBRECIPIENT.

3.3 Use of Funds.

(a) General Requirements. SUBRECIPIENT shall use the Grant Funds received under this Agreement for the purposes and in the amounts set forth in the Grant Plan. SUBRECIPIENT shall not use or expend Grant Funds for any other purpose, including but not limited to, for matching funds for other federal grants/cooperative agreements, lobbying or intervention in federal regulatory or adjudicatory proceedings, or to sue the federal government or any other government entity. SUBRECIPIENT shall not permit any federal employee to receive Grant Funds.

(b) Modification of Grant Plan. Under Sections 1.1(f) and 10.2 of this Agreement, SUBRECIPIENT may submit a written request to modify the Grant Plan. SUBRECIPIENT shall not appropriate, encumber or expend any additional or reallocated Grant Funds pursuant to such a request for modification until (1) the General Manager or designee has provided written approval for the request and (2) the parties have finally executed a modification of this Agreement under Section 10.2, to reflect the modified Grant Plan. In addition, if the modification request requires approval from the Approval Authority and/or Cal OES, as determined by the General Manager, SUBRECIPIENT shall not appropriate, encumber or expend any additional or reallocated Grant Funds pursuant to the modification request without approval from the Approval Authority and/or Cal OES.

(c) No Supplanting. SUBRECIPIENT shall use Grant Funds to supplement existing funds, and not replace (supplant) funds that have been appropriated for the same purpose.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 5 of 21 JUNE 1, 2023 (d) Obligations. SUBRECIPIENT must expend Grant Funds in a timely manner consistent with the grant milestones, guidance and assurances; and make satisfactory progress toward the goals, objectives, milestones and deliverables in this Agreement.

3.4 Grant Assurances; Other Requirements; Cooperation with Monitoring.

(a) SUBRECIPIENT shall comply with all Grant Assurances included in Appendix B, attached hereto and incorporated by reference as though fully set forth herein. SUBRECIPIENT shall require all subgrantees, contractors and other entities receiving Grant Funds through or from SUBRECIPIENT to execute a copy of the Grant Assurances, and shall ensure that they comply with those Grant Assurances.

(b) In addition to complying with all Grant Assurances, SUBRECIPIENT shall comply with all applicable statutes, regulations, executive orders, requirements, policies, guides, guidelines, information bulletins, Cal OES grant management memos, and instructions; the terms and conditions of the grant award; the approved application, and any conditions imposed by Cal OES or the Approval Authority. SUBRECIPIENT shall require and ensure that all subgrantees, contractors and other entities receiving Grant Funds through or from SUBRECIPIENT comply with all applicable statutes, regulations, executive orders, requirements, policies, guides, guidelines, information bulletins, Cal OES grant management memos, and instructions; the terms and conditions of the grant award; the approved application, and any conditions imposed by Cal OES or the Approval Authority.

(c) SUBRECIPIENT shall promptly comply with all standards, specifications and formats of San Francisco and the UASI Management Team, as they may from time to time exist, related to evaluation, planning and monitoring of the Grant Plan and compliance with this Agreement.

SUBRECIPIENT shall cooperate in good faith with San Francisco and the UASI Management Team in any evaluation, inspection, planning or monitoring activities conducted or authorized by DHS, Cal OES, San Francisco or the UASI Management Team. For ensuring compliance with non-supplanting requirements, upon request by City or the UASI Management Team, SUBRECIPIENT shall supply documentation certifying that a reduction of non-federal resources occurred for reasons other than the receipt or expected receipt of Grant Funds.

3.5 Administrative, Programmatic and Financial Management Requirements. SUBRECIPIENT shall establish and maintain administrative, programmatic and financial management systems and records in accordance with federal and State of California requirements. This provision requires, at a minimum, that SUBRECIPIENT comply with the following non-exclusive list of regulations commonly applicable to DHS grants, as applicable to this Agreement and the Grant Plan:

(a) Administrative Requirements:

1. 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (formerly 44 CFR Part 13, OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133).

(b) Cost Principles:

1. 2 CFR Part 200, Subpart E - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (formerly 44 CFR Part 13, OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133);

2. Federal Acquisition Regulations (FAR), Part 31.2 Contract Principles and Procedures, Contracts with Commercial Organizations.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 6 of 21 JUNE 1, 2023

1. 2 CFR Part 200 Subpart F - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (formerly 44 CFR Part 13, OMB Circulars A-21, A-87, A-89, A-102, A-110, A-122, and A-133).

3.6 Technology Requirements.

(a) National Information Exchange Model ("NIEM"). SUBRECIPIENT shall use the latest NIEM specifications and guidelines regarding the use of Extensible Markup Language ("XML") for all awards of Grant Funds.

(b) Geospatial Guidance. SUBRECIPIENT is encouraged to use Geospatial technologies, which can capture, store, analyze, transmit and/or display location-based information (i.e., information linked to a latitude and longitude), and to align any geospacial activities with the guidance available on the Federal Emergency Management Agency (“FEMA”) website.

(c) Criminal Intelligence Systems Operating Policies. Any information technology system funded or supported by Grant Funds shall comply with 28 CFR Part 23, Criminal Intelligence Systems Operating Policies, if applicable.

(d) SUBRECIPIENT is encouraged to use the DHS guidance in Best Practices for Government Use of CCTV: Implementing the Fair Information Practice Principles, if Grant Funds are used to purchase or install closed circuit television (CCTV) systems or to support operational CCTV systems.

3.7 Procurement Requirements.

(a) General Requirements. SUBRECIPIENT shall follow its own procurement requirements as long as those requirements comply with all applicable federal and State of California statutes, regulations, requirements, policies, guides, guidelines and instructions.

(b) Specific Purchases. If SUBRECIPIENT is using Grant Funds to purchase interoperable communication equipment, SUBRECIPIENT shall consult DHS’s SAFECOM’s coordinated grant guidance, which outlines standards and equipment information to enhance interoperable communication.

If SUBRECIPIENT is using Grant Funds to acquire critical emergency supplies, prior to expending any Grant Funds, SUBRECIPIENT shall submit to the UASI Management Team for approval by Cal OES a viable inventory management plan, an effective distribution strategy, sustainment costs for such an effort, and logistics expertise to avoid situations where funds are wasted because supplies are rendered ineffective due to lack of planning.

(c) Bond requirement. SUBRECIPIENT shall obtain a performance bond for any equipment items over $250,000 or any vehicle, aircraft or watercraft financed with Grant Funds.

3.8 Subgrantee and Contractor Requirements.

(a) SUBRECIPIENT shall ensure and independently verify that any subgrantee, contractor or other entity receiving Grant Funds through or from SUBRECIPIENT is not debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs, under Executive Orders 12549 and 12689, as implemented at 2 CFR Part 3000. SUBRECIPIENT shall obtain documentation of eligibility before disbursing Grant Funds to any subgrantee, contractor or other entity.

SUBRECIPIENT shall maintain documentary proof of this verification in its files. SUBRECIPIENT shall establish procedures for the effective use of the “Excluded Parties List System,” to assure that it does not provide Grant Funds to excluded parties. SUBRECIPIENT shall also establish procedures to provide for DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 7 of 21 JUNE 1, 2023 effective use and/or dissemination of the list to assure that its grantees and subgrantees, including contractors, at any tier do not make awards in violation of the non-procurement debarment and suspension common rule.

(b) SUBRECIPIENT shall ensure that any subgrantee, contractor or other entity receiving Grant Funds through or from SUBRECIPIENT complies with the requirements of 44 CFR Part 18, New Restrictions on Lobbying; and

(c) SUBRECIPIENT shall ensure that any subgrantee, contractor or other entity receiving Grant Funds through or from SUBRECIPIENT complies with the requirements of 2 CFR Part 3001, Requirements for Drug-Free Workplace (Financial Assistance).

3.9 Monitoring Grant Performance.

(a) City and the UASI Management Team are both authorized to perform periodic monitoring reviews of SUBRECIPIENT’s performance under this Agreement, to ensure that the Grant Plan goals, objectives, performance requirements, timelines, milestone completion, budgets and other criteria are being met. Programmatic monitoring may include the Regional Federal Preparedness Coordinators, or other federal or state personnel, when appropriate. Monitoring may involve a combination of desk-based reviews and on-site monitoring visits, inspection of records, and verifications of grant activities. These reviews will involve a review and analysis of the financial, programmatic, performance and administrative issues relative to each program and will identify areas where technical assistance and other support may be needed. The reviews may include, but are not limited to:

1. Evaluating eligibility of expenditures;

2. Comparing actual grant activities to those approved by the Approval Authority and specified in the Grant Plan;

3. Ensuring that any advances have been deposited in an interest bearing account and disbursed in accordance with applicable guidelines; and

4. Confirming compliance with: Grant Assurances; information provided on performance reports and payment requests; and needs and threat assessments and strategies.

(b) SUBRECIPIENT is responsible for monitoring and auditing the grant activities of any subgrantee, contractor or other entity receiving Grant Funds through or from SUBRECIPIENT. This requirement includes but is not limited to mandatory on-site verification visits.

(c) If after any monitoring review, the DHS or Cal OES makes findings that require a Corrective Action Plan by SUBRECIPIENT, the City shall place a hold on all Reimbursement Requests from SUBRECIPIENT until the findings are resolved.

3.10 Disbursement Procedures. San Francisco shall disburse Grant Funds to SUBRECIPIENT as follows:

(a) SUBRECIPIENT shall submit to the UASI Management Team, in the manner specified for notices pursuant to Article 9, a document ("Reimbursement Request") substantially in the form attached as Appendix C, attached hereto and incorporated by reference as though fully set forth herein.

The UASI Management Team shall serve as the primary contact for SUBRECIPIENT regarding any Reimbursement Request.

(b) The UASI Management Team will review all Reimbursement Requests for compliance with this Agreement and all applicable guidelines and requirements. The UASI Management Team will DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 8 of 21 JUNE 1, 2023 return to SUBRECIPIENT any Reimbursement Request that is submitted and not approved by the UASI Management Team, with a brief statement of the reason for the rejection of the Reimbursement Request.

(c) The UASI Management Team will submit any Reimbursement Request that is approved by the UASI Management Team to DEM. City through DEM shall review the Reimbursement Request for compliance with this Agreement and all applicable guidelines and requirements. City shall return to the UASI Management Team any Reimbursement Request that is not approved by City, with a brief explanation of the reason for the rejection of the Reimbursement Request.

(d) If a rejection relates only to a portion of the expenditures itemized in any Reimbursement Request, City shall have no obligation to disburse any Grant Funds for any other expenditures itemized in such Reimbursement Request unless and until SUBRECIPIENT submits a Reimbursement Request that is in all respects acceptable to the UASI Management Team and to City.

(e) If SUBRECIPIENT is not in compliance with any provision of this Agreement, City may withhold disbursement of Grant Funds until SUBRECIPIENT has taken corrective action and currently complies with all terms and conditions of the Agreement.

3.11 Disallowance. SUBRECIPIENT agrees that if it claims or receives reimbursement from City for an expenditure that is later disallowed by the State of California or the federal government, SUBRECIPIENT shall promptly refund the disallowed amount to City upon City’s written request. At its option, City may offset all or any portion of the disallowed amount against any other payment due to SUBRECIPIENT hereunder or under any other Agreement with SUBRECIPIENT. Any such offset with respect to a portion of the disallowed amount shall not release SUBRECIPIENT from SUBRECIPIENT’s obligation hereunder to refund the remainder of the disallowed amount.

3.12 Sustainability. Grant Funded programs that contain continuing personnel and operating expenses, over and above planning and implementation costs, must be sustained once the Grant Funding ends. If Equipment is purchased with grant funds the equipment must be sustained through the useful life of equipment. By executing this Agreement, SUBRECIPIENT acknowledges its responsibility and agrees to sustain continuing programs beyond the Grant Funding period. SUBRECIPIENT acknowledges and agrees that this sustainability requirement is a material term of the Agreement.

3.13 EHP Requirements.

(a) Grant Funded projects must comply with the federal Environmental and Historic Preservation ("EHP") program. SUBRECIPIENT shall not initiate any project with the potential to impact environmental or historic properties or resources until Cal OES and FEMA have completed EHP reviews and approved the project. Examples of projects that may impact EHP resources include: communications towers, physical security enhancements, new construction, and modifications to buildings, structures and objects that are 50 years old or greater. SUBRECIPIENT shall notify the UASI Management Team of any project that may require an EHP review. SUBRECIPIENT agrees to provide detailed project information to FEMA, Cal OES and/or the UASI Management Team, to cooperate fully in the review, and to prepare any documents requested for the review. SUBRECIPIENT shall comply with all conditions placed on the project as the result of the EHP review, and implement any treatment or mitigation measures deemed necessary to address potential adverse impacts. With prior approval of the UASI Management Team, SUBRECIPIENT may use Grant Funds toward the costs of preparing documents and/or implementing treatment or mitigation measures. Any change to the approved project scope of work will require re-evaluation for compliance with EHP requirements. If ground disturbing activities occur during project implementation, SUBRECIPIENT shall notify the UASI Management Team and ensure monitoring of ground disturbance. If any potential archeological resources are DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 9 of 21 JUNE 1, 2023 discovered, SUBRECIPIENT shall immediately cease construction in that area and notify the UASI Management Team, which will notify the appropriate State Historic Preservation Office. If SUBRECIPIENT is using Grant Funds for a communication tower project, SUBRECIPIENT shall complete its Federal Communication Commission (“FCC”) EHP process before preparing its Cal OES/FEMA EHP materials, and shall include the FCC EHP materials in the Cal OES/FEMA submission.

(b) Any construction or other project that SUBRECIPIENT initiates without the necessary EHP review and approval will not be eligible for reimbursement. Failure of SUBRECIPIENT to meet federal, State, and local EHP requirements, obtain applicable permits, or comply with any conditions that may be placed on the project as the result of FEMA’s and/or Cal OES's EHP review will result in the denial of Reimbursement Requests.

3.14 National Energy Conservation Policy and Energy Policy Acts. SUBRECIPIENT shall comply with the following requirements:

(a) Grant Funds may not be used in contravention of the Federal buildings performance and reporting requirements of Executive Order 13123, part 3 of Title V of the National Energy Conservation Policy Act (42 USC §8251 et seq.), or Subtitle A of Title I of the Energy Policy Act of 2005; and

(b) Grant Funds may not be used in contravention of Section 303 of the Energy Policy Act of 1992 (42 USC §13212).

3.15 Royalty-Free License. SUBRECIPIENT understands and agrees that FEMA reserves a royalty- free, non-exclusive and irrevocable license to reproduce, publish or otherwise use, and authorize others to use, for federal government purposes: (a) the copyright in any work developed using Grant Funds; and (b) any rights of copyright that SUBRECIPIENT purchases or acquires using Grant Funds. SUBRECIPIENT shall consult with the UASI Management Team and FEMA regarding the allocation of any patent rights that arise from, or are purchased with, Grant Funds.

3.16 Publication Statements. SUBRECIPIENT shall ensure that all publications created or developed under this Agreement prominently contain the following statement: “This document was prepared under a grant from the Federal Emergency Management Agencies Grant Programs Directorate (FEMA/GPD) within the US Department of Homeland Security. Points of view or opinions expressed in this document are those of the authors and do not necessarily represent the official position or policies of FEMA/GPD or the US Department of Homeland Security.”

ARTICLE 4
REPORTING REQUIREMENTS; AUDITS

4.1 Regular Reports. SUBRECIPIENT shall provide, in a prompt and timely manner, financial, operational and other reports, as requested by the UASI Management Team or by City, in form and substance satisfactory to the UASI Management Team or City. Such reports, including any copies, shall be submitted on recycled paper and printed on double-sided pages, to the maximum extent possible.

4.2 Notification of Defaults or Changes in Circumstances. SUBRECIPIENT shall notify the UASI Management Team and City immediately of (a) any Event of Default or event that, with the passage of time, would constitute an Event of Default; (b) any change of circumstances that would cause any of the representations or warranties contained in Article 5 to be false or misleading at any time during the term of this Agreement; and (c) any change of circumstances or events that would cause SUBRECIPIENT to be out of compliance with the Grant Assurances in Appendix B.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 10 of 21 JUNE 1, 2023

4.3 Books and Records. SUBRECIPIENT shall establish and maintain accurate files and records of all aspects of the Grant Plan and the matters funded in whole or in part with Grant Funds. Without limiting the scope of the foregoing, SUBRECIPIENT shall establish and maintain accurate financial books and accounting records relating to Authorized Expenditures and to Grant Funds received and expended under this Agreement, together with all invoices, documents, payrolls, time records and other data related to the matters covered by this Agreement, whether funded in whole or in part with Grant Funds. SUBRECIPIENT shall maintain all of the files, records, books, invoices, documents, payrolls and other data required to be maintained under this Section in a readily accessible location and condition for a period of not less than three (3) years after expiration of this Agreement or until any final audit by Cal OES has been fully completed, whichever is later.

4.4 Inspection and Audit. SUBRECIPIENT shall make available to the UASI Management Team and to City, and to UASI Management Team and City employees and authorized representatives, during regular business hours, all of the files, records, books, invoices, documents, payrolls and other data required to be established and maintained by SUBRECIPIENT under Section 4.3, and allow access and the right to examine those items. SUBRECIPIENT shall permit the UASI Management Team and City, and UASI Management Team and City employees and authorized representatives, to inspect, audit, examine and make excerpts and transcripts from any of the foregoing. The rights of the UASI Management Team and City pursuant to this Section shall remain in effect so long as SUBRECIPIENT has the obligation to maintain such files, records, books, invoices, documents, payrolls and other data under this Article 4. The DHS, the Comptroller General of the United States or designee, and Cal OES shall have the same inspection and audit rights as the City and UASI Management Team.

SUBRECIPIENT shall cooperate with any federal or state audit.

4.5 Audit Report. If the amount specified in Section 3.2 of this agreement is $750,000 or more, SUBRECIPIENT shall submit an organization-wide financial and compliance audit report. The audit must be performed in accordance with GAO’s Government Auditing Standards, and 2 CFR Part 200 Subpart F - Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. SUBRECIPIENT shall submit its audit report to the UASI Management Team no later than six months after the end of SUBRECIPIENT’s fiscal year.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

SUBRECIPIENT represents and warrants each of the following as of the date of this Agreement and at all times throughout the term of this Agreement:

5.1 No Misstatements. No document furnished or to be furnished by SUBRECIPIENT to the UASI Management Team or to City in connection with this Agreement, any Reimbursement Request or any other document relating to any of the foregoing, contains or will contain any untrue statement of material fact or omits or will omit a material fact necessary to make the statements contained therein not misleading, under the circumstances under which any such statement shall have been made.

5.2 Eligibility to Receive Federal Funds. By executing this Agreement, SUBRECIPIENT certifies that it is eligible to receive federal funds, and specifically certifies as follows:

(a) SUBRECIPIENT is not suspended, debarred or otherwise excluded from participation in federal assistance programs, as required by Executive Order 12549 and 12689, “Debarment and Suspension” and implemented at 2 CFR Part 3000.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 11 of 21 JUNE 1, 2023 (b) SUBRECIPIENT complies with 31 U.S.C. §1352, Limitation on use of appropriated funds to influence federal contracting and financial transactions, as implemented at 44 CFR Part 18 and 6 CFR Part 9.

(c) SUBRECIPIENT complies with the Drug-Free Workplace Act of 1988, as amended, 41 U.S.C. §701 et seq., as implemented in 2 CFR Part 3001, and will continue to provide a drug-free workplace as required under that Act and implementing regulations.

(d) SUBRECIPIENT is not delinquent in the repayment of any federal debt. See OMB Circular A-129.

SUBRECIPIENT acknowledges that these certifications of eligibility to receive federal funds are material terms of the Agreement.

5.3 NIMS Compliance. To be eligible to receive Grant Funds, SUBRECIPIENT must meet National Incident Management System ("NIMS") compliance requirements, and report full NIMS compliance via the National Incident Management System Capability Assessment Support Tool ("NIMSCAST"). By executing this Agreement, SUBRECIPIENT certifies that it is in full NIMS compliance, and that it has reported that compliance via the NIMSCAST. SUBRECIPIENT shall provide documentation of its NIMS compliance to the UASI Management Team. SUBRECIPIENT acknowledges that this certification is a material term of the Agreement.

ARTICLE 6

INDEMNIFICATION AND GENERAL LIABILITY

6.1 Indemnification. SUBRECIPIENT shall indemnify, protect, defend and hold harmless each of the Indemnified Parties from and against any and all Losses arising from, in connection with or caused by SUBRECIPIENT’s performance of this Agreement, including, but not limited to, the following: (a) a material breach of this Agreement SUBRECIPIENT; (b) a material breach of any representation or warranty of SUBRECIPIENT contained in this Agreement; (c) any personal injury or death caused, directly or indirectly, by any act or omission of SUBRECIPIENT or its employees, subgrantees or agents; (d) any loss of or damage to property caused, directly or indirectly, by any act or omission of SUBRECIPIENT or its employees, subgrantees or agents; (e) the use, misuse or failure of any equipment or facility used by SUBRECIPIENT, or by any of its employees, subgrantees or agents, regardless of whether such equipment or facility is furnished, rented or loaned to SUBRECIPIENT by an Indemnified Party; (f) any tax, fee, assessment or other charge for which SUBRECIPIENT is responsible under Section 10.4; or (g) any infringement of patent rights, copyright, trade secret or any other proprietary right or trademark of any person or entity in consequence of the use by any Indemnified Party of any goods or services furnished by SUBRECIPIENT or its employees, subgrantees or agents to such Indemnified Party in connection with this Agreement. The foregoing indemnity shall include, without limitation, reasonable fees of attorneys, consultants and experts and related costs and San Francisco’s costs of investigating any claims against San Francisco.

6.2 Duty to Defend; Notice of Loss. SUBRECIPIENT acknowledges and agrees that its obligation to defend the Indemnified Parties under Section 6.1: (a) is an immediate obligation, independent of its other obligations hereunder; (b) applies to any Loss which actually or potentially falls within the scope of Section 6.1, regardless of whether the allegations asserted in connection with such Loss are or may be groundless, false or fraudulent; and (c) arises at the time the Loss is tendered to SUBRECIPIENT by the Indemnified Party and continues at all times thereafter. The Indemnified Party shall give SUBRECIPIENT prompt notice of any Loss under Section 6.1 and SUBRECIPIENT shall have the right to defend, settle and compromise any such Loss; provided, however, that the Indemnified Party shall have the right to retain its own counsel at the expense of SUBRECIPIENT if representation of such DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 12 of 21 JUNE 1, 2023 Indemnified Party by the counsel retained by SUBRECIPIENT would be inappropriate due to conflicts of interest between such Indemnified Party and SUBRECIPIENT. An Indemnified Party's failure to notify SUBRECIPIENT promptly of any Loss shall not relieve SUBRECIPIENT of any liability to such Indemnified Party pursuant to Section 6.1, unless such failure materially impairs SUBRECIPIENT’s ability to defend such Loss. SUBRECIPIENT shall seek the Indemnified Party's prior written consent to settle or compromise any Loss if SUBRECIPIENT contends that such Indemnified Party shares in liability with respect thereto.

6.3 Incidental and Consequential Damages. Losses covered under this Article 6 shall include any and all incidental and consequential damages resulting in whole or in part from SUBRECIPIENT’s acts or omissions. Nothing in this Agreement shall constitute a waiver or limitation of any rights that any Indemnified Party may have under applicable law with respect to such damages.

6.4 LIMITATION ON LIABILITY OF SAN FRANCISCO. CITY’S OBLIGATIONS UNDER

THIS AGREEMENT SHALL BE LIMITED TO THE AGGREGATE AMOUNT OF GRANT FUNDS ACTUALLY DISBURSED HEREUNDER. NOTWITHSTANDING ANY OTHER PROVISION

CONTAINED IN THIS AGREEMENT OR ANY OTHER DOCUMENT OR COMMUNICATION

RELATING TO THIS AGREEMENT, IN NO EVENT SHALL CITY BE LIABLE, REGARDLESS OF

WHETHER ANY CLAIM IS BASED ON CONTRACT OR TORT, FOR ANY SPECIAL,

CONSEQUENTIAL, INDIRECT OR INCIDENTAL DAMAGES, INCLUDING LOST PROFITS,

ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE GRANT FUNDS, THE GRANT PLAN OR ANY ACTIVITIES PERFORMED IN CONNECTION WITH THIS AGREEMENT.

ARTICLE 7
EVENTS OF DEFAULT AND REMEDIES; TERMINATION FOR CONVENIENCE

7.1 Events of Default. The occurrence of any one or more of the following events shall constitute an "Event of Default" under this Agreement:

(a) False Statement. Any statement, representation, certification or warranty contained in this Agreement, in any Reimbursement Request, or in any other document submitted to the UASI Management Team or to City under this Agreement is found by the UASI Management Team or by City to be false or misleading.

(b) Failure to Perform Other Covenants. SUBRECIPIENT fails to perform or breaches any provision or covenant of this Agreement to be performed or observed by SUBRECIPIENT as and when performance or observance is due and such failure or breach continues for a period of ten (10) days after the date on which such performance or observance is due.

(c) Failure to Comply with Applicable Laws. SUBRECIPIENT fails to perform or breaches any of the terms or provisions of Article 12.

(d) Voluntary Insolvency. SUBRECIPIENT (i) is generally not paying its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, insolvency or other debtors' relief law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers of SUBRECIPIENT or of any substantial part of SUBRECIPIENT’s property or (v) takes action for the purpose of any of the foregoing.

(e) Involuntary Insolvency. Without consent by SUBRECIPIENT, a court or government authority enters an order, and such order is not vacated within ten (10) days, (i) appointing a custodian, DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 13 of 21 JUNE 1, 2023 receiver, trustee or other officer with similar powers with respect to SUBRECIPIENT or with respect to any substantial part of SUBRECIPIENT’s property, (ii) constituting an order for relief or approving a petition for relief or reorganization or arrangement or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, insolvency or other debtors' relief law of any jurisdiction or (iii) ordering the dissolution, winding-up or liquidation of SUBRECIPIENT.

7.2 Remedies upon Event of Default. Upon and during the continuance of an Event of Default, City may do any of the following, individually or in combination with any other remedy:

(a) Termination. City may terminate this Agreement by giving a written termination notice to SUBRECIPIENT and, on the date specified in such notice, this Agreement shall terminate and all rights of SUBRECIPIENT hereunder shall be extinguished. In the event of such termination, City will pay SUBRECIPIENT for Authorized Expenditures in any Reimbursement Request that was submitted and approved by the UASI Management Team and by City prior to the date of termination specified in such notice.

(b) Withholding of Grant Funds. City may withhold all or any portion of Grant Funds not yet disbursed hereunder, regardless of whether SUBRECIPIENT has previously submitted a Reimbursement Request or whether the UASI Management Team and/or City has approved the disbursement of the Grant Funds requested in any Reimbursement Request. Any Grant Funds withheld pursuant to this Section and subsequently disbursed to SUBRECIPIENT after cure of applicable Events of Default shall be disbursed without interest.

(c) Return of Grant Funds. City may demand the immediate return of any previously disbursed Grant Funds that have been claimed or expended by SUBRECIPIENT in breach of the terms of this Agreement, together with interest thereon from the date of disbursement at the maximum rate permitted under applicable law.

7.3 Termination for Convenience.

(a) City shall have the option, in its sole discretion, to terminate this Agreement, at any time during the term hereof, for convenience and without cause. City shall exercise this option by giving SUBRECIPIENT written notice of termination. The notice shall specify the date on which termination shall become effective.

(b) Upon receipt of the notice, SUBRECIPIENT shall commence and perform, with diligence, all actions necessary on the part of SUBRECIPIENT to effect the termination of this Agreement on the date specified by City and to minimize the liability of SUBRECIPIENT and City to third parties as a result of termination. All such actions shall be subject to the prior approval of the UASI Management Team.

(c) Within 30 days after the specified termination date, SUBRECIPIENT shall submit to the UASI Management Team an invoice for all Authorized Expenses incurred through the termination date.

For Authorized Expenses incurred after receipt of the notice of termination, City will only reimburse SUBRECIPIENT if the Authorized Expenses received prior approval from the UASI Management Team as specified in subparagraph (b).

(d) In no event shall City be liable for costs incurred by SUBRECIPIENT or any of its contractors or subgrantees after the termination date specified by City.

(e) City’s payment obligation under this Section shall survive termination of this Agreement.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 14 of 21 JUNE 1, 2023

7.4 Remedies Nonexclusive. Each of the remedies provided for in this Agreement may be exercised individually or in combination with any other remedy available hereunder or under applicable laws, rules and regulations. The remedies contained herein are in addition to all other remedies available to City at law or in equity by statute or otherwise and the exercise of any such remedy shall not preclude or in any way be deemed to waive any other remedy.

ARTICLE 8

ASSIGNMENTS

8.1 No Assignment by SUBRECIPIENT. SUBRECIPIENT shall not, either directly or indirectly, assign, transfer, hypothecate, subcontract or delegate all or any portion of this Agreement or any rights, duties or obligations of SUBRECIPIENT hereunder without the prior written consent of the UASI Management Team; provided, however, that any contractor or subgrantee specifically referenced in Appendix A shall not require the consent of Management Team. This Agreement shall not, nor shall any interest herein, be assignable as to the interest of SUBRECIPIENT involuntarily or by operation of law without the prior written consent of City. A change of ownership or control of SUBRECIPIENT or a sale or transfer of substantially all of the assets of SUBRECIPIENT shall be deemed an assignment for purposes of this Agreement.

