Twentynine Palms City Council
July 23, 2024

TWENTYNINE PALMS CITY COUNCIL

REGULAR MEETING AGENDA
6136 Adobe Road
Twentynine Palms, CA 92277
www.29palms.org
Tuesday, July 23, 2024
NOTICE IS HEREBY GIVEN, that the City Council will hold a Regular Meeting on Tuesday, July 23, 2024 at City Hall, 6136 Adobe Road, Twentynine Palms, CA 92277 to consider the following:

CLOSED SESSION AGENDA
5:30 P.M.

CALL TO ORDER
Roll Call.

Adjourn to Closed Session.

CLOSED SESSION
A “Closed” Session of the City Council may be held in accordance with state law which may include, but is not limited to, the following types of items: personnel matters, labor negotiations, security matters, providing instructions to real property negotiators and conference with legal counsel regarding pending litigation. The Closed Session will be held in the City Hall Conference Room located at 6136 Adobe Road, Twentynine Palms, California. Any public comment on Closed Session items will be taken before the Closed Session. Any required announcements or discussion of Closed Session items or actions following the Closed Session will be made in the City Council Chambers, 6136 Adobe Road, Twentynine Palms, California.

1. CONFERENCE WITH LEGAL COUNSEL- EXISTING LITIGATION, Pursuant to Government Code § 54956.9 (d)(1) - In Re: National Prescription Opiate Litigation, MDL No. 2804, Case No. 1:17-md-2804 (Multi-District Litigation).

REGULAR SESSION AGENDA
6:00 P.M.

CALL TO ORDER
Pledge of Allegiance.

Invocation - Amy Miranda, First Assembly of God Church.

Roll Call.

Closed Session Announcements.

Changes to the Agenda.

ANNOUNCEMENTS
These proceedings may be viewed on demand on the City of Twentynine Palms website at www.29palms.org.

You may also Live Stream this meeting by going on the City website and clicking on the "Meeting Agendas" link.

1. July 14-15, 2024 Storm Situation Summary Report.

AWARDS, PRESENTATIONS, APPOINTMENTS AND PROCLAMATIONS - NONE.

COUNCIL COMMENTS AND REPORTS OF MEETINGS ATTENDED

CONSENT CALENDAR
All matters listed under the Consent Calendar are to be considered routine by the City Council and will be enacted by one motion in the form listed. Any item may be removed from the Consent Calendar and considered separately by the City Council. The public will be given an opportunity to comment on Consent Calendar items prior to the City Council action.

2. Waive the Reading of Ordinance and Approve the Reading by Title Only.

3. Approval of Minutes of the City Council Meeting Held on June 25, 2024.

City Council - Regular Meeting - 25 Jun 2024 - Minutes - Pdf 5 - 8

4. Approval of Warrant Register Totaling $1,710,963.89
Approval of Warrant Register Totaling $1,710,963.89 - Pdf 9 - 14

5. Treasurer's Report - FY 2023-24 Quarter 4.

Recommendation: The City Council receive and approve the Treasurer's Report for the 4th Quarter of Fiscal Year 2024-25.

Treasurer's Report - FY 2023-24 Quarter 4. - Pdf
15 - 17

6. Adoption of Measure I Five-Year Plan for Fiscal Years 2024-2025 through 2028-2029.

Recommendation: The City Council adopt Resolution No. 24-___ approving the Measure I Five-Year Plan for Fiscal Years 2024-2025 through 2028-2029.

Adoption of Measure I Five-Year Plan for Fiscal Years 2024-2025 through 2028-2029. - Pdf
19 - 27

ITEMS REMOVED FROM CONSENT CALENDAR FOR DISCUSSION

PUBLIC HEARINGS

7. Twentynine Palms Lighting and Landscaping Assessment District #1, Confirming Assessment and Levying Assessment for FY 2024-2025.

Recommendation: The City Council:
1) Review and approve a request to increase the maintenance area for L-1 to include parkway segments on Mimosa Avenue from Florida Drive and Sunnyslope Drive. 2) Conduct the Public Hearing.
3) Adopt Resolution No. 24-__; a Resolution of the City Council of the City of Twentynine Palms confirming the diagram and assessment and levying assessment pursuant to the Lighting and Landscaping Act of 1972 for Fiscal Year 2024-2025.

Twentynine Palms Lighting and Landscaping Assessment District #1, Confirming Assessment and Levying Assessment for FY 2024-2025. - Pdf 29 - 40

8. Development Code Amendment Home Occupation Permits.

Recommendation: The City Council find the project exempt from CEQA and adopt the Ordinance approving the Development Code Amendment.

Development Code Amendment Home Occupation Permits. - Pdf 41 - 56

9. Development Code Amendment, Article 4 Part 1.

Recommendation: The City Council find the amendment exempt from CEQA and adopt the Ordinance, approving the Development Code Amendment.

Development Code Amendment, Article 4 Part 1. - Pdf
57 - 90

DISCUSSION AND POTENTIAL ACTION ITEMS

10. New National Opioid Settlement with Kroger Co.

Recommendation: The City Council:

1. Adopt Resolution No. 24-__ to Join a New National Opioid Settlement with Kroger Co.,

2. Authorize the City Manager to take all necessary and reasonable actions to effectuate the City’s participation, including executing all necessary agreements and documents subject to the review and approval of the City Attorney.

New National Opioid Settlement with Kroger Co. - Pdf
91 - 590

11. July 14-15, 2024, Monsoonal Storm.

Recommendation: The City Council review any item relating to the storm that occurred on July 14-15, 2024, and provide direction on how to proceed if needed.

July 14-15, 2024 Monsoonal Storm. - Pdf
591

FUTURE COUNCIL INITIATED ITEMS

1. Revisit funds that were allocated to the portable showers and Navigation Center.

PUBLIC COMMENTS
This is the time for the public to address the City Council on issues within the jurisdiction of the City Council that are NOT on this agenda. All comments are to be directed to the City Council and shall not consist of any personal attacks. Members of the public are expected to maintain a professional, courteous decorum during their comments. There is a time limitation of three minutes per person. If you haven’t already done so, please fill out name and address slips and give them to the City Clerk. The City Council is prohibited by State law from taking action or discussing items not included on the printed agenda. Public comments on specific agenda items will be deferred until consideration of the item on the agenda.

CITY MANAGER UPDATE

ADJOURNMENT

It is the intention of the City of Twentynine Palms to comply with the Americans with Disabilities Act in all respects. If you are a person with a disability who requires a disability-related modification or accommodation in order to participate in a meeting, including auxiliary aids or services, please request such modification or accommodation from the City Clerk at (760) 367- 4890 (facsimile). Notification at least 48 hours prior to the meeting will enable the City to make reasonable arrangements to assure accessibility to the meeting. Please advise us at the time whether you will require accommodations to participate in meetings on a regular basis. Any person affected by any application on this agenda may submit their concerns in writing prior to the meeting or appear in person and be heard in support or opposition to the proposal at the time the matter is considered on the agenda. The staff reports, applications and environmental documents may be viewed at either the office of Community Development or the office of the City Clerk, 6136 Adobe Road, from 7:00 a.m. until 6:00 p.m. Monday through Thursday, except legal holidays. The Invocation is given per Policy 10-01, and does not reflect the views of the City but rather is an expression of speech by a private citizen making the presentation. Telephone inquiries may be made at (760) 367-6799. If you challenge any agenda issue in court, you may be limited to raising only those issues that you or someone else raised at the public meeting described in this notice, or in written correspondence delivered to the City of Twentynine Palms at, or prior to, the public meeting.

This notice of agenda is hereby certified to have been posted on or before 6:00 p.m., July 18, 2024.

Cindy Villescas CMC, City Clerk Time/Date

TWENTYNINE PALMS CITY COUNCIL
City Council - Regular Meeting MINUTES
City Hall, 6136 Adobe Road, Twentynine Palms, CA 92277
www.29palms.org
June 25, 2024
CALL TO ORDER - Mayor Pro Tem Klink called the meeting to order at 6:07 p.m.

Pledge of Allegiance - Mr. Kurt Schauppner led the Pledge of Allegiance.

Invocation - Pastor Amy Miranda, First Assembly of God Church, gave the Invocation.

Roll Call - The following Councilmembers were present: Klink, Mintz, Scott, Wright. Bilderain had an excused absence.

Closed Session Announcements - None.

Changes to the Agenda. - None.

ANNOUNCEMENTS
Mayor Pro Tem Klink announced that these proceedings may be viewed on demand on the City of Twentynine Palms website at www.29palms.org. You may also Live Stream this meeting by going on our website and clicking on the "Meeting Agendas" link.

AWARDS, PRESENTATIONS, APPOINTMENTS AND PROCLAMATIONS

1. Presentation to Boy Scout Troop 77 for their Participation in the Cash for Trash and Recycling Program.

Councilmember Mintz and Mr. Mike Veto, Director of Municipal Services for Burrtec, presented checks in the amount of $300 each from Burrtec Waste and Recycling Services and from the City of Twentynine Palms.

COUNCIL COMMENTS AND REPORTS OF MEETINGS ATTENDED
Councilmember Scott mentioned that he attended the Juneteenth event at Knott's Sky Park and the Flag Raising Ceremony at City Hall.

Councilmember Wright commented that he attended the Juneteenth event at Knott's Sky Park and the Flag Raising Ceremony at City Hall. He thanked the Staff for putting on a great event. He reminded everyone to drink plenty of water and Warhawks Football season is coming up.

Councilmember Mintz mentioned that he attended the MDAQMD meeting, the Juneteenth event, and the Flag Raising Ceremony.

Mayor Pro Tem Klink commented that he attended the Flag Raising Ceremony and the Juneteenth event. He mentioned that the City received a thank you card from Ms. Carrie Williams and Ms. Karen Harper with Women of Color Global. He wished everyone celebrating a birthday in June a Happy Birthday.

CONSENT CALENDAR

2. Waive the Reading of Ordinance and Approve the Reading by Title Only.

3. Approval of Minutes of the City Council Meeting Held on June 11, 2024.

City Council - Regular Meeting
June 25, 2024

4. United States Geological Survey (USGS) Evaluation of Geohydrologic Conditions and Geochemical Conditions.

RECOMMENDATION: The City Council authorize the City Manager to execute the necessary agreements to engage the United States Geological Survey (USGS) to evaluate the geohydrologic and geochemical conditions within the City. Contract execution will occur following staff confirming the EPA Fiscal Year 2022 and Fiscal Year 2023 grant funds may be applied to USGS study costs.

ACTION: A motion was made by Councilmember Wright, seconded by Councilmember Mintz to approve the Consent Calendar as submitted.

The above motion was carried by the following:

ROLL CALL VOTE:

AYES: MINTZ, SCOTT, WRIGHT, KLINK
NOES: NONE
ABSTAIN: NONE
ABSENT: BILDERAIN
ITEMS REMOVED FROM CONSENT CALENDAR FOR DISCUSSION - None.

PUBLIC HEARING

5. Burrtec Rate Adjustment.

RECOMMENDATION: The City Council receive and approve the provided CPI rate increases for residential service per the franchise agreement in the amount of 4.26%. Receive and approve residential organic waste hauling and processing rates. Receive and approve Net Recycling rate adjustments in accordance with the terms of the franchise agreement.

City Manager James presented the Staff Report.

Mayor Pro Tem Klink mentioned that the containers provided for green waste are really small and asked if there are bigger containers available. Mr. Mike Veto, Director of Municipal Services, Burrtec, replied yes, there are 32-gallon, 64-gallon and 96-gallon containers. Customers can call Burrtec and request a bigger container.

Councilmember Scott asked Mr. Veto to explain the fees.

Mayor Pro Tem Klink opened the Public Hearing.

Mary Kay Sherry, Twentynine Palms, mentioned that she called Burrtec and inquired about larger containers and was told that larger containers will not be available in our area for a while. Mr. Veto mentioned he would find out and asked Ms. Sherry to provide him with her contact information and he would get back to her.

Mayor Pro Tem Klink closed the Public Hearing.

This item was a receive and file item.

DISCUSSION AND POTENTIAL ACTION ITEMS

6. Tourism Business Improvement District (TBID) Advisory Board Appointment.

RECOMMENDATION: The TBID Subcommittee (Mayor Bilderain and Mayor Pro Tem Klink) will make a recommendation to the City Council for the appointment to the TBID Advisory Board.

City Council - Regular Meeting
June 25, 2024
ACTION: A motion was made by Mayor Pro Tem Klink, seconded by Councilmember Scott to appoint Mr. Ben Uyeda to the TBID Board.

The above motion was carried by the following:

ROLL CALL VOTE:

AYES: MINTZ, SCOTT, WRIGHT, KLINK
NOES: NONE
ABSTAIN: NONE
ABSENT: BILDERAIN
Mr. Uyeda thanked the City Council for appointing him to the TBID Board and looks forward to helping out in any way he can.

7. Active Transportation Infrastructure Investment Program (ATIIP) Grant Application RECOMMENDATION: The City Council provide direction to staff as to whether or not to pursue the ATIIP grant.

City Manager James presented the Staff Report.

Councilmember Scott asked who was going to write the grant. City Manager James replied that our team would be writing the grant.

Joseph Carder, Twentynine Palms, mentioned that this is a great idea, and he is in support of this.

ACTION: All Councilmembers were in favor of having the City Manager pursue this grant.

8. Purchase of a New Code Enforcement Vehicle.

RECOMMENDATION: The City Council authorize City Staff to purchase a new Ford F-150 vehicle for the Code Enforcement division of the Community Development Department in the amount not to exceed $50,000 from Palm Springs Motors, in accordance with the quote provided.

City Manager James presented the Staff Report.

ACTION: A motion was made by Councilmember Mintz, seconded by Councilmember Wright to authorize City Staff to purchase a new Ford F-150 vehicle for the Code Enforcement division of the Community Development Department in the amount not to exceed $50,000 from Palm Springs Motors, in accordance with the quote provided.

The above motion was carried by the following:

ROLL CALL VOTE:

AYES: MINTZ, SCOTT, WRIGHT, KLINK
NOES: NONE
ABSTAIN: NONE
ABSENT: BILDERAIN

City Council - Regular Meeting
June 25, 2024

FUTURE COUNCIL INITIATED ITEMS

1. Revisit funds that were allocated to the portable showers and Navigation Center.

Mayor Pro Tem Klink asked if there was a need from Staff for someone to oversee the events that the City gives money out to, to make sure the funds are being used effectively. City Manager James mentioned this exact issue was discussed in the Management meeting earlier in the day and it would be brought to the City Council at a later date.

Councilmember Scott asked if the funding that was put aside for the portable showers would go back into the General Fund since that funding was not used in the last fiscal year. City Manager James mentioned that he would look into this and let the City Council know.

PUBLIC COMMENTS
Joseph Carder, Twentynine Palms, welcomed the new City Manager, and he thanked the City Council. He mentioned the community is very grateful that they were heard and for the process of the wastewater treatment plant.

Mayor Pro Tem Klink mentioned that the City did receive an email for the Burrtec item to be read into the record from Susan Peplow in regards to education for the community on the organic containers.

CITY MANAGER UPDATE
City Manager James provided the following update: Animal Control has joined with San Diego Humane Society and Best Friends Society to purchase an isolation center. This isolation center is going to be donated by these two groups to our Animal Shelter. He commented that a group of our employees identified a solution to help haul dumped tires that the City has collected. A licensed hauler was hired that was 50% cheaper than what the City typically pays, and they hauled away five hundred tires. He mentioned the Juneteenth event and the flag raising ceremony, saying that they were both great events and well attended, Park and Recreation is having a 4th of July event at Knott's Sky Park from 6pm to 9pm, a "Freedom Daze" event is taking place at Freedom Plaza from July 4-6th, organized by JT City Limits, offering 35 local rock bands, food and merchandise. He commented on "World Blood Donor Day" that was held recently in our city. The Blood Bank's goal was thirty-six units and that was exceeded. Finally, he added that the Nomination Period to run for City Council begins Monday, July 15, 2024, and goes through Thursday, August 8, 2024.

ADJOURNMENT - Mayor Pro Tem Klink adjourned the meeting to the next meeting on July 23, 2024, at 6:53 p.m.

Respectfully submitted,
Cindy Villescas, CMC
City Clerk/Public Information Officer

STAFF REPORT
TO: City Council
FROM: Finance Technician
FOR MEETING: Jul 23 2024
SUBJECT: Approval of Warrant Register Totaling $1,710,963.89 ATTACHMENTS:
• Approval of Warrant Register
Totaling $1,710,963.89

Check Date
Warrant Register
PPBI Gen Chkng

CITY OF TWENTYNINE PALMS
Vendor
WARRANT DATE: 07-23-24
Check / Payment
0018646 6/05/2024 [3581] ADVANCED IMAGING SOLUTIONS 198.62 0018647 6/05/2024 [1017] AUTOZONE (0842) 128.56
0018648 6/05/2024 [0506] JADYN BAUER 325.00
0018649 6/05/2024 [3709] CA STATE DISBURSEMENT UNIT 85.00 0018650 6/05/2024 [1053] CINTAS CORPORATION (8315) 1,255.20 0018651 6/05/2024 [2785] COPY CENTER PLUS INC. (8893) 341.05 0018652 6/05/2024 [3797] COREY EDWIN MCDANIEL 180.00
0018653 6/05/2024 [1087] DESERT HARDWARE (0301) 736.93
0018654 6/05/2024 [1106] FRONTIER 116.69
0018655 6/05/2024 [1106] FRONTIER 330.80
0018656 6/05/2024 [1106] FRONTIER 6.58
0018657 6/05/2024 [1107] FULTON DISTRIBUTING 442.66
0018658 6/05/2024 [3732] FUSE CONNECT, LLC. 2,000.00
0018659 6/05/2024 [0549] ALEXANDER GARCIA 278.58
0018660 6/05/2024 [1341] HI-DESERT AIR INC (0336) 2,400.00 0018661 6/05/2024 [3253] JOHN MAHANY PLUMBING INC (9127) 205.00 0018662 6/05/2024 [3801] KARYL NEWMAN 3,750.00
0018663 6/05/2024 [3660] KIMBERLY K. JOHNSON 1,415.00
0018664 6/05/2024 [2367] MIDAMERICA 495.00
0018665 6/05/2024 [3821] MOON PLEASURES INC 3,000.00
0018666 6/05/2024 [1175] AARON NEVEU 1,239.20
0018667[VOID] 6/05/2024 [0001] ONE TIME VENDOR - JENNY GOLDSCHMIEDT 600.00 0018668 6/05/2024 [0001] ONE TIME VENDOR - ROGER THOMAS 892.16 0018669 6/05/2024 [2582] OREILLY 1,402.67
0018670 6/05/2024 [0431] LESLIE PAAHANA 262.42
0018671 6/05/2024 [1036] PARKER'S BUILDING SUPPLY 29 PALMS (8036) 288.82 0018672 6/05/2024 [2231] PAYCHEX INC 1,783.60
0018673 6/05/2024 [2686] QUEST DIAGNOSTICS 433.30
0018674 6/05/2024 [3806] QUISHA D. HENDERSON 400.00
0018675 6/05/2024 [2355] RELIANCE STANDARD LIFE INSURANCE CO. 2,347.34 0018676 6/05/2024 [1212] RUTAN AND TUCKER 18,133.63
0018677 6/05/2024 [1214] SAN BERNARDINO CO OFFICE OF THE ASSESSOR 20.00 0018678 6/05/2024 [1213] SAN BERNARDINO CO SHERIFFS DEPT 582,596.25 0018679 6/05/2024 [1215] SAN BERNARDINO COUNTY LICENSE DEPT 26.99 0018680 6/05/2024 [2268] SAN BERNARDINO COUNTY-RADIO 107.16 0018681 6/05/2024 [1230] SCE 18,934.97
0018682 6/05/2024 [3700] SIMPLEVIEW 2,137.51
0018683 6/05/2024 [1249] SPECTRUM 153.39
0018684 6/05/2024 [1249] SPECTRUM 119.98
0018685 6/05/2024 [3734] STACEY LYNN SOLIE 2,625.00
0018686 6/05/2024 [3746] TANIA HAMMIDI 1,100.00
0018687 6/05/2024 [2484] TERRA NOVA PLANNING & RESEARCH INC. (9096) 21,634.78 0018688 6/05/2024 [1243] THE GAS COMPANY 564.83
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0018689 6/05/2024 [1250] TOTAL FITNESS (8331) 359.88
0018690 6/05/2024 [1254] TROPHY EXPRESS 160.75
0018691 6/05/2024 [1259] TWENTYNINE PALMS WATER DISTRICT 4,003.59 0018692 6/05/2024 [0456] MAX WALKER 278.98
0018693 6/05/2024 [1744] YUNEX LLC 550.00
0018694 6/05/2024 [0001] ONE TIME VENDOR - JENNY GOLDSCHMIEDT 600.00 0018695 6/06/2024 [3823] CLOYD HOLMES JR 8,000.00
0018696 6/20/2024 [3826] A JUMP N PARTY INC. 2,114.84
0018697 6/20/2024 [1001] LORI (8411) ABDELNOUR 1,475.00 0018698 6/20/2024 [1005] AFLAC 648.86
0018699 6/20/2024 [2760] AMERICAN RED CROSS TRAINING SERVICES 152.00 0018700 6/20/2024 [1007] ANDY'S LANDSCAPE AND TREE SERVICE (3803) 1,975.00 0018701 6/20/2024 [1014] ARROWHEAD CREDIT UNION 22,981.07 0018702 6/20/2024 [3598] CANON SOLUTIONS AMERICA 75.89
0018703 6/20/2024 [3747] CAROLYN P RIGGS 18,500.00
0018704 6/20/2024 [2703] CLIMATEC LLC (8837) 5,200.00
0018705 6/20/2024 [1079] DATA TICKET INC 436.52
0018706 6/20/2024 [1081] STEPHEN F DAVIS 400.00
0018707 6/20/2024 [1100] FEDEX 35.00
0018708 6/20/2024 [1102] FORENSIC DTS INC 418.70
0018709 6/20/2024 [1106] FRONTIER 75.69
0018710 6/20/2024 [3825] GROUND ZERO CUSTOM INC 1,300.00 0018711 6/20/2024 [2164] INNOVATIVE FEDERAL STRATEGIES LLC 3,800.00 0018712 6/20/2024 [0554] HERBERT STONE JAMES 174.67
0018713 6/20/2024 [1144] JAMES W (2985) KYLE 1,520.00
0018714 6/20/2024 [3787] LATIMER ENTERPRISE LLC 7,000.00 0018715 6/20/2024 [1150] MARK SPEER AUTOMOTIVE (2109) 546.88 0018716 6/20/2024 [3828] METROPOLITAN COMPOUNDS, INC 559.46 0018717 6/20/2024 [1167] MORONGO UNIFIED SCHOOL DISTRICT 8,652.00 0018718 6/20/2024 [1228] NCSI 240.50
0018719 6/20/2024 [1177] NEWCO DISTRIBUTORS INCORPORATED 798.86 0018720 6/20/2024 [1184] OFFICE DEPOT CREDIT PLAN 963.11 0018721 6/20/2024 [0001] ONE TIME VENDOR - LAFARWNDA DAVIS 65.00 0018722 6/20/2024 [0001] ONE TIME VENDOR - WANI-LE KITCHEN 186.26 0018723 6/20/2024 [0001] ONE TIME VENDOR - LANXI INC 345.10 0018724 6/20/2024 [0001] ONE TIME VENDOR - MARYBEL MARQUEZ 345.10 0018725 6/20/2024 [0001] ONE TIME VENDOR - MARYBEL MARQUEZ 345.10 0018726 6/20/2024 [2499] RACKSPACE US, INC 1,207.93
0018727 6/20/2024 [3682] RECDESK LLC 6,800.00
0018728 6/20/2024 [3824] ROBOTRONICS INC 2,260.00
0018729 6/20/2024 [1209] ROGERS ANDERSON MALADY AND SCOTT (2807) 9,000.00 0018730 6/20/2024 [1212] RUTAN AND TUCKER 11,346.12
0018731 6/20/2024 [1230] SCE 776.05
0018732 6/20/2024 [3822] SCHADDRICK BRADLEY 600.00
0018733 6/20/2024 [1224] SKY'S THE LIMIT OBSERVATORY & NATURE CENTER 3,000.00 0018734 6/20/2024 [1231] SPARKLETTS 478.80
0018735 6/20/2024 [1249] SPECTRUM 129.99
0018736 6/20/2024 [1249] SPECTRUM 159.98
0018737 6/20/2024 [3186] STILES ANIMAL REMOVAL INC. 2,850.00 0018738 6/20/2024 [1178] T-MOBILE 89.22
0018739 6/20/2024 [1252] TPHS 1,907.15
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0018740 6/20/2024 [2201] TRANSUNION RISK AND ALTERNATIVE 75.00 0018741 6/20/2024 [1269] VALIC C/O JP MORGAN CHASE 1,971.66 0018742 6/20/2024 [1270] VALLEY INDEPENDENT PRINTING 487.60 0018743 6/20/2024 [1271] VCA 29 PALMS ANIMAL HOSPITAL (0319) 243.00 0018744 6/20/2024 [1133] VISUAL EDGE IT, INC 130.48
0018745 6/20/2024 [3827] WILD HEART ESCAPES LLC 3,000.00 0018746 6/20/2024 [1744] YUNEX LLC 1,175.00
0018747 6/26/2024 [1524] 29 PALMS CREATIVE CENTER & GALLERY (2303) 800.00 0018748 6/26/2024 [1000] 29 PALMS FENCE (0035) 2,900.00 0018749 6/26/2024 [3581] ADVANCED IMAGING SOLUTIONS 630.34 0018750 6/26/2024 [2680] AIS 295.41
0018751 6/26/2024 [3121] AMERICAN EXPRESS 3,782.39
0018752 6/26/2024 [1008] ANIMAL ACTION LEAGUE INC 1,512.00 0018753 6/26/2024 [3591] AVCOM SERVICES 260.00
0018754 6/26/2024 [3735] CAROLINE PARTAMIAN 1,197.28
0018755 6/26/2024 [1072] COURTMASTER SPORTS, INC. 9,500.00 0018756 6/26/2024 [1079] DATA TICKET INC 125.00
0018757 6/26/2024 [1106] FRONTIER 135.79
0018758 6/26/2024 [1122] GOLD MOUNTAIN CA NEWS MEDIA 984.50 0018759 6/26/2024 [3829] HEATHER L. DRAKE 800.00
0018760 6/26/2024 [0510] ABIGAIL HERNANDEZ CONDE 143.69 0018761 6/26/2024 [3743] HOME DEPOT CREDIT SERVICES 1,592.89 0018762 6/26/2024 [1140] JOSHUA TREE NATIONAL PARK COUNCIL FOR THE 550.00 0018763 6/26/2024 [3722] JOSHUA TREE RESIDENTIAL EDUCATION 1,000.00 0018764 6/26/2024 [3800] KATHERINE ROBERTS 400.00
0018765 6/26/2024 [1150] MARK SPEER AUTOMOTIVE (2109) 2,124.05 0018766 6/26/2024 [3833] MICHELLE LANAY WALKER 600.00
0018767 6/26/2024 [3620] MIL-TREE VETERAN PROJECT 800.00 0018768 6/26/2024 [3834] MMHF, INC 1,500.00
0018769 6/26/2024 [1167] MORONGO UNIFIED SCHOOL DISTRICT 3,573.61 0018770 6/26/2024 [1167] MORONGO UNIFIED SCHOOL DISTRICT 1,841.28 0018771 6/26/2024 [3429] PLUM NELLY CREATIVE 800.00
0018772 6/26/2024 [1203] REACH OUT MORONGO BASIN (5005) 1,000.00 0018773 6/26/2024 [2396] SAN BERNARDINO COUNTY-CSA 344.64 0018774 6/26/2024 [2268] SAN BERNARDINO COUNTY-RADIO 107.16 0018775 6/26/2024 [1230] SCE 1,328.47
0018776 6/26/2024 [1230] SCE 6,596.00
0018777 6/26/2024 [3810] SHERWOOD DESIGN ENGINEERS, LTD. 14,505.46 0018778 6/26/2024 [3056] SOAP SUDS CLEANING SERVICE (9049) 48.52 0018779 6/26/2024 [1249] SPECTRUM 43.29
0018780 6/26/2024 [1249] SPECTRUM 37.95
0018781 6/26/2024 [1249] SPECTRUM 119.99
0018782 6/26/2024 [1249] SPECTRUM 1,179.00
0018783 6/26/2024 [1356] THEATRE 29 (0507) 800.00
0018784 6/26/2024 [3832] TIGRES TIRE RECYCLING 1,512.00 0018785 6/26/2024 [3831] TOMAHAWK LIVE TRAP 2,322.57
0018786 6/26/2024 [3093] TWENTYNINE PALMS ARTISTS GUILD 800.00 0018787 6/26/2024 [1269] VALIC C/O JP MORGAN CHASE 1,971.66 0018788 6/26/2024 [1271] VCA 29 PALMS ANIMAL HOSPITAL (0319) 1,679.47 0018789 6/26/2024 [0171] CYNTHIA VILLESCAS 123.55
0018790 6/26/2024 [3830] WALKER METTLING 200.00
Run: 7/16/2024 at 1:09 PM Page: 3

