Agenda packet — Upland City Council, June 27, 2022 (part 2 of 3)

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expenditure to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 2022-1.
“Future Facilities Costs” means the CFD Public Facilities Costs minus (i) costs previously paid pursuant to the Funding Agreement to acquire or construct the facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are expected to be available to finance CFD Public Facilities Costs pursuant to the Funding Agreement.
“Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax prepayments.
“Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.

The Special Tax Obligation applicable to an Assessor’s Parcel of Developed Property, or Undeveloped Property for which a Building Permit has been issued may be prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor’s Parcel only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel eligible to prepay the Special Tax Obligation shall provide the CFD Administrator with written notice of intent to prepay, and designate or identify the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor’s Parcel within thirty (30) days of the request, and may charge a reasonable fee for providing this service. Prepayment must be made at least 60 days prior to any redemption date for the CFD No. 2022-1 Bonds to be redeemed with the proceeds of such prepaid Special Taxes, unless a shorter period is acceptable to the Trustee and the City.

The Prepayment Amount (defined below) shall be calculated for each applicable Assessor’s Parcel or group of Assessor’s Parcels as summarized below (capitalized terms as defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Prepayment Amount
plus Defeasance Amount
plus Prepayment Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined in Step 14 below) shall be calculated as follows:

Step No.:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

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2. For Assessor’s Parcels of Developed Property, determine the Maximum Special Tax. For Assessor’s Parcels of Undeveloped Property for which a Building Permit has been issued, compute the Maximum Special Tax for that Assessor’s Parcel as though it was already designated as Developed Property, based upon the Building Permit which has already been issued for that Assessor’s Parcel.

3. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the total expected Maximum Special Tax revenue for CFD No. 2022- 1 assuming all Building Permits have been issued (build-out) within CFD No. 2022-1, excluding any Assessor’s Parcels for which the Special Tax Obligation has been previously prepaid.

4. Multiply the quotient computed pursuant to paragraph 3 by the Outstanding Bonds to compute the amount of Outstanding Bonds to be retired and prepaid for all applicable parcels and round that amount up to the nearest $5,000 increment (the “Bond Redemption Amount”).

5. Multiply the Bond Redemption Amount computed pursuant to paragraph 4 by the applicable redemption premium (expressed as a percentage), if any, on the Outstanding Bonds to be redeemed at the first available call date (the “Redemption Premium”).

6. Compute the Future Facilities Costs.

7. Multiply the quotient computed pursuant to paragraph 3 by the amount determined pursuant to paragraph 6 to compute the amount of Future Facilities Costs to be prepaid (the “Future Facilities Prepayment Amount”).

8. Compute the amount needed to pay interest on the Bond Redemption Amount from the first bond interest and/or principal payment date following the current Fiscal Year until the expected redemption date for the Outstanding Bonds which, depending on the Indenture, may be as early as the next interest payment date.

9. Compute the amount the CFD Administrator reasonably expects to derive from the reinvestment of the Prepayment Amount less the Future Facilities Prepayment Amount and the Prepayment Administrative Fees from the date of prepayment until the redemption date for the Outstanding Bonds to be redeemed with the prepayment.

10. Subtract the amount computed in paragraph 9 from the amount computed in paragraph 8 (the “Defeasance Amount”).

11. Calculate the administrative fees and expenses of CFD No. 2022-1, including the costs of computation of the prepayment, the costs to invest the prepayment proceeds, the costs of redeeming CFD No. 2022-1, and the costs of recording any notices to evidence the prepayment and the redemption (the “Prepayment Administrative Fees”).

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Credit”). No Reserve Fund Credit shall be granted if, after the Prepayment Amount is calculated, reserve funds are below 100% of the reserve requirement.

13. If any capitalized interest for the Outstanding Bonds will not have been expended at the time of the first interest and/or principal payment following the current Fiscal Year, a capitalized interest credit shall be calculated by multiplying the quotient computed pursuant to paragraph 3 by the expected balance in the capitalized interest fund after such first interest and/or principal payment (the “Capitalized Interest Credit”).

14. The amount to prepay the Special Tax Obligation is equal to the sum of the amounts computed pursuant to paragraphs 4, 5, 7, 10, and 11, less the amounts computed pursuant to paragraphs 12 and 13 (the “Prepayment Amount”).

15. From the Prepayment Amount, the sum of the amounts computed pursuant to paragraphs 4, 5, and 10, less the amounts computed pursuant to paragraphs 12 and 13 shall be deposited into the appropriate fund as established under the Indenture and be used to retire Outstanding Bonds or make Debt Service payments. The amount computed pursuant to paragraph 7 shall be deposited into the Construction Fund. The amount computed pursuant to paragraph 11 shall be retained by CFD No. 2022-1.

The Prepayment Amount may be sufficient to redeem an amount other than a $5,000 increment of CFD No. 2022-1 Bonds. In such cases, the increment above $5,000 or integral multiple thereof will be retained in the appropriate fund established under the Indenture to redeem CFD No. 2022-1 Bonds to be used with the next prepayment of CFD No. 2022-1 Bonds.

The CFD Administrator will confirm that all previously levied Special Taxes have been paid in full. With respect to any Assessor's Parcel for which the Special Tax Obligation is prepaid in full, once the CFD Administrator has confirmed that all previously levied Special Taxes have been paid, the Council shall cause a suitable notice to be recorded in compliance with the Act, to indicate the prepayment of the Special Tax and the release of the Special Tax lien on such Assessor’s Parcel, and the obligation of the owner of such Assessor's Parcel to pay the Special Tax shall cease.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year.

B. Partial Prepayment
The Special Tax on an Assessor’s Parcel of Developed Property or Undeveloped Property for which a building permit has been issued may be partially prepaid.

The amount of the prepayment shall be calculated as in Section 6.A.; except that a partial prepayment shall be calculated according to the following formula:

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PP = (PE-A) x F+A
These terms have the following meaning:

PP = the partial prepayment
PE = the Prepayment Amount calculated according to Section

6.A
F = the percentage by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax Obligation A = the Prepayment Administrative Fees and Expenses from Section 6.A
The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax Obligation, (ii) the percentage by which the Special Tax Obligation shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax Obligation for an Assessor’s Parcel within sixty (60) days of the request and may charge a reasonable fee for providing this service.

With respect to any Assessor’s Parcel that is partially prepaid, the City shall (i) distribute the funds remitted to it according to Section 6.A., and (ii) indicate in the records of CFD No. 2022-1 that there has been a partial prepayment of the Special Tax Obligation and that a portion of the Special Tax with respect to such Assessor’s Parcel, equal to the outstanding percentage (1.00 - F) of the Maximum Special Tax, shall continue to be levied on such Assessor’s Parcel.

Notwithstanding the foregoing, no partial prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed partial prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year.

7. TERM OF SPECIAL TAX
The Special Tax shall be levied as long as necessary to meet the Special Tax Requirement for a period not to exceed forty (40) Fiscal Years commencing with Fiscal Year 2022-23, provided however that the Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined that all Bonds that are expected to be issued have been issued and all required interest and principal payments on all Outstanding Bonds have been paid.

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of all Taxable Property in CFD No. 2022-1 to less than 8.90 Acres. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the sum of all Taxable Property in CFD No. 2022-1 to less than 8.90 Acres shall be classified as Provisional Property and will continue to be subject to the CFD No. 2022-1 Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes eligible for classification as Exempt Property.

If the use of an Assessor’s Parcel of Exempt Property changes so that such Assessor’s Parcel is no longer classified as one of the uses set forth in the first paragraph of Section 8 above that would make such Assessor’s Parcel eligible to be classified as Exempt Property, such Assessor’s Parcel shall cease to be classified as Exempt Property and shall be deemed to be Taxable Property.

9. APPEALS
Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If following such consultation the CFD Administrator determines that an error has occurred, then the CFD Administrator shall take any of the following actions, in order of priority, in order to correct the error:
(i) Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal Year prior to the payment date,
(ii) Require the CFD to reimburse the landowner for the amount of the overpayment to the extent of available CFD funds, or
(iii) Grant a credit against, eliminate or reduce the future Special Taxes on the landowner’s Assessor’s Parcel(s) in the amount of the overpayment.

If following such consultation and action by the CFD Administrator the landowner believes such error still exists, such person may file a written notice of appeal with the City Council. Upon the receipt of such notice, the City Council or designee may establish such procedures as deemed necessary to undertake the review of any such appeal. If the City Council or designee determines an error still exists, the CFD Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error.

The City Council or designee thereof shall interpret this Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguities and make determinations relative to the administration of the Special Tax and any landowner appeals. The decision of the City Council or designee shall be final.

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RESOLUTION NO. ________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UPLAND

DETERMINING THE NECESSITY TO INCUR A BONDED
INDEBTEDNESS FOR COMMUNITY FACILITIES DISTRICT NO.
2022-1 (ENCLAVE AT UPLAND), SUBMITTING TO THE QUALIFIED

ELECTORS OF THE COMMUNITY FACILITIES DISTRICT A

PROPOSITION TO AUTHORIZE THE LEVY OF A SPECIAL TAX

THEREIN, TO AUTHORIZE SUCH COMMUNITY FACILITIES

DISTRICT TO INCUR A BONDED INDEBTEDNESS SECURED BY

THE LEVY OF A SPECIAL TAX THEREIN TO FINANCE CERTAIN

TYPES OF PUBLIC FACILITIES AND TO ESTABLISH AN

APPROPRIATIONS LIMIT FOR SUCH COMMUNITY FACILITIES

DISTRICT AND CALLING A SPECIAL ELECTION FOR THE

COMMUNITY FACILITIES DISTRICT ON A PROPOSITION FOR

INCURRING SUCH BONDED INDEBTEDNESS
WHEREAS, on May 23, 2022, the City Council (the “City Council”) of the City of Upland (the “City”), pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the California Government Code (the “Act”), adopted Resolution No. 6660 declaring the necessity for Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California (“CFD No. 2022-1”), to incur a bonded indebtedness for the purpose of financing public facilities, which are necessary to meet increased demands placed upon the City as a result of development which will occur within CFD No. 2022-1; and WHEREAS, notice was published and mailed to the owner of all of the property in CFD No. 2022-1 relative to the intention of the City Council to establish CFD No. 2022-1, to incur bonded indebtedness in one or more series for CFD No. 2022-1the levy of special taxes therein, the provision of public facilities therein, and of the time and place of the public hearing; and
WHEREAS, on June 27, 2022, at the time and place of the hearing and the notice thereof, the City Council conducted the public hearing and afforded al l persons interested, including persons owning property within CFD No. 2022-1, an opportunity to be heard on the proposed authorization to incur bonded indebtedness, and no protests were received; and WHEREAS, on June 27, 2022, at the conclusion of the hearing, the City Council adopted the resolution of formation pursuant to Section 53325.1(a) of the Act (the “Resolution of Formation”), establishing CFD No. 2022-1; and
WHEREAS, the City Clerk has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-1; and WHEREAS, the City Council has determined that it is necessary that bonded indebtedness in one or more series for CFD No. 2022-1 be incurred to contribute to the financing of all or a portion of the Facilities and to authorize the submittal of a proposition to the qualified electors of CFD No. 2022-1, being the landowner of CFD No. 2022-1, all as authorized by the Act.

NOW, THEREFORE, the City Council of the City of Upland hereby finds, determines and resolves as follows:

Section 1. Necessity. It is necessary for CFD No. 2022-1 to incur a bonded indebtedness as authorized under the terms and provisions of the Act f or the purpose of

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providing and financing the Facilities.

Section 2. Purpose for Bonded Indebtedness. The specific purposes for the proposed bonded indebtedness is to contribute to the financing of the acquisition or construction of the following types of public facilities (the “Facilities”):
(a) Facilities owned and operated by the City in lieu of certain City development impact fees, which include, but are not limited to park, traffic, water, sewer, storm drain and other capital improvements, police and fire facilities; and (b) The incidental expenses incurred are: (i) the cost of planning and designing the public facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the formation of the CFD No. 2022-1, the issuance of the bonds thereof, the determination of the amount of and collection of special taxes, the payment of special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the CFD No. 2022-1, and (iii) any other expenses incidental to the construction, completion, and inspection of the public Facilities.

Section 3. Territory to Pay for Bonded Indebtedness. The property within CFD No. 2022-1 will pay for the bonded indebtedness.

Section 4. Bond Authorization. The amount of the bonded indebtedness of CFD No. 2022-1 may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the indebtedness is to be incurred as authorized pursuant to the Act. The maximum aggregate amount of the indebtedness to be authorized for CFD No. 2022-1 is $6,500,000.

Section 5. Costs Included. The amount of the bonded indebtedness shall include all costs and estimated costs incidental to, or connected with, the accomplishment of the purposes for which the bonded indebtedness is to be incurred, including, but not limited to, the estimated costs of construction and acquisition of the Facilities, acquisition of land and rights-of-way, satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued, architectural, insp ection, legal, fiscal and financial consultant fees, bond and other reserve funds and interest on any bonds of CFD No. 2022-1 estimated to be due and payable within two years from the date of the issuance of such bonds, election costs, and all costs of issuance of the bonds, including, but not limited to, underwriter's discount, fees for bond counsel, disclosure counsel, appraisers, financial advisors, market absorption consultants and other consultants, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, and other credit enhancement costs, and printing costs.

Section 6. Terms of Bonds. The maximum term of the bonds and/or any series shall not exceed 40 years, and such bonds may be issued in differing series, at differing times.

The maximum rate of interest to be paid on the bonds shall not exceed 12 percent per annum or the maximum interest rate permitted by law at the time of sale of any of such bonds. The bonds, except where other funds are made available, shall be pa id exclusively from the annual levy of the special tax within CFD No. 2022-1, and are not secured by any other taxing power or the City.

Section 7. Proposition to be Submitted to Voters . The proposition to be submitted to the voters within CFD No. 2022-1 with respect to the proposed bonded indebtedness shall be as follows:

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PROPOSITION B:

Shall Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur bonded indebtedness in one or more series for Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, in a maximum aggregate amount not to exceed $6,500,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022?
Section 8. Election. The date of the special election with respect to the incurring of the aforementioned bonded indebtedness for CFD No. 2022-1, at which time the proposition set forth in Section 7 hereof shall be submitted to the appropriate qualified voters of CFD No. 2022-1 is June 27, 2022, and that special election is hereby called for that date. Pursuant to Section 53326 of the Act, since at the time of the close of the public hearing, and for at least the preceding 90 days, less than 12 persons have been registered to vote within the territory of CFD No. 2022-1, the vote in the special election will be by the landowners of CFD No. 2022- 1 whose property would be subject to the special taxes if they were levied at the time of the election, with each landowner of record at the close of the public hearing having one vote for each acre or portion of an acre of land that he or she owns within CFD No. 2022-1, and the special election shall be conducted by the City Clerk (the “City Clerk”). The special election shall be consolidated with the special election with respect to the propositions rega rding (i) the levy of special taxes within CFD No. 2022-1 for the payment of the principal of and interest on the bonds to finance the acquisition or construction of all or a portion of the Facilities, and (ii) establishing an appropriations limit for CFD No. 2022-1 which has also been called for June 27, 2022. The consolidated special elections shall be conducted by the City Clerk pursuant to applicable provisions of the California Elections Code with respect to mail -ballot elections of cities and specifically Division 4 (commencing with Section 4000) of that Code, insofar as they may be applicable. Pursuant to Section 53326 of the Act, the official ballots shall be delivered by the City Clerk to the qualified electors by mail or personal service. T he voted official ballots shall be received by the City Clerk by 7:00 p.m. on the date of the election; provided that if all qualified electors have voted, the election shall be closed with the concurrence of the City Clerk.

Section 9. Accountability Measures. Pursuant to and in compliance with Section 53410 of the Act, if the voters approve the proposition contained in the official ballots for the consolidated special elections with respect to CFD No. 2022-1 incurring bonded indebtedness for the purposes for which such indebtedness by CFD No. 2022-1, is to be incurred and bonds of CFD No. 2022-1 are to be issued (the “Bond Proposition”), the incurring of such bonded indebtedness and the issuance of bonds of CFD No. 2022-1 shall be subject to the following accountability measures:
(a) the Bond Proposition shall identify the specific purposes for which the bonds are to be issued;
(b) the proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition;
(c) an account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and

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(d) the City Manager or his designee shall file a report with the City Council as required by Section 53411 of the California Government Code.

The City Council finds that the Bond Proposition which will be set forth in the official ballot for the consolidated special elections, and which is set forth in Section 7 hereof, identifies the specific purposes for which CFD No. 2022-1 will incur bonded indebtedness and issue bonds.

Section 10. Effective Date. This Resolution is and shall be effective from the date of its adoption.

PASSED, APPROVED AND ADOPTED this 27th day of June, 2022.

Bill Velto, Mayor

I, Keri Johnson, City Clerk of the City of Upland, do hereby certify that the foregoing Resolution was adopted at a regular meeting of the City Council held on the 27th day of June, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

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RESOLUTION NO. ______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UPLAND

CALLING A SPECIAL ELECTION AND SUBMITTING TO THE
VOTERS OF COMMUNITY FACILITIES DISTRICT NO. 2022-1
(ENCLAVE AT UPLAND) OF THE CITY OF UPLAND PROPOSITIONS

REGARDING THE ANNUAL LEVY OF SPECIAL TAXES WITHIN THE

COMMUNITY FACILITIES DISTRICT TO PAY PRINCIPAL OF AND

INTEREST ON BONDS THEREOF AND TO PAY THE COSTS OF

PUBLIC FACILITIES AND ESTABLISHING AN APPROPRIATIONS

LIMIT THEREFOR
WHEREAS, pursuant to Section 53325.1 of the California Government Code, the City Council (the “City Council”) of the City of Upland (the “City”) has adopted the resolution of formation of Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California (“CFD No. 2022-1”), establishing the Community Facilities District and the boundaries thereof (the “Resolution of Formation”); and WHEREAS, pursuant to Section 53351 of the California Government Code, the City Council has also adopted a resolution determining that it is necessary that CFD No. 2022-1 incur a bonded indebtedness for the purpose of financing certain public facilities; and WHEREAS, by that resolution, the City Council called a special election on the proposition to be submitted to the voters with respect to CFD No. 2022-1 incurring a bonded indebtedness for the purpose of financing such public facilities; and WHEREAS, pursuant to Section 53326 of the California Governm ent Code, it is necessary that the City Council also submit to the voters of CFD No. 2022-1 the proposition relating to the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds thereof, if such bonds are authorized and issued; and
WHEREAS, pursuant to Section 53325.7 of the California Government Code, the City Council may also submit to the voters of CFD No. 2022-1 a proposition with respect to establishing an appropriations limit for CFD No. 2022-1; and WHEREAS, the City Clerk (the “City Clerk”) has advised the City Council that she has received a statement from the Registrar of Voters of the County of San Bernardino that there are no persons registered to vote in the territory of CFD No. 2022-1.

NOW, THEREFORE, the City Council of the City of Upland hereby finds, determines and resolves as follows:

Section 1. Findings. The City Council finds that: (i) the foregoing recitals are true and correct; (ii) 12 persons have not been registered to vote within the territory of CFD No. 2022-1 for each of the 90 days preceding the close of the public hearing on June 27, 2022; (iii) pursuant to Section 53326 of the California Government Code, as a result of the findings set forth in clause (ii) above, the vote in the special election called by this resolution shall be by the landowners of CFD No. 2022-1 whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within CFD No. 2022 -1 which would be subject to the proposed special taxes if they were levied at the time of the electio n; (iv) the owner of all of the property in CFD No. 2022-1 has by written consent (a) waived the time

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limits set forth in Section 53326 of the California Government Code for holding the election called by this resolution and the election on the proposition of CFD No. 2022-1 incurring bonded indebtedness, which pursuant to Section 4 hereof is consolidated with the election called hereby, (b) consented to the holding of the consolidated special elections on June 27, 2022, (c) waived notice and mailed notice of the time and date of the consolidated special elections, and (d) waived an impartial analysis of the ballot propositions pursuant to Section 9313 or 13119 of the California Elections Code and arguments and rebuttals pursuant to Sections 9314 to 9317, inclusive, mailing of a statement pursuant to Section 9401 of that Code and receipt of a ballot pamphlet as required by Section 3023 of that Code; and (v) the City Clerk has consented to the holding of the consolidated special elections on June 27, 2022.

Section 2. Call of Election. The City Council hereby calls and schedules special elections for June 27, 2022, within and for CFD No. 2022-1 on (i) the proposition with respect to the annual levy of special taxes on taxable property within CFD No. 2022 -1 for the payment of principal of and interest on the bonds of CFD No. 2022-1, which may be issued and sold to finance certain public facilities, and (ii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-1.

Section 3. Propositions.
(a) The propositions to be submitted to the voters of CFD No. 2022 -1 at such special election shall be as follows:

Proposition A: Shall Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Section 50075.1 levy a special tax annually on taxable property within Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold for the purposes specified in the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022 (the “Resolution of Formation”), to pay directly for Facilities authorized in the Resolution of Formation, to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, and to pay expenses incidental thereto, and to the levy and collection of the special tax, so long as the special tax is needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special tax set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022?
Proposition B: Shall Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, su bject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur bonded indebtedness in one or more series for Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California in a maximum aggregate amount not to exceed $6,500,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022? Proposition C: Shall Community Facilities Di strict No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California establish an annual

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appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, in the amount of $6,500,000?
Section 4. Consolidation of Elections. The special election called hereby on the propositions to be submitted to the voters of CFD No. 2022-1, as set forth in Section 3 hereof, shall be consolidated with the special election on the propositi on of CFD No. 2022-1 incurring bonded indebtedness. The ballot for said consolidated elections shall be in the form attached hereto as Exhibit A.

Section 5. Conduct of Election. Except as otherwise provided in Section 6 hereof, the consolidated special elections shall be conducted by the City Clerk in accordance with the provisions of the California Elections Code governing mail ballot elections of cities, and in particular the provisions of Division 4 (commencing with Section 4000), of that Code, insofar as they may be applicable.

Section 6. Election Procedures. The procedures to be followed in conducting the consolidated special elections on (i) the proposition with respect to CFD No. 2022 -1 incurring a bonded indebtedness, (ii) the proposition with re spect to the levy of special taxes on taxable property within CFD No. 2022-1, and (iii) the proposition with respect to establishing an appropriations limit for CFD No. 2022-1 in the amount of $6,500,000 (the “Consolidated Special Elections”) shall be as follows:
(a) Pursuant to Section 53326 of the California Government Code, ballots for the Consolidated Special Elections shall be distributed to the qualified electors by the City Clerk by mail or personal service.
(b) Pursuant to applicable sections of the California Elections Code governing the conduct of mail ballot elections of cities, and in particular Division 4 (commencing with Section 4000) of that Code with respect to elections conducted by mail, the City Clerk shall mail or deliver to each qualified elector an official ballot in the form attached hereto as Exhibit “A,” and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but ident ified as a sample ballot, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots and a copy of the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022. (c) The official ballot to be mailed or delivered by the City Clerk to each landowner- voter shall have printed or typed thereon the name of the landowner-voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certification to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner -voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner-voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner -voter, to vote all votes to which the landowner-voter is entitled based on its land ownership on the propositions set forth in the official ballot as marked thereon in the voting square opposite each such proposition, and further certifying as to the acreage of the landowner-voter’s land ownership within CFD No. 2022-1.
(d) The return identification envelope to be mailed or delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: (i) the name of the landowner, (ii) the address of the landowner, (iii) a declaration under penalty of perjury

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stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, (iv) the printed name and signature of the voter, (v) the address of the voter, (vi) the date of signing and place of execution of the declaration, and (vii) a notice that the envelope contains an official ballot and is to be opened only by the City Clerk. (e) The instruction to voter form to be mailed or delivered by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon prop erly inserted by 7:00 p.m. on the date of the Consolidated Special Elections; provided that if all qualified electors have voted, the elections shall be closed with the concurrence of the City Clerk.
(f) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the elections, the City Clerk shall canvass the votes cast in the Consolidated Special Elections, and shall file a statement with the City Council as to the results of such canvass and the election on each proposition set forth in the official ballot.

Section 7. Accountability Measures. Pursuant to Section 53410 of the California Government Code, if the voters approve the proposition contained in the official ballot for the Consolidated Special Elections with respect to CFD No. 2022-1 incurring bonded indebtedness for the purposes for which such indebtedness is to be incurred (the “Bond Proposition”) and bonds of CFD No. 2022-1 are to be issued, the incurring of such bonded indebtedness and the issuance of bonds of CFD No. 2022-1 shall be subject to the following accountability measures:
(a) The Bond Proposition shall identify the specific purposes for which the bonds are to be issued;
(b) The proceeds of the bonds shall be applied only for the specific purposes identified in the Bond Proposition;
(c) An account or accounts shall be created pursuant to the fiscal agent agreement for such bonds into which the proceeds of the sale of such bonds shall be deposited; and (d) The City Manager of the City or his designee, shall file a report with the City Council which shall contain the information required by Section 53411 of the California Government Code.