8.2 Agreement Made in Violation of this Article. Any agreement made in violation of Section 8.1 shall confer no rights on any person or entity and shall automatically be null and void.

8.3 SUBRECIPIENT Retains Responsibility. SUBRECIPIENT shall in all events remain liable for the performance by any subgrantee contractor, or assignee of all of the covenants, terms and conditions in this Agreement.

ARTICLE 9

NOTICES AND OTHER COMMUNICATIONS

9.1 Requirements. Unless otherwise specifically provided herein, all notices, consents, directions, approvals, instructions, requests and other communications hereunder shall be in writing, shall be addressed to the person and address set forth below and shall be (a) deposited in the U.S. mail, first class, certified with return receipt requested and with appropriate postage, (b) hand delivered or (c) sent via e- mail:

If to San Francisco:

San Francisco Department of Emergency Management
City Hall - 1 Dr Carlton B Goodlett Pl, Room 344
San Francisco, CA 94102
Attn: Mary Ellen Carroll, Executive Director
[email protected]

If to the UASI Management Team:

UASI Management Team
1663 Mission Street, Suite #320
San Francisco, CA 94103
Attn: Craig Dziedzic, General Manager
[email protected]

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 15 of 21 JUNE 1, 2023 If to SUBRECIPIENT:

City of Santa Clara
1500 Warburton Drive
Santa Clara, CA, 95050
ATTN: Jovan Grogan, City Manager
[email protected]

9.2 Effective Date. All communications sent in accordance with Section 9.1 shall become effective on the date of receipt. Such date of receipt shall be determined by: (a) if mailed, the return receipt, completed by the U.S. postal service; (b) if sent via hand delivery, a receipt executed by a duly authorized agent of the party to whom the notice was sent; or (c) if sent via facsimile, the date of telephonic confirmation of receipt by a duly authorized agent of the party to whom the notice was sent or, if such confirmation is not reasonably practicable, the date indicated in the facsimile machine transmission report of the party giving such notice.

9.3 Change of Address. From time to time any party hereto may designate a new address or recipient for notice for purposes of this Article 9 by written notice to the other party and the UASI Management Team.

ARTICLE 10

MISCELLANEOUS

10.1 No Waiver. No waiver by San Francisco of any default or breach of this Agreement shall be implied from any failure by the UASI Management Team or San Francisco to take action on account of such default if such default persists or is repeated. No express waiver by San Francisco shall affect any default other than the default specified in the waiver and shall be operative only for the time and to the extent therein stated. Waivers by San Francisco of any covenant, term or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by the UASI Management Team or San Francisco of any action requiring further consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar act.

10.2 Modification. This Agreement may not be modified, nor may compliance with any of its terms be waived, except by written instrument executed and approved in the same manner as this Agreement; provided, however, that the General Manager or designee may establish alternate procedures for modification of the Appendix A and the Grant Plan.

10.3 Governing Law; Venue. The formation, interpretation and performance of this Agreement shall be governed by the laws of the State of California, without regard to its conflict of laws principles. Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in San Francisco.

10.4 SUBRECIPIENT to Pay All Taxes. SUBRECIPIENT shall pay to the appropriate governmental authority, as and when due, any and all taxes, fees, assessments or other governmental charges, including possessory interest taxes and California sales and use taxes, levied upon or in connection with this Agreement, the Grant Plan, the Grant Funds or any of the activities contemplated by this Agreement.

10.5 Headings. All article and section headings and captions contained in this Agreement are for reference only and shall not be considered in construing this Agreement.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 16 of 21 JUNE 1, 2023

10.6 Entire Agreement. This Agreement sets forth the entire Agreement between the parties, and supersedes all other oral or written provisions. The following Appendices are attached to and a part of this Agreement:

 Appendix A, Authorized Expenditures and Timelines
 Appendix B, Grant Assurances
 Appendix C, Form of Reimbursement Request

10.7 Certified Resolution of Signatory Authority. Upon request of San Francisco, SUBRECIPIENT shall deliver to San Francisco a copy of the corporate resolution(s) authorizing the execution, delivery and performance of this Agreement, certified as true, accurate and complete by the appropriate authorized representative of SUBRECIPIENT.

10.8 Severability. Should the application of any provision of this Agreement to any particular facts or circumstances be found by a court of competent jurisdiction to be invalid or unenforceable, then (a) the validity of other provisions of this Agreement shall not be affected or impaired thereby, and (b) such provision shall be enforced to the maximum extent possible so as to effect the intent of the parties and shall be reformed without further action by the parties to the extent necessary to make such provision valid and enforceable.

10.9 Successors; No Third-Party Beneficiaries. Subject to the terms of Article 8, the terms of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their successors and assigns. Nothing in this Agreement, whether express or implied, shall be construed to give any person or entity (other than the parties hereto and their respective successors and assigns and, in the case of Article 6, the Indemnified Parties) any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

10.10 Survival of Terms. The obligations of SUBRECIPIENT and the terms of the following provisions of this Agreement shall survive and continue following expiration or termination of this Agreement: Sections 4.3 and 4.4, Article 6, this Article 10, and the Grant Assurances of Appendix B.

10.11 Further Assurances. From and after the date of this Agreement, SUBRECIPIENT agrees to do such things, perform such acts, and make, execute, acknowledge and deliver such documents as may be reasonably necessary or proper and usual to complete the transactions contemplated by this Agreement and to carry out the purpose of this Agreement in accordance with this Agreement.

10.12 Disclosure of Subawards and Executive Compensation. Pursuant to the Federal Funding Accountability and Transparency Act (FFATA) (P.L. 109-282) as amended by Section 6202(a) of the Government Funding Transparency Act of 2008 (P.L. 110-252), full disclosure to the public of entities or organizations receiving federal funds is now required. As defined by the Office of Management and Budget (OMB), all new Federal awards of $25,000 or more as of October 1, 2010, are subject to FFATA reporting requirements. The Transparency Act definition of “Federal awards” includes not only prime awards for grantees, cooperators, and contractors, but also awards to sub-recipients. If applicable, SUBRECIPIENT must provide the following information on SUBRECIPIENT letterhead within 30 days of receipt of this Agreement.

1. Subawards greater than $25,000:
a) Name of entity receiving award;
b) Amount of award;
c) Funding agency;
d) The Catalog of Federal Domestic Assistance program number; DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 17 of 21 JUNE 1, 2023 e) Award title (descriptive of the purpose of the funding action); f) Location of the entity and primary location of performance including city, state, and Congressional district;
g) Dun & Bradstreet (D&B) DUNS Number of the entity, and its parent if applicable; and, h) Total compensation and names of top five executives (same thresholds as for prime recipients).

2. The Total compensation and names of the top five executives if:
a) 80% or more of annual gross revenues are from Federal awards (contracts, sub-contracts and Federal financial assistance), and $25,000,000 or more in annual gross revenues from Federal awards; and,
b) Compensation information is not already available through reporting to the Securities and Exchange Commission.

10.13 Cooperation with UASI Programs and Activities.

(a) Subject to reasonable terms and conditions, SUBRECIPIENT agrees to participate in UASI-sponsored exercises, and to make available equipment acquired with Grant Funds for use as part of such exercises.

(b) To the extent permitted by law, SUBRECIPIENT agrees to share with the Approval Authority informational work products (such as plans, reports, data, etc.) created or acquired using Grant Funds.

(c) SUBRECIPIENT agrees to provide input towards the development of the regional Threat and Hazard Identification and Risk Assessment (THIRA) and Stakeholder Preparedness Review (SPR) as requested by UASI.

(d) SUBRECIPIENT agrees to complete the 2021 Nationwide Cybersecurity Review (NCSR), enabling agencies to benchmark and measure progress of improving their cybersecurity posture.

The Chief Information Officer (CIO), Chief Information Security Officer (CISO) or equivalent for each recipient should complete the NCSR. If there is no CIO or CISO, the most senior cybersecurity professional should complete the assessment.

(e) SUBRECIPIENT agrees to provide a preference for the purchase of goods, products or materials produced in the United States in accordance with 2 CFR Part 200, Section 322.

ARTICLE 11

INSURANCE

11.1 Types and Amounts of Coverage. Without limiting SUBRECIPIENT’s liability pursuant to Article 6 of this Agreement, SUBRECIPIENT shall maintain in force, during the full term of the Agreement, insurance in the following amounts and coverages:

(a) Workers’ Compensation, in statutory amounts, with Employers’ Liability Limits not less than $1,000,000 each accident, injury, or illness; and

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 18 of 21 JUNE 1, 2023 (b) Commercial General Liability Insurance with limits not less than $1,000,000 each occurrence Combined Single Limit for Bodily Injury and Property Damage, including Contractual Liability, Personal Injury, Products and Completed Operations; and

(c) Commercial Automobile Liability Insurance with limits not less than $1,000,000 each occurrence Combined Single Limit for Bodily Injury and Property Damage, including Owned, Non-Owned and Hired auto coverage, as applicable.

11.2 Additional Requirements for General and Automobile Coverage. Commercial General Liability and Commercial Automobile Liability Insurance policies must be endorsed to provide:

(a) Name as Additional Insured the City and County of San Francisco, its Officers, Agents, and Employees.

(b) That such policies are primary insurance to any other insurance available to the Additional Insureds, with respect to any claims arising out of this Agreement, and that insurance applies separately to each insured against whom claim is made or suit is brought.

11.3 Additional Requirements Regarding Workers' Compensation. Regarding Workers’ Compensation, SUBRECIPIENT hereby agrees to waive subrogation which any insurer of SUBRECIPIENT may acquire from SUBRECIPIENT by virtue of the payment of any loss.

SUBRECIPIENT agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation. The Workers’ Compensation policy shall be endorsed with a waiver of subrogation in favor of the City for all work performed by the SUBRECIPIENT, its employees, agents and subcontractors.

11.4 Additional Requirements for All Policies. All policies shall provide thirty days’ advance written notice to the City of reduction or nonrenewal of coverages or cancellation of coverages for any reason. Notices shall be sent to the City address in Article 9, Notices and Other Communications.

11.5 Required Post-Expiration Coverage. Should any of the required insurance be provided under a claims-made form, SUBRECIPIENT shall maintain such coverage continuously throughout the term of this Agreement and, without lapse, for a period of three years beyond the expiration of this Agreement, to the effect that, should occurrences during the Agreement term give rise to claims made after expiration of the Agreement, such claims shall be covered by such claims-made policies.

11.6 General Annual Aggregate Limit/Inclusion of Claims Investigation or Legal Defense Costs.

Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit or provides that claims investigation or legal defense costs be included in such general annual aggregate limit, such general annual aggregate limit shall be double the occurrence or claims limits specified above.

11.7 Lapse in Insurance. Should any required insurance lapse during the term of this Agreement, requests for reimbursement originating after such lapse may not be processed, in the City's sole discretion, until the City receives satisfactory evidence of reinstated coverage as required by this Agreement, effective as of the lapse date. If insurance is not reinstated, the City may, at its sole option, terminate this Agreement effective on the date of such lapse of insurance.

11.8 Evidence of Insurance. Before commencing any operations or expending any Grant Funds under this Agreement, SUBRECIPIENT shall furnish to City certificates of insurance and additional insured policy endorsements with insurers with ratings comparable to A-, VIII or higher, that are authorized to do business in the State of California, and that are satisfactory to City, in form evidencing all coverages set forth above. Failure to maintain insurance shall constitute a material breach of this Agreement.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 19 of 21 JUNE 1, 2023

11.9 Effect of Approval. Approval of the insurance by City shall not relieve or decrease the liability of SUBRECIPIENT hereunder.

11.10 Insurance for Subcontractors and Evidence of this Insurance. If a subcontractor or subgrantee will be used to complete any portion of this Agreement, SUBRECIPIENT shall ensure that the subcontractor or subgrantee shall provide all necessary insurance and shall name the City and County of San Francisco, its officers, agents and employees and the SUBRECIPIENT as additional insureds.

11.11 Authority to Self-Insure. Nothing in this Agreement shall preclude SUBRECIPIENT from self- insuring all or part of the insurance requirement in this Article. However, SUBRECIPIENT shall provide proof of self-insurance, in a form acceptable to San Francisco, in the amounts of each line of self-insurance.

ARTICLE 12

COMPLIANCE

12.1 Nondiscrimination. In the performance of this Agreement, SUBRECIPIENT agrees not to discriminate against any employee, San Francisco employee working with SUBRECIPIENT or any subgrantee of SUBRECIPIENT, applicant for employment with SUBRECIPIENT or subgrantee of SUBRECIPIENT, or against any person seeking accommodations, advantages, facilities, privileges, services, or membership in all business, social, or other establishments or organizations, on the basis of the fact or perception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual orientation, gender identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status (AIDS/HIV status), or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes.

12.2 Conflict of Interest. Through its execution of this Agreement, SUBRECIPIENT acknowledges that it is familiar with the provisions of Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California, and certifies that it does not know of any facts which constitutes a violation of said provisions and agrees that it will immediately notify City if it becomes aware of any such fact during the term of this Agreement. SUBRECIPIENT agrees that it will promptly notify City in writing of all violations of State or Federal criminal law involving fraud, bribery, or gratuities affecting or involving the use of Grant Funds.

12.3 Compliance with ADA. SUBRECIPIENT acknowledges that, pursuant to the ADA, programs, services and other activities provided by a public entity to the public, whether directly or through a grantee or contractor, must be accessible to the disabled public. SUBRECIPIENT shall not discriminate against any person protected under the ADA in connection with all or any portion of the Grant Plan and shall comply at all times with the provisions of the ADA.

12.4 Prohibition on Political Activity with City Funds. In accordance with San Francisco Administrative Code Chapter 12G, SUBRECIPIENT may not participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure (collectively, “Political Activity”) in the performance of the services provided under this Agreement. SUBRECIPIENT agrees to comply with San Francisco Administrative Code Chapter 12G and any implementing rules and regulations promulgated by San Francisco’s Controller. The terms and provisions of Chapter 12G are incorporated herein by this reference. In the event Contractor violates the provisions of this section, San Francisco may, in addition to any other rights or remedies available hereunder, (i) terminate this Agreement, and (ii) prohibit SUBRECIPIENT from bidding on or receiving any new City contract for a period of two (2) years. The Controller will not consider SUBRECIPIENT’s use of profit as a violation of this section.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 20 of 21 JUNE 1, 2023

12.5 Submitting False Claims; Monetary Penalties. Pursuant to San Francisco Administrative Code §21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for the statutory penalties set forth in that section. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (a) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (b) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (c) conspires to defraud the City by getting a false claim allowed or paid by the City; (d) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (e) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA Page 21 of 21 JUNE 1, 2023 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first specified herein.

CITY AND COUNTY OF SAN FRANCISCO: CITY OF SANTA CLARA:

SAN FRANCISCO DEPARTMENT OF

EMERGENCY MANAGEMENT

By: By:

_____________________________________ _______________________________________ MARY ELLEN CARROLL JOVAN D. GROGAN

EXECUTIVE DIRECTOR CITY MANAGER

Federal Tax ID #: 94-6000426

Approved as to Form: Approved as to Form:

David Chiu
City Attorney

By: ___________________________________ By: ___________________________________ Christina Fletes-Romo Glen R. Googins
Deputy City Attorney City Attorney

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195 G
DocuSign ed by:
&~1 O!jit-~ii
93CD8C3AEAF847C ...

U
DocuSigned by:
(Msfi(A,O., fult,s-~~t>
A850801 BCF A0411 ...

FY 21 UASI – CITY OF SANTA CLARA A-1 JUNE 1, 2023
Appendix A — Authorized Expenditures and Timelines

ENTITY: CITY OF SANTA CLARA

Total allocation to be spent on the following solution areas:

Webgrants Grants
Number Program Description Due Dates

Solution Areas Amount
Project Title: Regional Center of Cyber Security Excellence Project Equipment - 2021 UASI NPP Webgrant #: TBD
Funds to purchase cyber security equipment.

Project
Completion date:
03/31/2024

Equipment

AEL# 04HW-030NETD,
AEL# 04SW-04-NETW,
AEL# 21GN-00-CNST,
AEL# 05NP-00-SIEM, &
AEL# 21GN-00-INST

PROJECT
NOT TO
EXCEED
$150,000
TOTAL

ALLOCATION

TOTAL NOT
TO EXCEED:
$150,000

EQUIPMENT
Reimbursement for Equipment Requires:
 An approved EHP memo, if applicable.
 A performance bond is required for any equipment item that exceeds $250,000, or for any vehicle, aircraft, or watercraft, regardless of the cost. Failure to obtain and submit a performance bond to the UASI may result in disallowance of cost.  As allowable under Federal guidelines, procurement of equipment must follow local policies and procedures for competitive purchasing (provided they are not in conflict with Federal regulations which supersede them). If sole source approval is needed, SUBRECIPIENT must transmit the request to the UASI for request to the State.  Prior to reimbursement, SUBRECIPIENT must submit all invoices, AEL numbers, and a list of all equipment ID numbers and the deployed locations.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA A-2 JUNE 1, 2023
 SUBRECIPIENT must inventory, type, organize and track all equipment purchased in order to facilitate the dispatch, deployment, and recovery of resources before, during, and after an incident. ________________________________________________________________________________________________________

 All requests for reimbursements must be submitted within 30 days of project completion unless an earlier deadline is set in this Appendix. SUBRECIPIENT should submit reimbursement requests on a quarterly basis, as applicable.
 Authorized expenditures must fall into one of the following categories: Planning, Organization, Equipment, Training, or Exercises. Descriptions of authorized expenditures are in the following documents:
 FY 2021 Homeland Security Grant Program Notice of Funding Opportunity:
https://www.fema.gov/sites/default/files/documents/FEMA_FY2021-HSGP-NOFO_02-19-21.pdf  California Supplement to the Federal Funding Opportunity Announcement, dated September 2021, available at https://www.caloes.ca.gov/GrantsManagementSite/Documents/FY%202021%20HSGP%20State%20Supplement.pdf as “FY 2021 Homeland Security Grant Program California Supplement to the Federal Notice of Funding Opportunity.”  Authorized Equipment List: http://www.fema.gov/authorized-equipment-list  Cal OES Rules and Regulations, including the Recipient Handbook:
https://www.caloes.ca.gov/GrantsManagementSite/Documents/2021_Subrecipient_Handbook.pdf  Any equipment purchased under this Agreement must match the UASI 2021 Grant Application Workbook. Any modification to the inventory list in that Workbook must receive prior written approval from by the Bay Area UASI Program Manager.

 No Management and Administration expenses are allowed, unless expressly identified and authorized in this Appendix.

 Sustainability requirements may apply to some or all of the grant funded projects or programs authorized in this Appendix. See Agreement, ¶3.12.

 All EHP documentation must be submitted and approved prior to any expenditure of funds requiring EHP submission.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-1 JUNE 1, 2023

Initials: _____

Appendix B-- Grant Assurances

Name of Jurisdiction: CITY OF SANTA CLARA
Name of Authorized Agent: Chris Jackson, Sr. IT Services Manager Address: 1500 Warburton Ave
City: Santa Clara State: CA Zip Code: 95050
Telephone Number: (408) 835-9020
E-Mail Address: [email protected]

As the duly authorized representative of the SUBRECIPIENT, I hereby certify that SUBRECIPIENT has the legal authority to apply for federal assistance and the institutional, managerial and financial capability (including funds sufficient to pay any non-federal share of project cost) to ensure proper planning, management, and completion of the project described in this application, within prescribed timelines.

I further acknowledge that SUBRECIPIENT is responsible for reviewing and adhering to all requirements within the:
(a) Applicable Federal Regulations (see below);
(b) Federal Program Notice of Funding Opportunity (NOFO); (c) Federal Preparedness Grants Manual;
(d) California Supplement to the NOFO; and
(e) Federal and State Grant Program Guidelines.

Federal Regulations
Government cost principles, uniform administrative requirements, and audit requirements for federal grant programs are set forth in Title 2, Part 200 of the Code of Federal Regulations (C.F.R.). Updates are issued by the Office of Management and Budget (OMB) and can be found at http://www.whitehouse.gov/omb/.

State and federal grant award requirements are set forth below. SUBRECIPIENT hereby agrees to comply with the following:

1. Proof of Authority
SUBRECIPIENT will obtain proof of authority from the city council, governing board, or authorized body in support of this project. This written authorization must specify that SUBRECIPIENT and the city council, governing board, or authorized body agree:
(a) To provide all matching funds required for the grant project and that any cash match will be appropriated as required;
(b) Any liability arising out of the performance of this agreement shall be the responsibility of DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-2 JUNE 1, 2023

Initials: _____

SUBRECIPIENT and the city council, governing board, or authorized body; (c) Grant funds shall not be used to supplant expenditures controlled by the city council, governing board, or authorized body;
(d) SUBRECIPIENT is authorized by the city council, governing board, or authorized body to apply for federal assistance, and the institutional, managerial and financial capability (including funds sufficient to pay the non-federal share of project cost, if any) to ensure proper planning, management and completion of the project described in this application; and
(e) Official executing this agreement is authorized by SUBRECIPIENT.

This Proof of Authority must be maintained on file and readily available upon request.

2. Period of Performance
The period of performance is specified in the Award. SUBRECIPIENT is only authorized to perform allowable activities approved under the award, within the period of performance.

3. Lobbying and Political Activities
As required by Section 1352, Title 31 of the United States Code (U.S.C.), for persons entering into a contract, grant, loan, or cooperative agreement from an agency or requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan, SUBRECIPIENT certifies that:

(a) No federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any federal grant, the making of any federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any federal contract, grant, loan, or cooperative agreement. (b) If any funds other than federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying”, in accordance with its instructions. (c) The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly.

SUBRECIPIENT will also comply with provisions of the Hatch Act (5 U.S.C. §§ 1501- 1508 and §§ 7324-7328) which limit the political activities of employees whose principal employment activities are funded in whole or in part with federal funds.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-3 JUNE 1, 2023

Initials: _____

Finally, SUBRECIPIENT agrees that federal funds will not be used, directly or indirectly, to support the enactment, repeal, modification or adoption of any law, regulation or policy without the express written approval from the California Governor’s Office of Emergency Services (Cal OES) or the federal awarding agency.

4. Debarment and Suspension
As required by Executive Orders 12549 and 12689, and 2 C.F.R. § 200.214 and codified in 2 C.F.R. Part 180, Debarment and Suspension, SUBRECIPIENT will provide protection against waste, fraud, and abuse by debarring or suspending those persons deemed irresponsible in their dealings with the federal government. SUBRECIPIENT certifies that it and its principals, recipients, or subrecipients:

(a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any federal department or agency; (b) Have not within a three-year period preceding this application been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (federal, state, or local) transaction or contract under a public transaction; violation of federal or state antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (federal, state, or local) with commission of any of the offenses enumerated in paragraph (2)(b) of this certification; and (d) Have not within a three-year period preceding this application had one or more public transaction (federal, state, or local) terminated for cause or default.

Where SUBRECIPIENT is unable to certify to any of the statements in this certification, he or she shall attach an explanation to this application.

5. Non-Discrimination and Equal Employment Opportunity
SUBRECIPIENT will comply with all state and federal statutes relating to non- discrimination, including:

(a) Title VI of the Civil Rights Act of 1964 (Public Law (P.L.) 88-352 and 42 U.S.C. § 2000d et. seq.) which prohibits discrimination on the basis of race, color, or national origin and requires that recipients of federal financial assistance take reasonable steps to provide meaningful access to persons with limited English proficiency (LEP) to their programs and services;
(b) Title IX of the Education Amendments of 1972, (20 U.S.C. §§ 1681-1683, and 1685- 1686), which prohibits discrimination on the basis of sex in any federally funded educational program or activity;
(c) Section 504 of the Rehabilitation Act of 1973, (29 U.S.C. § 794), which prohibits discrimination against those with disabilities or access and functional needs; (d) Americans with Disabilities Act (ADA) of 1990 (42 U.S.C. §§ 12101- 12213), which DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-4 JUNE 1, 2023

Initials: _____

prohibits discrimination on the basis of disability and requires buildings and structures be accessible to those with disabilities and access and functional needs; (e) Age Discrimination Act of 1975, (42 U.S.C. §§ 6101-6107), which prohibits discrimination on the basis of age;
(f) Public Health Service Act of 1912 (42 U.S.C. §§ 290 dd—2), relating to confidentiality of patient records regarding substance abuse treatment; (g) Title VIII of the Civil Rights Act of 1968 (42 U.S.C. § 3601 et seq.), relating to nondiscrimination in the sale, rental or financing of housing as implemented by the Department of Housing and Urban Development at 24 C.F.R. Part100. The prohibition on disability discrimination includes the requirement that new multifamily housing with four or more dwelling units—i.e., the public and common use areas and individual apartment units (all units in buildings with elevators and ground-floor units in buildings without elevators)— be designed and constructed with certain accessible features (See 24 C.F.R. § 100.201);
(h) Executive Order 11246, which prohibits federal contractors and federally assisted construction contractors and subcontractors, who do over $10,000 in Government business in one year from discriminating in employment decisions on the basis of race, color, religion, sex, sexual orientation, gender identification or national origin; (i) Executive Order 11375, which bans discrimination on the basis of race, color, religion, sex, sexual orientation, gender identification, or national origin in hiring and employment in both the United States federal workforce and on the part of government contractors; (j) California Public Contract Code § 10295.3, which prohibits discrimination based on domestic partnerships and those in same sex marriages;
(k) DHS policy to ensure the equal treatment of faith-based organizations, under which all SUBRECIPIENTs and recipients must comply with equal treatment policies and requirements contained in 6 C.F.R. Part 19;
(l) SUBRECIPIENT will comply with California’s Fair Employment and Housing Act (FEHA) (California Government Code §§12940, 12945, 12945.2), as applicable. FEHA prohibits harassment and discrimination in employment because of ancestry, familial status, race, color, religious creed (including religious dress and grooming practices), sex (which includes pregnancy, childbirth, breastfeeding and medical conditions related to pregnancy, childbirth or breastfeeding), gender, gender identity, gender expression, sexual orientation, marital status, national origin, ancestry, mental and physical disability, genetic information, medical condition, age, pregnancy, denial of medical and family care leave, or pregnancy disability leave, military and veteran status, and/or retaliation for protesting illegal discrimination related to one of these categories, or for reporting patient abuse in tax supported institutions;
(m) Any other nondiscrimination provisions in the specific statute(s) under which application for federal assistance is being made; and
(n) The requirements of any other nondiscrimination statute(s) that may apply to this application.

6. Drug-Free Workplace
DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-5 JUNE 1, 2023

Initials: _____

As required by the Drug-Free Workplace Act of 1988 (41 U.S.C. § 701 et seq.), SUBRECIPIENT certifies that it will maintain a drug-free workplace and a drug-free awareness program as outlined in the Act.

7. Environmental Standards
SUBRECIPIENT will comply with state and federal environmental standards, including:
(a) California Environmental Quality Act (CEQA) (California Public Resources Code §§ 21000- 21177), to include coordination with the city or county planning agency; (b) CEQA Guidelines (California Code of Regulations, Title 14, Division 6, Chapter 3, §§ 15000- 15387);
(c) Federal Clean Water Act (CWA) (33 U.S.C. § 1251 et seq.), which establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters;
(d) Federal Clean Air Act of 1955 (42 U.S.C. § 7401) which regulates air emissions from stationary and mobile sources;
(e) Institution of environmental quality control measures under the National Environmental Policy Act (NEPA) of 1969 (P.L. 91-190); the Council on Environmental Quality Regulations for Implementing the Procedural Provisions of NEPA; and Executive Order 12898 which focuses on the environmental and human health effects of federal actions on minority and low-income populations with the goal of achieving environmental protection for all communities;
(f) Evaluation of flood hazards in floodplains in accordance with Executive Order 11988; (g) Executive Order 11514 which sets forth national environmental standards; (h) Executive Order 11738 instituted to assure that each federal agency empowered to enter into contracts for the procurement of goods, materials, or services and each federal agency empowered to extend federal assistance by way of grant, loan, or contract shall undertake such procurement and assistance activities in a manner that will result in effective enforcement of the Clean Air Act and the Federal Water Pollution Control Act Executive Order 11990 which requires preservation of wetlands; (i) The Safe Drinking Water Act of 1974, (P.L. 93-523); (j) The Endangered Species Act of 1973, (P.L. 93-205);
(k) Assurance of project consistency with the approved state management program developed under the Coastal Zone Management Act of 1972 (16 U.S.C. §§1451 et seq.); (l) Conformity of Federal Actions to State (Clear Air) Implementation Plans under Section 176(c) of the Clean Air Act of 1955, as amended (42 U.S.C. §§7401 et seq.); (m) Wild and Scenic Rivers Act of 1968 (16 U.S.C. § 1271 et seq.) related to protecting components or potential components of the national wild and scenic rivers system.

SUBRECIPIENT shall not be: 1) in violation of any order or resolution promulgated by the State Air Resources Board or an air pollution district; 2) subject to a cease and desist order pursuant to § 13301 of the California Water Code for violation of waste discharge requirements or discharge prohibitions; or 3) determined to be in violation of federal law relating to air or water pollution.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-6 JUNE 1, 2023

Initials: _____

8. Audits
For subrecipients expending $750,000 or more in federal grant funds annually, SUBRECIPIENT will cause to be performed the required financial and compliance audits in accordance with the Single Audit Act Amendments of 1996 and Title 2 of the Code of Federal Regulations, Part 200, Subpart F Audit Requirements.