0018791 6/27/2024 [3735] CAROLINE PARTAMIAN 2,520.00
0018792 6/27/2024 [3772] JONATHAN A CULLITON 200.00
0018793 6/27/2024 [3800] KATHERINE ROBERTS 200.00
0018794 6/27/2024 [3756] PETER O'LEARY 2,767.50
0018795 6/27/2024 [1192] PETTY CASH/CH 1,350.00
0018796 6/27/2024 [3056] SOAP SUDS CLEANING SERVICE (9049) 2,627.00 0018797 6/27/2024 [3734] STACEY LYNN SOLIE 1,310.00
0018798 7/01/2024 [0363] ROBERTA MELVILLE 265.72
0018799 7/02/2024 [3826] A JUMP N PARTY INC. 143.00
0018800 7/02/2024 [1506] A NEW CREATION FLOWERS & GIFTS (2187) 304.39 0018801 7/02/2024 [2408] ACCUFUND, INC 1,839.00
0018802 7/02/2024 [2760] AMERICAN RED CROSS TRAINING SERVICES 200.00 0018803 7/02/2024 [3729] ATRIUM APOTHECARY INC 72.00
0018804 7/02/2024 [3709] CA STATE DISBURSEMENT UNIT 85.00 0018805 7/02/2024 [3835] CHILDREN'S DISCOVERY MUSEUM OF THE DESERT 300.00 0018806 7/02/2024 [1081] STEPHEN F DAVIS 400.00
0018807 7/02/2024 [1093] ECS IMAGING INCORPORATED 5,855.00 0018808 7/02/2024 [1106] FRONTIER 80.50
0018809 7/02/2024 [1106] FRONTIER 6.58
0018810 7/02/2024 [1107] FULTON DISTRIBUTING 386.87
0018811 7/02/2024 [3732] FUSE CONNECT, LLC. 2,000.00
0018812 7/02/2024 [1122] GOLD MOUNTAIN CA NEWS MEDIA 1,068.60 0018813 7/02/2024 [1125] HDL COMPANIES 1,523.10
0018814 7/02/2024 [2934] I-BANK US BANK 63,461.39
0018815 7/02/2024 [3632] INLAND EMPIRE TOURISM COUNCIL 3,000.00 0018816 7/02/2024 [0554] HERBERT STONE JAMES 317.34
0018817 7/02/2024 [2183] JOE A GONSALVES & SON 3,000.00 0018818 7/02/2024 [3660] KIMBERLY K. JOHNSON 1,415.00
0018819 7/02/2024 [1150] MARK SPEER AUTOMOTIVE (2109) 205.48 0018820 7/02/2024 [3588] METLIFE SMALL BUSINESS CENTER 4,527.33 0018821 7/02/2024 [1175] AARON NEVEU 560.00
0018822 7/02/2024 [1179] NICHOLS LOCAL GOVERNMENT CONSULTING, LLC 2,200.00 0018823 7/02/2024 [0001] ONE TIME VENDOR - SHARYN BISHOP 1,450.00 0018824 7/02/2024 [0001] ONE TIME VENDOR - BROMIGOS 106.87 0018825 7/02/2024 [0001] ONE TIME VENDOR - WANDERING WILLOW FORGE 106.87 0018826 7/02/2024 [3382] PARTYLIFE PHOTOBOOTH 685.13
0018827 7/02/2024 [2231] PAYCHEX INC 1,435.07
0018828 7/02/2024 [1203] REACH OUT MORONGO BASIN (5005) 20,000.00 0018829 7/02/2024 [2355] RELIANCE STANDARD LIFE INSURANCE CO. 2,187.97 0018830 7/02/2024 [2396] SAN BERNARDINO COUNTY-CSA 4,500.00 0018831 7/02/2024 [1230] SCE 4,407.97
0018832 7/02/2024 [3700] SIMPLEVIEW 1,950.01
0018833 7/02/2024 [1249] SPECTRUM 119.99
0018834 7/02/2024 [1249] SPECTRUM 149.98
0018835 7/02/2024 [1249] SPECTRUM 199.99
0018836 7/02/2024 [3836] SUNNY DESERT NURSERY INC 3,244.41 0018837 7/02/2024 [1243] THE GAS COMPANY 435.41
0018838 7/02/2024 [1259] TWENTYNINE PALMS WATER DISTRICT 301.47 0018839 7/02/2024 [1271] VCA 29 PALMS ANIMAL HOSPITAL (0319) 492.12 0018840 7/02/2024 [1274] VSP 686.72
0018841 7/02/2024 [1277] WATERLINE TECHNOLOGIES INC 2,569.84 Run: 7/16/2024 at 1:09 PM Page: 4

0018842 7/02/2024 [2528] WELLS FARGO VENDOR FIN SERV 121.71 0018843 7/02/2024 [1287] XEROX FINANCIAL SVC 188.71
0018844 7/09/2024 [0520] MICAH ALLEN DEIBERT 103.14
0018845 7/10/2024 [3754] ABYGAIL BIGOS 150.00
0018846 7/10/2024 [2408] ACCUFUND, INC 100.00
0018847 7/10/2024 [2326] ANIMAL CARE EQUIPMENT AND SERVICE 288.87 0018848 7/10/2024 [2816] APOLLO WOOD RECOVERY, INC 3,753.75 0018849 7/10/2024 [1037] BURRTEC WASTE & RECYCLING (2692) 403.04 0018850 7/10/2024 [1052] CHARLES ABBOTT ASSOCIATES INC 48,277.04 0018851 7/10/2024 [1053] CINTAS CORPORATION (8315) 480.94 0018852 7/10/2024 [2785] COPY CENTER PLUS INC. (8893) 87.81 0018853 7/10/2024 [1087] DESERT HARDWARE (0301) 2,002.77 0018854 7/10/2024 [1102] FORENSIC DTS INC 189.00
0018855 7/10/2024 [1106] FRONTIER 116.69
0018856 7/10/2024 [1106] FRONTIER 342.48
0018857 7/10/2024 [1109] GALLS LLC 411.07
0018858 7/10/2024 [1122] GOLD MOUNTAIN CA NEWS MEDIA 1,251.00 0018859 7/10/2024 [1122] GOLD MOUNTAIN CA NEWS MEDIA 285.00 0018860 7/10/2024 [2696] HARRELL'S 6,459.09
0018861 7/10/2024 [2164] INNOVATIVE FEDERAL STRATEGIES LLC 3,800.00 0018862 7/10/2024 [3837] J R SIMPLOT COMPANY 10,602.60
0018863 7/10/2024 [1149] LLOYD PEST CONTROL CO INC (8202) 515.00 0018864 7/10/2024 [1150] MARK SPEER AUTOMOTIVE (2109) 1,140.30 0018865 7/10/2024 [1162] MOJAVE DESERT & MOUNTAIN 5,418.00 0018866 7/10/2024 [1228] NCSI 55.50
0018867 7/10/2024 [1036] PARKER'S BUILDING SUPPLY 29 PALMS (8036) 649.68 0018868 7/10/2024 [2686] QUEST DIAGNOSTICS 233.70
0018869 7/10/2024 [2499] RACKSPACE US, INC 1,207.93
0018870 7/10/2024 [1216] SAN BERNARDINO CO FIRE DEPARTMENT 508.15 0018871 7/10/2024 [1213] SAN BERNARDINO CO SHERIFFS DEPT 455,065.00 0018872 7/10/2024 [2396] SAN BERNARDINO COUNTY-CSA 407.42 0018873 7/10/2024 [2268] SAN BERNARDINO COUNTY-RADIO 2,587.78 0018874 7/10/2024 [1230] SCE 20,060.53
0018875 7/10/2024 [1249] SPECTRUM 119.98
0018876 7/10/2024 [1239] SWANK MOTION PICTURES INC 495.00 0018877 7/10/2024 [1250] TOTAL FITNESS (8331) 779.79
0018878 7/10/2024 [2201] TRANSUNION RISK AND ALTERNATIVE 75.00 0018879 7/10/2024 [1300] TRIAD REALTORS (0101) 424.30
0018880 7/10/2024 [1259] TWENTYNINE PALMS WATER DISTRICT 4,769.95 0018881 7/10/2024 [3636] UNITED STATES TREASURY 74.06
0018882 7/10/2024 [1269] VALIC C/O JP MORGAN CHASE 1,971.66 0018883 7/10/2024 [1270] VALLEY INDEPENDENT PRINTING 555.17 0018884 7/10/2024 [1273] VERIZON WIRELESS 872.38
0018885 7/10/2024 [1287] XEROX FINANCIAL SVC 188.71
0018886 7/11/2024 [0520] MICAH ALLEN DEIBERT 27.59
EFT 6/14/2024 93,091.56
Approved by: Date:

Total Checks: 1,710,963.89
Run: 7/16/2024 at 1:09 PM Page: 5

STAFF REPORT
TO: City Council
FROM: Finance Director
FOR MEETING: Jul 23 2024
SUBJECT: Treasurer's Report - FY 2023-24 Quarter 4.

RECOMMENDATION:

The City Council receive and approve the Treasurer's Report for the 4th Quarter of Fiscal Year 2024-25.

ORDER OF PROCEDURE:

Request Staff Report (Finance Director Presenting)
Council Questions of Staff
Request Public Comment
Council Discussion
Motion/Second
Discussion of Motion
Call the Question
ATTACHMENTS:
• TREASREP 6.30.24
• Securities Report 6.30.24
ENVIRONMENTAL:

N/A
ALTERNATIVES:

The City Council could choose not to accept this report as is.

FISCAL IMPACT:

N/A

City of Twentynine Palms
Treasurer's ReportJune 30, 2024
Average Interest Market Percent
Depository Term Matures Rate Amount Value of TotalPetty Cash and Cash on Hand On Hand N/A $950 $950 0.00%PPBI Bank Checking Account Demand 0.00% $1,590,583 $1,590,583 7.73%PPBI Bank - Successor Agency Demand 0.00% $649,530 $649,530 3.16%Local Agency Investment Fund Demand 4.55% $10,944,657 $10,881,082 52.87%Cash with MBS Demand 0.00% $9,398 $9,398 0.05%U.S. Treasury Bills 5.130% $1,524,473 $1,529,076 7.43%Cerfificate of Deposit 3.57% $5,418,000 $5,265,876 25.59% Total City Funds $20,137,591 $19,926,495 96.82%Funds Held in Trust:Cash With Fiscal Agent (Project Phoenix) $654,517 $654,517 3.18%Total Funds in the Treasurer's Custody $20,792,108 $20,581,012 100.00%NOTES:1) All the above investments are in compliance with the City's Investment Policy.2) The City has sufficient funds to meet its expenditure requirements for the next six months.Prepared by: Abigail Hernandez CondeDate: 7/15/24

City of Twentynine Palms RMB033895
Account eCD70981Report Name Position Report Export
Executed 6/30/2024
Certificates of Deposit
Issuer Settle Date Maturity Date Principal Payment Frequency Market Value Rate Interest Earned Redeemed AMERICAN EXPRESS 6/29/2022 6/29/2027 $245,000.00 Monthly $234,920.70 3.40% $684.65 AUSTIN TELCO FED CR 9/21/2022 9/21/2027 $249,000.00 Monthly $241,368.15 3.80% $777.70 BEAL BK USA LAS 3/2/2022 2/24/2027 $245,000.00 Semi Annual $227,818.15 2.05% $412.81 CAPITAL ONE BK USA 5/11/2022 5/11/2027 $246,000.00 Semi Annual $234,937.38 3.20% $647.01CAPITAL ONE NATL 4/27/2022 4/27/2027 $245,000.00 Semi Annual $232,233.05 2.90% $583.97CITY FED CR UN 1/12/2024 1/12/2029 $240,000.00 Monthly $233,839.20 3.95% $779.18COBALT FED CR UN 9/15/2022 9/15/2027 $249,000.00 Monthly $239,899.05 3.60% $736.77CREDIT UN OF TEX 9/14/2022 9/15/2025 $245,000.00 Semi Annual $240,604.70 3.60% $735.00 DISCOVER BK 5/18/2022 5/19/2027 $246,000.00 Semi Annual $234,878.34 3.20% $647.01 DORT FINL CR UN 6/20/2023 6/20/2028 $247,000.00 Quaterly $245,614.33 4.50% $913.56FIRST INTERNET BK 9/28/2022 9/25/2025 $249,000.00 Monthly $245,658.42 4.00% $818.63FIRST TECHNOLOGY FED 7/15/2022 7/15/2027 $249,000.00 Monthly $240,065.88 3.60% $736.77GREENSTATE CR UN 9/26/2023 9/26/2028 $248,000.00 Monthly $251,655.52 5.00% $1,019.18 LAFAYETTE FED CR UN 5/25/2022 5/25/2027 $245,000.00 Monthly $234,195.50 3.25% $654.45 MAINE SVGS FCU 7/21/2023 7/21/2028 $248,000.00 Monthly $249,455.76 4.80% $978.41MORGAN STANLEY 10/3/2019 10/3/2024 $245,000.00 Semi Annual $242,723.95 1.95% $392.67MORGAN STANLEY BK N 9/15/2022 9/15/2026 $245,000.00 Semi Annual $238,387.45 3.60% $724.93MOUNTAIN AMER FED CR 10/14/2022 10/15/2024 $248,000.00 Monthly $247,551.12 4.75% $968.22QUORUM FED CR UN PUR 9/30/2022 9/30/2026 $249,000.00 Monthly $245,145.48 4.15% $849.33STATE BK INDIA NEW 3/10/2022 3/10/2027 $245,000.00 Semi Annual $228,487.00 2.20% $443.01SYNCHRONY BK RETAIL 7/29/2022 7/29/2025 $245,000.00 Semi Annual $240,438.10 3.40% $684.66TOYOTA FINL SVGS BK 9/16/2022 9/16/2027 $245,000.00 Semi Annual $235,998.70 3.60% $724.93Totals $5,418,000.00 $5,265,875.93 3.57% $15,912.85 $0.00United States Treasury Bills Issuer Settle Date Maturity Date Purchase Price Payment Frequency Market Value Rate Interest Earned Redeemed TSRYS5709806 12/7/2023 6/6/2024 $0.00 At Maturity $0.00 0.000% $0.00 $250,000.00 TSRYS5598351 12/21/2023 6/13/2024 $0.00 At Maturity $0.00 0.000% $0.00 $1,024,000.00TSRYS5784685 4/11/2024 10/10/2024 $255,718.19 At Maturity $258,182.66 5.124% $0.00 TSRYS5819858 6/6/2024 12/5/2024 $1,268,754.50 At Maturity $1,270,893.00 5.136% $0.00Totals $1,524,472.69 $1,529,075.66 5.130%Cash, Money Funds, and Bank Deposits CASH BALANCE $9,398.61
TOTAL INVESTMENTS $6,942,472.69 $6,804,350.20

STAFF REPORT
TO: City Council
FROM: Finance Director
FOR MEETING: Jul 23 2024
SUBJECT: Adoption of Measure I Five-Year Plan for Fiscal Years 2024-2025 through 2028-2029.

RECOMMENDATION:

The City Council adopt Resolution No. 24-___ approving the Measure I Five-Year Plan for Fiscal Years 2024- 2025 through 2028-2029.

ORDER OF PROCEDURE:

Request Staff Report (Finance Director Presenting)
Council Questions of Staff
Request Public Comment
Council Discussion
Motion/Second
Discussion of Motion
Call the Question
ATTACHMENTS:
• Resolution 5-Year CIP 2025-
2029
• 2025-2029 MICIP Expenditure
Strategy
• 2025-2029 MICIP Request
Letter
• Exhibit A - 2025-2029 5-Year
CIP Plan
BACKGROUND:

Pursuant to the requirements of Measure I, which was renewed by the voters, each local jurisdiction receiving funds must annually adopt a Five-Year Capital Improvement Plan, which outlines the specific projects upon which those funds shall be expended. A Resolution adopting the Measure I Expenditure Plan for FY 2024-2025 through 2028-2029 for the City of Twentynine Palms is attached.

Measure I is a result of an initiative passed by voters of San Bernardino County, authorizing a 1/2 cent sales tax to be used for transportation purposes. Local street projects receive 70% of the proceeds. The City expects to receive $586,493 in general distribution for the upcoming fiscal year. In addition, the City is estimating to have $2,198,037 in funds available from prior years' Measure I distributions. The City has budgeted to spend $1,583,794 in Fiscal Year 2024-25.

The projects are primarily prioritized by the City's Pavement Management System. Pavement management incorporates life cycle costs into a more systematic approach to minor and major road maintenance and Page 19 of 591 reconstruction projects. The needs of the entire network as well as budget projections are considered before projects are executed. Pavement management encompasses the main aspects and tasks needed to maintain a quality pavement inventory and ensure that the overall condition of the road network can be sustained at desired levels.

The CIP for Fiscal Years 2024-2025 through 2028-2029, the adopted Resolution, and the City's Expenditure Strategy are due to SBCTA by September 1, 2024.

ENVIRONMENTAL:

Categorically Exempt.

ALTERNATIVES:

The City Council could choose to change the priorities presented in the 5-Year plan.

FISCAL IMPACT:

All funding for the projects listed in the Five-year plan will be from available Measure I (current allocation and carryover), General Capital Reserves, and Federal, State and local grants, which have been incorporated in the FY 2024-25 budget.

CITY OF TWENTYNINE PALMS

CITY COUNCIL
RESOLUTION NO. 24-____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TWENTYNINE

PALMS, CALIFORNIA, ADOPTING THE MEASURE I FIVE-YEAR CAPITAL IMPROVEMENT PLAN FOR FY 2024/2025 THROUGH FY 2028/2029
WHEREAS, San Bernardino County voters approved passage of Measure I in November 2004, authorizing the San Bernardino County Transportation Authority to impose a one-half of one percent retail transactions and use tax applicable in the incorporated and unincorporated territory of the County of San Bernardino; and WHEREAS, revenue from the tax can only be used for transportation improvement and traffic management programs authorized in the Expenditure Plans set forth in Ordinance No. 04- 01 of the Authority; and
WHEREAS, the Strategic Plan requires each local jurisdiction applying for revenue from the Local Street Program to annually adopt and update a Five-Year Capital Improvement Plan; and
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Twentynine Palms, State of California, that the Measure I Five-Year Capital Improvement Plan, attached to this resolution as Exhibit A, is hereby adopted.

PASSED, APPROVED, AND ADOPTED on the 23rd day of July 2024. ____________________________
Steven Bilderain, Mayor
ATTEST:
________________________________
Cindy Villescas, City Clerk
I hereby certify that the foregoing Resolution No. 24-___ was duly adopted by the City Council of the City of Twentynine Palms at a regular meeting thereof, held on the 23rd day of July 2024, by the following vote of the Council:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ABSTAIN: Councilmembers:
________________________________
Cindy Villescas, City Clerk

CITY OF TWENTYNINE PALMS

MEASURE I CAPITAL IMPROVEMENT PLAN

EXPENDITURE STRATEGY
Fiscal Year 2024/2025 thru 2028/2029
Each jurisdiction shall adopt a Measure I Capital Improvement Plan Expenditure Strategy as part of the annual Capital Improvement Plan adoption. The Expenditure Strategy is not intended to be a narrative description of the projects listed in the Capital Improvement Plan. Instead, the Expenditure Strategy should provide the policy approach adopted by the Council for the expenditure of Measure I funds. The jurisdictional Expenditure Strategy provides an opportunity to document circumstances or analyses which are not otherwise apparent when reviewing the Measure I Capital Improvement Plan.

You must include the strategy as part of the annual Capital Improvement Plan adopted by your governing body.

Guidance

1. The strategy should be no longer than one or two paragraphs.

2. Examples:
• The City/Town intends to accumulate Measure I revenue for a specific large project (i.e., “pay-as-you-go”).
• The City/Town intends to expend Measure I revenue for specific types of eligible projects and/or policy prioritization of specific programs; i.e., o Allocation of expenditures on a split of 60% for improvements to existing facilities and 40% for new project development.
o Dedication of revenues to maintenance of existing city/town center streets, which may be a strategy for built-out cities.

Pay as you go.

DATE: April 10, 2024
TO: City & Town Managers/County Executive Officer
FROM: Andrea Zureick, Director of Fund Administration
SUBJECT: Measure I Capital Improvement Plan Submittal
All jurisdictions receiving Measure I revenue from the Local Street Program must annually submit a Five-Year Capital Improvement Plan (CIP) that outlines the specific projects upon which Measure I Local Street Program (pass-through) funds will be expended. The CIP for Fiscal Years 2024/2025-2028/2029, an adopting Resolution, and an Expenditure Strategy are due to SBCTA by September 1, 2024. Additionally, if any changes have occurred to the projects included in the Fiscal Year 2023/2024 CIP, a revised CIP, with an adopting Resolution, is due by September 1, 2024, to avoid an audit finding.

Please note the revised format: The CIP must be prepared using the Excel CIP workbook that is attached to this email with the file name: 2025-2029 CIP_Report_Template Attach B. No other formats should be used.

If the Five-Year CIP is not submitted by the due date, Measure I pass-through funds will be withheld until the approved CIP has been received.

If you have any questions, please contact Marc Lucius at [email protected]. SBCTA highly recommends a draft be reviewed by SBCTA prior to your adoption to avoid any eligibility issues. When the CIP has been completed, please send an electronic copy and an original signed copy of the resolution to his attention. cc: TTAC Representative
Attachment A: 2025-2029 MICIP Instructions
Attachment B: CIP Excel Input file: 2025-2029 CIP_Report_Template Attachment C: Five-Year Revenue Estimates
Attachment D: Sample CIP Report
Attachment E: Sample Resolution
Attachment F: Sample Expenditure Strategy
Attachment G: Local Street Program Policies 40003, 40012 and 40016

Resolution Number: 24-XX Measure I Local Pass-through Program

FIVE YEAR CAPITAL IMPROVEMENT PLAN
Fiscal Years 2024/2025 thru 2028/2029
Jurisdiction:

Resolution Approval Date: 7/23/2024
Contact Person/Title: Stone James, City Manager Twentynine Palms Phone: (760) 367-6799
Email: [email protected]
6/30/24 Carryover Balance $2,198,037.00
Is Project in
City's
Non-motorized
Transportation
Plan?
(Yes/No)
Does Project
have an ATP
Component?
(Yes/No)
Is the Project on the
City's Nexus Study List?
(Public/DIF Share %)
Estimated Total
Project Cost
FY2024/25 Est. Revenue FY2025/26 Est. Revenue FY2026/27 Est. Revenue FY2027/28 Est. Revenue FY2028/29 Est. Revenue Total Est. Rev. $586,493 $628,317 $645,774 $662,949 $685,191 $3,208,724 Current
Estimate
Current
Estimate
Current
Estimate
Current
Estimate
Current
Estimate Total
Projects:

HSIP Safety Improvement (e.g., Flashing Beacon Installation) for Six High Crash Unsignalized
Intersections:
• Two Mile Rd & Lear Ave,
• Two Mile Road & Mesquite Springs Road,
• Adobe Road & Sullivan Road,
• Adobe Road & Smith Ranch Road,
• Utah Trail & Amboy Road, and
• Utah Trail & Baseline Road.

No No 0.0% 0.0% $559,590 $54,900 $0 $0 $0 $0 $54,900
Citywide Payment Improvements/Pavement Preservation No No 0.0% 0.0% $1,111,400 $424,000 $900,000 $0 $0 $0 $1,324,000 Split Rock Bridge - Project Management No No 0.0% 0.0% $4,847,873 $546,081 $250,000 $0 $0 $0 $796,081 Administrative Costs 0.0% 0.0% $10,000 $10,000 $10,000 $0 $0 $0 $20,000 Neighborhood Safety Project: Traffic safety improvements within three City residential neighborhoods: South of Two Mile Rd, North of Baseline Rd, East of Encelia Ave, and west of Elm Ave.

No No 0.0% 0.0% $1,150,000 $15,000 $0 $0 $0 $0 $15,000
SR62 Street Improvement Phase 2B - North side of SR62 from Encelia Avenue to Larrea Avenue - Project Management. No No 0.0% 0.0% $5,744,250 $56,250 $25,000 $0 $0 $0 $81,250 Channel at El Rey: Pavement Replacement No No 0.0% 0.0% $329,063 $329,063 $0 $0 $0 $0 $329,063 City-wide Channel Trail Class I: 6.9 mile long, 12' wide, PCC Class 1 bikeway. Limits: Trail head of the Fortynine Plams Canyon Trail, then easterly along the flood control channel to channel's east terminus at Bagdad Hwy.

No No 0.0% 0.0% $569,250 $148,500 $50,000 $0 $0 $0 $198,500

0.0% 0.0% $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0

0.0% 0.0% $0 $0 $0 $0 $0 $0 $0
Projects Total: $1,583,794 $1,235,000 $0 $0 $0 $2,818,794 (Must not exceed 150% of Carryover Balance
+ Total Estimated Revenue) Total Programming is currently 52% Total Estimated Programming: $2,818,794 Resolution Number: 24-XX Measure I Local Pass-through Program

FIVE YEAR CAPITAL IMPROVEMENT PLAN
Fiscal Years 2024/2025 thru 2028/2029
Jurisdiction:

Resolution Approval Date: 7/23/2024
Contact Person/Title: Stone James, City Manager Twentynine Palms Phone: (760) 367-6799
Email: [email protected]

Resolution Number: Measure I Local Pass-through Program

FIVE YEAR CAPITAL IMPROVEMENT PLAN
Fiscal Years 2024/2025 thru 2028/2029
Jurisdiction:

Resolution Approval Date:

Contact Person/Title: Adelanto
Phone:

Email:
6/30/24 Carryover Balance $0.00
Is Project in
City's
Non-motorized
Transportation
Plan?
(Yes/No)
Does Project
have an ATP
Component?
(Yes/No)
Is the Project on the
City's Nexus Study List?
(Public/DIF Share %)
Estimated Total
Project Cost
FY2024/25 Est.

Revenue
FY2025/26 Est.

Revenue
FY2026/27 Est.

Revenue
FY2027/28 Est.

Revenue
FY2028/29 Est.

Revenue Total Est. Rev.
$1,110,169 $1,165,996 $1,206,793 $1,247,573 $1,298,469 $6,029,001 Current
Estimate
Current
Estimate
Current
Estimate
Current
Estimate
Current
Estimate Total
Projects:
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
0% 100% $0 $0 $0 $0 $0 $0 $0
Projects Total: $0 $0 $0 $0 $0 $0
(Must not exceed 150% of Carryover
Balance + Total Estimated Revenue) Total Programming is currently 0% Total Estimated Programming: $0 Please read yellow
cells in column P for
Directions!

Directions:

Each Jurisdiction must annually submit a new 5 year CIP to SBCTA by September 1 to receive Local Street Pass-Through funds. 1) Only purple cells need attention/data entry.
2) Select your Jurisdiction in L2 Using Drop Down (Revenue will update automatically)
3) Enter the amount of your unused MSI Local Street funds estimated at the end of the current Fiscal Year in M6.
4) Type the Project Names in column B (see 5 for additional instructions) 5) Please include the type of work. There's no limit on categorial projects, like pavement mgmt or routine maintenance. If adding a specific road/named project, please include road name, limits and type of work. 6) Please enter yes or no as appropriate in cells C&D to indicate if the Project is in a Non-Motorized Trans Plan or has an ATP Component. 7) If the Project is a Capacity Improvement Project/Arterial Project, please enter the Public/DIF Share % from the Nexus Study. Otherwise, leave blank.

Please Contact SBCTA if you need help with this.
8) Please enter Estimated Total Project Cost in column G. May be more than the Measure I amount.
9) Please enter the amount of Measure I Local Street dollars estimated to be spent by Fiscal Year.
10) Make sure the programming doesn't exceed 150% of the 5 Year Estimated Revenue + Carryover Balance. If it does, cell H60 will turn pink as a flag, and will show a % above 150%. You will need to reduce programming during the 5 years per Measure I Policy VLS-9.
11) Hide/Unhide blank project lines as needed. If you need more lines to input Projects, please unhide rows up to line 100. If Projects exceed 100 lines, please contact SBCTA for a revised form.
12) Only input/submit the 5 Year CIP using the SBCTA-approved form sent to you. Contact SBCTA if you encounter problems.
13) All projects with expenditures MUST BE LISTED as a requirement of the Measure I Ordinance and Policy VLS-9. If an agency spends Measure I Local Street funds on a project not listed, a Revised CIP must be submitted by Sept 1 after the year where the expenditures were incurred to avoid an audit finding.
14) Consider submitting CIP to SBCTA for consistency review/policy compliance prior to adoption by jurisdictions governing body. Please call SBCTA with any questions using contact person from Cover Letter.

STAFF REPORT
TO: City Council
FROM: City Engineer
FOR MEETING: Jul 23 2024
SUBJECT: Twentynine Palms Lighting and Landscaping Assessment District #1, Confirming Assessment and Levying Assessment for FY 2024-2025.

RECOMMENDATION:

The City Council:
1) Review and approve a request to increase the maintenance area for L-1 to include parkway segments on Mimosa Avenue from Florida Drive and Sunnyslope Drive. 2) Conduct the Public Hearing.
3) Adopt Resolution No. 24-__; a Resolution of the City Council of the City of Twentynine Palms confirming the diagram and assessment and levying assessment pursuant to the Lighting and Landscaping Act of 1972 for Fiscal Year 2024-2025.

ORDER OF PROCEDURE:

Request Staff Report (City Manager Presenting)
Council Questions of Staff
Open Public Hearing
Request Public Comment
Close Public Hearing
Council Discussion
Motion/Second
Discussion of Motion
Call the Question
ATTACHMENTS:
• L-1 Maintenance Area Map
• Engineer_s Report 1st
meeting
• Resolution Confirming the
Diagram and Assessment copy
BACKGROUND:
08On May 28, 2024, the City Council approved Resolution No. 24-08, directing the filing of the Annual Report for the Twentynine Palms' Landscaping and Lighting District, approved the Engineer’s Report, and approved Resolution No. 24-09 to declare the City’s intention to order improvements and to levy and collect assessments for the Fiscal Year 2024-2025. The Resolution also gave the time and place for the Public Hearing to discuss the proposed assessment.

Since the approval of the Engineer's report at the Council meeting on May 28, 2024, it has come to the City's attention that the parkway, (the area between the curb and gutter, and the garden wall), along Mimosa Avenue, between Florida Avenue and Sunnyslope Avenues, was not included in the original maintenance areas of the assessment district when the boundaries were established. Because this

area is not the frontage of a house and is separated from the houses by a garden wall, like the areas around the perimeter of the Tract, Staff recommends that the area be included as part of the maintenance district. See the attached exhibit for Tract 16729.