The City Council finds that the Bond Proposition which is set forth in the official ballot for the consolidated special elections, which is attached as Exhibit “A” hereto, identifies the specific purposes for which CFD No. 2022-1 will incur bonded indebtedness and issue bonds.

Section 8. Effective Date. This Resolution is and shall be effective from the date of its adoption.

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PASSED, APPROVED AND ADOPTED this 27th day of June, 2022.

Bill Velto, Mayor

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

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46708.00811\40063339.2

A-1

EXHIBIT A

OFFICIAL BALLOT

CONSOLIDATED SPECIAL ELECTIONS FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (ENCLAVE AT UPLAND)

OF THE CITY OF UPLAND

COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA
June 27, 2022
To vote, mark a cross (+ or x) in the voting square after the word “YES” or after the word “NO”. All marks otherwise made are forbidden.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk and obtain another.

PROPOSITION A: Shall Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Section 50075.1 levy a special tax annually on taxable property within Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, to pay the principal of and interest on the bonds of the community facilities district which may be issued and sold for the purposes specified in the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022 (the “Resolution of Formation”), to pay directly for Facilities authorized in the Resolution of Formation, to replenish the reserve fund for the bonds, or to accumulate funds for future bond payments, including any amount required by federal law to be rebated to the United States with regard to the bonds, and to pay expenses incidental thereto, and to the levy and collection of the special tax, so long as the special tax is needed to pay the principal of and interest on the bonds and for such other purposes, at the special tax rates and pursuant to the method of apportioning the special tax set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022?

YES
NO
PROPOSITION B: Shall Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California, subject to accountability measures required pursuant to Government Code Sections 53410 and 53411, incur bonded indebtedness in one or more series for Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California in a maximum aggregate amount not to exceed $6,500,000 for the specific purposes set forth in the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022?

YES
NO

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46708.00811\40063339.2

A-2

PROPOSITION C: Shall Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California establish an annual appropriations limit, as defined by subdivision (h) of Section 8 of Article XIIIB of the California Constitution, in the amount of $6,500,000?

YES
NO

PROPOSITION A IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTION 50075 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA. PROPOSITION B IS SUBJECT TO THE ACCOUNTABILITY MEASURES PRESCRIBED IN SECTIONS 53410 AND 53411 OF THE GOVERNMENT CODE OF THE STATE OF CALIFORNIA.

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RESOLUTION NO. _______

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UPLAND DECLARING THE RESULTS OF THE

CONSOLIDATED SPECIAL ELECTIONS WITHIN
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (ENCLAVE

AT UPLAND)
WHEREAS, on June 27, 2022, the City Council (the “City Council”) of the City of Upland (the “City”) adopted a resolution determining the necessity for Community Facilities District No. 2022-1 (Ferree Street) of the City of Upland, County of San Bernardino, State of California (the “CFD No. 2022-1”), to incur a bonded indebtedness for CFD No. 2022-1 for the purposes of providing certain public facilities and calling a special election for CFD No. 2022-1 on the proposition for incurring such bonded indebtedness for June 27, 2022, and providing for the consolidation of said election with the election on the propositions with respect to (i) the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay principal of and interest on such bonds, and (ii) establishing an appropriations limit for CFD No. 2022- 1; and
WHEREAS, on June 27, 2022, the City Council also adopted a resolution calling a special election for June 27, 2022, for submitting to the qualified electors of CFD No. 2022-1 the proposition with respect to the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds thereof and the proposition with respect to establishing an appropriations limit for CFD No. 2022-1, and providing for the consolidation of that election with the election on the proposition of CFD No. 2022-1 incurring a bonded indebtedness (the “Election Resolution”); and
WHEREAS, the City Council has received a statement from the City Clerk (the “City Clerk”), who pursuant to the Election Resolution was authorized to conduct the consolidated special elections for CFD No. 2022-1 and act as the election official therefor, with respect to the canvass of the ballots returned and the results of the consolidated special elections, certifying that more than two-thirds of the votes cast upon the propositions submitted to the voters in the consolidated special elections in CFD No. 2022-1 were cast in favor of all such propositions.

NOW, THEREFORE, the City Council of the City of Upland hereby finds, determines and resolves as follows:

Section 1. Findings. The City Council finds that: (i) there were no persons registered to vote within the boundaries of CFD No. 2022-1 at the time of the close of the protest hearing on June 27, 2022, and pursuant to Section 53326 of the California Government Code (“Section 53326”) the vote in the consolidated special elections for CFD No. 2022-1 was, therefore, to be by the landowners owning land within CFD No. 2022-1, with each landowner having one vote for each acre or portion of an acre of land that he or she owned within CFD No. 2022-1 which would have been subject to the special tax if levied at the time of the consolidated special elections; (ii) pursuant to Section 53326 and the Election Resolution, the City Clerk distributed the ballot for the consolidated special elections to Lennar Homes of California, LLC, a California limited liability company, the owner of all of the taxable

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property included within the boundaries of CFD No. 2022-1 (the “Property Owner”) by mail or personal delivery; (iii) the Property Owner waived the time limits for holding the consolidated special elections and the election dates specified in Section 53326, and consented to the calling and holding of the consolidated special elections on June 27, 2022; (iv) the consolidated special elections have been properly conducted in accordance with all statutory requirements and the provisions of the Election Resolution; (v) pursuant to Section 53326, the Property Owner, which owns approximately 15.65 acres in CFD No. 2022-1, was entitled to a total of 16 votes; (vi) the ballot was returned by the Property Owner to the City Clerk prior to the hour on the date of the election specified by the City Council for the return of voted ballots; (vii) the ballot returned to the City Clerk by the Property Owner voted all votes to which it was entitled in favor of all propositions set forth therein; (viii) more than two-thirds of the votes cast in the consolidated special elections in CFD No. 2022-1, on each such proposition were cast in favor thereof, and pursuant to Sections 53328, 53329 and 53355 of the California Government Code, all such propositions carried; (ix) the City Council, as the legislative body of CFD No. 2022-1, is therefore authorized to take the necessary action to have CFD No. 2022-1 incur a bonded indebtedness in an amount not to exceed $6,500,000, to annually levy special taxes on taxable property within CFD No. 2022-1, in an amount sufficient to pay the principal of and interest on such bonds, and (x) an appropriations limit for CFD No. 2022-1 has been established in the amount of $6,500,000.

Section 2. Declaration of Results. All votes voted in the consolidated special elections on the propositions with respect to (i) CFD No. 2022-1 incurring bonded indebtedness in one or more series in a maximum aggregate amount not to exceed $6,500,000; (ii) the annual levy of special taxes on taxable property within CFD No. 2022-1 to pay the principal of and interest on the bonds of CFD No. 2022-1; and (iii) establishing an appropriations limit for CFD No. 2022-1 in the amount of $6,500,000 were voted in favor thereof, and all such propositions carried. The aggregate principal amount of the bonded indebtedness to be incurred by CFD No. 2022-1 shall not exceed $6,500,000.

Section 3. Effect of Elections. The effect of the results of the consolidated special elections, as specified in Section 2 hereof, is that the City Council, as the legislative body of CFD No. 2022-1, is authorized (i) to have CFD No. 2022-1 incur a bonded indebtedness in and for the purposes set forth in Proposition A of the Official Ballot for the consolidated special elections for CFD No. 2022-1; (ii) after CFD No. 2022-1 has incurred a bonded indebtedness and issued bonds therefor, to annually levy special taxes on taxable property within CFD No. 2022-1 in an amount sufficient to pay the principal of and interest on such bonds at the special tax rates and pursuant to the methodology for determining and apportioning such special taxes which are set forth in Exhibit A to the Resolution of Formation adopted by the City Council of the City of Upland on June 27, 2022; and (iii) an appropriations limit has been established for CFD No. 2022-1 in the amount of $6,500,000.

Section 4. Notice of Special Tax Lien. The City Clerk shall record a notice of special tax lien pursuant to Section 53328.3 of the California Government Code and Section 3114.5 of the California Streets and Highways Code.

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Section 5. Effective Date. This Resolution is and shall be effective from the date of its adoption.

PASSED, APPROVED AND ADOPTED this 27th day of June, 2022.

Bill Velto, Mayor

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

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ORDINANCE NO.

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

UPLAND ACTING AS THE LEGISLATIVE BODY OF
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (ENCLAVE

AT UPLAND) OF THE CITY OF UPLAND, AUTHORIZING THE

LEVY OF SPECIAL TAXES IN SUCH COMMUNITY FACILITIES

DISTRICT
WHEREAS, the City Council of the City of Upland, California (the “City Council”), has initiated proceedings, held a public hearing, conducted an election and received a favorable vote from the qualified electors authorizing the levy of special taxes in the community facilities district, all as authorized pursuant to the terms and provisions of the “Mello-Roos Community Facilities Act of 1982”, being Chapter 2.5, Part 1. Division 2, Title 5 of the Government Code of the State of California (the “Act”). This community facilities district shall hereinafter be referred to as Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California (the “District”).

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF UPLAND, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 2022-1 (ENCLAVE AT UPLAND), DOES ORDAIN AS FOLLOWS:

Section 1. This City Council does, by the passage of this ordinance, authorize the levy of special taxes on taxable properties located in the District pursuant to the Rate and Method of Apportionment for the District as set forth in Exhibit A attached hereto and incorporated herein by this reference (the “Rate and Method”).

Section 2. This City Council, acting as the legislative body of the District, is hereby further authorized, by resolution, to annually determine the special tax to be levied within the District for the then current tax year or future tax years; provided, however, the special tax to be levied shall not exceed the maximum special tax authorized to be levied pursuant to the Rate and Method.

Section 3. The special taxes herein authorized to be levied, to the extent possible, shall be collected in the same manner and at the same time as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes; provided, however, the District may utilize a direct billing procedure for any special taxes that cannot be collected on the County of San Bernardino tax roll or may, by resolution, elect to collect the special taxes at a different time or in a different manner if necessary to meet its financial obligations, and may covenant to foreclose and may actually foreclose on delinquent assessor’s parcels as permitted by the Act.

Section 4. The special taxes authorized to be levied shall be secured by the lien imposed pursuant to Section 3114.5 and 3115.5 of the California Streets and Highways Code, which lien shall be a continuing lien and shall secure each levy of the special taxes. The lien of the Special Tax (as defined in the Rate and Method) shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied and canceled in accordance with law or until the Special Tax ceases to be

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Ordinance No.

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levied by the City Council.

Section 5. This Ordinance shall be effective thirty (30) days after its adoption. Within fifteen (15) days after its adoption, the City Clerk shall cause this Ordinance, or a summary of it, to be published in a newspaper of general circulation in the City.

PASSED, APPROVED AND ADOPTED this ____ day of ________, 2022.

Bill Velto, Mayor

I, Keri Johnson, City Clerk of the City of Upland, California, do hereby certify that the foregoing Ordinance was introduced at a regular meeting of the City Council of the City of Upland held on the 27th day of June, 2022, and was adopted at a regular meeting of the City Council of the City of Upland on the ____ day of __________, 2022, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

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A-1

EXHIBIT A

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES FOR
COMMUNITY FACILITIES DISTRICT NO. 2022-1 (ENCLAVE AT UPLAND)

OF THE CITY OF UPLAND

A Special Tax shall be levied on all Taxable Property within the boundaries of Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland (“CFD No. 2022-1”) and collected each Fiscal Year commencing in Fiscal Year 2022- 23, in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 2022-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

1. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Map. An Acre means 43,560 square feet of land.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California.
“Administrative Expenses” means the following actual or reasonably estimated costs related to the administration of CFD No. 2022-1 including, but not limited to:
the costs of preparing and computing the Annual Special Tax (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City, the County or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022-1, or any designee thereof complying with arbitrage rebate requirements, including without limitation rebate liability costs and periodic rebate calculations; the costs to the City, CFD No. 2022-1, or any designee thereof complying with disclosure or reporting requirements of the City or CFD No. 2022-1, associated with applicable federal and State laws; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2022-1, or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses.

Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2022-1 for any other administrative purposes of CFD No. 2022-1, including attorney’s fees and other costs related to commencing and pursuing any foreclosure of delinquent Special Taxes.
“Annual Special Tax” means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel.
“Assessor” means the Assessor of the County of San Bernardino.

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A-2

“Assessor's Parcel” means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel Number.
“Assessor's Parcel Map” means an official map of the Assessor designating parcels by Assessor’s Parcel Number.
“Assessor's Parcel Number” means the number assigned to an Assessor's Parcel by the County for purposes of identification.
“Assigned Special Tax” means the Special Tax of that name described in Section

3.A below.
“Attached Residential Property” means Residential Property for which each Residential Unit share an interior wall with another Residential Unit. “Backup Special Tax” means the Special Tax of that name described in Section 3.B below.
“Bonds” means any bonds or other Debt of CFD No. 2022-1, whether in one or more series, secured by the levy of Special Taxes.
“Building Permit” means a building permit for construction of a Residential Unit within CFD No. 2022-1 issued by the City.
“Building Square Footage” means all of the square footage of usable area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, or similar area. The determination of Building Square Footage shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or by reference to appropriate records kept by the City.
“Calendar Year” means the period commencing January 1 of any year and ending the following December 31.
“CFD Administrator” means an authorized representative of the City, or designee thereof, responsible for determining the Special Tax Requirement, for preparing the Annual Special Tax roll and/or calculating the Backup Special Tax. “CFD No. 2022-1” means the Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland.
“City” means the City of Upland, California.
"Condominium" means a unit, whether attached or detached, meeting the statutory definition of a condominium contained in the California Civil Code Section 4285. “Council” means the City Council of the City acting as the legislative body of CFD No. 2022-1 under the Act.
“County” means the County of San Bernardino, California. “Debt” means any binding obligation to pay or repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts.
“Debt Service” means for each Fiscal Year, the total amount of principal and interest payable on any Outstanding Bonds during the Calendar Year commencing on January 1 of such Fiscal Year.

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A-3

“Detached Residential Property” means Residential Property not classified as Attached Residential Property.
“Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Provisional Property, for which a Building Permit was issued prior to May 1 of the previous Fiscal Year. An Assessor’s Parcel classified as Developed Property but for which the Building Permit that caused such Assessor’s Parcel to be classified as Developed Property has been cancelled and/or voided prior to the Fiscal Year for which Special Taxes are being levied shall be reclassified as Undeveloped Property, provided that the levy of the Annual Special Tax after such reclassification shall not be less than 1.1 times the annual Debt Service less Administrative Expenses on all Outstanding Bonds. If Bonds have not been issued, an Assessor’s Parcel classified as Developed Property for which such a Building Permit has been cancelled and/or voided shall be reclassified as Undeveloped Property.
“Exempt Property” means for each Fiscal Year, all Assessor’s Parcels designated as being exempt from Special Taxes pursuant to Section 8 below. “Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which Building Permits may be issued without further subdivision.
“Fiscal Year” means the period starting on July 1 and ending the following June 30. “Funding Agreement” means the Funding Agreement dated as of June 27, 2022, by and among the City, Lennar Homes of California, LLC, and Lewis Land Developers, LLC, as it may be amended.

“Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Class” means any of the classes listed in Table 1 under Section 3 below. “Lot” means a parcel created by a Final Map on which a Residential Unit can be constructed.
“Maximum Special Tax” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Sections 3.C and 3.D below, which may be levied in a given Fiscal Year on such Assessor’s Parcel of Taxable Property. “Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for the purpose of constructing one or more non-residential units or facilities.
“Outstanding Bonds” means all Bonds, which are deemed to be outstanding under the Indenture.
“Prepayment Amount” means the amount required to prepay the Annual Special Tax obligation in full for an Assessor’s Parcel as described in Section 6.A below.

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A-4

“Property Owner Association Property” means any Assessor’s Parcel within the boundaries of CFD No. 2022-1 owned in fee by a property owner association, including any master or sub-association.
“Proportionately” or “Proportionate” means for Developed Property, that the ratio of the actual Special Tax levy to the applicable Assigned Special Tax or Backup Special Tax is equal for all Assessor’s Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property. “Proportionately” may similarly be applied to other categories of Taxable Property as listed in Section 4 below. “Provisional Property” means all Assessor’s Parcels of Public Property, Property Owner Association Property or property that would otherwise be classified as Exempt Property pursuant to the provisions of Section 8, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage as set forth in Section 8. “Public Property” means any property within the boundaries of CFD No. 2022-1, which is owned by, or irrevocably offered for dedication to the federal government, the State of California, the County, the City or any other public agency; provided however that any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use.
“Residential Property” means Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing one or more Residential Units.
“Residential Unit” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental, separate from adjacent residential dwelling units.
“Special Tax” means any special tax levied within CFD No. 2022-1 pursuant to the Act and this Rate and Method of Apportionment of Special Tax. “Special Tax Obligation” means the total obligation of an Assessor’s Parcel of Taxable Property to pay the Special Tax for the remaining life of CFD No. 2022-1. “Special Tax Requirement” means that amount required in any Fiscal Year to: (i) pay regularly scheduled Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Fees and Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for acquisition or construction of facilities authorized by CFD No. 2022-1 and as required by the Funding Agreement provided that the inclusion of such amount does not cause an increase in the Special Tax to be levied on Undeveloped Property; and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the Annual Special Tax levy, as determined by the CFD Administrator pursuant to the Indenture.

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A-5

“State” means the State of California.
“Taxable Property” means all of the Assessor's Parcels within the boundaries of CFD No. 2022-1, which are not exempt from the levy of the Special Tax pursuant to law or Section 8 below.
“Trustee” means the trustee or fiscal agent under the Indenture. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property or Provisional Property.

2. LAND USE CLASSIFICATION
Each Fiscal Year, beginning with Fiscal Year 2022-23, each Assessor’s Parcel within CFD No. 2022-1 shall be classified as Taxable Property or Exempt Property. In addition, all Taxable Property shall further be classified as Developed Property, Undeveloped Property or Provisional Property, and all such Taxable Property shall be subject to the levy of Special Taxes in accordance with this Rate and Method of Apportionment of Special Tax determined pursuant to Sections 3 and 4 below.

Furthermore, each Assessor’s Parcel of Developed Property shall be classified according to its applicable Land Use Class based on its land use type and Building Square Footage.

3. SPECIAL TAX RATES

A. Assigned Special Tax for Developed Property

The Assigned Special Tax applicable to an Assessor's Parcel classified as Developed Property commencing in Fiscal Year 2022-23 shall be determined pursuant to Table 1 below.

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A-6

Table 1
Assigned Special Tax Rates

B. Backup Special Tax for Developed Property
The Backup Special Tax for Developed Property commencing in Fiscal Year 2022-23 shall be $41,404 per Acre.

For the purpose of calculating the Backup Special Tax, the land area applicable to a Condominium shall be computed from the Acreage of the Lot on which the Condominium is located, with the Acreage for such Lot allocated equally among all of the Condominiums located or to be located on such Lot.

C. Maximum Special Tax for Developed Property
The Maximum Special Tax for Developed Property shall be the greater of the Assigned Special Tax for Developed Property and the Backup Special Tax for Developed Property.

D. Maximum Special Tax for Provisional Property and Undeveloped Property
The Maximum Special Tax for Provisional Property and Undeveloped Property commencing in Fiscal Year 2022-23 shall be $41,404 per Acre.

Land
Use
Class
Land Use Type Building
Square Footage
Assigned
Special Tax
1 Detached Residential Property > 1,900 $2,106 per
Residential Unit
2 Detached Residential Property 1,801 – 1,900 $2,059 per Residential Unit
3 Detached Residential Property 1,701 – 1,800 $2,023 per Residential Unit
4 Detached Residential Property ≤ 1,700 $1,995 per
Residential Unit
5 Attached Residential Property > 1,750 $1,804 per
Residential Unit
6 Attached Residential Property 1,626 – 1,750 $1,747 per Residential Unit
7 Attached Residential Property 1,501 – 1,625 $1,694 per Residential Unit
8 Attached Residential Property ≤ 1,500 $1,673 per
Residential Unit
9 Non-Residential Property N/A $41,404 per Acre

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4. METHOD OF APPORTIONMENT
For each Fiscal Year, commencing Fiscal Year 2022-23, the CFD Administrator shall levy the Special Tax on all Taxable Property in accordance with the following steps:

Step 1: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at 100% of the applicable Assigned Special Tax; Step 2: If additional monies are needed to satisfy the Special Tax Requirement after Step 1 has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special Tax for Undeveloped Property;
Step 3: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, then the Special Tax amount determined in Step 1 shall be increased Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the Maximum Special Tax for Developed Property; Step 4: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Property up to 100% of the Maximum Special Tax for Provisional Property.

Notwithstanding the above, under no circumstances will the Special Tax levied in any Fiscal Year against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased as a result of a delinquency or default in the payment of the Special Tax applicable to any other Assessor’s Parcel within CFD No. 2022-1 by more than ten percent (10%) above what would have been levied in the absence of such delinquencies or defaults.

5. COLLECTION OF SPECIAL TAXES
Collection of the Annual Special Tax shall be made by the County in the same manner as ordinary ad valorem property taxes are collected and the Annual Special Tax shall be subject to the same penalties and the same lien priority in the case of delinquency as ad valorem taxes; provided, however, that the Council may provide for (i) other means of collecting the Special Tax, including direct billings thereof to the property owners; and (ii) judicial foreclosure of delinquent Annual Special Taxes.

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“Construction Fund” means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 2022-1.
“Future Facilities Costs” means the CFD Public Facilities Costs minus (i) costs previously paid pursuant to the Funding Agreement to acquire or construct the facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are expected to be available to finance CFD Public Facilities Costs pursuant to the Funding Agreement.
“Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax prepayments.
“Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.

The Prepayment Amount (defined below) shall be calculated for each applicable Assessor’s Parcel or group of Assessor’s Parcels as summarized below (capitalized terms as defined below):

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Step No.:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

6. Compute the Future Facilities Costs.

10. Subtract the amount computed in paragraph 9 from the amount computed in paragraph 8 (the “Defeasance Amount”).

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the costs of recording any notices to evidence the prepayment and the redemption (the “Prepayment Administrative Fees”).

12. If reserve funds for the Outstanding Bonds, if any, are at or above 100% of the reserve requirement (as defined in the Indenture) on the prepayment calculation date, a reserve fund credit shall be calculated as a reduction in the applicable reserve fund for the Outstanding Bonds to be redeemed pursuant to the prepayment (the “Reserve Fund Credit”). No Reserve Fund Credit shall be granted if, after the Prepayment Amount is calculated, reserve funds are below 100% of the reserve requirement.

Notwithstanding the foregoing, no Special Tax prepayment shall be allowed unless the aggregate amount of Maximum Special Taxes less

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Administrative Expenses that may be levied on Taxable Property, respectively, after the proposed prepayment is at least 1.1 times the Debt Service on all Outstanding Bonds in each Fiscal Year.

B. Partial Prepayment
The Special Tax on an Assessor’s Parcel of Developed Property or Undeveloped Property for which a building permit has been issued may be partially prepaid.

The amount of the prepayment shall be calculated as in Section 6.A.; except that a partial prepayment shall be calculated according to the following formula:

PP = (PE-A) x F+A
These terms have the following meaning:

PP = the partial prepayment
PE = the Prepayment Amount calculated according to Section

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earlier Fiscal Year if the CFD Administrator has determined that all Bonds that are expected to be issued have been issued and all required interest and principal payments on all Outstanding Bonds have been paid.

8. EXEMPTIONS
The CFD Administrator shall classify as Exempt Property (i) Assessor’s Parcels of Public Property, (ii) Assessor’s Parcels of Property Owner Association Property, or (iii) Assessor’s Parcels which are used as places of worship and are exempt from ad valorem property taxes because they are owned by a religious organization, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, and (v) Assessor’s Parcels of Developed Property classified as Non-Residential Property as determined reasonably by the CFD Administrator, provided that no such classification would reduce the sum of all Taxable Property in CFD No. 2022-1 to less than 8.90 Acres. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the sum of all Taxable Property in CFD No. 2022-1 to less than 8.90 Acres shall be classified as Provisional Property and will continue to be subject to the CFD No. 2022-1 Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes eligible for classification as Exempt Property.

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Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error.