9. Cooperation and Access to Records
SUBRECIPIENT must cooperate with any compliance reviews or investigations conducted by DHS. In accordance with 2 C.F.R. § 200.337, SUBRECIPIENT will give the awarding agency, the Comptroller General of the United States and, if appropriate, the state, through any authorized representative, access to and the right to examine all records, books, papers, or documents related to the award. SUBRECIPIENT will require any subrecipients, contractors, successors, transferees and assignees to acknowledge and agree to comply with this provision.

10. Conflict of Interest
SUBRECIPIENT will establish safeguards to prohibit SUBRECIPIENT’s employees from using their positions for a purpose that constitutes or presents the appearance of personal or organizational conflict of interest, or personal gain.

11. Financial Management
False Claims for Payment - SUBRECIPIENT will comply with 31 U.S.C §§ 3729-3733 which sets forth that no subrecipient, recipient, or subrecipient shall submit a false claim for payment, reimbursement or advance.

12. Reporting - Accountability
SUBRECIPIENT agrees to comply with applicable provisions of the Federal Funding Accountability and Transparency Act (FFATA) (P.L. 109-282), specifically (a) the reporting of subawards obligating $30,000 or more in federal funds and (b) executive compensation data for first-tier subawards. This includes the provisions of FFATA, which includes requirements for executive compensation, and also requirements implementing the Act for the non-federal entity at 2 C.F.R. Part 25 Financial Assistance Use of Universal Identifier and Central Contractor Registration and 2 C.F.R. Part 170 Reporting Subaward and Executive Compensation Information.

13. Whistleblower Protections
SUBRECIPIENT also must comply with statutory requirements for whistleblower protections at 10 U.S.C. § 2409, 41 U.S.C. § 4712, and 10 U.S.C. § 2324, 41 U.S.C. § 4304 and § 4310.

14. Human Trafficking
SUBRECIPIENT will comply with the requirements of Section 106(g) of the Trafficking Victims Protection Act of 2000, as amended (22 U.S.C. § 7104) which prohibits grant award recipients or a subrecipient from: (1) engaging in trafficking in persons during the period of DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-7 JUNE 1, 2023

Initials: _____

time that the award is in effect; (2) procuring a commercial sex act during the period of time that the award is in effect; (3) using forced labor in the performance of the award or subawards under the award.

15. Labor Standards
SUBRECIPIENT will comply with the following federal labor standards:
(a) The Davis-Bacon Act (40 U.S.C. §§ 276a to 276a-7), as applicable, and the Copeland Act (40 U.S.C. § 3145 and 18 U.S.C. § 874) and the Contract Work Hours and Safety Standards Act (40 U.S.C. §§ 327-333), regarding labor standards for federally-assisted construction contracts or subcontracts, and
(b) The Federal Fair Labor Standards Act (29 U.S.C. § 201 et al.) as they apply to employees of institutes of higher learning (IHE), hospitals and other non-profit organizations.

16. Worker’s Compensation
SUBRECIPIENT must comply with provisions which require every employer to be insured to protect workers who may be injured on the job at all times during the performance of the work of this Agreement, as per the workers compensation laws set forth in California Labor Code §§ 3700 et seq.

17. Property-Related
If applicable to the type of project funded by this federal award, the SUBRECIPIENT will:
(a) Comply with the requirements of Titles II and III of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (P.L. 91-646) which provide for fair and equitable treatment of persons displaced or whose property is acquired as a result of federal or federally-assisted programs. These requirements apply to all interests in real property acquired for project purposes regardless of federal participation in purchase; (b) Comply with flood insurance purchase requirements of Section 102(a) of the Flood Disaster Protection Act of 1973 (P.L. 93-234) which requires subrecipients in a special flood hazard area to participate in the program and to purchase flood insurance if the total cost of insurable construction and acquisition is $10,000 or more; (c) Assist the awarding agency in assuring compliance with Section 106 of the (d) National Historic Preservation Act of 1966, as amended (16 U.S.C. § 470), Executive Order 11593 (identification and protection of historic properties), and the Archaeological and Historic Preservation Act of 1974 (16 U.S.C. §469a-1 et seq.); and (e) Comply with the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. § 4831 and 24 CFR Part 35) which prohibits the use of lead-based paint in construction or rehabilitation of residence structures.

18. Certifications Applicable Only to Federally-Funded Construction Projects For all construction projects, SUBRECIPIENT will:
(a) Not dispose of, modify the use of, or change the terms of the real property title or other interest in the site and facilities without permission and instructions from the awarding agency. Will record the federal awarding agency directives and will include a covenant in DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-8 JUNE 1, 2023

Initials: _____

the title of real property acquired in whole or in part with federal assistance funds to assure nondiscrimination during the useful life of the project; (b) Comply with the requirements of the awarding agency with regard to the drafting, review and approval of construction plans and specifications; and (c) Provide and maintain competent and adequate engineering supervision at the construction site to ensure that the complete work conforms with the approved plans and specifications and will furnish progressive reports and such other information as may be required by the assistance awarding agency or State.

19. Use of Cellular Device While Driving is Prohibited
SUBRECIPIENT is required to comply with California Vehicle Code sections 23123 and 23123.5. These laws prohibit driving motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication. Drivers are also prohibited from the use of a wireless telephone without hands-free listening and talking, unless to make an emergency call to 911, law enforcement, or similar services.

20. California Public Records Act and Freedom of Information Act SUBRECIPIENT acknowledges that all information submitted in the course of applying for funding under this program, or provided in the course of an entity’s grant management activities that are under Federal control, is subject to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, and the California Public Records Act, California Government Code section 6250 et seq. SUBRECIPIENT should consider these laws and consult its own State and local laws and regulations regarding the release of information when reporting sensitive matters in the grant application, needs assessment, and strategic planning process.

HOMELAND SECURITY GRANT PROGRAM (HSGP) –

PROGRAM SPECIFIC ASSURANCES / CERTIFICATIONS

21. Acknowledgment of Federal Funding from DHS
All recipients must acknowledge their use of federal funding when issuing statements, press releases, requests for proposals, bid invitations, and other documents describing projects or programs funded in whole or in part with federal funds.

22. Activities Conducted Abroad
All recipients must ensure that project activities carried on outside the United States are coordinated as necessary with appropriate government authorities and that appropriate licenses, permits, or approvals are obtained.

23. Best Practices for Collection and Use of Personally Identifiable Information (PII) DHS defines personally identifiable information (PII) as any information that permits the identity of an individual to be directly or indirectly inferred, including any information that is linked or linkable to that individual. All recipients who collect PII are required to have a publicly-available privacy policy that describes standards on the usage and maintenance of PII they collect. Recipients may also find the DHS Privacy Impact Assessments: Privacy DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-9 JUNE 1, 2023

Initials: _____

Guidance and Privacy template a useful resource respectively.

24. Copyright
All recipients must affix the applicable copyright notices of 17 U.S.C. §§ 401 or 402 and an acknowledgement of U.S. Government sponsorship (including the award number) to any work first produced under federal financial assistance awards.

25. Duplication of Benefits
Any cost allocable to a particular federal financial assistance award provided for in 2 C.F.R.

Part 200, Subpart E may not be charged to other federal financial assistance awards to overcome fund deficiencies, to avoid restrictions imposed by federal statutes, regulations, or federal financial assistance award terms and conditions, or for other reasons. However, these prohibitions would not preclude recipients from shifting costs that are allowable under two or more awards in accordance with existing federal statutes, regulations, or the federal financial assistance award terms and conditions.

26. Energy Policy and Conservation Act
All recipients must comply with the requirements of 42 U.S.C. § 6201 which contain policies relating to energy efficiency that are defined in the state energy conservation plan issued in compliance with this Act.

27. Federal Debt Status
All recipients are required to be non-delinquent in their repayment of any federal debt.

Examples of relevant debt include delinquent payroll and other taxes, audit disallowances, and benefit overpayments. See OMB Circular A-129.

28. Fly America Act of 1974
All recipients must comply with Preference for U.S. Flag Air Carriers: (air carriers holding certificates under 49 U.S.C. § 41102) for international air transportation of people and property to the extent that such service is available, in accordance with the International Air Transportation Fair Competitive Practices Act of 1974 (49 U.S.C. § 40118) and the interpretative guidelines issued by the Comptroller General of the United States in the March 31, 1981, amendment to Comptroller General Decision B- 138942.

29. Hotel and Motel Fire Safety Act of 1990
In accordance with Section 6 of the Hotel and Motel Fire Safety Act of 1990, all SUBRECIPIENTs must ensure that all conference, meeting, convention, or training space funded in whole or in part with federal funds complies with the fire prevention and control guidelines of the Federal Fire Prevention and Control Act of 1974, as amended, 15 U.S.C. § 2225a.

30. Non-supplanting Requirement
All recipients who receive federal financial assistance awards made under programs that prohibit supplanting by law must ensure that federal funds do not replace (supplant) funds DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-10 JUNE 1, 2023

Initials: _____

that have been budgeted for the same purpose through non- federal sources.

31. Patents and Intellectual Property Rights
Unless otherwise provided by law, recipients are subject to the Bayh-Dole Act, Pub. L. No. 96-517, as amended, and codified in 35 U.S.C. § 200 et seq. All recipients are subject to the specific requirements governing the development, reporting, and disposition of rights to inventions and patents resulting from financial assistance awards located at 37 C.F.R. Part 401 and the standard patent rights clause located at 37 C.F.R. § 401.14.

32. SAFECOM
All recipients who receive federal financial assistance awards made under programs that provide emergency communication equipment and its related activities must comply with the SAFECOM Guidance for Emergency Communication Grants, including provisions on technical standards that ensure and enhance interoperable communications.

33. Terrorist Financing
All recipients must comply with Executive Order 13224 and U.S. law that prohibit transactions with, and the provisions of resources and support to, individuals and organizations associated with terrorism. Recipients are legally responsible to ensure compliance with the Order and laws.

34. Reporting of Matters Related to Recipient Integrity and Performance If the total value of the recipient’s currently active grants, cooperative agreements, and procurement contracts from all federal assistance offices exceeds $10,000,000 for any period of time during the period of performance of this federal financial assistance award, you must comply with the requirements set forth in the government-wide Award Term and Condition for Recipient Integrity and Performance Matters located at 2 C.F.R. Part 200, Appendix XII, the full text of which is incorporated here by reference in the award terms and conditions.

35. USA Patriot Act of 2001
All recipients must comply with requirements of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act), which amends 18 U.S.C. §§ 175–175c.

36. Use of DHS Seal, Logo, and Flags
All recipients must obtain permission from their DHS Financial Assistance Office, prior to using the DHS seal(s), logos, crests or reproductions of flags or likenesses of DHS agency officials, including use of the United States Coast Guard seal, logo, crests or reproductions of flags or likenesses of Coast Guard officials.

37. Performance Goals
In addition to the Biannual Strategy Implementation Report submission requirements outlined in the Preparedness Grants Manual, subrecipients must demonstrate how the grant- funded project addresses the core capability gap associated with each project and identified DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 21 UASI – CITY OF SANTA CLARA B-11 JUNE 1, 2023

Initials: _____

in the Threat and Hazard Identification and Risk Analysis or Stakeholder Preparedness Review or sustains existing capabilities, as applicable. The capability gap reduction or capability sustainment must be addressed in the Project Description of the BSIR for each project.

38. Applicability of DHS Standard Terms and Conditions to Tribes The DHS Standard Terms and Conditions are a restatement of general requirements imposed upon recipients and flow down to subrecipients as a matter of law, regulation, or executive order. If the requirement does not apply to Indian tribes or there is a federal law or regulation exempting its application to Indian tribes, then the acceptance by Tribes of, or acquiescence to, DHS Standard Terms and Conditions does not change or alter its inapplicability to an Indian tribe. The execution of grant documents is not intended to change, alter, amend, or impose additional liability or responsibility upon the Tribe where it does not already exist.

IMPORTANT
The purpose of the assurance is to obtain federal and state financial assistance, including any and all federal and state grants, loans, reimbursement, contracts, etc. SUBRECIPIENT recognizes and agrees that state financial assistance will be extended based on the representations made in this assurance. This assurance is binding on the SUBRECIPIENT, its successors, transferees, assignees, etc. Failure to comply with any of the above assurances may result in suspension, termination, or reduction of grant funds.

All appropriate documentation, as outlined above, must be maintained on file by SUBRECIPIENT and available for Cal OES or public scrutiny upon request. Failure to comply with these requirements may result in suspension of payments under the grant or termination of the grant or both and the subrecipient may be ineligible for award of any future grants if the Cal OES determines that any of the following has occurred: (1) the recipient has made false certification, or (2) violates the certification by failing to carry out the requirements as noted above.

All of the language contained within this document must be included in the award documents for all subawards at all tiers. All recipients are bound by the Department of Homeland Security Standard Terms and Conditions 2021, Version 11.4, hereby incorporated by reference, which can be found at: https://www.dhs.gov/publication/fy15-dhs-standard-terms-and-conditions.

The undersigned represents that he/she is authorized by SUBRECIPIENT to enter into this agreement for and on behalf of SUBRECIPIENT.

Signature of Authorized Agent:

Printed Name of Authorized Agent:

Title: Date:

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195 July 11, 2023 | 4:05 PM PDTCity Manager
Jovan D. Grogan

FY 2021 UASI – CITY OF SANTA CLARA C-1 JUNE 1, 2023

Appendix C -- Form of Reimbursement Request

REIMBURSEMENT REQUEST

Date: __________________

UASI Management Team
1663 Mission St, Suite 320
San Francisco, CA 94103

Re: FY 21 UASI Grant Reimbursement Request

Pursuant to Section 3.10 of the “Agreement between the City and County of San Francisco and the CITY OF SANTA CLARA for the Distribution of FY 2021 UASI Grant Funds” (the "Agreement"), dated JUNE 1, 2023 between the CITY OF SANTA CLARA (“SUBRECIPIENT”) and the City and County of San Francisco, SUBRECIPIENT hereby requests reimbursement as follows:

Total Amount of
Reimbursement
Requested in this
Request:

$_______________

Maximum Amount of
Funds Specified in
Section 3.2 of the
Agreement:

$_______________

Total of All Funds
Disbursed Prior to this
Request:

$_______________

SUBRECIPIENT certifies that:

(a) The total amount of funds requested pursuant to this Reimbursement Request will be used to reimburse SUBRECIPIENT for Authorized Expenditures, which expenditures are set forth on the attached Schedule 1, to which are attached true and correct copies of all required documentation of such expenditures.

(b) After giving effect to the disbursement requested pursuant to this Reimbursement Request, the Funds disbursed as of the date of this disbursement will not exceed the maximum amount set forth in Section 3.2 of the Agreement, or the not to exceed amounts specified in Appendix A for specific projects and programs.

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 2021 UASI – CITY OF SANTA CLARA C-2 JUNE 1, 2023

(c) The representations, warranties and certifications made in the Agreement are true and correct in all material respects as if made on the date hereof, and SUBRECIPIENT is in compliance with all Grant Assurances in Appendix B of the Agreement. Furthermore, by signing this report, SUBRECIPIENT certifies to the best of their knowledge and belief that the report is true, complete and accurate and expenditures, disbursements, and cash receipts are for the purpose and objectives set forth in the terms and conditions of the federal award. SUBRECIPIENT is aware that any false, fictitious or fraudulent information or the omission of any material fact, may subject SUBRECIPIENT to criminal civil or administrative penalties for fraud, false statements, false claims or otherwise.

(d) No Event of Default has occurred and is continuing.

(e) The undersigned is an officer of SUBRECIPIENT authorized to execute this Reimbursement Request on behalf of SUBRECIPIENT.

Signature of Authorized Agent: ______________________________________________

Printed Name of Authorized Agent: ___________________________________________

Title: ____________________________________ Date: __________________________

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195

FY 2021 UASI – CITY OF SANTA CLARA C-3 JUNE 1, 2023

SCHEDULE 1 TO REQUEST FOR REIMBURSEMENT
The following is an itemized list of Authorized Expenditures for which reimbursement is requested:

The following are attached as part of this Schedule 1 (Please check items that are applicable):

Equipment:

☐ Invoice
☐ Cleared Check Payment
☐ Purchase Order
☐ Packing Slip
☐ EHP Approval
☐ Watercraft or Aviation
☐ Sole Source
☐ Performance Bond
☐ Equipment Ledger (Please submit electronic copy to Grants Specialist)

For inquiries/questions, please contact:

Phone #: Email: ___________________ Print Name

Project

Payee

Amount

Description
If final claim
for project,
check box

☐

DocuSign Envelope ID: B8CD02F7-55B1-4186-B736-880E154D2195 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-937 Agenda Date: 9/19/2023

REPORT TO STADIUM AUTHORITY BOARD

SUBJECT
Report on the Audited Santa Clara Stadium Authority Fiscal Year 2022/23 Annual Financial Statements

BOARD PILLAR
Ensure Compliance with Measure J and Manage Levi’s Stadium

BACKGROUND
The Santa Clara Stadium Authority (Stadium Authority), the Stadium Funding Trust, and Goldman Sachs Bank USA entered into a Credit Agreement on June 19, 2013. Section 5.1(a) of the Credit Agreement requires that the Stadium Authority Annual Financial Statements be audited by independent certified public accountants within 180 days after the end of each fiscal year. On June 25, 2021, the Stadium Authority entered into a professional services agreement with KPMG, LLP (KPMG) to perform the annual financial audit of the Stadium Authority’s Fiscal Year 2022/23 Annual Financial Statements.

The Annual Financial Statements include: (1) the Independent Auditors’ Report which describes the auditors’ responsibility and their opinion of the Financial Statements, (2) Management’s Discussion and Analysis which provides an overall review of the Stadium Authority’s financial activities, (3) the Basic Financial Statements, and (4) the Notes to the Financial Statements which have additional information pertaining to the Stadium Authority’s operations and financial position.

The Audit Committee met with Stadium Authority and KPMG staff on August 30, 2023 to review the draft Stadium Authority Fiscal Year 2022/23 Annual Financial Statements. The role of the Audit Committee is to provide oversight of the Stadium Authority’s financial reporting processes, internal controls and independent auditors. At this meeting, Stadium Authority staff provided an overview of the Financial Statements and KPMG discussed the audit process and the audit results. Stadium Authority and KPMG staff also responded to questions relating to the financial results of the annual report. The Audit Committee accepted the Financial Statements and recommended that the Stadium Authority note and file the report at the September 19, 2023 Council and Authorities Concurrent Meeting. A finalized clean audit letter from KPMG is included in the financial statements attached to this report. To allow for adequate time for review, the Financial Statements were posted to the Stadium Authority’s website on September 12, 2023 at the following link:
https://www.santaclaraca.gov/our-city/santa-clara-stadium-authority/financial-reports The Financial Statements being discussed with this report cover the Stadium Authority’s 2022/23 fiscal year, which spans from April 1, 2022 to March 31, 2023.

City of Santa Clara Printed on 9/15/2023Page 1 of 3
powered by Legistar™
23-937 Agenda Date: 9/19/2023

DISCUSSION
On September 11, 2023, KPMG completed the financial audit of the Stadium Authority which resulted in the issuance of the Stadium Authority Fiscal Year 2022/23 Annual Financial Statements (Attachment 1), Internal Controls and Compliance Letter (Attachment 2) as required per the Stadium Authority debt covenants, and Independent Auditors’ Report (Attachment 3). KPMG expressed an unmodified (i.e., “clean”) opinion on the Financial Statements. An unmodified opinion is when the auditor concludes that the financial condition, position, and operations are fairly presented, and the financial statements are free of material misstatements.

Key financial highlights for the fiscal year ended March 31, 2023 are as follows:
· The carrying value of Levi’s Stadium, net of depreciation, is $683,106,548. · During the fiscal year, there were twelve National Football League (NFL) games, seven ticketed non-NFL events, and sixty-nine smaller special events held at Levi’s Stadium. · The Stadium Authority recognized $72,153,423 in operating revenue and $49,065,823 in operating expenses.
· Revenues from the non-NFL events were $19,574,275 and the related expenses were $10,765,108 resulting in net non-NFL event profit of $8,809,167. · Debt service payments during the fiscal year totaled $48,589,277. Overall remaining outstanding debt was reduced by $35,038,955.
· The City of Santa Clara (City) received $460,000 for stadium ground rent and $250,000 in senior and youth fees.

At the August 30, 2023 Audit Committee meeting, KPMG provided a summary of the methodology used to review and validate the financial statements. Subsequent to that meeting and financial statements draft, KPMG advised on several presentation changes that included a change to a prior year presentation to reflect the implementation of Governmental Accounting Standards Board (GASB) Statement 87, Leases. The changes did not have any effect on the bottom line of the financial statements. Below is a list of changes made incorporated to the final draft:
· Added additional supplemental noncash operating and capital financing activities in the statement of cash flow on page 12 to provide additional data on noncash items within the statements of cash flows.
· Recategorized the presentation of operating income, depreciation, and lease revenues at the reconciliation of operating income to cash provided by operating activities in the Fiscal Year 2021/2022 statements of cash flows on page 12 to reflect the implementation of GASB 87 presentation.
· Revised the presentation of the beginning balances for GASB 87 items to be on March 31, 2021 rather than as an addition item during the year at Note 2k. This was changed for lease liability (page 19), right-to-use leased assets (page 19), lease receivable (page 21), and deferred inflows leases related (page 21).
· Added Fiscal Year 2021/2022’s ending outstanding loan balance for Term A (page 26) and Management Company Revolving Loan (page 27).
· Revised the future estimated interest table in the long-term debt maturities section (page 28) to reflect the most recent estimates.

KPMG issued a final report on September 11, 2023 with no changes to the financial statements.

City of Santa Clara Printed on 9/15/2023Page 2 of 3
powered by Legistar™
23-937 Agenda Date: 9/19/2023

ENVIRONMENTAL REVIEW
This agenda not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15060(c)(1) as the it does not involve the exercise of discretionary powers by a public agency;

FISCAL IMPACT
Costs associated with the preparation of this report are included in the Stadium Authority Operating Budget.

COORDINATION
This report has been coordinated with the Stadium Authority Counsel’s Office.

RECOMMENDATION
Note and file the Santa Clara Stadium Authority Fiscal Year 2022/23 Annual Financial Statements.

Reviewed by: Kenn Lee, Treasurer
Approved by: Jōvan D. Grogan, Executive Director

ATTACHMENTS

1. Santa Clara Stadium Authority Financial Statements

2. Internal Controls and Compliance Letter

3. Independent Auditors’ Report (Debt Compliance Letter) City of Santa Clara Printed on 9/15/2023Page 3 of 3
powered by Legistar™
~

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Financial Statements
March 31, 2023 and 2022
(With Independent Auditors' Report Thereon)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Table of Contents
Independent Auditors' Report
Management's Discussion and Analysis (Unaudited)
Basic Financial Statements:

Statements of Net Position
Statements of Revenues, Expenses, and Changes in Net Position Statements of Cash Flows
Notes to Financial Statements
Page
4 10
11 12
13 ~
The Board of Directors
Santa Clara Stadium Authority:

KPMG LLP
500 Capitol Mall, Ste 2100
Sacramento, CA 95814-4754
Independent Auditors' Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of the Santa Clara Stadium Authority (the Stadium Authority), a component of the City of Santa Clara, as of and for the years ended March 31, 2023 and 2022, and the related notes to the financial statements, which collectively comprise the Stadium Authority's basic financial statements for the years then ended as listed in the table of contents.

In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Stadium Authority as of March 31, 2023 and 2022, and the changes in its financial position and its cash flows for the years then ended in accordance with U.S. generally accepted accounting principles.

Basis for Opinion
We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Stadium Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Emphasis of Matter
As discussed in Note 2 of the financial statements, during the year ended March 31, 2023, the Stadium Authority adopted new accounting standard, Governmental Accounting Standards Board Statement No. 87, Leases. The statement was adopted retroactively to the earliest year presented in the financial statements. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with U.S. generally accepted accounting principles, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Stadium Authority's ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditors' Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Stadium Authority's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Stadium Authority's ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit.

Required Supplementary Information
U.S. generally accepted accounting principles require that the management's discussion and analysis be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 11, 2023 on our consideration of the Stadium Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters.

The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Stadium Authority's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Stadium Authority's internal control over financial reporting and compliance.

Sacramento, California
September 11, 2023
3 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Management's Discussion and Analysis (Unaudited)
March 31, 2023 and 2022
The management's discussion and analysis of the Santa Clara Stadium Authority (Stadium Authority) provides an overall review of the Stadium Authority's financial activities for the fiscal years ended March 31, 2023 and 2022. The intent of this discussion and analysis is to look at the Stadium Authority's financial performance as a whole. Readers should review the discussion and analysis in conjunction with the basic financial statements, including the notes to the basic financial statements to enhance their understanding of the Stadium Authority's financial performance.

The Stadium Authority has elected to provide comparative financial statements to better assist the reader. The Stadium Authority's fiscal year runs from April 1 through March 31 to conform to the fiscal year of the Stadium Funding Trust (FinanceCo). The Stadium Authority is a component unit of the City of Santa Clara, California (City) whose fiscal year is July 1 through June 30.

The Stadium Authority exists as a public body, separate and distinct from the City. It was established to provide for development and operation of Levi's Stadium.

Financial Highlights
Key financial highlights for the fiscal year ended March 31, 2023 are as follows:
• The carrying value of Levi's Stadium at March 31, 2023, net of depreciation, is $683,106,548. • During the fiscal year, there were twelve National Football League (NFL) games, seven ticketed Non-NFL events, and sixty-nine smaller special events held at Levi's Stadium. • The Stadium Authority recognized $72,153,423 in operating revenue and $49,065,823 in operating expenses.
• The revenues from the Non-NFL events were $19,574,275 and the related expenses were $10,765,108 resulting in net Non-NFL event profit of $8,809,167.
• Debt service payments during the fiscal year totaled $48,589,277. Overall remaining outstanding debt was reduced by $35,038,955. The Stadium Authority also paid off the StadCo Subordinated Loan during the year.
• The assets of the Stadium Authority exceeded its liabilities by $109,570,809 due to income from the operation of Levi's Stadium.
• The City received $460,000 for stadium ground rent. Additionally, the City is required to be fully reimbursed for all of its administration and public safety costs by either the Stadium Authority for Non-NFL events or Forty Niners SC Stadium Company LLC (StadCo) for NFL events.

Overview of the Financial Statements
This annual report consists of a series of financial statements and the notes to those statements. These statements are organized so the reader can understand the Stadium Authority as a financial whole. The basic financial statements provide both a short-term and long-term view of the Stadium Authority's financial activities and financial position.

The basic financial statements are comprised of the statements of net position, the statements of revenues, expenses, and changes in net position, the statements of cash flows, and the notes to the financial statements.

The statements of net position provide information about the financial position of the Stadium Authority as a 4 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Management's Discussion and Analysis (Unaudited)
March 31, 2023 and 2022
whole, including all of its long-term liabilities on the full accrual basis. The statements of revenues, expenses, and changes in net position provide information about all revenue and expenses. The statements of cash flows provides information about cash activities for the period.

During the fiscal year ended March 31, 2023, the Stadium Authority implemented Governmental Accounting Standards Board (GASB) Statement No. 87 (GASB 87), Leases, which requires the Stadium Authority to recognize leases receivable and deferred inflows of resources related to lease arrangements where the Stadium Authority is a lessor. Further, the Stadium Authority is required to recognize a lease liability and an intangible right-to-use leased asset for lease arrangements where the Stadium Authority is a lessee. Fiscal year 2021-22 balances were adjusted as detailed in Note 2(k) of the basic financial statements. Fiscal year 2020-21 balances within this Management's Discussion and Analysis were not adjusted for the implementation of this GASB statement.

Financial Analysis of the Stadium Authority as a Whole
The Stadium Authority's net position at March 31, 2023, March 31, 2022, and March 31, 2021 is as follows:

FY2022 FY2023 FY2022
as adjusted increase increase
FY2023 Note 2k FY2021 (decrease) (decrease)
Assets:

Capital assets $ 689,075,880 702,507,201 718,014,273 (13,431,321) (15,507,072) Other assets 754,629,883 754,451,912 104,012,504 177,971 650,439,408 Total assets $ 1,443,705,763 1,456,959,113 822,026,777 (13,253,350) 634,932,336 Liabilities:

Current unearned re1.1enue $ 16,374,980 15,076,480 14,871,452 1,298,500 205,028 Other current liabilities 23,402,762 27,583,178 29,128,592 (4,180,416) (1,545,414) Long-term unearned re1.1enue 432,484,579 425,271,742 416,092,910 7,212,837 9,178,832 Other long-term liabilities 266,286,566 296,666,155 284,264,912 (30,379,589) 12,401,243 Total liabilities 738,548,887 764,597,555 744,357,866 (26,048,668) 20,239,689 Deferred inflows of resources:

Deferred inflows leases related 595,586,067 612,602,812 (17,016,745) 612,602,812 Total deferred inflows of resources 595,586,067 612,602,812 (17,016,745) 612,602,812 Net position, as restated:

Net in1.1estment in capital assets 449,951,997 422,193,509 421,218,714 27,758,488 974,795 Restricted for:

Debt service 20,844,381 21,453,314 20,126,006 (608,933) 1,327,308 Capital projects and other
agreements 52,822,516 47,055,671 43,997,714 5,766,845 3,057,957 Unrestricted deficit (414,048,085) (410,943,748) (407,673,523) (3,104,337) (3,270,225) Total net position $ 109,570,809 79,758,746 77,668,911 29,812,063 2,089,835 5 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Fiscal Year 2022-23 Analysis
Management's Discussion and Analysis (Unaudited)
March 31, 2023 and 2022
Capital assets decreased when compared to the prior year by $13,431,321 due to annual depreciation, partially offset by equipment and buildings additions. Other assets increased when compared to the prior year by $177,971. This was due mainly to the implementation of GASB 87 for leases, increases in accounts receivables for Non-NFL event revenues and cash deposit from excess revenues distributions at year-end. Liabilities decreased by $26,048,668 compared to the prior year. The decrease was due to principal prepayment of long-term debt and implementation of GASB 87 for leases, partly offset by an increase in unearned Stadium Builder License (SBL) revenue due to collection of SBL principal that is amortized over the life of the SBL. Total net position for the Stadium Authority, as a whole, increased between March 31, 2022 and March 31, 2023 to $109,570,809. This increase of $29,812,063 is primarily due to an increase in capital assets and the payoff of the StadCo Subordinated Loan that financed the construction of the Stadium.