As indicated within the Engineer’s report, the proposed net amounts to be assessed for each location within the assessment district are as follows:

Proposed
Last year’s assessment
Location No. Tract No. No. of lots assessment (FY24/25) • L-1 Tract 16729 132 $97.67/lot $101.58/lot
• L-2 Portion of Tract 2530 10 $Varies/lot $Varies/lot
The Landscaping and Lighting Act of 1972 permits the installation, maintenance, and servicing of landscaping and lighting through annual special assessments on real property benefiting from the improvement. The purpose of the assessment district is to provide a funding mechanism for the ongoing maintenance of the improvements in the public right-of-way, including parkway landscaping, retention basin landscaping, irrigation systems, street furniture, public art, perimeter block walls, street lighting, and other related improvements. Part B of the Engineer's Report lists the annual assessments for each annexed territory of the Assessment District.

Excluding the inflation escalation factor for L-1 and L-2 of 4.0%, there is no increase in the assessments for this fiscal year. The recommended procedures comply with all requirements of Proposition 218.

ENVIRONMENTAL:

Not Applicable
ALTERNATIVES:

The City Council could choose to amend the report.

FISCAL IMPACT:

There is no financial impact to the City.

ENGINEER'S REPORT

CITY OF TWENTYNINE PALMS
ASSESSMENT DISTRICT NO. 1
The undersigned respectfully submits the enclosed report as directed by City Council.

Richard Pedersen, P.E.

Engineer of Work
By____________________________
I HEREBY CERTIFY that the enclosed Engineer's Report, together with Assessment and Assessment Diagram thereto attached, was filed with me on the _____ day of __________________, 2024
Cindy Villescas,
City Clerk, City of Twentynine Palms,
San Bernardino County,
State of California
By____________________________
I HEREBY CERTIFY that the enclosed Engineer's Report, together with Assessment and Assessment Diagram thereto attached, was approved and confirmed by the City Council of the City of Twentynine Palms, California, on the _____ day of __________________, 2024 Cindy Villescas,
City Clerk, City of Twentynine Palms,
San Bernardino County,
State of California
By____________________________

ENGINEER'S REPORT

CITY OF TWENTYNINE PALMS
ASSESSMENT DISTRICT NO. 1

TABLE OF CONTENTS
PART A - General Description of Improvement. Plans and specification for the improvements are filed with the City Clerk. Although separately bound, the plans and specifications are a part of this report and are included in it by reference.

PART B- An estimate of the cost of the improvements.

PART C- A diagram showing all the parcels of real property within this assessment district.

PART D- Assessment Roll. An assessment of the estimated cost of the improvements on each benefited parcel of land within the assessment district.

PART A

PLANS AND SPECIFICATIONS
· L-1
TRACT NUMBER: 16729
LOCATION: North of El Paseo Road, West of Encelia avenue DESCRIPTION: Plans and specifications for the improvements are those prepared by Pope and Associates, Landscape Architects, dated August 5, 2004. These plans and specifications have been filed separately with the Clerk of the City of Twentynine Palms and are incorporated in this report by reference. In summary, the improvements consist of landscaping generally of native shrubs, vines, low perennials other decorative bushes, decorative rock, and a perimeter wall. Improvements include streetlights.

Perimeter parkway landscaping is bounded by the face of curb and the face of the perimeter wall along the along the perimeter of Tract 16729. In addition, to the parkway landscaping, a landscaped retention basin located at the corner of El Paseo Road and Encelia Avenue is included within the landscape maintenance district.
· L-2
TRACT NUMBER: Portion of Tract 2530
LOCATION: Historic Plaza
DESCRIPTION: Plans and specifications for the improvements, including landscaping, irrigations systems, public art, sidewalks, and street furniture to be maintained within the Plaza area, including the pocket park, which serve and benefit the properties within the boundaries of the Historic Plaza Maintenance Assessment District, L-2, are on file in the City Engineer’s Office. Said plans and specifications were prepared as separate instruments for the construction and installation of said item and are hereby incorporated by reference.

PART B
• L-1 Tract 16729

ITEM DESCRIPTION UNIT COST
ANNUAL
COST

1. Maintenance $17,700

2. Water consumption $925

3. Electrical Service $455

4. Legal Notices $238

5. Landscaping upgrades $0
TOTAL $19,318
Total cost for FY 2023/2024 $19,318
Total Revenues for FY2023/2024 $13,698
Surplus or deficit ($5,620)
Last Year's Reserve Fund Balance $87,065
Surplus / deficit ($5,620)
Total Reserve Fund $81,445
Estimate for FY24/25: $13,408.56
Last year’s assessment: $12,892.44
Number of lots: 132
Proposed Cost per lot per year (FY2024/2025) $101.58
Last year's assessment per lot per year: $97.67
• L-2 Tract 2530 (portion), Historic Plaza

ITEM DESCRIPTION UNIT COST
ANNUAL
COST

1. Maintenance $6,000

2. Water consumption $1,018

3. Electrical Service $0

4. Legal Notices $238
TOTAL $7,342
Total cost for FY 2023/2024 $7,342
Total Revenues for FY2023/2024 $8,360
Surplus or deficit $1,018
Last Year's Reserve Fund Balance $1,709
Surplus / deficit $1,018
Total Reserve Fund $2,727
Estimate for FY24/25: $10,019.98
Last year’s assessment: $9,634.58
Number of lots: 10
Proposed Cost per lot per year (FY2024/2025) Varies
Last year's assessment per lot per year: Varies

PART C
L-1, DESERT VISTA

L-2, THE HISTORIC PLAZA

PART D

ASSESSMENT ROLL
Reference
Number Tract No. Assessor’s Parcel Numbers Assessment /lot /year L-1 Tract 16729-1 0715-271- (1-68) and
Tract 16729 0715-281- (1-64) $101.58
TOTAL 13,408.56
L-2 Tract 2530 621-132-01 $1,697.02
621-132-02 $640.26
621-132-03 $1,200.49
621-132-04 $640.26
621-132-05 $399.84
621-133-01 $800.30
621-133-02 $1,440.57
621-133-03 $800.30
621-133-04 $960.37
621-133-05 $1,440.57
TOTAL $10,019.98

RESOLUTION NO. 24-___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

TWENTYNINE PALMS CONFIRMING THE DIAGRAM AND

ASSESSMENT AND LEVYING ASSESSMENT FOR FISCAL
YEAR 2024-2025
ASSESSMENT DISTRICT NO. 1
(Pursuant to the Landscaping and Lighting Act of 1972)
The City Council of the City of Twentynine Palms hereby resolves as follows:

Section 1: Pursuant to Chapter 3 of the Landscaping and Lighting Act of 1972, the City Council directed the City Engineer, Engineer of Work for Assessment District No. 1, to prepare and file an annual report for fiscal year 2023-2024.

Section 2: The Engineer of Work filed his annual report with the City Clerk, and the City Council adopted its resolution of intention to levy and collect assessments within the assessment district for fiscal year 2024-2025 and set a public hearing to be held on July 23, 2024, at the Council Chamber of the City Council located at 6136 Adobe Road, City of Twentynine Palms, California. Notice of the hearing was given in the time and manner required by law.

Section 3: At the public hearing, the City Council afforded to every interested person an opportunity to make a protest to the annual report either in writing or orally, and the City Council has considered each protest.

Section 4: The City Council hereby confirms the diagram and assessment as set forth in the annual report of the Engineer of Work and hereby levies the assessment set forth therein for fiscal year 2024-2025.

PASSED, APPROVED AND ADOPTED THIS 23rd DAY OF JULY, 2024. _________________________________

MAYOR
ATTEST:
____________________________

CITY CLERK (SEAL)

STAFF REPORT
TO: City Council
FROM: Assistant Planner
FOR MEETING: Jul 23 2024
SUBJECT: Development Code Amendment Home Occupation Permits.

RECOMMENDATION:

The City Council find the project exempt from CEQA and adopt the Ordinance approving the Development Code Amendment.

ORDER OF PROCEDURE:

Request Staff Report (Community Developemnt Director
Presenting)
Council Questions of Staff
Open the Public Hearing
Receive Public Comment
Close the Public Hearing
Council Discussion
Motion/Second
Discussion on Motion
Call the Question
ATTACHMENTS:
• City Council Ordinance -
Chapter 19.32 Home
Occupation Permit
• Chapter 19.32 Home
Occupation Permit draft
• Planning Commission
Resolution
BACKGROUND:

On October 17, 2023, the Planning Commission held a Public Hearing on changes to Chapter 19.32 Home Occupation Permits of the City's Development Code. The Commission approved the changes and forwarded a recommendation to the City Council for adoption of the code change.

Changes to Chapter 19.32 include the following:

1. Modifying the operating standards and implementing conditions of approval.

2. Eliminating the redundant language between operating standards and cottage food operation.

3. Implementing operating hours and delivery hours.

ENVIRONMENTAL:

This action is exempt from the California Environmental Quality Act (CEQA). Pursuant to Section 15061(b)(3), the activity is covered by the common-sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Page 41 of 591
ALTERNATIVES:

1. Request additional information from Staff and postpone the Hearing to a date certain.

2. Make modifications to the draft code and adopt with recommended changes.

3. Deny the Development Code Amendment.

FISCAL IMPACT:

None.

1 CITY OF TWENTYNINE PALMS CITY

COUNCIL
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TWENTYNINE

PALMS, CALIFORNIA, ADOPTING A DEVELOPMENT CODE
AMENDMENT, AMENDING CHAPTER 19.32 HOME OCCUPATION PERMIT, OF ARTICLE 3, ADMINISTRATION, PERMITS AND PROCEDURES, OF THE CITY OF TWENTYNINE PALMS DEVELOPMENT CODE.

WHEREAS, the City of Twentynine Palms General Plan was adopted by the City Council on April 24, 2012; and
WHEREAS, the City of Twentynine Palms Development Code was adopted by the City Council on July 26, 2016; and
WHEREAS, on October 17, 2023, the Planning Commission of the City of Twentynine Palms conducted a duly noticed and advertised Public Hearing on the Development Code Amendment for Chapter 19.32 Home Occupation Permit of Article 3, Administration, Permits and Procedures; and
WHEREAS, on Wednesday, July 10, 2024, the Development Code Amendment was duly noticed in the Desert Trail, a newspaper of general circulation within the City of Twentynine Palms; and
WHEREAS, on July 23, 2024, the City Council of the City of Twentynine Palms conducted a duly noticed and advertised Public Hearing on the Development Code Amendment as reflected in "Exhibit A" in accordance with the California Government Code Section 65350 et. seq. and California Government Code Section 65853 et. seq., required by law for this amendment; and
WHEREAS, a Public Hearing was held by the City Council on July 23, 2024, at which time the Council introduced Ordinance No. ___, amending Chapter 19.32 Home Occupation Permit, of Article 3, Administration, Permits and Procedures; and WHEREAS, on July 23, 2024, at the above noted Public Hearing for the Development Code Amendment, the City Council of the City of Twentynine Palms considered the potential environmental impacts that may occur with the adoption of the proposed Development Code Amendment and recommended that in accordance with the California Environmental Quality Act (CEQA) Guidelines, the proposed zoning text amendment has been reviewed for its potential to impact the environment. Pursuant to Section 15061(b)(3) of the State Guidelines to Implement the California Environmental Quality Act, the activity is covered by the common­sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment.

Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA; and WHEREAS, the City Council found that on the basis of the whole record before it,

2 including any public comments received, there is no substantial evidence that the Development Code Amendment would have a significant effect on the environment and that the proposed CEQA determination reflected the City Council's independent judgment and analysis; and
WHEREAS, the City Council, in its review of the proposed Development Code Amendment, makes the following findings:

A. A. That the Zone Change or Development Code Amendment is consistent with the intent of the goals and policies of the General Plan.

The Development Code Amendment is consistent with the following policies of the General Plan:

Goal LU-1 – Encourage orderly growth and development as envisioned by community residents.

Goal LU-4 – Adequately address the potential impacts of new development on the existing community and the City’s infrastructure system.

Goal LU-10 - Promote a high quality of life for Twentynine Palms residents by developing and sustaining a strong and diverse local economy.

B. The Zone Change or Development Code Amendment prescribes reasonable controls and standards to ensure compatibility with other established uses.

The Development Code Amendment is to make minor changes to Chapter 19.32 Home Occupation Permit of Article 3 of the Development Code, cleaning up inconsistencies in language.

C. The Zone Change or Development Code Amendment provides reasonable property development rights while protecting environmentally sensitive land uses and species.

The Amendment is to make minor modifications to Chapter 19.32 Home Occupation Permit of Article 3, Administration, Permits and Procedures.

D. The Zone Change or Development Code Amendment ensures protection of the general health, safety and welfare of the community.

The modifications to Chapter 19.32 Home Occupation Permit of Article 3 of the Development Code will protect the general health, safety and welfare of the community.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TWENTYNINE PALMS, CALIFORNIA, TAKES THE FOLLOWING ACTIONS:

Section 1. Based upon the review of the proposed amendment of the Development Code, Chapter 19.32 Home Occupation Permit of Article 3, Administration, Permits and Procedures, the City Council finds that the proposed amendment does not have the potential to have an adverse impact on the environment and, in accordance with the California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3), the activity is covered by the common-sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

3 Section 2. The City Council finds that the proposed amendment is consistent with the City's adopted General Plan Goals and Policies as the proposal will support the implementation of the General Plan and State law.

Section 3. The City Council approves and adopts the "Findings" required for approval of the Development Code update as set forth above.

Section 4. The City Council of the City of Twentynine Palms amends the Development Code as reflected in Exhibit "A."
Section 5. Notice of Adoption. The City Clerk of the City of Twentynine Palms shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted by Section 36933 of the Government Code of the State of California.

Section 6. Introduction Date. Ordinance No.___ was introduced by Council action on the 23rd day of July 2024.

Section 7. Effective Date. Ordinance No. ___becomes effective thirty (30) days after the second reading by City Council.

Section 8. Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and, to this end, the provisions of this Ordinance are declared to be severable.

4 PASSED, APPROVED, AND ADOPTED this 13
th day of August 2024.

Steve Bilderain, Mayor
ATTEST:

Cindy Villescas CMC, City Clerk
APPROVED AS TO FORM:

A. Patrick Munoz, City Attorney
I hereby certify that the foregoing is a true copy of Ordinance No. ___, introduced on the 23 rd
day of July 2024 and duly adopted by the City Council of the City of Twentynine Palms in a meeting held on the 13
th day of August 2024, in Twentynine Palms, California by the following vote, to wit.

AYES: COUNCIL MEMBERS
NOES: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
Cindy Villescas CMC, City Clerk

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-1 Home Occupation
Chapter 19.32 Home Occupation Permit
Sections:

19.32.010 Purpose .............................................................................................................................19.32-1

19.32.020 Applicability .......................................................................................................................19.32-1

19.32.030 Application and Required Fees...........................................................................................19.32-1

19.32.040 Approving Authority ..........................................................................................................19.32-2

19.32.050 Notification .........................................................................................................................19.32-2

19.32.060 Operating Standards/Conditions of Approval ....................................................................19.32-2

19.32.070 Cottage Food Operation....................................................................................................19.32-54

19.32.010 Purpose
These regulations are provided so that certain incidental and accessory uses may be established in residential neighborhoods under conditions that will ensure their compatibility with the neighborhood.

They are intended to protect the rights of the residents to engage in certain home occupations that are harmonious with a residential environment.

19.32.020 Applicability
A. The provisions of this Chapter shall apply to the operation of small, home-operated businesses and occupations in residential dwellings. A home occupation may be permitted as an accessory use in any structure authorized for residential use in the City with a Home Occupation Permit.

B. Prohibited Home Occupations. Certain uses are not compatible with residential activities and shall be prohibited. Prohibited home occupations shall include but are not limited to:

1. Barber and beauty shops.

2. Food catering or production except in compliance with the Cottage Food Act (Government Code Section 51035) and Section 19.32.070 (Cottage Food Operation).

3. Massage, except certified massage practitioners, except for home office uses associated with this activity.

4. Outdoor storage of equipment, materials, and other accessories specific to the construction trades.

5. Pet sitting and dog walking, except for home office uses associated with this activity.

6. Vehicle storage, cleaning, dismantling, installation, manufacture, repair, service, sale, lease, rental, or dispatching, and driving instruction.

7. Welding.

8. Any use that does not comply with Section 19.32.060 (Operating Standards).

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-2 Home Occupation

19.32.030 Application and Required Fees
A. Application Filing and Processing. Applications for Home Occupation Permits shall be filed and processed in accordance with Chapter 19.28 (Approval Requirements and Common Procedures).

B. Application Fees. Application fees shall be collected in accordance with Chapter 19.28.050 (Applications and Fees).

C. A home occupation shall require a City Business License, and any other permits required by Federal, State, County or Local agencies.

D. For home occupations conducted on rental property, the property owner’s written authorization for the proposed use shall be obtained prior to submittal of an application for a Home Occupation Permit and upon yearly renewal.

19.32.040 Approving Authority
The Community Development Director (Director) is authorized to approve, conditionally approve, modify or deny applications for Home Occupation Permits, and may refer applications for Home Occupation Permits to the Planning Commission for review.

19.32.050 Notification
The Director shall provide notice of Home Occupation Permit applications to all owners of property adjacent to the parcel on which the home occupation is proposed. Such notice shall be provided no later than five business days prior to issuance of the permit.

19.32.060 Operating Standards /Conditions of Approval
Home occupations shall comply with all of the following operating standards at all times:

A. Each home occupation operation shall conform to all state and county laws, regulations and requirements.

B. All home occupation operations shall maintain a valid City business license.

C. The operator of the home occupation operation shall reside within the residential unit used for such activity as their primary residence.

A.D. No dwelling shall be built or altered for the purpose of conducting the home occupation in such a manner as to change the residential character and appearance of the dwelling, or in such a manner as to cause the structure to be recognized as a place where a home occupation is conducted.

B.E. No more than two persons other than a member of the immediate family occupying such dwelling shall be employed. Exceptions are allowed for cottage food uses consistent with the State Cottage Food Act (Government Code Section 51035).

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-3 Home Occupation
C.F. There shall be no signs other than those permitted by Chapter 19.88 (Signs).

D.G. There shall be no advertisement of the location in a public forum. There shall be no display, sales or advertising signs on the premises.

E.H. There shall be no outdoor storage of All merchandise, supplies, equipment or other materials related to the home occupation operation. stored outdoors shall be screened from public view.

F.I. The storage of hazardous, toxic or combustible materials in amounts exceeding those typically found in residential areas shall be prohibited. The storage of any such material in amounts typically found in a residence shall be in approved containers designated for such materials.

G. The conduct of any home occupation, including but not limited to the storage of goods and equipment, shall not reduce or render unusable areas provided for off-street parking, setbacks, and yard areas as required by the regulations application to the land use district.

H.J.Electrical or mechanical equipment which creates visible or audible interference in radio or television receivers or causes fluctuations in line voltage outside the dwelling unit or which increases noise or fire hazards not normally associated with a residential use shall be prohibited.

I.K.There shall be complete conformity with Fire, Building, Plumbing, Electrical, and Health Codes and all applicable state and local laws. Activities conducted and equipment or material used shall not change the fire safety or occupancy classification of the premises.

J.L.The use of utilities shall be limited to the usage normally associated with a residential use.

K.M. A Home Occupation Permit shall not be transferable to another property or dwelling unit or to any subsequent owner of the property or dwelling unit for which the Home Occupation Permit was originally approved.

L.N. No traffic shall be generated by such home occupation in greater volumes than would normally be expected in a residential neighborhood, nor shall the use require additional parking spaces than provided on-site.

M. P; There shall not be any regular commercial delivery to or from the dwelling where a home occupation is being conducted. Commercial delivery of items shall be prohibited between the hours of 7:00 p.m. and 8:00 a.m.

N.O. No special off-street parking area shall be allowed in connection with the home occupation; however, the driveway may be used for such parking.

O.P. Storage and parking of vehicles on the premises, used in conjunction with the home occupation, shall be limited to automobiles and light trucks not exceeding 105,000 pounds gross vehicle weight.

P.Q. Home occupation activities shall be conducted indoors.

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-4 Home Occupation
Q.R. No more than 500 square feet of floor area may be used for storage of materials and supplies used for the home occupation.

R.S. Noise generated by the conduct of the home occupation shall not exceed that normally associated with residential use.

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-5 Home Occupation

19.32.070 Cottage Food Operation
Notwithstanding any of the provisions above, a cottage food operation as defined by the state of California under the provisions and allowances of Assembly Bill 1616 shall be allowed in any legally established residential unit in the City of Twentynine Palms provided that the provisions of Section

19.32.060 and the following requirements are met:

A. Each cottage food operation shall conform to all state and county laws, regulations and requirements.

B. The operator of a cottage food operation shall reside within the residential unit used for such activity as their primary residence.

C. No dwelling shall be built or altered for the purpose of conducting the cottage food operation in such a manner as to change the residential character and appearance of the dwelling, or in such a manner as to cause the structure to be recognized as a place where a cottage food operation is conducted.

D.C. No cottage food operation shall be located within 300 feet of another such operation.

E.D. Between the hours of 7:00 p.m. one day and 8:00 a.m. the following day, no cottage food operation shall sell or offer for sale from the residence food items prepared from that residence.

F.E. Commercial delivery of items used in a cottage food operation shall be prohibited between the hours of 7:00 p.m. one day and 8:00 a.m. the following day.

G. All cottage food operations shall conform to the requirements and restrictions of Chapter 19.80 (Noise Control).

H. Customers shall be prohibited from parking vehicles upon the property where they are purchasing products offered for sale by a cottage food operation, unless said property is at least 1 acre in size and occupied by a single-family residence. Customer parking may be permitted on property developed with two or more residential units, provided said property is at least 2 acres in size.

I.F. Only those individuals residing in the residential unit, as their primary residence, shall participate in a cottage food operation, with the exception that a cottage food operation may be permitted one fulltime equivalent employee.

J.G.Said full-time equivalent employee shall undergo a background check by the San Bernardino County Sheriff’s Department. Individuals found to have a felony conviction shall be prohibited from being an employee of a cottage food operation.

K.H. Customers of any cottage food operation shall be prohibited from consuming any products purchased from the cottage food operation on the property where such product was produced.

L.I. Where a cottage food operation is conducted from any residential unit, the operator of the cottage food operation shall police, clean and maintain the property with regard to discarded items that may result from the cottage food operation.

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-6 Home Occupation
M.J. The individual granted approval for a cottage food operation being conducted within or upon a property with more than one residential unit shall post signage and enforce requirements prohibiting, at all times, the loitering of one or more persons within or upon the property where the cottage food operation is being conducted.

N.K. There shall be no display, sale or advertising signs on the premises.

O. Within 30 days of receipt of a Home Occupation Permit from the City of Twentynine Palms for a cottage food operation, the operator of such facility shall present proof of receipt of a permit for same from the County of San Bernardino, Environmental Health Services, and Department of Public Health.

P. The cottage food operator shall contact the local waste disposal company to ascertain whether additional trash removal services shall be required for the level of food production being created. The cottage food operator shall provide to the City comments from the local waste disposal company that adequate trash removal shall occur for the level of activities added by the Cottage Food Operation.

Q.L. Violations of Chapter Section 19.32.070 (Home Occupation Permit Cottage Food Operation) may result in the revocation of the Business License by the City Manager and Home Occupation Permit issued by the City of Twentynine Palms. Operators who have had their City-issued Home Occupation Permit revoked shall be prohibited for two years from applying for another Home Occupation Permit for a cottage food operation.

R. All merchandise, supplies, equipment or other materials stored outdoors shall be screened from public view.

S. The storage of hazardous, toxic or combustible materials shall be in approved containers designated for such materials and shall be screened from public view.

T. There shall be complete conformity with all Fire, Building, Plumbing, Electrical and Health Codes and all applicable state and local laws, regulations and/or requirements. Activities conducted and equipment or materials used shall not change the fire safety or occupancy classification of the premises.

U.M. No cottage food operation shall be initiated until a City Business License has been issued by the City of Twentynine Palms.

V.N. The cottage food operation Home Occupation Permit shall not be transferable to another property or dwelling unit or to any subsequent owner or tenant of the property or dwelling unit for which the Home Occupation Permit was originally granted.

W. For a cottage food operation conducted on rental property, the property owner’s written authorization for the proposed use shall be obtained prior to submittal of an application for a cottage food operation Home Occupation Permit, and shall be submitted with such Home Occupation Permit application.

City of Twentynine Palms Development Code Article 3, Administration, Permits and Procedures Adopted July 26, 2016
Revised
Effective Page 19.32-7 Home Occupation
X. Cottage food operation activities shall be conducted wholly indoors.

Y. No more than 500 square feet of floor area may be used for storage of materials and supplies used for or in association with the cottage food operation.

Z.O. Where any cottage food operation employs an individual other than the primary operator, all local, county, state and federal labor laws shall apply and be conformed with.

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STAFF REPORT
TO: City Council
FROM: Assistant Planner
FOR MEETING: Jul 23 2024
SUBJECT: Development Code Amendment, Article 4 Part 1.

RECOMMENDATION:

The City Council find the amendment exempt from CEQA and adopt the Ordinance, approving the Development Code Amendment.

ORDER OF PROCEDURE:

Request Staff Report (Community Development
Director Presenting)
Council Questions of Staff
Open the Public Hearing
Receive Public Comment
Close the Public Hearing
Council Discussion
Motion/Second
Discussion on Motion
Call the Question
ATTACHMENTS:
• City Council Ordinance -
Article 4 Part 2
• Article 4 Site Development
Regulations Part 1 draft
• PC Reso 24-09 Article 4 Part 1
Site Dev Regulations
BACKGROUND:

On May 21, 2024, the Planning Commission held a Public Hearing on a proposed amendment to Article 4 of the Development Code. This was a continuation of the Hearing held on April 16, 2024. The Commission had a few modifications to the draft code that was presented by Staff. The Commission consensus was that open storage of boats, RV's and trailers are permitted in the front and street side yard setbacks of RS and RL zoning districts.

The Planning Commission consensus on fence heights was that six foot in the front yard and street side yard setback is appropriate in residential, public and commercial zoning districts and that eight foot in the front yard and street side yard setback is appropriate in the industrial zoning district.

The primary changes are identified below and were reviewed by the Planning Commission at the meeting of April 16th. Other minor changes such as removing unnecessary verbiage or correcting errors have also been made.

Chapter 19.68 General Development Standards and Exceptions

1. Establish a height limitation for installation of structures such as water elements or art pieces in the setback areas.

2. Establish setbacks for the installation of pools and spas

3. Establish regulations on the storage of boats, trailers, construction equipment, etc.

Chapter 19.69 Residential Development Standards and Design Criteria

1. Removing the requirements for roof pitch and 24-inch eaves on manufactured homes.

2. Removing the requirement for multi-family development to be open communities.

3. Removing the requirement for the development of design guidelines.

Chapter 19.70 Accessory Uses and Structures

1. Removing the allowance of cargo containers on vacant lots

2. Limiting the construction of guest houses to one per lot.

3. Simplifying the language on architectural compatibility.

4. Placing a limit of two cargo containers per residential lot.

Chapter 19.73 Commercial and Industrial Development Standards and Design Criteria

1. Modifying the square footage limit for development standard compliance.

2. Removing the requirement for the development of design guidelines.

Chapter 19.74 Fences, Walls and Screens

1. Modifying the language regarding barbed wire fencing.

2. Removing the requirement for graffiti resistant treatment as it is not enforceable.

ENVIRONMENTAL:

This action is exempt from CEQA pursuant to Section 15061(b)(3), which states that the activity is covered by the common-sense exception that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

ALTERNATIVES:

1. Request additional information from Staff and postpone the Hearing to a date certain.

2. Make modifications to the draft code and adopt with recommended changes.

3. Deny the Development Code Amendment.

FISCAL IMPACT:

None.

1 CITY OF TWENTYNINE PALMS CITY

COUNCIL
ORDINANCE NO. ___

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TWENTYNINE

PALMS, CALIFORNIA, ADOPTING A DEVELOPMENT CODE
AMENDMENT, AMENDING CHAPTERS 19.68, 19.69, 19.70, 19.73 AND 19.74 OF ARTICLE 4, SITE DEVELOPMENT REGULATIONS OF THE CITY OF TWENTYNINE PALMS DEVELOPMENT CODE.

WHEREAS, the City of Twentynine Palms General Plan was adopted by the City Council on April 24, 2012; and
WHEREAS, the City of Twentynine Palms Development Code was adopted by the City Council on July 26, 2016; and
WHEREAS, on April 16, 2024, and May 21, 2024, the Planning Commission of the City of Twentynine Palms conducted a duly noticed and advertised Public Hearing on the Development Code Amendment for Chapters 19.68, 19.69, 19.70, 19.73 and 19.74 of Article 4, Site Development Regulations; and
WHEREAS, on Wednesday, July 10, 2024, the Development Code Amendment was duly noticed in the Desert Trail, a newspaper of general circulation within the City of Twentynine Palms; and
WHEREAS, on July 23, 2024, the City Council of the City of Twentynine Palms conducted duly noticed and advertised Public Hearings on the Development Code Amendment as reflected in "Exhibit A" in accordance with the California Government Code Section 65350 et. seq. and California Government Code Section 65853 et. seq., required by law for this amendment; and
WHEREAS, a Public Hearing was held by the City Council on July 23, 2024, at which time the Council introduced Ordinance No. ___, amending Chapters 19.68, 19.69,

19.70, 19.73 and 19.74 of Article 4, Site Development Regulations; and WHEREAS, on July 23, 2024, at the above noted Public Hearing for the Development Code Amendment, the City Council of the City of Twentynine Palms considered the potential environmental impacts that may occur with the adoption of the proposed Development Code Amendment and recommended that in accordance with the California Environmental Quality Act (CEQA) Guidelines, the proposed zoning text amendment has been reviewed for its potential to impact the environment. Pursuant to Section 15061(b)(3) of the State Guidelines to Implement the California Environmental Quality Act, the activity is covered by the common­sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment.

Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA; and WHEREAS, the City Council found that on the basis of the whole record before it,

2 including any public comments received, there is no substantial evidence that the Development Code Amendment would have a significant effect on the environment and that the proposed CEQA determination reflected the City Council's independent judgment and analysis; and
WHEREAS, the City Council, in its review of the proposed Development Code Amendment, makes the following findings:

A. A. That the Zone Change or Development Code Amendment is consistent with the intent of the goals and policies of the General Plan.

The Development Code Amendment is consistent with the following policies of the General Plan:

Goal LU-1 – Encourage orderly growth and development as envisioned by community residents.

Goal LU-4 – Adequately address the potential impacts of new development on the existing community and the City’s infrastructure system.

Goal LU-10 - Promote a high quality of life for Twentynine Palms residents by developing and sustaining a strong and diverse local economy.

B. The Zone Change or Development Code Amendment prescribes reasonable controls and standards to ensure compatibility with other established uses.

The Development Code Amendment is to make minor changes to Article 4 of the Development Code, removing unnecessary verbiage and cleaning up inconsistencies in language.

C. The Zone Change or Development Code Amendment provides reasonable property development rights while protecting environmentally sensitive land uses and species.

The Amendment is to make minor modifications to Chapter 4, Site Development Regulations.

D. The Zone Change or Development Code Amendment ensures protection of the general health, safety and welfare of the community.

The modifications to Article 4 of the Development Code will protect the general health, safety and welfare of the community.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TWENTYNINE PALMS, CALIFORNIA, TAKES THE FOLLOWING ACTIONS:

Section 1. Based upon the review of the proposed amendment of the Development Code, Chapters 19.68, 19.69, 19.70, 19.73 and 19.74 of Article 4, Site Development Regulations, the City Council finds that the proposed amendment does not have the potential to have an adverse impact on the environment and, in accordance with the California Environmental Quality Act (CEQA) Guidelines Section 15061(b)(3), the activity is covered by the common-sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

3 Section 2. The City Council finds that the proposed amendment is consistent with the City's adopted General Plan Goals and Policies as the proposal will support the implementation of the General Plan and State law.

Section 3. The City Council approves and adopts the "Findings" required for approval of the Development Code update as set forth above.

Section 4. The City Council of the City of Twentynine Palms amends the Development Code as reflected in Exhibit "A."
Section 5. Notice of Adoption. The City Clerk of the City of Twentynine Palms shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the City in a manner permitted by Section 36933 of the Government Code of the State of California.

Section 6. Introduction Date. Ordinance No.___ was introduced by Council action on the 23rd day of July 2024.

Section 7. Effective Date. Ordinance No. ___becomes effective thirty (30) days after the second reading by City Council.

Section 8. Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and, to this end, the provisions of this Ordinance are declared to be severable.

4 PASSED, APPROVED, AND ADOPTED this 13
th day of August 2024.

Steve Bilderain, Mayor
ATTEST:

Cindy Villescas CMC, City Clerk
APPROVED AS TO FORM:

A. Patrick Munoz, City Attorney
I hereby certify that the foregoing is a true copy of Ordinance No. ___, introduced on the 23 rd
day of July 2024 and duly adopted by the City Council of the City of Twentynine Palms in a meeting held on the 13
th day of August 2024, in Twentynine Palms, California by the following vote, to wit.

AYES: COUNCIL MEMBERS
NOES: COUNCIL MEMBERS
ABSENT: COUNCIL MEMBERS
ABSTAIN: COUNCIL MEMBERS
Cindy Villescas CMC, City Clerk

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised General Development
Effective Page 19.68-1 Standards and Exceptions
EXHIBIT “A”
Chapter 19.68 General Development Standards and Exceptions Sections

19.68.010 Purpose ...............................................................................................................19.68-1

19.68.020 Height Measurements and Exceptions...............................................................19.68-1

19.68.030 Setback Requirements and Exceptions...............................................................19.68-2

19.68.010 Purpose
This Chapter establishes general development standards for height measurements and exceptions, as well as setback measurements and exceptions (e.g., projections, encroachments). Subsequent Chapters in this Article establish site development standards applicable to all uses or specific use types. Basic development standards applicable to each zone (e.g., density, lot area, building setback requirements, and height limitations) are provided in Article 2 (Land Use/Zoning Districts).

19.68.020 Height Measurements and Exceptions
The following rules apply to the calculation and determination of height of structures in the City. The intent of these regulations is to provide for compatibility in the measurement of building height under a variety of circumstances (e.g., sloped site).

A. Height Measurement. The height of a structure shall be measured as the vertical distance from the finish grade to the highest point of the roof of the structure. Height is measured as the vertical distance from the finish grade of the site to an imaginary plane located the allowed number of feet above and parallel to the finish grade. See Figure 19.68.020-1 (Height Measurement).

Figure 19.68.020-1
Height Measurement
B. Height Limits. Height limits are established throughout this Title. Primarily, height limits are listed in the Chapters of Article 2 (Land Use/Zoning Districts). Additional height limits are established for

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised General Development
Effective Page 19.68-2 Standards and Exceptions
accessory structures, fences and walls, outdoor lighting, and signs and are contained in subsequent Chapters of this Article.

C. Height Exceptions. Height limits typically exclude architectural features and appurtenances such as, but not limited to, chimneys, antennas, elevators, windmills and similar mechanical equipment.

1. Architectural Features. Chimneys, cupolas, flagpoles, monuments, radio and other towers, gas storage holders, water tanks, and similar structures and mechanical appurtenances may be permitted in excess of building height limits by no more than 50 percent of the applicable height limitation; provided, however, that the same may be safely erected and maintained at such height in view of the specific conditions and circumstances affecting the structure and adjacent properties.

2. Structures in Residential Districts.
a. Antenna, Noncommercial. One noncommercial antenna may be permitted up to 52.5 feet in height for each parcel. Antennae shall be set back from all property lines at least 1.25 times the height of the antenna. Height does not include the additional height of whip antennae.

Additional antennae shall require a Conditional Use Permit. b. Windmills, Noncommercial. One noncommercial windmill or solar energy collector may be permitted up to 35 feet in height for each parcel. Structures shall be set back from all property lines at least 1.25 times the height of the structure, measured to the top of the highest element of the structure. Additional windmills or solar collectors shall require a Conditional Use Permit.

Up to a 50 percent increase in height, to 52.5 feet, may be approved subject to a Conditional Use Permit.

19.68.030 Setback Requirements and Exceptions
A. General Yard and Setback Requirements.

1. Required Yard Area. Except as otherwise specified in this Title, required yard areas shall be kept free of buildings and structures.
a. Exceptions:
i. Water Elements. Water elements such as fountains, ponds, and other water treatments, up to a maximum height of six feet, may be placed in setback areas, provided they are integral to the overall architectural or landscape design of the site and do not create a traffic safety hazard. The installation of water elements may be subject to approval of building permits. ii. Public Art Installations. PublicInstallation of art, such as sculptures, statues, murals and other installations of an adequately durable and weatherproof design, up to a maximum height of six feet, may be placed in street setback areas, provided they are integral to the overall architectural or landscape design of the site and do not create a traffic safety hazard.

The installation of art may be subject to approval of building permits.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised General Development
Effective Page 19.68-3 Standards and Exceptions

2. Exclusivity of Required Yard Area. No yard or other open space provided around any building for the purpose of complying with this Title shall be considered as providing a yard or open space for any other building or structure.

B. Through Lots. On through lots, either line separating such lot from a public thoroughfare may be designated by the owner as the front lot line. In such cases, the minimum rear yard shall be the average of the yards on lots next adjoining. If such lots next adjoining are undeveloped, the minimum rear yard shall conform to the front yard setback for the zone in which the property is located. See Figure

19.68.030-1 (Lot Type Diagram) for an illustration of a through lot.

Figure 19.68.030-1
Lot Type Diagram
C. Front Yards. Generally, the front yard setback is determined by the front lot line, which is the lot line paralleling the street. In the case of a lot abutting two or more streets (corner lot), the front yard shall be the shortest length of the lot abutting a street, unless otherwise designated by the Community Development Director. See Figure 19.68.030-2 (Yard Setback Measurement Diagram) for an illustration of all yards.

D. Street Side Yards. Except as otherwise permitted, a street side yard shall be used only for landscaping, pedestrian walkways, driveways or off-street parking.

E. Rear and Interior Side Yards. Except as otherwise permitted, these yards shall be used only for landscaping, pedestrian walkways, driveways, off-street parking or loading, recreational activities or facilities, or similar accessory activities.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised General Development
Effective Page 19.68-4 Standards and Exceptions
F. Vertical Clearance. Except as otherwise provided in this Title, every part of a required yard shall be open from its lowest point to the sky unobstructed. Building overhangs, bay windows, and other such elements may intrude as permitted, pursuant to Subsection 19.68.030.H (Allowed Encroachments or Projections into Required Yards).

G. Setback Measurement. The setback of all buildings and structures shall be measured at a right angle from the property line. Except as permitted in Subsection 19.68.030.H (Allowed Encroachments or Projections into Required Yards), or as otherwise specified in this Title for specific types of structures (e.g., accessory structures, signs) or through the issuance of the applicable permit, structures shall not extend beyond required setback lines.

Figure 19.68.030-2
Yard Setback Measurement Diagram
H. Allowed Encroachments or Projections into Required Yards. In addition to the structures listed in Section 19.70 (Accessory Uses and Structures) and Section 19.74 (Fences, Walls, and Screens), the following structures and architectural features attached to the main building may project into the required yards as set forth below.

I. Residential and Public District Projections and Encroachments.

1. No projection may be permitted to obstruct the view of a required clear site triangle.

2. Attached architectural features such as awnings, canopies, eaves, chimneys, cornices, planter boxes, bay windows and cantilevered portions of the structure (not exceeding 50 percent of the length of the wall to which they are attached) and similar architectural features or mechanical equipment normally incidental to the use are permitted to encroach up to 4 feet into front or rear yards and up to 2 feet into side or street side yards.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised General Development
Effective Page 19.68-5 Standards and Exceptions

3. For properties in the R-HD district, attached unenclosed patio roofs, decks, porches and similar structures (having open, unenclosed sides around at least 50 percent of their perimeters) are permitted to encroach 15 5 feet into a rear yard, with a minimum 5-foot setback to the rear yard property line. In no case shall such encroachments exceed 50 percent of the length of a building.

4. For properties in all residential districts except R-HD, attached unenclosed patio roofs, decks, porches and similar structures (having open, unenclosed sides around at least 50 percent of their perimeters) are permitted to encroach up to 50 percent of the required rear yard, with a minimum 5-foot setback to the rear yard property line. In no case shall such encroachments exceed 50 percent of the length of a building.

5. Pools, spas, and related equipment no greater than 6 feet in height may be located in a required rear or interior , side, or street side yard setbacks, with a minimum 5-foot setback to the property lines.

6. Open storage of boats, recreational vehicles and trailers, and construction vehicles and equipment are not allowed in front and street side yard areas of multi-family residential and public districts. (RM, R-HD, P). (04/16/24 Commission consensus was to allow in RS and RL zones)

6.7.Storage of construction vehicles and equipment is not permitted in residential and public districts.

J. Nonresidential Projections and Encroachments.

1. No projection may be permitted to obstruct the view of a required clear site triangle.

2. Attached architectural features such as awnings, canopies, eaves, chimneys, cornices, planter boxes, bay windows, and cantilevered portions of the structure (not exceeding 50 percent of the length of the wall on any one story) are permitted to encroach up to 4 feet into front or rear yards and up to 2 feet into side or street side yards.

3. Attached unenclosed patio roofs, decks, porches and similar structures (having open, unenclosed sides around at least 50 percent of their perimeters) are permitted to encroach to within 1 foot of the rear, side, or street side property line, subject to an Administrative Use Permit.

4. Stairways, landings, corridors and fire escapes are permitted to encroach up to 5 feet in front and street side yards, up to 4 feet in interior side yards, and up to 510 feet in rear yards.

5. Open Storage of boats, recreational vehicles, trailers, and construction vehicles and equipment are not permitted in allowed in front and street side yard areas of commercial districts (CO, CN, CG, CT).

City of Twentynine Palms Development Code Article 4, Special Regulating Uses Adopted July 26, 2016
Revised Residential Development Standards
Effective Page 19.69-1 and Design Criteria
Chapter 19.69 Residential Development Standards and Design Criteria
Sections

19.69.010 Purpose ............................................................................................................... 19.69-1

19.69.020 Applicability ....................................................................................................... 19.69-1

19.69.030 Review Required ................................................................................................ 19.69-1

19.69.040 Development Standards – Manufactured or Mobile Homes .............................. 19.69-1

19.69.050 Development Standards – Multi-Family Residential ......................................... 19.69-2

19.69.060 Design Criteria – Residential ............................................................................. 19.69-3

19.69.010 Purpose
This Chapter establishes standards for conventionally built, mobile and manufactured homes to ensure consistency with state law requirements and for multi-family residential development to ensure consistency with surrounding land uses and the policies of the General Plan. This Chapter also enables the development of design criteria to allow flexibility in design solutions for residential development.

19.69.020 Applicability
The standards contained in this Chapter shall apply to the following, unless specifically stated otherwise:

A. New Uses and Structures. For all buildings erected and all uses of land established after the effective date of this Title, the development standards in this Chapter shall be complied with.

B. Modification to Existing Structures and Uses. Whenever an existing building is modified or a use is expanded such that it creates an increase of 1,000 square feet or more or 4 or more in the number of existing dwelling units for multiple-family residential projects, the development standards in this Chapter shall be complied with.

19.69.030 Review Required
Consistency with the regulations contained in this Chapter shall be reviewed concurrent with any required Building Permit or Land Use Permit for applicable projects.

19.69.040 Development Standards – Manufactured or Mobile Homes The following standards shall apply to all manufactured or mobile homes on lots permitting single-family residences.

A. Manufactured and mobile homes shall be constructed to meet the standards of the National MobilehomeMobile Home Construction and Safety Standards Act pursuant to Section 18551 of the California Health and Safety Code.

B. Manufactured and mobile homes must be less than 10 years old. , unless an older coach is approved by the Planning Commission.

City of Twentynine Palms Development Code Article 4, Special Regulating Uses Adopted July 26, 2016
Revised Residential Development Standards
Effective Page 19.69-2 and Design Criteria
C. Manufactured and mobile homes shall be attached to an engineered, permanent perimeter foundation approved by the Building and Safety Division.

D. The home shall have a minimum width and depth of 20 feet excluding garages, porches, patios, eaves, cabanas and popouts.

E. The siding material shall consist of stucco, wood, brick, stone or decorative concrete block. Synthetic siding material and textures may be used when determined by the Planning Division to be compatible with the neighborhood.

F. The exterior covering material shall extend to surrounding grade.

G. The roofing material shall be tile, rock, shingles or materials customarily used on residential structures in the neighborhood.

H. The roof shall have a pitch not less than 2 inches of vertical rise for each 12 inches of horizontal run.

I. The roof shall have sloping lines with a minimum 24-inch eave overhang, measured from the vertical side of the home. The Community Development Director (Director) may approve an alternate design, if the Director finds that the alternate design is architecturally compatible with homes in the vicinity or that the alternate design is compatible with the Desert Southwest Design Guidelines adopted by the City.

19.69.050 Development Standards – Multi-Family Residential A. On-site recreational areas for both adults and children for any proposed multi-family project exceeding 10 dwelling units shall be provided.

B. Bus benches and shelters shall be designed into large-scale projects when bus service is available or planned.

C. Trash storage facilities shall be provided in accordance with Chapter 19.92 (Trash Storage Facilities).

D. New construction and development shall be generally consistent in scale, mass and character with other structures in the immediately surrounding neighborhood.

E. New multi-family development shall be designed as publicly accessible open communities, unless a Use Permit is obtained authorizing fencing and/or gating of the development.

F.E. New multi-family development shall be designed to preserve natural and scenic resources, where feasible.

G.F. New multi-family development shall provide a minimum 20-foot separation between buildings, as determined by adopted Building Code and Fire Dept. requirements.

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Revised Residential Development Standards
Effective Page 19.69-3 and Design Criteria
H.G. New multi-family development shall incorporate an internal street design that provides direct and efficient routes to adjacent public streets.

I.H.New multi-family development shall provide pedestrian connections to adjacent residential and commercial developments. Such access shall be physically separated from vehicular traffic, except where the access utilizes public sidewalks within a public-right-of-way.

J.I. New multi-family development shall provide pedestrian and bicycle access to open space, parks and adjacent neighborhoods. Such access shall not be mixed with vehicular and through traffic, except where the access utilizes public sidewalks or bikeways within a public-right-of-way.

K.J.Homeowner associations or other legally enforceable mechanisms shall be established to maintain all common areas within multiple-family developments.

L. Multi-family developments shall be in compliance with the adopted Multi-Family Residential Design Guidelines.

19.69.060 Design Guidelines – Residential Uses
A. Purpose. Residential design criteria are intended to be used as a reference to assist project designers in understanding and responding to the City’s goals and objectives for high-quality single-family and multi-family residential development. The criteria complement the development regulations in this Development Code by providing examples of potential design solutions and appropriate design interpretations.

B. Applicability. These residential design criteria are advisory for permitted uses, but shall be used as a guide in conjunction with uses subject to a Site Plan Review, inor xception, Administrative Use Permit, Conditional Use Permit, ariance, ubdivision, or a lanned evelopment proposal to encourage a high level of design quality, while at the same time providing the flexibility necessary to encourage creativity on the part of project designers.

C. Implementation. Effective implementation of the design criteria shall be considered as a basis for making the required findings for approval provided, however, that applicants may submit alternative design solutions that are different than contained in the criteria but result in superior solutions that also are consistent with the General Plan. The criteria shall address:

1. Site design, including parking layout/location, building location, and building massing.

2. Appropriate use of signage.

3. Use of architectural features and landscape features, and provision of public areas.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.70-1 Accessory Uses and Structures
Chapter 19.70 Accessory Uses and Structures
Sections

19.70.010 Purpose ............................................................................................................... 19.70-1

19.70.020 Applicability ....................................................................................................... 19.70-1

19.70.030 Permit Requirements .......................................................................................... 19.70-1

19.70.040 Exempt Accessory Structures ............................................................................. 19.70-1

19.70.050 Allowed Uses and Development Standards – General ....................................... 19.70-2

19.70.060 Allowed Uses and Development Standards – Residential ................................. 19.70-3

19.70.070 Allowed Uses and Development Standards – Commercial, Industrial, and Public ............................................................................................................................ 19.70-6

19.70.080 Accessory Outdoor Display ................................................................................ 19.70-7

19.70.090 Accessory Residential Dwellings ....................................................................... 19.70-8

19.70.010 Purpose
This Chapter establishes the regulations and criteria that allow compatible accessory uses to be located within the various land use districts in conjunction with a primary use or incidental to the primary use on the same property. Unless otherwise provided, all accessory uses are subject to the same regulations as the primary use.

19.70.020 Applicability
The regulations and standards contained in this Chapter shall apply only to those structures and uses expressly identified in this Section and shall be in addition to any other development standards and regulations contained elsewhere in this Development Code. For the purposes of this Title, accessory second dwelling units are not considered accessory structures; accessory second dwelling units are governed by the requirements of Chapter 19.134 (Accessory Second Dwelling Units) and are exempt from the requirements of this Chapter.

19.70.030 Permit Requirements
A. All accessory structures, including those accessory structures identified in Section 19.70.040 (Exempt Accessory Structures), are subject to review through the same permit process required for the primary use. Where no permit is required, the accessory structure shall be reviewed through the Zoning Clearance process to ensure consistency with all applicable development standards.

B. Accessory outdoor display is exempt from the requirement to obtain a permit where such display meets all standards of Section 19.70.080 (Accessory Outdoor Display).

19.70.040 Exempt Accessory Structures
The following accessory structures are exempt from the development standards of this Chapter.

A. Play equipment that is no greater than 8 feet in height.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
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Effective Page 19.70-2 Accessory Uses and Structures
B. Decks or uncovered patios.

C. Tennis courts.

D. Pools and spas.

E. Pool accessories no greater than 8 feet in height, excluding mechanical equipment.

F. Water wells.

G. Similar at-grade or below-grade structures.

19.70.050 Allowed Uses and Development Standards – General A. In addition to the accessory uses specifically provided for by this Section or elsewhere in the Development Code, each land use shall be deemed to include such other accessory uses which are necessarily and customarily associated with and are clearly incidental and subordinate to the land use.

Whenever such accessory uses are questioned, it shall be the responsibility of the Community Development Director to determine if a proposed accessory use meets the criteria set forth in this Chapter.

B. The combination of accessory structures and primary use structures shall not exceed the maximum lot coverage or floor area ratio (FAR) specified by the land use district. Landscape features, pools, spas and related equipment shall not count toward and are not subject to the maximum lot coverage and maximum FAR requirements.

C. Permitted accessory structures shall be located on the same parcel as the primary use within the building envelope, except where expressly allowed.

D. Seagoing cargo containers or similar storage facilities may be used for the purpose of temporary storage or containment of construction cleanup materials, subject to the following:

1. Seagoing cargo containers or similar storage facilities may be located anywhere on the property, except in the clear sight triangles, during the duration of an active Building Permit.

2. Such temporary storage devices must be removed within 30 days of Building Permit finaling or expiration.

3. No permit is necessary for this type of use; however, the contractor is to inform the City of the intended use of these cargo containers and have the fact noted on other issued permit(s).

E. Seagoing cargo containers or similar storage facilities may be used on a vacant or developed property for the purpose of temporary storage or containment of cleanup material other than construction cleanup materials, subject to the issuance of a Temporary Use Permit in accordance with Chapter 19.34 (Temporary Use Permit and Standards).

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.70-3 Accessory Uses and Structures

19.70.060 Allowed Uses and Development Standards – Residential A. Accessory Uses. The following uses shall be permitted as accessory uses to each single dwelling unit which is allowed:

1. Guest Housing. Residential occupancy of a living unit, with no kitchen plumbing, located on the same parcel as the primary dwelling unit, but separated from it by at least 10 feet. This housing is for use by the occupants or temporary guests of the occupants of the premises and is not to be rented or otherwise used as a separate dwelling, except as provided in Section 19.70.090 (Accessory Residential Dwellings). A maximum of one guest house shall be allowed per parcel.

2.1.Accessory animal boarding, breeding, housing, lodging, sheltering or raising as specified by Chapter 19.102 (Animal Keeping).

B. Accessory Structures. The following regulations shall apply to all accessory structures as specified:

1. Architectural Compatibility. All accessory structures that enclose or shelter 120 square feet or more than 500 square feet of floor area shall be required to be architecturally compatible with the main building(s) on site. Architectural compatibility shall be determined by similar architectural style and color. as follows:
a. An accessory structure shall be considered architecturally compatible when the accessory structure possesses at least two of the following architectural features or traits of the primary use structure on-site:
i. Equal or lesser height than the primary structure on-site. ii. Wall-covering materials (wood, stucco, metal).
iii. Wall texture (smooth, stucco, lace stucco, lap siding). iv. Roofing material (tile, shake, composition, metal). v. Roofing pitch.
vi. Structural eaves (present or absent; when present, the extent/distance projecting from supporting wall).
vii. Fascia materials (present and, if so, decorative or functional). viii. Mass and scale of structure relative to structural height (short and broad, tall and thin, massive).
ix. Windows size (proportionally large and/or small relative to surrounding wall). x. Window characteristics (few or numerous, single-pane, multi-pane, decorative).

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Revised
Effective Page 19.70-4 Accessory Uses and Structures
xi. Decorative treatments (pop-outs, columns, dormers, window surrounds, decorative arches).
b. The Planning Commission may determine an accessory building to be architecturally compatible with the main building on a site where the Commission finds that the proposed accessory structure is consistent, compatible and complementary to the main building on-site and/or to the buildings in the immediate area. A Conditional Use Permit shall be required and processed in accordance with Chapter 19.42 (Conditional Use Permit).

2. Exemptions from Architectural Compatibility.
a. All accessory structures, whether or not a Building Permit is required, which enclose or shelter 500 square feet or less of floor area or which are located within the Rural Living (RL) District, regardless of size, shall not be required to be architecturally compatible with the primary use structure on-site.
a. Any accessory structure which, by its location, is not visible from any individual at ground or second-story level from any public right-of-way or adjoining property shall not be required to be architecturally compatible with the primary use structure on-site.

3. Accessory structures which enclose or shelter more than 500 square feet of floor area shall not be located within any required front, side, street side or rear yard setback area.

4. Accessory structures which enclose or shelter more than 120 square feet of floor area, up to and including 500 square feet of floor area, may be located within the required side or rear yard setback area, subject to compliance with all other applicable requirements of this Code.

5. Accessory structures which enclose or shelter 120 square feet of floor area or less may be located within the required side, street side, or rear yard setback area, subject to compliance with all other applicable requirements of this Code.

6. Color. All accessory structures, regardless of size, shall be painted a color compatible with the primary use structure on-site. This requirement shall also apply to those accessory structures that are exempt from the architectural compatibility requirements of Subsection 19.70.060.B(1), above.

7.2.In the Single-Family Residential (RS) Districts, the cumulative total area of all accessory structures upon a recorded lot may not exceed 50 percent of the area of the main structure or 1,000 square feet, whichever is larger. Within the Rural Living (RL) Districts, the cumulative total area of all accessory buildings upon a recorded lot may not exceed 100 percent of the area of the main structure or 2,500 square feet, whichever is larger. An accessory second dwelling unit as permitted under Chapter 19.134 (Accessory Second Dwelling Units) shall not be included within the cumulative total of allowed square footage for accessory structure(s). A greater size may be approved through a Conditional Use Permit.

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Effective Page 19.70-5 Accessory Uses and Structures

8.3.In the RS Districts, an accessory structure may not be higher than the height of the established primary use structure or sixteen feet (16’) whichever is greater. A greater height may be approved through a Conditional Use Permit.

9.4.In the RL District, accessory structures may be constructed up to the maximum height allowed within the land use district in which it is located, regardless of the height of the primary use structure. A greater height may be approved through a Conditional Use Permit.

10.5. In the Multi-Family Residential (RM) District, the cumulative total area of all accessory structures upon a recorded lot may not exceed 50 percent of the cumulative total habitable area of all primary structures on-site containing a residential unit and shall be subject to the height, setback and lot coverage limitations of the RM Land Use District.

11.6. In all residential districts, when the height of an accessory structure is greater than the required yard setback, the accessory structure shall be located a minimum distance from the property line equal to that of the height of the accessory structure.

C. Seagoing cargo containers and similar storage facilities may be permitted as permanent storage facilities on a lot containing a residence subject to the following conditions. A maximum of two cargo containers are permitted on any residentially zoned property.

1. Approval of a Cargo Container Review Permit Site Plan Review where it is demonstrated that the requested container(s) is to be located within the rear one-half of the lot and shall be screened from view of any public rights-of-ways or adjacent residential properties by residential structures, landforms or physical features of the lot, landscaping or opaque fencing of up to 8 6 feet in height, with any visible remaining exterior portion of the container(s) painted in a manner compatible with the principal residence on-site.

2. Screening shall be waived if the container(s) is/are completely encased within an on-site, stick-built skin and eaves, which are architecturally consistent with the primary residence on-site and are in compliance with the required setbacks for the zoning district. located no closer than 50 feet to any adjoining property line.

3. Containers shall be maintained in reasonable aesthetic condition at all times, as determined by the Community Development Director; shall not exceed 50 percent of the floor area of the primary residence on-site, inclusive of all accessory structures; shall not be stacked one atop another; and shall not be used for habitation of persons or animals.

4. Alternative allowances, including size, screening, condition, location, or habitation, may be considered and approved by the Planning Commission under review and approval of a Conditional Use Permit.

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Effective Page 19.70-6 Accessory Uses and Structures

19.70.070 Allowed Uses and Development Standards – Commercial, Industrial, and Public
A. Accessory Uses. The following uses shall be permitted as accessory uses to primary commercial, industrial, or public uses which are allowed by a land use district:

1. Accessory residential dwellings as specified in Section 19.70.090 (Accessory Residential Dwellings).

2. Accessory outdoor sales or display areas subject to the standards set forth in Section 19.70.080 (Accessory Outdoor Display).

B. Accessory Structures. The following regulations shall apply to all accessory structures as specified:

1. Permanent use of seagoing cargo containers and similar storage facilities may be used as accessory structures on lots designated for commercial or industrial uses and containing an existing use subject to the following conditions:
a. Approval of a Site Plan Review where it is demonstrated that the requested container(s) shall not be located within any required setback area, shall not be located closer than 50 feet to any public rights-of-way when located between the right-of-way and any structure on-site, and shall be screened from view of any property used for residential purposes and/or the public rightsof-way by on-site structures, landforms or physical features of the lot, landscaping or opaque fencing of up to 8 feet in height, wherein any visible remaining exterior portion of the container(s) shall be painted in a color compatible with the primary use structure on-site. b. Screening shall be waived if the container(s) is/are completely encased within an on-site, stickbuilt skin and eaves, which are architecturally consistent with the primary residence on-site and are in compliance with the setbacks for the zoning district. located no closer than 50 feet to any adjoining property line.
c. Containers shall be maintained in reasonable aesthetic condition at all times, as determined by the Community Development Director; shall not exceed 500 square feet of container per acre of land; shall not be stacked one atop another; and shall not be used for habitation of persons or animals. Further, containers may be mobile if all possible future locations of such container(s) are identified, screening is provided, and the locations are approved under the Site Plan Review.
d. No seagoing cargo container(s) shall be utilized for any purpose other than that directly associated with the primary activity on-site, nor shall the container(s) be allowed to be rented, leased or hired for compensation of any means.
e. Alternative allowances, including size, screening, condition, location, or habitation, may be considered and approved by the Planning Commission under review and approval of a Conditional Use Permit.