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C I T Y O F
Upland

CFD Report

Community Facilities District
No. 2022-1 (Enclave at Upland)

June 2022

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TABLE OF CONTENTS

I. INTRODUCTION ........................................................................................ 1 II. GENERAL DESCRIPTION & BOUNDARIES OF CFD NO. 2022-1 ........................... 2 III. DESCRIPTION OF FACILITIES ........................................................................ 3 IV. COST ESTIMATES...................................................................................... 4 V. RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX ................................. 5 EXHIBIT A (BOUNDARY MAP) ......................................................................... A-1 EXHIBIT B (RATE AND METHOD OF APPORTIONMENT) .......................................... B-1

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1 I. Introduction
WHEREAS, the City Council of the City of Upland (hereinafter referred to as the “City Council”), in the State of California, did, pursuant to the terms and provisions of Chapter 2.5 of Part 1, of Division 2, of Title 5 of the Government Code of the State of California, as amended (the “Act”), adopted a Resolution of Intention for the proposed formation of City of Upland Community Facilities District No. 2022-1 (Enclave at Upland) (“CFD No. 2022-1”).

WHEREAS, this Community Facilities District Report (“Report”) is being provided to the City Council and generally contains the following:

1. A brief description of Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland (“CFD No. 2022-1”);

2. A brief description of the Facilities required at the time of formation to meet the needs of CFD No. 2022-1;

3. A brief description of the Boundaries of CFD 2022-1; and

4. An estimate of the cost of financing the bonds used to pay for the Facilities, including all costs associated with formation of the District, issuance of bonds, determination of the amount of the special taxes to be collected, collection of the special taxes; costs otherwise incurred by the City in order to carry out the authorized purposes of the CFD No. 2022-1; and any other incidental expenses.

For particulars, reference is made to the Resolution of Intention, Resolution No. 6659 as previously approved. All capitalized terms not defined herein are defined in the Rate and Method of Apportionment of Special Tax section (Exhibit B) of this Report.

NOW THEREFORE Willdan Financial Services, the appointed responsible firm directed to prepare the Report, pursuant to the provisions of the Code, does hereby submit the following.

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2 II. General Description & Boundaries of CFD No. 2022-1 A representation of the exterior boundaries of the territory proposed for inclusion in CFD No. 2022-1, including properties and parcels of land proposed to be subject to the levy of a Special Tax by CFD No. 2022-1, is shown on the boundary map designated as “PROPOSED BOUNDARIES OF COMMUNITY FACILITIES DISTRICT 2022-1 (ENCLAVE AT UPLAND)”, which is on file in the office of the Clerk of the City Council of the City of Upland and was recorded with the County Recorder of the County of San Bernardino on May 25, 2022 in Book 90 of Maps of Assessment and Community Facilities Districts at Page 35 and as Instrument Number 2022-0193415. A copy of the map is attached hereto as Exhibit A and hereby incorporated by reference.

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3 III. Description of Facilities
The General Description of the Facilities that may be acquired or constructed is as follows:

 Facilities owned and operated by the City in lieu of certain City development impact fees, which include, but are not limited to park, traffic, water, sewer, storm drain and other capital improvements, police and fire facilities; and
 The incidental expenses proposed to be incurred are: (i) the cost of planning and designing the public facilities and the cost of environmental evaluations thereof, (ii) all costs associated with the formation of the proposed CFD 2022-1, the issuance of the bonds thereof, the determination of the amount of and collection of special taxes, the payment of special taxes, and costs otherwise incurred in order to carry out the authorized purposes of the proposed CFD 2022-1, and (iii) any other expenses incidental to the construction, completion, and inspection of the public Facilities (the “Incidental Expenses”).

This description of the public capital facilities is general in nature. The final nature and location of improvements and facilities will be determined upon the preparation of final plans and specifications. The final plans and specifications may show substitutes in lieu of, or modifications to, proposed work. Any such substitution shall not be a change or mod ification in the proceedings as long as the facilities provide a service substantially similar to that as set forth in the Report.

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4 IV. Cost Estimates
The proceeds of CFD No. 2022-1 will be used to fund fees and the construction of facilities in the amount of approximately $3,560,256.

For cost particulars, reference is made to Attachment 2 of the recorded Enclave at Upland Development Agreement.

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5 V. Rate and Method of Apportionment of Special Tax
The Rate and Method of Apportionment (RMA) provide sufficient information to allow a property owner within CFD No. 2022-1 to estimate the Maximum Special Tax for his or her property. It also includes method of prepayment in full or prepayment in part and the procedure for prepayments.

For particulars on the RMA, reference is made to Exhibit B of this report.

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A-1

EXHIBIT A
Boundary Map

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A-2

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B-1

EXHIBIT B
Rate and Method of Apportionment

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B-2

RATE AND METHOD OF

APPORTIONMENT OF SPECIAL TAX
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(ENCLAVE AT UPLAND)

A Special Tax shall be levied on all Taxable Property within the boundaries of Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland (“CFD No. 2022-1”) and collected each Fiscal Year commencing in Fiscal Year 2022-23, in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 2022-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

1. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Map. An Acre means 43,560 square feet of land. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means the following actual or reasonably estimated costs related to the administration of CFD No. 2022-1 including, but not limited to: the costs of preparing and computing the Annual Special Tax (whether by the City or designee thereof or both); the costs of collecting the Special Taxes (whether by the City, the County or otherwise); the costs of remitting the Special Taxes to the Trustee; the costs of the Trustee (including its legal counsel) in the discharge of the duties required of it under the Indenture; the costs to the City, CFD No. 2022 -1, or any designee thereof complying with arbitrage rebate requirements, including without limitation rebate liability costs and periodic rebate calculations; the costs to the City, CFD No. 2022-1, or any designee thereof complying with disclosure or reporting requirements of the City or CFD No. 2022-1, associated with applicable federal and State laws; the costs associated with preparing Special Tax disclosure statements and responding to public inquiries regarding the Special Taxes; the costs to the City, CFD No. 2022-1, or any designee thereof related to an appeal of the Special Tax; and the City’s annual administration fees and third party expenses. Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2022-1 for any other administrative purposes of CFD No. 2022-1, including attorney’s fees and other costs related to commencing and pursuing any foreclosure of delinquent Special Taxes. “Annual Special Tax” means the Special Tax actually levied in any Fiscal Year on any Assessor’s Parcel.
“Assessor” means the Assessor of the County of San Bernardino. “Assessor's Parcel” means a lot or parcel shown on an Assessor's Parcel Map with an assigned Assessor's Parcel Number.

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“Assessor's Parcel Map” means an official map of the Assessor designating parcels by Assessor’s Parcel Number.
“Assessor's Parcel Number” means the number assigned to an Assessor's Parcel by the County for purposes of identification.
“Assigned Special Tax” means the Special Tax of that name described in Section 3.A below. “Attached Residential Property” means Residential Property for which each Residential Unit share an interior wall with another Residential Unit.
“Backup Special Tax” means the Special Tax of that name described in Section 3.B below. “Bonds” means any bonds or other Debt of CFD No. 2022-1, whether in one or more series, secured by the levy of Special Taxes.
“Building Permit” means a building permit for construction of a Residential Unit within CFD No. 2022-1 issued by the City.
“Building Square Footage” means all of the square footage of usable area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, or similar area.

The determination of Building Square Footage shall be made by reference to the Building Permit(s) issued for such Assessor’s Parcel and/or by reference to appropriate records kept by the City.
“Calendar Year” means the period commencing January 1 of any year and ending the following December 31.
“CFD Administrator” means an authorized representative of the City, or designee thereof, responsible for determining the Special Tax Requirement, for preparing the Annual Special Tax roll and/or calculating the Backup Special Tax.
“CFD No. 2022-1” means the Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland.
“City” means the City of Upland, California.
"Condominium" means a unit, whether attached or detached, meeting the statutory definition of a condominium contained in the California Civil Code Section 4285. “Council” means the City Council of the City acting as the legislative body of CFD No. 2022 -1 under the Act.
“County” means the County of San Bernardino, California. “Debt” means any binding obligation to pay or repay a sum of money, including obligations in the form of bonds, certificates of participation, long-term leases, loans from government agencies, or loans from banks, other financial institutions, private businesses, or individuals, or long-term contracts.
“Debt Service” means for each Fiscal Year, the total amount of principal and interest payable on any Outstanding Bonds during the Calendar Year commencing on January 1 of such Fiscal Year. “Detached Residential Property” means Residential Property not classified as Attached Residential Property.
“Developed Property” means for each Fiscal Year, all Taxable Property, exclusive of Provisional Property, for which a Building Permit was issued prior to May 1 of the previous Fiscal Year. An

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Assessor’s Parcel classified as Developed Property but for which the Building Permit that caused such Assessor’s Parcel to be classified as Developed Property has been cancelled and/or voided prior to the Fiscal Year for which Special Taxes are being levied shall be reclassified as Undeveloped Property, provided that the levy of the Annual Special Tax after such reclassification shall not be less than 1.1 times the annual Debt Service less Administrative Expenses on all Outstanding Bonds. If Bonds have not been issued, an Assessor’s Parcel classified as Developed Property for which such a Building Permit has been cancelled and/or voided shall be reclassified as Undeveloped Property.
“Exempt Property” means for each Fiscal Year, all Assessor’s Parcels designated as being exempt from Special Taxes pursuant to Section 8 below.
“Final Map” means a subdivision of property by recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285 that creates individual lots for which Building Permits may be issued without further subdivision. “Fiscal Year” means the period starting on July 1 and ending the following June 30. “Funding Agreement” means the Funding Agreement dated as of June 27th, 2022, by and between the City and Lewis Management Corp., as it may be amended. “Indenture” means the indenture, fiscal agent agreement, resolution or other instrument pursuant to which Bonds are issued, as modified, amended and/or supplemented from time to time, and any instrument replacing or supplementing the same.
“Land Use Class” means any of the classes listed in Table 1 under Section 3 below. “Lot” means a parcel created by a Final Map on which a Residential Unit can be constructed. “Maximum Special Tax” means for each Assessor’s Parcel, the maximum Special Tax, determined in accordance with Sections 3.C and 3.D below, which may be levied in a given Fiscal Year on such Assessor’s Parcel of Taxable Property.
“Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit has been issued for the purpose of constructing one or more non-residential units or facilities.
“Outstanding Bonds” means all Bonds, which are deemed to be outstanding under the Indenture. “Prepayment Amount” means the amount required to prepay the Annual Special Tax obligation in full for an Assessor’s Parcel as described in Section 6.A below. “Property Owner Association Property” means any Assessor’s Parcel within the boundaries of CFD No. 2022-1 owned in fee by a property owner association, including any master or sub - association.
“Proportionately” or “Proportionate” means for Developed Property, that the ratio of the actual Special Tax levy to the applicable Assigned Special Tax or Backup Special Tax is equal for all Assessor’s Parcels of Developed Property. For Undeveloped Property, "Proportionately" means that the ratio of the actual Special Tax levy per Acre to the Maximum Special Tax per Acre is equal for all Assessor's Parcels of Undeveloped Property. “Proportionately” may similarly be applied to other categories of Taxable Property as listed in Section 4 below. “Provisional Property” means all Assessor’s Parcels of Public Property, Property Owner Association Property or property that would otherwise be classified as Exempt Property pursuant

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to the provisions of Section 8, but cannot be classified as Exempt Property because to do so would reduce the Acreage of all Taxable Property below the required minimum Acreage as set forth in Section 8.
“Public Property” means any property within the boundaries of CFD No. 2022-1, which is owned by, or irrevocably offered for dedication to the federal government, the State of California, the County, the City or any other public agency; provided however that any property owned by a public agency and leased to a private entity and subject to taxation under Section 53340.1 of the Act shall be taxed and classified in accordance with its use. “Residential Property” means Assessor’s Parcels of Developed Property for which a Building Permit has been issued for the purpose of constructing one or more Residential Units. “Residential Unit” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental, separate from adjacent residential dwelling units. “Special Tax” means any special tax levied within CFD No. 2022-1 pursuant to the Act and this Rate and Method of Apportionment of Special Tax.
“Special Tax Obligation” means the total obligation of an Assessor’s Parcel of Taxable Property to pay the Special Tax for the remaining life of CFD No. 2022-1. “Special Tax Requirement” means that amount required in any Fiscal Year to: (i) pay regularly scheduled Debt Service on all Outstanding Bonds; (ii) pay periodic costs on the Outstanding Bonds, including but not limited to, credit enhancement and rebate payments on the Outstanding Bonds; (iii) pay Administrative Fees and Expenses; (iv) pay any amounts required to establish or replenish any reserve funds for all Outstanding Bonds; (v) accumulate funds to pay directly for acquisition or construction of facilities authorized by CFD No. 2022-1 and as required by the Funding Agreement provided that the inclusion of such amount does not cause an increase in the Special Tax to be levied on Undeveloped Property; and (vi) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year; less (vii) a credit for funds available to reduce the Annual Special Tax levy, as determined by the CFD Administrator pursuant to the Indenture. “State” means the State of California.
“Taxable Property” means all of the Assessor's Parcels within the boundaries of CFD No. 2022- 1, which are not exempt from the levy of the Special Tax pursuant to law or Section 8 below. “Trustee” means the trustee or fiscal agent under the Indenture. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property or Provisional Property.

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3. SPECIAL TAX RATES

A. Assigned Special Tax for Developed Property

The Assigned Special Tax applicable to an Assessor's Parcel classified as Developed Property commencing in Fiscal Year 2022-23 shall be determined pursuant to Table 1 below.

Table 1
Assigned Special Tax Rates

B. Backup Special Tax for Developed Property
The Backup Special Tax for Developed Property commencing in Fiscal Year 2022-23 shall be $41,404 per Acre.

C. Maximum Special Tax for Developed Property
Land
Use
Class
Land Use Type Building
Square Footage
Assigned
Special Tax
1 Detached Residential Property > 1,900 $2,106 per
Residential Unit
2 Detached Residential Property 1,801 – 1,900 $2,059 per Residential Unit
3 Detached Residential Property 1,701 – 1,800 $2,023 per Residential Unit
4 Detached Residential Property ≤ 1,700 $1,995 per
Residential Unit
5 Attached Residential Property > 1,750 $1,804 per
Residential Unit
6 Attached Residential Property 1,626 – 1,750 $1,747 per Residential Unit
7 Attached Residential Property 1,501 – 1,625 $1,694 per Residential Unit
8 Attached Residential Property ≤ 1,500 $1,673 per
Residential Unit
9 Non-Residential Property N/A $41,404 per Acre

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The Maximum Special Tax for Developed Property shall be the greater of the Assigned Special Tax for Developed Property and the Backup Special Tax for Developed Property.

D. Maximum Special Tax for Provisional Property and Undeveloped Property The Maximum Special Tax for Provisional Property and Undeveloped Property commencing in Fiscal Year 2022-23 shall be $41,404 per Acre.

4. METHOD OF APPORTIONMENT
For each Fiscal Year, commencing Fiscal Year 2022-23, the CFD Administrator shall levy the Special Tax on all Taxable Property in accordance with the following steps:

Step 1: The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property at 100% of the applicable Assigned Special Tax; Step 2: If additional monies are needed to satisfy the Special Tax Requirement after Step 1 has been completed, the Special Tax shall be levied Proportionately on each Assessor's Parcel of Undeveloped Property up to 100% of the Maximum Special Tax for Undeveloped Property; Step 3: If additional monies are needed to satisfy the Special Tax Requirement after the first two steps have been completed, then the Special Tax amount determined in Step 1 shall be increased Proportionately on each Assessor’s Parcel of Developed Property up to 100% of the Maximum Special Tax for Developed Property;
Step 4: If additional monies are needed to satisfy the Special Tax Requirement after the first three steps have been completed, then the Special Tax shall be levied Proportionately on each Assessor’s Parcel of Provisional Property up to 100% of the Maximum Special Tax for Provisional Property.

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6. PREPAYMENT OF SPECIAL TAX OBLIGATION
A. Prepayment in Full
Property owners may prepay and permanently satisfy the Special Tax Obligation by a cash settlement with the City as permitted under Government Code Section 53344. The following definitions apply to this Section 6:
“CFD Public Facilities Costs” means $3,600,000 or such lower number as (i) shall be determined by the CFD Administrator as sufficient to acquire or construct the facilities to be financed under the Act and financing program for CFD No. 2022-1, or (ii) shall be determined by the Council concurrently with a covenant that it will not issue any more Bonds (except refunding bonds).
“Construction Fund” means the fund (regardless of its name) established pursuant to the Indenture to hold funds, which are currently available for expenditure to acquire or construct the facilities or pay fees authorized to be funded by CFD No. 2022-1. “Future Facilities Costs” means the CFD Public Facilities Costs minus (i) costs previously paid pursuant to the Funding Agreement to acquire or construct the facilities, (ii) monies currently on deposit in the Construction Fund, and (iii) monies currently on deposit in an escrow or other designated fund that are expected to be available to finance CFD Public Facilities Costs pursuant to the Funding Agreement. “Outstanding Bonds” means all Previously Issued Bonds, which remain outstanding as of the first interest and/or principal payment date following the current Fiscal Year excluding Bonds to be redeemed at a later date with proceeds of prior Special Tax prepayments.
“Previously Issued Bonds” means all Bonds that have been issued prior to the date of prepayment.

The Special Tax Obligation applicable to an Assessor’s Parcel of Developed Property, or Undeveloped Property for which a Building Permit has been issued may be prepaid and the obligation to pay the Special Tax for such Assessor’s Parcel permanently satisfied as described herein, provided that a prepayment may be made with respect to a particular Assessor’s Parcel only if there are no delinquent Special Taxes with respect to such Assessor’s Parcel at the time of prepayment. An owner of an Assessor’s Parcel eligible to prepay the Special Tax Obligation shall provide the CFD Administrator with written notice of intent to prepay, and designate or identify the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the Prepayment Amount for such Assessor’s Parcel within thirty (30) days of the request, and may charge a reasonable fee for providing this service. Prepayment must be made a t least 60 days prior to any redemption date for the CFD No. 2022-1 Bonds to be redeemed with the proceeds of such prepaid Special Taxes, unless a shorter period is acceptable to the Trustee and the City.

The Prepayment Amount (defined below) shall be calculated for each applicable Assessor’s Parcel or group of Assessor’s Parcels as summarized below (capitalized terms as defined below):

Bond Redemption Amount
plus Redemption Premium
plus Future Facilities Prepayment Amount
plus Defeasance Amount

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plus Prepayment Administrative Fees and Expenses
less Reserve Fund Credit
less Capitalized Interest Credit
Total: equals Prepayment Amount
As of the proposed date of prepayment, the Prepayment Amount (defined in Step 14 below) shall be calculated as follows:

Step No.:

1. Confirm that no Special Tax delinquencies apply to such Assessor’s Parcel.

3. Divide the Maximum Special Tax computed pursuant to paragraph 2 by the total expected Maximum Special Tax revenue for CFD No. 2022 -1 assuming all Building Permits have been issued (build-out) within CFD No. 2022-1, excluding any Assessor’s Parcels for which the Special Tax Obligation has been previously prepaid.

6. Compute the Future Facilities Costs.

10. Subtract the amount computed in paragraph 9 from the amount computed in paragraph 8 (the “Defeasance Amount”).

11. Calculate the administrative fees and expenses of CFD No. 2022-1, including the costs of computation of the prepayment, the costs to invest the prepayment

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proceeds, the costs of redeeming CFD No. 2022 -1, and the costs of recording any notices to evidence the prepayment and the redemption (the “Prepayment Administrative Fees”).

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B. Partial Prepayment
The Special Tax on an Assessor’s Parcel of Developed Property or Undeveloped Property for which a building permit has been issued may be partially prepaid. The amount of the prepayment shall be calculated as in Section 6.A.; except that a partial prepayment shall be calculated according to the following formula:

PP = (PE-A) x F+A
These terms have the following meaning:

PP = the partial prepayment
PE = the Prepayment Amount calculated according to Section 6.A F = the percentage by which the owner of the Assessor’s Parcel(s) is partially prepaying the Special Tax Obligation
A = the Prepayment Administrative Fees and Expenses from Section 6.A The owner of any Assessor’s Parcel who desires such partial prepayment shall notify the CFD Administrator of (i) such owner’s intent to partially prepay the Special Tax Obligation, (ii) the percentage by which the Special Tax Obligation shall be prepaid, and (iii) the company or agency that will be acting as the escrow agent, if any. The CFD Administrator shall provide the owner with a statement of the amount required for the partial prepayment of the Special Tax Obligation for an Assessor’s Parcel within sixty (60) days of the request and may charge a reasonable fee for providing this service.

7. TERM OF SPECIAL TAX
The Special Tax shall be levied as long as necessary to meet the Special Tax Requirement for a period not to exceed forty (40) Fiscal Years commencing with Fiscal Year 2022 -23, provided however that the Special Tax will cease to be levied in an earlier Fiscal Year if the CFD Administrator has determined that all Bonds that are expected to be issued have been issued and all required interest and principal payments on all Outstanding Bonds have been paid.

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determined reasonably by the CFD Administrator, provided that no such classification would reduce the sum of all Taxable Property in CFD No. 2022-1 to less than 8.90 Acres. Assessor’s Parcels which cannot be classified as Exempt Property because such classification would reduce the sum of all Taxable Property in CFD No. 2022-1 to less than 8.90 Acres shall be classified as Provisional Property and will continue to be subject to the CFD No. 2022-1 Special Taxes accordingly. Tax exempt status for the purpose of this paragraph will be assigned by the CFD Administrator in the chronological order in which property becomes eligible for classification as Exempt Property.

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FUNDING AGREEMENT

Relating to

CITY OF UPLAND
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(ENCLAVE AT UPLAND)

By and Among

THE CITY OF UPLAND,

LEWIS LAND DEVELOPERS, LLC,
a Delaware limited liability company

and

LENNAR HOMES OF CALIFORNIA, LLC,
a California limited liability company

June 27, 2022

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1 FUNDING AGREEMENT
COMMUNITY FACILITIES DISTRICT NO. 2022-1
(ENCLAVE AT UPLAND)

OF THE CITY OF UPLAND
This FUNDING AGREEMENT (the “Agreement”) is entered into the 27th day of June 2022 by and among the CITY OF UPLAND, a municipal corporation, organized and existing under the laws of the State of California (the “City”), LEWIS LAND DEVELOPERS, LLC, a Delaware limited liability company (“Lewis”) and LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company (“Owner”).

R E C I T A L S
A. Owner has purchased from Lewis that certain real property located on approximately 15.56 gross acres of land within San Bernardino County Assessor’s Parcel Nos. 1007-041-05-0-000, 1007-041-06-0-000, 1007-051-02-0-000, 1007-051-03-0-000 and 1007-051- 04-0-000 (the “Property”) located in the City that is planned to be developed by Owner with approximately 192 condominium dwelling units (the “Project”). Lewis is responsible for advancing the costs of forming the District (as defined below), as a cond ition of the sale of the Property.

B. The City is in the process of establishing a community facilities district pursuant to the provisions of Chapter 2.5 (commencing with § 53311) of Part 1 of Division 2 of Title 5 of the Government Code, commonly known as the “Mello-Roos Community Facilities Act of 1982” (the “Act”), over and including the Property for the purpose of levying special taxes (the “Special Taxes”) and selling bonds, in one or more series (the “Bonds), in an amount sufficient to finance the design, planning, engineering, installation, and construction of certain public facilities and improvements, to be owned, operated or maintained by the City (the “Public Facilities”) to satisfy the obligation of the Project and the Owner for the payment of certain fees of the City (the “City Fees”). The Public Facilities and City Fees are generally described in Exhibit A attached hereto and are necessary to the development of the Project. Said community facilities district shall be known as “Community Facilities District No. 2022-1 (Enclave at Upland) of the City of Upland, County of San Bernardino, State of California” (the “District”).

C. Section 53313.5 of the Act provides that a community facilities district may finance the purchase of facilities completed prior to the adoption of the resolution establishing the community facilities district, and may purchase facilities completed after the adoption of the resolution of formation establishing the community facilities district if the facilities have been constructed as if they had been constructed under the direction and supervision, or under the authority of, the local agency whose governing body is conducting proceedings for the establishment of the community facilities district.

D. The purpose of this Agreement is to provide for the levy of Special Taxes and the issuance and sale of the Bonds of the District secured by the Special Taxes to finance the design, planning, engineering, financing, installation, and construction of the Public Facilities and expenses incidental thereto in satisfaction of the City Fees.

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2 E. Capitalized terms used herein and not otherwise defined shall have the meaning set forth in Exhibit B attached hereto and by this reference herein incorporated.

AGREEMENTS
NOW, THEREFORE, in consideration of the preceding recitals and the mutual covenants hereinafter contained, the parties agree as follows:

Section 1. Establishment of District. The City shall initiate proceedings pursuant to the Act for the establishment of the District. Such proceedings include elections pursuant to Sections 53326, 53350 and 53353.5 of the Act on (i) the question of the issuance of the Bonds of the District to finance the design, planning, engineering, construction management, financing, installation and construction or acquisition of the Public Facilities, including the direct payment to the City for such Public Facilities, (ii) the question of the annual levy of the Special Taxes on those portions of the Property subject to the Special Taxes to pay directly for the Public Facilities and to pay the principal of and interest on the Bonds and the annual administrative expenses of the City in levying and collecting such Special Taxes, paying the principal and interest on such Bonds and providing for the registration, exchange and transfer of such Bonds, including the fees of fiscal agents and paying agents, and any necessary replenishment of the reserve fund for such Bonds, and (iii) the question of the establishment of an appropriations limit for the District.