Fiscal Year 2021-22 Analysis
Capital assets decreased when compared to the prior year by $15,507,072 due to annual depreciation, partially offset by equipment and buildings additions. Other assets increased when compared to the prior year by $650,439,048. This was due mainly to the net effect of increase in cash and restricted cash offset by a decrease in accounts receivable as result of the August 31, 2022 Settlement Agreement between Stadium Authority, StadCo and Management Co. (See Note 3). Additionally, the Stadium Authority implemented GASB 87 in fiscal year 2022-23 and restated balances in assets (see Note 2k). Liabilities increased by $20,239,689 mainly due to the implementation of GASB 87 and principal prepayment of long-term debt, partly offset by an increase in unearned Stadium Builder License (SBL) revenue due to collection of SBL principal that is amortized over the life of the SBL. Total net position for the Stadium Authority, as a whole, increased between March 31, 2021 and March 31, 2022 to $79,758,746. This increase of $2,089,835 is primarily due to the implementation of GASB 87 partially offset by a decrease in capital assets. 6 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Management's Discussion and Analysis (Unaudited)
March 31, 2023 and 2022
The Stadium Authority's revenues, expenses, and changes in net position for the fiscal years ended March 31, 2023, March 31, 2022, and March 31, 2021 are as follows:

Operating revenues
Operating expenses
Operating income
Nonoperating revenues
Nonoperating expenses
Income before contributions
$
FY2023
72,153,423
(49,065,823)
23,087,600
18,147,968
(13,550,322)
and other revenues 27,685,246
Contributions and other revenues 2,126,817
Increase in net position 29,812,063
Total net position - beginning of fiscal
period 79,758,746
Total net position - end of fiscal period $ 109,570,809 Fiscal Year 2022-23 Analysis
FY2022
as adjusted
Note 2k
51,123,882
(51,210,463)
(86,581)
15,986,564
(14,895,722)
1,004,261
1,085,574
2,089,835
77,668,911
79,758,746
FY2023 FY2022
increase increase
FY2021 (decrease) (decrease)
38,373,955 21,029,541 12,749,927
(25,937,991) 2,144,640 (25,272,472)
12,435,964 23,174,181 (12,522,545)
4,691,577 2,161,404 11,294,987
(15,243,240) 1,345,400 347,518
1,884,301 26,680,985 (880,040)
282,021 1,041,243 803,553
2,166,322 27,722,228 (76,487)
75,502,589 2,089,835 2,166,322
77,668,911 29,812,063 2,089,835
Stadium Authority operating revenues increased by $21,029,541 when compared with the prior year. This was mainly due to the implementation of GASB 87 and increases in rents and licenses and charges for services from NFL Games, ticketed Non-NFL events and smaller special events being held. The operating expenses decreased by $2,144,640 compared to the prior year. This decrease is primarily due to higher Stadium Manager expenses and Non-NFL events expenses offsets by zero settlement expense true-up. The Stadium Authority recognized additional expenses for the unpaid Shared Stadium Expenses and Other Expenses in fiscal year 2021-22 as part of the Settlement Agreement (see Note 3).

Nonoperating revenues increased by $2,161,404 mainly due to the implementation of GASB 87. Nonoperating expenses decreased by $1,345,400 mainly due to a decrease in interest expense.

Contributions and other revenues were $2,126,817, an increase of $1,041,243 over the prior fiscal year. These represent special hotel tax revenues collected to pay the CFO Advance Loan.

Fiscal Year 2021-22 Analysis
Stadium Authority operating revenues increased when compared with the prior year by $12,749,927. This was mainly due to increase in charges for services from NFL Games and smaller special events being held and increase in rents and licenses partially offset by the implementation of GASB 87. The Operating expenses increased by $25,272,472 compared to the prior year. This increase is primarily because, pursuant to the August 31, 2022 Settlement Agreement between StadCo, ManagementCo, and Stadium Authority, Stadium 7 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Management's Discussion and Analysis (Unaudited)
March 31, 2023 and 2022
Authority paid Shared Stadium Expenses and Other Expenses from prior fiscal years' that were previously withheld from payment (see Note 3).

Nonoperating revenues increased by $11,294,987 mainly due to the implementation of GASB 87 partially offset by a decrease in interest income from SBL. Nonoperating expenses decreased by $347,518 mainly due to a decrease in interest expense. Significant prepayments were made on the StadCo Subordinated Loan in the prior year decreasing principal and resulting in lower interest expense.

Contributions and other revenues were $1,085,574, an increase of $803,553 over the prior fiscal year. These represent special hotel tax revenues collected to pay the CFO Advance Loan. While the overall hotel tax revenues increased significantly in the current year as we continue to recover from COVID-19, revenues were insufficient to cover the accrued interest on the loan.

Capital Assets
The capital assets of the Stadium Authority are those which are used in the performance of the Stadium Authority's functions, including but not limited to infrastructure-related assets. These assets do not include StadCo's tenant improvements. At March 31, 2023, capital assets totaled $689,075,880.

Further detail may be found in Note 4 to the financial statements.

Debt Administration
At March 31, 2023, the Stadium Authority had total debt outstanding of $245,274,737, as shown in detail in Note 5 to the financial statements. Stadium Authority's debt comprised Stadium Funding Trust Term A loan of $215,415,240 and the CFO Advance Loan of $29,859,497. The StadCo Subordinate Loan has been paid off at the end of the year with year-end excess revenues distributed as instructed under Article 14.

Economic and Financial Overview
Over the last few years, Silicon Valley has seen job growth that has outpaced the rest of the state. This growth has led to rising home prices and a significant increase in commercial and residential development, including several projects in the vicinity of Levi's Stadium. Major financial factors impacting the Stadium Authority are:
• In May 2013, a Naming Rights Agreement with Levi Strauss & Co. (Levi's) was approved. The name of the Stadium is "Levi's Stadium". The naming rights agreement calls for Levi's to pay a total of $154.2 million to the Stadium Authority over a 20-year period. The agreement requires the Stadium Authority to hold at least 36 "Major Events" (with 25,000+ attendees) every three contract years. The Second Amendment to the Stadium Management Agreement states that ManagementCo would pay the Stadium Authority as liquidated damages the amount owed by the Stadium Authority to Levi's® in the event the required number of events is not met. As of March 31, 2023, the Stadium Authority has received $62.1 million in naming rights revenue.
• Stadium Builders Licenses (SBLs) entitle the license holder to priority rights to buy tickets for events at Levi's Stadium. The total value of the currently active SBL holders' licenses is $547.2 million. Through March 31, 2023, $522.5 million in SBL principal payments have been collected since inception. This is due in part to a number of SBL holders paying off or prepaying a large portion of their SBL, and defaulted SB Ls 8 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Management's Discussion and Analysis (Unaudited)
March 31, 2023 and 2022
being resold at full price. In addition to SBL collections, the Stadium Authority has collected $64.6 million in interest from license holders who financed their SBLs since inception. • The Stadium Authority generated $24.2 million in lease revenue during the NFL season and $8.8 million net profit associated with hosting Non-NFL events for the fiscal year ended March 31, 2023. • The Stadium Authority collects a 10% surcharge on the price of admission to all regular season NFL games and a $4 per ticket surcharge for all ticketed Non-NFL events. There were ten regular season NFL games held at Levi's Stadium and two play-off games during fiscal year March 31, 2023, which resulted in $11.4 million in NFL ticket surcharge revenues. The Stadium Authority also recognized $1.3 million in Non-NFL event ticket surcharge revenues from the seven ticketed events held at the Stadium.

Contacting the Stadium Authority's Financial Management This financial report is designed to provide our residents, taxpayers, investors, and creditors with a general overview of the Stadium Authority's finances and to demonstrate the Stadium Authority's accountability for the money it receives. If you have any questions about this report or need additional financial information, contact the City of Santa Clara Finance Department at 1500 Warburton Avenue, Santa Clara, CA 95050-3796. 9 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Current assets:

Cash
Restricted cash
Restricted cash with fiscal agent
Accounts receivable
Lease receivable
Materials, supplies, and prepaids
Total current assets
Capital assets:

Buildings, net
Machinery and equipment, net
Construction in progress
Total capital assets
Right-to-use leased assets
Long-term restricted cash with fiscal agent
Long-term lease receivable
Total noncurrent assets
Total assets
Current liabilities:

Accounts payable and accrued liabilities
Interest payable
Due to other City of Santa Clara funds
Deferred rent, current portion
Term A loan payable, current portion
Subordinated loan payable, current portion
Unearned revenue, current portion
Total current liabilities
Deferred rent
Lease liability
Term A loan payable
CFO advance loan payable
Subordinated loan payable
Unearned revenue
Total noncurrent liabilities
Total liabilities
Statements of Net Position
March 31 , 2023 and 2022
Assets
Liabilities
Deferred Inflows of Resources
Deferred inflows leases related
Total deferred inflows of resources
Net Position
Net investment in capital assets
Restricted for:

Debt service
Capital projects and other agreements
Unrestricted deficit
Total net position
See accompanying notes to financial statements.
10 $
$
$
$
$
$
$
$
2022
As Adjusted
2023 Note 2k
11,286,692 20,039,971
54,725,592 35,722,544
24,265,375 27,003,662
18,994,260 13,095,258
11,669,804 11,418,381
1,015,999
120,941,723 108,295,815
683,106,548 699,633,308
3,873,939 2,405,127
2,095,393 468,766
689,075,880 702,507,201
27,934,663 28,732,796
11,536,235 11,536,235
594,217,262 605,887,066
1,322,764,040 1,348,663,298
1,443,705,763 1,456,959,113
1,357,581 1,229,217
5,948,285 6,128,361
142,896 131,278
495,000 460,000
15,459,000 14,723,000
4,911,322
16,374,980 15,076,480
39,777,742 42,659,658
7,149,723 6,665,679
29,321,106 29,321,106
199,956,240 215,415,239
29,859,497 30,374,503
14,889,628
432,484,579 425,271,742
698,771,145 721,937,897
738,548,887 764,597,555
595,586,067 612,602,812
595,586,067 612,602,812
449,951,997 422,193,509
20,844,381 21,453,314
52,822,516 47,055,671
(414,048,085) (410,943,748)
109,570,809 79,758,746

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Statements of Revenues, Expenses, and Changes in Net Position Years ended March 31, 2023 and 2022
Operating revenues:

Charges for services
Rents and licensing
Operating expenses:

Leases
Materials, services, and supplies (note 3a)
Selling, general, and administrative expenses
Depreciation
Operating (loss) income
Nonoperating revenues (expenses):

Interest revenue
Other revenue
Interest expense
Income before contributions and other revenues
Contributions and other revenues:

Contribution from Community Facilities District
Change in net position
Net position - beginning of period
Net position - end of period
See accompanying notes to financial statements.
11 2023
$ 33,161,155
38,992,268
72,153,423
1,229,044
28,308,133
1,522,695
18,005,951
49,065,823
23,087,600
17,530,057
617,911
{13,550,322)
27,685,246
2,126,817
29,812,063
79,758,746
$ 109,570,809
2022
As Adjusted
Note 2k
11,720,968
39,402,914
51,123,882
1,215,019
30,651,977
1,565,865
17,777,602
51,210,463
(86,581)
15,986,564
(14,895,722}
1,004,261
1,085,574
2,089,835
77,668,911
79,758,746

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Statements of Cash Flows
Years ended March 31, 2023 and 2022
2023 2022
Cash flows from operating activities:

Receipts from customers $ 32,312,422 24,286,339
Payments to suppliers (30,064,398) (29,446,734)
Rents and licensing received 49,947,986 41,840,919
Net cash provided by operating activities 52,196,010 36,680,524 Cash flows from noncapital financing activities:

Increase in due to other City of Santa Clara funds 629,529 7,972 Net cash provided by noncapital financing activities 629,529 7,972 Cash flows from capital and related financing activities:

Contribution from Community Facilities District 2,248,478 818,906 Acquisition and construction of capital assets (3,108,564) (1,064,907) Principal payments on capital debt (35,038,955) (17,353,477) Interest paid on capital debt {13,918,397} {14,374,662} Net cash used in capital and related financing activities (49,817,438) {31,974,140} Cash flows from investing activity:

Interest and dividends 4,503,381 4,123,966
Net cash provided by investing activity 4,503,381 4,123,966 Net increase in cash and restricted cash 7,511,482 8,838,322 Cash and restricted cash, beginning of period 94,302,412 85,464,090 Cash and restricted cash, end of period $ 101,813,894 94,302,412 Reconciliation of operating income to cash provided by operating activities:

Operating income $ 23,087,600 (86,581)
Depreciation 18,005,951 17,777,602
Lease revenues 7,285,255 7,320,255
Shared stadium expenses 5,823,817
Change in operating assets and liabilities:

Accounts receivable (5,689,607) (1,700,739)
Accounts payable and accrued liabilities (539,569) (1,375,735) Prepaid expenses 1,015,999 (1,015,999)
Unearned revenue 8,511,337 9,383,860
Deferred rent 519,044 554,044
Net cash provided by operating activities $ 52,196,010 36,680,524 Noncash operating and capital financing activities:

Equipment purchases included in accounts payable and accrued expense $ 667,933 407,490 Settlement write-off included in accounts receivable 7,425,353 See accompanying notes to financial statements.
12 SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
(1) Organization and Reporting Entity
(a) Organization
On June 8, 2010, residents of Santa Clara voted to adopt Measure J, the Santa Clara Stadium Taxpayer Protection and Economic Progress Act, resulting in the approval to construct a new 68,500-seat football stadium (the Stadium) to be leased to the San Francisco 49ers (49ers). In addition, Measure J called for the creation of the Santa Clara Stadium Authority to own, develop, construct, operate, and maintain the Stadium project. The City of Santa Clara, California (City) and the City of Santa Clara Redevelopment Agency (Agency) entered into a Joint Exercise of Powers Agreement (JPA Agreement) establishing the Santa Clara Stadium Authority (Stadium Authority). The JPA Agreement was later amended to add the Bayshore North Project Enhancement Authority as a member of the Stadium Authority. On June 28, 2011, the Governor signed into law Assembly Bill No. X1 26 (ABX1 26), which called for the dissolution of Redevelopment Agencies throughout the State. The California State Supreme Court upheld ABX1 26, and as a result, on February 1, 2012, all California Redevelopment Agencies were dissolved. The Successor Agency of the City of Santa Clara (Successor Agency) then assumed the obligations of the Agency under the JPA Agreement. (b) Financial Reporting Entity
As defined by US generally accepted accounting principles (GAAP), the financial reporting entity consists of a primary government, as well as its component units, which are legally separate organizations for which the elected officials of the primary government are financially accountable.

Financial accountability is defined as:
1) Appointment of a voting majority of the component unit's board and either (a) the ability to impose will by the primary government or (b) the possibility that the component unit will provide a financial benefit to or impose a financial burden on the primary government; or 2) Fiscal dependency on the primary government.

Based upon the application of these criteria, the Stadium Authority has no component units. However, the Stadium Authority is a component unit of the City because the Mayor and City Council serve as the Board of the Stadium Authority. The City Manager serves as the Executive Director. The debt which was incurred for the construction of the Stadium is the responsibility of the Stadium Authority. The City is not a party to the debt nor has the City guaranteed such debt. (2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The financial statements of the Stadium Authority have been prepared in conformity with GAAP, as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing government accounting and financial reporting principles. The Stadium Authority is included as an enterprise fund in the City's Annual Financial Report, and therefore, these financial statements do not purport to represent the financial position and changes in financial position of the City.
13 (Continued)

SANT A CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
(b) Basis of Accounting and Measurement Focus
The Stadium Authority reports its activities as a business-type activity. The financial statements include statements of net position, statements of revenues, expenses, and changes in net position, and statements of cash flows, and are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the statements of net position. Reported net position is segregated into three categories - net investment in capital assets, restricted and unrestricted. The statements of revenues, expenses, and changes in net position present increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which a liability is incurred.

Operating revenues are those revenues that are generated from the primary operations of the Stadium Authority. All other revenues are reported as nonoperating. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.
(c) Year-End
An amendment was made to the JPA Agreement on November 13, 2012 in part to change the fiscal year of the Stadium Authority from a July 1 through June 30 fiscal year to an April 1 through March 31 fiscal year to conform with the fiscal year of Stadium Funding Trust. (d) Cash, Restricted Cash, and Restricted Cash with Fiscal Agent The Stadium Authority's cash is not pooled with the City but is held in separate bank and trust accounts.
(i) Composition of Cash, Restricted Cash, and Restricted Cash with Fiscal Agent Cash, restricted cash, and restricted cash with fiscal agent at March 31, 2023 and 2022 consist of cash deposits in banks.

Restricted cash includes revenue that has not yet been transferred to Stadium Funding Trust accounts. On the 15th of the following month all revenue is swept into the Stadium Funding Trust accounts as required by the Deposit and Disbursement Agreement and becomes restricted cash with fiscal agent. It also includes cash dedicated to construction and the capital expenditure and operating reserve accounts.

Restricted cash with fiscal agent consists of stadium deposits pledged to a syndicate of lenders and deposits for stadium construction. The application of these deposits is restricted to fund stadium construction and Stadium Authority operations and debt service. (ii) Investments Authorized by Debt Agreements
Stadium Authority maintains required amount of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if Stadium Authority fails to meet its obligations under these debt 14 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
issues. The California Government Code 53601 (L) allows these funds to be invested in accordance with the statutory provisions governing the issuance of those bonds, indebtedness, other arrangements, or certificates of participation in accordance with the ordinance, resolution, indenture, or agreement of the local agency providing for the issuance. (iii) Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. Under California Government Code Section 53651, depending on specific types of eligible securities, a bank must deposit eligible securities posted as collateral with its agent having a fair value of 105% to 150% of the Stadium Authority's cash on deposit. All of the deposits are either insured by the Federal Depository Insurance Corporation (FDIC) or collateralized with pledged securities held in the trust department of the financial institutions.
(e) Accounts Receivable
Accounts receivable are recorded in the Stadium Authority's accounts at the amounts that are contractually due. Accounts receivable include payments due from the Forty Niners Stadium Management Company, LLC (ManagementCo) as a result of the operations of non-National Football League (NFL) events held at the Stadium and the overpayment of stadium manager expenses. Naming Rights revenue due from Levi's Strauss & Co., special tax proceeds collected by the Community Facilities District (CFO) and not yet paid to Stadium Authority pursuant to the CFO Reimbursement Agreement, and other miscellaneous receivables are also included as accounts receivable in the statements of net position.
(f) Capital Assets
Capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair value on the date contributed.

Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets with a value over $5,000 and is charged as an expense against operations.

Buildings
Machinery and equipment
Useful lives
(years)
20-50
2-25
The cost of maintenance, repairs, minor replacements, and renewals are charged to operations as incurred. Major replacements, renewals, and betterments are capitalized. Sales and retirements of depreciable property are recorded by removing the related cost and accumulated depreciation from the accounts. Gains or losses on sales and retirements of property are reflected in the statements of revenues, expenses, and changes in net position.

Interest is capitalized on construction in progress in accordance with applicable guidance. 15 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
(g) Unearned Revenue and Revenue Recognition
Stadium Builder License (SBL) proceeds and payments received for other license agreements are initially recorded as unearned revenue and are recognized as revenue over the term of the contracts.

Rental income is recognized as revenue on a straight-line basis over the term of the Stadium Lease (Note 6(b)).

Non-NFL event revenue, NFL ticket surcharge, Non-NFL ticket surcharge, and other operating revenues are recognized as they are earned.
{h) Risk Management
Per the terms of the Stadium Lease, during operations, the Forty Niners SC Stadium Company LLC (StadCo) procures insurance and the Stadium Authority pays a proportionate share to StadCo. The Fairly Group is the insurance broker for Stadium operations. (i) Income Taxes
The Stadium Authority falls under the purview of Internal Revenue Code, Section 115 and corresponding California Revenue and Taxation Code provisions. As such, the Stadium Authority is not subject to federal or state income taxes.

U) Use of Estimates
The preparation of financial statements in conformity with US generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
(k) Lease Agreements
The Stadium Authority implemented GASB 87, Leases, during the year ended March 31, 2023.

The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments' leasing activities. There was no impact to beginning net position for fiscal year 2021-22.
16 (Continued)

SANT A CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
The statements of net position for fiscal year 2021-22 was adjusted as follows:

FY 2022
previously GASB 87 FY 2022
reported adjustment adjusted
Current assets:

Lease receivable $ 11,418,381 11,418,381
Noncurrent assets:

Right-to-use leased assets 28,732,796 28,732,796
Long-term lease receivable 605,887,066 605,887,066
Total change in assets $ 646,038,243
Current liabilities:

Interest payable $ 5,753,456 374,905 6,128,361
Noncurrent liabilities:

Lease liability 29,321,106 29,321,106
Total change in liabilities 29,696,011
Deferred inflows of resources:

Deferred inflows leases related 612,602,812 612,602,812 Net position:

Unrestricted deficit (414,683,168) 3,739,420 (410,943,748) Total change in liabilities, deferred
inflows of resources and net position $ 646,038,243
17 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
The statements of revenues, expenses and changes in net position for fiscal year 2021-22 was adjusted as follows:

FY 2022
previously
reported
Operating re1..enues:

Rents and licensing $ 46,723,169
Operating expenses:

Depreciation 16,979,469
Total change in operating income
Non operating re\enues:

Interest re\enue 4,128,756
Total change in net position $
GASB 87
adjusbnent
{7,320,255)
798,133
(8,118,388)
11,857,808
3,739,420
FY 2022
adjusted
39,402,914
17,777,602
15,986,564
Lessee - The Stadium Authority is a lessee for noncancelable lease of buildings. The Stadium Authority recognizes any lease liability with an initial, and individual value of $100,000 and an intangible right-to-use lease asset (lease asset) in the statement of net position financial statements.

At the commencement of a lease, the Stadium Authority initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how the Stadium Authority determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments as follows:
• The Stadium Authority uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the Stadium Authority generally uses its estimated incremental borrowing rate as the discount rate for leases. The Stadium Authority used a

2.18% discount rate for the expected lease payments to present value. • The lease term includes the noncancelable period of the lease. • Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the Stadium Authority is reasonably certain to exercise. 18 (Continued)

SANT A CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
The Stadium Authority monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. The Stadium Authority has the Ground Lease with the City (Note 6) and the balances related to the leases liability and right-to-use as of March 31, 2023 were $29.3 million and $27.9 million, respectively. The leases have remaining terms of 31 to 35 years as of April 1, 2022. The Stadium Authority recognized $798 thousand in lease expense and $647 thousand in interest expense during the current fiscal year related to these leases.

A summary of lease liability activity during the year ended March 31, 2023 and 2022 are as follows:

March 31, 2022
March 31, as adjusted March 31,
2021 Additions Reductions Note 2k Additions Reductions 2023 Lease liabil~y $ 29,530,929 (209,823) 29,321,106 29,321,106 Total lease liabil~y $ 29,530,929 (209,823) 29,321,106 29,321,106 Right-to-use leased assets for the year ended March 31, 2023 was as follows:

Balance Balance
March 31, March 31,
2022 Additions Reductions 2023
Right-to-use leased assets being depreciated:

Buildings $ 29,530,929 29,530,929
Total right-to-use leased assets 29,530,929 29,530,929
Less accumulated depreciation for:

Buildings (798,133) (798,133) (1,596,266)
Total accumulated depreciation (798,133) (798,133) (1,596,266) Total right-to-use leased assets, net $ 28,732,796 (798,133) 27,934,663 19 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
Right-to-use leased assets for the year ended March 31, 2022 was as follows:

Balance Balance
March 31, March 31,
2021 Additions Reductions 2022
Right-to-use leased assets being depreciated:

Buildings $ 29,530,929 29,530,929
Total right-to-use leased assets 29,530,929 29,530,929
Less accumulated depreciation for:

Buildings (798,133) (798,133)
Total accumulated depreciation (798,133) (798,133)
Total right-to-use leased assets, net $ 29,530,929 (798,133) 28,732,796 Future principal and interest amounts from lease liability are as follows as of March 31, 2023:

Principal Interest
Year ending March 31:
2024 $ 495,000
2025 6,542 993,458
2026 354,518 645,482
2027 362,325 637,675
2028 370,303 629,697
2029-2033 2,390,877 3,009,123
2034-2038 3,188,462 2,711,538
2039-2043 4,077,810 2,322,190
2044-2048 5,069,480 1,830,520
2049-2053 6,175,243 1,224,757
2054-2058 7,325,546 494,454
Total $ 29,321,106 14,993,894
Lessor- The Stadium Authority is a lessor for noncancelable leases of land and building. The Stadium Authority recognizes a lease receivable and a deferred inflow of resources in the financial statements.

At the commencement of a lease, the Stadium Authority initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease 20 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
payments received at or before the lease commencement date. Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the Stadium Authority determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts as follows:
• The Stadium Authority uses its estimated incremental borrowing rate as the discount rate for leases. The Stadium Authority used a 2.18% discount rate for the expected lease payments to present value.
• The lease term includes the noncancelable period of the lease. • Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The Stadium Authority monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. The Stadium Authority has the Stadium Lease with StadCo (Note 6) and the balances related to the leases receivable and deferred inflow of resources as of March 31, 2023 were $605.9 million and $595.6 million, respectively. The leases have remaining terms of 31 to 35 years as of April 1, 2022. The Stadium Authority recognized $7.3 million in lease revenue under rents and licensing revenue category and $12.7 million in interest revenue during the current fiscal year related to these leases.

A summary of lease receivable activity during the year ended March 31, 2023 and 2022 are as follows:

March 31, 2022
March 31, as adjus led March 31,
2021 Additions Reductions Note 2k Additions Reductions 2023 Lease receivable $ 629,619,557 (12,314,110) 617,305,447 (11,418,381) 605,887,066 Total lease receivable $ 629,619,557 (12,314,110) 617,305,447 (11,418,381) 605,887,066 A summary of deferred inflows of resources activity during the year ended March 31, 2023 and 2022 are as follows:

March 31, 2022
March 31, as adjusted March 31,
2021 Additions Reductions Note 2k Additions Reductions 2023 Def erred inflows leases related $ 629,619,557 (17,016,745) 612,602,812 (17,016,745) 595,586,067 Total deferred inflows
leases related $ 629,619,557 (17,016,745) 612,602,812 (17,016,745) 595,586,067 21 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
Future principal and interest amounts from lease receivable are as follows as of March 31, 2023:

Year ending March 31:
2024
2025
2026
2027
2028
2029-2033
2034-2038
2039-2043
2044-2048
2049-2053
2054-2058
Total
(3) Stadium Development
(a) Transaction Overview
Principal
$ 11,669,804
11,926,763
12,189,380
12,457,780
12,732,090
67,991,212
75,813,743
84,536,272
94,262,345
105,107,424
117,200,252
$ 605,887,065
Interest
13,092,196
12,835,237
12,572,620
12,304,220
12,029,910
55,818,788
47,996,257
39,273,728
29,547,655
18,702,576
6,609,748
260,782,935
During fiscal year 2011-12, the Stadium Authority and StadCo entered into a series of agreements in connection with the construction of the Stadium. The Stadium was constructed and is owned by the Stadium Authority; certain tenant improvement components are owned by StadCo. Construction on the Stadium began in April 2012 and it was substantially completed in July 2014, in time for the 2014 NFL season.

The City owns the land on which the Stadium was constructed. The City has leased the land to the Stadium Authority under a ground lease, and the Stadium Authority has leased the Stadium to StadCo for the six-month period from August through January (the NFL season) of each year, for an initial lease term of 40 years. The Stadium Lease commenced in August 2014 upon substantial completion of construction.

The Stadium Authority retained a design-build firm to complete the design and construction of the Stadium pursuant to a guaranteed maximum price contract. The Stadium Authority was generally responsible for amounts due to the design-builder, except that StadCo was responsible for payment of costs of tenant improvements. StadCo acted as construction agent for the Stadium Authority, with primary responsibility for administering the design-build contract.

The Stadium Authority and StadCo have engaged ManagementCo, an affiliate of StadCo, to manage the Stadium on a year-round basis. The Stadium Management Agreement has an initial term of 25 years, plus a 15-year renewal option. The Stadium Authority pays ManagementCo for services related to its operations on behalf of the Stadium Authority. For the years ended March 31, 2023 and 2022, ManagementCo charged the Stadium Authority $8.1 million and $6.8 million in Shared 22 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
Expenses, and $7.4 million and $7.8 million in Other Operating and Management Expenses, respectively.