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Effective Page 19.70-7 Accessory Uses and Structures

19.70.080 Accessory Outdoor Display
The intent of this Section is to provide for the appropriate location and design of outdoor sales and display areas and to mitigate any adverse impacts that such uses may have on adjacent properties and rights-ofway.

A. Accessory Outdoor Sales and Display Permitted. Outdoor sales and display shall be permitted as an accessory use only in commercial and industrial land use districts, subject to the following requirements:

1. Outdoor sales and display shall only be permitted in an area not greater than 500 square feet or 10 percent of the gross floor area of the ground floor of the building, whichever is less, and shall be located at least 50 feet from any residentially zoned property.

2. Outdoor sales and display shall not be permitted within any required setback area, except as allowed under Subsection 19.70.080.A.4.

3. Stacked items shall not exceed 6 feet in height. No material or display items shall be located within 3 feet of any building entry.

4. Vending machines and accessory outdoor sales and display may be permitted outside of the building and within a required setback when located against and parallel to the building facade, extending up to 4 feet in depth from the building. These items shall count toward the total outdoor sales and display area permitted by this Section. Public telephones and mailboxes are excluded from these regulations.

5. Outdoor sales and display of items shall be located on a permanent durable surface.

6. No outdoor sales and display shall be allowed in areas set aside, required or designated for pedestrian walkways, drive ing aisles, driveways, maneuvering areas, emergency access ways, offstreet parking or unloading/loading.

7. Outdoor sales and display items may be located on sidewalks in the public right-of-way only if permitted in accordance with Chapter 19.55 6 (Transient Seller’s and Sidewalk Vending Licenses).

Outdoor sales and display items shall be permitted on privately owned walks or other areas intended for pedestrian movement provided an unobstructed, continuous path with a minimum 4-foot width is maintained. Materials located at the edge of a pedestrian way adjacent to a driving aisle shall not extend more than 10 feet without providing a break of not less than 4 feet in width to allow for unobstructed access onto the pedestrian way.

8. Items for outdoor sale and display shall be completely screened from view from any abutting residentially zoned property.

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Effective Page 19.70-8 Accessory Uses and Structures

9. No outdoor sales, storage or display areas shall be located in the clear sight triangle as defined by this Code, or located in any manner that would restrict or limit adequate sight distances for interior or exterior vehicular movements.

10. Any outdoor display or sale item located outdoors in a manner constituting a sign must conform to the appropriate sign ordinance or regulations.

11. In the City of Twentynine Palms, Outdoor sales and display shall only be accessory to a principal nonresidential use where such use conducts its activities within a completely enclosed building or group of buildings on the same property, shall be conducted by employees of the principal use, and shall be owned by the owner of the principal use and not a consignment operation or arrangement.

19.70.090 Accessory Residential Dwellings
The following dwelling is allowed as an accessory use to a primary agricultural, commercial, industrial or institutional use where such use demonstrates the need for on-site residency of one or more people to maintain, operate and/or secure the primary nonresidential land use on the property.

A. Caretaker’s Residence. Residential occupancy of a dwelling unit by the owners, operators or caretaker employed to maintain, operate or guard part or all of the property on which the caretaker dwelling is located as an accessory use. The caretaker dwelling unit may be located either above the first floor or behind a primary use structure. Caretaker housing shall be processed in accordance with the permit requirements identified in the applicable land use district chapters contained in Article 2 of this Development Code.

City of Twentynine Palms Development Code Article 4, Special Regulating Uses Adopted July 26, 2016
Revised Commercial and Industrial Development
Effective Page 19.73-1 Standards and Design Criteria
Chapter 19.73 Commercial and Industrial Development
Standards and Design Criteria
Sections

19.73.010 Purpose ...............................................................................................................19.73-1

19.73.020 Applicability.......................................................................................................19.73-1

19.73.030 Review Required................................................................................................19.73-1

19.73.040 Minimum Development Standards – Commercial and Industrial Uses.............19.73-1

19.73.050 Design Criteria – Commercial and Industrial Uses............................................19.73-2

19.73.010 Purpose
This Chapter establishes mandatory development standards for commercial and industrial development to ensure consistency with surrounding land uses, and to implement the policies of the General Plan. This Chapter also enables the development of design criteria to allow flexibility in design solutions, and to reflect the policies of the General Plan.

19.73.020 Applicability
The standards contained in this Chapter shall apply to the following:

A. New Uses and Structures. For all buildings erected and all uses of land established after the effective date of this Title, the development standards in this Chapter shall be complied with.

B. Modification to Existing Structures and Uses. Whenever an existing building is modified or a use is expanded such that it creates an increase of 1,000 square feet or more or 25 percent or more in the existing square footage of a use, as determined by the Community Development Director, the development standards in this Chapter shall be complied with. for all new construction.

19.73.030 Review Required
Consistency with the regulations contained in this Chapter shall be reviewed concurrent with any required Building Permit or Land Use Permit for applicable projects.

19.73.040 Minimum Development Standards – Commercial and Industrial Uses
A. All mechanical equipment shall be screened from public rights-of-way and parking lots as an integral part of the building design through the use of parapets, screen walls, equipment wells or similar design features, a minimum of 6 inches above the tallest piece of mechanical equipment.

B. Those portions of the front setback area not improved with drive aisles, walls, and signage or similar features shall be landscaped. Said landscaping shall reflect a desert theme, including use of droughtresistant plants. All landscaping installation, design and landscaping plans are also subject to the requirements of the state of California.

City of Twentynine Palms Development Code Article 4, Special Regulating Uses Adopted July 26, 2016
Revised Commercial and Industrial Development
Effective Page 19.73-2 Standards and Design Criteria
C. Vibrations generated on-site shall not be detectable off-site. For uses that may generate vibrations detectable off-site, a detailed vibration assessment and plan addressing and mitigating these impacts shall be submitted for review and approval.

D. Electrical disturbances or interference. For uses that may produce electrical disturbances or interference to surrounding land uses, a detailed electrical interference assessment and plan addressing and mitigating these impacts shall be submitted for review and approval.

E. Odors, dust and airborne pollution shall be controlled so as not to impact surrounding land uses or the public rights-of-way. For uses that may generate odors, dust or airborne pollution, a detailed assessment and plan addressing and mitigating these impacts shall be submitted for review and approval.

19.73.050 Design Criteria – Commercial and Industrial Uses A. Purpose. Commercial and industrial design criteria are intended to be used as a reference to assist project designers in understanding and responding to the City’s goals and objectives for high-quality commercial and industrial development. The criteria complement the development regulations contained in this Development Code by providing examples of potential design solutions and appropriate design interpretations.

B. Applicability. These commercial and industrial design criteria are advisory for permitted uses, but shall be used as a guide in conjunction with uses subject to a Site Plan Review, inor xception, Administrative Use Permit, Conditional Use Permit, ariance, ubdivision, or a lanned evelopment proposal to encourage a high level of design quality, while at the same time providing the flexibility necessary to encourage creativity on the part of project designers.

C. Criteria Formulation and Adoption. The Community Development Director shall develop design criteria for consideration by the Planning Commission and adoption by Resolution of the City Council.

D. Implementation. Effective implementation of the design criteria shall be considered as a basis for making the required findings for approval provided, however, that applicants may submit alternative design solutions that are different than contained in the criteria but result in superior solutions that also are consistent with the General Plan. The criteria shall address:

1. Site design, including parking layout/location, building location, and building massing.

2. Appropriate use of signage.

3. Acceptable design and use of architectural features and landscape features, and provision of public areas.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
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Effective Page 19.74-1 Fences, Walls, and Screens
Chapter 19.74 Fences, Walls, and Screens
Sections

19.74.010 Purpose ...............................................................................................................19.74-1

19.74.020 Applicability.......................................................................................................19.74-1

19.74.030 Permit Requirements and Exemptions...............................................................19.74-1

19.74.040 Location and Height Measurements...................................................................19.74-2

19.74.050 Materials and Maintenance ................................................................................19.74-2

19.74.060 Requirements by Land Use Type .......................................................................19.74-3

19.74.010 Purpose
The purpose of this Chapter is to regulate the height and location of fences, walls and screening to provide light, air and privacy without obstructing views, establish buffers between different land uses, and safeguard against visual obstructions at the intersections of streets and/or driveways.

19.74.020 Applicability
The standards contained in this Chapter shall apply to the following:

A. New Uses and Buildings. Fences, walls and screens shall be provided as required by this Chapter for all buildings erected and all uses of land established after the effective date of this Title.

B. Modification to Existing Structures and Uses. Fences, walls and screens shall be provided as required by this Chapter whenever an existing building is modified or a use is expanded such that it creates an increase of more than 25 percent in the number of existing dwelling units for residential projects or more than 25 percent in the existing square footage of commercial or industrial projects. In all cases where the change in use will involve outside storage as defined by this Code, such fences, walls or screening as set forth in Chapter 19.130 (Outdoor Storage) shall be required.

19.74.030 Permit Requirements and Exemptions
A. Permit Required. Unless otherwise exempt, Zoning Clearance is required for new fences and walls.

B. Exemptions. Fences and walls listed below are exempt from land use and development permits but may still require building permits.

1. Retaining Walls. Retaining walls less than 36 inches in height are exempt from the requirements of this Chapter.

2. Residential Fences and Walls. Fences and walls located on residential property constructed in compliance with the requirements of this Chapter.

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Effective Page 19.74-2 Fences, Walls, and Screens

3. Required Fences and Walls. The requirements of this Chapter shall not apply to a fence or wall required by any law or regulation of the City (including temporary construction site fencing), county, state, or federal government, or any agency thereof.

19.74.040 Location and Height Measurements
A. Height Measurement. Fence and wall height shall be measured from the highest finish grade at the base of the fence or wall to the uppermost part of the fence or wall; except when there is a difference in the ground level between two adjoining parcels, the fence or wall shall be measured at the mid-point of the retaining wall height as measured on the side with the lowest finish grade. See Figure 19.74.040-1 (Measurement of Fence and Wall Height on Parcels with Different Elevations).

Figure 19.74.040-1
Measurement of Fence and Wall Height on Parcels with Different Elevations

19.74.050 Materials and Maintenance
A. Fence, Wall and Screen Materials. Fences, walls and screens shall be constructed of attractive, longlasting materials and architecturally integrated with the building design and with existing fences/walls on the site. The following limitations apply:

1. Fences and gates approved for screening purposes in residential zones shall be chain link, solid wood, solid vinyl, tubular steel or wrought iron. Where tubular steel or wrought iron is used, it shall be backed by solid or perforated metal sheeting painted to match the fence or gate. When chain link is used for screening it must be backed with wood or plastic slats, solid plastic sheet, or knitted fabric privacy/wind screening. Decorative block walls may also be used for screening purposes.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.74-3 Fences, Walls, and Screens

2. Fences and gates approved for screening purposes in commercial, office, mixed-use, industrial, or public and open space zones shall be a solid wall or material, chain link, metal, tubular steel or wrought iron. Open fencing shall be backed by solid or perforated metal sheeting painted to match the fence or gate. When chain link is used for screening it must be backed with wood or plastic slats, except that chain link fence is not permitted for screening purposes along any property line abutting the right-of-way along Adobe Road or SR-62 in the CO, CN, CT, CG, and CS land use districts.

3. If not required for screening purposes, chain link fencing is permitted in all land use districts, except along any property line abutting the right-of-way along Adobe Road or SR-62 in the CO, CN, CT, CG, and CS land use districts.

4. Alternative materials for screening purposes may be approved by the Community Development Director or the Planning Commission as part of a discretionary permit approval.

5. Barbed wire shall not be permitted or maintained in or about the construction of a fence, wall or screen along the front, side, street side or rear lines of any residential lot or any nonresidential lot abutting a residential lot, or within 3 feet of the property lines. (These say the same thing)

6. Barbed wire shall not be permitted or maintained in or about the construction of a fence, wall or screen located within any setback area. along the front or street side property line of any lot, or within 3 feet of a property line.

7. No sharp wire or points shall project at the top of the fence or wall 6 feet or less in height.

B. Graffiti Resistance. Graffiti-resistant aesthetic surface treatment shall be required for all fences and walls adjacent to a public right-of-way, in a residential zone, or as determined through discretionary permit approval.

C.B. Maintenance. Fences, walls and screens shall be continuously maintained in an orderly and good condition.

19.74.060 Requirements by Land Use Type
A. Applicable to All Land Use Types.

1. Fencing and Walls for Pools, Spas and Similar Features. Swimming pools, spas and other similar water features shall be enclosed in compliance with Building Code requirements.

2. Temporary Fences. Nothing in this Chapter shall be deemed to prohibit the erection of a temporary fence around construction projects in compliance with the Building Code and other applicable requirements of the Development Code.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.74-4 Fences, Walls, and Screens
B. Residential and Public Districts.

1. Maximum Height. The height of fences, walls or screening (including landscape) in residential and public districts is limited according to Table 19.74.060-1 (Maximum Height of Fences, Walls and Screens in Residential and Public Land Use Districts).

Table 19.74.060-1
Maximum Height of Fences, Walls and Screens in Residential and Public Land Use Districts
Location of Fence/Wall/Screening Maximum Height(1)
Required front yard area 64 ft
Required rear and interior side yard area 8 ft (2),(3)
Required street side yard area 8 ft (2),(4)
At intersections of streets, alleys, and driveways within the clear site vision triangle(5)

2.5 ft
All other areas of lot 8 ft
1 As part of a discretionary permit approval, the designated approving authority may grant additional height or location requirements to enclose or screen specific areas or uses or for fences and walls designed for noise attenuation.
2 Where the rear or street side yard directly abuts a minimum of a four-lane highway, a block wall not exceeding 8 feet in height may be constructed within 10 feet of the rear or street side property line. 3 For through lots where the rear yard is adjacent to the front yard of adjoining property, the height of fences, walls or screening shall not exceed 4 feet within a setback area equal to the front yard setback of the adjoining property.
4 The maximum height of a fence, wall or screen shall be 4 feet within the street side yard of a reverse corner lot.
5 See definition of clear site vision triangle in Chapter 19.06 (Definitions).

2. Required Walls. A solid masonry wall shall be provided between uses as follows:
a. An 8-foot solid masonry wall shall be required between any parking areas developed on a parcel zoned for multiple-family residential uses (RM or R-HD zones) and an abutting parcel zoned for single-family residential (RL or RS zone), except that the masonry wall shall not exceed 4 feet in height within the required front yard setback.
b. An 8-foot solid masonry wall shall be required between any parking areas developed on a parcel zoned high density residential (R-HD) and an abutting parcel zoned multi-family residential (RM), except that the masonry wall shall not exceed 4 feet in height within the required front yard setback.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.74-5 Fences, Walls, and Screens
C. Commercial Districts.

1. Maximum Height. The height of fences, walls or screening in commercial land use districts is limited according to Table 19.74.060-2 (Maximum Height of Fences, Walls and Screens in Commercial Land Use Districts).

Table 19.74.060-2
Maximum Height of Fences, Walls and Screens in Commercial Land Use Districts Location of Fence/Wall/Screening Maximum Height(1)
Required front yard area 64 ft
Required rear and interior side yard area 8 ft(2)
Required street side yard area 84 ft
At intersections of streets, alleys, and driveways within the clear site vision triangle(3) 2.5 ft All other areas of lot 8 ft
1 As part of discretionary permit review, the designated approving authority may grant additional height or location requirements to enclose or screen specific areas or uses or for fences and walls designed for noise attenuation.
2 For through lots where the rear yard is adjacent to the front yard of adjoining property, the height of fences, walls or screening shall not exceed 43 feet within a setback area equal to the front yard setback of the adjoining property.
3 See definition of clear site vision triangle in Chapter 19.06 (Definitions).

2. Required Walls. A solid masonry wall shall be provided as follows:
a. An 8-foot solid masonry wall shall be required between any parcel zoned for commercial land use uses and an abutting parcel zoned for residential or public uses, except that the masonry wall shall not exceed 4 feet in height within the required front yard setback.

3. Screening.
a. Screening of Mechanical Equipment. Mechanical equipment, including rooftop equipment, shall be screened by a permanent parapet wall and shall not be visible from grade level or adjacent street elevations. Such screening shall extend a minimum of six inches above be as high as the highest portion of the equipment and shall be readily accessible for maintenance. b. Screening of Commercial Loading Docks and Trash Storage Areas. Loading docks and trash storage areas shall be screened from public view, adjoining public streets and rights-of-way, and residentially zoned areas. The method of screening shall be architecturally compatible with other on-site development in terms of colors and materials. Exceptions may be permitted

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.74-6 Fences, Walls, and Screens
through the Administrative Use Permit process for sites with unique characteristics (e.g., shallow lot depth, grade differential).

D.b. Industrial Districts.

1. Maximum Height. The height of fences, walls or screening in industrial land use districts is limited according to Table 19.74.060-3 (Maximum Height of Fences, Walls and Screens in Industrial Land Use Districts).

Table 19.74.060-3
Maximum Height of Fences, Walls and Screens in Industrial Land Use Districts Location of Fence/Wall/Screening Maximum Height(1)
Required front yard area 86 ft
Required rear and interior side yard area 10 ft(2)
Required street side yard area 86 ft
At intersections of streets, alleys, and driveways within the clear site vision triangle(3)

2.5 ft
All other areas of lot 10 ft
1 As part of discretionary permit review, the designated approving authority may grant additional height or location requirements to enclose or screen specific areas or uses or for fences and walls designed for noise attenuation
2 For through lots where the rear yard is adjacent to the front yard of adjoining property, the height of fences, walls or screening shall not exceed 43 feet within a setback area equal to the front yard setback of the adjoining property.
3 See definition of clear site vision triangle in Chapter 19.06 (Definitions).

2. Required Walls. A solid masonry wall shall be provided as follows:
a. A 10-foot solid masonry wall shall be required between any parcel zoned for industrial land use uses and an abutting parcel zoned for residential uses, except that the masonry wall shall not exceed 64 feet in height within the required front yard setback. b. At the discretion of the approving authority, a solid masonry wall up to 10 feet in height may be required between any parcel zoned for industrial land use uses and an abutting parcel zoned for commercial uses, where such wall is necessary to address land use or activity incompatibilities. The masonry wall shall not exceed 6 feet in height within the required front yard setback.

3. Screening.

City of Twentynine Palms Development Code Article 4, Site Development Regulations Adopted July 26, 2016
Revised
Effective Page 19.74-7 Fences, Walls, and Screens
a. Screening of Mechanical Equipment. Mechanical equipment, including rooftop equipment, shall be screened by a permanent parapet wall and shall not be visible from grade level or adjacent street elevations. Such screening shall extend six inches above be as high as the highest portion of the equipment and shall be readily accessible for maintenance. b. Screening of Commercial Loading Docks and Trash Storage Areas. Loading docks and trash storage areas shall be screened from public view, adjoining public streets and rights-of-way, and residentially zoned areas. The method of screening shall be architecturally compatible with other on-site development in terms of colors and materials. Exceptions may be permitted through the Administrative Use Permit process for sites with unique characteristics (e.g., shallow lot depth, grade differential).

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STAFF REPORT
TO: City Council
FROM: City Manager
FOR MEETING: Jul 23 2024
SUBJECT: New National Opioid Settlement with Kroger Co.

RECOMMENDATION:

The City Council:

1. Adopt Resolution No. 24-__ to Join a New National Opioid Settlement with Kroger Co.,

2. Authorize the City Manager to take all necessary and reasonable actions to effectuate the City’s participation, including executing all necessary agreements and documents subject to the review and approval of the City Attorney.

ORDER OF PROCEDURE:

Request Staff Report (City Manager Presenting)
Council Questions of Staff
Request Public Comment
Council Discussion
Motion/Second
Discussion on Motion
Call the Question
ATTACHMENTS:
• Resolution No. 24 - __
National Opioid Settlement with
Kroger Co.
• Kroger Settlement Overview
• Kroger Notice Email
• Kroger Settlement Agreement
• Proposed California State
Subdivision Agreement
BACKGROUND:

Thousands of governmental entities sued pharmaceutical distributors and manufacturers alleging they contributed to the current opioid epidemic in the United States by grossly misrepresenting the risks of long-term use, and failing to properly monitor suspicious orders. A judicial panel consolidated the cases into one action known as a “multidistrict litigation” (or “MDL”) — In re National Prescription Opiate Litigation, No. 1:17-md-02804 (N.D. Ohio) (the “Opioid Litigation”).

In July of 2021, the governmental plaintiffs reached nationwide settlements to resolve all claims in the Opioid Litigation against the three largest pharmaceutical distributors: McKesson, Cardinal Health and AmerisourceBergen (collectively referred to as the “Distributors”), and manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson (collectively referred to as “J&J”). At that time, there were two settlements, one with the Distributors, and one with J&J.

In addition to the monetary payments, the agreements also require the Distributors and J&J to implement changes to methods of opioid marketing, sale and distribution practices and further require the Distributors to implement additional safeguards to prevent diversion of prescription opioids. This reform package includes the creation of a clearinghouse through which the Distributors will be required to account not only for their own shipments, but also the shipments of the other distributors, and to detect, stop, and report suspicious opioids orders. In addition, J&J (which ceased marketing opioids in 2015 and ceased selling opioids in 2020) will not market or sell any opioid products in the next ten years and has agreed to cease lobbying efforts concerned with prescription opioids for ten years. J&J also has agreed to make the clinical trial data for its discontinued opioids available for medical research.

Although not a party to the Opioid Litigation, the City of Twentynine Palms (“City”) was eligible to participate in the two nationwide settlements and receive certain settlement funds. The City authorized the City Manager to sign and execute participation agreements in the settlements and accompanying documents, which released all claims against the Distributors and J&J.

On March 28, 2023, the City Council approved the City’s participation in the nationwide Opioid Litigation against 5 settling defendants - Teva, Allergan, CVS, Walgreens, and Walmart. These settlements were largely on the same terms as the Distributors and J&J settlements.

A new national opioid settlement agreement dated March 22, 2024 has been reached with Kroger Co. The Settlement requires Kroger Co. to pay over a billion dollars to abate the opioid epidemic. Of this amount, approximately $1.2 billion will be used by participating states and subdivisions to remediate and abate the impacts of the opioid crisis. Depending on participation by states and subdivisions, the Settlement requires payments over eleven years after its effective date. This settlement will build on the existing framework that states and subdivisions have created through the other opioid settlements, particularly the Walgreens, Walmart and CVS settlements. The anticipated $1.2 billion settlement to the participating states is based on a methodology determined among the state Attorneys General which looks at population and the severity of harm caused by the opioid epidemic in each participating state. According to the allocation formula, the California will receive 10.19%, or approximately $122.2 million, of the overall settlement, which shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund. Based on the allocation of settlement funds to Cities and Counties within the State of California, the City of Twentynine Palms is projected to be allocated 0.002% of the Abatement account, which equates to $1,711.10. This is a very rough estimate that will change depending on how many cities and counties choose to participate. Because this estimate is based on 100% participation, the actual amount available to the City will likely be less.

The proposed settlement has two key participation steps.  First, each eligible state decides whether to participate in each Settlement. A list of participating states for each settlement can be found at https://nationalopioidsettlement.com.  Second, eligible subdivisions within each participating state decide whether to participate in the Settlement. The more subdivisions that participate, the more funds flow to that state and its subdivisions.

Any subdivision that does not participate cannot directly share in any of the settlement funds, even if the subdivision’s state is settling and other participating subdivisions are sharing in settlement funds. If the state does not participate, the subdivisions in that state are not eligible to participate in the Settlement.

Any settlement funds the City receives may only be used for specific opioid-abatement-related uses, which are enumerated in the settlement agreements. The agreements are available online at https://oag.ca.gov/opioids.

If the City wishes to participate, it must authorize the City Manager to sign and execute participation agreements in the settlements and accompanying documents, which release all claims against the settling defendants, by August 12, 2024. By default, if the City joins the settlements, San Bernardino County (the “County”) will manage the City’s share of settlement funds, which shall be used for County-wide opioid abatement. There is an option for Page 92 of 591 the City to request to manage its funds directly, which would require the City to comply with certain management and reporting requirements in the settlement agreements.

If the City does not participate, its share will go to the State of California. Due to the City’s current lack of opioidabatement infrastructure, the restricted use requirements in the settlement agreements, and the specific reporting requirements for entities administering their share of funds directly, it is likely that the cost of administering the City’s funds will outweigh the amount it could receive. It is therefore recommended that the City joins the settlement and have the County administer its share of funds.

As more settlements on similar terms are likely to be reached in the Opioid Litigation, it is further recommended that the City Council authorizes the City Manager to approve future settlements having substantially similar terms with other defendants in the Opioid Litigation.

The City should decide as soon as possible whether it wishes to join the settlement, as joining requires it to pass a resolution or issue a minute order authorizing the City Manager to join, and have the City Manager execute the necessary documents, prior to the August 12, 2024 deadline.

ENVIRONMENTAL:

N/A
ALTERNATIVES:

The City Council could choose to decline to adopt the proposed Resolution or recommend changes.

FISCAL IMPACT:

None. Program management and reporting requirements will be handled by the County of San Bernardino.

CITY OF TWENTYNINE PALMS

CITY COUNCIL RESOLUTION
NO. 24-__

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TWENTYNINE

PALMS, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO TAKE

ALL NECESSARY ACTIONS TO SETTLE CLAIMS AGAINTS KROGER
CO., AND ENTER INTO ANY OTHER FUTURE SETTLEMENTS WITH

SUBSTANTIALLY SIMILAR TERMS WITH OTHER DEFENDANTS IN THE NATIONAL PRESCRIPTION OPIATE LITIGATION.

WHEREAS, the United States is facing an ongoing public health crisis of opioid abuse, addiction, overdose, and death, forcing the State of California and California counties and cities to spend billions of dollars each year to address the direct consequences of this crisis; and, WHEREAS, over the last several years, thousands of governmental entities (states, counties, cities, and tribal sovereigns) sued pharmaceutical distributors and manufacturers alleging they contributed to the current opioid crisis by grossly misrepresenting the risks of longterm use and failing to properly monitor suspicious orders. On or about December 12, 2017, a judicial panel consolidated the cases into one action known as a “multidistrict litigation” (or “MDL”) — In re National Prescription Opiate Litigation, No. 1:17-md-02804 (N.D. Ohio) (the “Opioids Litigation”). The Opioids Litigation has since been overseen by a single federal judge (Judge Dan Polster) in the Northern District of Ohio; and WHEREAS, in July 2021, many of the governmental plaintiffs reached nationwide settlements to resolve the Opioids Litigation brought by states and local entities against certain (1) pharmaceutical distributors: McKesson Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation (“Distributors”), and (2) manufacturers: Johnson & Johnson, Janssen Pharmaceuticals, Inc., Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Janssen Pharmaceutica, Inc. (“Manufacturers”); and
WHEREAS, the City was not a party to the Opioids Litigation, but has had opportunities to receive settlement funds by entering into settlement agreements with defendants; and WHEREAS, on December 14, 2021, the City Council authorized the City Manager to take all necessary actions to opt-in and join an Opioid Litigation settlement and settle claims against the three largest pharmaceutical distributors, McKesson, Cardinal Health, and AmerisourceBergen, and manufacturer Janssen Pharmaceuticals, Inc. and its parent company Johnson & Johnson, and
WHEREAS, on March 28, 2023, the City Council authorized the City Manager to take all necessary actions to opt-in and join an Opioid Litigation settlement to resolve all claims in the Opioid Litigation against five settling defendants: Teva, Allergan, CVS, Walgreens, and Walmart, and
WHEREAS, a new national opioid settlement agreement dated March 22, 2024, has been reached with Kroger, Co., and
WHEREAS, under the terms of the settlement, $1.2 billion will be paid to participating states and subdivisions over a period of eleven years to remediate and abate the impacts of the opioid crisis, and

WHEREAS, under the terms of the settlement, California is scheduled to receive

10.1861592681% of the overall settlement, which shall be allocated as follows: 15% to the State Fund; 70% to the Abatement Accounts Fund; and 15% to the Subdivision Fund, and WHEREAS, although not a party to the Opioid Litigation, the City is eligible to participate in the new settlement and receive 0.002% of the 70% Abatement Account Fund as established under the proposed California State Subdivision Agreement with Kroger, and WHEREAS, the intent of this Resolution is to authorize the City Manager to sign and execute participation agreements in the new settlement and accompanying documents, which release all claims against the settling defendant, and
WHEREAS, by default, if the City joins the settlement, San Bernardino County (the “County”) will receive and manage the City’s share of settlement funds, which shall be used for County-wide opioid abatement, and
WHEREAS, the City has the option to receive funds directly, which would require the City to comply with certain use and reporting obligations; and WHEREAS, jurisdictions must opt-in and execute all the necessary documents on or before August 12, 2024, and
WHERAS, the City desires to join the settlement and allocate its funding to the County for county-wide opioid abatement; and
WHEREAS, as more settlements on similar terms are likely to be reached in the Opioid Litigation, City Council authorizes the City Manager to review and approve future settlements with substantially similar terms with other defendants in the Opioid Litigation.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TWENTYNINE PALMS, CALIFORNIA, RESOLVES AS FOLLOWS:

Section 1. Participation in the National Opioid Settlement. The City Council hereby approves and elects to “opt in” to the settlement agreement reached with Kroger Co.

Section 2. City Manager Appointment. The City Council does hereby appoint the City Manager as the City’s Authorized Representative to take all necessary and reasonable actions to effectuate the City’s participation in the settlement and sign all necessary agreements and documents, each following review and approval of the City Attorney.

Section 3. Funds Administration. The City Council does hereby elect for the County to receive and administer the City’s share of funds.