From time to time prior to the issuance of the Bonds, at the written request of Lewis and Owner, and subject to Lewis advancing funds as determined by the City as necessary to pay all costs related thereto in accordance with Section 4 below, the City shall use its reasonable best efforts to undertake proceedings which may be deemed necessary to amend the Rate and Method or to amend the boundaries of the District.

Section 2. Payment of City Fees as Deposit. Owner shall timely pay or deposit with the City in full when due all City Fees. Any payment or deposit of City Fees before Special Taxes are received or proceeds of the Bonds become available, including all City Fees paid prior to the execution of this Agreement, shall be held on deposit by the City in a separate account used exclusively for City Fees (the “Deposit Account”). Earnings on the investment of funds in the Deposit Account shall be returned to the City. The City may use any City Fees so collected for legally permitted purposes. If the City uses any of the funds in the Deposit Account, Lewis, or Lewis’s designee, shall be reimbursed from the proceeds of Bonds subsequently issued even if such Bonds must be issued on a taxable basis.

Immediately upon the City receiving proceeds of the Bonds in accordance with this Agreement, the City shall disburse to Lewis, or Lewis’s designee, all funds held in the Deposit Account. In addition, prior to the issuance of Bonds, to the extent Special Taxes in the Special Fund are available to be disbursed for Public Facilities in accordance with Section 6(a)(3) below, an equal amount of funds held in the Deposit Account shall be returned to Lewis.

Section 3. Sale of Bonds. Upon Lewis’s written request, the City shall use its reasonable best efforts, as hereinafter provided, to issue and sell Bonds, in one or more series, in accordance with the provisions of this Agreement and the Financing District Policy. Each series of Bonds is expected to have a debt service amortization schedule matching the annual Special

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3 Taxes available for debt service pursuant to the Rate and Method and for a term of not more than forty (40) years, for the purpose of raising an amount sufficient to pay for the design, planning, engineering, construction management, financing, installation and construction or acquisition of the Public Facilities, not to exceed an amount equal to the total City Fees for the Project. In connection with the issuance of the first series of Bonds, the City on behalf of itself and the District shall establish criteria for the issuance of Additional Bonds which meet the criteria of the Financing District Policy. The timing of the issuance and sale of each series of Bonds, the aggregate principal amount thereof, and the terms and conditions upon which they shall be sold shall be as set forth in this Agreement and otherwise as determined by the City in its sole reasonable discretion after consultation with Lewis. Not by way of limitation of the foregoing, the timing of the issuance and sale of the first series of Bonds and any Additional Bonds shall be as soon as reasonably practicable, as determined by the City in its sole reasonable discretion following consultation with its financial advisor, underwriter and other consultants and counsel after written request from Lewis. Owner shall use its reasonable best efforts to cooperate with City in connection with any Bond sale, provided, however, that Owner shall not be required to advance any funds to the City for expenses or otherwise in connection with the issuance of bonds and provided further that Owner shall not be required to provide any credit enhancement (such as a letter of credit) to secure the issuance of Bonds.

Section 4. Advance of Certain Expenses. Lewis has advanced $50,000 (the “Initial Deposit”) to the City for the City’s costs reasonably associated with the establishment of the District (the “Formation Costs”). To the extent the Initial Deposit is insufficient to cover all Formation Costs, the City may require an additional deposit from Lewis by providing a written request with the amount of such additional deposit and an itemization of all remaining, unfunded Formation Costs. Any such additional deposits shall be remitted by Lewis. Such additional deposit, all deposits for Reimbursable Expenses (defined below) and the Initial Deposit shall be referred to, collectively, as the “Deposits.” Upon the formation of the District, the unexpended portion of the Deposits for Formation Costs shall be returned to Lewis. In addition, Lewis shall deposit funds with the City for the City’s reasonable out-of-pocket expenses associated with the sale of each series of Bonds, including, but not limited to, (i) the fees and expenses of any consultants and legal counsel to the City employed in connection with the issuance of the Bonds, including an engineer, special tax consultant, financial advisor, bond counsel and any other consultant deemed necessary or advisable by the City, (ii) the costs of appraisals, market absorption and feasibility studies and other reports deemed necessary or advisable by the City in connection with the issuance of the Bonds, (iii) the costs of publication of notices and other costs related to any proceeding undertaken in connection with the issuance of the Bonds, (iv) reasonable charges for City staff time incurred in connection with the issuance of the Bonds, including a reasonable allocation of City overhead expense, and (v) any and all other actual costs and expenses incurred by the City in connection with the issuance of the Bonds (“Reimbursable Expenses”). If the Bonds are issued by the District, the City shall reimburse Lewis from proceeds of the Bonds, without interest, for the portion of the Deposits that have been expended or encumbered, said reimbursement to be made from the proceeds of the Bonds on the date of issuance of the Bonds or as soon as reasonably possible thereafter and only to the extent otherwise permitted under the Act, and refund any unexpended or unencumbered amount of the Deposits. If the Special Taxes are levied and collected, the City may reimburse Lewis from the receipts of Special Taxes (net of amounts required to pay District administrative expenses), without interest, for the portion of the Deposits that have been expended or encumbered, said reimbursement from receipts of Special

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4 Taxes to be made on or before the end of each fiscal year; provided, however, that the City may retain such collected Special Taxes in the amounts that it deems reasonably necessary to facilitate the issuance of the Bonds.

The City shall keep records of all Formation Costs and Reimbursable Expenses advanced by the City pursuant to this Section 4, which records shall be available for inspection by Lewis during regular business hours. The sole source of funds for reimbursement of any advance expenditure made by the City for Formation Costs and Reimbursable Expenses shall be the Deposits, proceeds of the Bonds, or Special Tax receipts.

The Owner shall not be required to make any Deposits for Formation Costs or otherwise pursuant to this Agreement; provided however if Lewis does not provide the required Deposits for Formation Costs or other amounts required under this Agreement, the City shall not be required to issue the Bonds.

Section 5. Tax Requirements. The timing of the sale of each series of Bonds, the nature of the investments in which the proceeds of the Bonds shall be invested, the duration of such investments, and the timing of the expenditure of such proceeds shall be as set forth in this Agreement and the applicable fiscal agent agreement (the “Fiscal Agent Agreement”); provided, that in all such matters City shall comply with the requirements of and limitations prescribed by the provisions of Sections 103 and 141 through 150 of the Internal Revenue Code of 1986 (the “Code”), as amended, and the implementing regulations of the United States Department of the Treasury with respect to all tax exempt Bonds. The City shall not be required to take any such action with respect to all tax exempt Bonds which in the opinion of the City’s bond counsel could result in the Bonds being classified by the United States Department of the Treasury as “arbitrage bonds” or which could otherwise result in the interest on any tax-exempt Bonds being included in gross income for purposes of Federal income taxation. Should any change in or regulatory interpretation of any such requirement or limitation which may occur after the date of this Agreement require or necessitate, in the reasonable opinion of such bond counsel, any action on the part of the City in order to avoid such a classification or loss of tax exemption, the City shall , notwithstanding any provision of this Agreement, forthwith take such action. In the event the City fails to comply with requirements set forth above in this Section 5, the City’s liability is limited to the Special Tax revenues generated by the District.

Section 6. Priority and Allocation of Special Taxes and Bond Proceeds. (a) Special Taxes Prior to the Issuance of Bonds.

Prior to the issuance of Bonds, Special Taxes shall be levied on Developed Property pursuant to the Rate and Method in and following the first fiscal year in which an Assessor’s Parcel is classified as Developed Property until the issuance of the final series of Bonds.

Prior to the issuance of the first series of Bonds, the proceeds of the Special Taxes shall be allocated in the following priority:
(1) first, to pay all reasonable costs of administration of the District;

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5 (2) second, to pay eligible costs reasonably determined by the City to be necessary to facilitate the issuance of Bonds within the next six (6) months; and (3) third, the amount remaining after payment of the amounts for (1) and (2) shall be deposited in the Special Fund and disbursed first to reimburse prior Deposits paid by Lewis to City pursuant to Section 4 of this Agreement, then to fund the Public Facilities. (b) Special Taxes Following the Issuance of Bonds. Following the issuance of the first series of Bonds and continuing until the issuance of the final series of Bonds, the City shall levy Special Taxes on all Assessor’s Parcels classified as Developed Property at the Assigned Special Tax amount pursuant to the Rate and Method or such lesser amount which complies with the Fiscal Agent Agreement. In years in which there is no levy of Special Taxes on Undeveloped Property, the priority for allocation of the Special Taxes collected from Developed Property shall be as follows:
(1) first, to fund an amount up to the annual Administrative Expense Requirement;
(2) second, to pay principal and interest on outstanding Bonds and to replenish the reserve fund to the applicable reserve fund requirement; (3) third, to fund all actual administrative expenses in excess of the Administrative Expense Requirement; and
(4) fourth, all remaining amounts shall reduce special tax levies in subsequent fiscal years.
(c) Bond Proceeds. The proceeds of all Bonds shall be allocated and disbursed according to the following priorities:
(1) first, to fund all costs of issuance of the Bonds including (i) a reserve fund for the Bonds which does not exceed the amount permitted under the Code or the Act, (ii) capitalized interest for the period required to collect sufficient Special Taxes through the annual levy, (iii) the underwriter’s discount, (iv) the Formation Costs and Reimbursable Expenses not funded initially with Deposits, and (v) bond counsel fees, disclosure counsel fees, financial advisor, appraisal and market absorption consultant fees, special tax consultant fees, fiscal agent or trustee fees and other typical and reasonable out-of-pocket expenses incurred by the City in connection with the issuance and sale of the Bonds;
(2) second, to reimburse, without interest, the portion of all prior Deposits paid by Lewis pursuant to this Agreement that had not been previously returned or reimbursed to Lewis; and
(3) third, to fund the Public Facilities in satisfaction of an amount equal to the total City Fees applicable to the Project for which Special Taxes were insufficient to pay, as may be determined by the City in consultation with Lewis.

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6 Section 7. Indemnification. Owner shall promptly defend, indemnify and hold harmless the City, its officers, employees and agents, and each and every one of them, and the District from any and all claims, actions, liability, damages, losses, expenses and costs arising out of Owner’s performance of, or failure to perform, its duties hereunder or by reason of, or arising out of, this Agreement; provided, however, Owner shall not be responsible to indemnify or hold harmless any party for that party's negligence or willful misconduct.

Lewis shall promptly defend, indemnify and hold harmless the City, its officers, employees and agents, and each and every one of them, and the District from any and all claims, actions, liability, damages, losses, expenses and costs arising out of Lewis's performance of, or failure to perform, its duties hereunder or by reason of, or arising out of, this Agreement; provided, however, Lewis shall not be responsible to indemnify or hold harmless any party for that party's negligence or willful misconduct.

Section 8. City Policies. The Rate and Method, the sale of the Bonds and the ratio of the appraised market value of all parcels of property within the District to the total amount of the assessment and special tax obligation thereof after the issuance and sale of the Bonds (the “Value- to-Lien Ratio”) shall comply with the Financing District Policy of the City.

Section 9. (a) Representations, Covenants and Warranties of Owner. Owner represents and warrants for the benefit of the City as follows:
(1) Organization. Owner is duly organized, validly existing and in good standing under the laws of the State of California, is duly qualified to conduct business as a limited liability company and is in good standing under the laws of the State of California and has the limited liability company power and limited liability company authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated.
(2) Authority. Owner has the limited liability company power and limited liability company authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered by Owner, and this Agreement has been duly and validly executed and delivered by Owner. (3) Binding Obligation. This Agreement is a legal, valid and binding obligation of Owner, enforceable against Owner in accordance with its terms, subject to bankruptcy and other equitable principles.
(4) Compliance with Laws. Owner shall not with knowledge commit, suffer or permit any act to be done in, upon or to the lands of Owner in the District in violation of any law, ordinance, rule, regulation or order of any governmental authority or any covenant, condition or restriction now or hereafter affecting the lands in the District. (5) Additional Information. Owner agrees to cooperate with all reasonable written requests for nonproprietary information by the underwriter of the Bonds or the City related to the status of construction of improvements within the District, the anticipated completion dates for future improvements, and any other customary and reasonable matter material to the investment quality of the Bonds.

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7 (6) Continuing Disclosure. Owner agrees to comply with all of its obligations under any continuing disclosure agreement executed by it in connection with the offering and sale of any of the Bonds. Owner shall cooperate with City in complying with the requirements of Rule 15c2-12 of the Securities and Exchange Commission in connection with the issuance and sale of the Bonds. Owner shall provide information to the City regarding its operations and financial condition as such information has been disclosed in the Official Statement. The City, in consultation with the underwriter of the Bonds, may determine that some or all of such financial information will be included in the preliminary official statement and the final official statement for the Bonds. If Owner owns property within the District responsible for more than 20% of the Special Taxes levied in such fiscal year, then Owner shall be deemed a “Major Owner” and agrees to provide all information regarding the planned development of the property within the District which is necessary to ensure that the official statement for each series of Bonds complies with the requirements of Rule 15c2-12 of the Securities and Exchange Commission and all other applicable federal and state securities laws. As a condition to the issuance of each series of Bonds, the Owner further agrees to enter into a Continuing Disclosure Agreement to provide and file with the Electronic Municipal Market Access maintained by the MSRB certain semi-annual and event disclosure related to the District as and to the extent determined necessary by the District to comply with federal and state securities laws. Copies of all such reports shall also be provided to the City and the underwriter of the Bonds. If Owner sells any portion of property within the District to an entity and such entity will be classified as a Major Developer because it will be responsible for the payment of annual Special Taxes which represent 20% or more of the annual debt service on the Bonds, Owner shall require such entity to enter into a continuing disclosure undertaking as provided in this section. (b) Representations, Covenants and Warranties of Lewis. Lewis represents and warrants for the benefit of the City as follows:

1. Organization. Lewis is duly organized, validly existing and in good standing under the laws of the State of Delaware, is duly qualified to conduct business as a limited liability company and is in good standing under the laws of the State of California and has the limited liability company power and limited liability company authority to own its properties and assets and to carry on its business as now being conducted and as now contemplated.

2. Authority. Lewis has the limited liability company power and limited liability company authority to enter into this Agreement, and has taken all action necessary to cause this Agreement to be executed and delivered by Lewis, and this Agreement has been duly and validly executed and delivered by Lewis.

3. Binding Obligation. This Agreement is a legal, valid and binding obligation of Lewis, enforceable against Lewis in accordance with its terms, subject to bankruptcy and other equitable principles.

Section 10. Independent Contractor. Owner is an independent contractor and not the agent of the City or the District. This Agreement shall not and does not create a joint venture or partnership between the City and Owner. The City shall have no responsibility or liability for the payment of any amount to any employee or subcontractor of Owner.

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8 Section 11. Special Taxes. The parties are entering into this Agreement and establishing the District for the purpose of creating a stream of Special Tax revenues that will be available to the District to pay directly the costs of acquisition, construction and/or equipping the Public Facilities and to pay debt service on the Bonds, the proceeds of which will be used to p ay the costs of acquisition, construction and/or equipping of the Public Facilities. Owner and City hereby acknowledge and agree (i) that any reduction or termination of the Special Taxes by exercise of the initiative power or other action would constitute a substantial impairment of the Special Tax revenue stream that Owner and City intend to create for the purpose of providing an assured source of funding for construction, acquisition and/or equipping of the Public Facilities, and (ii) that this Agreement is being entered into, and the Special Taxes are being imposed upon the Property pursuant to the Rate and Method, in accordance with existing laws relating to the imposition of fees and charges as a condition of development of the Property and such Speci al Taxes are being incurred as an incident of the voluntary act of development of the Property. To the fullest extent permitted by law, Owner hereby waives any right to exercise the initiative power that may be authorized in California Constitution Article XIIIC, Section 3, to reduce or appeal the Special Taxes. The foregoing covenant shall not prevent the Owner in any way from (a) bringing an action or suit contending that the Special Tax has not been levied in accordance with the methodologies contained in the Rate and Method, (b) bringing an action or suit with respect to the application or use of the Special Tax levied and collected or (c) bringing an action or suit to enforce the obligations of the City and/or the District under any agreements among the Owner, the City and/or the District or to which the Owner is a party or beneficiary.

Section 12. Disclosure of Special Taxes.
(a) From and after the date of this Agreement, Owner shall provide a “Notice of Special Tax” (as defined in Section 12(b) below) to each prospective purchaser of a home in the District prior to the execution by the home buyer of the sale contract for such home. Owner shall (i) maintain records of each Notice of Special Tax for a period of five (5) years, and (ii) shall provide copies of each notice to City promptly following the giving of such notice. Owner shall include the Notice of Special Tax in all Owner’s applications for Final Subdivision Reports required by the Department of Real Estate (“DRE”) which are filed after the effective date of this Agreement.

Owner shall require of a builder acquiring lots within the Property (a “Residential Builder”), prior to the close of escrow on any residential lot, to (i) maintain records of each Notice of Special Tax for a period of five (5) years, (ii) provide copies of each notice to City promptly following the giving of such notice, and (iii) include the Notice of Special Tax in all of such Residential Builder’s applications for Final Subdivision Reports required by DRE. (b) With respect to any parcel, the term “Notice of Special Tax” means a notice in the form prescribed by California Government Code Section 53341.5 which is calculated to disclose to the purchaser thereof (i) that the property being purchased is subject to the Special Taxes and other special taxes of the District; (ii) the classification of such property; (iii) the maximum annual amount of the Special Taxes and other special taxes of the District and the number of years for which they are authorized to be levied; and (iv) the types of facilities and services to be paid with the proceeds of the Special Taxes and other special taxes of the District.

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9 (c) City will file with the San Bernardino County Recorder’s office a notice of special tax lien that gives notice of the existence of the District and the levy of the Special Tax on property within the District for the benefit of subsequent property owners, pursuant to requirements of Section 3114.5 of the Streets and Highways Code. (d) Sample Property Tax Bill/Special Tax Information Sheet. Owner and its successors and assigns shall prepare and have available in its sales office, copies of either a sample property tax bill in a form reasonably acceptable for the City or special tax information sheet in substantially the form attached hereto as Exhibit C (the “Special Tax Information Sheet”), which shows the assigned annual Special Taxes and other special taxes authorized to be levied within the District under the Rate and Method. Owner and its successors and assigns shall make available to prospective homebuyers to take with them, copies of such sample property tax bill or Special Tax Information Sheet at the time written information regarding the base home price and property tax information for a specific home site is requested by and provided to such homebuyers. Owner intends to comply with this requirement by providing prospective homebuyers who request such additional written information, with the sample property tax bill in Owner’s Master Property Disclosure Report, a copy of which has been presented to and approved by the City.

Section 13. Binding on Community Facilities District. The District shall automatically become a party to this Agreement, and all provisions hereof which apply to the City shall also apply to the District. The City Council of the City, acting as the legislative body of the District, shall perform all parts of this Agreement which require performance on the part of the District.

Section 14. Assignment. Upon the successful formation of the District, this Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto and shall run with the land without any further action of the City, Lewis or Owner.

Section 15. Prompt Action. All consents, approvals and determinations required of any of the City, Lewis or Owner pursuant to this Agreement shall be promptly given or made, and shall not be unreasonably withheld or conditioned.

Section 16. General. This Agreement contains the entire agreement between the parties with respect to the matters herein provided for. This Agreement may only be amended by a subsequent written agreement signed on behalf of all parties. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the parties. This Agreement shall be construed and governed by the Constitution and laws of the State of California. Should any party to this Agreement commence a court action or proceeding against the other party with respect to this Agreement, the party(ies) prevailing in such action or proceeding shall be entitled to receive from the losing party its attorney’s fees, expert witness fees, court costs and other costs incurred by it in prosecuting or defending such action or proceeding. The captions of the sections of this Agreement are provided for convenience only, and shall not have any bearing on the interpretation of any section hereof. This Agreement may be executed in several counterparts, each of which shall be an original of the same agreement.
[Signature Page Follows]

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S-1

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the date first above written.

LEWIS LAND DEVELOPERS, LLC, a
Delaware limited liability company

By: Lewis Management Corp., a Delaware
corporation,
Its Manager

By:

Name:

Its:

LENNAR HOMES OF CALIFORNIA, LLC, a
California limited liability company
By:

Geoff Smith
Vice President, Forward Planning

CITY OF UPLAND

By: ________________________________
Michael Blay, City Manager

ATTEST:

By:

City Clerk

-Signature Page-
Funding and Acquisition Agreement

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A-1

EXHIBIT A

DESCRIPTION OF PUBLIC FACILITIES
Public Facilities consist of City park, traffic, water, sewer, storm drain and other capital improvements, police and fire facilities and all incidental expenses authorized to be funded with the following City Fees:

City Fee
Amount Per
Multi-Family DU1
General $853
Fire $432
Police $774
Parks (Quimby) $9,182
Traffic $1,169
Water $2,900
Sewer $918
Storm Drain $2,315

1 The amount stated for each City Fee shall be fixed pursuant to the Development Agreement for the term of the Development Agreement.

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B-1

EXHIBIT B

DEFINITIONS
The following terms shall have the meanings ascribed to them for purposes of this Agreement. Unless otherwise indicated, any other terms, capitalized or not, when used herein shall have the meanings ascribed to them in the Fiscal Agent Agreement (as hereinafter defined). “Additional Bonds” means any series of Bonds issued by or on behalf of the District after the first series of Bonds, in each case in compliance with and under supplements to the Fiscal Agent Agreement, which Additional Bonds shall be secured on a parity lien or subordinate lien position with other Bonds previously issued.
“Agreement” means this Agreement, together with any supplement hereto. “Act” means the Mello-Roos Community Facilities Act of 1982, Sections 53311 et seq. of the California Government Code, as amended.
“Administrative Expense Requirement” means $15,000 per year commencing in the first year of issuance of Bonds.
“Assessor’s Parcel” shall have the meaning ascribed to it in the Rate and Method. “Bonds” means any series of bonds issued by or on behalf of the District. “City Fees” means the City development impact fees applicable to the Project to fund park, traffic, water, sewer, storm drain and other capital improvements, police and fire facilities , as described in Exhibit A.
“Financing District Policy” means the City of Upland Local Debt Policy, dated June 26, 2017 or as further amended from time to time.
“Fiscal Agent” means the financial institution or other entity that enters into a Fiscal Agent Agreement with the City with respect to the Bonds.
“Fiscal Agent Agreement” means, collectively, any agreement or agreements by that or similar name to be executed by the City, for and on behalf of the District, and the Fiscal Agent, which will provide for, among other matters, the issuance of the Bonds and the establishment of the Special Fund as originally executed by the City and the fiscal agent and as it may be amended from time to time.
“Lewis” means LEWIS LAND DEVELOPERS, LLC, a Delaware limited liability company, its successors and assigns.
“Owner” means LENNAR HOMES OF CALIFORNIA, LLC, a California limited liability company, as the owner of the Property, and its successors and assigns, other than individual homebuyers.

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B-2

“Project” means the development of the Property with approximately 192 dwelling units. “Property” means the real property within the District as further described in Recital A. “Rate and Method” means the rate and method of apportionment of special taxes approved for the District in accordance with the Act.
“Special Fund” means a discrete, interest-bearing special fund of the City to be established and administered pursuant to this Agreement and the Fiscal Agent Agreement. “Special Tax” or “Special Taxes” means the special tax designated in the Rate and Method.

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46708.00811\35038736.3

C-1

EXHIBIT C

CITY OF UPLAND SPECIAL TAX INFORMATION SHEET
Community Facilities District No. 2022-1
(Enclave at Upland)

1. WHAT IS COMMUNITY FACILITIES DISTRICT (CFD) NO. 2022- 1?
CFD No. 2022-1 (Enclave at Upland) was formed pursuant to the “Mello-Roos Community Facilities Act of 1982” to finance certain public facilities.

2. WHO IS RESPONSIBLE TO PAY THE SPECIAL TAX AND HOW
IS IT BILLED?
The property owner is responsible for paying the CFD No. 2022-1 (Enclave at Upland) special taxes, which will appear as a separate line item on your property tax bill along with your regular property taxes.

3. HOW MUCH WILL MY SPECIAL TAX BE?
The special tax is based upon the size of the home. The assigned and maximum special taxes for CFD No. 2022-1 (Enclave at Upland) are summarized below.