On August 31, 2022, Stadium Authority, StadCo and ManagementCo settled the arbitration and disputes regarding the partially suspended Shared Expenses and Operating and Management Expenses from June 2019. As part of the settlement, under section 11 (b)(iii), Stadium Authority agreed to recognize the $15.8 million unpaid expenses along with $426 thousand interest expenses under the Revolving Loan incurred from fiscal year 2019-20 through fiscal year 2021-22, ManagementCo's prior unauthorized payments of the unpaid expenses through the Revolving Loan are now treated as timely Stadium Authority payments, but without Stadium Authority agreeing to ManagementCo's actions or draws under the Revolving Loan. The $16.3 million in ManagementCo expenses were recorded in fiscal year ended March 31, 2022. These are the Shared Expenses and Operating and Management Expenses that were previously withheld in 2020 and 2021. (b) Construction Funding
Funding for construction of the Stadium, excluding tenant improvements funded by StadCo, falls into three major categories: an initial construction loan from a bank syndicate, which was refinanced during 2013 as described below; funding from the StadCo Subordinated Loan; and construction period and other revenues.
(i) Stadium Construction Loan Facility
The initial financing included a delayed draw term loan facility (the Construction Facility) provided by a syndicate of banks (the Lenders) to Stadium Funding Trust (FinanceCo). FinanceCo, a Delaware statutory trust, entered into the Construction Facility with the Lenders and then issued a loan facility to the Stadium Authority in the amount of $450 million (the Authority Loan). The Construction Facility had a maturity date of September 1, 2015. In June 2013, FinanceCo and the Stadium Authority refinanced the Construction Facility, resulting in FinanceCo paying off the Construction Facility and entering into a new debt structure that includes 26-year fixed rate notes and a delayed draw 5-year loan facility. FinanceCo then issued a new loan facility to the Stadium Authority in the amount of $450 million. The Stadium Authority's loan facilities are discussed in Note 5.
(ii) StadCo Subordinated Loan
In March 2012, StadCo agreed to loan the Stadium Authority up to $500 million (the Subloan) to be used for the construction of Levi's Stadium. During the refinance process in June 2013, the interest rate on the Subloan was fixed and part of the then outstanding Subloan was paid down. The Subloan is discussed in Note 5.
(iii) Construction Period and Other Revenues
Certain revenues were collected by the Stadium Authority while the Stadium was under construction. These construction period and other revenues primarily consist of SBL and Naming Rights revenues collected by the Stadium Authority.
23 (Continued)

SANT A CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
(4) Capital Assets
Capital asset activity for the year ended March 31, 2023 was as follows:

Balance Balance
March 31, March 31,
2022 Additions Reductions 2023
Nondepreciable assets:

Construction in progress $ 468,766 1,754,706 (128,079) 2,095,393 Total nondepreciable
assets 468,766 1,754,706 {128,079) 2,095,393
Capital assets being depreciated:

Buildings 826,227,884 826,227,884
Machinery and equipment 3,991,661 2,149,870 6,141,531
Less accumulated depreciation for:

Buildings (126,594,576) (16,526,760) (143,121,336)
Machinery and equipment (1,586,534) (681,058) (2,267,592) Net depreciable assets 702,038,435 (15,057,948) 686,980,487 Net capital assets $ 702,507,201 (13,303,242) (128,079) 689,075,880 24 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
Capital asset activity for the year ended March 31, 2022 was as follows:

Balance Balance
March 31, March 31,
2021 Additions Reductions 2022
Nondepreciable assets:

Construction in progress $ 406,177 247,001 (184,412) 468,766 Total nondepreciable
assets 406,177 247,001 (184,412} 468,766
Capital assets being depreciated:

Buildings 826,249,132 (21,248) 826,227,884
Machinery and equipment 2,560,605 1,431,056 3,991,661
Less accumulated depreciation for:

Buildings (110,067,816) (16,526,760) (126,594,576)
Machinery and equipment {1,133,825} (452,709} {1,586,534} Net depreciable assets 717,608,096 (15,548,413} (21,248) 702,038,435 Net capital assets $ 718,014,273 (15,301,412) (205,660) 702,507,201 Interest expense incurred during the years ended March 31, 2023 and 2022 totaled $13,550,322 and $14,895,722, respectively. No interest was capitalized. (5) Long-Term Debt
(a) Long-Term Debt Summary
Changes in long-term debt for the year ended March 31, 2023 consisted of the following:

Outstanding Outstanding Amounts
as of as of due
Interest March 31, March 31, within one
Type of indebtedness Issue date D.Je date rates 2022 Additions Reductions 2023 year Business type activity debt:

Stadium Funding Trust
Loan:

TermA Loan 6/19/2013 4/1/2039 5.00 % $ 230, 138,239 (14,722,999) Ill 215,415,240 15,459,000 StadCo cro Advance 4/1/2013 12/31/2054 5.73 30,374,503 (515,006) 29,859,497 StadCo Subordinated Loan 3/28/2012 3/31/2043 5.50 19,800,950 (19,800,950) Total $ 280,313,692 (35,038,955) 245,274,737 15,459,000 111 The difference between the principal payrrent recorded versus arrount disclosed in the prior year is rrainly due to a rounding adjustrrent to true-up to the correct ending debt balance at March 31, 2023. 25 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
Changes in long-term debt for the year ended March 31, 2022 consisted of the following:

Outstanding Outstanding Amounts
as of as of due
Interest March 31, March 31, within one
Type of indebtedness Issue date IAle date rates 2021 Additions Reductions 2022 year Business type activity debt:

Stadium Funding Trust
Loan:

TermA Loan 6/19/2013 4/1/2039 5.00 % $ 244,160,240 (14,022,001) 230,138,239 14,723,000 StadCo CFO Advance 4/1/2013 12/31/2054 5.73 29,502,893 871,610 (I) 30,374,503 StadCo Subordinated Loan 3/28/2012 3/31/2043 5.50 23,132,426 (3,331,476) 19,800,950 4,911,322 Total $ 296,795,559 871,610 (17,353,477) 280,313,692 19,634,322 111 The addition to the StadCo CFO Advance is interest being added to principal due to the tining of the quarter~ payments. (see note S(c)). (b) Stadium Funding Trust Loan
The Restated Credit Agreement by and among FinanceCo, the Stadium Authority and Goldman Sachs Bank was entered into on June 19, 2013. FinanceCo agreed to loan the Stadium Authority up to $450 million. Under the Restated Credit Agreement, the loan from FinanceCo consists of the Term A Loan and the Term B Loan. On March 31, 2016, the Stadium Authority paid the remaining amount due on the Term B Loan.
(i) Term A Loan
The Term A Loan was made in the amount of $282.79 million. This loan bears interest at a fixed rate of 5%, payable semiannually, with annual principal payments due beginning in April 2018. It has a maturity date in 2039 and is subject to certain prepayment premiums. The loan was fully drawn at closing. As of March 31, 2023 and 2022, $215.4 million and $230.1 million was outstanding, respectively. Debt service on this loan is secured by a pledge of available SBL revenues of Stadium Authority.

In the event of default under the loan agreement, FinanceCo has the right, upon written notice to the Stadium Authority, to accelerate and declare the Stadium Authority's obligation to repay the related loan to FinanceCo to be immediately due and payable. (c) StadCo CFD Advance
In May 2010, the City completed the proceedings to establish CFO for the purpose of financing certain publicly owned facilities and public services associated with the Stadium.

On June 11, 2013, the CFO, the Stadium Authority, and StadCo entered into a Reimbursement Agreement under which the CFO would agree to reimburse the Stadium Authority for costs of the publicly owned facilities and public services constructed for the Stadium. The reimbursement can only be made from the special tax generated by the CFO, as and when received by the CFO. 26 (Continued)

SANT A CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
StadCo has agreed to advance to the Stadium Authority funds to pay for the CFO Infrastructure (StadCo CFO Advance). To evidence the Stadium Authority's obligation to repay the StadCo CFO Advance, the Stadium Authority and StadCo also executed a note on June 11, 2013. The StadCo CFO Advance has a maximum principal of $38 million and an interest rate of 5.73%.

During the year ended March 31, 2023, as the special CFO tax was submitted to the Stadium Authority, a number of payments were made on the StadCo CFO Advance. StadCo CFO Advance payments were made midway through each quarter. The interest that accrued between the last StadCo CFO Advance payment and the end of the year is added to principal. The Stadium Authority made $1.7 million in interest and $515 thousand in principal payments. As of March 31, 2023 and 2022, $29.9 million and $30.4 million was outstanding, respectively. (d) StadCo Subordinated Loan
The Restated StadCo Obligations Agreement dated as of June 19, 2013 was entered into by and between StadCo and the Stadium Authority as part of the take-out financing process. Under the Restated StadCo Obligations Agreement, StadCo will loan the Stadium Authority an amount not to exceed $500 million with a fixed 5.50% interest rate. Required principal repayments started in March 2016 and the Stadium Authority may prepay the loan at any time. Debt service on this loan is secured by a pledge of available Stadium Authority revenues on a basis subordinate to outstanding senior loans, if any.

Payments totaling $20.8 million were made on the loan during the year. This included $19.8 million in principal prepayment and $1 million in interest. As of March 31, 2023, the StadCo Subordinate Loan has been paid off.

In the event of default under the loan agreement, StadCo has the right, upon written notice to the Stadium Authority, to accelerate and declare the Stadium Authority's obligation to repay the related loan to StadCo to be immediately due and payable.
(e) Management Company Revolving Loan
The Management Company Revolving Loan dated as of March 28, 2012 was entered into by and between the Stadium Authority and ManagementCo. The Management Company Revolving Loan provides borrowing to the Stadium Authority in an amount not to exceed $25 million through the earlier of the end of the term of the Stadium Lease or the expiration of the Stadium Management Agreement, with interest at the prime rate payable quarterly. The Management Company Revolving Loan may be used solely for the purpose of enabling the Stadium Authority to pay Covered Stadium Authority Operating Expenses (as defined in the agreement) to the extent, and only to the extent, that funds are not otherwise available.

As of March 31, 2023 and 2022, there was no balance outstanding. (f) Pledge of Future Revenues
The pledge of future revenues ends upon repayment of the $215.4 million in outstanding principal on the Term A which is scheduled to occur in fiscal year 2039-40. For fiscal year 2022-23, revenues including operating revenues and nonoperating interest earnings amounted to $90.3 million and 27 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
operating costs including operating expenses, but not interest, depreciation, or amortization amounted to $31.1 million. Net revenues available for debt service amounted to $59.2 million, which represented a coverage ratio of 3.82 on the $15.5 million of debt service. (g) Long-Term Debt Maturities
Future principal and interest amounts due on long-term debt are as follows as of March 31, 2023:

Year ending March 31:
2024
2025
2026
2027
2028
Thereafter
Total
(6) Leases
(a) Ground Lease
Principal
$ 15,459,000
7,299,896
7,838,094
8,404,934
9,001,865
197,270,948
$ 245,274,737
Interest
11,708,761
11,343,766
10,951,861
10,531,615
10,081,522
97,846,926
152,464,451
On February 28, 2012, the Stadium Authority entered into a lease (the Ground Lease) with the City whereby the City leases the Stadium site to the Stadium Authority. The Ground Lease was amended on June 19, 2013.

The Ground Lease has an initial term of 40 years. The first lease year commenced on the first day following the substantial completion of construction (August 1, 2014) and ended on the next following March 31. The subsequent lease years will start on April 1 and end on the following March 31. The Stadium Authority will have five successive extension options, each four years in duration, which would commence following the initial term expiration date.

The Ground Lease provides that the City will receive a fixed ground rent (Fixed Ground Rent) of $180 thousand for the first year of Stadium operations payable by the Stadium Authority. Beginning in the second year of Stadium operations and annually thereafter through the tenth year of Stadium operations, the Fixed Ground Rent will increase annually by $35 thousand. Beginning in the 11th year of Stadium operations, Fixed Ground Rent will be increased to equal $1 million, and thereafter will be increased by $100 thousand every five years through the end of the initial term of the Ground Lease. If the term of the Ground Lease is extended, then, during the first extension term, the Fixed Ground Rent will equal $1.58 million; and if and to the extent the Ground Lease is further extended, the Fixed Ground Rent will be increased by $80 thousand every four years thereafter through the expiration of the term of the Ground Lease. While the Fixed Ground Rent payments vary over the course of the Ground Lease, Ground Lease expense is recorded on a straight-line basis. Therefore $979 thousand of ground lease expense was reported in each of the fiscal years ended March 31, 2023 and 2022. 28 (Continued)

SANT A CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
The Ground Lease also provides that the City will receive a performance-based rent equal to 50% of the net income from Non-NFL events, less certain credits including 50% of the Fixed Ground Rent, payable by the Stadium Authority. If certain of the credits are not used within the year incurred or the next five succeeding years, the credits will expire. The Stadium Authority reported a net Non-NFL event profit of $8,809,167 for fiscal year 2022-23, which triggers the performance-based rent. However, the Stadium Authority did not pay the performance-based rent due because the performance-based rent amount based on potential credits from public safety costs in excess of a disputed threshold are the subject of pending litigation (see Note 7).

Future minimum payments due under the lease are as follows:

Year ending March 31:
2024 $ 495,000
2025 1,000,000
2026 1,000,000
2027 1,000,000
2028 1,000,000
Thereafter 33,500,000
$ 37,995,000
(b) Stadium Lease
On March 28, 2012, the Stadium Authority entered into a lease with StadCo whereby the Stadium Authority leases the Stadium to StadCo. On June 19, 2013, the same parties entered into an Amended and Restated Stadium Lease Agreement (the Stadium Lease).

The Stadium Lease has an initial term of 40 years commencing on the first day following the substantial completion of construction (August 1, 2014) and includes five successive options to extend the term by four years each. The Stadium Lease is divided into two seasons:
• The Tenant Season, which includes the NFL season (including preseason, regular season, and postseason NFL games) and runs from August 1 through January 31; and • The Stadium Authority Season, which runs from February 1 through July 31.

Pursuant to the Stadium Lease, the Stadium Authority and StadCo will be entitled to receive and collect separate revenues. Initially, rent payable by StadCo to the Stadium Authority was $24.5 million per year. This amount was established pursuant to the Stadium Lease in connection with the take-out financing, which occurred on June 19, 2013. The Stadium Lease allowed for one opportunity to adjust the rent if operating or debt service expenses are either more or less than projected in determining the initial rent. Based on the changes to the projected operating and debt service expenses, the provisions for a one-time rent adjustment were triggered. At the Stadium Authority Board (Board) meeting held on March 22, 2016, the Board decided not to adjust the rent, and instead passed a motion to pursue the informal dispute resolution procedures and to proceed to the arbitration process if necessary.

Thereafter, on May 3, 2016, StadCo filed for arbitration with the Stadium Authority. 29 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
On June 18, 2018, the arbitrator entered an Arbitration Award in favor of the Stadium Authority and against StadCo. This award adjusted the facility rent from $24.5 million to $24.76 million, an increase of $262,000. This increase is retroactive to the first lease year resulting in a total amount owed to the Stadium Authority of $1.31 million for the first five lease years, through March 31, 2020. In addition to the adjustment to the facility rent, the Stadium Authority was entitled to reimbursement of its legal fees, determined by the arbitrator to be $2.28 million. The lease also provides for a fair market rent adjustment in year 33.

The Stadium Authority received $24.7 million and $25.3 million in stadium rent from StadCo in each of the fiscal years ended March 31, 2023 and 2022, respectively. There were seven additional NFL events in fiscal year 2022-23, therefore; lease revenues in fiscal year 2022-23 were higher than the prior year.

The Stadium Authority may elect to expand the Tenant Season to consist of the entire lease year, from April 1 through the next succeeding March 31 (Stadium Authority Put Right), by delivering written notice to StadCo. The Stadium Authority Put Right may be exercised at any time during lease year 13, or at any time that the Management Company Revolving Loan balance exceeds $20 million. The expansion of the Tenant Season will be effective as of the applicable Tenant Season Expansion Date as set forth in the Stadium Lease. Effective from and after the Tenant Season Expansion Date, and continuing through the remainder of the Stadium Lease term, the Tenant Season will consist of the entire lease year.
(7) Contingencies
(a) Asset Retirement Obligation
Pursuant to the Ground Lease, the Stadium Authority may be required to demolish the Stadium and other improvements at the end of the lease term, upon written notice from the City. Pursuant to the Stadium Lease, the Stadium Authority will establish reserves to fund the cost of demolishing the stadium at the end of the lease term. While such reserves are projected to cover the entire demolition cost, StadCo will be responsible for funding any shortfall. (b) Historical SBL Buffet Costs
On April 30, 2020, the Stadium Authority received an invoice in the amount of $4,388,709 for previously unbilled "complimentary" buffet costs associated with certain SBL holders for the NFL seasons from 2014 thru 2018. On May 13, 2020, the Stadium Authority issued a response letter disputing the newly billed costs citing that the costs were not presented in a reasonable manner relative to the financial planning and reporting requirements of the Lease Agreement and Stadium Management Agreement and there is no justification for delaying presentment and demand for payment. The invoices presented also lack sufficient supporting documentations in order to confirm the validity of the costs and charges under the Lease Agreement terms. StadCo and ManagementCo have initiated arbitration proceedings to dispute the Stadium Authority's position and the dispute is still outstanding. 30 (Continued)

SANTA CLARA STADIUM AUTHORITY
(a Component Unit of the City of Santa Clara, California) Notes to Financial Statements
March 31, 2023 and 2022
In fiscal year 2021-22, ManagementCo invoiced an additional $902,081 in new buffet costs to the Stadium Authority through the fiscal year 2021-22 Non-NFL events' net loss. ManagementCo also issued a certificate of loan to the Stadium Authority under the Management Company Revolving Loan for the buffet amount and subsequently paid off the loan through the year-end excess cash distribution.

Stadium Authority objected to and disputes ManagementCo's unauthorized payment of these buffet costs through the Revolving Loan, and also the payment of that loan through year-end excess cash.

Pursuant to the parties' August 31, 2022 settlement agreement and stipulation, ManagementCo's draw under the Revolving Loan will be treated as a timely Stadium Authority payment, under protest, and with a full reservation of Stadium Authority's rights and claims. The Stadium Authority recorded a receivable from ManagementCo for the loan draw on the buffet costs as of March 31, 2023.

In fiscal year 2022-23, ManagementCo reported $1,164,668 in buffet costs to be charged to the Stadium Authority for the 2022-23 season. The Stadium Authority did not record a liability for this cost since the dispute is still outstanding.
(c) Public Safety Costs
In June 2019, StadCo filed an Arbitration Demand regarding alleged amounts due from the Stadium Authority under the public safety costs terms of the Stadium Lease, for fiscal year 2017-18. According to the Stadium Lease, StadCo is required to reimburse the City for the costs incurred for providing public safety services for NFL events that exceed the revenue from off-site parking permit fees. The Stadium Lease contains a provision that creates a "threshold" on the amount of public safety costs that StadCo must pay for each of the NFL seasons. If the total public safety costs exceed the threshold, then the Stadium Lease requires the Stadium Authority to reimburse or credit to StadCo the costs above the threshold in the form of rent credits. The Stadium Lease includes an obligation for StadCo to negotiate a threshold increase in good faith if the total amounts are over the threshold for three consecutive years. The Stadium Authority invoked the good faith negotiation process after costs exceeded the threshold for three seasons, which was in advance of the incurred public safety costs for fiscal year 2017-2018. StadCo filed several amended Arbitration Demands or formal demand letters for public safety costs damages for the subsequent NFL seasons and fiscal years 2018-2019, 2019-2020, 2021-2022, and 2022-2023.

The Ground Lease contains provisions that provide rent credits to the Stadium Authority in the event that public safety costs exceed the threshold. The rent credit is equivalent to the public safety costs that exceed the threshold in a fiscal year. The Stadium Authority is allowed to use these excess credits to apply against the performance-based rent owed to the City in the event that public safety costs exceed the threshold, and that excess amount is not paid directly by the Stadium Authority. Both the performance-based rent credit from the City and rent credit from the Stadium Authority expire in the next five succeeding years if not used within the year incurred. The public safety costs, threshold amount and calculations, and credits are currently under litigation with StadCo. As of March 31, 2023, the Stadium Authority did not record a liability for this cost since the dispute is still outstanding and the amount in question is not estimable.
(8) Subsequent Events
Management has evaluated subsequent events through September 11, 2023, which is the date the financial statements were available to be issued, and determined there are no other items to disclose. 31 ~ KPMG LLP
500 Capitol Mall, Ste 2100
Sacramento, CA 95814-4754
Independent Auditors' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards The Board of Directors
Santa Clara Stadium Authority:

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Santa Clara Stadium Authority (the Stadium Authority), a component of the City of Santa Clara, California, which comprise the Stadium Authority's statement of financial position as of March 31, 2023, and the related statements of revenues, expenses and changes in net position, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated September 11, 2023.

Our report contains an emphasis of matter paragraph referring to the Authority's adoption, in 2022-23, of Governmental Accounting Standards Board (GASB) Statement No. 87, Leases.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Stadium Authority's internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Stadium Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Stadium Authority's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Stadium Authority's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Sacramento, California
September 11, 2023
2 The Board of Director
Santa Clara Stadium Authority:

KPMG LLP
500 Capitol Mall, Ste 2100
Sacramento, CA 95814-4754
Independent Auditors' Report
We have audited, in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the Santa Clara Stadium Authority (the Stadium Authority), a component of the City of Santa Clara, California, which comprise the statements of net position as of March 31, 2023 and 2022, and the related statements of revenues, expenses and changes in net position, and cash flows for the years then ended, and the related notes to the financial statements, and have issued our report thereon dated September 11, 2023.

In connection with our audit, nothing came to our attention that caused us to believe that the Stadium Authority failed to comply with the terms, covenants, provisions, or conditions of Sections 5 to 6, of the Credit Agreement dated June 19, 2013, by and among the Stadium Authority, Stadium Funding Trust and Goldman Sachs Bank USA (as Administrative Agent), insofar as they relate to accounting matters. However, our audit was not directed primarily toward obtaining knowledge of such noncompliance. Accordingly, had we performed additional procedures, other matters may have come to our attention regarding the Stadium Authority's noncompliance with the above-referenced terms, covenants, provisions, or conditions of the Indenture, insofar as they relate to accounting matters.

This report is intended solely for the information and use of the board of directors and management of the Stadium Authority, Stadium Funding Trust and Goldman Sachs Bank USA and is not intended to be and should not be used by anyone other than these specified parties.

Sacramento, California
September 11, 2023
City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-448 Agenda Date: 9/19/2023

REPORT TO COUNCIL

SUBJECT
Action on the FY 2022/23 Annual Report for the Santa Clara Tourism Improvement District (SCTID) as Presented by the SCTID Owner’s Association.

COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development

BACKGROUND
The Santa Clara Tourism Improvement District, initially formed in 2005 pursuant to the Parking and Business Improvement Law of 1989, includes 11 hotels near the Santa Clara Convention Center: AC Hotel, Santa Clara, Avatar Hotels, Delta Santa Clara, Element Santa Clara, Embassy Suites, Hilton Santa Clara, Hyatt Centric Silicon Valley, Hyatt House, Hyatt Regency, Marriott Santa Clara, and TownPlace Suites by Marriott.

On May 25, 2021, at the request of the lodging businesses, City Council, pursuant to the Property and Business Improvement District Lay of 1994 (1994 Law), Streets and Highways Code Section 36600 et seq. approved Resolution No. 21-8694 establishing the Santa Clara Tourism Improvement District (SCTID) to fund sales and marketing efforts for convention and group business travel.

The SCTID was formed for a five-year term, July 1, 2021 - June 30, 2026, and the assessment method for collections was changed from $1.00 occupied room night to 1.5% of gross short-term (30 days or less) room rentals (10 or more) for FY 2021/22. On June 6, 2022, City Council actions included support for the Silicon Valley/Santa Clara DMO, Inc.’s proposed SCTID assessment increase from 1.5% to 2.0% which went into effect July 1, 2022.

Per the SCTID’s Management District Plan, the Silicon Valley/Santa Clara DMO, Inc. dba Discover Santa Clara® (the DMO) serves as the SCTID Owner’s Association and is responsible for managing the affairs of the SCTID as well as implementing activities and programs as outlined in the Management District Plan. The DMO has an active contract with the City to provide destination marketing services through June 30, 2026.

DISCUSSION
Pursuant to Section 36650 of the Streets and Highways Code, the Owner’s Association is required to file an Annual Report to the clerk that includes the following:
· Any proposed changes in the boundaries of the property and business improvement district or in any benefit zones or classification of property or businesses within the district; · The improvements, maintenance, and activities to be provided for that fiscal year; · An estimate of the cost of providing the improvements, maintenance, and activities for that fiscal year;
·
City of Santa Clara Printed on 9/15/2023Page 1 of 3
powered by Legistar™
23-448 Agenda Date: 9/19/2023
· The method and basis of levying the assessment in sufficient detail to allow each real property or business owner, as appropriate, to estimate the amount of the assessment to be levied against his or her property or business for that fiscal year; · The estimated amount of any surplus or deficit revenues to be carried over from a previous fiscal year; and
· The estimated amount of any contributions to be made from sources other than assessments levied pursuant to this part.

The Annual Report was approved by the DMO Board on August 10, 2023. Staff is transmitting the SCTID’s Annual Report to the City Council for compliance with the 1994 Law. It should be noted that for added transparency for the benefit of Council and the public, the DMO Annual Report provides detailed information (including line item detail of the FY23/24 Annual Budget) which are beyond the requirements of Section 36650.

The report is organized as follows:

1. Accomplishments: The FY 2022/23 accomplishments are listed.

2. Boundary: There are no proposed changes to the Santa Clara Tourism Improvement District boundary.

3. Improvement and Activities: The improvements and activities planned for FY 2023/24 are consistent with the Management District Plan.

4. FY 2022/23 Financials: As of this writing, the DMO expended approximately 67% of the Operating Budget. The detailed financial report is included as Appendix A in the Annual Report.

5. Key Performance Indicators (KPIs): Results of the FY 2022/23 KPIs are reported.

6. Cost: Provides the budgeted cost for each DMO Program for FY 2023/24. The FY 2023/24 Operating Budget is $3.05 million which is an increase from the FY 2022/23 Operating Budget.

For additional background and detail, the full line-item budget, that was approved by the DMO Board, is included as Appendix B in the Annual Report.

7. Surplus and Other Funding: The surplus includes SCTID collections that have been carried over from previous years.

The City Council may approve the report as filed or may modify any particular contained in the report (e.g., addition of clarifying language, cost) and approve it as modified. Any proposed modification to the district plan itself must be made after a noticed public hearing on such proposed changes pursuant to the procedures set forth in Sections 36635 and 36636 of the CA Streets and Highways Code.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that it is a fiscal activity that does not involve any commitment to any specific project with may result in a potential significant impact on the environment.

FISCAL IMPACT
The City receives 2% of the amount from the assessment collected to cover its costs of collection and administration. Of the FY 2023/24 projected revenue of $2.2 million, the City would receive $44,000.

City of Santa Clara Printed on 9/15/2023Page 2 of 3
powered by Legistar™
23-448 Agenda Date: 9/19/2023

COORDINATION
This report has been coordinated with the City Attorney’s Office and the Finance Department.

RECOMMENDATION
Approve the FY 2022/23 Annual Report for the Santa Clara Tourism Improvement District (SCTID) as presented by the SCTID Owner’s Association.

Reviewed by: Ruth Mizobe Shikada, Office of the City Manager Approved by: Jōvan D. Grogan, City Manager

ATTACHMENTS

1. Santa Clara Tourism Improvement District FY 2022/23 Annual Report City of Santa Clara Printed on 9/15/2023Page 3 of 3
powered by Legistar™

Discover Santa Clara® FY 2022/23 Annual Report Page 2 of 30 FY 2022/23 Annual Report

THINK BIG. LOOK FORWARD. August 10, 2023

Santa Clara
Tourism Improvement
District

DISCOVER
A

Discover Santa Clara® FY 2022/23 Annual Report Page 3 of 30

TABLE OF CONTENTS
LETTER FROM THE CEO ....................................................................................................................................... 4 FISCAL YEAR 2022/23 ACCOMPLISHMENTS ...................................................................................... 5 Convention Sales, Incentives and Services ................................................................. 5 Marketing & Communications ............................................................................................. 6 Administration and Operations .......................................................................................... 8 BOUNDARY .................................................................................................................................................................. 10 IMPROVEMENTS AND ACTIVITIES ................................................................................................................ 11 FY 2022/23 FINANCIALS ................................................................................................................................... 16 KEY PERFORMANCE INDICATORS (KPIs) .............................................................................................. 17 COST ................................................................................................................................................................................ 19 ASSESSMENT ........................................................................................................................................................... 20 SURPLUS AND OTHER FUNDING ................................................................................................................. 22 Appendix A – FY 2022/23 Financial Report ..................................................................................... 23 Appendix B – FY 2023/24 Operating Budget ................................................................................. 26 Appendix C – Assessed Businesses .................................................................................................... 30

SILICON VALLEY/SANTA CLARA DMO, INC. BOARD OF DIRECTORS

Catherine Lentz, Chair
Forty Niners Stadium
Management Co.

Nadine Nader
City of Santa Clara

Leo Wandling, Vice-Chair
I.A.T.S.E – Local 134

Christopher Hamilton
Levy Restaurant

Kelly Carr, Treasurer
OVG360

Barb Granter
California’s Great
America

Christine Lawson,
Secretary/Ex-Officio
Discover Santa Clara®
Chris Sullivan
Santa Clara Marriott

Ruth Mizobe Shikada,
Ex-Officio
City of Santa Clara

Sean Steenson
Delta Hotel

Fernando Vazquez
Hyatt Centric

Discover Santa Clara® FY 2022/23 Annual Report Page 4 of 30

LETTER FROM THE CEO

On behalf of the team, it is with pleasure that I present you with the Discover Santa Clara® (the “DMO”) Annual Report for FY 2022/23. While the past year has brought some challenges due to the unprecedented impact of the Covid-19 pandemic, subsequent slow rebound, and staff turnover/open positions, there are also many achievements to celebrate.