Section 4. Future Opioid Settlements. The City Council does hereby authorize the City Manager to approve future settlements with substantially similar terms with other defendants in the Opioid Litigation.

PASSED, APPROVED, AND ADOPTED on the 23rd day of July 2024.

Steven Bilderain, Mayor
ATTEST:

Cindy Villescas, City Clerk
I hereby certify that the foregoing Resolution No. 24-__ was duly adopted by the City Council of the City of Twentynine Palms at a Closed session meeting thereof, held on the 23rd day of July 2024, by the following vote of the Council:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Cindy Villescas, City Clerk

Subdivision Name, Subdivision State
Rubris Reference Number: Subdivision Crosslink ID
TO LOCAL POLITICAL SUBDIVISIONS:

THIS NOTICE CONTAINS IMPORTANT INFORMATION ABOUT
A NEW NATIONAL OPIOID SETTLEMENT.

KROGER CO. SETTLEMENT OVERVIEW
A proposed nationwide settlement agreement (“Settlement”) has been reached that would resolve the legal claims of states and local political subdivisions against regional supermarket pharmacy Kroger Co. related to alleged misconduct related to opioids.

The Settlement requires Kroger Co. to pay over a billion dollars to abate the opioid epidemic. Of this amount, approximately $1.2 billion will be used by participating states and subdivisions to remediate and abate the impacts of the opioid crisis. Depending on participation by states and subdivisions, the Settlement requires payments over eleven years after its effective date.

The Settlement also contains injunctive relief governing opioid dispensing practices and requires Kroger Co. to implement safeguards to prevent diversion of prescription opioids.

The proposed settlement has two key participation steps.

First, each eligible state decides whether to participate in each Settlement. A list of participating states for each settlement can be found at https://nationalopioidsettlement.com.

Second, eligible subdivisions within each participating state decide whether to participate in the Settlement. The more subdivisions that participate, the more funds flow to that state and its subdivisions. Any subdivision that does not participate cannot directly share in any of the settlement funds, even if the subdivision’s state is settling and other participating subdivisions are sharing in settlement funds. If the state does not participate, the subdivisions in that state are not eligible to participate in the Settlement.

WHO IS RUBRIS INC. AND WHAT IS THE IMPLEMENTATION ADMINISTRATOR? The Settlement provides that an Implementation Administrator will provide notice and manage the collection of participation forms. Rubris Inc. is the Implementation Administrator for this new Settlement and was also retained for the prior national opioid settlements.

WHY IS YOUR SUBDIVISION RECEIVING THIS NOTICE?
Your state has elected to participate in the Settlement, and therefore your subdivision may participate in that Settlement. This notice is also sent directly to counsel for such subdivisions if the Implementation Administrator has their information.

If you are represented by an attorney with respect to opioid claims, please contact them.

Subdivisions can participate in the Settlement whether or not they filed a lawsuit or are represented.

WHERE CAN YOU FIND MORE INFORMATION?
Detailed information about the Settlement, including each settlement agreement, may be found at:
https://nationalopioidsettlement.com. This website also includes information about how the Settlement are being implemented in most states and how funds will be allocated within your state.

You are encouraged to review the settlement agreement terms and discuss the terms and benefits with your counsel, your Attorney General’s Office, and other contacts within your state.

Information and documents regarding the Settlement and your state allocation can be found on the settlement website at https://nationalopioidsettlement.com.

Your subdivision will need to decide whether to participate in the proposed Settlement, and subdivisions are encouraged to work through this process before the August 12, 2024, deadline.

HOW DO YOU PARTICIPATE IN THE SETTLEMENTS?
The Settlement requires that you take affirmative steps to “opt in” to the Settlement.

In the next few weeks, you will receive documentation and instructions from the Implementation Administrator or, in some cases, your Attorney General’s Office. In order to participate in a settlement, a subdivision must sign and return the required Participation Form.

Please add the following email addresses to your “safe” list so emails do not go to spam / junk folders: [email protected] and [email protected]. Please monitor your email for the Participation Form and instructions.

All required documentation must be signed and returned on or before August 12, 2024.

Subject: NEW NATIONAL OPIOID SETTLEMENT NOTICE – Kroger Co.

To: Subdivision Name, Subdivision State
Rubris Reference Number: Subdivision Crosslink ID

NOTICE OF NEW NATIONAL OPIOID SETTLEMENT

AND UPCOMING ACTION NEEDED TO PARTICIPATE
A new national opioid settlement has been reached with Kroger Co. This is the formal notice required by the settlement and authorized by the parties.

Please read this email and the attached document carefully.

You are receiving this notice because your state has elected to participate in the national opioid settlement with Kroger Co. The list of states participating in the settlement can be found at https://nationalopioidsettlement.com.

Your subdivision might have participated in the national opioid settlements with Johnson & Johnson/Janssen, the three Distributors (Cardinal, AmerisourceBergen (Cencora), and McKesson), Teva, Allergan, CVS, Walgreens, and Walmart.

This notice concerns the opportunity to participate in the new settlement with the new Settling Defendant (Kroger Co.). Your subdivision or special district may participate in the new settlement whether or not it sued Kroger Co.

In the next few weeks, you will receive additional information and documentation to sign and return if you wish to join the new national opioid settlement with Kroger Co.. Please review the list of individuals on this email and contact the Implementation Administrator at [email protected] if someone else at your subdivision or special district should receive communications about this settlement.

Your subdivision or special district must “opt in” to participate in the new settlements. To do so, you must sign and return the documentation that you will be receiving in the next few weeks.

The deadline to return the required documentation is August 12, 2024. Documentation submitted for prior national settlements is not applicable to the new settlement.

The attached document provides additional information concerning the new national opioid settlement involving Kroger Co.

Questions about this notice or the process for receiving and submitting the required Settlement Participation Forms may be directed to your attorney, the Implementation Administrator at [email protected], or your Attorney General's Office If your subdivision or special district is represented by an attorney with respect to opioid claims and they are not copied on this message, please immediately contact them concerning this notice.

Thank you,
National Opioid Settlements Implementation Administrator National Kroger Settlement
The Implementation Administrator is retained to provide the settlement notice required by the respective settlement agreements referenced above and to manage the collection of settlement participation forms for each settlement.

1 KROGER SETTLEMENT

AGREEMENT

2 KROGER SETTLEMENT AGREEMENT
This Settlement Agreement, dated as of March 22, 2024 (the “Agreement”), sets forth the terms of settlement between and among the Settling States, the Participating Subdivisions, and Kroger (as those terms are defined below). Upon satisfaction of the conditions set forth in Sections II and VIII, this Agreement will be binding on the Settling States, Kroger, and the Participating Subdivisions. This Agreement will then be filed as part of a Consent Judgment in the respective courts of each of the Settling States, pursuant to the terms set forth in Section VIII.

I. Definitions
Unless otherwise specified, the following definitions apply:

A. “Additional Remediation Amount.” The amount available to the Settling States totaling up to $8,000,000.00, to be paid in accord with the payment schedule at Exhibit M-3.

B. “Adjusted State Remediation Payment.” The State Remediation Payment reduced by the Overall State Allocation for each Non-Settling State on Exhibit F.

C. “Agreement.” This agreement, as set forth above. For the avoidance of doubt, this Agreement is inclusive of all exhibits.

D. “Alleged Harms.” The alleged past, present, and future financial, societal, and public nuisance harms and related expenditures arising out of the alleged misuse and abuse of Products, non-exclusive examples of which are described in the documents listed on Exhibit A, that have allegedly arisen as a result of the physical and bodily injuries sustained by individuals suffering from opioid-related addiction, abuse, death, and other related diseases and disorders, and that have allegedly been caused by Released Entities.

E. “Allocation Statute.” A state law that governs allocation, distribution, and/or use of some or all of the Settlement Fund amounts allocated to that Settling State and/or its Subdivisions. An Allocation Statute may, without limitation, contain a Statutory Trust, further restrict expenditures of funds, form an advisory committee, establish oversight and reporting requirements, or address other default provisions and other matters related to the funds. An Allocation Statute is not required to address all three (3) types of funds comprising the Settlement Fund or all default provisions.

F. “Annual Fees Payment.” The amounts payable by Kroger in each Payment Year comprised of the State AG Fees and Costs payment, the Additional Remediation Amount payment, and the Private Attorney Fees payment, and not including the Annual Remediation Payment.

3 G. “Annual Remediation Maximum.” The total amount available to Eligible States for Annual Remediation Payments in each Payment Year as set forth in the “Maximum Annual Remediation Payment” column of Exhibit M-1. In no event shall an Annual Remediation Payment in Payment Years 1-2, or 5-10 exceed the Annual Remediation Maximum for that Payment Year set forth in Exhibit M-1. For Payment Years 3-4, the Annual Remediation Payment may exceed the Annual Remediation Maximum for that Payment Year only to the extent needed for the Incentive Payment A Catch-up Payment for a Settling State that has not earned some or all of Incentive Payment BC in prior Payment Years, having resulted in correspondingly lower Annual Remediation Payments in those prior Payment Years. For Payment Year 11, the Annual Remediation Payment may exceed the Annual Remediation Maximum for that Payment Year only to the extent needed to pay the Incentive Payment Earn-Back provided by Section IV.H.7.

H. “Annual Remediation Payment.” The amount payable to the Settlement Fund by Kroger for Settling States’ Base Payments and Incentive Payments on the Payment Date for each Payment Year, as calculated by the Settlement Fund Administrator.

I. “Appropriate Official.” As defined in Section XIII.F.3.

J. “Bankruptcy Code.” Title 11 of the United States Code, 11 U.S.C. § 101, et seq.

K. “Bar.” Either: (1) a law barring Subdivisions in a Settling State from maintaining Released Claims against Released Entities (either through a direct bar or through a grant of authority to release claims and the exercise of such authority in full) or (2) a ruling by the highest court of the Settling State (or, in a Settling State with a single intermediate court of appeals, the intermediate court of appeals) when setting forth the general principle that Subdivisions in the Settling State may not maintain any Released Claims against Released Entities, whether on the ground of this Agreement (or the release in it) or otherwise. For the avoidance of doubt, a law or ruling that is conditioned or predicated upon payment by a Released Entity (apart from the Annual Remediation Payments by Kroger under this Agreement) shall not constitute a Bar.

L. “Base Payment.” As defined in Section IV.G.

M. “Case-Specific Resolution.” Either: (1) a law barring the Subdivision at issue from maintaining any Released Claims against any Released Entities (either through a direct bar or through a grant of authority to release claims and the exercise of such authority in full); or (2) a ruling by a court of competent jurisdiction over the Subdivision at issue that the Subdivision may not maintain any Released Claims at issue against any Released Entities, whether on the ground of this Agreement (or the release in it) or otherwise. For the avoidance of doubt, a law or ruling that is conditioned or predicated upon payment by a Released Entity (apart from the annual payments by Kroger under this Agreement) shall not constitute a Case-Specific Resolution.

N. “Claim.” Any past, present or future cause of action, claim for relief, cross-claim or counterclaim, theory of liability, demand, derivative claim, request, assessment, charge, covenant, damage, debt, lien, loss, penalty, judgment, right, obligation, dispute, suit, contract, controversy, agreement, parens patriae claim, promise, performance, warranty, omission, or grievance of any nature whatsoever, whether legal, equitable, statutory, regulatory or administrative, whether arising under federal, state or local common law, statute, regulation,

4 guidance, ordinance or principles of equity, whether filed or unfiled, whether asserted or unasserted, whether known or unknown, whether accrued or unaccrued, whether foreseen, unforeseen or unforeseeable, whether discovered or undiscovered, whether suspected or unsuspected, whether fixed or contingent, and whether existing or hereafter arising, in all such cases, including, but not limited to, any request for declaratory, injunctive, or equitable relief, compensatory, punitive, or statutory damages, absolute liability, strict liability, restitution, remediation, subrogation, contribution, indemnity, apportionment, disgorgement, reimbursement, attorney fees, expert fees, consultant fees, fines, penalties, expenses, costs or any other legal, equitable, civil, administrative, or regulatory remedy whatsoever.

O. “Claim-Over.” A Claim asserted by a Non-Released Entity against a Released Entity on the basis of contribution, indemnity, or other claim-over on any theory relating to a NonParty Covered Conduct Claim asserted by a Releasor.

P. “Compensatory Restitution Amount.” The aggregate amount paid or incurred by Kroger hereunder for Opioid Remediation, which includes each Annual Remediation Payment and does not include amounts paid as attorneys’ fees and costs or identified pursuant to Section V.B.2 as being used to pay attorneys’ fees, investigation costs or litigation costs, which shall be up to the amount of the Adjusted State Remediation Payment.

Q. “Consent Judgment.” A consent judgment in a form to be agreed by the Settling States and Kroger prior to the Effective Date that, among other things, (1) approves this Agreement and (2) provides for the release set forth in Section X.A, including the dismissal with prejudice of any Released Claims that the Settling State has brought against Released Entities.

R. “Covered Conduct.” Any actual or alleged act, failure to act, negligence, statement, error, omission, breach of any duty, conduct, event, transaction, agreement, misstatement, misleading statement or other activity of any kind whatsoever from the beginning of time through the Initial Participation Date (and any past, present, or future consequence of any such act, failure to act, negligence, statement, error, omission, breach of duty, conduct, event, transaction, agreement, misstatement, misleading statement or other activity) relating in any way to (1) compounding, counseling and documentation relating to any Product or class of Products (2) the discovery, development, manufacture, packaging, repackaging, marketing, promotion, advertising, labeling, recall, withdrawal, distribution, delivery, monitoring, reporting, supply, sale, prescribing, dispensing, physical security, warehousing, use or abuse of, or operating procedures relating to, any Product, or any system, plan, policy or advocacy relating to any Product or class of Products, including, but not limited to, any unbranded promotion, marketing, programs, or campaigns relating to any Product or class of Products; (3) the characteristics, properties, risks, or benefits of any Product; (4) the reporting, disclosure, non-reporting or nondisclosure to federal, state or other regulators of orders placed with any Released Entity; or (5) diversion control programs or suspicious order monitoring.

S. “Designated State.” The State of Tennessee.

T. “Effective Date.” The date sixty (60) calendar days after the Reference Date.

5 U. “Eligible States.” The thirty-three (33) states of the United States listed in Exhibit F, and the District of Columbia.

V. “Enforcement Committee.” A committee consisting of representatives of the Settling States and of the Participating Subdivisions. Exhibit B contains the organizational bylaws of the Enforcement Committee. Notice pursuant to Section XIII.R shall be provided when there are changes in membership or contact information.

W. “Final Order.” An order or judgment of a court of competent jurisdiction with respect to the applicable subject matter (1) which has not been reversed or superseded by a modified or amended order, is not currently stayed, and as to which any right to appeal or seek certiorari, review, reargument, stay, or rehearing has expired, and as to which no appeal or petition for certiorari, review, reargument, stay, or rehearing is pending, or (2) as to which an appeal has been taken or petition for certiorari, review, reargument, stay, or rehearing has been filed and (a) such appeal or petition for certiorari, review, reargument, stay, or rehearing has been resolved by the highest court to which the order or judgment was appealed or from which certiorari, review, reargument, stay, or rehearing was sought, or (b) the time to appeal further or seek certiorari, review, reargument, stay, or rehearing has expired and no such further appeal or petition for certiorari, review, reargument, stay, or rehearing is pending.

X. “Global Settlement Amount.” The Global Settlement Amount is $1,372,800,000, which is comprised of the State Remediation Payment, Private Attorney Fees, State AG Fees and Costs, and Additional Remediation Amount.

Y. “Implementation Administrator.” Rubris, Inc., which is the vendor that will be retained by Kroger for costs of up to $1,500,000, to provide notice pursuant to Section VII.A and to manage the initial joinder period for Subdivisions, including the issuance and receipt of Subdivision Participation Agreements.

Z. “Incentive Payment A.” The incentive payment described in Section IV.H.4.

AA. “Incentive Payment A Catch-up Payment.” As defined in Section IV.H.4.f.

BB. “Incentive Payment BC.” The incentive payment described in Section IV.H.5.

CC. “Incentive Payment D.” The incentive payment described in Section IV.H.6.

DD. “Incentive Payment Earn-Back.” The incentive payment described in Section IV.H.7.

EE. “Initial Participating Subdivision.” A Subdivision that meets the requirements set forth in Section VII.D.

FF. “Initial Participation Date.” The date ninety (90) calendar days after the Preliminary Agreement Date, unless it is extended by written agreement of Kroger and the Enforcement Committee.

6 GG. “Injunctive Relief Terms.” The terms described in Section III and set forth in Exhibit P.

HH. “Kroger.” The Kroger Co.

II. “Later Litigating Subdivision.” A Subdivision (or Subdivision official asserting the right of or for the Subdivision to recover for Alleged Harms to the Subdivision and/or the people thereof) that: (1) first files a lawsuit bringing a Released Claim against a Released Entity after the Trigger Date; or (2) adds a Released Claim against a Released Entity after the Trigger Date to a lawsuit brought before the Trigger Date that, prior to the Trigger Date, did not include any Released Claims against a Released Entity; or (3) (a) was a Litigating Subdivision whose Released Claims against Released Entities were resolved by a legislative Bar or legislative Case-Specific Resolution as of the Trigger Date, (b) such legislative Bar or legislative Case-Specific Resolution is subject to a Revocation Event after the Trigger Date, and (c) the earlier of the date of completion of opening statements in a trial in an action brought by a Subdivision in that Settling State that includes a Released Claim against a Released Entity or one hundred eighty (180) days from the Revocation Event passes without a Bar or Case-Specific Resolution being implemented as to that Litigating Subdivision or the Litigating Subdivision's Released Claims being dismissed; or (4) (a) was a Litigating Subdivision whose Released Claims against Released Entities were resolved by a judicial Bar or judicial Case-Specific Resolution as of the Trigger Date, (b) such judicial Bar or judicial Case-Specific Resolution is subject to a Revocation Event after the Trigger Date, and (c) such Litigating Subdivision takes any action in its lawsuit asserting a Released Claim against a Released Entity other than seeking a stay or dismissal.

JJ. “Later Participating Subdivision.” A Participating Subdivision that is not an Initial Participating Subdivision, but meets the requirements set forth in Section VII.E.

KK. “Litigating Subdivision.” A Subdivision (or Subdivision official) that brought any Released Claim against any Released Entity prior to the Trigger Date; provided, however, that a Subdivision (or Subdivision official) that is a Prior Litigating Subdivision shall not be considered a Litigating Subdivision. Exhibit C is an agreed list of all Litigating Subdivisions. Exhibit C will be updated (including with any corrections) periodically, and a final version of Exhibit C will be attached hereto as of the Reference Date.

LL. “National Arbitration Panel.” The panel comprised as described in Section VI.F.2.b.

MM. “National Disputes.” As defined in Section VI.F.2.a.

NN. “Non-Eligible State.” Any state or territory of the United States of America that is not an Eligible State.

OO. “Non-Litigating Subdivision.” Any Subdivision that is neither a Litigating Subdivision nor a Later Litigating Subdivision.

7 PP. “Non-Litigating Threshold Subdivisions.” Primary Subdivisions (a) with populations greater than 30,000 that have not sued Kroger as of the Initial Participation Date and (b) with populations between 10,000 and 30,000 that have not sued Kroger but did sue McKesson, AmerisourceBergen, Cardinal or Janssen prior to July 1, 2021 related to any allegations regarding the Products for Covered Conduct Attached as Exhibit W is a list of the Non-Litigating Threshold Subdivisions in each Eligible State. Exhibit W will be updated (including with any corrections) periodically, and a final version of Exhibit W will be attached hereto as of the Initial Participation Date.

QQ. “Non-Participating Subdivision.” Any Subdivision that is not a Participating Subdivision.

RR. “Non-Party Covered Conduct Claim.” A Claim against any Non-Released Entity involving, arising out of, or related to Covered Conduct (or conduct that would be Covered Conduct if engaged in by a Released Entity).

SS. “Non-Party Settlement.” A settlement by any Releasor that settles any Non-Party Covered Conduct Claim and includes a release of any Non-Released Entity.

TT. “Non-Released Entity.” An entity that is not a Released Entity.

UU. “Non-Settling State.” Any Eligible State that is not a Settling State.

VV. “Opioid Remediation.” Care, treatment, and other programs and expenditures (including reimbursement for past such programs or expenditures1 except where this Agreement restricts the use of funds solely to future Opioid Remediation) designed to (1) address the misuse and abuse of opioid products in the Settling States, (2) treat or mitigate opioid use or related disorders in the Settling States, or (3) mitigate other alleged effects of, including on those injured as a result of, the opioid epidemic in the Settling States. Exhibit E provides a non-exhaustive list of expenditures that qualify as being paid for Opioid Remediation. Qualifying expenditures may include reasonable related administrative expenses in connection with the above.

WW. “Opioid Tax.” Any tax, assessment, license fee, surcharge or any other fee (other than a fixed prospective excise tax or similar tax or fee that has no restriction on pass-through) imposed by a Settling State on Kroger on the sale, transfer or distribution of opioid products; provided, however, that none of the following as currently enacted shall be considered an Opioid Tax for purposes of this Agreement: 16 Del. Code Chapter 48B; fees assessed by the Minnesota Board of Pharmacy under Minnesota Statutes section 151.065; any penalty assessed under Minnesota’s Opiate Product Registration Fee law, Minnesota Statutes section 151.066; the MinnesotaCare Wholesale Drug Distributor and Use Tax, Minnesota Statutes section 292.52; the Excise Tax on sale of Opioids, Article 20-D of New York’s Tax Law; the Opioid Stewardship Act, Article 33, Title 2-A of New York’s Public Health Law; and Rhode Island’s Opioid Stewardship Act, R.I. Gen. Laws §§ 21-28.10, et seq.).
1 Reimbursement includes amounts paid to any governmental entities for past expenditures or programs

8 XX. “Overall Allocation Percentage.” A Settling State’s percentage as set forth in Exhibit F.

YY. “Participating Subdivision.” Any Subdivision that meets the requirements for becoming a Participating Subdivision under Section VII.B and Section VII.C. Participating Subdivisions include both Initial Participating Subdivisions and Later Participating Subdivisions.

ZZ. “Participation Percentage of Incentive BC Eligible Subdivision Population.” As defined in Section IV.H.5.e.

AAA. “Parties.” Kroger and the Settling States (each, a "Party").

BBB. “Payment Date.” March 31 for each Payment Year, which is the date by which Kroger makes the Annual Remediation Payment and the Annual Fees Payment.

CCC. “Payment Year.” The calendar year during which the applicable Annual Remediation Payment and the Annual Fees Payment is due. Payment Year 1 is 2024, Payment Year 2 is 2025 and so forth. References to payment “for a Payment Year” mean the Annual Remediation Payment and/or Annual Fees Payment due during that year. References to eligibility “for a Payment Year” mean eligibility in connection with the Annual Remediation Payment and/or Annual Fees Payment due during that year.

DDD. “Potential Earn-Back Amount.” As defined in Section IV.H.7.

EEE. “Preliminary Agreement Date.” The date on which Kroger is to inform the Settling States of their determination whether the condition in Section II.B has been satisfied. The Preliminary Agreement Date shall be no more than ten (10) calendar days after the end of the notice period to Eligible States, unless it is extended by written agreement of Kroger and the Enforcement Committee.

FFF. “Primary Fire District.” A fire district that covers a population of 25,000, or 0.20% of an Eligible State’s population if an Eligible State’s population is greater than 18 million. If not easily calculable from state data sources and agreed to between the Eligible State and Kroger, a fire district’s population is calculated by dividing the population of the county or counties a fire district serves by the number of fire districts in the county or counties. “Primary Fire Districts” shall mean fire districts as identified in connection with the implementation of the July 21, 2021 Janssen Settlement Agreement.

GGG. “Primary Subdivision.” A Subdivision that is a General Purpose Government (including, but not limited to, a municipality, county, county subdivision, city, town, township, parish, village, borough, gore, or any other entities that provide municipal-type government) with population over 10,000. Attached as Exhibit I is an agreed list of the Primary Subdivisions in each Eligible State.

HHH. “Prior Litigating Subdivision.” A Subdivision (or Subdivision official) that brought any Released Claim against any Released Entity prior to the Trigger Date and all such Released Claims were separately settled or finally adjudicated prior to the Trigger Date; provided, however,

9 that if the final adjudication was pursuant to a Bar, such Subdivision shall not be considered a Prior Litigating Subdivision. Notwithstanding the prior sentence, Kroger and the Settling State of the relevant Subdivision may agree in writing that the Subdivision shall not be considered a Prior Litigating Subdivision.

III. “Private Attorney Fees” are the amount to be paid by Kroger for private attorneys’ litigation fees and costs on behalf of Participating Subdivisions. The maximum amount of Private Attorney Fees are $148,800,000. For avoidance of doubt, Private Attorney Fees do not include State AG Fees and Costs or Additional Remediation Amount.

JJJ. “Product.” Any chemical substance, whether used for medicinal or non-medicinal purposes, and whether natural, synthetic, or semi-synthetic, or any finished pharmaceutical product made from or with such substance, that is: (1) an opioid or opiate, as well as any product containing any such substance; or (2) benzodiazepine, carisoprodol, or gabapentin; or (3) a combination or "cocktail" of chemical substances prescribed, sold, bought, or dispensed to be used together that includes opioids or opiates. “Product” shall include, but is not limited to, any substance consisting of or containing buprenorphine, codeine, fentanyl, hydrocodone, hydromorphone, meperidine, methadone, morphine, oxycodone, oxymorphone, tapentadol, tramadol, opium, heroin, carfentanil, diazepam, estazolam, quazepam, alprazolam, clonazepam, oxazepam, flurazepam, triozolam, temazepam, midazolam, carisoprodol, gabapentin, or any variant of these substances or any similar substance. Notwithstanding the foregoing, nothing in this section prohibits a Settling State from taking administrative or regulatory action related to benzodiazepine (including, but not limited to, diazepam, estazolam, quazepam, alprazolam, clonazepam, oxazepam, flurazepam, triozolam, temazepam, and midazolam), carisoprodol, or gabapentin that is wholly independent from the use of such drugs in combination with opioids, provided such action does not seek money (including abatement and/or remediation) for conduct prior to the Initial Participation Date.

KKK. “Reference Date.” The date on which Kroger is to inform the Settling States of its determination whether the condition in Section VIII has been satisfied. The Reference Date shall be no later than thirty (30) calendar days after the Initial Participation Date, unless it is extended by written agreement of Kroger and the Enforcement Committee.

LLL. “Released Claims.” Any and all Claims that directly or indirectly are based on, arise out of, or in any way relate to or concern the Covered Conduct occurring prior to the Initial Participation Date. Without limiting the foregoing, Released Claims include any Claims that have been asserted against Released Entities, by a Settling State or Litigating Subdivision in any federal, state, or local action or proceeding (whether judicial, arbitral, or administrative) based on, arising out of, or relating to, in whole or in part, the Covered Conduct, or any such Claims that could be or could have been asserted prior to the Initial Participation Date by a Settling State, Subdivision, or Releasor (whether or not such Settling State, Subdivision, or Releasor has brought such action or proceeding). The Parties intend that this term, “Released Claims,” be interpreted broadly. This Agreement does not release Claims by private individuals. It is the intent of the Parties that Claims by private individuals be treated in accordance with applicable law. Released Claims is also used herein to describe claims brought by a Later Litigating Subdivision or other non-party Subdivision that would have been Released Claims if they had been brought by a Releasor against a Released Entity.

10 MMM.“Released Entities.” With respect to Released Claims, Kroger and (1) all past and present subsidiaries, divisions, predecessors, successors, and assigns (in each case, whether direct or indirect) of Kroger; (2) all past and present subsidiaries and divisions (in each case, whether direct or indirect) of any entity described in subsection (1); (3) the respective past and present officers, directors, members, trustees, and employees of any of the foregoing (each for actions that occurred during and related to their work for, or employment with, any of Kroger or the foregoing entities); (4) all past and present joint ventures (whether direct or indirect) of Kroger or its subsidiaries, including in any subsidiary’s capacity as a participating member in such joint venture; (5) all direct or indirect parents and shareholders of Kroger (solely in their capacity as parents or shareholders of Kroger with respect to Covered Conduct); and (6) any insurer of Kroger or any person or entity otherwise described in subsections (1)-(5) (solely in its role as insurer of such person or entity and subject to the last sentence of Section X.C). An illustrative list of Kroger’s joint ventures, subsidiaries and affiliates and predecessor entities is set forth in Exhibit J. Any person or entity described in subsections (3)-(6) shall be a Released Entity solely in the capacity described in such clause and shall not be a Released Entity with respect to its conduct in any other capacity. Notwithstanding any other provision of this Agreement, Albertsons Companies, Inc. (and its joint ventures, subsidiaries, divisions, and affiliates, and the predecessors, successors, assigns, and agents of Albertsons Companies, Inc., its joint ventures, subsidiaries, divisions, and affiliates) is not a Released Entity and will not become a Released Entity if acquired by Kroger. Any other entity acquired, or joint venture entered into, by Kroger after the Initial Participation Date is not a Released Entity. Further and notwithstanding anything else in this paragraph, no entity sued in In re: National Prescription Opiate Litigation, No. 1:17-md-2804 (N.D. Ohio) is included as a Released Entity other than the entities listed on Exhibit J.