Land Use Category
Taxable
Unit
Building Square
Footage
Assigned
Special Tax
Per Taxable
Unit

1. 4. HOW LONG WILL I HAVE TO PAY THE CFD NO. 2022-1
SPECIAL TAX?
The special tax shall be levied as long as necessary to meet the special tax requirement for a period not to exceed forty (40) fiscal years commencing with fiscal year 2022- 23, provided however that the special tax will cease to be levied in an earlier fiscal year if the CFD No. 2022-1 (Enclave at Upland) Administrator has determined that all bonds that are expected to be issued have been issued and all required interest and principal payments on all outstanding bonds have been paid.

5. CAN THE SPECIAL TAXES BE PREPAID?
Homeowners have the option of prepaying special taxes anytime. For prepayment information please contact the City of Upland’s CFD No. 2022-1 (Enclave at Upland)

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46708.00811\35038736.3

C-2

administrator, Willdan Financial Services, 27368 Via Industria, Suite 200, Temecula, CA 92590, phone (951) 587-3575.

6. WHERE CAN I GET MORE INFORMATION?
For more information in regards to CFD No. 2022-1, contact the City of Upland’s CFD No. 2022-1 (Enclave at Upland) administrator, Willdan Financial Services, 27368 Via Industria, Suite 200, Temecula, CA 92590, phone (951) 587-3575.

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S T A F F R E P O R T
I T E M N O . 11.B .

D A T E :J u ne 2 7, 2 02 2
T O :M A YO R A N D C I T Y C O U N C I L
F R O M : M I C H A E L B L A Y, C I T Y M A N A G E R P R E P A R E D B Y : B R A D E N Y U, P U B L I C W O R K S D I R E C TO R

N I C O L E D E M O E T, E N V I R O N M E N TA L Q U A L I T Y A D M I N I S T R A TO R S U B J E C T :P U B L I C H E A R I N G TO C O N S I D E R P R O P O S E D S E W E R A N D S O L I D

W A S T E R A T E S, C O N S I D E R A T I O N O F A P P R O V A L O F A M E N D E D

A N D R E S TA T E D A G R E E M E N T F O R S O L I D W A S T E C O L L E C T I O N ,

P R O C E S S I N G A N D D I S P O S A L S E R V I C E S W I T H B U R R T E C W A S T E I N D U S T R I E S, I N C .

R E C O M M E N D E D A C T I O N
I t i s recom m en d ed th at th e C i ty C oun cil con d u ct a p u b lic h eari n g on sew er rat es an d solid w aste rates an d take th e follow in g actions:

1. A p p rove a Resol u t ion ad op ti ng revis ion s t o ad ju s t the sched ul e of sew er servic e rates in clud in g p ass-th rou g h sewer rates from I nland E m p ire Utilities A g ency; and

2. A p p rove a Resolution ap p rovin g A m end ed and Restated A g reem ent for S olid Waste C ollection, P rocessing an d D isp osal S ervices w ith B u rrtec Waste I nd ustries, I nc. an d A d op tin g Rates for S olid Waste C ollection S ervices Rates.

G O A L S T A T E M E N T
Th e p rop osed ac ti on sup p orts t h e C ity's g oal of p rovid in g hig h -q u ality cos t-effec ti ve services to the com m un ity.

B A C K G R O U N D

S E W E R
Th e C i ty of U p lan d ’s (C ity) m on th ly S ew er S ervice C h arg e is b roken into two com p on ents:
th e C i ty’s S ew er S ervices c om p on en t for collection an d transm i ssion of was tewat er and the I n lan d E m p ire U t ilit ies A g ency’s (I E U A ) p ort ion for treatm en t and d is p os al of wastewater.

Th e m on th ly S ew er S ervice C harg e is curren tly $2 9.6 9 p er E q uivalen t D welling Un it (E D U).

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O n J u n e 9 , 2 01 4, t h e C i ty ad op ted Resolu tion N o. 62 29 , settin g forth a five-year rate ad ju stm en t sch ed u le for the C it y S ewer S ervice Fee. T h e last rate ad ju s tm en t im p lem ented p u rsuan t to th is sched ule oc cu rred on J uly 1 , 2 01 7, settin g th e rate at $10 .10 p er E q uivalen t D w ellin g U nit (E D U ) p er m on th .

O n A u g u st 1 0, 20 15 , t he C i ty ad op ted Res olu ti on N o. 6 29 3 set ti n g forth a five-year ad ju stm en t s ch ed u le for t h e I n lan d E m p i re Utilities A g enc y (I E U A ) "Pass -T hroug h" S ewerag e Treatm ent Rate. T he l ast rat e ad ju st m en t i m p lem en t ed p u rsu an t to t h i s s ch ed u le oc cu rred on J u ly 1 , 20 19 , setting th e "Pass-T hroug h" rate at $2 0.0 0 p er E D U p er m on th .

O n N ovem b er 20 , 2 01 9, I E U A 's B oard of D irect ors ad op t ed a t w o-year rat e i n c reas e for F iscal Years 2 02 0-2 1 an d 20 21 -22 , in creasing t h e E D U m on th ly rat e to $2 0 .6 0 for F Y 2 02 0-2 1 an d $2 1.2 2 for F Y 20 21 -22 . H ow ever, d ue to th e C O V I D p an d em ic I E U A d ecid ed not t o in crease th eir S ew er Treat m en t Rat e for F Y 20 20 -21 . I E U A d id in crease th eir rat e to $21 .22 for F Y 20 21 -22 .

O n J u n e 2 2, 20 20 , th e C it y C oun ci l m aintain ed t h e cu rrent F Y 2 01 9-2 0 S ewer E q uivalen t D w ellin g U n it (E D U ) rate am ou n t of $29 .69 p er E D U p er m ont h b y ab s orb in g th e I E U A in crease an d red u cing th e C ity's rate for F Y 20 20 -21 .

O n A p ril 1 2,2 02 2, s taff m ad e a p res en t ati on to t h e P u b l ic Works C om m i tt ee reg ard ing the p rop osal to increase t he E D U M ont hl y Pas s-T h rou g h S ewer rate from th e cu rrent F Y 2 02 1-2 2 rate of $21 .22 to $2 1.8 6 for F Y 2 02 2-2 3, an ap p roxim ate th ree p erc ent increase. T he C om m ittee recei ved an d fil ed th e p resen tat ion an d recom m en d ed t h at C ity C ou n c il d iscuss staff's rec om m en d ati on of a F i ve-year Pass -T h rou g h of an y i ncreases of t he I E U A m on th ly E D U rat e not-to-exceed 7% in any cal en d ar year an d increasin g U p lan d 's C ity S ew er S ervice Fee p ortion b ack to either $10 .10 (7 .6%) or $1 0.8 5 ($1 0.2 %), t he m axim u m rate for the C ity S ewer S ervice Fee p reviou sly ap p roved b y the C ity C ou ncil.

O n M ay 9, 2 02 2, the C ity C ou ncil authorized the C ity M an ag er to m ail a P rop osition 21 8 n otice reg ard in g a p u b l ic hearin g d ate of J u n e 2 7, 2 02 2 at 7 p .m . for consid eration of a sew er rate ad ju stm en t inclu d ing p ass-throug h sew er rates.

O n J u n e 1 5, 2 02 2, I E U A i n c reas ed t h e E D U M on th ly Pass-Th rou g h S ew er rate from the cu rrent F Y 20 21 -22 rate of $2 1.2 2 to $2 1.8 6 for F Y 20 22 -23 .

A s req ui red b y P rop os it ion 2 18 , C i ty C ou ncil d i rec ted s taff to m ove forw ard and p rep are notices for th e F i ve-year Pass-T hroug h of an y increases of t h e I E U A m ont hly E D U rate for treatm ent servic es not t o exceed 7 % i n any calend ar year an d in creasi n g U p l and 's C it y S ew er S ervice Fee b ack to $10 .85 (10 .2%). Th ese n oti ces w ere m ai led all p rop erty ow n ers of record and inclu d ed inform at ion on t he sc hed ul ed p u b l ic h eari n g , an d b ac kg rou n d in form ati on on the sewer rate ad ju stm en t inclu d ing th e p ass-throug h sew er rate.

S O L I D W A S T E
O n N ovem b er 27 , 2 00 0, th e C it y C ou n ci l aw ard ed a s oli d w ast e c oll ect ion an d d isp osal services con tract (A g reem en t) t o B u rrt ec Waste I nd ustries, I n c . (B u rrtec) t o p rovi d e solid w aste collection an d d isp osal s ervi ces as an excl u s ive fran c h i se. Per th e A g reem en t an d su b seq u ent am en d m ents, B urrtec can req u est an an nu al C onsum er P rice I nd ex (C P I ) ad ju stm en t effect ive J uly 1st of each year. Th e rate ad ju s tm en t m u st b e req u es ted b y B urrtec and ap p roved b y C ity C ou n ci l. Th e C ity of U p lan d (C ity) recei ved a let ter d ated M arch 1 5,

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20 22 , req uesting a resid ential and com m ercial solid waste rate ad justm ent.

I n ad d it ion , S B 1 38 3 w as s ig ned in to law es tab li sh in g m et han e em i ss ion s red uction t arg ets in a st atewi d e effort t o red u ce em is si on s of sh ort -lived clim ate p oll u t an t s (S LC P ) caused b y org anic w ast e. T h is w as in ten d ed t o d rastically lim it s ou rces of m eth ane ent eri ng ou r Lan d fills w ith t he g oal to red u ce th e d i sp osal of org an ics was te b y 5 0% b y 2 02 1, an d 75 % b y t h e year 20 25 . W it h th ese chan g es, t he C i ty m ust p rovid e ad d i ti on al s oli d waste servic es to com p ly w ith these new req u irem en ts.

O n A p ri l 1 2, 2 02 2, s taff m ad e a p resent ation to t h e P u b li c W orks C om m itt ee reg ard in g the p rop osed rat e ad ju st m en ts. T h e C om m it tee recei ved an d fil ed t h e p resent ation an d recom m end ed that th e p resen tation b e forw ard ed to th e C ity C oun cil for th eir con sid eration.

O n M ay 9, 2 02 2, the C ity C ou ncil authorized the C ity M an ag er to p ost a P rop osition 21 8 p ub lic notification and to set a p ub lic h eari ng d at e on J un e 27 , 20 22 , at 7 p .m . for c on s id erat ion of a solid w aste rate ad ju stm en t.

I S S U E S /A N A L Y S I S

S E W E R
Th e C ity's wastewater utility is a n ot-for-p rofit p rog ram an d sewer rates are estab lish ed to p rovid e su ffic ien t reven ue t o cover t h e cost as soc iat ed in run ning th e C ity’s s ew er p rog ram in clud in g b u t not l im it ed to m ai n t en an ce, rep airs, p erson n el , m aterial s, d eb t servic es an d system reh ab il it ati on an d rep lacem ent for th e op eration of a rel iab le an d safe s ervi ces , and to m aintain ad eq u ate res erves . I t is p rojected t hat for F Y 2 02 1-2 2, th e s ew er exp en ses w ill exceed th e anticip ated reven ue b y nearly $74 2,0 00 .

W ith exp en s es in creasi ng d ue t o i nfl ati on, th e d efi ci t w il l w id en i f t he rates rem ai n th e sam e.

S taff is rec om m end in g th at the C i ty C ou n c il ad ju st t he C i ty’s S ew er S ervice Fee (t h e C ity’s p ortion of the m on th ly S ewer S ervi ce C h arg e) t o $10 .85 p er E D U as ap p roved i n Resolu tion N o. 62 29 .

I n ad d ition, I E U A has increased th eir p ortion of th e m ont hly S ew er S ervice C harg e b y 3% for F Y 2 02 2/2 3 to $21 .86 p er E D U. S taff i s als o recom m end in g th at t he C i ty C oun cil ap p rove a F ive-year Pass-T hroug h of an y increases of the I E U A m on th ly E D U rate, n ot-to-exceed 7 % in any calen d ar year to help cover cost now an d into th e future.

I f ad op t ed , t he m on t h l y S ew er S ervi ce C h arg e for F Y 2 02 2/2 3 w i ll increase to $32 .71 p er E D U.

S O L I D W A S T E
S B 1 38 3 req u i res th at th e A g reem en t with B urrt ec an d th e C it y b e up d ated . Rat h er th an p rep arin g a fou rt h am en d m ent to t h e A g reem ent, th e C i ty d raft ed an am end ed an d restated A g reem ent t h at w il l c ons oli d at e th e orig inal ag reem en t d ated N ovem b er 27 , 20 00 w it h the 1st, 2n d and 3 rd am end m en ts d ated J anu ary 8, 20 04 , M ay 2 9, 20 07 an d J u ne 25 , 2 01 4, resp ectively, an d i n c orp orat es th e im p l em en tat ion of t h e req uirem ents of S B 13 83 . I n ad d ition , th e C it y M anag er h as n eg oti ated t he follow in g i tem s th at w ill al so b e in clud ed in to th e new am end ed an d restated ag reem en t:

R esidential C usto m er S ervice and B illing: C urren tl y th e C it y p rovid es all resid en tial cu stom er service and b illing , b ut for m ore effic ien t cu st om er s ervi ce, B u rrtec w i ll take over these services. T he C ity w ill retain the collection of th e m on th ly service charg e.

B ulky S w eep Pro gram : B u rrtec w ill ad d a weekly B u lky Sweep P rog ram wh ere B urrtec staff wou ld c om e to the C ity th ree d ays a week (M /W /F ) t o p ick-up b ulky was te at set locations (D ow ntow n, M em orial Park, C itru s Park and Pacific E lectric Trail from E uclid Ave

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to B en son A ve). T h i s is in ad d it ion to the cu rren t O n-D em and B u lky p i cku p req u est as un d erlined in A rticle 4.0 1(c)(iii) of the ag reem ent.

D o w nto w n S t reet S w eeping: U nd er th e cu rrent ag reem ent , C lean Sweep (B u rrtec’s su b contractor) i s s ch ed u led to sw eep th e d own town area b i-m onthly, b u t si nc e th ey are in t he area, th ey cu rrent ly sweep w eekl y. T he ag reem en t will b e u p d ated t o reflec t the service th e C it y c u rren tl y h as, an d wi ll ad d ten on -cal l st reet sw eep ing d ays (see S ection

4.0 8(b )-(c) of ag reem ent).

D o w nto w n S idew alks S t eam C leaning: C urren tly C lean Sweep steam clean s the d own town si d ewal ks twice a year. T h i s service w il l b e u p d ated to in cl ud e q uarterly cleaning s an d ad d ten on -call sid ew alk clean in g d ays.

D o w nto w n T rash & R ecycling R eceptacles: B urrt ec w ill rep lac e al l exis ti n g t ras h & recyclin g recep tacles (see E xh ib it D ).

C o nstructio n o f T rash E nclo sures: B urrt ec w il l construct new trash en cl osu res at M em orial Park (1 n ew, 2 up g rad e/retrofitted ) and in th e D ow ntow n Parkin g Lots (3 new).

H H W P ro gram: B u rrtec w il l p rovid e p erson n el (on e p rog ram coord inator an d one w orker) to sup p lem en t C ity staff in ru nn in g the C ity’s H H W P rog ram (see E xh ib it D ).

Pro gram C o st C o m po nent: T he ag reem en t w ill ch ang e term in olog y of “P rog ram C ost C om p on ent” to “F ran ch ise Fee” to reflect a m ore stan d ard n am ing con vention .

E xhibit o f F ee M etho do lo gy: E xhib it N w ill b e ad d ed t o d ocum ent t h e m eth od ol og y of how the rates are calculated for m ore clarity and transp arency.

U pdate t he P avem ent I m p act F ee: T he Pavem ent I m p act Fee will in crease from ap p roxim ately $2 19 ,85 0 p er year t o $35 0,0 00 p er year. Th is fee w il l con ti n u e to in crease b y C P I an nu ally.

A m ended A greem ent T erm s: I n ord er to p rovid e th ese services w ith no ad d ition al rate in crease b eyon d C P I , B urrtec n eg ot iat ed an ext ension of t he t erm so th at cost recovery cou ld b e am orti zed over a set p eriod . I f ap p roved , t he ag reem en t t erm w ould exten d b y 10 years.

C P I lim it increase: W ith in flation rates increasin g , B u rrtec n eg otiated th at th e an nu al C P I increase lim it b e in creased from four p ercen t (4 %) to five p ercen t (5 %) ann ually.

F inally, rat es m u st al so b e u p d ated t o in corp orate th e ad d i ti on al w ork need ed to p erform th ese new req u irem en ts . I n th e cu rrent A g reem en t, B urrt ec is all ow ed to m ake a rate ad ju stm en t b u t m ust m ake a req u est on or b efore M arc h 15 th ann ual ly. B u rrtec p rep ared an estim ated rate increase t hat i ncorp orat ed th e req u est ed C P I in crease an d es ti m at ed th e ap p rop riate com p en sation of th e ad d ition al services req uired to m eet S B 1 38 3.

F I S C A L I M P A C T S

S E W E R
Th e p rop osed rat e in crease p revi ous ly ad op t ed b y resolu tion of th e C i ty C oun cil shou ld result in an i n c reas e in revenu es of $1 ,10 0,0 00 an d w il l p rovid e a fi n an ci al p ath t o offs et an ticip ated exp en se i ncreases i n th e w ast ew ater u tility op erat ion s, in clud in g t h e cost of m aintenan ce, m aterials, rep airs, p ersonn el, an d system rehab ilitation an d rep lacem ent.

S O L I D W A S T E
Th e p rop os ed b i -m on th ly rat e i ncrease shall p rovid e ap p rop ri ate cos t recovery for ren d erin g solid w ast e services, in cl ud in g th e ad d it ion al services req u ired b y S B 13 83 . S taff recom m end s that a rate in crease occu r effective J u ly 1 , 20 22 .

A L T E R N A T I V E S
P rovid e altern ative d irection to staff.

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AT TAC HM E NT S :

Description
Resolution-Sewer Rate Adjustment
Resolution-Solid Waste Rate Adjustment
Exhibit A to Resolution for Solid Waste Rates: Restated Solid Waste Agreement Exhibit N to Agreement
Proposition 218 Notice

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RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UPLAND, CALIFORNIA , ADOPTING A REVISED SCHEDULE OF
THE REGIONAL “PASS-THROUGH” SEWERAGE TREATMENT

RATE AND A REVISED SCHEDULE OF THE CITY SEWER

MAINTENANCE FEE

WHEREAS, the City of Upland is a party to the Regional Sewerage Service Contract, whereby the Inland Empire Utilities Agency (IEUA) provides sewage treatment and disposal services for the City, as well as other contracting agencies, and

WHEREAS, the City provides sewage disposal services to its users by operating and maintaining the City’s sanitary sewer system, which collects and conveys sewage to IEUA for sewage treatment and disposal; and

WHEREAS, on May 18, 2002, the IEUA Board of Directors adopted Resolution No. 2022-5-3, increasing its service rate for the operation and maintenance of the regional sewerage system and the treatment of sewerage, commonly known as the regional “pass-through” sewerage treatment rate, applicable to the contracting agencies, including the City; and

WHEREAS, the total monthly sewer service fee, as defined in Section 13.32.080 (B) of the Upland Municipal Code, is the sum of the IEUA treatment and disposal charge and the City sewer maintenance charge (collectively “Sewer Service Fee”); and

WHEREAS, Government Code Section 53756 provides automatic adjustments for pass-through increases; and

WHEREAS, to sustain the City’s sewer maintenance service requirements, with adequate operating reserve and capital for system rehabilitation required to provide continued safe and reliable sewage disposal service, the City determined the current costs exceed the amount collected from consumers; and

WHEREAS, the City Council finds and determines that, in accordance with the determination, the schedule for rates on the City sewer maintenance service fee and the IEUA Pass-Through sewer fees should be revised to reflect the estimated reasonable cost; and

WHEREAS, pursuant to Section 13.32.060 of the Upland Municipal Code, the City Council, by a two thirds vote, has the power to revise and collect fees, tolls, rates, rental or other charges for services and facilities furnished by it, either within or without its territorial limits, in connection with the sanitary sewage system; and

WHEREAS, Pursuant to Article XIIID Section 6 of the California Constitution, forty-five (45) days prior to the public hearing, on or about May 13, 2022, notices of the public hearing were mailed to property owners and tenants; and

WHEREAS, at the public hearing conducted on June 27, 2022, the City Council received written and oral testimony regarding the regional “pass-through” sewerage treatment rate; and

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Resolution No.

Page 2 ends

WHEREAS, on the basis of the evidence presented during the public hearing, the City Council has determined that the schedule for the IEUA regional “pass-through” sewerage treatment rate, and the City sewer maintenance service fee shall be adjusted as set forth below; and

WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, the City Council of the City of Upland hereby finds, determines and resolves as follows:

Section 1. All of the facts set forth in the recitals part of the Resolution, are true and correct.

Section 2. Users of the City’s sewer service are charged based on the number of Equivalent Dwelling Units (EDUs), as defined in Section 13.32.080 (A) of the Upland Municipal Code.

Section 3. The total monthly sewer service fee for use of the City’s sewer service shall be the sum of the treatment and disposal charge, which is paid to IEUA as a pass- through charge, and the City sewer maintenance service fee or charge.

Section 4. Effective July 1, 2022, the IEUA regional “pass-through” sewerage treatment rate, per EDU per month, shall be set as follows:

Fiscal Year Effective Date Treatment Rate
FY 22-23 July 1, 2022 $21.86
(*) Per month per Equivalent Dwelling Unit (EDU) or Single-Family Home

Section 5. Effective July 1, 2022, the City Sewer Maintenance Charge, as specified in Section 13.32.080 (B) of the Upland Municipal Code, shall be superseded as follows:

Fiscal Year Effective Date Charge/Fee, per EDU
per month
FY 22-23 July 1, 2022 $10.85
(*) Per month per Equivalent Dwelling Unit (EDU) or Single-Family Home

Section 6. The charges or fees set forth above will remain in effect until amended by subsequent resolution(s) of the City Council.

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Resolution No.

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Section 7. The City Council finds that the California Environmental Quality Act of 1970, as amended, does not apply to the adoption of this Resolution, pursuant to Section 15273 of Article 18 of Chapter 3 of Title 14 of the California Code of Regulations.

The City Council expressively finds based on the evidence before it that the increase is for the purposes of:
a. Meeting the operating expenses, including employee wage rates; b. Purchasing supplies, equipment, and materials;
c. Obtaining funds for capital projects necessary to maintain service; and d. Meeting the financial reserves.

Section 8. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Resolution, and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

Section 9. The City Clerk shall certify the adoption of this Resolution.

PASSED, APPROVED and ADOPTED this 27th day of June, 2022.

Bill Velto, Mayor

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

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RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

UPLAND, CALIFORNIA, APPROVING AMENDED AND

RESTATED AGREEMENT FOR SOLID WASTE COLLECTION,

PROCESSING AND DISPOSAL SERVICES WITH BURRTEC
WASTE INDUSTRIES, INC. AND ADOPTING RATES FOR

SOLID WASTE COLLECTION SERVICES RATES
WHEREAS, on November 27, 2000, the City of Upland (the “City”) and Burrtec Waste Industries, Inc. (“Burrtec”) entered into an Agreement Between the City of Upland with Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Services; and
WHEREAS, on January 8, 2004, the City and Burrtec entered into Addendum No. 1 to the Agreement Between the City of Upland with Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Services; and WHEREAS, on May 29, 2007, the City and Burrtec entered into the Second Amendment to the Agreement Between the City of Upland with Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Services; and WHEREAS, on May 27, 2014, the City and Burrtec entered into the Third Amendment to the Agreement Between the City of Upland with Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Services; and WHEREAS, since the approval of the original agreement and its amendments, California law changed to now require the City to implement additional solid waste diversion programs that were not included as part of the original agreement or amendments thereto; and
WHEREAS, as a result of regulations implementing Senate Bill (SB) 1383 Senate Bill 1383 (Short-lived Climate Pollutants (SLCP): Organic Waste Methane Emissions Reductions) that took effect January 1, 2022, organic waste can no longer be able to be disposed of in the landfill and organic waste collection services must be provided to all residents and businesses; and
WHEREAS, to comply with these the SB 1383 requirements, the City negotiated with Burrtec to provide the necessary services; and WHEREAS, the City and Burrtec have negotiated an Amended and Restated Agreement Between the City of Upland with Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Services (“Agreement”); and WHEREAS, the City Council now desires to approve the Agreement; and WHEREAS, the rate structure for the monthly solid waste service fees has two customer classes: (i) residential, and (ii) non-residential; and

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Resolution No.