In October 2022, the DMO welcomed me as the new CEO where to date, my focus has been dedicated to cultivating a formidable team and establishing foundational processes to ensure success moving-forward. Key positions have been filled, including Director of Sales, Director of Marketing, and Sales Manager, to allocate critical resources and develop strategies that support the achievement of the DMO’s designated Key Performance Indicators (KPIs).

While we faced several obstacles, such as the delayed timeline in assembling our team and the challenges brought on by tech layoffs, the threat of a recession, and intense market competition, our progress in identifying potential larger conventions for Santa Clara is commendable. However, these circumstances restricted our ability to execute many of the tactics outlined in the FY 2022/23 strategic plan.

Nonetheless, we have experienced notable accomplishments in the past calendar year. Our team successfully secured one P2 event, scheduled to take place in November 2023.

Additionally, we hosted a high-profile client for a site inspection in June 2023, as Santa Clara is being considered for a multi-year P1 event from 2025 to 2030. While we have yet to secure a P1 piece of citywide business, we have had interest and the opportunity to be part of the bidding process in partnership with the Santa Clara Convention Center (the “SCCC”). These preliminary wins demonstrate the teams’ capabilities, and they remain proactive in prospecting for new citywide business, establishing relationships, and generating interest in Santa Clara. These efforts will undoubtedly yield future business opportunities, despite the complexities of the current landscape.

In the upcoming fiscal year, we anticipate continued growth and are committed to re- introducing Santa Clara as a premier destination through direct sales and marketing efforts. To support our goals, we will be expanding our team by adding an additional Sales Manager, Marketing Manager, and Manager of Sales Systems & Strategy. Together, with a robust business plan focused on gaining exposure and cultivating strong partnerships with influential meeting and event planners, we will continue to propel the DMO forward.

Christine Lawson
CEO

Discover Santa Clara® FY 2022/23 Annual Report Page 5 of 30 FISCAL YEAR 2022/23 ACCOMPLISHMENTS

Convention Sales, Incentives and Services

The Convention Sales, Incentives, and Services category has been instrumental in building a successful foundation for growth. Dedicated efforts and strategic investments in this area have yielded significant accomplishments, with the intention of driving visitation to the assessed lodging businesses, our partners, and the City.

• Hired a Convention Sales Manager in September 2022 to focus on Citywide (P1 and P2) conventions/events.
• Welcomed new Director of Sales, Luz Chatman, on June 26, 2023 to develop a strategic deployment and sales plan to drive exposure, increase leads, and close larger pieces of citywide business.
• The Board approved the addition of a Manager, Sales Systems and Strategy position in the FY 2023/24 budget. This new role will oversee the management of the DMO's Simpleview Customer Relationship Management (CRM) system, and contribute data insights to our strategic sales efforts, enhancing efficiency and effectiveness. • Reformed our operations by introducing a cadence of meetings to include:
o Daily business review meetings, uniting the DMO, Convention Center, and Levy sales teams. Through detailed evaluation of every lead, we ensure optimal revenue generation for all stakeholders and assessed lodging businesses.
o Continued and facilitated twice-monthly sales meetings to support collaboration across the DMO, Convention Center and Levy Sales Teams.

Through these collaborative efforts, we have harnessed collective expertise to drive overnight visitation to assessed lodging businesses. o Implemented bi-weekly DMO team meetings and weekly one-on-one meetings with individual team members.
• Revamped and successfully implemented an advanced P1/P2 site inspection process, significantly elevating our ability to present the city of Santa Clara and our esteemed partners in a compelling manner. By providing a rich and immersive experience during site visits, we have strengthened our position as an attractive destination for group, meeting, and leisure customers.
• Collaborated with the Convention Center, Levy, and the SCTID Hotels to assess and revise the existing Booking Policy to meet current market dynamics, maintain a competitive edge, explore mutually beneficial strategies for better representation of the City, and to drive business. A new Booking Policy was approved by the Board and implemented in April of 2023.
• Implemented bi-monthly meetings with the SCTID Hotel Directors of Sales to discuss needs and strategies, and to communicate current DMO activities. • Crafted a FY 2023/24 DMO Tradeshow/Sales Trip Calendar and Planning Checklist to gain both vital exposure and to reacquaint the marketplace with Santa Clara and all that the city and our partners have to offer for groups/meetings and leisure travel.

Discover Santa Clara® FY 2022/23 Annual Report Page 6 of 30 • Initiated a Request for Proposal (RFP) process to design and build a compelling tradeshow booth that will impress attendees and capture the spirit of Santa Clara to drive exposure, leads, and new business.
• Joined San Francisco Travel, providing the DMO with additional sales and marketing opportunities such as listing our Convention Center in their venue and supplier search tool, opportunities to participate in SF Travel-led tradeshows and meetings, and media familiarization excursions (FAMs), to name a few. The DMO will continue to explore opportunities to leverage this partnership.
• CEO attended high-profile industry events including the Visit California Forum, and California Travel’s Spring Board Meeting which provided excellent insight on current efforts, campaigns, and participation opportunities for DMOs in addition to networking opportunities, and exposure for the DMO.
• Crafted necessary standard operating procedures for more effective communications and operations among the DMO, the Convention Center, Levy, and our SCTID Hotel partners.
• Partnered with San Francisco Travel and Team San Jose to develop a compelling bid to host Super Bowl 60 for 2026. The Bay Area was named the official host and the Super Bowl will be held at Levi’s® Stadium.

Marketing & Communications

The Marketing and Communications program has played a pivotal role in regaining exposure for the DMO. Over the past Fiscal Year, strategic investments and creative campaigns have effectively highlighted the unique offerings and attractions that Santa Clara has to offer.

• Hired a Director of Marketing, Katelyn Studebaker, who started on May 3, 2023 to develop and execute a diverse and durable marketing plan. • Received Board approval to add a Marketing Manager for FY 2023/24 to begin in mid-July 2023.
• Promotional materials were prepared in partnership with our Marketing Agency partner,
We The Creative, to create a foundation of tools for sales and to establish a cadence of social media posts to drive exposure, and business. Specific items created were:
o Master Sales Pitch Deck: A customizable deck of information about the DMO’s brand and the benefits of booking with Santa Clara that can be used at tradeshows, direct client interaction and can be sent as a follow-up to customers in a PDF format.
o Social Media Posts: Contracted and developed a social media campaign of eight (8) diverse monthly posts highlighting the space at the SCCC, our innovative food experience, our partners, and the City to drive demand for overnight visitation to assessed lodging businesses and our partners.

Discover Santa Clara® FY 2022/23 Annual Report Page 7 of 30 o These posts were brought to life through imagery and our branded taglines including #discoversantaclara #santaclara #conventioncenter #ThinkBigLookForward #MakeItYours #trailblazers #events #innovation @legendaryevents.
o Email Templates: Two email templates were created with the intent of emailing our database of approximately 5,000 customers to acquaint them with our new brand and how we are differentiating ourselves through unique events and experiences, collaboration, and culinary excellence. Responses to these emails will provide the sales team with the opportunity to reconnect and requalify clients. Campaigns will begin in Q1 of FY 2023/24. o RFP Template: Developed a branded template outlining our unique approach to events. This will be used to send to clients who have requested a proposal and ensure consistency in brand messaging across team members. • Implemented monthly marketing calls with
We The Creative to include the DMO,
Convention Center and Levy leadership to manage projects and discuss future strategy.
• Identified and implemented Email Marketing Platform, Act-On, to enable the DMO to effectively execute, automate and retarget clients with on-going targeted Email campaigns.
• Launched the first DMO email in May 2023 through Act-On to our database of 5,000 meeting/event planners, announcing Levi’s® Stadium as the hosting location of Super Bowl 60.
• Initiated Google Ad campaign in March 2023 that is on-going, targeting meeting planners, weddings, and groups/events based upon our customer personas.

Responses will allow us to identify commonalities across the groups which will enhance future ad strategy to drive overnight visitation to assessed lodging businesses.
• Created a Discover Santa Clara® website landing page to support our marketing efforts by directing clients responding to our campaigns and seeking additional information. This will allow us to track content reviewed, RFPs submitted and requests to speak to our sales department.
• In June 2023, the Director of Marketing developed a new Social Media Content strategy to be executed in concert with
We The Creative. The goal is to target social
media channels with relevant content for specific customer segments. Specifically:
o LinkedIn will be used to reach meeting and event planners. o Facebook and Instagram will be focused on creating valuable Santa Clara content that motivates followers to save and share with the target audience of Leisure travel, Staycationer’s and Day Trippers. Social media content categories will center around Santa Clara events, local restaurant spotlights, SCTID Hotel spotlights, Santa Clara news and User Generated Content. • In June 2023, the DMO began utilizing social media Reels to feature on Facebook and Instagram providing an excellent opportunity to show our personality, spread brand awareness and connect with our audience through authentic content while growing our follower base.

Discover Santa Clara® FY 2022/23 Annual Report Page 8 of 30 • Conducted two Instagram growth initiative campaigns with local and diverse influencers to grow followers with a focus on the content being “liked, followed and shared.”
o Growth initiative #1: Partnered with a high-profile local influencer “sanjosefoos” on a contest promoting two complimentary Beyonce concert tickets for her August 2023 show at Levi’s® Stadium. Grew followers by 3,170 (25%) in a 24-hour period for the minimal cost of only $2,934.00. o Growth initiative #2: Partnered with influencer “Ninersnationbn” to promote a contest to win two complimentary 49’ers tickets for opening day. Grew followers by 1,000 at a cost of $1,333.00.
• Initiated the creation of a Social Media Influencer Catalog to include pricing for local influencers available for hire to create inspirational content to promote Santa Clara and increase the DMO’s base of followers.
• Made calibrations to the existing Discover Santa Clara® website specific to:
o Increased functionality by replacing ‘buzz words.’ Existing website is now easier to navigate.
o Upgraded authenticity by replacing stock images with real Santa Clara images.
o Updated homepage widgets to be more intuitive (Meet, Play, Plan, Stay). • Director of Marketing conducted a collateral review with representatives from the DMO, OVG, Levy and the City to make refinements to current tools and identify additional needs.
• Refreshed photography for the DMO marketing brochure, better showcasing what the destination and our partners have to offer to each of our target audiences.

Initiated updating floor plans for both the DMO and the SCCC to include:
o Welcome to Santa Clara 3D Map providing a sense of place for SCCC’s proximity to hotels, Levi’s® Stadium, Great America, nearby parking lots and surrounding points of interest.
o More detailed overview of the SCCC space, levels, and offerings. o Detailed capacity charts.
• Initiated search for photographers to shoot both updated catering photos for Levy and SCCC spaces to have professional photos for sales and marketing efforts.

Photoshoots will take place in Q1 FY 2023/24.

Administration and Operations

The following initiatives taken in FY 2022/23 not only reinforced the commitment to effective administration and operations for the DMO, but will ultimately benefit our partners, positioning them for increased visibility, collaboration, and success in the market.

Discover Santa Clara® FY 2022/23 Annual Report Page 9 of 30 • CEO and Administrative Services Manager went through a strong orientation immersion process including:
o Meetings with the City, Jones Lang LaSalle (JLL), and the SCCC teams providing support for the DMO CEO and team’s onboarding including weekly meetings with Kelly Carr, GM of the SCCC, and Dan Fenton of JLL. o Conducted CEO introductory meetings with the DMO Board Members and the SCTID Hotel General Managers and Directors of Sales to understand business needs and develop rapport.
o Fostered strategic collaborations by organizing CEO meetings with key vendor partners, further strengthening the support system for assessed lodging businesses.
o Continued the onboarding process through regular meetings with City representatives Ruth Shikada and Nancy Thome to facilitate seamless integration and maximize operational efficiency.
• CEO engaged with DMO accounting firm, ArightCo, to sharpen current reporting stack and processes.
• Formalized a partnership with Krisch & Company to facilitate the creation of Financial Standard Operating Processes (SOPs) for the DMO slated to be presented for the Board's approval in Q1 of FY 2023/24 with the ultimate objective of the DMO securing custody of the budget and SCTID Assessment Funds. • In June, the CEO met with Mayor Gillmor to discuss the vision for Santa Clara, share DMO accomplishments to date, and strategies in-flight.
• Alerted the current accounting firm, ArightCo, that we will be transitioning to a new accounting firm, Krisch & Company in the upcoming FY 2023/24 to better serve the evolving needs of the DMO.
• Commenced working with CPS HR Consulting to design the DMO’s annual review format and process for implementation in Q1 of FY 2023/24. • Partnered with ADP to initiate discussions and take the necessary steps to launch a DMO 401k program in July 2023.
• Worked with JLL to create a DMO Workplan for completion prior to the conclusion of the JLL contract with the City on December 31, 2023. The current focus is on crafting incentive plans for eligible positions on the team, Sales Managers, Director of Sales, Director of Marketing and CEO. The goal is to have plan drafts completed for presentation to the Board prior to the end of Q1 of FY 2023/24. • Completed the FY 2023/24 budget process which was presented to the Board of Directors and approved on April 7, 2023. This comprehensive financial plan ensures the allocation of resources is aligned with our strategic objectives, benefiting our assessed lodging businesses, and driving their success in the coming year. • CEO recognized by Smart Meetings as one of their “2023 Smart Women in Meetings” Award Winners. This prestigious honor provides excellent exposure for the DMO, highlighting our leadership and expertise in the industry.

Discover Santa Clara® FY 2022/23 Annual Report Page 10 of 30

BOUNDARY

The Santa Clara Tourism Improvement District (the “SCTID”) will include all lodging businesses with ten (10) rooms or more, existing and in the future, available for public occupancy within the boundaries of a portion of the city of Santa Clara. The boundary, as shown in the map below, currently includes eleven (11) lodging businesses, listed in the Appendix. There are no proposed changes to the boundaries of the SCTID. One (1) lodging business is currently undergoing renovation and will be under new management.

One SCTID Hotel partner changed ownership:
o The Avatar Hotel is anticipated to re-open as a Tapestry Collection by Hilton property in September 2023: 4200 Great America Pkwy, Santa Clara, CA 95054

The Plaza
Suites
Af.. Hotel
S Hotels
Marriott
~ Convention Center
c:.:: City of Santa Clara
• TID Boundaries
Santa Clara TID
The Elemen t
Bi ltmore
HoteJ_
&Suites

Discover Santa Clara® FY 2022/23 Annual Report Page 11 of 30

IMPROVEMENTS AND ACTIVITIES

The improvements and activities to be provided for FY 2023/24 are consistent with the Management District Plan (the “Plan”) with no proposed changes. The focus will be on the execution of high-impact sales and marketing efforts to gain exposure, lead generation, and bookings for the City and our partners now that we have the majority of our team members in place. Aligned with the activities and improvements outlined in the Plan, noted below are highlights and areas of focus anticipated for FY 2023/24.

Convention Sales, Incentives and Services

• Development of Sales Organization Model.

With the arrival of the Director of Sales in late June, a priority will be to develop a Sales organizational structure that sets the DMO up for success. This structure will include deploying the sales team towards targeted market segments (e.g., technology, banking, sports, etc.) so that the team is both interacting and qualifying key business influencers to drive awareness and business for the City and our partners.

• Enhancement of Sales Enablement and Operations Process.

With the addition of the Manager, Sales Systems & Strategy budgeted to start on September 1, 2023, we have the opportunity to both evolve and create new processes specific to day-to-day sales operations, forecasting, business intelligence, and tracking sales performance metrics. These critical processes will enable the team to be more effective in time management, focusing on the right customers for the City and our partners while properly tracking all business activity in the CRM to support future tactics and strategic approach.

• Attendance to Key/High-Profile Tradeshows and Targeted Sales Trips.

Due to the turnover of staff and the delayed onboarding of the current DMO team, a considerable number of planned activities related to direct sales, in the form of tradeshows, business trips and customer activities, did not occur during FY 2022/23 as intended. However, with our newly added staff and continued focus on recruiting an additional Sales Manager, the DMO is entering the new fiscal year with a more robust team. By strengthening our team and resuming our planned sales activities, we are taking the initiative towards fulfilling our mission of driving visitation to assessed lodging businesses, the City, and our partners. Moreover, these efforts will allow us to forge valuable connections, and promote our destination in a compelling way.

• Client Familiarization Trip and Events.

Efforts will be focused on inviting key meeting/event planners to Santa Clara as a means of providing vital information and first-hand experience on what the City and our partners have to offer. This and other targeted events will allow us to highlight our offerings and build/deepen important relationships for future business.

Discover Santa Clara® FY 2022/23 Annual Report Page 12 of 30 • Creation of Target Account List.

The DMO team will be developing multiple target client lists based upon business segments and influence. These lists are crucial to afford us the ability for focused and efficient resource allocation, enabling the sales and marketing teams to prioritize efforts and allocate time and energy towards prospects with the highest potential for conversion. This targeted approach will serve to maximize productivity and increases the likelihood of achieving our KPIs.

• Active Involvement in Industry/Community Events.

The DMO team is committed to expanding their reach and fostering meaningful connections within the industry. With a proactive approach, the team will actively engage in high-profile industry and professional networking events, seizing every opportunity to highlight the destination's offerings. By participating in these events, the team aims to gain exposure, and establish a strong presence in the market (e.g., MPI, SVBTA, etc.).

Marketing & Communications

• Website Redesign.

The objective is to redesign the current DMO website to provide a richer and more diverse experience for our group, meeting, and leisure customers. This revamp aims to generate increased demand for overnight visitation to assessed lodging businesses, and overall economic impact for the City. Providing varied audience content will support investments on the sales and marketing side to drive traffic to the site, and keep people engaged while on the site with the goal of meeting planners being more inclined to complete an RFP.

Additionally, it is critical that we enhance the site to support the DMO’s goal of marketing the destination with updated events and reasons to come/stay at assessed lodging businesses in Santa Clara.

• Branding Meeting.

While the DMO has created a brand, the goal of the branding session is to answer the question “Why Santa Clara?” There is a need to have greater and more compelling content to be used to create stories that resonate with our target customer segments to create an emotional connection, increase exposure, leads and overall economic impact to the City. The goal is to have completed this meeting before the end of Q1 of FY 2023/24.

• Photoshoots.

The DMO has allocated a portion of the budget to invest in photography to build and expand its content library. Currently, the DMO primarily uses stock photography that does not accurately portray the destination or our valued partners.

Discover Santa Clara® FY 2022/23 Annual Report Page 13 of 30 Websites, social media, Google Ads, and other sales materials can all benefit from the use of rich imagery. The use of captivating visuals will help create an authentic and compelling representation of our destination, effectively captivating the attention and interest of potential visitors.

Additionally, the DMO’s Director of Marketing has scheduled and will manage photoshoots for both the Convention Center and Levy with monies from these respective budgets to bolster our portfolio of sales and marketing assets.

• Videography.

For numerous marketing purposes, including the website, it is imperative that the DMO invest in video production. With the popularity of video for marketing, the DMO will be investing in video production to drive exposure, leads and bookings. The goal of the DMO is to have a comprehensive highlight reel that highlights the destination and offerings.

These videos will be further segmented into smaller clips intended for usage with specific target audiences/ customer segments.

By incorporating captivating and informative videos, the goal is to effectively engage our audience, evoke interest, and inspire visitors to choose our destination for their next travel experience, driving demand for the City and our partners.

• Focus on Influencer Marketing.

The DMO has budgeted funds to collaborate with “influencers” who are widely regarded as experts in their field or as having significant social influence. This will help us connect with the influencers audience and raise the DMOs exposure and followers through diverse audiences, thus increasing followers and demand.

• Customer Database Growth Strategies.

In today's digital landscape, where social media platforms and email marketing have become vital pillars of business success, implementing effective customer database growth strategies is crucial specifically for popular platforms like Instagram, LinkedIn, Facebook, Email subscribers, and web views, with the aid of Google Analytics. The DMO’s marketing team will focus on harnessing the potential of these platforms and utilizing data-driven insights so that we can unlock new avenues for growth, enhance customer engagement, and boost exposure, leads, and business.

• Development of Content Strategy.

There will be a strong focus on developing a potent content strategy for key channels such as our website, social media platforms, and email marketing. A well-crafted strategy will ensure consistent and engaging content, leading to a strong brand identity and increased audience engagement. Moreover, delivering personalized and relevant messages to specific customer segments will help to drive better conversion rates and customer retention.

Discover Santa Clara® FY 2022/23 Annual Report Page 14 of 30 Some areas of concentration will be on developing blogs and whitepapers for the DMO website, and advanced creation of custom content calendars for both social media platforms and Email marketing.

• Strategic Advertising.

In addition to the Google Ads that began running in March 2023, the DMO will expand digital advertising in the new fiscal year. This will include PPC advertising on multiple platforms that allow targeting by job title, such as LinkedIn and Meta. There are many creative ways to hyper target Meta (Facebook/Instagram) ads, including geotargeting conferences that the DMO attends. LinkedIn advertising will include setting up automated direct messages to individuals with Event Planner and Executive Admin titles.

The DMO will begin retargeting people who began an RFP but did not complete it.

Retargeting is a high priority initiative. To date, 6.6k RFPs were started, and only twenty- one were submitted. Purchasing website display ads on reputable websites such as CNN, ESPN, Better Homes and Gardens, Huffington Post, The Weather Channel and Yahoo will also be researched.

• Participation in Visit California Marketing Campaigns.

Visit California is a non-profit organization that is focused on developing, executing, and maintaining marketing programs to further develop tourism in California. Visit California has a wide reach and provides DMOs the opportunity to participate in marketing programs allowing for diversification of sales and marketing exposure and exploiting their follower base in both domestic and international markets.

Administration and Operations

• Creation of DMO Financial SOPs.

The DMO is actively developing Financial Standard Operating Procedures (SOPs) in collaboration with Krisch and Company and City representation. These SOPs aim to establish fiscally responsible processes within the organization and ultimately secure custody of the SCTID Assessment Funds. The DMO seeks to create essential policies that will promote sound financial management and ensure the efficient allocation of resources.

• Development of Annual Review Process.

The DMO partnership with CPS HR Consulting to collaborate on developing an innovative Annual Review format and process. Our primary objective is to ensure that leadership within our organization is equipped to deliver valuable feedback on performance, identify areas of success, and pinpoint opportunities for growth.

Through this strategic collaboration, we aim to create an effective framework that fosters professional development and enhances the overall productivity and success of our team. The goal is to have an approved process by the end of Q1 of FY 2023/24.

Discover Santa Clara® FY 2022/23 Annual Report Page 15 of 30 • Construction of Goal Setting Process and Incentive Plans.

The DMO is partnering with JLL to develop competitive incentive plans. The goal is to foster a supportive and motivating culture that rewards individuals based on the achievement of their personal KPIs. Additionally, the intent is to encourage team collaboration to achieve collective DMO goals.

Contingency

The budget shall continue to include a contingency line item to account for uncollected assessments, if any. If there are contingency funds collected, they may continue to be held in a reserve fund or utilized for other program, administration, or renewal costs at the discretion of the DMO Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the DMO Board.

Contingency/reserve funds may be spent on District programs or administrative and renewal costs in such proportions as determined by the DMO Board. The reserve fund may be used for the costs of renewing the SCTID.

City Administration Fee

The City of Santa Clara shall continue to be paid a fee equal to 2% of the amount of assessment collected to cover its costs of collection and administration which may include but are not limited to staffing costs, legal services, and operational costs for rent, telephone, supplies, postage, and other general office expenses.

Discover Santa Clara® FY 2022/23 Annual Report Page 16 of 30 FY 2022/23 FINANCIALS

Compared to the forecasted amount of $1.17 million, the SCTID assessment for FY 2022/23 is estimated to actualize at approximately $2.5 million. With the continued impact of Covid-19 and the prospect of a recession on individual travel, meetings, and events at the beginning of the fiscal year, it was difficult to predict this unanticipated revenue growth of $1.3 million (72.5%) in assessment revenue.

As of June 30, 2023, the DMO expended 67% of the Operating Budget leaving a balance of $550,507. As previously referenced, the delay in assembling the team greatly inhibited our ability to execute many of the budgeted activities for the DMO. As we enter FY 2023/24 with new key discipline leaders in sales and marketing the team looks forward to reacquainting the market and key customers with the City, our partners, and offerings.

Income Budget Actuals
SCTID Assessment $1,174,623 $2,500,000
Other Revenue $66,000 $69,571

FY 2022/23 Expenditures Budget Actuals Balance

CONVENTION SALES,
INCENTIVES & SERVICES $607,274 $199,245
$408,029

MARKETING &
COMMUNICATIONS $203,048 $121,529 $81,520
ADMINSTRATION $822,592 $770,014 $52,579
CONTINGENCY $35,239 $0 $35,239
CITY ADMINISTRATION FEE $23,429 $50,288 ($26,859)
TOTALS $1,691,583 $1,141,076 $550,507

An additional Reserve Fund was created in FY 2021/22 to be used for any large-scale unexpected expenses or emergencies only upon Board of Directors approval. There were no expenses to the Reserve Fund.

FY 2022/23 Expenditures Budget Actuals Balance
RESERVE FUND $678,001 $0 $678,001

The detailed FY 2022/23 Financial Report is included as Appendix A.

Discover Santa Clara® FY 2022/23 Annual Report Page 17 of 30 KEY PERFORMANCE INDICATORS (KPIs)

The established KPIs are the core metrics that drive success and serve as the compass for the DMO. Our KPIs are strategically established to ensure the realization of targeted objectives, with the primary focus on securing a specified number of P1 and P2 events that translate into substantial revenue, hotel room occupancy, and overall economic impact for the Convention Center, the SCTID Hotels and the City.

With the current economic and competitive landscape, and lack of a full team, the DMO did not achieve the established KPIs for FY 2022/23, however did secure one P2 event that will actualize in FY 2023/24. With the continued building of the DMO team, there is confidence that FY 2023/24 KPIs will be achieved.

Silicon Valley/Santa Clara DMO Inc.

Performance Measures
2022/23
Target
2022/23
Actuals
2023/24
Target

1. Event Mix (Consumed)
Percent of P1 Events 1% 0% 0.5%
Number of P1 Events 3 0 1
Percent of P2 Events 2% 0% 1.0%
Number of P2 Events 6 0 2

2. Number of Definite Events Booked (Booked in the year for future years)
Number of P1 Events 5 0 2
Number of P2 Events 11 1 4

3. Convention Center Gross Revenue (P1 & P2) $2,580,000 $0 $800,000

4. Number of Room Nights Booked (For future years) 16,438 750 4,506

5. Number of Room Nights Consumed 9,375 0 2,253

6. Number of Weeks Impacted (Consumed) 9 4 2

7. Customer Service Survey Results (Overall satisfaction) 85% 0% 85%

8. Number of Prospects (active) (Non-cumulative P1 & P2) 300 53 140

9. Economic Impact (Consumed P1 and P2 events) $6,031,943 $0 $2,745,582

KPI Summary

1. Event Mix. This KPI focuses on the target mix of convention/meeting types (P1’s– P5’s) that will deliver the best financial and economic results for the City. Additionally, the goal is to focus on the type and quality of events as opposed to strictly focusing on the quantity of events. While the quality of event mix overall at the Convention Center improved, there were no consumed P1s and P2 during this fiscal year.

Discover Santa Clara® FY 2022/23 Annual Report Page 18 of 30

2. Definite Events Booked. A “definite” event is a future event confirmed with a signed executed Convention Center contract and at least one SCTID lodging business. While the DMO team did not meet the target of nine citywide events to be consumed in FY 2022/23 or the booking goal of 16 events to be booked in the fiscal year for future years, one P2 event was contracted in FY 2022/23 for November 2023.

3. Convention Center Gross Revenue. The Convention Center’s Gross Revenue came in higher than expected at $16,791,629. However, there were no consumed P1 or P2 events for the DMO. There were staffing challenges with the DMO only having one dedicated sales manager.

4. Room Nights Booked. Achieving the goals for occupied hotel rooms in the past fiscal year was a collaborative effort with OVG, Levy and the DMO. While the goal of booking P1 and P2 events resulting in 16,438 in booked guestrooms was not achieved, the DMO did contract one P2 event with 750 guestrooms.

5. Room Nights Consumed. Achieving the goals for rooms that have been occupied in the past fiscal year is a collaborative effort with OVG, Levy and the DMO. The team has made great strides in securing business for the Convention Center that drives overnight stays into SCTID hotels while generating significant revenue. The groups that are characterized as larger (P1 and P2) are a focus of the DMO. There were not any consumed room nights for P1s and P2s this year.

6. Number of Weeks Impacted. This KPI reports the number of weeks throughout the year where a P1/P2 event or a combination of events positively impacted Santa Clara’s economy and was above the 700 peak room nights threshold per day for two or more days. In FY 2022/23, there were 4-weeks impacted to a goal of 9-weeks based upon overlapping P3-P5 events.

7. Customer Service Survey Results. The newly developed and completed customer service platform has provided valuable insight in assessing successes and opportunities in the service areas. Because there were not any P1 or P2 events, there was no score for the DMO.

The team will continue to leverage this tool to further understand the customer experience and increase satisfaction.

8. Prospects. While measures were being taken to assist with prospecting efforts, due to the staffing challenges in the year there was not a significant increase in the number for P1 and P2 prospects. However, there has been significant sales activity from the DMO side, with 264 leads being researched and 53 active prospects in the pipeline.

9. Economic Impact. The total economic impact of Convention Center events in the fiscal year was $57,879,937. However, there was not any economic impact for consumed P1 or P2 events for the DMO.