NNN. “Releasors.” With respect to Released Claims, (1) each Settling State; (2) each Participating Subdivision; and (3) without limitation and to the maximum extent of the power of each Settling State’s Attorney General’s and/or Participating Subdivision to release Claims, (a) the Settling State’s and Participating Subdivision’s departments, agencies, divisions, boards, commissions, Subdivisions, districts, instrumentalities of any kind and attorneys, including its Attorney General, and any person in his or her official capacity whether elected or appointed to serve any of the foregoing and any agency, person, or other entity claiming by or through any of the foregoing, (b) any public entities, public instrumentalities, public educational institutions, unincorporated districts, fire districts, irrigation districts, and other Special Districts in a Settling State, and (c) any person or entity acting in a parens patriae, sovereign, quasi-sovereign, private attorney general, qui tam, taxpayer, or other capacity seeking relief on behalf of or generally applicable to the general public with respect to a Settling State or Subdivision in a Settling State, whether or not any of them participate in this Agreement. The inclusion of a specific reference to a type of entity in this definition shall not be construed as meaning that the entity is not a Subdivision. Each Settling State’s Attorney General represents that he or she has or has obtained (or will obtain no later than the Initial Participation Date) the authority set forth in Section X.G. In addition to being a Releasor as provided herein, a Participating Subdivision shall also provide the Subdivision Settlement Participation Form referenced in Section VII providing for a release to the fullest extent of the Participating Subdivision’s authority.

OOO. “Remediation Accounts Fund.” The component of the Settlement Fund described in Section V.

11 PPP. “Revocation Event.” With respect to a Bar, Settlement Class Resolution, or CaseSpecific Resolution, a revocation, rescission, reversal, overruling, or interpretation that in any way limits the effect of such Bar, Settlement Class Resolution, or Case-Specific Resolution on Released Claims, or any other action or event that otherwise deprives the Bar, Settlement Class Resolution, or Case-Specific Resolution of force or effect in any material respect.

QQQ. “Settlement Class Resolution.” A class action resolution in a court of competent jurisdiction in a Settling State (that is not successfully removed to federal court) with respect to a class of Subdivisions in that Settling State that (1) conforms with that Settling State’s statutes, case law, and rules of procedure regarding class actions; (2) is approved and entered as an order of a court of competent jurisdiction in that Settling State and such order has become a Final Order; (3) is binding on all Non-Participating Subdivisions in that Settling State (other than opt outs as permitted under the next sentence); (4) provides that all such Non-Participating Subdivisions may not bring any Released Claims against any Released Entities, whether on the ground of this Agreement (or the releases herein) or otherwise; and (5) does not impose any costs or obligations on Kroger other than those provided for in this Agreement, or contain any provision inconsistent with any provision of this Agreement. If applicable state law requires that opt-out rights be afforded to members of the class, a class action resolution otherwise meeting the foregoing requirements shall qualify as a Settlement Class Resolution unless Subdivisions collectively representing more than one percent (1%) of the total population of that Settling State opt out. In seeking certification of any Settlement Class, the applicable Settling State and Participating Subdivisions shall make clear that certification is sought solely for settlement purposes and shall have no applicability beyond approval of the settlement for which certification is sought. Nothing in this Agreement constitutes an admission by any Party that class certification would be appropriate for litigation purposes in any case or for purposes unrelated to this Agreement.

RRR. “Settlement Fund.” The interest-bearing fund established at U.S. Bank pursuant to this Agreement into which the Annual Remediation Payments are made under Section IV, which is intended to be classified as a “qualified settlement fund” within the meaning of 26 C.F.R. §§

1.468B-1 et seq. and which shall be approved by any Settling State in accordance with the requirements of 26 C.F.R. § 1.468B-1.

SSS. “Settlement Fund Administrator.” BrownGreer PLC, which is the entity that annually determines the Annual Remediation Payment (including calculating offset or reduction and Incentive Payments pursuant to Section IV and any amounts subject to offset or reduction pursuant to Section XII) and Additional Remediation Amount, administers the Settlement Fund, and distributes amounts into the Remediation Accounts Fund, State Fund, and Subdivision Fund pursuant to this Agreement. The duties of the Settlement Fund Administrator shall be governed by this Agreement. Prior to the Effective Date, Kroger and the Enforcement Committee shall agree to a detailed description of the Settlement Fund Administrator’s duties and responsibilities, including a detailed mechanism for paying the Settlement Fund Administrator’s fees and costs, all of which shall be appended to the Agreement as Exhibit L.

TTT. “Settlement Fund Escrow.” The interest-bearing escrow fund established pursuant to this Agreement to hold disputed payments made under this Agreement.

12 UUU. “Settlement Payment Schedule.” The schedule attached to this Agreement as Exhibit M-1, Exhibit M-2, and Exhibit M-3.

VVV. “Settling State.” An Eligible State that has entered into this Agreement and delivers executed releases in accordance with Section VIII.A.

WWW. “State Allocation.” The State Remediation Payment multiplied by the percentage for each Eligible State listed in Exhibit F. The allocation percentages in Exhibit F reflect a re-allocation to only states in which the Released Entities operate because any and all potential claims and/or liability against the Released Entities arise from alleged Covered Conduct related to Products in those states.

XXX. “State AG Fees and Costs.” The amount to be paid by Kroger to the Settling States for their litigation fees and costs pursuant to Exhibit S and Exhibit T. The State AG Fees and Costs are 2% times the State Remediation Payment, minus the Additional Remediation Amount, with the maximum amount being $16,000,000.00.

YYY. “State Fund.” The component of the Settlement Fund described in Section V.

ZZZ. “Statewide Payment Amount.” The amount from an Annual Remediation Payment to be paid to a Settling State, its separate types of funds (if applicable), and its Participating Subdivision listed on Exhibit G.

AAAA. “State Remediation Payment.” The maximum amount owed by Kroger to the Settling States and Subdivisions, exclusive of the Private Attorney Fees, State AG Fees and Costs, Additional Remediation Amount, and is in the amount of $1,200,000,000.

BBBB.“State-Subdivision Agreement.” An agreement that a Settling State reaches with the Subdivisions in that Settling State regarding the allocation, distribution, and/or use of funds allocated to that Settling State and to its Subdivisions. A State-Subdivision Agreement shall be effective if approved pursuant to the provisions of Exhibit O or if adopted by statute. Preexisting agreements addressing funds other than those allocated pursuant to this Agreement shall qualify if the approval requirements of Exhibit O are met. A Settling State and its Subdivisions may revise a State-Subdivision Agreement if approved pursuant to the provisions of Exhibit O, or if such revision is adopted by statute.

CCCC.“Statutory Trust.” A trust fund established by state law to receive funds allocated to a Settling State's Remediation Accounts Fund and restrict any expenditures made using funds from the Settling State's Remediation Accounts Fund to Opioid Remediation, subject to reasonable administrative expenses. A Settling State may give a Statutory Trust authority to allocate one (1) or more of the three (3) types of funds comprising such Settling State’s Settlement Fund, but this is not required.

DDDD. “Subdivision.” Any (1) General Purpose Government (including, but not limited to, a municipality, county, county subdivision, city, town, township, parish, village, borough, gore, or any other entities that provide municipal-type government), School District, or Special District within a Settling State, and (2) any other subdivision, subdivision official (acting

13 in an official capacity on behalf of the subdivision) or sub-entity of or located within a Settling State (whether political, geographical or otherwise, whether functioning or non-functioning, regardless of population overlap, and including, but not limited to, Nonfunctioning Governmental Units and public institutions) that has filed a lawsuit that includes a Released Claim against a Released Entity in a direct, parens patriae, or any other capacity. “General Purpose Government,” “School District,” and “Special District” shall correspond to the “five basic types of local governments” recognized by the U.S. Census Bureau and match the 2017 list of Governmental Units. 2 The three (3) General Purpose Governments are county, municipal, and township governments; the two (2) special purpose governments are School Districts and Special Districts.3 “Fire District,” “Health District,” “Hospital District,” and “Library District” shall correspond to categories of Special Districts recognized by the U.S. Census Bureau.4 References to a Settling State’s Subdivisions or to a Subdivision “in,” “of,” or “within” a Settling State include Subdivisions located within the Settling State even if they are not formally or legally a sub-entity of the Settling State; provided, however, that a “Health District” that includes any of the following words or phrases in its name shall not be considered a Subdivision: mosquito, pest, insect, spray, vector, animal, air quality, air pollution, clean air, coastal water, tuberculosis, and sanitary.

EEEE. “Subdivision Allocation Percentage.” The portion of a Settling State's Subdivision Fund set forth in Exhibit G that a Subdivision will receive pursuant to Section V if it becomes a Participating Subdivision. The aggregate Subdivision Allocation Percentage of all Subdivisions receiving a Subdivision Allocation Percentage in each Settling State shall equal one hundred percent (100%). Immediately upon the effectiveness of any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3 (or upon the effectiveness of an amendment to any State-Subdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3) that addresses allocation from the Subdivision Fund, whether before or after the Initial Participation Date, Exhibit G will automatically be amended to reflect the allocation from the Subdivision Fund pursuant to the StateSubdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3. The Subdivision Allocation Percentages contained in Exhibit G may not change once notice is distributed pursuant to Section VII.A, except upon the effectiveness of any StateSubdivision Agreement, Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3 (or upon the effectiveness of an amendment to any State-Subdivision Agreement, 2 https://www.census.govidataidatasets/2017/econ/gus/public-use-files.html. 3 E.g., U.S. Census Bureau, “Technical Documentation: 2017 Public Use Files for State and Local Government Organization” at 7 (noting that “the Census Bureau recognizes five basic types of local governments,” that three of those are “general purpose governments” (county governments, municipal governments, and township governments), and that the other two are “school district and special district governments”), https://www2.census.gov/programs-surveysigus/datasets/2017/2017_gov_org_meth_tech_doc.pdf. 4 A list of 2017 Government Units provided by the Census Bureau identifies 38,542 Special Districts and categorizes them by “FUNCTION_NAME.” “Govt_Units_2017_Final” spreadsheet, “Special District” sheet, included in “Independent Governments - list of governments with reference information,” https://www.census.govidataidatasets/2017/econ/gus/public-use-files.html. As used herein, “Fire District” corresponds to Special District function name “24 — Local Fire Protection,” “Health District” corresponds to Special District function name “32 — Health,” “Hospital District” corresponds to Special District function name “40 —Hospitals,” and “Library District” corresponds to Special District function name “52 — Libraries.” See id.

14 Allocation Statute, Statutory Trust, or voluntary redistribution allowed by Section V.D.3) that addresses allocation from the Subdivision Fund. For the avoidance of doubt, no Subdivision not listed on Exhibit G shall receive an allocation from the Subdivision Fund and no provision of this Agreement shall be interpreted to create such an entitlement.

FFFF. “Subdivision Fund.” The component of the Settlement Fund described in Section V.A.

GGGG. “Subdivision Settlement Participation Form.” The form attached as Exhibit K that Participating Subdivisions must execute and return to the Implementation Administrator or Settlement Fund Administrator, and which shall (1) make such Participating Subdivisions signatories to this Agreement, (2) include a full and complete release of any and of such Subdivision’s claims, and (3) require the prompt dismissal with prejudice of any Released Claims that have been filed by any such Participating Subdivision HHHH. “Threshold Motion.” A motion to dismiss or equivalent dispositive motion made at the outset of litigation under applicable procedure. A Threshold Motion must include as potential grounds for dismissal any applicable Bar or the relevant release by a Settling State or Participating Subdivision provided under this Agreement and, where appropriate under applicable law, any applicable limitations defense.

IIII. “Total Unearned Incentive Payments.” As defined in Section IV.H.7.

JJJJ. “Trigger Date.” In the case of a Primary Subdivision, the Reference Date. In the case of all other Subdivisions, the Preliminary Agreement Date.

II. Participation by Eligible States and Condition to Preliminary Agreement A. Notice to Eligible States. On March 25, 2024, this Agreement shall be distributed to all Eligible States. The Attorneys General of the Eligible States shall then have until April 24, 2024 to decide whether to become Settling States. Eligible States that determine to become Settling States shall so notify Kroger and shall further commit to obtaining any necessary additional state releases prior to the Reference Date. This notice period may be extended by written agreement of Kroger and the Enforcement Committee.

B. Condition to Preliminary Agreement. Following the notice period set forth in Section II.A, Kroger shall determine whether, in its sole discretion, enough Eligible States have agreed to become Settling States to proceed with notice to Subdivisions as set forth in Section VII.

If Kroger determines that this condition has been satisfied, and that notice to the Subdivisions should proceed, it will so notify the Settling States by providing notice to the Enforcement Committee on the Preliminary Agreement Date. If Kroger determine that this condition has not been satisfied, and this Agreement will have no further effect and all releases and other commitments or obligations contained herein will be void.

C. Later Joinder by Eligible States. After the Preliminary Agreement Date, an Eligible State may only become a Settling State with the consent of Kroger and the Enforcement Committee. If an Eligible State becomes a Settling State more than sixty (60) calendar days after

15 the Preliminary Agreement Date, but on or before the Reference Date, the Subdivisions in that Eligible State that become Participating Subdivisions within ninety (90) calendar days of the Eligible State becoming a Settling State shall be considered Initial Participating Subdivisions. An Eligible State may not become a Settling State after the Reference Date.

D. Litigation Activity. Following the Preliminary Agreement Date, Eligible States that determine to become Settling States shall make reasonable efforts to cease litigation activity against Kroger, including by jointly seeking stays or, where appropriate, severance of claim against Kroger, where feasible, and otherwise to minimize such activity by means of agreed deadline extensions and agreed postponement of depositions, document productions, and motion practice if a motion to stay or sever is not feasible or is denied.

III. Injunctive Relief
A. Injunctive Relief. As part of the Consent Judgment, the Parties agree to the entry of the injunctive relief terms attached in Exhibit P.

IV. Settlement Payments
A. Settlement Fund. All payments under this Section IV shall be made into the Settlement Fund, except that, where specified, they shall be made into the Settlement Fund Escrow.

The Settlement Fund shall be allocated and used only as specified in Section V.

B. Annual Remediation Payments

1. Kroger shall make eleven (11) Annual Remediation Payments, each comprised of Base Payments and Incentive Payments as provided in this Section IV and as determined by the Settlement Fund Administrator as set forth in this Agreement, provided that the Annual Remediation Payment in Payment Year 1 shall consist solely of Base Payments.

The payment schedule for the Annual Remediation Payments is attached hereto as Exhibit M-2.

2. In no instance shall Kroger’s Annual Remediation Payment obligation exceed the Annual Remediation Maximum, reduced for Non-Settling States, except as specified in the definition of “Annual Remediation Maximum” for Payment Years 3, 4, and 11. In no instance shall the sum of Kroger’s Annual Remediation Payment obligations for Payment Years 1-11 exceed the sum of Kroger’s Annual Remediation Maximums for Payment Years 1-11, reduced for Non-Settling States.

C. Settlement Fund Payment Process

1. To determine each Annual Remediation Payment for Payment Year 2 forward, the Settlement Fund Administrator shall use the data as of sixty (60) days prior to the Payment Date for each payment, unless another provision of the Agreement specifies a different date.

Prior to the Effective Date, the Parties will include an exhibit to the Agreement setting forth in detail the process for the Settlement Fund Administrator obtaining relevant data and for

16 distributing funds to the Settling States and their Participating Subdivisions listed on Exhibit G consistent with the terms of this Agreement as quickly as practical.

2. The Settlement Fund Administrator shall determine the Annual Remediation Payment and the Statewide Payment Amount for each Settling State, consistent with the provisions in Exhibit L, by:
a. Determining, for each Settling State, the amount of Base Payments and Incentive Payments to which the Settling State is entitled by applying the criteria under Section IV.F, Section IV.G, and Section IV.H; b. applying any offsets, credits or reductions as specified under Section IV and Section XII;
c. determining the total amount owed by Kroger to all Settling States and the Participating Subdivisions listed on Exhibit G; and d. the Settlement Fund Administrator shall then allocate, after subtracting the portion of any Settlement Fund Administrator costs and fees owed out of funds from the Settlement Fund pursuant to Section V.C.5, the Annual Remediation Payment pursuant to Section V among the Settling States, among the separate types of funds for each Settling State (if applicable), and among the Participating Subdivisions listed on Exhibit G.

3. If, no later than fifty (50) days prior to the Payment Date, Kroger and the Enforcement Committee inform the Settlement Fund Administrator that they agree on the amount of the Annual Remediation Payment and the Statewide Payment Amount for each Settling State, Kroger shall pay the agreed-upon Annual Remediation Payment amount on the Payment Date and the Settlement Fund Administrator shall treat those amounts as the determination described in Section IV.C.2. If the Settlement Fund Administrator is not so informed, it shall give notice to Kroger, the Settling States, and the Enforcement Committee of the amount of the Annual Remediation Payment, and the Statewide Payment Amount for each Settling State, following the determination described in Section IV.C.2, and the following timeline shall apply:
a. Within twenty-one (21) calendar days of the notice provided by the Settlement Fund Administrator, Kroger, any Settling State or the Enforcement Committee may dispute, in writing, the calculation of the Annual Remediation Payment or the Statewide Payment Amount for a Settling State. Such disputing party must provide a written notice of dispute to the Settlement Fund Administrator, the Enforcement Committee, any affected Settling State, and Kroger identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected.
b. Within twenty-one (21) calendar days of the sending of a written notice of dispute, any affected party may submit a response, in writing, to the

17 Settlement Fund Administrator, the Enforcement Committee, any affected Settling State, and Kroger identifying the basis for disagreement with the notice of dispute. c. If no response is filed, the Settlement Fund Administrator shall adjust the amount calculated consistent with the written notice of dispute, and Kroger shall pay the adjusted amount, collectively totaling that year's Annual Remediation Payment, on the Payment Date. If a written response to the written notice of dispute is timely sent to the Settlement Fund Administrator, the Settlement Fund Administrator shall notify Kroger of the preliminary amount to be paid, which shall be the greater of the amount originally calculated by the Settlement Fund Administrator or the amount that would be consistent with the notice of dispute, provided, however, that in no circumstances shall the preliminary amount to be paid be higher than the Annual Remediation Maximum. For the avoidance of doubt, a transfer of payments from the Settlement Fund Escrow for other Payment Years does not count toward determining whether the amount to be paid is higher than the Annual Remediation Maximum.
d. The Settlement Fund Administrator shall place any disputed amount of the preliminary amount paid by Kroger into the Settlement Fund Escrow and shall disburse any undisputed amount to each Settling State and its Participating Subdivisions listed on Exhibit G pursuant to Section IV.C.4.

4. If a Settling State informs the Settlement Fund Administrator that it and its Participating Subdivisions listed on Exhibit G have agreed on the amount of its Statewide Payment Amount, determined pursuant to Section IV.C.2 or Section IV.C.3, to be distributed to the Settling State, among its separate types of funds (if applicable), and among its Participating Subdivisions listed on Exhibit G, the Settlement Fund Administrator shall disburse the Statewide Payment Amount pursuant to the consensus distribution amounts provided by the Settling State as quickly as practical. For a Settling State that does not so notify the Settlement Fund Administrator, the Settlement Fund Administrator shall allocate the Settling State’s Statewide Payment Amount, pursuant to Section V, among the separate types of funds for the Settling State (if applicable), and among its Participating Subdivisions listed on Exhibit G using the following procedures:
a. As soon as possible for each payment and following the determination described in Section IV.C.2 or Section IV.C.3, the Settlement Fund Administrator shall give notice to the relevant Settling States and their Participating Subdivisions listed on Exhibit G of the amount to be received by each Settling State, the amount to be received by the separate types of funds for each Settling State (if applicable), and the amount to be received by each Participating Subdivision listed on Exhibit G for each Settling State.
b. Within twenty-one (21) days of the notice provided by the Settlement Fund Administrator, any Settling State or Participating Subdivision listed on Exhibit G may dispute, in writing, the calculation of the amount to be received by the relevant Settling State and/or its Participating Subdivision listed on Exhibit G. A dispute will be deemed invalid and disregarded if it challenges the

18 allocations adopted by a State-Subdivision Agreement approved pursuant to the provisions of Exhibit O or by statute. Such disputing party must provide a written notice of dispute to the Settlement Fund Administrator, any affected Settling State, and any affected Participating Subdivision identifying the nature of the dispute, the amount of money that is disputed, and the Settling State(s) affected. c. Within twenty-one (21) days of the sending of a written notice of dispute, any affected Settling State or any affected Participating Subdivision may submit a response, in writing, to the Settlement Fund Administrator, any affected Settling State and any affected Participating Subdivision identifying the basis for disagreement with the notice of dispute.
d. If no response is filed, the Settlement Fund Administrator shall adjust the amount calculated consistent with the written notice of dispute. e. The Settlement Fund Administrator shall place any disputed amount into the Settlement Fund Escrow and shall disburse any undisputed amount to the Settling State and its Participating Subdivisions eligible for payment.

5. Disputes described in this subsection shall be resolved in accordance with the terms of Section VI.F.

6. The Settlement Fund Administrator may combine the disbursements of Annual Remediation Payments with disbursement of funds under other comparable opioid settlements. In determining when disbursements for each Annual Remediation Payment will be made, the Settlement Fund Administrator may take into account the timeline for the availability of disbursements under other comparable opioid settlements.

7. For the avoidance of doubt, a Subdivision not listed on Exhibit G shall not receive an allocation from the Subdivision Fund and no provision of this Agreement shall be interpreted to create such an entitlement.

D. Procedure for Annual Remediation Payment and Annual Fees Payment in Payment Year 1. The process described in Section IV.C shall not apply to Payment Year 1. The procedure in lieu of Section IV.C for Payment Year 1 is as set forth below:

1. The Payment Date for Payment Year 1 is March 31, 2024. Kroger shall deposit into a segregated interest-bearing bank account it establishes the “Maximum Base Payment” for Payment Year 1 as specified in Exhibit M-2. Kroger shall also deposit into two (2) separate segregated interest-bearing bank accounts it establishes: (a) the “Maximum Exhibit R Attorney Fee and Cost Funds” for Payment Year 1 as specified in Exhibit M-3; and (b) the sum of the “State Cost Fund,” the “Maximum State Outside Counsel Fee Fund,” and the “Maximum Additional Remediation Amount” for Payment Year 1 as specified in Exhibit M-3. Kroger shall separately account for the interest earned on each of the three (3) accounts.

19 2. Kroger shall provide proof to the Enforcement Committee of the deposits required by Section IV.D.1 by March 31, 2024. Kroger shall not remove any money from the segregated bank accounts, except as provided by Section IV.D.3 and Section IV.D.4.

3. In the event that an Eligible State does not agree to become a Settling State by the Preliminary Agreement Date, such State’s share of the funds held in the segregated bank account holding the “Maximum Base Payment” for Payment Year 1 shall immediately revert to Kroger. This amount shall be calculated by multiplying the aggregate Overall Allocation Percentage attributable to Eligible States that have not agreed to become Settling State by the Preliminary Agreement Date by the “Maximum Base Payment” amount specified in Exhibit M-2 for Payment Year 1. In the event that, in accordance with the terms of Section VIII.B, Kroger determines not to proceed with the Settlement, or the Settlement does not become effective for any other reason, the funds held in the segregated bank accounts shall immediately revert to Kroger.

4. If the condition set forth in Section VIII.B is met, Kroger shall transfer into the Settlement Fund, no later than five (5) business days after the Reference Date (unless the Enforcement Committee specifies a later date), the amount in the segregated account holding the “Maximum Base Payment” for Payment Year 1 (including all interest accrued on that account) plus the total amount of the Base Payment owed in Payment Year 1 for the Eligible States that newly agreed to become a Settling State between the Preliminary Agreement Date and the Reference Date, which shall be calculated by multiplying those Settling States’ Overall Allocation Percentage by the amount specified in Exhibit M-2 for Payment Year 1. If the condition set forth in Section VIII.B is met, Kroger also shall transfer into the relevant funds as directed by the Enforcement Committee, no later than five (5) business days after the Reference Date (unless the Enforcement Committee specifies a later date), the amount in the segregated account holding the “Maximum Exhibit R Attorney Fee and Cost Funds” for Payment Year 1 (including all interest accrued on that account), and the amount in the segregated account holding the sum of the “State Cost Fund,” the “Maximum State Outside Counsel Fee Fund,” and the “Maximum Additional Remediation Amount” for Payment Year 1 (including all interest accrued on that account), except that any reductions provided by Section IX.B and Exhibits R, S, and T shall revert to Kroger. Kroger shall provide an accounting to the Enforcement Committee of the transfers, including Statewide Payment Amount for Payment Year 1 for each Eligible State that newly agreed to become a Settling State between the Preliminary Agreement Date and the Reference Date.

5. The Annual Remediation Payment for Payment Year 1 transferred by Kroger into the Settlement Fund pursuant to Section IV.D.4 shall be disbursed by the Settlement Fund Administrator after the Effective Date to each Settling State and to its Initial Participating Subdivisions listed on Exhibit G pursuant to Section IV.C.4 through Section IV.C.7; provided, however, that for any Settling State where the Consent Judgment has not been entered as of the Effective Date, the funds allocable to that Settling State and its Participating Subdivisions listed on Exhibit G shall not be disbursed until ten (10) calendar days after the entry of the Consent Judgment in that Settling State.

20 E. Payment Date for Payment Years 2 through 11. The Payment Date for Payment Year 2 is March 31, 2025. The Payment Date for Payment Years 3 through 11 shall be each successive March 31. The Annual Remediation Payments for those Payment Years shall be made pursuant to the process set forth in Section IV.C.

F. Offsets to Annual Remediation Payments to the Settlement Fund for Non-Settling States. An offset equal to $1,200,000,000 times the Overall Allocation Percentage assigned to each Non-Settling State in Exhibit F shall be deducted from the total amount to be paid by Kroger to the Settlement Fund. For the avoidance of doubt, the Adjusted State Remediation Payment is calculated in a way that reflects this offset. The Base Payments and Incentive Payments are also subject to offset and reduction as provided in Section XII.

G. Base Payments.

1. Subject to the offset and reduction provisions set forth in Section XII, Kroger shall make Base Payments into the Settlement Fund in an amount equal to thirty-eight percent (38%) of the Adjusted State Remediation Payment. The maximum total for Base Payments is $456,000,000. The Base Payments shall be due in installments consistent with Exhibit M2 over the eleven (11) Payment Years, subject to potential offsets for Non-Settling States as provided in Section IV.F.

2. The Base Payment for any Settling State in each Payment Year shall be the Base Payment for that Payment Year specified in Exhibit M-2 times the Settling State’s Overall Allocation Percentage specified in Exhibit F.

H. Incentive Payments.

1. Subject to the offset and reduction provisions set forth in Section XII, Kroger shall make potential additional incentive payments totaling up to a maximum of sixty-two percent (62%) of the Adjusted State Remediation Payment, with the Incentive Payment amount depending on whether and the extent to which the criteria set forth below are met in each Settling State. The maximum total for Incentive Payments is $744,000,000.

2. A Settling State qualifies to receive Incentive Payments in addition to Base Payments if it meets the incentive eligibility requirements specified below. With the exception of the Incentive Payment Earn-Back, the maximum total Incentive Payment for any Settling State shall be no more than the maximum total for Incentive Payments listed in Section IV.H.1 times the Settling State’s Overall Allocation Percentage specified in Exhibit F. With the exception of the Incentive Payment Earn-Back, Incentive Payments are statespecific, with the actual amount depending on whether and the extent to which the criteria set forth below are met in such Settling State.

3. The incentive payments shall be divided among four (4) categories, referred to as Incentive Payments A, BC and D, and the Incentive Payment Earn-Back. Incentive Payments A and BC will be due in installments over the ten (10) Payment Years beginning with Payment Year 2, and Incentive Payment D will be due in installments over Payment Years 6 through 11, as shown on Exhibit M-2. The Incentive Payment Earn-Back will be

21 due, if earned pursuant to Section IV.H.7, in Payment Year 11. The total amount of incentive payments in an Annual Remediation Payment shall be the sum of the incentive payments for which the individual Settling States are eligible for that Payment Year under the criteria set forth below. The incentive payments shall be made with respect to a specific Settling State based on its eligibility for that Payment Year under the criteria set forth below. For the avoidance of doubt, eligibility for Incentive Payments A, BC, and D shall be determined on a Settling State-by-Settling State basis.

4. Incentive Payment A.
a. Incentive Payment A is mutually exclusive with Incentive Payments BC and D; if a Settling State receives Incentive Payment A in an Annual Remediation Payment, such Settling State is not eligible for Incentive Payments BC or D in that Annual Remediation Payment. A Settling State that receives Incentive Payment A is eligible to receive the Incentive Payment Earn-Back, if the requirements of Section IV.H.7 are met.
b. Incentive Payment A shall be equal to sixty-two percent (62%) of the Adjusted State Remediation Payment, provided all Settling States satisfy the requirements of Incentive Payment A. Incentive Payment A will be due to a Settling State as part of the Annual Remediation Payment over ten (10) Payment Years, starting in Payment Year 2, and shall equal a total potential maximum of $744,000,000 if all Eligible States qualify for Incentive Payment A. Each Settling State’s share of Incentive Payment A in a given year, provided that Settling State qualifies, shall equal the total maximum amount available for Incentive Payment A for that year as reflected in Exhibit M-2 times the Settling State’s Overall Allocation Percentage.
c. Qualification for Incentive Payment A is as follows: A Settling State qualifies for Incentive Payment A if, as of two (2) years of the Effective Date:
(i) there is a Bar in that Settling State in full force and effect, (ii) there is a Settlement Class Resolution in that Settling State in full force and effect, (iii) the Released Claims of all of the following entities are released through the execution of Subdivision Settlement Participation Forms, or there is a Case-Specific Resolution against such entities: all Primary Subdivisions, Litigating Subdivisions, School Districts with a K-12 student enrollment of at least 25,000 or .10% of a Settling State’s population, whichever is greater, Hospital Districts that have at least one hundred twenty-five (125) hospital beds in one or more hospitals rendering services in that district, and Primary Fire Districts; or (iv) a combination of the actions in clauses (i)-(iii) has achieved the same level of resolution of Claims by Subdivisions (e.g., a Bar against future litigation combined with full joinder by Litigating Subdivisions). For the avoidance of doubt, subsection (iv) cannot be satisfied unless all Litigating Subdivisions are Participating Subdivisions or there is a Case-Specific Resolution against any such Subdivisions that are not Participating Subdivisions. Kroger and the Enforcement Committee shall meet and confer in order to agree on data sources for purposes of this Section prior to the Initial Participation Date.