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2 WHEREAS, the rate structure for refuse, recycling and organics collection is based on the container size, type of service, and frequency of collection; and WHEREAS, the City has determined that it is necessary to impose new, increased or modified rates for its solid waste service charges (collectively herein, the “Charges”); and
WHEREAS, the revenues derived from the Charges will not exceed the funds required to provide the solid waste services and shall be used exclusively for the provision of solid waste collection services; and
WHEREAS, the amount of the Charges will not exceed the proportional cost of the service attributable to each parcel upon which they are proposed for imposition; and
WHEREAS, the Charges will not be imposed on a parcel unless the solid waste services are actually used by, or immediately available to, the owner of the parcel; and
WHEREAS, California Constitution article XIII D, section 6 (“Article XIII D”) requires that prior to imposing any increase to the Charges, the City shall provide written notice (the “Notice”) by mail of the proposed increases to the rates for the Charges to the record owner of each parcel upon which the rate increases to the Charges are proposed for imposition and any tenant directly liable for payment of such Charges (collectively herein referred to as “customers”), the amount of the rates for the Charges proposed to be imposed on each parcel, the basis upon which the rates for the Charges were calculated, the reason for the rate increases to the Charges, and the date time and location of a public hearing (the “Hearing”) on the proposed rate increases to the Charges; and
WHEREAS, such Notice was provided to the affected property owners and tenants not less than 45 days prior to the Hearing on the proposed rate increases; and
WHEREAS, the Hearing was held on this day, June 27, 2022; and WHEREAS, at the Hearing the City Council heard all oral testimony, and considered all written materials and written protests concerning the establishment and imposition of the proposed rate increases to the Charges, and at the close of the Hearing the City did not receive written protests against the establishment and imposition of the proposed rate increases to the Charges from a majority of the record owners or property upon which the Charges are proposed for imposition or any tenants directly liable for the payment of the Charges (i.e., a customer of record who is not a property owner); and
WHEREAS, the City Council now desires to establish and impose the proposed Charges.

NOW, THEREFORE, the City Council of the City of Upland hereby finds, determines and resolves as follows:

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Resolution No.

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3 Section 1. The above recitals are all true and correct and are incorporated herein.

Section 2. The City Council hereby approves the Amended and Restated Agreement Between the City of Upland with Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Services, attached hereto as Exhibit A and incorporated herein by this reference.

Section 3. The City Council hereby adopts the Charges for solid waste collection services at the maximum rates, effective July 1, 2022, as set forth in Exhibit B attached hereto and incorporated herein by this reference.

Section 4. For the fiscal year beginning July 1, 2023, and annually thereafter on July 1 through and including July 1, 2026, the maximum rates provided in Exhibit B shall be automatically adjusted based upon the annual percentage change in the Consumer Price Index (CPI), All Urban Consumers for the Riverside-San Bernardino-Ontario, CA Metropolitan Area, as determined by the United States Department of Labor Statistics. However, the service component and program cost component, and disposal fee component, are each capped by a 4% maximum rate adjustment each year.

Section 5. To the extent any Charges established by this Resolution are inconsistent with any Charges previously adopted by the City Council, it is the explicit intention of the City Council that the Charges adopted pursuant to this Resolution shall prevail.

Section 6. The City Council hereby finds that the administration, operation, maintenance, and improvements of the solid waste collection system, which are to be funded by the Charges, are necessary to maintain solid waste services within the City’s existing service area. The City Council further finds that such Charges are necessary and reasonable to fund the administration, operation, maintenance, and improvements of the solid waste collection system. Based on these findings, the City Council hereby determines that this Resolution is statutorily exempt from the requirements of CEQA pursuant to California Public Resources Code section 21080(b)(8) and State CEQA Guidelines section 15273(a). The documents and materials that constitute the record of proceedings on which these findings have been based are located at 460 N. Euclid Avenue, Upland, California 91786. The custodian for these records is the City Clerk of the City.

Section 7. If any section, subsection, sentence, clause, phrase, or portion of this Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Resolution, and each section, subsection, sentence, clause, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional.

Section 8. The City Clerk shall certify the adoption of this Resolution.

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Resolution No.

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4 PASSED, APPROVED and ADOPTED this 27th day of June, 2022.

Bill Velto, Mayor

AYES:

NOES:

ABSENT:

ABSTAINED:

ATTEST:

Keri Johnson, City Clerk

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Amended and Restated Agreement
Between the City of Upland
and
Burrtec Waste Industries, Inc.
for Solid Waste Collection,
Processing and Disposal Services
June 27, 2022

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TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS AND CONTRACT INTERPRETATION ........... 3

1.01 Definitions ............................................... 3

1.02 Interpretation. ........................................... 3 a. Gender and Plurality ................................ 3 b. Headings ............................................ 3 c. References to Parts ................................. 3 d. Examples ............................................ 3

1.03 Integration ............................................... 3

1.04 Governing Law ............................................. 3

1.05 Severability .............................................. 4

1.06 Construal ................................................. 4 ARTICLE 2 REPRESENTATIONS AND WARRANTIES .................... 5

2.01 Of Collector .............................................. 5

2.02 Of City ................................................... 5

2.03 Waiver .................................................... 5 ARTICLE 3 TERM OF AGREEMENT ................................. 6

3.01 Term ...................................................... 6

3.02 Survival of Certain Provisions ............................ 6

3.03 Statutory Continuation Rights ............................. 6

3.04 Transition to Next Collector .............................. 6

3.05 Conditions Precedent. ..................................... 6 ARTICLE 4 SERVICES .......................................... 8

4.01 Collection and Transportation. ............................ 8 a. Service Standards. .................................. 8 b. Scope of Regular Collection Service ................. 9 c. Special Collection Service. ........................ 11 d. Frequency. ......................................... 13 e. Hours. ............................................. 14 f. Routing. ........................................... 14 g. Vehicles. .......................................... 16 h. Containers. ........................................ 17 i. Personnel. ......................................... 18

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(continued)
Page

4.02 Diversion. ............................................... 19 a. Processing. ........................................ 19 b. Certification of Re-use ............................ 20 c. Transformation ..................................... 20 d. Indemnification for Failure to Meet AB 939 Goals ... 21 e. Minimum Diversion Requirements ..................... 21

4.03 Disposal. ................................................ 22 a. Disposal Facility .................................. 22 b. Disposal Fees ...................................... 22 c. Indemnification. ................................... 22

4.04 Customer Service and Public Relations. ................... 24 a. Phone Access. ...................................... 24 b. Customer Complaints and Inquiries .................. 25 c. Office Hours ....................................... 25

4.05 Public Education and Community Relations. ................ 25 a. Community Relations ................................ 25 b. News Media Relations ............................... 25 c. SB 1383 Education and Outreach ..................... 26

4.06 Emergency Services. ...................................... 26

4.07 City Right to Perform Services. .......................... 26 a. Events ............................................. 26 b. Notice ............................................. 27 e. Records and Reports ................................ 27 f. Waiver of Takings Claim ............................ 27

4.08 Street Sweeping .......................................... 27 a. Scope of Street Sweeping Services .................. 27 b. Locations .......................................... 28 c. Frequency .......................................... 28 d. Hours .............................................. 28 e. Routing ............................................ 28 f. Emergency Services During Regular Business Hours ... 29 g. Emergency Services After Hours ..................... 29

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TABLE OF CONTENTS
(continued)
Page

iii

h. Holidays ........................................... 29 i. Equipment .......................................... 29 j. Personnel .......................................... 30 k. Services During Wind Down Period ................... 30 ARTICLE 5 MISCELLANEOUS SERVICE PROVISIONS ................. 31

5.01 Title to Waste ........................................... 31

5.02 Compliance with Law ...................................... 31

5.03 Cooperation with Waste Studies ........................... 31

5.04 Public Performance Review ................................ 32

5.05 Service Materials Belong to City ......................... 33

5.06 Procurement of Recycled Materials ........................ 33

5.07 Hazardous Waste .......................................... 33 ARTICLE 6 CHANGE IN SCOPE OF SERVICES ...................... 34

6.01 Change in Scope of Services. ............................. 34 a. Upon City Direction ................................ 34 b. Upon Collector Proposal ............................ 34 ARTICLE 7 RECORDS AND REPORTING ............................ 35

7.01 Records .................................................. 35 a. Maintenance ........................................ 35 b. City Inspection and Audit .......................... 35 c. SB 1383 Recordkeeping .............................. 35

7.02 Reporting. ............................................... 35 a. Monthly ............................................ 35 b. Quarterly .......................................... 35 c. Annual ............................................. 36 d. SB 1383 Reporting .................................. 36 e. Additional Information ............................. 36 ARTICLE 8 INDEMNITIES, INSURANCE, BONDS .................... 37

8.01 Collector Indemnification and Defense. ................... 37 a. Indemnification of City ............................ 37 b. Hazardous Substances Indemnification ............... 37 c. AB 939 Indemnification ............................. 38

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(continued)
Page

d. Liabilities During Term Only ....................... 39 e. Reduction of CERCLA and Other Liability ............ 39

8.02 Insurance. ............................................... 39 a. Insurance Requirements ............................. 39 b. Minimum Limits of Insurance ........................ 39 c. Other Insurance Provisions ......................... 40 d. Evidence of Insurance Coverage; Insurance
Repository ......................................... 40

8.03 Performance Bond ......................................... 41

8.04 Letter of Credit ......................................... 41

8.05 City’s Right to Draw Against Performance Bond/Letter of Credit ................................................ 41

8.06 Financial Guaranty Agreement ............................. 42 ARTICLE 9 CRIMINAL ACTIVITY OF COLLECTOR. .................. 43

9.01 Criminal Activity of Collector ........................... 43 ARTICLE 10 SERVICE FEES ..................................... 44

10.01 Collector Service Fee .................................... 44

10.02 Franchise Fee ............................................ 44

10.03 Recyclables Revenue ...................................... 44

10.04 Additional Revenue; Rebates; State, Local, or Federal Grants and/or Incentive Money ............................ 44

10.05 Collector Payment to the City ............................ 45

10.06 Adjustments. ............................................. 46 a. Adjustments to Total Customer Rates ................ 46 b. Special Rate Review. ............................... 46 c. Changes in Scope of Service ........................ 48 d. Customer Notification .............................. 48 e. No Release or Assumption of Liability .............. 48

10.07 Collector Billing. ....................................... 48 a. Billing and Payment – Residential Customers ........ 48 b. Billing – Commercial Customers ..................... 49 c. Collector Mailing .................................. 49 d. Data Base .......................................... 49

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(continued)
Page

e. Dispute Resolution ................................. 49

10.08 Disputes. ................................................ 50 a. Customer Notice of Dispute ......................... 50 b. Collector’s Response ............................... 50 c. Dispute Resolution ................................. 50 ARTICLE 11 BREACHES, DEFAULTS AND REMEDIES .................. 51

11.01 Minor Breaches and Liquidated Damages .................... 51 a. Failure to Correct Missed Service .................. 51 b. Discourtesy ........................................ 51 c. Damage to Customer’s Property ...................... 51 d. Excessive Noise .................................... 51 e. Collection Outside Permitted Hours ................. 51 f. Failure to Respond to Complaint .................... 51 g. Failure to Log Complaint ........................... 51 h. Failure to Submit Complaint Log to City ............ 51 i. Failure to Submit Reports to City .................. 52 j. Failure to Respond to Emergency Services During
Work Hours ......................................... 52 k. Failure to Respond to Emergency Services After
Hours .............................................. 52 l. Spillage of Litter ................................. 52 m. Failure to provide Containers for SB 1383
Collection Service ................................. 52 n. Failure to conduct annual outreach and education ... 52 o. Failure to complete annual SB 1383 monitoring
requirements ....................................... 52 p. Failure to timely complete annual SB 1383
reporting requirements ............................. 52 q. Commingled Waste ................................... 53 r. Improper Disposal .................................. 53 s. Failure to Label Containers ........................ 53 t. Failure to perform waste studies ................... 53 u. Failure to investigate complaints. ................. 53

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TABLE OF CONTENTS
(continued)
Page

v. Failure to fulfill any other obligation in this
Agreement. ......................................... 53

11.02 Defaults. ................................................ 53 a. Service Defaults: .................................. 53 b. Performance Assurance Defaults: .................... 54 c. False Representations; Breach of Representations
or Warranties ...................................... 55

11.03 Breaches and Defaults Excused ............................ 55 a. Performance Excused ................................ 55 b. Notice ............................................. 56 c. City’s Rights ...................................... 56

11.04 Remedies Upon Default .................................... 56 a. Termination ........................................ 56 b. Suspension ......................................... 56 c. City Right to Perform Services ..................... 56 d. All Other Available Remedies ....................... 56

11.05 Remedies Not Exclusive ................................... 57

11.06 Waivers. ................................................. 57 a. City Waiver of Breach .............................. 57 b. Collector Waiver of Defenses ....................... 57

11.07 Jurisdiction; Venue ...................................... 58

11.08 Costs .................................................... 58

11.09 Assurance of Performance ................................. 58 ARTICLE 12 SUSPENSION OR TERMINATION. ....................... 59

12.01 City Right to Suspend or Terminate. ...................... 59 a. Termination Events ................................. 59 b. Suspension Events .................................. 59 c. Notice ............................................. 59 d. Suspension, Termination of a Portion of
Performance Obligations: Reduction in Service Fee .. 59

12.02 Collector’s Obligations Upon Termination ................. 60 a. Use of Service Assets .............................. 60 b. Pay Outstanding Damages ............................ 60

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(continued)
Page

vii

c. Cooperation During Transition ...................... 60 ARTICLE 13 DISPUTE RESOLUTION ............................... 61

13.01 Alternative Dispute Resolution ........................... 61

13.02 Parties’ Obligations During Pendency of Dispute .......... 61 ARTICLE 14 THE PARTIES. ..................................... 62

14.01 Collector Is Independent Contractor ...................... 62

14.02 Parties in Interest ...................................... 62

14.03 Binding on Successors .................................... 62

14.04 Further Assurances ....................................... 62

14.05 Actions of the City in Its Governmental Capacity ......... 62

14.06 Collector’s Obligations Performed at Its Sole Expense .... 62

14.07 Parties’ Representatives ................................. 62

14.08 Gifts Prohibited ......................................... 63

14.09 Due Diligence ............................................ 63 ARTICLE 15 ASSIGNMENT AND AMENDMENTS ........................ 64

15.01 Assignment. .............................................. 64 a. City Assignment .................................... 64 b. Collector Assignment ............................... 64 c. Assign ............................................. 65 d. Subcontractor ...................................... 65

15.02 Amendments ............................................... 65 a. By Agreement ....................................... 65 b. City Manager May Act as Authorized Representative .. 65 ARTICLE 16 NOTICES, CONSENTS, APPROVALS, ETC. ............... 66

16.01 Notices, etc ............................................. 66

16.02 Exercise of Options ...................................... 66 ARTICLE 17 EXECUTION OF AGREEMENT ........................... 67

17.01 Execution in Counterparts ................................ 67

17.02 Authority to Execute ..................................... 67 EXHIBIT A DEFINITIONS....................................... A-1 EXHIBIT B COLLECTOR’S REPRESENTATIONS AND WARRANTIES........ B-1 EXHIBIT C CITY’S REPRESENTATIONS AND WARRANTIES............. C-1

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(continued)
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viii

EXHIBIT D SCOPE OF REGULAR COLLECTION SERVICES.............. D-1 EXHIBIT E TRANSITION IMPLEMENTATION PLAN AND SCHEDULE....... E-1 EXHIBIT F MAINTENANCE PROTOCOL.............................. F-1 EXHIBIT G COLLECTOR BILLING PROCEDURE AND POLICY............ G-1 EXHIBIT H COMMUNITY RELATIONS ACTIVITIES.................... H-1 EXHIBIT I HAZARDOUS WASTE SCREENING PROTOCOL................ I-1 EXHIBIT J MONTHLY AND QUARTERLY REPORTS..................... J-1 EXHIBIT K ANNUAL REPORTS.................................... K-1 EXHIBIT L FORM OF PARENT GUARANTY........................... L-1 EXHIBIT M RATES............................................. M-1 EXHIBIT N RATE ADJUSTMENT METHODOLOGY....................... N-1 EXHIBIT O STREET SWEEPING SCHEDULE AND LOCATIONS............ O-1 EXHIBIT P STREET SWEEPING FREQUENCY......................... P-1

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Agreement Between the City of Upland and
Burrtec Waste Industries, Inc. for
Solid Waste Collection, Processing and Disposal Services

1 This Agreement for Solid Waste Collection, Processing and Disposal Services (“Agreement”) is made and entered into by and between the City of Upland, a California municipal corporation (the “City”), and Burrtec Waste Industries, Inc., a California corporation (“Collector”), as of June 27, 2022 (“Effective Date”).

This Agreement is entered into on the basis of the followings facts, understandings, and intentions of the parties:

A. The Legislature of the State of California, by enactment of the California Integrated Waste Management Act of 1989 (Public Resources Code Section 40000, et seq.; hereinafter the “Act”) established a Solid Waste management process which requires cities and other local jurisdictions to implement source reduction, reuse, and recycling as integrated waste management practices; and B. The Act authorizes and requires local agencies to make adequate provisions for Solid Waste handling within their jurisdictions; and
C. The State of California (the “State”) has found and
declared that the amount of Solid Waste generated in California, coupled with diminishing landfill space and potential adverse environmental impacts from landfilling, have created an urgent need for State and local agencies to enact and implement an aggressive new integrated waste management program. Through enactment of the Act the State has directed the responsible state agency, and all local agencies, to promote recycling and to maximize the use of feasible source reduction, recycling and composting options in order to reduce the amount of Solid Waste that must be disposed of by land disposal; and the City is currently required to divert Solid Waste generated in the City from landfills pursuant to the diversion provisions of AB 939, AB 341, AB 1826, SB 1383, and their implementing regulations, and may be subject to additional requirements during the Term of this Agreement; and
D. The City Council has enacted Chapter 13.28 of Title 13 of the Upland City Code, which establishes standards for the collection and removal of Solid Waste, Recyclables, and Organic Waste, the disposal of Solid Waste, the Recycling of Recyclables and Organic Waste, and requirements for Collection Agreements; and E. Pursuant to Sections 49300 and 49500-49523 of the Act, City is authorized to enter into an exclusive agreement for the Collection and disposal of Solid Waste; and

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

2 F. Pursuant to this Agreement, City desires to engage Collector as an independent contractor to exclusively provide automated Solid Waste, Organic Waste and Recyclables collection services in the City. Collector shall furnish all personnel, equipment, and supplies necessary to collect, or otherwise remove and dispose of all Solid Waste, Organic Waste and Recyclables, as defined herein, generated or accumulated at all residential and Commercial/Industrial Premises within the City, except as otherwise specifically provided herein; and
G. Collector has represented and warranted to City that it has the experience, responsibility, and qualifications to implement the Collection of Solid Waste, Recyclables, and Organic Waste, and to arrange with residents and other entities in the City for the Collection, safe transport, processing, and disposal of all materials in compliance with Applicable Laws; and H. The City intends that this Agreement will contribute to providing the most cost-efficient, best Solid Waste management services to its citizens;
NOW, THEREFORE, in consideration of the mutual promises, covenants, guaranties and conditions contained in this Agreement and for other good and valuable consideration, the City and Collector agree as follows:

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

3 ARTICLE 1 DEFINITIONS AND CONTRACT INTERPRETATION

1.01 Definitions. As used herein, capitalized words shall have the meanings set forth in Exhibit A, which shall control in the event of any conflict with the definitions used in the recitals hereto.

1.02 Interpretation.
a. Gender and Plurality. Words of the masculine
gender mean and include correlative words of the feminine and neuter genders, and vice versa. Words importing the singular number mean and include the plural number, and vice versa, unless the context demands otherwise.
b. Headings. Any captions or headings following the
Exhibit, Section, subsection, paragraph and Article numbers and preceding the operative text hereof shall be for convenience of reference only and shall not in any way control or affect the scope, intent, meaning, construction, interpretation or effect hereof.
c. References to Parts. References to Sections and
Articles refer to Sections and Articles hereof, unless specified otherwise. References to Exhibits refer to Exhibits attached hereto.
d. Examples. Use of examples are for purpose of
illustration only. In the event of any ambiguity or conflict between the examples and the provisions which they illustrate, the provisions shall govern.

1.03 Integration. This Agreement contains the entire
Agreement between the parties with respect to the transactions contemplated hereby. This Agreement shall completely and fully supersede all prior understandings and agreements between the Parties with respect to such transactions. All exhibits and attachments referenced herein are incorporated by reference.

1.04 Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California (without giving effects to the State’s principles of conflicts of laws). Venue for suit shall be the County of San Bernardino and the Central District of the United States District Court.

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

4 1.05 Severability. If any clause, sentence, provision, subsection, Section or Article hereof or Exhibit hereto shall be ruled invalid by any court of competent jurisdiction, then the Parties shall:
(1) promptly meet and negotiate in good faith a substitute for such provision which shall, to the greatest extent legally permissible, effectuate the intent of the Parties therein; (2) if necessary or desirable to accomplish preceding item (1) above, apply to the court having declared such invalidity for a judicial construction of the substituted portion of this Agreement; and
(3) negotiate such changes in, substitutions or additions to the remaining provisions hereof as may be necessary in addition to and in conjunction with preceding items (1) and (2) above to effectuate the intent of the Parties in the invalid provision.

The invalidity of such provision shall not affect any of the remaining provisions hereof, and this Agreement shall be construed and enforced as if such invalid provision did not exist.

1.06 Construal. This Agreement shall be interpreted and construed reasonably and neither for nor against either Party, regardless of the degree to which either Party participated in its drafting. Collector acknowledges that it determined to participate in the competitive procurement of this Agreement upon its choice and initiative with full knowledge of the terms, conditions and risks of participation. The Parties have negotiated this Agreement at arms’ length and with advice of their respective attorneys, and no provision herein shall be construed against the City solely because it prepared this Agreement in its executed forms.

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

5 ARTICLE 2 REPRESENTATIONS AND WARRANTIES

2.01 Of Collector. The Collector hereby covenants,
represents, and warrants the representations and warranties set forth in Exhibit B to City for the purpose of inducing City to enter into this Agreement and to consummate the transaction contemplated hereby, all of which shall be true as of the Effective Date.

2.02 Of City. The City hereby covenants, represents;` and warrants the representations and warranties set forth in Exhibit C to Collector for the purpose of inducing Collector to enter into this Agreement and to consummate the transaction contemplated hereby, all of which shall be true as of the Effective Date.

2.03 Waiver. The obligations of the Parties hereunder are preconditioned upon the truth and correctness of the
representations and warranties made by the Parties, respectively, in this Article 2. However, either Party may waive such precondition, in whole or in part.

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

6 ARTICLE 3 TERM OF AGREEMENT

3.01 Term. The Term of this Agreement shall be for a period of seventeen (17) years commencing upon the date of execution of this Agreement. On January 1, 2033, and annually thereafter, the term shall be automatically extended for one (1) year so that the remaining term of the Agreement shall always be seven (7) years, unless either party notifies the other in writing (the “Wind Down Notice”) before December 31st in any year that is does not wish the term to be automatically extended in which case the Agreement shall terminate at the end of the Term, or seven (7) years from the date of the last extension pursuant hereto, whichever is later (the “Wind Down Period”).

3.02 Survival of Certain Provisions. All representations and warranties of the Parties herein, and all indemnifications provided for herein, and any other rights and obligations of the Parties expressly stated to survive the termination of this Agreement, shall survive such termination or expiration.

3.03 Statutory Continuation Rights. Collector acknowledges that it is familiar with Article 3 of Chapter 6 of Part 8 of Division 30 of the Public Resources Code, commencing with Section 49520, and that such provisions are inapplicable to the Collector in this Agreement as this Agreement provides an exclusive franchise. .

3.04 Transition to Next Collector. Upon expiration of this Agreement, if Collector and City do not enter into a succeeding agreement, Collector shall cooperate fully with City and the subsequent collector(s), franchisee(s), licensee(s), permittee(s) or other Person providing services similar to the Services so as to assure an efficient, orderly, timely and effective transition in accordance with Section 12.02cc.

3.05 Conditions Precedent. This Agreement shall automatically expire and be of no further force or effect, without the need for notice pursuant to Section 11.02 or otherwise, if the conditions precedent set forth below are not satisfied by Collector, or waived (in written form) by Cit. Waiver of any of the following as a condition to the continued effectiveness of this Agreement will not preclude City from pursuing any claim for breach of this Agreement:

The representations and warranties made by Collector in Section 2.01 and Exhibit B of this Agreement are true and correct on and as of the Effective Date:

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

7 (a) evidence of insurance coverage in compliance
with Section 8.02;
(b) the performance bond in compliance with
Section 8.03; and
(c) the Financial Guaranty Agreement in compliance
with Section 8.06 of this Agreement.

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

8 ARTICLE 4 SERVICES

4.01 Collection and Transportation.
a. Service Standards.
(1) General. Collector acknowledges that one of
the City’s primary purposes in competitively procuring Services hereunder, selecting. Collector and executing this Agreement, is to improve the quality of Customers’ waste management services.