Discover Santa Clara® FY 2022/23 Annual Report Page 19 of 30 COST

In preparing the FY 2023/24 Adopted Operating Budget, it is important to address the challenges the DMO has encountered since its inception. The unprecedented impact of the Covid-19 pandemic and subsequent slow rebound have continued to test our resilience.

Additionally, we have faced the unavoidable reality of staffing turnover, further amplifying the hurdles we have had to overcome. In navigating these obstacles, our steadfast commitment has been to monitor expenses diligently and to ensure a maximum return on investment for all budgeted expenditures. As we delve into the upcoming fiscal year, our approach remains unwavering. However, we must also acknowledge the need to revitalize the DMO with an aggressive sales and marketing plan, one that propels the organization forward and secures critical customer and market exposure for the City and our partners.

The allocation of budgeted funds within the Adopted FY 2023/24 Operating Budget has been crafted to seize every opportunity to effectively raise awareness of Santa Clara in the Meetings and Convention industry. We have designed an aggressive direct sales and marketing plan strategically tailored to enhance Santa Clara's stature and recognition among key decision makers.

In addition to increased resources and personnel, there will be a continued emphasis to improve the DMO’s administrative functionality, including consistency in operations, ongoing effectiveness in financial reporting, policy/financial SOP development and Human Resources administration.

The full FY 2023/24 Adopted Operating Budget is included as Appendix B

BUDGETED COST BY PROGRAM FY 2023/24
Adopted
% of Budget
CONVENTION SALES, INCENTIVES & SERVICES $1,188,331 38.9% MARKETING & COMMUNICATIONS $818,578 26.8%
ADMINSTRATION $935,821 30.7%
CONTINGENCY $66,000 2.2%
CITY ADMINISTRATION FEE $44,000 1.4%
TOTAL OPERATING BUDGET $3,052,730 100%

FY 2023/24 Projections
The cost of providing improvements and activities for FY 2023/24 is consistent with the Plan.

The total budget has increased as a result of adding team members to execute specific tactics and improved business conditions. The total Operating Budget for FY 2023/24 is $3,052,730 which includes the estimated SCTID collections for the fiscal year of $2,200,000, $786,730 in carry-over funds, and $66,000 in other revenue. The categorical breakdown is below. All budget category allocations of estimated SCTID revenue for FY 2023/24 are within the authorized twenty percent (20%) adjustment of the SCTID revenue allocations from the prior year.

Discover Santa Clara® FY 2022/23 Annual Report Page 20 of 30 Category % of
Budget
FY 2023/24
Assessment
Estimate
% Change
from
previous
year
Other
Revenue
FY 2022/23
Carryover
FY 2023/24
Operating
Budget

CONVENTION SALES,
INCENTIVES & SERVICES 40% $880,000 0% $0 $328,331 $1,208,331

MARKETING &
COMMUNICATIONS 20% $440,000 3% $66,000 $202,578 $708,578 ADMINSTRATION 35% $770,000 -3% $0 $255,821 $1,025,821
CONTINGENCY 3% $66,000 0% $0 $0 $66,000

CITY ADMINISTRATION
FEE 2% $44,000 0% $0 $0 $44,000
TOTALS 100% $2,200,000 $66,000 $786,730 $3,052,730

ASSESSMENT

The assessment rate for the initial year FY 2021/22, was one and one-half percent (1.5%) on gross short-term (30 days or less) room rentals (10 rooms or more). In compliance with the Plan, the DMO’s Board of Directors approved an increase of one-half percent (0.50%) for FY 2022/23 increasing the annual assessment rate to the maximum of two percent (2.0%) on gross short- term room rentals. Based on the benefit received, assessments will not be collected on stays by any officer or employee of a foreign government who is exempt by reason of express provision of Federal law or international treaty. Additionally, assessments will not be collected on stays by any Federal or State of California officer or employee on official business who shall provide one of the following; a warrant or check drawn on the Treasury of the United States; a copy of the official travel orders indicating the issuing governmental agency and the employee’s full name; or, a copy of a letter on the official letterhead of an exempt governmental agency requesting exemption and listing the employee’s name and stating that the stay is for official government business. The dates of occupancy must also be included.

The term “gross room rental revenue” as used herein means: the consideration received, whether or not actually charged by the lodging business, for the occupancy of space in a lodging business valued in money, whether said gross room rental revenue is received in money, goods, labor, or otherwise, including all receipts, cash, credits, and property and services of any kind or nature. A lodging business may provide complimentary non-assessable rooms for employee use, guest satisfaction or charitable purposes (by a qualified 501(c)(3) charity) and a lodging business shall detail all complimentary non-assessable rooms in its regular reporting.

Failure to accurately report complimentary rooms shall result in assessment of the rooms in question. Gross room rental revenue shall not include any federal, state, or local taxes collected, including but not limited to transient occupancy taxes.

Discover Santa Clara® FY 2022/23 Annual Report Page 21 of 30 The assessment is levied upon and a direct obligation of the assessed lodging business.

However, the assessed lodging business may, at its discretion, pass the assessment on to transients. The amount of assessment, if passed on to each transient, shall be disclosed in advance and separately stated from the amount of rent charged and any other applicable taxes, and each transient shall receive a receipt for payment from the business. If the SCTID assessment is identified separately it shall be disclosed as the “SCTID Assessment.” As an alternative, the disclosure may include the amount of the SCTID assessment and the amount of the assessment imposed pursuant to the California Tourism Marketing Act, Government Code §13995 et seq. and shall be disclosed as the “Tourism Assessment.” The assessment is imposed solely upon and is the sole obligation of the assessed lodging business even if it is passed on to transients. The assessment shall not be considered revenue for any purpose, including calculation of transient occupancy taxes.

Bonds or any debt obligation shall not be issued.

Time and Manner for Collecting Assessments
The City will continue to be responsible for collecting the assessment on a quarterly basis or at the close of any shorter reporting period as established by the Director of Finance (including any delinquencies, penalties, and interest) from each assessed lodging business. The City shall make all reasonable efforts to collect the assessments from each assessed lodging business.

The City shall forward the assessments collected to the Owners’ Association.

Penalties and Interest
The SCTID shall reimburse the City of Santa Clara for any costs associated with collecting unpaid assessments. If sums in excess of the delinquent SCTID assessment are sought to be recovered in the same collection action by the City, the SCTID shall bear its pro rata share of such collection costs. Assessed businesses which are delinquent in paying the assessment shall be responsible for paying:

1. Delinquency Interest
Any lodging business that fails to remit any assessment imposed within the time required shall pay interest as described in subparagraph three below.

2. Penalty for Willful Noncompliance or Repeated Delinquencies If the City determines that the nonpayment of any remittance due is due to willful noncompliance or repeated delinquencies, a penalty of twenty-five percent (25%) of the amount of the assessment shall be added thereto in addition to the interest as required by subparagraph three below.

3. Calculation of Interest
In addition to the penalties imposed, any lodging business that fails to remit any assessment imposed shall pay interest at the rate of the United States government T- Bills sold at the latest sale prior to the date of the delinquency plus three percent (3%) prorated per month or fraction thereof on the amount of the assessment, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

Discover Santa Clara® FY 2022/23 Annual Report Page 22 of 30

4. Penalties and Interest Merged with Assessment
Except for the purpose of calculation of interest and penalties, every penalty imposed and such interest as accrues under the provisions of this section shall become a part of the assessment herein.

SURPLUS AND OTHER FUNDING

Surplus / Deficit
The surplus includes SCTID collections that have been carried over from previous years. The total amount of funds to be carried over is estimated at $3,541,406. Of these funds, $328,331 is allocated to Convention Sales, Incentives & Services, $202,578 is allocated to Marketing & Communications, and $255,821 is allocated to Administration for FY 2023/24. Of the remaining funds, $1,221,092 will be placed into a Reserve Fund leaving a balance of $1,533,584 in unallocated funds.

Category Carryover
CONVENTION SALES, INCENTIVES & SERVICES $328,331
MARKETING & COMMUNICATIONS $202,578
ADMINSTRATION $255,821
Reserve Fund $1,221,092
Unallocated $1,533,584
TOTAL $3,541,406

Other Funding
The DMO receives $66,000 in marketing support from two sources: OVG and Levy Restaurants.

OVG, the company appointed by the City of Santa Clara to oversee the Convention Center, will contribute $36,000, while Levy Restaurants, the contracted food and beverage provider for groups and events at the Convention Center, will contribute $30,000.

Discover Santa Clara® FY 2022/23 Annual Report Page 23 of 30 Appendix A – FY 2022/23 Financial Report

Silicon ValleyfSanta Clara DMO, Inc.

FY 2022123 YEAR-TO-DATE (YTD} SUMMARY BY PROGRAM JUNE 2023 FY 22/23 Budget YTD Budge t Actua l YTD Exp Variance Expended Budget l1em
CONVENTION SALES , INCENTIVES & SERVICES YTD Annual
Personn el s 457,669.00 $ 457,669.00 $ 120,776.37 $ 336,892.63 26% 26% Salary s 300,000.00 $ 300,000.00 $ 105.797.42 $ 194,202.58 35% 35%

1.0 FTE Director of Sales s 112,500.00 $ 112,500.00 $ $ 112.500.00 0% 0%

1.0 FTE Sales Manager s 97,500.00 $ 97,500.00 $ 73.442.40 $ 24,057.60 75% 75%

1.0 FTE Sales Manager s 90,000.00 $ 90,000.00 $ 32.355.02 $ 57,644.98 36% 36% Incentives s 75,000.00 $ 75,000.00 $ - $ 75,000.00 0% 0% Benefits s 33,934.00 $ 33,934.00 $ 5.311.88 $ 28,622.12 16% 16% Health s 18,934.00 $ 18,934.00 $ 5.311.88 $ 13,622.12 28% 28% 401K Fee s 15,000.00 $ 15,000.00 $ - $ 15,000.00 0% 0%
Payroll Taxes $ 44,415.00 $ 44,415.00 $ 9.147.07 $ 35,267.93 21% 21% Other-Cell Phone Stipend s 1.320.00 $ 1,320.00 $ 520.00 $ 800.00 39% 39% Other-relocation s 3,000.00 $ 3,000.00 $ - $ 3.000.00 0% 0% Conv ention Sales , Incentives & Servic es Expenses s 149,605.00 $ 149,605.00 $ 78,469 .06 $ 71 ,135.94 52% 52% Operating Supplies $ - $ 223.11 $ (223. 11) 0 % 0%
Memberships s 3,015.00 $ 3,015.00 $ 2.018.75 $ 996.25 67% 67% lndustrv Related Expense s - $ - $ 270.00 $ (270 00) 0% 0% Professional Convention Management Association (PCMA) s 1.000 00 $ 1,000 00 $ 444.62 $ 555.38 44% 44% Meeting Professional International (MPI) s 1.665.00 $ 1,665.00 $ 134.08 $ 1.530.92 8% 8% California Society of Assoc iation Executives (Cal SAE) s 350.00 $ 350.00 $ 420.05 $ (70.05) 120% 120% California Travel Association s - $ - $ 750.00 $ (750.00) 0% 0% Mileage Reimbursement s 500.00 $ - $ - $ - 0% 0%
Subscription Services s 32,390.00 $ 32,390.00 $ 43,282.96 $ (10,892.96) 134% 134% CVENT s 19,202.00 $ 19,202.00 $ 26,633.46 $ (7,431.46) 139% 139% Knowland s 13,188.00 $ 13,188.00 $ 16,649.50 $ (3,461.50) 126% 126% Business Development s 50,000.00 $ 50,000.00 $ 2,427.08 $ 47,572.92 5% 5% Conferences and T radeshows s 20,700.00 $ 20,700.00 $ 21,536.92 $ 3,554.77 104% 104% CONNECT Marketplace s 4,450.00 $ 4,450.00 $ - $ 4,450 .00 0% 0% CONNECT Medical Tech s 4,450.00 $ 4,450 .00 $ - $ 4,450 .00 0% 0% IMEX North America s 11,800.00 $ 11,800.00 $ 17,145.23 $ (5,345.23 145% 145% Other Cont & Tradeshows s - $ - $ 4,391.69 $ (4,391.69) 0% 0% Support Services s 36,000.00 $ 36,000.00 $ 6,271.40 $ 36,000.00 17% 17% Virlllal Happy Hour s 2,000.00 $ 2,000.00 $ - $ 2,000.00 0% 0% Client Activations $ 4,000.00 $ 4,000.00 $ - $ 4,000.00 0% 0% Personalized Greet ings s 2,000.00 $ 2,000.00 $ - $ 2,000.00 0% 0% Client Events s 28,000.00 $ 28,000.00 $ - $ 28,000.00 0% 0% Site Visits s - $ - $ 6,271.40 $ (6,271.40) 0% 0%

Discover Santa Clara® FY 2022/23 Annual Report Page 24 of 30

• • L: l• ...... .
=~a• JI - J-
I A.i
FY 22123 Budget YTD Budge t Act ual YTD Exp Variance Expended Budget Item
Trav el & Entertainment s 7,000 .00 $ 7,500 .00 $ 2,708.84 $ 4,791.16 36% 39% Destination International Annual Convention s . $ . $ 49.85 CONNECT Marketplace $ 2,300.00 $ 2,300 .00 $ . $ 2,300 .00 0% 0% IMEX North America $ 1,900.00 $ 1,900.00 $ 866 .24 $ 1,033.76 46% 46% CONNECT Medical T ech $ 2,800.00 $ 2,800.00 $ - $ 2,800 .00 0% 0% Oth er Expense s - $ - $ 1,737 .87 $ (1,737.87) 0% 0%
Mileage Reimbursement s - $ 500.00 $ 54.88
TOTAL CONV ENTION SAL ES, INCENTIVES & S ERVICES s 607 ,274.00 $ 607,274.00 $ 199,245 .43 $ 408,028 .57 33% 33%

MARKETING & COMMUNI CATIONS
Perso nnel s $ $ 30,429.82 $ (30,429.82) 0% 0%
Salary

1.0 FTE Director of Marketing $ - $ - $ 22,158.99 $ (22, 158 99) 0% 0% Incentives $ - $ - $ - $ - 0% 0%
Benefits $ - $ - $ - $ - 0% 0%
Health $ - $ - $ 2,3 18. 14 $ (2,318.14) 0% 0%
401K Fee $ - $ - $ - $ - 0% 0%
Payroll T axes $ - $ - $ 5,9 12.69 $ (5,912.69' 0% 0%
Other- Cell Phone Stipend s - $ - $ 40.00 $ (40.00) 0% 0% Other-re loca tion $ - $ - $ - $ - 0% 0%
Market ing Expenses s 203,048.00 $ 203,048.00 $ 91 ,098.69 $ 111 ,949.31 45% 45% Con Ira ct Services s 124,460.00 $ 124 ,460.00 $ 84,549.74 $ 39,910.26 68% 68% Marke ting Serv ices $ 110,000.00 $ 110,000.00 $ 71,838 .89 $ 38,161.11 65% 65% W ebsite s 14,460.00 $ 14 ,460.00 $ 12,7 10.85 $ 1,749.15 88% 88% Advertising & Promotions s 75,000.00 $ 75,000.00 $ 6,093.82 $ 68,906 .18 8% 8% Softw are Licenses s 3,588.00 $ 3,588.00 $ 455.1 3 $ 81,519.49 60% 13% TOTAL MARKET ING & COMM UNICATIONS s 203,048.00 $ 203,048.00 $ 121 ,528.51 $ 81 ,51 9.49 60% 60%

ADMINISTRATION
Personnel s 476,375 .00 $ 476,375 .00 $ 305 ,747 .95 $ 170,627.05 64% 64% Salary s 335 ,000.00 $ 335 ,000.00 $ 264,48 1.43 $ 70,5 18.57 7 9% 79%

1.0 FTE CEO s 210,000 .00 $ 210,000 .00 $ 167,096.72 $ 42,903 .28 80% 80%

1.0 FTE Ad ministrative Assistant $ 125,00 0.00 $ 125,000.00 $ 97,384.71 $ 27,6 15.29 78% 78% Incentives s 52,500.00 $ 52,500. 00 $ - $ 52,500.00 0% 0% Benefits s 36,796.00 $ 36 ,796. 00 $ 14,850 .78 $ 21,945.22 40% 40% Health s 13,770.00 $ 13,770 .00 $ 14,850 .78 $ (1,080.78) 108% 108% 40 1K Fee s 23,026.00 $ 23,026.00 $ - $ 23,026.00 0% 0% Payroll T axes $ 46 ,119.00 $ 46,119.00 $ 21,695.74 $ 24,423.26 47% 47% Other- Cell Phone Stipend $ 960.00 $ 960.00 $ 720.00 $ 240.00 75% 75% Other- Car Allowanc e s - $ - $ 4,000.00 $ (4,000.00) 0% 0% Other - Relocation $ 5,000.00 $ 5,000.00 $ - $ 5,000.00 0% 0%

Discover Santa Clara® FY 2022/23 Annual Report Page 25 of 30

• • L: l• ...... .
=
•
ll I _.,_
11 I _._
-I •
FY 22/23 Budget YTD Budget Actual YTD Exp Variance Expended Budge t l'lem
Ad ministrat ive Expenses s 346,218.00 $ 346,218.00 $ 464,265.88 $ (118,047.88) 134% 134% Contract Services s 299,964.00 $ 299,964.00 $ 307,176.14 $ (7,212.14) 102% 102% Human Resources s 30,000.00 $ 30,000.00 $ 5,133.75 $ 24,866.25 17% 17% Fiscal s 30,904.00 $ 30,904.00 $ 59,106.60 $ (28,202 60' 191% 191% Legal s 24,000.00 $ 24,000.00 $ 32,726.50 $ (8,726.50) 136% 136% Payroll s 6,000.00 $ 6,000.00 $ 1,983.00 $ 4,017.00 33% 33% Professional Services s 135,000.00 $ 135,000.00 $ 139,866 .87 $ (4,866.87) 104% 104% IT s 4,000.00 $ 4,000.00 $ 3,1 20.43 $ 879.57 78% 78%
Audit s 10,000.00 $ 10,000.00 $ . $ 10,000.00 0% 0%
Staffing Services s 60,060.00 $ 60,060.00 $ 65,238.99 $ (5,178.99 ) 109% 109% Opera ting Supplies s 14,777.00 $ 14,777.00 $ 42,474.52 $ (27,697.52) 287% 287% Bank Fees s 500.00 $ 500.00 $ 60.00 $ 440.00 12% 12%
Office supplies s 5,000.00 $ 5,000.00 $ 18,637.67 $ (13,637.67) 373% 373% Licenses s 100.00 $ 100.00 $ 71.50 $ 28.50 72% 72%
Software Licenses s 3,877.00 $ 3,877.00 $ 4,589.66 $ (712.66) 118% 118% Postage s 300.00 $ 300.00 $ 9.55 $ 290.45 3 % 3%
IT (Computers and Hardware) s 5,000 .00 $ 5,000.00 $ 19,106.14 $ 114,106.14) 382% 382% Insurance s 11,737.00 $ 11,737.00 $ 11,209.67 $ 527.33 96% 96% Workers Comp s 1,852.00 $ 1,852.00 $ 1,247.56 $ 604.44 67% 67% Business Owners Liability & Property s 1,800.00 $ 1,800.00 $ 1,824 .00 $ (24.00) 10 1% 101% Professional Liability s 3,085.00 $ 3,085.00 $ 3,089.43 $ (4.43) 100% 100% Manage ment Liability s 5,000.00 $ 5,000.00 $ 5,048.68 $ (48.68) 10 1% 101% Memberships s 1,600.00 $ 1,600.00 $ 4,221.25 $ (2,621.25) 264% 264% Destinations International s 1,600.00 $ 1,600.00 $ 4,221.25 $ (2,621.25) 264% 264% Mileage Reimbursement s 500.00 $ 500.00 $ . $ 500.00 0% 0% Recruitment s 500.00 $ 500.00 $ 56,601.06 $ (56,10 1.06) 11320% 11320% Subscription Services s 17,140.00 $ 17,140.00 $ 42,583.24 $ (25,443.24) 248% 248% Act On s - $ - $ 20,876.00 $ (20,876.00 ) 0% 0%
CRM System (Simpleview) s 9,800.00 $ 9,800.00 $ 9,641.65 $ 158.35 98% 98% Cos tar Realty Information s - $ - $ 2,640.00 $ (2,640.00' 0% 0% Destinations International EiC Subscription s 7,340.00 $ 7,340.00 $ 9,425.59 $ (2,085.59 ) 128% 128% TOTAL AIJMINISTRATION s 822,593.00 $ 822,593.00 $ 770,013.83 $ 52,579. 17 94% 94% Co ntinge ncy s 35,239.00 $ 35,239.00 $ - $ 35,239.00 0% 0% City Adm inistra tion Fee s 23,429.00 $ 23,429.00 $ 50,288.49 $ (26,859.49] 215% 215% TOTAL OPERATING BUDGET $ 11, 691 ,583.00 s 1,691,583.00 $ 1,141,076.26 $ 550,506.74 67% 67%

Discover Santa Clara® FY 2022/23 Annual Report Page 26 of 30 Appendix B – FY 2023/24 Operating Budget
Silicon Valley/Santa Clara DMO, Inc.

FY 2023/24 Adopted Budget
Budget Item FY 2022/23 FY 2023/24 FY 2023/24
Adopted Adopted Variance

CONV ENTION SALES, INCENTIVES & SERVICES
Personne l $ 457,669 $ 735,056 $ 277,387
Salary $ 300,000 $ 480,500 $ 180,500

1.0 FTE Direc t or of Sales $ 112,500 $ 180,000 $ 67,500

1.0 FTE Sales Manager $ 97,500 $ 105,000 $ 7,500
LO FTE Sales Manager $ 90,000 $ 120,500 $ 30,500

1.0 FTE Manager, Sales Systems & Strategy $ - $ 75,000 $ 75,000 Incentives $ 75,000 $ 101,375 $ 26,375
Benefits $ 33,934 $ 68,540 $ 34,606
Health & Dent al $ 18,934 $ 4 1,124 $ 22,190
Retireme nt Plan $ 15,000 $ 27,416 $ 12,416
Payroll Taxes $ 44,415 $ 79,721 $ 35 ,306
Other-Ce ll Phone Stipend $ 1,320 $ 1,920 $ 600
Other-Re location $ 3,000 $ 3,000 $ -
Conven t ion Sales , Inc entives & Serv ices Expe nses $ 149,605 $ 453,275 $ 303,670 Business Developmen t $ 50,000 $ 150,000 $ 100,000
Confe re nces and Tradeshows $ 20,700 $ 47,700 $ 27,000 Dest inat ion Internat ional Annual Convent ion $ - $ 1,100 $ 1,100 CalTrave l Summ it $ - $ 1,100 $ 1,100
IMEX North Ame rica $ 11,800 $ 15,000 $ 3,200
TEAMS Conferences & Expo $ - $ 5,000 $ 5,000
Connec t Wes t $ 4,450 $ 4,500 $ 50
Connect DC $ 4,450 $ - $ (4,450 )
CalSAE Seasona l Spectacu lar $ - $ 600 $ 600
PCMA Conve ning Leaders $ - $ 2,000 $ 2,000
Visit Outloo k Forum $ - $ 1,300 $ 1,300
Simpleview Annual Summ it $ - $ 3,200 $ 3,200
Dest inatio ns Internat ional - CEO Summit $ - $ 1,400 $ 1,400 Visit Califo rnia Go West Sales Mission $ - $ 3,000 $ 3,000 Helms Briscoe Conferenc e $ - $ 5,500 $ 5,500
MPI ACE/WEC $ - $ 2,000 $ 2,000
Market ing Conference - Social Med ia Marketing Wo rld $ - $ 2,000 $ 2,000 Memberships $ 3,0 15 $ 12,508 $ 9,493
Cal SAE $ 350 $ 751 $ 401
CalTRAVEL $ - $ 1,900 $ 1,900
San Francisco Travel $ - $ 5,250 $ 5,250
Mee ting Professional Internat ional (MPI) $ 1,665 $ 2,025 $ 360 Professional Conve nt ion Manageme nt Asso ciat ion (PCMA: $ 1,000 $ 2,037 $ 1,037 Sales & Marketing Excut ives Interna t ional $ - $ 345 $ 345 NATPE Mem bership $ - $ 200 $ 200
Subscription Services $ 32,390 $ 33,684 $ 1,294
CVENT $ 19,202 $ 16,836 $ (2,366 )
CVENT- License $ - $ 3,000 $ 3,000
Know land $ 13,188 $ 13,848 $ 660
Support Services $ 36,000 $ 120,300 $ 84,300
Site Tou rs $ - $ 15,000 $ 15,000
Fam iliarizat ion Trips $ - $ 30,000 $ 30;000
Client Events $ 28,000 $ 20,000 $ (8,000)

Discover Santa Clara® FY 2022/23 Annual Report Page 27 of 30 Silicon Valley/Santa Clara OMO, Inc.

FY 2023/24 Adopted Budget
Budget Item FY 2022/23 FY 2023/24 FY 2023/24
Adopted Adopted Variance
Virtual Happy Hour $ 2,000 $ - $ (2,0 00)
Client Activations $ 4,000 $ 6,000 $ 2,000
Personalized Gree tings $ 2,000 $ 2,400 $ 400
Promot ional Items $ - $ 20,000 $ 20,0 00
Tradeshow Booth Storage $ - $ 2,400 $ 2,400
Tradeshow Shipping. Set- Up+ Breakdow n $ - $ 24,500 $ 24,500 Travel & Entertainment $ 7,500 $ 89,083 $ 811,583
Destination Inte rnati onal Annual Conve ntion $ - $ 2,254 $ 2,254 CalTrave l Summ it $ - $ 1,410 $ 1,410
IMEX Nort h Ame rica $ 1,900 $ 4,749 $ 2,849
TEAMS Confe rence + Expo $ - $ 5,620 $ 5,620
Connect West $ 2,300 $ 444 $ (1,856)
Connect DC $ 2,800 $ - $ (2,8 00)
CalSEA Seasonal Spectac ular $ - $ 1,055 $ 1,055
PCMA Conve ning Leaders $ - $ 2,142 $ 2,142
Visit Califo rnia Out look Forum $ - $ 3,520 $ 3,520
Simpleview Annual Summ it $ - $ 4,660 $ 4,660
Destinati on Inte rnational - CEO Summit $ - $ 2,331 $ 2,331 Visit Califo rnia Go West Sales Mission $ - $ 2,380 $ 2,380 Helms Briscoe $ - $ 3,960 $ 3,960
MPI WEC 2024 $ - $ 2.435 $ 2.435
Social Med ia Marketing World Conference $ - $ 2,365 $ 2,365 Quarte rly Sales Trips $ - $ 22.418 $ 22.418
Client Ente rtainment $ - $ 24,000 $ 24,000
Mileage Reimbursement $ 500 $ 3,340 $ 2,840
TOTAL CONVENTION SALES, INCENTIVES & SERVICES $ 607,274 $ 1,188,331 $ 581,057

MARKETING & COMMUNICATIONS
Personne l $ - $ 408,895 $ 408,895
Salary $ - $ 256 ,294 $ 256,294
LO FTE Direct or of Marketing $ - $ 156,294 $ 156,294
LO FTE Marketing Manager $ - $ 100,000 $ 100,000
As- Needed/Hourly $ - $ 13,500 $ 13,500
Incent ives $ - $ 39,074 $ 39,074
Benefits $ - $ 56,545 $ 56,545
Healt h & Dental $ 18,934 $ 33,927 $ 14,993
Retirement Plan $ - $ 22,618 $ 22,6 18
Payroll Taxes $ - $ 42,522 $ 42,522
Other -Cell Phone Stipend $ - $ 960 $ 960
Marketing Expenses $ 203,048 $ 409,683 $ 206,635
Advertising & Promotions $ 75,000 $ 70,000 $ (5,000)
Contract Services $ 124,460 $ 339 ,683 $ 215,223
Marketing Consultant $ 110,000 $ 66,000 $ (44,000)
Digita l Marketing $ - $ 110,000 $ 11 0,000
Influenc er Marketing $ - $ 10,000 $ 10,000
Email Marketing $ - $ 10,000 $ 10,0 00
Photography $ - $ 20,000 $ 20,000
Videograp hy $ - $ 30,000 $ 30,000
Branding $ - $ 15,000 $ 15,000

Discover Santa Clara® FY 2022/23 Annual Report Page 28 of 30

Silicon Valley/Santa Clara DMO, Inc.