22 d. A Settling State that does not qualify for Incentive Payment A as of two (2) years after the Effective Date shall not be eligible for Incentive Payment A for that Payment Year or any subsequent Payment Years.
e. Kroger shall indicate before the Initial Participation Date whether existing legislation in a Settling State is sufficient to qualify as a Bar. f. If a Settling State does not qualify for Incentive Payment A as of the Payment Date for Payment Year 2, and becomes eligible for Incentive Payment A as of Payment Date for Payment Year 3, it shall receive the payment that it would have received for Incentive Payment A for Payment Year 2 (the “Incentive Payment A Catch-up Payment”) on the Payment Date for Payment Year 3. If a Settling State is not eligible for Incentive Payment A as of the Payment Date for Payment Year 3, and becomes eligible for Incentive Payment A as of two (2) years after the Effective Date, it shall receive the payment that it would have received for Incentive Payment A for Payment Years 2 and 3 (also an “Incentive Payment A Catch-up Payment”) on the Payment Date for Payment Year 4. The Incentive Payment A Catch-up Payment shall be reduced by any amounts paid to the Settling State under Incentive Payment BC prior to the Settling State’s eligibility for Incentive Payment A.
g. If Kroger made a payment under Incentive Payment A solely on the basis of a Bar or Settlement Class Resolution in a Settling State and that Bar or Settlement Class Resolution is subsequently removed, revoked, rescinded, reversed, overruled, interpreted in a manner to limit the scope of the release, or otherwise deprived of force or effect in any material respect, that Settling State shall not be eligible for Incentive Payment A thereafter, unless the Settling State requalifies for Incentive Payment A through any method pursuant to Section IV.H.4.c, in which case the Settling State shall be eligible for Incentive Payment A less any litigation fees and costs incurred by Kroger in the interim, except that, if the re-imposition occurs after the completion of opening statements in a trial involving a Released Claim, the Settling State shall not be eligible for Incentive Payment A (unless this exception is waived by Kroger).

5. Incentive Payment BC.
a. Incentive Payment BC shall be available to Settling States that do not qualify for Incentive Payment A.
b. Incentive Payment BC shall be up to a maximum of fifty-nine percent (59%) of the Settling State’s State Allocation. Incentive Payment BC will be due to a Settling State as part of the Annual Remediation Payment over ten (10) Payment Years, starting in Annual Remediation Payment 2. Subject to Section IV.F, Incentive Payment BC shall equal a total potential maximum of $708,000,000 if all states are eligible.

23 c. A Settling State may earn Incentive Payment BC in Annual Remediation Payments 2 through 11 and may receive, when combined with the Settling State’s Base Payment, a maximum of up to ninety-seven 97% of the Settling State’s State Allocation. The maximum Incentive Payment BC for any Settling State in a given Payment Year shall be the Incentive Payment BC for that Payment Year specified in Exhibit M-2 times the Settling State’s Overall Allocation Percentage specified in Exhibit F, provided such Settling State becomes eligible for Incentive Payment BC by sixty (60) days before the Payment Date for Payment Year 6.
d. The amount of Incentive Payment BC for which a Settling State is eligible shall be determined based on the aggregate population of the Settling State’s Incentive BC Subdivisions that are Participating Subdivisions or have had their claims resolved through a Case-Specific Resolution, divided by the aggregate population of all the Settling State’s Incentive BC Subdivisions. The Settling State’s Incentive BC Subdivisions are (i) all Litigating Subdivisions (including School Districts and Special Districts) and (ii) all Non-Litigating Threshold Subdivisions (collectively, all Litigating Subdivisions and all Non-Litigating Threshold Subdivisions are “Incentive BC Subdivisions”). e. The percentage of the Settling State’s maximum Incentive Payment BC for the Payment Year provided by Section IV.H.5.c to which the Settling State is entitled shall be determined according to the table of Incentive BC payment levels below:

Participation Percentage of Incentive BC
Eligible Subdivision Population5
Incentive Payment BC Percentage
for the Relevant Payment Year
Less than 85% 0%
85% or more but less than 86% 3.57%
86% or more but less than 87% 8.93%
5 The “Participation Percentage of Incentive BC Eligible Subdivision Population” shall be determined by the aggregate population of the Settling State’s Incentive BC Subdivisions that are Participating Subdivisions, or have had their claims resolved through a Case-Specific Resolution, divided by the aggregate population of the Settling State’s Incentive BC Subdivisions. In calculating the Settling State’s population that resides in Incentive BC Subdivisions, the population of the Settling State’s Incentive BC Subdivisions shall be the sum of the population of all Incentive BC Subdivisions in the Settling State, notwithstanding that persons may be included within the population of more than one Incentive BC Subdivision. An individual Subdivision shall not be included more than once in the numerator, and shall not be included more than once in the denominator, of the calculation regardless if it (or any of its officials) is named as multiple plaintiffs in the same lawsuit; provided, however, that for the avoidance of doubt, no Subdivision will be excluded from the numerator or denominator under this sentence unless a Subdivision otherwise counted in the denominator has the authority to release the Claims (consistent with Section X) of the Subdivision to be excluded.

24 87% or more but less than 88% 14.29%
88% or more but less than 89% 19.64%
89% or more but less than 90% 25%
90% or more but less than 91% 30.36%
91% or more but less than 92% 35.71%
92% or more but less than 93% 41.07%
93% or more but less than 94% 46.43%
94% or more but less than 95% 51.79%
95% or more but less than 96% 60.71%
96% or more but less than 97% 68.75%
97% or more but less than 98% 76.79%
98% or more but less than 99% 84.82%
99% or more but less than 100% 92.86%
100% 100%
f. For Payment Years 2-5, the percentage of the available Incentive Payment BC amount for which a Settling State is eligible will be based on the Participation Percentage of Incentive BC Eligible Subdivision Population as of sixty (60) days before the Payment Date. For Payment Years 6-11, the percentage of the available Incentive Payment BC amount for which a Settling State is eligible will be based on the Participation Percentage of Incentive BC Eligible Subdivision Population as of sixty (60) days before the Payment Date for Payment Year 6. If Incentive BC Eligible Subdivisions that have become Participating Subdivisions, or achieved Case-Specific Resolution status, collectively represent less than eightyfive percent (85%) of a Settling State’s Incentive BC Eligible Subdivision population by sixty (60) days before the Payment Date for Payment Year 6, the Settling State shall not receive any Incentive Payment BC. g. If there are no Incentive BC Eligible Subdivisions in a Settling State, and that Settling State is otherwise eligible for Incentive Payment BC because it is not eligible for Incentive Payment A, that Settling State will receive its maximum

25 Incentive Payment BC for that Annual Remediation Payment provided by Section IV.H.5.c.

6. Incentive Payment D.
a. Incentive Payment D shall be available to Settling States that do not qualify for Incentive Payment A.
b. Incentive Payment D shall be equal to up to a maximum of ten percent (10%) of the Adjusted State Remediation Payment, with the actual amount depending whether and the extent to which the criteria set forth below are met in each Settling State. The maximum total for Incentive Payment D is $120,000,000. 6 c. Incentive Payment D shall be paid starting at Payment Year 6 and the amount of Incentive Payment D in Payment Years 6-11 will depend on (i) the Settling State meeting the qualifications set out in Section IV.H.6.d and (ii) the Participation Percentage of Incentive BC Eligible Subdivision Population achieved by the Settling State as of sixty (60) days prior to the Payment Date for Payment Year 6.
d. A Settling State qualifies for Incentive Payment D if no Later Litigating Subdivision (for purposes of Incentive Payment D, Later Litigating Subdivisions are limited to (i) a Primary Subdivision; (ii) a school district with a K-12 student enrollment of at least 25,000 or 0.10% of the Settling State’s population, whichever is greater; (iii) a health district or hospital district that has at least one hundred twenty-five (125) hospital beds in one or more hospitals rendering services in that district; and (iv) Primary Fire Districts) in that Settling State has a lawsuit against a Released Entity survive more than six (6) months after denial in whole or in part of a Threshold Motion.
e. A Settling State’s qualification for Incentive Payment D shall be determined as of sixty (60) calendar days prior to the Payment Date (“Incentive Payment D Look-Back Date”). If a Later Litigating Subdivision’s lawsuit in that Settling State survives more than six (6) months after denial in whole or in part a Threshold Motion after that date, that Settling State shall not be eligible for Incentive Payment D for the Payment Year in which that occurs and any subsequent Payment Year.
f. The Incentive Payment D for any Settling State qualifying for Incentive Payment D in Payment Years 6-11 shall be equal to between three percent (3%) and ten percent (10%) of the of the State Remediation Payment times the Settling State’s Overall Allocation Percentage specified in Exhibit F. The 6 The Incentive Payment BC table specified in Section IV.H.5.e and Incentive Payment D table specified in Section IV.H.6.f operate so that the combined amount of Incentive Payment BC and Incentive Payment D cannot exceed sixtytwo percent (62%) of the Adjusted State Remediation Payment over the term of the Agreement. Kroger will have no obligation to pay more than $744,000,000 for the combined amounts of Incentive Payment BC and Incentive Payment D minus any offsets for Non-Settling States specified in Section IV.F.

26 applicable percentage shall be determined based on the Participation Percentage of Incentive BC Eligible Subdivision Population achieved by the Settling State as of sixty (60) days prior to the Payment Date for Payment Year 6 as shown in the table below:

Participation Percentage of Incentive
BC Eligible Subdivision Population as
of sixty (60) days prior to the Payment
Date for Payment Year 6
Each Eligible Settling State’s
Applicable Incentive Payment
D Percentage
Participation of less than 95% 10% of State Allocation
Participation of 95% but less than 96% 9% of State Allocation Participation of 96% but less than 97% 8% of State Allocation Participation of 97% but less than 98% 7% of State Allocation Participation of 98% but less than 99% 6% of State Allocation Participation of 99% but less than 100% 5% of State Allocation Participation of 100% 3% of State Allocation
g. Incentive Payment D shall be paid in six equal installments. Prior to making the Annual Remediation Payment for Payment Years 6-11, the Settlement Fund Administrator shall determine a Settling State’s qualification for Incentive Payment D as of the Incentive Payment D Look-Back Date for that Payment Year.

Prior to the Incentive Payment D Look-Back Date for each Payment Year, Kroger may provide the Settlement Fund Administrator and the Enforcement Committee with notice identifying any Settling State(s) it believes do not qualify for Incentive Payment D and information supporting its belief.
h. Notwithstanding Section IV.H.6.d and Section IV.H.6.e, a Settling State can become re-eligible for Incentive Payment D if the lawsuit that survived a Threshold Motion is dismissed pursuant to a later motion on grounds included in the Threshold Motion, in which case the Settling State shall be eligible for Incentive Payment D less any litigation fees and costs incurred by Kroger in the interim, except that if the dismissal motion occurs after the completion of opening statements in such action, the Settling State shall not be eligible for Incentive Payment D.

7. Incentive Payment Earn-Back. Upon calculation of Incentive Payments A, BC, and D for Payment Year 11, all Incentive Payment amounts that have been unearned by any Settling State under this Agreement for Payment Years 2-11 will be aggregated to determine the Total Unearned Incentive Payments for all Settling States. In Payment Year 11, the Settling States can collectively qualify to receive the Total Unearned Incentive Payments, up to a maximum of 2% of the State Remediation Payment ($24,000,000) (the “Potential Earn-Back Amount”), if there has been no lawsuit for Covered Conduct against a Released Entity by a Non-Eligible State or Subdivision in a Non-Eligible State that survived more than six (6) months after denial in whole or in part of a Threshold Motion. If, at any point prior to Payment Year 11, any lawsuit for Covered Conduct against a Released Entity by a Non-Eligible State or Subdivision in a Non-Eligible State survives more than (6) months

27 after denial in whole or in part of a Threshold Motion, no Settling State is eligible for any portion of the Potential Earn-Back Amount. If no lawsuit for Covered Conduct against a Released Entity by a Non-Eligible State or Subdivision in a Non-Eligible State survives more than six (6) months after denial in whole or in part of a Threshold Motion, then the Settling States will receive the Potential Earn-Back Amount in accordance with the Overall Allocation Percentages in Exhibit F.

I. In no event shall any Settling State receive Base Payments and Incentive Payments A, BC, and D totaling more than one hundred percent (100%) of its respective Overall Allocation Percentage specified in Exhibit F times the State Remediation Payment. However, if the requirements in Section IV.H.7 are met by the Settling States, a Settling State may receive Base Payments and Incentive Payments totaling more than one hundred percent (100%) of its respective Overall Allocation Percentage specified in Exhibit F times the State Remediation Payment.

V. Allocation and Use of Settlement Payments
A. Components of Settlement Fund. The Settlement Fund shall be funded by the Annual Remediation Payments and comprised of a Remediation Accounts Fund, a State Fund, and a Subdivision Fund for each Settling State. The payments made under Section IV into the Settlement Fund shall be initially allocated among those three (3) sub-funds and distributed and used as provided below. Payments placed into the Settlement Fund do not revert back to Kroger.

B. Use of Settlement Payments.

1. It is the intent of the Parties that the payments disbursed from the Settlement Fund to Settling States and Participating Subdivisions be for Opioid Remediation, subject to exceptions that must be documented in accordance with Section V.B.2. In no event may less than ninety-five (95%) of Kroger’s maximum amount of payments pursuant to Section IV as set forth on Exhibit M-2 over the entirety of all Payments Years (but not any single Payment Year) be spent on Opioid Remediation.

2. While disfavored by the Parties, a Settling State or a Participating Subdivision set forth on Exhibit G may use monies from the Settlement Fund (that have not been restricted by this Agreement solely to future Opioid Remediation) for purposes that do not qualify as Opioid Remediation. If, at any time, a Settling State or a Participating Subdivision set forth on Exhibit G uses any monies from the Settlement Fund for a purpose that does not qualify as Opioid Remediation, such Settling State or Participating Subdivision set forth on Exhibit G shall identify such amounts and report to the Settlement Fund Administrator and Kroger how such funds were used, including if used to pay attorneys' fees, investigation costs, litigation costs, or costs related to the operation and enforcement of this Agreement, respectively. It is the intent of the Parties that the reporting under this Section V.B.2 shall be available to the public. For the avoidance of doubt, (a) any amounts not identified under this Section V.B.2 as used to pay attorneys' fees, investigation costs, or litigation costs shall be included in the Compensatory Restitution Amount for purposes of Section V.F and (b) Participating Subdivisions not listed on Exhibit G may only use monies from the Settlement Fund for purposes that qualify as Opioid Remediation.

28 C. Allocation of Settlement Fund. The allocation of the Settlement Fund allows for different approaches to be taken in different states, such as through a State-Subdivision Agreement.

Given the uniqueness of Settling States and their Subdivisions, Settling States and their Subdivisions are encouraged to enter into State-Subdivision Agreements in order to direct the allocation of their portion of the Settlement Fund. As set out below, the Settlement Fund Administrator will make an initial allocation to three (3) state-level sub-funds. The Settlement Fund Administrator will then, for each Settling State and its Participating Subdivisions, apply the terms of this Agreement and any relevant State-Subdivision Agreement, Statutory Trust, Allocation Statute, or voluntary redistribution of funds as set out below before disbursing the funds.

1. Base Payments. The Settlement Fund Administrator will allocate Base Payments under Section IV.G among the Settling States pursuant to Section IV.G.2. Base payments for each Settling State will then be allocated fifteen percent (15%) to its State Fund, seventy percent (70%) to its Remediation Accounts Fund, and fifteen percent (15%) to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in Section V.D.

2. Incentive Payments. The Settlement Fund Administrator will treat Incentive Payments under Section IV.H on a state-specific basis. Incentive Payments for which a Settling State is eligible under Section IV.H will be allocated fifteen percent (15%) to its State Fund, seventy percent (70%) to its Remediation Accounts Fund, and fifteen percent (15%) to its Subdivision Fund. Amounts may be reallocated and will be distributed as provided in Section V.D.

3. Application of Adjustments. If an offset or reduction under Section XII applies with respect to a Settling State, the offset or reduction shall be applied proportionally to all amounts that would otherwise be apportioned and distributed to the State Fund, the Remediation Accounts Fund, and the Subdivision Fund for that Settling State.

4. Settlement Fund Administrator. Prior to the Effective Date, Kroger and the Enforcement Committee will agree to a detailed mechanism consistent with the foregoing for the Settlement Fund Administrator to follow in allocating, apportioning, and distributing payments, which shall then be appended hereto as Exhibit L.

5. Settlement Fund Administrator Costs. Any costs and fees associated with or arising out of the duties of the Settlement Fund Administrator as described in Exhibit L shall be paid from the interest accrued in the Settlement Fund Escrow and the Settlement Fund; provided, however, that if such accrued interest is insufficient to pay the entirety of any such costs and fees, Kroger shall pay fifty percent (50%) of the additional amount and fifty percent (50%) shall be paid out of the Settlement Fund.

D. Settlement Fund Reallocation and Distribution. As set forth below, within a particular Settling State's account, amounts contained in the Settlement Fund sub-funds may be reallocated and distributed per a State-Subdivision Agreement or other means. If the apportionment of amounts is not addressed and controlled under Section V.D.1 and Section V.D.2, then the default provisions of Section V.D.4 apply. It is not necessary that a State-Subdivision Agreement or other means of allocating funds pursuant to Section V.D.1 and Section V.D.2

29 address all of the Settlement Fund sub-funds. For example, a Statutory Trust might only address disbursements from a Settling State’s Remediation Accounts Fund.

1. Distribution by State-Subdivision Agreement. If a Settling State has a StateSubdivision Agreement, amounts apportioned to that Settling State’s State Fund, Remediation Accounts Fund, and Subdivision Fund under Section V.C shall be reallocated and distributed as provided by that agreement. Any State-Subdivision Agreement entered into after the Preliminary Agreement Date shall be applied only if it requires: (a) that all amounts be used for Opioid Remediation, except as allowed by Section V.B.2, and (b) that at least seventy percent (70%) of amounts be used solely for future Opioid Remediation.7 For a State-Subdivision Agreement to be applied to the relevant portion of an Annual Payment, notice must be provided to Kroger and the Settlement Fund Administrator at least sixty (60) calendar days prior to the Payment Date.

2. Distribution by Allocation Statute. If a Settling State has an Allocation Statute and/or a Statutory Trust that addresses allocation or distribution of amounts apportioned to such Settling State’s State Fund, Remediation Accounts Fund, and/or Subdivision Fund and that, to the extent any or all such sub-funds are addressed, requires (1) all amounts to be used for Opioid Remediation, except as allowed by Section V.B.2, and (2) at least seventy percent (70%) of all amounts to be used solely for future Opioid Remediation then, to the extent allocation or distribution is addressed, the amounts apportioned to that Settling State’s State Fund, Remediation Accounts Fund, and Subdivision Fund under Section V.C shall be allocated and distributed as addressed and provided by the applicable Allocation Statute or Statutory Trust. For the avoidance of doubt, an Allocation Statute or Statutory Trust need not address all three (3) sub-funds that comprise the Settlement Fund, and if the applicable Allocation Statute or Statutory Trust does not address distribution of all or some of these three (3) sub-funds, the applicable Allocation Statute or Statutory Trust does not replace the default provisions described in Section V of any such unaddressed fund. For example, if an Allocation Statute or Statutory Trust that meets the requirements of this Section V.D.2 only addresses funds restricted to remediation, then the default provisions of this Agreement concerning allocation among the three (3) sub-funds comprising the Settlement Fund and the distribution of the State Fund and Subdivision Fund for that Settling State would still apply, while the distribution of the applicable State’s Remediation Accounts Fund would be governed by the qualifying Allocation Statute or Statutory Trust.

3. Voluntary Redistribution. A Settling State may choose to reallocate all or a portion of its State Fund to its Remediation Accounts Fund. A Participating Subdivision included on Exhibit G may choose to reallocate all or a portion of its allocation from the Subdivision Fund to the Settling State’s Remediation Accounts Fund or to another Participating Subdivision. The Settlement Fund Administrator is not required to honor a voluntary redistribution for which notice is provided to it less than sixty (60) calendar days prior to the applicable Payment Date.

4. Distribution in the Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust. If Section V.D.1 and Section V.D.2 do not apply, amounts apportioned to that 7 Future Opioid Remediation includes amounts paid to satisfy any future demand by another governmental entity to make a required reimbursement in connection with the past care and treatment of a person related to the Alleged Harms

30 Settling State’s State Fund, Remediation Accounts Fund, and Subdivision Fund under Section V.C shall be distributed as follows:
a. Amounts apportioned to that Settling State’s State Fund shall be distributed to that Settling State.
b. Amounts apportioned to that Settling State’s Remediation Accounts Fund shall be distributed consistent with Section V.E. Each Settling State shall submit to the Settlement Fund Administrator a designation of a lead state agency or other entity to serve as the single point of contact for that Settling State’s funding requests from the Remediation Accounts Fund and other communications with the Settlement Fund Administrator. The designation of an individual entity is for administrative purposes only and such designation shall not limit funding to such entity or even require that such entity receive funds from this Agreement. The designated entity shall be the only entity authorized to request funds from the Settlement Fund Administrator to be disbursed from that Settling State’s Remediation Accounts Fund. If a Settling State has established a Statutory Trust then that Settling State’s single point of contact may direct the Settlement Fund Administrator to release the Settling State’s Remediation Accounts Fund to the Statutory Trust.
c. Amounts apportioned to that Settling State’s Subdivision Fund shall be distributed to Participating Subdivisions in that Settling State included on Exhibit G per the Subdivision Allocation Percentage listed in Exhibit G. Section VII.I shall govern amounts that would otherwise be distributed to Non-Participating Subdivisions listed in Exhibit G. For the avoidance of doubt and notwithstanding any other provision in this Agreement, no Non-Participating Subdivision will directly receive any amount from the Settlement Fund, regardless of whether such Subdivision is included on Exhibit G.
d. Special Districts shall not be allocated funds from the Subdivision Fund, except through a voluntary redistribution allowed by Section V.D.3 to Special Districts that are Participating Subdivisions. A Settling State may allocate funds from its State Fund or Remediation Accounts Fund for Special Districts that are Participating Subdivisions.

5. Restrictions on Distribution. No amounts may be distributed from the Subdivision Fund contrary to Section VII, i.e., no amounts may be distributed directly to Non-Participating Subdivisions or to Later Participating Subdivisions to the extent such a distribution would violate Section VII.E through Section VII.H. Amounts allocated to the Subdivision Fund that cannot be distributed by virtue of the preceding sentence shall be distributed into the sub-account in the Remediation Accounts Fund for the Settling State in which the Subdivision is located, unless those payments are redirected elsewhere by a State-Subdivision Agreement described in Section V.D.1 or by an Allocation Statute or a Statutory Trust described in Section V.D.2.

E. Provisions Regarding the Remediation Accounts Fund.

31 1. State-Subdivision Agreement, Allocation Statute, and Statutory Trust Fund Provisions. A State-Subdivision Agreement, Allocation Statute, or Statutory Trust may govern the operation and use of amounts in that Settling State’s Remediation Accounts Fund so long as it complies with the requirements of Section V.D.1 or Section V.D.2, as applicable, and all direct payments to Subdivisions comply with Section VII.E through Section VII.H.

2. Absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust.

In the absence of a State-Subdivision Agreement, Allocation Statute, or Statutory Trust that addresses distribution, the Remediation Accounts Fund will be used solely for future Opioid Remediation and the following shall apply with respect to a Settling State:
a. Regional Remediation.
(i) At least fifty percent (50%) of distributions for remediation from a Settling State’s Remediation Accounts Fund shall be annually allocated and tracked to the regional level. A Settling State may allow the Advisory Committee established pursuant to Section V.E.2.d to define its regions and assign regional allocations percentages. Otherwise, the Settling State shall (A) define its initial regions, which shall consist of one (1) or more General Purpose Subdivisions and which shall be designated by the state agency with primary responsibility for substance abuse disorder services employing, to the maximum extent practical, existing regions established in that Settling State for opioid abuse treatment or other public health purposes; (B) assign initial regional allocation percentages to the regions based on the Subdivision Allocation Percentages in Exhibit G and an assumption that all Subdivisions included on Exhibit G will become Participating Subdivisions.
(ii) This minimum regional expenditure percentage is calculated on the Settling State’s initial Remediation Accounts Fund allocation and does not include any additional amounts a Settling State has directed to its Remediation Accounts Fund from its State Fund, or any other amounts directed to the fund. A Settling State may dedicate more than fifty percent (50%) of its Remediation Accounts Fund to the regional expenditure and may annually adjust the percentage of its Remediation Accounts Fund dedicated to regional expenditures as long as the percentage remains above the minimum amount.
(iii) The Settling State (A) has the authority to adjust the definition of the regions, and (B) may annually revise the percentages allocated to each region to reflect the number of General Purpose Subdivisions in each region that are Non-Participating Subdivisions. b. Subdivision Block Grants. Certain Subdivisions shall be eligible to receive regional allocation funds in the form of a block grant for future Opioid Remediation. A Participating Subdivision eligible for block grants is a county or parish (or in the case of Settling States that do not have counties or parishes that

32 function as political subdivisions, a city) that (1) does not contain a Litigating Subdivision or a Later Litigating Subdivision for which it has the authority to end the litigation through a release, bar or other action, (2) either (i) has a population of 400,000 or more or (ii) in the case of California has a population of 750,000 or more and (3) has funded or otherwise managed an established health care or treatment infrastructure (e.g., health department or similar agency). Each Subdivision eligible to receive block grants shall be assigned its own region. c. Small Settling States. Notwithstanding the provisions of Section V.E.2.a, Settling States with populations under four (4) million that do not have existing regions described in Section V.E.2.a shall not be required to establish regions. However, such a Settling State that contains one (1) or more Subdivisions eligible for block grants under Section V.E.2.b shall be divided regionally so that each block-grant eligible Subdivision is a region and the remainder of the state is a region.
d. Advisory Committee. The Settling State shall designate an Opioid Settlement Remediation Advisory Committee (the “Advisory Committee”) to provide input and recommendations regarding remediation spending from that Settling State’s Remediation Accounts Fund. A Settling State may elect to use an existing advisory committee or similar entity (created outside of a StateSubdivision Agreement or Allocation Statute); provided, however, the Advisory Committee or similar entity shall meet the following requirements:
(i) Written guidelines that establish the formation and composition of the Advisory Committee, terms of service for members, contingency for removal or resignation of members, a schedule of meetings, and any other administrative details;
(ii) Composition that includes at least an equal number of local representatives as state representatives;
(iii) A process for receiving input from Subdivisions and other communities regarding how the opioid crisis is affecting their communities, their remediation needs, and proposals for remediation strategies and responses; and
(iv) A process by which Advisory Committee recommendations for expenditures for Opioid Remediation will be made to and considered by the appropriate state agencies.

3. Remediation Accounts Fund Reporting. The Settlement Fund Administrator shall track and assist in the report of remediation disbursements as agreed to between Kroger and the Enforcement Committee

33 F. Nature of Payment. Kroger, the Settling States, and the Participating Subdivisions each acknowledge and agree that notwithstanding anything to the contrary in this Agreement, including, but not limited to, the scope of the Released Claims:

1. They have entered into this Agreement to avoid the delay, expense, inconvenience, and uncertainty of further litigation;

2. (a) The Settling States and Participating Subdivisions sought compensatory restitution and remediation for alleged damage or harm caused by the potential violation of a law (within the meaning of 26 U.S.C. § 162(f)(2)(A) and 26 C.F.R. § 1.162-21(e)(4)(i) as damages for the Alleged Harms allegedly suffered by the Settling States and Participating Subdivisions; (b) the Compensatory Restitution Amount is less than or equal to the amount, in the aggregate, of the Alleged Harms allegedly suffered by the Settling States and Participating Subdivisions; and (c) the portion of the Compensatory Restitution Amount received by each Settling State or Participating Subdivision is less than or equal to the amount of the Alleged Harms allegedly suffered by such Settling State or Participating Subdivision;

3. The payment of the Compensatory Restitution Amount by Kroger constitutes, and is paid for, compensatory restitution and remediation for alleged damage or harm caused by the potential violation of a law (within the meaning of 26 U.S.C. § 162(f)(2)(A) and 26 C.F.R. § 1.162-21(e)(4)(i) in order to restore, in whole or in part, the Settling States, Participating Subdivisions, and persons to the same position or condition that they would be in had the Settling States, Participating Subdivisions, and persons not suffered the Alleged Harms, and constitutes compensatory restitution and remediation for alleged damage or harm allegedly caused by the potential violation of a law; and

4. For the avoidance of doubt: (a) the entire Compensatory Restitution Amount is properly characterized as described in Section V.F, (b) no portion of the Compensatory Restitution Amount represents reimbursement to any Settling State or Participating Subdivision or other person or entity for the fees or costs of any investigation or litigation, including without limitation attorneys’ fees, (c) no portion of the Global Settlement Amount constitutes the disgorgement of any allegedly ill-gotten gains, and (d) no portion of the Global Settlement Amount is paid for, is in place of, or is properly characterized as the payment of any fine, penalty, punitive damages, or other punitive assessments.

VI. Enforcement
A. Enforceability. This Agreement is enforceable only by the Settling States and Kroger; provided, however, that Released Entities may enforce Section X and Participating Subdivisions listed on Exhibit G have the enforcement rights described later in this paragraph and in Section VI.D. Except to the extent allowed by the Injunctive Relief Terms, Settling States and Participating Subdivisions shall not have enforcement rights against Kroger with respect to either the terms of this Agreement that apply only to or in other Settling States or any Consent Judgment entered into by another Settling State. Participating Subdivisions shall not have enforcement rights against Kroger with respect to this Agreement or any Consent Judgment except that Participating Subdivisions listed on Exhibit G shall have enforcement rights as set forth herein as to payments