Therefore, Collector shall collect residential Solid Waste from all single-family and multi—family premises and commercial and industrial businesses under the City’s jurisdiction, and shall perform all Services in a prompt, thorough, comprehensive, reliable, courteous and professional manner so that Customers receive high-quality Service at all times. Enumeration of and specifications of requirements for particular aspects of the quality of Services shall not relieve Collector of the duty and obligation of accomplishing all other aspects of Services in the manner provided in this paragraph, whether such other aspects are enumerated elsewhere herein or not.
(2) Litter. Collector shall clean up litter in
the immediate vicinity of any Solid Waste storage area, including the areas where Containers are placed for collection, whether or not Collector has caused the litter: Collector shall discuss instances of repeated litter caused by a Customer directly with the responsible Customer and report such instances to City. City will cooperate with Collector to rectify such situation if Collector has already attempted to do so without success.

Collector shall use due care to prevent Solid Waste
from being spilled or scattered during Collection and
transportation. All vehicles, containers and debris boxes shall be covered during transport to the Disposal Facility, Composting.

Facility, and Processing Facility. Collector shall not transfer loads from one vehicle to another on any public street, unless necessitated by mechanical failure or accidental damage to a vehicle. If any Solid Waste is spilled or scattered, Collector shall immediately clean it up. Collector shall be responsible for paying any fines assessed by the operator of the Disposal Facility, Composting Facility, and Processing Facility or other Person for improperly covering loads or spills.
(3) Respect for Property.
(i) Private Property. Collector shall use
due care in entering and exiting Customers’ property or enclosures

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

9 to provide Services. After making Collections, Collector shall close all gates opened by them and shall use the paved accessways on public or private property. Collector shall promptly repair or compensate Customer for all damage to Customer’s property caused by the negligence or carelessness of Collector’s employees. (ii) Containers. Collector shall handle
Containers with due care to promote the longest possible useful life. Collector shall return containers in an upright position to a location that does not obstruct traffic or access to the Customer’s property.
(iii) Pavement. Collector shall be
responsible for damage to driving surfaces where Containers are located on public or private property, when City or Customer can demonstrate to satisfaction of City that the damages are the result of Collector’s Vehicles exceeding the legal maximum weight limits of the State or the negligent operation of Vehicles by Collector’s employees.
(4) Noise. Collector shall conduct Collection as
quietly as possible and shall conform to noise level regulations.

Collector will promptly resolve any noise complaints to City satisfaction. City may conduct random checks of noise emission levels to ensure compliance herewith.
b. Scope of Regular Collection Service. Collector
shall timely and fully perform Collection Services described in Exhibit D in accordance with the provisions of this Agreement. To the extent that any portion of Services is provided exclusively by Collector, it shall be so only if Collector is and shall at all times be ready, willing, and able to provide Services in accordance herewith and with Applicable Law.
(1) Collector shall not commingle, in the vehicles
or otherwise, any refuse with any Recyclables , Organic Waste or Green Waste, or any refuse, Recyclables, Organic Waste or Green Waste with each other when collected by Collector, unless otherwise specifically authorized in writing by City. Collector shall not be deemed to have violated this Section where such materials were commingled prior to Collection by Collector.
(2) Collector shall comply with the requirements
of the City’s Construction and Demolition Waste diversion ordinance, and Applicable Law, as may be adopted or amended, consistent with this Agreement. Collector and shall assist customers with compliance by diverting Construction and Demolition

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10 Waste to the maximum extent feasible and by providing receipts for all materials collected.
(3) Exceptions.
(i) Special Wastes. Collector shall not
be required to collect special wastes, including grease wastes from grease traps or grease interceptors.
(ii) Recyclables Not Discarded by Customer.

Recyclables belong to the Customer until set out at the curb for transfer to Collector. Customers may dispose of such Recyclables and bulky goods through other appropriate means including, but not limited to, taking them to drop-off facilities and donating or selling them to private or public entities.
(iii) Waste Not Properly Placed in
Containers. Collector shall not be required to collect any Solid Waste that: is not placed inside the appropriate Container, bags or bundles; has been overloaded in Containers by weight or volume; or has been compacted or otherwise placed, kept, or accumulated in a manner that the Solid Waste will not, of its own weight, fall out of the Container in which it is placed when such Container is turned upside down except for excess Solid Waste or Bulky Waste properly set out. Collector shall complete and leave a Non- Collection Notice securely attached to any adjacent Container of Customer, or if no Containers are set out, to Customer’s door. The use of permanent stickers to affix a Non-Collection Notice is not allowed. In the event a Customer commingles refuse, Organic Waste, or Green Waste with Recyclables for Recyclable collection or commingles refuse or Recyclables with Green Waste or Organic Waste for Green Waste or Organic Waste collection, Collector may treat such collection as a refuse collection subject to the applicable refuse Collection Rates.
(iv) Container Not Placed in -Proper or
Safe Collection Location. Collector shall provide Collection Services for all properly placed Containers —except that Collector shall not be required to collect any Solid Waste from any Container which is placed in a manner which would otherwise preclude the safe pickup thereof. Collector shall complete and leave a Non- Collection Notice securely attached to such improperly placed Container. The use of permanent stickers-to affix a Non-Collection Notice is not allowed.
(v) Unsafe Condition. If Collector
determines that any condition at or near any collection location presents a health or safety threat to Collector’s employees,

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11 Collector shall immediately notify the City Representative thereof. Upon City authorization, the Collector may discontinue collection for any such location until the safety hazard is eliminated. Collector shall complete and leave a Non-Collection Notice securely attached to Customer’s Container or on the door to the Customer’s premises. The use of permanent stickers to affix a Non-Collection Notice is not allowed.
(vi) Hazardous Waste or Unsafe Materials.

If Collector determines that Containers contain Hazardous Waste or other materials that present a health or safety threat to Collector’s employees, Collector may refuse to collect such Container. Collector shall notify the City Fire Department immediately. Collector will notify City thereof in its report. c. Special Collection Service.
(1) Bulky Waste.
(i) Resident Requested Collection.

Collector shall provide Bulky Waste collection at the curbside or alleyway upon request up to four (4) times per calendar year to each residential Customer in the City. Collector shall provide such Customer requested collection by or on the next scheduled service day of the Customer. Customer requests for such service may be done in person, over the telephone, or in writing. Collector may bill the Customer for Customer requested Bulky Waste collection services in excess of the four (4) free collections in accordance with Exhibit M. When a Customer requests a Bulky Waste collection in excess of the required four (4) free collections, the Customer shall be told the cost of the additional collection. Service specifications shall include: recovery rates pursuant to the diversion provisions of AB 939, AB 341, AB 1826, SB 1383, and their implementing regulations, and collection of all white goods, all brown goods, all couches and mattresses, and other Bulky Waste up to four (4) feet in length.
(ii) On City Demand. Within twenty-four
(24) hours of City Notice to Collector, Collector shall pick up and dispose of Bulky Waste deposited on public streets or other public property located within the City at no charge.
(iii) Weekly Bulky Collection Program. In
addition, Collector shall pick up Bulky Waste deposited at the City’s Downtown, Memorial Park, Citrus Park, Olivedale Park, and Pacific Electric Trail from Euclid Avenue to Benson Avenue, three days each week (on Mondays, Wednesday, and Fridays).

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12 (2) Backyard Collection Service. Backyard
Collection shall be available to any Residential Customer upon request, for the fee specified in Exhibit M. Residential Customers, including disabled Customers, who demonstrate inability to bring Containers to the curb and meet certain eligibility requirements, as determined by the City Manager, shall not be charged a backyard collection service fee.
(3) Christmas Tree Collection. Collector shall
collect all Christmas trees set at curbside from December 26 to January 21 annually. Collector will distribute City-provided notification to Customers by mail of such collection dates and that trees placed on the curbside at other times must be cut up for delivery as organic waste/green waste/wood waste. Collector may identify additional sites for centralized drop-off of Christmas trees by Customers and shall ensure that trees will not accumulate outside of such drop-off containers or locations.

Collector shall deliver trees to a green/organic waste or composting facility for diversion.
(4) Alley Service. Collector acknowledges that up
to approximately ten percent (10%) of Residential Customers receive pick up of collection containers in service alleys at no additional charge to the City or the Customer.
(5) Clean-Up Programs.
(i) Multi Family Clean-Up. A minimum of
two (2) times per Agreement year, Collector shall, in response to written request of the City, deliver and collect Roll-Off Containers for use in multi-family neighborhood clean-up programs at no charge. These services shall consist of a single Collection day beginning at 6:00 a.m. and ending at 8:00 p.m. The City shall notify Collector in writing not less than thirty (30) calendar days prior to the date of the service. The notice to the Collector shall specify the date of delivery and collection of the Roll-Off Containers, the locations(s) for delivery, and the number and size of the Roll-Off Containers to be delivered. As part of this service, Collector shall provide on-site supervision at all times the Roll-Off Containers are available for multi-family
neighborhood clean-up Services. Solid Waste Collected as a part of this special Collection Service shall be included in the City’s minimum diversion requirements.
(ii) City- Roll off Service. Upon the City
Manager’s or designee’s request, Collector shall provide at no charge six (6) times per Agreement year, a minimum of six (6) 40-

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13 cubic yard roll-of boxes for Solid Waste collection and disposal services on City sponsored projects.
(6) Collection From City Facilities. Collector
shall provide at no charge Solid Waste, Recycling, and Organic Waste collection services to the City facilities and properties listed in Exhibit D.
(7) Commercial Waste Audits. Collector shall
provide free upon any Commercial Customer’s request, a waste audit for the Commercial Customer’s serviced facilities. The purpose of such waste audit shall be to identify opportunities for decreasing waste generation and increasing waste diversion at the Commercial Customer’s serviced facilities. Collector shall inform all Commercial Customers of this free service though bill inserts a minimum of two (2) times per Agreement year. Collector shall include a listing of Customer requests for free waste audits and a summary of waste audit results for the preceding year in each annual report.
(8) Mulch. Collector shall provide, free of
charge, a minimum of one hundred and twenty (120) cubic yards of mulch to the City upon City request, per Agreement year. The mulch shall meet the standards set forth in 14 CCR sections 18993.1 for the purpose of the City meeting its annual recovered organic waste procurement target.

The City shall notify Collector in writing not less than thirty (30) calendar days prior to the date of the service. The notice to the Collector shall specify the date of delivery and collection of the Roll-Off Containers, the locations(s) for delivery, and the size and number of the Roll-Off Containers to be delivered. d. Frequency.
(1) Regular Schedule
(i) Residential. Collector shall collect
Solid Waste, Recyclables, and Organic Waste once (1) a week from each Residential Customer as scheduled and noticed to the Customer. (ii) Commercial. Collector shall collect
Solid Waste, Recyclables, and Organic Waste at least once (1) a week from each Commercial Customer as scheduled and noticed to the Customer.

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14 (iii) City. Collector shall collect Solid
Waste, Recyclables, and Organic Waste according to a schedule mutually agreed upon by the City and Collector.
(2) Holiday Schedule. City-designated holidays
are as follows: Christmas Day, New Year’s Day, Memorial Day, Labor Day, Thanksgiving Day, and Independence Day. Collector shall notify Customers annually in advance of Holiday Collection schedule, and the City shall approve the Collector’s Holiday Collection schedule in advance.
e. Hours.
(1) Residential. Collector shall perform
Collection Services within residential areas only between 7:00 a.m. and 6:00 p.m., Monday through Friday. Saturday collection hours shall be between 7:00 a.m. and 6:00 p.m. Other Exceptions shall be effected only upon the mutual agreement of City and Collector.
(2) Commercial. Collector shall perform
Collection Services within commercial areas only between 6:00 a.m. and 6:00 p.m., Monday through Saturday. Commercial collection in areas that border residential areas shall begin no earlier than 7:00 a.m. Exceptions shall be effected only upon the mutual agreement of City and Collector.
(3) City. Collector shall perform Collection
Services for City facilities and properties listed in Exhibit D according to a schedule mutually agreed upon by the City and Collector. Exceptions shall be effected only upon the mutual agreement of City and Collector.
(4) No Sunday Pickup. Collector shall not perform
scheduled Collection Services on Sunday.
f. Routing.
(1) Route Changes.
(i) City-Initiated, Material Route Changes
During Agreement Term. City reserves the right to change the day of the week for Collection Services on any route. City shall notify Collector of any change in the Collection Service day at least sixty (60) days in advance of the effective date of the change, and Collector shall provide the City with maps precisely defining the revised collection routes and schedules requested by the City not less than thirty (30) calendar days prior to the

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15 proposed date of implementation. Collector shall in turn notify all affected Customers of the change at least fourteen (14) days in advance of the effective date of the change. City shall not initiate route schedule changes more often than six (6) times in any Contract Year nor more often than two (2) times per individual numbered route in any Agreement Year. Any notification
requirements and decreases in routing efficiency due to City- initiated route changes shall be compensated to the Collector. (ii) Collector-Initiated, Material Route
Changes During Agreement Term. Collector shall submit to City, in writing, any proposed route schedule changes with maps precisely defining the revised collection routes and schedules not less than sixty (60) calendar days prior to the proposed date of
implementation. The City may provide written comments on such proposed change to Collector no later than ten (10) calendar days thereafter, and in such event Collector shall revise the routes to reflect such comments and return them to the City within ten (10) calendar days. Collector shall not implement any route changes without the prior review of the City Representative. Collector shall notify Customer of route schedule changes not less than thirty (30) calendar days before the proposed date of
implementation. Any notification requirements and decreases in routing efficiency due to Collector-initiated route changes shall be at Collector’s expense.
(iii) City-Initiated, Immaterial Route
Changes During Agreement Term. City reserves the right to change the route path on any route. City shall notify Collector of any change in a Collection Service route at least sixty (60) days in advance of the effective date of the change, and Collector shall provide the City with maps precisely defining the revised collection routes requested by the City not less than thirty (30) calendar days prior to the proposed date of implementation. (iv) Collector-Initiated, Immaterial Route
Changes During Agreement Term. Collector shall submit to City, in writing, any proposed route path changes with maps precisely defining the revised collection routes not less than sixty (60) calendar days prior to the proposed date of implementation. The City may provide written comments on such proposed change to Collector no later than ten (10) calendar days thereafter, and in such event Collector shall revise the routes to reflect such comments and return them to the City within ten (10) calendar days.

Collector shall not implement any route changes without the prior review of the City Representative.

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16 (2) Route Audits. City reserves the right to
conduct audits of Collector’s Collection routes. Collector shall cooperate with City in connection therewith, including permitting City employees or agents designated by the City Representative to ride in the Collection Vehicles during the conduct thereof.

Collector shall have no responsibility or liability for the salary, wages, benefits or worker compensation claims of any person designated by the City Representative to conduct such audits. g. Vehicles.
(1) Specifications. Collector shall provide route
vehicles that comply with South Coast Air Quality Management District (SCAQMD) regulations for fleet vehicle emissions. (i) Noise. The noise level generated by
Collection Vehicles using compaction mechanisms during the stationary compaction process shall not exceed seventy-five decibels at a distance of twenty-five feet from the Vehicle measured at an elevation of five feet above ground level using the “A” scale of a standard sound level meter at slow response, or Applicable Law, whichever is more stringent. Collector shall cause the Collection Vehicles to be tested by an independent testing authority annually during the month of May and shall submit a certificate of testing showing that the Vehicles meet the requirements of this Section together with the annual report submitted by Collector.
(2) Registration, Certifications. Collector
shall register all Vehicles, except those Vehicles used solely on Collector’s premises, with the California Department of Motor Vehicles in accordance with Applicable Law. Collector shall obtain a certificate of compliance (smog check) issued pursuant to Part 5 of Division 26 of the California Health and Safety Code (Section 43000 et seq.) and the regulations promulgated thereunder and/or a safety compliance report issued pursuant to Division 14.8 of the California Vehicle Code (Section 34500 et seq.) and the regulations promulgated thereunder, as applicable to each Vehicle. Collector shall maintain copies of registration certificates and reports and make them available for inspection upon request by the City.

Collector shall also obtain certificate of compliance for SCAQMD fleet vehicle emissions requirements.
(3) Safety Markings. Contract shall ensure that
all Service Assets bear all necessary and appropriate and safety features, including highway lighting, flashing and warning lights, clearance lights, and warning flags, in accordance with the

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17 requirements of the California Vehicle Code and other Applicable Law.
(4) Identification. Collector shall ensure that
its name, telephone number, and the Vehicle number shall be visibly displayed on all Vehicles in letters and figures not less than four (4) inches high on each side and the rear of each vehicle. (5) Public Relations Signage. City may design and
produce interchangeable signs containing messages designed to alert the public to special waste management programs in English and additional languages as deemed appropriate by the City.

Collector shall install such City provided signage on Collector Vehicle, for uses in the City within thirty (30) days upon request by the City. The City may request a maximum of two (2) signage changes per contract year.
(6) Maintenance. Collector shall at all times
maintain Vehicles in good condition in accordance with the maintenance protocol contained in Exhibit G, so that they operate properly and safely. Collector acknowledges that it is important to the City that Collector present a professional and pleasing image. Therefore, Collector shall wash all Vehicles at least once (1) each week and shall repaint all Vehicles (including trim) not less than every thirty (30) months.
h. Containers.
(1) Residential Containers. Collector shall
provide a three-container collection program, using Containers that comply with the requirements of this Agreement and SB 1383 Regulations. Default level of service for Residential Customers is 90-100 gallons for organic waste, 60-70 gallons for recyclables, and 60-70 gallons for Solid Waste. Residential Customers shall be allowed to choose an alternative level of service: 32 gallon, or 90 gallon for Solid Waste and 32 gallon or 90 gallon for organic waste and recyclables. After an initial three (3)-month adjustment period, residential customers are allowed one (1) change of container size per year. Collector shall provide requested container size within fourteen (14) days of a Customer request for change of container size.
(i) Provided by Collector for Solid Waste
Collection. Solid Waste collection Containers shall be provided by the Collector for the Collection of Solid Waste.

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18 (ii) Provided by Collector for Recyclables
Collection. Recyclables collection Containers shall be provided by the Collector for the Collection of Recyclables.
(iii) Provided by Collector for Organic
Waste Collection. Green Waste Collection Containers shall be provided by the Collector. For the Collection of Organic Waste. (iv) Repair of Containers. Collector shall
repair Collector-provided Containers within seven (7) days of a request for repair from a Customer or from the City Representative.

If the repair cannot be completed within seven (7) days, Collector shall provide such Customer with a replacement Container. (2) Commercial Containers. Collector shall
provide a four-container collection program, using Containers that comply with the requirements of this Agreement and SB 1383 Regulations
i. Personnel.
(1) Driver Licensing and Safety. Collector shall
ensure that all drivers are trained and qualified in the operation of Collection Vehicles and that they have, in full force and effect, a valid license of the appropriate class issued by the California Department of Motor Vehicles. Collector shall maintain photocopies of licenses for all Vehicle operators. Collector shall provide suitable operational and safety training for all of its personnel who utilize or operate Vehicles or other equipment for Collection or who are otherwise directly involved in Collection.

Collector shall train its personnel to identify and not collect Hazardous Waste, except as provided in this Agreement.
(2) Identification, Appearance, Conduct.

Collector shall require each driver and all other personnel who come into contact with the public to wear a uniform identifying his name. Collector shall use its best efforts to assure that all personnel present a neat and orderly appearance and conduct themselves in a courteous manner. Collector shall regularly train its employees in Customer courtesy, prohibit the use of loud or profane language, and instruct Collection crews to perform their work as quietly as possible. If any personnel is found not to be courteous or not to be performing Services in the manner required hereby, Collector shall take all appropriate corrective measures. (3) No Gratuities. Collector shall not permit its
personnel to demand, solicit, or accept directly or indirectly,

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19 any additional compensation or gratuity from Customers or any members of the public.
(4) Nondiscrimination. In the performance of all
work and Services hereunder, Collector shall not discriminate against any person on the basis of such person’s race, sex, color, ancestry, physical handicap, medical condition, national origin, religion, marital status, sexual orientation, or as otherwise prohibited by Applicable Law. Collector shall comply with all Applicable Law regarding non-discrimination, including in employment.

4.02 Diversion.
a. Processing.
(1) Facility Selection. Collector shall transport
and deliver to a Processing Facility or Facilities all Recyclables including Recyclables from single-family households, and Recyclable Bulky Waste. Collector shall transport and deliver to a Composting Facility or Processing Facility all Organic Waste.

Such Facilities shall be permitted under and in substantial compliance with Applicable Law. Collector shall make Reasonable Business Efforts to select Facilities which create the most economic value for the City, taking into account any applicable tipping fees, revenue sharing, and transportation costs thereto, consistent with public health and safety, diversion provisions of AB 939, AB 341, SB 1383, and their implementing regulations, and Collector’s obligations hereunder. Collector shall ensure there is sufficient capacity at such Facility or Facilities to process, and store until marketed, all Recyclables, Bulky Waste, and Organic Waste Collected by Collector during any one-week collection period, and that the City Representative and his or her designees shall have access to such Facility or Facilities at all reasonable times; provided that Collector shall have no responsibility or liability for the salary, wages, benefits or worker’s compensation claims of the City Representative or any such designee. (2) Weighing and Record Requirements. Collector
shall ensure that, at a minimum, all materials shall be weighed upon delivery to the Processing Facility or Facilities and Organic Waste Processing Facility, as the case may be, and all weight and related delivery information (including date, time, material type, route and truck number) shall be recorded.
(3) Recyclables Specifications. Collector shall
ensure or cause to be ensured that the quality of Recyclables continues to meet the specifications set out by Collector in its

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20 current Marketing Plan or such other specifications as are mutually agreed by Collector and the City Representative. City shall have no responsibility for the quality of Recyclables delivered by Collector to the Processing Facility nor for any Recyclables rejected by the Processing Facility or broker or other purchaser because the Recyclables do not meet specifications. City shall make no warranty, either express or implied, with respect to the Recyclables, including but not limited to any warranty of merchantability and any warranty of fitness for a particular purpose.
(4) Disposal of Residue. Collector shall dispose
of, or provide for the disposal of, any and all residue remaining from the processing of Recyclables in accordance with. Applicable Law. The cost thereof shall be included in fees for Processing or Composting Facilities, as the case may be.
(5) Processing Fees. Collector shall pay for
processing of Recyclables, and Bulky Waste at City-reviewed Processing Facilities, Green Waste at a City-reviewed Composting Facility , Organic Waste at a City-revised Organic Waste Processing Facility, and the disposal of residue therefrom, unless otherwise mutually agreed by City and Collector. Collector shall not, under any circumstances, cause to be charged to City any material that was collected by Collector or by any other person without the express prior written authorization of the City Representative. (6) Collector Responsibility. In the event
Collector fails or is unable, for any reason whatsoever, to provide for processing of Recyclables, Recyclable Bulky Waste, Green Organic Waste, and Organic Waste, Collector shall reimburse City for any costs incurred by City in securing alternate processing services, including storage or disposal costs if such alternative is required, in light of cost, expediency, and lost revenue. b. Certification of Re-use. Collector shall use
Reasonable Business Efforts to obtain certifications of re-use of Recyclables, Bulky Waste and any other materials. Collected hereunder or diverted from disposal.
c. Transformation. Collector acknowledges that the
California Integrated Waste Management Act requires Solid waste diversion from landfill disposal and that “transformation,” as defined in California Public Resources Code Section 40201, provides for a maximum of ten percent (10%) diversion credit.

To the extent possible, Collector shall not process by means of transformation any Recyclables or Organic Waste materials targeted

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21 for collection through Collector’s Recycling and Organic Waste collection programs, nor shall Collector ship, transport, deliver or otherwise make available any such Recyclables or Organic Waste to any person for the purpose of transformation, without the express prior written authorization of City Representative.

However, if residue from any Processing Facility is disposed through transformation, Collector will provide City with the data to support diversion credit, if any.

Collector shall make reasonable efforts to ship, transport, deliver, or otherwise make available non-Recyclables or non- Organic Waste for the purpose of transformation in an amount necessary for the City to receive the ten percent (10%) diversion credit for transformation. Collector will provide City with the data to support diversion credit from transformation, if any. d. Indemnification for Failure to Meet Waste Diversion
Goals. Collector agrees to protect and defend City with counsel selected by Collector and approved by City, to pay all attorneys’ fees, and to indemnify and hold City harmless from and against all fines or penalties imposed by CalRecycle if the diversion goals specified in California Public Resources Code Section 41780, AB 939, AB 341 (Chapter 476, Statutes of 2012), AB 1826 (Chapter 727, Statutes of 2014), and SB 1383 (Chapter 395, Statutes of 2016), and their implementing regulations, as they may be amended, as of the date hereof and hereafter throughout are not met by the City with respect to the Solid Waste Collected by Collector and if the lack in meeting such goals are attributable to the failure of the Collector to implement and operate the recycling or diversion programs or undertake the related activities required by this Agreement. City Council shall not unreasonably refuse to approve new programs and/or rate adjustments, nor shall the City Council unreasonably delay review and approval of any such change or adjustment that may prevent Contractor in meeting such goals. e. Minimum Diversion Requirements. Collector shall
implement and operate programs that will meet the diversion provisions of AB 939, AB 341, AB 1826, SB 1383, their implementing regulations, and Public Resources Code Section 41780.