FY 2023/24 Adopted Budget
Budget Item FY 2022/23 FY 2023/24 FY 2023/24
Adopted Adopted Variance
Webs it e Development $ - $ 60,500 $ 60,500
Webs ite Hosting $ 14,460 $ 18,183 $ 3,723
Sohware Licenses $ 3,588 $ - $ (3,588)
TOTAL MARKETING & COMMUNICATIONS $ 203,048 $ 818,578 $ 615,530

ADMINSTRATION
Personne l $ 476 ,375 $ 548,336 $ 71,961
Salary $ 335,000 $ 367,328 $ 32,328

1.0 FTE CEO $ 210,000 $ 242,828 $ 32,828

1.0 FTE Administ rative Services Manager $ 125,000 $ 124,500 $ (500) Incent ives $ 52,500 $ 60,707 $ 8,207
Benefits $ 36,796 $ 52,397 $ 15,601
Health & Dental $ 13,770 $ 31,438 $ 17,668
40Ik $ 23,0 26 $ 20,959 $ (2,067)
Payroll Taxes $ 46,119 $ 60,944 $ 14,825
Other - Cell Phone Stipend $ 960 $ 960 $ -
Other - Car Allowance $ - $ 6,000 $ 6,000
Other - Relocation $ 5,000 $ - $ (5,000)
Administrat i1ve Expenses $ 346,218 $ 387,485 $ 41,267
Cont ract Services $ 299,964 $ 289 ,776 $ (10,188)
Audit $ 10,000 $ 15,000 $ 5,000
Fiscal $ 30,904 $ 65,108 $ 34,204
Acco unt ing $ 20,000 $ 51,060 $ 31,060
Tax Prepa rat ion $ 2,000 $ 5,000 $ 3,000
Fiscal Sponsor $ 8,904 $ 9,048 $ 144
Huma n Resources $ 30,000 $ 20,000 $ (10,000)
IT Services $ 4,000 $ 5,574 $ 1,574
Legal $ 24,000 $ 35,000 $ 11,000
Payro ll $ 6,0 00 $ 5,600 $ (400)
Professional Services $ 135,0 00 $ 100,000 $ (35,000)
Temp _ St affing Services $ 60,060 $ 31,494 $ (28,566)
Inte rnal Team Strategy Mee tings $ - $ 12,000 $ 12,000 Insurance $ 11,737 $ 12,978 $ 1,241
Business Owners Liability & Property $ l,800 $ l,897 $ 97 Management Liabilit y $ 5,000 $ 2,946 $ (2,05 4)
Professional Cyber Liability $ 3,085 $ 3,283 $ 198
Wo rkers Comp $ 1,852 $ 4,852 $ 3,0 00
Memberships $ 1,600 $ 3,350 $ 1,750
Destinations Inte rnational $ 1,600 $ 3,350 $ 1,750
Mileage Reimbursement $ 500 $ - $ (500)
Operating Supp lies $ 10,900 $ 10 ,850 $ (50)
Bank Fees $ 500 $ 250 $ (250)
Comp uters- Hardware $ 5,0 00 $ - $ (5,000)
Lice nses $ 100 $ 100 $ -
Office supp lies $ 5,000 $ 8,0 00 $ 3,0 00
Postage/Ma iling/Shipping $ 300 $ 2,500 $ 2,200
Sohware Licenses $ 3,877 $ 8,124 $ 4,247
Quickboo ks $ - $ 1,302 $ 1,302
Ado be Ac robat $ - $ 2,26 8 $ 2,268

Discover Santa Clara® FY 2022/23 Annual Report Page 29 of 30

Silicon Valley/Santa Clara OMO, Inc .

FY 2023/24 Adopted Budget
Budge t Item FY 2022/23 FY 2023/24 FY 2023/24
Adopted Adop ted Variance
Microso ft Office + Email $ - $ 3,624 $ 3,624
Zoom $ - $ 930 $ 930
Office Rent $ - $ 8,100 $ 8,100
Recruitment $ 500 $ 500 $ -
Subscr iption Services $ 17,140 $ 53,807 $ 36,667
Simpleview CRM System $ 9,800 $ 28,600 $ 18,800
Annual Subscription $ 9,800 $ 13,800 $ 4,000
ACT- ON $ - $ 4,800 $ 4,800
Add it ional Support Hours $ - $ 10,000 $ 10,000
Destinat ions Internat ional $ 7,340 $ 7,707 $ 367
CoStar Group (STR Reports ) $ - $ 15,000 $ 15,000
Trade Journals/Newspape rs $ - $ 2,500 $ 2,500
TOTAL ADMINISTRATION $ 822,593 $ 935,821 $ 113,228
CONTINGENCY $ 35,239 $ 66,000 $ 30,76 1
CITY ADMINISTRATION FEE $ 23,429 $ 44,000 $ 20,571
TOTAL OPERATING BUDGET $ 1,691,583 $ 3,052,730 s 1,361,147

Discover Santa Clara® FY 2022/23 Annual Report Page 30 of 30

Appendix C – Assessed Businesses

SCTID Hotel Partner Name Address City, State ZIP
AC Hotel 2970 Lakeside Dr Santa Clara, CA 95054
Avatar Hotel
(Reopening as a Tapestry Collection by
Hilton property in September 2023
4200 Great America Pkwy Santa Clara, CA 95054
Delta Hotel by Marriott 2151 Laurelwood Rd Santa Clara, CA 95054 Embassy Suites 2885 Lakeside Dr Santa Clara, CA 95054 Hilton Santa Clara 4949 Great America Pkwy Santa Clara, CA 95054 Hyatt House 3915 Rivermark Plaza Santa Clara, CA 95054 Hyatt Regency 5101 Great America Pkwy Santa Clara, CA 95054 Marriott Santa Clara 2700 Mission College Blvd Santa Clara, CA 95054 The Element 1950 Wyatt Dr Santa Clara, CA 95054
Hyatt Centric Santa Clara 3100 Lakeside Dr Santa Clara, CA 95054 TownePlace Suites by Marriott 2877 Lakeside Dr Santa Clara, CA 95054 City of Santa Clara
Agenda Report
1500 Warburton Avenue
Santa Clara, CA 95050
santaclaraca.gov
@SantaClaraCity
23-1032 Agenda Date: 9/19/2023

REPORT TO COUNCIL

SUBJECT
Public Hearing: Approval of the 2022-2023 Consolidated Annual Performance and Evaluation Report (CAPER) for Submission to the U.S. Department of Housing and Urban Development (HUD)

COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development

BACKGROUND
The City of Santa Clara receives entitlement funds from the United States Department of Housing and Urban Development (HUD) through HUD’s Community Development Program. The funds allocated to the City are Community Development Block Grant (CDBG) and Home Investment Partnerships (HOME) funds. These funds are provided for programs and activities that benefit low- income persons and households. The City develops a five ‐
year strategic plan called a Consolidated
Plan (ConPlan) which identifies housing and community needs of low-income persons within the City, identifies and prioritizes resources to address those needs, and establishes annual goals and objectives to measure performance. The current ConPlan was approved by council on May 12, 2020.

During each year of the five-year ConPlan cycle, the City prepares an Annual Action Plan. The Annual Action Plan provides a summary of the projects, activities, and the specific federal and non- federal resources that will be allocated to address the priority needs and specific goals identified in the ConPlan. The 2022-2023 Annual Action Plan was approved by the City Council on May 10, 2022.

At the end of each program year, the City reports its progress and accomplishments to HUD. This year-end report is called the Consolidated Annual Performance and Evaluation Report (CAPER).

This 2022 CAPER reports on the 2022-2023 Program Year; the third year of the current ConPlan cycle.

DISCUSSION
The 2022 CAPER, following a format established by HUD, summarizes the City's HUD program accomplishments during the program year, the number of beneficiaries, and the resources used to complete the specified activities and projects. The major accomplishments include, but are not limited to, the following.

Tenant Based Rental Assistance (TBRA). TBRA provided rental and deposit assistance to homeless households or those at risk of becoming homeless with incomes at or below 60% of the Area Median Income (AMI). A total of 26 households were assisted, comprising 36 adults and 44 children. Case management services were also provided and funded through City special revenue funds. Funds spent (approx.): $547,886, (HOME), and $272,367 (City Affordable Housing Funds and City Housing Successor Funds),totaling $820,253.

City of Santa Clara Printed on 9/15/2023Page 1 of 3
powered by Legistar™
23-1032 Agenda Date: 9/19/2023
Public Services & Homelessness Services. CDBG, HOME and local funds were awarded to fund 16 different public service activities such as meals, legal services, senior care and housing assistance to low-income residents. Approximately 2,231 people benefited from these services.

Funds spent: $166,504 (CDBG), $129,133 General Funds, $197,368 (City Housing Successor Funds), and $225,697 (City Affordable Housing Funds),totaling $718,702.

Capital Improvement Projects. 15 households benefited from capital improvements through the City’s Neighborhood Conservation and Improvement Program and Rebuilding Together Silicon Valley’s Minor Home Repair Program. This program assists homeowners to rehabilitate their homes by addressing building/housing code deficiencies, abatement of hazardous conditions and accessibility needs. Funds Spent (approx.): $336,122 (CDBG NCIP) and $97,543 (CDBG Minor Repairs), totaling $433,665.

FISCAL IMPACT
There is no cost to the City other than administrative staff time and expense to produce the 2022- 2023 CAPER.

COORDINATION
This report has been coordinated with the Finance Department and City Attorney’s Office.

ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment.

A public notice announcing the availability of the CAPER for review and the start of the 15-day public review period was published in the Santa Clara Weekly on August 30, 2023. The public review period runs from August 30 - September 19, 2023 and provides the public the opportunity to review and comment on the CAPER prior to HUD submission. Comments received during the public review period will be incorporated into the final version of the CAPER.

ALTERNATIVES

1. No Action. Should the Council choose to not take action, HUD may withhold future funding until the CAPER is submitted.

City of Santa Clara Printed on 9/15/2023Page 2 of 3
powered by Legistar™
23-1032 Agenda Date: 9/19/2023

RECOMMENDATION

1. Approve the 2022-2023 Consolidated Annual Performance and Evaluation Report (Attachment 1) and authorize the City Manager, or his designee, to execute the documents for submission to the U.S. Department of Housing and Urban Development (HUD) by September 29, 2023 unless otherwise directed by HUD.

2. Direct staff to incorporate all public comments into the final version to be submitted to HUD on or before September 29, 2023.

Reviewed by: Andrew Crabtree, Director of Community Development Approved by: Jōvan Grogan, City Manager

ATTACHMENTS

1. 2022-2023 Consolidated Annual Performance Evaluation Report (CAPER) City of Santa Clara Printed on 9/15/2023Page 3 of 3
powered by Legistar™

CONSOLIDATED
ANNUAL

PERFORMANCE

AND EVALUATION

REPORT (CAPER)
Pr
ogram Year 2022-2023
City of Santa Clara
Pr
epared by:

Housing & Community Services
1500 Warburton Ave.

Santa Clara, CA 95050
-
Contents
.................................................................................................................................................. 1 Overview .................................................................................................................................... 1 CR-05 Goals and Outcomes – 91.520(a) ................................................................................... 1 CR-10 Racial and Ethnic Composition of (persons/households /families) Assisted .................... 7 CR-15 Resources and Investments – 91.520(a) ......................................................................... 8 CR-20 Affordable Housing – 91.520(b) .....................................................................................12 CR-25 Homeless and Other Special Needs – 91.220(d, e); 91.320(d, e); 91.520(c) .................14 CR-30 Public Housing – 91.220(h); 91.320(j) ............................................................................17 CR-35 Other Actions – 91.220(j)-(k); 91.320(i)-(j) ......................................................................18 CR-40 Monitoring – 91.220 (d,e); 91.520 ..................................................................................22 CR-45 - CDBG – 91.520(c) .......................................................................................................23 CR-50 HOME – 91.520(d) .........................................................................................................24 2021-2022 CAPER 1

Overview
The City of Santa Clara receives entitlement funds from the United States Department of Housing and Urban Development (HUD) through HUD’s Community Planning and Development (CPD) program. The funds allocated to the City are Community Development Block Grant (CDBG) and Home Investment Partnerships (HOME) funds. These funds are provided for programs and activities that benefit low-income persons and households. The City develops a 5‐year strategic plan called a Consolidated Plan (ConPlan) which identifies housing and community needs of low-income persons within the City, identifies and prioritizes resources to address those needs, and establishes annual goals and objectives to measure performance.

The ConPlan was approved by council on May 12, 2020.

During the 5-year ConPlan cycle, the City develops Annual Action Plans for each year. The Annual Action Plan provides a summary of the projects, activities, and the specific federal and non-federal resources that will be allocated to address the priority needs and specific goals identified in the ConPlan. The 2022-2023 Annual Action Plan was approved by the City Council on May 10, 2022.

At the end of each program year, the City reports on its progress and accomplishments. This year-end report is called the Consolidated Annual Performance and Evaluation Report (CAPER). This 2022 CAPER reports on activities performed during the 2022-2023 Program Year; the third year of the 2020-2025 ConPlan cycle.

CR-05 Goals and Outcomes – 91.520(a)
Progress the jurisdiction has made in carrying out its strategic plan and its action plan.

91.520(a)
Program Year 2022 is year three of the 2020-2025 ConPlan. Data in Table 1 highlights key accomplishments and shows progress towards the ConPlan goals. Results for activities funded with local funds are noted in this narrative rather than the table. A summary of each ConPlan goal are:

Affordable Housing Goal – The ConPlan has a 5-year goal of assisting 420 households. The Goal Outcome Indicators stated in the ConPlan that make up the 420 households are:
215 households receiving homeowner rehabilitations through the Neighborhood Conservation Improvement Program (NCIP) and the minor repair program. 5 rental units rehabilitated.
200 households to receive Tenant Based Rental Assistance (TBRA).

2022 – 2023 CAPER 2

For Program Year 2022, the progress towards the Affordable Housing goal is:

NCIP. 4 large scale rehabilitation projects were completed with NCIP loans. Funds Spent (approx.): $336,122 was drawn in FY22/23 from two IDIS activities; #999 and #1057 (CDBG).

Minor Repair Rehabilitation. 11 minor repair projects received grants through Rebuilding Together Silicon Valley. Funds Spent (approx.): $97,543 (CDBG).

Tenant Based Rental Assistance (TBRA). TBRA provided rental and deposit assistance to homeless households or those at risk of becoming homeless with incomes at or below 60% of the Area Median Income (AMI). 26 households were assisted that comprise of 36 adults and 44 children. Case management services were also provided and funded through City special revenue funds. Funds spent (approx.): $547,885 ($413,947 was drawn in FY22/23 and $133,939 was drawn in FY23/24, but it was for program year 2022-2023) (HOME).

Homelessness Goal – The ConPlan has a 5-year goal of assisting 515 people with Homelessness Prevention and Case Management services. The Goal Outcome Indicators that make up the 515 households are:
315 households to receive homeless prevention services for domestic violence survivors.
200 homeless households to receive case management services funded with local funds.

For Program Year 2022, the progress towards the ConPlan goal of Homelessness is:

Next Door Solutions. 72 households affected by domestic violence received services, exceeding the annual goal of 69 households. Funds Spent: $30,000 (CDBG).

County Homeless Prevention and Intensive Case Management Program. 148 homeless households received case management services. Funds Spent: $175,000 (Local funds).

TBRA. 26 TBRA households received case management services. Funds Spent:
$272,367 (Local funds).

Public Services – The ConPlan has a 5-year goal of assisting 10,020 persons through various Public Services.

For Program Year 2022, the progress towards the ConPlan goal of 10,020 persons are:
754 households received a variety of public services from three non-profit agencies and from City-run programs. Funds spent: $160,504 (CDBG)
1,683 persons received a variety of public services from six non-profit agencies. Funds spent: $129,133 (Local)
2022 – 2023 CAPER 3

Fair Housing – The ConPlan has a 5-year goal of assisting 150 households assisted with Fair Housing services.

For Program Year 2022, 32 households received assistance. Funds spent: $18,000 (HOME) Comparison of the proposed versus actual outcomes for each outcome measure submitted with the consolidated plan and explain, if applicable, why progress was not made toward meeting goals and objectives. 91.520(g)
Table 1 provides numeric detail on activities completed in Program Year 2022, and progress made toward meeting the ConPlan goals and objectives. Although some of the public service agencies did not meet their annual goal, the City is still on pace to meet its overall five-year goals.
2021-2022 CAPER 4

Table1 (CR05) – Accomplishments – Program Year & ConPlan to Date Goal Category Source
and
Amount
Indicator Unit of
Measure
Expected
2020-2025
Strategic
Plan
Actual
2020-2025
Strategic
Plan
Percent
Complete
of 5-year
Goal
Expected
PY
2022
Actual
PY
2022
Percent
Complete
PY 2022
Admin.

Other –
Admin. of
CDBG &
HOME
HOME:
$0

CDBG:
$258,352
Other Other 0 0 0% 0 0 0%
Affordable
Housing
Affordable
Housing
CDBG:
$1,162,144
Homeowner
Housing
Rehabilitated
Household
Housing Unit 215 42 19.53% 45 15 31.11%
HOME:
$858,244
Rental units
rehabilitated
Household
Housing Unit 5 0 0% 1 0 0%
TBRA/Rapid
Rehousing
Households
Assisted 200 126 63% 40 26 65%
Fair
Housing
Affordable
Housing
Non-
Homeless
Special
Needs
HOME:
$22,197
Public service
activities other than
Low/Moderate
Income Housing
Benefit
Households
Assisted 150 75 50% 30 32 107%
Homeless
Homeless CDBG:
$30,000
Public service
activities other than
Low/Moderate
Income Housing
Benefit
Persons
Assisted 315 142 45% 63 72 114%
Homeless
County
Case Mgt.
&
Homeless
Prevention
CHSF:
$250,000

CAHF:
$225,697
Homelessness
Prevention
Persons
Assisted 200 331 166% 60 148 370%
Public
Facility
Impr.

Public
Facilities
CDBG:
$642,000
Public Facility or
infrastructure
activities other than
low/mod income
housing benefit
Households
Assisted 150 0 0% 0 0 0%
Public
Services
Non-
Homeless
Special
Needs
CDBG:
$160,504
Nonprofit
agencies

Public service
activities other than
Low/Moderate
Income Housing
Benefit
Persons
Assisted 7,045 2,930 42% 1,409 754 54%
Non-
Homeless
Special
Needs
General
Fund
$147,303
Public service
activities other than
Low/Moderate
Income Housing
Benefit
Persons
Assisted 2975 3,518 118% 595 1,683 283%
Non-
Homeless
Special
Needs
General
Funds:
$0
Public service
activities
Low/Moderate
Income Housing
Benefit (ERAP)
Households
Assisted 250 261 104% 0 0 0%
2022 – 2023 CAPER 5
Assess how the jurisdiction’s use of funds, particularly CDBG, addresses the priorities and specific objectives identified in the plan, giving special attention to the highest priority activities identified.

The ConPlan describes the following priorities and objectives in order to guide programmatic decisions and resource allocation:

Affordable Housing: Support affordable housing for low-income and special needs households. This includes funding new affordable housing developments, rent subsidies, and rehabilitation of single and multi-family housing.

There are four housing problems that are measured by ACS Comprehensive Housing Affordability Strategy (CHAS) data that gi ve a glimpse into the conditions of households:
1) Incomplete kitchen facilities;
2) Incomplete plumbing facilities;
3) More than 1 person per room; and,
4) C
ost Burden. The ratio of housing costs to household income.

A. Cost Burden of greater than 30% and less than 50%.

B. S evere Cost Burden of greater than 50%.

According to 2015-2019 CHAS data, 39.60% of the 44,670 Santa Clara households experience at least one of the four Housing Problems. Further, 17.55% of households have a housing cost burden greater than 30% but less than 50%, and 15.72% experience severe cost burden in which their housing expenses exceed 50% of their income. Taking into consideration those two data points, one third of all Santa Clara households have a housing cost burden greater than 30%.

The CDBG-f unded Neighborhood Conservation and Improvement Program (NCIP) continued to see low interest coming out of the pandemic. In preparation for the 2023-2024 program year, the City increased its marketing of the NCIP program. The City has also advertised the program to contractors to increase the pool of contractors for the program.

Rebuilding Together Silicon Valley has also increased their advertisement. Both programs are slowly beginning to see interest as citizens are more open to having contractors and workers in their home. The City also allocated CDBG funds to six (6) capital projects which are slated to begin construction in fall 2023.

The HOME-f unded Tenant Based Rental Assistance (TBRA) program which also addresses the goal of Affordable Housing has been restricted in adding new clients. Based on a projected reduction of HOME Program Income and no increase in entitlement funds, the City has directed its administrator to reduce the number of households to 20-25. In PY2022, TBRA assisted 26 households with rental subsidies, and used local funds to provide the households with case management. The households comprised of 36 adults and 44 children (80 people). 2022 – 2023 CAPER 6

Public Services: Several non-profit partners provide services to the Santa Clara low-income residents. Most agencies saw a slow start to the program year as people were warming to the loosening of pandemic restrictions and as agencies dealt with staff turnover. Many of the agencies were slow to return to pre-pandemic numbers, but by the end of the program year, had returned to pre-pandemic levels.

Homelessness: The City funds Next Door Solutions to Domestic Violence to provide services to those impacted by domestic violence. The agency assisted 72 persons during the program year. The City also uses local funds to provide funding to the County of Santa Clara’s Office of Supportive Housing to administer case management services to 20 homeless households and provides Homeless Prevention services. The City uses non-federal funds to support weekly mobile shower and laundry services in partnership with WeHope.

Fair Housing: The City used HOME funds to fund Project Sentinel, a non-profit agency, that promotes Fair Housing choice through funding education, counseling, advocacy, investigation, conciliation, and enforcement of Fair Housing regulations. 32 households were assisted.

Public Facilities: The City published a capital projects NOFA in April of 2022 and another CDBG/HOME/HOME ARP NOFA in January 2023. The City will be funding a total of two capital improvement projects for public facilities in the coming year, the results of which will be in future CAPERs.
2022 – 2023 CAPER 7
CR-10 Racial and Ethnic Composition of (persons/households /families) Assisted
Describe the families assisted (including the racial and ethnic status of families assisted). 91.520(a)

CDBG HOME LOCAL
White 457 31 290
Black or African American 42 11 50
Asian 187 1 50
American Indian/Alaska Native 25 6 18
Native Hawaiian or Other Pacific Islander 7 0 19
Asian & White 2 0 2
Black/African American & White 5 0 1
American Indian/Alaska Native & White 4 0 1
Other Multi-Racial 112 9 82
Total 841 58 513
Hispanic 250 38 152
Not Hispanic 591 20 361
Table 2 (CR-10) – Table of assistance to racial and ethnic populations by source of funds Narrative
The City’s programs serve an ethnically diverse population of individuals and families. In some categories the services provided to Santa Clara residents align with the overall demographics of the city. 24.87% of beneficiaries identify as White (37.9% of the City’s population identify as White). 8.46% of the beneficiaries identify as Asian (45.10% of the City’s population identify as Asian). 5.39% of beneficiaries identify as “Other” (7.2% of the City’s population identify as “Other”). Of all beneficiaries, 24.69% identified as Hispanic while 16.3% of the overall City population identifies as Hispanic. Data derived from 2015-2019 CHAS Data.

NOTE: IDIS did not have space for other demographics AND other funding sources that were identified.

See added table for a more detailed account of participant and demographic data. 2022 – 2023 CAPER 8

CR-15 Resources and Investments – 91.520(a)
Identify the resources made available
Source of
Funds Source Resources
Made Available
Amount
Expended During
Program Year
CDBG CDBG Allocation and Program Income $1,611,000 $936,921.37 HOME HOME Allocation and Program Income $880,441 $617,029.53 HOME-ARP HOME – American Rescue Program $80,000 $36,353.95 Gen. Fund General Fund $129,303 $129,132.83
Other City Affordable Housing Fund $225,697 $225,697.00 Other City Housing Successor Fund $250,000 $197,368.46
Table 1 - Resources Made Available
Narrative
The City of Santa Clara used CDBG, HOME funds, and local funds to carry out the objectives identified in the 5-Year ConPlan. These activities were performed throughout the City, with no directed geographic concentration of resources.

CDBG: CDBG resources that were available in Program Year 2022 totaled $1,611,000. $477,683.80 was used for homeowner rehabilitation activities (i.e., Rebuilding Together Silicon Valley, NCIP and project delivery costs) which addressed the Goal Outcome Indicator of Affordable Housing. $166,504 was used for Public Services such as youth and senior services which addressed the Goal Outcome Indicator of Public Services. $268,733.57 was used for Administration.

HOME: HOME resources that were available in Program Year 2022 totaled $880,441. $591,832.53 was used for Tenant Based Rental Assistance Program Goal Outcome Indicator of Affordable Housing. $18,000 was used for Fair Housing Services.

HOME-ARP: $36,353.95 was spent on the administration of HOME-ARP funds. These funds were spent on the creation of the HOME ARP Plan.

GENERAL FUNDS: General Fund resources that were available in Program Year 2022 for public services totaled $129,303. $129,132.83 was dispersed.

CITY AFFORDABLE HOUSING FUND (CAHF): CAHF resources that were available in Program Year 2022 totaled $225,697. $197,368.46 was spent to address the ConPlan Goal Outcome Indicator of Homelessness through case management services. 2022 – 2023 CAPER 9

CITY HOUSING SUCCESSOR FUND (CHSF): CHSF resources that were available in Program Year 2022 totaled $250,000. $250,000 was used to address the ConPlan Goal Outcome Indicator of Homelessness through case management services for TBRA participants and the County’s homeless prevention program and intensive case management.

Identify the geographic distribution and location of investments Target
Area
Planned %
of Allocation
Actual %
of Allocation
Narrative
Description
Citywide 100 100 Service area
Table 2 – Identify the geographic distribution and location of investments Narrative
All activities and programs were open to all low-income residents in the City of Santa Clara.

Leveraging:

Explain how federal funds leveraged additional resources (private, state and local funds), including a description of how matching requirements were satisfied, as well as how any publicly owned land or property located within the jurisdiction that were used to address the needs identified in the plan.

Fiscal Year Summary – HOME Match

1. Excess match from prior Federal fiscal year $7,309,030.00

2. Match contributed during current Federal fiscal year $125,813.29

3. Total match available for current Federal fiscal year (Line 1 plus Line 2) $7,434,843.29

4. Match liability for current Federal fiscal year $187,473.72

5. Excess match carried over to next Federal fiscal year (Line 3 minus Line 4) $7,247,369.57 Table 3 – Fiscal Year Summary - HOME Match Report
The PR-33 (HOME Matching Liability Report) shows the required match contribution to be $187,473.72. The City met its match requirement through the exemption of property taxes and carry-over match from prior program years. Further, the City was able to use local funds of to pay for case management services for TBRA clients. Locally funded case management services for our TBRA clients have resulted in a more comprehensive and successful program for our previously homeless families. Lastly, CDBG funds are leveraged private funds from our nonprofits to allow for more beneficiaries served.

The City has used public lands to address ConPlan goals. Some projects are in the construction phase while others are still in the planning stages.
2022 – 2023 CAPER 10

Match Contribution for the Federal Fiscal Year
Project
No. or
other ID
Date of
Contribution
Cash
(non-
Federal
sources)
Foregone
Taxes, Fees,
Charges
Appraised
Land/Real
Property
Required
Infrastructure
Site
Preparation,
Construction
Materials
Bond Total Match
#10 -
Liberty
Tower
04/10/2023 0 $50,501.21 0 0 0 0 $50,501.21
#20 - BWC
Jackson
St.
04/10/2023

0 $13,701.43 0 0 0 0 $13,701.43
#21 - SC
Senior
Homes
04/10/2023

$9,659.00 0 0 0 0 $9,659.00
#210 -
BWC
Main St.
04/10/2023

0 $7,145.41 0 0 0 0 $7,145.41
#254 - De
La Cruz
04/10/2023

0 $11,459.46 0 0 0 0 $11,459.46
#326 -
Briarwood
04/10/2023

0 $12,062.60 0 0 0 0 $12,062.60
#639 -
Cypress
04/10/2023

0 $11,225.61 0 0 0 0 $11,225.61
HUD
funded -
Shafer
House
04/10/2023

0 $10,058.58 0 0 0 0 $10,058.58
Table 4 - Match Contribution for the Federal Fiscal Year HOME Program Income
Program Income – Enter the program amounts for the reporting period Balance on hand at
beginning of
reporting period
$
Amount received
during reporting period
$
Total amount expended
during reporting period
$
Amount expended
for TBRA
$
Balance on hand at end
of reporting period
$
$285,800.58 $83,498.84 $193,874.76 $591,832.53 $175,424.66 Table 5 – Program Income

2022 – 2023 CAPER 11

HOME MBE/WBE report
Minority Business Enterprises and Women Business Enterprises – Indicate the number and dollar value of contracts for HOME projects completed during the reporting period
Total Minority Business Enterprises White Non-
Hispanic Alaskan Native or
American Indian
Asian or Pacific
Islander
Black Non-
Hispanic
Hispanic
Contracts
Number 0
Dollar Amount 0 0 0 0 0 0
Sub-Contracts
Number
Dollar Amount
Total Women Business
Enterprise
Male
Contracts
Number 0 0 0
Dollar Amount 0 0 0
Sub-Contracts
Number
Dollar Amount
Table 6 - Minority Business and Women Business Enterprises Minority Owners of Rental Property – Indicate the number of HOME assisted rental property owners and the total amount of HOME funds in these rental properties assisted
Total Minority Property Owners White Non-
Hispanic Alaskan Native or
American Indian
Asian or Pacific
Islander
Black Non-
Hispanic
Hispanic
Number 0
Dollar Amount 0
Table 7 – Minority Owners of Rental Property
Relocation and Real Property Acquisition – Indicate the number of persons displaced, the cost of relocation payments, the number of parcels acquired, and the cost of acquisition Parcels Acquired 0
Businesses Displaced 0
Nonprofit Organizations Displaced 0
Households Temporarily Relocated, not Displaced 0
Households
Displaced
Total Minority Property Enterprises White Non-
Hispanic Alaskan Native
or American
Indian
Asian or Pacific
Islander
Black Non-
Hispanic
Hispanic
Number 0
Cost 0
Table 8 – Relocation and Real Property Acquisition
2022 – 2023 CAPER 12
CR-20 Affordable Housing – 91.520(b)
Evaluation of the jurisdiction's progress in providing affordable housing, including the number and types of families served, the number of extremely low-income, low-income, moderate-income, and middle-income persons served.

City Council and Authorities ConcurrentSeptember 19, 2023

City Council and Authorities Concurrent
September 19, 2023