If the City finds that additional programs are necessary to meet any required diversion goals, the City may require proposals for additional diversion programs to meet the diversion requirements.

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22 4.03 Disposal.
a. Disposal Facility. Collector shall transport and
deliver to a Disposal Facility and/or transfer station all Solid Waste, including Residential, Commercial, Industrial, City Solid Waste, Solid Waste collected in performing emergency services, and Bulky Waste which cannot be diverted.

Collector shall observe and comply with all regulations in effect at such Disposal Facility and cooperate with the operator thereof with respect to operations thereat, including directions to unload collection vehicles in designated areas, accommodating construction and maintenance, and hazardous waste exclusion programs. Collector shall at all times operate according to safe industry practices. Such Facilities shall be permitted under and in substantial compliance with Applicable Law. Collector shall make Reasonable Business Efforts to select Facilities which result in the least expensive disposal option for the City, taking into account any applicable tipping fees, revenue sharing, and transportation costs thereto, consistent with public health and safety, diversion provisions of AB 939 and successor statutes (including AB 341, AB 1826, and SB 1383), and Collector’s obligations hereunder. Collector shall cooperate with City in enforcing mandatory Commercial Recycling and Organic Waste efforts as adopted by AB 341 (Chapter 476, Statutes of 2012), AB 1826 (Chapter 727, Statutes of 2014), and SB 1383 (Chapter 395, Statutes of 2021), any Applicable Law, and their implementing regulations, as they may be amended. Collector shall provide any notices or information reasonably requested by City in enforcement of such requirements.
b. Disposal Fees. Collector shall pay for disposal of
Solid Waste by Collector at a Disposal Facility unless otherwise mutually agreed by City and Collector. Collector shall not, under any circumstances whatsoever, cause to be charged to City any material that was collected by Collector or by any other person, other than Solid Waste Collected hereunder without the express prior written authorization of the City Representative. c. Indemnification.
(1) Collector Conduct Included. Collector shall
indemnify, defend with counsel approved by the City, pay all attorneys’ fees, protect and hold harmless the City (including parties described in this subsection below) from and against all Liabilities (defined in this subsection below) paid, incurred or suffered by, or asserted against, the City arising from or attributable to any repair, cleanup or detoxification, or

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23 preparation and implementation of any removal, remediation, response, closure, or other plan (regardless of whether undertaken due to governmental action) concerning any Hazardous Waste and/or Household Hazardous Waste (“HHW”) at any place where Collector delivers, stores, processes, composts, or disposes of Solid Waste to the extent that such Liabilities are caused by the following:
(i) Collector Negligence or Misconduct.
the wrongful, willful or negligent act, error or omission, or the misconduct of the Collector;
(ii) Customer and Non-Customer Materials.

The collection, delivery, handling, processing, composting, or disposal by the Collector of Hazardous Waste, which are generated or placed in Collector’s collection containers by Collector’s Customers or by Persons placing such materials in Collector’s collection containers;
(iii) Failure to Comply with Hazardous Waste
Laws and Regulations. The failure of Collector to undertake Hazardous Waste training procedures required by Applicable Law with respect to its employees or any subcontractor or Collector’s Hazardous Waste Screening protocol described in Exhibit J, whichever is more stringent;
For the purposes of this section, “City” shall include its officers, employees, agents, Contractors, attorneys,
administrators, affiliates, representatives, servants, insurers, heirs, assigns, and any successor or successors to the City’s interest; “Collector” shall include its employees, officers, agents, subcontractors, and consultants performing or responsible for performing Services; and “Liabilities” shall include claims, actual damages (including special and consequential damages, whether in contract, statute, or in tort, or pursuant to any theory), natural resource damages, punitive damages, injuries, costs, financial loss, response remediation and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, mediation, arbitration, legal or administrative
proceedings, interest, fines, charges, penalties, and expenses (including attorney’s and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity) of any kind whatsoever.

(2) City Negligence Excluded. The Collector shall
not, however, be required to reimburse or indemnify the City to the extent any such liabilities are due to the sole negligence of the City.

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24 (3) Indemnification Survives Termination. Such
indemnification shall be limited to Liabilities resulting from Services from and after the date hereof through the Term.

Indemnification resulting from Services during the Term shall survive the termination of this Agreement.
(4) Statutory Agreement. The foregoing indemnity
is intended to operate as an agreement pursuant to Section 107(e)of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9607(e) and California Health and Safety Code Section 25364, to insure, protect, hold harmless, and indemnify the City from liability in accordance with this section.

The provisions of this subsection shall survive the termination of this Agreement.

4.04 Customer Service and Public Relations.
a. Phone Access.
(1) Toll-free Number. Collector shall maintain a
local telephone number, toll-free to Customers, at least during Office Hours (“Phone Hours”). The telephone number shall be listed under Collector’s name and the City’s governmental listings in the City telephone directory. Collector shall maintain telephone answering system capable of accepting at least five (5) incoming calls at one time. Collector shall provide an answering machine or answering service to take reports of missed pick-ups and other complaints which are received outside of Phone Hours.
(2) Emergency Number. Collector shall also
maintain a local emergency telephone number, toll-free to Customers, for use outside Collector’s Phone Hours, which shall be Separately listed as an emergency number under Collector’s name and under the City’s governmental listings in the City telephone directory. Collector shall have a representative, or answering service required to contact such representative, available at such emergency number outside Phone Hours, as soon as possible, and in no event more than one (1) hour following the time of the emergency call.
(3) Multi-lingual, TDD Services. Collector shall
at all times maintain the capability of responding to telephone calls in English, Spanish, and such other languages as City may direct. Collector shall at all times maintain the capability of responding to telephone calls through Telecommunications Device for the Deaf (TDD) Services. These capabilities shall be maintained for both the local telephone number and the emergency telephone number.

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25 b. Customer Complaints and Inquiries. Collector shall record in a computerized daily log all complaints, including date, time, complainant’s name and address if the complainant is willing to give this information, and nature and date and manner of resolution of complaint. Any such calls received via Collector’s answering service shall be recorded in the log and responded to no later than the following work day. This manual log shall be available for inspection by City during Office Hours. All incoming calls shall be answered within a maximum of four rings. Any call “on-hold” in excess of 1.5 minutes shall be switched to a message center where Collector shall maintain information in a daily log to enable a customer service representative to return customer calls. All “call backs” shall be attempted a minimum of one time prior to 6:00 p.m. on the day of the call. If the caller is not contacted on the first attempt, Collector shall make subsequent attempts on the next working day after the original call. Collector shall make a minimum of three attempts within twenty-four hours of the receipt of the call. If Collector is unable to reach the caller on the phone, Collector shall send a postcard to the caller.

All attempts to contact the caller shall be recorded on the log kept by Collector.
c. Office Hours. Collector shall maintain an office,
open from Monday through Friday at a minimum from 7:00 a.m. to 6:00 p.m. daily, and on Saturdays following recognized Friday holidays at a minimum from 7:00 a.m. to 6:00 p.m. The Office must be staffed by Collector during these business hours.

4.05 Public Education and Community Relations.
a. Community Relations. Collector’s plan for public
education and outreach, and community relations activities to implement route changes and Organic Waste collection, reviewed by City, is attached as Exhibit E. Collector shall timely and fully implement such plan. Collector shall distribute public education and outreach materials prepared and provided by the City to Customers for distribution with Customers’ quarterly bills in accordance with Exhibit E. Any other promotional materials or news releases will be developed with the City and distributed by the Collector.
b. News Media Relations. Collector shall notify City
Representative by telephone followed by email of all requests for news media interviews related to the Services within twenty-four hours of Collector’s receipt of the request. Before responding to any inquiries involving controversial issues or any issues likely to affect participation or Customer perception of services, Collector will discuss Collector’s proposed response with City.

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26 c. SB 1383 Education and Outreach. Collector shall use Reasonable Business Efforts to outreach and educate the public on the importance of recycling and separating Solid Waste in order to achieve maximum waste diversion in accordance with 14 CCR Sections 18985.1-18985.2. Collector shall develop and implement a program of educational presentations and materials concerning the importance of recycling and diversion, proper techniques for Solid Waste disposal and recycling, and options for the disposal of Hazardous Waste. The educational program shall include a well- defined component aimed at capturing Organic Waste, and Green Waste generated by landscaping services and contractors, including information for Customers on how and why Organic Waste and Green Waste should be collected and diverted. A new educational program shall be prepared for each fiscal year, and submitted to the City Manager no later than April 1st. Collector shall perform the recordkeeping requirements related to compliance with education and outreach requirements under 14 CCR Section 18985.3.

4.06 Emergency Services.

Collector shall provide, or begin providing, emergency services within twenty-four hours of notification by City. Emergency services are services beyond the services specified in this Agreement and include services needed following natural disasters such as earthquakes. Collector shall be paid at a rate equal to the Collector’s then applicable fee for such service, plus five percent (5%).

4.07 City Right to Perform Services.
a. Events. City reserves the right, which it may
exercise in its sole discretion, to perform, or contract for the performance of, any or all of Collector’s Service obligations, including the collection of Solid Waste or any portion thereof and transportation to a City-reviewed Processing Facility, Composting Facility or Disposal Facility, as the case may be, in the following events:
(1) Collector, due to Uncontrollable
Circumstances or for any reason whatsoever, fails, Solid Wastes, or is unable for a period of 48 hours to collect and/or at any time to transport Solid Waste or any portion thereof to a Processing Facility, Composting Facility, or Disposal Facility, as the case may be, selected in accordance with this Agreement; (2) Solid Waste generated by Customers for which
Collector is obligated to provide Services accumulates in the City to such an extent, in such manner or for such time that the City

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

27 Manager or City Council determines that such accumulation endangers or threatens the public health, safety, or welfare; or (3) The City suspends or terminates this Agreement
or any portion of Collector’s Service obligations due to an Event of Default or continuance of an Uncontrollable Circumstance.

City has no obligation to continue providing such Services and may at any time, at its sole discretion, cease to provide such Services. However, City’s right to provide such Services shall continue until Collector can demonstrate to the City’s
satisfaction that Collector is ready, willing, and able to resume timely and full Service or until the City can make alternative arrangements for providing Solid Waste services comparable to Services in scope and price, which may include contracting with another service provider.
b. Notice. The City may give Collector written notice
that City is exercising its right to perform Services, which notice shall be effective immediately.
c. Records and Reports. Upon City’s request, Collector
shall promptly provide City with immediate access and/or possession of Records, including those related to routing and billing.
d. Waiver of Takings Claim. Collector agrees that the
City’s exercise of rights under this section does not constitute a taking of private property for which City must compensate Collector; and does not exempt Collector from any indemnifications made with respect to diversion, disposal, or Services generally, which Parties acknowledge are intended to extend to circumstances arising under this Section. Collector is not required to indemnify City against claims and damages arising from the negligence of City officers and employees and agents driving Vehicles.

4.08 Street Sweeping.
a. Scope of Street Sweeping Services. Collector shall
provide street sweeping services including all labor, materials, fuel, and equipment to all arterial, collector, commercial, residential and industrial streets, including cul-de-sacs, street centerlines, paved medians, left turn pockets, alleys, maintenance yards, intersections and facilities within the City.

Collector shall transport and dispose of all sweeping wastes in accordance with all City, County and Federal requirements.

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

28 Sweeping wastes are to be off-loaded at the Upland Public Works Yard located at 1370 North Benson Avenue.
b. Locations. Collector shall provide street sweeping
services to the locations more particularly described in Exhibits “O” (“Street Sweeping Locations and Schedule”) and “P” (“Street Sweeping Frequency”) which may be modified from time to time by the Director of Public Works or his/her designated representative upon providing thirty (30) days written notice to Collector.

Collector shall provide sweeping services outside of the Street Sweeping Schedule on Exhibit “P” on an as-needed basis a maximum of twelve (12) times per year during regular sweeping hours, and an additional six (6) times per year outside of regular sweeping hours.

In addition to those sweeping services in Exhibits “O” and in “P” and the above, Collector shall provide sweeping services for special community events ten (10) times per year and on-call street sweeping ten (10 )times per year, not to exceed a total of one hundred twenty (120) sweeping hours. Community events and on-call street sweeping days are selected at the sole discretion of City, and City shall provide forty-eight (48) hour notice to Collector when possible.
c. Frequency. Collector shall operate sufficient
number of sweepers per day to provide street sweeping services, five days a week in accordance with the City’s Street Sweeping schedule as identified in Exhibit “O” including, but not limited to residential streets, alleys, commercial and industrial streets, City-owned parking lots, state highways, City arterial streets, curbs, gutters, and medians and islands with or without curbs. All sweeping must be consistent with City posted signage and to City specifications, which may include varying start times for different types of areas. CITY reserves the right to adjust the Street Sweeping Schedule identified in Exhibit “O” at any time with written notice to Collector.
d. Hours. Collector shall only provide street sweeping
services during the hours designated for each respective street.

The Director of Public Works or his/her designated representative may modify the hours to perform sweeping and Collector shall accommodate those hours of sweeping.
e. Routing. Collector shall provide a routing plan to
the Director of Public Works or his/her designated representative.

The Director of Public Works or his/her representative reserves the right to modify Collector’s routing plan as he/she deems necessary.

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29 f. Emergency Services During Regular Business Hours.

During regular business hours, Monday through Friday from 6:00 am to 6:00 pm, the City may call upon Collector to respond to an emergency situation that requires immediate street sweeping services. These situations may include, but not be limited to, spill of non-hazardous waste and debris, debris of accidents involving automobiles, storms, and floods. Collector shall respond to these emergency services requests within two (2) hours of notification. Failure to respond within the designated time will result in penalty as outlined in Article 11 of the Agreement.

Collector shall perform emergency services during regular business hours at the same unit price as the regular street sweeping services specified herein.
g. Emergency Services After Hours. During weekends,
holidays and after work hours (Monday to Friday from 6:00 pm to 6:00 am), the City may call upon Collector to respond to an emergency situation that requires immediate street sweeping services. Collector is required to respond to these emergency services requests within two (2) hours of notification time.

Failure to respond within the designated time will result in penalty as outlined in Article 11 of the Agreement. Collector shall perform emergency services during after-hours at the same unit price as the regular street sweeping services specified herein. h. Holidays. Collector shall provide street sweeping
services on days that the City provides Collection services and recognize the holidays in Exhibit D.
i. Equipment. A sufficient number of primary sweepers
and back-up sweepers shall be provided by Collector. The primary sweepers shall have installed an “active” or “passive” Global Positioning System (GPS) that will enable Collector to view, via computer, equipment location at all times. The GPS must be able to track non-sweeping stops and speed of the equipment and be able to generate reports and maps with an exact description of services.

Data collected shall be provided to City on a daily basis or other schedule mutually agreed upon by Collector and City.

Collector shall be responsible for the operation and
maintenance of the street sweepers, and both the primary and secondary vehicles. Collector shall be responsible for all maintenance, insurance and vehicle replacement costs of all street sweeping vehicles.

All street sweepers must meet South Coast Air Quality
Management District’s (SCAQMD) PM10-efficient standards and be certified by SCAQMD as meeting the testing and performance

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

30 standards set forth in SCAQMD Rule 1186.1 and any future regulatory requirements including the use of alternative fuels.

Collector shall comply with the most up-to-date edition of the California Stormwater Best Management Practices issued by the California Stormwater Quality Association.

Sweepers shall be maintained in accordance with the
manufacturer’s instructions and to the City’s satisfaction. Each sweeper shall be completely refurbished and repainted no less than once every five (5) years. City reserves the right to inspect sweepers and Collector’s physical operations on an annual basis to ensure proper maintenance of equipment and sweepers.

The noise level generated by equipment or vehicles shall not exceed a single-event noise level of seventy-five (75) decibels at a distance of twenty-five (25) feet from the vehicles. Collector shall submit to City, upon City’s request, a certificate of vehicle noise level testing by an independent testing entity approved by the City. Each vehicle used for street sweeping shall be equipped with an audible warning device that is activated when the vehicle is backing up.

Collector shall affix upon the street sweeping vehicles magnetic signs, decals or painted signs approved by the Director of Public Works that contains the Collector’s name, local phone number and vehicle identification number visibly displayed on the vehicle.
j. Personnel. Sweeping shall be conducted by personnel
adequately trained in sweeper operation. Collector shall designate the same operators to sweep in the City on a permanent, regular basis. If there is an operator change, Collector will notify City within 24 hours. All operators will be required to speak English. k. Services During Wind Down Period. In the event the
City provides a Wind Down Notice to Collector, then during the Wind Down Period, Collector shall not be obligated to provide the Street Sweeping Services set forth in Section 4.08 of the Agreement, nor shall the City be entitled to receive the City Credits.

4.09 Sidewalk Steam Cleaning.
a. Collector shall steam clean the Downtown sidewalks
each calendar quarter, and provide on-call sidewalk steam cleaning ten (10 )times per year.

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Agreement Between the City of Upland and Burrtec Waste Industries, Inc. for Solid Waste Collection, Processing and Disposal Service

31 ARTICLE 5 MISCELLANEOUS SERVICE PROVISIONS

5.01 Title to Waste. The Parties agree and intend that all Solid Waste except Hazardous Waste and HHW becomes the property of Collector upon being set out for Collection.

5.02 Compliance with Law. Collector shall perform, and shall cause any contractors or Subcontractors to perform, all Services in accordance and compliance with Applicable Law, including obtaining and maintaining throughout the Term all necessary Permits, licenses, and approvals required to perform Services.

Collector shall show proof of such Permits, licenses, or approvals and shall demonstrate compliance with the terms and conditions of such Permits, licenses, and approvals upon the request of the City.

The City Manager shall have the power to establish rules and regulations relating to the accumulation, collection, recycling, composting, disposal, and management of Solid Waste not inconsistent herewith and with Applicable Law, which the City Manager finds are reasonably necessary for enforcement hereof or of Applicable Law or for preservation of the public peace, health, and safety. Collector agrees to comply with any and all such rules and regulations, subject to adjustments in the Service Fee defined in Section 10.01 for Changes in Law.

Reference to particular provisions or requirements of Applicable Law herein shall not be construed to limit Collector’s obligation to comply with all provisions of Applicable Law. In the event of any inconsistency between Applicable Law and this Agreement, the more stringent provision shall apply. Nothing herein shall be construed to relieve the Collector of any obligations imposed by Applicable Law.

5.03 Cooperation with Waste Studies. Collector shall meet its SB 1383 Regulations contamination monitoring requirements using either Route Reviews or Waste Evaluations. If Collector elects to preform Route Reviews, Collector shall, at its sole expense, conduct annual route reviews each calendar year for prohibited Container contaminants in Containers in a manner that is deemed safe by the Collector, is approved by City, and is conducted in a manner that results in all routes being reviewed annually pursuant to 14 CCR Section 18984.5. Collector shall visually inspect the contents of a reasonably representative number of Containers, as directed and approved by City.

Collector shall develop a route review methodology that complies with the requirements of 14 CCR Section 18984.5(b). Collector shall submit its proposed route review methodology for the coming year

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32 to the City no later than January 15 of each year describing its proposed methodology for the calendar year and schedule for performance of each route’s annual review. Collector’s proposed route review methodology shall include its plan for Container inspections and shall also include its plan for prioritizing the inspection of Customers that are more likely to be out of compliance. City shall review, comment on, and approve the proposed methodology. Collector may commence with the proposed methodology upon approval. If City notifies Collector that the methodology is inadequate to meet the requirements of SB 1383, Collector shall, at its sole expense, revise the methodology and, after obtaining CITY approval, conduct additional route reviews, increased Container inspections, or implement other changes using the revised procedure.

Collector shall document Contamination with still pictures or video, and will notify the Customer of the Contamination by following the applicable procedures specified in 14 CCR Section 18984.5. Collector shall perform the recordkeeping requirements for Container minimization in 14 CCR Section 18984.6. Collector may, at its discretion Collect the Container as Recyclable Materials, Organic Materials, or as Solid Waste.

Alternatively, if Contractor elects to perform Waste Evaluations, Contractor shall, at its sole expense, conduct waste evaluations that comply with and meet the requirements of 14 CCR Section 18984.5(c).

Collector shall cooperate with City on any and all waste composition studies, including modification of routes, separate collection of individual Customer’s Solid Waste, and/or delivering targeted loads of Solid Waste to a City-designated location or locations; provided that if such location is farther than the Processing Facility, Composting Facility, and/or Disposal Facility selected hereunder, Collector shall be compensated for additional mileage or documented costs associated with conducting waste studies.

5.04 Public Performance Review. City Council shall have the right and sole option to conduct a public hearing upon sixty days’ Notice to Collector at such time that it selects, not more than once (1) annually, to review Collector’s performance and quality of Service. Collector shall attend and participate in such hearing.

Council may use Records and reports, including records of Customer complaints, as a basis of such reviews. Within thirty (30) days after the conclusion of the public hearing, the City Council shall issue a report with respect to the matters raised at the hearings.

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33 If any breach of or noncompliance herewith is found, the provisions of Article 11 shall apply.

5.05 Service Materials Belong to City. All data, reports, documents, brochures, public education materials, and other computerized, written, printed, or photographic materials developed by City or Collector in connection with Services, whether developed directly or indirectly by City or Collector, shall be and remain the property of City without limitation or restriction on the use of such materials by City. Collector shall not use such materials in connection with any project not connected with this Agreement without the prior written consent of City.

5.06 Procurement of Recycled Materials Collector agrees to coordinate and cooperate with the City to meet its Organic Waste procurement target, as required by SB 1383 Regulations.

5.07 Hazardous Waste. Collector shall implement the Hazardous Waste screening, identification, and prevention protocol attached as Exhibit J. If Collector inadvertently delivers materials to any Processing Facility, Composting Facility, or Disposal Facility which comprise Hazardous Waste and Collector cannot identify or fails to remove it, Collector shall arrange for its proper disposal in accordance with Applicable Law and/or cooperate with such Facility owner or operator with respect thereto.

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34 ARTICLE 6 CHANGE IN SCOPE OF SERVICES

6.01 Change in Scope of Services.
a. Upon City Direction. The City reserves the right to
direct Collector to implement a change in scope of Services at any time, including new or amended diversion programs or special services, for any reason whatsoever, subject to adjustments, if any, of the Service Fee by agreement of the Parties or by arbitration.
b. Upon Collector Proposal. The Collector may propose
to the City a change in the scope of Services, including new developments in collection, recycling, and processing technologies and techniques, whether on the Collection routes or at a Processing Facility or Composting Facility, at any time, for any reason whatsoever, subject to City approval.

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35 ARTICLE 7 RECORDS AND REPORTING

7.01 Records
a. Maintenance. Collector shall maintain any and all
ledgers, books of account, invoices, vouchers, canceled checks, and other records or documents evidencing or relating to charges for Services, the Service Fee, or performance hereunder, including routing, level of each Customer’s services, inventory, maintenance logs, etc. (“Records”), for the Term plus two years, or any longer period required by Applicable Law. Collector shall further maintain computerized data base(s) in computerized format containing a complete Customer file, including all information required for the reports specified in this Article 7 and sufficient to allow input of information for City and Collector to reconcile the Service Fee.
b. City Inspection and Audit. Upon Notice by the City,
Collector shall use Reasonable Business Efforts to provide copies of Records to City or City’s designees for inspection or audit at City Hall. Otherwise, Collector shall make Records available to City or City’s designees for inspection or audit at the Local Office or Collector’s address indicated for receipt of Notices during Office Hours. Where City has reason to believe that Records may be lost or discarded due to dissolution, disbandment or termination of Collector’s business or other reason, City may require that Collector give City custody of the Records and that the Records and .documents be maintained in City Hall, in which event access to such Records shall be granted to any Person duly authorized by Collector. Collector shall assure that the computerized data bases shall at all times be accessible by City.

Collector shall use Reasonable Business Efforts to promptly provide the City any additional information relevant hereto which is not specified in this Article 7.
c. SB 1383 Recordkeeping. Collector shall prepare and
maintain the records identified in 14 CCR Section 18995.2(f).

7.02 Reporting.
a. Monthly. Collector shall submit monthly reports to
City in written form and compatible computerized format, containing, at a minimum, a record of the Solid Waste disposed of and Diverted. These reports shall be due on the fifteenth day of each month for the preceding month.
b. Quarterly. Collector shall submit quarterly reports
to City in written form and compatible computerized format in

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Upland City CouncilJune 27, 2022

Upland City Council
June 27, 2022